<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission file number 1-9161
CHRYSLER CORPORATION
------------------------
(Exact name of registrant as specified in its charter)
STATE OF DELAWARE 38-2673623
----------------------- --------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12000 Chrysler Drive, Highland Park, Michigan 48288-0001
---------------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
(313) 956-5741
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ No / /
The registrant had 354,472,454 shares of common stock outstanding as of
September 30, 1994.
<PAGE> 2
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page No.
-------
Part I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements 1-5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6-10
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 5. Other Information 11-13
Item 6. Exhibits and Reports on Form 8-K 14
Signature Page 15
Exhibit Index 16
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
For the Three and Nine Months Ended September 30, 1994 and 1993
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
1994 1993 1994 1993
---------------------- ----------------------
(In millions of dollars)
<S> <C> <C> <C> <C>
Sales of manufactured products $ 10,938 $ 8,995 $ 35,858 $ 29,540
Finance and insurance income 323 352 996 1,087
Other income 398 366 1,110 1,021
-------- --------- --------- --------
TOTAL SALES AND REVENUES 11,659 9,713 37,964 31,648
-------- --------- --------- --------
Costs, other than items below 8,672 7,392 27,653 23,571
Depreciation of property and equipment (Note 5) 235 235 741 738
Amortization of special tools (Note 5) 203 116 709 508
Selling and administrative expenses 900 812 2,852 2,469
Pension expense 174 169 509 555
Nonpension postretirement benefit expense 197 200 604 595
Interest expense 215 271 697 863
Gain on sales of automotive assets
and investments (Note 4) -- (94) -- (265)
-------- --------- --------- --------
TOTAL COSTS AND EXPENSES 10,596 9,101 33,765 29,034
-------- --------- --------- --------
EARNINGS BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF CHANGES
IN ACCOUNTING PRINCIPLES 1,063 612 4,199 2,614
Provision for income taxes (Note 6) 412 189 1,654 976
-------- --------- --------- --------
EARNINGS BEFORE CUMULATIVE EFFECT OF
CHANGES IN ACCOUNTING PRINCIPLES 651 423 2,545 1,638
Cumulative effect of changes in accounting
principles (Note 3) -- -- -- (4,966)
-------- --------- --------- --------
NET EARNINGS (LOSS) $ 651 $ 423 $ 2,545 $ (3,328)
Preferred stock dividends 20 20 60 60
-------- --------- --------- --------
NET EARNINGS (LOSS) ON COMMON STOCK $ 631 $ 403 $ 2,485 $ (3,388)
======== ========= ========= ========
(In dollars or millions of shares)
Primary earnings (loss) per common share:
Earnings before cumulative effect of
changes in accounting principles $ 1.76 $ 1.13 $ 6.92 $ 4.61
Cumulative effect of changes in
accounting principles -- -- -- (14.50)
-------- --------- --------- --------
Net earnings (loss) per common share $ 1.76 $ 1.13 $ 6.92 $ (9.89)
======== ========= ========= ========
Average common and dilutive equivalent
shares outstanding 358.8 357.9 359.3 342.5
Fully diluted earnings per common share:
Earnings before cumulative effect of
changes in accounting principles $ 1.60 $ 1.04 $ 6.24 $ --
Cumulative effect of changes in
accounting principles -- -- -- --
-------- --------- --------- --------
Net earnings per common share $ 1.60 $ 1.04 $ 6.24 $ --
======== ========= ========= ========
Average common and dilutive equivalent
shares outstanding 407.4 406.2 407.8 --
Dividends declared per common share $ 0.25 $ 0.15 $ 0.70 $ 0.45
</TABLE>
- -------------------------
See notes to consolidated financial statements.
1
<PAGE> 4
Item 1. FINANCIAL STATEMENTS - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
1994 1993
------------ -----------------------------
Sept. 30 Dec. 31 Sept. 30
------------ ------------ ------------
(In millions of dollars)
<S> <C> <C> <C>
ASSETS:
Cash and cash equivalents $ 5,241 $ 4,040 $ 4,092
Marketable securities 1,896 1,055 797
Accounts receivable - trade and other 2,317 1,799 1,559
Inventories (Note 2) 3,528 3,629 3,658
Prepaid taxes, pension and other expenses 623 833 884
Finance receivables and retained interests in sold
receivables and other related amounts 11,073 10,208 9,950
Property and equipment 10,081 9,319 8,930
Special tools 3,433 3,455 3,214
Intangible assets 4,213 4,328 4,529
Deferred tax assets (Note 6) 1,349 2,210 2,407
Other assets 2,752 2,954 1,652
------------ ------------ ------------
TOTAL ASSETS $ 46,506 $ 43,830 $ 41,672
============ ============ ============
LIABILITIES:
Accounts payable $ 7,438 $ 6,863 $ 6,462
Short-term debt 3,814 3,297 2,945
Payments due within one year on long-term debt 949 1,283 1,681
Accrued liabilities and expenses 5,101 4,650 4,351
Long-term debt 7,156 6,871 6,768
Accrued noncurrent employee benefits 9,288 10,613 10,033
Other noncurrent liabilities 3,716 3,417 3,425
------------ ------------ ------------
TOTAL LIABILITIES 37,462 36,994 35,665
------------ ------------ ------------
SHAREHOLDERS' EQUITY: (shares in millions)
Preferred stock - $1 per share par value; authorized 20.0
shares; Series A Convertible Preferred Stock; issued:
1994 and 1993 - 1.7 shares (aggregate liquidation
preference $863 million) 2 2 2
Common stock - $1 per share par value; authorized
1,000.0 shares; issued: 1994 and 1993 - 364.1 shares 364 364 364
Additional paid-in capital 5,533 5,533 5,532
Retained earnings 3,371 1,170 374
Treasury stock - at cost: 1994 - 9.6 shares;
1993 - 10.4 and 12.0 shares, respectively (226) (233) (265)
------------ ------------ ------------
TOTAL SHAREHOLDERS' EQUITY 9,044 6,836 6,007
------------ ------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 46,506 $ 43,830 $ 41,672
============ ============ ============
</TABLE>
- -------------------------
See notes to consolidated financial statements.
2
<PAGE> 5
Item 1. FINANCIAL STATEMENTS - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 1994 and 1993
<TABLE>
<CAPTION>
1994 1993
------------ -------------
(In millions of dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ 2,545 $ (3,328)
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization 1,450 1,246
Provision for credit losses 174 184
Deferred income tax provision 839 533
Gain on sales of automotive assets and investments -- (265)
Cumulative effect of changes in accounting principles -- 4,966
Change in accounts receivable (527) 310
Change in inventories (43) (586)
Change in prepaid expenses and other assets 171 (189)
Change in accounts payable and accrued and other liabilities 283 (1,146)
Other 101 18
------------ -------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,993 1,743
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities (3,393) (3,532)
Sales and maturities of marketable securities 2,530 4,027
Proceeds from sales of automotive assets and investments 62 461
Finance receivables acquired (14,148) (12,854)
Finance receivables collected 2,406 5,689
Proceeds from sales of finance receivables 10,984 8,052
Proceeds from sales of nonautomotive assets -- 2,267
Expenditures for property and equipment (1,627) (1,102)
Expenditures for special tools (706) (826)
Other (87) 165
------------ -------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (3,979) 2,347
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in short-term debt (less than 90-day maturities) 517 2,166
Proceeds under revolving lines of credit and long-term borrowings 561 5,846
Payments on revolving lines of credit and long-term borrowings (608) (12,178)
Proceeds from issuance of common stock, net of expenses -- 1,952
Dividends paid (290) (209)
Other 7 68
------------ -------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 187 (2,355)
------------ -------------
Change in cash and cash equivalents 1,201 1,735
Cash and cash equivalents at beginning of period 4,040 2,357
------------ -------------
Cash and cash equivalents at end of period $ 5,241 $ 4,092
============= =============
</TABLE>
- -------------------------
See notes to consolidated financial statements.
3
<PAGE> 6
Item 1. FINANCIAL STATEMENTS - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Consolidation and Financial Statement Presentation
The consolidated financial statements of Chrysler Corporation and its
consolidated subsidiaries ("Chrysler") include the accounts of all significant
majority-owned subsidiaries and entities. Intercompany accounts and
transactions have been eliminated in consolidation. The unaudited consolidated
financial statements of Chrysler for the three and nine months ended September
30, 1994 and 1993 reflect all adjustments, consisting of only normal and
recurring items (with the exception of the items discussed in Note 3), which
are, in the opinion of management, necessary to present a fair statement of the
results for the interim periods. The operating results for the three and nine
months ended September 30, 1994 are not necessarily indicative of the results
of operations for the entire year. Reference should be made to the
consolidated financial statements included in the Annual Report on Form 10-K
for the year ended December 31, 1993. Amounts for 1993 have been reclassified
to conform with current period classifications.
Note 2. Inventories
Inventories, summarized by major classification, were as follows:
<TABLE>
<CAPTION>
1994 1993
----------- ----------------------------
Sept. 30 Dec. 31 Sept. 30
----------- ----------- -----------
(In millions of dollars)
<S> <C> <C> <C>
Finished products, including service parts $ 1,052 $ 1,016 $ 984
Raw materials, finished production parts and supplies 1,325 1,177 1,196
Vehicles held for short-term lease 1,151 1,436 1,478
----------- ----------- -----------
TOTAL $ 3,528 $ 3,629 $ 3,658
============ ============ ============
</TABLE>
Note 3. Changes in Accounting Principles
Certain Investments in Debt and Equity Securities
Effective January 1, 1994, Chrysler adopted Statement of Financial Accounting
Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and
Equity Securities." This new accounting standard specifies the accounting and
reporting requirements for changes in the fair values of investments in debt
and equity securities which have readily determinable fair values. Adoption of
this accounting standard did not have a material effect on Chrysler's
consolidated financial statements at January 1, 1994.
Nonpension Postretirement Benefits
Effective January 1, 1993, Chrysler adopted SFAS No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions," which requires the
accrual of such benefits during the years the employees provide services. The
adoption of this accounting standard resulted in an after-tax charge of $4.68
billion, or $13.68 per common share. This one-time charge represented the
immediate recognition of the SFAS No. 106 transition obligation of $7.44
billion, partially offset by $2.76 billion of estimated tax benefits.
Implementation of SFAS No. 106 did not increase Chrysler's cash expenditures
for nonpension postretirement benefits.
Postemployment Benefits
Effective January 1, 1993, Chrysler adopted SFAS No. 112, "Employers'
Accounting for Postemployment Benefits." This accounting standard requires the
accrual of benefits provided to former or inactive employees after employment
but prior to retirement. Adoption of this accounting standard resulted in the
recognition of an after-tax charge of $283 million, or $0.82 per common share.
Adoption of SFAS No. 112 did not increase Chrysler's cash expenditures for
postemployment benefits. Previously reported results for the nine months ended
September 30, 1993 have been restated to reflect the adoption of SFAS No. 112
effective January 1, 1993.
4
<PAGE> 7
Item 1. FINANCIAL STATEMENTS - Continued
Note 3. Changes in Accounting Principles - Continued
Impaired Loans
In May 1993, the Financial Accounting Standards Board issued SFAS No. 114,
"Accounting by Creditors for Impairment of a Loan," effective for fiscal years
beginning after December 15, 1994. This new accounting standard requires
creditors to evaluate the collectibility of both contractual interest and
principal of receivables when evaluating the need for a loss accrual. Based on
its initial assessment, Chrysler believes that the implementation of this new
accounting standard will not have a material impact on its consolidated
operating results or financial position. Chrysler plans to adopt this standard
on or before January 1, 1995, as required.
Note 4. Sales of Automotive Assets and Investments
During the first and second quarters of 1994, Chrysler sold certain operations
of its Acustar division, and entered into five-year supply agreements with the
purchasers. Aggregate net proceeds from the sales and the supply agreements
were approximately $325 million. The related pretax gains of approximately
$256 million have been deferred and will be recognized over the term of the
supply agreements.
During the third quarter of 1993, Chrysler sold its remaining 23.3 million
shares of Mitsubishi Motors Corporation ("MMC") stock for proceeds of $152
million, resulting in a pretax gain of $94 million ($58 million after
applicable income taxes). During the second quarter of 1993, Chrysler sold the
plastics operations of its Acustar division for net proceeds of $132 million,
resulting in a pretax gain of $60 million ($39 million after applicable income
taxes). Also during the second quarter of 1993, Chrysler sold an aggregate of
27 million shares of MMC for proceeds of $177 million, resulting in a pretax
gain of $111 million ($70 million after applicable income taxes).
Note 5. Changes in Estimated Service Lives of Fixed Assets
Effective April 1, 1994, Chrysler revised the estimated service lives of
certain special tools and property and equipment. These revisions were based
on updated assessments of the service lives of the related assets and resulted
in the recognition of additional amortization of special tools of $74 million
and $163 million, respectively, in the three and nine months ended September
30, 1994, and decreased depreciation of property and equipment of $15 million
and $30 million, respectively, for the three and nine months ended September
30, 1994.
Note 6. Income Taxes
During the third quarter of 1993, the Omnibus Budget Reconciliation Act of 1993
was enacted in the United States. This legislation increased the federal
maximum statutory corporate income tax rate to thirty-five percent, retroactive
to January 1, 1993. The adjustment of deferred tax assets and liabilities to
the higher tax rate, partially offset by the increased tax provision on 1993
earnings, resulted in the recognition, in the third quarter of 1993, of a $51
million net decrease in the provision for income taxes.
------------------------------
* * * * *
5
<PAGE> 8
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL REVIEW
Chrysler Corporation and its consolidated subsidiaries ("Chrysler") reported
earnings before income taxes of $1,063 million for the third quarter of 1994,
compared with $612 million for the third quarter of 1993. For the first nine
months of 1994, Chrysler reported earnings before income taxes and the
cumulative effect of changes in accounting principles of $4.2 billion, compared
with $2.6 billion for the comparable period of 1993. Pretax earnings for the
third quarter and first nine months of 1993 included gains on sales of
automotive assets and investments of $94 million and $265 million,
respectively.
The improvement in operating results in the third quarter and first nine
months of 1994 over the corresponding periods of 1993 resulted from an increase
in sales volume and pricing actions, including lower per unit sales incentives,
partially offset by increased profit-based employee costs. Chrysler's
worldwide factory car and truck sales for the three and nine months ended
September 30, 1994 increased 15 percent and 12 percent, respectively, over the
comparable 1993 periods. Combined U.S. and Canadian dealers' days supply of
vehicle inventory was 54 days at September 30, 1994, as compared to 63 days at
December 31, 1993 and 54 days at September 30, 1993.
Net earnings for the third quarter of 1994 were $651 million, or $1.76 per
common share, compared with $423 million, or $1.13 per common share, in the
third quarter of 1993. Net earnings for the three months ended September 30,
1993 included a $51 million favorable adjustment to the income tax provision to
reflect the increase in the U.S. federal tax rate to 35 percent. Net earnings
for the nine months ended September 30, 1994 were $2.5 billion, compared to a
net loss of $3.3 billion for the comparable period of 1993. The net loss for
the first nine months of 1993 resulted from a charge of $4.7 billion for the
cumulative effect of a change in accounting principle related to the adoption
of Statement of Financial Accounting Standards ("SFAS") No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions." Results for the
first nine months of 1993 also included a charge of $283 million for the
cumulative effect of a change in accounting principle relating to the adoption
of SFAS No. 112, "Employers' Accounting for Postemployment Benefits."
In the third quarter of 1994, North American vehicle industry retail sales,
on a Seasonally Adjusted Annual Rate basis, were 16.2 million cars and trucks,
compared to 15.1 million units for the third quarter of 1993, an increase of 7
percent. Chrysler's U.S. and Canada combined retail car and truck market share
for the third quarter of 1994 decreased slightly from the third quarter of
1993. Chrysler's U.S. and Canada combined retail car and truck market share
for the nine months ended September 30, 1994 remained consistent with the
corresponding 1993 period. Increases in truck market share were offset by
decreases in car market share in both the third quarter and nine month periods,
as shown in the following table:
<TABLE>
<CAPTION>
Third Quarter Nine Months
------------------------------- -------------------------------
Inc./ Inc./
1994 1993 (Dec.) 1994 1993 (Dec.)
-------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
U.S. Retail Market Share (1):
Car 8.0% 9.1% (1.1) % 9.1% 9.9% (0.8) %
Truck 20.5% 19.9% 0.6 % 22.2% 21.6% 0.6 %
Combined U.S. Car and Truck 13.1% 13.4% (0.3) % 14.5% 14.5% ---
U.S. and Canada Combined Retail
Market Share (1) 13.5% 13.6% (0.1) % 14.9% 14.9% ---
</TABLE>
- ------------------------------
(1) All market share data include fleet sales.
The decline in Chrysler's U.S. car market share for the three and nine
month periods was principally the result of declines in sales of models which
are being replaced in the fall of 1994 with all-new 1995 models, partially
offset by increased sales in the basic middle and basic large segments. The
increases in U.S. truck market share for the three and nine month periods
reflect increased sales of full-size pickup trucks, resulting from the
introduction of Chrysler's all-new Dodge Ram pickup truck in late 1993. Despite
increased retail unit sales in 1994, market shares in the minivan and small
sport-utility segments decreased slightly from the 1993 periods, principally as
a result of market demand in excess of Chrysler's current production
capabilities for minivans and Jeep(R) vehicles.
6
<PAGE> 9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
FINANCIAL REVIEW - Continued
Pretax earnings of Chrysler Financial Corporation ("CFC") for the third
quarter of 1994 and 1993 were $82 million and $64 million, respectively. For
the nine months ended September 30, 1994 and 1993, CFC's earnings before income
taxes and the cumulative effect of changes in accounting principles were $226
million and $176 million, respectively. The improved results in the third
quarter and first nine months of 1994 compared to the corresponding periods of
1993 were primarily the result of higher levels of automotive financing and
lower costs of bank facilities, partially offset by reduced retail automotive
margins. CFC reported net earnings of $50 million in the third quarter of
1994, compared to $22 million in the third quarter of 1993. CFC's net earnings
for the third quarter of 1993 were reduced by a $16 million adjustment to
reflect a retroactive increase in the U.S. federal income tax rate to 35
percent. CFC's net earnings for the first nine months of 1994 and 1993 were
$141 million and $73 million, respectively. CFC's net earnings for the first
nine months of 1993 included charges totaling $30 million for the adoptions of
SFAS No. 106 and SFAS No. 112.
Chrysler's revenues and results of operations are principally derived
from the North American automotive marketplace. During the first nine months
of 1994, North American automobile industry sales increased from the 1993
levels, as the U.S. economic recovery continued. Overall, Chrysler experienced
sales growth consistent with the North American automobile industry. In
response to the economic recovery, during the first quarter of 1994 Chrysler
revised its productive asset acquisition plans to increase its worldwide
production capacity by approximately 500,000 units per year by 1996. These
planned capacity expansions increased Chrysler's projected spending for new
product development and the acquisition of productive assets, and could result
in the addition of up to 6,000 employees by the end of 1996.
COMPARISON OF SELECTED ELEMENTS OF REVENUE AND COSTS
Chrysler's total sales and revenues for the third quarter and first nine
months of 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
Third Quarter Nine Months
------------------------------------ -----------------------------------
Inc./ Inc./
1994 1993 (Dec.) 1994 1993 (Dec.)
---------- ---------- -------- ---------- ---------- --------
(In millions of dollars) (In millions of dollars)
<S> <C> <C> <C> <C> <C> <C>
Sales of manufactured products $ 10,938 $ 8,995 22 % $ 35,858 $ 29,540 21 %
Finance and insurance income 323 352 (8)% 996 1,087 (8)%
Other income 398 366 9 % 1,110 1,021 9 %
---------- ---------- ---------- ----------
Total sales and revenues $ 11,659 $ 9,713 20 % $ 37,964 $ 31,648 20 %
========== ========== ========== ==========
</TABLE>
The increase in sales of manufactured products in the third quarter of
1994 primarily reflects the 15 percent increase in factory unit sales as
compared to the third quarter of 1993, and an increase in the average revenue
per unit, net of sales incentives, to $18,252 in the third quarter of 1994. The
increase in sales of manufactured products in the first nine months of 1994
primarily reflects the 12 percent increase in factory unit sales as compared to
the first nine months of 1993, and an increase in the average revenue per unit,
net of sales incentives, to $17,533 for the nine months ended September 30,
1994. The increase in average revenue per unit in both 1994 periods was due to
pricing actions, including lower per unit sales incentives, and sales of a
larger proportion of trucks.
The decrease in finance and insurance income in the three and nine
months ended September 30, 1994 as compared to the corresponding 1993 periods
was primarily the result of reduced nonautomotive financing revenue, reflecting
liquidations of CFC's nonautomotive portfolios. Total automotive financing
volume in the third quarter and first nine months of 1994 was $16.3 billion and
$51.4 billion, respectively, compared to $13.7 billion and $43.4 billion for
the corresponding 1993 periods. Financing support provided in the U.S. by CFC
for new Chrysler vehicle retail deliveries (including fleet) and wholesale
vehicle sales to dealers and the number of vehicles financed during the three
and nine months ended September 30, 1994 and 1993 were as follows:
7
<PAGE> 10
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
COMPARISON OF SELECTED ELEMENTS OF REVENUE AND COSTS - Continued
<TABLE>
<CAPTION>
Third Quarter Nine Months
-------------------- -------------------
1994 1993 1994 1993
------- ------- ------- -------
<S> <C> <C> <C> <C>
U.S. Penetration:
Retail 23 % 24 % 24 % 24 %
Wholesale 76 % 77 % 74 % 74 %
Number of New Chrysler Vehicles Financed
in the U.S. (in thousands):
Retail 113 117 399 365
Wholesale 371 332 1,216 1,105
</TABLE>
The increase in other income resulted principally from increased interest
income for the three and nine months ended September 30, 1994, reflecting
Chrysler's increased cash, cash equivalents and marketable securities balances
in 1994 as compared to 1993.
Total costs and expenses for the third quarter and first nine months of 1994
and 1993 were as follows:
<TABLE>
<CAPTION>
Third Quarter Nine Months
------------------------------------ ------------------------------------
Inc./ Inc./
1994 1993 (Dec.) 1994 1993 (Dec.)
