<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
SCHEDULE 13E-4/A
Issuer Tender Offer Statement
(Pursuant to Section 13(e)(1)
of the Securities Exchange Act of 1934)
AMENDMENT NO. 7
-----------------
SANTA FE PACIFIC CORPORATION
(Name of Issuer and Person Filing Statement)
Common Stock, $1.00 par value
(Title of Class of Securities)
802183 10 3
(CUSIP Number of Class of Securities)
------------------
Jeffrey R. Moreland
Vice President - Law and General Counsel
Santa Fe Pacific Corporation
1700 East Golf Road
Schaumburg, Illinois 60173-5860
(708) 995-6000
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person Filing Statement)
------------------
Copies to:
Scott J. Davis
Mayer, Brown & Platt
190 South LaSalle Street
Chicago,Illinois 60603-3441
(312) 782-0600
December 23, 1994
(Date Tender Offer First Published, Sent or Given to
Securityholders)
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<PAGE>
Santa Fe Pacific Corporation (the "Company") hereby amends and supplements
its statement on Schedule 13E-4 (the "Original Schedule 13E-4") filed with the
Securities and Exchange Commission (the "Commission") on December 23, 1994 as
amended by Amendments No. 1 through 6 thereto. Unless otherwise indicated
herein, each capitalized term used but not defined herein shall have the meaning
assigned to such term in the Original Schedule 13E-4.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The total amount of funds required by SFP to purchase 38 million shares of
the common stock outstanding pursuant to the Offer is estimated to be
approximately $760 million. In addition, SFP may require $400 million for the
repayment of existing debt ($200 million of which was issued during the fourth
quarter of 1994), approximately $75 million for the payment of fees, expenses,
and prepayment premium, approximately $75 million in anticipation of 1995
financing requirements and $250 million of liquidity for working capital and
other corporate cash needs. The Offer, the repayment of existing debt, and the
provision of working capital will be funded by bank financing under the SFP
Credit Agreement described below.
SFP has entered into a credit agreement (the "SFP Credit Agreement") dated
January 27, 1995 with J.P. Morgan Securities Inc., as Arranger, Chase
Securities, Inc., Chemical Securities Inc., Goldman Sachs & Co. and Union Bank
of Switzerland ("UBS"), as Co-Arrangers, Morgan Guaranty Trust Company of New
York, The Chase Manhattan Bank (National Association), Chemical Bank, Pearl
Street L.P. and UBS, as Arranging Agents, and Morgan Guaranty Trust Company of
New York, as Administrative Agent and Documentation Agent, pursuant to which the
Arranging Agents have agreed, subject to the terms and conditions set forth in
the SFP Credit Agreement, to provide SFP with up to an aggregate of $1.56
billion in financing (the "Bank Financing").
The SFP Credit Agreement provides for three facilities (the "Credit
Facilities"): (i) a term loan facility (the "Term Loan Facility") of up to $1
billion; (ii) a $250 million revolving credit facility (the "Tranche A Revolving
Credit Facility"); and (iii) a $310 million revolving credit facility (the
"Tranche B Revolving Credit Facility" and, together with the Tranche A Revolving
Credit Facility, the "Revolving Credit Facilities"). The proceeds of the Term
Loan Facility and the Tranche B Revolving Credit Facility are to be used to
purchase SFP Common Stock pursuant to the Offer, to repay existing debt, to pay
prepayment premiums, fees and expenses, and, in the case of the Tranche B
Revolving Credit Facility, for working capital and other general corporate
purposes, including Restricted Payments. The proceeds of the Tranche A Revolving
Credit Facility are to be used for working capital and other general corporate
purposes.
Loans under the Term Loan Facility will mature on June 30, 2001 and will be
subject to semi-annual amortization commencing on December 31, 1996 in the
following amounts:
<TABLE>
<CAPTION>
INSTALLMENT PRINCIPAL AMOUNT
----------- ----------------
<S> <C>
12/31/96 $ 50,000,000
06/30/97 50,000,000
12/31/97 50,000,000
06/30/98 50,000,000
12/31/98 50,000,000
06/30/99 75,000,000
12/31/99 75,000,000
06/30/00 100,000,000
12/31/00 100,000,000
06/30/01 400,000,000
</TABLE>
Loans under the Tranche A Revolving Credit Facility will mature on December
31, 1999. Loans under the Tranche B Revolving Credit Facility will mature on
the earliest of (a) December 31, 1997, (b) six months after a final decision
(either approval or disapproval) by the ICC in respect of the Merger and (c) six
months after termination of the Merger Agreement.
All loans under the Credit Facilities will bear interest at a rate per
annum, at SFP's option, of either: (a) the higher of (i) the prime rate of
interest publicly announced from time to time by Morgan Guaranty Trust Company
of New York and (ii) the federal funds rate plus 0.5% (such higher rate, the
"Base Rate"), in each case plus the Applicable Margin (determined based on the
pricing grid set forth below); or (b) the Eurodollar rate established by certain
reference banks (the "Eurodollar Rate") for each applicable interest period plus
the Applicable Margin (determined based on the pricing grid set forth below).
SFP will also be required to pay a facility fee (the "Facility Fee") under
each of the Credit Facilities. The Applicable Margins and the Facility Fees will
be at the rates per annum set forth in the following Pricing Grids:
<PAGE>
PRICING GRID - TERM LOAN FACILITY
<TABLE>
<CAPTION>
If SFP's If SFP's If SFP's If SFP's If SFP's
Pricing Ratio Pricing Ratio Pricing Ratio Pricing Ratio Pricing Ratio If SFP's
is at least .42 is at least .38 is at least .34 is at least .30 is at least .26 Pricing Ratio
or higher and below .42 and below .38 and below .34 and below .30 is below .26
---------------- ---------------- ---------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Facility Fee...... .20% .25% .30% .30% .375% .50%
Eurodollar Rate+.. .40% .625% .825% 1.075% 1.25% 1.50%
Base Rate+........ 0% 0% 0% 0% .25% .50%
</TABLE>
PRICING GRID - REVOLVING CREDIT FACILITIES
<TABLE>
<CAPTION>
If SFP's If SFP's If SFP's If SFP's If SFP's
Pricing Ratio Pricing Ratio Pricing Ratio Pricing Ratio Pricing Ratio If SFP's
is at least .42 is at least .38 is at least .34 is at least .30 is at least .26 Pricing Ratio
or higher and below .42 and below .38 and below .34 and below .30 is below .26
---------------- ---------------- ---------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Facility Fee...... .20% .25% .30% .30% .375% .50%
Eurodollar Rate+.. .40% .50% .70% .95% 1.125% 1.25%
Base Rate+........ 0% 0% 0% 0% .125% .25%
- ----------
The Pricing Ratio, for purposes of the grid above, is defined as the quotient obtained by dividing consolidated EBITDA of SFP for
the latest four quarters by the amount of consolidated total debt of SFP at the end of the latest quarter.
</TABLE>
The Facility Fees set forth above will be increased by .25% until SFP Rail
has unconditionally guaranteed payment of the Credit Facilities.
During the fiscal quarter in which the initial loan to fund the Offer is
made, the Applicable Margins and Facility Fees shall be those applicable to a
Pricing Ratio of at least .30 and below .34.
If SFP's senior, unsecured, non-credit-enhanced public debt has a rating
(implied or actual) from Moody's Investors Services, Inc. of at least Baa3 or
from Standard & Poor's Rating Group of at least BBB-, SFP may request the
Administrative Agent to solicit competitive bids from the lenders for loans
("Bid Loans") bearing interest at a margin over LIBOR or an absolute rate, for
specific interest periods. SFP will have the right to accept or reject bids in
its discretion.
The Credit Facilities will be secured by a pledge of the capital stock of
SFP Rail. If at the time of the Merger BNI's senior, unsecured non-credit-
enhanced public debt has a rating from Moody's Investors Service, Inc. of at
least Baa3 and from Standard & Poor's Ratings Group of at least BBB- and neither
such rating agency has announced that such ratings have been placed on review
with negative implications or on watch for possible downgrade, such pledge will
be released simultaneously with the Merger.
SFP may voluntarily repay any loans (other than Bid Loans) under the Credit
Facilities. SFP will be required to make prepayments of loans under the Term
Loan Facility under certain circumstances (i) as required by the restricted
payment covenant as described below, (ii) out of the net cash proceeds (rounded
to the nearest $1,000,000) of assets sold in excess of certain baskets, (iii)
out of the net cash proceeds of certain issuances of debt or equity and (iv) at
the request of lenders having at least 51% of the commitments in the event of a
change of control of SFP (other than the Merger) or BNI.
The commitments of the Arranging Agents under the SFP Credit Agreement to
make term loans to fund the Offer will terminate on May 15, 1995.
The making of the initial loans under the SFP Credit Agreement is subject
to conditions customary for financings of this type, including but not limited
to: (i) the Merger Agreement being in full force and effect without any
waivers, amendments or other modifications that would adversely affect the
interests of the lenders under the SFP Credit Agreement, unless lenders having
51% or more of the commitments have consented thereto; (ii) absence of default
or event of default; (iii) accuracy of representations and warranties in all
material respects; (iv) no material adverse change since September 30, 1994
(taking into account the Offer); (v) no material litigation; (vi) corporate
resolutions; certificate of incorporation and by-laws; (vii) satisfactory legal
opinions; (viii) a solvency opinion of SFP and SFP Rail; and (ix) delivery of
the SFP Rail Stock. The making of the initial loans will be further conditioned
upon (a) the shareholders of SFP and BNI having approved the Merger and (b) the
termination of SFP's $200,000,000 Credit Agreement, dated as of June 15, 1994,
and repayment of all amounts, if any, outstanding thereunder.
The SFP Credit Agreement contains representations and warranties, covenants
and events of default which are customary for similar financings. The covenants
include without limitation: (i) negative pledge at all levels (including
subsidiary stock and assets, but excluding liens in connection with equipment
debt and other customary exceptions); (ii) limitations on other debt of SFP and
its subsidiaries, which covenant is limited after the Merger to subsidiaries, if
BNI, as the surviving corporation, is maintaining investment grade status at
such time;; (iii) minimum tangible net worth, increasing by a percentage of net
income and certain equity issuances (and further adjusted at the time of the
Merger); (iv) limitation on indebtedness calculated using a ratio of (a) EBITDA
(latest four quarters) to (b) total consolidated debt (excluding SFP's existing
receivables financing); and (v) fixed charge coverage ratio, which covenant is
subject to adjustment at the time of the Merger if BNI, as the surviving
corporation, is maintaining investment grade status, all as set forth for such
covenants in Section 10 of the SFP Credit Agreement. The events of default
include without limitation: (i) failure of SFP to continue to own 100% of the
capital stock of SFP Rail; and (ii) consummation of the Merger if such
consummation would result in a material adverse change with respect to SFP or
the surviving corporation of the Merger.
The SFP Credit Agreement also provides that SFP may not prior to the Merger
declare or pay any dividend (other than dividends payable solely in SFP Common
Stock) on, or make any payment on account of, or set apart assets for a sinking
or other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, any shares of any class of capital stock of SFP (other
than pursuant to the Offer) or any warrants or options to purchase any such
capital stock, whether outstanding on the date of the SFP Credit Agreement or
thereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations of
SFP or any subsidiary (such declarations, payments, setting apart, purchases,
redemptions, defeasance, retirements, acquisitions and distributions being
"Restricted Payments"), except that, so long as no default or event of default
under the SFP Credit Agreement exists or would exist after giving effect
thereto:
(a) SFP may make Restricted Payments on any date in an amount equal
to the amount of the Primary Restricted Payments Basket (as defined below)
on such date less the aggregate amount of Restricted Payments previously
made pursuant to this clause (a); provided that no Restricted Payments may
be made in any fiscal quarter from amounts constituting part of the Primary
Restricted Payments Basket under clause (b) of the definition of Primary
Restricted Payments Basket unless SFP met the Eligibility Test (as defined
below) for the immediately preceding fiscal quarter; and
(b) in addition to the Restricted Payments permitted pursuant to the
foregoing clause (a), SFP may make Restricted Payments in any fiscal
quarter if (i) SFP met the Eligibility Test for the immediately preceding
fiscal quarter, (ii) the amount of such Restricted Payments do not exceed
the Additional Restricted Payments Basket (as defined below) on the date of
such Restricted Payments less the aggregate amount of Restricted Payments
previously made pursuant to this clause (b), and (iii) simultaneously with
making such Restricted Payments, SFP makes a prepayment in respect of the
term loans under the SFP Credit Agreement in an amount at least equal to
the amount of such Restricted Payments.
After the Merger, the level of Restricted Payments which BNI, as the surviving
corporation, may make will be dependent on whether BNI is maintaining investment
grade status at the time of such payment.
For purposes of the foregoing covenant, the following terms will have the
following meanings:
"Additional Restricted Payments Basket": means, on any date, an amount
equal to 50% of the sum of Excess Adjusted Consolidated Cash Flow for each
fiscal quarter of SFP ended after the date of the SFP Credit Agreement and prior
to such date.
"Adjusted Consolidated Cash Flow": means, for any period, consolidated
income from continuing operations for such period, plus depreciation and
amortization, deferred income taxes, merger-related costs (net of current tax
benefit, if any) and costs of accelerated vesting of employee benefits, in each
case to the extent deducted from earnings in determining such consolidated
income from continuing operations as determined in accordance with GAAP, less
consolidated capital expenditures for such period; provided that not more than
$35 million in the aggregate (less the amount of current income tax expense
associated therewith) may be included for merger-related costs in calculating
Adjusted Consolidated Cash Flow during the term of the SFP Credit Agreement.
"Eligibility Test": SFP shall be deemed to have met the Eligibility Test
for any fiscal quarter if Adjusted Consolidated Cash Flow for such fiscal
quarter exceeds the amount set forth for such fiscal quarter under the column
"Cash Flow Target" below.
<TABLE>
<CAPTION>
QUARTER ENDED CASH FLOW TARGET QUARTER ENDED CASH FLOW TARGET
- ------------- ---------------- ------------- ----------------
(IN MILLIONS) (IN MILLIONS)
<S> <C> <C> <C>
03/31/95......... $ 9 06/30/98......... $ 36
06/30/95......... (27) 09/30/98......... 73
09/30/95......... 5 12/31/98......... 125
12/31/95......... 65 03/31/99......... 58
03/31/96......... 31 06/30/99......... 49
06/30/96......... 8 09/30/99......... 89
09/30/96......... 41 12/31/99......... 141
12/31/96......... 93 03/31/00......... 58
03/31/97......... 42 06/30/00......... 49
06/30/97......... 25 09/30/00......... 89
09/30/97......... 60 12/31/00......... 141
12/31/97......... 113 03/31/01......... 58
03/31/98......... 49 06/30/01......... 49
</TABLE>
"Excess Adjusted Consolidated Cash Flow": means, for any fiscal quarter,
the amount, if any, by which Adjusted Consolidated Cash Flow for such fiscal
quarter exceeds the amount set forth for such fiscal quarter under the column
"Cash Flow Target" above.
"Primary Restricted Payments Basket": means, on any calculation date, the
sum of (a) the Basic Amount plus (b) $5,000,000 for each fiscal quarter ended
after the date of the SFP Credit Agreement in which SFP met the Eligibility
Test. For purposes of the foregoing, the "Basic Amount" shall be (i) on any
calculation date during the fiscal quarter ending March 31, 1995, $30,000,000,
(ii) on any calculation date during the fiscal quarter ending June 30, 1995,
$40,000,000 and (iii) on any calculation date thereafter, $50,000,000.
SFP will be permitted to consummate the Alternative Merger described in the
Merger Agreement provided that the pledge on the SFP Rail stock and the
Guarantee of SFP Rail will not be released upon the Alternative Merger. If SFP
consummates the Alternative Merger, the Credit Facilities will become due and
payable on the date that is six months after the date of such merger unless (a)
on such date the senior, unsecured, non credit-enhanced public debt of SFP has a
rating (express or implied) from Moody's Investors Service, Inc. of at least
Baa3 and from Standard & Poor's Ratings Group of at least BBB-, and neither such
rating agency has announced that such ratings have been placed on review with
negative implications or on watch for possible downgrade or (b) if such ratings
are not in effect, and lenders having 51% or more of the commitments shall have
requested that the Credit Facilities be unconditionally guaranteed by BNI, such
guarantee shall have been delivered (in which case SFP will also be permitted to
unconditionally guarantee BNI's bank credit facilities).
SFP has agreed to pay the Arranger, the Co-Arrangers, the Arranging Agents
and the Administrative Agent certain fees which are customary for similar types
of financings.
The foregoing description of the SFP Credit Agreement is qualified in its
entirety by reference to the text thereof filed as an exhibit to the Schedule
13E-4, copies of which may be obtained from the offices of the Commission in the
manner set forth in "--7. Certain Information Concerning SFP" in the Offer to
Purchase (except that such information will not be available at the regional
offices of the Commission).
It is anticipated that the indebtedness incurred by SFP through borrowings
under the SFP Credit Agreement will be repaid from funds generated internally by
SFP and its subsidiaries (including, after the Merger, if consummated, funds
generated by BNI) and from other sources which may include the proceeds of the
private or public sale of debt or equity securities. No final decisions have
been made concerning the method SFP will employ to repay such indebtedness.
Such decisions will be made based on SFP's review from time to time of the
advisability of particular actions, as well as on prevailing interest rates and
financial and other economic conditions.
<PAGE>
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
------- -----------
Exhibit (p) - SFP Credit Agreement dated January 27, 1995.
Exhibit (q) - Form of Press Release dated January 30, 1995.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete, and correct.
January 30, 1995 By /s/ Jeffrey R. Moreland
- --------------- ---------------------------
(Date) Name: Jeffrey R. Moreland
Title: Vice President - Law
and General Counsel
<PAGE>
EXHIBIT 99(q)
EXECUTION COPY
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SANTA FE PACIFIC CORPORATION
_____________________________________
$1,560,000,000
CREDIT AGREEMENT
Dated as of January 27, 1995
_____________________________________
J.P. MORGAN SECURITIES INC.,
as Arranger
CHASE SECURITIES, INC., CHEMICAL SECURITIES INC.,
GOLDMAN, SACHS & CO. and UNION BANK OF SWITZERLAND,
as Co-Arrangers
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
CHEMICAL BANK, PEARL STREET L.P.
and UNION BANK OF SWITZERLAND,
as Arranging Agents
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Administrative Agent and Documentation Agent
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
- ----------------------------------------------------------------------
<S> <C>
SECTION 1. DEFINITIONS............................................... 2
1.1 Defined Terms............................................. 2
1.2 Other Definitional Provisions............................. 26
SECTION 2. THE TERM LOANS............................................ 27
2.1 Term Loans 27
2.2 Procedure for Term Loan Borrowing......................... 27
2.3 Repayment of Term Loans................................... 27
SECTION 3. THE TRANCHE A REVOLVING CREDIT LOANS...................... 28
3.1 Tranche A Revolving Credit Commitments.................... 28
3.2 Procedure for Tranche A Revolving Credit Borrowing........ 28
3.3 Repayment of Tranche A Revolving Credit Loans............. 29
SECTION 4. THE TRANCHE B REVOLVING CREDIT LOANS...................... 29
4.1 Tranche B Revolving Credit Commitments.................... 29
4.2 Procedure for Tranche B Revolving Credit Borrowing........ 29
4.3 Repayment of Tranche B Revolving Credit Loans............. 30
SECTION 5. THE MONEY MARKET LOANS.................................... 30
5.1 Money Market Option....................................... 30
5.2 Money Market Quote Request................................ 30
5.3 Invitation for Money Market Quotes........................ 31
5.4 Submission and Contents of Money Market Quotes............ 31
5.5 Notice to Borrower........................................ 32
5.6 Acceptance and Notice by Borrower......................... 32
5.7 Allocations 33
5.8 Certain Restrictions...................................... 33
5.9 Repayment of Money Market Loans........................... 33
SECTION 6. CERTAIN PROVISIONS APPLICABLE TO THE COMMITMENTS
AND THE LOANS............................................. 34
6.1 Fees 34
6.2 Minimum Borrowing Amounts................................. 34
6.3 Termination or Reduction of Commitments................... 34
6.4 Optional Prepayments; Mandatory Prepayments............... 34
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
6.5 Conversion and Continuation Options....................... 36
6.6 Minimum Amounts of Tranches............................... 36
6.7 Interest Rates and Payment Dates.......................... 36
6.8 Computation of Interest and Fees.......................... 37
6.9 Evidence of Debt.......................................... 38
6.10 Basis for Determining Interest Rate Inadequate or Unfair.. 38
6.11 Illegality 39
6.12 Increased Cost and Reduced Return......................... 39
6.13 Taxes 41
6.14 Base Rate Loans Substituted for Affected Eurodollar Loans. 44
6.15 Pro Rata Treatment and Payments........................... 44
6.16 Funding Losses............................................ 46
6.17 Replacement of Affected Lender............................ 46
SECTION 7. REPRESENTATIONS AND WARRANTIES............................ 46
7.1 Financial Condition....................................... 46
7.2 No Change 47
7.3 Corporate Existence and Power............................. 47
7.4 Corporate and Governmental Authorization; Non
Contravention............................................ 47
7.5 Binding Effect............................................ 48
7.6 Litigation 48
7.7 Taxes 48
7.8 Federal Regulations....................................... 48
7.9 ERISA 48
7.10 Not an Investment Company................................. 49
7.11 Subsidiaries 49
7.12 Environmental Matters..................................... 49
7.13 Full Disclosure........................................... 49
7.14 Merger Agreement.......................................... 50
SECTION 8. CONDITIONS PRECEDENT...................................... 50
8.1 Conditions to Closing Date................................ 50
8.2 Conditions to Initial Loan................................ 52
8.3 Conditions to Each Loan................................... 53
SECTION 9. AFFIRMATIVE COVENANTS..................................... 54
9.1 Information 54
9.2 Payment of Obligations.................................... 57
9.3 Maintenance of Properties; Insurance...................... 57
9.4 Conduct of Business and Maintenance of Existence.......... 57
9.5 Compliance with Laws...................................... 58
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
9.6 Inspection of Property, Books and Records; Accounting
Practices............................................... 58
9.7 Use of Proceeds........................................... 58
9.8 Interest Rate Agreements.................................. 59
SECTION 10. NEGATIVE COVENANTS....................................... 59
10.1 Financial Condition Covenants............................. 59
10.2 Limitation on Debt........................................ 60
10.3 Limitation on Liens....................................... 62
10.4 Consolidations, Mergers and Sale of Assets................ 63
10.5 Limitation on Restricted Payments......................... 65
10.6 Limitation on Investments................................. 66
10.7 Limitation on Transactions with Affiliates................ 66
10.8 Limitation on Sales and Leasebacks........................ 66
10.9 Amendments to Merger Agreement............................ 67
10.10 Limitation on Dividend Restrictions at Santa Fe Railroad.. 67
SECTION 11. EVENTS OF DEFAULT........................................ 67
11.1 Events of Default......................................... 67
11.2 Notice of Default......................................... 70
SECTION 12. THE AGENTS............................................... 70
12.1 Appointment and Authorization............................. 70
12.2 Agents and Affiliates..................................... 70
12.3 Action by Agents.......................................... 71
12.4 Consultation with Experts; Delegation of Duties........... 71
12.5 Liability of Agents....................................... 71
12.6 Indemnification of Agents................................. 72
12.7 Credit Decision........................................... 72
12.8 Successor Administrative Agent............................ 72
12.9 Other Agents.............................................. 72
SECTION 13. MISCELLANEOUS............................................ 73
13.1 Amendments and Waivers.................................... 73
13.2 Notices 73
13.3 No Waiver; Cumulative Remedies............................ 74
13.4 Survival of Representations and Warranties................ 74
13.5 Expenses 74
13.6 Successors and Assigns.................................... 75
13.7 Indemnification by the Borrower........................... 76
13.8 Adjustments............................................... 77
</TABLE>
-iii-
<PAGE>
<TABLE>
<S> <C>
13.9 Release of Security Interest.............................. 77
13.10 Syndication............................................... 77
13.11 Counterparts.............................................. 78
13.12 Severability.............................................. 78
13.13 Integration 78
13.14 GOVERNING LAW............................................. 78
13.15 Submission To Jurisdiction; Waivers....................... 78
13.16 Acknowledgements.......................................... 79
13.17 WAIVERS OF JURY TRIAL..................................... 79
</TABLE>
SCHEDULES:
Schedule I Bank Names, Addresses and Commitments
Schedule II Financial Covenant Requirements and Cash Flow Targets
Schedule III Existing Debt
Schedule IV Automatic Amendments upon Consummation of Alternative Merger
EXHIBITS:
Exhibit A Form of Money Market Quote Request
Exhibit B Form of Invitation for Money Market Quotes
Exhibit C Form of Money Market Quote
Exhibit D Form of Notice of Money Market Borrowing
Exhibit E Form of Stock Pledge Agreement
Exhibit F Form of Railway Guarantee
Exhibit G-1 Form of Opinion of Mayer, Brown & Platt (Closing Date)
Exhibit G-2 Form of Opinion of Richard E. Weicher, Esq. (Closing Date)
Exhibit G-3 Form of Opinion of Fritz R. Kahn, P.C. (Closing Date)
Exhibit G-4 Form of Opinion of Simpson Thacher & Bartlett (Closing Date)
Exhibit G-5 Form of Opinion of Mayer, Brown & Platt (Railway Guarantee Event)
Exhibit G-6 Form of Opinion of Richard E. Weicher, Esq. (Railway Guarantee
Event)
Exhibit G-7 Form of Opinion of Fritz R. Kahn, P.C. (Railway Guarantee Event)
Exhibit H Form of Assignment and Acceptance
Exhibit I Form of Syndication Supplement
Exhibit J Form of Pricing Ratio Certificate
-iv-
<PAGE>
CREDIT AGREEMENT, dated as of January 27, 1995, among:
(i) SANTA FE PACIFIC CORPORATION, a Delaware corporation (the
"Borrower");
(ii) the several banks and other financial institutions from time to
time parties to this Agreement as Lenders (the "Lenders");
(iii) J.P. MORGAN SECURITIES INC., as Arranger (in such capacity, the
"Arranger");
(iv) CHASE SECURITIES, INC., CHEMICAL SECURITIES INC., GOLDMAN,
SACHS & CO. and UNION BANK OF SWITZERLAND, as Co-Arrangers (in such capacity,
the "Co-Arrangers");
(v) MORGAN GUARANTY TRUST COMPANY OF NEW YORK, THE CHASE MANHATTAN
BANK (NATIONAL ASSOCIATION), CHEMICAL BANK, PEARL STREET L.P. and UNION BANK OF
SWITZERLAND, as Arranging Agents (in such capacity, the "Arranging Agents"); and
(vi) MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Documentation
Agent (in such capacity, the "Documentation Agent") and as Administrative Agent
(in such capacity, the "Administrative Agent").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Borrower and Burlington Northern Inc. ("Burlington") are
parties to the Merger Agreement, dated as of June 29, 1994, as amended by the
Amendment, dated as of October 26, 1994, by Amendment No. 2, dated as of
December 18, 1994, and by Amendment No. 3, dated January 24, 1995 (as so
amended, the "Merger Agreement"), pursuant to which the Borrower and Burlington
have agreed, upon and subject to the terms and conditions set forth therein,
that the Borrower will merge with and into Burlington (the "Merger");
WHEREAS, as provided in the Merger Agreement, on December 23, 1994, the
Borrower and Burlington commenced a several tender offer for shares of the
Borrower's common stock ("Shares") pursuant to which the Borrower offered to
purchase up to 38,000,000 Shares for $20.00 per Share upon the terms and
conditions described in the Offer to Purchase, dated December 23, 1994, as
supplemented on January 13, 1995 and January 25, 1995 (the "Borrower Tender
Offer");
WHEREAS, the Borrower wishes to refinance certain of its existing
indebtedness (as hereinafter defined, the "Existing Borrower Securities" and the
"Existing Borrower Bank Debt"); and
<PAGE>
2
WHEREAS, the Borrower has requested the Lenders to make available the
credit facilities described in this Agreement in order to finance, in part, the
Borrower Tender Offer, the repayment of the Existing Borrower Securities and the
Existing Borrower Bank Debt and the payment of fees and expenses relating to
such transactions and to provide for the ongoing working capital and general
corporate needs of the Borrower and its Subsidiaries;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
-------------
shall have the following meanings:
"Absolute Rate Auction": a solicitation of Money Market Quotes setting
forth Money Market Absolute Rates pursuant to Section 5.
"Accelerated Vesting Costs": all costs associated with the accelerated
vesting of employee benefits in connection with the Merger Agreement and
the transactions contemplated thereby.
"Accounts Receivable Financing": any transaction or series of
transactions that may be entered into by the Borrower or any of its
Subsidiaries pursuant to which the Borrower or any of its Subsidiaries may
sell, convey or otherwise transfer, or may grant a security interest in,
Receivables Program Assets; it being understood that such transaction or
transactions may, or may not, be recorded as liabilities on the
consolidated balance sheet of the Borrower.
"Accounts Receivable Financing Amount": with respect to any Accounts
Receivable Financing and without duplication, the outstanding principal
amount of obligations referred to in clause (a) of the definition of
Receivables Program Obligations.
"Additional Restricted Payments Basket": on any date, an amount equal
to 50% of the sum of Excess Adjusted Consolidated Cash Flow for each fiscal
quarter of the Borrower ended after the date of this Agreement and prior to
such date.
"Adjusted Consolidated Cash Flow": for any period, Consolidated Income
From Continuing Operations for such period, plus depreciation and
amortization deducted from earnings in determining such Consolidated Income
From Continuing Operations, plus deferred taxes deducted from earnings in
determining such Consolidated Income From Continuing Operations, plus
Merger-Related Costs (net of
<PAGE>
3
current tax benefit, if any) and Accelerated Vesting Costs deducted from
earnings in determining such Consolidated Income From Continuing
Operations, less Consolidated Capital Expenditures for such period;
provided, that not more than $35,000,000 in the aggregate (less the amount
of current income tax expense associated therewith) may be included for
Merger-Related Costs in calculating Adjusted Consolidated Cash Flow during
the term of this Agreement.
"Adjusted Consolidated EBITDA": for any period, the sum of (a)
Consolidated EBITDA for such period, plus (b) Consolidated Receivables
Financing Expense for such period, plus (c) Consolidated Lease Expense for
such period, minus (d) Consolidated Capital Expenditures for such period.
"Administrative Agent": as defined in the Preamble to this Agreement.
"Administrative Questionnaire": with respect to each Lender, an
administrative questionnaire in the form prepared by the Administrative
Agent and submitted to the Administrative Agent (with a copy to the
Borrower) duly completed by such Lender.
"Affected Lender" means any Lender that (i) has demanded compensation
under subsection 6.12 or 6.13 or (ii) which has had the obligation to make
Eurodollar Loans suspended pursuant to subsection 6.11.
"Affiliate": each Controlling Person and each Person (other than the
Borrower or a Subsidiary) that is controlled by or is under common control
with a Controlling Person.
"Agents": the collective reference to the Administrative Agent, the
Documentation Agent, the Arranger, the Co-Arrangers and the Arranging
Agents.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Allocation Date": the date on which the Arranger gives notice to the
Borrower that the Arranger and the Co-Arrangers have received and allocated
offered Commitments of financial institutions that are to become Lenders
under this Agreement.
"Alternative Merger": the "Alternative Merger" described in Section
1.8 of the Merger Agreement.
"Applicable Lending Office": with respect to any Lender, (a) in the
case of its Base Rate Loans, its Domestic Lending Office, (b) in the case
of its Eurodollar Loans, its Eurodollar Lending Office and (c) in the case
of its Money Market Loans, its Money Market Lending Office.
<PAGE>
4
"Applicable Margin": during each fiscal quarter of the Borrower, the
rate per annum set forth below for the relevant Type of Term Loan or
Revolving Credit Loan, as the case may be, opposite the Pricing Ratio Level
determined as of the end of the immediately preceding fiscal quarter, as
shown (in the absence of manifest error) on the Pricing Ratio Certificate
delivered for such immediately preceding fiscal quarter:
TERM LOANS -- APPLICABLE MARGIN
-------------------------------
<TABLE>
<CAPTION>
Applicable Margin
------------------
<S> <C> <C>
Pricing Ratio Level Base Rate Loans Eurodollar Loans
- ------------------------------ --------------- -----------------
Level I 0% .400%
Level II 0 .625
Level III 0 .825
Level IV 0 1.075
Level V .25 1.250
Level VI .50 1.500
</TABLE>
REVOLVING CREDIT LOANS -- APPLICABLE MARGIN
-------------------------------------------
<TABLE>
<CAPTION>
Applicable Margin
- ----------------------
<S> <C> <C>
Pricing Ratio Level Base Rate Loans Eurodollar Loans
- ---------------------- --------------- ----------------
Level I 0% .400%
Level II 0 .500
Level III 0 .700
Level IV 0 .950
Level V .125 1.125
Level VI .250 1.250
</TABLE>
; provided, however, that (a) if any interest payment is made during the
period between the first day of a fiscal quarter and the date which is five
Domestic Business Days after the date of delivery of the Pricing Ratio
Certificate for the immediately preceding fiscal quarter, such interest
payment shall be tentatively calculated on the basis of the Applicable
Margins in effect for such immediately preceding fiscal quarter until the
Applicable Margins are adjusted upon delivery of such Pricing Ratio
Certificate and (b) in the event that no Pricing Ratio Certificate has been
delivered for a fiscal quarter prior to the last day of the next succeeding
fiscal quarter, the Applicable Margins shall thereafter be tentatively
calculated as those applicable to Pricing Ratio Level VI until delivery of
such Pricing Ratio Certificate; and provided, further, that during the
fiscal quarter in which the Tender Offer Funding Date occurs
<PAGE>
5
the Applicable Margins shall be those applicable to Pricing Ratio Level IV.
Changes in the Applicable Margins in respect of any Loans resulting from
the operation of either of clauses (a) or (b) above for any fiscal quarter
shall be given effect through adjustments to the next interest payments to
be made in respect of Committed Loans so as to give effect to such
Applicable Margins for all affected Committed Loans retroactively to the
beginning of such fiscal quarter.
"Approved Transaction": the purchase, acquisition or construction of
assets which are used in the business of Santa Fe Railroad and its
Subsidiaries as conducted on the date of this Agreement.
"Arranger": as defined in the Preamble to this Agreement.
"Arranging Agents": as defined in the Preamble to this Agreement.
"Assignee": as defined in subsection 13.6(c).
"Assignment and Acceptance": each Assignment and Acceptance,
substantially in the form of Exhibit H, delivered pursuant to subsection
13.6(c).
"Base Rate": for any day, a rate per annum equal to the higher of (a)
the Prime Rate for such day and (b) the sum of 1/2 of 1% plus the Federal
Funds Rate for such day.
"Base Rate Loan": a Revolving Credit Loan or Term Loan bearing
interest based upon the Base Rate in accordance with this Agreement.
"Benefitted Lender": defined in subsection 13.8.
"Borrower": as defined in the Preamble to this Agreement; from and
after consummation of the Merger in the manner permitted by this Agreement,
the terms "Borrower" and "Burlington" shall each mean Burlington as the
surviving corporation of the Merger.
"Borrower Consolidated Tangible Net Worth": at any date, the
consolidated stockholders' equity of the Borrower and its Consolidated
Subsidiaries less their consolidated Intangible Assets, all as included in
a balance sheet prepared in accordance with GAAP as of such date. For
purposes of this definition, "Intangible Assets" means the amount (to the
extent reflected in such balance sheet) of (a) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of
assets of a going concern business made within twelve months after the
acquisition of such business) subsequent to December 31, 1994 in the book
value of any asset owned by the Borrower or a Consolidated Subsidiary, (b)
all investments in unconsolidated Subsidiaries, (c) all equity investments
in Persons (other than Pipeline
<PAGE>
6
Partners) that are not Subsidiaries to the extent that the aggregate amount
of all such investments exceeds $50,000,000, and (d) all unamortized debt
issuance costs, goodwill, patents, trademarks, service marks, trade names,
copyrights, organization or developmental expenses and other intangible
assets (other than unamortized debt discount).
"Borrower Tender Offer": as defined in the Recitals to this
Agreement.
"Borrower's 1993 Form 8-K/A": the Borrower's report on Form 8-K/A,
dated October 5, 1994, as filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934 as amended.
"Borrowing Date": any Domestic Business Day or Eurodollar Business
Day, as the case may be, specified in a notice pursuant to subsection 2.2,
3.2, 4.2 or 5.2 as a date on which the Borrower requests the Lenders to
make Loans hereunder.
