<PAGE> 1
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- --------------------------------------------------------------------------------
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 JUNE 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-9161
CHRYSLER CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
STATE OF DELAWARE 38-2673623
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 CHRYSLER DRIVE, AUBURN HILLS, MICHIGAN 48326-2766
(Address of principal executive offices) (Zip Code)
</TABLE>
(810) 576-5741
(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 728,604,220 shares of common stock outstanding as of
June 30, 1996, adjusted for the two-for-one stock split declared on May 16, 1996
which is to be distributed on July 15, 1996 to shareholders of record on June
15, 1996.
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<PAGE> 2
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements..................................................... 1-5
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations............................................................ 6-11
Part II. OTHER INFORMATION
Item 1. Legal Proceedings........................................................ 12
Item 4. Submission of Matters to a Vote of Security Holders...................... 12
Item 5. Other Information........................................................ 13-15
Item 6. Exhibits and Reports on Form 8-K......................................... 16
Signature Page..................................................................... 17
Exhibit Index...................................................................... 18
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
THREE MONTHS
ENDED SIX MONTHS ENDED
----------------- -----------------
1996 1995 1996 1995
------- ------- ------- -------
(IN MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C>
Sales of manufactured products.............................. $14,858 $11,653 $28,902 $24,482
Finance and insurance revenues.............................. 431 408 880 788
Other revenues.............................................. 550 455 1,013 859
------- ------- ------- -------
TOTAL REVENUES......................................... 15,839 12,516 30,795 26,129
------- ------- ------- -------
Costs, other than items below............................... 11,740 10,049 22,745 20,565
Depreciation and special tools amortization................. 591 590 1,202 1,153
Selling and administrative expenses......................... 1,220 1,076 2,307 2,084
Employee retirement benefits................................ 306 293 617 604
Interest expense............................................ 262 270 534 515
------- ------- ------- -------
TOTAL EXPENSES......................................... 14,119 12,278 27,405 24,921
------- ------- ------- -------
EARNINGS BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE................................. 1,720 238 3,390 1,208
Provision for income taxes.................................. 683 103 1,348 481
------- ------- ------- -------
EARNINGS BEFORE CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE................................. 1,037 135 2,042 727
Cumulative effect of a change in accounting principle....... -- -- -- (96)
------- ------- ------- -------
NET EARNINGS........................................... $ 1,037 $ 135 $ 2,042 $ 631
Preferred stock dividends................................... 1 3 2 17
------- ------- ------- -------
NET EARNINGS ON COMMON STOCK........................... $ 1,036 $ 132 $ 2,040 $ 614
======= ======= ======= =======
(IN DOLLARS OR MILLIONS OF SHARES)
PRIMARY EARNINGS PER COMMON SHARE (Note 4):
Earnings before cumulative effect of a change in
accounting principle................................... $ 1.39 $ 0.17 $ 2.70 $ 0.96
Cumulative effect of a change in accounting principle..... -- -- -- (0.13)
------- ------- ------- -------
Net earnings per common share............................. $ 1.39 $ 0.17 $ 2.70 $ 0.83
======= ======= ======= =======
Average common and dilutive equivalent shares outstanding... 747.7 757.5 754.4 741.3
FULLY DILUTED EARNINGS PER
COMMON SHARE (Note 4):
Earnings before cumulative effect of a change in
accounting principle................................... $ 1.38 $ 0.17 $ 2.68 $ 0.91
Cumulative effect of a change in accounting principle..... -- -- -- (0.12)
------- ------- ------- -------
Net earnings per common share............................. $ 1.38 $ 0.17 $ 2.68 $ 0.79
======= ======= ======= =======
Average common and dilutive equivalent shares outstanding... 753.0 780.3 761.6 801.5
DIVIDENDS DECLARED PER COMMON SHARE......................... $ 0.35 $ 0.25 $ 0.65 $ 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>
1996 1995
----------- --------------------------
JUNE 30 DECEMBER 31 JUNE 30
----------- ------------ -----------
(UNAUDITED) (UNAUDITED)
(IN MILLIONS OF DOLLARS)
<S> <C> <C> <C>
ASSETS:
Cash and cash equivalents.................................... $ 5,635 $ 5,543 $ 4,008
Marketable securities........................................ 3,127 2,582 3,828
------- ------- -------
Total cash, cash equivalents and marketable
securities............................................ 8,762 8,125 7,836
Accounts receivable -- trade and other....................... 2,610 2,003 2,189
Inventories.................................................. 5,535 4,448 4,338
Prepaid pension, taxes and other expenses.................... 707 985 950
Finance receivables and retained interests in sold
receivables................................................ 12,914 13,623 12,496
Property and equipment....................................... 13,283 12,595 11,637
Special tools................................................ 3,492 3,566 3,449
Intangible assets............................................ 1,889 2,082 2,124
Deferred tax assets.......................................... 245 490 402
Other assets................................................. 6,357 5,839 5,343
------- ------- -------
TOTAL ASSETS............................................ $55,794 $53,756 $50,764
======= ======= =======
LIABILITIES:
Accounts payable............................................. $ 9,155 $ 8,290 $ 7,739
Short-term debt.............................................. 1,667 2,674 3,689
Payments due within one year on long-term debt............... 2,388 1,661 1,472
Accrued liabilities and expenses............................. 8,567 7,032 6,538
Long-term debt............................................... 9,166 9,858 8,119
Accrued noncurrent employee benefits......................... 9,390 9,217 8,941
Other noncurrent liabilities................................. 4,039 4,065 3,852
------- ------- -------
TOTAL LIABILITIES....................................... 44,372 42,797 40,350
------- ------- -------
SHAREHOLDERS' EQUITY (Note 4): (shares in millions)
Preferred stock -- $1 per share par value; authorized 20.0
shares; Series A Convertible Preferred Stock; issued and
outstanding: 1996 -- 0.1; 1995 -- 0.1 and 0.3 shares,
respectively (aggregate liquidation preference 1996 --
$32 million; 1995 -- $68 million and $128 million,
respectively).............................................. * * *
Common stock -- $1 per share par value; authorized 1,000.0
shares; issued: 1996 -- 820.4; 1995 -- 408.2 shares and
404.9 shares, respectively................................. 820 408 405
Additional paid-in capital................................... 5,117 5,506 5,503
Retained earnings............................................ 7,816 6,280 5,318
Treasury stock -- at cost: 1996 -- 91.8 shares; 1995 --
29.9 and 22.5 shares, respectively......................... (2,331) (1,235) (812)
------- ------- -------
TOTAL SHAREHOLDERS' EQUITY.............................. 11,422 10,959 10,414
------- ------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.............. $55,794 $53,756 $50,764
======= ======= =======
</TABLE>
- -------------------------
* Less than $1 million
See notes to consolidated financial statements.
2
<PAGE> 5
ITEM 1. FINANCIAL STATEMENTS -- CONTINUED
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
-------- --------
(IN MILLIONS OF
DOLLARS)
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES............................ $ 4,083 $ 3,888
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities................................. (1,946) (3,195)
Sales and maturities of marketable securities...................... 2,101 2,640
Finance receivables acquired....................................... (12,879) (12,291)
Finance receivables collected...................................... 4,268 320
Proceeds from sales of finance receivables......................... 8,691 9,988
Expenditures for property and equipment............................ (1,613) (1,413)
Expenditures for special tools..................................... (473) (431)
Proceeds from the sale of nonautomotive assets..................... 476 --
Other.............................................................. -- 108
-------- --------
NET CASH USED IN INVESTING ACTIVITIES......................... (1,375) (4,274)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in short-term debt (less than 90-day maturities)............ (1,137) (956)
Proceeds from long-term borrowings................................. 1,122 1,833
Payments on long-term borrowings................................... (1,075) (714)
Repurchases of common stock........................................ (1,110) (608)
Dividends paid..................................................... (455) (322)
Other.............................................................. 39 16
-------- --------
NET CASH USED IN FINANCING ACTIVITIES......................... (2,616) (751)
-------- --------
Change in cash and cash equivalents.................................. 92 (1,137)
Cash and cash equivalents at beginning of period..................... 5,543 5,145
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD........................... $ 5,635 $ 4,008
======== ========
</TABLE>
During the first six months of 1996, Chrysler Financial Corporation acquired
$750 million of marketable securities in non-cash transactions related to the
securitization of retail receivables.
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 unaudited 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 consolidated financial
statements of Chrysler for the three and six months ended June 30, 1996 and 1995
reflect all adjustments, consisting of only normal and recurring items, 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 six
months ended June 30, 1996 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, 1995. Certain amounts for 1995 have been reclassified to
conform with current period classifications.
NOTE 2. INVENTORIES
Inventories, summarized by major classification, were as follows:
<TABLE>
<CAPTION>
1996 1995
------- ----------------------
JUNE 30 DECEMBER 31 JUNE 30
------- ----------- -------
(IN MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Finished products, including service parts....................... $1,561 $1,232 $1,197
Raw materials, finished production parts and supplies............ 1,374 1,456 1,410
Vehicles held for short-term lease............................... 2,600 1,760 1,731
------ ------ ------
TOTAL....................................................... $5,535 $4,448 $4,338
====== ====== ======
</TABLE>
NOTE 3. CHANGES IN ACCOUNTING PRINCIPLES
Effective January 1, 1996, Chrysler adopted Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." The adoption of
this new accounting standard did not have a material impact on Chrysler's
consolidated operating results or financial position. Also see Note 8.
Effective January 1, 1995, Chrysler changed its accounting treatment for
vehicle sales for which Chrysler conditionally guarantees the minimum resale
value of the vehicles in accordance with the consensus reached on Emerging
Issues Task Force Issue 95-1, "Revenue Recognition on Sales with a Guaranteed
Minimum Resale Value." In accordance with the consensus, these vehicle sales are
accounted for as operating leases with the related revenues and costs deferred
at the time of shipment. A portion of the deferred revenues and costs is
recognized over the corresponding guarantee period, with the remainder
recognized at the end of the guarantee period. The average guarantee period for
these vehicles is approximately nine months. Implementation of this accounting
change resulted in the recognition of an after-tax charge of $96 million, or
$0.13 per common share, for the cumulative effect of this change in accounting
principle. Previously reported results for the six months ended June 30, 1995
have been restated to reflect the cumulative effect of this accounting change.
NOTE 4. TWO-FOR-ONE STOCK SPLIT
On May 16, 1996, Chrysler's Board of Directors declared a two-for-one stock
split to be effected in the form of a 100 percent stock dividend to be
distributed on July 15, 1996 to shareholders of record on June 15, 1996. All per
share data and the average common and dilutive equivalent shares outstanding
have been
4
<PAGE> 7
ITEM 1. FINANCIAL STATEMENTS -- CONTINUED
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
adjusted to reflect this stock split for all periods presented. The number of
common shares issued, outstanding and held in treasury as of June 30, 1996 have
been adjusted to reflect this stock split. In addition, the par value of the new
shares issued as a result of the two-for-one stock split has been transferred
from additional paid-in capital to common stock. Additional paid-in capital,
common stock balances, common shares issued, outstanding and held in treasury
for prior periods have not been restated for the two-for-one stock split.
NOTE 5. COMMON STOCK REPURCHASES
During the first quarter of 1996, Chrysler's Board of Directors approved an
increase in Chrysler's planned 1996 common stock repurchases from $1 billion to
$2 billion and approved an additional $1 billion of common stock repurchases for
1997. These common stock repurchases are subject to market and general economic
conditions. During the second quarter and first six months of 1996, Chrysler
repurchased 24.4 million and 36.1 million shares, respectively, of its common
stock at a cost of $786 million and $1,118 million, respectively (including $32
million in unsettled repurchases). Share amounts have been adjusted to reflect
the two-for-one stock split.
NOTE 6. SALE OF DEFENSE ELECTRONICS AND AIRBORNE SYSTEMS UNITS
On June 14, 1996, Chrysler completed the sale of Electrospace Systems, Inc.
("ESI") and Chrysler Technologies Airborne Systems, Inc. ("CTAS"), for net
proceeds of $476 million. ESI and CTAS are engaged principally in the
manufacture of defense electronics and aircraft modification, respectively, and
represent substantially all of the operations of Chrysler Technologies
Corporation. The sale resulted in a pretax gain of $101 million ($87 million
after taxes) and is included in Costs, other than items below in the
consolidated statement of earnings.
NOTE 7. PLANT PROVISION
The results of operations for the second quarter and first six months of
1995 include a $232 million provision ($143 million after taxes) for costs
associated with production changes at the Newark assembly plant. The provision
reflects the recognition of supplemental unemployment benefits, job security
benefits and other related employee costs, and the write-down of certain
equipment and tooling. The provision is included in Costs, other than items
below in the consolidated statement of earnings.
NOTE 8. LOSS ON ASSETS TO BE SOLD
Consistent with its strategy to focus on its core automotive business,
Chrysler has committed to a plan of disposal for Thrifty Rent-A-Car System, Inc.
("Thrifty") and is currently reviewing preliminary non-binding bids. In
accordance with SFAS No. 121, assets to be disposed of should be reported at the
lower of carrying value or fair value less cost to sell. As a result, a pretax
loss of $65 million ($100 million after taxes) was recognized in the second
quarter of 1996. The pretax loss is included in Costs, other than items below in
the consolidated statement of earnings. The after-tax loss includes the effect
of not being able to claim a tax deduction for the capital loss on Chrysler's
investment in Thrifty. Chrysler's assessment of the fair value of Thrifty was
based principally on an analysis of the preliminary non-binding bids. Thrifty's
assets and liabilities at June 30, 1996 were not material to Chrysler's
consolidated assets and liabilities. Thrifty's results of operations for the
three and six months ended June 30, 1996 were immaterial to Chrysler's
consolidated results of operations. The sale of Thrifty is expected to be
completed by the end of 1996.
5
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis should be read in conjunction with
the consolidated financial statements and notes thereto. All per share data has
been adjusted to reflect the two-for-one stock split.
FINANCIAL REVIEW
Chrysler reported earnings before income taxes and the cumulative effect of
a change in accounting principle of $1,720 million for the second quarter of
1996, compared with $238 million for the second quarter of 1995. For the first
six months of 1996, Chrysler reported earnings before income taxes and the
cumulative effect of a change in accounting principle of $3,390 million,
compared with $1,208 million for the first six months of 1995. Net earnings for
the second quarter of 1996 were $1,037 million, or $1.39 per common share,
compared with $135 million, or $0.17 per common share, for the second quarter of
1995. Net earnings for the first six months of 1996 were $2,042 million, or
$2.70 per common share, compared with $631 million, or $0.83 per common share,
for the first six months of 1995.
Earnings for the second quarter and first six months of 1996 include a gain
of $101 million ($87 million after taxes) from the sale of Electrospace Systems,
Inc. ("ESI") and Chrysler Technologies Airborne Systems, Inc. ("CTAS"), and a
charge of $65 million ($100 million after taxes) related to a write-down of
Thrifty Rent-A-Car System, Inc. ("Thrifty"). Earnings for the second quarter and
first six months of 1995 include a $232 million charge ($143 million after
taxes) for costs associated with production changes at Chrysler's Newark
assembly plant. Earnings for the first six months of 1995 include a charge of
$115 million ($71 million after taxes) for a voluntary minivan owner service
action. Net earnings for the first six months of 1995 include a charge of $96
million, or $0.13 per common share, for the cumulative effect of a change in
accounting principle related to the consensus reached on Emerging Issues Task
Force ("EITF") 95-1, "Revenue Recognition on Sales with a Guaranteed Minimum
Resale Value."
The following table summarizes this information:
<TABLE>
<CAPTION>
SECOND QUARTER SIX MONTHS
-------------- ----------------
1996 1995 1996 1995
------ ---- ------ ------
(IN MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C>
Earnings before income taxes and cumulative effect of a change
in accounting principle...................................... $1,720 $238 $3,390 $1,208
Gain on sale of ESI and CTAS................................... (101) -- (101) --
Thrifty write-down............................................. 65 -- 65 --
Newark charge.................................................. -- 232 -- 232
Voluntary minivan owner service action......................... -- -- -- 115
------ ---- ------ ------
Pretax earnings excluding items above........................ $1,684 $470 $3,354 $1,555
====== ==== ====== ======
</TABLE>
Excluding the items listed above, the improvement in operating results in
the second quarter and first six months of 1996 as compared with the second
quarter and first six months of 1995 resulted primarily from an increase in
shipments and a reduction in average sales incentives per vehicle. The increase
in shipments was primarily due to increased shipments of minivans and Dodge Ram
pickup trucks. Minivan shipments in the second quarter and first six months of
1995 were adversely affected by the changeover and launch of Chrysler's all-new
minivans. The increase in shipments of Dodge Ram pickup trucks in the second
quarter and first six months of 1996 primarily reflects production at two
additional facilities.
Chrysler's worldwide shipments in the second quarter and first six months
of 1996 were 801,769 units and 1,554,945 units, respectively, compared with
635,151 units and 1,349,916 units, respectively, in the second quarter and first
six months of 1995.
Chrysler's revenues and results of operations are principally derived from
the U.S. and Canada automotive marketplaces. In the second quarter of 1996,
retail sales of new cars and trucks in the U.S. and
6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- CONTINUED
FINANCIAL REVIEW -- CONTINUED
Canada, on a Seasonally Adjusted Annual Rate basis, were 16.7 million units,
compared with 15.9 million units for the second quarter of 1995, an increase of
5 percent.
Chrysler's U.S. and combined U.S. and Canada retail sales and market share
data for the second quarter and first six months of 1996 and 1995 were as
follows:
<TABLE>
<CAPTION>
SECOND QUARTER SIX MONTHS
-------------------------------- ------------------------------------
INCREASE/ INCREASE/
1996 1995 (DECREASE) 1996 1995 (DECREASE)
------- ------- ---------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
U.S. Retail Market(1):
Car sales....................... 256,119 228,183 27,936 471,266 442,219 29,047
Car market share................ 10.6% 9.7% 0.9% 10.5% 10.1% 0.4%
Truck sales (including
minivans).................... 448,467 384,104 64,363 824,626 694,648 129,978
Truck market share.............. 24.1% 21.9% 2.2% 23.5% 21.1% 2.4%
Combined car and truck sales.... 704,586 612,287 92,299 1,295,892 1,136,867 159,025
Combined car and truck market
share........................ 16.4% 14.9% 1.5% 16.2% 14.8% 1.4%
U.S. and Canada Retail Market(1):
Combined car and truck sales.... 773,017 680,505 92,512 1,417,695 1,253,637 164,058
Combined car and truck market
share........................ 16.7% 15.2% 1.5% 16.5% 15.1% 1.4%
</TABLE>
- -------------------------
(1) All retail sale and market share data include fleet sales.
Chrysler's U.S. car market share increased in the second quarter and first
six months of 1996 primarily as a result of increased sales of its midsize
sedans and coupes, including the new Plymouth Breeze and Chrysler Sebring
convertible. The increase in Chrysler's U.S. truck market share for the second
quarter and first six months of 1996 primarily reflects increased sales of its
Dodge Ram pickup trucks and minivans.
Chrysler Financial Corporation ("CFC") reported pretax earnings of $155
million for the second quarter of 1996 as compared with $127 million for the
second quarter of 1995. For the first six months of 1996, CFC reported pretax
earnings of $309 million as compared with $236 million for the first six months
of 1995. CFC's net earnings for the second quarter and first six months of 1996
were $101 million and $199 million, respectively, as compared with $86 million
and $155 million for the second quarter and first six months of 1995. The
increase in net earnings in the second quarter and first six months of 1996 as
compared with the corresponding 1995 periods primarily reflects higher average
receivables outstanding, net margin improvements due to lower effective
borrowing costs and higher gains from increased receivable sales.
7
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- CONTINUED
COMPARISON OF SELECTED ELEMENTS OF REVENUES AND EXPENSES
Chrysler's total revenues for the second quarter and first six months of
1996 and 1995 were as follows:
<TABLE>
<CAPTION>
SECOND QUARTER SIX MONTHS
-------------------------------- --------------------------------
INCREASE/ INCREASE/
1996 1995 (DECREASE) 1996 1995 (DECREASE)
------- ------- ---------- ------- ------- ----------
(IN MILLIONS OF DOLLARS) (IN MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Sales of manufactured products..... $14,858 $11,653 28% $28,902 $24,482 18%
Finance and insurance revenues..... 431 408 6% 880 788 12%
Other revenues..................... 550 455 21% 1,013 859 18%
------- ------- ------- -------
Total revenues................ $15,839 $12,516 27% $30,795 $26,129 18%
======= ======= ======= =======
</TABLE>
The increase in sales of manufactured products in the second quarter of
1996 as compared with the second quarter of 1995 primarily reflects a 26 percent
increase in vehicle shipments and an increase in average revenue per unit, net
of sales incentives, from $18,198 in the second quarter of 1995 to $18,649 in
the second quarter of 1996. The increase in sales of manufactured products in
the first six months of 1996 as compared with the first six months of 1995
primarily reflects a 15 percent increase in vehicle shipments and an increase in
average revenue per unit, net of sales incentives, from $17,964 in the first six
months of 1995 to $18,604 in the first six months of 1996. The increase in
average revenue per unit in the second quarter and first six months of 1996 was
principally due to pricing actions and a decrease in average sales incentives
per unit.
The increase in other revenues for the second quarter and first six months
of 1996 as compared with the corresponding 1995 periods was primarily due to the
recognition of lease revenue in accordance with EITF 95-1.
Chrysler's total expenses for the second quarter and first six months of
1996 and 1995 were as follows:
<TABLE>
<CAPTION>
SECOND QUARTER SIX MONTHS
------------------------------------ ------------------------------------
INCREASE/ INCREASE/
1996 1995 (DECREASE) 1996 1995 (DECREASE)
------- ------- ---------- ------- ------- ----------
(IN MILLIONS OF DOLLARS) (IN MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Costs, other than items
below................... $11,740 $10,049 17% $22,745 $20,565 11%
Depreciation and special
tools amortization...... 591 590 --% 1,202 1,153 4%
Selling and administrative
expenses................ 1,220 1,076 13% 2,307 2,084 11%
Employee retirement
benefits................ 306 293 4% 617 604 2%
Interest expense.......... 262 270 (3)% 534 515 4%
------- ------- ------- -------
Total expenses....... $14,119 $12,278 15% $27,405 $24,921 10%
======= ======= ======= =======
</TABLE>
Costs, other than items below increased in the second quarter and first six
months of 1996, as compared with the second quarter and first six months of
1995, primarily as a result of a 26 percent and 15 percent increase in vehicle
shipments, respectively. Costs, other than items below for the second quarter
and first six months of 1995 include a charge of $232 million related to
production changes at the Newark assembly plant. Costs, other than items below
for the first six months of 1995 include a $115 million provision related to a
voluntary minivan owner service action. Costs, other than items below were 79
percent of sales of manufactured products for both the second quarter and first
six months of 1996, compared with 86 percent and 84 percent for the second
quarter and first six months of 1995, respectively.
8
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- CONTINUED
COMPARISON OF SELECTED ELEMENTS OF REVENUES AND EXPENSES -- CONTINUED
Selling and administrative expenses for the second quarter and first six
months of 1996 increased as compared with the corresponding 1995 periods
primarily as a result of increased profit-based employee compensation costs and
advertising expenses.
Employee retirement benefits for the second quarter and first six months of
1996 were comparable to the corresponding 1995 periods. Employee retirement
benefits in the third quarter of 1996 are expected to increase as compared with
the third quarter of 1995 primarily as a result of costs associated with a
voluntary early retirement program offered to certain salaried employees in the
third quarter of 1996. The cost of this voluntary early retirement program is
estimated to be $50 million to $100 million, depending primarily on the number
of employees accepting the early retirement offer.
During the second quarter of 1996, Chrysler completed the sale of ESI and
CTAS for net proceeds of $476 million. ESI and CTAS are engaged principally in
the manufacture of defense electronics and aircraft modification, respectively,
and represent substantially all of the operations of Chrysler Technologies
Corporation. The sale resulted in a pretax gain of $101 million ($87 million
after taxes) and is included in Costs, other than items below in the
consolidated statement of earnings.
Consistent with its strategy to focus on its core automotive business,
Chrysler has committed to a plan of disposal for Thrifty and is currently
reviewing preliminary non-binding bids. In accordance with Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," assets to be
disposed of should be reported at the lower of carrying value or fair value less
cost to sell. As a result, a pretax loss of $65 million ($100 million after
taxes) was recognized in the second quarter of 1996. The pretax loss is included
in Costs, other than items below in the consolidated statement of earnings. The
after-tax loss includes the effect of not being able to claim a tax deduction
for the capital loss on Chrysler's investment in Thrifty. Chrysler's assessment
of the fair value of Thrifty was based principally on an analysis of the
preliminary non-binding bids. Thrifty's assets and liabilities at June 30, 1996
were not material to Chrysler's consolidated assets and liabilities. Thrifty's
results of operations for the three and six months ended June 30, 1996 were
immaterial to Chrysler's consolidated results of operations. The sale of Thrifty
is expected to be completed by the end of 1996.
LIQUIDITY AND CAPITAL RESOURCES
Chrysler's combined cash, cash equivalents and marketable securities
totaled $8.8 billion at June 30, 1996 (including $1.2 billion held by CFC and
the Car Rental Operations), compared with $8.1 billion at December 31, 1995
(including $1.2 billion held by CFC and the Car Rental Operations). The increase
in Chrysler's combined cash, cash equivalents and marketable securities in the
first six months of 1996 was primarily the result of cash generated by operating
activities, marketable securities acquired in a non-cash transaction related to
the securitization of retail receivables, and net proceeds from the sale of ESI
and CTAS, partially offset by capital expenditures, net debt repayments, common
stock repurchases and dividend payments.
During the first quarter of 1996, Chrysler's Board of Directors approved an
increase in Chrysler's planned 1996 common stock repurchases from $1 billion to
$2 billion and approved an additional $1 billion of common stock repurchases for
1997. These common stock repurchases are subject to market and general economic
conditions. During the second quarter and the first six months of 1996, Chrysler
repurchased 24.4 million and 36.1 million shares, respectively, of its common
stock at a cost of $786 million and $1,118 million, respectively (including $32
million in unsettled repurchases). Share amounts have been adjusted to reflect
the two-for-one stock split.
During the second quarter of 1996, Chrysler increased its quarterly common
dividend from $0.30 to $0.35 per common share. Dividends per common share
amounts have been adjusted to reflect the two-for-one stock split.
9
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- CONTINUED
LIQUIDITY AND CAPITAL RESOURCES -- CONTINUED
At June 30, 1996, Chrysler (excluding CFC) had debt maturities totaling
$318 million through 1998. During the second quarter of 1996, Chrysler replaced
its existing $1.7 billion revolving credit agreement, which was to expire in
July 1999, with a new $2.4 billion revolving credit agreement expiring in April
2001. No amounts were outstanding under either revolving credit agreement during
the second quarter of 1996. Chrysler believes that cash from operations and its
cash position will be sufficient to meet its capital expenditure, debt maturity,
common stock repurchase and other funding requirements.
Receivable sales continued to be a significant source of funding for CFC,
which realized $4.7 billion of net proceeds from the sale of automotive retail
receivables in the first six months of 1996 compared with $3.2 billion of net
proceeds in the first six months of 1995. In addition, securitization of
revolving wholesale account balances provided funding for CFC which aggregated
$6.6 billion and $7.3 billion at June 30, 1996 and 1995, respectively.
During the second quarter of 1996, CFC entered into new revolving credit
facilities which replaced its existing U.S. and Canadian credit facilities. The
new facilities, which total $8 billion, consist of a $2 billion facility
expiring in April 1997 and a $6 billion facility expiring in April 2001. As of
June 30, 1996, $10 million of this amount was utilized.
At June 30, 1996, CFC had contractual debt maturities of $2.3 billion for
the remainder of 1996, $2.9 billion in 1997 and $2.5 billion in 1998. CFC
believes that cash provided by operations, receivable sales, access to term debt
markets and the issuance of commercial paper will provide sufficient liquidity
to meet its debt maturity and other funding requirements.
During the second quarter of 1996, Chrysler completed the sale of ESI and
CTAS for net proceeds of $476 million.
Chrysler's strategy is to focus on its core automotive business. As part of
this strategy, Chrysler has sold certain assets and businesses which are not
related to its core automotive business, has committed to a plan of disposal for
Thrifty, and is exploring the sale of other such assets and businesses in the
near term.
NEW ACCOUNTING STANDARD
In June 1996, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 125, "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities." This Statement is
effective for transfers and servicing of financial assets and extinguishments of
liabilities occurring after December 31, 1996. Chrysler has not determined the
impact that the adoption of this accounting standard will have on its
consolidated operating results or financial position. Chrysler will adopt this
accounting standard on January 1, 1997, as required.
OUTLOOK
The statements contained in this Outlook section are based on management's
current expectations. With the exception of the historical information contained
herein, the statements presented in this Outlook section are forward-looking
statements that involve numerous risks and uncertainties. Actual results may
differ materially.