----------- ----------- -------- ---------- ---------- -------
(In millions of dollars) (In millions of dollars)
<S> <C> <C> <C> <C> <C> <C>
Costs, other than items below $ 8,672 $ 7,392 17 % $ 27,653 $ 23,571 17 %
Depreciation of property and
equipment 235 235 -- 741 738 --
Amortization of special tools 203 116 75 % 709 508 40 %
Selling and administrative expenses 900 812 11 % 2,852 2,469 16 %
Pension expense 174 169 3 % 509 555 (8)%
Nonpension postretirement
benefit expense 197 200 (2)% 604 595 2 %
Interest expense 215 271 (21)% 697 863 (19)%
Gain on sales of automotive
assets and investments -- (94) -- -- (265) --
----------- ----------- ---------- ----------
Total costs and expenses $ 10,596 $ 9,101 16 % $ 33,765 $ 29,034 16 %
=========== =========== ========== ==========
</TABLE>
Costs, other than items below increased in the third quarter and first
nine months of 1994 primarily as a result of increased factory unit sales and
sales of an increased proportion of higher-priced vehicles. Costs, other than
items below were 79 percent and 77 percent of sales of manufactured products for
the respective three and nine month periods ended September 30, 1994, compared
to 82 percent and 80 percent for the respective three and nine month periods
ended September 30, 1993. These decreases were primarily attributable to greater
capacity utilization.
Depreciation of property and equipment for the third quarter and first
nine months of 1994 remained consistent with the comparable 1993 periods as
increases resulting from Chrysler's facility modernization program were
substantially offset by lower depreciation at CFC reflecting the reductions in
CFC's nonautomotive operations.
Special tooling amortization increased significantly in the third
quarter and first nine months of 1994 compared with the comparable 1993 periods
primarily as a result of the shortening of the remaining service lives of
certain special tools, effective April 1, 1994.
The increase in selling and administrative expenses for the third
quarter of 1994, as compared to the third quarter of 1993 was principally due to
increased advertising. For the nine-month periods, the increase in 1994
primarily resulted from increased advertising expenses and profit-based employee
costs.
8
<PAGE> 11
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
COMPARISON OF SELECTED ELEMENTS OF REVENUE AND COSTS - Continued
Pension expense for the third quarter of 1994 remained comparable with the
third quarter of 1993, while decreasing for the first nine months of 1994 as
compared to the first nine months of 1993. Plan funding improvements,
including the $5.4 billion in contributions made in 1993 and 1994, resulted in
reductions to pension expense. These reductions were partially offset by
increases resulting from the reduction in the discount rate used to measure
pension expense and scheduled increases in benefits included in the 1993
national contracts with Chrysler's principal collective bargaining units.
Nonpension postretirement benefit expense for the three and nine month
periods ended September 30, 1994 remained comparable with the 1993 periods, as
increases resulting from the decrease in the discount rate used to measure
nonpension postretirement benefit expense were offset by cost savings
associated with the implementation of new managed care initiatives.
The decrease in interest expense for the third quarter of 1994 was
primarily due to lower average automotive borrowings, resulting from Chrysler's
repayment of $1.2 billion of debt since September 30, 1993. Interest expense
decreased for the first nine months of 1994 primarily due to lower average
borrowings resulting from the repayment of automotive borrowings and CFC's 1993
sales of nonautomotive operations. CFC's average effective cost of borrowings
was 7.7 percent and 8.2 percent in the third quarter and first nine months of
1994, respectively, compared to 8.9 percent and 8.7 percent in the
corresponding periods of 1993. The decrease in the 1994 periods primarily
reflects lower term debt and bank facility costs, partially offset by higher
short-term interest rates.
LIQUIDITY AND CAPITAL RESOURCES
Chrysler's combined cash, cash equivalents and marketable securities
totaled $7.1 billion at September 30, 1994 (including $507 million held by
CFC), an increase of $2.0 billion from December 31, 1993. The increase in the
first nine months of 1994 was the result of cash generated by operating
activities, partially offset by pension contributions and capital expenditures.
During the first quarter of 1994, Chrysler revised its near-term new
product development and productive asset acquisition plans to include various
actions intended to increase the capacity at several of its facilities.
Chrysler currently expects to spend approximately $21 billion in the 1994 to
1998 period for new product development and the acquisition of productive
assets.
Chrysler's projected pension benefit obligation in excess of plan assets
was $2.2 billion at December 31, 1993. Chrysler contributed $1.9 billion to
the pension fund in the first nine months of 1994. During the second quarter
of 1994, Chrysler announced an objective, subject to a continuation of present
general economic, industry and capital market trends, to fully fund the
remaining pension obligation by the end of 1994. In order to achieve this
objective, Chrysler estimates that contributions during the fourth quarter of
1994 will not exceed $650 million.
During the third quarter of 1994, Chrysler replaced its existing $1.5
billion revolving credit agreement, which was to expire in June 1996, with a
new $1.7 billion agreement, expiring in July 1999. The new agreement provides
for reduced interest rates and commitment fees, less restrictive financial
covenants and the removal of the lenders' ability to obtain security interests
in Chrysler's assets. No borrowings have been outstanding under either
revolving credit agreement during 1994.
At September 30, 1994, Chrysler (excluding CFC), had debt maturities
totaling $243 million through 1996. Chrysler believes that cash from
operations and its cash position will be sufficient to enable it to meet its
capital expenditure, pension contribution, debt maturity and other funding
requirements.
Chrysler's ability to market its products successfully depends
significantly on the availability of inventory financing for its dealers and,
to a lesser extent, the availability of financing for retail and fleet
purchasers of its products, both of which CFC provides.
Receivable sales continued to be a significant source of funding for CFC,
which realized $5.2 billion of net proceeds from the sale of retail receivables
in the first nine months of 1994, compared to $5.7 billion in the first nine
months of 1993. In addition, CFC's revolving wholesale receivable sale
arrangements provided funding which aggregated $3.6 billion and $4.1 billion at
September 30, 1994 and 1993, respectively.
9
<PAGE> 12
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
LIQUIDITY AND CAPITAL RESOURCES - Continued
At September 30, 1994, CFC had U.S. and Canadian credit facilities totaling
$5.2 billion and receivable sale agreements totaling $1.7 billion. At
September 30, 1994, no amounts were outstanding under CFC's U.S. and Canadian
credit facilities or receivable sale agreements.
At September 30, 1994, CFC had debt maturities of $4.1 billion during the
remainder of 1994 (including $3.1 billion of commercial paper), $625 million in
1995, and $1.1 billion in 1996. CFC believes that cash provided by operations,
receivable sales, and the issuance of term debt and commercial paper will be
sufficient to enable CFC to meet its funding requirements.
NEW ACCOUNTING STANDARD
In May 1993, the Financial Accounting Standards Board issued SFAS No. 114,
"Accounting by Creditors for Impairment of a Loan," effective for fiscal
years beginning after December 15, 1994. This new accounting standard requires
creditors to evaluate the collectibility of both contractual interest and
principal of receivables when evaluating the need for a loss accrual. Based on
its initial assessment, Chrysler believes that the implementation of this new
accounting standard will not have a material impact on its consolidated
operating results or financial position. Chrysler plans to adopt this standard
on or before January 1, 1995, as required.
REVIEW BY INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP, Chrysler's independent public accountants,
performed a review of the financial statements for the three and nine months
ended September 30, 1994 and 1993 in accordance with the standards for such
reviews established by the American Institute of Certified Public Accountants.
The review did not constitute an audit, and accordingly, Deloitte & Touche LLP
did not express an opinion on the aforementioned data. Refer to the
Independent Accountants' Report included at Exhibit 15A.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On July 8, 1994, Chrysler entered into a Consent Decree with the Ohio
Environmental Protection Agency that resolved previously reported allegations
of improper waste disposal at a Chrysler facility in Dayton, Ohio. Pursuant to
the Consent Decree, Chrysler paid a civil penalty of $164,000.
10
<PAGE> 13
Item 5. OTHER INFORMATION
SUPPLEMENTAL INFORMATION
CHRYSLER (WITH CFC AND CAR RENTAL OPERATIONS ON AN EQUITY BASIS)
STATEMENT OF EARNINGS
For the Three and Nine Months Ended September 30, 1994 and 1993
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------- ------------------------
1994 1993 1994 1993
-------- ------- ---------- --------
(In millions of dollars)
<S> <C> <C> <C> <C>
Sales of manufactured products $ 11,017 $ 8,962 $ 36,238 $ 29,990
Equity in earnings of unconsolidated subsidiaries
and affiliates 65 68 169 128
Interest and other income 80 57 212 167
-------- ------- ---------- --------
TOTAL SALES AND REVENUES 11,162 9,087 36,619 30,285
-------- ------- ---------- --------
Costs, other than items below 8,540 7,155 27,471 23,432
Depreciation of property and equipment 217 207 686 644
Amortization of special tools 203 116 709 508
Selling and administrative expenses 714 627 2,278 1,919
Pension expense 172 166 503 548
Nonpension postretirement benefit expense 196 198 601 591
Interest expense 57 100 172 294
Gain on sales of automotive assets
and investments -- (94) -- (265)
-------- ------- ---------- --------
TOTAL COSTS AND EXPENSES 10,099 8,475 32,420 27,671
-------- ------- ---------- --------
EARNINGS BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF CHANGES
IN ACCOUNTING PRINCIPLES 1,063 612 4,199 2,614
Provision for income taxes 412 189 1,654 976
-------- ------- ---------- --------
EARNINGS BEFORE CUMULATIVE EFFECT OF
CHANGES IN ACCOUNTING PRINCIPLES 651 423 2,545 1,638
Cumulative effect of changes in
accounting principles -- -- -- (4,966)
-------- ------- ---------- --------
NET EARNINGS (LOSS) $ 651 $ 423 $ 2,545 $ (3,328)
Preferred stock dividends 20 20 60 60
-------- ------- ---------- --------
NET EARNINGS (LOSS) ON COMMON STOCK $ 631 $ 403 $ 2,485 $ (3,388)
======== ======= ========== ========
</TABLE>
This unaudited Supplemental Information, "Chrysler (with CFC and Car Rental
Operations on an Equity Basis)," reflects the results of operations of Chrysler
with its investments in Chrysler Financial Corporation ("CFC") and its
investments in short-term vehicle rental subsidiaries (the "Car Rental
Operations") accounted for on an equity basis rather than as consolidated
subsidiaries. This Supplemental Information does not purport to present
results of operations in accordance with generally accepted accounting
principles because it does not comply with Statement of Financial Accounting
Standards ("SFAS") No. 94, "Consolidation of All Majority-Owned Subsidiaries."
The financial covenants contained in certain of Chrysler's credit facilities
are based on this Supplemental Information. In addition, because the
operations of CFC and the Car Rental Operations are different in nature than
Chrysler's manufacturing operations, management believes that this
disaggregated financial data enhances an understanding of the consolidated
financial statements.
11
<PAGE> 14
SUPPLEMENTAL INFORMATION
CHRYSLER (WITH CFC AND CAR RENTAL OPERATIONS ON AN EQUITY BASIS)
BALANCE SHEET
<TABLE>
<CAPTION>
1994 1993
------------ -----------------------------
Sept. 30 Dec. 31 Sept. 30
------------ ------------- ------------
(In millions of dollars)
<S> <C> <C> <C>
ASSETS:
Cash and cash equivalents $ 5,070 $ 3,777 $ 3,898
Marketable securities 1,559 707 458
Accounts receivable - trade and other 862 805 1,402
Inventories 2,651 2,483 2,458
Prepaid taxes, pension and other expenses 564 713 745
Property and equipment 9,594 8,820 8,432
Special tools 3,433 3,455 3,214
Investments in and advances to unconsolidated subsidiaries
and affiliated companies 3,665 3,685 3,673
Intangible assets 3,827 3,882 4,071
Deferred tax assets 2,887 3,642 3,871
Other assets 2,128 2,051 632
----------- ------------ ------------
TOTAL ASSETS $ 36,240 $ 34,020 $ 32,854
============ ============ ============
LIABILITIES:
Accounts payable $ 6,977 $ 6,074 $ 5,856
Short-term debt 142 100 101
Payments due within one year on long-term debt 181 399 1,170
Accrued liabilities and expenses 4,835 4,422 4,089
Long-term debt 2,104 2,281 2,323
Accrued noncurrent employee benefits 9,242 10,562 9,982
Other noncurrent liabilities 3,715 3,346 3,326
----------- ------------ ------------
TOTAL LIABILITIES 27,196 27,184 26,847
----------- ------------ ------------
SHAREHOLDERS' EQUITY: (shares in millions)
Preferred stock - $1 per share par value; authorized 20.0
shares; Series A Convertible Preferred Stock; issued:
1994 and 1993 - 1.7 shares (aggregate liquidation
preference - $863 million) 2 2 2
Common stock - $1 per share par value; authorized
1,000.0 shares; issued: 1994 and 1993 - 364.1 shares 364 364 364
Additional paid-in capital 5,533 5,533 5,532
Retained earnings 3,371 1,170 374
Treasury stock - at cost: 1994 - 9.6 shares;
1993 - 10.4 and 12.0 shares, respectively (226) (233) (265)
----------- ------------ ------------
TOTAL SHAREHOLDERS' EQUITY 9,044 6,836 6,007
----------- ------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 36,240 $ 34,020 $ 32,854
============ ============ ============
</TABLE>
This unaudited Supplemental Information, "Chrysler (with CFC and Car Rental
Operations on an Equity Basis)," reflects the financial position of Chrysler
with its investments in CFC and the Car Rental Operations accounted for on an
equity basis rather than as consolidated subsidiaries. This Supplemental
Information does not purport to present financial position in accordance with
generally accepted accounting principles because it does not comply with SFAS
No. 94, "Consolidation of All Majority-Owned Subsidiaries." The financial
covenants contained in certain of Chrysler's credit facilities are based on
this Supplemental Information. In addition, because the operations of CFC and
the Car Rental Operations are different in nature than Chrysler's manufacturing
operations, management believes that this disaggregated financial data enhances
an understanding of the consolidated financial statements.
12
<PAGE> 15
SUPPLEMENTAL INFORMATION
CHRYSLER (WITH CFC AND CAR RENTAL OPERATIONS ON AN EQUITY BASIS)
STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 1994 and 1993
<TABLE>
<CAPTION>
1994 1993
------------ -------------
(In millions of dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ 2,545 $ (3,328)
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization 1,395 1,152
Equity in earnings of unconsolidated subsidiaries and affiliates (169) (128)
Deferred income tax provision 839 533
Gain on sales of automotive assets and investments -- (265)
Cumulative effect of changes in accounting principles -- 4,966
Change in accounts receivable (58) (445)
Change in inventories (207) (146)
Change in prepaid expenses and other assets (12) (316)
Change in accounts payable and accrued and other liabilities 494 (872)
Other 156 158
------------ -------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,983 1,309
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities (2,095) (2,376)
Sales and maturities of marketable securities 1,234 2,877
Proceeds from sales of automotive assets and investments 62 461
Expenditures for property and equipment (1,600) (1,092)
Expenditures for special tools (706) (826)
Other 50 (74)
------------ -------------
NET CASH USED IN INVESTING ACTIVITIES (3,055) (1,030)
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in short-term debt (less than 90-day maturities) 42 14
Proceeds under revolving lines of credit and long-term borrowings 7 20
Payments on revolving lines of credit and long-term borrowings (400) (235)
Proceeds from issuance of common stock, net of expenses -- 1,952
Dividends paid (290) (209)
Other 6 68
------------ -------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (635) 1,610
------------ -------------
Change in cash and cash equivalents 1,293 1,889
Cash and cash equivalents at beginning of period 3,777 2,009
------------ -------------
Cash and cash equivalents at end of period $ 5,070 $ 3,898
============ =============
</TABLE>
This unaudited Supplemental Information, "Chrysler (with CFC and Car Rental
Operations on an Equity Basis)," reflects the cash flows of Chrysler with its
investments in CFC and the Car Rental Operations accounted for on an equity
basis rather than as consolidated subsidiaries. This Supplemental Information
does not purport to present cash flows in accordance with generally accepted
accounting principles because it does not comply with SFAS No. 94,
"Consolidation of All Majority-Owned Subsidiaries." The financial covenants
contained in certain of Chrysler's credit facilities are based on this
Supplemental Information. In addition, because the operations of CFC and the
Car Rental Operations are different in nature than Chrysler's manufacturing
operations, management believes that this disaggregated financial data enhances
an understanding of the consolidated financial statements.
13
<PAGE> 16
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The exhibits filed with this Report are listed in the Exhibit
Index which immediately precedes such exhibits.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the three months
ended September 30, 1994.
14
<PAGE> 17
CONFORMED
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CHRYSLER CORPORATION
------------------------
(Registrant)
Date: October 14, 1994 By /s/ J. D. Donlon, III
------------------- ------------------------------
J. D. Donlon, III
Vice President and Controller
(Chief Accounting Officer)
15
<PAGE> 18
EXHIBIT INDEX
For Quarterly Report on Form 10-Q for the
Quarterly Period Ended September 30, 1994
Exhibit
4E Conformed copy of $1,675,000,000 Revolving Credit Agreement, dated
as of July 29, 1994, among Chrysler Corporation, the several Banks
party to the Agreement and Chemical Bank, as Agent for the Banks.
(Filed with this report.)
11 Statement regarding computation of earnings per common share.
(Filed with this report.)
15A Letter, dated October 11, 1994, re unaudited interim information.
(Filed with this report.)
15B Letter, dated October 14, 1994, re unaudited interim information.
(Filed with this report.)
27 Financial Data Schedule for nine months ended September 30, 1994.
16
<PAGE> 1
EXHIBIT 4E
$1,675,000,000
REVOLVING
CREDIT AGREEMENT
DATED AS OF JULY 29, 1994
CHRYSLER CORPORATION,
AS BORROWER
CHEMICAL BANK,
AS AGENT
CHEMICAL SECURITIES INC.,
AS ARRANGER
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . 11
SECTION 2. AMOUNT AND TERMS OF THE COMMITMENTS . . . . . . . . . . . . . . . . 11
2.1 The Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.2 Repayment of Loans; Evidence of Debt . . . . . . . . . . . . . . . . 12
2.3 Procedure for Borrowing . . . . . . . . . . . . . . . . . . . . . . 12
2.4 Conversion and Continuation Options . . . . . . . . . . . . . . . . 13
2.5 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.6 Termination or Reduction of Commitments . . . . . . . . . . . . . . 15
2.7 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.8 Interest Rate and Payment Dates . . . . . . . . . . . . . . . . . . 15
2.9 Computation of Interest and Fees . . . . . . . . . . . . . . . . . . 16
2.10 Inability to Determine Interest Rate . . . . . . . . . . . . . . . . 16
2.11 Pro Rata Treatment and Payments . . . . . . . . . . . . . . . . . . 17
2.12 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.13 Requirements of Law . . . . . . . . . . . . . . . . . . . . . . . . 18
2.14 Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.15 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.16 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.17 Transfer of Commitments to CFC . . . . . . . . . . . . . . . . . . . 21
SECTION 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . 22
3.1 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . 22
3.2 No Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.3 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . 22
3.4 Corporate Authorization; No Violation . . . . . . . . . . . . . . . 22
3.5 Government Authorization . . . . . . . . . . . . . . . . . . . . . . 22
3.6 Federal Regulations . . . . . . . . . . . . . . . . . . . . . . . . 23
3.7 Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . . 23
3.8 No Material Litigation . . . . . . . . . . . . . . . . . . . . . . . 23
3.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4. CONDITIONS PRECEDENT TO LOANS . . . . . . . . . . . . . . . . . . . 23
4.1 Conditions of Effectiveness . . . . . . . . . . . . . . . . . . . . 23
4.2 Conditions to All Loans . . . . . . . . . . . . . . . . . . . . . . 25
(a) Representations and Warranties . . . . . . . . . . . . . . . . 25
(b) No Default or Event of Default . . . . . . . . . . . . . . . . 25
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Page
<S> <C>
SECTION 5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 25
5.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 25
5.2 Certificates; Other Information . . . . . . . . . . . . . . . . . . 26
5.3 Accrual of Liabilities; Payment of Tax Liabilities . . . . . . . . . 26
5.4 Maintenance of Corporate Existence; Compliance with Applicable Law;
Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . 26
5.5 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 27
6.1 Indebtedness to Total Capitalization . . . . . . . . . . . . . . . . 27
6.2 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . 27
6.3 Limitation on Sales and Leasebacks . . . . . . . . . . . . . . . . . 29
6.4 Limitation on Fundamental Changes . . . . . . . . . . . . . . . . . 29
SECTION 7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 8. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . 33
8.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . 33
8.4 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.6 Non-Reliance on Agent and Other Banks . . . . . . . . . . . . . . . 34
8.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.8 Agent in Its Individual Capacity . . . . . . . . . . . . . . . . . . 35
8.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . 35
9.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . 37
9.4 Survival of Representations and Warranties . . . . . . . . . . . . . 37
9.5 Payment of Expenses and Taxes . . . . . . . . . . . . . . . . . . . 37
9.6 Successors and Assigns; Participations and Assignments . . . . . . . 37
9.7 Right of Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.8 Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.9 New Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.10 Increase in Commitments . . . . . . . . . . . . . . . . . . . . . . 41
9.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
Page
<S> <C>
9.12 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.13 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.14 Acknowledgement . . . . . . . . . . . . . . . . . . . . . . . . . . 42
</TABLE>
SCHEDULES
Schedule I - Commitments
Schedule II - Liens Permitted under Subsection 6.2(a)
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of New Bank Supplement
Exhibit C - Form of Increased Commitment Supplement
Exhibit D - Form of Opinion of Simpson Thacher & Bartlett
Exhibit E - Form of Opinion of General Counsel to the Company
Exhibit F - Form of Assignment and Acceptance
Exhibit G - Form of Addendum
Exhibit H - Form of Closing Certificate
<PAGE> 5
REVOLVING CREDIT AGREEMENT dated as of July 29, 1994 among CHRYSLER
CORPORATION, a Delaware corporation (the "Company"), the several commercial
banks from time to time parties to this Agreement (collectively, the "Banks";
individually, a "Bank"), CHEMICAL BANK, a New York banking corporation
("Chemical"), as agent for the Banks hereunder, and CHEMICAL SECURITIES INC.,
as arranger of the Commitments hereunder (the "Arranger").
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms defined in
the caption to this Agreement shall have the meanings set forth therein, and
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
"Addendum": an addendum substantially in the form of
Exhibit G.
"Agent": Chemical and its affiliates, as the arranger of
the Commitments and as the agent for the Banks under this Agreement,
together with any of its or their successors.