"Burlington": as defined in the Recitals to this Agreement; from and
after consummation of the Merger in the manner permitted by this Agreement,
the terms "Borrower" and "Burlington" shall each mean Burlington as the
surviving corporation of the Merger.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"Cash Equivalents": (a) securities issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof having maturities of not more than six months from
the date of acquisition, (b) certificates of deposit and eurodollar time
deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case, with any commercial bank having
equity capital in excess of $500,000,000 which has, or the holding company
of which has, at the time of purchase, commercial paper ratings meeting the
requirements specified in clause (d) below, (c) repurchase obligations with
a term of not more than seven days for underlying securities of the types
described in clause (a) or (d) of this definition (without regard to the
final maturity of the underlying security) entered into with any financial
institution meeting the qualifications specified in clause (b) above or any
primary dealer in U.S. government securities, and (d) commercial paper
rated at least A-1 or the equivalent thereof by S&P and at least P-1 or the
equivalent thereof by Moody's at the time of purchase and in each case
maturing within six months after the date of acquisition.
<PAGE>
7
"Change of Control": a Change of Control shall be deemed to occur (a)
with respect to the Borrower (i) at any time when the Merger Agreement is
in effect, and at any time after the consummation of the Merger, if a
"person" or a "group" (within the meaning of Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934) becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934) of more
than 50% of the then outstanding voting stock of the Borrower; (ii) at any
time after the Merger Agreement has terminated (and the Merger has not
occurred), if any "person" or "group" becomes the "beneficial owner" of
more than 30% of the outstanding shares of voting stock of the Borrower; or
(iii) at any time, if the majority of the Board of Directors of the
Borrower shall not be Continuing Directors of the Borrower; and (b) with
respect to Burlington, at any time while the Merger Agreement is in effect,
and at any time after the consummation of the Merger, if a "person" or a
"group" becomes the "beneficial owner" of more than 50% of the then
outstanding voting stock of Burlington. For purposes of this definition,
"Continuing Directors" means, as of any date and with respect to any
Person, (A) individuals who on the date one year prior to such date were
members of such Person's Board of Directors and (B) any new Directors whose
nomination for election by such Person's shareholders was approved by a
vote of at least a majority of the Directors then still in office who
either were Directors on the date one year prior to such date or whose
nomination for election was previously so approved. The consummation of the
Merger, and the reconstitution of the Board of Directors of the Borrower at
the time of the Merger as contemplated by the Merger Agreement, shall not
constitute a Change of Control.
"Closing Date": the date on which the conditions precedent set forth
in subsection 8.1 shall be satisfied.
"Co-Arrangers": as defined in the Preamble to this Agreement.
"Commitment": as to any Lender, the collective reference to such
Lender's Term Loan Commitment, Tranche A Revolving Credit Commitment and
Tranche B Revolving Credit Commitment; as to all the Lenders, the
"Commitments."
"Commitment Percentage": as to any Lender at any time, the percentage
which such Lender's Commitment then constitutes of the aggregate
Commitments (or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such
Lender's Loans then outstanding constitutes of the aggregate principal
amount of the Loans then outstanding).
"Committed Loans": the collective reference to the Term Loans and the
Revolving Credit Loans.
"Consolidated Capital Expenditures": for any period, the amount of
capital expenditures of the Borrower and its Consolidated Subsidiaries for
such period as
<PAGE>
8
included on the consolidated statement of cash flows prepared in accordance
with GAAP.
"Consolidated EBIT": for any period, Consolidated Income From
Continuing Operations for such period, plus Consolidated Interest Expense
for such period, plus the amount of income taxes deducted from earnings in
determining such Consolidated Income From Continuing Operations, plus
(after the Merger) the Special Charges Adjustment, if any, for such period.
"Consolidated EBITDA": for any period, Consolidated Income From
Continuing Operations for such period, plus Consolidated Interest Expense
for such period, plus the amount of income taxes, depreciation and
amortization deducted from earnings in determining such Consolidated Income
From Continuing Operations, plus Merger-Related Costs and Accelerated
Vesting Costs deducted from earnings in determining such Consolidated
Income From Continuing Operations, plus (after the Merger) the Special
Charges Adjustment, if any, for such period; provided, that not more than
$52,500,000 in the aggregate may be included for Merger-Related Costs in
calculating Consolidated EBITDA from and after October 1, 1994.
"Consolidated Fixed Charges": for any period, the sum of (a)
Consolidated Interest Expense plus (b) Consolidated Lease Expense plus (c)
Consolidated Receivables Financing Expense plus (d) dividends paid on
preferred stock during such period.
"Consolidated Income From Continuing Operations": for any period, the
consolidated income (or loss) of the Borrower and its Consolidated
Subsidiaries from continuing operations for such period, determined in
accordance with GAAP.
"Consolidated Interest Expense": for any period, the amount of
consolidated interest expense of the Borrower and its Consolidated
Subsidiaries for such period, as included in a statement of operations
prepared in accordance with GAAP.
"Consolidated Lease Expense": for any period, the amount of
consolidated expense of the Borrower and its Consolidated Subsidiaries for
such period for rent or lease payments under leases (excluding amounts paid
for time and mileage charges for equipment) that are not capitalized, as
included in a statement of operations prepared in accordance with GAAP, but
exclusive of any amounts required to be paid by the Borrower or a
Consolidated Subsidiary (whether or not designated as rents or additional
rents) on account of maintenance, repairs, insurance, taxes and similar
charges.
"Consolidated Net Income": for any period, the consolidated net
income (or loss) of the Borrower and its Consolidated Subsidiaries for such
period, determined in accordance with GAAP.
<PAGE>
9
"Consolidated Receivables Financing Expense": for any period, the
expense amount of the Borrower and its Consolidated Subsidiaries for such
period, as included in a statement of operations prepared in accordance
with GAAP, attributable to Accounts Receivable Financings.
"Consolidated Subsidiary": at any date, any Subsidiary or other
entity the accounts of which are consolidated with those of the Borrower in
its consolidated financial statements prepared in accordance with GAAP as
of such date.
"Consolidated Total Debt": the aggregate amount of all Debt of the
Borrower and its Consolidated Subsidiaries, plus all related unamortized
debt discount, plus any Accounts Receivable Financing Amount, determined on
a consolidated basis; provided that (i) any Debt of Pipeline Partners for
which a Subsidiary is liable solely by virtue of being a general partner of
such debtor and (ii) an amount not to exceed $350,000,000 of Receivables
Program Obligations that do not constitute Debt shall not be counted for
purposes of determining Consolidated Total Debt.
"Controlling Person": any Person that is in control of the Borrower
(such control being the power to direct or cause a direction of the
management and policies of the Borrower, whether through the ownership of
voting stock, by contract or otherwise), but the mere holding of a position
as an officer or a director of the Borrower shall not, in the absence of
other factors, cause a Person to be a Controlling Person. Prior to the
Merger or the Alternative Merger, Burlington shall not constitute a
Controlling Person as a result of its execution, delivery and performance
of the Merger Agreement.
"Debt": of any Person at any date, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(c) all accrued obligations of such Person to pay the deferred purchase
price of property or services, except (i) any obligation with respect to an
asset the purchase price of which does not exceed $50,000, (ii) any
obligation arising in the ordinary course of business and payable in full
in less than one year and (iii) accounts payable or accrued expenses
arising in the ordinary course of business and payable in full in less than
one year, (d) all lease obligations of such Person as lessee which would be
capitalized in accordance with GAAP, (e) all Debt of others secured by a
Lien on any asset of such Person, whether or not such Debt is otherwise an
obligation of such Person (but only to the extent of the fair market value
of the asset subject to such Lien), (f) all obligations of such Person in
respect of acceptances issued or created for the account of such Person and
all obligations of such Person which have become due and payable to
reimburse the issuing bank or other Person in respect of a letter of credit
or similar instrument issued for such Person's account, (g) any obligations
of the Borrower or any Subsidiary under Receivables Documents to repurchase
or otherwise insure the collectability of Receivables Program Assets other
than (i) any such obligations for
<PAGE>
10
breach of warranty claims and (ii) any such obligations under expense
reimbursement provisions, indemnity provisions and interest and yield
protection provisions and (h) all obligations of others of the character
described in the foregoing clauses (a) through (g) Guaranteed by such
Person (but only to the extent of the maximum liability of such Person
under such Guarantee).
"Default": any of the events specified in Section 11, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Disposition": the sale, assignment, lease, exchange, transfer or
other disposition of any asset, other than equipment or materials which are
unfit or undesirable for use by the Borrower and its Subsidiaries and
disposed of in the ordinary course of business; and "Dispose" shall be the
verb form of such term.
"Documentation Agent": as defined in the Preamble to this Agreement.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Domestic Business Day": any day except a Saturday, Sunday or other
day on which commercial banks in New York City are authorized by law to
close.
"Domestic Lending Office": as to each Lender, its office located at
its address set forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Domestic Lending Office) or such
other office as such Lender may hereafter designate as its Domestic Lending
Office by notice to the Borrower and the Administrative Agent.
"Eligibility Test": the Borrower shall be deemed to have met the
Eligibility Test for any fiscal quarter if Adjusted Consolidated Cash Flow
for such fiscal quarter exceeds the amount set forth opposite such fiscal
quarter under the column "Cash Flow Target" on Schedule II.
"Environmental Laws": any and all applicable federal, state, local
and foreign statutes, laws, judicial decisions, regulations, ordinances,
rules, judgments, orders, decrees, injunctions, permits, concessions,
grants, franchises, licenses, governmental agreements and other
restrictions relating to the environment, the effect of the environment on
human health or to emissions, discharges or releases of pollutants,
contaminants, or Hazardous Substances or wastes into the environment
including, without limitation, ambient air, surface water, ground water, or
land, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of pollutants,
contaminants, or Hazardous Substances or wastes or the clean-up or other
remediation thereof.
<PAGE>
11
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group": the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or
any Subsidiary, are treated as a single employer under Section 414 of the
Internal Revenue Code.
"Eurodollar Business Day": any Domestic Business Day on which
commercial banks are open for international business (including dealings in
Dollar deposits) in London.
"Eurodollar Lending Office": as to each Lender, its office, branch or
affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Eurodollar Lending Office) or such other office, branch or affiliate of
such Lender as it may hereafter designate as its Eurodollar Lending Office
by notice to the Borrower and the Administrative Agent.
"Eurodollar Loans": Revolving Credit Loans or Term Loans bearing
interest based upon the Eurodollar Rate in accordance with this Agreement.
"Eurodollar Rate": for any Interest Period, the average (rounded
upward, if necessary, to the next higher 1/16 of 1%) of the respective
rates per annum at which deposits in Dollars are offered by each of the
Reference Lenders to prime banks in the London interbank market at
approximately 11:00 A.M., London time, two Eurodollar Business Days before
the first day of such Interest Period in an amount approximately equal to
the principal amount of the Eurodollar Loan of such Reference Lender to
which such Interest Period is to apply and for a period of time comparable
to such Interest Period.
"Event of Default": any of the events specified in Section 11,
provided that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
"Excess Adjusted Consolidated Cash Flow": for any fiscal quarter, the
amount, if any, by which Adjusted Consolidated Cash Flow for such fiscal
quarter exceeds the amount set forth opposite such fiscal quarter under the
column "Cash Flow Target" on Schedule II.
"Existing Borrower Bank Debt": Debt outstanding under the Existing
Credit Agreement.
<PAGE>
12
"Existing Borrower Securities": (i) $200,000,000 of 12.65% Senior
Notes due October 1, 2000 of the Borrower issued under separate Note
Agreements dated as of October 1, 1990, as amended, between the Borrower
and various financial institutions; and (ii) $100,000,000 of 8-3/8% Notes
due November 1, 2001 and $100,000,000 of 8-5/8% Notes due November 1, 2004,
both issued by the Borrower under a Restated Indenture dated as of November
1, 1994 between the Borrower and The First National Bank of Chicago, as
Trustee.
"Existing Credit Agreement": the Credit Agreement dated as of June 15,
1994 among the Borrower, the Banks named therein, Morgan Guaranty Trust
Company of New York, as Documentation Agent, and Bank of America National
Trust and Savings Association, as Administrative Agent.
"Facility Fee Calculation Amount": as to any Lender on any date, the
sum of (a) the outstanding principal amount of such Lender's Term Loans and
Revolving Credit Loans on such date and (b) the undrawn amount of such
Lender's (i) Term Loan Commitment (during the Term Loan Commitment Period),
(ii) Tranche A Revolving Credit Commitment (during the Tranche A Revolving
Credit Commitment Period) and (iii) Tranche B Revolving Credit Commitment
(during the Tranche B Revolving Credit Commitment Period). In calculating
the "undrawn" amount of any Lender's Commitment for purposes of clause (b)
of this definition, any reduction in the actual availability of such
Lender's Commitment caused by outstanding Money Market Loans shall be
disregarded.
"Facility Fee Rate": during each fiscal quarter of the Borrower (before
or after the Railway Guarantee Event, as indicated in the appropriate
column below), the rate per annum set forth below opposite the Pricing
Ratio Level determined as of the end of the immediately preceding fiscal
quarter, as shown (in the absence of manifest error) on the Pricing Ratio
Certificate delivered for such immediately preceding fiscal quarter:
Pricing Ratio Level Facility Fee Rate Facility Fee Rate
------------------- ----------------- -----------------
(Prior to Railway (From and after
Guarantee Event) Railway Guarantee Event)
Level I .45% .20%
Level II .50 .25
Level III .55 .30
Level IV .55 .30
Level V .625 .375
Level VI .75 .50
; provided, however, that (a) if any payment of facility fees is made
during the period between the first day of a fiscal quarter and the date
which is five Domestic Business
<PAGE>
13
Days after the date of delivery of the Pricing Ratio Certificate for the
immediately preceding fiscal quarter, such facility fee payment shall be
tentatively calculated on the basis of the Facility Fee Rate in effect for
such immediately preceding fiscal quarter until the Facility Fee Rate is
adjusted upon delivery of such Pricing Ratio Certificate and (b) in the
event that no Pricing Ratio Certificate has been delivered for a fiscal
quarter prior to the last day of the next succeeding fiscal quarter, the
Facility Fee Rate shall thereafter be tentatively calculated as that
applicable to Pricing Ratio Level VI until delivery of such Pricing Ratio
Certificate; and provided, further, that during the fiscal quarter in which
the Tender Offer Funding Date occurs, the Facility Fee Rate will be that
applicable to Pricing Ratio Level IV. Changes in the Facility Fee Rate, if
any, resulting from the operation of either of clauses (a) or (b) above for
any fiscal quarter shall be given effect through adjustments to the next
facility fee payment to be made under this Agreement so as to give effect
to such Facility Fee Rate retroactively to the beginning of such fiscal
quarter.
"Federal Funds Rate": for any day, the rate per annum (rounded upward,
if necessary, to the nearest 1/100th of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business
Day next succeeding such day, provided that (a) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Domestic Business Day as so
published on the next succeeding Domestic Business Day, and (b) if no such
rate is so published on such next succeeding Domestic Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to Morgan
Guaranty Trust Company of New York on such day on such transactions as
determined by the Administrative Agent.
"GAAP": generally accepted accounting principles as defined and
determined in accordance with subsection 1.2(b).
"Guarantee": by any Person, any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (b) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part), provided that the term Guarantee
shall not include endorsements for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has a corresponding
meaning.
<PAGE>
14
"Hazardous Substances": any toxic, radioactive, caustic or otherwise
hazardous substance, including petroleum, its derivatives, by-products and
other hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day of
each March, June, September and December, (b) as to any Eurodollar Loan
having an Interest Period of three months or less, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period
longer than three months, each day which is three months, or a whole
multiple thereof, after the first day of such Interest Period and the last
day of such Interest Period, (d) as to any Money Market Loan having an
Interest Period of three months or 90 days, as the case may be, or less,
the last day of such Interest Period and (e) as to any Money Market Loan
having an Interest Period longer than three months or 90 days, as the case
may be, each day which is three months, or a whole multiple thereof, after
the first day of such Interest Period and the last day of such Interest
Period.
"Interest Period": (a) with respect to any Eurodollar Loan:
(i) in respect of any Loan borrowed as or converted into a
Eurodollar Loan, the period commencing on the borrowing or conversion
date, as the case may be, with respect to such Eurodollar Loan and
ending one, two, three or six months thereafter, as selected by the
Borrower in its Notice of Committed Borrowing or Notice of Eurodollar
Conversion, as the case may be, given with respect thereto; and
(ii) in respect of any Eurodollar Loan continued as a
Eurodollar Loan for a subsequent Interest Period, each period
commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six
months thereafter, as selected by the Borrower in its Notice of
Eurodollar Continuation given with respect thereto;
provided, that all of the foregoing provisions relating to Interest Periods
in respect of Eurodollar Loans are subject to the following:
(A) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day that is not a Eurodollar Business Day, such
Interest Period shall be extended to the next succeeding Eurodollar
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Eurodollar
Business Day;
(B) any Interest Period in respect of any Term Loan, Tranche A
Revolving Credit Loan or Tranche B Revolving Credit Loan, as the case
may
<PAGE>
15
be, that would otherwise extend beyond the Term Loan Termination Date,
the Tranche A Revolving Credit Termination Date or the Tranche B
Revolving Credit Maturity Date, as the case may be, shall end on the
Term Loan Termination Date, the Tranche A Revolving Credit Termination
Date or the Tranche B Revolving Credit Maturity Date, respectively.
(C) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Eurodollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall, subject to clause (B)
above, end on the last Eurodollar Business Day of a calendar month; and
(D) the Borrower shall select Interest Periods so as not to require
a payment or prepayment of any Eurodollar Loan during an Interest
Period for such Loan;
(b) with respect to each Money Market LIBOR Loan, the period
commencing on the date of such Loan specified in the applicable Notice of
Money Market Borrowing and ending such whole number of months thereafter as
the Borrower may elect in accordance with Section 5; provided, that all of
the foregoing provisions relating to Interest Periods in respect of Money
Market LIBOR Loans are subject to the following:
(i) any Interest Period pertaining to a Money Market LIBOR
Loan that would otherwise end on a day that is not a Eurodollar
Business Day shall be extended to the next succeeding Eurodollar
Business Day unless such Eurodollar Business Day falls in another
calendar month, in which case such Interest Period shall end on the
next preceding Eurodollar Business Day;
(ii) any Interest Period pertaining to a Money Market LIBOR
Loan that begins on the last Eurodollar Business Day of a calendar
month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall,
subject to clause (iii) below, end on the last Eurodollar Business Day
of a calendar month; and
(iii) any Interest Period in respect of any such Tranche
A Money Market Loan that would otherwise end after the Tranche A
Revolving Credit Termination Date shall end on the Tranche A Revolving
Credit Termination Date, and any Interest Period in respect of any
such Tranche B Money Market Loan that would otherwise end after the
Tranche B Revolving Credit Maturity Date shall end on the Tranche B
Revolving Credit Maturity Date; and
(c) with respect to each Money Market Absolute Rate Loan, the period
commencing on the date of such Loan specified in the applicable Notice of
Money
<PAGE>
16
Market Borrowing and ending such number of days thereafter (but not less
than 7 nor more than 365 days) as the Borrower may elect in accordance with
Section 5; provided, that all of the foregoing provisions relating to
Interest Periods in respect of Money Market Absolute Rate Loans are subject
to the following:
(i) any Interest Period pertaining to a Money Market
Absolute Rate Loan that would otherwise end on a day that is not a
Eurodollar Business Day shall be extended to the next succeeding
Eurodollar Business Day; and
(ii) any Interest Period in respect of any such Tranche A
Money Market Loan that would otherwise end after the Tranche A
Revolving Credit Termination Date shall end on the Tranche A Revolving
Credit Termination Date, and any Interest Period in respect of any
such Tranche B Money Market Loan that would otherwise end after the
Tranche B Revolving Credit Maturity Date shall end on the Tranche B
Revolving Credit Maturity Date.
"Interest Rate Agreement": an interest rate protection agreement,
interest rate future, interest rate option, interest rate cap or other
interest rate hedge arrangement, providing to the Borrower protection
against increases in interest rates.
"Internal Revenue Code": the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investment": any investment in any Person, whether by means of share
purchase, capital contribution, loan, time deposit or otherwise.
"Investment Grade Status": a Person shall be deemed to have
Investment Grade Status if such Person's senior, unsecured, non credit-
enhanced debt has an actual or implied rating from Moody's of at least Baa3
and from S&P of at least BBB- and if neither of such rating agencies has
announced that such rating of such rating agency is under review with
negative implications or on watch for possible downgrade.
"Invitation for Money Market Quotes": each request by the Borrower
for Lenders to submit bids to make Money Market Loans, which shall contain
the information in respect of such requested Money Market Loans specified
in Exhibit B and shall be delivered to the Lenders in writing, by telecopy,
or by telephone, immediately confirmed by telecopy.
"Lenders": as defined in the Preamble to this Agreement; such term
shall include Lenders that are parties to this Agreement on the date hereof
and Lenders that become parties to this Agreement pursuant to subsection
13.6(c) or subsection 13.10.
<PAGE>
17
"LIBOR Auction": a solicitation of Money Market Quotes setting forth
Money Market Margins based on the Eurodollar Rate pursuant to Section 5.
"Lien": any mortgage, pledge, hypothecation, assignment (to the
extent such assignment is intended to secure an obligation of any Person),
encumbrance, lien (statutory or other), charge or other security interest
or any preference, priority or other security agreement or, if they have
the same economic effect as any of the foregoing, any preferential
arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
capitalized lease).
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Railway Guarantee and the Stock
Pledge Agreement.
"Loan Parties": the Borrower and (after the Railway Guarantee Event)
Santa Fe Railroad.
"Material Plan": at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $20,000,000.
"Material Subsidiary": Santa Fe Railroad, SFP Pipeline Holdings,
Inc., Santa Fe Pacific Pipelines, Inc., and any other Subsidiary of the
Borrower the consolidated assets of which, as would be shown in a
consolidated balance sheet as at the last day of its most recently ended
fiscal year determined in accordance with GAAP, are in excess of (a) prior
to the Merger, the greater of (i) $50,000,000 and (ii) 5% of Borrower
Consolidated Tangible Net Worth as of the last day of the most recently
ended fiscal year and (b) after the Merger, 5% of Surviving Company
Consolidated Tangible Net Worth as of the last day of the most recently
ended fiscal year. Unless otherwise specified, references in any Loan
Document to "Material Subsidiary" shall be references to a Material
Subsidiary of the Borrower.
"Merger": as defined in the Recitals to this Agreement; such term
shall not include the Alternative Merger.
"Merger Agreement": as defined in the Recitals to this Agreement.
"Merger-Related Costs": expenses incurred by or on behalf of the
Borrower in connection with the Merger Agreement, this Agreement (except
for fees amortized over the term of this Agreement) and the transactions
contemplated thereby and hereby, including, without limitation, the fees
and expenses of attorneys, accountants, lenders, investment bankers,
brokers, finders or other Persons engaged by it or on its behalf.
<PAGE>
18
"Money Market Absolute Rate": as defined in subsection 5.4(b)(iv).
"Money Market Absolute Rate Loan": a Loan to be made by a Lender
pursuant to an Absolute Rate Auction.
"Money Market Lending Office": as to each Lender, its Domestic
Lending Office or such other office, branch or affiliate of such Lender as
it may hereafter designate as its Money Market Lending Office by notice to
the Borrower and the Administrative Agent; provided that any Lender may
from time to time by notice to the Borrower and the Administrative Agent
designate separate Money Market Lending Offices for its Money Market LIBOR
Loans, on the one hand, and its Money Market Absolute Rate Loans, on the
other hand, in which case all references herein to the Money Market Lending
Office of such Lender shall be deemed to refer to either or both of such
offices, as the context may require.
"Money Market LIBOR Loan": a Loan to be made by a Lender pursuant to
a LIBOR Auction (including such a loan bearing interest at the Base Rate
pursuant to clause (ii) of the last sentence of subsection 6.10).
"Money Market Loan": a Money Market LIBOR Loan or a Money Market
Absolute Rate Loan.
"Money Market Margin": as defined in subsection 5.4(b)(iii).
"Money Market Quote": each offer by a Lender to make Money Market
Loans pursuant to an Invitation for Money Market Quotes, which Money Market
Quote shall contain the information specified in Exhibit C and shall be
delivered to the Administrative Agent or the Borrower by telephone,
immediately confirmed by telecopy.
"Money Market Quote Request": each request by the Borrower for
Lenders to submit bids to make Money Market Loans, which shall contain the
information in respect of such requested Money Market Loans specified in
Exhibit A and shall be delivered to the Administrative Agent in writing, by
telecopy notice, or by telephone, immediately confirmed by telecopy.
"Moody's": Moody's Investors Service, Inc.
"Multiemployer Plan": at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which (a) any member
of the ERISA Group is then making or accruing an obligation to make
contributions or (b) any Person, who was at the time of such contribution a
member of the ERISA Group, has within the preceding five plan years made
contributions.
<PAGE>
19
"Net Cash Proceeds": (a) in connection with any Specified
Disposition, the cash proceeds (including any cash payments received by way
of deferred payment of principal pursuant to a note or installment
receivable or purchase price adjustment receivable or otherwise, but only
as and when received) of such Disposition net of all attorneys' fees,
accountants' fees, investment banking fees, survey costs, title insurance
premiums, required debt payments (other than pursuant hereto) and other
customary fees actually incurred in connection therewith and net of taxes
paid or payable as a result thereof and net of purchase price adjustments
reasonably expected to be payable in connection therewith and (b) in
connection with any Specified Securities Issuance, the cash proceeds
received from such issuance, net of all investment banking fees, legal
fees, accountants' fees, underwriting discounts and commissions and other
customary fees and expenses, actually incurred in connection therewith.
"Notice of Base Rate Conversion": as defined in subsection 6.5(a);
each such notice shall be delivered in writing or by telecopy and shall
specify the principal amount of the Eurodollar Loans being converted to
Base Rate Loans pursuant thereto.
"Notice of Committed Borrowing": an irrevocable notice from the Borrower,
delivered pursuant to subsection 2.2, 3.2 or 4.2, as the case may be,
requesting the Lenders to make Committed Loans; each such notice shall be
delivered in writing or by telecopy and shall specify (i) whether Term
Loans, Tranche A Revolving Credit Loans or Tranche B Revolving Credit Loans
are requested thereby, (ii) the amount of such Loans, (iii) whether such
Loans are to be initially Eurodollar Loans, Base Rate Loans or a
combination thereof, and (iv) if such Loans are to be entirely or partly
Eurodollar Loans, the respective amounts of each such Type of Loan and the
length of the initial Interest Period for such Eurodollar Loans.
"Notice of Eurodollar Continuation": as defined in subsection 6.5(b);
each such notice shall be delivered in writing or by telecopy and shall
specify the length or lengths of the Interest Periods to be applicable to
the Eurodollar Loans being continued pursuant thereto.
"Notice of Eurodollar Conversion": as defined in subsection 6.5(a);
each such notice shall be delivered in writing or by telecopy and shall
specify the principal amount of Base Rate Loans being converted to
Eurodollar Loans pursuant thereto and the length or lengths of the initial
Interest Period(s) applicable thereto.
"Notice of Money Market Borrowing": each confirmation by the Borrower
of its acceptance of Money Market Quotes, which Notice of Money Market
Borrowing shall be substantially in the form of Exhibit D and shall be
delivered to the Administrative Agent by telecopy.
"Participant": as defined in subsection 13.6(b).
<PAGE>
20
"PBGC": the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.
"Plan": at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code
and either (i) is maintained, or contributed to, by any member of the ERISA
Group for employees of any member of the ERISA Group or (ii) has at any
time within the preceding five years been maintained, or contributed to, by
any Person which was at the time of such maintenance or contribution a
member of the ERISA Group for employees of any Person which was at such
time a member of the ERISA Group.
"Pipeline Partners": Santa Fe Pacific Pipeline Partners, L.P.
"Pricing Ratio Certificate": a certificate, substantially in the form
of Exhibit J, delivered pursuant to subsection 9.1(e).
"Pricing Ratio Level": for purposes of the Pricing Ratio Certificate
delivered following the end of a fiscal quarter of the Borrower, the ratio
of (i) Consolidated EBITDA for the four consecutive fiscal quarters ended
with and including such fiscal quarter to (ii) the amount of Consolidated
Total Debt as at the end of such fiscal quarter, as set forth below:
<TABLE>
<CAPTION>
Level Pricing Ratio
- ----------------------- -------------------------------
<S> <C>
Level I .42 or higher
Level II at least .38 but lower than .42
Level III at least .34 but lower than .38
Level IV at least .30 but lower than .34
Level V at least .26 but lower than .30
Level VI lower than .26
</TABLE>
"Primary Restricted Payments Basket": on any calculation date, the
sum of (a) the Basic Amount plus (b) $5,000,000 for each fiscal quarter
ended after the date of this Agreement in which the Borrower met the
Eligibility Test. For purposes of this definition, the "Basic Amount"
shall be (i) on any calculation date during the fiscal quarter ending March
31, 1995, $30,000,000, (ii) on any calculation date during the fiscal
quarter ending June 30, 1995, $40,000,000 and (iii) on any calculation date
thereafter, $50,000,000.
<PAGE>
21
"Prime Rate": the rate of interest publicly announced from time to
time by Morgan Guaranty Trust Company of New York as its prime rate at its
principal office in New York City.
"Railway Guarantee": the Guarantee to be made by Santa Fe Railroad in
favor of the Administrative Agent as a condition to the occurrence of the
Railway Guarantee Event, substantially in the form of Exhibit F, as the
same may be amended, supplemented or otherwise modified from time to time.
"Railway Guarantee Event": the execution and delivery by Santa Fe
Railroad of the Railway Guarantee to the Administrative Agent, and the
delivery to the Administrative Agent of (a) executed legal opinions
substantially in the forms of, and from the counsel specified in, Exhibits
G-5, G-6 and G-7 (with such changes therein as shall be approved by the
Administrative Agent), (b) such evidence of the corporate authority,
authorization and incumbency of signing officers of Santa Fe Railroad as
the Administrative Agent shall reasonably request and (c) copies of all
necessary governmental and other consents and approvals in respect of the
Railway Guarantee (if any are required), and if none are required a
certificate of the Borrower to such effect.
"Receivables Documents": a receivables purchase agreement entered
into by the Borrower, a Selling Subsidiary and/or a Receivables Subsidiary
and each other instrument, agreement and other document entered into by the
Borrower or any Selling Subsidiary or Receivables Subsidiary relating to
the transactions contemplated by such receivables purchase agreement,
including but not limited to the transfer of the Receivables Program Assets
by the Borrower and the Selling Subsidiaries pursuant to such receivables
purchase agreement.
"Receivables Program Assets": (a) all rights of the Borrower or any
Selling Subsidiary to payments (whether constituting accounts, chattel
paper, instruments, general intangibles or otherwise, and including the
right to payment of any interest or finance charges) which are transferred
by the Borrower, a Selling Subsidiary or a Receivables Subsidiary pursuant
to the Receivables Documents, (b) all rights, title and interest of the
Borrower, a Selling Subsidiary or a Receivables Subsidiary in goods
relating to a sale that gave rise to such rights to payment, (c) security
interests or liens (and the property subject thereto) purporting to secure
such rights to payment, (d) all guaranties and other agreements or
arrangements of whatever character from time to time supporting such rights
to payment, (e) lock-boxes and bank accounts of the Borrower, any Selling
Subsidiary or a Receivables Subsidiary in which proceeds of any of the
foregoing are held, and all investments from such accounts and other claims
and rights in connection therewith, (f) rights and interests of a
Receivables Subsidiary under Receivables Documents, and (g) and all
collections (including recoveries) and other proceeds of the assets
described in the foregoing clauses.
<PAGE>
22
"Receivables Program Obligations": (a) notes, trust certificates,
undivided interests, partnership interests or other interests representing
the right to be paid a specified principal amount from the Receivables
Program Assets, and (b) related obligations of the Borrower, a Subsidiary
or a Special Purpose Vehicle (including, without limitation, rights in
respect of interest or yield, breach of warranty claims and expense
reimbursement and indemnity provisions).
"Receivables Subsidiary": a special purpose Wholly-Owned Subsidiary
created in connection with the transactions contemplated by an Accounts
Receivable Financing, which Subsidiary engages in no activities other than
those incidental to such Accounts Receivable Financing.
"Reference Lenders": Morgan Guaranty Trust Company of New York, The
Northern Trust Company and National Westminster Bank USA.
"Register": as defined in subsection 13.6(f).
"Regulation G": Regulation G of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"Regulation U": Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"Required Lenders": at any time prior to the date on which Lenders
other than the Arranging Agents have become parties to this Agreement,
Lenders the Commitment Percentages of which aggregate at least 80%; and at
any time thereafter, Lenders the Commitment Percentages of which aggregate
at least 51%.
"Restricted Payments": as defined in subsection 10.5.
"Revolving Credit Commitments": the collective reference to the
Tranche A Revolving Credit Commitments and the Tranche B Revolving Credit
Commitments.
"Revolving Credit Loans": the collective reference to the Tranche A
Revolving Credit Loans and the Tranche B Revolving Credit Loans.
"S&P": Standard & Poor's Ratings Group.
"Sale and Leaseback Transaction": as defined in subsection 10.8.
"Santa Fe Railroad": The Atchison, Topeka and Santa Fe Railway
Company, a Delaware corporation, and its successors.
<PAGE>
23
"Selling Subsidiary": any Subsidiary other than a Receivables
Subsidiary which is a party to a Receivables Document.
"Shares": as defined in the Recitals to this Agreement.
"Special Charges": the amount of one-time costs arising out of the
Merger, which would include separation, relocation, retraining and other
similar non-recurring costs, which would be deducted from earnings in any
period in determining Consolidated Income From Continuing Operations for
such period.
"Special Charges Adjustment": for any calculation of Consolidated
EBIT or Consolidated EBITDA for the four consecutive fiscal quarters ended
with (i) the first fiscal quarter in which Special Charges are deducted in
determining Consolidated Income From Continuing Operations (the "Base
Quarter"), 100% of Special Charges deducted from earnings in such period of
four fiscal quarters in determining Consolidated Income From Continuing
Operations for such period, (ii) the fiscal quarter immediately following
the Base Quarter, 75% of Special Charges deducted from earnings in such
period of four fiscal quarters in determining Consolidated Income From
Continuing Operations for such period, (iii) the second fiscal quarter
following the Base Quarter, 50% of Special Charges deducted from earnings
in such period of four fiscal quarters in determining Consolidated Income
From Continuing Operations for such period and (iv) the third fiscal
quarter following the Base Quarter, 25% of Special Charges deducted from
earnings in such period of four fiscal quarters in determining Consolidated
Income From Continuing Operations for such period.
"Special Purpose Vehicle": a trust, partnership or other special
purpose Person established by the Borrower and/or its Subsidiaries to
implement an Accounts Receivable Financing.
"Specified Disposition": as defined in subsection 10.4(c).
"Specified Obligations": with respect to any Person, the collective
reference to (a) the Debt of such Person and (b) the obligations of such
Person to make payments to counterparties under Interest Rate Agreements in
the event of the occurrence of a termination event thereunder.
"Specified Securities Issuance": any issuance by the Borrower or any
of its Subsidiaries of any equity securities, or of any debt securities
other than as permitted by subsection 10.2.
"Stock Pledge Agreement": the Stock Pledge Agreement to be executed
and delivered by the Borrower, substantially in the form of Exhibit E, as
the same may be amended, supplemented or otherwise modified from time to
time.
<PAGE>
24
"Subsidiary": any corporation or other entity of which securities or
other ownership interests having ordinary voting power to elect a majority
of the board of directors or other persons performing similar functions are
at the time directly or indirectly owned by the Borrower (or, if such term
is used with reference to any other Person, by such other Person). Unless
otherwise specified, references in any Loan Document to "Subsidiary" shall
be references to a Subsidiary of the Borrower.
"Surviving Company Consolidated Tangible Net Worth": at any date on
or after the date of the Merger, the consolidated stockholders' equity of
Burlington (as the surviving corporation of the Merger) and its
Consolidated Subsidiaries less their consolidated Intangible Assets, all as
included in a balance sheet prepared in accordance with GAAP as of such
date. For purposes of this definition "Intangible Assets" means the amount
(to the extent reflected in such balance sheet) of (i) all write-ups (other
than write-ups resulting from foreign currency translations and write-ups
of assets of a going concern business made within twelve months after the
acquisition of such business) subsequent to the date of the Merger in the
book value of any asset owned by the Borrower or a Consolidated Subsidiary,
(ii) all Investments in unconsolidated Subsidiaries, (iii) all equity
Investments in Persons that are not Subsidiaries, and (iv) all unamortized
debt issuance costs, goodwill, patents, trademarks, service marks, trade
names, copyrights, organization or developmental expenses and other
intangible assets (other than unamortized debt discount).
"Syndication Supplement": the Syndication Supplement, substantially
in the form of Exhibit I, to be executed and delivered pursuant to
subsection 13.10.