Chrysler's worldwide vehicle production in the second quarter of 1996 was
775,797 units, an increase of 181,371 units or 31 percent as compared with the
second quarter of 1995. Worldwide vehicle production for the third quarter of
1996 is expected to be approximately 608,100 units, an increase of approximately
65,200 units or 12 percent as compared with the third quarter of 1995. This
expected production level is heavily dependent on continued favorable economic
conditions in the U.S. and Canada, where Chrysler's sales are
10
<PAGE> 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- CONTINUED
OUTLOOK -- CONTINUED
concentrated. A significant weakening of economic conditions in the U.S. and
Canada or an interruption in production as a result of labor disputes could
result in the lowering of third-quarter 1996 planned production.
Chrysler's projections for full-year 1996 retail (including fleet) industry
sales for the U.S. and Canada are 15.5 million units and 1.2 million units,
respectively. Full-year 1995 retail (including fleet) industry sales were 15.1
million units and 1.2 million units in the U.S. and Canada, respectively. Actual
levels of industry retail (including fleet) sales will depend on, among other
things, economic conditions in the U.S. and Canada as well as the outcome of the
1996 labor negotiations. Accordingly, there can be no assurance that Chrysler's
estimates will be accurate.
At June 30, 1996, Chrysler had a total of approximately 128,000 employees
worldwide (117,000 in the U.S. and Canada). In the U.S. and Canada,
approximately 95 percent of Chrysler's hourly employees and 23 percent of its
salaried employees are represented by bargaining units. The existing national
agreements with Chrysler's principal U.S. and Canadian bargaining units will
expire in September 1996. While Chrysler negotiated its current labor agreements
without an interruption in production in 1993, it cannot predict whether
satisfactory agreements can be negotiated with its principal bargaining units in
1996 without an interruption in production. An interruption in production could
have a material adverse effect on Chrysler's consolidated operating results.
In addition, Chrysler wishes to caution readers that several factors, as
well as those factors described elsewhere in this discussion, or in other
Securities and Exchange Commission filings, in some cases have affected, and in
the future could affect, Chrysler's actual results and could cause Chrysler's
actual results for the remainder of 1996 and beyond to differ materially from
those expressed in any forward-looking statement made by, or on behalf of,
Chrysler. Those factors include: business conditions and growth in the
automotive industry and general economy; changes in consumer debt levels and
interest rates; changes in consumer preferences away from pickup trucks, sport
utility vehicles and minivans; competitive factors, such as domestic and foreign
rival car and truck offerings, sales incentives, acceptance of new products and
price pressures; excess or shortage of manufacturing capacity; and changes in
foreign exchange rates and the resulting impact on pricing strategies of major
foreign competitors. Additionally, many of Chrysler's competitors have larger
worldwide sales volumes and greater financial resources, which may, over time,
place Chrysler at a competitive disadvantage in responding to substantial
changes in consumer preferences, government regulations, or adverse economic
conditions in the U.S. and Canada. Finally, the automotive industry is highly
cyclical and the duration of cycles has historically been difficult to predict.
REVIEW BY INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP, Chrysler's independent public accountants, performed
a review of the financial statements for the three and six months ended June 30,
1996 and 1995 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.
11
<PAGE> 14
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Three of the four previously reported purported class action lawsuits that
alleged defects in the antilock braking system used in certain model year
vehicles (see page 16 of the 1995 Annual Report on Form 10-K) were voluntarily
dismissed, and one additional purported class action containing similar
allegations was filed. Chrysler has announced a recall involving the repair of
the antilock braking system on those vehicles.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of Stockholders of Chrysler Corporation was held on May
16, 1996.
(c) At the meeting, the following matters were submitted to a vote of the
stockholders of Chrysler Corporation(1):
(1) the election of the following nominees as directors of Chrysler
Corporation. The vote with respect to each nominee was as follows:
<TABLE>
<CAPTION>
NOMINEE FOR WITHHELD
------------------------------------------------------------- ------------ ----------
<S> <C> <C>
Lilyan H. Affinito........................................... 337,187,726 2,096,370
James D. Aljian.............................................. 336,366,878 2,917,218
Robert E. Allen.............................................. 337,163,653 2,120,443
Joseph A. Califano, Jr....................................... 336,599,841 2,684,255
Thomas G. Denomme............................................ 336,816,768 2,467,328
Robert J. Eaton.............................................. 336,762,377 2,521,719
Earl G. Graves............................................... 336,672,314 2,611,782
Kent Kresa................................................... 337,162,530 2,121,566
Robert J. Lanigan............................................ 337,316,372 1,967,724
Robert A. Lutz............................................... 336,815,464 2,468,632
Peter A. Magowan............................................. 337,386,851 1,897,245
John B. Neff................................................. 337,362,376 1,921,720
Malcolm T. Stamper........................................... 336,744,008 2,540,088
Lynton R. Wilson............................................. 337,318,786 1,965,310
</TABLE>
(2) a recommendation of the Board of Directors that the stockholders
appoint the firm of Deloitte and Touche LLP as independent accountants
to audit the books, records and accounts of Chrysler Corporation for
the year 1996. The vote on this matter was as follows:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
------------ ------- ------- ----------------
<S> <C> <C> <C>
337,957,237 536,393 790,466 -0-
</TABLE>
(3) a recommendation of the Board of Directors that the stockholders
approve an amendment to the Chrysler Corporation 1991 Stock
Compensation Plan to authorize the payment of Board of Directors'
compensation in shares of Chrysler Common Stock and restricted stock
units. The vote on this matter was as follows:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
------------ --------- --------- ----------------
<S> <C> <C> <C>
327,410,413 9,418,422 2,455,261 -0-
</TABLE>
- -------------------------
(1) Voting results have not been restated to reflect the two-for-one stock
split.
12
<PAGE> 15
ITEM 5. OTHER INFORMATION
SUPPLEMENTAL INFORMATION
CHRYSLER (WITH CFC AND CAR RENTAL OPERATIONS ON AN EQUITY BASIS)
STATEMENT OF EARNINGS (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------- -------------------
1996 1995 1996 1995
------- ------- ------- -------
(IN MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C>
Sales of manufactured products...................... $15,103 $11,776 $29,277 $24,721
Equity in earnings of unconsolidated subsidiaries
and affiliates.................................... 97 132 257 229
Interest income and other revenues.................. 202 125 374 246
------- ------- ------- -------
TOTAL REVENUES................................. 15,402 12,033 29,908 25,196
------- ------- ------- -------
Costs, other than items below....................... 11,737 9,968 22,708 20,397
Depreciation and special tools amortization......... 558 574 1,141 1,120
Selling and administrative expenses................. 1,033 912 1,945 1,764
Employee retirement benefits........................ 299 289 605 596
Interest expense.................................... 55 52 119 111
------- ------- ------- -------
TOTAL EXPENSES................................. 13,682 11,795 26,518 23,988
------- ------- ------- -------
EARNINGS BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE... 1,720 238 3,390 1,208
Provision for income taxes.......................... 683 103 1,348 481
------- ------- ------- -------
EARNINGS BEFORE CUMULATIVE EFFECT OF A CHANGE
IN ACCOUNTING PRINCIPLE...................... 1,037 135 2,042 727
Cumulative effect of a change in accounting
principle......................................... -- -- -- (96)
------- ------- ------- -------
NET EARNINGS................................... $ 1,037 $ 135 $ 2,042 $ 631
======= ======= ======= =======
</TABLE>
This 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." 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 5. OTHER INFORMATION -- CONTINUED
SUPPLEMENTAL INFORMATION
CHRYSLER (WITH CFC AND CAR RENTAL OPERATIONS ON AN EQUITY BASIS)
BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
-------- ------------------------
JUNE 30 DECEMBER 31 JUNE 30
-------- ------------ --------
(IN MILLIONS OF DOLLARS)
<S> <C> <C> <C>
ASSETS:
Cash and cash equivalents......................................... $ 5,327 $ 4,980 $ 3,781
Marketable securities............................................. 2,216 1,908 3,071
------- ------- -------
Total cash, cash equivalents and marketable securities............ 7,543 6,888 6,852
Accounts receivable -- trade and other............................ 2,156 816 680
Inventories....................................................... 4,640 3,762 3,540
Prepaid pension, taxes and other expenses......................... 670 948 885
Property and equipment............................................ 12,178 11,717 10,845
Special tools..................................................... 3,492 3,566 3,449
Investments in and advances to unconsolidated subsidiaries and
affiliated companies............................................ 3,699 3,755 3,692
Intangible assets................................................. 1,518 1,718 1,754
Deferred tax assets............................................... 1,749 1,978 1,881
Other assets...................................................... 5,658 5,327 5,019
------- ------- -------
TOTAL ASSETS............................................... $ 43,303 $ 40,475 $ 38,597
======= ======= =======
LIABILITIES:
Accounts payable.................................................. $ 8,133 $ 7,654 $ 7,234
Short-term debt................................................... 344 140 140
Payments due within one year on long-term debt.................... 47 48 27
Accrued liabilities and expenses.................................. 8,203 6,741 6,271
Long-term debt.................................................... 1,747 1,763 1,797
Accrued noncurrent employee benefits.............................. 9,327 9,156 8,882
Other noncurrent liabilities...................................... 4,080 4,014 3,832
------- ------- -------
TOTAL LIABILITIES.......................................... 31,881 29,516 28,183
------- ------- -------
SHAREHOLDERS' EQUITY: (shares in millions)
Preferred stock -- $1 per share par value; authorized 20.0 shares;
Series A Convertible Preferred Stock; issued and outstanding:
1996 -- 0.1; 1995 -- 0.1 and 0.3 shares, respectively (aggregate
liquidation preference 1996 -- $32 million; 1995 -- $68 million
and $128 million, respectively)................................. * * *
Common stock -- $1 per share par value; authorized 1,000.0 shares;
issued: 1996 -- 820.4; 1995 -- 408.2 shares and 404.9 shares,
respectively.................................................... 820 408 405
Additional paid-in capital........................................ 5,117 5,506 5,503
Retained earnings................................................. 7,816 6,280 5,318
Treasury stock -- at cost: 1996 -- 91.8 shares; 1995 -- 29.9 and
22.5 shares, respectively....................................... (2,331) (1,235) (812)
------- ------- -------
TOTAL SHAREHOLDERS' EQUITY................................. 11,422 10,959 10,414
------- ------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY................. $ 43,303 $ 40,475 $ 38,597
======= ======= =======
</TABLE>
- -------------------------
* Less than $1 million
This 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
covenant contained in Chrysler's revolving credit facility is 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.
14
<PAGE> 17
ITEM 5. OTHER INFORMATION -- CONTINUED
SUPPLEMENTAL INFORMATION
CHRYSLER (WITH CFC AND CAR RENTAL OPERATIONS ON AN EQUITY BASIS)
CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
------- -------
(IN MILLIONS OF
DOLLARS)
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES................................ $ 3,340 $ 2,283
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities..................................... (1,451) (2,111)
Sales and maturities of marketable securities.......................... 1,112 1,708
Expenditures for property and equipment................................ (1,263) (1,251)
Expenditures for special tools......................................... (473) (431)
Proceeds from sale of nonautomotive assets............................. 476 --
Other.................................................................. 63 (4)
------- -------
NET CASH USED IN INVESTING ACTIVITIES............................. (1,536) (2,089)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in short-term debt (less than 90-day maturities)................ 74 --
Proceeds from long-term borrowings..................................... 14 --
Payments on long-term borrowings....................................... (18) (470)
Repurchases of common stock............................................ (1,110) (608)
Dividends paid......................................................... (455) (322)
Other.................................................................. 38 15
------- -------
NET CASH USED IN FINANCING ACTIVITIES............................. (1,457) (1,385)
------- -------
Change in cash and cash equivalents...................................... 347 (1,191)
Cash and cash equivalents at beginning of period......................... 4,980 4,972
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD............................... $ 5,327 $ 3,781
======= =======
</TABLE>
This 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." 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.
15
<PAGE> 18
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 June
30, 1996.
16
<PAGE> 19
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: July 12, 1996 By J. D. Donlon, III
--------------------------------------
J. D. Donlon, III
Vice President and Controller
(Principal Accounting Officer)
17
<PAGE> 20
EXHIBIT INDEX
FOR QUARTERLY REPORT ON FORM 10-Q FOR THE
QUARTERLY PERIOD ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
EXHIBIT
- -------
<S> <C>
4-E Copy of $2,400,000,000 Revolving Credit Agreement, dated as of April 26, 1996, among
Chrysler Corporation, Chrysler Canada Ltd., the several Banks party to the
Agreement, Royal Bank of Canada, as Canadian Administrative Agent, and Chemical
Bank, as Administrative Agent for the Banks (Filed with this report).
11 Statement regarding computation of earnings per common share (Filed with this
report).
15A Letter, dated July 11, 1996, re unaudited interim information (Filed with this
report).
15B Letter, dated July 11, 1996, re unaudited interim information (Filed with this
report).
27 Financial Data Schedule for the six months ended June 30, 1996 (Filed with this
report).
</TABLE>
18
<PAGE> 1
EXHIBIT 4-E
EXECUTION COPY
========================================
$2,400,000,000
REVOLVING
CREDIT AGREEMENT
Dated as of April 26, 1996
CHRYSLER CORPORATION and
CHRYSLER CANADA LTD.,
as BORROWERS
ROYAL BANK OF CANADA,
as CANADIAN ADMINISTRATIVE AGENT
CHEMICAL BANK,
as ADMINISTRATIVE AGENT
========================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 1. DEFINITIONS..................................................... 1
1.1 Defined Terms................................................ 1
1.2 Other Definitional Provisions................................ 18
SECTION 2. THE U.S. COMMITMENTS............................................ 18
2.1 The U.S. Commitments......................................... 18
2.2 Procedure for U.S. Loan Borrowing............................ 18
2.3 Conversion and Continuation Options.......................... 19
2.4 Certain Matters Relating to Eurodollar Loans................. 19
2.5 Transfer of Commitments to CFC............................... 21
SECTION 3. THE CANADIAN COMMITMENTS........................................ 21
3.1 The Canadian Commitments..................................... 21
3.2 Procedure for C$ Prime Loan Borrowing........................ 22
3.3 Bankers' Acceptances......................................... 22
3.4 Conversion Option............................................ 25
3.5 Currency Fluctuations, etc................................... 25
SECTION 4. GENERAL PROVISIONS.............................................. 26
4.1 Repayment of Loans; Evidence of Debt......................... 26
4.2 Interest Rate and Payment Dates.............................. 27
4.3 Facility Fees................................................ 28
4.4 Lending Procedures........................................... 28
4.5 Termination or Reduction of Commitments...................... 29
4.6 Optional Prepayments......................................... 29
4.7 Computation of Interest and Fees............................. 29
4.8 Pro Rata Treatment and Payments.............................. 30
4.9 Increased Costs.............................................. 31
4.10 Capital Adequacy............................................. 32
4.11 Indemnity.................................................... 33
4.12 Use of Proceeds.............................................. 34
4.13 Replacement of Banks......................................... 34
SECTION 5. REPRESENTATIONS AND WARRANTIES.................................. 34
5.1 Financial Condition.......................................... 35
5.2 No Change.................................................... 35
5.3 Corporate Existence.......................................... 35
5.4 Corporate Authorization; No Violation........................ 35
5.5 Government Authorization..................................... 35
5.6 Federal Regulations.......................................... 35
5.7 Enforceable Obligations...................................... 36
5.8 No Material Litigation....................................... 36
5.9 Taxes........................................................ 36
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
SECTION 6. CONDITIONS PRECEDENT TO LOANS................................... 36
6.1 Conditions of Effectiveness.................................. 36
6.2 Conditions to All Facility Loans............................. 38
SECTION 7. AFFIRMATIVE COVENANTS........................................... 38
7.1 Financial Statements......................................... 38
7.2 Certificates; Other Information.............................. 39
7.3 Payment of Tax Liabilities................................... 39
7.4 Maintenance of Corporate Existence;
Compliance with Applicable Law............................... 39
7.5 Insurance.................................................... 40
7.6 Notices...................................................... 40
SECTION 8. NEGATIVE COVENANTS.............................................. 40
8.1 Indebtedness to Total Capitalization......................... 40
8.2 Limitation on Liens.......................................... 40
8.3 Limitation on Sales and Leasebacks........................... 42
8.4 Limitation on Fundamental Changes............................ 42
SECTION 9. EVENTS OF DEFAULT............................................... 42
SECTION 10. THE AGENT...................................................... 44
10.1 Appointment.................................................. 45
10.2 Delegation of Duties......................................... 45
10.3 Exculpatory Provisions....................................... 45
10.4 Reliance by Agents........................................... 45
10.5 Notice of Default............................................ 46
10.6 Non-Reliance on Agents and other Banks....................... 46
10.7 Indemnification.............................................. 46
10.8 Agents in their Individual Capacity.......................... 47
10.9 Successor Agent.............................................. 47
SECTION 11. FOREIGN CURRENCY SUBFACILITIES................................ 47
11.1 Terms of Foreign Currency Subfacilities...................... 47
11.2 Currency Fluctuations, etc................................... 49
SECTION 12. GUARANTEE.................................................... 50
12.1 Guarantee.................................................... 50
12.2 No Subrogation, Contribution, Reimbursement or Indemnity..... 50
12.3 Amendments, etc. with respect to the
Subsidiary Borrower Obligations.............................. 51
12.4 Guarantee Absolute and Unconditional......................... 51
12.5 Reinstatement................................................ 52
12.6 Payments..................................................... 52
12.7 Judgments Relating to Guarantee.............................. 53
12.8 Independent Obligations...................................... 54
SECTION 13. MISCELLANEOUS.................................................. 54
13.1 Amendments and Waivers....................................... 54
13.2 Notices...................................................... 55
13.3 No Waiver; Cumulative Remedies............................... 56
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
13.4 Survival of Representations and Warranties................... 56
13.5 Payment of Expenses and Taxes................................ 56
13.6 Successors and Assigns; Participations and Assignments....... 56
13.7 Right of Set-off............................................. 59
13.8 Adjustments.................................................. 59
13.9 New Banks; Commitment Increases; Commitment
Reallocations................................................ 60
13.10 Counterparts................................................. 61
13.11 Judgments Relating to Chrysler Canada........................ 61
13.12 WAIVERS OF JURY TRIAL........................................ 62
13.13 GOVERNING LAW................................................ 62
13.14 Integration.................................................. 63
SCHEDULES
Schedule I - Commitments
Schedule II - Liens Permitted Under Subsection 8.2(a)
EXHIBITS
Exhibit A - Form of New Bank Supplement
Exhibit B - Form of Commitment Increase Supplement
Exhibit C - Form of Opinion of Simpson Thacher & Bartlett
Exhibit D-1 - Form of Opinion of General Counsel to Chrysler
Exhibit D-2 - Form of Opinion of Fasken Campbell Godfrey,
Canadian Counsel to Chrysler Canada
Exhibit E-1 - Form of Assignment and Acceptance
Exhibit E-2 - Form of Commitment Reallocation Supplement
Exhibit F-1 - Form of Addendum
Exhibit F-2 - Form of Foreign Currency Subfacility Addendum
Exhibit G - Form of Closing Certificate
Exhibit H - Form of Promissory Note
</TABLE>
<PAGE> 5
REVOLVING CREDIT AGREEMENT dated as of April 26, 1996 among CHRYSLER
CORPORATION, a Delaware corporation ("Chrysler"), CHRYSLER CANADA LTD., a
Canadian corporation ("Chrysler Canada"), the several commercial banks from
time to time parties to this Agreement (as more specifically defined below,
the"Banks"), ROYAL BANK OF CANADA, a Canadian chartered bank ("Royal"), as
Canadian administrative agent for the C$ Banks (as defined below) hereunder,
and CHEMICAL BANK, a New York banking corporation ("Chemical"), as
administrative agent for the Banks hereunder.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1. 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):
"Acceptance Fee": the fee payable in C$ to each C$ Bank in respect
of Bankers' Acceptances computed in accordance with subsection 3.3.
"Addendum": an addendum substantially in the form of Exhibit F-1.
"Administrative 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.
"Agents": the collective reference to the Administrative Agent and
the Canadian Administrative Agent.
"Aggregate Canadian Extensions of Credit": with respect to any C$
Bank, at any time, the aggregate principal amount of all C$ Loans (US$
Equivalent) made by such Bank then outstanding.
"Aggregate Foreign Extensions of Credit": with respect to any US$
Bank, at any time, the sum of (a) the aggregate Foreign Currency
Subfacility Maximum Borrowing Amounts with respect to such Bank under any
Foreign Committed Subfacility to which it is a party and (b) the
aggregate outstanding principal amount of all Foreign Currency Loans (US$
Equivalent) made by such Bank under any Foreign Uncommitted Subfacility
to which it is a party.
"Aggregate U.S. Extensions of Credit": with respect to any US$
Bank, at any time, the aggregate principal amount of all U.S. Loans made
by such Bank then outstanding.
"Aggregate U.S./Foreign Extensions of Credit": with respect to any
US$ Bank, at any time, the sum of the Aggregate Foreign Extensions of
Credit of such Bank and the Aggregate U.S. Extensions of Credit of such
Bank at such time.
"Agreement": this Revolving Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
"Applicable BA Discount Rate":
<PAGE> 6
2
(a) with respect to any Schedule I C$ Bank, as applicable to a
Bankers' Acceptance being purchased by such Schedule I C$ Bank on any day,
the average (as determined by the Canadian Administrative Agent) of the
respective percentage discount rates (expressed to two decimal places and
rounded upward, if necessary, to the nearest 1/100th of 1%) quoted to the
Canadian Administrative Agent by each Schedule I C$ Reference Bank as the
percentage discount rate at which such Schedule I C$ Reference Bank would,
in accordance with its normal practices, at or about 10:00 A.M., Toronto
time, on such day, be prepared to purchase bankers' acceptances accepted by
such Schedule I Reference C$ Bank having a maturity date comparable to the
maturity date of such Bankers' Acceptance; and
(b) with respect to any Schedule II C$ Bank, as applicable to a
Bankers' Acceptance being purchased by such Schedule II C$ Bank on any day,
the average (as determined by the Canadian Administrative Agent) of the
respective percentage discount rates (expressed to two decimal places and
rounded upward, if necessary, to the nearest 1/100th of 1%) quoted to the
Canadian Administrative Agent by each Schedule II C$ Reference Bank as the
percentage discount rate at which such Schedule II C$ Reference Bank would,
in accordance with its normal practices, at or about 10:00 A.M., Toronto
time, on such day, be prepared to purchase bankers' acceptances accepted by
such Schedule II Reference C$ Bank having a maturity date comparable to the
maturity date of such Bankers' Acceptance.
"Applicable Margin": with respect to each Eurodollar Loan or
Bankers' Acceptance at any date, the applicable percentage per annum set
forth below based upon the Status and U.S. Utilization or Canadian
Utilization, as applicable, on such date (provided that if the Commitments
have been terminated prior to such date, the U.S. Utilization and Canadian
Utilization for such date shall be deemed to be greater than 50%):
<TABLE>
<CAPTION>
Level I Level II Level III Level IV Level V
U.S./Canadian Status Status Status Status Status
- -------------- ------- -------- --------- -------- -------
Utilization
- -----------
<S> <C> <C> <C> <C> <C>
Less than or equal to 50%: 0.1300% 0.1600% 0.2250% 0.2500% 0.5000%
Greater than 50%: 0.2550% 0.2850% 0.3500% 0.3750% 0.6250%
</TABLE>
"Assignee": as defined in subsection 13.6(c).
"Available Chrysler/CFC Commitment": as to any US$ Bank, at a
particular time, an amount equal to the excess, if any, of (a) the amount
of such Bank's U.S. Base Commitment at such time over (b) the Aggregate
U.S./Foreign Extensions of Credit of such Bank at such time plus the
unpaid principal amount at such time of all CFC Loans made by such Bank
pursuant to the CFC Commitment Transfer Agreement; collectively, as to
all the US$ Banks, the "Available Chrysler/CFC Commitments".
"Available Canadian Commitment": as to any C$ Bank, at a particular
time, an amount equal to the excess, if any, of (a) the amount of such
Bank's Canadian Commitment at such time over (b) the Aggregate Canadian
Extensions of Credit of such Bank at such time.
<PAGE> 7
3
"Available U.S. Commitment": as to any US$ Bank, at a particular
time, an amount equal to the excess, if any, of (a) the amount of such
Bank's U.S. Commitment at such time over (b) the Aggregate U.S./Foreign
Extensions of Credit of such Bank at such time.
"BA Discount Proceeds": in respect of any Bankers' Acceptance to be
purchased by a C$ Bank on any day under subsection 3.3, an amount
(rounded to the nearest whole Canadian cent, and with one-half of one
Canadian cent being rounded up) calculated on such day by dividing:
(i) the face amount of such Bankers' Acceptance; by
(ii) the sum of one plus the product of:
(1) the Applicable BA Discount Rate (expressed as a
decimal) applicable to such Bankers' Acceptance;
and
(2) a fraction, the numerator of which is the number of
days remaining in the term of such Bankers'
Acceptance and the denominator of which is 365;
with such product being rounded up or down to the
fifth decimal place and .000005 being rounded up.
"Bankers' Acceptance": a bill of exchange denominated in C$ drawn
by Chrysler Canada and accepted by a C$ Bank pursuant to subsection 3.3.
"Banking Day": in respect of any city, any day on which commercial
banks are open for business (including dealings in foreign exchange and
foreign currency deposits) in that city.
"Bank Rate": the upper limit of the Bank of Canada operating band
for overnight loans as announced from time to time.
"Banks": as defined in the caption to this Agreement; provided,
that (a) each reference herein to any Bank shall be deemed to be a
reference to each US$ Bank and to each C$ Bank unless the context
otherwise requires (in which case such reference shall be deemed to be a
reference only to each US$ Bank or to each C$ Bank, as applicable) and
(b) each reference herein to any Bank shall, to the extent applicable, be
deemed to be a reference to any subsidiary, affiliate, branch or agency
of any Bank which is a party to a Foreign Currency Subfacility.
"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
<PAGE> 8
4
Day, the average of the quotations for the day of such transactions
received by the Administrative 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": U.S. 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 2.2, 3.2 or 3.3 as a date on which a Facility Borrower
requests the Banks to make Facility 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 (a) when used in connection with a Eurodollar Loan
with respect to which the Eurodollar Rate is determined based upon the
Telerate screen in accordance with the definition of Eurodollar Rate,
"Business Day" shall mean any Business Day on which dealings in foreign
currencies and exchange between banks may be carried on in London, England
and New York City and (b) when used in connection with a C$ Loan, "Business
Day" shall mean a day on which banks are open for business in Toronto,
Ontario, Canada but excludes Saturday, Sunday and any other day which is a
legal holiday in Toronto, Ontario, Canada.
"C$ Bank": each Bank designated as a "C$ Bank" on Schedule I, as
such Schedule may be modified from time to time pursuant to subsection
13.6 or 13.9.
"C$ Commitment Percentage": as to any C$ Bank at any time, the
percentage of the aggregate Canadian Commitments then constituted by such
Bank's Canadian Commitment.
"C$ Loans": the collective reference to C$ Prime Loans and Bankers'
Acceptances. For the purposes of this Agreement, the principal amount of
any C$ Loan constituting a Bankers' Acceptance shall be deemed to be the
face amount of such Bankers' Acceptance.
"C$ Prime Loans": C$ Loans at such time as they bear interest at a
rate based upon the Canadian Prime Rate.
"CAFE": Corporate Average Fuel Economy Standards promulgated by the
United States Department of Transportation.
"Canadian Administrative Agent": Royal, in its capacity as Canadian
administrative agent for the C$ Banks under this Agreement, together with
any of its successors.
"Canadian Calculation Date": the Business Day immediately preceding
the Effective Date and the last Business Day of each calendar month.
"Canadian Commitment": as to any C$ Bank, its obligation to make C$
Loans and purchase Bankers' Acceptances, to or from Chrysler Canada
hereunder in an aggregate principal amount (US$ Equivalent) at any one time
outstanding not to exceed the amount
<PAGE> 9
5
(expressed in Dollars) set forth opposite such Bank's name on Schedule I,
as such amount may be changed from time to time as provided herein.
"Canadian Dollars" or "C$": lawful currency of Canada.
"Canadian Exchange Rate": on a particular date, the rate at which
C$ may be exchanged into Dollars, determined by reference to the Bank of
Canada noon rate as published on the Reuters Screen page BOFC. In the
event that such rate does not appear on such Reuters page, the "Canadian
Exchange Rate" shall be determined by reference to any other means (as
selected by the Canadian Administrative Agent) by which such rate is quoted
or published from time to time by the Bank of Canada; provided, that if at
the time of any such determination, for any reason, no such exchange rate
is being quoted or published, the Canadian Administrative Agent may use any
reasonable method as it deems applicable to determine such rate, and such
determination shall be conclusive absent manifest error.