"Agreement": this Revolving Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
"Applicable Eurodollar Margin": with respect to each
Eurodollar Loan at a particular time, the applicable percentage
per annum set forth below based upon the Status at such time:
Applicable Eurodollar
Status Margin
------ -------------------------
Level I 0.375%
Level II 0.375%
Level III 0.375%
Level IV 0.500%
Level V 0.625%
Level VI 0.750%.
"Assignee": as defined in subsection 9.6(c).
<PAGE> 6
2
"Available Company/CFC Commitment": as to any Bank at a
particular time an amount equal to the difference between (a) the
amount of such Bank's Commitment under subsection 2.1(a) plus the
amount of such Bank's Transferred Commitment, if any, at such time
and (b) the aggregate unpaid principal amount at such time of all
Loans made by such Bank hereunder and all CFC Loans made by such
Bank pursuant to the CFC Commitment Transfer Agreement;
collectively, as to all the Banks, the "Available Company/CFC
Commitments".
"Base Rate": at a particular date, the higher of (a) the
rate of interest publicly announced by Chemical in New York City
from time to time as its prime rate and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. For purposes
hereof "Federal Funds Effective Rate" shall mean, for any day, the
weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the
Agent from three federal funds brokers of recognized standing
selected by it. The prime rate is not intended to be the lowest
rate of interest charged by Chemical in connection with extensions
of credit to debtors.
"Base Rate Loans": Loans at such time as they are made
and/or being maintained at a rate of interest equal to or based
upon the Base Rate.
"Borrowing Date": any Business Day specified in a notice
pursuant to subsection 2.3 as a date on which the Company requests
the Banks to make Loans.
"Business Day": a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are authorized
or required by law to close, provided, that when used in connection
with a Eurodollar Loan, "Business Day" shall also exclude any day
on which commercial banks are not open for dealings in Dollar
deposits in the London interbank market.
"CAFE": Corporate Average Fuel Economy Standards
promulgated by the United States Department of Transportation.
"Capital Lease Obligations": of any Person at a
particular time, the obligations of such Person to pay rent and
other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination
thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person
under GAAP.
"Car Rental Operations": collectively, (i) each
corporation substantially all of the assets of which constitute
motor vehicles in daily rental service and (ii) Pentastar.
"CFC": Chrysler Financial Corporation, a Michigan
corporation.
<PAGE> 7
3
"CFC Commitment": any "Commitment" under and as defined
in the CFC Commitment Transfer Agreement.
"CFC Commitment Transfer Agreement": as defined in
subsection 2.17.
"CFC Loan": any "Loan" under and as defined in the CFC
Commitment Transfer Agreement.
"Chrysler Canada": Chrysler Canada Ltd., a Canadian
corporation.
"Chrysler Mexico": Chrysler de Mexico, S.A., a Mexican
corporation.
"Chrysler Technologies": Chrysler Technologies
Corporation, a Michigan corporation.
"Code": the Internal Revenue Code of 1986, as amended
from time to time.
"Commercial Bank": any Person (a) licensed to engage in
commercial banking business and (b) which on the date it becomes a
Bank hereunder (i) is entitled to receive payments under this
Agreement without deduction or withholding of any United States
federal income taxes and (ii) is entitled to an exemption from, or
is not subject to, United States backup withholding tax.
"Commitment": as to any Bank, its obligation to make
Loans to the Company pursuant to subsection 2.1 in the amount
referred to therein; collectively, as to all the Banks, the
"Commitments".
"Commitment Fee Rate": for any day, the rate per annum
set forth below opposite the Status in effect on such day:
Commitment Fee
Status Rate
------ --------------
Level I 0.100%
Level II 0.125%
Level III 0.150%
Level IV 0.1875%
Level V 0.250%
Level VI 0.375%.
"Commitment Percentage": as to any Bank at a particular
time, the percentage of the aggregate Commitments then constituted
by such Bank's Commitment.
<PAGE> 8
4
"Commitment Period": as to the Commitment of any Bank,
the period from and including the Effective Date (or, in the case
of any Assignee which is not already a Bank and any New Bank, from
the date that such Assignee or New Bank becomes a party to this
Agreement as provided in subsection 9.6(c) or 9.9, as the case may
be) to but not including the Termination Date or such earlier date
as such Commitment shall terminate as provided herein.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Company within
the meaning of Section 414(b) or (c) of the Code.
"Company Car Program": the program (or any substantially
similar successor program) in existence on the Effective Date
pursuant to which the Company makes motor vehicles available for
lease to certain current and former employees of the Company and
its subsidiaries.
"Contractual Obligation": as to any Person, any
provision of any security issued by such Person or of any
agreement, instrument or undertaking to which such Person is a
party or by which it or any of its property is bound.
"D&P": Duff & Phelps Credit Rating Company or its
successors.
"D&P Bond Rating": for any day, the rating of the
Company's senior long-term unsecured debt by D&P in effect at 9:00
A.M., New York City time, on such day. If D&P shall have changed
its system of classifications after the date hereof, the D&P Bond
Rating shall be considered to be at or above a specified level if
it is at or above the new rating which most closely corresponds to
the specified level under the old rating system.
"Default": except as otherwise provided in Section 7(c),
any of the events specified in Section 7, whether or not any
requirement for the giving of notice, the lapse of time, or both,
or the happening of any other condition, has been satisfied.
"Dollars" or "$": lawful currency of the United States.
"Effective Date": the date on which all of the
conditions set forth in subsection 4.1 have been satisfied.
"Environmental Laws": any and all Federal, foreign,
state, local and municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decrees and requirements of any
Governmental Authority regulating, relating to or imposing
liability or standards of conduct concerning environmental
protection matters, including, without limitation, Hazardous
Materials, as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of
1974, as amended from time to time.
<PAGE> 9
5
"Eurodollar Loans": Loans at such time as they are made
and/or being maintained at a rate of interest based upon the LIBO
Rate.
"Eurodollar Tranche": the collective reference to
Eurodollar Loans whose Interest Periods begin on the same date and
end on the same later date (whether or not such Eurodollar Loans
originally were made on the same day).
"Eurostar": Eurostar Automobilwerk Gesellschaft mbH &
Co. K-G, an Austrian corporation.
"Event of Default": except as otherwise provided in
Section 7(c), any of the events specified in Section 7, provided
that any requirement for the giving of notice, the lapse of time,
or both, or the happening of any other condition, has been
satisfied.
"Excluded Subsidiaries": Chrysler Technologies, each of
its subsidiaries, CFC, each of its subsidiaries, each Receivable
Finance Company and the Car Rental Operations.
"Execution Date": the date on which the conditions set
forth in subsection 4.1(a)(ii) have been satisfied.
"Existing Credit Agreement": the Second Amended and
Restated Credit Agreement dated as of June 30, 1993 among the
Company, the financial institutions parties thereto and Chemical,
as agent, as amended through the date hereof.
"Federal Funds Effective Rate": as defined in the
definition of Base Rate.
"Fitch": Fitch Investors Service, Inc. or its successors.
"Fitch Bond Rating": for any day, the rating of the
Company's senior long-term unsecured debt by Fitch in effect at
9:00 A.M., New York City time, on such day. If Fitch shall have
changed its system of classifications after the date hereof, the
Fitch Bond Rating shall be considered to be at or above a specified
level if it is at or above the new rating which most closely
corresponds to the specified level under the old rating system.
"GAAP": generally accepted accounting principles in the
United States of America in effect from time to time, except that
for purposes of determining compliance with the covenants set forth
in subsections 6.1 and 6.2(n), "GAAP" shall mean generally accepted
accounting principles in the United States of America in effect on
December 31, 1993 applied consistently with those used in compiling
the audited financial statements referred to in subsection 3.1.
"Governmental Authority": any nation or government, any
state or other political subdivision thereof, and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
<PAGE> 10
6
"Guaranty": any guaranty by any Person of Indebtedness
or other obligations of any other Person or any assurance with
respect to the financial condition of any other Person (including,
without limitation, any purchase or repurchase agreement, any
indemnity or any keep-well, take-or-pay, through-put or other
arrangement having the effect of assuring or holding harmless any
third Person against loss with respect to any Indebtedness or other
obligation of such other Person) except indorsements of negotiable
instruments for collection in the ordinary course of business.
"Hazardous Materials": any hazardous materials,
hazardous wastes, hazardous constituents, hazardous or toxic
substances, petroleum products (including crude oil or any fraction
thereof), defined or regulated as such in or under any
Environmental Law.
"Indebtedness": without duplication: (a) any
indebtedness of the Company or any of its Subsidiaries for borrowed
money or for the deferred purchase price of property or services,
(b) any withdrawal obligation of the Company or any of its
Subsidiaries to a Multiemployer Plan, (c) all Capital Lease
Obligations of the Company and its Subsidiaries, (d) all
liabilities of the types described in clauses (a) through (c) of
this definition entitled to the benefits of any Guaranty by the
Company or any of its Subsidiaries and (e) all liabilities secured
by any Lien on any property owned by the Company or any of its
Subsidiaries even though the Company or such Subsidiary has not
assumed or otherwise become liable for the payment thereof, in each
case to be determined on a consolidated basis in accordance with
GAAP; provided, however, that the term "Indebtedness" shall not
include short-term obligations (including Guaranties in respect
thereof) payable to suppliers incurred in the ordinary course of
business; and provided, further, that for purposes of subsection
6.1, "Indebtedness" shall include obligations of the types
described in clauses (a) through (e) of this definition of Chrysler
Technologies and its subsidiaries.
"Interest Payment Date": (a) with respect to any
Eurodollar Loan having an Interest Period of three months or less,
the last day of such Interest Period, (b) with respect to any
Eurodollar Loan having an Interest Period longer than three months,
the day which is three months after the first day of such Interest
Period, and the last day of such Interest Period, (c) with respect
to any Base Rate Loan, the last day of each March, June, September
and December to occur while such Base Rate Loan is outstanding and
the Termination Date and (d) with respect to all Eurodollar Loans,
the date of any repayment, prepayment or conversion thereof.
Interest shall accrue from and including the first day of an
Interest Period to but excluding the last day of such Interest
Period.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, 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 Company in its notice of borrowing
or notice of conversion, as the case may be, given with respect
thereto; and
<PAGE> 11
7
(ii) thereafter, 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 Company by irrevocable notice to the Agent not less
than three Business Days prior to the last day of the then current
Interest Period with respect thereto;
provided, that the foregoing provisions are subject to the
following:
(A) if any Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall
be extended to the next succeeding 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 Business Day;
(B) any Interest Period that begins on the last 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 end on the last
Business Day of a calendar month; and
(C) any Interest Period that would otherwise extend
beyond the Termination Date shall end on the Termination
Date.
"Level": any of Level I, Level II, Level III, Level IV,
Level V or Level VI.
"Level I": (i) an S&P Bond Rating of A+, (ii) a Moody's
Bond Rating of A1, (iii) a D&P Bond Rating of A+ and (iv) a Fitch
Bond Rating of A+.
"Level II": (i) an S&P Bond Rating of A, (ii) a Moody's
Bond Rating of A2, (iii) a D&P Bond Rating of A and (iv) a Fitch
Bond Rating of A.
"Level III": (i) an S&P Bond Rating of A-, (ii) a
Moody's Bond Rating of A3, (iii) a D&P Bond Rating of A- and (iv) a
Fitch Bond Rating of A-.
"Level IV": (i) an S&P Bond Rating of BBB+ or BBB, (ii)
a Moody's Bond Rating of Baa1 or Baa2, (iii) a D&P Bond Rating of
BBB+ or BBB and (iv) a Fitch Bond Rating of BBB+ or BBB.
"Level V": (i) an S&P Bond Rating of BBB-, (ii) a
Moody's Bond Rating of Baa3, (iii) a D&P Bond Rating of BBB- and
(iv) a Fitch Bond Rating of BBB-.
"Level VI": (i) an S&P Bond Rating of BB+ or lower (or
unrated by S&P), (ii) a Moody's Bond Rating of Ba1 or lower (or
unrated by Moody's), (iii) a D&P Bond Rating of BB+ or lower (or
unrated by D&P) and (iv) a Fitch Bond Rating of BB+ or lower (or
unrated by Fitch).
"LIBO Rate": with respect to each day during each
Interest Period for any Eurodollar Loan, the rate per annum equal
to the quotient of (a) the average (rounded
<PAGE> 12
8
upwards, if necessary, to the nearest whole multiple of 1/16 of one
percent) of the respective rates notified to the Agent by each
Reference Bank as the rate per annum at which such Reference Bank
is offered Dollar deposits two Business Days prior to the beginning
of such Interest Period in the London interbank market at
approximately 11:00 A.M., London time, for delivery on the first
day of such Interest Period for the number of days comprised
therein and in an amount comparable to the amount of the Eurodollar
Loan of such Reference Bank to be outstanding during such Interest
Period, divided by (b) a number equal to 1.00 minus the aggregate
(without duplication) of the rates (expressed as a decimal) of
reserve requirements current on the date two Business Days prior to
the beginning of such Interest Period (including, without
limitation, basic, supplemental, marginal and emergency reserves)
under any regulations of the Board of Governors of the Federal
Reserve System or other Governmental Authority having jurisdiction
with respect thereto, as now and from time to time hereafter in
effect, dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of such Board) maintained by a member
bank of such System (such LIBO Rate to be adjusted to the next
higher 1/100 of one percent).
"Lien": (a) any judgment lien or execution, attachment,
levy, distraint or similar legal process or (b) any mortgage,
pledge, hypothecation, assignment, lien, charge, encumbrance or
other security interest of any kind or nature whatsoever
(including, without limitation, the interest of the lessor under
any capital lease and the interest of the seller under any
conditional sale or other title retention agreement), which secures
or purports to secure any Indebtedness or other indebtedness or
obligations.
"Loans": shall have the meaning set forth in subsection
2.1(a).
"Moody's": Moody's Investors Service, Inc. or its
successors.
"Moody's Bond Rating": for any day, the rating of the
Company's senior long-term unsecured debt by Moody's in effect at
9:00 A.M., New York City time, on such day. If Moody's shall have
changed its system of classifications after the date hereof, the
Moody's Bond Rating shall be considered to be at or above a
specified level if it is at or above the new rating which most
closely corresponds to the specified level under the old rating
system.
"Multiemployer Plan": a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"New Bank": as defined in subsection 9.9.
"New Venture Gear": New Venture Gear, Inc., a Delaware
corporation.
"Note": as defined in subsection 9.6(g).
"Pentastar": Pentastar Transportation Group, Inc., an
Oklahoma corporation.
<PAGE> 13
9
"Permitted Encumbrances": (a) Liens for taxes not yet
due or which are being contested in good faith by appropriate
proceedings, provided that adequate reserves with respect thereto
are maintained on the books of the Company in conformity with GAAP,
(b) landlords', carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the
ordinary course of business which are not overdue for a period of
more than 60 days or which are being contested in good faith by
appropriate proceedings and (c) easements, rights-of-way,
restrictions and other similar encumbrances incurred in the
ordinary course of business which, in the aggregate, are not
substantial in amount in relation to the value of the property
subject thereto and which do not in any case materially detract
from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Company.
"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 a particular time, any employee benefit plan
which is covered by ERISA and in respect of which the Company or a
Commonly Controlled Entity is (or, if such plan were terminated at
such time, would under Section 4069 of ERISA be deemed to be) an
"employer" as such term is defined in Section 3(5) of ERISA.
"Rating Agencies": the collective reference to D&P,
Fitch, Moody's and S&P.
"Receivable Finance Company": any corporation
substantially all of the assets of which constitute receivables
arising out of the making of loans to Persons to finance the
acquisition of tangible property.
"Reference Banks": Chemical, Royal Bank of Canada and
NBD Bank N.A., or such successor bank as shall be chosen in
accordance with subsection 2.9(c).
"Regulation G": Regulation G of the Board of Governors
of the Federal Reserve System, as from time to time in effect.
"Regulation T": Regulation T of the Board of Governors
of the Federal Reserve System, as from time to time in effect.
"Regulation U": Regulation U of the Board of Governors
of the Federal Reserve System, as from time to time in effect.
"Regulation X": Regulation X of the Board of Governors
of the Federal Reserve System, as from time to time in effect.
"Required Banks": at a particular time, Banks having at
least 51% of the aggregate amount of the Commitments at such time
or, if the Commitments have expired or been terminated, Banks
holding at least 51% of the outstanding principal amount of the
Loans.
<PAGE> 14
10
"Requirement of Law": as to any Person, the certificate
of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation,
or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its
property is subject.
"Responsible Officer": at a particular time, the Chief
Financial Officer, the Treasurer or the Controller of the Company.
"S&P": Standard & Poor's Ratings Group or its successors.
"S&P Bond Rating": for any day, the rating of the
Company's senior long-term unsecured debt by S&P in effect at 9:00
A.M., New York City time, on such day. If S&P shall have changed
its system of classifications after the date hereof, the S&P Bond
Rating shall be considered to be at or above a specified level if
it is at or above the new rating which most closely corresponds to
the specified level under the old rating system.
"Status": as to the Company, the existence of Level I,
Level II, Level III, Level IV, Level V or Level VI, as the case may
be. For the purposes of this definition, "Status" will be set at
the lowest Level assigned to the Company by any Rating Agency,
unless only one Rating Agency has assigned such Level to the
Company, in which case the Status will be set at the second lowest
Level assigned to the Company by any Rating Agency. Status I shall
be deemed to be the highest Level and Status VI shall be deemed to
be the lowest Level. Notwithstanding the foregoing, if on the
Effective Date the Company's Status shall be Level IV, but would be
Level III if one Rating Agency were to rate the Company at a higher
Level, then the Company's Status shall nevertheless be set at Level
III; provided, that on and after the first date subsequent to the
Effective Date on which either (a) the Company's Status as
determined pursuant to the preceding sentence shall be increased
above Level IV or (b) any Rating Agency shall lower its bond
rating, Status shall be determined in accordance with the
immediately preceding sentence.
"Subsidiary": at a particular time, any corporation
included as a consolidated subsidiary of the Company in the
financial statements contained in the most recent annual report
filed by the Company with the Securities and Exchange Commission on
Form 10-K pursuant to the Securities Exchange Act of 1934, as
amended, provided that no Excluded Subsidiary shall be or, for any
reason, become a Subsidiary for purposes of this Agreement.
"Significant Subsidiary" shall mean, at a particular time, Chrysler
Canada and Chrysler Mexico and any other Subsidiary the assets of
which then constitute at least 10% of the consolidated assets of the
Company and its Subsidiaries. "Wholly-owned Subsidiary" shall mean
any Subsidiary at least 90% of whose capital stock having ordinary
voting power for the election of directors is owned, directly or
indirectly, by the Company.
"Termination Date": the fifth anniversary of the
Execution Date, or such earlier date as the Commitments shall
terminate as provided herein.
<PAGE> 15
11
"Total Capitalization": the sum of Indebtedness and Total
Shareholders' Equity.
"Total Shareholders' Equity": the sum of (i) the par
value (or stated value on the books of the Company) of the capital
stock of the Company, (ii) the par value (or stated value on the
books of the Company) of the preferred stock of the Company, (iii)
the aggregate amount of additional paid-in capital of the Company
and (iv) retained earnings (or minus accumulated deficit) of the
Company less (v) treasury stock (at cost) of the Company, each of
clauses (i) through (v) of this definition determined in accordance
with GAAP and, to the extent not inconsistent with GAAP, in
accordance with the Company's past practices. For the purposes of
this definition, the Company's investments in CFC and the Car
Rental Operations shall be accounted for on an equity basis rather
than as consolidated subsidiaries.
"Transferred Commitment": as defined in subsection
2.17(a).
"Type": as to any Loan, its nature as a Base Rate Loan
or a Eurodollar Loan.
"Utilization Fee Rate": a rate per annum equal to 1/8 of
1%.
1.2 Other Definitional Provisions. (a) All terms
defined in this Agreement shall have the defined meanings when used in any
Notes or any certificate or other document made or delivered pursuant hereto.
(b) As used herein and in any Notes, and in any
certificate or other document made or delivered pursuant hereto, accounting
terms relating to the Company and its subsidiaries not defined in subsection
1.1, and accounting terms partly defined in subsection 1.1 to the extent not
defined, shall have the respective meanings given to them under GAAP. The
covenant contained in subsection 5.1 that the financial statements furnished to
the Banks for the first three quarterly periods of each fiscal year of the
Company be prepared in accordance with GAAP shall not be construed to mean that
the technical presentation of such financial statements need be in accordance
with GAAP, so long as the presentation (with respect to such matters as the
presence or absence of footnotes, captions and the like) of such financial
statements is in accordance with the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
(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, subsection, schedule and exhibit references are to this Agreement
unless otherwise specified.
SECTION 2. AMOUNT AND TERMS OF THE COMMITMENTS
2.1 The Commitments. (a) Subject to the terms and
conditions hereof, each Bank severally agrees to make revolving credit loans
("Loans") to the Company from time to time during the Commitment Period with
respect to such Bank's Commitment in an
<PAGE> 16
12
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Bank's name in Schedule I, as such amount may be
reduced or increased as provided herein or as such amount may be reduced or
increased by a Transferred Commitment made or withdrawn, respectively, pursuant
to subsection 2.17. During such Commitment Period, the Company may use such
Commitment by borrowing, prepaying the Loans of such Bank in whole or in part
and reborrowing, all in accordance with the terms and conditions hereof.
(b) The Loans may be Base Rate Loans or Eurodollar
Loans, or any combination thereof, as determined by the Company and notified to
the Agent in accordance with subsection 2.3, provided that no Eurodollar Loans
shall be made during any period commencing with the day following the day that
is one month prior to the Termination Date and ending on the Termination Date.
2.2 Repayment of Loans; Evidence of Debt. (a) The
Company shall repay to the Agent for the account of each Bank all outstanding
Loans (together with all accrued unpaid interest thereon) on the last day of
the Commitment Period of such Bank. The Company shall pay interest on the
unpaid principal amount of the Loans from time to time outstanding from the
date hereof until payment in full thereof at the rates per annum, and on the
dates, set forth in subsection 2.8.
(b) (i) Each Bank shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Company to
the appropriate lending office of such Bank resulting from each Loan made by
such lending office of such Bank from time to time, including the amounts of
principal and interest payable and paid to such lending office of such Bank
from time to time under this Agreement.
(ii) The Agent shall maintain the Register pursuant to subsection
9.6(d), and a subaccount for each Bank, in which Register and subaccounts
(taken together) shall be recorded (A) the amount of each Loan made hereunder,
the Type of each Loan made and the Interest Period (if any) applicable thereto,
(B) the amount of any principal or interest due and payable or to become due
and payable from the Company to each Bank hereunder and (C) the amount of any
sum received by the Agent hereunder from the Company and each Bank's share
thereof.