"Tender Offer Funding Date": the date of payment by the Borrower for
the Shares purchased by it pursuant to the Borrower Tender Offer, which
shall be the date of the initial Term Loans (but in any event not later
than May 15, 1995).
"Term Loan": as defined in subsection 2.1.
"Term Loan Commitment": as to any Lender, the obligation of such
Lender to make Term Loans to the Borrower in an aggregate principal amount
not to exceed the amount set forth opposite such Lender's name under the
column "Term Loan Commitment" on Schedule I, as such amount may be changed
from time to time in accordance with the provisions of this Agreement.
"Term Loan Commitment Period": the period from and including the
Tender Offer Funding Date to and including May 15, 1995.
"Term Loan Termination Date: the date on which the last principal
installment in respect of the Term Loans is due (or such earlier date on
which such Loans shall become due and payable pursuant to the terms of this
Agreement).
<PAGE>
25
"Tranche": the collective reference to Term Loans, Tranche A
Revolving Credit Loans or Tranche B Revolving Credit Loans, as the case may
be, the then current Interest Periods with respect to all of which begin on
the same date and end on the same later date (whether or not such Loans
shall originally have been made on the same day).
"Tranche A Money Market Loans ": as defined in subsection 5.2
"Tranche A Revolving Credit Commitment": as to any Lender, the
obligation of such Lender to make Tranche A Revolving Credit Loans to the
Borrower hereunder in an aggregate principal amount at any one time
outstanding not to exceed the amount set forth opposite such Lender's name
under the column "Tranche A Revolving Credit Commitment" on Schedule I, as
such amount may be changed from time to time in accordance with the
provisions of this Agreement.
"Tranche A Revolving Credit Commitment Period": the period from and
including the Tender Offer Funding Date to and including December 31, 1999.
"Tranche A Revolving Credit Loans": as defined in subsection 3.1.
"Tranche A Revolving Credit Termination Date": the last day of the
Tranche A Revolving Credit Commitment Period (or such earlier date on which
the Tranche A Revolving Credit Commitments shall terminate pursuant to the
terms of this Agreement).
"Tranche B Money Market Loans ": as defined in subsection 5.2.
"Tranche B Revolving Credit Commitment": as to any Lender, the
obligation of such Lender to make Tranche B Revolving Credit Loans to the
Borrower hereunder in an aggregate principal amount at any one time
outstanding not to exceed the amount set forth opposite such Lender's name
under the column "Tranche B Revolving Credit Commitment" on Schedule I, as
such amount may be changed from time to time in accordance with the
provisions of this Agreement.
"Tranche B Revolving Credit Commitment Period": the period from and
including the Tender Offer Funding Date to the earliest of (a) December 31,
1997, (b) the date which is six months after the issuance by the Interstate
Commerce Commission, or successor agency, of a final decision approving the
Merger, (c) the date which is six months after the issuance by the
Interstate Commerce Commission, or successor agency, of a final decision
disapproving the Merger and (d) the date of termination of the Merger
Agreement.
"Tranche B Revolving Credit Loans": as defined in subsection 4.1.
<PAGE>
26
"Tranche B Revolving Credit Maturity Date": the earliest of (a)
December 31, 1997, (b) the date which is six months after the issuance by
the Interstate Commerce Commission, or successor agency, of a final
decision (either approval or disapproval) in respect of the Merger and (c)
the date which is six months after the termination of the Merger Agreement.
"Tranche B Revolving Credit Termination Date": the last day of the
Tranche B Revolving Credit Commitment Period (or such earlier date on which
the Tranche B Revolving Credit Commitments shall terminate pursuant to the
terms of this Agreement).
"Type": as to any Committed Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Unfunded Liabilities": with respect to any Plan at any time, the
amount (if any) by which (a) the value of all benefit liabilities under
such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (b)
the fair market value of all Plan assets allocable to such liabilities
under Title IV of ERISA (excluding any accrued but unpaid contributions),
all determined as of the then most recent valuation date for such Plan, but
only to the extent that such excess represents a potential liability of a
member of the ERISA Group to the PBGC or any other Person under Title IV of
ERISA.
"United States": the United States of America, including the States
and the District of Columbia, but excluding its territories and
possessions.
"Value": with respect to a Sale and Leaseback Transaction, as of any
particular time, the amount equal to the greater of (a) the net proceeds of
the sale or transfer of the property leased pursuant to such Sale and
Leaseback Transaction or (b) the fair market value of such property at the
time of entering into such Sale and Leaseback Transaction, in either case,
divided first by the number of full years of the term of the lease and then
multiplied by the number of full years of such term remaining at the time
of determination, without regard to any renewal or extension options
contained in the lease.
"Wholly-Owned Subsidiary": any Subsidiary all of the shares of
capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the
Borrower (or, if such term is used with reference to any other Person, by
such other Person).
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto.
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27
(b) Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be
prepared in accordance with generally accepted accounting principles as in
effect from time to time, applied on a basis consistent (except for changes
concurred with by the Borrower's independent public accountants) with the most
recent audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Lenders; provided, that if the
Borrower notifies the Administrative Agent that the Borrower wishes to amend any
covenant in Section 10 to eliminate the effect of any change in generally
accepted accounting principles on the operation of such covenant (or if the
Administrative Agent notifies the Borrower that the Required Lenders wish to
amend Section 10 for such purpose), then the Borrower's compliance with such
covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Lenders.
(c) From and after the date of the Merger, accounting terms (whether
or not defined herein) relating to the Borrower's financial results for any
periods prior to the Merger shall be deemed to refer to the combined financial
results of the Borrower and Burlington for such periods.
(d) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(e) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. THE TERM LOANS
2.1 Term Loans. Subject to the terms and conditions hereof, each
Lender severally agrees to make term loans ( "Term Loans") to the Borrower
during the Term Loan Commitment Period in an aggregate principal amount not to
exceed the amount of the Term Loan Commitment of such Lender. The Term Loans
may from time to time be (a) Eurodollar Loans, (b) Base Rate Loans or (c) a
combination thereof, as determined by the Borrower and notified to the
Administrative Agent in accordance with subsections 2.2 and 6.5.
2.2 Procedure for Term Loan Borrowing. The Borrower shall request
Term Loans by delivering a Notice of Committed Borrowing to the Administrative
Agent prior to 10:00 A.M., New York City time, (a) three Eurodollar Business
Days prior to the requested Borrowing Date, if all or any part of the Term Loans
to be made on such Borrowing Date
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28
are to be initially Eurodollar Loans or (b) on such Borrowing Date, otherwise,
requesting that the Lenders make Term Loans on such Borrowing Date. Upon receipt
of such Notice of Committed Borrowing the Administrative Agent shall promptly
notify each Lender thereof, and not later than 11:00 A.M., New York City time,
on such Borrowing Date each Lender shall make available to the Administrative
Agent at its office specified in subsection 13.2 the amount of the Term Loan to
be made by such Lender on such Borrowing Date, in immediately available funds.
The Administrative Agent shall on such Borrowing Date make available to the
Borrower the aggregate of the amounts made available to the Administrative Agent
by the Lenders, in like funds as received by the Administrative Agent.
2.3 Repayment of Term Loans. The Borrower hereby unconditionally
promises to pay to the Administrative Agent, for the account of each Lender, the
aggregate principal amount of the Term Loans of such Lender, in ten consecutive
semi-annual installments, payable on the last day of each June and December,
commencing on December 31, 1996. Each such installment in respect of the Term
Loans of each Lender shall be in an amount equal to the percentage set forth
below opposite the relevant installment payment date of the aggregate principal
amount of the Term Loans of such Lender outstanding on the last day of the Term
Loan Commitment Period:
Installment Payment Date % of Principal Amount Due
------------------------ -------------------------
December 31, 1996 5%
June 30, 1997 5%
December 31, 1997 5%
June 30, 1998 5%
December 31, 1998 5%
June 30, 1999 7.5%
December 31, 1999 7.5%
June 30, 2000 10%
December 31, 2000 10%
June 30, 2001 40%.
SECTION 3. THE TRANCHE A REVOLVING CREDIT LOANS
3.1 Tranche A Revolving Credit Commitments. (a) Subject to the
terms and conditions hereof, each Lender severally agrees to make revolving
credit loans ("Tranche A Revolving Credit Loans") to the Borrower from time to
time during the Tranche A Revolving Credit Commitment Period in an aggregate
principal amount at any one time outstanding not to exceed the amount of such
Lender's Tranche A Revolving Credit Commitment; provided, that no Tranche A
Revolving Credit Loan may be made if, after giving effect to such Loan and to
any simultaneous repayment of outstanding Loans, the aggregate outstanding
principal amount of Tranche A Revolving Credit Loans and Tranche A Money Market
Loans would exceed the aggregate amount of the Tranche A Revolving Credit
Commitments. During the
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29
Tranche A Revolving Credit Commitment Period the Borrower may use the Tranche A
Revolving Credit Commitments by borrowing Tranche A Revolving Credit Loans,
prepaying Tranche A Revolving Credit Loans in whole or in part, and reborrowing
Tranche A Revolving Credit Loans, all in accordance with the terms and
conditions hereof.
(b) The Tranche A Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) Base Rate Loans or (iii) a combination thereof, as
determined by the Borrower and notified to the Administrative Agent in
accordance with subsections 3.2 and 6.5; provided, that no Tranche A Revolving
Credit Loan shall be made as a Eurodollar Loan after the day that is one month
prior to the Tranche A Revolving Credit Termination Date.
3.2 Procedure for Tranche A Revolving Credit Borrowing. The
Borrower shall request Tranche A Revolving Credit Loans by delivering a Notice
of Committed Borrowing to the Administrative Agent prior to 10:00 A.M., New York
City time, (a) three Eurodollar Business Days prior to the requested Borrowing
Date, if all or any part of the requested Tranche A Revolving Credit Loans are
to be initially Eurodollar Loans or (b) on such Borrowing Date, otherwise,
requesting the Lenders to make Tranche A Revolving Credit Loans on such
Borrowing Date. Upon receipt of such Notice of Committed Borrowing the
Administrative Agent shall promptly notify each Lender thereof, and not later
than 11:00 A.M., New York City time, on such Borrowing Date each Lender shall
make available to the Administrative Agent at its office specified in subsection
13.2 the amount of the Tranche A Revolving Credit Loan to be made by such Lender
on such Borrowing Date, in immediately available funds. The Administrative
Agent shall on such Borrowing Date make available to the Borrower the aggregate
of the amounts made available to the Administrative Agent by the Lenders, in
like funds as received by the Administrative Agent.
3.3 Repayment of Tranche A Revolving Credit Loans. The Borrower
hereby unconditionally promises to pay to the Administrative Agent, for the
account of each Lender, on the Tranche A Revolving Credit Termination Date, the
aggregate principal amount of the Tranche A Revolving Credit Loans of such
Lender outstanding on such date.
SECTION 4. THE TRANCHE B REVOLVING CREDIT LOANS
4.1 Tranche B Revolving Credit Commitments. (a) Subject to the
terms and conditions hereof, each Lender severally agrees to make revolving
credit loans ("Tranche B Revolving Credit Loans") to the Borrower from time to
time during the Tranche B Revolving Credit Commitment Period in an aggregate
principal amount at any one time outstanding not to exceed the amount of such
Lender's Tranche B Revolving Credit Commitment; provided, that (i) no Tranche B
Revolving Credit Loan may be made if, after giving effect to such Loan and to
any simultaneous repayment of outstanding Loans, the aggregate outstanding
principal amount of Tranche B Revolving Credit Loans and Tranche B Money Market
Loans would exceed the aggregate amount of the Tranche B Revolving Credit
Commitments and (ii)
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30
no Tranche B Revolving Credit Loan may be made until the date on which the Term
Loan Commitments have been fully drawn. During the Tranche B Revolving Credit
Commitment Period the Borrower may use the Tranche B Revolving Credit
Commitments by borrowing Tranche B Revolving Credit Loans, prepaying Tranche B
Revolving Credit Loans in whole or in part, and reborrowing Tranche B Revolving
Credit Loans, all in accordance with the terms and conditions hereof.
(b) The Tranche B Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) Base Rate Loans or (iii) a combination thereof, as
determined by the Borrower and notified to the Administrative Agent in
accordance with subsections 3.2 and 6.5; provided, that no Tranche B Revolving
Credit Loan shall be made as a Eurodollar Loan after the day that is one month
prior to the Tranche B Revolving Credit Termination Date.
4.2 Procedure for Tranche B Revolving Credit Borrowing. The
Borrower shall request Tranche B Revolving Credit Loans by delivering a Notice
of Committed Borrowing to the Administrative Agent prior to 10:00 A.M., New York
City time, (a) three Eurodollar Business Days prior to the requested Borrowing
Date, if all or any part of the requested Tranche B Revolving Credit Loans are
to be initially Eurodollar Loans or (b) on such Borrowing Date, otherwise,
requesting the Lenders to make Tranche B Revolving Credit Loans on such
Borrowing Date. Upon receipt of such Notice of Committed Borrowing the
Administrative Agent shall promptly notify each Lender thereof, and not later
than 11:00 A.M., New York City time, on such Borrowing Date each Lender shall
make available to the Administrative Agent at its office specified in subsection
13.2 the amount of the Tranche B Revolving Credit Loan to be made by such Lender
on such Borrowing Date, in immediately available funds. The Administrative
Agent shall on such Borrowing Date make available to the Borrower the aggregate
of the amounts made available to the Administrative Agent by the Lenders, in
like funds as received by the Administrative Agent.
4.3 Repayment of Tranche B Revolving Credit Loans. The Borrower
hereby unconditionally promises to pay to the Administrative Agent, for the
account of each Lender, on the Tranche B Revolving Credit Maturity Date, the
aggregate principal amount of the Tranche B Revolving Credit Loans of such
Lender outstanding on such date.
SECTION 5. THE MONEY MARKET LOANS
5.1 Money Market Option. The Borrower may, as set forth in this
Section, at any time when the Borrower's senior, unsecured, non-credit-enhanced
debt has an actual or implied rating from Moody's of at least Baa3 or from S&P
of at least BBB-, request the Administrative Agent to solicit offers from all
the Lenders to make Money Market Loans to the Borrower. The Lenders may, but
shall have no obligation to, make such offers, and the Borrower may, but shall
have no obligation to, accept any such offers in the manner set forth in this
Section. No Money Market Loan may be made if, after giving effect to such Loan
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31
and to any simultaneous repayment of outstanding Loans, the aggregate
outstanding principal amount of Revolving Credit Loans and Money Market Loans
would exceed the aggregate amount of the Revolving Credit Commitments.
5.2 Money Market Quote Request. When the Borrower wishes to request
offers to make Money Market Loans under this Section, it shall transmit to the
Administrative Agent by telex or facsimile transmission a Money Market Quote
Request so as to be received no later than Noon, New York City time, (a) four
Eurodollar Business Days prior to the Borrowing Date proposed therein, in the
case of a LIBOR Auction, or (b) one Business Day prior to the Borrowing Date
proposed therein, in the case of an Absolute Rate Auction (or, in either case,
such other time or date as the Borrower and the Administrative Agent shall have
mutually agreed and shall have notified to the Lenders not later than the date
of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective), specifying:
(i) the proposed Borrowing Date, which shall be a Eurodollar
Business Day in the case of a LIBOR Auction or a Domestic Business Day in
the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Loans, which shall be
$5,000,000 or a larger whole multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set forth
a Money Market Margin or a Money Market Absolute Rate, and
(v) whether the requested Money Market Loans are to be applied
against unused Tranche A Revolving Credit Commitments ("Tranche A Money
Market Loans") or unused Tranche B Revolving Credit Commitments ("Tranche B
Money Market Loans").
5.3 Invitation for Money Market Quotes. The Administrative Agent,
promptly upon receipt of any Money Market Quote Request, shall send to the
Lenders by telex or facsimile transmission an Invitation for Money Market
Quotes, which shall constitute an invitation by the Borrower to each Lender to
submit Money Market Quotes offering to make the Money Market Loans to which such
Money Market Quote Request relates in accordance with this Section.
5.4 Submission and Contents of Money Market Quotes. (a) Each
Lender may submit, as it may elect in its sole discretion, a Money Market Quote
containing an offer or offers to make Money Market Loans in response to any
Invitation for Money Market Quotes. Each Money Market Quote must comply with
the requirements of this subsection
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32
5.4 and must be submitted to the Administrative Agent by telex or facsimile
transmission at its offices specified in or pursuant to subsection 13.2 not
later than (i) 9:15 A.M., New York City time, three Eurodollar Business Days
prior to the proposed Borrowing Date, in the case of a LIBOR Auction, or (ii)
9:15 A.M., New York City time, on the proposed Borrowing Date, in the case of an
Absolute Rate Auction (or, in either case, such other time or date as the
Borrower and the Administrative Agent shall have mutually agreed and shall have
notified to the Lenders not later than the date of the Money Market Quote
Request for the first LIBOR Auction or Absolute Rate Auction for which such
change is to be effective); provided that Money Market Quotes submitted by the
Administrative Agent (or any affiliate of the Administrative Agent) in the
capacity of a Lender may be submitted, and may only be submitted, if the
Administrative Agent or such affiliate notifies the Borrower of the terms of the
offer or offers contained therein not later than 15 minutes prior to the
deadline for the other Lenders. Subject to Sections 8 and 11, any Money Market
Quote so made shall be irrevocable except with the written consent of the
Administrative Agent given on the instructions of the Borrower.
(b) Each Money Market Quote shall in any case specify:
(i) the proposed Borrowing Date,
(ii) the principal amount of the Money Market Loan for which each
such offer is being made, which principal amount (A) may be greater than or
less than the Revolving Credit Commitments of the quoting Lender, (B) must
be $5,000,000 or a larger whole multiple of $1,000,000, (C) may not exceed
the principal amount of Money Market Loans for which offers were requested
and (D) may be subject to an aggregate limitation as to the principal
amount of Money Market Loans for which offers being made by such quoting
Lender may be accepted,
(iii) in the case of a LIBOR Auction, the margin above or below the
applicable Eurodollar Rate (the "Money Market Margin") offered for each
such Money Market Loan, expressed as a percentage (specified to the nearest
1/16 of 1%) to be added to or subtracted from the Eurodollar Rate,
(iv) in the case of an Absolute Rate Auction, the rate of interest
per annum (specified to the nearest 1/100 of 1%) (the "Money Market
Absolute Rate") offered for each such Money Market Loan, and
(v) the identity of the quoting Lender.
A Money Market Quote may set forth up to three separate offers by the quoting
Lender with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(c) Any Money Market Quote shall be disregarded if it:
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33
(i) is not substantially in conformity with Exhibit C or does not
specify all of the information required by subsection 5.4(b);
(ii) contains qualifying, conditional or similar language;
(iii) proposes terms other than or in addition to those set forth in
the applicable Invitation for Money Market Quotes; or
(iv) arrives after the time set forth in subsection 5.4(a).
5.5 Notice to Borrower. The Administrative Agent shall promptly
notify the Borrower of the terms (a) of any Money Market Quote submitted by a
Lender that is in accordance with subsection 5.4 and (b) of any Money Market
Quote that amends, modifies or is otherwise inconsistent with a previous Money
Market Quote submitted by such Lender with respect to the same Money Market
Quote Request. Any such subsequent Money Market Quote shall be disregarded by
the Administrative Agent unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money Market Quote. The
Administrative Agent's notice to the Borrower shall specify (i) the aggregate
principal amount of Money Market Loans for which offers have been received for
each Interest Period specified in the related Money Market Quote Request, (ii)
the respective principal amounts and Money Market Margins or Money Market
Absolute Rates, as the case may be, so offered and (iii) if applicable,
limitations on the aggregate principal amount of Money Market Loans for which
offers in any single Money Market Quote may be accepted.
5.6 Acceptance and Notice by Borrower. Not later than 10:00 A.M.,
New York City time, (a) three Eurodollar Business Days prior to the proposed
Borrowing Date, in the case of a LIBOR Auction or (b) on the proposed Borrowing
Date, in the case of an Absolute Rate Auction (or, in either case, such other
time or date as the Borrower and the Administrative Agent shall have mutually
agreed and shall have notified to the Lenders not later than the date of the
Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction
for which such change is to be effective), the Borrower shall notify
the Administrative Agent of its acceptance or non-acceptance of the offers
notified to it pursuant to subsection 5.5. In the case of acceptance, such
notice shall be a Notice of Money Market Borrowing and shall specify the
aggregate principal amount of offers for each Interest Period that are accepted.
The Borrower may accept any Money Market Quote in whole or in part; provided
that:
(i) the aggregate principal amount of Money Market Loans made
pursuant to a Money Market Quote Request may not exceed the applicable
amount set forth in such Money Market Quote Request,
(ii) the principal amount of Money Market Loans made on a
Borrowing Date pursuant to a Money Market Quote Request must be $5,000,000
or a larger whole multiple of $1,000,000,
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34
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the case
may be, and
(iv) the Borrower may not accept any offer that is required to
be disregarded as described in subsection 5.4(c) or that otherwise fails to
comply with the requirements of this Agreement.
5.7 Allocations. If offers are made by two or more Lenders with the
same Money Market Margins or Money Market Absolute Rates, as the case may be,
for a greater aggregate principal amount than the amount in respect of which
such offers are accepted for the related Interest Period, the principal amount
of Money Market Loans in respect of which such offers are accepted shall be
allocated by the Administrative Agent among such Lenders as nearly as possible
(in whole multiples of $1,000,000, as the Administrative Agent may deem
appropriate) in proportion to the aggregate principal amounts of such offers.
Determinations by the Administrative Agent of the amounts of Money Market Loans
shall be conclusive in the absence of manifest error.
5.8 Certain Restrictions. The Borrower may request offers to make
Money Market Loans for up to three Interest Periods in a single Money Market
Quote Request. The Borrower may not give a Money Market Quote Request within
five Eurodollar Business Days (or such other number of days as the Borrower and
the Administrative Agent may agree) of any other Money Market Quote Request. No
Money Market Loans may be made on any Borrowing Date if, after giving effect
thereto, there would be outstanding Money Market Loans made on more than five
Borrowing Dates.
5.9 Repayment of Money Market Loans. The Borrower hereby
unconditionally promises to pay to the Administrative Agent, for the account of
the relevant Lender, on the last day of the Interest Period with respect
thereto, the aggregate principal amount of each Money Market Loan of such
Lender.
SECTION 6. CERTAIN PROVISIONS APPLICABLE TO
THE COMMITMENTS AND THE LOANS
6.1 Fees. (a) The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a facility fee (i) for the period from and
including the Allocation Date to the Tender Offer Funding Date, computed at the
rate of .50% per annum, and (ii) for the period from and including the Tender
Offer Funding Date to the date on which the Commitments have terminated and all
Loans have been repaid in full, computed at the Facility Fee Rate, in each case
on the average daily Facility Fee Calculation Amount of such Lender during the
period for which payment is made, payable quarterly in arrears on the date of
execution of this Agreement, on the last day of each March, June, September and
December and on the date on which the Commitments have terminated and all Loans
have
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35
been repaid in full, commencing on the first of such dates to occur after
the Allocation Date.
(b) The Borrower agrees to pay to the Administrative Agent, for the
account of the Arranger, the Co-Arrangers, the Arranging Agents or the
Administrative Agent, as the case may be, the fees on the dates and in the
amounts described or referred to in the fee letter, dated December 22, 1994,
among such parties.
6.2 Minimum Borrowing Amounts. Each borrowing under the Term Loan
Commitments shall be in an amount equal to $25,000,000 or a whole multiple of
$1,000,000 in excess thereof. Each borrowing under the Tranche A Revolving
Credit Commitments or the Tranche B Revolving Credit Commitments shall be in an
amount equal to $10,000,000 or a whole multiple of $1,000,000 in excess thereof.
6.3 Termination or Reduction of Commitments. The Borrower shall have
the right, upon not less than two Domestic Business Days' notice to the
Administrative Agent, to terminate any of the Commitments or, from time to time,
to reduce the amount of any of the Commitments; provided, that no reduction of
the Revolving Credit Commitments shall be permitted if, after giving effect
thereto and to any simultaneous repayment of Revolving Credit Loans and/or Money
Market Loans, (a) the aggregate outstanding principal amount of the Tranche A
Revolving Credit Loans and Tranche A Money Market Loans would exceed the Tranche
A Revolving Credit Commitments or (b) the aggregate outstanding principal amount
of the Tranche B Revolving Credit Loans and Tranche B Money Market Loans would
exceed the Tranche B Revolving Credit Commitments. Any reduction of any of the
Commitments shall be in an amount equal to $10,000,000 or a whole multiple of
$1,000,000 in excess thereof and shall reduce permanently such Commitments then
in effect.
6.4 Optional Prepayments; Mandatory Prepayments. (a) The Borrower
may, (i) upon notice to the Administrative Agent not later than 11:00 A.M., New
York City time, on the date of prepayment, prepay any Base Rate Loans (or any
Money Market Loans bearing interest based upon the Base Rate pursuant to clause
(ii) of the last sentence of subsection 6.10) or (ii) upon at least three
Eurodollar Business Days' notice to the Administrative Agent, prepay any
Eurodollar Loans, in each case in whole or in part in amounts aggregating
$10,000,000 or any larger whole multiple of $1,000,000, by paying the principal
amount to be prepaid together with accrued interest thereon to the date of
prepayment; provided, however, that partial prepayments under paragraph (f) of
this subsection 6.4 shall not be subject to such $10,000,000 minimum or
$1,000,000 multiple restrictions. Upon prepaying any Eurodollar Loan on any date
other than the last day of an Interest Period applicable thereto, the Borrower
shall be obligated to pay the amounts described in subsection 6.16.
(b) Except as provided in subsection 6.4(a) with respect to a Money
Market Loan bearing interest based upon the Base Rate pursuant to clause (ii) of
the last sentence of
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36
subsection 6.10, the Borrower may not prepay all or any
portion of the principal amount of any Money Market Loan prior to the maturity
thereof.
(c) Upon receipt of a notice of prepayment pursuant to this
subsection 6.4, the Administrative Agent shall promptly notify each Lender of
the contents thereof and of such Lender's ratable share (if any) of such
prepayment, and such notice shall not thereafter be revocable by the Borrower.
(d) On the date of receipt by the Borrower of proceeds of any
Specified Securities Issuance, the Borrower shall prepay the Term Loans by an
amount equal to 100% of the Net Cash Proceeds of such Specified Securities
Issuance. It is understood that the foregoing prepayment requirements in
respect of Specified Securities Issuances does not constitute permission to
incur Debt not permitted by subsection 10.2 and other applicable provisions of
this Agreement.
(e) If the Borrower or any Subsidiary makes any Specified Disposition
in respect of which a prepayment of the Loans is required by subsection 10.4(c),
the Borrower shall, not later than the next Interest Payment Date to occur after
such Specified Disposition, prepay the Term Loans by an amount equal to 100% of
the Net Cash Proceeds of such Specified Disposition.
(f) The Borrower will make prepayments in respect of the Term Loans
as required by clause (b) of subsection 10.5.
(g) All partial prepayments in respect of the Term Loans will be
applied to the installments thereof in the inverse order of the scheduled
maturity thereof.
(h) After prepayment in full of the Term Loans, any prepayment
required pursuant to this subsection to be applied in respect of Term Loans
shall instead be applied to the prepayment of Tranche B Revolving Credit Loans
and the simultaneous reduction of the Tranche B Revolving Credit Commitments in
the amount of such prepayment.
(i) If a Change of Control shall occur with respect to the Borrower
or Burlington, the Administrative Agent shall, upon the request of the Required
Lenders, by notice to the Borrower given within six months after the date of
such Change of Control, terminate the Commitments, whereupon the Commitments
shall immediately terminate, and any Loans then outstanding (together with
accrued interest thereon) shall become due and payable on the fifth Eurodollar
Business Day after such notice is given.
6.5 Conversion and Continuation Options. (a) The Borrower may, on
the last day of any Interest Period with respect thereto, convert Eurodollar
Loans to Base Rate Loans by giving notice thereof (a "Notice of Base Rate
Conversion") to the Administrative Agent at least two Domestic Business Days'
prior to the last day of the then current Interest Period in respect of the
Eurodollar Loans being converted. The Borrower may from time to
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37
time convert Base Rate Loans to Eurodollar Loans by giving notice thereof (a
"Notice of Eurodollar Conversion") to the Administrative Agent at least three
Eurodollar Business Days prior to the first day of the Interest Period to be
applicable to such Loans. Upon receipt of any such notice the Administrative
Agent shall promptly notify each Lender thereof. All or any part of outstanding
Eurodollar Loans and Base Rate Loans may be converted as provided herein,
provided that no Loan may be converted into a Eurodollar Loan when any Event of
Default has occurred and is continuing.
(b) The Borrower may continue any Eurodollar Loans as such upon the
expiration of the then current Interest Period with respect thereto by giving
notice thereof (a "Notice of Eurodollar Continuation") to the Administrative
Agent at least three Eurodollar Business Days prior to the last day of such then
current Interest Period, provided that no Eurodollar Loan may be continued as
such when any Event of Default has occurred and is continuing, and provided,
further, that if the Borrower shall fail to give such Notice of Eurodollar
Continuation or if such continuation is not permitted pursuant to the preceding
proviso, such Loans shall be automatically converted to Base Rate Loans on the
last day of such then expiring Interest Period.
6.6 Minimum Amounts of Tranches. All borrowings, conversions and
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of the Loans
comprising each Eurodollar Tranche shall be equal to $10,000,000 or a whole
multiple of $1,000,000 in excess thereof. Not more than eight Tranches may be
outstanding at any time.
6.7 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
shall bear interest during each Interest Period with respect thereto at a rate
per annum equal to the Eurodollar Rate determined for such Interest Period plus
the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum equal
to the Base Rate plus the Applicable Margin.
(c) Each Money Market Loan shall bear interest at the applicable rate
set forth in the Notice of Money Market Borrowing applicable thereto.
(d) If any principal amount of any Loan shall not be paid when due,
from and after the date on which such principal amount was due (i) the
outstanding principal amount of all Eurodollar Loans and Money Market Loans
shall bear interest at 2% above the rate that would otherwise be applicable
thereto until the earlier of (A) the date on which such overdue principal amount
is paid in full and (B) the last day of the respective Interest Periods
applicable to such outstanding Eurodollar Loans and Money Market Loans, and
thereafter the outstanding principal amount of all Eurodollar Loans and Money
Market Loans shall bear interest at a rate equal to 2% above the rate applicable
at such time to Revolving Credit Loans that are Base Rate Loans until such
overdue principal amount is paid in full (as well
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38
after as before judgment) and (ii) the outstanding principal amount of all Base
Rate Loans shall bear interest at a rate equal to 2% above the rate applicable
at such time to Revolving Credit Loans that are Base Rate Loans until such
overdue principal amount is paid in full (as well after as before judgment). If
all or a portion of (i) any interest payable on any Loan or (ii) any facility
fee or other amount payable hereunder, shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), such overdue amount shall
bear interest at a rate per annum which is 2% above the rate applicable at such
time to Revolving Credit Loans that are Base Rate Loans, in each case from the
date of such non-payment until such amount is paid in full (as well after as
before judgment).
(e) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (d) of this
subsection shall be payable from time to time on demand.
6.8 Computation of Interest and Fees. (a) Facility fees and,
whenever it is calculated on the basis of the Prime Rate, interest shall be
calculated on the basis of a 365-(or 366-, as the case may be) day year for the
actual days elapsed; and, otherwise, interest shall be calculated on the basis
of a 360-day year for the actual days elapsed. The Administrative Agent shall
as soon as practicable notify the Borrower and the relevant Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on a Loan
resulting from a change in the Base Rate shall become effective as of the
opening of business on the day on which such change becomes effective. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Lenders of the effective date and the amount of each such change in the Base
Rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error.
(c) If any Reference Lender shall for any reason no longer have a
Commitment or any Loans, such Reference Lender shall thereupon cease to be a
Reference Lender, and if, as a result, there shall only be one Reference Lender
remaining, the Administrative Agent (after consultation with the Borrower and
the Lenders) shall, by notice to the Borrower and the Lenders, designate another
Lender as a Reference Lender so that there shall at all times be at least two
Reference Lenders.
(d) Each Reference Lender shall use its best efforts to furnish
quotations of rates to the Administrative Agent as contemplated hereby. If any
of the Reference Lenders shall be unable or shall otherwise fail to supply such
rates to the Administrative Agent upon its request, the rate of interest shall,
subject to the provisions of subsection 6.10, be determined on the basis of the
quotations of the remaining Reference Lenders or Reference Lender.
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39
6.9 Evidence of Debt. (a) Each Lender shall maintain in accordance
with its usual practice appropriate records evidencing indebtedness of the
Borrower to such Lender resulting from each Loan of such Lender from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.
(b) The Administrative Agent shall maintain the Register pursuant to
subsection 13.6(f), and a record therein for each Lender, in which shall be
recorded (i) the amount of each Loan made hereunder, the Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
(c) The entries made in the Register and the records of each Lender
maintained pursuant to subsection 6.9(a) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such record, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made by
such Lender in accordance with the terms of this Agreement.
6.10 Basis for Determining Interest Rate Inadequate or Unfair. If on
or prior to the first day of any Interest Period for any Eurodollar Loan or
Money Market LIBOR Loan:
(a) the Administrative Agent is advised by the Reference Lenders that
deposits in Dollars (in the applicable amounts) are not being offered by
the Reference Lenders in the relevant market for such Interest Period, or
(b) in the case of Committed Loans, Lenders having 50% or more of the
aggregate amount of the Commitments advise the Administrative Agent that
the Eurodollar Rate as determined by the Administrative Agent will not
adequately and fairly reflect the cost to such Lenders of funding their
Eurodollar Loans for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to the Borrower and
the Lenders, whereupon until the Administrative Agent notifies the Borrower that
the circumstances giving rise to such suspension no longer exist, the
obligations of the Lenders to make, convert Loans into or continue Loans as, as
the case may be, Eurodollar Loans shall be suspended, and any Loan that was to
be converted into, or continued as, a Eurodollar Loan for such Interest Period
shall, instead, be continued as, or converted into, a Base Rate Loan on the
first day of such Interest Period. Unless the Borrower notifies the
Administrative Agent at least two Domestic Business Days before the first day of
any such Interest Period in respect
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40
of any requested Eurodollar Loan or Money Market LIBOR Loan for which a Notice
of Committed Borrowing or Notice of Money Market Borrowing, as the case may be,
has previously been given that it elects not to borrow on such date, (i) if such
requested Loan is a Eurodollar Loan, such Loan shall instead be made as a Base
Rate Loan and (ii) if such requested Loan is a Money Market LIBOR Loan, such
Money Market LIBOR Loan shall bear interest for each day from and including the
first day to but excluding the last day of the Interest Period applicable
thereto at the rate applicable to Base Rate Revolving Credit Loans for such day.
6.11 Illegality. If, on or after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Eurodollar Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for any Lender (or its Eurodollar Lending Office) to make,
maintain or fund its Eurodollar Loans and such Lender shall so notify the
Administrative Agent, the Administrative Agent shall forthwith give notice
thereof to the other Lenders and the Borrower, whereupon until such Lender
notifies the Borrower and the Administrative Agent that the circumstances giving
rise to such suspension no longer exist, the obligation of such Lender to make
Eurodollar Loans shall be suspended. Before giving any notice to the
Administrative Agent pursuant to this subsection, such Lender shall designate a
different Eurodollar Lending Office if such designation will avoid the need for
giving such notice and will not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender. If such Lender shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Eurodollar Loans
to maturity and shall so specify in such notice, the Borrower shall prepay in
full the then outstanding principal amount of each such Eurodollar Loan on the
date required by law (as specified in such notice), together with accrued
interest thereon. Concurrently with prepaying each such Eurodollar Loan, the
Borrower shall borrow a Base Rate Loan in an equal principal amount from such
Lender (on which interest and principal shall be payable contemporaneously with
the related Eurodollar Loans of the other Lenders), and such Lender shall make
such a Base Rate Loan.
6.12 Increased Cost and Reduced Return. (a) If on or after (i) the
date hereof, in the case of any Committed Loan or any obligation to make
Committed Loans, or (ii) the date of the related Money Market Quote, in the case
of any Money Market Loan, the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its Applicable Lending office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System, but excluding any such reserve
requirement in respect of Eurocurrency liabilities described in
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41
paragraph (c) of this subsection 6.12), special deposit, insurance assessment or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender (or its Applicable Lending Office) or on the
interbank eurodollar market any other condition affecting its Eurodollar Loans
or Money Market Loans or its obligation to make such Loans and the result of any
of the foregoing is to increase the cost to such Lender (or its Applicable
Lending Office) of making or maintaining any such Loan, or to reduce the amount
of any sum received or receivable by such Lender (or its Applicable Lending
Office) under this Agreement with respect thereto, by an amount deemed by such
Lender to be material, then, within 15 days after demand by such Lender (with a
copy to the Administrative Agent), the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction.