"Canadian Facility Fee": as defined in subsection 4.3(b).
"Canadian Prime Rate": with respect to a C$ Prime Loan, on any day,
the greater of (a) the annual rate of interest announced from time to time
by Royal as its reference rate then in effect for determining interest
rates on C$ denominated commercial loans in Canada and (b) the annual rate
of interest equal to the sum of (i) the CDOR Rate and (ii) 0.75% per annum.
"Canadian Register": as defined in subsection 13.6(d).
"Canadian Reset Date": as defined in subsection 3.5(a).
"Canadian Utilization": with respect to any Utilization Period, the
percentage equivalent of a fraction (a) the numerator of which is the
average daily principal amount of C$ Loans (US$ Equivalent) outstanding
during such Utilization Period and (b) the denominator of which is the
average daily amount of the aggregate Canadian Commitments of all C$
Banks during such Utilization Period.
"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.
"CDOR Rate": on any day, the annual rate of interest which is the
rate based on an average 30 day rate applicable to C$ bankers' acceptances
appearing on the "Reuters Screen CDOR Page" (as defined in the
International Swap Dealer Association, Inc. definitions, as modified and
amended from time to time) as of 10:00 A.M., Toronto time, on such day, or
if such day is not a Business Day, then on the immediately preceding
Business Day; provided, however, if such rate does not appear on the
Reuters Screen CDOR Page as contemplated, then
<PAGE> 10
6
the CDOR Rate on any day shall be calculated as the arithmetic mean of the
30 day rates applicable to C$ bankers' acceptances quoted by the Schedule I
C$ Reference Banks as of 10:00 A.M., Toronto time, on such day, or if such
day is not a Business Day, then on the immediately preceding Business Day.
If less than all of the Schedule I C$ Reference Banks quote the
aforementioned rate on the days and at the times described above, the "CDOR
Rate" shall be such other rate or rates as the Canadian Administrative
Agent and Chrysler Canada may agree.
"CFC": Chrysler Financial Corporation, a Michigan corporation.
"CFC Commitment Transfer Agreement": as defined in subsection 2.5.
"CFC Loan": any "Loan" under and as defined in the CFC Commitment
Transfer Agreement.
"Chartered Bank": a bank named on Schedule I or Schedule II to the
Bank Act (Canada).
"Chrysler Mexican Subsidiary": any Subsidiary of Chrysler organized
under the laws of Mexico.
"Chrysler Technologies": Chrysler Technologies Corporation, a
Michigan corporation.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Commercial Bank": (a) with respect to the U.S. Commitments and the
U.S. Loans thereunder, any Person (i) licensed to engage in commercial
banking business and (ii) which on the date it becomes a Bank (or purchases
a participation) hereunder (x) is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal
income taxes and (y) is entitled to an exemption from, or is not subject
to, United States backup withholding tax and (b) with respect to the
Canadian Commitments and the C$ Loans thereunder, any Chartered Bank which
(except in the case of participations) has a Related US$ Bank.
"Commitment": as to any Bank, the sum of such Bank's U.S.
Commitment and Canadian Commitment.
"Commitment Percentage": as to any Bank at a particular time, the
percentage of the aggregate Commitments then constituted by such Bank's
Commitment.
"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 13.6(c) or 13.9, as the case may be) to but not including the
Termination Date or such earlier date as such Commitment shall terminate
as provided herein.
<PAGE> 11
7
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with Chrysler 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
Chrysler makes motor vehicles available for lease to certain current and
former employees of Chrysler 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 Chrysler'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 9(c), any of the
events specified in Section 9, 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.
"Designated Canadian Commitment Amount": with respect to each C$
Bank at a particular time, the Designated Canadian Percentage of such C$
Bank's Canadian Commitment then in effect; provided, that in the event
that C$ Loans shall be outstanding after the Canadian Commitments shall
have been terminated, the "Designated Canadian Commitment Amount" of such
C$ Bank, on any day, shall be deemed to equal the Designated Canadian
Percentage of the aggregate principal amount of the C$ Loans (US$
Equivalent) made by such C$ Bank outstanding on such day.
"Designated Canadian Percentage": a percentage which may be
specified by each C$ Bank, and may be changed from time to time, by written
notice to each Facility Borrower and each Agent; provided, that if no such
percentage has been so specified, such percentage shall be deemed to be
zero. Each such notice shall, unless otherwise agreed by each Facility
Borrower, be furnished within a 30-day period commencing on the Effective
Date or commencing on an anniversary of the Effective Date.
"Dollars" or "$": lawful currency of the United States.
"Effective Date": subject to satisfaction of the conditions set
forth in subsection 6.1, April 26, 1996.
"Environmental Laws": any and all Federal, foreign, state,
provincial, local and municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees and requirements of any Governmental Authority
regulating, relating to or imposing liability or
<PAGE> 12
8
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.
"Eurodollar Loans": U.S. Loans at such time as they are made and/or
being maintained at a rate of interest based upon the Eurodollar Rate.
"Eurodollar Rate": in the case of any Eurodollar Loan, with respect
to each day during each Interest Period pertaining to such Eurodollar Loan,
the rate of interest determined on the basis of the rate for deposits in
Dollars for a period equal to such Interest Period commencing on the first
day of such Interest Period appearing on Page 3750 of the Telerate screen
as of 11:00 A.M., London time, two Business Days prior to the beginning of
such Interest Period, provided, that in the event that such rate does not
appear on Page 3750 of the Telerate Service (or otherwise on such service),
the "Eurodollar Rate" shall be determined by reference to such other
publicly available service for displaying eurodollar rates as may be agreed
upon by the Administrative Agent and Chrysler. In the absence of such
agreement, the "Eurodollar Rate" shall instead be the rate per annum equal
to the average (rounded upward, if necessary, to the nearest 1/100th of 1%)
of the respective rates notified to the Administrative Agent by each of the
Eurodollar Reference Banks as the rate at which such Eurodollar Reference
Bank is offered Dollar deposits at or about 10:00 A.M., New York City time,
two Business Days prior to the beginning of the relevant Interest Period,
in the interbank eurodollar market where the eurodollar and foreign
currency and exchange operations in respect of its Eurodollar Loans are
then being conducted 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 its Eurodollar Loan to be outstanding during such Interest
Period.
"Eurodollar Reference Banks": Chemical, Royal and Credit Suisse or
such successor bank as shall be chosen in accordance with subsection
4.7(c).
"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 9(c),
any of the events specified in Section 9, 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.
"Excess U.S. Utilization Period": any Utilization Period with
respect to which the U.S. Utilization exceeds 50%.
"Excluded Subsidiaries": Chrysler Technologies, each of its
subsidiaries, CFC, each of its subsidiaries, each Receivable Finance
Company and the Car Rental Operations.
<PAGE> 13
9
"Existing Credit Agreements": the collective reference to (i) the
Revolving Credit Agreement dated as of July 29, 1994 among Chrysler, the
several commercial banks parties thereto, Chemical, as agent, and
Chemical Securities Inc. as arranger and (ii) the Amended and Restated
Credit Agreement dated as of August 1, 1994 among Chrysler Canada, the
lenders parties thereto and Royal, as agent.
"Facility Borrowers": the collective reference to Chrysler and
Chrysler Canada.
"Facility Fee": any U.S. Facility Fee or Canadian Facility Fee.
"Facility Fee Rate": for any day, the rate per annum set
forth below opposite the Status in effect on such day:
<TABLE>
<CAPTION>
Facility Fee
Status Rate
------- ------------
<S> <C>
Level I Status 0.0700%
Level II Status 0.0900%
Level III Status 0.1250%
Level IV Status 0.2000%
Level V Status 0.2500%
</TABLE>
"Facility Loans": the collective reference to the U.S. Loans and
the C$ Loans.
"Federal Funds Effective Rate": as defined in the definition of
Base Rate.
"Final Date": the later of (a) the Termination Date and (b) the
date on which all of the Loans and CFC Loans shall have been paid in
full.
"Fitch": Fitch Investors Service, Inc. or its successors.
"Fitch Bond Rating": for any day, the rating of Chrysler'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.
"Foreign Borrowers": the collective reference to (a) the Foreign
Subsidiary Borrowers and (b) if applicable, Chrysler in its capacity as a
borrower under any Foreign Currency Subfacility.
"Foreign Calculation Date": the last Business Day of each calendar
month.
<PAGE> 14
10
"Foreign Committed Subfacility": any Foreign Currency Subfacility
designated as a "Foreign Committed Subfacility" pursuant to the relevant
Foreign Currency Subfacility Addendum.
"Foreign Currency": Dollars and any currency other than Dollars as
to which a Foreign Exchange Rate may be calculated.
"Foreign Currency Loans": any loan made pursuant to a Foreign
Currency Subfacility.
"Foreign Currency Subfacility": any credit facility providing for
borrowings in a Foreign Currency which has been designated as a "Foreign
Currency Subfacility" pursuant to a Foreign Currency Subfacility
Addendum.
"Foreign Currency Subfacility Addendum": a Foreign Currency
Subfacility Addendum substantially in the form of Exhibit F-2 and
conforming to the requirements of Section 11.
"Foreign Currency Subfacility Maximum Borrowing Amount": as defined
in subsection 11.1(b).
"Foreign Exchange Rate": with respect to any Foreign Currency
(other than Dollars) on a particular date, the rate at which such Foreign
Currency may be exchanged into Dollars, equal to the average (rounded
upward, if necessary, to the nearest 1/100th of 1%) of the respective
rates notified to the Administrative Agent by each of the Foreign
Exchange Reference Banks as the spot rate of exchange in the interbank
market where its foreign currency exchange operations in respect of such
Foreign Currency are then being conducted, at or about 12:00 noon, local
time, at such date for the purchase of Dollars with such Foreign
Currency, for delivery two Banking Days later; provided, that if at the
time of any such determination, for any reason, no such spot rate is
being quoted by the Foreign Exchange Reference Banks, the Administrative
Agent may use anary which is a borrower under a Foreign Currency
Subfacility.
"Foreign Uncommitted Subfacility": any Foreign Currency Subfacility
designated as a "Foreign Uncommitted Subfacility" pursuant to the
relevant Foreign Currency Subfacility Addendum.
"GAAP": generally accepted accounting principles in the United
States of America and, to the extent applicable, Canada, in effect from
time to time, except that for purposes of determining compliance with the
covenants set forth in subsections 8.1 and 8.2(n), "GAAP" shall mean
generally accepted accounting principles in the United States of America
("U.S. GAAP") and, to the extent applicable, Canada, in effect on
December 31, 1995 applied, in the case of U.S. GAAP, consistently with
those used in compiling the audited financial statements referred to in
subsection 5.1.
"Governmental Authority": any nation or government, any state,
province or other political subdivision thereof, and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
<PAGE> 15
11
"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": as applied to any Person, without duplication: (a)
any indebtedness of such Person or any of its Subsidiaries for borrowed
money or for the deferred purchase price of property or services, (b) any
withdrawal obligation of such Person or any of its Subsidiaries to a
Multiemployer Plan, (c) all Capital Lease Obligations of such Person 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
such Person or any of its Subsidiaries and (e) all liabilities secured by
any Lien on any property owned by such Person or any of its Subsidiaries
even though such Person 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 8.1, "Indebtedness" shall include obligations of the types
described in clauses (a) through (e) of this definition of Chrysler
Technologies and its subsidiaries.
"Initial Offered Canadian Commitment Amount": with respect to each
C$ Bank, the amount specified opposite such Bank's name on Schedule I in
the column captioned "Initial Offered Canadian Commitment Amount", which
amount shall equal the commitment amount offered by such Bank in
connection with the initial syndication of the Canadian Commitments.
"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
Chrysler in its notice of borrowing or notice of conversion, as the case
may be, given with respect thereto; and
(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 Chrysler
by irrevocable notice to the Administrative 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:
<PAGE> 16
12
(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 or Level V.
"Level I": (i) an S&P Bond Rating of A+ or better, (ii) a Moody's
Bond Rating of A1 or better, (iii) a D&P Bond Rating of A+ or better and
(iv) a Fitch Bond Rating of A+ or better.
"Level II": (i) an S&P Bond Rating of A or A-, (ii) a Moody's Bond
Rating of A2 or A3, (iii) a D&P Bond Rating of A or A- and (iv) a Fitch
Bond Rating of A or A-.
"Level III": (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 IV": (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 V": (i) an S&P Bond Rating of BB+ (or lower ) or unrated,
(ii) a Moody's Bond Rating of Ba1 (or lower) or unrated, (iii) a D&P Bond
Rating of BB+ (or lower) or unrated and (iv) a Fitch Bond Rating of BB+
(or lower) or unrated.
"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": the collective reference to the Facility Loans and the
Foreign Currency Loans.
"Moody's": Moody's Investors Service, Inc. or its successors.
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"Moody's Bond Rating": for any day, the rating of Chrysler'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 13.9.
"New Venture Gear": New Venture Gear, Inc., a Delaware corporation.
"Other Taxes": as defined in the definition of "Taxes".
"Pentastar": Pentastar Transportation Group, Inc., an Oklahoma
corporation.
"Permitted Encumbrances": (a) Liens for taxes not yet due or which
are being contested in good faith by appropriate actions, provided that
adequate reserves with respect thereto are maintained on the books of
Chrysler 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 actions 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 Chrysler.
"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 Chrysler 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": the collective reference to the Eurodollar
Reference Banks, the Foreign Exchange Reference Banks, the Schedule I C$
Reference Banks and the Schedule II C$ Reference Banks.
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14
"Registers": the collective reference to the U.S. Register and the
Canadian Register.
"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.
"Related C$ Bank": as defined in the definition of "US$ Bank
Combined Commitment".
"Related US$ Bank": as defined in the definition of "US$ Bank
Combined Commitment".
"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 or for purposes of determining
whether to accelerate the Loans pursuant to Section 9, Banks holding at
least 51% of the outstanding principal amount of the Loans (US$
Equivalent).
"Required Canadian Banks": at any date, C$ Banks having at least
51% of the aggregate amount of the Canadian Commitments at such date.
"Required U.S. Banks": at any date, US$ Banks having at least 51%
of the aggregate amount of the U.S. Commitments at such date.
"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 Chrysler or Chrysler Canada,
as the case may be. Each certificate furnished by a Responsible Officer
hereunder shall be treated as a certificate on behalf of the relevant
Facility Borrower and no Responsible Officer shall have any personal
liability in connection therewith.
"S&P": Standard & Poor's Ratings Services or its successors.
<PAGE> 19
15
"S&P Bond Rating": for any day, the rating of Chrysler'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.
"Schedule I C$ Bank": any C$ Bank named on Schedule I to the Bank
Act (Canada).
"Schedule I Reference C$ Banks": the collective reference to Royal,
The Bank of Nova Scotia and Canadian Imperial Bank of Commerce.
"Schedule II C$ Bank": any C$ Bank named on Schedule II to the Bank
Act (Canada).
"Schedule II Reference C$ Banks": the collective reference to
Chemical Bank of Canada, ABN Amro Bank Canada and Morgan Bank of Canada.
"Status": as to Chrysler, the existence of Level I, Level II, Level
III, Level IV or Level V, as the case may be. For the purposes of this
definition, "Status" will be set at the lowest Level assigned to Chrysler
by any Rating Agency, unless only one Rating Agency has assigned such Level
to Chrysler, in which case the Status will be set at the second lowest
Level assigned to Chrysler by any Rating Agency. Level I shall be deemed
to be the highest Level and Level V shall be deemed to be the lowest
Level.
"Subsidiary": at a particular time, any corporation that would then
be required to be included as a consolidated subsidiary of Chrysler in the
financial statements contained in an annual report prepared by Chrysler 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, Chrysler de Mexico, S.A. and
any other Subsidiary the assets of which then constitute at least 10% of
the consolidated assets of Chrysler 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 Chrysler.
"Subsidiary Borrowers": the collective reference to Chrysler Canada
and the Foreign Subsidiary Borrowers.
"Subsidiary Borrower Obligations": with respect to each Subsidiary
Borrower, the unpaid principal of and interest on (including, without
limitation, interest accruing after the maturity of the Loans made to such
Subsidiary Borrower and interest accruing after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to such Subsidiary Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such
proceeding) the Loans made to such Subsidiary Borrower and all other
obligations and liabilities of such Subsidiary Borrower to any Agent or to
any Bank, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, this
<PAGE> 20
16
Agreement, any Foreign Currency Subfacility or any other document made,
delivered or given in connection herewith or therewith, whether on account
of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees, charges and
disbursements of counsel to any Agent or to any Bank that are required to
be paid by such Subsidiary Borrower pursuant to this Agreement or any
Foreign Currency Subfacility) or otherwise.
"Taxes": all net income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, imposed, levied,
collected, withheld or assessed by any country (or by any political
subdivision or taxing authority thereof or therein), excluding, with
respect to any Bank, net income taxes, franchise taxes imposed in lieu of
net income taxes, and Canadian capital and large corporations taxes, in
each case imposed by any country (or any political subdivision or taxing a
26, 2001, or such earlier date as the Commitments shall terminate as
provided herein.
"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 Chrysler) of the capital stock of Chrysler,
(ii) the par value (or stated value on the books of Chrysler) of the
preferred stock of Chrysler, (iii) the aggregate amount of additional
paid-in capital of Chrysler and (iv) retained earnings (or minus
accumulated deficit) of Chrysler less (v) treasury stock (at cost) of
Chrysler, 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 Chrysler's past practices.
"Transferred Commitment": as defined in subsection 2.5(a).
"Type": as to any U.S. Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"US$ Bank": each Bank designated as a "US$ Bank" on Schedule I, as
such Schedule may be modified from time to time pursuant to subsection
13.6 or 13.9.
"US$ Bank Combined Commitment": as to any US$ Bank, the sum of (a)
such Bank's U.S. Base Commitment and (b) if such Bank has a Related C$
Bank, such Related C$ Bank's Canadian Commitment; provided, that in the
event that Loans or CFC Loans shall be outstanding after the Commitments
shall have been terminated, the "US$ Bank Combined Commitment" of each US$
Bank, on any day, shall be deemed to equal the aggregate principal amount
of the Loans (US$ Equivalent) and CFC Loans made by such Bank (or, if
applicable, such Bank's Related C$ Bank) outstanding on such day. For the
purposes of this Agreement, (i) "Related C$ Bank" means, with respect to
any US$ Bank, as applicable, either (x) such Bank in its capacity as a C$
Bank or (y) any subsidiary, affiliate, branch or agency of such Bank which
is a C$ Bank and (ii) "Related US$ Bank" means, with respect to any C$
Bank, as applicable, either (x) such Bank in its capacity as a US$ Bank or
(y) any subsidiary, affiliate, branch or agency of such Bank which is a US$
Bank. The entry by any US$ Bank into any Foreign Currency Subfacility
shall have no effect on the amount of the US$ Bank Combined Commitment of
such Bank.
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"US$ Bank Net Combined Commitment": with respect to each US$ Bank,
an amount equal to such US$ Bank's US$ Bank Combined Commitment minus, in
the case of each US$ Bank that has a Related C$ Bank, such Related C$
Bank's Designated Canadian Commitment Amount.
"US$ Equivalent": on any date of determination, with respect to any
amount in Canadian Dollars or any Foreign Currency, the equivalent in
Dollars of such amount, determined by the relevant Agent using the Canadian
Exchange Rate or the Foreign Exchange Rate, as applicable, then in effect
with respect thereto as determined pursuant to subsection 3.5 or Section
11, respectively.
"U.S. Base Commitment": as to any US$ Bank, its obligation to make
U.S. Loans in an aggregate principal amount at any one time outstanding not
to exceed the amount set forth opposite such Bank's name on Schedule I, as
such amount may be reduced or increased as provided herein, determined
without giving effect to any Transferred Commitment pursuant to subsection
2.5.
"U.S. Commitment": as to any US$ Bank, its obligation to make U.S.
Loans in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth opposite such Bank's name on 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 2.5.
"U.S. Commitment Percentage": as to any US$ Bank at any time, the
percentage of the aggregate U.S. Commitments then constituted by such
Bank's U.S. Commitment.
"U.S. Facility Fee": as defined in subsection 4.3(a).
"U.S. Net Commitment": at any date, with respect to any US$ Bank,
the excess of (a) the U.S. Commitment of such Bank on such date over (b)
the Aggregate Foreign Extensions of Credit of such Bank on such date.
"U.S. Loans": as defined in subsection 2.1(a).
"U.S. Register": as defined in subsection 13.6(d).
"U.S. Utilization": for any Utilization Period, with respect to the
U.S. Commitments, the percentage equivalent of a fraction (a) the
numerator of which is the average daily principal amount of U.S. Loans
outstanding during such Utilization Period and (b) the denominator of
which is the average daily amount of the aggregate U.S. Net Commitments
of all US$ Banks during such Utilization Period.
"Utilization Period": (a) each fiscal quarter of Chrysler and (b)
any portion of a fiscal quarter of Chrysler ending on the Final Date.
<PAGE> 22
18
1.2 Other Definitional Provisions. (a) All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto, accounting terms relating to Chrysler 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 Chrysler 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. THE U.S. COMMITMENTS
2.1 The U.S. Commitments. (a) Subject to the terms and conditions
hereof, each US$ Bank severally agrees to make revolving credit loans ("U.S.
Loans") to Chrysler from time to time during the Commitment Period. During the
Commitment Period, Chrysler may use the U.S. Commitment of each US$ Bank by
borrowing, prepaying or repaying the U.S. Loans of such Bank in whole or in
part and reborrowing, all in accordance with the terms and conditions hereof.
Notwithstanding anything to the contrary contained in this Agreement, in no
event may U.S. Loans be borrowed under this subsection 2.1 if, after giving
effect thereto and the application of the proceeds thereof, the aggregate
principal amount of U.S. Loans made by any US$ Bank then outstanding would
exceed such Bank's U.S. Net Commitment.
(b) U.S. Loans may be Base Rate Loans or Eurodollar Loans, or any
combination thereof, as determined by Chrysler and notified to the
Administrative 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 Procedure for U.S. Loan Borrowing. Chrysler may borrow under
the U.S. Commitments during the Commitment Period on any Business Day,
provided, that Chrysler shall give the Administrative Agent irrevocable notice
(which notice must be received by the Administrative 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 Administrative Agent
shall promptly notify each US$ Bank
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thereof. Not later than 12:00 noon, New York City time, on the Borrowing Date
specified in such notice, each US$ Bank shall make an amount equal to the amount
of the U.S. Loan to be made by such Bank available to the Administrative Agent
for the account of Chrysler at the office of the Administrative Agent specified
in subsection 13.2 in funds immediately available to the Administrative Agent.
Such borrowing will then be made available to Chrysler by the Administrative
Agent crediting the account of Chrysler on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the US$
Banks and in like funds as received by the Administrative 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 then aggregate Available U.S.
Commitments. Each borrowing of Eurodollar Loans shall be in an aggregate
principal amount not less than $25,000,000.
2.3 Conversion and Continuation Options. (a) Chrysler may elect
from time to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only
be made on the last day of an Interest Period with respect thereto. Chrysler
may elect from time to time to convert Base Rate Loans to Eurodollar Loans by
giving the Administrative Agent at least three Business Days' prior irrevocable
notice of such election. Any such notice of conversion to Eurodollar Loans
shall specify the length of the initial Interest Period or Interest Periods
therefor. Upon receipt of any such notice the Administrative Agent shall
promptly notify each US$ 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 Administrative
Agent has or the Required US$ 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 Chrysler
giving irrevocable notice to the Administrative 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 Administrative Agent has
or the Required US$ 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 Chrysler 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. Upon receipt of any notice from Chrysler pursuant to this
paragraph (b), the Administrative Agent shall promptly notify each US$ Bank
thereof.
(c) Notwithstanding anything to the contrary in this subsection 2.3,
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 $25,000,000.
2.4 Certain Matters Relating to Eurodollar Loans. (a) In the
event that (i) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon Chrysler) that by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate applicable pursuant to
subsection 4.2(a) or (ii) the
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Required U.S. Banks shall have determined (which determination shall be
conclusive and binding upon Chrysler) and shall notify the Administrative Agent
that the Eurodollar Rate applicable pursuant to subsection 4.2(a) does not
adequately cover the cost to the US$ Banks of making or maintaining Eurodollar
Loans, the Administrative Agent shall forthwith give telecopy notice of such
determination to Chrysler and the US$ 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 US$ 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 Administrative Agent, no
further Eurodollar Loans shall be made or continued as such, nor shall Chrysler
have the right to convert Base Rate Loans to Eurodollar Loans.
(b) Upon notice from any Affected Bank (as hereinafter defined),
Chrysler shall pay to the Administrative Agent for the account of such Affected
Bank an additional amount for each Eurodollar Loan of such Affected Bank,
payable on the last day of the Interest Period with respect thereto, equal to
P X [[R / (1.00 - r)] - R] X [T / 360]
Where P = the principal amount of such Eurodollar Loan of such Bank;
R = the Eurodollar Rate (expressed as a decimal) for such Interest
Period;
T = the number of days in such Interest Period during which such
Bank was an "Affected Bank"; and
r = the aggregate of rates (expressed as a decimal) of reserve
requirements ("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 Federal
Reserve Board 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 the Federal
Reserve Board) maintained by a member bank of the Federal
Reserve System.
The term "Affected Bank" shall mean any US$ Bank party to this
Agreement that (i) is (x) organized under the laws of the United States or any
State thereof or (y) a bank organized under laws other than those of the United
States of America or a State thereof that is funding its Eurodollar Loans
through a branch or agency located in the United States of America and (ii) is
subject to actual Reserve Requirements in respect of its Eurodollar Loans. Each
US$ Bank agrees to notify the Administrative Agent promptly upon becoming an
Affected Bank, and of any subsequent change of status, disclosing the
effective date of such change.
(c) Upon the occurrence of any of the events specified in
subsection 2.4(a), each US$ Bank whose Eurodollar Loans are affected by any such
event agrees that it will transfer its Eurodollar Loans affected by any such
event to another branch office (or, if such Bank so elects, to an affiliate) of
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such Bank, provided that such transfer shall be made only if such Bank shall
have determined in good faith (which determination shall, absent manifest error,
be final, conclusive and binding upon all parties) that, (i) on the basis of
existing circumstances, such transfer will avoid such events and will not result
in any additional costs, liabilities or expenses to such Bank or to Chrysler and
(ii) such transfer is oorrowing by CFC under CFC's Commitment Transfer Agreement
with the Banks dated as of April 26, 1996 (as amended, restated, supplemented,
replaced or otherwise modified from time to time, the "CFC Commitment Transfer
Agreement"), of such portion of the Available Chrysler/CFC Commitments as may be
specified in such notice (as to each US$ Bank, its "Transferred Commitment";
collectively, for all US$ Banks, the "Transferred Commitments"), provided that,
after giving effect thereto, (i) the amount of such Transferred Commitment of
any US$ Bank shall in no case exceed 50% of the then outstanding U.S. Base
Commitment of such Bank, (ii) the Aggregate U.S./Foreign Extensions of Credit of
each US$ Bank shall be no greater than such Bank's U.S. Commitment and (iii) the
aggregate of all Foreign Currency Subfacility Maximum Borrowing Amounts in
respect of each US$ Bank (x) shall not exceed 60% of such Bank's U.S. Base
Commitment and (y) shall not exceed such Bank's U.S. Commitment. Each transfer
or withdrawal of any Transferred Commitment shall be made pro rata according to
the respective U.S. Base Commitments of the US$ Banks. As of the Effective
Date, the Transferred Commitments shall be zero, unless Chrysler 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
2.5(a) shall indicate the Transferred Commitments and, as to each US$ Bank, its
pro rata Transferred Commitment, and the pro rata Transferred Commitment of each
US$ Bank shall have been previously reviewed by the Administrative Agent.
(d) Chrysler may, by giving thirty days' written notice to the
Administrative Agent and CFC, withdraw any consent to borrowing by CFC given in
accordance with subsection 2.5(a) in respect of any portion of the Transferred
Commitments not utilized by CFC as of the date of such notice, in which case the
Transferred Commitments will be reduced accordingly.
(e) At any time a notice given in accordance with subsection 2.5(a)
is in effect and the Available Chrysler/CFC Commitments are increased in
accordance with subsection 13.9, Chrysler shall as of the effective date of such
increase give notice in accordance with subsection 2.5(a) and comply with the
notice requirement of subsection 2.5(b), if applicable.
(f) Chrysler shall continue to pay the Facility Fee required
pursuant to subsection 4.3 in relation to any Transferred Commitments.