(iii) The entries made in the Register and accounts maintained
pursuant to paragraphs (i) and (ii) of this subsection 2.2 shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the Company therein recorded; provided, however,
that the failure of any Bank or the Agent to maintain such account, such
Register or such subaccount, as applicable, or any error therein, shall not in
any manner affect the obligation of the Company to repay (with applicable
interest) the Loans made to the Company by such Bank in accordance with the
terms of this Agreement.
2.3 Procedure for Borrowing. (a) The Company may
borrow under the Commitments during the Commitment Period on any Business Day,
provided, that the Company shall give the Agent irrevocable notice (which
notice must be received by the
<PAGE> 17
13
Agent prior to 10:00 A.M., New York City time, (i) three Business Days prior to
the requested Borrowing Date, in the case of Eurodollar Loans and (ii) two
Business Days prior to the requested Borrowing Date, in the case of Base Rate
Loans) specifying (A) the amount to be borrowed, (B) the requested Borrowing
Date, (C) whether the borrowing is to be of Eurodollar Loans or Base Rate Loans
and (D) if the borrowing is to be of Eurodollar Loans, the duration of the
Interest Period with respect thereto. Upon receipt of such notice the Agent
shall promptly notify each Bank thereof. Not later than 12:00 noon, New York
City time, on the Borrowing Date specified in such notice, each Bank shall
(except as provided in paragraph (b) below) make an amount equal to the amount
of the Loan to be made by such Bank available to the Agent for the account of
the Company at the office of the Agent specified in subsection 9.2 in funds
immediately available to the Agent. Such borrowing will then be made available
to the Company by the Agent crediting the account of the Company on the books
of such office with the aggregate of the amounts made available to the Agent by
the Banks and in like funds as received by the Agent. Each borrowing of Base
Rate Loans shall be in an aggregate principal amount not less than the lesser
of (i) $25,000,000 and (ii) the amount of the undrawn Commitments pursuant to
subsection 2.1(a). Each borrowing of Eurodollar Loans shall be in an aggregate
principal amount not less than $25,000,000.
(b) Unless the Agent shall have received notice from a
Bank prior to a Borrowing Date that such Bank will not make available to the
Agent such Bank's ratable portion of such borrowing, the Agent may assume that
such Bank has made such portion available to the Agent on the date of such
borrowing in accordance with subsection 2.3(a), and the Agent may, in reliance
upon such assumption, make available to the Company on such date a
corresponding amount. If the Agent does, in such circumstances, make available
to the Company such amount, such Bank shall within three Business Days
following such Borrowing Date make such ratable portion available to the Agent,
together with interest thereon for each day from and including such Borrowing
Date that such ratable portion was not made available, at the Federal Funds
Effective Rate. If such amount is so made available, such payment to the Agent
shall constitute such Bank's Loan on such Borrowing Date for all purposes of
this Agreement. If such amount is not so made available to the Agent, then the
Agent shall notify the Company of such failure, and on the fourth Business Day
following such Borrowing Date the Company shall pay to the Agent such ratable
portion, together with interest thereon for each day that the Company had the
use of such ratable portion, at the Federal Funds Effective Rate. Nothing
contained in this subsection 2.3(b) shall relieve any Bank which has failed to
make available its ratable portion of any borrowing hereunder from its
obligation to do so in accordance with the terms hereof.
(c) The failure of any Bank to make the Loan to be made
by it on any Borrowing Date shall not relieve any other Bank of its obligation,
if any, hereunder to make its Loan on such Borrowing Date, but no Bank shall be
responsible for the failure of any other Bank to make the Loan to be made by
such other Bank on such Borrowing Date.
2.4 Conversion and Continuation Options. (a) The
Company may elect from time to time to convert Eurodollar Loans to Base Rate
Loans by giving the Agent at least two Business Days' prior irrevocable notice
of such election, provided that any such conversion of Eurodollar Loans may
only be made on the last day of an Interest Period with respect thereto. The
Company may elect from time to time to convert Base Rate Loans to
<PAGE> 18
14
Eurodollar Loans by giving the Agent at least three Business Days' prior
irrevocable notice of such election. Any such notice of conversion to
Eurodollar Loans shall specify the length of the initial Interest Period or
Interest Periods therefor. Upon receipt of any such notice the Agent shall
promptly notify each Bank thereof. All or any part of outstanding Eurodollar
Loans and/or Base Rate Loans may be converted as provided herein, provided that
(i) no Base Rate Loan may be converted into a Eurodollar Loan when any Event of
Default has occurred and is continuing and the Agent has or the Required Banks
have determined in its or their sole discretion not to permit such a conversion
and (ii) no Base Rate Loan may be converted into a Eurodollar Loan after the
date that is one month prior to the Termination Date.
(b) Any Eurodollar Loans may be continued as such upon
the expiration of the then current Interest Period with respect thereto by the
Company giving irrevocable notice to the Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in subsection
1.1, of the length of the next Interest Period to be applicable to such
Eurodollar Loans, provided that no Eurodollar Loan may be continued as such (i)
when any Event of Default has occurred and is continuing and the Agent has or
the Required Banks have determined in its or their sole discretion not to
permit such a continuation or (ii) after the date that is one month prior to
the Termination Date and provided, further, that if the Company shall fail to
give such notice or if such continuation is not permitted such Eurodollar Loans
shall be automatically converted to Base Rate Loans on the last day of such
then expiring Interest Period.
(c) Notwithstanding anything to the contrary in this
subsection 2.4, all continuations and conversions hereunder shall be in such
amounts so that, after giving effect thereto, the aggregate principal amount of
the Eurodollar Loans comprising any Eurodollar Tranche shall not be less than
$25,000,000.
2.5 Fees. (a) The Company agrees to pay to the Agent,
for the account of each Bank, a commitment fee computed for each day during the
Commitment Period at a rate per annum equal to the Commitment Fee Rate in
effect for such day on the amount of the Available Company/CFC Commitment of
such Bank on such day, payable quarterly in arrears on the last day of each
March, June, September and December and on the Termination Date. Commitment
fees that are not paid when due shall bear interest, payable on demand, from
the date when due until paid in full (both before and after judgment) at a
fluctuating rate per annum equal to 2% per annum plus the Base Rate.
(b) The Company agrees to pay to the Agent, for the
account of each Bank, a utilization fee for each day during the Commitment
Period on which the aggregate principal amount of the Loans then outstanding is
greater than 50% of the Commitments then in effect. Such fee shall be payable
quarterly in arrears on the last day of each March, June, September and
December and on the Termination Date and shall be computed for each day during
such period at a rate per annum equal to the Utilization Fee Rate on the
aggregate principal amount of the Eurodollar Loans then outstanding.
Utilization fees that are not paid when due shall bear interest, payable on
demand, from the date when due until paid in full (both before and after
judgment) at a fluctuating rate per annum equal to 2% per annum plus the Base
Rate.
<PAGE> 19
15
2.6 Termination or Reduction of Commitments. The
Company shall have the right, upon not less than five Business Days' notice to
the Agent, to terminate the Commitments or, from time to time, reduce the
amount of the Commitments to an amount not less than the aggregate principal
amount of the Loans then outstanding, if any, after giving effect to any
contemporaneous prepayment thereof permitted under subsection 2.7. Upon
receipt of such notice the Agent shall promptly notify each Bank thereof. Any
such reduction shall be in an amount equal to $25,000,000 or a multiple of
$1,000,000 in excess thereof and shall reduce permanently the amount of the
Commitments then in effect. Any termination of the Commitments shall be
accompanied by prepayment in full of the Loans, together with accrued interest
thereon to the date of such prepayment, and the prepayment of any unpaid
commitment fee and utilization fee then accrued hereunder and the payment of
any other amounts due pursuant to subsection 2.15.
2.7 Prepayments. The Company may, at its option at any
time and from time to time, prepay the Loans, in whole or in part, without
premium or penalty, subject to the provisions of subsection 2.15, upon at least
four Business Days' notice to the Agent specifying the date and amount of
prepayment, provided that each partial prepayment of the Loans shall be in an
aggregate amount equal to $25,000,000 or a multiple of $1,000,000 in excess
thereof, and provided, further, that after giving effect to any prepayment of
Eurodollar Loans, the aggregate principal amount of the Eurodollar Loans
comprising any outstanding Eurodollar Tranche shall not be less than
$25,000,000. Upon receipt of such notice, the Agent shall promptly notify each
Bank thereof. Such notice shall be irrevocable, and the payment amount
specified in such notice shall be due and payable on the date specified,
together with accrued interest to such date on the amount prepaid.
2.8 Interest Rate and Payment Dates. (a) The
Eurodollar Loans shall bear interest for each day during each Interest Period
therefor on the unpaid principal amount thereof at a rate per annum equal to
the LIBO Rate determined for such Interest Period in accordance with the terms
hereof plus the Applicable Eurodollar Margin in effect on the first day of such
Interest Period.
(b) The Base Rate Loans shall bear interest on the
unpaid principal amount thereof, for each day from the date such Base Rate
Loans are made until the maturity thereof (whether at the stated maturity, by
acceleration or otherwise) at a rate per annum equal to the Base Rate for such
day.
(c) If all or a portion of (i) the principal amount of
any of the Loans or (ii) any interest payable thereon shall not be paid when
due (whether at the stated maturity, by acceleration or otherwise) such overdue
amount shall bear interest for each day from the date of such non-payment until
paid in full (both before and after judgment) at a rate per annum equal to 2%
per annum plus the Base Rate for such day, provided that if such overdue amount
is of the principal amount of any Eurodollar Loans and the due date therefor is
other than the last day of the Interest Period with respect thereto, such
Eurodollar Loans shall bear interest from the date that such principal amount
was due to the last day of such Interest Period at a rate per annum which is 2%
per annum plus the LIBO Rate determined for such Interest Period in accordance
with the terms hereof plus the highest possible Applicable
<PAGE> 20
16
Eurodollar Margin and for each day thereafter at 2% per annum plus the Base
Rate for such day until paid in full (both before and after judgment).
(d) Interest shall be payable in arrears on each
Interest Payment Date, provided that interest accruing pursuant to paragraph
(c) of this subsection shall be payable on demand.
2.9 Computation of Interest and Fees. (a) Interest in
respect of Base Rate Loans and fees shall be calculated on the basis of a 365
or 366-day year, as the case may be, for the actual days elapsed. Interest in
respect of Eurodollar Loans shall be calculated on the basis of a 360-day year
for the actual days elapsed. The Agent shall, as soon as practicable, notify
the Company and the Banks of each determination of the LIBO 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
in the Base Rate shall become effective as provided herein. The Applicable
Eurodollar Margin with respect to Eurodollar Loans that is in effect on the
first day of any Interest Period with respect to such Eurodollar Loans shall
remain in effect throughout such Interest Period. The Agent shall notify the
Company and the Banks of the effective date and the amount of each such change.
(b) Each determination, pursuant to and in accordance
with any provision of this Agreement, of an interest rate applicable to a
Eurodollar Loan for any Interest Period by the Agent, and each determination by
a Reference Bank of a rate with respect to a Eurodollar Loan for any Interest
Period to be notified to the Agent pursuant to the definition of "LIBO Rate",
shall be conclusive and binding on the Company and the Banks in the absence of
manifest error. The Agent shall, at the request of the Company, deliver to the
Company a statement showing the quotations given by the Reference Banks and the
computation used by the Agent in determining the LIBO Rate.
(c) If any Reference Bank's Commitment shall terminate
(otherwise than on termination of all the Commitments), or, as the case may be,
all Loans made by it are assigned, or prepaid or repaid (otherwise than on the
ratable prepayment or repayment of the Loans among the Banks) for any reason
whatsoever, such Reference Bank shall thereupon cease to be a Reference Bank,
and, if as a result of the foregoing, there shall only be one Reference Bank
remaining, then the Agent (after consultation with the Company and the Banks)
shall, as soon as practicable thereafter, by notice to the Company and the
Banks, designate another Bank that is willing to act as a Reference Bank so
that there shall at all times be at least two Reference Banks. In acting so to
designate another Bank to serve as a Reference Bank, the Agent will use its
best efforts to ensure that one Reference Bank will, at all times, be a Bank
that has its headquarters office located outside the United States.
(d) If any of the Reference Banks shall be unable or
shall otherwise fail to provide notice of a rate to the Agent with respect to a
Eurodollar Loan, the LIBO Rate shall be determined on the basis of the rates
provided in notices of the remaining Reference Banks.
2.10 Inability to Determine Interest Rate. In the event
that (i) the Agent shall have determined (which determination shall be
conclusive and binding upon the Company) that by reason of circumstances
affecting the London interbank eurodollar market,
<PAGE> 21
17
adequate and reasonable means do not exist for ascertaining the LIBO Rate
applicable pursuant to subsection 2.8(a) or (ii) the Required Banks shall have
determined (which determination shall be conclusive and binding upon the
Company) and shall notify the Agent that the LIBO Rate applicable pursuant to
subsection 2.8(a) does not adequately cover the cost to the Banks of making or
maintaining Eurodollar Loans, the Agent shall forthwith give telecopy notice of
such determination to the Company and the Banks at least one Business Day prior
to the first day of the proposed Interest Period for such Eurodollar Loans. If
such notice is given (x) any Eurodollar Loans requested to be made or continued
on the first day of such Interest Period shall be made as or converted into
Base Rate Loans and (y) any Loans that were to have been converted on the first
day of such Interest Period to Eurodollar Loans shall be continued as Base Rate
Loans. Until such notice has been withdrawn by the Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall the Company have
the right to convert Base Rate Loans to Eurodollar Loans.
2.11 Pro Rata Treatment and Payments. (a) Each
borrowing (except borrowings pursuant to subsection 9.9 or 9.10) by the Company
from the Banks, each payment (including each prepayment) by the Company on
account of principal and fees (except for payments to a particular Bank
pursuant to or as a result of subsection 2.12, 2.13, 2.14 or 2.15), each
transfer or withdrawal of any Transferred Commitment pursuant to subsection
2.17, and any reduction of the amount of the Commitments of the Banks hereunder
(except for a Commitment reduction or termination pursuant to subsection 2.14),
shall be made pro rata according to the amounts of the then existing
Commitments. Each payment by the Company on account of interest shall be made
pro rata according to the respective amounts thereof then due and owing to each
Bank. All payments (including prepayments) by the Company hereunder shall be
made without set-off or counterclaim to the Agent for the account of the Banks
at the office of the Agent referred to in subsection 9.2 in lawful money of the
United States of America and in immediately available funds. The Agent shall
distribute such payments to each Bank promptly upon receipt in like funds as
received. If any payment hereunder (other than a payment in respect of a
Eurodollar Loan) becomes due and payable on a day other than a Business Day,
the maturity thereof shall be extended to the next succeeding Business Day,
and, with respect to payments of principal, interest thereon shall be payable
at the then applicable rate during such extension. If any payment on a
Eurodollar Loan becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day (and,
with respect to payments of principal, interest thereon will be payable at the
then applicable rate during such extension) unless the result of such extension
would be to extend such payment into another calendar month in which event such
payment shall be made on the immediately preceding Business Day.
(b) Unless the Agent shall have received notice from
the Company prior to the date on which any payment is due to the Banks
hereunder that the Company will not make such payment in full, the Agent may
assume that the Company has made such payment in full to the Agent on such
date, and the Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to the amount then
due to such Bank. If and to the extent the Company shall not have so made such
payment in full to the Agent, each Bank shall repay to the Agent forthwith on
demand such amount distributed to such Bank together with interest thereon, for
each day from and including the date such
<PAGE> 22
18
amount is distributed to such Bank to but excluding the date such Bank repays
such amount to the Agent at the Federal Funds Effective Rate for each such day.
Nothing contained in this subsection 2.11(b) shall relieve the Company from its
obligations to make payments on all amounts due hereunder in accordance with
the terms hereof.
2.12 Illegality. Notwithstanding any other provision
herein, if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Bank to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Bank hereunder to make Eurodollar Loans, continue Eurodollar
Loans as such and convert Base Rate Loans to Eurodollar Loans shall forthwith
be cancelled and all subsequent Loans made by such Bank shall be made as Base
Rate Loans and (b) such Bank's Loans then outstanding as Eurodollar Loans, if
any, shall be converted automatically to Base Rate Loans on the respective last
days of the then current Interest Periods with respect to such Loans or within
such earlier period as required by law. If any such conversion of a Eurodollar
Loan occurs on a day which is not the last day of the then current Interest
Period with respect thereto, the Company shall pay to such Bank such amounts,
if any, as may be required pursuant to subsection 2.15.
2.13 Requirements of Law. In the event that the
adoption of or any change in any law, regulation, treaty or directive or in the
interpretation or application thereof or compliance by any Bank with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Bank to any tax of any kind
whatsoever with respect to this Agreement, any Note or any Loans,
or change the basis of taxation of payments to such Bank of
principal, commitment fee, utilization fee, interest or any other
amount payable hereunder (except for changes in the rate of tax on
the overall net income of such Bank); or
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or for
the account of, or advances or loans by, or other credit extended
by, or any other acquisition of funds by, any office of such Bank
which are not otherwise included in the determination of the LIBO
Rate hereunder; or
(iii) shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank of
making, converting into, continuing or maintaining Eurodollar Loans or
maintaining its Commitment, or to reduce any amount receivable thereunder then,
in any such case, the Company shall promptly pay such Bank, upon its demand,
any additional amounts necessary to compensate such Bank for such additional
cost or reduced amount receivable which such Bank deems to be material as
determined by such Bank with respect to this Agreement, any Note or the Loans.
If a Bank becomes entitled to claim any additional amounts pursuant to this
subsection 2.13, it shall promptly notify the Company, through the Agent, of
the event by
<PAGE> 23
19
reason of which it has become so entitled. At the time of such notification
such affected Bank shall provide the Company with a written statement, which
shall be conclusive in the absence of manifest error, setting forth the amount
that would adequately compensate such affected Bank for such additional cost or
reduction in amounts receivable and setting forth in reasonable detail the
assumptions upon which such affected Bank calculated such amount. The
agreements in this subsection shall survive the termination of this Agreement,
the termination of the Commitments and the payment of the Loans and all other
amounts payable hereunder.
2.14 Capital Adequacy. In the event the Board of
Governors of the Federal Reserve System, the Comptroller of the Currency or
other domestic or foreign Governmental Authority having jurisdiction with
respect to the matters referred to below shall, pursuant to any Capital
Adequacy Law (as hereinafter defined), in the opinion of counsel for any Bank
(which may, in the discretion of such Bank, be such Bank's internal counsel),
require (whether or not such requirement has the force of law) that the
Commitment of such Bank under this Agreement (plus the amount of any
Transferred Commitment) be treated as an asset or otherwise be included for
purposes of calculating the amount of capital to be maintained by such Bank or
any corporation controlling such Bank (such requirement, a "Capital Adequacy
Law"), and such Bank shall determine that, as a result of any change in any
Capital Adequacy Law subsequent to the Execution Date, the cost to such Bank of
maintaining its Commitment (plus the amount of any Transferred Commitment)
shall be increased by an amount which such Bank determines to be material, such
affected Bank shall so notify the Company and the Agent within ninety (90) days
of such determination (the date of such determination, the "Determination
Date"). At the time of such notification such affected Bank shall provide the
Company with a written statement setting forth the amount that would adequately
compensate such affected Bank for the costs associated with such change in
Capital Adequacy Law and setting forth in reasonable detail the assumptions
upon which such affected Bank calculated such amount, and a copy of the opinion
of counsel referred to in the preceding sentence, provided that such affected
Bank shall not be required to disclose information not made available to the
public. The Company and such affected Bank shall thereafter negotiate in good
faith an agreement to increase the commitment fee payable to such affected Bank
under this Agreement, which, in the opinion of such affected Bank, will
adequately compensate such affected Bank for such costs so long as such change
in Capital Adequacy Law is in effect and continues to increase the costs to
such Bank of maintaining its Commitment (plus the amount of any Transferred
Commitment). If such increase is approved in writing by the Company within
forty-five (45) days from the date of the notice to the Company from such
affected Bank, the commitment fee payable by the Company under this Agreement
shall, effective from (i) the Determination Date or, if such change in Capital
Adequacy Law shall not become effective until a date which is later than the
Determination Date, from such later date or (ii) such other date as shall be
mutually agreed upon between the Company and such affected Bank, include the
amount of such agreed increase, and the Company will so notify the Agent. If
the Company and such affected Bank are unable to agree on such an increase
within forty-five (45) days from the date of the notice to the Company from
such affected Bank, the Company shall, by written notice to such affected Bank
within fifty (50) days from the date of the aforesaid notice to the Company
from such affected Bank, elect either to (a) terminate the Commitment
(including the amount of any Transferred Commitment) of such affected Bank
concurrently with the
<PAGE> 24
20
execution by one or more New Banks or Banks of supplements hereto,
substantially in the form of Exhibit B or Exhibit C, as the case may be, and,
in the case of any New Bank, such New Bank becoming a party hereto pursuant to
subsection 9.9, and the sum of such New Banks' Commitments and Banks' increases
in their Commitments shall be in an aggregate amount at least equal to the
Commitment of such affected Bank immediately prior to its termination, and the
sum of such New Banks' Transferred Commitments and Banks' increases in their
Transferred Commitments shall be in an aggregate amount at least equal to the
Transferred Commitment of such affected Bank immediately prior to its
termination, (b) increase the commitment fee payable to such affected Bank by
the amount and for the time period requested by such affected Bank, or (c)
extend the period of negotiation for a further forty-five (45) day period to
commence the forty-sixth day after the date of notice from such affected Bank.
At the end of such second forty-five (45) day period the Company shall by
written notice to such affected Bank elect either clause (a) or clause (b) of
the preceding sentence, provided that if the Company elects clause (b) at such
time it shall pay to the affected Bank an increase in commitment fee by the
amount requested by such Bank and for the time period requested by such Bank.
Without limiting the foregoing if the Company elects to take the action
described in clause (b) of the second preceding sentence, it may simultaneously
therewith reduce the Commitment of such affected Bank by an amount chosen by
the Company, provided that concurrently therewith one or more New Banks or
Banks shall have executed supplements, substantially in the form of Exhibit B
or Exhibit C, as the case may be, and, in the case of any New Bank, become a
party hereto pursuant to subsection 9.9, and the sum of such New Banks'
Commitments and Banks' increases in their Commitments shall be in an aggregate
amount at least equal to such reduction in the Commitment of such affected
Bank, and the sum of such New Banks' Transferred Commitments and Banks'
increases in their Transferred Commitments shall be in an aggregate amount at
least equal to such reduction in the Transferred Commitment of such affected
Bank. If the Company fails to provide notice to such affected Bank as
described in the third preceding sentence by such fiftieth day, the Company
shall be deemed to have taken the action described in clause (b) above. The
agreements in this subsection shall survive the termination of this Agreement,
the termination of the Commitments and the payment of the Loans and all other
amounts payable hereunder.