(b) If any Lender shall have determined that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Lender (or its parent holding company) as a consequence of
such Lender's obligations hereunder to a level below that which such Lender (or
its parent holding company) could have achieved but for such adoption, change,
request or directive (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender (or its parent holding company)
for such reduction.
(c) In addition to, and without duplication of, amounts which may
become payable from time to time pursuant to paragraphs (a) and (b) of this
subsection 6.12, the Borrower agrees to pay to each Lender which requests
compensation under this paragraph (c) by notice to the Borrower, on the last day
of each Interest Period with respect to any Eurodollar Loan made by such Lender,
at any time when such Lender shall be required to maintain reserves against
"Eurocurrency liabilities" under Regulation D of the Board of Governors of the
Federal Reserve System (or, at any time when such Lender may be required by the
Board of Governors of the Federal Reserve System or by any other governmental
authority, whether within the United States or in another relevant jurisdiction,
to maintain reserves against any other category of liabilities which includes
deposits by reference to which the Eurodollar Rate is determined as provided in
this Agreement or against any category of extensions of credit or other assets
of such Lender which includes any such Eurodollar Loans), an additional amount
(determined by such Lender's calculation or, if an accurate calculation is
impracticable, reasonable estimate using such reasonable means of allocation as
such Lender shall determine) equal to the actual costs, if any, incurred
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42
by such Lender during such Interest Period as a result of the applicability of
the foregoing reserves to such Eurodollar Loans.
(d) Each Lender will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to this
subsection 6.12 and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Lender, be otherwise disadvantageous to
such Lender; provided that if a Lender shall not have so notified the Borrower
within 90 days of such event, such Lender may not seek compensation for any
period beginning prior to the date which is 90 days prior to the date upon which
the Borrower is notified of such event. A certificate of any Lender claiming
compensation under this subsection and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods.
(e) The provisions of this subsection shall survive any termination
of this Agreement.
6.13 Taxes. (a) Any and all payments by the Borrower to or for the
account of any Lender or the Administrative Agent hereunder shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings (subject to
paragraph (g) hereof), and all liabilities with respect thereto, excluding, in
the case of each Lender and the Administrative Agent, taxes imposed on or
measured by its net income, and franchise, value added or similar taxes imposed
on it, by a jurisdiction on the basis of a present or former connection between
such jurisdiction and the Lender or Administrative Agent other than a connection
arising solely from such Administrative Agent or Lender having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder to any Lender or the Administrative
Agent, (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this subsection 6.13) such Lender or the Administrative Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law and (iv) the
Borrower shall furnish to the Administrative Agent, at its address referred to
in subsection 13.2, the original or a certified copy of a receipt evidencing
payment thereof.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or charges or
similar levies which
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43
arise from any payment made hereunder or from the execution or delivery of, or
otherwise with respect to, this Agreement (hereinafter referred to as "Other
Taxes").
(c) The Borrower agrees to indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this subsection 6.13) paid by such Lender
or the Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
This indemnification shall be made within 30 days from the date such Lender or
the Administrative Agent (as the case may be) makes written demand therefor. If
any Lender or the Administrative Agent receives any written demand from any
taxing authority asserting a liability for any Taxes or Other Taxes for which
such Lender or the Administrative Agent is entitled to an indemnity under this
paragraph (c), such Lender or Agent shall promptly furnish the Borrower and the
Administrative Agent with a copy of such demand.
(d) If any Lender is a "foreign corporation, partnership or trust"
within the meaning of the Internal Revenue Code, on or prior to the date of its
execution and delivery of this Agreement in the case of each Lender listed on
the signature pages hereof and on or prior to the date on which it becomes a
Lender in the case of each other Lender, and from time to time thereafter (but
only so long as such Lender remains lawfully able to do so), such Lender agrees
with and in favor of the Administrative Agent and the Borrower to deliver to the
Administrative Agent and the Borrower: (i) before the payment of any interest in
the first calendar year and before the payment of any interest in each third
succeeding calendar year during which interest may be paid under this Agreement,
properly completed Internal Revenue Service Forms 1001, or any successor form
prescribed by the Internal Revenue Service, certifying that such Lender is
entitled to benefits under an income tax treaty to which the United States is a
party which reduces the rate of withholding tax on payments of interest; (ii)
before the payment of any interest is due in the first taxable year of such
Lender and in each succeeding taxable year of such Lender during which interest
may be paid under this Agreement, two properly completed and executed copies of
Internal Revenue Service Form 4224, or any successor form prescribed by the
Internal Revenue Service, certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or a business in
the United States; or (iii) such other form or forms as may be required under
the Internal Revenue Code or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding tax. Such Lender
agrees to promptly notify the Administrative Agent and the Borrower of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction. In addition, in the event any Lender that claims
exemption from, or reduction of, withholding tax under a United States tax
treaty by providing Internal Revenue Service Form 1001 sells, assigns, grants a
participation in, or otherwise transfers all or part of the obligations of the
Borrower to such Lender under this Agreement, such Lender agrees to notify the
Administrative Agent and the Borrower of the percentage amount in which it is no
longer the beneficial owner of obligations of the Borrower to such Lender under
this Agreement. To the extent of such percentage amount, the Administrative
Agent and the Borrower will treat
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44
such Lender's Internal Revenue Service Form 1001 as no longer valid. In the
event any Lender that claims exemption from United States withholding tax by
filing Internal Revenue Service Form 4224 with the Administrative Agent and the
Borrower sells, assigns, grants a participation in, or otherwise transfers all
or part of the obligations of the Borrower to such Lender under this Agreement,
such Lender agrees to undertake sole responsibility for complying with the
withholding tax requirements imposed by Sections 1441 and 1442 of the Internal
Revenue Code. If the Form 1001, Form 4224 or any other appropriate forms
required to be provided by a Lender at the time such Lender first becomes a
party to this Agreement indicates a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from Taxes. The Borrower shall not be required to pay any amounts with respect
to United States withholding taxes under subsection (a) of this subsection 6.13
if the Lender shall have delivered to the Borrower an Internal Revenue Service
Form 1001 or 4224 and such Lender was not actually entitled based on the law at
the time of such delivery to a reduced United States interest withholding tax.
(e) For any period with respect to which a Lender has failed to
provide the Borrower with the appropriate form pursuant to subsection 6.13(d)
(unless such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Lender shall not be entitled to indemnification under subsection 6.13(a)
with respect to Taxes imposed by the United States. Should a Lender which is
otherwise exempt from or subject to a reduced rate of withholding tax become
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as such Lender shall reasonably request to
assist such Lender to recover such Taxes.
(f) In the event that the Borrower is obligated to make an
indemnification payment pursuant to this subsection 6.13 to any Lender and the
Lender receives a refund of Taxes with respect to which the Borrower made an
indemnification payment, the Lender promptly shall remit the amount of such
refund to the Borrower.
(g) If any Lender is entitled to a reduction in the applicable
withholding tax, the Administrative Agent may withhold from any interest payment
to such Lender an amount equivalent to the applicable withholding tax after
taking into account such reduction. If the forms or other documentation
required by paragraph (d) are not delivered to the Administrative Agent, then
the Administrative Agent may withhold from any interest payment to such Lender
not providing such forms or other documentation an amount equivalent to the
applicable withholding tax unless the Borrower withholds the appropriate amount
pursuant to subsection 6.13(a).
(h) If the Internal Revenue Service or any other governmental
authority of the United States or other jurisdiction asserts a claim that the
Administrative Agent or the Borrower did not properly withhold tax from amounts
paid to or for the account of any Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to notify
the Administrative Agent or the Borrower of a change in
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45
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify the
Administrative Agent and the Borrower fully for all amounts paid, directly or
indirectly, by the Administrative Agent or the Borrower as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Administrative Agent or the Borrower
under this subsection, together with all costs and expenses (including
reasonable fees and disbursements of counsel).
(i) Each Lender agrees that it will (i) take all reasonable actions
requested by the Borrower, including, without limitation, changing the
jurisdiction of the Lender's Applicable Lending Office, that are, in the
judgment of such Lender, not disadvantageous to such Lender to maintain all
complete or partial exemptions, if any, available to it from withholding taxes
(whether available by treaty or existing administrative waiver), and (ii) to the
extent reasonable and, in the judgment of such Lender, not disadvantageous to
it, otherwise cooperate with the Borrower to minimize any amounts payable by the
Borrower under this subsection 6.13.
(j) The provisions of this subsection shall survive any termination
of this Agreement. Each Lender will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to this
subsection 6.13; provided that if a Lender shall not have so notified the
Borrower within 90 days of such event of which it has knowledge, such Lender may
not seek compensation for any period beginning prior to the date which is 90
days prior to the date upon which the Borrower is notified of such event.
6.14 Base Rate Loans Substituted for Affected Eurodollar Loans. If
any Lender is an Affected Lender and the Borrower shall, by at least five
Eurodollar Business Days' prior notice to such Lender through the Administrative
Agent, have elected that the provisions of this subsection 6.14 shall apply to
such Lender, then, unless and until such Lender notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer apply:
(a) all Loans which would otherwise be made by such Lender as
Eurodollar Loans shall be made instead as Base Rate Loans (on which
interest and principal shall be payable contemporaneously with the related
Eurodollar Loans of the other Lenders), and
(b) after each of its Eurodollar Loans has been repaid, all payments
of principal which would otherwise be applied to repay such Eurodollar
Loans shall be applied to repay its Base Rate Loans instead.
6.15 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower in respect of Committed Loans, each payment by the Borrower on account
of any facility fee hereunder and any reduction of the Commitments of the
Lenders shall be made
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46
pro rata according to the respective Commitment Percentages of the Lenders. Each
payment (including each prepayment) by the Borrower on account of principal of
and interest on the Loans shall be made pro rata according to the respective
outstanding principal amounts of the Loans then due and owing to the Lenders.
All payments (including prepayments) to be made by the Borrower hereunder,
whether on account of principal, interest, fees or otherwise, shall be made
without deduction, set-off or counterclaim and shall be made prior to 12:00
Noon, New York City time, on the due date thereof to the Administrative Agent,
for the account of the Lenders, at the Administrative Agent's office specified
in subsection 13.2, in Dollars and in immediately available funds. The
Administrative Agent shall distribute such payments to the Lenders promptly upon
receipt in like funds as received. Whenever any payment of principal of, or
interest on, the Base Rate Loans or of fees shall be due on a day that is not a
Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Eurodollar Loans shall be due on a day that is not a Eurodollar
Business Day, the date for payment thereof shall be extended to the next
succeeding Eurodollar Business Day unless such Eurodollar Business Day falls in
another calendar month, in which case the date for payment thereof shall be the
next preceding Eurodollar Business Day. Whenever any payment of principal of, or
interest on, the Money Market Loans shall be due on a day that is not a
Eurodollar Business Day, the date for payment thereof shall be extended to the
next succeeding Eurodollar Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest thereon shall
be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Lenders
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrower shall not have so made such payment, each Lender shall
repay to the Administrative Agent forthwith on demand such amount distributed to
such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Administrative Agent, at the Federal Funds Rate.
(c) Unless the Administrative Agent has received notice from a Lender
prior to a Borrowing Date that such Lender will not make available to the
Administrative Agent the amount that would constitute its share of the Loans to
be made on such Borrowing Date, the Administrative Agent may assume that such
Lender is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to
the Administrative Agent by the required time on such Borrowing Date, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Rate for the
period until such Lender makes such amount immediately available to the
Administrative Agent. A certificate
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47
of the Administrative Agent submitted to any Lender with respect
to any amounts owing under this subsection shall be conclusive in the absence of
manifest error. In addition to, and not in limitation of, the foregoing, if such
Lender's share of such Loans is not made available to the Administrative Agent
by such Lender within three Business Days of such Borrowing Date, the
Administrative Agent shall also be entitled to recover such amount with interest
thereon at the rate per annum equal to the Federal Funds Rate plus the
Applicable Margin applicable to Revolving Credit Loans that are Eurodollar
Loans, on demand, from the Borrower.
6.16 Funding Losses. If the Borrower makes any payment of principal
with respect to any Eurodollar Loan or Money Market Loan on any day other than
the last day of an Interest Period applicable thereto, or if the Borrower fails
to borrow or prepay any Eurodollar Loan or Money Market Loan after giving a
Notice of Committed Borrowing or Notice of Money Market Borrowing, the Borrower
shall reimburse each Lender within 15 days after demand for any resulting loss
or expense incurred by it (or by an existing or prospective Participant in the
related Loan), including (without limitation) any loss incurred in liquidating
or employing deposits from third parties, but excluding loss of margin for the
period after any such payment or failure to borrow or prepay, provided that such
Lender shall have delivered to the Borrower a certificate as to the amount of
such loss or expense, which certificate shall be conclusive in the absence of
manifest error. The provisions of this subsection shall survive any termination
of this Agreement.
6.17 Replacement of Affected Lender. At any time any Lender is an
Affected Lender, the Borrower may replace such Affected Lender as a party to
this Agreement with one or more other bank(s) or financial institution(s)
reasonably satisfactory to the Administrative Agent, such bank(s) or financial
institution(s) to have a Commitment or Commitments, as the case may be, in an
aggregate amount equal to the Commitment of such Affected Lender being replaced
thereby (and upon notice from the Borrower such Affected Lender shall assign,
without recourse or warranty, its Commitment, its Loans, and all of its other
rights and obligations hereunder to such replacement bank(s) or other financial
institution(s) for a purchase price equal to the sum of the principal amount of
the Loans so assigned, all accrued and unpaid interest thereon, its ratable
share of all accrued and unpaid fees, any amounts payable under subsection 6.16
as a result of such Lender receiving payment of any Eurodollar Loan prior to the
end of an Interest Period therefor and all other obligations owed to such
Affected Lender hereunder; provided that no Affected Lender shall be required to
assign any Money Market Loan.
SECTION 7. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement and
to make the Loans, the Borrower hereby represents and warrants to each Agent and
each Lender that:
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48
7.1 Financial Condition. (a) The consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of December 31, 1993 and the
related consolidated statements of operations, stockholders' equity and cash
flows for the fiscal year then ended, reported on by Price Waterhouse and set
forth in the Borrower's 1993 Form 8-K/A, a copy of which has been delivered to
each of the Lenders, fairly present, in conformity with GAAP, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
date and their consolidated results of operations, changes in stockholders'
equity and cash flows for such fiscal year.
(b) The unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of September 30, 1994 and the related unaudited
consolidated statements of income and cash flows for the nine months then ended,
set forth in the Borrower's quarterly report on Form 10-Q for the fiscal quarter
ended September 30, 1994, as filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended, a copy of which has
been delivered to each of the Lenders, fairly present, in conformity with GAAP
applied on a basis consistent with the financial statements referred to in
paragraph (a) of this subsection, the consolidated financial position of the
Borrower and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such nine-month period.
7.2 No Change. Since September 30, 1994, and taking into account the
Borrower Tender Offer, there has been no material adverse change in the
financial position, results of operations or business of the Borrower and its
Consolidated Subsidiaries, considered as a whole.
7.3 Corporate Existence and Power. The Borrower is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted, except in any case where the failure to be in good standing or to
have such powers, licenses, authorizations, consents or approvals would not, in
the aggregate, materially adversely affect the financial position, results of
operations or business of the Borrower and its Consolidated Subsidiaries, taken
as a whole.
7.4 Corporate and Governmental Authorization; Non Contravention. The
execution, delivery and performance by the Borrower of this Agreement and the
Stock Pledge Agreement are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of applicable law, rule
or regulation or of the Restated Certificate of Incorporation or By-laws of the
Borrower or of any agreement, judgment, injunction, order, decree or other
instrument binding upon the Borrower or result in the creation or imposition of
any Lien on any asset of the Borrower or any Subsidiary except for (a) the Lien
created by the Stock Pledge Agreement, (b) contravention of certain provisions
of the Existing
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49
Borrower Securities, and (c) any contravention of or default under or Lien
arising under any law, rule or regulation or any agreement, judgment, order,
decree or other instrument (other than agreements or instruments constituting or
evidencing Debt) not material to the business of the Borrower and its
Consolidated Subsidiaries, taken as a whole, which contravention, default or
Lien would not (i) materially adversely affect the financial position, results
of operations or business of the Borrower and its Consolidated Subsidiaries,
taken as a whole or (ii) adversely affect in any substantive way the rights and
remedies of the Agents and the Lenders hereunder and under the other Loan
Documents.
7.5 Binding Effect. This Agreement constitutes, and the Stock Pledge
Agreement when executed and delivered will constitute, a valid and binding
agreement of the Borrower except as the enforceability thereof may be limited by
(a) bankruptcy, insolvency or similar laws affecting creditors' rights generally
and (b) general equitable principles (whether enforceability is considered in a
proceeding in equity or at law).
7.6 Litigation. Except as disclosed in the Securities and Exchange
Commission filings referred to in subsection 7.1, there is no action, suit or
proceeding pending against, or to the knowledge of the Borrower threatened
against or affecting, the Borrower or any of its Subsidiaries before any court
or arbitrator or any governmental body, agency or official (a) in which there is
a reasonable possibility of an adverse decision that could materially adversely
affect the business, financial position or results of operations of the Borrower
and its Consolidated Subsidiaries, taken as a whole, or (b) that in any manner
draws into question the validity of this Agreement or any other Loan Document.
7.7 Taxes. United States Federal income tax returns of the Borrower
and its Material Subsidiaries have been examined and closed or the statutes of
limitations have expired for all fiscal years through the year ended December
31, 1980. The Borrower and its Material Subsidiaries have filed all United
States Federal income tax returns and all other material tax returns which are
required to be filed by them and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Borrower or any Material
Subsidiary except for any taxes being contested in good faith by appropriate
proceedings and as to which accruals have been provided in accordance with GAAP.
The accruals on the books of the Borrower and its Material Subsidiaries in
respect of taxes or other governmental charges are, in the opinion of the
Borrower, adequate.
7.8 Federal Regulations. (a) No part of the proceeds of any Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation G or Regulation
U, except that, to the extent described in subsection 9.7, proceeds of the Loans
may be used to purchase Shares in the Borrower Tender Offer or as a result of
Restricted Payments.
(b) After giving effect to the making of the Loans and the use of the
proceeds thereof, less than 25% in value of the assets of the Borrower, and of
the Borrower and its Subsidiaries, in each case subject to the restrictions on
sale, pledge or other disposition
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50
contained in this Agreement or subject to any such restrictions contained in any
Debt instrument to which any Lender or affiliate of any Lender is a party, a
default under which could constitute a Default under subsection 11.1(f) or
11.1(g), will constitute "margin stock" within the meaning of Regulation G and
Regulation U.
7.9 ERISA. Each member of the ERISA Group has fulfilled its
obligations under the minimum funding standards of ERISA and the Internal
Revenue Code with respect to each Plan and is in compliance in all material
respects with the presently applicable provisions of ERISA and the Internal
Revenue Code with respect to each Plan. No member of the ERISA Group has (a)
sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (b) failed to make any
contribution or payment to any Plan or Multiemployer Plan, or made any amendment
to any Plan, that has resulted or could result in the imposition of a Lien or
the posting of a bond or other security under ERISA or the Internal Revenue Code
or (c) incurred any liability under Title IV of ERISA other than for regular
contributions, which are not delinquent, and other than a liability to the PBGC
for premiums under Section 4007 of ERISA or a liability to any Multiemployer
Plan not in excess of $12,000,000 (prior to the date of the Merger) or
$50,000,000 (from and after the date of the Merger).
7.10 Not an Investment Company. The Borrower is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
7.11 Subsidiaries. Each of the Borrower's corporate Material
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted except
in any case where the failure to be in good standing or to have such powers,
licenses, authorizations, consents and approvals would not, in the aggregate (a)
materially adversely affect the financial position, results of operations or
business of the Borrower and its Consolidated Subsidiaries, considered as a
whole, or (b) adversely affect in any substantive way the rights and remedies of
the Agents and the Lenders hereunder or under any other Loan Document.
7.12 Environmental Matters. The Borrower and its Subsidiaries are in
compliance in all material respects with all Environmental Laws, and no
Hazardous Substances have been released upon any properties owned, leased or
operated by the Borrower or any of its Subsidiaries, except, in each case, to an
extent that would not be reasonably anticipated to have a material adverse
effect on the business, financial condition or results of operations of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
7.13 Full Disclosure. The material furnished to the Agents and the
Lenders by or on behalf of the Borrower in connection with the negotiation,
execution and delivery of this Agreement and the other Loan Documents, taken as
a whole, does not contain as of the
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51
date hereof, did not contain at the time so furnished and will not contain on
the date of the initial borrowing of Loans, any untrue statement of a material
fact and does not as of the date hereof omit, did not omit at the time so
furnished and will not omit on the date of the initial borrowing of Loans, to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
projections provided by or on behalf of the Borrower to the Agents and the
Lenders in connection with the negotiation, execution and delivery of this
Agreement and the other Loan Documents were prepared in good faith on the basis
of information and assumptions that the Borrower believed to be reasonable as of
the date such material was provided, and such assumptions are reasonable as of
the date hereof (it being understood that projections are subject to significant
uncertainties and contingencies, many of which are beyond the Borrower's
control, and that no assurance can be given that the projections will be
realized).
7.14 Merger Agreement. On the Closing Date, on the date of any Term
Loan and on the date of any Tranche B Revolving Credit Loan (other than any
Tranche B Revolving Credit Loan made during the six month period following a
decision by the Interstate Commerce Commission disapproving the Merger), the
Borrower shall not be aware of any event or circumstance that is reasonably
likely to prevent the consummation of the Merger.
SECTION 8. CONDITIONS PRECEDENT
8.1 Conditions to Closing Date. The Closing Date will occur on the
date of satisfaction of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized officer of the
Borrower, with a counterpart for each Lender and (ii) the Stock Pledge
Agreement, executed and delivered by a duly authorized officer of the
Borrower, with a counterpart or a conformed copy for each Lender.
(b) Merger Agreement. The Merger Agreement shall be in full force
and effect without any waivers, amendments or other modifications that
would adversely affect the interests of the Lenders, unless such
modifications have the written consent of the Arranging Agents.
(c) Related Agreements. The Administrative Agent shall have
received, with a copy for each Lender, true and correct copies, certified
as to authenticity by the Borrower, of the Merger Agreement and such other
documents or instruments as may be reasonably requested by the
Administrative Agent, including, without limitation, a copy of any material
debt instrument, material security agreement or other material contract to
which the Borrower or its Subsidiaries may be a party.
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52
(d) Corporate Proceedings of the Borrower. The Administrative Agent
shall have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance satisfactory to the Administrative
Agent, of the Board of Directors of the Borrower authorizing (i) the
execution, delivery and performance of this Agreement and the Stock Pledge
Agreement, (ii) the borrowings contemplated hereunder and (iii) the
granting by it of the Liens created pursuant to the Stock Pledge Agreement,
certified by the secretary or an assistant secretary of the Borrower as of
the Closing Date, which certificate shall be in form and substance
satisfactory to the Administrative Agent and shall state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded.
(e) Borrower Incumbency Certificate. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of the
Borrower, dated the Closing Date, as to the incumbency and signature of the
officers of the Borrower executing this Agreement and the Stock Pledge
Agreement and documents executed by the Borrower pursuant hereto and
thereto, satisfactory in form and substance to the Administrative Agent,
executed by the vice-president - finance or the chief financial officer and
the secretary or an assistant secretary of the Borrower.
(f) Corporate Documents. The Administrative Agent shall have
received, with a counterpart for each Lender, true and complete copies of
the certificate of incorporation and by-laws of the Borrower, certified as
of the Closing Date as complete and correct copies thereof by the secretary
or an assistant secretary of the Borrower.
(g) Fees. The Administrative Agent shall have received the fees
referred to in subsection 6.1 to be received on or prior to the Closing
Date.
(h) Legal Opinions. The Administrative Agent shall have received,
with a counterpart for each Lender, the following executed legal opinions:
(i) the executed legal opinion of Mayer, Brown & Platt,
counsel to the Borrower, substantially in the form of Exhibit G-1;
(ii) the executed legal opinion of Richard E. Weicher,
Esq, general counsel of Santa Fe Railroad, substantially in the form
of Exhibit G-2;
(iii) the executed legal opinion of Fritz R. Kahn, P.C.,
special counsel to the Administrative Agent with respect to Interstate
Commerce Commission matters, substantially in the form of Exhibit G-3;
and
(iv) the executed legal opinion of Simpson Thacher &
Bartlett, special counsel to the Administrative Agent, substantially
in the form of Exhibit G-4.
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53
Each such legal opinion shall be dated the Closing Date and shall cover
such other matters incident to the transactions contemplated by this
Agreement as the Administrative Agent may reasonably require.
(i) Solvency Opinion. The Administrative Agent shall have received,
with a counterpart for each Lender, an executed copy of a solvency opinion
with respect to the Borrower and Santa Fe Railroad delivered by Houlihan
Lokey Howard & Zukin Inc., dated the Closing Date, in form and substance
satisfactory to the Arranging Agents.
(j) Pledged Stock; Stock Powers. The Administrative Agent shall have
received the certificates representing 100% of the issued and outstanding
common stock of Santa Fe Railroad being pledged pursuant to the Stock
Pledge Agreement, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the Borrower.
(k) Representations and Warranties. Each of the representations and
warranties made by the Borrower and the other Loan Parties in the Loan
Documents shall be true and correct in all material respects on and as of
the Closing Date as if made on and as of the Closing Date.
(l) No Default. No Default or Event of Default shall have occurred
and be continuing on the Closing Date.
8.2 Conditions to Initial Loan. The agreement of each Lender to make
its initial Loan is subject to the satisfaction of the following conditions
precedent:
(a) Closing Date. The Closing Date shall have occurred or shall
occur simultaneously with the making of the initial Loans.
(b) Tender Offer Funding Date. The Tender Offer Funding Date shall
have occurred or shall occur simultaneously with the making of the initial
Loans.
(c) Merger Agreement. The Merger Agreement shall be in full force
and effect without any waiver, amendment or other modification that would
adversely affect the interests of the Lenders, unless such modifications
have the written consent of the Arranging Agents (in the case of any such
Loan made prior to the date on which Lenders other than the Arranging
Agents have become parties to this Agreement) or the Required Lenders (in
the case of any such Loan made on or after the date on which Lenders other
than Arranging Agents have become parties to this Agreement).
(d) Merger Approval. A majority of the shareholders of each of the
Borrower and Burlington shall have approved the Merger in accordance with
the
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54
requirements of the Merger Agreement and applicable law, and the
Administrative Agent shall have received such evidence of such approval as
shall be reasonably requested by it.
(e) Existing Borrower Bank Debt. The Existing Credit Agreement shall
have been terminated and the Existing Borrower Bank Debt shall have been
repaid in full, and the Administrative Agent shall have received such
evidence thereof as shall be reasonably requested by it.
(f) Notice of Redemption. The Borrower shall have given a notice of
redemption or offer to purchase in respect of the Existing Borrower
Securities, and the Administrative Agent shall have received a copy of each
such notice.
8.3 Conditions to Each Loan. The agreement of each Lender to make
any Loan requested to be made by it on any date (including, without limitation,
its initial Loan) is subject to the satisfaction of the following conditions
precedent:
(a) Merger Agreement. In the case of any Term Loan or Tranche B
Revolving Credit Loan to be made prior to the Merger or the Alternative
Merger, the Merger Agreement shall be in full force and effect without any
waiver, amendment or other modification that would adversely affect the
interests of the Lenders, unless such modifications have the written
consent of the Arranging Agents (in the case of any such Loan made prior to
the date on which Lenders other than the Arranging Agents have become
parties to this Agreement) or the Required Lenders (in the case of any such
Loan made on or after the date on which Lenders other than Arranging Agents
have become parties to this Agreement).
(b) Representations and Warranties. Each of the representations and
warranties made by the Borrower and the other Loan Parties in the Loan
Documents shall be true and correct in all material respects on and as of
such date as if made on and as of such date.
(c) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the Loans
requested to be made on such date.
(d) Notice of Borrowing. The Administrative Agent shall have
received by the time required pursuant to subsection 2.2, 3.2, 4.2 or 5.6,
as the case may be, the Notice of Committed Borrowing or Notice of Money
Market Borrowing, as the case may be, in respect of such Loans.
(e) Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement, the other Loan Documents and
the Merger
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55
Agreement shall be satisfactory in form and substance to the Arranging
Agents (in the case of any such Loan made prior to the date on which
Lenders other than the Arranging Agents have become parties to this
Agreement) or the Administrative Agent (in the case of any such Loan made
on or after the date on which Lenders other than Arranging Agents have
become parties to this Agreement), and the Administrative Agent and the
Lenders shall have received such other documents and legal opinions in
respect of any aspect or consequence of the transactions contemplated
hereby or thereby as the Arranging Agents (in the case of any such Loan
made prior to the date on which Lenders other than the Arranging Agents
have become parties to this Agreement) or the Administrative Agent (in the
case of any such Loan made on or after the date on which Lenders other than
Arranging Agents have become parties to this Agreement) shall reasonably
request.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date thereof that the conditions contained in
paragraphs (a), (b), (c) and (d) of this subsection have been satisfied.
SECTION 9. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as any of the Commitments
remains in effect or any amount is owing to any Lender or Agent hereunder or
under any other Loan Document:
9.1 Information. The Borrower will deliver to the Administrative
Agent, in sufficient number for all of the Lenders (and the Administrative Agent
shall promptly deliver to each Lender upon receipt):
(a) as soon as available and in any event within 120 days after the
end of each fiscal year of the Borrower, a consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income, stockholders'
equity and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on
in a manner acceptable to the Securities and Exchange Commission by Price
Waterhouse or other independent public accountants of nationally recognized
standing;
(b) within 120 days after the end of each fiscal year of the
Borrower, a consolidating balance sheet in reasonable detail of the
Borrower and its Consolidated Subsidiaries as of the end of such fiscal
year and the related consolidating statement of income for such fiscal
year, all certified by the chief financial officer, chief accounting
officer or vice president-finance of the Borrower as having been used in
connection with the preparation of the financial statements referred to in
paragraph (a) of this subsection;
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56
(c) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such quarter, the related consolidated
statement of income for such quarter and for the portion of the Borrower's
fiscal year ended at the end of such quarter, setting forth in comparative
form such statement of income for the corresponding quarter and the
corresponding portion of the Borrower's previous fiscal year, and the
related consolidated statement of cash flow for the portion of the
Borrower's fiscal year ended at the end of such quarter, setting forth in
comparative form such statement of cash flow for the corresponding portion
of the Borrower's previous fiscal year, all certified as to fairness of
presentation, generally accepted accounting principles and consistency
(except for any changes concurred with by the Borrower's independent public
accountants) by the chief financial officer, chief accounting officer or
vice president-finance of the Borrower;
(d) simultaneously with the delivery of each set of financial
statements referred to in paragraphs (a) and (c) of this subsection, a
certificate of the chief financial officer, chief accounting officer or
vice president-finance of the Borrower (A) setting forth in reasonable
detail the calculations required to establish whether the Borrower was in
compliance with the requirements of subsections 10.1, 10.2(a)(ix), 10.3(m),
10.5, 10.6 and 10.8 on the date of such financial statements, (B) stating
whether there exists on the date of such certificate any Default and, if
any Default then exists, setting forth the details thereof and the action
that the Borrower is taking or proposes to take with respect thereto and
(C) stating whether, to the best of his knowledge, after due inquiry, since
the date of the most recent previous delivery of financial statements
pursuant to paragraph (a) or (c) of this subsection, there has been any
material adverse change in the business, financial position or results of
operations of the Borrower and its Consolidated Subsidiaries, taken as a
whole, and, if so, the nature of such material adverse change;
(e) within fifteen Business Days after the end of each fiscal
quarter, a Pricing Ratio Certificate signed by the chief financial officer,
chief accounting officer or vice president-finance of the Borrower, showing
calculations of the Pricing Ratio Level for the period ended with the
period covered by such financial statements;
(f) simultaneously with the delivery of each set of financial
statements referred to in paragraph (a) of this subsection, a statement of
the firm of independent public accountants that reported on such statements
(i) stating that their audit examination has included a review of the terms
of this Agreement as they relate to financial or accounting matters
(including without limitation the requirements of subsections 10.1,
10.2(a)(ix), 10.3(m), 10.5, 10.6 and 10.8, provided that the provisions of
subsection 10.1 need not be covered in the statements delivered by such
accountants for the fiscal year in which the Merger occurs and, to the
extent that the Borrower's financial statements are prepared in accordance
with subsection 1.2(c), for
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57
the fiscal year following the fiscal year in which the Merger occurs) and
(ii) stating whether anything has come to their attention to cause them to
believe that any Default existed on the date of such statements;
(g) within five days after any officer of the Borrower obtains
knowledge of any Default, if such Default is then continuing, a certificate
of the chief financial officer, chief accounting officer or vice president-
finance of the Borrower setting forth the details thereof and the action
that the Borrower is taking or proposes to take with respect thereto;
(h) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(i) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and annual, quarterly or other reports that
the Borrower shall have filed with the Securities and Exchange Commission
(it being understood that if such reports and the financial statements,
reports and proxy statements referred to in paragraph (h) of this
subsection are provided within the time period prescribed by, and contain
the financial statements, opinions and certifications required by,
paragraphs (a) and (c) of this subsection, the requirements of supplying
such financial statements, opinions and certifications shall be deemed to
have been met);
(j) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined
in Section 4043 of ERISA) with respect to any Plan that might constitute
grounds for a termination of such Plan under Title IV of ERISA, or knows
that the plan administrator of any Plan has given or is required to give
notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA
or notice that any Multiemployer Plan is in reorganization, is insolvent or
has been terminated, a copy of such notice; (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate, impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or
appoint a trustee to administer any Plan, a copy of such notice; (iv)
applies for a waiver of the minimum funding standard under Section 412 of
the Internal Revenue Code, a copy of such application; (v) gives notice of
intent to terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Plan or
makes any amendment to any Plan that has resulted or could result in the
imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer, the vice president-finance or
the chief accounting officer of the Borrower setting forth details as to
such occurrence
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58
and action, if any, that the Borrower or applicable member of the ERISA
Group is required or proposes to take;
(k) as soon as reasonably practicable after the chairman, president,
secretary, treasurer, chief financial officer, vice president-finance,
chief legal officer or any vice president of the Borrower obtains knowledge
of the commencement of, or a material threat of the commencement of, an
action, suit, arbitration or other proceeding against the Borrower or any
Subsidiary before any court or arbitrator or any governmental body, agency,
arbitrator or other official in which there is a reasonable possibility of
an adverse decision that could materially adversely affect the business,
financial position or results of operation of the Borrower and its
Consolidated Subsidiaries, considered as a whole, or that in any manner
draws into question the validity of this Agreement or any other Loan
Document, information as to the nature of such pending or threatened
action, suit or proceeding;
(l) promptly after the chairman, president, secretary, treasurer,
chief financial officer, vice president-finance, chief legal officer or any
vice president of the Borrower obtains knowledge of a Change of Control,
information as to the details thereof;
(m) promptly upon execution thereof, any amendment, waiver or other
modification of the Merger Agreement; and
(n) from time to time such additional information regarding the
financial position, results of operations or business of the Borrower or
any of its Subsidiaries as the Administrative Agent, at the reasonable
request of any Lender, may request.
9.2 Payment of Obligations. The Borrower will, and will cause each
Subsidiary to, pay and discharge (a) all material taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties attach
thereto and (b) all material lawful claims for labor, materials and supplies
that, if unpaid, might become a Lien upon any properties of the Borrower or any
Subsidiary; provided that neither the Borrower nor any Subsidiary shall be
required (i) to pay any such tax, assessment, charge, levy or claim that is
being contested in good faith by appropriate proceedings and for which adequate
reserves have been provided or (ii) to pay or discharge any such tax,
assessment, charge, levy or claim if, in the opinion of the Borrower, such non-
payment and non-discharge is in the best interests of the Borrower and not
disadvantageous in any material respect to the Lenders. The Borrower will
maintain, and will cause each Subsidiary to maintain, in accordance with
generally accepted accounting principles, appropriate reserves for the accrual
of any such tax, assessment, charge, levy or claim.
9.3 Maintenance of Properties; Insurance. (a) Except as otherwise
permitted by subsection 10.4, the Borrower will keep, and will cause each
Subsidiary to keep, all
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59
material property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted, to the extent required by sound
business practice.
(b) The Borrower will insure, and will cause each Subsidiary to
insure, its assets and businesses to such extent as is customary for companies
engaged in the same or similar businesses in similar locations.