SECTION 3. THE CANADIAN COMMITMENTS
3.1 The Canadian Commitments (a) Subject to the terms and
conditions hereof, each C$ Bank severally agrees to make revolving credit loans
(which shall be C$ Prime Loans) to, and to accept Bankers' Acceptances from,
Chrysler Canada from time to time during the Commitment Period. During the
Commitment Period, Chrysler Canada may use the Canadian Commitment of each C$
Bank by borrowing, prepaying or repaying the C$ Prime Loans or Bankers'
Acceptances of such Bank, in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof. Notwithstanding anything to the
contrary contained in this Agreement, in no event may C$ Prime Loans or Bankers'
Acceptances be borrowed or issued under this subsection 3.1 if, after giving
effect thereto and the application of the proceeds thereof, the Aggregate
Canadian Extensions of Credit of any C$ Bank then outstanding would exceed such
C$ Bank's Canadian Commitment.
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3.2 Procedure for C$ Prime Loan Borrowing. Chrysler Canada may
borrow C$ Prime Loans during the Commitment Period on any Business Day, provided
that Chrysler Canada shall give the Canadian Administrative Agent irrevocable
notice (which notice must be received by the Canadian Administrative Agent prior
to 10:30 A.M., Toronto time, one Business Day prior to the requested Borrowing
Date, specifying (a) the amount to be borrowed and (b) the requested Borrowing
Date. Upon receipt of such notice, the Canadian Administrative Agent shall
promptly notify each C$ Bank thereof. Not later than 10:30 A.M., Toronto time,
on the Borrowing Date specified in such notice, each C$ Bank shall make the
amount of its share of such borrowing available to the Canadian Administrative
Agent for the account of Chrysler Canada at the office of the Canadian
Administrative Agent specified in subsection 13.2 and in funds immediately
available to the Canadian Administrative Agent. Each borrowing pursuant to this
subsection 3.2 shall be in an aggregate principal amount of the lesser of (i)
C$5,000,000 or an integral multiple of C$100,000 in excess thereof or (ii) the
amount in C$ which has a US$ Equivalent equal to the then aggregate Available
Canadian Commitments.
3.3 Bankers' Acceptances. (a) Chrysler Canada may issue Bankers'
Acceptances denominated in C$, for purchase by the C$ Banks, each in accordance
with the provisions of this subsection 3.3.
(b) Procedures.
(1) Notice. Chrysler Canada shall notify the Canadian
Administrative Agent by irrevocable written notice by 10:00 A.M., Toronto
time, one Business Day prior to the Borrowing Date in respect of any
borrowing by way of Bankers' Acceptances.
(2) Minimum Borrowing Amount. Each borrowing by way of Bankers'
Acceptances shall be in a minimum aggregate face amount of C$10,000,000.
(3) Face Amounts. The face amount of each Bankers' Acceptance
shall be C$100,000 or any integral multiple thereof.
(4) Term. Bankers' Acceptances shall be issued and shall mature on
a Business Day. Each Bankers' Acceptance shall have a term of at least 30
days and not more than 365 days excluding days of grace and shall mature on
or before the Termination Date and shall be in form and substance
reasonably satisfactory to each C$ Bank.
(5) Bankers' Acceptances in Blank. To facilitate the acceptance of
Bankers' Acceptances under this Agreement, Chrysler Canada shall, upon
execution of this Agreement and from time to time as required, provide to
the Canadian Administrative Agent drafts, in form satisfactory to the
Canadian Administrative Agent, duly executed and endorsed in blank by
Chrysler Canada in quantities sufficient for each C$ Bank to fulfill its
obligations hereunder. In addition, Chrysler Canada hereby appoints each
C$ Bank as its attorney to sign and endorse on its behalf, in handwriting
or by facsimile or mechanical signature as and when deemed necessary by
such C$ Bank, blank forms of Bankers' Acceptances. Chrysler Canada
recognizes and agrees that all Bankers' Acceptances signed and/or endorsed
on its behalf by a C$ Bank shall bind Chrysler Canada as fully and
effectually as if signed in the handwriting of and duly issued by the
proper signing officers of Chrysler Canada. Each C$ Bank is hereby
authorized to issue such Bankers' Acceptances endorsed in blank in such
face amounts as may
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be determined by such Bank provided that the aggregate amount thereof is
equal to the aggregate amount of Bankers' Acceptances required to be
accepted by such Bank. No C$ Bank shall be responsible or liable for its
failure to accept a Bankers' Acceptance if the cause of such failure is, in
whole or in part, due to the failure of Chrysler Canada to provide duly
executed and endorsed drafts to the Canadian Administrative Agent on a
timely basis nor shall any C$ Bank be liable for any damage, loss or other
claim arising by reason of any loss or improper use of any such instrument
except loss or improper use arising by reason of the gross negligence or
willful misconduct of such Bank, its officers, employees, agents or
representatives. Each C$ Bank shall maintain a record with respect to
Bankers' Acceptances (i) received by it from the Canadian Administrative
Agent in blank hereunder, (ii) voided by it for any reason, (iii) accepted
by it hereunder, (iv) purchased by it hereunder and (v) cancelled at their
respective maturities. Each C$ Bank further agrees to retain such records
in the manner and for the statutory periods provided in the various
Canadian provincial or federal statutes and regulations which apply to
such Bank.
(6) Execution of Bankers' Acceptances. Drafts of Chrysler Canada
to be accepted as Bankers' Acceptances hereunder shall be duly executed on
behalf of Chrysler Canada. Notwithstanding that any person whose signature
appears on any Bankers' Acceptance as a signatory for Chrysler Canada may
no longer be an authorized signatory for Chrysler Canada at the date of
issuance of a Bankers' Acceptance, such signature shall nevertheless be
valid and sufficient for all purposes as if such authority had remained in
force at the time of such issuance and any such Bankers' Acceptance so
signed shall be binding on Chrysler Canada.
(7) Issuance of Bankers' Acceptances. Promptly following receipt
of a notice of borrowing by way of Bankers' Acceptances, the Canadian
Administrative Agent shall so advise the C$ Banks and shall advise each C$
Bank of the face amount of each Bankers' Acceptance to be accepted by it
and the term thereof. The aggregate face amount of Bankers' Acceptances to
be accepted by a C$ Bank shall be determined by the Canadian Administrative
Agent by reference to the respective Canadian Commitments of the C$ Banks,
except that, if the face amount of a Bankers' Acceptance, which would
otherwise be accepted by a C$ Bank, would not be C$100,000 or an integral
multiple thereof, such face amount shall be increased or reduced by the
Canadian Administrative Agent in its sole and unfettered discretion to the
nearest integral multiple of C$100,000.
(8) Acceptance of Bankers' Acceptances. Each Bankers' Acceptance
to be accepted by a C$ Bank shall be accepted at such Bank's office
referred to in its Addendum.
(9) Purchase of Bankers' Acceptances. On the relevant Borrowing
Date, each C$ Bank shall purchase from Chrysler Canada, at the Applicable
BA Discount Rate, any Bankers' Acceptance accepted by it and provide to the
Canadian Administrative Agent the BA Discount Proceeds for the account of
Chrysler Canada. The Acceptance Fee payable by Chrysler Canada to such
Bank under subsection 3.3(d) in respect of each Bankers' Acceptance
accepted and purchased by such Bank shall be set off against the BA
Discount Proceeds payable by such Bank under this subsection 3.3(b)(9).
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(10) Sale of Bankers' Acceptances. Each C$ Bank may at any time
and from time to time hold, sell, rediscount or otherwise dispose of any or
all Bankers' Acceptances accepted and purchased by it.
(11) Waiver of Presentment and Other Conditions. Chrysler Canada
waives presentment for payment and any other defense to payment of any
amounts due to a C$ Bank in respect of a Bankers' Acceptance accepted by it
pursuant to this Agreement which might exist solely by reason of such
Bankers' Acceptance being held, at the maturity thereof, by such Bank in
its own right and Chrysler Canada agrees not to claim any days of grace if
such Bank as holder sues Chrysler Canada on the Bankers' Acceptances for
payment of the amount payable by Chrysler Canada thereunder.
(c) With respect to each Bankers' Acceptance, Chrysler Canada shall
give irrevocable telephone or written notice (or such other method of
notification as may be agreed upon between the Canadian Administrative Agent and
Chrysler Canada) to the Canadian Administrative Agent at or before 2:00 P.M.,
Toronto time, two Business Days prior to the maturity date of such Bankers'
Acceptance followed by written confirmation electronically transmitted to the
Canadian Administrative Agent on the same day, of Chrysler Canada's intention to
issue a Bankers' Acceptance on such maturity date (a "Refunding Bankers'
Acceptance") to provide for the payment of such maturing Bankers' Acceptance (it
being understood that payments by Chrysler Canada and fundings by the C$ Banks
in respect of each maturing Bankers' Acceptance and the related Refunding
Bankers' Acceptance shall be made on a net basis reflecting the difference
between the face amount of such maturing Bankers' Acceptance and the BA Discount
Proceeds (net of the applicable Acceptance Fee) of such Refunding Bankers'
Acceptance). Any repayment of Bankers' Acceptances must be made at or before
12:00 noon, Toronto time, on the respective maturity dates of such Bankers'
Acceptances. If Chrysler Canada fails to give such notice, Chrysler Canada shall
be deemed to have repaid such maturing Bankers' Acceptances with funds obtained
by way of C$ Prime Loans commencing on the maturity date of such maturing
Bankers' Acceptances.
(d) An Acceptance Fee shall be payable by Chrysler Canada to each
C$ Bank in advance (in the manner specified in subsection 3.3(b)(9)) upon the
issuance of a Bankers' Acceptance to be accepted by such Bank calculated at the
rate per annum equal to the Applicable Margin, such Acceptance Fee to be
calculated on the face amount of such Bankers' Acceptance and to be computed on
the basis of the number of days in the term of such Bankers' Acceptance.
Subject to the additional amounts payable under subsection 3.3(e), the amount of
Acceptance Fees to be paid as specified above shall be the amount which would be
due and payable if the Canadian Utilization for the term of the relevant
Bankers' Acceptance was less than 50%.
(e) On the first Business Day following the last day of each
Utilization Period, Chrysler Canada shall pay to the Canadian Administrative
Agent, for the ratable benefit of the C$ Banks an additional amount on account
of Acceptance Fees in respect of each Bankers' Acceptance outstanding during
such Utilization Period equal to an amount calculated by multiplying:
(i) a fraction, the numerator of which is the number of days in the term
of the Bankers' Acceptance in such Utilization Period and the
denominator of which is the number of days in the term of the
Bankers' Acceptance; by
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(ii) the excess (if any) of (A) the amount of Acceptance Fees which
would have been payable in respect of such Bankers' Acceptance had
the Canadian Utilization at the time of the issuance of such
Bankers' Acceptance been the same as the actual Canadian
Utilization during such Utilization Period, over (B) the amount of
Acceptance Fees which actually were paid in respect of such
Bankers' Acceptance.
3.4 Conversion Option. Subject to the provisions of this Agreement,
Chrysler Canada may, prior to the Termination Date, effective on any Business
Day, convert, in whole or in part, C$ Prime Loans into Bankers' Acceptances or
vice versa upon giving to the Canadian Administrative Agent prior irrevocable
telephone or written notice within the notice period and in the form which would
be required to be given to the Canadian Administrative Agent in respect of the
category of C$ Prime Loan into which the outstanding C$ Prime Loan is to be
converted in accordance with the provisions of subsection 3.2 or 3.3, as
applicable, followed by written confirmation on the same day, provided that:
(i) no C$ Prime Loan may be converted into a Bankers' Acceptance when any
Event of Default has occurred and is continuing and the Canadian
Administrative Agent has or the Required C$ Banks have determined in
its or their sole discretion that such conversion is not appropriate;
(ii) each conversion to Bankers' Acceptances shall be for a minimum
aggregate amount of C$10,000,000 (and whole multiples of C$100,000 in
excess thereof) and each conversion to C$ Prime Loans shall be in a
minimum aggregate amount of C$5,000,000; and
(iii) Bankers' Acceptances may be converted only on the maturity date of
such Bankers' Acceptances and, provided that, if less than all
Bankers' Acceptances are converted, then after such conversion not
less than C$10,000,000 (and whole multiples of C$100,000 in excess
thereof) shall remain as Bankers' Acceptances.
3.5 Currency Fluctuations, etc. (a) No later than 2:00 P.M.,
Toronto time, on each Canadian Calculation Date, the Canadian Administrative
Agent shall (i) determine the Canadian Exchange Rate as of such date and (ii)
give notice thereof to Chrysler and Chrysler Canada. The Canadian Exchange Rate
so determined shall become effective on the first Business Day immediately
following the relevant Canadian Calculation Date (a "Canadian Reset Date") and
shall remain effective until the next succeeding Canadian Reset Date.
(b) No later than 2:00 P.M., New York City time, on each Canadian
Reset Date and each Borrowing Date in respect of C$ Loans, the Canadian
Administrative Agent shall (i) determine the US$ Equivalent of the C$ Loans
then outstanding (after giving effect to any C$ Loans to be made or repaid on
such date) and (ii) notify Chrysler and Chrysler Canada of the results of such
determination.
(c) If, on any Canadian Reset Date (after giving effect to (i) any
C$ Loans to be made or repaid on such date and (ii) any increase or decrease in
any Canadian Commitment pursuant to subsection 13.9 effective on such date of
which the Canadian Administrative Agent has received notice), the Aggregate
Canadian Extensions of Credit of any C$ Bank exceeds 105% of the Canadian
Commitment of such C$ Bank, then, within ten Business Days after notice thereof
from the Canadian
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26
Administrative Agent, (i) Chrysler Canada shall reduce the aggregate C$ Loans
(which reduction, in the case of Bankers' Acceptances, may be effected by cash
collateralization thereof on terms reasonably satisfactory to each C$ Bank)
and/or (ii) Chrysler shall increase the Canadian Commitments pursuant to
subsection 13.9 in an amount such that, after giving effect thereto, the
Aggregate Canadian Extensions of Credit of each C$ Bank shall be equal to or
less than the Canadian Commitment of such Bank.
(d) The Canadian Administrative Agent shall promptly furnish the
Administrative Agent and each affected C$ Bank with a copy of any notice
delivered to Chrysler or Chrysler Canada pursuant to this subsection 3.5.
(e) Notwithstanding the foregoing provisions of this subsection 3.5,
after the initial Canadian Calculation Date, the Canadian Administrative Agent
may at its option suspend the resetting of the Canadian Exchange Rate pursuant
to subsection 3.5(a) and the making of the determinations referred to in
subsections 3.5(b) and 3.5(c) during any period when the sum of the Aggregate
Canadian Extensions of Credit of all C$ Banks, calculated using the Canadian
Exchange Rate effective as of the last Canadian Reset Date prior to such
suspension, is less than 50% of the aggregate Canadian Commitments then in
effect.
SECTION 4. GENERAL PROVISIONS
4.1 Repayment of Loans; Evidence of Debt. (a) The relevant Facility
Borrower shall repay to the relevant Agent for the account of each relevant Bank
all outstanding relevant Facility Loans (together with all accrued unpaid
interest thereon) on the Termination Date (or such earlier date as may be
established pursuant to Section 9) and shall pay interest on the relevant unpaid
principal amount of the Facility 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 4.2.
(b)(i) Each Bank shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of each Facility Borrower to
the appropriate lending office of such Bank resulting from each Facility 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 Administrative Agent shall maintain the U.S. Register pursuant to
subsection 13.6(d), and a subaccount for each US$ Bank, in which Register and
subaccounts (taken together) shall be recorded (A) the amount of each U.S. Loan
made hereunder, the Type of each U.S. 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 Chrysler to each US$ Bank hereunder
and (C) the amount of any sum received by the Administrative Agent hereunder
from Chrysler and each US$ Bank's share thereof.
(iii) The Canadian Administrative Agent shall maintain the Canadian
Register pursuant to subsection 13.6(d), and a subaccount for each C$ Bank, in
which Register and subaccounts (taken together) shall be recorded (A) the
amount of each C$ Loan made hereunder, whether such Loan is a C$ Prime Loan or
a Bankers' Acceptance, (B) the amount of any principal or interest due and
payable or to become due and payable from Chrysler Canada to each C$ Bank
hereunder and (C) the amount of
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27
any sum received by the Canadian Administrative Agent hereunder from Chrysler
Canada and each C$ Bank's share thereof.
(iv) The entries made in the Registers and accounts maintained pursuant to
paragraphs (i), (ii) and (iii) of this subsection 4.1(b) shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the relevant Facility Borrower therein recorded;
provided, however, that the failure of any Bank or either 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 each Facility
Borrower to repay the Facility Loans (and all other amounts owing with respect
thereto) made to such Facility Borrower in accordance with the terms of this
Agreement.
4.2 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 Eurodollar
Rate determined for such Interest Period in accordance with the terms hereof
plus the Applicable 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) Each C$ Prime Loan shall bear interest on the unpaid principal
amount thereof, for each day from the date such C$ Prime Loans are made until
the maturity thereof (whether at the stated maturity, by acceleration or
otherwise), at a rate per annum equal to the Canadian Prime Rate determined for
such day.
(d) If all or a portion of (i) the principal amount of any Facility
Loan, (ii) any interest payable thereon or (iii) any Facility Fee, Acceptance
Fee or other amount payable hereunder shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise) such overdue amount shall bear
interest for each day from the date of such non-payment until paid in full (both
before and after judgment) at a rate per annum which is (x) in the case of
overdue principal, the rate that would otherwise be applicable thereto pursuant
to the foregoing provisions of this subsection 4.2 plus 2%, or (y) in the case
of any overdue interest, Facility Fee, Acceptance Fee or other amount, the rate
described in subsection 4.2(b) (in the case of amounts payable in Dollars) or
4.2(c) (in the case of amounts payable in C$) plus 2%, in each case from the
date of such non-payment to (but excluding) the date on which such amount is
paid in full (as well after as before judgment).
(e) Interest shall be payable in arrears (i) with respect to
Eurodollar Loans having an Interest Period of three months or less, on the last
day of such Interest Period, (ii) with respect to Eurodollar Loans having an
Interest Period longer than three months, on each day which is three months, or
a whole multiple thereof, after the first day of such Interest Period and the
last day of such Interest Period, (iii) with respect to Base Rate Loans and C$
Prime Loans, on the last day of each March, June, September and December, and
(iv) with respect to all Facility Loans, upon each repayment, prepayment or
conversion thereof; provided that interest accruing pursuant to subsection
4.2(d) shall be payable on demand. Interest payable in respect of U.S. Loans
shall be payable in Dollars by Chrysler and interest payable in respect of C$
Loans shall be payable in C$ by Chrysler Canada (subject to Section 12).
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(f) The amount of interest on any Eurodollar Loans to be paid on
any date as specified in paragraph (e) above shall in each case be determined
under the assumption that the U.S. Utilization for the Utilization Period(s)
during which such interest accrued was less than 50%. On the first Business Day
following the last day of each Excess U.S. Utilization Period, Chrysler shall
pay to the Administrative Agent, for the benefit of the US$ Banks, an additional
amount of interest equal to the excess (if any) of (i) the amount of interest
which accrued during such U.S. Utilization Period after giving effect to the
actual U.S. Utilization for such Utilization Period (whether or not such accrued
interest was actually payable during such Utilization Period) over (ii) the
amount of interest which would have accrued during such Utilization Period if
the U.S. Utilization during such Utilization Period had been less than 50%.
4.3 Facility Fees. (a) Chrysler agrees to pay to the
Administrative Agent, for the account of each US$ Bank, in Dollars, a facility
fee (the "U.S. Facility Fee") for each day from and including the Effective Date
to but excluding the Final Date. Such fee shall be payable quarterly in arrears
on (i) the first Business Day of each January, April, July and October (for the
three-month period (or portion thereof) ended on the last day of the immediately
preceding month) and (ii) on the Final Date (for the period ended on such date
for which no payment has been received pursuant to clause (i) above) and shall
be computed for each day during such period at a rate per annum equal to the
Facility Fee Rate in effect on such day on the US$ Bank Net Combined Commitment
of such US$ Bank in effect on such day.
(b) Chrysler Canada agrees to pay to the Canadian Administrative
Agent, for the account of each relevant C$ Bank, in Dollars, a facility fee (the
"Canadian Facility Fee") for each day from and including the Effective Date to
but excluding the Final Date. Such fee shall be payable quarterly in arrears
on (i) the first Business Day of each January, April, July and October (for the
three-month period (or portion thereof) ended on the last day of the
immediately preceding month) and (ii) on the Final Date (for the period ended
on such date for which no payment has been received pursuant to clause (i)
above) and shall be computed for each day during such period at a rate per
annum equal to the Facility Fee Rate in effect on such day on the Designated
Canadian Commitment Amount of such C$ Bank in effect on such day.
4.4 Lending Procedures. (a) Unless the relevant Agent shall have
received notice from a Bank prior to a Borrowing Date that such Bank will not
make available to such Agent such Bank's ratable portion of the relevant
borrowing, such Agent may assume that such Bank has made such portion available
to such Agent on the date of such borrowing in accordance with subsection 2.2,
3.2 or 3.3, and such Agent may, in reliance upon such assumption, make
available to the relevant Facility orrower on such date a corresponding amount.
If such Agent does, in such circumstances, make available to such Facility
Borrower such amount, such Bank shall make such ratable portion available to
such Agent forthwith on demand, 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 in the case of U.S. Loans) or at
the then effective Bank Rate (in the case of C$ Loans). If such amount is so
made available, such payment to such 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 such Agent, then such Agent shall notify the relevant
Facility Borrower of such failure, and on the fourth Business Day following
such Borrowing Date such Facility Borrower shall pay to such Agent such ratable
portion, together with interest thereon for each day that such Facility
Borrower had the use of such ratable portion, at the Federal Funds Effective
Rate (in the case of U.S. Loans) or at the then
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effective Bank Rate (in the case of C$ Loans). Nothing contained in this
subsection 4.4 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.
(b) 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.
4.5 Termination or Reduction of Commitments. Chrysler shall have
the right, upon not less than five Business Days' notice to the Administrative
Agent, to terminate the U.S. Commitments or, from time to time, reduce the
amount of the U.S. Commitments; provided, that, after giving effect thereto and
any contemporaneous prepayment of the Loans, (a) the Aggregate U.S. Extensions
of Credit of each US$ Bank shall be no greater than such Bank's U.S. Net
Commitment, (b) the Aggregate U.S./Foreign Extensions of Credit of each US$
Bank shall be no greater than such Bank's U.S. Commitment and (c) the aggregate
of all Foreign Currency Subfacility Maximum Borrowing Amounts in respect of
each US$ Bank shall not exceed 60% of such Bank's U.S. Base Commitment.
Chrysler Canada shall have the right, upon not less than five Business Days'
notice to the Administrative Agent, to terminate the Canadian Commitments or,
from time to time, reduce the amount of the Canadian Commitments; provided,
that, after giving effect thereto and any contemporaneous prepayment of the C$
Loans, the Aggregate Canadian Extensions of Credit of each C$ Bank shall be no
greater than such Bank's Canadian Commitment. Upon receipt of such notice the
Administrative Agent shall promptly notify each relevant 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 (in the case of U.S. Commitments) and $10,000,000
or a multiple of $1,000,000 in excess thereof (in the case of Canadian
Commitments), and shall reduce permanently the amount of the affected
Commitments then in effect. Any termination of the Commitments shall be
accompanied by prepayment in full of the relevant Loans, together with accrued
interest thereon to the date of such prepayment, and the prepayment of any
unpaid fee then accrued hereunder and the payment of any other amounts due
pursuant to subsection 4.11.
4.6 Optional Prepayments. Each Facility Borrower may, at its
option at any time and from time to time, prepay the Loans made to it, in whole
or in part, without premium or penalty, subject to the provisions of subsection
4.11, upon at least four Business Days' notice to the relevant Agent specifying
the date and amount of prepayment and the category or categories of Facility
Loan to be prepaid, provided that each partial prepayment shall be in an
aggregate amount equal to $25,000,000 or a multiple of $1,000,000 in excess
thereof (in the case of U.S. Loans) and C$5,000,000 or a multiple of
C$1,000,000 in excess thereof (in the case of C$ Prime Loans), 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 relevant Agent shall promptly notify each relevant 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. Notwithstanding anything to the
contrary above, Facility Loans consisting of Bankers' Acceptances may not be
prepaid pursuant to this subsection 4.6.
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4.7 Computation of Interest and Fees. (a) Interest (other than
interest calculated on the basis of the Prime Rate or the Canadian Prime Rate)
shall be calculated on the basis of a 360-day year for the actual days elapsed.
Facility Fees, Acceptance Fees and interest calculated on the basis of the
Prime Rate or the Canadian Prime Rate is expressed herein and shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for
the actual days elapsed. The relevant Agent shall, as soon as practicable,
notify the relevant Facility Borrower and the relevant Banks of each
determination of the Eurodollar Rate or the Applicable BA Discount Rate. Any
change in the interest rate on a Facility Loan or in any Facility Fee or
Acceptance Fee resulting from a change in the Base Rate, the Canadian Prime
Rate, the Applicable Margin or Status shall become effective as of the opening
of business on the day on which such change in the Base Rate or Canadian Prime
Rate shall become effective, or the Applicable Margin or Status changes as
provided herein, as the case may be. Subject to subsection 4.2(f), the
Applicable Margin with respect to Eurodollar Loans or Bankers' Acceptances that
is in effect on the first day of any Interest Period with respect to such
Eurodollar Loans or Bankers' Acceptances shall remain in effect throughout such
Interest Period. The relevant Agent shall notify the relevant Facility
Borrower and the relevant Banks of the effective date and the amount of each
such change in the Base Rate or Canadian Prime Rate.
(b) Each determination, pursuant to and in accordance with any
provision of this Agreement, of an interest rate applicable to a Eurodollar
Loan or Bankers' Acceptances for any Interest Period by the relevant Agent, and
each determination by a Reference Bank of a rate with respect to a Eurodollar
Loan or a Bankers' Acceptance for any Interest Period to be notified to the
relevant Agent pursuant to the definition of "Eurodollar Rate" or "Applicable
BA Discount Rate", as the case may be, shall be conclusive and binding on the
relevant Facility Borrower and the relevant Banks in the absence of manifest
error. The relevant Agent shall deliver to such Facility Borrower a statement
showing the quotations given by the relevant Reference Bank and the computation
used by the relevant Agent in determining any Eurodollar Rate or Applicable BA
Discount Rate.
(c) If any Reference Bank's relevant Commitment shall terminate
(otherwise than on termination of all the Commitments), or, as the case may be,
the relevant Facility Loans made by it are assigned, or prepaid or repaid
(otherwise than on the prepayment or repayment of the relevant Facility 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 of a particular category remaining, then the
relevant Agent (after consultation with the relevant Facility Borrower and the
relevant Banks) shall, as soon as practicable thereafter, by notice to the
relevant Facility Borrower and the relevant 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 of each category. In acting so to designate another
Bank to serve as a Eurodollar Reference Bank, the Administrative Agent will use
its best efforts to ensure that one Eurodollar Reference Bank will, at all
times, be a US$ Bank that has its headquarters office located outside the
United States.
(d) If any of the relevant Reference Banks shall be unable or shall
otherwise fail to provide notice of a rate to the relevant Agent with respect
to a Eurodollar Rate, an Applicable BA Discount Rate or a Foreign Exchange
Rate, such rate shall be determined on the basis of the rates provided in
notices of the remaining relevant Reference Banks.
4.8 Pro Rata Treatment and Payments. (a) Each borrowing of U.S.
Loans shall be made pro rata according to the then existing Available U.S.
Commitments of the US$ Banks and each
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borrowing of C$ Loans shall be made pro rata according to the then existing
Canadian Commitments of the C$ Banks. Any reduction of the amount of the
Commitments of the Banks hereunder (except for the termination or reduction of
a particular Bank's Commitment pursuant to subsection 4.10(b)) shall be made
pro rata according to the amounts of the then existing relevant Commitments.
Each payment (except for payments to a particular Bank pursuant to or as a
result of subsection 2.4(b), 4.9, 4.10 or 4.11 but otherwise including each
prepayment) by a Facility Borrower on account of principal of and interest on
any category of Facility Loan (other than Eurodollar Loans) shall be made on a
pro rata basis according to the amounts of the then outstanding Facility Loans
of such type of the relevant Banks. Each payment (including each prepayment)
by Chrysler on account of principal of and interest on Eurodollar Loans
designated by Chrysler to be applied to a particular Eurodollar Tranche shall
be made pro rata according to the respective outstanding principal amounts of
such Eurodollar Loans then held by the US$ Banks. Any reduction of the amount
of the Commitments of the Banks hereunder (except for a Commitment reduction or
termination pursuant to subsection 4.10), shall be made pro rata according to
the amounts of the then existing relevant Commitments. All payments (including
prepayments) by the relevant Facility Borrower hereunder shall be made without
set-off or counterclaim to the relevant Agent for the account of the relevant
Banks at the office of the relevant Agent referred to in subsection 13.2 in
Dollars or C$, as applicable, and in immediately available funds. The relevant
Agent shall distribute such payments to each relevant 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. The provisions of the first five sentences of this subsection 4.8(a)
shall not apply to any borrowing or prepayment made pursuant to subsection
13.9.