2.15 Indemnity. The Company agrees to indemnify each
Bank against and to hold each Bank harmless from any loss or reasonable expense
which such Bank may sustain or incur as a consequence of (a) default by the
Company in making a borrowing of, conversion into or continuation of Eurodollar
Loans after the Company has given a notice requesting the same in accordance
with the provisions of this Agreement, (b) default by the Company in making any
prepayment after the Company has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment or conversion of
Eurodollar Loans on a day which is not the last day of an Interest Period with
respect thereto. Such indemnification may include an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on the
amount so prepaid or converted, or not so borrowed, converted or continued, for
the period from the date of such prepayment or conversion or of such failure to
borrow, convert or continue to the last day of such Interest Period (or, in the
case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the
applicable rate of interest for such Loans provided for herein (excluding,
however, the Applicable Eurodollar
<PAGE> 25
21
Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Bank) which would have accrued to such Bank on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. This covenant shall survive
the termination of this Agreement, the termination of the Commitments and the
payment of the Loans and all other amounts payable hereunder.
2.16 Use of Proceeds. The proceeds of the Loans shall
be used by the Company for general corporate purposes including, without
limitation, the funding of acquisitions.
2.17 Transfer of Commitments to CFC. (a) From time to
time prior to the Termination Date, the Company may, by giving four Business
Days' notice to the Agent, each Bank and CFC (which notice shall, upon the
expiration of said four-Business Day period, supersede and cancel all prior
notices given under this subsection), consent to the transfer to and the
borrowing by CFC under CFC's Fourth Amended and Restated Commitment Transfer
Agreement with the Banks dated as of May 23, 1994 (as amended, restated,
supplemented or otherwise modified from time to time, the "CFC Commitment
Transfer Agreement"), of such portion of the Available Company/CFC Commitments
as may be specified in such notice (as to each Bank, its "Transferred
Commitment"; collectively, for all Banks, the "Transferred Commitments"),
provided that the amount of such Transferred Commitment of any Bank shall in no
case exceed 50% of the then outstanding Commitment of such Bank. As of the
Effective Date, the Transferred Commitments shall be zero, unless the Company
shall have delivered a notice pursuant to the foregoing sentence at least four
Business Days prior to the Effective Date. Each notice given pursuant to this
subsection 2.17(a) shall indicate the Transferred Commitments and, as to each
Bank, its pro rata Transferred Commitment, and the pro rata Transferred
Commitment of each Bank shall have been previously reviewed by the Agent.
(b) The Company may, by giving thirty days' written
notice to the Agent, each Bank and CFC, withdraw any consent to borrowing by
CFC given in accordance with subsection 2.17(a) in respect of any portion of
the Transferred Commitments not utilized by CFC as of the date of such notice.
(c) At any time a notice given in accordance with
subsection 2.17(a) is in effect and the Available Company/CFC Commitments are
increased in accordance with subsection 9.9 or 9.10, the Company shall as of
the effective date of such increase give notice in accordance with subsection
2.17(a) and comply with the notice requirement of subsection 2.17(b), if
applicable.
(d) The Company shall continue to pay the commitment fee
required pursuant to subsection 2.5 in relation to the Available Company/CFC
Commitments, including any Transferred Commitments.
<PAGE> 26
22
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Agreement
and to make the Loans, the Company hereby represents and warrants to the Agent
and to each Bank that:
3.1 Financial Condition. The consolidated balance
sheet of the Company and its subsidiaries as at December 31, 1993 and the
related consolidated statements of income and changes in financial position for
the fiscal year ended on such date, certified by Deloitte & Touche, copies of
which, as contained in or incorporated by reference in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1993, have
heretofore been furnished to each Bank, present fairly the consolidated
financial position of the Company and its subsidiaries as at such date, and the
consolidated results of their operations and changes in cash flow for the
fiscal year then ended. The unaudited consolidated balance sheet of the
Company and its subsidiaries as at March 31, 1994, and the related consolidated
statements of income and changes in financial position for the three-month
period ended on such date, certified by a Responsible Officer, copies of which
have heretofore been delivered to each Bank, present fairly the consolidated
financial position of the Company and its subsidiaries as at such date, and the
consolidated results of their operations and changes in cash flow for the
three-month period then ended (subject to normal year-end audit adjustments).
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP. As at December 31, 1993,
neither the Company nor any of its subsidiaries had any asset, liability,
contingent obligation, liability for taxes, long-term lease or unusual forward
or long-term commitment material to the financial condition of the Company and
its subsidiaries taken as a whole, which was not reflected (i) in the foregoing
statements or in the notes thereto or (ii) in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1993.
3.2 No Change. Between March 31, 1994 and the
Effective Date, there will have been no material adverse change in the
business, operations, property or financial condition of the Company and its
subsidiaries taken as a whole.
3.3 Corporate Existence. The Company and each of its
Significant Subsidiaries is a corporation duly incorporated, validly existing
and in good standing under the laws of the jurisdiction of its incorporation
and duly qualified as a foreign corporation and in good standing under the laws
of each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification except where the failure to
be so qualified would not have a material adverse effect on the business,
operations, property or financial condition of the Company and its Subsidiaries
taken as a whole.
3.4 Corporate Authorization; No Violation. The
execution, delivery and performance by the Company of this Agreement and any
Notes are within the Company's corporate powers, have been duly authorized by
all necessary corporate action, and do not contravene any Requirement of Law or
Contractual Obligation of the Company or any of its Subsidiaries or result in
the creation of a Lien on any of their respective assets.
3.5 Government Authorization. No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority is required to be
<PAGE> 27
23
obtained or made by the Company for the due execution, delivery and performance
by the Company of this Agreement or any Notes.
3.6 Federal Regulations. Neither the Company nor any
of its Subsidiaries is principally engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U, T, G or X issued by the Board of Governors of the Federal Reserve
System), and no proceeds of any borrowing hereunder will be used in violation
of Regulation U or X of the Board of Governors of the Federal Reserve System.
If requested by the Agent or any Bank at any time, the Company will furnish to
the Agent and each Bank a statement in conformity with the requirements of FR
Form U-1 referred to in Regulation U.
3.7 Enforceable Obligations. This Agreement has been
duly executed and delivered on behalf of the Company, and this Agreement
constitutes, and any Notes, when executed and delivered, will constitute, a
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and by general
principles of equity.
3.8 No Material Litigation. No litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of the Company, threatened by or
against the Company or any of its Subsidiaries or against any of its or their
respective properties or revenues (a) with respect to this Agreement or any
Notes or any of the transactions contemplated hereby or thereby, or (b) which
would reasonably be expected to have a material adverse effect on the business,
operations, property or financial condition of the Company and its Subsidiaries
taken as a whole.
3.9 Taxes. Each of the Company and its Subsidiaries
has filed or caused to be filed all tax returns which to the knowledge of the
Company are required to be filed, and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees and other charges imposed on it or any of
its property by any Governmental Authority (other than those the amount or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP, if any,
have been provided on the books of the Company or its Subsidiaries, as the case
may be).
SECTION 4. CONDITIONS PRECEDENT TO LOANS
4.1 Conditions of Effectiveness. The effectiveness of
this Agreement is subject to the satisfaction of the following conditions
precedent:
(a) Execution of Agreement and Addenda. (i) This
Agreement shall have been executed and delivered by a duly
authorized officer of each of the Company and the Agent and (ii)
the Agent shall have received an executed Addendum (or a copy
thereof by facsimile transmission) from each Person listed on
Schedule I, provided, that, notwithstanding the foregoing, in the
event that an Addendum has not been duly
<PAGE> 28
24
executed and delivered by each Person listed on Schedule I on the
date (which shall be no earlier than the date hereof) on which this
Agreement shall have been executed and delivered by each of the
Company and the Agent, this Agreement shall, subject to
satisfaction of the other conditions precedent set forth in this
subsection 4.1, nevertheless become effective on such date with
respect to those Persons which have executed and delivered an
Addendum on or before such date if on such date the Company and the
Agent shall have designated one or more Commercial Banks (the
"Designated Banks") to assume, in the aggregate, all of the
Commitments which would have been held by the Persons listed on
Schedule I (the "Non-Executing Persons") which have not so executed
an Addendum (subject to each such Designated Bank's prior written
consent in its sole discretion and its execution of an Addendum).
Schedule I shall automatically be deemed to be amended to reflect
the respective Commitments of the Designated Banks and the omission
of the Non-Executing Persons as Banks hereunder. The Company
acknowledges that each Person which has executed an Addendum shall
constitute a "Bank" for the purposes of this Agreement.
(b) Closing Certificate. The Agent shall have received
a certificate of the Company, dated the Effective Date,
substantially in the form of Exhibit H, with appropriate
insertions, satisfactory in form and substance to the Agent,
executed by the President or any Vice President and the Secretary
or any Assistant Secretary of the Company, and attaching the
documents referred to in subsection 4.1(c) and (d).
(c) Corporate Proceedings of the Company. The Agent
shall have received a copy of the resolutions, in form and
substance satisfactory to the Agent, of the Board of Directors of
the Company (or a duly authorized committee thereof, in which case
such resolutions shall be accompanied by evidence of the authority
of such committee to act in regard to such matters) authorizing (i)
the execution, delivery and performance of this Agreement and (ii)
the borrowings contemplated hereunder.
(d) Corporate Documents. The Agent shall have received
true and complete copies of the certificate of incorporation and
by-laws of the Company.
(e) Legal Opinions. The Agent shall have received the
following executed legal opinions, with a copy for each Bank:
(i) the executed legal opinion of Simpson Thacher
& Bartlett, counsel to the Agent, substantially in the
form of Exhibit D; and
(ii) the executed legal opinion of William J.
O'Brien, General Counsel of the Company, which General
Counsel is hereby instructed to prepare and deliver such
legal opinion, substantially in the form of Exhibit E.
(f) Existing Credit Agreement. The Agent shall have
received satisfactory evidence that the Existing Credit Agreement
shall have been terminated pursuant to an irrevocable notice of
termination of commitments and that any amounts owing thereunder
(including, without limitation, accrued unpaid commitment fees
thereunder through the Effective Date) by the Company shall have
been (or shall upon the
<PAGE> 29
25
occurrence of the Effective Date be) paid in full. Without
affecting any terms of the Existing Credit Agreement which
expressly survive the termination of the Existing Credit Agreement,
each Bank party to the Existing Credit Agreement hereby waives any
requirement of advance notice of such termination contained in the
Existing Credit Agreement and hereby agrees that the Existing
Credit Agreement and the commitments thereunder (subject to receipt
of any other required consents of any other Person) shall terminate
simultaneously with the satisfaction by the Company of the
conditions to effectiveness set forth in this subsection 4.1.
The Agent shall notify the Banks of the Effective Date promptly after the
occurrence thereof, which notice shall be accompanied, if applicable, by a copy
of Schedule I revised to give effect to any deemed amendments thereto made
pursuant to subsection 4.1(a).
4.2 Conditions to All Loans. The obligation of each
Bank to make any Loan (including any Loan on the Effective Date but excluding
any conversion or continuation of any Loan pursuant to subsection 2.4) is
subject to the satisfaction of the conditions precedent described in clauses
(a) and (b) below:
(a) Representations and Warranties. The representations
and warranties made by the Company herein (except for the
representations and warranties set forth in subsection 3.2) shall
be true and correct in all material respects on and as of the
Borrowing Date for such Loan as if made on and as of such date.
(b) No Default or Event of Default. No Default or Event
of Default shall have occurred and be continuing on such Borrowing
Date or after giving effect to the Loan to be made on such
Borrowing Date.
Each borrowing by the Company hereunder shall constitute a representation and
warranty by the Company hereunder as of the date of each such borrowing that
the conditions in clauses (a) and (b) above have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Company hereby agrees that from and after the
Effective Date, so long as the Commitments remain in effect, any Loans remain
outstanding and unpaid or any other amount is owing hereunder to any Bank or
the Agent:
5.1 Financial Statements. The Company will furnish to
each Bank:
(a) as soon as available, but in any event within 120
days after the end of each fiscal year of the Company, a copy of
the consolidated balance sheet of the Company and its subsidiaries
as at the end of such year and the related consolidated statements
of income and cash flows for such year, setting forth in each case
in comparative form the figures as of the end of and for the
previous year, reported on without qualification or exception by
Deloitte & Touche or other independent public accountants of
nationally recognized standing (other than a qualification or
exception relating to a
<PAGE> 30
26
change in the application of accounting principles used by the
Company and its subsidiaries, which change shall be concurred with
by Deloitte & Touche or such other accountants, as the case may
be); and
(b) as soon as available, but in any event within 60
days after the end of each of the first three quarterly periods of
each fiscal year of the Company, a copy of the unaudited
consolidated balance sheet of the Company and its subsidiaries as
at the end of each such quarter and the related unaudited
consolidated statements of income and cash flows of the Company and
its subsidiaries for the portion of the fiscal year through such
date, setting forth in each case in comparative form such figures
as of the end of and for the previous year, certified by a
Responsible Officer;
all such financial statements shall be complete and correct in all material
respects and prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein (except for such changes
in accounting principles as may be approved by such Responsible Officer and
concurred in by the Company's independent public accountants and disclosed
therein).
5.2 Certificates; Other Information. The Company will
furnish to each Bank:
(a) concurrently with the delivery of the financial
statements referred to in subsections 5.1(a) and (b), a certificate
of a Responsible Officer (i) stating that such officer has obtained
no knowledge of any Default or Event of Default except as specified
in such certificate and (ii) showing in reasonable detail the
calculations supporting such statement in respect of subsection
6.1;
(b) promptly after the same are sent, copies of all
financial statements and reports which the Company sends to its
common or preferred stockholders as a class, and promptly after the
same are filed, copies of all regular or periodic reports which the
Company may file with the Securities and Exchange Commission or any
successor or analogous Governmental Authority; and
(c) promptly, such additional financial and other
information as the Agent or any Bank may from time to time
reasonably request.
5.3 Accrual of Liabilities; Payment of Tax Liabilities.
The Company will maintain, and cause each Significant Subsidiary to maintain,
in accordance with GAAP, appropriate reserves for the accrual of taxes and all
other obligations, liabilities and claims and pay and discharge, and cause each
Significant Subsidiary to pay and discharge, at or before their maturity, all
taxes and other similar governmental levies, charges and imposts of any
Governmental Authority except where the same are being contested in good faith
by appropriate proceedings.
5.4 Maintenance of Corporate Existence; Compliance with
Applicable Law; Maintenance of Properties. The Company will (a) maintain its
corporate existence, rights and franchises necessary to continue its business
and the corporate existence, rights and franchises
<PAGE> 31
27
necessary to continue the business of each Significant Subsidiary, provided
that the foregoing shall not be a limitation on the right of the Company to
discontinue any operations if in the opinion of the Company such discontinuance
is in the best interest of the Company and would not materially affect the
ability of the Company to pay its debts as they become due; (b) comply, and
cause each Significant Subsidiary to comply, with all provisions of any
applicable law, ordinance or governmental rule or regulation (including,
without limitation, any Environmental Law or ERISA) to which it is subject, the
failure to comply with which would in the aggregate materially and adversely
affect the business, operations, property or financial condition of the Company
and its Subsidiaries taken as a whole; and (c) maintain, and cause each
Significant Subsidiary to maintain, the properties which are used or useful in
its respective operations in good working order and condition.
5.5 Insurance. The Company will maintain, and cause
each Significant Subsidiary to maintain, a program of insurance with
financially sound and reputable companies in such form and upon such terms and
in such amounts and against such risks (including liability for bodily injury
and property damage) as in the reasonable opinion of the Company is available
on commercially reasonable terms and will provide sound and reasonable
protection for the Company's or such Significant Subsidiary's assets and
operations. Notwithstanding the immediately preceding sentence, the Company
and any Significant Subsidiary may implement a program of self-insurance
against customary risks provided that such self-insurance program will provide
sound and reasonable protection for the Company's or such Significant
Subsidiary's assets and operations.
5.6 Notices. The Company will (a) promptly give notice
in writing to the Agent (which shall promptly notify each Bank) of the
occurrence of any Default or Event of Default, or of the occurrence of any
event that would be an Event of Default under paragraph (c) of Section 7 but
for the proviso therein contained, or of the commencement of (i) any material
litigation or proceedings affecting the Company or any Significant Subsidiary
or (ii) any dispute between the Company or any Significant Subsidiary and any
Governmental Authority or any other party if such litigation, proceedings or
dispute would reasonably be expected to result in any material adverse change
in the business, operations, property or financial condition of the Company or
any of its Significant Subsidiaries; and (b) as soon as possible, deliver to
the Agent (which shall promptly notify each Bank) copies of any notices
received by the Company of any failure or alleged failure to meet CAFE,
emission or safety requirements that the Company reasonably deems to be
material to the business, operations, property or financial condition of the
Company.
SECTION 6. NEGATIVE COVENANTS
The Company hereby covenants that, from and after the
Effective Date, so long as the Commitments remain in effect, any Loans remain
outstanding and unpaid or any other amount is owing hereunder to any Bank or
the
Agent:
6.1 Indebtedness to Total Capitalization. The Company
will not permit the ratio of Indebtedness to Total Capitalization as of the
last day of any quarterly period of any fiscal year of the Company to be
greater than 0.60 to 1.0.
<PAGE> 32
28
6.2 Limitation on Liens. The Company will not, nor
will it permit any Subsidiary (other than Eurostar and New Venture Gear) to,
create, assume or incur or suffer to be created, assumed or incurred or to
exist any Lien on any of its properties or assets, whether now owned or
hereafter acquired, provided, however, that the foregoing restriction shall not
apply to the following:
(a) Liens existing on the Effective Date and described on
Schedule II hereto;
(b) Liens on property or assets of any corporation
existing at the time such corporation becomes a Subsidiary;
(c) Liens in favor of the Company or any Wholly-owned
Subsidiary;
(d) Liens in favor of any Governmental Authority to
secure progress, advance or other payments pursuant to any contract
or provision of any statute;
(e) Liens (including, without limitation, the interest
of the lessor under any capital lease) on property or assets (i)
existing at the time of the acquisition thereof (including
acquisition through merger or consolidation) or (ii) to secure the
payment of all or any part of the purchase price or construction
cost thereof or to secure any Indebtedness incurred prior to, at
the time of, or within 150 consecutive days after, the acquisition
or completion of such property or assets for the purpose of
financing all or any part of the purchase price or construction
cost thereof;
(f) any extension, renewal or replacement (or successive
extensions, renewals or replacements), as a whole or in part, of
any Lien referred to in the foregoing clauses (a) through (e),
inclusive; provided that (i) no such extension, renewal or
replacement shall result in an increase in the liabilities secured
thereby and (ii) such extension, renewal or replacement Lien shall
be limited to all or a part of the same property that secured the
Lien so extended, renewed or replaced (plus additions, accessions,
replacements and improvements to such property);
(g) Liens in respect of judgments or awards or in
respect of attachments (i) in an amount less than $25,000,000 for a
period of 150 consecutive days after the same shall have been
incurred or (ii) which shall have been stayed pending appeal or
bonded and which the Company or such Subsidiary, as the case may
be, shall, at the time, in good faith be contesting in appropriate
proceedings;
(h) Liens on properties acquired for use as dealerships
and incurred in the ordinary course of business by the Company or
any Subsidiary;
(i) Liens in the form of pledges by Chrysler Mexico to
financial institutions of Dollar or Mexican peso deposits or Dollar
or Mexican peso certificates of deposit owned by Chrysler Mexico to
secure Dollar or Mexican peso borrowings from such financial
institutions by Chrysler Mexico;
<PAGE> 33
29
(j) Liens on (i) motor vehicles leased to employees and
(ii) employee lease payments in connection with the Company Car
Program to secure the purchase price of such motor vehicles;
(k) Assignments of rights under letters of credit issued
in connection with export transactions;
(l) Transfers with or without recourse to financial
institutions of receivables arising from sales of vehicles and
parts in the ordinary course of business;
(m) Permitted Encumbrances; and
(n) Liens (other than those permitted by clauses (a)
through (m) above) securing liabilities of the Company or any of
its Subsidiaries incurred after the Effective Date in an aggregate
principal amount not to exceed at any one time outstanding 10% of
Total Shareholders' Equity (as of the last day of the most recent
fiscal quarter of the Company).
6.3 Limitation on Sales and Leasebacks. The Company
will not, nor will it permit any Subsidiary (other than Eurostar and New
Venture Gear) to, enter into any agreement with any Person (not including the
Company or any Subsidiary) providing for the leasing by the Company or a
Subsidiary of any real or personal property which has been owned and operated
by the Company or any such Subsidiary for more than 150 consecutive days and
which has been or is to be sold or transferred by the Company 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 real or personal property
(herein referred to as a "sale and leaseback transaction") unless the Company
or such Subsidiary would be permitted to create Indebtedness secured by a Lien
pursuant to subsection 6.2 on the real or personal property to be leased in an
amount equal to such Indebtedness, if any, with respect to such sale and
leaseback transaction; provided, that, in addition to the foregoing, the
Company and each of its Subsidiaries may enter into sale and leaseback
transactions so long as the aggregate book value of the real or personal
property leased with respect thereto does not exceed at any one time
outstanding $100,000,000 for the Company and all such Subsidiaries.
Notwithstanding the provisions of this subsection, a sale of property and a
leaseback thereof pursuant to an operating lease (that is, a lease which under
GAAP would not be capitalized on the books of the lessee) thereof shall not be
deemed to be a sale and leaseback transaction.
6.4 Limitation on Fundamental Changes. The Company
will not, nor will it permit any Significant Subsidiary to, merge or
consolidate with or into any other corporation, nor will the Company or any
Significant Subsidiary enter into any Material Asset Disposition (as
hereinafter defined) except that:
(a) any Significant Subsidiary may merge or consolidate
(i) with or into the Company (provided that the Company shall be
the continuing or surviving corporation), (ii) with or into any one
or more Wholly-owned Subsidiaries or (iii) with or into any other
Person if the disposition of the stock of such Significant
Subsidiary by its parent corporation does not constitute a Material
Asset Disposition;
<PAGE> 34
30
(b) any Significant Subsidiary may enter into any
Material Asset Disposition by which its assets are transferred to
the Company or a Wholly-owned Subsidiary; and
(c) the Company or any Significant Subsidiary may merge
or consolidate with or into any corporation, provided, that (i) the
Company shall be the continuing or surviving corporation or, in the
case of a merger involving a Significant Subsidiary, the continuing
and surviving corporation after such merger or consolidation shall
be a Significant Subsidiary of the Company, and (ii) immediately
after such merger or consolidation, no Default or Event of Default
shall have occurred and be continuing.