9.4 Conduct of Business and Maintenance of Existence. Except as
permitted by subsection 10.4, the Borrower will continue, and will cause each
Subsidiary to continue, to engage in business of the same general type as now
conducted by the Borrower and such Subsidiary, and will preserve, renew and keep
in full force and effect, and will cause each Subsidiary to preserve, renew and
keep in full force and effect, its corporate existence and its rights,
privileges and franchises necessary or desirable in the normal conduct of
business; provided that nothing in this subsection shall prohibit (a) any
merger, consolidation or Disposition permitted by subsection 10.4, or (b) the
termination of the corporate existence of any Subsidiary (other than Santa Fe
Railroad) if the Borrower in good faith determines that such termination is in
the best interest of the Borrower and is not materially disadvantageous to the
Lenders.
9.5 Compliance with Laws. The Borrower will comply, and will cause
each Subsidiary to comply, in all material respects with all applicable laws,
ordinances, rules, regulations and requirements of governmental authorities
(including, without limitation, Environmental Laws and ERISA and the rules and
regulations thereunder) except (a) where necessity of compliance therewith is
contested in good faith by appropriate proceedings or (b) where the failure so
to comply would not have a material adverse effect on the business, financial
position or results of operations of the Borrower and its Consolidated
Subsidiaries, considered as a whole.
9.6 Inspection of Property, Books and Records; Accounting Practices.
The Borrower will, and will cause each Subsidiary to, keep proper books of
record and account made of all dealings and transactions in relation to its
business and activities, and will, and will cause each Material Subsidiary to,
permit representatives of any Lender at such Lender's expense to visit and
inspect any of their respective properties, to examine and make abstracts from
any of their respective books and records and to discuss their respective
affairs, finances and accounts with their respective officers and independent
public accountants, all at such reasonable times and as often as may reasonably
be desired. The Borrower shall make no significant change in its accounting
practices except as permitted or required by GAAP.
9.7 Use of Proceeds. (a) The Borrower will use the proceeds of the
Term Loans only to provide a portion of the financing for (i) the purchase by
the Borrower of the Shares pursuant to the Borrower Tender Offer for an
aggregate purchase price not to exceed $760,000,000, (ii) the payment of fees,
expenses and premium related to the Borrower Tender Offer, the refinancing of
the Existing Borrower Securities and the Existing Borrower Bank Debt, and
related financings and (iii) the refinancing of up to $400,000,000 in
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aggregate principal amount of Existing Borrower Securities and the Existing
Borrower Bank Debt.
(b) The Borrower will use the proceeds of the Tranche A Revolving
Credit Loans for working capital and other general corporate purposes.
(c) The Borrower will use the proceeds of the Tranche B Revolving
Credit Loans to provide a portion of the financing for (i) the purchase by the
Borrower of the Shares pursuant to the Borrower Tender Offer for an aggregate
purchase price not to exceed $760,000,000, (ii) the payment of fees, expenses
and premium related to the Borrower Tender Offer, the refinancing of the
Existing Borrower Securities and the Existing Borrower Bank Debt, and related
financings, (iii) the refinancing of up to $400,000,000 in aggregate principal
amount of Existing Borrower Securities and the Existing Borrower Bank Debt and
(iv) working capital and other general corporate purposes, including Restricted
Payments permitted by subsection 10.5.
(d) None of the proceeds of any Loan will be used, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any "margin stock" within the meaning of Regulation G or
Regulation U in violation of such Regulations.
9.8 Interest Rate Agreements. On or after the date of this
Agreement, and in any event within 45 days after the date of the initial Loans,
the Borrower will enter into, and maintain in full force and effect, Interest
Rate Agreements, with counterparties that are financial institutions having
public debt ratings at the time each such Interest Rate Agreement is entered
into of at least A- from S&P or at least A3 from Moody's, with respect to at
least 66-2/3% of the aggregate principal amount of the Term Loans on terms and
conditions, and for periods, reasonably satisfactory to the Arranging Agents.
SECTION 10. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any of the Commitments
remains in effect or any amount is owing to any Lender or Agent hereunder or
under any other Loan Document:
10.1 Financial Condition Covenants.
-----------------------------
(a) Maintenance of Consolidated Tangible Net Worth. The Borrower
will not permit Borrower Consolidated Tangible Net Worth during any fiscal
quarter prior to the date of the Merger, to be less than (i) the amount set
forth opposite such fiscal quarter under the column "Net Worth Base Level"
in Schedule II, plus (ii) at any time during the second, third and fourth
fiscal quarters of any fiscal year from and after January 1, 1997, 75% of
Consolidated Net Income for all prior fiscal quarters of the
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Borrower ended during such fiscal year for which Consolidated Net Income is
a positive number, plus (iii) an amount equal to 100% of the cumulative
additions to Consolidated Tangible Net Worth resulting from issuances of
equity securities by the Borrower from and after the Closing Date
(excluding issuance of shares of common stock of the Borrower pursuant to
any employee or director stock option program, benefit plan or compensation
program). The Borrower will not permit Surviving Company Consolidated Net
Worth at any time from and after the date of the Merger to be less than (A)
an amount equal to 75% of Surviving Company Consolidated Tangible Net Worth
on the last day of the fiscal quarter in which the Merger occurs plus (B)
for each fiscal quarter of the Borrower, beginning with the first full
fiscal quarter ending after the date of the Merger, for which Consolidated
Net Income is a positive number, 50% of Consolidated Net Income for such
fiscal quarter, plus (C) an amount equal to 100% of the cumulative
additions to Surviving Company Consolidated Tangible Net Worth resulting
from issuances of equity securities by the Borrower from and after the date
of the Merger (excluding issuance of shares of common stock of the Borrower
pursuant to any employee or director stock option program, benefit plan or
compensation program).
(b) Fixed Charge Coverage. (i) At any time prior to the Merger, the
Borrower will not permit the ratio of (A) Adjusted Consolidated EBITDA for
any period of four consecutive fiscal quarters to (B) Consolidated Fixed
Charges for such period of four consecutive fiscal quarters, to be less
than the ratio set forth opposite the last day of such period under the
column "Coverage Ratio" in Schedule II.
(ii) If Burlington, as the surviving corporation of the Merger, is
maintaining Investment Grade Status on the date of the Merger, the Borrower
will not, at any time after the Merger, permit the ratio of (A)
Consolidated EBIT for any period of four consecutive fiscal quarters to (B)
Consolidated Interest Expense for such period of four consecutive fiscal
quarters, to be less than 2.5 to 1.0.
(iii) If Burlington, as the surviving corporation of the Merger, is
not maintaining Investment Grade Status on the date of the Merger, the
Borrower will not, at any time after the Merger, permit the ratio of (A)
Adjusted Consolidated EBITDA for any period of four consecutive fiscal
quarters to (B) Consolidated Fixed Charges for such period of four
consecutive fiscal quarters, to be less than the ratio set forth opposite
the last day of such period under the column "Coverage Ratio" in Schedule
II.
(c) Maintenance of Debt Coverage; Limitation on Consolidated Total
Debt. (i) The Borrower will not permit Consolidated Total Debt on any
date during any fiscal quarter (other than the last day of such fiscal
quarter) to be an amount that would cause the ratio of (A) Consolidated
EBITDA for the four consecutive fiscal quarters preceding such date to (B)
the amount of such Consolidated Total Debt, to be less than (x) in the case
of any calculation prior to March 31, 1995, .25 or (x) in the
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62
case of any calculation thereafter, the ratio set forth opposite the last
day of such four preceding fiscal quarters under the column "Leverage
Ratio" in Schedule II.
(ii) The Borrower will not permit Consolidated Total Debt on the last
day of any fiscal quarter to be an amount that would cause the ratio of (A)
Consolidated EBITDA for the four consecutive fiscal quarters ending on such
date to (B) the amount of such Consolidated Total Debt, to be less than the
ratio set forth opposite such date under the column "Leverage Ratio" in
Schedule II.
10.2 Limitation on Debt. (a) At any time prior to the Merger, and,
if on the date of the Merger, Burlington, as the surviving corporation of the
Merger, is not maintaining Investment Grade Status, at any time from and after
the Merger, the Borrower will not, and will not permit any Subsidiary to,
create, incur, assume or suffer to exist any Debt, except:
(i) Debt of the Borrower under this Agreement, and, from and
after the Railway Guarantee Event, Debt of Santa Fe Railroad under the
Railway Guarantee;
(ii) Debt of any Subsidiary to the Borrower;
(iii) Debt of the Borrower or any of its Subsidiaries used for
the purposes specified in, and secured by any Lien permitted by, subsection
10.3(b), (c), (d), (e) or (j);
(iv) Debt outstanding on the date hereof and listed on Schedule
III;
(v) Debt of the Borrower to any Subsidiary;
(vi) Debt of the Borrower the proceeds of which are used to
refinance Debt of the Borrower, and Debt of any Subsidiary the proceeds of
which are used to refinance Debt of such Subsidiary; provided, that, in
each case, such new Debt (i) has an average maturity at least as long as
that of the existing Debt being refinanced and (ii) is on terms no less
favorable to the Lenders, in either priority of payment or security, than
the Debt being refinanced;
(vii) Debt of Burlington and its Subsidiaries in an amount not
exceeding the amount of such Debt outstanding on the date of the Merger;
(viii) Receivables Program Obligations, to the extent such
Obligations constitute Debt, in an aggregate amount not exceeding
$350,000,000; and
(ix) additional Debt of the Borrower in an aggregate principal
amount at any time outstanding which does not exceed 5% of Borrower
Consolidated Tangible Net Worth (prior to the Merger) or 15% of Surviving
Company Consolidated Tangible Net Worth (after the Merger).
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63
(b) At any time from and after the Merger if Burlington, as the
surviving corporation of the Merger, is maintaining Investment Grade Status on
the date of the Merger, the Borrower will not permit any Subsidiary to create,
incur, assume or suffer to exist any Debt, except:
(i) Debt under the Railway Guarantee;
(ii) Debt of any Subsidiary to the Borrower;
(iii) Debt of any Subsidiary used for the purposes specified
in, and secured by any Lien permitted by, subsection 10.3(b), (c), (d), (e)
or (j);
(iv) Debt of any Subsidiary outstanding on the date hereof and
listed on Schedule III;
(v) Debt of any Subsidiary the proceeds of which are used to
refinance Debt of such Subsidiary; provided, that such new Debt (i) has an
average maturity at least as long as that of the existing Debt being
refinanced and (ii) is on terms no less favorable to the Lenders, in either
priority of payment or security, than the Debt being refinanced;
(vi) Debt of Subsidiaries of Burlington in an amount not
exceeding the amount of such Debt outstanding on the date of the Merger;
and
(vii) Receivables Program Obligations of Subsidiaries, to the
extent such Obligations constitute Debt, in an aggregate amount not
exceeding $350,000,000.
10.3 Limitation on Liens. Neither the Borrower nor any Material
Subsidiary will create or have outstanding any Lien on any asset now owned or
hereafter acquired by it, except:
(a) Liens created by the Stock Pledge Agreement and other Liens
existing on the date hereof securing Debt outstanding on the date hereof;
(b) any Lien existing on any asset of any corporation at the time
such corporation becomes a Material Subsidiary and not created in
contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed for the
purpose of financing all or any part of the cost of acquiring such asset,
provided that such Lien attaches to such asset, and only to such asset,
concurrently with or within 90 days after the acquisition (or completion of
development) thereof;
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(d) any Lien on any asset of any corporation existing at the time
such corporation is merged into or consolidated with the Borrower or a
Material Subsidiary and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition thereof
by the Borrower or a Material Subsidiary and not created in contemplation
of such acquisition;
(f) Liens created on railroad property pursuant to after-acquired
property clauses of mortgages on such railroad property so long as such
mortgage was in existence on the date hereof;
(g) Liens arising pursuant to judgments, attachments, distraints or
similar legal processes in an amount not exceeding $100,000,000 which have
been bonded or stayed pending appeal or other contest;
(h) materialmen's, vendor's, workmen's, operator's, mechanics',
carrier's and like Liens imposed by law, incurred in good faith in the
ordinary course of business and securing obligations that are not yet due
or that are being contested in good faith by appropriate proceedings;
(i) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, provided that (i) such Debt is not increased
beyond its original principal amount and is not secured by any additional
assets and (ii) any refinancing, extension, renewal or refunding of the
Borrower's 4% Mortgage Bonds due 1995 may not be secured by any Lien;
(j) any Lien on railroad locomotives, auto racks or rolling stock
securing Debt incurred for the purpose of acquiring or refurbishing such
property; provided, that such Lien attaches to such property and only to
such property within 180 days after the acquisition, or 360 days after the
completion of refurbishment, of such property;
(k) any Lien on Receivables Program Assets securing Receivables
Program Obligations;
(l) Liens on assets of Burlington and its Subsidiaries existing on
the date of the Merger, provided, that such Liens are not spread to cover
assets of the Borrower or its Subsidiaries; and
(m) Liens not otherwise permitted by the foregoing clauses of this
subsection securing Debt in an aggregate principal amount at any time
outstanding which, together with the aggregate Value of all outstanding
Sale and Leaseback Transactions, would not exceed 5% of Borrower
Consolidated Tangible Net Worth (prior to the
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65
Merger), or 10% of Surviving Company Consolidated Tangible Net Worth (after
the Merger).
10.4 Consolidations, Mergers and Sale of Assets. (a) The Borrower
will not, and will not permit any Material Subsidiary to, consolidate with or
merge into any other Person or Dispose of all or substantially all of its
assets, property or business, in any single transaction or series of related
transactions; provided, that (i) the Merger may be consummated in accordance
with paragraph (d) of this subsection 10.4; (ii) the Alternative Merger may be
consummated in accordance with paragraph (e) of this subsection 10.4; (iii) at
any time after the Merger, Santa Fe Railroad may, with the prior written consent
of the Required Lenders, merge with Burlington Northern Railroad Company,
provided, that unless the stock pledged pursuant to the Stock Pledge Agreement
shall have been released pursuant to subsection 13.9 prior to the date of such
merger, the Administrative Agent must continue to hold a perfected security
interest in 100% of the outstanding stock of such surviving corporation pursuant
to the Stock Pledge Ageement; and (iv) any Subsidiary of the Borrower (other
than Santa Fe Railroad) may merge into the Borrower, and any Subsidiary (other
than Santa Fe Railroad) may merge or consolidate with or into another Person if
either the corporation surviving such consolidation or merger is a Wholly-Owned
Subsidiary or the requirements of subsection 10.4(c) are met, and if, in each
case under this clause (iv), after giving effect thereto, no Default shall have
occurred and be continuing; and provided, further, that except as expressly
permitted by the foregoing proviso, no merger, consolidation or Disposition in
respect of the Borrower or Santa Fe Railroad shall be permitted unless such
merger, consolidation or Disposition has the prior written consent of Lenders
whose Commitment Percentages aggregate at least 80%.
(b) The Borrower will at all times own, directly and not through
another Subsidiary, all outstanding capital stock of Santa Fe Railroad.
(c) The Borrower will not (i) at any time prior to the Merger, or
(ii) at any time after the Merger when Burlington, as surviving corporation of
the Merger, is not maintaining Investment Grade Status, Dispose of, or permit
any of its Subsidiaries to Dispose of, any of its respective assets in any
single transaction or series of related transactions if the net proceeds of such
transaction, when added to the net proceeds of all such other Dispositions by
the Borrower and its Subsidiaries during the current fiscal quarter and the
preceding three fiscal quarters, would exceed (x) for any such calculation
before April 1, 1996, 7-1/2% of Borrower Consolidated Tangible Net Worth, (y)
for any such calculation on or after April 1, 1996 and prior to the Merger, 5%
of Borrower Consolidated Tangible Net Worth, or (z) for any such calculation
after the Merger, 5% of Surviving Company Consolidated Tangible Net Worth, in
each case as of the end of the most recently ended fiscal quarter (each such
Disposition, a "Specified Disposition"), except that (A) the Borrower and its
Subsidiaries may make any Specified Disposition if the Net Cash Proceeds of such
Specified Disposition (rounded to the nearest $1,000,000) are applied to prepay
the Loans in accordance with subsection 6.4(e); (B) the Borrower and its
Subsidiaries may make Specified Dispositions in respect of assets having a book
value not exceeding $175,000,000
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66
in the aggregate so long as this Agreement is outstanding if the Net Cash
Proceeds of each such Specified Disposition pursuant to this clause (B) are
designated by the Borrower for use in an Approved Transaction and are actually
so used within six months of the receipt thereof; and (C) the Borrower or any
Subsidiary may transfer (by means of sale, pledge or otherwise) Receivables
Program Assets.
(d) The Borrower may consummate the Merger in accordance with the
Merger Agreement and applicable law, provided that (i) concurrently with the
Merger, Burlington, as the surviving corporation of the Merger, shall assume all
the obligations of the Borrower under this Agreement and the other Loan
Documents to which Borrower is a party pursuant to an assumption agreement in
form and substance reasonably satisfactory to the Administrative Agent, and (ii)
concurrently with the Merger, the Administrative Agent shall receive copies of
all regulatory approvals required in respect of the Merger and an opinion of
counsel to the Borrower, in form and substance reasonably satisfactory to the
Administrative Agent, to the effect that all such regulatory approvals have been
obtained and are in full force and effect, the Merger has been duly consummated
in accordance with the Merger Agreement and applicable law, and this Agreement
and the other Loan Documents to which the Borrower is a party continue to be the
legally valid and enforceable obligations of Burlington, as the surviving
corporation of the Merger.
(e) The Borrower may consummate the Alternative Merger in accordance
with the Merger Agreement and applicable law, provided that (i) concurrently
with the Alternative Merger, the Administrative Agent shall receive copies of
all regulatory approvals required in respect of the Alternative Merger and an
opinion of counsel to the Borrower, in form and substance reasonably
satisfactory to the Administrative Agent, to the effect that all such regulatory
approvals have been obtained and are in full force and effect, the Alternative
Merger has been duly consummated in accordance with the Merger Agreement and
applicable law, and this Agreement and the other Loan Documents to which the
Borrower is a party continue to be the legally valid and enforceable obligations
of the Borrower, as the surviving corporation of the Alternative Merger, (ii)
concurrently with the Alternative Merger, this Agreement shall be deemed
automatically amended in the manner set forth in Schedule IV, and (iii) after
giving effect to the Alternative Merger, the Stock Pledge Agreement and (if the
Railway Guarantee Event has occurred) the Railway Guarantee shall be in full
force and effect, and the Administrative Agent shall continue to hold a
perfected first priority security interest in 100% of the voting stock of the
Santa Fe Railroad pledged pursuant to the Stock Pledge Agreement.
10.5 Limitation on Restricted Payments. (a) At any time prior to
the Merger, the Borrower will not declare or pay any dividend (other than
dividends payable solely in common stock of the Borrower) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other acquisition of
any shares of any class of Capital Stock of the Borrower (other than in the
Borrower Tender Offer) or any warrants or options to purchase any such Stock,
whether now or hereafter outstanding, or make any other distribution in respect
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thereof, either directly or indirectly, whether in cash or property or in
obligations of the Borrower or any Subsidiary (such declarations, payments,
setting apart, purchases, redemptions, defeasance, retirements, acquisitions and
distributions being herein called "Restricted Payments"), except that, so long
as no Default or Event of Default exists or would exist after giving effect
thereto:
(i) the Borrower may make Restricted Payments on any date in an
amount equal to the amount of the Primary Restricted Payments Basket on
such date less the aggregate amount of Restricted Payments previously made
pursuant to this clause (i); provided, that no Restricted Payments may be
made in any fiscal quarter from amounts constituting part of the Primary
Restricted Payments Basket under clause (ii) of the definition of Primary
Restricted Payments Basket unless the Borrower met the Eligibility Test for
the immediately preceding fiscal quarter; and
(ii) in addition to the Restricted Payments permitted pursuant
to the foregoing clause (i) the Borrower may make Restricted Payments in
any fiscal quarter if (A) the Borrower met the Eligibility Test for the
immediately preceding fiscal quarter, (B) the amount of such Restricted
Payments do not exceed the Additional Restricted Payments Basket on the
date of such Restricted Payments less the aggregate amount of Restricted
Payments previously made pursuant to this clause (ii) and (C)
simultaneously with making such Restricted Payments, the Borrower makes a
prepayment in respect of the Term Loans in an amount at least equal to the
amount of such Restricted Payments.
(b) At any time after the Merger, the Borrower will not, make
Restricted Payments, except that so long as no Default or Event of Default
exists or would exist after giving effect thereto, (i) if Burlington, as the
surviving corporation of the Merger, is maintaining Investment Grade Status on
the date of such Restricted Payments (or, in the case of dividends, the date of
declaration thereof), the Borrower may make Restricted Payments at any time
after the Merger and (ii) if Burlington, as the surviving corporation of the
Merger, is not maintaining Investment Grade Status on the date of such
Restricted Payments (or, in the case of dividends, the date of declaration
thereof), the Borrower may make Restricted Payments (A) in the fiscal quarter in
which the Merger occurs at a rate per share of common stock not in excess of the
rate at which Burlington paid dividends on its common stock for the fiscal
quarter prior to the fiscal quarter in which the Merger occurred and (B)
thereafter, in a cumulative amount not exceeding 30% of the amount of the
Borrower's cumulative positive Consolidated Net Income from and after the fiscal
quarter in which the Merger occurred.
10.6 Limitation on Investments. The Borrower will not, and will not
permit any Subsidiary to, make any Investment in any Person, except (a)
Investments, in an aggregate amount not exceeding 5% of Borrower Consolidated
Tangible Net Worth in the aggregate while this Agreement is in effect, made in
the ordinary course of business of the Borrower and its Subsidiaries and in the
same lines of business as the Borrower and its
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Subsidiaries are engaged in on the date of this Agreement, (b) Investments by
the Borrower in its Subsidiaries and Investments by such Subsidiaries in the
Borrower and in other Subsidiaries, if such Investments are used in the same
lines of business as the Borrower and its Subsidiaries are engaged in on the
date of this Agreement, and (c) Investments in Cash Equivalents; provided, that
neither the Borrower nor any Subsidiary will make Investments (other than
Investments for short-term cash management purposes) after the date of this
Agreement in SFP Pipeline Holdings, Inc. in an aggregate amount exceeding
$15,000,000.
10.7 Limitation on Transactions with Affiliates. The Borrower will
not, and will not permit any Subsidiary to, directly or indirectly, pay any
funds to or for the account of, make any Investment (whether by acquisition of
stock or indebtedness, by loan, advance, transfer of property, guarantee or
other agreement to pay, purchase or service, directly or indirectly, any Debt,
or otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect any transaction in
connection with any joint enterprise or other joint arrangement with, any
Affiliate other than in the ordinary course of business and on terms and
conditions at least as favorable to the Borrower or such Subsidiary as the terms
and conditions which would apply in a similar transaction with a Person not an
Affiliate.
10.8 Limitation on Sales and Leasebacks. The Borrower will not, and
will not permit any Subsidiary to, directly or indirectly, enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been owned for at least 180
days and is to be sold or transferred by the Borrower or such Subsidiary to such
Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such property or rental obligations of the
Borrower or such Subsidiary ("Sale and Leaseback Transactions") if the aggregate
Value of all outstanding Sale and Leaseback Transactions, plus the aggregate
outstanding principal amount of all Debt secured by Liens permitted by
subsection 10.3(m), would exceed the amount permitted by subsection 10.3(m).
10.9 Amendments to Merger Agreement. The Borrower will not consent
to any amendment, waiver or other modification (including, without limitation,
any waiver of the condition set forth in Section 9.3(i) of the Merger Agreement)
of the Merger Agreement that would adversely affect the interests of the
Lenders.
10.10 Limitation on Dividend Restrictions at Santa Fe Railroad. The
Borrower will not permit Santa Fe Railroad to enter into any agreement after the
date hereof with any Person which prohibits or limits the ability of Santa Fe
Railroad to pay dividends or make other distributions to the Borrower.
SECTION 11. EVENTS OF DEFAULT
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11.1 Events of Default. If any of the following events shall occur
and be continuing:
(a) the Borrower shall fail to pay when due any principal of any
Loan;
(b) the Borrower shall fail to pay interest on any Loan or any fees
or other amounts payable hereunder within five days after the same becomes
due and payable;
(c) the Borrower shall fail to observe or perform any covenant
contained in subsection 9.1(g) or Section 10;
(d) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement or any other Loan Document (other
than those covered by clause (a), (b) or (c) above), or any other Loan
Party shall fail to observe or perform any covenant or agreement contained
in any Loan Document to which it is a party, in each case for 30 days after
written notice thereof has been given to the Borrower by the Administrative
Agent at the request of any Lender;
(e) any representation, warranty, certification or statement made by
any Loan Party in any Loan Document or in any certificate, financial
statement or other document delivered pursuant to this Agreement or any
other Loan Document shall prove to have been incorrect in any material
respect when made (or deemed made);
(f) any payment in respect of Specified Obligations of the Borrower
and its Material Subsidiaries (except for Debt under this Agreement) having
a principal amount in excess of $50,000,000 in the aggregate shall not be
paid when due or within any applicable grace period;
(g) any event or condition shall occur that:
(i) results in the acceleration of the maturity of any
Specified Obligations of the Borrower and its Material Subsidiaries
(except for Debt under this Agreement) in a principal amount in excess
of $50,000,000 in the aggregate (excluding Specified Obligations
covered by subclause (ii) below, unless such Specified Obligations are
Guaranteed by the Borrower or any Material Subsidiary other than
solely as a result of a Material Subsidiary being a general partner of
Pipeline Partners) or enables (or, with the giving of notice or lapse
of time or both, would enable) the holder of such Specified Obligation
or any Person acting on behalf of such holder to accelerate the
maturity thereof (provided, that any acceleration or potential
acceleration of Existing Borrower Securities in respect of which a
notice of redemption or offer to purchase has been duly given will not
constitute a Default or Event of Default if such Debt is redeemed or
purchased in accordance with such notice of
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redemption or offer to purchase (or if the basis for such acceleration
or potential acceleration is waived or defeased), or
(ii) results in the acceleration of the maturity of any
Specified Obligations in a principal amount in excess of $25,000,000
in the aggregate of Pipeline Partners or any of its Subsidiaries which
are Material Subsidiaries;
(h) the Borrower or any Material Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;
(i) an involuntary case or other proceeding shall be commenced
against the Borrower or any Material Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be entered
against the Borrower or any Subsidiary under the federal bankruptcy laws as
now or hereafter in effect;
(j) any member of the ERISA Group at the time in question shall fail
to pay when due an amount or amounts aggregating in excess of $5,000,000
which it shall have become liable to pay under Title IV of ERISA; or notice
of intent to terminate a Material Plan shall be filed under Title IV of
ERISA by any member of the ERISA Group at the time in question, any plan
administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in respect
of, or to cause a trustee to be appointed to administer any Material Plan;
or a condition shall exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any Material Plan must be terminated; or
there shall occur a complete or partial withdrawal from, or a default,
within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or
more Multiemployer Plans which could cause one or more members of the ERISA
Group to incur a current payment obligation in excess of $10,000,000;
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71
(k) one or more judgments or orders for the payment of money in an
aggregate amount in excess of $50,000,000 shall be rendered against the
Borrower or any Material Subsidiary and such judgments or orders shall
continue unsatisfied and unstayed for a period of 30 days;
(l) any authorization, approval or consent necessary for any Loan
Party to execute, deliver or perform its material obligations under any
Loan Document to which such Loan Party is a party (i) is revoked or
terminated or otherwise is not in full force and effect or (ii) expires and
is not renewed; or if at any time it is or becomes unlawful for any Loan
Party to perform any of its material obligations under any Loan Document to
which such Loan Party is a party;
(m) at any time after the Railway Guarantee Event, the Railway
Guarantee shall cease, for any reason (other than the release thereof by
written instrument signed by the Administrative Agent on behalf of the
Lenders), to be in full force and effect or Santa Fe Railroad shall so
assert; or at any time prior to the release of the security interest
pursuant to subsection 13.9 the Administrative Agent shall not have a
perfected first priority security interest in 100% of the voting stock of
Santa Fe Railroad pledged pursuant to the Stock Pledge Agreement (other
than by reason of any release of such security interest by the
Administrative Agent) or the Stock Pledge Agreement shall cease to be in
full force and effect or the Borrower or any of its Subsidiaries shall so
assert in writing;
(n) the Merger or the Alternative Merger shall be consummated and
such consummation shall result in a material adverse effect on the
financial position, results of operations or business of the Borrower and
its Consolidated Subsidiaries taken as a whole; or
(o) an Early Amortization Period shall commence under (and as defined
in) the Receivables Program Documents relating to the Accounts Receivable
Financing of Santa Fe Railroad in effect on the date of this Agreement
(other than by reason of voluntary termination by the Borrower or the
Subsidiary party to such Receivables Program Documents); or any "event of
default", "termination event", "wind-down event" or other similar event
shall occur and be continuing that permits parties to any Receivables
Program Documents relating to any Accounts Receivable Financing of the
Borrower or any of its Consolidated Subsidiaries, whether now or hereafter
in effect, to cease to purchase Receivables Program Assets under such
Accounts Receivable Financing prior to the originally scheduled termination
of the obligation of such parties to make such purchases (other than by
reason of voluntary termination by the Borrower or the Subsidiary party to
such Receivables Program Documents);
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (h) or (i) of this subsection 11.1 with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest
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72
thereon) and all other amounts owing under this Agreement shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement to be due and payable forthwith, whereupon the same shall immediately
become due and payable. Except as expressly provided above in this subsection
11.1, presentment, demand, protest and all other notices of any kind are hereby
expressly waived by the Borrower.
11.2 Notice of Default. The Administrative Agent shall give notice
to the Borrower under subsection 11.1(d) promptly upon being requested to do so
by any Lender and shall thereupon notify all the Lenders thereof.
SECTION 12. THE AGENTS
12.1 Appointment and Authorization. Subject to the limitations set
forth in subsection 12.9, each Lender irrevocably appoints and authorizes each
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to such Agent by the terms hereof or
thereof, together with all such powers as are reasonably incidental thereto.
12.2 Agents and Affiliates. Each Agent shall have the same rights
and powers under this Agreement as any other Lender and may exercise or refrain
from exercising the same as though it were not an Agent. The Lenders
acknowledge that each Agent may receive information regarding the Borrower or
its Affiliates that is not expressly furnished pursuant to this Agreement to it
in such capacity (including information that may be subject to confidentiality
obligations in favor of the Borrower or such Affiliate) and acknowledge that
each Agent shall be under no obligation to provide such information to them.
Each Agent and each of their respective affiliates may accept deposits from,
lend money to, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with the
Borrower or any Subsidiary or Affiliate of the Borrower as if it were not an
Agent hereunder and without notice to or consent of the Lenders.
12.3 Action by Agents. The obligations of the Agents hereunder are
only those expressly set forth herein and no Agent shall have or be deemed to
have any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against the Agents. Each Agent shall not
be deemed to have knowledge or notice of the occurrence of
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73
any Default except, in the case of the Administrative Agent, received requests
from any Lender pursuant to subsection 11.1(d). Without limiting the generality
of the foregoing, no Agent shall be required to take any action with respect to
any Default, except as expressly provided in Section 11. Each Agent shall be
fully justified in failing or refusing to take any action under this Agreement
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate and, if it so requests, it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
12.4 Consultation with Experts; Delegation of Duties. Any Agent may
execute any of its duties under this Agreement by or through agents, employees
or legal counsel. Any Agent may consult with legal counsel (who may be internal
counsel or counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
12.5 Liability of Agents. No Agent nor any of such Agent's
affiliates nor any of their respective directors, officers, agents, or employees
shall be liable for any action taken or not taken by it in connection herewith
(a) with the consent or at the request of the Required Lenders or (b) in the
absence of its own gross negligence or willful misconduct. Without limiting the
generality of the foregoing, if this Agreement requires that any notice,
consent, certificate, statement, opinion or other writing be reasonably
satisfactory or otherwise acceptable to either Agent, then neither Agent nor any
of their respective directors, officers, agents or employees shall be liable for
accepting the same or acting thereon as long as such Agent did so in good faith.
No Agent nor any of their directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection with this Agreement or
any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Borrower; (iii) the satisfaction of any condition
specified in Section 8, except receipt of items required to be delivered to the
Administrative Agent; or (iv) the validity, effectiveness or genuineness of this
Agreement or any other instrument or writing furnished in connection herewith.
No Agent shall incur any liability by acting in reliance upon any notice,
consent, certificate, statement or other writing (which may be a bank wire,
telex or similar writing) believed by it to be genuine or to be signed by the
proper party or parties.
12.6 Indemnification of Agents. Each Lender shall, ratably in
accordance with its Commitment, indemnify each Agent and such Agent's affiliates
and their respective directors, officers, agents and employees (to the extent
not reimbursed by the Borrower) against any cost, expense (including counsel
fees and disbursements (which for these purposes shall encompass the allocated
costs and all disbursements of internal counsel)), claim, demand, action, loss
or liability (except such as result from such indemnitee's gross negligence or
willful misconduct) that such indemnitee may suffer or incur in connection
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74
with this Agreement or any action taken or omitted by such indemnitee hereunder.
The provisions of this subsection shall survive any termination of this
Agreement.
12.7 Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon any Agent and such Agent's affiliates or
any other Lender or their respective directors, officers, agents or employees,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without reliance upon any
Agent or such Agent's affiliates or any other Lender or their respective
directors, officers, agents or employees, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking any action under this Agreement.
Except for notices, reports and other documents expressly herein required to be
furnished to the Lenders by an Agent, such Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Borrower which may come into the possession
of any of such Agent or its affiliates or directors, officers, agents or
employees.
12.8 Successor Administrative Agent. The Administrative Agent may
resign at any time by giving notice thereof to the Lenders and the Borrower.
Upon any such resignation, the Required Lenders (with the consent of the
Borrower, which shall not be unreasonably withheld or delayed) shall have the
right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank organized or licensed
under the laws of the United States or of any State thereof and having a
combined capital and surplus of at least $500,000,000. Upon the acceptance of
its appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section and subsection
13.5 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent.
12.9 Other Agents. The Arranger, the Co-Arrangers, the Arranging
Agents and the Documentation Agent, in such respective capacities, shall have no
duties or responsibilities, and shall incur no liability, under this Agreement
or the other Loan Documents.
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SECTION 13. MISCELLANEOUS
13.1 Amendments and Waivers. Neither this Agreement nor any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrower
written amendments, supplements or modifications hereto and to the other Loan
Documents for the purpose of adding any provisions to this Agreement or the
other Loan Documents or changing in any manner the rights of the Lenders or of
the Borrower hereunder or thereunder or (b) waive, on such terms and conditions
as the Required Lenders or the Administrative Agent, as the case may be, may
specify in such instrument, any of the requirements of this Agreement or the
other Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall (i) reduce the amount or extend the scheduled date of
maturity of any Loan or of any installment thereof, or reduce the stated rate of
any interest or fee payable hereunder or extend the scheduled date of any
payment thereof or increase the amount or extend the expiration date of any
Lender's Commitment, in each case without the consent of each Lender affected
thereby, or (ii) amend, modify or waive any provision of this subsection or
reduce the percentage specified in the definition of Required Lenders, or
consent to the assignment or transfer by the Borrower or any other Loan Party of
any of its rights and obligations under this Agreement and the other Loan
Documents or, except as provided in subsection 13.9, release the Lenders'
security interest under the Stock Pledge Agreement or release the Railway
Guarantee, in each case without the written consent of all the Lenders, or (iii)
amend, modify or waive any provision of Section 12 without the written consent
of the then Administrative Agent. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Borrower, the Lenders, the Administrative Agent and all
future holders of the Loans. In the case of any waiver, the Borrower, the
Lenders and the Administrative Agent shall be restored to their former positions
and rights hereunder and under the other Loan Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon.
13.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered, or three Domestic
Business Days after being deposited in the mail, postage prepaid, or, in the
case of telecopy notice, when received, addressed as follows in the case of the
Borrower and the Administrative Agent and as set forth in Schedule I in the case
of the Arranging Agents and Lenders, or to such other address as may be
hereafter notified by the respective parties hereto:
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76
The Borrower: Santa Fe Pacific Corporation
1700 East Golf Road
Schaumburg, Illinois 60173
Attention: Vice President-Finance
Fax: (708) 995-6466
The Adminis-
trative Agent: Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260
Attention: Charles H. King
Fax: (212) 648-5336
; provided that any notice, request or demand to or upon the Administrative
Agent shall not be effective until received.