(b) Unless the relevant Agent shall have received notice from the
relevant Facility Borrower prior to the date on which any payment is due to the
relevant Banks hereunder that such Facility Borrower will not make such payment
in full, the relevant Agent may assume that such Facility Borrower has made
such payment in full to the relevant Agent on such date, and the relevant Agent
may, in reliance upon such assumption, cause to be distributed to each relevant
Bank on such due date an amount equal to the amount then due to such Bank. If
and to the extent a Facility Borrower shall not have so made such payment in
full to the relevant Agent, each relevant Bank shall repay to the relevant
Agent forthwith on demand such amount distributed to such Bank together with
interest thereon, for each day from and including the date such amount is
distributed to such Bank to but excluding the date such Bank repays such amount
to the relevant Agent at the Federal Funds Effective Rate (in the case of U.S.
Loans) or the then effective Bank Rate (in the case of C$ Loans) for each such
day. Nothing contained in this subsection 4.8(b) shall relieve a Facility
Borrower from its obligations to make payments on all amounts due hereunder in
accordance with the terms hereof.
4.9 Increased Costs. In the event that any law, regulation, treaty
or directive or any change therein or in the interpretation or application
thereof or compliance by any Bank with any
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32
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority enacted or made subsequent to the date
hereof:
(a) shall subject any Bank to any Taxes with respect to this
Agreement, or any Loans, or change the basis on which such Taxes are
calculated; or
(b) does or 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,
advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Bank; or
(c) does or 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 or maintaining advances or extensions of credit hereunder to either
Facility Borrower or to reduce any amounts receivable hereunder from either
Facility Borrower (such increase in cost or reduction in amounts receivable,
"Increased Costs") then, in any such case, such Facility Borrower shall
promptly pay to the relevant Agent for the account of such Bank, upon the
written demand of such Bank to such Facility Borrower (with a copy to the
relevant Agent), so long as such Increased Costs are not otherwise included in
the amounts required to be paid to such Bank pursuant to subsection 2.4(b),
4.10 or 4.11, any additional amounts necessary to compensate such Bank for
such Increased Costs which such Bank deems to be material as determined by such
Bank with respect to its Eurodollar Loans or Bankers' Acceptances, as the case
may be. If a Bank becomes entitled to claim any additional amounts pursuant to
this subsection 4.9, it shall promptly (but in any event within 90 days after
becoming aware of such amounts) notify the relevant Facility Borrower, through
the relevant Agent, of the event by reason of which it has become so entitled.
A certificate as to any additional amounts payable pursuant to the foregoing
sentence submitted by a Bank, through the relevant Agent, to the relevant
Facility Borrower shall be conclusive in the absence of manifest error. 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.
4.10 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
Effective 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
Chrysler and the Administrative 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 Chrysler 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
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33
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. Chrysler and such affected Bank shall thereafter
negotiate in good faith an agreement to increase the Facility 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 Chrysler
within forty-five (45) days from the date of the notice to Chrysler from such
affected Bank, the Facility Fee payable by Chrysler 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 Chrysler and such affected Bank, include the
amount of such agreed increase, and Chrysler will so notify the Administrative
Agent. If Chrysler and such affected Bank are unable to agree on such an
increase within forty-five (45) days from the date of the notice to Chrysler
from such affected Bank, Chrysler shall, by written notice to such affected
Bank within fifty (50) days from the date of the aforesaid notice to Chrysler
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 execution by one or more New Banks or Banks of
supplements hereto, substantially in the form of Exhibit A or Exhibit B, as the
case may be, and, in the case of any New Bank, such New Bank becoming a party
hereto pursuant to subsection 13.9, 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 Facility 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 Chrysler
shall by written notice to such affected Bank elect either clause (a) or clause
(b) of the preceding sentence, provided that if Chrysler elects clause (b) at
such time it shall pay to the affected Bank an increase in the Facility Fee by
the amount requested by such Bank and for the time period requested by such
Bank. Without limiting the foregoing if Chrysler 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
Chrysler, provided that concurrently therewith one or more New Banks or Banks
shall have executed supplements, substantially in the form of Exhibit A or
Exhibit B, as the case may be, and, in the case of any New Bank, become a party
hereto pursuant to subsection 13.9, 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 Chrysler
fails to provide notice to such affected Bank as described in the third
preceding sentence by such fiftieth day, Chrysler 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.
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34
4.11 Indemnity. Each Facility Borrower, as applicable, agrees to
indemnify each relevant Bank against and to hold each relevant Bank harmless
from any loss or reasonable expense which such Bank may sustain or incur as a
consequence of (a) default by such Facility Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans or Bankers' Acceptances
after such Facility Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement, (b) default by such
Facility Borrower in making any prepayment after such Facility Borrower 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. In the case of
Eurodollar Loans 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 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 Facility Loans and all other amounts payable
hereunder.
4.12 Use of Proceeds. The proceeds of the Facility Loans shall be
used by each Facility Borrower for general corporate purposes including,
without limitation, the funding of acquisitions.
4.13 Replacement of Banks. Chrysler shall be permitted to replace
any Bank which (a) requests reimbursement for amounts owing pursuant to
subsection 2.4, 4.9, 4.10, or 4.11, or (b) defaults in its obligation to make
Facility Loans, with a replacement Commercial Bank; provided that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement,
(iii) the relevant Facility Borrower or Foreign Subsidiary Borrower shall repay
(or the replacement Commercial Bank shall purchase, at par) all Loans (other
than Bankers' Acceptances) and other amounts (including accrued interest) owing
to such replaced Bank concurrently with such replacement, (iv) in the case of
any replaced C$ Banks, (x) Chrysler Canada shall pay to such replaced Bank an
amount equal to the aggregate face amount of Chrysler Canada's obligations
pursuant to any Bankers' Acceptance accepted by such replaced Bank, which
amount shall be held by such replaced Bank in an interest bearing account for
application to repay such Bankers' Acceptance at maturity and (y) Chrysler
Canada shall give the Canadian Administrative Agent notice of the provision of
such amounts, (v) Chrysler shall be liable to such replaced Bank under
subsection 4.11 if any Eurodollar Loan owing to such replaced Bank shall be
prepaid (or purchased) other than on the last day of the Interest Period
relating thereto, (vi) the replacement Commercial Bank, if not already a Bank,
and the terms and conditions of such replacement, shall be reasonably
satisfactory to the Administrative Agent, (vii) the replaced Bank shall be
obligated to make such replacement in accordance with the provisions of
subsection 13.6 (provided that Chrysler shall be obligated to pay the
registration and processing fee referred to therein), (viii) until such time as
such replacement shall be consummated, the Facility Borrowers shall pay all
additional amounts (if any) required pursuant to subsection 2.4, 4.9 or 4.10,
as the case may be, and (ix) any such replacement shall not be deemed to be a
waiver of any rights which the Facility
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35
Borrowers, the Foreign Subsidiary Borrowers, any Agent or any other Bank shall
have against the replaced Bank.
SECTION 5. REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Agreement and to
make the Loans, Chrysler (and Chrysler Canada, in the case of each
representation and warranty which relates to Chrysler Canada or any of its
Subsidiaries) hereby represents and warrants to the Agents and to each Bank
that:
5.1 Financial Condition. The consolidated balance sheet of
Chrysler and its subsidiaries as at December 31, 1995 and the related
consolidated statements of income and changes in financial position for the
fiscal year ended on such date, reported on by Deloitte & Touche LLP, copies of
which, as contained in or incorporated by reference in Chrysler's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995, have heretofore been
furnished to each Bank, present fairly the consolidated financial position of
Chrysler 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 Chrysler and its subsidiaries as at
March 31, 1996, 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 Chrysler 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, 1995, neither Chrysler 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 Chrysler and its subsidiaries taken as a whole,
which was not reflected (i) in the foregoing statements or in the notes thereto
or (ii) in Chrysler's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995.
5.2 No Change. Between December 31, 1995 and the Effective Date,
there will have been no material adverse change in the business, operations,
property or financial condition of Chrysler and its subsidiaries taken as a
whole.
5.3 Corporate Existence. Chrysler 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 Chrysler and its Subsidiaries taken as a
whole.
5.4 Corporate Authorization; No Violation. The execution, delivery
and performance by each Facility Borrower of this Agreement are within such
Facility Borrower's corporate powers, have been duly authorized by all
necessary corporate action, and do not contravene any Requirement of Law or
Contractual Obligation of Chrysler or any of its Subsidiaries or result in the
creation of a Lien on any of their respective assets.
<PAGE> 40
36
5.5 Government Authorization. No authorization or approval or
other action by, and no notice to or filing with, any Governmental Authority is
required to be obtained or made by either Facility Borrower for the due
execution, delivery and performance by such Facility Borrower of this
Agreement.
5.6 Federal Regulations. Neither Chrysler 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), and no proceeds of any borrowing hereunder will be
used in violation of Regulation U or X. If requested by the Administrative
Agent or any Bank at any time, Chrysler will furnish to the Administrative
Agent and each Bank a statement in conformity with the requirements of FR Form
U-1 referred to in Regulation U.
5.7 Enforceable Obligations. This Agreement has been duly executed
and delivered on behalf of each Facility Borrower and constitutes a legal,
valid and binding obligation of each Facility Borrower enforceable against such
Facility Borrower 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.
5.8 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of either Facility Borrower, threatened by or against Chrysler
or any of its Subsidiaries or against any of its or their respective properties
or revenues (a) with respect to this Agreement or any of the transactions
contemplated hereby, or (b) which would reasonably be expected to have a
material adverse effect on the business, operations, property or financial
condition of Chrysler and its Subsidiaries taken as a whole.
5.9 Taxes. Each of Chrysler and its Subsidiaries has filed or
caused to be filed all tax returns which to the knowledge of either Facility
Borrower 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 Chrysler or its Subsidiaries, as the case
may be).
SECTION 6. CONDITIONS PRECEDENT TO LOANS
6.1 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
Facility Borrower, each Bank and each Agent, (ii) the Administrative 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 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 Facility Borrower
and the Administrative Agent, this Agreement shall, subject to
satisfaction of the other conditions precedent set forth in this
subsection 6.1, nevertheless become effective on
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37
such date with respect to those Persons which have executed and delivered
an Addendum on or before such date if on such date Chrysler and the
Administrative 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. Each Facility Borrower acknowledges that each
Person which has executed an Addendum shall constitute a "Bank" for the
purposes of this Agreement.
(b) CFC Commitment Transfer Agreement. The Administrative Agent
shall have received the CFC Commitment Transfer Agreement, executed and
delivered by each party thereto.
(c) Closing Certificate. The Administrative Agent shall have
received a certificate of each Facility Borrower, dated the Effective
Date, substantially in the form of Exhibit G, with appropriate insertions,
satisfactory in form and substance to the Administrative Agent, executed
by the President or any Vice President and the Secretary or any Assistant
Secretary of each Facility Borrower, and attaching the documents referred
to in subsections 6.1(d) and (e).
(d) Corporate Proceedings of the Facility Borrowers. The
Administrative Agent shall have received a copy of the resolutions, in
form and substance satisfactory to the Administrative Agent, of the Board
of Directors of each Facility Borrower (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 the execution, delivery and performance of this Agreement.
(e) Corporate Documents. The Administrative Agent shall have
received true and complete copies of the certificate of incorporation or
amalgamation and by-laws of each Facility Borrower.
(f) Legal Opinions. The Administrative 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 Administrative Agent, substantially in the form of
Exhibit C;
(ii) the executed legal opinion of William J. O'Brien,
General Counsel of Chrysler, substantially in the form of Exhibit
D-1; and
(iii) the executed legal opinion of Fasken Campbell Godfrey,
Canadian Counsel to Chrysler Canada, substantially in the form of
Exhibit D-2.
(g) Existing Credit Agreements. The Administrative Agent shall have
received satisfactory evidence that the Existing Credit Agreements shall
have been terminated pursuant to an irrevocable notice of termination and
that any amounts owing thereunder (including,
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38
without limitation, any accrued unpaid fees thereunder through the
Effective Date) by Chrysler or Chrysler Canada, as the case may be, shall
have been (or shall upon the occurrence of the Effective Date be) paid in
full. Without affecting any terms of the Existing Credit Agreements which
expressly survive the termination of the Existing Credit Agreements, each
Bank party to any Existing Credit Agreement hereby waives any requirement
of advance notice of such termination contained in such Existing Credit
Agreement and hereby agrees that such 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
of the conditions to effectiveness set forth in this subsection 6.1.
The Administrative 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 6.1(a).
6.2 Conditions to All Facility Loans. The obligation of each Bank
to make any Facility Loan (including any Facility Loan on the Effective Date
but excluding any conversion or continuation of any Loan pursuant to subsection
2.3 or 3.4) is subject to the satisfaction (or waiver by the Required U.S.
Banks (in the case of U.S. Loans) or the Required C$ Banks (in the case of C$
Loans)) of the conditions precedent described in clauses (a), (b) and (c)
below:
(a) Representations and Warranties. The representations and
warranties made by Chrysler herein (except for the representations and
warranties set forth in subsection 5.2) shall be true and correct in all
material respects on and as of the Borrowing Date for such Facility 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 Facility Loan to be made on such Borrowing Date.
(c) Corporate Authority. The borrowing of such Facility Loan shall
have been duly authorized by all necessary corporate action on the part of
the relevant Facility Borrower and the relevant Agent shall have received
evidence of such corporate authority.
Each borrowing by either Facility Borrower hereunder shall constitute a
representation and warranty by such Facility Borrower hereunder as of the date
of each such borrowing that the conditions in clauses (a), (b) and (c) above
have been satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
From and after the Effective Date, so long as the Commitments remain
in effect, any Facility Loans remain outstanding and unpaid or any other amount
is owing hereunder to any Bank or either Agent:
7.1 Financial Statements. Each Facility Borrower will furnish (a)
in the case of Chrysler, to the Administrative Agent and each Bank or (b) in
the case of Chrysler Canada, to the Canadian Administrative Agent and each C$
Bank:
<PAGE> 43
39
(i) as soon as available, but in any event within 120 days after
the end of each fiscal year of such Facility Borrower, a copy of the
consolidated balance sheet of such Facility Borrower 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 LLP or
other independent public accountants of nationally recognized standing
(other than a qualification or exception relating to a change in the
application of accounting principles used by such Facility Borrower and
its subsidiaries, which change shall be concurred with by Deloitte &
Touche LLP or such other accountants, as the case may be); and
(ii) 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 such Facility Borrower, a copy of the unaudited consolidated balance
sheet of such Facility Borrower and its subsidiaries as at the end of each
such quarter and the related unaudited consolidated statements of income
and cash flows of such Facility Borrower 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 present fairly the consolidated financial
condition and results of operations of such Facility Borrower and its
Subsidiaries for the period referred to therein (subject, in the case of
interim statements to normal year-end adjustment) and shall be 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 such
Facility Borrower's independent public accountants and disclosed therein).
7.2 Certificates; Other Information. Each Facility Borrower will
furnish (a) in the case of Chrysler, to the Administrative Agent and each Bank
or (b) in the case of Chrysler Canada, to the Canadian Administrative Agent
and each C$ Bank:
(i) concurrently with each delivery of financial statements
pursuant to subsection 7.1, a certificate of a Responsible Officer (x)
stating that such officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and (y) in the
case of Chrysler, showing in reasonable detail the calculations
supporting such statement in respect of subsection 8.1;
(ii) promptly after the same are sent, copies of all financial
statements and reports which Chrysler 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 such Facility Borrower may file with
the Securities and Exchange Commission, the Ontario Securities Commission,
or any successor or analogous Governmental Authority; and
(iii) promptly, such additional financial and other information as
the relevant Agent or any relevant Bank may from time to time reasonably
request.
7.3 Payment of Tax Liabilities. Chrysler will pay and discharge,
and cause each Significant Subsidiary to pay and discharge, at or before their
maturity, all taxes and other similar
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40
governmental levies, charges and imposts of any Governmental Authority except
where the same are being contested in good faith by appropriate actions.
7.4 Maintenance of Corporate Existence; Compliance with Applicable
Law. Chrysler will (a) maintain its corporate existence, rights and
franchises necessary to continue its business and the corporate existence,
rights and franchises necessary to continue the business of each Significant
Subsidiary, provided that the foregoing shall not be a limitation on the right
of Chrysler to discontinue any operations if in the opinion of Chrysler such
discontinuance is in the best interest of Chrysler and would not materially
adversely affect the ability of either Facility Borrower to pay its debts as
they become due; and (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 Chrysler and its Subsidiaries taken as a whole.
7.5 Insurance. Chrysler 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 Chrysler is available on commercially
reasonable terms and will provide sound and reasonable protection for
Chrysler's or such Significant Subsidiary's assets and operations.
Notwithstanding the immediately preceding sentence, Chrysler 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 Chrysler's and such Significant Subsidiary's
assets and operations.
7.6 Notices. Chrysler (and in the case of clause (a)(i) below,
Chrysler Canada, but only in the case of any Default or Event of Default
relating to it) will (a) promptly give notice in writing to the Administrative
Agent (which shall promptly notify each Bank) of (i) 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 9 but for the proviso therein
contained, or (ii) the commencement of (x) any material litigation or
proceedings affecting Chrysler or any Significant Subsidiary or (y) any dispute
between Chrysler 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 Chrysler or any of its
Significant Subsidiaries; and (b) as soon as possible, deliver to the
Administrative Agent (which shall promptly notify each Bank) copies of any
notices received by Chrysler of any failure or alleged failure to meet CAFE,
emission or safety requirements that Chrysler reasonably deems to be material
to the business, operations, property or financial condition of Chrysler.
SECTION 8. NEGATIVE COVENANTS
From and after the Effective Date, so long as the Commitments remain
in effect, any Facility Loans remain outstanding and unpaid or any other amount
is owing hereunder to any Bank or either Agent:
<PAGE> 45
41
8.1 Indebtedness to Total Capitalization. Chrysler will not permit
the ratio of Indebtedness to Total Capitalization as of the last day of any
quarterly period of any fiscal year of Chrysler to be greater than 0.60 to 1.0.
8.2 Limitation on Liens. Chrysler 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 Chrysler 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 Chrysler or any
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 Chrysler or any Subsidiary;
(i) Liens in the form of pledges by any Chrysler Mexican Subsidiary
to financial institutions of Dollar or Mexican peso deposits or Dollar or
Mexican peso certificates of
<PAGE> 46
42
deposit owned by such Chrysler Mexican Subsidiary to secure Dollar or
Mexican peso borrowings from such financial institutions by such Chrysler
Mexican Subsidiary;
(j) Liens on (i) motor vehicles leased to employees and (ii) employee
lease payments in connection with the Chrysler employee lease 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 Chrysler 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 Chrysler).
8.3 Limitation on Sales and Leasebacks. Chrysler 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 Chrysler or any
Subsidiary) providing for the leasing by Chrysler or a Subsidiary of any real
or personal property which has been owned and operated by Chrysler or any such
Subsidiary for more than 150 consecutive days and which has been or is to be
sold or transferred by Chrysler 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 Chrysler or such Subsidiary would be
permitted to create Indebtedness secured by a Lien pursuant to subsection 8.2
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, Chrysler 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 $100,000,000 for Chrysler
and all such Subsidiaries. Notwithstanding the provisions of this subsection,
a sale of property and a leaseback thereof pursuant to an operating lease (that
is, a lease which under GAAP would not be capitalized on the books of the
lessee) thereof shall not be deemed to be a sale and leaseback transaction.
8.4 Limitation on Fundamental Changes. (a) Chrysler will not (i)
merge or consolidate with any other Person (unless (x) Chrysler shall be the
continuing corporation and (y) immediately before and immediately after giving
effect to such merger or consolidation, no Default or Event of Default shall
have occurred and be continuing) or (ii) sell or convey all or substantially
all of its assets to any Person.
(b) Chrysler Canada will not (i) amalgamate with any other Person
(unless (x) the amalgamated Person shall, if requested by the Canadian
Administrative Agent, execute and deliver a confirmation that it is a resident
of Canada for purposes of the Income Tax Act (Canada), a ratification of any
outstanding C$ Loans and a confirmation of its assumption of the Subsidiary
Borrower
<PAGE> 47
43
Obligations owing by Chrysler Canada and (y) immediately before and
immediately after giving effect to such amalgamation, no Default or Event
of Default shall have occurred and be continuing) or (ii) sell or convey
all or substantially all of its assets to any Person (other than Chrysler).
SECTION 9. EVENTS OF DEFAULT
Upon the occurrence of any of the following events:
(a) Chrysler or any Subsidiary Borrower shall fail to pay any
principal of any Loan when due in accordance with the terms hereof or
of the relevant Foreign Currency Subfacility, as the case may be; or
fail to pay any interest on any Loan, or any other amount payable
hereunder or under any Foreign Currency Subfacility, within five
Business Days after any such amount becomes due in accordance with the
terms hereof or of the relevant Foreign Currency Subfacility, as the
case may be; or
(b) Any representation or warranty made or deemed made by either
Facility Borrower 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 Chrysler and
its Subsidiaries taken as a whole or (ii) to the validity or
enforceability of this Agreement or the rights and remedies of the
Administrative Agent or the Banks hereunder; or
(c) Chrysler shall default in the observance or performance of
any agreement contained in subsection 8.1 provided that so long as no
Facility 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 7.1 of financial statements covering the 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 9) within which financial statements
covering the fiscal quarter next following the initial date of such
default are required to be furnished pursuant to subsection 7.1 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 either Facility Borrower of a notice of intention to
borrow pursuant to subsection 2.2, 3.2 or 3.3 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) either Facility Borrower shall default in the observance or
performance of any agreement contained in subsections 8.2 through 8.4;
or
(e) either Facility Borrower 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 such Facility Borrower of notice of such
default from either Agent or the Required Banks; or
<PAGE> 48
44
(f) (i) Chrysler 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) Chrysler 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 such Indebtedness to become due
prior to its stated maturity (or in the case of Indebtedness constituting a
Guaranty, 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 any Chrysler Mexican Subsidiary solely by reason of a
default by such Chrysler Mexican Subsidiary 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 such
Chrysler Mexican Subsidiary to obtain such other currency with Mexican
pesos; or
(g) (i) Chrysler 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, 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 Chrysler or any of
its Significant Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against Chrysler
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 Chrysler 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) Chrysler 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) Chrysler 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 Chrysler or any of its Subsidiaries involving in
the aggregate a liability (to the extent not paid or covered by insurance)
of $25,000,000 (or its equivalent in another currency) or more and shall
have been unpaid for a period of 30 consecutive days;
<PAGE> 49
45
then, and in any such event, (a) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (g) above with respect to
either Facility Borrower, automatically (x) the Commitments shall
immediately terminate and (y) the Loans (including the face amount of all
Bankers' Acceptances accepted by any C$ Bank), with accrued interest
thereon, and all other amounts owing under this Agreement and the Foreign
Currency Subfacilities 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
Administrative Agent may, or upon the request of the Required Banks, the
Administrative Agent shall, by notice to each Facility Borrower, declare
the Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the consent of the Required Banks, the
Administrative Agent may, or upon the request of the Required Banks, the
Administrative Agent shall, by notice of default to each Facility Borrower,
declare the Loans (including the face amount of all Bankers' Acceptances
accepted by any C$ Bank), with accrued interest thereon, and all other
amounts owing under this Agreement and the Foreign Currency Subfacilities
to be due and payable forthwith, whereupon the same shall immediately
become due and payable. Except as expressly provided above in this Section
9, presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
SECTION 10. THE AGENTS
10.1 Appointment. Each Bank hereby irrevocably designates and
appoints the Administrative Agent as the administrative agent of such Bank
under this Agreement, and each such Bank irrevocably authorizes the
Administrative 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 Administrative Agent
by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. Each C$ Bank hereby irrevocably designates
and appoints the Canadian Administrative Agent as the Canadian
administrative agent of such Bank under this Agreement, and each C$ Bank
hereby irrevocably authorizes the Canadian Administrative Agent as Canadian
administrative agent for such Bank 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 Canadian Administrative Agent
by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, neither Agent shall 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 any Foreign Currency Subfacility or otherwise exist
against either Agent.
10.2 Delegation of Duties. Each 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. Neither Agent shall be responsible for the negligence or
misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
10.3 Exculpatory Provisions. Neither Agent nor any of their
respective 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 either Facility
Borrower, any Foreign Subsidiary Borrower or any Subsidiary or any officer
thereof contained in this
<PAGE> 50
46
Agreement, any Foreign Currency Subfacility or in any certificate, report,
statement or other document referred to or provided for in, or received by
either Agent under or in connection with, this Agreement or any Foreign
Currency Subfacility or for the sufficiency of this Agreement or any
Foreign Currency Subfacility or for any failure of either Facility
Borrower, any Foreign Subsidiary Borrower or any Subsidiary to perform its
obligations hereunder or thereunder. Neither Agent shall be under any
obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any Foreign Currency Subfacility, or to inspect the
properties, books or records of either Facility Borrower, any Foreign
Subsidiary Borrower or any Subsidiary.
10.4 Reliance by Agents. Each Agent shall be entitled to rely,
and shall be fully protected in relying, upon any 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
Chrysler), independent accountants and other experts selected by the
relevant Agent. Each Agent shall be fully justified in failing or refusing
to take any action under this Agreement unless it shall first receive such
advice or concurrence of the Required 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. Each Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement 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 failure to act
pursuant thereto shall be binding upon all the Banks.
10.5 Notice of Default. Neither Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent has received notice from a Bank or either
Facility Borrower 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 either Agent receives such a notice, such Agent shall give
notice thereof to the Banks, and, if such notice is received from a Bank,
such Agent shall give notice thereof to each Facility Borrower. The
Administrative 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 Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event
of Default as it shall deem advisable in the best interests of the Banks.
10.6 Non-Reliance on Agents and other Banks. Each Bank
expressly acknowledges that neither 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 either Agent
hereafter taken, including any review of the affairs of either Facility
Borrower, shall be deemed to constitute any representation or warranty by
either Agent to any Bank. Each Bank represents to each Agent that it has,
independently and without reliance upon either 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
Facility Borrowers and any Foreign Subsidiary Borrower and made its own
decision to make its Loans and enter into this Agreement and any Foreign
Currency Subfacility. Each Bank also represents that it will,
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47
independently and without reliance upon either 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 or any Foreign Currency
Subfacility 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 Facility Borrowers and any Foreign
Subsidiary Borrower. Except for notices, reports and other documents
expressly required to be furnished to the Banks by the relevant Agent
hereunder, neither Agent shall 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
either Facility Borrower or any Foreign Subsidiary Borrower which may come
into the possession of such Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
10.7 Indemnification. The Banks (or, in the case of the
indemnity in favor of the Canadian Administrative Agent, the C$ Banks)
agree to indemnify each Agent (to the extent not reimbursed by either
Facility Borrower and without limiting the obligation of each Facility
Borrower to do so), ratably according to the respective amounts of their
Commitment Percentages (or, in the case of the indemnity in favor of the
Canadian Administrative Agent, the C$ Banks' respective C$ Commitment
Percentages) in effect on the date on which indemnification is sought under
this subsection 10.7 (or, if indemnification is sought after the date upon
which the Commitments shall have terminated, ratably in accordance with
such Commitment Percentages (or C$ 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 such Agent in any way relating
to or arising out of this Agreement or any Foreign Currency Subfacility, or
any documents contemplated by or referred to herein or the transactions
contemplated hereby or any action taken or omitted by such Agent under or
in connection with any of the foregoing, provided that no Bank shall be
liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Agent's gross negligence or willful
misconduct. The agreements in this subsection 10.7 shall survive the
termination of this Agreement or any Foreign Currency Subfacility, the
termination of the Commitments and the payment of the Loans and all other
amounts payable hereunder or under any Foreign Currency Subfacility.
10.8 Agents in their Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in
any kind of business with each Facility Borrower and any Foreign Subsidiary
Borrower as though such Agent was not an Agent hereunder. With respect to
its Loans made or renewed by it, each Agent shall have the same rights and
powers under this Agreement as any Bank and may exercise the same as though
it were not an Agent, and the terms "Bank" and "Banks" shall include each
Agent in its individual capacity.