For purposes of this subsection, the term "Material Asset Disposition" shall
mean any transaction (not including a transaction by which a Lien is created,
which is covered by subsection 6.2, or any "sale and leaseback transaction" as
such term is defined in subsection 6.3) consisting of the sale, lease, transfer
or other disposition of assets having a book value at the time of such
transaction equal to or greater than 10% of the total book value of all assets
of the Company and its Subsidiaries at such time, and any group of related
sales, leases, transfers or other dispositions shall be treated as one
transaction for purposes of determining whether the same is a Material Asset
Disposition; provided that the term "Material Asset Disposition" shall in no
event include any sale or sales of assets consisting solely of accounts
receivable or any sale, lease, transfer or other disposition of any or all
assets of Eurostar or New Venture Gear or a sale of the capital stock of either
such company or any of their respective subsidiaries.
SECTION 7. EVENTS OF DEFAULT
Upon the occurrence of any of the following events:
(a) the Company shall fail to pay any principal of any
Loan when due in accordance with the terms hereof; or the Company
shall fail to pay any interest on any Loan, or any other amount
payable hereunder, within five Business Days after any such amount
becomes due in accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made
by the Company herein (or in any amendment hereto) or which is
contained in any certificate, document or financial or other
statement furnished at any time under or in connection with this
Agreement shall prove to have been incorrect on or as of the date
made or deemed made in any respect which is materially adverse (i)
in relation to the business, operations, property or financial
condition of the Company and its Subsidiaries taken as a whole or
(ii) to the validity or enforceability of this Agreement or any
Notes or the rights and remedies of the Agent or the Banks
hereunder or thereunder; or
(c) the Company shall default in the observance or
performance of any agreement contained in subsection 6.1, provided
that so long as no Loans are outstanding hereunder while any such
default is continuing, such default shall not be a Default or
become an Event of Default hereunder until the earliest of (i) the
date of furnishing pursuant to subsection 5.1(a) or (b) of
financial statements covering the
<PAGE> 35
31
fiscal quarter next following the initial date as of which such
default occurred, which financial statements show that such default
is continuing as of the last day of such next following quarter,
(ii) the last day of the period (without regard to any grace period
provided by paragraph (e) of this Section 7) within which financial
statements covering the fiscal quarter next following the initial
date of such default are required to be furnished pursuant to
subsection 5.1(a) or (b) if such financial statements have not then
been furnished, and (iii) the close of business on the Business Day
next preceding the date of delivery by the Company of a notice of
intention to borrow pursuant to subsection 2.3 that is delivered
after the initial date as of which such default occurred and before
the delivery of financial statements covering the next following
fiscal quarter showing that such default has ceased to exist; or
(d) the Company shall default in the observance or
performance of any agreement contained in subsections 6.2 through
6.4; or
(e) the Company shall default in the observance or
performance of any other agreement, covenant or term contained in
this Agreement, and such default shall continue unremedied for a
period of 30 days after receipt by the Company of notice of such
default from the Agent or the Required Banks; or
(f) (i) the Company or any Significant Subsidiary shall
default in any payment or payments on any Indebtedness (other than
the Loans), which payment or payments at any one time aggregate
more than $25,000,000 (or its equivalent in another currency),
beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created or (ii) the
Company or any Significant Subsidiary shall default in the
observance or performance of any agreement or condition relating to
any Indebtedness (other than the Loans) in the principal amount of
more than $25,000,000 (or its equivalent in another currency) or
contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist
with respect to any such Indebtedness (in each case with respect to
this clause (ii), excluding a default in any payment on any
Indebtedness), and the effect of such default, event or condition
is to cause, or to permit any holder or holders of such
Indebtedness (or a trustee or agent on its or their behalf) to
cause, such Indebtedness to become due prior to its stated maturity
(or in the case of Indebtedness constituting a Guaranty, to
require, or to permit such Person or Persons to require, payment
thereof); provided, however, that no default of the type described
in clause (i) above shall be deemed to have occurred with respect
to Chrysler Mexico solely by reason of a default by Chrysler Mexico
in any payment of any Indebtedness denominated in a currency other
than Mexican pesos or any guarantee thereof that occurs solely as a
result of the inability of Chrysler Mexico to obtain such other
currency with Mexican pesos; or
(g) (i) the Company or any of its Significant
Subsidiaries shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or relating to winding-up, liquidation,
<PAGE> 36
32
dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part
of its assets, or the Company or any of its Significant
Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Company or
any of its Significant Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 consecutive days; or
(iii) there shall be commenced against the Company or any of its
Significant Subsidiaries any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of its
assets which results in the entry of an order for any such relief
which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 consecutive days from the entry thereof;
or (iv) the Company or any of its Significant Subsidiaries shall
take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii) or (iii) above; or (v) the Company or any of its
Significant Subsidiaries shall admit in writing its inability to
pay its debts generally as they become due; or
(h) one or more final judgments or decrees not subject
to appeal shall be entered against the Company or any of its
Subsidiaries involving in the aggregate a liability (not paid or
fully covered by insurance) of $25,000,000 or more and shall have
been unpaid for a period of 30 consecutive days;
then, and in any such event, (a) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (g) above with respect to the Company,
automatically (x) the Commitments shall immediately terminate and (y) the Loans
(with accrued interest thereon) and all other amounts owing under this
Agreement and any Notes 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 Banks, the Agent
may, or upon the request of the Required Banks, the Agent shall, by notice to
the Company, declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; and (ii) with the consent of the
Required Banks, the Agent may, or upon the request of the Required Banks, the
Agent shall, by notice of default to the Company, declare the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and
any Notes to be due and payable forthwith, whereupon the same shall immediately
become due and payable. Except as expressly provided above in this Section 7,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
SECTION 8. THE AGENT
8.1 Appointment. Each Bank hereby irrevocably
designates and appoints the Agent as the agent of such Bank under this
Agreement, and each such Bank irrevocably authorizes the Agent, in such
capacity, to take such action on its behalf under the provisions of this
Agreement and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of this Agreement, together with such other
powers as are
<PAGE> 37
33
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Agent.
8.2 Delegation of Duties. The Agent may execute any of
its duties under this Agreement by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys in-fact selected by it with reasonable
care.
8.3 Exculpatory Provisions. Neither the Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be (a) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement (except for its or
such Person's own gross negligence or willful misconduct) or (b) responsible in
any manner to any of the Banks for any recitals, statements, representations or
warranties made by the Company or any officer thereof contained in this
Agreement or in any certificate, report, statement or other document referred
to or provided for in, or received by the Agent under or in connection with,
this Agreement or for the sufficiency of this Agreement or any Notes or for any
failure of the Company to perform its obligations hereunder or thereunder. The
Agent shall not be under any obligation to any Bank to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or records
of the Company.
8.4 Reliance by Agent. The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Company), independent accountants and other experts selected by the Agent. The
Agent may deem and treat the payee of any Note as the holder thereof for all
purposes unless (a) a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Agent; and (b) except in the case of any
pledge or assignment to the Federal Reserve Bank pursuant to subsection 9.6(g),
the Agent shall have received the written agreement of such assignee that such
assignee is bound hereby as it would have been had it been an original Bank
party hereto, in each case in form satisfactory to the Agent. The 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 Banks (or, if so required by this Agreement, all of the Banks) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Banks against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement and any Notes in accordance with a request of the Required Banks (or,
if so required by this Agreement, all of the Banks), and such request and any
action taken or
<PAGE> 38
34
failure to act pursuant thereto shall be binding upon all the Banks and all
future holders of any Notes.
8.5 Notice of Default. The Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Agent has received notice from a Bank or the
Company referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event
that the Agent receives such a notice, the Agent shall give notice thereof to
the Banks, and, if such notice is received from a Bank, the Agent shall give
notice thereof to the Company. The Agent shall take such action with respect
to such Default or Event of Default as shall be reasonably directed by the
Required Banks (or, if so required by this Agreement, all of the Banks);
provided that, unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Banks.
8.6 Non-Reliance on Agent and Other Banks. Each Bank
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agent hereafter
taken, including any review of the affairs of the Company, shall be deemed to
constitute any representation or warranty by the Agent to any Bank. Each Bank
represents to the Agent that it has, independently and without reliance upon
the Agent or any other Bank, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Company and made its own decision to make its Loans and
enter into this Agreement. Each Bank also represents that it will,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Company. Except for
notices, reports and other documents expressly required to be furnished to the
Banks by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Company which may come into the possession of the Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
8.7 Indemnification. The Banks agree to indemnify the
Agent (to the extent not reimbursed by the Company and without limiting the
obligation of the Company to do so), ratably according to the respective
amounts of their Commitment Percentages in effect on the date on which
indemnification is sought under this subsection 8.7 (or, if indemnification is
sought after the date upon which the Commitments shall have terminated, ratably
in accordance with such Commitment Percentages immediately prior to such date),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Loans) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement, or
<PAGE> 39
35
any documents contemplated by or referred to herein or the transactions
contemplated hereby or any action taken or omitted by the Agent under or in
connection with any of the foregoing, provided that no Bank shall be liable for
the payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct. The
agreements in this subsection 8.7 shall survive the termination of this
Agreement, the termination of the Commitments and the payment of the Loans and
all other amounts payable hereunder.
8.8 Agent in Its Individual Capacity. The Agent and
its affiliates may make Loans to, accept deposits from and generally engage in
any kind of business with the Company as though the Agent were not the Agent
hereunder. With respect to its Loans made or renewed by it and any Note issued
to it, the Agent shall have the same rights and powers under this Agreement as
any Bank and may exercise the same as though it were not the Agent, and the
terms "Bank" and "Banks" shall include the Agent in its individual capacity.
8.9 Successor Agent. The Agent may resign as Agent
upon 10 days' notice to the Banks and the Company and may be removed at any
time with or without cause by the Required Banks. If the Agent shall resign or
be removed as Agent under this Agreement, then either (a) the Required Banks
shall appoint from among the Banks a successor agent for the Banks, which
successor agent shall be approved by the Company (unless an Event of Default
shall have occurred and be continuing), or (b) if a successor agent shall not
have been so appointed and approved within the ten-day period following the
Agent's notice to the Banks or its removal as Agent, the Agent shall then
appoint a successor agent who shall serve as Agent until such time, if any, as
the Required Banks appoint, and the Company approves (unless an Event of
Default shall have occurred and be continuing), a successor agent as provided
in (a) above. Upon its appointment pursuant to either clause (a) or (b) above,
such successor agent shall succeed to the rights, powers and duties of the
Agent, and the term "Agent" shall mean such successor agent effective upon its
appointment, and the former Agent's rights, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement or any holders of the Notes.
After any retiring or removed Agent's resignation or removal hereunder as
Agent, the provisions of this Section 8 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. With the written consent
of the Required Banks, the Agent and the Company may, from time to time, enter
into written amendments, supplements or modifications hereto for the purpose of
adding any provisions to this Agreement or any Notes or changing in any manner
the rights of the Banks or of the Company hereunder or thereunder, and with the
consent of the Required Banks the Agent on behalf of the Banks may execute and
deliver to the Company a written instrument waiving, on such terms and
conditions as the Agent may specify in such instrument, any of the requirements
of this Agreement or any Notes or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement
<PAGE> 40
36
or modification shall (a) extend the maturity of any Note or Loan, or reduce
the rate or extend the time of payment of interest thereon, or reduce or
forgive the principal amount thereof, or reduce the rate of payment of
commitment or utilization fees payable hereunder or increase the amount or
extend the term of any Bank's Commitment or amend, modify or waive any
provision of this subsection 9.1 or reduce the percentage specified in the
definition of Required Banks, or consent to the assignment or transfer by the
Company of any of its rights and obligations under this Agreement, in each case
without the written consent of each Bank directly affected thereby, or (b)
amend, modify or waive any provision of Section 8 without the written consent
of the Agent. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Banks and shall be binding upon
the Company, the Banks, the Agent and all future holders of any Notes. In the
case of any waiver, the Company, the Banks and the Agent shall be restored to
their former position and rights hereunder and under any outstanding Notes, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
9.2 Notices. All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in writing or by
telecopy and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand or when deposited in the
mail, first class or air postage prepaid, or, in the case of telecopied notice,
when telecopied, receipt acknowledged; addressed as follows in the case of the
Company and the Agent, and as set forth in its Addendum in the case of each
Bank, or to such address or other address as may be hereafter notified by the
respective parties hereto and any future holders of any Notes:
The Company: Chrysler Corporation
Chrysler Center
P.O. Box 1919
Detroit, Michigan 48288
Attention: Treasurer's Office
Telecopy: (313) 252-7948
The Agent: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: John Cannon
Telecopy: (212) 270-1469
With a copy to: Chemical Bank
Agency Services
140 East 45th Street
New York, New York 10017
Attention: James Morgan, Account Manager
Telecopy: (212) 622-0002
provided that any notice, request or demand to or upon the Agent pursuant to
subsection 2.3, 2.6, 2.7, 2.17 or 8.5 shall not be effective until received.
Each Bank is hereby authorized to
<PAGE> 41
37
divulge any information pertaining to this Agreement, the transactions
contemplated hereby and the records maintained by such Bank when required by
any Governmental Authority.
9.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Agent or any Bank, any
right, remedy, power or privilege hereunder 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.
9.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement.
9.5 Payment of Expenses and Taxes. The Company agrees:
(a) to pay or reimburse the Agent for all reasonable
out-of-pocket costs and expenses incurred in connection with the
preparation and execution of, and any amendment, supplement or
modification to, this Agreement, any Notes, and any other documents
prepared in connection herewith or therewith, and the consummation
of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of
Simpson Thacher & Bartlett, special counsel to the Agent;
(b) to pay or reimburse each Bank and the Agent for all
reasonable costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, any
Notes, and any such other documents, including, without limitation,
the reasonable fees and disbursements of special counsel to the
Agent and the Banks; and
(c) to pay and reimburse (i) each Bank for any payments
made by such Bank to the Agent pursuant to the provisions of
subsection 8.7 and (ii) the Agent for any and all liabilities,
expenses or disbursements incurred by it which pursuant to the
provisions of subsection 8.7 are the subject of indemnification
payments from the Banks to the extent that the Agent, for whatever
reason, did not receive such indemnification payments from any Bank
or Banks.
The agreements in this subsection 9.5 shall survive
termination of this Agreement, termination of the Commitments and the payment
of the Loans and all other amounts payable hereunder.
9.6 Successors and Assigns; Participations and
Assignments. (a) This Agreement shall be binding upon and inure to the
benefit of the Company, the Banks, the Agent, all future holders of any Notes
and their respective successors and assigns, except that the Company may not
assign or transfer any of its rights or obligations under this Agreement and
any Notes without the prior written consent of each Bank.
<PAGE> 42
38
(b) Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at any time
sell to one or more Commercial Banks ("Participants") participating interests
in any Loan owing to such Bank, any Note held by such Bank, any Commitment of
such Bank or any other interest of such Bank hereunder. In the event of any
such sale by a Bank of a participating interest to a Participant, such Bank's
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any such Loan for all purposes
under this Agreement, and the Company and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement, provided, that the terms of any participation
agreement or certificate relating to any such participation shall prohibit any
subparticipations by such Participant and provided, further any such
participation agreement or certificate shall permit the Bank granting such
participations the right to consent to waivers, amendments or supplements to
this Agreement without the consent of such Participant except in the case of
(a) waivers of any Default or Event of Default described in Section 7(a), and
(b) any amendment or modification extending the maturity of any Note or Loan,
or reducing the rate or extending the time of payment of interest thereon, or
reducing the principal amount thereof or reducing the rate of payment of
commitment or utilization fees payable hereunder, in each case to the extent
such Participant is directly affected thereby. The Company agrees that if
amounts outstanding under this Agreement and any Notes are due or unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall, to the extent
permitted by applicable law and with the consent of the Required Banks, have
the right of setoff in respect of its participating interest in amounts owing
under this Agreement and any Note to the same extent as if the amount of its
participating interest were owing directly to it as a Bank under this Agreement
or any Note, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Banks the proceeds
thereof as provided in subsection 9.8 as fully as if it were a Bank hereunder.
The Company also agrees that each Participant shall be entitled to the benefits
of subsections 2.13 and 2.15 with respect to its participation in the
Commitments and the Loans outstanding from time to time as if it were a Bank;
provided that, no Participant shall be entitled to receive any greater amount
pursuant to subsection 2.13 or 2.15 than the transferor Bank would have been
entitled to receive in respect of the amount of the participation transferred
by such transferor Bank to such Participant had no such transfer occurred.
(c) Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at any time
and from time to time assign to any Bank or any affiliate thereof or, with the
consent of the Company and the Agent (which shall not be unreasonably withheld
by either the Company or the Agent, as the case may be), to an additional
Commercial Bank (an "Assignee") all or any part of its rights and obligations
under this Agreement and any Notes pursuant to an Assignment and Acceptance
(each, an "Assignment and Acceptance"), substantially in the form of Exhibit F,
executed by such Assignee, such assigning Bank (and, in the case of an Assignee
that is not then a Bank or an affiliate thereof, by the Company and the Agent)
and delivered to the Agent for its acceptance and recording in the Register (as
defined below); provided, however, that a Bank may not assign its rights or
obligations under this Agreement or under any Notes unless and until (i) the
conditions for the Agent's treating an assignee of any Loan as the holder
thereof pursuant
<PAGE> 43
39
to the second sentence of subsection 8.4 shall have been satisfied and (ii) if
such assigning Bank is not assigning all of its rights and obligations under
this Agreement, the aggregate principal amount of such Bank's obligations
hereunder and under the CFC Commitment Transfer Agreement so assigned shall be
in an aggregate amount of $10,000,000 or greater (unless, at the Company's
discretion, a lesser amount is mutually agreed upon between the Company and
such Bank) and (iii) if such assigning Bank is not assigning all of its rights
and obligations under this Agreement, after giving effect to the assignment,
the aggregate principal amount of such assigning Bank's obligations hereunder
and under the CFC Commitment Transfer Agreement shall be in an aggregate amount
of $10,000,000 or greater (unless, at the Company's discretion, a lesser amount
is mutually agreed upon between the Company and such Bank); and provided,
further, that in no event shall any such assignment by any Bank to any assignee
be permitted hereunder unless contemporaneously therewith such Bank shall
assign to such assignee a percentage interest in such Bank's rights and
obligations under the CFC Commitment Transfer Agreement and any promissory
notes issued thereunder that is equal to the percentage interest then being
assigned hereunder. Upon such execution, delivery, acceptance and recording,
from and after the effective date determined pursuant to such Assignment and
Acceptance, (x) the Assignee thereunder shall be a party hereto and to the CFC
Commitment Transfer Agreement and, to the extent provided in such Assignment
and Acceptance, have the rights and obligations of a Bank hereunder and under
the CFC Commitment Transfer Agreement with a Commitment and a Transferred
Commitment as set forth therein, and (y) the assigning Bank thereunder shall,
to the extent provided in such Assignment and Acceptance, be released from its
obligations under this Agreement and the CFC Commitment Transfer Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Bank's rights and obligations under this Agreement and
the CFC Commitment Transfer Agreement, such assigning Bank shall cease to be a
party hereto and to the CFC Commitment Transfer Agreement).
(d) The Agent shall maintain at its address referred to
in subsection 9.2 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 Banks and the Commitment and Transferred Commitment of, and principal
amount of the Loans and loans under the CFC Commitment Transfer Agreement and
the Types of such Loans owing to each Bank from time to time. The entries in
the Register shall be prima facie evidence of the matters therein recorded, and
the Company, the Agent and the Banks may (and, in the case of any Loan or other
obligation hereunder not evidenced by a Note, shall) treat each Person whose
name is recorded in the Register as the owner of the Loan recorded therein for
all purposes of this Agreement. The Register shall be available for inspection
by the Company or any Bank at any reasonable time and from time to time upon
reasonable prior notice. The Agent shall give prompt written notice to the
Company of the making of any entry in the Register or any change in any such
entry.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Bank and an Assignee (and, in the case of an Assignee
that is not then a Bank or an affiliate thereof, by the Company and the Agent)
together with payment to the Agent of a registration and processing fee of
$2,500, the Agent shall (i) promptly accept such Assignment and Acceptance and
(ii) on the effective date determined pursuant thereto record
<PAGE> 44
40
the information contained therein in the Register and give notice of such
acceptance and recordation to the Banks and the Company.
(f) The Company authorizes each Bank to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
any and all financial information in such Bank's possession concerning the
Company and its affiliates which has been delivered to such Bank by or on
behalf of the Company pursuant to this Agreement or the CFC Commitment Transfer
Agreement or which has been delivered to such Bank by or on behalf of the
Company in connection with such Bank's credit evaluation of the Company and its
affiliates prior to becoming a party to this Agreement and the CFC Commitment
Transfer Agreement.
(g) Nothing herein shall prohibit any Bank from pledging
or assigning all or any portion of its Loans or any Note to any Federal Reserve
Bank in accordance with applicable law. In order to facilitate such pledge or
assignment, the Company hereby agrees that, upon request of any Bank at any
time and from time to time after the Company has made its initial borrowing
hereunder, the Company shall provide to such Bank, at the Company's own
expense, a promissory note (a "Note"), substantially in the form of Exhibit A,
evidencing the Loans owing to such Bank.
9.7 Right of Set-off. Upon the occurrence and during
the continuance of an Event of Default, subject to receipt of the consent of
the Required Banks, each Bank is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Bank (including, without
limitation, its branches) to or for the credit or the account of the Company
against any and all of the obligations of the Company now or hereafter existing
under this Agreement and any Note held by such Bank, irrespective of whether or
not such Bank shall have made any demand under this Agreement or such Note and
although such obligations may be unmatured. Each Bank agrees promptly to
notify the Company and the Agent after any such set-off and application made by
such Bank, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Bank under this
subsection are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Bank may have.