13.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
13.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
13.5 Expenses. The Borrower shall pay all reasonable out-of-pocket
expenses of the Agents in connection with the preparation and effectiveness of
this Agreement and the other Loan Documents (including (i) reasonable fees and
disbursements of Simpson Thacher & Bartlett, special counsel to the
Administrative Agent and of Fritz R. Kahn, Esq., special counsel to the
Administrative Agent for Interstate Commerce Commission matters, in connection
with the preparation and effectiveness of this Agreement and the other Loan
Documents and (ii) reasonable allocated costs and all disbursements of the
Administrative Agent's internal legal counsel for any period up to and including
the date on which Lenders other than the Arranging Agents become parties to this
Agreement with respect to reviewing the provisions hereof affecting the rights
and responsibilities of the Administrative Agent, but no fees or disbursements
of any other legal counsel). The Borrower shall also pay (i) all reasonable
out-of-pocket expenses of the Administrative Agent (including, without
duplication, reasonable fees and disbursements of the Administrative Agent's
outside counsel and the allocated cost and all disbursements of the
Administrative Agent's internal counsel)
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77
in connection with (A) the administration of this Agreement and any waiver or
consent hereunder or any amendment hereof or (B) any Default or alleged Default
hereunder and (ii) if an Event of Default occurs, all out-of-pocket expenses
incurred by any Agent or any Lender, including reasonable fees and disbursements
of counsel (including allocated costs of the Administrative Agent's internal
counsel), in connection with such Event of Default and collection, bankruptcy,
insolvency and other enforcement proceedings resulting therefrom.
13.6 Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that (i) the Borrower may not assign
or otherwise transfer any of its rights or obligations under this Agreement
(except as permitted by subsection 10.4) without the prior written consent of
all Lenders and (ii) a Lender may assign or otherwise transfer any of its rights
under this Agreement only in accordance with the provisions of paragraph (b),
(c) or (d) of this subsection.
(b) Any Lender may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitments
or its Loans. In the event of any such grant by a Lender of a participating
interest to a Participant, whether or not upon notice to the Borrower and the
Administrative Agent, such Lender shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other Loan
Documents. Any agreement pursuant to which any Lender may grant such a
participating interest shall provide that such Lender shall retain the sole
right and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement and the other Loan Documents;
provided that such participation agreement may provide that such Lender will not
agree to any modification, amendment or waiver of this Agreement or the other
Loan Documents without the consent of the Participant that would reduce the
principal of or rate of interest on any Loan or Loans in which such Participant
has a participating interest, reduce any fee payable pursuant to subsection 6.1
or postpone the date fixed for any payment of interest on such Loan or Loans or
of such fees or is of a type that requires the consent of all the Lenders
pursuant to clause (ii) of the proviso in subsection 13.1. The Borrower agrees
that each Participant shall, to the extent provided in its participation
agreement but subject to paragraph (e) of this subsection, be entitled to the
benefits of subsections 6.10 through 6.16 with respect to its participating
interest. An assignment or other transfer that is not permitted by paragraph
(c) or (d) below shall be given effect for purposes of this Agreement only to
the extent of a participating interest granted in accordance with this paragraph
(b).
(c) Any Lender may, in accordance with applicable law, at any time
assign to one or more banks or other entities of a type to which commercial
banks customarily assign loans of the type made under this Agreement (each an
"Assignee") a portion of its Commitments in an amount not less than $10,000,000
(provided, that, if such Lender's
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Commitment is $10,000,000 or less, it may assign all, but not less than all, of
its Commitment and provided, further, that assignments by one Lender to another
Lender may be in any amounts) and its rights and obligations under this
Agreement and the other Loan Documents, and such Assignee shall assume such
rights and obligations, pursuant to an Assignment and Acceptance executed by
such Assignee and such transferor Lender, with (and subject to) the consent of
the Borrower and the Administrative Agent which consents shall not be
unreasonably withheld; provided that if an Assignee is a Lender or an affiliate
of a Lender, no such consent shall be required. Each such assignment must be a
proportionate share of the transferor Lender's Commitment and Committed Loans.
Upon execution and delivery of such instrument and payment by such Assignee to
such transferor Lender of an amount equal to the purchase price agreed between
such transferor Lender and such Assignee (and, in the case of an Assignee not
incorporated under the laws of the United States of America or a state thereof,
delivery to the Administrative Agent of the documents described in subsection
6.13), such Assignee shall be a Lender party to this Agreement and shall have
all the rights and obligations of a Lender with Commitments as set forth in such
instrument of assumption, and the transferor Lender shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. In connection with any such assignment
the transferor Lender shall pay to the Administrative Agent a fee of $3,500 for
processing such assignment.
(d) Any Lender may at any time assign all or any portion of its
rights under this Agreement to a Federal Reserve Bank. No such assignment shall
release the transferor Lender from its obligations hereunder.
(e) No Participant or other transferee of any Lender's rights shall
be entitled to receive any greater payment under subsections 6.12 or 6.16 than
such Lender would have been entitled to receive with respect to the rights
transferred (if it had not so transferred such rights), unless such transfer is
made with the Borrower's prior written consent after the date hereof or made
pursuant to subsection 13.10.
(f) The Administrative Agent shall maintain at the address of the
Administrative Agent referred to in subsection 13.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Commitments of,
and principal amounts of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of a Loan or other
obligation hereunder as the owner thereof for all purposes of this Agreement and
the other Loan Documents, notwithstanding any notice to the contrary. Any
assignment of any Loan or other obligation hereunder shall be effective only
upon appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
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13.7 Indemnification by the Borrower. The Borrower agrees to
indemnify each Lender and each Agent, their respective affiliates and the
respective directors, officers, agents, stockholders, partners and employees of
the foregoing (each an "Indemnitee") and hold each such Indemnitee harmless from
and against all liabilities, losses, damages, costs and expenses, including,
subject to the limitations set forth in the next succeeding sentence,
reasonable fees and disbursements of counsel (which for these purposes shall
encompass the allocated costs of internal legal services and all disbursements
of internal counsel), in connection with any investigative, administrative or
judicial action, suit or proceeding, whether or not such Indemnitee shall be
designated a party thereto, that may be incurred by such Indemnitee relating to
or arising out of this Agreement or the other Loan Documents or any actual or
proposed use of the proceeds of any Loan, provided that in no event shall any
Indemnitee have the right to be indemnified hereunder by the Borrower for its
own gross negligence or willful misconduct as determined by a court of competent
jurisdiction. The obligation of the Borrower to indemnify each Indemnitee under
this subsection for fees and disbursements of counsel shall be limited to the
fees and expenses of one counsel in each jurisdiction representing all such
Persons, except (i) to the extent that, in the reasonable judgment of any such
Person, the existence of actual or potential conflicts of interest make
representation by the same counsel inappropriate and (ii) that any such Person
that is a party to, or compelled to participate in, any such action, suit or
proceeding shall be indemnified for the reasonable fees and disbursements of its
counsel to the extent provided in the immediately preceding sentence. The
provisions of this subsection shall survive any termination of this Agreement.
13.8 Adjustments. If any Lender (a "Benefitted Lender") shall at any
time receive any payment of all or part of its Committed Loans (or, after
acceleration of the Loans pursuant to Section 11, its Loans), or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by deduction, set-off or counterclaim, pursuant to events or
proceedings of the nature referred to in subsection 11.1(h) or (i), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender's
Committed Loans (or, after acceleration of the Loans pursuant to Section 11, its
Loans), or interest thereon, such Benefitted Lender shall purchase for cash from
the other Lenders a participating interest in such portion of each such other
Lender's Committed Loans (or, after acceleration of the Loans pursuant to
Section 11, its Loans), or shall provide such other Lenders with the benefits of
any such collateral, or the proceeds thereof, as shall be necessary to cause
such Benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, however, that
if all or any portion of such excess payment or benefits is thereafter recovered
from such Benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest.
13.9 Release of Security Interest. If on the date of the Merger (but
not the Alternative Merger) Burlington is maintaining Investment Grade Status,
the security interest created by the Stock Pledge Agreement shall be released,
and the Administrative Agent shall
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deliver to the Borrower the stock certificates pledged pursuant to the Stock
Pledge Agreement, in each case simultaneously with the Merger.
13.10 Syndication. If on the date of execution of this Agreement by
the Borrower and the Agents Lenders other than the Arranging Agents have not
become parties hereto, such additional Lenders may on any date thereafter become
Lenders parties hereto by entering into a Syndication Supplement with the
Arranging Agents and the Administrative Agent, and delivering a copy thereof to
the Borrower. Upon such execution and delivery, from and after the Syndication
Effective Date set forth therein, such new Lenders shall become Lenders parties
to this Agreement with the Commitments set forth in such Syndication Supplement,
and Schedule I to this Agreement shall be deemed amended to reflect the addition
of such new Lenders and their Commitments and the resulting adjustments of the
Commitments of the Arranging Agents. If any Loans are outstanding on such
Syndication Effective Date, the Arranging Agents shall sell and assign to each
new Lender, and each such new Lender shall acquire, a share equal to its
Commitment Percentage of such outstanding Loans, and if any such outstanding
Loans are Eurodollar Loans the Borrower shall reimburse each Arranging Agent and
each such new Lender, upon its demand, for any net loss or expense incurred by
it as a result of such transaction occurring on a day other than the last day of
an Interest Period with respect thereto. A certificate of any Lender or
Arranging Agent, containing reasonable detail, shall be prima facie evidence of
the amount owing to it under this subsection. The provisions of this subsection
shall survive any termination of this Agreement.
13.11 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
13.12 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13.13 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to the subject matter hereof not expressly set forth or referred
to herein or in the other Loan Documents.
13.14 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY,
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AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
13.15 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgement in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in subsection 13.2 or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto; and
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction.
13.16 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither any Agent nor any Lender has any fiduciary relationship
with or duty to the Borrower arising out of or in connection with this
Agreement or any of the other Loan Documents, and the relationship between
the Agents and Lenders, on one hand, and the Borrower, on the other hand,
in connection herewith or therewith is solely that of creditor and debtor;
and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Borrower and the Lenders.
<PAGE>
82
13.17 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
<PAGE>
83
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
SANTA FE PACIFIC CORPORATION
By:
__________________________________________________
Title:
J.P. MORGAN SECURITIES INC.,
as Arranger
By:
__________________________________________________
Title:
CHASE SECURITIES, INC., as a
Co-Arranger
By:
__________________________________________________
Title:
CHEMICAL SECURITIES INC., as a
Co-Arranger
By:_______________________________________________
Title:
GOLDMAN, SACHS & CO., as a
Co-Arranger
By:_______________________________________________
Title:
<PAGE>
84
UNION BANK OF SWITZERLAND, as a
Co-Arranger
By:_______________________________________________
Title:
By:_______________________________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as an Arranging Agent,
as Administrative Agent, as Documentation
Agent and as a Lender
By:_______________________________________________
Title:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), as an
Arranging Agent and as a Lender
By:_______________________________________________
Title:
CHEMICAL BANK, as an Arranging Agent
and as a Lender
By:_______________________________________________
Title:
<PAGE>
85
PEARL STREET L.P., as an Arranging
Agent and as a Lender
By:_______________________________________________
Title:
UNION BANK OF SWITZERLAND, as an
Arranging Agent and as a Lender
By:_______________________________________________
Title:
By:_______________________________________________
Title:
<PAGE>
SCHEDULE I
----------
BANK NAMES, ADDRESS AND COMMITMENTS
<TABLE>
<CAPTION>
Name/Address Commitment
- ------------ ----------
<S> <C>
Morgan Guaranty Trust Company of New York $360,000,000
60 Wall Street
New York, New York 10260
Attention: Charles H. King
Fax: (212) 648-5336
The Chase Manhattan Bank $300,000,000
(National Association)
One Chase Manhattan Plaza
New York, New York 10005
Attention: David L. Burnett
Fax: (212) 422-6249
Chemical Bank $300,000,000
10 South LaSalle Street
Suite 2300
Chicago, Illinois 60603
Attention: Jennifer H. McGowan
Fax: (312) 346-9310
Pearl Street L.P. $300,000,000
85 Broad Street
New York, New York 10004
Attention: Nancy Unrath
Fax: (212) 902-3757
Union Bank of Switzerland $300,000,000
Chicago Branch
30 South Wacker Drive
Chicago, Illinois 60606
Attention: Michelle Moreno
Fax: (312) 993-5530
</TABLE>
<PAGE>
SCHEDULE II
-----------
FINANCIAL COVENANT REQUIREMENTS AND CASH FLOW TARGETS
<TABLE>
<CAPTION>
NET WORTH CASH FLOW
COVERAGE LEVERAGE BASE LEVEL TARGET
FISCAL QUARTER RATIO RATIO ($ MILLIONS) ($ MILLIONS)
ENDING
<S> <C> <C> <C> <C>
Mar. 31, 1995 1.000 0.250 300 9
Jun. 30, 1995 1.000 0.250 300 (27)
Sep. 30, 1995 1.050 0.275 300 5
Dec. 31, 1995 1.100 0.300 300 65
Mar. 31, 1996 1.100 0.300 400 31
Jun. 30, 1996 1.100 0.300 400 8
Sep. 30, 1996 1.350 0.335 400 41
Dec. 31, 1996 1.350 0.335 400 93
Mar. 31, 1997 1.400 0.335 600 42
Jun. 30, 1997 1.400 0.335 600 25
Sep. 30, 1997 1.600 0.390 600 60
Dec. 31, 1997 1.600 0.390 600 113
Mar. 31, 1998 1.650 0.390 800 49
Jun. 30, 1998 1.650 0.390 800 36
Sep. 30, 1998 1.750 0.430 800 73
Dec. 31, 1998 1.750 0.430 800 125
Mar. 31, 1999 1.750 0.430 1050 58
Jun. 30, 1999 1.750 0.430 1050 49
Sep. 30, 1999 2.000 0.460 1050 89
Dec. 31, 1999 2.000 0.460 1050 141
Mar. 31, 2000 2.000 0.460 1350 58
Jun. 30, 2000 2.000 0.460 1350 49
Sep. 30, 2000 2.250 0.500 1350 89
Dec. 31, 2000 2.250 0.500 1350 141
Mar. 31, 2001 2.250 0.500 1575 58
Jun. 30, 2001 2.250 0.500 1575 49
</TABLE>
<PAGE>
SCHEDULE III
------------
EXISTING DEBT
<TABLE>
<CAPTION>
SANTA FE PACIFIC CORPORATION
DEBT OUTSTANDING AS OF 1/27/95
Outstanding
Santa Fe Pacific Corporation ($ millions)
<S> <C>
Senior Notes 12.65% due 10/00 $ 200.0
Senior Debentures 8.375% due 11/01 100.0
Senior Debentures 8.625% due 11/04 100.0
Subtotal 400.0
Santa Fe Railroad
Various Equipment Obligations 498.9
General & Adjustment Mortgage Bonds 4% due 10/95 95.8
Topeka Office Building Mortgage 10.32% due 1/14 32.6
Capitalized Leases 3.7
Subtotal 630.9
SFP Pipeline Holdings, Inc.
Pipeline Exchangeable Debentures due 8/10 219.0
Debt Discounts (16.9)
TOTAL DEBT $1,233.1
</TABLE>
<PAGE>
SCHEDULE IV
-----------
AUTOMATIC AMENDMENTS UPON
CONSUMMATION OF ALTERNATIVE MERGER
As provided in subsection 10.4(e) of the Credit Agreement,
simultaneously with the consummation of the Alternative Merger, the Credit
Agreement shall be deemed automatically amended as follows:
I. Amendments to Subsection 1.1.
----------------------------
(a) Addition of New Defined Terms.
-----------------------------
The following new defined terms shall be deemed inserted, in the
correct alphabetical order, in subsection 1.1:
"Burlington Guarantee": an irrevocable and unconditional guarantee of
payment of all obligations and liabilities of the Borrower under this
Agreement and the other Loan Documents, duly executed and delivered by
Burlington pursuant to subsection 13.18; the Burlington Guarantee shall be
in substantially the form of the Railway Guarantee (with such changes
therein as shall be required to reflect that Burlington, rather than the
Santa Fe Railroad, is the guarantor thereunder) except that the Burlington
Guarantee shall include such financial and other covenants in respect of
Burlington that are set forth in Burlington's $500,000,000 credit agreement
with Chemical Bank as agent to be entered into on or prior to the Tender
Offer Funding Date, as in effect on the date of the Alternative Merger;
provided, that if such credit agreement shall have been terminated prior to
the date of the Alternative Merger, the covenants to be included in the
Burlington Guarantee shall be the covenants contained in such credit
agreement on the Tender Offer Funding Date.
"Burlington Guarantee Event": the execution and delivery by
Burlington of the Burlington Guarantee to the Administrative Agent, and the
delivery to the Administrative Agent of (i) executed legal opinions of
counsel for Burlington and the Lenders covering the matters specified in
Exhibits G-5 and G-7 (with such changes therein as shall be required to
reflect that such opinions address Burlington and the Burlington Guarantee,
rather than the Santa Fe Railroad and the Railway Guarantee and with such
other changes therein as shall be approved by the Administrative Agent),
(ii) such evidence of the corporate authority, authorization and incumbency
of signing officers of Burlington as the Administrative Agent shall
reasonably request, and (iii) copies of all necessary governmental and
other consents and approvals in respect of the Burlington Guarantee (if any
are required), and if none are required a certificate of the Borrower and
Burlington to such effect.
<PAGE>
2
(b) Amendment of Certain Defined Terms. The following defined terms
contained in subsection 1.1 shall be deemed amended to read in their entirety as
follows:
"Loan Documents": this Agreement, the Railway Guarantee (after the
Railway Guarantee Event), the Stock Pledge Agreement and, if delivered
pursuant to subsection 13.18, the Burlington Guarantee.
"Loan Parties": the Borrower and (after the Railway Guarantee Event)
Santa Fe Railroad and (after the Burlington Guarantee Event) Burlington.
(c) Amendment of Definition of Debt. The definition of the defined term
"Debt" shall be deemed amended to add the following proviso to the end thereof:
"; provided, that from and after the Burlington Guarantee Event, any
guarantee by the Borrower, in form and substance reasonably
satisfactory to the Required Lenders, of Debt of Burlington under
credit facilities with commercial banks and other financial
institutions, in an aggregate principal amount not exceeding the
amount of such Debt outstanding on the date of the Alternative Merger,
shall not constitute Debt of the Borrower."
II. Amendment to Section 6
----------------------
(a) Addition of Subsection 6.4(j). The following new paragraph (j) shall
be deemed added at the end of subsection 6.4:
(j) In the event that the Administrative Agent shall give notice to
the Borrower pursuant to subsection 13.18 requiring the Burlington
Guarantee Event to occur, and if either (A) the Borrower is not maintaining
Investment Grade Status or (B) the Burlington Guarantee Event does not
occur, in each case on the date which is six months after the date of the
Alternative Merger, the outstanding principal amount of all Loans, together
with accrued interest thereon and all accrued facility fees and other
amounts owing under this Agreement or any other Loan Document, shall become
due and payable, and the Commitments shall automatically terminate, in each
case on the date which is six months after the date of the Alternative
Merger.
III. Amendments to Section 11
------------------------
(a) Addition of Events of Default relating to Burlington. Subsection 11.1
shall be deemed amended to add the following new paragraphs (appropriately
designated by letters to follow consecutively the paragraphs in subsection 11.1
on the date of the Alternative Merger):
<PAGE>
3
(__) any payment in respect of Debt of Burlington and its
Subsidiaries having a principal amount in excess of $100,000,000 in the
aggregate shall not be paid when due or within any applicable grace period;
(__) any event or condition shall occur that results in the
acceleration of the maturity of any Debt of Burlington and its Subsidiaries
in a principal amount in excess of $100,000,000 in the aggregate or enables
(or, with the giving of notice or lapse of time or both, would enable) the
holder of such Debt or any Person acting on behalf of such holder to
accelerate the maturity thereof;
(__) Burlington or any Subsidiary of Burlington shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;
(__) an involuntary case or other proceeding shall be commenced
against Burlington or any Subsidiary of Burlington seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be entered
against Burlington or any Subsidiary of Burlington under the federal
bankruptcy laws as now or hereafter in effect;
(__) at any time after the Burlington Guarantee Event, one or more
judgments or orders for the payment of money in an aggregate amount in
excess of $100,000,000 shall be rendered against Burlington or any
Subsidiary of Burlington and such judgments or orders shall continue
unsatisfied and unstayed for a period of 30 days;
(__) at any time after the Burlington Guarantee Event, any
authorization, approval or consent necessary for Burlington to execute,
deliver or perform its material obligations under the Burlington Guarantee
(i) is revoked or terminated or otherwise is not in full force and effect
or (ii) expires and is not renewed; or if any time after the Burlington
Guarantee Event it is or becomes unlawful for Burlington to perform any of
its material obligations under the Burlington Guarantee; or
<PAGE>
4
(__) at any time after the Burlington Guarantee Event, the Burlington
Guarantee shall cease for any reason (other than the release thereof by
written instrument signed by the Administrative Agent on behalf of the
Lenders) to be in full force and effect or Burlington shall so assert;
IV. Amendment to Section 13.
-----------------------
(a) Addition of Subsection 13.18. The following new subsection 13.18
shall be deemed added to the Credit Agreement.
13.18 Polling of Lenders Upon Alternative Merger. If the Alternative
Merger shall be consummated, and if at any time on or after the date of the
Alternative Merger and prior to the date which is five months after the
Alternative Merger, the Borrower shall not be maintaining Investment Grade
Status, the Administrative Agent shall poll the Lenders to determine
whether the Required Lenders wish to require the Burlington Guarantee Event
to occur, and if the Required Lenders direct the Administrative Agent to do
so, the Administrative Agent will give notice to the Borrower requiring the
Burlington Guarantee Event to occur subject to the provisions of subsection
6.4(j).
<PAGE>
EXHIBIT A
---------
FORM OF
MONEY MARKET QUOTE REQUEST
[Date]
To: Morgan Guaranty Trust Company of New York
(the "Administrative Agent")
From: Santa Fe Pacific Corporation
(the "Borrower")
Re: $1,560,000,000 Credit Agreement (the "Credit Agreement") dated as of
January 27, 1995 among (i) the Borrower, (ii) the Lenders named
therein, (iii) J.P. Morgan Securities Inc., as Arranger, (iv) Chase
Securities, Inc., Chemical Securities Inc., Goldman, Sachs & Co. and
Union Bank of Switzerland, as Co-Arrangers, (v) Morgan Guaranty Trust
Company of New York, The Chase Manhattan Bank (National Association),
Chemical Bank, Pearl Street L.P. and Union Bank of Switzerland, as
Arranging Agents, and (vi) Morgan Guaranty Trust Company of New York,
as Administrative Agent and as Documentation Agent.
We hereby give notice pursuant to subsection 5.2 of the Credit
Agreement that we request Money Market Quotes for the following proposed Money
Market Loan(s):
Date of Borrowing: _______________
<TABLE>
<CAPTION>
<S> <C>
Principal Amount/*/ Interest Period/**/
---------------- ------------------
Tranche A $
Tranche B $
</TABLE>
<PAGE>
2
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the Eurodollar Rate.]
Terms used herein have the meanings assigned to them in the Credit
Agreement.
SANTA FE PACIFIC CORPORATION
By:
-----------------------------------
Title:
/*/ Amount must be $5,000,000 or a larger whole multiple of $1,000,000.
/**/ Not less than one month in the case of a LIBOR Auction, not less than 7
days in the case of an Absolute Rate Auction and not more than 365 days in
the case of an Absolute Rate Auction, subject to the provisions of the
definition of Interest Period.
<PAGE>
EXHIBIT B
---------
FORM OF
INVITATION FOR MONEY MARKET QUOTES
To: [Name of Lender]
Re: Invitation for Money Market Quotes to Santa Fe Pacific Corporation (the
"Borrower")
Pursuant to subsection 5.3 of the $1,560,000,000 Credit Agreement
dated as of January 27, 1995 among the (i) Borrower, (ii) the Lenders named
therein, (iii) J.P. Morgan Securities Inc., as Arranger, (iv) Chase Securities,
Inc., Chemical Securities Inc., Goldman, Sachs & Co. and Union Bank of
Switzerland, as Co-Arrangers, (v) Morgan Guaranty Trust Company of New York, The
Chase Manhattan Bank (National Association), Chemical Bank, Pearl Street L.P.
and Union Bank of Switzerland, as Arranging Agents, and (vi) Morgan Guaranty
Trust Company of New York, as Administrative Agent and as Documentation Agent,
we are pleased on behalf of the Borrower to invite you to submit Money Market
Quotes to the Borrower for the following proposed Money Market Loan(s):
Date of Borrowing: ______________________
<TABLE>
<CAPTION>
Principal Amount Interest Period
---------------- ---------------
<S> <C>
Tranche A $
Tranche B $
</TABLE>
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the Eurodollar Rate.]
Please respond to this invitation by no later than 9:15 A.M. (New York
City time) on [date]. THIS INVITATION IS FROM THE ADMINISTRATIVE
<PAGE>
2
AGENT ON BEHALF OF THE BORROWER AND YOUR RESPONSE SHOULD BE SUBMITTED TO THE
ADMINISTRATIVE AGENT.
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Administrative
Agent
Dated: _____________________ By:__________________________
Authorized Officer
<PAGE>
EXHIBIT C
---------
FORM OF
MONEY MARKET QUOTE
To: Morgan Guaranty Trust Company of New York, as Administrative Agent
Re: Money Market Quote to
Santa Fe Pacific Corporation (the "Borrower")
In response to your invitation [on behalf of the Borrower] dated
________________________, 19___, we hereby make the following Money
Market Quote on the following terms:
1. Quoting Lender: ____________________________________________
2. Person to contact at Quoting Lender:
--------------------------------
3. Date of Borrowing: ____________________________________/*/
4. We hereby offer to make Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
<TABLE>
<CAPTION>
Principal Interest Money Market
Amount /**/ Period /***/ [Margin/****/] [Absolute Rate/*****/]
- ----------- ------------ -------------------------------------
<S> <C> <C>
$
$
</TABLE>
[Provided, that the aggregate principal amount of Money Market Loans for
which the above offers may be accepted shall not exceed $
______________________.]
<PAGE>
2
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the $1,560,000,000
Credit Agreement dated as of January 27, 1995 among (i) the Borrower, (ii) the
Lenders named therein, (iii) J.P. Morgan Securities Inc., as Arranger, (iv)
Chase Securities, Inc., Chemical Securities Inc., Goldman, Sachs & Co. and Union
Bank of Switzerland, as Co-Arrangers, (v) Morgan Guaranty Trust Company of New
York, The Chase Manhattan Bank (National Association), Chemical Bank, Pearl
Street L.P. and Union Bank of Switzerland, as Arranging Agents, and (vi) Morgan
Guaranty Trust Company of New York, as Administrative Agent and as Documentation
Agent, irrevocably obligates us to make the Money Market Loan(s) for which any
offer(s) are accepted, in whole or in part.
Very truly yours,
[NAME OF LENDER]
Dated: ___________________ By: ________________________________
Authorized Officer
/*/ As specified in the related Invitation.
/**/ Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the
individual offers exceeds the amount the Lender is willing to lend.
Bids must be made for $5,000,000 or a larger whole multiple of
$1,000,000.
/***/ Not less than one month in the case of a LIBOR Auction, not less than 7
days in the case of an Absolute Rate Auction and not more than 365 days
in the case of an Absolute Rate Auction, as specified in the related
Invitation. No more than three bids are permitted for each Interest
Period.
/****/ Margin over or under the Eurodollar Rate determined for the applicable
Interest Period. Specify percentage (to the nearest 1/16 of 1%) and
specify whether "PLUS" or "MINUS".
/*****/ Specify rate of interest per annum (to the nearest 1/100 of 1%).
<PAGE>
EXHIBIT D
---------
FORM OF
NOTICE OF MONEY MARKET BORROWING
To: Morgan Guaranty Trust Company of New York, as Administrative Agent
Re: Acceptance of Money Market Quote of [Name of Lender]
In response to the Money Market Quote submitted by
[Name of Lender] dated , 19 , we hereby accept such
Money Market Quote on the following terms:
1. Date of Borrowing: _________________________________ /*/
2. We hereby accept the offered Money Market Loan(s) in the following
principal amounts, for the following Interest Periods and at the following
rates:
<TABLE>
<CAPTION>
Principal Interest Money Market
Amount /**/ Period [Margin] [Absolute Rate]
- ----------- -------- ------------------------
<S> <C> <C>
$
$
</TABLE>
Very truly yours,
SANTA FE PACIFIC CORPORATION
Dated: ____________________ By: ____________________________
Authorized Officer
/*/ As specified in the related Quote.
/**/ Principal amount of Money Market Loans for each Interest Period may not
exceed principal amount requested. Principal amount of each Money Market
Loan must be $5,000,000 or a larger whole multiple of $1,000,000.
<PAGE>
EXHIBIT E
---------
FORM OF
STOCK PLEDGE AGREEMENT
STOCK PLEDGE AGREEMENT, dated as of ___________ __, 1995, made by
SANTA FE PACIFIC CORPORATION, a Delaware corporation (the "Borrower"), in favor
of MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as administrative agent (in such
capacity, the "Administrative Agent") for the Lenders parties to the Credit
Agreement described below.
W I T N E S S E T H:
----------------------------
WHEREAS, the Borrower is a party to the Credit Agreement, dated as of
January 27, 1995 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among (i) the Borrower, (ii) the Lenders named
therein, (iii) J.P. Morgan Securities Inc., as Arranger, (iv) Chase Securities,
Inc., Chemical Securities Inc., Goldman, Sachs & Co. and Union Bank of
Switzerland, as Co-Arrangers, (v) Morgan Guaranty Trust Company of New York, The
Chase Manhattan Bank (National Association), Chemical Bank, Pearl Street L.P.
and Union Bank of Switzerland, as Arranging Agents, and (vi) Morgan Guaranty
Trust Company of New York, as Administrative Agent and as Documentation Agent;
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make Loans to the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, the Borrower is the legal and beneficial owner of the shares
of Pledged Stock issued by the Issuer; and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective Loans to the Borrower under the Credit Agreement that
the Borrower shall have executed and delivered this Stock Pledge Agreement to
the Administrative Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Agents and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective Loans under the Credit Agreement, the Borrower
hereby agrees with the Administrative Agent, for the ratable benefit of the
Lenders and the Agents, as follows:
<PAGE>
2
1. Defined Terms. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement.
(b) As used herein, the following terms shall have the following
meanings:
"Agreement": this Stock Pledge Agreement, as the same may be amended,
modified or otherwise supplemented from time to time.
"Code": the Uniform Commercial Code from time to time in effect in
the State of New York.
"Collateral": the Pledged Stock and all Proceeds.
"Issuer": The Atchison, Topeka and Santa Fe Railway Company.
"Lenders": the collective reference to (i) each Lender (as defined in
the Credit Agreement) and (ii) each Lender set forth in clause (i) of this
defined term, and each affiliate of any such Lender, that is a party to any
Interest Rate Agreement entered into pursuant to subsection 9.8 of the
Credit Agreement.
"Obligations": the collective reference to the unpaid principal of
and interest on the Loans and all other obligations and liabilities of the
Borrower to the Agents or the Lenders (including, without limitation,
interest accruing at the then applicable rate provided in the Credit
Agreement after the maturity of the Loans and interest accruing at the then
applicable rate provided in the Credit Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding), whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, the Credit Agreement, this Agreement, the
other Loan Documents, any Secured Interest Rate Agreement or any other
document made, delivered or given in connection therewith, in each case
whether on account of principal, interest, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Agents or to the Lenders that are required
to be paid by the Borrower pursuant to the terms of the Credit Agreement or
this Agreement or any other Loan Document or any Secured Interest Rate
Agreement).
"Pledged Stock": the shares of capital stock listed on Schedule 1
hereto, together with all stock certificates, options, rights or privileges
of any nature whatsoever that may be issued or granted by the Issuer to the
Borrower while this Agreement is in effect.
<PAGE>
3
"Proceeds": all "proceeds" as such term is defined in Section 9-
306(1) of the Uniform Commercial Code in effect in the State of New York on
the date hereof and,
in any event, such term shall include, without limitation, all dividends,
distributions or other income or profits from the Pledged Stock,
collections thereon or distributions with respect thereto.
"Secured Interest Rate Agreement": any Interest Rate Agreement
entered into by the Borrower pursuant to subsection 9.8 of the Credit
Agreement to which any Lender is a party.
"Securities Act": the Securities Act of 1933, as amended.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section and paragraph
references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Pledge; Grant of Security Interest. The Borrower hereby delivers
to the Administrative Agent, for the ratable benefit of the Lenders and the
Agents, all the Pledged Stock and hereby grants to Administrative Agent, for the
ratable benefit of the Lenders and the Agents, a first security interest in the
Collateral, as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations. All certificates representing the Pledged Stock
delivered to the Administrative Agent by the Borrower pursuant hereto shall be
in suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, and accompanied by any
required transfer tax stamps, all in form and substance satisfactory to the
Administrative Agent.
3. Stock Powers. Concurrently with the delivery to the
Administrative Agent of each certificate representing one or more shares of
Pledged Stock, the Borrower shall deliver an undated stock power covering such
certificate, duly executed in blank by the Borrower.
4. Representations and Warranties. The Borrower represents and
warrants that:
(a) The shares of Pledged Stock constitute all the issued and
outstanding shares of all classes of the capital stock of the Issuer.
(b) All the shares of the Pledged Stock have been duly authorized and
validly issued and are fully paid and nonassessable.
<PAGE>
4
(c) The Borrower is the record and beneficial owner of, and has good
and marketable title to, the Pledged Stock, free of any and all Liens or options
in favor of, or claims of, any other Person, except the security interest
created by this Agreement. The Borrower is not and will not become a party to or
otherwise bound by any agreement, other than this Agreement, which restricts in
any manner the rights of any present or future holder of any of the Pledged
Stock with respect thereto.
(d) There is no requirement for any registration, recording or filing
in connection with the creation of a valid security interest in the Collateral.
Upon delivery to the Administrative Agent of the stock certificates evidencing
the Pledged Stock, the security interest created by this Agreement will
constitute a valid, perfected first priority security interest in the
Collateral, enforceable in accordance with its terms against all creditors of
the Borrower and any Persons purporting to purchase any Collateral from the
Borrower, except as affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
(e) The chief executive office of the Borrower is located at its
address set forth in subsection 13.2 of the Credit Agreement.
5. Covenants. The Borrower covenants and agrees with the Agents and
the Lenders that, from and after the date of this Agreement until this Agreement
is terminated and the security interests created hereby are released:
(a) If the Borrower shall, as a result of its ownership of the
Pledged Stock, become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights, whether in addition to, in substitution of, as a conversion of, or in
exchange for any shares of the Pledged Stock, or otherwise in respect thereof,
the Borrower shall accept the same as the agent of the Agents and the Lenders,
hold the same in trust for the Agents and the Lenders and deliver the same
forthwith to the Administrative Agent in the exact form received, duly indorsed
by the Borrower to the Administrative Agent, if required, together with an
undated stock power covering such certificate duly executed in blank by the
Borrower, to be held by the Administrative Agent, subject to the terms hereof,
as additional collateral security for the Obligations. Any sums paid upon or in
respect of the Pledged Stock upon the liquidation or dissolution of the Issuer
shall be paid over to the Administrative Agent to be held by it hereunder as
additional collateral security for the Obligations, and in case any distribution
of capital shall be made on or in respect of the Pledged Stock or any property
shall be distributed upon or with respect to the Pledged Stock pursuant to the
recapitalization or reclassification of the capital of the Issuer or pursuant to
the reorganization thereof, the property so distributed shall be delivered to
the Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the
<PAGE>
5
Pledged Stock shall be received by the Borrower, the Borrower shall, until such
money or property is paid or delivered to the Administrative Agent, hold such
money or property in trust for the Lenders, segregated from other funds of the
Borrower, as additional collateral security for the Obligations.
(b) Without the prior written consent of the Administrative Agent,
the Borrower will not (i) vote to enable, or take any other action to permit,
the Issuer to issue any stock or other equity securities of any nature or to
issue any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of the Issuer,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Collateral, (iii) create, incur or permit to exist
any Lien or option in favor of, or any claim of any Person with respect to, any
of the Collateral, or any interest therein, except for the security interests
created by this Agreement or (iv) enter into any agreement or undertaking (other
than the Credit Agreement and this Agreement) restricting the right or ability
of the Borrower or the Administrative Agent to sell, assign or transfer any of
the Collateral.
(c) The Borrower shall maintain the security interest created by this
Agreement as a first perfected security interest and shall defend such security
interest against claims and demands of all Persons whomsoever. At any time and
from time to time, upon the written request of the Administrative Agent, and at
the sole expense of the Borrower, the Borrower will promptly and duly execute
and deliver such further instruments and documents and take such further actions
as the Administrative Agent may reasonably request for the purposes of obtaining
or preserving the full benefits of this Agreement and of the rights and powers
herein granted. If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any promissory note, other instrument
or chattel paper, such note, instrument or chattel paper shall be immediately
delivered to the Administrative Agent, duly endorsed in a manner satisfactory to
the Administrative Agent, to be held as Collateral pursuant to this Agreement.
(d) The Borrower shall pay, and save the Agents and the Lenders
harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes which may be
payable or determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Agreement.