10.9 Successor Agents. Each Agent may resign as an Agent upon
30 days' notice to the Banks and the Facility Borrowers and may be removed
at any time with or without cause by the Required Banks. If an Agent shall
resign or be removed as an Agent under this Agreement, then either (a) the
Required Banks shall appoint from among the Banks a successor
administrative agent or Canadian administrative agent, as applicable, for
the Banks, which successor agent shall be approved by Chrysler (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
thirty-day period following such
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48
Agent's notice to the Banks or its removal as Agent, such Agent shall then
appoint a successor agent who shall serve as Administrative Agent or
Canadian Administrative Agent, as applicable, until such time, if any, as
the Required Banks appoint, and Chrysler 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 Administrative Agent or the Canadian Administrative Agent, as
applicable, and the terms "Administrative Agent", "Canadian Administrative
Agent" and "Agent", as applicable, 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. After any retiring or removed Agent's resignation or removal
hereunder as Agent, the provisions of this Section 10 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 11. FOREIGN CURRENCY SUBFACILITIES
11.1 Terms of Foreign Currency Subfacilities. (a) Subject to
the provisions of this Section 11, each Bank hereby agrees that Chrysler
may in its discretion from time to time designate any credit facility to
which any one or more Foreign Borrowers and any one or more Banks is a
party as a "Foreign Currency Subfacility", with the consent of each such
Bank in its sole discretion, and subject to confirmation by the
Administrative Agent that such facility complies with the requirements of
this Section 11, by delivering a Foreign Currency Subfacility Addendum to
the Administrative Agent, executed by Chrysler and any relevant Foreign
Subsidiary Borrower and executed or acknowledged in writing by each such
Bank, provided, that on the effective date of such designation (i) no
Default or Event of Default shall have occurred and be continuing and (ii)
Chrysler shall have agreed in writing to pay to the Administrative Agent an
administration fee in respect of such Foreign Currency Subfacility in an
amount mutually acceptable to Chrysler and the Administrative Agent. Each
Foreign Currency Subfacility Addendum shall specify whether the relevant
Foreign Currency Subfacility is a Foreign Committed Subfacility or a
Foreign Uncommitted Subfacility. Except as otherwise provided in this
Section 11, the terms and conditions of each Foreign Currency Subfacility
shall be determined by mutual agreement of the relevant Foreign Borrower(s)
and Bank(s). The documentation governing each Foreign Currency Subfacility
shall contain an express acknowledgement that such Foreign Currency
Subfacility shall be subject to the provisions of this Section 11. Each
Bank party to a Foreign Currency Subfacility must be a US$ Bank or a
subsidiary, affiliate, branch or agency of a US$ Bank, and each party
hereto and, by agreeing to any Foreign Currency Subfacility designation as
contemplated hereby, any such subsidiary, affiliate, branch or agency,
acknowledges and agrees that each reference in this Agreement to any Bank
shall, to the extent applicable, be deemed to be a reference to such
subsidiary, affiliate, branch or agency. In the event of any inconsistency
between the terms of this Agreement and the terms of any Foreign Currency
Subfacility, the terms of this Agreement shall prevail. It is understood
that the provisions of subsections 4.9, 4.10 and 4.11 do not apply to any
Foreign Currency Subfacility or any Loans made thereunder.
(b) The documentation governing each Foreign Currency
Subfacility shall set forth the maximum amount (expressed in Dollars)
available to be borrowed from each Bank thereunder (each, a "Foreign
Currency Subfacility Maximum Borrowing Amount"). In no event shall (i) the
aggregate of all Foreign Currency Subfacility Maximum Borrowing Amounts in
respect of all Banks at any time exceed $400,000,000, (ii) the aggregate of
all Foreign Currency Subfacility Maximum Borrowing Amounts in respect of
any Bank at any time (x) exceed 60% of such Bank's U.S. Base Commitment or
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(y) exceed such Bank's U.S. Commitment, or (iii) the Aggregate U.S./Foreign
Extensions of Credit of any Bank at any time exceed such Bank's U.S.
Commitment. The making of Foreign Currency Loans by a Bank under a Foreign
Currency Subfacility shall under no circumstances reduce the amount
available to be borrowed from such Bank under any other Foreign Currency
Subfacility to which such Bank is a party.
(c) Except as otherwise required by applicable law, in no event
shall the Banks party to a Foreign Currency Subfacility have the right to
accelerate the Foreign Currency Loans outstanding thereunder, or to
terminate their commitments (if any) to make such Loans prior to the stated
termination date in respect thereof, except, in each case, in connection
with an acceleration of the Loans or a termination of the Commitments
pursuant to Section 9 of this Agreement, provided, that nothing in this
paragraph (c) shall be deemed to require any Bank to make a Foreign
Currency Loan if the applicable conditions precedent to the making of such
Foreign Currency Loan set forth in the relevant Foreign Currency
Subfacility have not been satisfied. No Foreign Currency Loan may be made
under a Foreign Currency Subfacility if a Default or Event of Default shall
have occurred and be continuing or would result therefrom.
(d) The relevant Banks, or, if so specified in the relevant
Foreign Currency Subfacility, an agent acting on their behalf, shall
furnish to the Administrative Agent, immediately upon its request, a
statement setting forth the outstanding Foreign Currency Loans made under
such Foreign Currency Subfacility. The Administrative Agent shall be
entitled to rely on any such statement without further investigation.
(e) If any amendment, supplement or other modification to a
Foreign Currency Subfacility shall (i) add a Bank as a party thereto or
(ii) change the Foreign Currency Subfacility Maximum Borrowing Amount of
any Bank party thereto, Chrysler shall promptly furnish an appropriately
revised Foreign Currency Subfacility Addendum, executed by Chrysler, any
relevant Foreign Subsidiary Borrower and the affected Banks (or any agent
acting on their behalf), to the Administrative Agent.
(f) Chrysler may terminate its designation of a facility as a
Foreign Currency Subfacility, with the consent of each Bank party thereto
in its sole discretion, by written notice to the Administrative Agent,
which notice shall be executed by Chrysler, any relevant Foreign Subsidiary
Borrower and each Bank party to such Foreign Currency Subfacility (or any
agent acting on their behalf). Once notice of such termination is received
by the Administrative Agent, such Foreign Currency Subfacility and the
loans and other obligations outstanding thereunder shall immediately cease
to be subject to the terms of this Agreement (including the guarantee of
Chrysler contained in Section 12).
(g) Nothing in this Section 11 shall be deemed to limit the
ability of Chrysler or any of the Subsidiaries to enter into credit
facilities which do not constitute Foreign Currency Subfacilities.
11.2 Currency Fluctuations, etc. (a) No later than 2:00 P.M.,
New York City time, on each Foreign Calculation Date, the Administrative
Agent shall (i) determine the Foreign Exchange Rate as of such Foreign
Calculation Date with respect to each Foreign Currency covered by a Foreign
Currency Subfacility and (ii) give notice thereof to the relevant Banks and
Chrysler. The Foreign Exchange Rates so determined shall become effective
on the first Business Day immediately following
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50
the relevant Foreign Calculation Date (a "Foreign Reset Date") and shall
remain effective until the next succeeding Foreign Reset Date. If on any
Foreign Calculation Date a Foreign Exchange Rate cannot be determined with
respect to any Foreign Currency, such Foreign Exchange Rate shall remain at
the applicable rate effective as of the most recent Foreign Reset Date with
respect to which such Foreign Exchange Rate was available until such
Foreign Exchange Rate can once again be determined.
(b) No later than 2:00 P.M., New York City time, on each Foreign
Reset Date and each Borrowing Date, the Administrative Agent shall (i)
determine the US$ Equivalent of the Foreign Currency Loans then outstanding
under each Foreign Currency Subfacility (after giving effect to any Foreign
Currency Loans to be made or repaid on such date) and (ii) notify the
relevant Banks and Chrysler of the results of such determination.
(c) If, on any Foreign Reset Date or any Borrowing Date (after
giving effect to (i) any Loans to be made or repaid on such date and (ii)
any amendment, supplement or other modification to any Foreign Currency
Subfacility effective on such date of which the Administrative Agent has
received notice), the Aggregate U.S./Foreign Extensions of Credit of any
Bank exceed 105% of the U.S. Commitment of such Bank, then, within ten
Business Days after notice thereof to Chrysler from the Administrative
Agent, Chrysler shall cause the relevant Foreign Borrower to reduce the
Aggregate Foreign Extensions of Credit of such Bank in an amount such that,
after giving effect thereto, the Aggregate U.S./Foreign Extensions of
Credit of such Bank shall be equal to or less than the U.S. Commitment of
such Bank.
(d) If, on any Foreign Reset Date or any Borrowing Date (after
giving effect to (i) any Foreign Currency Loans to be made or repaid on
such date and (ii) any amendment, supplement or other modification to any
Foreign Currency Subfacility effective on such date of which the
Administrative Agent has received notice), the US$ Equivalent of the
Foreign Currency Loans made by any Bank outstanding under any Foreign
Currency Subfacility to which such Bank is a party exceeds 105% of the
Foreign Currency Subfacility Maximum Borrowing Amount of such Bank with
respect thereto, then Chrysler shall cause the relevant Foreign Borrower,
within ten Business Days after notice thereof to Chrysler from the
Administrative Agent, to (i) increase the Foreign Currency Subfacility
Maximum Borrowing Amount of such Bank with respect to such Foreign Currency
Subfacility (subject to the approval of such Bank) in accordance with
subsection 11.1(e) and/or (ii) prepay such Foreign Currency Loans in
accordance with the terms of such Foreign Currency Subfacility in an
aggregate amount such that, after giving effect thereto, the US$ Equivalent
of such Foreign Currency Loans shall be equal to or less than such Bank's
Foreign Currency Subfacility Maximum Borrowing Amount with respect to such
Foreign Currency Subfacility.
(e) The Administrative Agent shall promptly furnish each
affected Bank with a copy of any notice described in subsection 11.2(c) or
11.2(d) which has been delivered to Chrysler by the Administrative Agent.
SECTION 12. GUARANTEE
12.1 Guarantee. In order to induce the Agents and the Banks to
execute and deliver this Agreement, to become a party to any Foreign
Currency Subfacility and to make or maintain the Loans, and in
consideration thereof, Chrysler hereby unconditionally and irrevocably
guarantees, as primary obligor and not merely as surety, to the
Administrative Agent, for the ratable benefit of the
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51
Agents and the Banks, the prompt and complete payment and performance by
each Subsidiary Borrower when due (whether at stated maturity, by
acceleration or otherwise) of the Subsidiary Borrower Obligations. The
guarantee contained in this Section 12, subject to subsection 12.5, shall
remain in full force and effect until the Subsidiary Borrower Obligations
are paid in full and the Commitments are terminated, notwithstanding that
from time to time prior thereto any Subsidiary Borrower may be free from
any Subsidiary Borrower Obligations.
Chrysler agrees that whenever, at any time, or from time to time,
it shall make any payment to either Agent or any Bank on account of its
liability under this Section 12, it will notify the Administrative Agent
(and, in the cases of payments to it, the Canadian Administrative Agent)
and such Bank in writing that such payment is made under the guarantee
contained in this Section 12 for such purpose. No payment or payments made
by any Subsidiary Borrower or any other Person or received or collected by
either Agent or any Bank from any Subsidiary Borrower or any other Person
by virtue of any action or proceeding or any setoff or appropriation or
application, at any time or from time to time, in reduction of or in
payment of the Subsidiary Borrower Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of Chrysler under this
Section 12 which, notwithstanding any such payment or payments, shall
remain liable for the unpaid and outstanding Subsidiary Borrower
Obligations until, subject to subsection 12.5, the Subsidiary Borrower
Obligations are paid in full and the Commitments are terminated.
12.2 No Subrogation, Contribution, Reimbursement or Indemnity.
Notwithstanding anything to the contrary in this Section 12, Chrysler
hereby irrevocably waives (a) all rights which may have arisen in
connection with the guarantee contained in this Section 12 to be subrogated
to any of the rights (whether contractual, under the Bankruptcy Code,
including Section 509 thereof, under common law or otherwise) of either
Agent or any Bank against any Subsidiary Borrower or against either Agent
or any Bank for the payment of the Subsidiary Borrower Obligations and (b)
all contractual, common law, statutory and other rights of reimbursement,
contribution, exoneration or indemnity (or any similar right) from or
against any Subsidiary Borrower or any other Person which may have arisen
in connection with the guarantee of the Subsidiary Borrower Obligations
contained in this Section 12, in each case until all Subsidiary Borrower
Obligations of such Subsidiary Borrower have been paid in full. So long as
the Subsidiary Borrower Obligations remain outstanding, if any amount shall
be paid by or on behalf of any Subsidiary Borrower or any other Person to
Chrysler on account of any of the rights waived in this subsection 12.2,
such amount shall be held by Chrysler in trust, segregated from other funds
of Chrysler, and shall, forthwith upon receipt by Chrysler, be turned over
to the Administrative Agent in the exact form received by Chrysler (duly
indorsed by Chrysler to the Administrative Agent, if required), to be
applied against the Subsidiary Borrower Obligations, whether matured or
unmatured, in such order as the Administrative Agent may determine. The
provisions of this subsection 12.2 shall survive the term of the guarantee
contained in this Section 12 and the payment in full of the Subsidiary
Borrower Obligations and the termination of the Commitments.
12.3 Amendments, etc. with respect to the Subsidiary Borrower
Obligations. Chrysler shall remain obligated under this Section 12
notwithstanding that, without any reservation of rights against Chrysler,
and without notice to or further assent by Chrysler, any demand for payment
of or reduction in the principal amount of any of the Subsidiary Borrower
Obligations made by either Agent or any Bank may be rescinded by such Agent
or such Bank, and any of the Subsidiary Borrower Obligations continued, and
the Subsidiary Borrower Obligations, or the liability of any other party
upon or for any part thereof, or any collateral security or guarantee
therefor or right of offset with respect
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52
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or
released by either Agent or any Bank, and this Agreement and any other
documents executed and delivered in connection herewith or in connection
with any Foreign Currency Subfacility may be amended, modified,
supplemented or terminated, in whole or in part, as may be deemed advisable
from time to time, and any collateral security, guarantee or right of
offset at any time held by either Agent or any Bank for the payment of the
Subsidiary Borrower Obligations may be sold, exchanged, waived, surrendered
or released. No Agent or Bank shall have any obligation to protect,
secure, perfect or insure any lien at any time held by it as security for
the Subsidiary Borrower Obligations or for the guarantee contained in this
Section 12 or any property subject thereto.
12.4 Guarantee Absolute and Unconditional. Chrysler waives any
and all notice of the creation, renewal, extension or accrual of any of the
Subsidiary Borrower Obligations and notice of or proof of reliance by
either Agent or any Bank upon the guarantee contained in this Section 12 or
acceptance of the guarantee contained in this Section 12; the Subsidiary
Borrower Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon the guarantee contained in this Section 12; and
all dealings between Chrysler or the Subsidiary Borrowers, on the one hand,
and the Agents and the Banks, on the other, shall likewise be conclusively
presumed to have been had or consummated in reliance upon the guarantee
contained in this Section 12. Chrysler waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon
Chrysler or any Subsidiary Borrower with respect to the Subsidiary Borrower
Obligations. The guarantee contained in this Section 12 shall be construed
as a continuing, absolute and unconditional guarantee of payment without
regard to (a) the validity or enforceability of this Agreement, any Foreign
Currency Subfacility, any of the Subsidiary Borrower Obligations or any
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by either Agent or any Bank,
(b) the legality under applicable Requirements of Law of repayment by the
relevant Subsidiary Borrower of any Subsidiary Borrower Obligations or the
adoption of any Requirement of Law purporting to render any Subsidiary
Borrower Obligations null and void, (c) any defense, setoff or counterclaim
(other than a defense of payment or performance by the applicable
Subsidiary Borrower) which may at any time be available to or be asserted
by Chrysler or any Subsidiary Borrower against either Agent or any Bank, or
(d) any other circumstance whatsoever (with or without notice to or
knowledge of Chrysler or any Subsidiary Borrower) which constitutes, or
might be construed to constitute, an equitable or legal discharge of any
Subsidiary Borrower for any Subsidiary Borrower Obligations, or of Chrysler
under the guarantee contained in this Section 12, in bankruptcy or in any
other instance. When either Agent or any Bank is pursuing its rights and
remedies under this Section 12 against Chrysler, such Agent or Bank may,
but shall be under no obligation to, pursue such rights and remedies as it
may have against any Subsidiary Borrower or any other Person or against any
collateral security or guarantee for the Subsidiary Borrower Obligations or
any right of offset with respect thereto, and any failure by either Agent
or any Bank to pursue such other rights or remedies or to collect any
payments from any Subsidiary Borrower or any such other Person or to
realize upon any such collateral security or guarantee or to exercise any
such right of offset, or any release of any Subsidiary Borrower or any such
other Person or of any such collateral security, guarantee or right of
offset, shall not relieve Chrysler of any liability under this Section 12,
and shall not impair or affect the rights and remedies, whether express,
implied or available as a matter of law, of the Agents and the Banks
against Chrysler.
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53
12.5 Reinstatement. The guarantee contained in this Section 12
shall continue to be effective, or be reinstated, as the case may be, if at
any time payment, or any part thereof, of any of the Subsidiary Borrower
Obligations is rescinded or must otherwise be restored or returned by
either Agent or any Bank upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of any Subsidiary Borrower or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, any Subsidiary Borrower or any substantial
part of its property, or otherwise, all as though such payments had not
been made.
12.6 Payments. Chrysler hereby agrees that any payments in
respect of the Subsidiary Borrower Obligations pursuant to this Section 12
will be paid without setoff or counterclaim in C$ (in the case of
Subsidiary Borrower Obligations arising under this Agreement) or, at the
option of the relevant Bank(s), in Dollars or in the relevant Foreign
Currency (in the case of Subsidiary Borrower Obligations arising under any
Foreign Currency Subfacility), to (unless otherwise specified by the
Administrative Agent): (a) the Canadian Administrative Agent at the office
of the Canadian Administrative Agent specified in subsection 13.2 (in the
case of Subsidiary Borrower Obligations arising under this Agreement) or
(b) the relevant Bank(s) (or an agent acting on their behalf) at the office
specified for payments under the relevant Foreign Currency Subfacility or
such other office as shall have been specified by the relevant Bank(s) in
each case to the extent permitted by applicable law (in the case of
Subsidiary Borrower Obligations arising under any Foreign Currency
Subfacility).
(b) In the event that any law, regulation, treaty or directive
(whether or not in effect on the date hereof), shall require any Taxes to
be withheld or deducted from any amount payable to any Bank under the
guarantee contained in this Section 12, upon notice by such Bank to
Chrysler (with a copy to the Administrative Agent) to the effect that as a
result of such law, rule, regulation, treaty or directive, Taxes are being
withheld or deducted from amounts payable to such Bank under the guarantee
contained in this Section 12, Chrysler will pay to such Bank (or, if
applicable, the relevant Agent or any other agent acting on such Bank's
behalf) additional amounts (in the relevant currency) so that such
additional amounts, together with amounts otherwise payable under the
guarantee contained in this Section 12, will yield to such Bank, after
deduction from such increased amount of all Taxes required to be withheld
or deducted therefrom, an amount that would be equal to the amount that
such Bank would have received under the guarantee contained in this Section
12 had no such withholding or deduction been required calculated after
taking into account all applicable Taxes and Other Taxes. If Chrysler
fails to pay any Taxes when due following notification by any Bank as
provided above, Chrysler shall indemnify such Bank for any incremental
taxes, interest or penalties that may become payable by any Bank as a
result of any such failure by Chrysler to make such payment. Within 30
days after the payment by Chrysler of any Taxes withheld or deducted from
any amount payable to any Bank under the guarantee contained in this
Section 12, Chrysler will furnish to such Bank (with a copy to the
Administrative Agent), the original or a certified copy of a receipt
evidencing payment thereof.
(c) If a payment made by Chrysler has been increased by an
amount referred to in subsection 12.6(b), and a Bank or any subsidiary,
parent or other affiliate of such Bank is able to apply for or otherwise
take advantage of any tax credit, deduction in computing income or similar
benefit (a "Tax Credit") by reason of any withholding or deduction made by
Chrysler in respect of the amount of the increase, then, subject to
subsection 12.6(d), such Bank will use reasonable efforts to obtain, or
cause such affiliate to obtain, the Tax Credit and such Bank, when it or
its affiliate realizes such Tax Credit (whether by way of reducing taxes
payable, receiving a tax refund, or otherwise), shall, subject to
subsection 12.6(d), repay to Chrysler such amount, if any (not exceeding
the amount of the increase)
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54
as is reasonably determined in the absolute and uncontrolled discretion of
such Bank to be equal to the net after-tax value to such Bank and its
affiliate, as the case may be, of such part of the Tax Credit as is
reasonably attributable to such withholding or deduction, having regard to
all dealings giving rise to similar credits, deductions or benefits in
relation to the same tax period and to the cost of obtaining the same. Any
such reimbursement shall be conclusive evidence of the amount due to
Chrysler and shall be accepted by it in full and final settlement of its
rights of reimbursement hereunder.
(d) Notwithstanding subsection 12.6(c), (i) nothing therein
contained shall interfere with the right of a Bank to arrange its tax
affairs in whatever manner it deems fit and, in particular, no Bank shall
be under any obligation to claim relief from its corporate profits or
similar tax liability in respect of any such deduction or withholding in
priority to any other reliefs, claims, credits or deductions available to
it and (ii) a Bank shall not be obligated to disclose to Chrysler any
information regarding its tax affairs or tax computations.
12.7 Judgments Relating to Guarantee. (a) If, for the purpose
of obtaining judgment in any court, it is necessary to convert a sum due
under the guarantee contained in this Section 12 in one currency into
another currency, Chrysler agrees, to the fullest extent that it may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures in the relevant jurisdiction the
relevant Bank (or agent acting on its behalf) could purchase the first
currency with such other currency for the first currency on the Banking Day
immediately preceding the day on which final judgment is given.
(b) The obligations of Chrysler in respect of any sum due under
the guarantee contained in this Section 12 shall, notwithstanding any
judgment in a currency (the "Judgment Currency") other than that in which
such sum is denominated in accordance with this Section 12 (the "Agreement
Currency"), be discharged only to the extent that, on the Banking Day
following receipt by any Bank (or agent acting on its behalf) (the
"Applicable Creditor") of any sum adjudged to be so due in the Judgment
Currency, the Applicable Creditor may in accordance with normal banking
procedures in the relevant jurisdiction purchase the Agreement Currency
with the Judgment Currency; if the amount of the Agreement Currency so
purchased is less than the sum originally due to the Applicable Creditor in
the Agreement Currency, Chrysler agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Applicable Creditor
against such loss, provided, that if the amount of the Agreement Currency
so purchased exceeds the sum originally due to the Applicable Creditor, the
Applicable Creditor agrees to remit such excess to Chrysler. The
obligations of Chrysler contained in this subsection 12.7 shall survive the
termination of the guarantee contained in this Section 12 and the payment
of all amounts owing hereunder.
12.8 Independent Obligations. The obligations of Chrysler under
the guarantee contained in this Section 12 are independent of the
obligations of each Subsidiary Borrower, and a separate action or actions
may be brought and prosecuted against Chrysler whether or not the relevant
Subsidiary Borrower be joined in any such action or actions. Chrysler
waives, to the full extent permitted by law, the benefit of any statute of
limitations affecting its liability hereunder or the enforcement thereof.
SECTION 13. MISCELLANEOUS
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55
13.1 Amendments and Waivers. With the written consent of the
Required Banks, the Administrative Agent and the Facility Borrowers may,
from time to time, enter into written amendments, supplements or
modifications hereto for the purpose of adding any provisions to this
Agreement or changing in any manner the rights of the Banks or of either
Facility Borrower hereunder or thereunder, and with the consent of the
Required Banks the Administrative Agent on behalf of the Banks may execute
and deliver to the Facility Borrowers a written instrument waiving, on such
terms and conditions as the Administrative Agent may specify in such
instrument, any of the requirements of this Agreement or any Default or
Event of Default and its consequences; provided, however, that no such
waiver and no such amendment, supplement or modification shall (a) extend
the maturity of any Facility 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 any Facility Fee or Acceptance
Fee 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 13.1 or reduce the percentage specified in the definition of
Required Banks, Required U.S. Banks or Required Canadian Banks, or consent
to the assignment or transfer by either Facility Borrower of any of its
rights and obligations under this Agreement, in each case without the
written consent of each Bank directly affected thereby, (b) release
Chrysler from its obligations under the guarantee contained in Section 12
without the prior written consent of each C$ Bank and each Bank party to a
Foreign Currency Subfacility or (c) amend, modify or waive any provision of
Section 10 without the written consent of each Agent directly affected
thereby. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Banks and shall be binding
upon each Facility Borrower, the Banks and each Agent. In the case of any
waiver, each Facility Borrower, the Banks and each Agent shall be restored
to their former position and rights hereunder, 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. The Administrative Agent shall
give the Canadian Administrative Agent prompt written notice of any waiver,
amendment, supplement or modification entered into pursuant to this
subsection 13.1.
13.2 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 Facility Borrowers, the Canadian Administrative Agent and the
Administrative 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:
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Chrysler: Chrysler Corporation
1000 Chrysler Drive
Auburn Hills, Michigan 48326-2766
Attention: Treasurer's Office
Telecopy: (810) 512-1766
Chrysler Canada: Chrysler Canada Ltd.
2450 Chrysler Center
Windsor, Ontario
Canada N9A4H6
Attention: Treasurer
Telecopy: (519) 973-4310
The Administrative
Agent: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: Rosemary Bradley
Telecopy: (212) 972-9854
With a copies to: Chemical Bank Agency Services
Grand Central Tower
140 East 45th Street
New York, New York 10017
Attention: Sandra Miklave, Account Manager
Telecopy: (212) 622-0002
The Canadian
Administrative
Agent: Royal Bank of Canada
Loan Structuring and Syndications
Royal Bank Plaza, South Tower
200 Bay Street
Toronto, Ontario
Canada M5J 2J5
Attention: Manager, Business Operations
Telecopy: (416) 974-2407
provided that any notice, request or demand to or upon an Agent pursuant to
subsection 2.2, 2.3, 2.5, 3.2, 3.3, 3.4, 4.5 or 4.6 shall not be effective
until received. Each Bank is hereby authorized to divulge any information
pertaining to this Agreement, the transactions contemplated hereby and the
records maintained by such Bank when required by any Governmental
Authority.
13.3 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of either 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,
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remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.
13.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement.
13.5 Payment of Expenses and Taxes. Each of Chrysler and, as
applicable, Chrysler Canada, agrees:
(a) to pay or reimburse the Administrative 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, 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 Administrative Agent;
(b) to pay or reimburse each Bank and each Agent for all
reasonable costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, and
any such other documents, including, without limitation, the
reasonable fees and disbursements of one firm of special counsel in
each of the United States and Canada to the Agents and the Banks; and
(c) to pay and reimburse (i) each Bank for any payments made by
such Bank to either Agent pursuant to the provisions of subsection
10.7 and (ii) each Agent for any and all liabilities, expenses or
disbursements incurred by it which pursuant to the provisions of
subsection 10.7 are the subject of indemnification payments from the
Banks to the extent that such Agent, for whatever reason, did not
receive such indemnification payments from any Bank or Banks.
The agreements in this subsection 13.5 shall survive termination
of this Agreement, termination of the Commitments and the payment of the
Loans and all other amounts payable hereunder.
13.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Facility Borrowers, the Banks, the Agents, and their respective successors
and assigns, except that no Facility Borrower may assign or transfer any of
its rights or obligations under this Agreement without the prior written
consent of each Bank (in the case of Chrysler) or all of the C$ Banks (in
the case of Chrysler Canada).
(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 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 Chrysler and the
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Administrative 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
9(a), and (b) any amendment or modification extending the maturity of any
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 the Facility Fee payable hereunder, in each case to the extent
such Participant is directly affected thereby. Chrysler agrees that if
amounts outstanding under this Agreement 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 to the same extent as if the amount of its participating
interest were owing directly to it as a Bank under this Agreement, 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 13.8 as fully as if it were a Bank hereunder.
Chrysler also agrees that each Participant shall be entitled to the
benefits of subsections 4.9 and 4.11 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 subsections 4.9 and 4.11 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 Chrysler and the Administrative Agent (which shall not be
unreasonably withheld by either Chrysler or the Administrative 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 pursuant to an
Assignment and Acceptance (each, an "Assignment and Acceptance"),
substantially in the form of Exhibit E-1, 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 Chrysler and the Administrative Agent) and
delivered to the Administrative Agent for its acceptance and recording in
the relevant Register; provided, however, that a Bank may not assign its
rights or obligations under this Agreement unless and until (i) 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
(which may constitute U.S. Commitments and/or Canadian Commitments)
hereunder and, in the case of US$ Banks, under the CFC Commitment Transfer
Agreement so assigned shall be in an aggregate amount of $10,000,000 or
greater (unless, at Chrysler's discretion, a lesser amount is mutually
agreed upon between Chrysler and such Bank); (ii) if such assigning Bank is
not assigning all of its rights and obligations (which may constitute U.S.
Commitments and/or Canadian Commitments) under this Agreement, after giving
effect to the assignment, the aggregate principal amount of such assigning
Bank's obligations hereunder and, in case of US$ Banks, under the CFC
Commitment Transfer Agreement shall be in an aggregate amount of
$25,000,000 or greater (unless, at Chrysler's discretion, a lesser amount
is mutually agreed upon between Chrysler and such Bank) and (iii) after
giving effect to any such assignment by a US$ Bank, (x) the Aggregate
U.S./Foreign Extensions of Credit of such Bank shall not exceed its U.S.