9.8 Adjustments. If any Bank (a "benefitted Bank")
shall at any time receive any payment of all or part of its Loans, or interest
thereon, or commitment or utilization fees payable hereunder, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, pursuant to events or proceedings of the nature referred to in clause
(g) of Section 7, or otherwise), in a greater proportion than any such payment
to and collateral received by any other Bank, if any, in respect of such other
Bank's Loans, interest thereon, or Commitment, then such benefitted Bank shall
purchase for cash from the other Banks such portion of each such other Bank's
Loans, interest or fees or shall provide such other Banks with the benefits of
any such collateral, or the proceeds thereof, as shall be necessary to cause
such benefitted Bank to share the excess payment or benefits of such collateral
or proceeds ratably with each of the other Banks; provided, however, that if
all or any portion of such excess payment or benefits is thereafter recovered
from such benefitted
<PAGE> 45
41
Bank, such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest. The Company
agrees that each Bank so purchasing a portion of another Bank's Loan may
exercise all rights of payment (including, without limitation, rights of
set-off) with respect to such portion as fully as if such Bank were the direct
holder of such portion.
9.9 New Banks. During the term of this Agreement with
the consent of the Company and upon notification to the Agent, one or more
additional Commercial Banks may become a party to this Agreement by executing a
New Bank Supplement with the Company and the Agent, substantially in the form
of Exhibit B, whereupon such Commercial Bank (herein called a "New Bank") shall
become a Bank for all purposes and to the same extent as if originally a party
hereto and shall be bound by and entitled to the benefits of this Agreement,
and Schedule I hereto shall be deemed to be amended to add the name and reflect
the Commitment of such New Bank, provided that any such New Bank has also
become a New Bank with the same Commitment Percentage under the CFC Commitment
Transfer Agreement pursuant to subsection 9.10 thereof. Effective as of the
date on which any such New Bank becomes a Bank pursuant to the provisions of
this subsection 9.9, the aggregate Commitments shall be increased by the amount
of such New Bank's Commitment. If on the date upon which such New Bank becomes
a Bank pursuant to the provisions of this subsection 9.9, there is an unpaid
principal amount of Loans, the Company shall borrow Loans from such New Bank
through the Agent pursuant to subsection 2.1, in an amount determined by
multiplying the amount of such New Bank's Commitment as reduced by any transfer
made pursuant to subsection 2.17(c) by a fraction, the numerator of which shall
be the then unpaid principal amount of the Loans and the denominator of which
shall be the aggregate Commitments of the Banks other than the New Bank.
Notwithstanding anything herein to the contrary, if there are Eurodollar Loans
outstanding, a Commercial Bank that becomes a New Bank will make Loans (which
shall constitute Eurodollar Loans for the purposes of this Agreement) to the
Company (pro rata according to its Commitment Percentage) having Interest
Periods corresponding to the then unexpired portions of the respective Interest
Periods of such Eurodollar Loans and bearing interest at a rate equal to such
rate as shall be mutually agreed upon between such New Bank and the Company
reflecting current market conditions in the eurodollar market. The Agent shall
advise the Banks of each addition of a New Bank hereunder, of the amount of its
Commitment and of the amount of any borrowing from it hereunder made
simultaneously upon its addition.
9.10 Increase in Commitments. During the term of this
Agreement, with the consent of the Company and upon notification to the Agent,
any Bank may increase the amount of its Commitment by executing a Commitment
Increase Supplement with the Company and the Agent, substantially in the form
of Exhibit C, whereupon such Bank shall be bound by and entitled to the
benefits of this Agreement with respect to the full amount of its Commitment as
so increased, and Schedule I hereto shall be deemed to be amended to reflect
the increased Commitment of such Bank. Effective as of the date on which any
such Bank increases its Commitment pursuant to the provisions of this
subsection 9.10, the aggregate Commitments shall be increased by the amount of
such Bank's additional Commitment. If on the date upon which such Bank
increases its Commitment pursuant to this subsection 9.10 there is an unpaid
principal amount of Loans, the Company shall borrow Loans from such Bank
through the Agent, in an amount determined by multiplying the
<PAGE> 46
42
amount of the increase in such Bank's Commitment, as reduced by any transfer
made pursuant to subsection 2.17, by a fraction, the numerator of which shall
be the then unpaid principal amount of the Loans and the denominator of which
shall be the aggregate Commitments of the Banks other than the amount of the
additional Commitment of such Bank. Notwithstanding anything herein to the
contrary, if there are Eurodollar Loans outstanding, a Bank that increases its
Commitment pursuant to this subsection 9.10 will make Loans (which shall
constitute Eurodollar Loans for the purposes of this Agreement) to the Company
(pro rata according to the amount of the increase in such Bank's Commitment)
having Interest Periods corresponding to the then unexpired portions of the
respective Interest Periods of such Eurodollar Loans and bearing interest at a
rate equal to such rate as shall be mutually agreed upon between such Bank and
the Company reflecting current market conditions in the eurodollar market. The
Agent shall advise the Banks of such increase in the Commitment of a Bank and
of the amount of any borrowing from it hereunder made simultaneously upon such
increase.
9.11 Counterparts. This Agreement may be executed by
one or more of the parties hereto on any number of separate counterparts, 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 each of the Company and the Agent.
9.12 GOVERNING LAW. THIS AGREEMENT AND ANY NOTES AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF
LAW.
9.13 Integration. This Agreement represents the
agreement of each party with respect to the subject matter hereof, and there
are no promises or representations by the Agent or any Bank relative to the
subject matter hereof not reflected herein.
9.14 Acknowledgement. Notwithstanding anything
contained in the CFC Commitment Transfer Agreement to the contrary, the
undersigned Banks hereby acknowledge and agree that the definition "Chrysler
Agreement" contained in the CFC Commitment Transfer Agreement shall be deemed
to refer to this Agreement, as amended, supplemented or otherwise modified from
time to time.
<PAGE> 47
43
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.
CHRYSLER CORPORATION
By:____________________________________
Title:
CHEMICAL BANK, as Agent
By:____________________________________
Title:
CHEMICAL SECURITIES INC., as Arranger
By:____________________________________
Title:
<PAGE> 48
SCHEDULE I
COMMITMENTS
<TABLE>
<CAPTION>
AMOUNT OF
NAME AND ADDRESS OF BANK COMMITMENT
------------------------ -------------
(IN MILLIONS)
-------------
<S> <C>
ABNAMRO Bank, N.V . . . . . . . . . . . . . . . . . . . . . . . . . . $ 75
135 South LaSalles Street
Chicago, IL 60603
Attention: Robert Graff
Telecopier: (312) 606-8425
ARAB BANKING CORPORATION . . . . . . . . . . . . . . . . . . . . . . $ 25
245 Park Avenue, 31st Floor
New York, NY 10167-0064
Attention: Grant McDonald
Telecopier: (212) 599-8385
with a copy to:
Connell & Taylor
535 Fifth Avenue
24th Floor
New York, NY 10017
Attn: William Connell
Telecopier: (212)490-2011
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION . . . . . . . . . . . . . . . . . . . . . $ 50
335 Madison Avenue
New York, NY 10017
Attention: Thomas J. Somers
Telecopier: (212) 503-7023
BANK OF MONTREAL . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25
115 South LaSalle Street
Chicago, IL 60603
Attention: Lynn Durning
Telecopier: (312) 750-4314
</TABLE>
<PAGE> 49
2
<TABLE>
<CAPTION>
AMOUNT OF
NAME AND ADDRESS OF BANK COMMITMENT
------------------------ ----------
<S> <C>
THE BANK OF NEW YORK . . . . . . . . . . . . . . . . . . . . . . . . $ 75
One Wall Street, 22nd Floor
New York, NY 10286
Attention: Douglas Ober
Telecopier: (212) 635-6434
THE BANK OF NOVA SCOTIA . . . . . . . . . . . . . . . . . . . . . . . $ 75
The Bank of Nova Scotia (Atlanta Agency)
Suite 2700
600 Peachtree Street, N.E.
Atlanta, GA 30303
Attention: Shannon Law
Telecopier: (404) 888-8998
with a copy to:
The Bank of Nova Scotia
181 W. Madison Street
Chicago, IL 60602
Attention: James S. Coleman
Telecopier: (312) 201-4108
The Bank of Nova Scotia
Scotia Plaza
44 King Street West
Toronto, Ontario M5H1H1
Canada
Attention: Rob Prowse
BANKERS TRUST COMPANY . . . . . . . . . . . . . . . . . . . . . . . . $ 50
130 Liberty Street, 23rd Floor
New York, NY 10006
Attention: Ned Benedict
Telecopier: (212)
BARCLAYS BANK PLC . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25
222 Broadway
New York, NY 10038
Attention: Timothy E. Weidman
Telecopier: (212) 412-7589
</TABLE>
<PAGE> 50
3
<TABLE>
<CAPTION>
AMOUNT OF
NAME AND ADDRESS OF BANK COMMITMENT
------------------------ ----------
<S> <C>
BHF-BANK, GRAND CAYMAN BRANCH . . . . . . . . . . . . . . . . . . . $ 25
55 East 59th Street
New York, NY 10022
Attention: Paul Travers
Telecopier: (212) 756-5911
CIBC, INC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 75
200 West Monroe Street, Suite 2300
Chicago, IL 60606
Attention: Karl Johnson
Telecopier: (312) 726-8884
THE CHASE MANHATTAN BANK, N.A. . . . . . . . . . . . . . . . . . . . $ 75
1 Chase Manhattan Plaza, 5th Floor
New York, NY 10081
Attention: Karl Schmidt
Telecopier: (212) 552-6731
CHEMICAL BANK . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 125
270 Park Avenue, 5th Floor
New York, NY 10017
Attention: David W. Fox, Jr.
Telecopier: (212) 270-1469
COMERICA BANK . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 75
Delivery by Overnight Mail or Telecopy:
- --------------------------------------
One Detroit Center, 8th floor
500 Woodward Avenue MC 3265
Detroit, MI 48226
Attention: Renee D. Weinman
Telecopier: (313) 222-9559
Other Deliveries by Mail:
- ------------------------
P.O. Box 75000
Detroit, MI 48275-3265
Attention: Renee D. Weinman
CONTINENTAL BANK . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50
231 South LaSalle Street
Chicago, IL 60697
Attention: David Noda
Telecopier: (312) 987-5500
</TABLE>
<PAGE> 51
4
<TABLE>
<CAPTION>
AMOUNT OF
NAME AND ADDRESS OF BANK COMMITMENT
------------------------ ----------
<S> <C>
CREDIT LYONNAIS CHICAGO BRANCH . . . . . . . . . . . . . . . . . . . $ 75
and CREDIT LYONNAIS CAYMAN ISLAND BRANCH
Credit Lyonnais Chicago Branch
227 West Monroe St., Suite 3800
Chicago, IL 60606
Attention: Jocelyn Cote
Telecopier: (312) 641-0527
CREDIT SUISSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50
12 East 49th Street, 41st floor
New York, NY
Attn: Kris Kristinsson
Telecopy: (212) 238-5245
with a copy to:
Credit Suisse
227 West Monroe Street, 40th Floor
Chicago, IL 60606
Attention: David Giddy
Telecopier: (312) 630-0359
CREDITANSTALT-BANKVEREIN . . . . . . . . . . . . . . . . . . . . . . $ 25
245 Park Avenue, 27th Floor
New York, NY 10167
Attention: Christina Schoen
Telecopier: (212) 856-1006
with a copy to:
Sullivan & Worcester
767 Third Avenue
New York, NY 10017
Attention: George Lindsay
Telecopy: 212-758-2151
THE FIRST NATIONAL BANK OF CHICAGO . . . . . . . . . . . . . . . . . $ 25
One First National Plaza, Suite 0324
Chicago, IL 60670
Attention: Steve Fercho
Telecopier: (312) 732-1712
</TABLE>
<PAGE> 52
5
<TABLE>
<CAPTION>
AMOUNT OF
NAME AND ADDRESS OF BANK COMMITMENT
------------------------ ----------
<S> <C>
ISTITUTO BANCARIO SAN PAOLO DI TORINO, S.p.A. . . . . . . . . . . . . $ 25
245 Park Avenue
35th floor
New York, New York 10167
Attention: Timothy Reynolds
Telecopy: (212)599-5303
THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED - NEW YORK BRANCH . . . . . . . . . . . . . . . . . . $ 75
165 Broadway
New York, NY 10006
Attention: Yumiko Noda
Telecopier: (212) 608-2317
MELLON BANK, N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25
One Mellon Bank Center
Pittsburgh, PA 15258-0001
Attention: Robert W. Goode
Telecopier: (412) 236-1914
MORGAN GUARANTY TRUST COMPANY OF NEW YORK . . . . . . . . . . . . . . $ 75
60 Wall Street
New York, NY 10260
Attention: Timothy Broadbent
Telecopier: (212) 648-5336
NBD, BANK, N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 75
611 Woodward Avenue
Detroit, MI 48226
Attention: William Canny
Telecopier: (313) 255-1671
NATIONAL WESTMINSTER BANK PLC . . . . . . . . . . . . . . . . . . . . $ 25
135 Bishopsgate
London, ENGLAND EC2M3UR
Attention: Barry H. Coleman
Telecopier: 44-71-375-5192
</TABLE>
<PAGE> 53
6
<TABLE>
<CAPTION>
AMOUNT OF
NAME AND ADDRESS OF BANK COMMITMENT
------------------------ ----------
<S> <C>
NATIONSBANK OF NORTH CAROLINA, N.A. . . . . . . . . . . . . . . . . . $ 75
70 W. Madison, Suite 5300
Chicago, IL 60602
Attention: Michael Zehfuss
Telecopier: (312) 372-9194
ROYAL BANK OF CANADA . . . . . . . . . . . . . . . . . . . . . . . . $ 75
GRAND CAYMAN (NORTH AMERICA #1) BRANCH
c/o New York Operations Center
Pierrepont Plaza
300 Cadman Plaza West
Brooklyn, New York 11201-2701
Attention: Manager, Loans Administration
Telecopier: (718) 522-6292 or (718) 522-6293
with a copy to:
Royal Bank of Canada
One North Franklin Street
Suite 700
Chicago, IL 60606
Attention: Ray Boland
Telecopier: (312) 551-0805
SOCIETE GENERALE . . . . . . . . . . . . . . . . . . . . . . . . . . $ 75
181 West Madison, 34th Floor
Chicago, IL 60602
Attention: Claude S. Garsin
Telecopier: (312) 578-5099
</TABLE>
<PAGE> 54
7
<TABLE>
<CAPTION>
AMOUNT OF
NAME AND ADDRESS OF BANK COMMITMENT
------------------------ ----------
<S> <C>
SWISS BANK CORPORATION . . . . . . . . . . . . . . . . . . . . . . . $ 50
222 Broadway, 4th Floor
New York, NY 10038
Attention: Stephanie Kim
Telecopier: (212) 574-3852
with a copy to:
Swiss Bank Corporation
222 Broadway, 4th Floor
New York, NY 10038
Attention: Reto Jenal
Telecopier: (212) 574-3852
UNION BANK OF SWITZERLAND--CHICAGO BRANCH . . . . . . . . . . . . . . $ 50
30 South Wacker Drive
Chicago, IL 60606
Attention: Walter Wolf, Jr.
Telecopier: (312) 993-5530
THE YASUDA TRUST AND BANKING COMPANY, LTD. . . . . . . . . . . . . . $ 50
181 W. Madison Street, Suite 4500
Chicago, Illinois 60602
Attention: Robert Orenstein
Telecopier: (312) 683-3899
with a copy to:
McLauglin, Rissman & Doll
6 West Hubbard, Suite 500
Chicago, IL 60611
Attention: John Doll
Telecopy: 312-527-2023
------
Total: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,675
</TABLE>
<PAGE> 55
SCHEDULE II
LIENS PERMITTED UNDER SUBSECTION 6.2(A)
NONE.
<PAGE> 56
Exhibit A to
Revolving Credit Agreement
[FORM OF NOTE]
REVOLVING CREDIT NOTE
$
New York, New York
___________, 199_
FOR VALUE RECEIVED, the undersigned, Chrysler
Corporation, a Michigan corporation (the "Company"), hereby unconditionally
promises to pay to the order of [NAME OF BANK] (the "Bank") at the office of
Chemical Bank, located at 270 Park Avenue, New York, New York 10017, in lawful
money of the United States of America and in immediately available funds, on
the Termination Date the principal amount of (a) [AMOUNT IN WORDS] DOLLARS
($______) or, if less, (b) the aggregate unpaid principal amount of all Loans
made by the Bank to the Company pursuant to subsection 2.1 of the Revolving
Credit Agreement, as hereinafter defined. The Company further agrees to pay
interest in like money at such office on the unpaid principal amount hereof
from time to time outstanding at the rates and on the dates specified in
subsection 2.8 of such Revolving Credit Agreement.
The holder of this promissory note is authorized to
endorse on the schedules annexed hereto and made a part hereof or on a
continuation thereof which shall be attached hereto and made a part hereof the
date, Type and amount of each Loan made pursuant to the Revolving Credit
Agreement and the date and amount of each payment or prepayment of principal
thereof, each continuation thereof, each conversion of all or a portion thereof
to another Type and, in the case of Eurodollar Loans, the length of each
Interest Period with respect thereto. Each such endorsement shall constitute
prima facie evidence of the accuracy of the information endorsed. The failure
to make any such endorsement or any error in such endorsement shall not affect
the obligations of the Company in respect of any Loan.
This promissory note (a) has been issued pursuant to
subsection 9.6(g) of the Revolving Credit Agreement dated as of _____, 1994 (as
amended, supplemented or otherwise modified from time to time, the "Revolving
Credit Agreement"), among the Company, the several commercial banks from time
to time parties thereto, Chemical Bank, as agent for the Banks, and Chemical
Securities Inc., as arranger of the Commitments thereunder, (b) is subject to
the provisions of the Revolving Credit Agreement and (c) is subject to
prepayment in whole or in part as provided in the Revolving Credit Agreement.
Upon the occurrence of any one or more of the Events of
Default specified in the Revolving Credit Agreement, all amounts then remaining
unpaid on this promissory note shall become, or may be declared to be,
immediately due and payable, all as provided in the Revolving Credit Agreement.
<PAGE> 57
2
All parties now and hereafter liable with respect to
this promissory note, whether maker, principal, surety, guarantor, endorser or
otherwise, hereby waive presentment, demand, protest and all other notices of
any kind.
Unless otherwise defined herein, terms defined in the
Revolving Credit Agreement and used herein shall have the meanings given to
them in the Revolving Credit Agreement.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
CHRYSLER CORPORATION
By:_________________________
Title:
<PAGE> 58
Schedule A
to Revolving Credit Note
<TABLE>
<CAPTION>
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
Amount Amount of Base Rate Unpaid Principal
Amount of Base Rate Converted to Amount of Principal of Loans Converted to Balance of
Date Loans Base Rate Loans Base Rate Loans Repaid Eurodollar Loans Base Rate Loans Notation Made By
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE> 59
Schedule B
to Revolving Credit Note
<TABLE>
<CAPTION>
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
Interest Period Amount of Amount of
Amount Converted and Eurodollar Principal of Eurodollar Loans Unpaid Principal
Amount of to Eurodollar Rate with Respect Eurodollar Loans Converted to Base Balance of Notation
Date Eurodollar Loans Loans Thereto Repaid Rate Loans Eurodollar Loans Made By
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE> 60
Exhibit B to
Revolving Credit Agreement
[FORM OF NEW BANK SUPPLEMENT]
NEW BANK SUPPLEMENT
NEW BANK SUPPLEMENT, dated _______ __, ____, to the Revolving
Credit Agreement, dated as of _______ __, 1994 (as amended, supplemented or
otherwise modified from time to time, the "Revolving Credit Agreement"), among
Chrysler Corporation (the "Company"), the several commercial banks from time to
time parties thereto (individually a "Bank" and collectively the "Banks"),
Chemical Bank, as agent for the Banks thereunder, and Chemical Securities Inc.,
as arranger of the Commitments thereunder.
W I T N E S S E T H :
WHEREAS, the Revolving Credit Agreement provides in
subsection 9.9 thereof that any Commercial Bank, although not originally a
party thereto, may become a party to the Revolving Credit Agreement with the
consent of the Company and upon notification to the Agent by executing a New
Bank Supplement with the Company and the Agent in substantially the form of
this New Bank Supplement; and
WHEREAS, the undersigned was not an original party to the
Revolving Credit Agreement but now desires to become a party thereto;
NOW, THEREFORE, the undersigned hereby agrees as follows:
1. The undersigned agrees to be bound by the provisions of
the Revolving Credit Agreement, and agrees that it
shall, on the date this New Bank Supplement is accepted
by the Company and the Agent, become a Bank for all
purposes of the Revolving Credit Agreement to the same
extent as if originally a party thereto.
2. The amount of the Commitment of the undersigned shall
be $__________.
3. The undersigned's address for notices and telecopy
number for the purposes of the Revolving Credit
Agreement are as follows:
__________.
<PAGE> 61
2
Terms defined in the Revolving Credit Agreement shall
have their defined meanings when used herein.
IN WITNESS WHEREOF, the undersigned has caused this New
Bank Supplement to be executed and delivered by a duly authorized officer on
the date first above written.
[INSERT NAME OF NEW BANK]
By:_________________________
Title:
Accepted this _____ day
of _____ ____
CHRYSLER CORPORATION
By:_________________________
Title:
Accepted this _____ day
of _____ ____
CHEMICAL BANK, as Agent
By:_________________________
Title:
<PAGE> 62
Exhibit C to
Revolving Credit Agreement
[FORM OF COMMITMENT INCREASE SUPPLEMENT]
COMMITMENT INCREASE SUPPLEMENT
COMMITMENT INCREASE SUPPLEMENT, dated _______ __, ____, to
the Revolving Credit Agreement, dated as of _______ __, 1994 (as amended,
supplemented or otherwise modified from time to time, the "Revolving Credit
Agreement"), among Chrysler Corporation (the "Company"), the several commercial
banks from time to time parties thereto (individually a "Bank" and collectively
the "Banks"), Chemical Bank, as agent for the Banks thereunder, and Chemical
Securities Inc., as arranger of the Commitments thereunder.
W I T N E S S E T H :
WHEREAS, the Revolving Credit Agreement provides in
subsection 9.10 thereof that any Bank with the consent of the Company and upon
notification to the Agent may increase the amount of its Commitment by
executing a Commitment Increase Supplement with the Company and the Agent in
substantially the form of this Commitment Increase Supplement; and
WHEREAS, the undersigned now desires to increase the amount
of its Commitment under the Revolving Credit Agreement;
NOW, THEREFORE, the undersigned hereby agrees as follows:
The undersigned agrees, subject to the terms and
conditions of the Revolving Credit Agreement, that it
shall on the date this Commitment Increase Supplement
is accepted by the Company and the Agent have its
Commitment to the Company increased by
$_______________, thereby making the amount of its
Commitment $_______________.