6. Cash Dividends; Voting Rights. Unless an Event of Default shall
have occurred and be continuing and the Administrative Agent shall have given
notice to the Borrower of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 7 below, the Borrower shall be
permitted to receive all cash dividends paid in the normal course of business of
the Issuer and consistent with past practice in respect of the Pledged Stock and
to exercise all voting and corporate rights with respect to the Pledged Stock;
provided, however, that no vote shall be cast or corporate right exercised or
other action taken which, in the Administrative Agent's reasonable judgment,
would impair the Collateral or which would be inconsistent with or
<PAGE>
6
result in any violation of any provision of the Credit Agreement, this Agreement
or any other Loan Document.
7. Rights of the Lenders and the Agents. (a) The Administrative
Agent may at any time or from time to time, in its sole discretion, cause any or
all of the Pledged Stock to be transferred of record into the name of the
Administrative Agent or its nominee. The Borrower will promptly give to the
Administrative Agent copies of any notices or other communications received by
it with respect to Pledged Stock registered in the name of the Borrower and the
Administrative Agent will promptly give to the Borrower copies of any notices
and communications received by the Administrative Agent with respect to the
Pledged Stock registered in the name of the Administrative Agent or its nominee.
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the Borrower, (a) the Administrative Agent shall have the right to receive any
and all cash dividends paid in respect of the Pledged Stock and make application
thereof to the Obligations in such order as set forth in Section 16, and (b) all
shares of the Pledged Stock not previously registered in the name of the
Administrative Agent or its nominee shall be registered in the name of the
Administrative Agent or its nominee, and the Administrative Agent or its nominee
may thereafter exercise (i) all voting, corporate and other rights pertaining to
such shares of the Pledged Stock at any meeting of shareholders of the Issuer or
otherwise and (ii) any and all rights of conversion, exchange, subscription and
any other rights, privileges or options pertaining to such shares of the Pledged
Stock as if it were the absolute owner thereof (including, without limitation,
the right to exchange at its discretion any and all of the Pledged Stock upon
the merger, consolidation, reorganization, recapitalization or other fundamental
change in the corporate structure of the Issuer, or upon the exercise by the
Borrower or the Administrative Agent of any right, privilege or option
pertaining to such shares of the Pledged Stock, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Stock with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Administrative Agent may determine), all
without liability except to account for property actually received by it, but
the Administrative Agent shall have no duty to the Borrower to exercise any such
right, privilege or option and shall not be responsible for any failure to do so
or delay in so doing.
8. Remedies. If an Event of Default shall have occurred and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted in this Agreement and in any
other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the Code. Without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon the Borrower or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
<PAGE>
7
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, assign, give option or options to
purchase or otherwise dispose of and deliver the Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, in the over-the-counter market, at any exchange, broker's
board or office of any Agent or any Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
Any Agent or any Lender shall have the right upon any such public sale or sales,
and, to the extent permitted by law, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free of any right or
equity of redemption in the Borrower, which right or equity is hereby waived or
released. The Administrative Agent shall apply any Proceeds from time to time
held by it and the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred in respect thereof or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of the Agents and the Lenders hereunder, including, without
limitation, reasonable attorneys' fees and disbursements of counsel to the
Administrative Agent, to the payment in whole or in part of the Obligations, in
such order as the Administrative Agent may elect, and only after such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation, Section
9-504(1)(c) of the Code, need the Administrative Agent account for the surplus,
if any, to the Borrower. To the extent permitted by applicable law, the Borrower
waives all claims, damages and demands it may acquire against any Agent or any
Lender arising out of the exercise by them of any rights hereunder. If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition. The Borrower shall remain liable for
any deficiency if the proceeds of any sale or other disposition of Collateral
are insufficient to pay the Obligations and the fees and disbursements of any
attorneys employed by any Agent or any Lender to collect such deficiency.
9. Registration Rights; Private Sales. (a) If the Administrative
Agent shall determine to exercise its right to sell any or all of the Pledged
Stock pursuant to Section 8 hereof, and if in the opinion of the Administrative
Agent it is necessary or advisable to have the Pledged Stock, or that portion
thereof to be sold, registered under the provisions of the Securities Act, the
Borrower will cause the Issuer to (i) execute and deliver, and cause the
directors and officers of the Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Administrative Agent, necessary or advisable to
register the Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange
<PAGE>
8
Commission applicable thereto. The Borrower agrees to cause the Issuer to comply
with the provisions of the securities or "Blue Sky" laws of any and all
jurisdictions which the Administrative Agent shall designate and to make
available to its security holders, as soon as practicable, an earnings statement
(which need not be audited) which will satisfy the provisions of Section 11(a)
of the Securities Act.
(b) The Borrower recognizes that the Administrative Agent may be
unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. The
Borrower acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if the Issuer would agree to do so.
(c) The Borrower further agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Stock pursuant to this Section valid
and binding and in compliance with any and all other applicable legal
requirements. The Borrower further agrees that a breach of any of the covenants
contained in this Section will cause irreparable injury to the Agents and the
Lenders, that the Agents and the Lenders have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section shall be specifically enforceable against the
Borrower, and the Borrower hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred under the Credit Agreement.
10. Irrevocable Authorization and Instruction to Issuer. The
Borrower hereby authorizes and instructs the Issuer to comply with any
instruction received by it from the Administrative Agent in writing that (a)
states that an Event of Default has occurred and (b) is otherwise in accordance
with the terms of this Agreement, without any other or further instructions from
the Borrower, and the Borrower agrees that the Issuer shall be fully protected
in so complying.
11. Administrative Agent's Appointment as Attorney-in-Fact. (a) The
Borrower hereby irrevocably constitutes and appoints the Administrative Agent
and any officer or agent of the Administrative Agent, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Borrower and in the name of
the Borrower or in the Administrative Agent's own name, from time to time in the
Administrative Agent's discretion, but at the
<PAGE>
9
expense of the Borrower, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Agreement, including, without limitation, any financing
statements, endorsements, assignments or other instruments of transfer. Without
limiting the generality of the foregoing, at any time and from time to time
while an Event of Default has occurred and is continuing, the Administrative
Agent may, in the name of the Borrower or in its own name, exercise all or any
of the following powers with respect to all or any of the Collateral:
(i) demand, sue for, collect, receive and give acquittance for any
and all monies due or to become due upon or by virtue thereof;
(ii) settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto;
(iii) sell, transfer, assign or otherwise deal in or with the same or
the proceeds or avails thereof, as fully and effectually as if the
Administrative Agent were the absolute owner thereof; and
(iv) extend the time of payment of any or all thereof and to make any
allowance and other adjustments with reference thereto;
provided that the Administrative Agent shall give the Borrower not less than ten
days' prior written notice of the time and place of any sale or other intended
disposition of any of the Collateral. The Administrative Agent and the Borrower
agree that such notice constitutes "reasonable notification" within the meaning
of Section 9-504(3) of the Code.
(b) The Borrower hereby ratifies all that said attorneys shall
lawfully do or cause to be done pursuant to the power of attorney granted in
paragraph 11. All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
12. Duty of Administrative Agent. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the Code or otherwise,
shall be to deal with it in substantially the same manner as the Administrative
Agent deals with similar securities and property for its own account. Neither
the Administrative Agent, any Lender nor any of their respective directors,
officers, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Borrower or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.
<PAGE>
10
13. Execution of Financing Statements. Pursuant to Section 9-402 of
the Code, the Borrower authorizes the Administrative Agent to file financing
statements with respect to the Collateral without the signature of the Borrower
in such form and in such filing offices as the Administrative Agent reasonably
determines appropriate to perfect the security interests of the Administrative
Agent under this Agreement. A carbon, photographic or other reproduction of
this Agreement shall be sufficient as a financing statement for filing in any
jurisdiction.
14. Authority of Administrative Agent. The Borrower acknowledges
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Borrower, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and neither the Borrower
nor the Issuer shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.
15. Appointment of Administrative Co-Agents. At any time or times,
in order to comply with any legal requirements in any jurisdiction, the
Administrative Agent may appoint another bank or trust company or one or more
other persons, either to act as administrative co-agent or co-agents, jointly
with the Administrative Agent, or to act as separate administrative agent or
agents on behalf of the Lenders with such power and authority as may be
necessary for the effectual operation of the provisions hereof and may be
specified in the instrument of appointment (which may, in the discretion of the
Administrative Agent, include provisions for the protection of such
administrative co-agent or separate administrative agent similar to the
provisions of this Section 15).
16. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, the proceeds of any sale of, or other
realization upon, all or any part of the Collateral and any cash held shall be
applied by the Administrative Agent in the following order of priorities:
first, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the
Administrative Agent, and all expenses, liabilities and advances incurred
or made by the Administrative Agent in connection therewith, and any other
unreimbursed expenses for which the Administrative Agent or any Lender is
to be reimbursed pursuant to subsection 13.5 of the Credit Agreement or
Section 19 hereof and unpaid fees owing to the Administrative Agent under
the Credit Agreement;
second, to the ratable payment of unpaid principal of the Obligations;
<PAGE>
11
third, to the ratable payment of accrued but unpaid interest on the
Obligations in accordance with the provisions of the Credit Agreement;
fourth, to the ratable payment of all other Obligations, until all
Obligations have been paid in full; and
finally, to payment to the Borrower or its successors or assigns, or
as a court of competent jurisdiction may direct, of any surplus then
remaining from such proceeds.
17. Further Assurances. (a) The Borrower agrees that it will, at
its expense and in such manner and form as the Administrative Agent may require,
execute, deliver, file and record any financing statement, specific assignment
or other paper and take any other action that may be necessary or desirable, or
that the Administrative Agent may request, in order to create, preserve, perfect
or validate any security interest in the Collateral granted hereunder or to
enable the Administrative Agent to exercise and enforce its rights hereunder
with respect to any of the Collateral.
(b) The Borrower agrees that it will not change (i) its name,
identity or corporate structure in any manner (other than pursuant to the Merger
or the Alternative Merger) or (ii) the location of its chief executive office
unless it shall have given the Administrative Agent not less than 30 days' prior
notice thereof.
18. Termination of Security Interests; Release of Collateral. Upon
repayment in full of all Obligations and the termination of the Commitments
under the Credit Agreement, the security interests in the Collateral granted
hereunder shall terminate and all rights to the Collateral shall revert to the
Borrower. At any time and from time to time prior to such termination of the
security interests in the Collateral granted hereunder, the Administrative Agent
(i) may release any of the Collateral with the prior written consent of the
Lenders parties to the Credit Agreement in accordance with the provisions of the
Credit Agreement and (ii) shall release the security interests in the Collateral
granted hereunder in accordance with the provisions of subsection 13.9 of the
Credit Agreement. Upon any such termination of the security interest in the
Collateral granted hereunder or release of Collateral, the Administrative Agent
will, at the expense of the Borrower, execute and deliver to the Borrower such
documents as the Borrower shall reasonably request to evidence the termination
of the security interests in the Collateral granted hereunder or the release of
such Collateral, as the case may be.
19. Expenses and Indemnification. (a) The Borrower agrees that it
will forthwith upon demand pay to the Administrative Agent:
(i) the amount of any taxes which the Administrative Agent may have
been required to pay by reason of the security interests in the Collateral
granted hereunder or to free any of the Collateral from any Lien thereon;
and
<PAGE>
12
(ii) the amount of any and all out-of-pocket expenses, including the
fees and disbursements of counsel and of any other experts, which the
Administrative Agent may incur in connection with (w) the administration or
enforcement of this Agreement, including such expenses as are incurred to
preserve the value of the Collateral and the validity, perfection, rank and
value of any security interest in the Collateral granted hereunder, (x) the
collection, sale or other disposition of any of the Collateral, (y) the
exercise by the Administrative Agent of any of the rights conferred upon it
hereunder or (z) any Default or Event of Default.
Any such amount not paid on demand shall bear interest at the rate applicable to
Revolving Credit Loans that are Base Rate Loans plus 2%.
(b) The indemnification provisions of subsection 13.7 of the Credit
Agreement are incorporated by reference herein as if set forth in full herein.
(c) The provisions of this Section 19 shall survive any termination
of the Credit Agreement.
20. Notices. All notices, requests and demands to or upon the
Administrative Agent or the Borrower to be effective shall be in writing (or by
facsimile transmission or similar electronic transfer) and shall be deemed to
have been duly given or made (a) when delivered by hand or (b) if given by mail,
three Domestic Business Days after the date deposited in the mails by certified
mail, return receipt requested, or (c) if by facsimile transmission or similar
electronic transfer, when received, addressed to the Administrative Agent or the
Borrower at its address or transmission number for notices provided in
subsection 13.2 of the Credit Agreement. The Administrative Agent and the
Borrower may change their addresses and transmission numbers for notices by
notice in the manner provided in this Section.
21. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
22. Amendments in Writing; No Waiver; Cumulative Remedies. (a)
None of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Borrower and the Administrative Agent, provided that any provision of this
Agreement may be waived by the Administrative Agent and the Lenders in a letter
or agreement executed by the Administrative Agent or by facsimile transmission
from the Administrative Agent.
(b) No Agent nor any Lender shall by any act (except by a written
instrument pursuant to paragraph 22(a) hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any
<PAGE>
13
Default or Event of Default or in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on the part of any
Agent or any Lender, any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by any Agent or any Lender of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which such Agent or such Lender would otherwise have
on any future occasion.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
23. Section Headings. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
24. Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of the Borrower and shall inure to the benefit of the
Agents and the Lenders and their successors and assigns.
25. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered as of the date first above written.
SANTA FE PACIFIC CORPORATION
By: ____________________________
Title:
<PAGE>
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Stock
Pledge Agreement, dated as of __________ __, 1995, made by Santa Fe Pacific
Corporation for the benefit of Morgan Guaranty Trust Company of New York, as
Administrative Agent (the "Pledge Agreement"). The undersigned agrees for the
benefit of the Agents and the Lenders as follows:
1. The undersigned will be bound by the terms of the Pledge Agreement
and will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The undersigned will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in paragraph 5 of the
Pledge Agreement.
3. The terms of paragraph 9 of the Pledge Agreement shall apply to
it, mutatis mutandis, with respect to all actions that may be required of it
under or pursuant to or arising out of Section 9 of the Pledge Agreement.
THE ATCHISON, TOPEKA AND SANTA FE
RAILWAY COMPANY
By: _____________________________________
Title:
Address for Notices:
1700 East Golf Road
Schaumberg, Illinois 60173
Attention: ______________________________
Fax: ____________________________________
<PAGE>
SCHEDULE 1
TO STOCK PLEDGE AGREEMENT
-------------------------
DESCRIPTION OF PLEDGED STOCK
<TABLE>
<CAPTION>
Stock
Issuer Certificate
Class of Stock No. No. of Shares
- ------------------------------ -------------- ------------ -------------
<S> <C> <C> <C>
The Atchison, Topeka and Santa Common
Fe Railway Company
</TABLE>
<PAGE>
EXHIBIT F
---------
FORM OF
GUARANTEE
GUARANTEE, dated as of ________, 199__ (as the same may be amended,
modified or otherwise supplemented from time to time, this "Guarantee"), made by
THE ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY (the "Guarantor"), in favor of
the Lenders (as hereinafter defined) and MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, as administrative agent (in such capacity, the "Administrative Agent") for
the Lenders parties to the Credit Agreement described below.
W I T N E S S E T H:
----------------------------
WHEREAS, Santa Fe Pacific Corporation (the "Borrower") is a party to
the Credit Agreement, dated as of January 27, 1995 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among (i) the
Borrower, (ii) the Lenders named therein, (iii) J.P. Morgan Securities Inc., as
Arranger, (iv) Chase Securities, Inc., Chemical Securities Inc., Goldman, Sachs
& Co. and Union Bank of Switzerland, as Co-Arrangers, (v) Morgan Guaranty Trust
Company of New York, The Chase Manhattan Bank (National Association), Chemical
Bank, Pearl Street L.P. and Union Bank of Switzerland, as Arranging Agents, and
(vi) Morgan Guaranty Trust Company of New York, as Administrative Agent and as
Documentation Agent;
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make Loans to the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, the Borrower owns directly all of the issued and outstanding
stock of the Guarantor;
WHEREAS, a portion of the proceeds of the Loans will be used to enable
the Borrower to provide for working capital and other needs of the Guarantor in
connection with the operation of its business and the Guarantor will thereby be
directly and indirectly benefitted by the financial arrangements in the Credit
Agreement; and
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed
that facility fees payable to the Lenders under the Credit Agreement will be
reduced upon execution and delivery of this Guarantee;
<PAGE>
2
NOW, THEREFORE, in consideration of the premises, the Guarantor hereby
agrees with the Administrative Agent, for the ratable benefit of the Lenders and
the Agents, as follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement.
(b) As used herein, the following terms shall have the following
meanings:
"Lenders": the collective reference to (i) each Lender (as defined in
the Credit Agreement) and (ii) each Lender set forth in clause (i) of this
defined term, and each affiliate of any such Lender, that is a party to any
Interest Rate Agreement entered into pursuant to subsection 9.8 of the
Credit Agreement.
"Obligations" means the collective reference to the unpaid principal
of and interest on the Loans and all other obligations and liabilities of
the Borrower to the Agents or the Lenders (including, without limitation,
interest accruing at the then applicable rate provided in the Credit
Agreement after the maturity of the Loans and interest accruing at the then
applicable rate provided in the Credit Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding), whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Credit Agreement, this Guarantee, the other
Loan Documents, any Secured Interest Rate Agreement or any other document
made, delivered or given in connection therewith, whether on account of
principal, interest, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to
the Agents or to the Lenders that are required to be paid by the Borrower
or the Guarantor pursuant to the terms of the Credit Agreement or this
Guarantee or any other Loan Document or any Secured Interest Rate
Agreement).
"Secured Interest Rate Agreement": any Interest Rate Agreement
entered into pursuant to subsection 9.8 of the Credit Agreement to which
any Lender is a party.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Guarantee shall refer to this Guarantee as a whole and
not to any particular provision of this Guarantee, and section and paragraph
references are to this Guarantee unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
<PAGE>
3
2. Guarantee. (a) Subject to the provisions of paragraph 2, the
Guarantor, as primary obligor and not as surety only, hereby unconditionally and
irrevocably guarantees to the Lenders and to the Administrative Agent, for the
ratable benefit of the Lenders, the Agents and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations. This Guarantee is a guarantee of
payment and not merely a guarantee of collection.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of the Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by the Guarantor under applicable federal and state laws relating to the
insolvency of debtors.
(c) The Guarantor further agrees to pay any and all expenses
(including, without limitation, all fees and disbursements of counsel) which may
be paid or incurred by any Agent or any Lender in enforcing, or obtaining advice
of counsel in respect of, any rights with respect to, or collecting, any or all
of the Obligations and/or enforcing any rights with respect to, or collecting
against, the Guarantor under this Guarantee. This Guarantee shall remain in
full force and effect until the Obligations are paid in full and the Commitments
are terminated, notwithstanding that from time to time prior thereto the
Borrower may be free from any Obligations.
(d) The Guarantor agrees that the Obligations may at any time and
from time to time exceed the amount of the liability of the Guarantor hereunder
without impairing this Guarantee or affecting the rights and remedies of any
Agent or any Lender hereunder.
(e) No payment or payments made by the Borrower, the Guarantor, any
other guarantor or any other Person or received or collected by any Agent or any
Lender from the Borrower, the Guarantor, any other guarantor or any other Person
by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of the Guarantor hereunder which shall, notwithstanding any such
payment or payments other than payments made by the Guarantor in respect of the
Obligations or payments received or collected from the Guarantor in respect of
the Obligations, remain liable for the Obligations up to the maximum liability
of the Guarantor hereunder until the Obligations are paid in full and the
Commitments are terminated.
(f) The Guarantor agrees that whenever, at any time, or from time to
time, it shall make any payment to any Agent or any Lender on account of its
liability hereunder, it will notify the Administrative Agent in writing that
such payment is made under this Guarantee for such purpose.
3. No Subrogation. Notwithstanding any payment or payments made by
the Guarantor hereunder or any set-off or application of funds of the Guarantor
by any
<PAGE>
4
Lender, the Guarantor shall not be entitled to be subrogated to any of
the rights of any Agent or any Lender against the Borrower or any other
guarantor or any collateral security or guarantee or right of set-off held by
any Agent or any Lender for the payment of the Obligations, nor shall the
Guarantor seek or be entitled to seek any contribution or reimbursement from the
Borrower or any other guarantor in respect of payments made by the Guarantor
hereunder, until all amounts owing to the Agents and the Lenders by the Borrower
on account of the Obligations are paid in full and the Commitments are
terminated. If any amount shall be paid to the Guarantor on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full, such amount shall be held by the Guarantor in trust for the Agents
and the Lenders, segregated from other funds of the Guarantor, and shall,
forthwith upon receipt by the Guarantor, be turned over to the Administrative
Agent in the exact form received by the Guarantor (duly indorsed by the
Guarantor to the Administrative Agent, if required), to be applied against the
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.
4. Amendments, etc. with respect to the Obligations; Waiver of
Rights. The Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against the Guarantor and without notice to or
further assent by the Guarantor, any demand for payment of any of the
Obligations made by any Agent or any Lender may be rescinded by such party and
any of the Obligations continued, and the Obligations, or the liability of any
other party upon or for any part thereof, or any collateral security or
guarantee therefor or right of set-off with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
settled, compromised, waived, surrendered or released by any Agent or any
Lender, and the Credit Agreement and the other Loan Documents and any other
documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Administrative
Agent (or the Required Lenders, as the case may be) may deem advisable from time
to time, and any collateral security, guarantee or right of set-off at any time
held by any Agent or any Lender for the payment of the Obligations may be sold,
exchanged, waived, surrendered or released. No Agent nor any Lender shall have
any obligation to protect, secure, perfect or insure any Lien at any time held
by it as security for the Obligations or for this Guarantee or any property
subject thereto. When making any demand hereunder against the Guarantor, any
Agent or any Lender may, but shall be under no obligation to, make a similar
demand on the Borrower or any other guarantor, and any failure by any Agent or
any Lender to make any such demand or to collect any payments from the Borrower
or any such other guarantor or any release of the Borrower or such other
guarantor shall not relieve the Guarantor of its several obligations or
liabilities hereunder, and shall not impair or affect the rights and remedies,
express or implied, or as a matter of law, of any Agent or any Lender against
the Guarantor. For the purposes hereof "demand" shall include the commencement
and continuance of any legal proceedings.
5. Guarantee Absolute and Unconditional. The Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Obligations and
<PAGE>
5
notice of or proof of reliance by any Agent or any Lender upon this Guarantee or
acceptance of this Guarantee, and the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon this Guarantee; and all dealings
between the Borrower and the Guarantor, on the one hand, and the Agents and the
Lenders, on the other hand, likewise shall be conclusively presumed to have been
had or consummated in reliance upon this Guarantee. The Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or the Guarantor with respect to the
Obligations. The Guarantor understands and agrees that this Guarantee shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity, regularity or enforceability of the Credit
Agreement or any other Loan Document, any of the Obligations or any other
collateral security therefor or guarantee or right of set-off with respect
thereto at any time or from time to time held by any Agent or any Lender, (b)
any defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower against any Agent or any Lender, (c) any change in the existence,
structure or ownership of the Borrower or the Guarantor, or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting the Borrower or
its assets, the Guarantor or any other guarantor of any of the Obligations, or
(d) any other circumstance whatsoever (with or without notice to or knowledge of
the Borrower or the Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Obligations,
or of the Guarantor under this Guarantee, in bankruptcy or in any other
instance. When pursuing its rights and remedies hereunder against the Guarantor,
any Agent and any Lender may, but shall be under no obligation to, pursue such
rights and remedies as it may have against the Borrower or any other Person or
against any collateral security or guarantee for the Obligations or any right of
set-off with respect thereto, and any failure by any Agent or any Lender to
pursue such other rights or remedies or to collect any payments from the
Borrower or any such other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of set-off, or any release
of the Borrower or any such other Person or any such collateral security,
guarantee or right of set-off, shall not relieve the Guarantor of any liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Agents and the Lenders
against the Guarantor. This Guarantee shall remain in full force and effect and
be binding in accordance with and to the extent of its terms upon the Guarantor
and the successors and assigns thereof, and shall inure to the benefit of the
Agents and the Lenders, and their respective successors, indorsees, transferees
and assigns, until all the Obligations and the obligations of the Guarantor
under this Guarantee shall have been satisfied by payment in full and the
Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement the Borrower may be free from any Obligations.
The Guarantor hereby acknowledges and agrees that this Guarantee is an
independent obligation of the Guarantor, and any stay with respect to a
bankruptcy of the Borrower shall not operate as a stay against the Guarantor
with respect to this Guarantee.
<PAGE>
6
6. Reinstatement. This Guarantee shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the Obligations is rescinded or must otherwise be restored or returned
by any Agent or any Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or the Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or the Guarantor or any substantial
part of its property, or otherwise, all as though such payments had not been
made.
7. Payments. The Guarantor hereby guarantees that payments hereunder
will be paid to the Administrative Agent without set-off or counterclaim, free
and clear of and without deduction or withholding for or on account of any
present or future taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature, now or hereafter imposed by any governmental or
taxing authority to which the Guarantor is subject, in Dollars at the office of
the Administrative Agent set forth in subsection 13.2 of the Credit Agreement.
8. Representations and Warranties. The Guarantor hereby represents
and warrants that:
(a) it is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the corporate power and
authority and the legal right to own and operate its property, to lease the
property it operates and to conduct the business in which it is currently
engaged;
(b) it has the corporate power and authority and the legal right to
execute and deliver, and to perform its obligations under, this Guarantee, and
has taken all necessary corporate action to authorize its execution, delivery
and performance of this Guarantee;
(c) this Guarantee constitutes a legal, valid and binding obligation
of the Guarantor enforceable in accordance with its terms, except as affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting the enforcement of creditors' rights
generally, general equitable principles and an implied covenant of good faith
and fair dealing;
(d) the execution, delivery and performance of this Guarantee will
not violate any provision of any requirement of law or contractual obligation
binding upon the Guarantor and will not result in or require the creation or
imposition of any Lien on any of the properties or revenues of the Guarantor
pursuant to any such requirement of law or contractual obligation; and
(e) no consent or authorization of, filing with, or other act by or
in respect of, any arbitrator or governmental authority and no consent of any
other Person (including, without limitation, any stockholder or creditor of the
Guarantor) is required
<PAGE>
7
in connection with the execution, delivery, performance, validity or
enforceability of this Guarantee.
The Guarantor agrees that the foregoing representations and warranties shall be
deemed to have been made by the Guarantor on the date of each borrowing by the
Borrower under the Credit Agreement on and as of such date of borrowing as
though made hereunder on and as of such date.
9. Authority of Administrative Agent. The Guarantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Guarantee with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Guarantee shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Guarantor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and the Guarantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
10. Notices. All notices, requests and demands to or upon any Agent,
any Lender or the Guarantor to be effective shall be in writing (or by facsimile
transmission or similar electronic transfer) and shall be deemed to have been
duly given or made (a) when delivered by hand or (b) if given by mail, three
Domestic Business Days after the date deposited in the mails by certified mail,
return receipt requested, or (c) if by facsimile transmission or similar
electronic transfer, when received, addressed as follows:
(a) if to any Agent or any Lender, at its address or transmission
number for notices provided in subsection 13.2 of the Credit Agreement; and
(b) if to the Guarantor, at its address or transmission number for
notices set forth under its signature below.
Each Agent, each Lender and the Guarantor may change its address and
transmission numbers for notices by notice in the manner provided in this
Section.
11. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12. Integration. This Guarantee represents the agreement of the
Guarantor with respect to the subject matter hereof and there are no promises or
<PAGE>
8
representations by any Agent or any Lender relative to the subject matter hereof
not reflected herein.
13. Amendments in Writing; No Waiver; Cumulative Remedies. (a)
None of the terms or provisions of this Guarantee may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Guarantor and the Administrative Agent, provided that any provision of this
Guarantee may be waived by the Administrative Agent and the Lenders in a letter
or agreement executed by the Administrative Agent or by facsimile transmission
from the Administrative Agent.
(b) No Agent nor any Lender shall by any act (except by a written
instrument pursuant to paragraph 13(a) hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of any Agent or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by any Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which such Agent
or such Lender would otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
14. Expenses and Indemnification. (a) The Guarantor shall pay all
reasonable out-of-pocket expenses of the Administrative Agent in connection with
the preparation and effectiveness of this Guarantee (including reasonable fees
and disbursements of Simpson Thacher & Bartlett, special counsel to the
Administrative Agent, and of Fritz R. Kahn, Esq., special counsel to the
Administrative Agent for Interstate Commerce Commission matters, in connection
with the preparation and effectiveness of this Guarantee). The Guarantor shall
also pay all reasonable out-of-pocket expenses of the Administrative Agent
(including, without duplication, reasonable fees and disbursements of the
Administrative Agent's outside counsel and the allocated cost and all
disbursements of the Administrative Agent's internal counsel) in connection with
an Event of Default and collection, bankruptcy, insolvency and other enforcement
proceedings resulting therefrom.
(b) The Guarantor agrees to indemnify the Administrative Agent, its
affiliates and the directors, officers, agents, stockholders, partners and
employees of the foregoing (each an "Indemnitee") and hold each such Indemnitee
harmless from and against all liabilities, losses, damages, costs and expenses
including, subject to the limitations set forth in the next succeeding sentence,
reasonable fees and disbursements of counsel (which for these purposes shall
encompass the allocated costs of internal legal
<PAGE>
9
services and all disbursements of internal counsel), in connection with any
investigative, administrative or judicial action, suit or proceeding, whether or
not such Indemnitee shall be designated a party thereto, that may be incurred by
such Indemnitee relating to or arising out of this Guarantee, provided that in
no event shall any Indemnitee have the right to be indemnified hereunder by the
Guarantor for its own gross negligence or willful misconduct as determined by a
court of competent jurisdiction.
(c) The provisions of this Section 14 shall survive any termination
of the Credit Agreement.
15. Section Headings. The Section headings used in this Guarantee
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
16. Successors and Assigns. This Guarantee shall be binding upon the
successors and assigns of the Guarantor and shall inure to the benefit of the
Agents and the Lenders and their successors and assigns.
17. Governing Law. This Guarantee shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
18. Submission To Jurisdiction; Waivers. The Guarantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Guarantee, or for recognition and enforcement
of any judgement in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Guarantor at its address set forth under its signature below or at such
other address of which the Administrative Agent shall have been notified
pursuant hereto; and
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction.
19. Acknowledgements. The Guarantor hereby acknowledges that:
<PAGE>
10
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Guarantee;
(b) neither any Agent nor any Lender has any fiduciary relationship
with or duty to the Guarantor arising out of or in connection with this
Guarantee, and the relationship between the Agents and Lenders, on one
hand, and the Guarantor, on the other hand, in connection herewith or
therewith is solely that of creditor and debtor; and
(c) no joint venture is created hereby or otherwise exists by virtue
of the transactions contemplated hereby among the Lenders or among the
Guarantor and the Lenders.
20. WAIVERS OF JURY TRIAL. THE GUARANTOR AND, BY ACCEPTANCE HEREOF,
THE ADMINISTRATIVE AGENT, THE OTHER AGENTS AND THE LENDERS HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be
duly executed and delivered by its duly authorized officer as of the day and
year first above written.
THE ATCHISON, TOPEKA AND SANTA FE
RAILWAY COMPANY
By: ______________________________________
Title:
Address for Notices:
1700 East Golf Road
Shaumberg, Illinois 60173
Attention: _______________________________
Fax: _____________________________________
<PAGE>
EXHIBIT G-1
-----------
[OPINION OF MAYER, BROWN & PLATT]
__________ __, 1995
To the Agents and Lenders Referred to Below
c/o Morgan Guaranty Trust Company of New York,
as Administrative Agent
60 Wall Street
New York, New York 10260-0060
Ladies and Gentlemen:
We have acted as special counsel for Santa Fe Pacific Corporation, a
Delaware corporation (the "Borrower"), in connection with the execution and
delivery of (a) the Credit Agreement, dated as of January 27, 1995 (the "Credit
Agreement"), among (i) the Borrower, (ii) the lenders named therein (the
"Lenders"), (iii) J.P. Morgan Securities Inc., as Arranger, (iv) Chase
Securities, Inc., Chemical Securities Inc., Goldman, Sachs & Co. and Union Bank
of Switzerland, as Co-Arrangers, (v) Morgan Guaranty Trust Company of New York,
The Chase Manhattan Bank (National Association), Chemical Bank, Pearl Street
L.P. and Union Bank of Switzerland, as Arranging Agents, and (vi) Morgan
Guaranty Trust Company of New York, as Administrative Agent and as Documentation
Agent (the Arranger, the Co-Arrangers, the Arranging Agents, the Administrative
Agent and the Documentation Agent collectively referred to herein as the
"Agents"), and (b) the Stock Pledge Agreement executed and delivered pursuant to
the Credit Agreement. Terms defined in the Credit Agreement are used herein as
therein defined. This opinion is being rendered to you at the request of our
client pursuant to subsection 8.1(h)(i) of the Credit Agreement.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of the Credit Agreement and the Stock Pledge
Agreement and such documents, corporate records, certificates of public
officials and other instruments as we have deemed necessary for purposes of this
opinion. We have assumed, without independent investigation, the genuineness of
all signatures of all parties (other than those on behalf of the Borrower), the
legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals and the conformity to authorized originals of all
documents submitted to us as copies. As to facts material to this opinion, we
have relied without independent investigation upon the written statements and
representations of the Borrower and its officers and representatives and public
officials.
Upon the basis of the foregoing, and subject to the qualifications set
forth below, we are of the opinion that:
<PAGE>
___________, 1995
Page 2
1. The Borrower is a corporation validly existing and in good standing
under the laws of the State of Delaware. Each of the Borrower's Material
Subsidiaries is validly existing and in good standing under the laws of the
State of Delaware. The Borrower has all corporate powers to carry on its
business as now conducted.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Stock Pledge Agreement are within the Borrower's
corporate powers and have been duly authorized by all necessary corporate
action on the part of the Borrower.
3. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Stock Pledge Agreement do not require any action
by or in respect of, or filing with, any governmental body, agency or
official of the United States of America or the States of New York or
Delaware or contravene, or constitute a default under, any provision of
applicable law or regulation of the United States of America or the State
of New York, the General Corporation Law of the State of Delaware or of the
certificate of incorporation or by-laws of the Borrower or, to the best of
our knowledge, of any material agreement, judgment, injunction, order,
decree or other instrument binding upon the Borrower or any of its
Subsidiaries or, to the best of our knowledge, result in the creation or
imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries, other than the Lien created pursuant to the Stock Pledge
Agreement; provided that we express no opinion as to any contravention of
or default under, or any Lien which may be required to be created or
imposed under, any Existing Borrower Securities.
4. Each of the Credit Agreement and the Stock Pledge Agreement has
been duly executed by the Borrower and constitutes a valid and binding
agreement of the Borrower enforceable against the Borrower in accordance
with its terms.
5. The Stock Pledge Agreement creates in favor of the Administrative
Agent, for the ratable benefit of the Agents and the Lenders, a security
interest in the Collateral described therein.
6. The Stock Pledge Agreement, together with the delivery of the
certificates representing the shares of stock identified on Schedule I
thereto (the "Pledged Shares") to the Administrative Agent in the State of
New York, creates in favor of the Administrative Agent, for the ratable
benefit of the Agents and the Lenders, a perfected security interest under
the Uniform Commercial Code as in effect in the State of New York on the
date hereof in the Pledged Shares. Assuming the Administrative Agent
acquires its interest in the Pledged Shares in good faith and without
notice of any adverse claims, and that the certificate representing each
Pledged Share is either in bearer form, issued or endorsed in
<PAGE>
___________, 1995
Page 3
the name of the Administrative Agent or in blank, the Administrative Agent
will acquire its security interest in the Pledged Shares free of adverse
claims.
Our opinions are subject to the following qualifications:
(a) We express no opinion as to the effect of the law of any
jurisdiction other than the State of New York wherein any Lender or its
Applicable Lending Office may be located, or wherein enforcement of the
Credit Agreement may be sought, which limits the rates of interest legally
chargeable or collectible.
(b) Our opinions are subject to the effect of any applicable
bankruptcy, involvency, fraudulent conveyance, reorganization, moratorium
or similar law affecting creditors' rights generally and to the effect of
general principles of equity (regardless of whether considered in a
proceeding in equity or at law), including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing.
(c) We express no opinion with respect to indemnification or
contribution obligations which contravene public policy.
(d) Certain remedial provisions of the Stock Pledge Agreement may be
unenforceable under applicable law, but the inclusion of such provisions
does not affect the validity of the Stock Pledge Agreement or the Lien
created thereby and the Stock Pledge Agreement contains adequate provisions
for the practical realization of the benefits purported to be granted
thereby.
(e) We express no opinion as to subsection 13.15(b) of the Credit
Agreement insofar as it relates to an action brought in the United States
District Court for the Southern District of New York and note that such
matters may be raised by such court.