Commitment and (y) the aggregate of all Foreign Currency Subfacility
Maximum Borrowing Amounts
<PAGE> 63
59
in respect of such Bank (I) shall not exceed 60% of such Bank's U.S. Base
Commitment and (II) shall not exceed such Bank's U.S. Commitment; and
provided, further, that in no event shall any such assignment by any US$
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 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, in the case of a US$ Bank, 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, in the case of a US$ Bank, 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, in the case of a US$ Bank,
the CFC Commitment Transfer Agreement, such assigning Bank shall cease to
be a party hereto and, in the case of a US$ Bank, to the CFC Commitment
Transfer Agreement).
(d) (i) The Administrative Agent shall maintain at its address
referred to in subsection 13.2 a copy of each Assignment and Acceptance
delivered to it and a register (the "U.S. Register") for the recordation of
the names and addresses of the US$ Banks and the U.S. Commitment and
Transferred Commitment of, and principal amount of the U.S. Loans and CFC
Loans and the Types of such loans owing to, each US$ Bank from time to
time. The entries in the U.S. Register shall be prima facie evidence of
the matters therein recorded, and Chrysler, the Administrative Agent and
the Banks may treat each Person whose name is recorded in the U.S. Register
as the owner of the Loans recorded therein for all purposes of this
Agreement. The U.S. Register shall be available for inspection by Chrysler
or any U.S. Bank at any reasonable time and from time to time upon
reasonable prior notice. The Administrative Agent shall give prompt
written notice to Chrysler of the making of any entry in the U.S. Register
or any change in any such entry.
(ii) The Canadian Administrative Agent shall maintain at its
address referred to in subsection 13.2 a register (the "Canadian Register")
for the recordation of the names and addresses of the C$ Banks, the
Canadian Commitments of such Banks, and the principal amount of each
category of C$ Loan owing to each such Bank from time to time. The entries
in the Canadian Register shall be conclusive, in the absence of clearly
demonstrable error, and Chrysler Canada, the Canadian Administrative Agent
and the Banks may treat each Person whose name is recorded in the Canadian
Register as the owner of the C$ Loans recorded therein for all purposes of
this Agreement. The Canadian Register shall be available for inspection by
Chrysler, Chrysler Canada or any C$ Bank at any reasonable time and from
time to time upon reasonable prior notice. The Canadian Administrative
Agent shall give prompt written notice to Chrysler Canada of the making of
any entry in the Canadian 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 Chrysler and the
Administrative Agent) together with payment to the Administrative Agent of
a registration and processing fee of $2,500, the Administrative Agent shall
(i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the
<PAGE> 64
60
information contained therein in the relevant Register and give notice of
such acceptance and recordation to the relevant Banks and Chrysler.
(f) Chrysler authorizes each US$ Bank (in the case of U.S.
Loans) and each C$ Bank (in the case of Canadian Loans) 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 Chrysler and its affiliates which has been delivered to such
Bank by or on behalf of Chrysler pursuant to this Agreement or, in the case
of a US$ Bank, the CFC Commitment Transfer Agreement or which has been
delivered to such Bank by or on behalf of Chrysler in connection with such
Bank's credit evaluation of Chrysler and its affiliates prior to becoming a
party to this Agreement and, in the case of a US$ Bank, the CFC Commitment
Transfer Agreement.
(g) Nothing herein shall prohibit any US$ Bank from pledging or
assigning all or any portion of its U.S. Loans to any Federal Reserve Bank
in accordance with applicable law. In order to facilitate such pledge or
assignment, Chrysler hereby agrees that, upon request of any US$ Bank at
any time and from time to time after Chrysler has made its initial
borrowing hereunder, Chrysler shall provide to such Bank, at Chrysler's own
expense, a promissory note, substantially in the form of Exhibit H,
evidencing the U.S. Loans owing to such Bank.
13.7 Rights 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 either Facility Borrower against any and all of the
obligations of such Facility Borrower then due and owing. Each Bank agrees
promptly to notify such Facility Borrower and the Administrative 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.
13.8 Adjustments. If any Bank (a "benefitted Bank") shall at
any time, except in connection with any termination, replacement or
assignment of or by such Bank pursuant to this Agreement, receive any
payment of all or part of its U.S. Loans or C$ Loans, or interest thereon,
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 9, or otherwise) in a greater
proportion than any such payment to, or any collateral received by, any
other Bank, if any, in respect of such other Bank's U.S. Loans or C$ Loans,
as the case may be, or interest thereon, such benefitted Bank shall
purchase for cash from the other US$ Banks or C$ Banks, as the case may be,
such portion of each such other Bank's U.S. Loans or C$ Loans, as the case
may be, or shall provide such other relevant 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 relevant Banks;
provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such benefitted Bank, such purchase
shall be rescinded, and the purchase price and benefits returned, to the
extent of such recovery, but without interest. Each Facility Borrower
agrees that each Bank so purchasing a portion of another Bank's U.S. Loans
or C$ Loans, as the case may be, may exercise all rights of payment
(including, without
<PAGE> 65
61
limitation, rights of set-off) with respect to such portion as fully as if
such Bank were the direct holder of such portion.
13.9 New Banks; Commitment Increases; Commitment Reallocations.
(a) With the consent of Chrysler and upon notification to the
Administrative Agent, one or more additional Commercial Banks may become a
party to this Agreement by executing a New Bank Supplement with Chrysler
and the Administrative Agent, substantially in the form of Exhibit A,
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, in the
case of any US$ Bank, any such New Bank has also become a New Bank with the
same "Commitment Percentage" under and as defined in the CFC Commitment
Transfer Agreement pursuant to Section 9.10 thereof. Each New Bank shall
be designated as a US$ Bank with a U.S. Commitment and/or a C$ Bank with a
Canadian Commitment, as specified in such New Bank Supplement.
(b) With the consent of Chrysler and upon notification to the
Administrative Agent, any Bank may increase the amount of its Commitment by
executing a Commitment Increase Supplement with Chrysler and the
Administrative Agent, substantially in the form of Exhibit B, 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 (which
increase shall be allocated to its U.S. Commitment and/or its Canadian
Commitment, as specified in such Commitment Increase Supplement), and
Schedule I hereto shall be deemed to be amended to reflect the increased
Commitment of such Bank.
(c) With the consent of the Administrative Agent (which shall
not be unreasonably withheld), so long as no Default or Event of Default
shall have occurred and be continuing, Chrysler may reallocate all or any
portion of the Canadian Commitment of any C$ Bank to the U.S. Commitment of
such C$ Bank's Related US$ Bank or reallocate all or any portion of the
U.S. Commitment of any US$ Bank to the Canadian Commitment of such US$
Bank's Related C$ Bank by executing a Commitment Reallocation Supplement
hereto with the Administrative Agent, substantially in the form of Exhibit
E-2, whereupon the affected US$ Bank and C$ Bank shall be bound by and
entitled to the benefits of this Agreement with respect to the full amount
of the U.S. Commitment or Canadian Commitment of such Bank after giving
effect to such reallocation, and Schedule I hereto shall be deemed to be
amended to reflect such reallocation. Each reallocation pursuant to this
subsection 13.9(c) shall be subject to the prior written consent of the
affected US$ Bank and C$ Bank, provided, that each C$ Bank and its Related
US$ Bank confirm that, as of the date hereof, such C$ Bank and its Related
US$ Bank are willing to consider any reallocation of such Related US$
Bank's U.S. Commitment to such C$ Bank's Canadian Commitment which does not
increase such C$ Bank's Canadian Commitment above its Initial Offered
Canadian Commitment Amount.
(d) (i) If on the date upon which a Commercial Bank becomes a
New Bank (designated as a US$ Bank), upon which a Bank obtains a U.S.
Commitment or upon which a US$ Bank's U.S. Commitment is changed pursuant
to this subsection 13.9, there is an unpaid principal amount of U.S. Loans,
Chrysler shall borrow U.S. Loans from, or prepay U.S. Loans of, such Bank,
as applicable, in an amount such that, after giving effect thereto, the
quotient of (x) the U.S. Loans of such Bank of each Type (and, in the case
of Eurodollar Loans, of each Eurodollar Tranche) and (y)
<PAGE> 66
62
such Bank's U.S. Commitment is equal to the comparable quotient of each
other US$ Bank; provided, that after the first Foreign Currency Subfacility
becomes effective hereunder, the amount of such borrowing or prepayment
shall instead be determined by reference to the amount of each Type of U.S.
Loan (and, in the case of Eurodollar Loans, of each Eurodollar Tranche)
which would have been outstanding from such Bank if (1) each such Type or
tranche had been borrowed on the date of the relevant change in such Bank's
U.S. Commitment after giving effect to such change and (2) the aggregate
amount of each such Type or tranche requested to be so borrowed had been
increased or decreased, as the case may be, to the extent necessary to give
effect, with respect to such Bank, to the first sentence of subsection
4.8(a). Any Eurodollar Loan borrowed pursuant to the preceding sentence
shall bear interest at a rate equal to such rate as shall be mutually
agreed upon between Chrysler and the relevant Bank reflecting current
market conditions.
(ii) If on the date upon which a Commercial Bank becomes a New
Bank (designated as a C$ Bank), upon which a Bank obtains a Canadian
Commitment or upon which a C$ Bank's Canadian Commitment is changed
pursuant to subsection 13.9, there is an unpaid principal amount of C$
Loans, Chrysler Canada shall borrow C$ Loans from, or prepay or cash
collateralize (in the case of Bankers' Acceptances) C$ Loans of, such Bank,
as applicable, in an amount such that, after giving effect thereto, the
quotient of (x) the C$ Loans of such Bank of each category (and, in the
case of Bankers' Acceptances, of each maturity) and (y) such Bank's
Canadian Commitment is equal to the comparable quotient of each other C$
Bank. Any Bankers' Acceptance borrowed pursuant to the preceding sentence
shall yield an Acceptance Fee at a rate equal to such rate as shall be
mutually agreed upon between Chrysler and the relevant Bank reflecting
current market conditions.
(e) The Administrative Agent shall advise the Canadian
Administrative Agent and the Banks of each addition of a New Bank and of
each change in a Bank's U.S. Commitment or Canadian Commitment pursuant to
this subsection 13.9 and of the amount of any borrowing or prepayment
required to be made from or to any such Bank pursuant to this subsection
13.9 upon such addition or change.
13.10 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 Chrysler and the Administrative
Agent.
13.11 Judgments Relating to Chrysler Canada. (a) If, for the
purpose of obtaining judgment in any court, it is necessary to convert a
sum owing hereunder by Chrysler Canada in one currency into another
currency, Chrysler Canada agrees, to the fullest extent that it may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures in the relevant jurisdiction the
relevant Bank could purchase the first currency with such other currency
for the first currency on the Banking Day immediately preceding the day on
which final judgment is given.
(b) The obligations of Chrysler Canada in respect of any sum due
in C$ to any party hereto or any holder of the obligations owing hereunder
(the "Applicable Creditor") shall, notwithstanding any judgment in a
currency (the "Judgment Currency") other than C$, be discharged only to the
extent that, on the Banking Day following receipt by the Applicable
Creditor of any sum adjudged to be so due in the Judgment Currency, the
Applicable Creditor may in accordance with
<PAGE> 67
63
normal banking procedures in the relevant jurisdiction purchase C$ with the
Judgment Currency; if the amount of C$ so purchased is less than the sum
originally due to the Applicable Creditor in C$, Chrysler Canada agrees, as
a separate obligation and notwithstanding any such judgment, to indemnify
the Applicable Creditor against such loss, provided, that if the amount of
C$ so purchased exceeds the sum originally due to the Applicable Creditor,
the Applicable Creditor agrees to remit such excess to Chrysler Canada.
The obligations of Chrysler Canada contained in this subsection 13.11 shall
survive the termination of this Agreement and the payment of all other
amounts owing hereunder.
13.12 WAIVERS OF JURY TRIAL. THE FACILITY BORROWERS, THE
ADMINISTRATIVE AGENT, THE CANADIAN ADMINISTRATIVE AGENT AND THE BANKS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM
THEREIN.
13.13 GOVERNING LAW. THIS AGREEMENT 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.
<PAGE> 68
64
13.14 Integration. This Agreement represents the agreement of
each party with respect to the subject matter hereof, and there are no
promises or representations by either Agent or any Bank relative to the
subject matter hereof not reflected herein.
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: \s\ T.P. Capo
------------------------------------
Title: Vice President and Treasurer
CHRYSLER CANADA LTD.
By:\s\ M.A. Schmid
------------------------------------
Title: Treasurer
By: \s\ G.T. Gaudette
------------------------------------
Title: Vice President - Finance
CHEMICAL BANK, as Administrative Agent
By: \s\ Rosemary Bradley
------------------------------------
Title: Vice President
ROYAL BANK OF CANADA, as Canadian
Administrative Agent
By: \s\ David W. Cox
------------------------------------
Title: Senior Manager
<PAGE> 69
EXHIBIT A TO
REVOLVING CREDIT AGREEMENT
[FORM OF NEW BANK SUPPLEMENT]
SUPPLEMENT, dated _________________, to the Revolving Credit
Agreement, dated as of April 26, 1996 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among CHRYSLER CORPORATION
("Chrysler"), CHRYSLER CANADA LTD., the Banks parties thereto, ROYAL BANK OF
CANADA, as Canadian Administrative Agent, and CHEMICAL BANK, as Administrative
Agent.
W I T N E S S E T H :
WHEREAS, the Credit Agreement provides in subsection 13.9(a)
thereof that any Commercial Bank, although not originally a party thereto, may
become a party to the Credit Agreement with the consent of Chrysler by
executing and delivering to Chrysler and the Administrative Agent a supplement
to the Credit Agreement in substantially the form of this Supplement; and
WHEREAS, the undersigned was not an original party to the 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
Credit Agreement, and agrees that it shall, on the date this Supplement
is accepted by Chrysler and the Administrative Agent, become a Bank for
all purposes of the Credit Agreement to the same extent as if originally
a party thereto.
2. [The undersigned shall be a US$ Bank and the amount of its U.S.
Commitment shall be $___________________.] [The undersigned shall be a
C$ Bank and amount of its Canadian Commitment shall be $_______________.]
3. The undersigned's address for notices for the purposes of the
Credit Agreement is as follows:
4. Terms defined in the Credit Agreement shall have their defined
meanings when used herein.
<PAGE> 70
2
IN WITNESS WHEREOF, the undersigned has caused this Supplement to be
executed and delivered by a duly authorized officer on the date first above
written.
[INSERT NAME OF BANK]
By________________________________
Title:
Accepted this _____ day of
______________, 199_.
CHRYSLER CORPORATION
By____________________________
Title:
Accepted this ____ day of
______________, 199_.
CHEMICAL BANK, as Administrative Agent
By____________________________
Title:
<PAGE> 71
EXHIBIT B TO
REVOLVING CREDIT AGREEMENT
[FORM OF COMMITMENT INCREASE SUPPLEMENT]
SUPPLEMENT, dated _________________, to the Revolving Credit
Agreement, dated as of April 26, 1996 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among CHRYSLER
CORPORATION ("Chrysler"), CHRYSLER CANADA LTD. ("Chrysler Canada"), the Banks
parties thereto, ROYAL BANK OF CANADA, as Canadian Administrative Agent, and
CHEMICAL BANK, as Administrative Agent.
W I T N E S S E T H :
WHEREAS, the Credit Agreement provides in subsection 13.9(b)
thereof that any Bank with the consent of Chrysler may increase the amount
of its Commitment by executing and delivering to Chrysler and the
Administrative Agent a supplement to the Credit Agreement in substantially the
form of this Supplement; and
WHEREAS, the undersigned now desires to increase the amount of its
Commitment under the Credit Agreement;
NOW THEREFORE, the undersigned hereby agrees as follows:
1. The undersigned agrees, subject to the terms and conditions of
the Credit Agreement, that on the date this Supplement is accepted by
Chrysler and the Administrative Agent it [shall have its U.S. Commitment
to Chrysler increased by $______________] [shall have its Canadian
Commitment to Chrysler Canada increased by $______________], thereby
making the amount of its [U.S.] [Canadian] Commitment $______________].
2. Terms defined in the Credit Agreement shall have their defined
meanings when used herein.
<PAGE> 72
2
IN WITNESS WHEREOF, the undersigned has caused this Supplement to be
executed and delivered by a duly authorized officer on the date first above
written.
[INSERT NAME OF BANK]
By________________________________
Title:
Accepted this _____ day of
______________, 199_.
CHRYSLER CORPORATION
By____________________________
Title:
Accepted this ____ day of
______________, 199_.
CHEMICAL BANK, as Administrative Agent
By____________________________
Title:
<PAGE> 73
EXHIBIT C TO
REVOLVING CREDIT AGREEMENT
[FORM OF OPINION OF SIMPSON THACHER & BARTLETT]
April 26, 1996
To: Chemical Bank, as administrative agent
under the Revolving Credit Agreement
referred to below
270 Park Avenue
New York, New York 10017
The Banks listed on Schedule I hereto
Re: The Revolving Credit Agreement, dated as of April
26, 1996 (the "Credit Agreement"), among Chrysler
Corporation, a Delaware corporation ("Chrysler"),
Chrysler Canada Ltd., a Canadian corporation
("Chrysler Canada"; together with Chrysler, the
"Facility Borrowers"), the Banks parties thereto,
Royal Bank of Canada, as Canadian Administrative
Agent, and Chemical Bank, as Administrative Agent.
Ladies and Gentlemen:
We have acted as counsel to the Administrative Agent in connection
with the execution and delivery of the Credit Agreement.
This opinion is delivered to you pursuant to subsection 6.1(f)(i)
of the Credit Agreement. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
In arriving at the opinion expressed below, we have examined (a) a
counterpart of the Credit Agreement, signed by Chrysler, Chrysler Canada, the
Canadian Administrative Agent and the Administrative Agent and (b) such
documents as we have deemed necessary or appropriate for the purposes of this
opinion.
In such examination, we have assumed the genuineness of all
signatures, the authenticity, regularity and completeness of all documents
submitted to us as originals, the completeness of all documents submitted to us
as certified, conformed or photostatic copies and the conformity of such
documents to the original documents.
We have also assumed that the Credit Agreement has been duly
authorized, executed and delivered by each Facility Borrower; that each
Facility Borrower is duly incorporated and validly existing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to execute, deliver and perform its obligations under the Credit
Agreement; that neither Facility Borrower is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended; that the execution,
delivery and performance by each Facility Borrower of the Credit Agreement has
been duly authorized by all necessary corporate action on the part of each
Facility Borrower, does not
<PAGE> 74
2
contravene the certificate of incorporation, by-laws or similar organizational
documents of either Facility Borrower, does not violate, or require any consent
not obtained under, any applicable law or regulation or any order, writ,
injunction or decree of any court or other Governmental Authority binding upon
either Facility Borrower and does not violate, or require any consent not
obtained under, any contractual obligation applicable to or binding upon either
Facility Borrower; and that the Credit Agreement constitutes a valid and
legally binding obligation of the Canadian Administrative Agent and the Banks.
Based upon the foregoing, and subject to the qualifications and
comments set forth below, we are of the opinion that, insofar as the law of the
State of New York is concerned, the Credit Agreement constitutes a valid and
legally binding obligation of each Facility Borrower, enforceable against each
Facility Borrower in accordance with its terms, except as affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing, except that we
express no opinion as to (a) any indemnification obligations of the Facility
Borrowers under the Credit Agreement to the extent such obligations might be
deemed to be inconsistent with public policy; (b) any provision of the Credit
Agreement that purports to establish an evidentiary standard for determinations
by the Banks or either Agent; (c) any setoff right contained in subsection 13.7
or 13.8 of the Credit Agreement authorizing any Bank to set off and apply
deposits at any time held, and any other indebtedness at any time owing, by
such Bank to or for the account of any party against any participation
transferred to or by such Bank; (d) subsections 12.7 and 13.11 of the Credit
Agreement; or (e) any Foreign Currency Subfacility.
We note that (i) a New York statute provides that with respect to a
foreign currency obligation, a court of the State of New York shall render a
judgment or decree in such foreign currency and such judgment or decree shall
be converted into currency of the United States at the rate of exchange
prevailing on the date of entry of such judgment or decree and (ii) with
respect to a foreign currency obligation, a United States Federal court in New
York may award judgment in United States dollars, provided that we express no
opinion as to the rate of exchange such court would apply.
We are members of the Bar of the State of New York and we do not
express any opinion herein concerning any law other than the law of the State
of New York.
This opinion has been rendered solely for your benefit in
connection with the Credit Agreement and the transactions contemplated thereby
and may not be relied upon by you for any other purpose, or relied upon by any
other person, firm or corporation without our prior written consent or
furnished to any other person, firm or corporation other than any assignee or
participant under the Credit Agreement or any bank examiner or other regulatory
authority without our prior written consent.
Very truly yours,
SIMPSON THACHER & BARTLETT
<PAGE> 75
SCHEDULE I
THE BANKS
<PAGE> 76
EXHIBIT D-1 TO
REVOLVING CREDIT AGREEMENT
[FORM OF OPINION OF GENERAL COUNSEL TO CHRYSLER]
April 26, 1996
To: Chemical Bank, as Administrative Agent
The commercial banks (the "Banks") from time to time parties to the
Revolving Credit Agreement dated as of April 26, 1996 among Chrysler
Corporation, Chrysler Canada Ltd., the Banks, Royal Bank of Canada, as
Canadian Administrative Agent, and Chemical Bank, as Administrative Agent
Dear Sirs:
I am General Counsel to Chrysler Corporation, a Delaware corporation
("Chrysler"), and have acted as such in connection with the execution and
delivery of the Revolving Credit Agreement dated as of April 26, 1996 (the
"Revolving Credit Agreement") among Chrysler, Chrysler Canada Ltd. ("Chrysler
Canada"), the Banks, Royal Bank of Canada, as Canadian Administrative Agent,
and Chemical Bank, as Administrative Agent. This opinion is delivered to you
pursuant to subsection 6.1(f)(ii) of the Revolving Credit Agreement. As used
herein, the term "Facility Borrowers" refers to Chrysler and Chrysler Canada.
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 Chrysler and certificates of public
officials and officers of Chrysler, 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 Chrysler, (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 Chrysler. For
the purposes of my opinions set forth in paragraphs 4 and 7 below, I have
relied on an opinion letter of even date herewith issued by Fasken Campbell
Godfrey, special Canadian counsel to Chrysler Canada, to the extent that
matters relevant as a basis for the opinions set forth in such paragraphs are
covered by such opinion letter.
Based upon the foregoing, I am of the opinion that:
1. Chrysler and each of its Significant Subsidiaries
is duly incorporated, validly existing and, where applicable,
in good standing under the laws of the jurisdiction of its
incorporation and duly qualified as a foreign corporation to
do business and, where applicable, in good standing under the
laws of each
<PAGE> 77
2
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
Chrysler and its Subsidiaries taken as a whole.
2. The execution, delivery and performance by
Chrysler of the Revolving Credit Agreement are within
Chrysler's corporate powers and have been duly authorized by
all necessary corporate action.
3. The execution, delivery and performance by each
Facility Borrower of the Revolving Credit Agreement do not
contravene (a) any Requirement of Law of the United States of
America, the State of New York or the State of Michigan or (b)
any provision of the General Corporation Law of the State of
Delaware.
4. The execution, delivery and performance by each
Facility Borrower of the Revolving Credit Agreement do not
contravene, to the best of my knowledge after due inquiry, any
Contractual Obligation of Chrysler or any of its Subsidiaries.
5. No authorization or approval or other action by,
and no notice to or filing with, any Governmental Authority of
the United States of America, the State of New York or the
State of Michigan is required to be obtained or made by either
Facility Borrower for the due execution, delivery and
performance by each Facility Borrower of the Revolving Credit
Agreement.
6. The Revolving Credit Agreement has been duly
executed and delivered on behalf of Chrysler.
7. The Revolving Credit Agreement constitutes a
legal, valid and binding obligation of each Facility Borrower
enforceable against each Facility Borrower 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.
8. 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 Chrysler 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 Chrysler and its Subsidiaries taken as a whole.
I express no opinion as to (a) any indemnification obligations of
the Facility Borrowers under the Revolving Credit Agreement to the extent such
obligations might be deemed to be inconsistent with public policy; (b) any
provision of the Revolving Credit Agreement that purports to establish an
evidentiary standard for determinations by the Banks or either Agent; (c) any
setoff right contained in subsection 13.7 or 13.8 of the Revolving Credit
Agreement authorizing any Bank to set off
<PAGE> 78
3
and apply deposits at any time held, and any other indebtedness at any time
owing, by such Bank to or for the account of any party against any
participation transferred to or by such Bank; (d) subsection 12.7 or 13.11 of
the Revolving Credit Agreement; or (e) any Foreign Currency Subfacility.
I note that (i) a New York statute provides that with respect to a
foriegn currency obligation, a court of the State of New York shall render a
judgment or decree in such foreign currency and such judgment or decree shall
be converted into currency of the United States at the rate of exchange
prevailing on the date of entry of such judgment or decree and (ii) with
respect to a foreign currency obligation, a United States Federal court in
New York may award judgment in United States dollars, provided that I express
no opinion as to the rate of exchange such court would apply.
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> 79
EXHIBIT D-2 TO
REVOLVING CREDIT AGREEMENT
[FORM OF OPINION OF CANADIAN COUNSEL
to
CHRYSLER CANADA]
April 26, 1996
Chemical Bank, as Administrative Agent
270 Park Avenue
New York, New York 10017
The Banks parties to the Credit Agreement referred to below
Dear Sirs:
We have acted as special Canadian counsel to Chrysler Canada Ltd., a
Canadian corporation ("Chrysler Canada") in connection with the execution and
delivery of the Revolving Credit Agreement, dated as of April 26, 1996 (the
"Credit Agreement"), among Chrysler Corporation, Chrysler Canada, the Banks
parties thereto, Royal Bank of Canada, as Canadian Administrative Agent, and
Chemical Bank, as Administrative Agent. This opinion is delivered to you
pursuant to subsection 6.1(f)(iii) of the Credit Agreement. Terms used herein
which are defined in the Credit Agreement shall have the respective meanings
set forth in the Credit Agreement, unless otherwise defined herein.
In connection with this opinion, we have examined executed copies (or
facsimile transmitted signature pages) of the Credit Agreement and such
corporate documents and records of Chrysler Canada, and certificates of public
officials and officers of Chrysler Canada, and such other documents as we have
deemed necessary or appropriate for purposes of this opinion. For the purposes
of this opinion, we have assumed (i) the genuineness of all signatures of, and
the authority of, Persons signing the Credit Agreement on behalf of parties
thereto other than Chrysler Canada, (ii) the
<PAGE> 80
Chemical Bank, as Administrative Agent -2- April 26, 1996
authenticity of all documents submitted to us as originals, (iii) the
conformity to authentic original documents of all documents submitted to
us as certified, conformed, facsimile or photostatic copies, (iv) the due
authorization, execution and delivery of the Credit Agreement by the parties
thereto other than Chrysler Canada and (v) the enforceability of the Credit
Agreement against the parties thereto other than
Chrysler Canada.
The opinions expressed herein are limited to the laws of general
application of the Province of Ontario and the laws of general application of
Canada applicable therein (the "Specified Laws"), and we do not express any
opinion herein concerning any other law (including, without limitation, any law
of any political subdivision of the Province of Ontario).
For purposes of the opinion set forth in paragraph 1 below, we have
relied upon a Certificate of Compliance dated April __, 1996 issued by the
Department of Industry and Science Canada and have assumed that a like
certificate bearing today's date would be available if requested.
Based upon the foregoing and subject to the qualifications set forth
herein, we are of the opinion that:
1. Chrysler Canada is a corporation continued under the Canada
Business Corporations Act and has not been discontinued or dissolved
under that Act.
2. The Credit Agreement has been duly executed on behalf of
Chrysler Canada. The execution, delivery and performance by
Chrysler Canada of the Credit Agreement (a) are within the corporate
powers of Chrysler Canada, (b) have been duly authorized by all
necessary corporate action on the part of Chrysler Canada, and (c)
do not contravene (i) the articles or by-laws of Chrysler Canada,
(ii) any statutory law, rule, or regulation under the Specified Laws
presently in effect which affects or binds Chrysler Canada or, to
our actual knowledge, any order, writ, judgment, injunction,
determination or award presently in effect which affects or binds
Chrysler Canada or any of its properties or (iii) to our actual
knowledge, any Contractual Obligation to which Chrysler Canada is a
party.
3. No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority under the
Specified Laws is required to be obtained or made by either Facility
Borrower for the due execution, delivery and performance by such
Facility Borrower of the Credit Agreement.