Terms defined in the Revolving Credit Agreement shall have
their defined meanings when used herein.
<PAGE> 63
2
IN WITNESS WHEREOF, the undersigned has caused this
Commitment Increase Supplement to be executed and delivered by a duly
authorized officer on the date first above written.
[INSERT NAME AND ADDRESS OF BANK]
By:___________________________
Title:
Accepted this _____ day
of _____ ____
CHRYSLER CORPORATION
By:_________________________
Title:
Accepted this _____day
of _____ ____
CHEMICAL BANK, as Agent
By:_________________________
Title:
<PAGE> 64
Exhibit D to
Revolving Credit Agreement
[FORM OF OPINION OF SIMPSON THACHER & BARTLETT]
[EFFECTIVE DATE]
To the Banks parties on the date hereof to
the Revolving Credit Agreement referred to below
Dear Sirs:
We have acted as special counsel for Chemical Bank, as agent,
in connection with the preparation, execution and delivery of the Revolving
Credit Agreement dated as of ______ __, 1994 (the "Revolving Credit Agreement")
among Chrysler Corporation (the "Company"), the Banks parties thereto, Chemical
Bank, as agent (in such capacity, the "Agent"), and Chemical Securities Inc.,
as arranger of the Commitments thereunder. Terms defined in the Revolving
Credit Agreement shall have the same meaning when used herein.
In that connection, we have reviewed the following documents:
1. Counterparts of the Revolving Credit Agreement executed
by the Company and the Agent.
2. The documents furnished pursuant to subsection 4.1 of
the Revolving Credit Agreement and listed on Annex I
hereto.
In our examination of the documents referred to above we have
assumed the authenticity of all such documents submitted to us as originals,
the genuineness of all signatures, the due authority of all parties executing
such documents and the conformity to the originals of such documents submitted
to us as copies. We have relied, as to factual matters, on the documents we
have examined.
Based upon the foregoing, it is our opinion that each of the
documents referred to in paragraphs 1 and 2 above is substantially responsive
to the requirements of subsection 4.1 of the Revolving Credit Agreement.
In rendering the foregoing opinion, it should be pointed out
that we are members of the Bar of the State of New York and do not express, or
purport to express, any opinion with respect to the laws of any other
jurisdiction.
This opinion is rendered to you in connection with the
Revolving Credit Agreement. This opinion may not be relied upon by you for any
other purpose, or relied
<PAGE> 65
2
upon by any other person, firm or corporation without our prior written consent
or furnished to any other person, firm or corporation other than any assignee
or participant under the Revolving Credit Agreement or any bank examiner or
other regulatory authority without our prior written consent.
Very truly yours,
<PAGE> 66
Annex I
to
Opinion of Simpson Thacher & Bartlett
List of Documents Furnished Pursuant
to Subsection 4.1 of the
Revolving Credit Agreement
<PAGE> 67
Exhibit E to
Revolving Credit Agreement
[FORM OF OPINION OF GENERAL COUNSEL TO COMPANY]
[EFFECTIVE DATE]
To the commercial banks from time to time parties to
the Revolving Credit Agreement dated as of _______ __,
1994 among Chrysler Corporation, such banks, Chemical Bank,
as agent for the Banks, and Chemical Securities Inc.,
as arranger of the Commitments thereunder
Dear Sirs:
I am General Counsel to Chrysler Corporation, a Delaware
corporation (the "Company"), and have acted as such in connection with the
execution and delivery of the Revolving Credit Agreement dated as of ______ __,
1994 (the "Revolving Credit Agreement") among the Company, the commercial banks
from time to time parties thereto, Chemical Bank, as agent for the Banks, and
Chemical Securities Inc., as arranger of the Commitments thereunder. This
opinion is delivered to you pursuant to subsection 4.1(e)(ii) of the Revolving
Credit Agreement. Terms used herein which are defined in the Revolving Credit
Agreement shall have the respective meanings set forth in the Revolving Credit
Agreement, unless otherwise defined herein.
In connection with this opinion, I or members of my staff
have examined executed copies of each of the Revolving Credit Agreement and
such corporate documents and records of the Company and certificates of public
officials and officers of the Company, and such other documents, as I have
deemed necessary or appropriate for the purposes of this opinion. For the
purposes of this opinion, I have assumed (i) the genuineness of all signatures
of, and the authority of, Persons signing the Revolving Credit Agreement on
behalf of parties thereto other than the Company, (ii) the authenticity of all
documents submitted to me as originals, (iii) the conformity to authentic
original documents of all documents submitted to me as certified, conformed or
photostatic copies and (iv) the due authorization, execution and delivery of
the Revolving Credit Agreement by the parties thereto other than the Company.
Based upon the foregoing, I am of the opinion that:
1. The Company and each of its Significant Subsidiaries is
duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its
incorporation and duly qualified as a foreign
<PAGE> 68
2
corporation to do business and in good standing under
the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its
business requires such qualification except where the
failure to be so qualified would not have a material
adverse effect on the business, operations, property or
financial or other condition of the Company and its
Subsidiaries taken as a whole.
2. The execution, delivery and performance by the Company
of the Revolving Credit Agreement and any Note are
within the Company's corporate powers, have been duly
authorized by all necessary corporate action, and do
not contravene any Requirement of Law or, to the best
of my knowledge after due inquiry, any Contractual
Obligation of the Company or any of its Subsidiaries.
3. No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority is
required to be obtained or made by the Company for the
due execution, delivery and performance by the Company
of the Revolving Credit Agreement and any Note.
4. The Revolving Credit Agreement has been duly executed
and delivered on behalf of the Company and the
Revolving Credit Agreement constitutes, and any Note,
when executed and delivered will constitute, a legal,
valid and binding obligation of the Company enforceable
against the Company in accordance with its terms,
except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity.
5. No litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or,
to the best of my knowledge after due inquiry,
threatened by or against the Company or against any of
its Subsidiaries or against any of its or their
respective properties or revenues (a) with respect to
the Revolving Credit Agreement or any of the
transactions contemplated thereby, or (b) which might
reasonably be expected to have a material adverse
effect on the business, operations, property or
financial or other condition of the Company and its
Subsidiaries taken as a whole.
I am a member of the bar of the States of Michigan and New
York, and the foregoing opinion may not be taken as extending to matters
arising under laws other than the laws of the States of Michigan and New York,
the corporate laws of the State of Delaware and the federal laws of the United
States of America.
Very truly yours,
<PAGE> 69
Exhibit F to
Revolving Credit Agreement
[FORM OF ASSIGNMENT AND ACCEPTANCE]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Revolving Credit Agreement, dated as
of _____, 1994 (as amended, supplemented or otherwise modified from time to
time, the "Revolving Credit Agreement"), among Chrysler Corporation (the
"Company"), the commercial banks from time to time parties thereto, Chemical
Bank, as agent for the Banks, and Chemical Securities Inc., as arranger of the
Commitments thereunder. Unless otherwise defined herein, terms defined in the
Revolving Credit Agreement and used herein shall have the meanings given to
them in the Revolving Credit Agreement.
_________________ (the "Assignor") and ____________________
(the "Assignee") agree as follows:
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 Assignment Date (as defined below), a ___% interest (the "Assigned
Interest") in and to the Assignor's rights and obligations under the Revolving
Credit Agreement with respect to those credit facilities contained in the
Revolving Credit Agreement as are set forth on SCHEDULE 1 (individually, an
"Assigned Facility"; collectively, the "Assigned Facilities"), in a principal
amount for each Assigned Facility as set forth on SCHEDULE 1.
The Assignor (i) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Revolving Credit Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Revolving Credit Agreement, or any instrument or document
furnished pursuant thereto, other than that it 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 (ii) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Company, any of its subsidiaries or any other obligor or the
performance or observance by the Company, any of its subsidiaries or any other
obligor of any of their respective obligations under the Revolving Credit
Agreement or any instrument or document furnished pursuant hereto or thereto.
The Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii) confirms that it
has received a copy of the Revolving Credit Agreement, together with such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (iii)
agrees that it has made and will, independently and without reliance upon the
Assignor, the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions
<PAGE> 70
2
in taking or not taking action under the Revolving Credit Agreement or any
instrument or document furnished pursuant hereto or thereto; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Revolving Credit Agreement or any
instrument or document furnished pursuant hereto or thereto as are delegated to
the Agent by the terms thereof, together with such powers as are incidental
thereto; and (v) agrees that it will be bound by the provisions of the
Revolving Credit Agreement and will perform in accordance with its terms all
the obligations which by the terms of the Revolving Credit Agreement are
required to be performed by it as a Bank.
The effective date of this Assignment and Acceptance shall be
________ __, 199_ (the "Assignment Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Agent for acceptance by
it and recording by the Agent pursuant to subsection 9.6(e) of the Revolving
Credit Agreement, effective as of the Assignment Date (which shall not, unless
otherwise agreed to by the Agent, be earlier than five Business Days after the
date of such acceptance and recording by the Agent).
Upon such acceptance and recording, from and after the
Assignment Date, the 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 Assignment Date or
accrue subsequent to the Assignment Date. The Assignor and the Assignee shall
make all appropriate adjustments in payments by the Agent for periods prior to
the Assignment Date or with respect to the making of this assignment directly
between themselves.
From and after the Assignment Date (i) the Assignee shall be
a party to the Revolving Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Bank thereunder
and shall be bound by the provisions thereof; and (ii) the Assignor shall, to
the extent provided in this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Revolving Credit Agreement.
THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED 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> 71
Schedule 1
to Assignment and Acceptance
Name and Address of Assignor:
Name and Address of Assignee:
Assignment Date:
Credit Principal Commitment Percentage Assigned*/-
Facility Assigned Amount Assigned ---------------------------------
- ----------------- ---------------
$ . %
_______________ ___ _______________________
[Name of Assignee] [Name of Assignor]
By:_________________________ By:__________________________
Name: Name:
Title: Title:
- -------------------------
*/ 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> 72
2
Consented To:
CHRYSLER CORPORATION
By:________________________
Name:
Title:
CHEMICAL BANK, as Agent
By:________________________
Name:
Title:
[Consents required only to the extent expressly
provided in subsection 9.6 of the Revolving Credit
Agreement.]
Accepted for Recordation
in the Register:
CHEMICAL BANK, as Agent
By:_____________________________
Name:
Title:
<PAGE> 73
Exhibit G to
Revolving Credit Agreement
[FORM OF ADDENDUM]
ADDENDUM
The undersigned Bank (i) agrees to all of the provisions of
the Revolving Credit Agreement dated as of July 29, 1994 (the "Revolving Credit
Agreement") among Chrysler Corporation (the "Company"), the commercial banks
from time to time parties thereto, Chemical Bank, as agent for the Banks, and
Chemical Securities Inc., as arranger of the Commitments thereunder, and (ii)
becomes a party thereto, as a Bank with an obligation to make Loans to the
Company from time to time during the Commitment Period with respect to such
Bank's Commitment in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth opposite such Bank's name in Schedule I to
the Revolving Credit Agreement, as such amount may be reduced or increased as
provided in the Revolving Credit Agreement or as such amount may be reduced or
increased by a Transferred Commitment made or withdrawn, respectively, pursuant
to subsection 2.17 of the Revolving Credit Agreement. Capitalized terms
defined in the Revolving Credit Agreement shall have their respective defined
meanings herein.
We hereby confirm that the address for notices with respect
to the undersigned Bank set forth on the above-referenced Schedule I shall
constitute our address for notices for the purposes of subsection 9.2 of the
Revolving Credit Agreement, except as otherwise set forth below:
1. Name of Bank:
2. Address for Notices:
Attention:
Telecopy Number:
3. Administrative Contact:
Telecopy:
Name of Bank:_____________________________
By:_____________________________________
Title:
Dated as of July 29, 1994
<PAGE> 74
Exhibit H to
Revolving Credit Agreement
[FORM OF CLOSING CERTIFICATE]
CLOSING CERTIFICATE
Pursuant to subsections 4.1(b), (c) and (d) of the Revolving
Credit Agreement dated as of __________, 1994 (the "Revolving Credit
Agreement"; unless otherwise defined herein, terms defined in the Revolving
Credit Agreement and used herein shall have the meanings given to them in the
Revolving Credit Agreement) among Chrysler Corporation (the "Company"), the
commercial banks from time to time parties thereto, Chemical Bank, as agent for
the Banks, and Chemical Securities Inc., as arranger of the Commitments
thereunder, the undersigned ________ of the Company hereby certifies as
follows:
1. The representations and warranties of the Company
contained in the Revolving Credit Agreement or in any
certificate, document or financial or other statement
furnished by or on behalf of the Company pursuant to or
in connection with the Revolving Credit Agreement are
true and correct in all material respects on and as of
the date hereof with the same effect as if made on the
date hereof except for representations and warranties
stated to relate to a specific earlier date, in which
case such representations and warranties were true and
correct in all material respects as of such earlier
date;
2. No Default or Event of Default has occurred and is
continuing as of the date hereof or after giving effect
to any Loans to be made on the date hereof; and
3. ____________________ is and at all times since
_____________________ 19__, has been the duly elected
and qualified [Assistant] Secretary of the Company and
the signature set forth on the signature line for such
officer below is such officer's true and genuine
signature;
and the undersigned [Assistant] Secretary of the Company hereby certifies as
follows:
1. There are no liquidation or dissolution proceedings
pending or to my knowledge threatened against the
Company, nor to my knowledge has any other event
occurred affecting or threatening the corporate
existence of the Company;
2. The Company is a corporation duly organized, validly
existing and in good standing under the laws of
Michigan;
<PAGE> 75
2
3. Attached hereto as Annex A is a complete and correct
copy of resolutions duly adopted by the Board of
Directors (or a duly authorized committee thereof) of
the Company on _________, 19__; such resolutions have
not in any way been amended, modified, revoked or
rescinded and have been in full force and effect since
their adoption to and including the date hereof and are
now in full force and effect; such resolutions are the
only corporate proceedings of the Company now in force
relating to or affecting the matters referred to
therein;
4. Attached hereto as Annex B is a complete and correct
copy of the by-laws of the Company as in effect at all
times since _________________, 19__ to and including
the date hereof; and attached hereto as Annex C is a
true and complete copy of the certificate of
incorporation of the Company as in effect at all times
since ___________________, 19__ to and including the
date hereof; and
5. The following persons are now duly elected and
qualified officers of the Company holding the offices
indicated next to their respective names below, and
such officers have held such offices with the Company
at all times since ________________, 19__ to and
including the date hereof, and the signatures appearing
opposite their respective names below are the true and
genuine signatures of such officers, and each of such
officers is duly authorized to execute and deliver on
behalf of the Company the Revolving Credit Agreement
and any certificate or other document to be delivered
by the Company pursuant to the Revolving Credit
Agreement:
Name Office Signature
---- ------ ---------
_________________ _____________________ _________________________
_________________ _____________________ _________________________
_________________ [Assistant] Secretary _________________________
IN WITNESS WHEREOF, the undersigned have hereto set our names.
_____________________ ______________________________
Title: [___________] Title: [Assistant] Secretary
Date: _________, 1994
<PAGE> 76
Annex A
to Closing Certificate
[Attach Resolutions]
<PAGE> 77
Annex B
to Closing Certificate
[Attach By-Laws]
<PAGE> 78
Annex C
to Closing Certificate
[Attach Certificate of Incorporation]
<PAGE> 1
EXHIBIT 11
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
Earnings Per Common Share Data
APB Opinion No.15 Calculation
<TABLE>
<CAPTION>
Period Ended September 30, 1994
------------------------------------------------------
Three Months Ended Nine Months Ended
-------------------- --------------------
1994 1993 1994 1993
---- ---- ---- ----
(In millions of dollars and shares)
<S> <C> <C> <C> <C>
Primary:
Net earnings (loss) $ 651 $ 423 $ 2,545 $ (3,328)
Preferred stock dividend (20) (20) (60) (60)
------- ------- ------- --------
Earnings (loss) attributable to common stock $ 631 $ 403 $ 2,485 $ (3,388)
======= ======= ======= ========
Weighted average shares outstanding 354.4 351.4 354.2 342.5
Shares issued on exercise of dilutive options 10.1 10.0 10.5 --
Shares purchased with proceeds of options (6.0) (4.8) (5.7) --
Shares contingently issuable 0.3 1.3 0.3 --
------- ------- ------- --------
Shares applicable to primary earnings (loss) 358.8 357.9 359.3 342.5
======= ======= ======= ========
Fully Diluted:
Net earnings $ 651 $ 423 $ 2,545 $ --
Preferred stock dividend -- -- -- --
------- ------- ------- --------
Earnings attributable to common stock $ 651 $ 423 $ 2,545 $ --
======= ======= ======= ========
Weighted average shares outstanding 354.4 351.4 354.2 --
Shares issued on exercise of dilutive options 10.1 12.3 10.5 --
Shares purchased with proceeds of options (6.0) (6.7) (5.7) --
Shares applicable to convertible preferred stock 47.9 47.9 47.9 --
Shares contingently issuable 1.0 1.3 0.9 --
------- ------- ------- --------
Shares applicable to fully diluted earnings 407.4 406.2 407.8 --
======= ======= ======= ========
Per Common Share Data: (In dollars)
Primary:
Earnings before cumulative effect of
changes in accounting principles $ 1.76 $ 1.13 $ 6.92 $ 4.61
Cumulative effect of changes in
accounting principles -- -- -- (14.50)
------- ------- ------- --------
Net earnings (loss) per common share $ 1.76 $ 1.13 $ 6.92 $ (9.89)
======= ======= ======= ========
Fully Diluted:
Earnings before cumulative effect of
changes in accounting principles $ 1.60 $ 1.04 $ 6.24 $ --
Cumulative effect of changes in
accounting principles -- -- -- --
------- ------- ------- --------
Net earnings per common share $ 1.60 $ 1.04 $ 6.24 $ --
======= ======= ======= ========
</TABLE>
Note: Earnings (loss) per common share amounts were computed by dividing
earnings (loss) after deduction of preferred stock dividends by the
average number of common and dilutive equivalent shares outstanding.
In the three months ended September 30, 1994 and 1993, and in the nine
months ended September 30, 1994, fully diluted per common share amounts
assume conversion of the convertible preferred stock, the elimination
of the related preferred stock dividend requirement, and the issuance
of common stock for all other potentially dilutive equivalents
outstanding. Computations of primary earnings per common share
exclude the effect of common stock equivalents and shares contingently
issuable for any period in which their inclusion would have the effect
of increasing the earnings per common share amount or decreasing the
loss per common share amount otherwise computed. Fully diluted per
common share amounts are not applicable for loss periods.
<PAGE> 1
EXHIBIT 15A
CONFORMED
INDEPENDENT ACCOUNTANTS' REPORT
Shareholders and Board of Directors
Chrysler Corporation
Highland Park, Michigan
We have reviewed the accompanying consolidated balance sheet of Chrysler
Corporation and consolidated subsidiaries as of September 30, 1994 and 1993,
and the related consolidated statements of earnings and cash flows for the
three-month and nine-month periods ended September 30, 1994 and 1993. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the consolidated financial statements referred to above for
them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Chrysler Corporation and
consolidated subsidiaries as of December 31, 1993, and the related consolidated
statements of earnings and cash flows for the year then ended (not presented
herein); and in our report dated January 18, 1994, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance sheet
as of December 31, 1993, is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.
DELOITTE & TOUCHE LLP
Detroit, Michigan
October 11, 1994
<PAGE> 1
EXHIBIT 15B
CONFORMED
October 14, 1994
Chrysler Corporation
12000 Chrysler Drive
Highland Park, Michigan
We have made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited interim
financial information of Chrysler Corporation and consolidated subsidiaries for
the periods ended September 30, 1994 and 1993, as indicated in our report dated
October 11, 1994. Because we did not perform an audit, we expressed no opinion
on that information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended September 30, 1994, is
incorporated by reference in the following Registration Statements:
<TABLE>
<CAPTION>
Registration
Form Statement No. Description
- ---------- --------------- ------------------------------------------------------------------
<S> <C> <C>
S-8 33-5588 Chrysler Salaried Employees' Savings Plan
S-8 33-6117 Chrysler Corporation Stock Option Plan
S-3 33-13739 Chrysler Corporation Common Stock deliverable to Selling stockholder named therein
S-3 33-15716 Chrysler Corporation Common Stock deliverable to Selling stockholders named therein
S-8 33-15544 Chrysler Corporation Common Stock deliverable pursuant to the 1972 and
(Post-Effective 1980 American Motors Corporation Stock Option Plans
Amendment No. 1)
S-3 33-15849 Chrysler Corporation Debt Securities
S-3 33-22233 Chrysler Corporation Common Stock deliverable to Selling stockholders named therein
S-3 33-39688 Chrysler Corporation Common Stock deliverable to Selling stockholders named therein
S-8 33-47986 Chrysler Corporation 1991 Stock Compensation Plan
S-3 33-59294 Chrysler Corporation Common Stock deliverable to Selling stockholders named therein
S-8 33-55817 Chrysler Corporation 1991 Stock Compensation Plan
</TABLE>
We are also aware that the aforementioned report, pursuant to Rule 436(c)
under the Securities Act of 1933, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
DELOITTE & TOUCHE LLP
Detroit, Michigan
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 5,241
<SECURITIES> 1,896
<RECEIVABLES> 2,317
<ALLOWANCES> 75
<INVENTORY> 3,528
<CURRENT-ASSETS> 0
<PP&E> 17,068
<DEPRECIATION> 6,987
<TOTAL-ASSETS> 46,506
<CURRENT-LIABILITIES> 0
<BONDS> 7,156
<COMMON> 364
0
2
<OTHER-SE> 8,678
<TOTAL-LIABILITY-AND-EQUITY> 46,506
<SALES> 35,858
<TOTAL-REVENUES> 37,964
<CGS> 27,653 <F1>
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,852
<LOSS-PROVISION> 24
<INTEREST-EXPENSE> 697
<INCOME-PRETAX> 4,199
<INCOME-TAX> 1,654
<INCOME-CONTINUING> 2,545
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,545
<EPS-PRIMARY> 6.92
<EPS-DILUTED> 6.24
<FN>
<F1>
(1) Excludes depreciation of property and equipment, amortization of special
tools, pension expense and nonpension postretirement benefit expense.
</FN>
</TABLE>