(f) We express no opinion as to any provision of any Loan Document
that purports to establish an evidentiary standard for determinations by
the Lenders or the Agents.
Our opinions herein are limited solely to the federal laws of the
United States of America, the laws of the State of New York and the General
Corporation Law of the State of Delaware, and we express no opinion herein
concerning the laws of any other jurisdiction.
The opinions given herein are as of the date hereof. We assume no
obligation to update or supplement this opinion to reflect any facts or
circumstances that may hereafter come to our attention or any changes in law
that may hereafter occur.
<PAGE>
___________, 1995
Page 4
This opinion is furnished to you solely in connection with the
transactions described above and (i) may not be relied upon by anyone other than
you and (ii) may be so relied upon only in connection with the transactions
described in the Credit Agreement.
Very truly yours,
MAYER, BROWN & PLATT
<PAGE>
EXHIBIT G-2
-----------
[OPINION OF GENERAL COUNSEL]
__________ __, 1995
To the Agents and Lenders Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Administrative Agent
60 Wall Street
New York, New York 10260-0060
Ladies and Gentlemen:
I am the General Counsel of The Atchison, Topeka & Santa Fe Railway
Company (the "Santa Fe Railroad") and have been asked to render this opinion to
you pursuant to subsection 8.1(h)(ii) of the Credit Agreement, dated as of
January 22, 1995 (the "Credit Agreement"), among (i) Santa Fe Pacific
Corporation, a Delaware corporation (the "Borrower"), (ii) the lenders named
therein (the "Lenders"), (iii) J.P. Morgan Securities Inc., as Arranger, (iv)
Chase Securities, Inc., Chemical Securities Inc., Goldman, Sachs & Co. and Union
Bank of Switzerland, as Co-Arrangers, (v) Morgan Guaranty Trust Company of New
York, The Chase Manhattan Bank (National Association), Chemical Bank, Pearl
Street L.P. and Union Bank of Switzerland, as Arranging Agents, and (vi) Morgan
Guaranty Trust Company of New York, as Administrative Agent and as Documentation
Agent (the Arranger, the Co-Arrangers, the Arranging Agents, the Administrative
Agent and the Documentation Agent collectively referred to herein as the
"Agents"). Terms defined in the Credit Agreement are used herein as therein
defined.
I, or attorneys under my supervision, have examined originals or
copies, certified or otherwise identified to my satisfaction, of the Credit
Agreement, the Stock Pledge Agreement and such documents, corporate records,
certificates of public officials and other instruments as I have deemed
necessary for purposes of this opinion.
Upon the basis of the foregoing, and subject to the qualifications set
forth below, I am of the opinion that:
1. The Santa Fe Railroad is a corporation, validly existing and in
good standing under the laws of the State of Delaware.
2. The Santa Fe Railroad has all corporate powers and all
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted, except in any case where the failure to be in
good standing
<PAGE>
___________, 1995
Page 2
or to have such powers, licenses, authorizations, consents or approvals would
not, in the aggregate, materially adversely affect the financial position,
results of operations or business of the Santa Fe Railroad.
3. Except as referred to in subsection 7.6 of the Credit Agreement,
to the best of my knowledge there is no action, suit or proceeding pending
against, or threatened against or affecting, the Santa Fe Railroad before any
court or arbitrator or any governmental body, agency or official in which there
is a reasonable possibility of an adverse decision that could materially
adversely affect the business, financial position or results of operations of
the Santa Fe Railroad, considered as a whole.
The opinions given herein are as of the date hereof. I assume no
obligation to update or supplement this opinion to reflect any facts or
circumstances that may hereafter come to my attention or any changes in law that
may hereafter occur.
This opinion is furnished to you solely in connection with the
transactions described above and (i) may not be relied upon by anyone other than
you and (ii) may be so relied upon only in connection with the transactions
described in the Credit Agreement.
Very truly yours,
Richard E. Weicher
<PAGE>
EXHIBIT G-3
-----------
[OPINION OF FRITZ R. KAHN, P.C.]
__________ __, 1995
To the Lenders named in Schedule I hereto
and the Agents Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Administrative Agent
60 Wall Street
New York, New York 10260-0060
Ladies and Gentlemen:
I have acted as special counsel to Morgan Guaranty Trust Company of
New York, as Administrative Agent and as Documentation Agent, in connection with
the preparation, execution and delivery of (a) the Credit Agreement, dated as of
January 27, 1995 (the "Credit Agreement"), among (i) Santa Fe Pacific
Corporation, a Delaware corporation (the "Borrower"), (ii) the lenders named
therein (the "Lenders"), (iii) J.P. Morgan Securities Inc., as Arranger, (iv)
Chase Securities, Inc., Chemical Securities Inc., Goldman, Sachs & Co. and Union
Bank of Switzerland, as Co-Arrangers, (v) Morgan Guaranty Trust Company of New
York, The Chase Manhattan Bank (National Association), Chemical Bank, Pearl
Street L.P. and Union Bank of Switzerland, as Arranging Agents, and (vi) Morgan
Guaranty Trust Company of New York, as Administrative Agent and as Documentation
Agent (the Arranger, the Co-Arrangers, the Arranging Agents, the Administrative
Agent and the Documentation Agent collectively referred to herein as the
"Agents") and (b) the Stock Pledge Agreement executed and delivered pursuant to
the Credit Agreement.
This opinion is delivered to you pursuant to subsection 8.1(h)(iii) of
the Credit Agreement. Unless otherwise defined herein, terms defined in the
Credit Agreement are used herein as therein defined.
In connection with this opinion I have examined the following
documents:
(a) a copy of the Credit Agreement signed by the Borrower, the Agents
and the Lenders; and
(b) a copy of the Stock Pledge Agreement signed by the Borrower.
In such examination I have assumed the genuineness of all signatures,
the authenticity, regularity and completeness of all the aforementioned
documents submitted to me as originals, the completeness of all documents
submitted
<PAGE>
- 2 -
to me as certified, conformed or photostatic copies and the conformity
of such documents to the original documents.
Based upon the foregoing, and subject to the qualifications and
comments set forth below, I am of the opinion that the execution, delivery and
performance by the Borrower of the Credit Agreement and the Stock Pledge
Agreement (a) do not require any action by or in respect of, filing with, or
notice to, the Interstate Commerce Commission and (b) will not violate any
provision of the Interstate Commerce Act, as amended, or any regulation
promulgated thereunder.
I note that any transfer of the Pledged Stock pledged pursuant to the
Stock Pledge Agreement, upon foreclosure thereof, to a carrier regulated by the
Interstate Commerce Commission under the Interstate Commerce Act would require
the approval of the Interstate Commerce Commission.
I am a member of the Bar of the District of Columbia and I do not
express any opinion concerning any law other than the federal laws of the United
States of America.
This opinion is rendered to you in connection with the above-described
transactions. This opinion may not be relied upon by you for any other purpose,
or relied upon by any other person, firm or corporation without my prior written
consent.
Very truly yours,
FRITZ R. KAHN, P.C.
<PAGE>
SCHEDULE I
LENDERS PARTIES TO THE CREDIT AGREEMENT
Morgan Guaranty Trust Company of New York
The Chase Manhattan Bank (National Association)
Chemical Bank
Pearl Street L.P.
Union Bank of Switzerland
[Other Lenders]
<PAGE>
EXHIBIT G-4
-----------
[OPINION OF SIMPSON THACHER & BARTLETT]
___________ __, 1995
To the Lenders named in Schedule I hereto
and the Agents Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Administrative Agent
60 Wall Street
New York, New York 10260-0060
Ladies and Gentlemen:
We have acted as special counsel to Morgan Guaranty Trust Company of
New York, as Administrative Agent, in connection with the preparation,
execution and delivery of the Credit Agreement, dated as of January 27, 1995
(the "Credit Agreement"), among (i) Santa Fe Pacific Corporation, a Delaware
corporation (the "Borrower"), (ii) the lenders named therein (the "Lenders"),
(iii) J.P. Morgan Securities Inc., as Arranger, (iv) Chase Securities, Inc.,
Chemical Securities Inc., Goldman, Sachs & Co. and Union Bank of Switzerland,
as Co-Arrangers, (v) Morgan Guaranty Trust Company of New York, The Chase
Manhattan Bank (National Association), Chemical Bank, Pearl Street L.P. and
Union Bank of Switzerland, as Arranging Agents, and (vi) Morgan Guaranty Trust
Company of New York, as Administrative Agent and as Documentation Agent (the
Arranger, the Co-Arrangers, the Arranging Agents, the Administrative Agent and
the Documentation Agent collectively referred to herein as the "Agents").
This opinion is delivered to you pursuant to subsection 8.1(h)(iv) of
the Credit Agreement. Unless otherwise defined herein, terms defined in the
Credit Agreement are used herein as therein defined.
In connection with this opinion we have examined the following
documents:
(a) a copy of the Credit Agreement signed by the Borrower, the Agents
and the Lenders;
(b) a copy of the opinion of Mayer, Brown & Platt addressed to you
and dated the date hereof in respect of the Credit Agreement; and
<PAGE>
- 2 -
(c) a copy of the opinion of Fritz R. Kahn, P.C. addressed to you and
dated the date hereof in respect of the Credit Agreement.
In such examination we have assumed the genuineness of all
signatures, the authenticity, regularity and completeness of all the
aforementioned documents submitted to us as originals, the completeness of all
documents submitted to us as certified, conformed or photostatic copies and the
conformity of such documents to the original documents.
To the extent that our opinion expressed below relates to the matters
set forth in the above-mentioned opinions of Mayer, Brown & Platt and Fritz R.
Kahn, P.C., we have assumed without independent investigation the correctness
of the matters (other than paragraph 4 of such opinion of Mayer, Brown & Platt)
set forth in such opinions, our opinion being subject to the assumptions,
qualifications and limitations set forth in such opinions with respect thereto.
Based upon the foregoing, and subject to the qualifications and
comments set forth below, we are of the opinion that, insofar as the law of the
State of New York is concerned, the Credit Agreement constitutes a legal, valid
and binding obligation of the Borrower, enforceable against it in accordance
with its terms.
Our opinion is subject to the following qualifications:
(a) Our opinion is subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(b) We express no opinion as to subsection 13.15(b) of the Credit
Agreement insofar as it relates to an action brought in the United States
District Court for the Southern District of New York and note that such
matters may be raised by such court.
(c) We express no opinion as to any indemnification obligations of
the Borrower under the Credit Agreement to the extent such obligations
might be deemed to be inconsistent with public policy.
(d) We express no opinion as to matters governed by the Interstate
Commerce Act.
(e) We express no opinion as to any provision of the Credit Agreement
that purports to establish an evidentiary standard for determinations by
the Lenders or the Agents.
<PAGE>
- 3 -
We are members of the Bar of the State of New York, and we do not
express any opinion concerning any law other than the law of the State of New
York.
This opinion is rendered to you in connection with the above-
described transactions. This opinion may not be relied upon by you for any
other purpose, or relied upon by any other person, firm or corporation without
our prior written consent.
Very truly yours,
SIMPSON THACHER & BARTLETT
<PAGE>
SCHEDULE I
LENDERS PARTIES TO THE CREDIT AGREEMENT
Morgan Guaranty Trust Company of New York
The Chase Manhattan Bank (National Association)
Chemical Bank
Pearl Street L.P.
Union Bank of Switzerland
[Other Lenders]
<PAGE>
EXHIBIT G-5
-----------
[OPINION OF MAYER, BROWN & PLATT]
____________ __, 199__
To the Agents and Lenders which are parties
to the Credit Agreement referred to below
c/o Morgan Guaranty Trust Company of New York,
as Administrative Agent
60 Wall Street
New York, New York 10260-0060
Ladies and Gentlemen:
We have acted as special counsel for The Atchison, Topeka and Santa Fe
Railway Company, a Delaware corporation (the "Guarantor"), in connection with
the execution and delivery of the Guarantee, dated as of _________, 199_ (the
"Railway Guarantee"), made by the Guarantor in favor of Morgan Guaranty Trust
Company of New York, as Administrative Agent. Terms defined in the Railway
Guarantee are used herein as therein defined. This opinion is being rendered to
you at the request of our client pursuant to the Credit Agreement.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of the Credit Agreement and the Railway
Guarantee and such documents, corporate records, certificates of public
officials and other instruments as we have deemed necessary for purposes of this
opinion. We have assumed, without independent investigation, the genuineness of
all signatures of all parties (other than those on behalf of the Guarantor), the
legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals and the conformity to authorized originals of all
documents submitted to us as copies. As to facts material to this opinion, we
have relied without independent investigation upon the written statements and
representations of the Guarantor and its officers and representatives and public
officials.
Upon the basis of the foregoing, and subject to the qualifications set
forth below, we are of the opinion that:
1. The Guarantor is a corporation validly existing and in good
standing under the laws of the State of Delaware. The Guarantor has all
corporate powers to carry on its business as now conducted.
<PAGE>
___________, 199_
Page 2
2. The execution, delivery and performance by the Guarantor of the
Railway Guarantee are within the Guarantor's corporate powers and have been
duly authorized by all necessary corporate action on the part of the
Guarantor.
3. The execution, delivery and performance by the Guarantor of the
Railway Guarantee do not require any action by or in respect of, or filing
with, any governmental body, agency or official of the United States of
America or the States of New York or Delaware or contravene, or constitute
a default under, any provision of applicable law or regulation of the
United States of America or the State of New York, the General Corporation
Law of the State of Delaware or of the certificate of incorporation or by-
laws of the Guarantor or, to the best of our knowledge, of any material
agreement, judgment, injunction, order, decree or other instrument binding
upon the Guarantor or any of its Subsidiaries or, to the best of our
knowledge, result in the creation or imposition of any Lien on any asset of
the Guarantor or any of its Subsidiaries.
4. The Railway Guarantee has been duly executed and delivered by the
Guarantor and constitutes a valid and binding agreement of the Guarantor
enforceable against the Guarantor in accordance with its terms.
The opinions expressed in paragraphs 3 and 4 are based upon our review
of the Interstate Commerce Act, as amended, and the regulations promulgated
thereunder as of the date hereof as interpreted and applied by the courts and
the Interstate Commerce Commission (the "Commission"). In that regard, the
limited scope of the Commission's jurisdiction over rail carrier securities,
pursuant to 49 U.S.C. (S) 11301, was delineated in Association of American
Railroads v. United States, 603 F.2d 953 (D.C. Cir. 1979), and has been accepted
by the Commission. See, e.g., Finance Docket No. 31424, Acquisition by Tampa
Bay & Western Transportation, Inc. of a CSX Transportation, Inc. Line Between
Sulphur Springs and Broco, FL (not printed), served July 23, 1990; Finance
Docket No. 31395, Kansas City Southern -- Petition For Exemption (not printed),
served January 4, 1989; Finance Docket No. 30683, Gulf & Ohio Railways, Inc. --
Exemption from 49 U.S.C. 11301, 10901, and 11322 (not printed), served November
6, 1985. The Commission is empowered to regulate a rail carrier's issuance of
the securities, i.e., stocks, bonds or other evidence of interest in, or
indebtedness of, the carrier, or its assumption of obligation or liability
related to the securities of another company. The court in AAR held that "the
ICC may regulate 'other evidence of interest in or indebtedness of' a carrier
only when that 'evidence' is of like kind to stocks or bonds." 603 F.2d at 964.
The court explained, "Congress primarily intended to reach financings in which
the instrument was publicly issued and publicly traded." Id. at 971.
The loans to Santa Fe Pacific Corporation pursuant to the Credit Agreement
(the "SFP Loans") cannot be likened to stocks or bonds; they do not come within
the term "security" as ordinarily understood. Nor will the SFP Loans be
publicly issued or publicly traded. The SFP Loans are simply the type of bank
financing not evidenced by notes that long has been held to be outside the
Commission's jurisdiction. See, e.g.,
<PAGE>
___________, 199_
Page 3
Gateway Transp. Co. -- Purchase --Northern Transp. Co., 85 M.C.C. 59, 66 (1959);
Consolidated Freight Lines, Inc.-- Consolidation -- Consolidated Freightways,
Inc., 80 M.C.C. 495, 498 (1959). Thus, it is our opinion that, under current
law, the SFP Loans are not "securities" within the meaning of Section 11301.
Because Section 11301 only requires Commission approval of the assumption
of an obligation relating to the "securities" of another person, the Commission
has held that it does not have jurisdiction over the issuance of a guarantee by
a regulated rail carrier of the obligations of another person if such
obligations do not constitute "securities". See Missouri-Kansas-Texas Railroad
Company -- Assumption of Obligation -- Exemption from 49 U.S.C. 11301 (not
printed), served November 5, 1985, at 1, where the Commission held that, since
the notes being guaranteed were not "securities" under Section 11301(a)(2), it
followed "that the assumption of [an] obligation by MKT, as guarantor, with
respect to the note or notes to be issued ... is a transaction that does not
fall within [the ICC's] jurisdiction." See also Finance Docket No. 30780,
Buffalo Crushed Stone, Inc., et al. -- Securities Exemption (not printed),
served March 4, 1986, at 3 (guarantee by a carrier of non-securities of another
entity is not within Commission jurisdiction). Accordingly, it is our opinion
that, under current law, Commission approval of the Railway Guarantee would not
be required.
Our opinions are subject to the following qualifications:
(a) Our opinions are subject to the effect of any applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
similar law affecting creditors' rights generally and to the effect of general
principles of equity (regardless of whether considered in a proceeding in equity
or at law), including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing.
(b) We express no opinion with respect to indemnification or
contribution obligations which contravene public policy.
(c) We express no opinion as to subsection 18(b) of the Railway
Guarantee insofar as it relates to an action brought in the United States
District Court for the Southern District of New York and note that such matters
may be raised by such court.
(d) We express no opinion as to any provision of the Railway Guarantee
that purports to establish an evidentiary standard for determinations by the
Lenders or the Agents.
Our opinions herein are limited solely to the federal laws of the
United States of America, the laws of the State of New York and the General
Corporation Law of the State of Delaware, and we express no opinion herein
concerning the laws of any other jurisdiction.
<PAGE>
___________, 199_
Page 4
The opinions given herein are as of the date hereof. We assume no
obligation to update or supplement this opinion to reflect any facts or
circumstances that may hereafter come to our attention or any changes in law
that may hereafter occur.
This opinion is furnished to you solely in connection with the
transactions described above and (i) may not be relied upon by anyone other than
you and (ii) may be so relied upon only in connection with the transactions
described in the Credit Agreement and the Railway Guarantee.
Very truly yours,
MAYER, BROWN & PLATT
<PAGE>
EXHIBIT G-6
-----------
[OPINION OF GENERAL COUNSEL]
___________ __, 199__
To the Agents and Lenders Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Administrative Agent
60 Wall Street
New York, New York 10260-0060
Ladies and Gentlemen:
I am the General Counsel of The Atchison, Topeka & Santa Fe Railway
Company (the "Santa Fe Railroad") and have been asked to render this opinion to
you pursuant to the Credit Agreement, dated as of January 27, 1995 (the "Credit
Agreement"), among (i) Santa Fe Pacific Corporation, a Delaware corporation (the
"Borrower"), (ii) the lenders named therein (the "Lenders"), (iii) J.P. Morgan
Securities Inc., as Arranger, (iv) Chase Securities, Inc., Chemical Securities
Inc., Goldman, Sachs & Co. and Union Bank of Switzerland, as Co-Arrangers, (v)
Morgan Guaranty Trust Company of New York, The Chase Manhattan Bank (National
Association), Chemical Bank, Pearl Street L.P. and Union Bank of Switzerland, as
Arranging Agents, and (vi) Morgan Guaranty Trust Company of New York, as
Administrative Agent and as Documentation Agent (the Arranger, the Co-Arrangers,
the Arranging Agents, the Administrative Agent and the Documentation Agent
collectively referred to herein as the "Agents"). Terms defined in the Credit
Agreement are used herein as therein defined.
I, or attorneys under my supervision, have examined originals or
copies, certified or otherwise identified to my satisfaction, of the Credit
Agreement and the Railway Guarantee and such documents, corporate records,
certificates of public officials and other instruments as I have deemed
necessary for purposes of this opinion.
Upon the basis of the foregoing, and subject to the qualifications set
forth below, I am of the opinion that:
1. The Santa Fe Railroad is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware.
2. The Santa Fe Railroad has all corporate powers and all
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted, except in any case where the failure to be in
good standing or to have such powers, licenses, authorizations, consents or
approvals would not, in the
<PAGE>
___________, 199_
Page 2
aggregate, materially adversely affect the financial position, results of
operations or business of the Santa Fe Railroad.
3. Except as referred to in subsection 7.6 of the Credit Agreement,
to the best of my knowledge there is no action, suit or proceeding pending
against, or threatened against or affecting, the Santa Fe Railroad before any
court or arbitrator or any governmental body, agency or official in which there
is a reasonable possibility of an adverse decision that could materially
adversely affect the business, financial position or results of operations of
the Santa Fe Railroad.
The opinions given herein are as of the date hereof. I assume no
obligation to update or supplement this opinion to reflect any facts or
circumstances that may hereafter come to my attention or any changes in law that
may hereafter occur.
This opinion is furnished to you solely in connection with the
transactions described above and (i) may not be relied upon by anyone other than
you and (ii) may be so relied upon only in connection with the transactions
described in the Credit Agreement and the Railway Guarantee.
Very truly yours,
Richard E. Weicher
<PAGE>
EXHIBIT G-7
-----------
[OPINION OF FRITZ R. KAHN, P.C.]
____________ __, 199__
To the Lenders named in Schedule I hereto
and the Agents Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Administrative Agent
60 Wall Street
New York, New York 10260-0060
Ladies and Gentlemen:
I have acted as counsel to Morgan Guaranty Trust Company of New York,
as Administrative Agent and as Documentation Agent, in connection with the
preparation, execution and delivery of the Guarantee, dated as of
______________, 199__ (the "Railway Guarantee"), made by The Atchison, Topeka
and Santa Fe Railway Company, a Delaware corporation (the "Guarantor"), in favor
of Morgan Guaranty Trust Company of New York, as Administrative Agent.
This opinion is delivered to you pursuant to the Credit Agreement.
Unless otherwise defined herein, terms defined in the Railway Guarantee are used
herein as therein defined.
In connection with this opinion I have examined the following
documents:
(a) a copy of the Credit Agreement signed by the Borrower, the Agents
and the Lenders; and
(b) a copy of the Railway Guarantee signed by the Guarantor.
In such examination I have assumed the genuineness of all signatures,
the authenticity, regularity and completeness of all the aforementioned
documents submitted to me as originals, the completeness of all documents
submitted to me as certified, conformed or photostatic copies and the conformity
of such documents to the original documents.
Based upon the foregoing, and subject to the qualifications and
comments set forth below, I am of the opinion that the execution, delivery and
performance by the Guarantor of the Railway Guarantee (a) do not require any
action by or in respect of, filing with, or notice to, the Interstate Commerce
Commission and (b) will not violate
<PAGE>
___________, __, 199_
any provision of the Interstate Commerce Act, as amended, or any regulation
promulgated thereunder.
I am a member of the Bar of the District of Columbia and I do not
express any opinion concerning any law other than the federal laws of the United
States of America.
This opinion is rendered to you in connection with the above-described
transactions. This opinion may not be relied upon by you for any other purpose,
or relied upon by any other person, firm or corporation without my prior written
consent.
Very truly yours,
FRITZ R. KAHN, P.C.
<PAGE>
SCHEDULE I
LENDERS PARTIES TO THE CREDIT AGREEMENT
Morgan Guaranty Trust Company of New York
The Chase Manhattan Bank (National Association)
Chemical Bank
Pearl Street L.P.
Union Bank of Switzerland
[Other Lenders]
<PAGE>
EXHIBIT H
---------
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of January 27,
1995 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among (i) Santa Fe Pacific Corporation (the "Borrower"),
(ii) the Lenders named therein, (iii) J.P. Morgan Securities Inc., as Arranger,
(iv) Chase Securities, Inc., Chemical Securities Inc., Goldman, Sachs & Co. and
Union Bank of Switzerland, as Co-Arrangers, (v) Morgan Guaranty Trust Company of
New York, The Chase Manhattan Bank (National Association), Chemical Bank, Pearl
Street L.P. and Union Bank of Switzerland, as Arranging Agents, and (vi) Morgan
Guaranty Trust Company of New York, as Administrative Agent and as Documentation
Agent. Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
The Assignor identified on Schedule 1 hereto (the "Assignor") and the
Assignee identified on Schedule 1 hereto (the "Assignee") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as of
the Effective Date (as defined below), the interest described in Schedule 1
hereto (the "Assigned Interest") in and to the Assignor's rights and obligations
under the Credit Agreement and the other Loan Documents.
2. The Assignor (a) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; and (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, any of its Subsidiaries or any other
obligor or the performance or observance by the Borrower, any of its
Subsidiaries or any other obligor of any of their respective obligations under
the Credit Agreement or any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto.
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements delivered pursuant to subsection 9.1 thereof and such other
documents and information
<PAGE>
2
as it has deemed appropriate to make its own credit analysis and decision to
enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, the Agents or any other
Lender 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 the Credit Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; (d) appoints and
authorizes each Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto as are
delegated to such Agent by the terms thereof, together with such powers as are
incidental thereto; and (e) agrees that it will be bound by the provisions of
the Credit Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant to subsection
6.13(d) of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall be
the Effective Date of Assignment described in Schedule 1 hereto (the "Effective
Date"). Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance by it and recording by the
Administrative Agent pursuant to the Credit Agreement, effective as of the
Effective Date (which shall not, unless otherwise agreed to by the
Administrative Agent, be earlier than five Business Days after the date of such
acceptance and recording by the Agent).
5. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignee whether such amounts have accrued prior to the
Effective Date or accrue subsequent to the Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to the Effective Date or with respect to
the making of this assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Loan Documents and shall be bound by the provisions thereof and (b) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
7. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.
<PAGE>
SCHEDULE 1
TO ASSIGNMENT AND ACCEPTANCE
- -------------------------------------------------------------------------------
Name of Assignor: __________________________________________________
Name of Assignee: __________________________________________________
Effective Date of Assignment: ______________________________________
Credit Principal Commitment Percentage
Facility Assigned/1/ Amount Assigned Assigned/2/
- ----------------------------- ----------------- -----------------------
Term Loan $ . %
Tranche A Revolving Credit $ . %
Tranche B Revolving Credit $ . %
Assignee: Assignor:
___________________________________ ____________________________________
By: By:
_______________________________ ________________________________
Title: Title:
Accepted: Consented To:
MORGAN GUARANTY TRUST SANTA FE PACIFIC CORPORATION
COMPANY OF NEW YORK, as
Administrative Agent
By: By:
_______________________________ ________________________________
Title: Title:
/1/ Assignments of the credit facilities will be permitted on a pro rata basis
only.
/2/ Calculate the Commitment Percentage that is assigned to at least 15 decimal
places and show as a percentage of the aggregate commitments of all
Lenders.
<PAGE>
EXHIBIT I
---------
FORM OF
SYNDICATION SUPPLEMENT
SYNDICATION SUPPLEMENT, dated as of _________________, 1995, among (i)
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), CHEMICAL BANK, PEARL STREET L.P. AND UNION BANK OF SWITZERLAND, as
Arranging Agents (the "Arranging Agents"), (ii) the Lenders named on the
signature pages hereof as New Lenders (the "New Lenders") and (iii) MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent.
W I T N E S S E T H:
-------------------
WHEREAS, the Arranging Agents are parties to the Credit Agreement,
dated as of January 27, 1995 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among (i) Santa Fe Pacific
Corporation (the "Borrower"), (ii) the Lenders named therein, (iii) J.P. Morgan
Securities Inc., as Arranger, (iv) Chase Securities, Inc., Chemical Securities
Inc., Goldman, Sachs & Co. and Union Bank of Switzerland, as Co-Arrangers, (v)
the Arranging Agents, and (vi) Morgan Guaranty Trust Company of New York, as
Administrative Agent and as Documentation Agent; and
WHEREAS, pursuant to subsection 13.10 of the Credit Agreement, the New
Lenders wish to become parties to the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto hereby agree as follows:
1. Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
2. Effective on ______________, 1995 (the "Syndication Effective
Date") each New Lender will be a Lender party to the Credit Agreement, and
Schedule I to the Credit Agreement will be replaced in its entirety with
Schedule I to this Syndication Supplement. Effective on the Syndication
Effective Date, each New Lender will be deemed to have acquired from the
Arranging Agents, ratably in accordance with the Commitment Percentages of the
Arranging Agents immediately before the Syndication Effective Date, such New
Lender's Commitment Percentage of all Committed Loans outstanding on the
Syndication Effective Date, and at or before 12:00 Noon, New York City time, on
the Syndication Effective Date, each New Lender will make available to the
Administrative Agent, at its office specified in subsection 13.2, for the
respective accounts of the Arranging Agents, an amount equal to such New
Lender's Commitment
<PAGE>
2
Percentage of all Committed Loans outstanding on the Syndication Effective Date
(such New Lender's acquisition of its Commitment Percentage of outstanding
Committed Loans on the Syndication Effective Date being subject to its payment
of such amount to the Administrative Agent on the Syndication Effective Date).
Effective on the Syndication Effective Date, each New Lender will have the
rights and obligations of a Lender, in accordance with its Commitment, under the
Credit Agreement and the other Loan Documents and shall be bound by the
provisions thereof, and each Arranging Agent will, to the extent provided in
this Syndication Supplement, relinquish its rights and be released from its
obligations under the Credit Agreement and the other Loan Documents.
3. No Arranging Agent (a) makes any representation or warranty or
assumes any responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or with
respect to the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, any other Loan Document or any
other instrument or document furnished pursuant thereto, other than that such
Arranging Agent has not created any adverse claim upon the interest being
assigned by it hereunder and that such interest is free and clear of any such
adverse claim; or (b) makes any representation or warranty or assumes any
responsibility with respect to the financial condition of the Borrower, any of
its Subsidiaries or any other obligor or the performance or observance by the
Borrower, any of its Subsidiaries or any other obligor of any of their
respective obligations under the Credit Agreement or any other Loan Document or
any other instrument or document furnished pursuant hereto or thereto.
4. Each New Lender (a) represents and warrants that it is legally
authorized to enter into this Syndication Supplement; (b) confirms that it has
received a copy of the Credit Agreement, together with copies of the financial
statements delivered pursuant to subsection 9.1 thereof and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Syndication Supplement; (c) agrees that it will,
independently and without reliance upon the Agents or any other Lender 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
the Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (d) appoints and authorizes each
Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto as are delegated to
such Agent by the terms thereof, together with such powers as are incidental
thereto; and (e) agrees that it will be bound by the provisions of the Credit
Agreement and will perform in accordance with its terms all the obligations
which by the terms of the Credit Agreement are required to be performed by it as
a Lender including, if it is organized under the laws of a jurisdiction outside
the United States, its obligation pursuant to subsection 6.13(d) of the Credit
Agreement.
5. From and after the Syndication Effective Date, the Administrative
Agent shall distribute all principal payments in respect of the Committed Loans,
all
<PAGE>
3
payments of interest accruing from and after the Syndication Effective Date
on the Committed Loans and all payments in respect of facility fees accruing
from and after the Syndication Effective Date, to the Lenders in accordance
with their Commitment Percentages as adjusted pursuant to this Syndication
Supplement. As provided in subsection 13.10 of the Credit Agreement, each
Arranging Agent and each New Lender will bill the Borrower directly for any
costs and expenses arising as a result of the occurrence of the Syndication
Effective Date on a date other than the last day of an Interest Period for any
outstanding Committed Loan.
6. This Syndication Supplement shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Syndication
Supplement to be executed as of the date first above written by their respective
duly authorized officers.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as an Arranging Agent and
as Administrative Agent
By:
______________________________________________
Title:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), as an
Arranging Agent
By:
______________________________________________
Title:
CHEMICAL BANK, as an Arranging Agent
By:
______________________________________________
Title:
PEARL STREET L.P., as an Arranging
Agent
By:
______________________________________________
Title:
<PAGE>
4
UNION BANK OF SWITZERLAND, as an
Arranging Agent
By:
______________________________________________
Title:
By:
______________________________________________
Title:
NEW LENDERS:
-----------
[NAMES OF LENDERS]
By:
______________________________________________
Title:
<PAGE>
SCHEDULE I
----------
BANK NAMES, ADDRESS AND COMMITMENTS
Name/Address Commitment
-----------------------
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260
Attention: Charles H. King
Fax: (212) 648-5336 $
The Chase Manhattan Bank
(National Association)
One Chase Manhattan Plaza
New York, New York 10005
Attention: David L. Burnett
Fax: (212) 422-6249 $
Chemical Bank
10 South LaSalle Street
Suite 2300
Chicago, Illinois 60603
Attention: Jennifer H. McGowan
Fax: (312) 346-9310 $
Pearl Street L.P.
85 Broad Street
New York, New York 10004
Attention: Nancy Unrath
Fax: (212) 902-3757 $
Union Bank of Switzerland
Chicago Branch
30 South Wacker Drive
Chicago, Illinois 60606
Attention: Michelle Moreno
Fax: (312) 993-5530 $
<PAGE>
EXHIBIT J
---------
FORM OF
PRICING RATIO CERTIFICATE
Pursuant to subsection 9.1(e) of the Credit Agreement, dated as of
January 27, 1995, among Santa Fe Pacific Corporation, the several banks and
other financial institutions from time to time parties thereto as Lenders, J.P.
Morgan Securities Inc., as Arranger, Chase Securities, Inc., Chemical Securities
Inc., Goldman, Sachs & Co. and Union Bank of Switzerland, as Co-Arrangers,
Morgan Guaranty Trust Company of New York, The Chase Manhattan Bank (National
Association), Chemical Bank, Pearl Street L.P. and Union Bank of Switzerland, as
Arranging Agents, and Morgan Guaranty Trust Company of New York, as
Documentation Agent and as Administrative Agent, the undersigned hereby
certifies that the Pricing Ratio Level in respect of the period of four
consecutive fiscal quarters most recently ended is calculated as follows:
(Four fiscal quarters ended __________________)
Consolidated Income From
Continuing Operations, plus $ _______________
Consolidated Interest Expense, plus _______________
income taxes, plus _______________
depreciation and amortization, plus _______________
Merger-Related Costs (subject to
$62,500,000 aggregate cap over
life of transaction) _______________
---------------
Consolidated EBITDA $
===============
Consolidated Total Debt
at end of last fiscal quarter $______________
Pricing = Consolidated EBITDA $ =
Ratio ------------------------ ------------- -----------
Consolidated Total Debt $
<PAGE>
2
IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of the date set forth below.
Dated: ____________________________
SANTA FE PACIFIC CORPORATION
By: ___________________________________________
Title:
<PAGE>
Exhibit 99(q)
[LOGO OF SANTA FE PACIFIC]
CORPORATE COMMUNICATIONS NEWS
FOR IMMEDIATE RELEASE MEDIA CONTACT: Catherine Westphal
#13 (708) 995-6273
SANTA FE PACIFIC SIGNS CREDIT AGREEMENT
SCHAUMBURG, ILLINOIS, January 30, 1995 - Santa Fe Pacific Corporation (SFP)
announced that it has signed a definitive credit agreement with a group of banks
led by Morgan Guaranty Trust Company of New York, providing financing
commitments of $1,560 million. The other institutions providing financing are
Chase Manhattan, Chemical Bank, Pearl Street L.P., an affiliate of Goldman
Sachs, and Union Bank of Switzerland.
The financing will be used by SFP to purchase 38 million of its own shares
for $760 million, to refinance $400 million of existing debt, for fees and
expenses incurred in connection with the tender offer and debt refinancing, and
for working capital and general corporate purposes. The debt to be refinanced
will include SFP's 8 3/8% Senior Notes due November 1, 2001 and its 8 5/8%
Senior Notes due November 1, 2004. The financing is conditioned on, among other
things, approval of the merger agreement between SFP and Burlington Northern,
Inc. (BN) by both companies' shareholders at special meetings scheduled for
February 7, 1995, and the successful completion of the tender offer.
As part of their agreement to merge, SFP and BN have made a joint tender
offer to purchase 63 million shares of SFP common stock for $20.00 per share in
cash. Because of possible prorationing in the tender offer, shareholders who
tender may not receive cash for all their shares. The tender offer was announced
on December 18, 1994, and is scheduled to expire at midnight, February 8, unless
extended. The tender offer may be extended by SFP and BN by giving notice to the
Depositary and making a public announcement. The offer is conditioned on, among
other things, approval of the merger agreement by both companies' shareholders.
Santa Fe Pacific Corporation (NYSE;SFX) is the parent company of The
Atchison, Topeka and Santa Fe Railway Company, which operates in 12 states and
offers service to Mexico. In addition, Santa Fe owns a 44% interest in Santa Fe
Pacific Pipelines Partners, L.P.
###