4. To our actual knowledge, no litigation or proceeding of or
before any arbitrator or Governmental Authority of Canada or the
Province of Ontario is pending by or against
<PAGE> 81
Chemical Bank, as Administrative Agent -3- April 26, 1996
Chrysler Canada or against any of its properties or revenues (a)
with respect to the Credit Agreement or (b) which would, if
adversely determined, have a material adverse effect on the
business, operations, property or financial condition of Chrysler
and its Subsidiaries taken as a whole.
5. None of the Canadian Administrative Agent or the C$ Banks
will be liable for, and Chrysler Canada will not be required to
deduct or withhold, any Canadian Withholding Tax (as defined below)
on or from any amounts paid or credited to a C$ Bank that is a
resident of Canada for purposes of the Income Tax Act (Canada) by
Chrysler Canada on account of C$ Loans (including interest and
Acceptance Fees) or Canadian Facility Fees under the Credit
Agreement. None of the Administrative Agent or the Banks (other
than the C$ Banks) will be subject to any Taxes (as defined below)
on amounts paid or credited to a C$ Bank by Chrysler Canada on
account of C$ Loans (including interest and Acceptance Fees) or
Canadian Facility Fees under the Credit Agreement.
The term "Taxes" shall mean all taxes, charges, fees, levies,
imposts and other assessments, including all income, sales, use,
goods and services, value added, capital, capital gains,
alternative, net worth, transfer, profits, withholding, payroll,
employer health, excise, real property and personal property taxes,
and any other taxes, customs duties, fees, assessments or other
similar charges in the nature of a tax together with any
installments with respect thereto and any interest, fines and
penalties, imposed by any Governmental Authority of Canada or of
the Province of Ontario.
The term "Canadian Withholding Tax" shall mean all taxes imposed
under Part XIII of the Income Tax Act (Canada) and any similar
taxes imposed under the Corporations Tax Act (Ontario).
6. In any action or proceeding arising out of or relating to the
Credit Agreement in any court of competent jurisdiction in the
Province of Ontario, such court would recognize and give effect to
the provisions of subsection 13.13 of the Credit Agreement wherein
the respective parties thereto agree that the Credit Agreement shall
be governed by, and construed and interpreted in accordance with,
the internal laws of the State of New York provided that such choice
of laws is bona fide (in the sense that it was not made with a view
to avoiding the consequences of the laws of any other jurisdiction)
and is not contrary to "public policy", as such term is understood
under the Specified Laws and, to the extent specifically pleaded and
proved as a fact by expert evidence, such court would apply the laws
of the State of New York to all issues which under conflict of laws
rules in effect in the Province of Ontario are characterized to be
contract issues, except that any such court (i) will apply those
laws of the Province of Ontario which such court characterizes as
procedural and will not apply those laws of the State of New York
which such court characterizes as procedural; (ii) will not apply
those laws of the State of New York which such court would
characterize as revenue, expropriatory, penal or similar laws; and
(iii) will not apply those laws of the State of New York the
application of which such court would characterize as inconsistent
with "public policy", as such term is understood under the Specified
Laws.
7. The laws of the Province of Ontario permit an action to be
brought on a final, non-appealable, conclusive and subsisting
judgment in personam of the courts of the State of New York or the
courts of the United States of America for the Southern District of
<PAGE> 82
Chemical Bank, as Administrative Agent -4- April 26, 1996
New York, which is not impeachable as void or voidable under the
internal laws of the State of New York, for a sum certain if (i) the
court rendering such judgment had jurisdiction over the judgment
debtor, as recognized by the courts of the Province of Ontario; (ii)
such judgment debtor was duly served with the process of the courts
of State of New York or the courts of the United States of America
for the Southern District of New York or appeared to such process,
(iii) such judgment was not obtained by fraud or in a manner
contrary to natural justice and the enforcement thereof would not be
inconsistent with "public policy", as such term is understood under
the Specified Laws or contrary to any order made by the
Attorney General of Canada under the Foreign Extraterritorial
Measures Act (Canada); (iv) the enforcement of such judgment does
not constitute, directly or indirectly, the enforcement of foreign
revenue, expropriatory, penal or similar laws; (v) there has been
compliance with the Limitations Act (Ontario), which specifies a
period within which an action to enforce a foreign judgment must be
commenced; and (vi) prior to the rendering of judgment by the court
in the Province of Ontario, the judgment debtor does not avail
itself of any right or defense based on either law or admissible
fact which has accrued to such judgment debtor subsequent to the
entering of such judgment of the courts of the State of New York or
the courts of the United States of America for the Southern District
of New York. Pursuant to the Currency Act (Canada), a judgment in
money rendered by a court of the Province of Ontario must be awarded
in Canadian currency and such judgment may be based on a rate of
exchange in effect on a day other than the day of payment of the
judgment.
8. Our review of the Credit Agreement disclosed nothing which
would indicate that the transactions contemplated by the Credit
Agreement are inconsistent with "public policy" as such term is
understood under the Specified Laws.
Opinions expressed above based upon our "actual knowledge" refer
solely to the conscious awareness of facts or other information by the lawyer
who has signed this opinion and any lawyer who has had active involvement in
negotiating the Credit Agreement or in preparing this opinion.
This opinion is given as of the date hereof and we undertake no
obligation to notify you of any changes in law or fact occurring after the
date hereof. This opinion is furnished to you solely in connection with the
execution and delivery of the Credit Agreement, may not be furnished to any
other person, firm or corporation, other than any assignee or participant under
the Credit Agreement or any bank examiner or other regulatory authority,
without our prior written consent, and may not be relied upon by anyone other
than you and the other counsel providing legal opinions to you pursuant to
subsection 6.1(f) of the Credit Agreement, and then by you and such other
counsel only in connection with the execution and delivery of the Credit
Agreement.
Yours very truly,
<PAGE> 83
Chemical Bank, as Administrative Agent -5- April 26, 1996
<PAGE> 84
EXHIBIT E-1 TO
REVOLVING CREDIT AGREEMENT
[FORM OF ASSIGNMENT AND ACCEPTANCE]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Revolving Credit Agreement, dated as of April 26,
1996 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among CHRYSLER CORPORATION ("Chrysler"), CHRYSLER CANADA
LTD. ("Chrysler Canada"), the Banks parties thereto, ROYAL BANK OF CANADA, as
Canadian Administrative Agent, and CHEMICAL BANK, as Administrative Agent.
Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.
__________(the "Assignor") and _________ (the "Assignee") agree as follows:
I. The Assignor hereby irrevocably sells and assigns to the Assignee without
recourse to the Assignor, and the Assignee hereby irrevocably purchases and
assumes from the Assignor without recourse to the Assignor, as of the Effective
Date (as defined below), an interest (the "Assigned Interest"), as described
on SCHEDULE 1, in and to the Assignor's rights and obligations under the Credit
Agreement with respect to those credit facilities contained in the Credit
Agreement as 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.
II. The Assignor A. makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any instrument or
document furnished pursuant thereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the 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 B.
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of Chrysler, Chrysler Canada, any Subsidiaries or
any other obligor or the performance or observance by Chrysler, Chrysler
Canada, any Subsidiaries or any other obligor of any of their respective
obligations under the Credit Agreement or any instrument or document furnished
pursuant hereto or thereto.
III. The Assignee A. represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; B. confirms that it has received
a copy of the Credit Agreement, together with 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; C. agrees that it has
made and will, independently and without reliance upon the Assignor, either
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 in
taking or not taking action under the Credit Agreement or any instrument or
document furnished pursuant hereto or thereto; D. appoints and authorizes the
Administrative Agent to take such action as administrative agent on its behalf
and to exercise such powers and discretion under the Credit Agreement or any
instrument or document furnished pursuant hereto or thereto as are delegated to
the Administrative Agent by the terms thereof, together with such powers as are
incidental thereto; E. in the case of each C$ Bank, appoints and authorizes the
Canadian Administrative Agent to take such action as Canadian administrative
agent on its behalf and to exercise such powers and discretion under the Credit
Agreement or any instrument or document furnished pursuant hereto or
<PAGE> 85
Chemical Bank, as Administrative Agent -2- April 26, 1996
thereto as are delegated to the Canadian Administrative Agent by the terms
thereof, together with such powers as are incidental thereto; and F. agrees
that it will be bound by the provisions of the Credit Agreement and will
perform in accordance with its terms all the obligations which by the terms of
the Credit Agreement are required to be performed by it as a Bank.
IV. The effective date of this Assignment and Acceptance shall
be ______ __, 199_ (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the relevant Agent for
recording by such Agent pursuant to subsection 13.6(d) of the Credit
Agreement, effective as of the Effective Date (which shall not, unless
otherwise agreed to by the Administrative Agent, be earlier than five Business
Days after the date of such recording by the relevant Agent).
V. Upon such recording, from and after the Effective Date, the relevant
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) which accrue
subsequent to the Effective Date to the Assignee. The Assignor and the
Assignee shall make all appropriate adjustments in payments by the relevant
Agent for periods prior to the Effective Date or with respect to the making of
this assignment directly between themselves.
VI. From and after the Effective Date, A. the Assignee shall be a party to
the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Bank thereunder and shall be
bound by the provisions thereof and B. the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
VII. 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> 86
SCHEDULE 1
TO ASSIGNMENT AND ACCEPTANCE
RELATING TO THE REVOLVING CREDIT AGREEMENT, DATED AS OF APRIL 26, 1996
AMONG CHRYSLER CORPORATION, CHRYSLER CANADA LTD., THE BANKS PARTIES THERETO,
ROYAL BANK OF CANADA, AS CANADIAN ADMINISTRATIVE AGENT
AND CHEMICAL BANK, AS ADMINISTRATIVE AGENT
________________________________________________________________________________
Name and Address of Assignor:
Name and Address of Assignee:
Effective Date of Assignment:
Credit Principal
Facility Assigned Amount Assigned
_________________________ _____________________
$ ________
[Name of Assignee] [Name of Assignor]
By _____________________________________ By _________________________________
Name: Name:
Title: Title:
<PAGE> 87
2
Consented To:
CHRYSLER CORPORATION
By: ____________________
Name:
Title:
CHEMICAL BANK, as Administrative Agent
By: ____________________
Name:
Title:
[Consents required only to the extent expressly
provided in subsection 13.6(c) of the Credit
Agreement.]
Receipt Acknowledged for Purposes of Recordation
in the relevant Register:
[CHEMICAL BANK, as Administrative Agent
By: _______________________________
Name:
Title:]
[ROYAL BANK OF CANADA, as Canadian
Administrative Agent
By: _______________________________
Name:
Title:]
<PAGE> 88
EXHIBIT E-2 TO
REVOLVING CREDIT AGREEMENT
[FORM OF COMMITMENT REALLOCATION SUPPLEMENT]
SUPPLEMENT, dated _________________, to the Revolving Credit
Agreement, dated as of April 26, 1996 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among CHRYSLER CORPORATION
("Chrysler"), CHRYSLER CANADA LTD., the Banks parties thereto, ROYAL BANK OF
CANADA, as Canadian Administrative Agent, and CHEMICAL BANK, as Administrative
Agent.
W I T N E S S E T H :
WHEREAS, the Credit Agreement provides in subsection 13.9(c)
thereof that Chrysler, with the consent of the affected Bank(s) and the
Administrative Agent, may reallocate all or any portion of the Canadian
Commitment of any C$ Bank to the U.S. Commitment of such C$ Bank's Related
US$ Bank or reallocate all or any portion of the U.S. Commitment of any US$
Bank to the Canadian Commitment of such US$ Bank's Related C$ Bank by executing
and delivering to the Administrative Agent a supplement to the Credit Agreement
in substantially the form of this Supplement;
WHEREAS, Chrysler now desires to reallocate the [Canadian][U.S.]
Commitment of [insert name of Bank] to the [U.S.][Canadian] Commitment of its
Related [US$][C$] Bank (the "Affected Bank(s)") under the Credit Agreement; and
WHEREAS, each of the Affected Bank(s) and the Administrative Agent
has consented to such reallocation;
NOW THEREFORE, each party hereto hereby agrees as follows:
1. Each party hereto agrees, subject to the terms and conditions of
the Credit Agreement, that on the date this Supplement has been consented
to by each of the Affected Bank(s) and the Administrative Agent, [insert
name of Bank] shall have $__________ of its [Canadian][U.S.] Commitment
reallocated to the [U.S.][Canadian] Commitment of its Related [US$][C$]
Bank, thereby making the amount of its [Canadian][U.S.] Commitment
$________ and the amount of its Related [US$][C$] Bank's [U.S.][Canadian]
Commitment $_________.
2. Terms defined in the Credit Agreement shall have their defined
meanings when used herein.
<PAGE> 89
2
IN WITNESS WHEREOF, the undersigned has caused this Supplement to be
executed and delivered by a duly authorized officer on the date first above
written.
CHRYSLER CORPORATION
By ____________________________________
Title:
Consented to this ____ day of
______________, 199_.
[NAME(S) OF BANK(S)]
By ___________________________________
Title:
Consented to this ____ day of
______________, 199_.
CHEMICAL BANK, as Administrative Agent
By ___________________________________
Title:
<PAGE> 90
EXHIBIT F-1 TO
REVOLVING CREDIT AGREEMENT
[FORM OF ADDENDUM]
ADDENDUM TO REVOLVING CREDIT AGREEMENT
The undersigned Bank (a) agrees to all of the provisions of the Revolving
Credit Agreement dated as of April 26, 1996 among Chrysler Corporation
("Chrysler"), Chrysler Canada Ltd. ("Chrysler Canada"), the Banks parties
thereto, Royal Bank of Canada, as Canadian Administrative Agent, and Chemical
Bank, as Administrative Agent (as the same may be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), and (b) becomes
a party thereto, as a Bank and, in each case to the extent indicated on
Schedule I to the Credit Agreement, a US$ Bank and a C$ Bank, with an
obligation (i) in the case of a US$ Bank, to make U.S. Loans to Chrysler and
(ii) in the case of a C$ Bank, to make C$ Prime Loans to and accept Bankers'
Acceptances from Chrysler Canada, provided, that, after giving effect thereto,
as applicable, (x) the aggregate principal amount of a US$ Bank's U.S. Loans
shall not exceed such US$ Bank's U.S. Commitment as set forth opposite the
undersigned Bank's name on said Schedule I (or, if less, its U.S. Net
Commitment) and (y) the aggregate principal amount (US$ Equivalent) of a C$
Bank's C$ Prime Loans and Bankers' Acceptances shall not exceed such C$ Bank's
Canadian Commitment as set forth opposite the undersigned Bank's name on said
Schedule I, in each case as the amount of such U.S. Commitment or Canadian
Commitment, as applicable, may be changed from time to time as provided in the
Credit Agreement. Capitalized terms defined in the Credit Agreement shall have
their respective defined meanings herein.
Address(es) for notices for the purposes of subsection 13.2 of the Credit
Agreement:
Address(es) for Notices:
______________________________ ______________________________
______________________________ ______________________________
Attention: Attention:
Telecopy Number: Telecopy Number:
Name of Bank:______________________________________
As of April 26, 1996 By ________________________________________________
Title:
<PAGE> 91
EXHIBIT F-2 TO
REVOLVING CREDIT AGREEMENT
[FORM OF FOREIGN CURRENCY SUBFACILITY ADDENDUM]
FOREIGN CURRENCY SUBFACILITY ADDENDUM
To: Chemical Bank, as Administrative Agent
From: Chrysler Corporation
[Insert name[s] of Foreign Subsidiary Borrower[s]]
1. This Foreign Currency Subfacility Addendum is being delivered to you
pursuant to subsection 11.1(a) of the Revolving Credit Agreement, dated as of
April 26, 1996, among Chrysler Corporation ("Chrysler"), Chrysler Canada Ltd.,
the Banks parties thereto, Royal Bank of Canada, as Canadian Administrative
Agent, and Chemical Bank, as Administrative Agent (as the same may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement").
Terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement.
2. The effective date (the "Addendum Effective Date") of this Foreign
Currency Subfacility Addendum will be ______________________ __, 19__.
3. Please be advised that, as of the Addendum Effective Date, the
credit facility described below is hereby designated as a "Foreign Currency
Subfacility" for the purposes of the Credit Agreement.
TYPE OF SUBFACILITY:*
FOREIGN CURRENC[Y][IES]:
FOREIGN CURRENCY SUBFACILITY Foreign Currency Subfacility
MAXIMUM BORROWING AMOUNTS: Name of Bank Maximum Borrowing Amount
$
_______________
* Insert short description of terms of Foreign Currency Subfacility, and state
whether it is designated as a Foreign Committed Subfacility or a Foreign
Uncommitted Subfacility.
<PAGE> 92
2
4. Chrysler hereby represents and warrants that (i) the
documentation complies in all respects with the requirements of Section 11 of
the Credit Agreement and (ii) ______________ of ______________** contains
an express acknowledgement that such Foreign Currency Subfacility shall be
subject to the provisions of Section 11 of the Credit Agreement.
CHRYSLER CORPORATION
By _______________________________
Title:
[INSERT NAME OF FOREIGN SUBSIDIARY
BORROWER]
By _______________________________
Title:
[NAME OF BANK]**
By _______________________________
Title:
Acknowledged:
CHEMICAL BANK, as Administrative Agent
By ________________________________
Title:
_______________
** Provide citation to relevant provision from the documentation and attach
page containing such provision.
*** In lieu of executing Foreign Currency Subfacility Addendum, Bank(s) may
instead attach such Addendum as an Exhibit to the relevant Foreign Currency
Subfacility documentation.
<PAGE> 93
EXHIBIT G TO
REVOLVING CREDIT AGREEMENT
[FORM OF CLOSING CERTIFICATE]
CLOSING CERTIFICATE
Pursuant to subsections 6.1(c), (d) and (e) of the Revolving Credit
Agreement dated as of April 26, 1996 (the "Credit Agreement"; unless otherwise
defined herein, terms defined in the Credit Agreement and used herein shall
have the meanings given to them in the Credit Agreement) among CHRYSLER
CORPORATION ("Chrysler"), CHRYSLER CANADA LTD. ("Chrysler Canada"), the Banks
parties thereto, ROYAL BANK OF CANADA, as Canadian Administrative Agent, and
CHEMICAL BANK, as Administrative Agent, the undersigned ________ of [Chrysler]
[Chrysler Canada] hereby certifies as follows:
1. The representations and warranties of [Chrysler] [Chrysler Canada]
contained in the Credit Agreement or in any certificate, document or financial
or other statement furnished by or on behalf of [Chrysler] [Chrysler Canada]
pursuant to or in connection with the 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 [Chrysler] [Chrysler Canada] 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 [Chrysler] [Chrysler Canada]
hereby certifies as follows:
4. There are no liquidation or dissolution proceedings pending or to
my knowledge threatened against [Chrysler] [Chrysler Canada], nor to my
knowledge has any other event occurred affecting or threatening the
corporate existence of [Chrysler] [Chrysler Canada];
5. [Chrysler] [Chrysler Canada] is a corporation duly organized,
validly existing and in good standing under the laws of [Delaware]
[Canada];
6. Attached hereto as Exhibit A is a complete and correct copy of
resolutions duly adopted by the Board of Directors (or a duly authorized
committee thereof) of [Chrysler] [Chrysler Canada] 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 [Chrysler] [Chrysler
Canada] now in force relating to or affecting the matters referred to
therein;
<PAGE> 94
2
7. Attached hereto as Exhibit B is a complete and correct copy of
the by-laws of [Chrysler] [Chrysler Canada] as in effect at all times
since _________________, 19__ to and including the date hereof; and
attached hereto as Exhibit C is a true and complete copy of the
certificate of incorporation of [Chrysler] [Chrysler Canada] as in
effect at all times since ___________________, 19__ to and including the
date hereof; and
8. The following persons are now duly elected and qualified officers
of [Chrysler] [Chrysler Canada] holding the offices indicated next to
their respective names below, and such officers have held such offices
with [Chrysler] [Chrysler Canada] 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 [Chrysler] [Chrysler Canada] the Credit
Agreement and any certificate or other document to be delivered by
[Chrysler] [Chrysler Canada] pursuant to the Credit Agreement:
Name Office Signature
________________ [________] ____________________
________________ [Assistant] Secretary ____________________
IN WITNESS WHEREOF, the undersigned have hereto set our names.
______________ ______________
Title: [___________] Title: [Assistant] Secretary
Date: April 26, 1996
<PAGE> 95
EXHIBIT H TO
REVOLVING CREDIT AGREEMENT
[FORM OF U.S. LOAN PROMISSORY NOTE]
U.S. LOAN PROMISSORY NOTE
$ _____ New York, New York
___________, 199_
FOR VALUE RECEIVED, the undersigned, Chrysler Corporation, a Delaware
corporation ("Chrysler"), 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 U.S. Loans made by the Bank to
Chrysler pursuant to subsection 2.1 of the Credit Agreement, as hereinafter
defined. Chrysler 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 4.2 of such 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 U.S. Loan made pursuant to the 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 Chrysler
in respect of any U.S. Loan.
This promissory note (a) has been issued pursuant to subsection 13.6(g) of
the Revolving Credit Agreement dated as of April 26, 1996 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among Chrysler, Chrysler Canada Ltd., a Canadian corporation, the Banks from
time to time parties thereto, Royal Bank of Canada, as Canadian Administrative
Agent, and Chemical Bank, as Administrative Agent, (b) is subject to the
provisions of the Credit Agreement and (c) is subject to prepayment in whole or
in part as provided in the Credit Agreement.
Upon the occurrence of any one or more of the Events of Default specified
in the 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 Credit Agreement.
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.
<PAGE> 96
2
Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the 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> 97
<TABLE>
<CAPTION>
Schedule A
to U.S. Loan Promissory Note
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
Amount Amount of Base Rate
Amount of Base Rate Converted to Amount of Principal of Loans Converted to Unpaid Principal Balance Notation
Date Loans Base Rate Loans Base Rate Loans Repaid Eurodollar Loans of Base Rate Loans Made By
- ---- ------------------- --------------- ---------------------- ------------------- ------------------------ --------
<S> <C> <C> <C> <C> <C> <C>
Schedule B
to U.S. Loan Promissory Note
</TABLE>
<PAGE> 98
<TABLE>
<CAPTION>
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
Interest Period and
Amount of Amount Converted Eurodollar Rate with
Date Eurodollar Loans to Eurodollar Loans Respect Thereto
- ------------------ ---------------- ------------------- --------------------
<S> <C> <C> <C>
<CAPTION>
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
Amount of Principal of Amount of Eurodollar Unpaid Principal
Eurodollar Loans Loans Converted to Balance of Eurodollar Notation
Repaid Base Rate Loans Loans Made By
- ---------------------- -------------------- --------------------- --------
<S> <C> <C> <C>
</TABLE>
<PAGE> 99
<TABLE>
<CAPTION>
Interest Period and Amount of
Eurodollar Rate Amount of Principal Eurodollar Loans Unpaid Principal
Amount of Amount Converted to with Respect of Eurodollar Loans Converted to Base Balance of Eurodollar
Date Eurodollar Loans Eurodollar Loans Thereto Repaid Rate Loans Loans Notation
Made By
<S> <C> <C> <C> <C> <C>
</TABLE>
0
<PAGE> 1
EXHIBIT 11
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
EARNINGS PER COMMON SHARE DATA
APB OPINION NO. 15 CALCULATION
<TABLE>
<CAPTION>
PERIOD ENDED JUNE 30,
---------------------------------------
THREE MONTHS
ENDED SIX MONTHS ENDED
----------------- -----------------
1996 1995 1996 1995
------ ------ ------ ------
(IN MILLIONS OF DOLLARS AND SHARES)
<S> <C> <C> <C> <C>
PRIMARY:
Net earnings............................................ $1,037 $ 135 $2,042 $ 631
Preferred stock dividend................................ (1) (3) (2) (17)
------ ------ ------ ------
Earnings attributable to common stock................... $1,036 $ 132 $2,040 $ 614
====== ====== ====== ======
Weighted average shares outstanding..................... 738.7 750.2 745.6 734.0
Shares issued on exercise of dilutive options........... 22.4 12.4 24.1 12.9
Shares purchased with proceeds of options............... (14.4) (6.1) (16.2) (6.4)
Shares contingently issuable............................ 1.0 1.0 0.9 0.8
------ ------ ------ ------
Shares applicable to primary earnings................... 747.7 757.5 754.4 741.3
====== ====== ====== ======
FULLY DILUTED:
Net earnings............................................ $1,037 $ 135 $2,042 $ 631
Preferred stock dividend................................ -- (3) -- --
------ ------ ------ ------
Earnings attributable to common stock................... $1,037 $ 132 $2,042 $ 631
====== ====== ====== ======
Weighted average shares outstanding..................... 738.7 750.2 745.6 734.0
Shares issued on exercise of dilutive options........... 22.4 24.2 24.1 18.8
Shares purchased with proceeds of options............... (14.4) (17.2) (15.6) (12.0)
Shares applicable to convertible preferred stock........ 4.5 21.4 5.8 59.4
Shares contingently issuable............................ 1.8 1.7 1.7 1.3
------ ------ ------ ------
Shares applicable to fully diluted earnings............. 753.0 780.3 761.6 801.5
====== ====== ====== ======
PER COMMON SHARE DATA: (In dollars)
Primary:
Earnings before cumulative effect of a change in
accounting principle............................... $ 1.39 $ 0.17 $ 2.70 $ 0.96
Cumulative effect of a change in accounting
principle.......................................... -- -- -- (0.13)
------ ------ ------ ------
Net earnings per common share......................... $ 1.39 $ 0.17 $ 2.70 $ 0.83
====== ====== ====== ======
Fully Diluted:
Earnings before cumulative effect of a change in
accounting principle............................... $ 1.38 $ 0.17 $ 2.68 $ 0.91
Cumulative effect of a change in accounting
principle.......................................... -- -- -- (0.12)
------ ------ ------ ------
Net earnings per common share......................... $ 1.38 $ 0.17 $ 2.68 $ 0.79
====== ====== ====== ======
</TABLE>
NOTE: Primary earnings per common share amounts were computed by dividing
earnings after deduction of preferred stock dividends by the average number of
common and dilutive equivalent shares 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 otherwise
computed. 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, unless such conversion has the effect of
increasing the earnings per common share amount otherwise computed. All per
share data has been adjusted to reflect the two-for-one stock split.
<PAGE> 1
--------------------------------------------------------
Suite 900 Telephone: (313) 396-3000
600 Renaissance Center
Detroit, Michigan 48243-1704
DELOITTE & TOUCHE LOGO
EXHIBIT 15A
INDEPENDENT ACCOUNTANTS' REPORT
Shareholders and Board of Directors
Chrysler Corporation
Auburn Hills, Michigan
We have reviewed the accompanying consolidated balance sheet of Chrysler
Corporation and consolidated subsidiaries as of June 30, 1996 and 1995 and the
related consolidated statements of earnings and condensed cash flows for the
three-month and six-month periods ended June 30, 1996 and 1995. 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, 1995, 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, 1996, 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, 1995, is fairly stated, in all material respects, in relation
to the consolidated balance sheet from which it has been derived.
DELOITTE & TOUCHE LLP
July 11, 1996
DELOITTE & TOUCHE TOHMATSU INTERNATIONAL
<PAGE> 1
--------------------------------------------------------
Suite 900 Telephone: (313) 396-3000
600 Renaissance Center
Detroit, Michigan 48243-1704
DELOITTE & TOUCHE LLP LOGO
EXHIBIT 15B
July 11, 1996
Chrysler Corporation
1000 Chrysler Drive
Auburn Hills, 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 three month periods ended June 30, 1996 and 1995, as indicated in our report
dated July 11, 1996. 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 June 30, 1996, 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
(Post-Effective 1972 and 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 also are 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
DELOITTE & TOUCHE TOHMATSU INTERNATIONAL
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 5,635
<SECURITIES> 3,127
<RECEIVABLES> 2,610
<ALLOWANCES> 71
<INVENTORY> 5,535
<CURRENT-ASSETS> 0
<PP&E> 21,494
<DEPRECIATION> 8,211
<TOTAL-ASSETS> 55,794
<CURRENT-LIABILITIES> 0
<BONDS> 9,166
0
0<F2>
<COMMON> 820
<OTHER-SE> 10,602
<TOTAL-LIABILITY-AND-EQUITY> 55,794
<SALES> 28,902
<TOTAL-REVENUES> 30,795
<CGS> 22,745<F1>
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 15
<INTEREST-EXPENSE> 534
<INCOME-PRETAX> 3,390
<INCOME-TAX> 1,348
<INCOME-CONTINUING> 2,042
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,042
<EPS-PRIMARY> 2.70<F3>
<EPS-DILUTED> 2.68<F3>
<FN>
<F1>Excludes depreciation and amortization of special
tools and employee retirement benefits.
<F2>Less than $1 million.
<F3>Adjusted to reflect the two-for-one stock split.
</FN>
</TABLE>
