SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
July 29, 1994
Illinois Central Corporation
Exact name of registrant as specified in its
charter
Delaware 1-10720
(State or other jurisdiction (Commission File
of incorporation) Number)
13-3545405
(I.R.S. Employer Identification No.)
455 North Cityfront Plaza Drive, Chicago, Illinois
(Address of principal executive offices)
60611-5504
(Zip Code)
Registrant's telephone number, including area code:
(312) 755-7500
Item 7. Financial Statements and Exhibits
(a) - N/A
(b) - N/A
(c) Exhibits:
3.1 Restated Articles of
Incorporation of Illinois
Central Corporation
4.1 Interail Agreement
(Excluding schedules 1, 2
and 3 included therein).
4.2 Toronto Dominion Credit
Agreement (Incorporated by
reference to Exhibit 4.1 to
the Quarterly Report of the
Illinois Central Railroad
Company on Form 10-Q for the
three months ended March 31,
1994. (SEC File No. 1-7092))
4.3 Form of Receivables Purchase
Agreement dated as of March 29,
1994, between Illinois Central
Railroad Company and Golden Gate
Funding Corporation.
(Incorporated by reference to
Exhibit 4.2 to the Quarterly
Report of the Illinois Central
Railroad Company on Form 10-Q for
the three months ended March 31,
1994. (SEC File No. 1-7092))
10.1 Form of the Illinois Central
Railroad Company Executive
Performance Compensation Program
(Incorporated by reference to
Exhibit 10.1 to the Quarterly
Report of the Illinois Central
Railroad Company on Form 10-Q for
the three months ended March
31, 1994. (SEC File No. 1-7092))
10.2 Form of the Illinois Central
Railroad Company Supplemental
Executive Retirement Plan
(Incorporated by reference to
Exhibit 10.2 to the Quarterly
Report of the Illinois Central
Railroad Company on Form 10-Q for
the three months ended March 31, 1994.
(SEC File No. 1-7092))
10.3 Form of the Illinois Central
Railroad Company Executive
Deferred Compensation Plan
(Incorporated by reference to
Exhibit 10.3 to the Quarterly
Report of the Illinois Central
Railroad Company on Form 10-Q
for the three months ended March
31, 1994. (SEC File No. 1-7092))
10.4 Form of the Illinois Central
Railroad Company Performance
Compensation Program (Incorporated
by reference to Exhibit 10.4 to
the Quarterly Report of the Illinois
Central Railroad Company on Form
10-Q for the three months ended
March 31, 1994. (SEC File No. 1-7092))
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 hereto duly authorized.
ILLINOIS CENTRAL CORPORATION
/s/JOHN V. MULVANEY
John V. Mulvaney
Controller
Date: July 29, 1994
ILLINOIS CENTRAL CORPORATION
AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Sequential
No. Descriptions Page No.
3.1 Restated Articles of
Incorporation of Illinois
Central Corporation
4.1 Interail Agreement
(Excluding schedules 1, 2
and 3 included therein).
4.2 Toronto Dominion Credit
Agreement (Incorporated by
reference to Exhibit 4.1 to
the Quarterly Report of the
Illinois Central Railroad
Company on Form 10-Q for the
three months ended March 31,
1994. (SEC File No. 1-7092))
4.3 Form of Receivables Purchase
Agreement dated as of March 29,
1994, between Illinois Central
Railroad Company and Golden Gate
Funding Corporation.
(Incorporated by reference to
Exhibit 4.2 to the Quarterly
Report of the Illinois Central
Railroad Company on Form 10-Q for
the three months ended March 31,
1994. (SEC File No. 1-7092))
10.1* Form of the Illinois Central
Railroad Company Executive
Performance Compensation Program
(Incorporated by reference to
Exhibit 10.1 to the Quarterly
Report of the Illinois Central
Railroad Company on Form 10-Q for
the three months ended March
31, 1994. (SEC File No. 1-7092))
10.2* Form of the Illinois Central
Railroad Company Supplemental
Executive Retirement Plan
(Incorporated by reference to
Exhibit 10.2 to the Quarterly
Report of the Illinois Central
Railroad Company on Form 10-Q for
the three months ended March 31, 1994.
(SEC File No. 1-7092))
10.3* Form of the Illinois Central
Railroad Company Executive
Deferred Compensation Plan
(Incorporated by reference to
Exhibit 10.3 to the Quarterly
Report of the Illinois Central
Railroad Company on Form 10-Q
for the three months ended March
31, 1994. (SEC File No. 1-7092))
10.4* Form of the Illinois Central
Railroad Company Performance
Compensation Program (Incorporated
by reference to Exhibit 10.4 to
the Quarterly Report of the Illinois
Central Railroad Company on Form
10-Q for the three months ended
March 31, 1994. (SEC File No. 1-7092))
----------------------------
* Items so marked identify management
contracts or compensatory plans
agreements.
RESTATED
CERTIFICATE OF INCORPORATION
OF
ILLINOIS CENTRAL CORPORATION
(As amended through April 21, 1994)
ARTICLE ONE
Name. The name of the Corporation is
Illinois Central Corporation.
ARTICLE TWO
Registered Agent. The address of its
registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, City
of Wilmington, County of New Castle, Delaware
19801. The name of its registered agent at such
address is The Corporation Trust Company.
ARTICLE THREE
Purpose. The purpose of the Corporation is to
engage in any lawful act or activity for which
corporations may now or hereafter be organized
under the General Corporation Law of the State of
Delaware.
ARTICLE FOUR
A. Authorized Shares and Classes of Stock.
The total number of shares which the Corporation
shall have the authority to issue is One Hundred
Five Million (105,000,000) composed of (i) One
Hundred Million (100,000,000) shares of common
stock, par value $0.001 per share, and (ii) Five
Million (5,000,000) shares of Preferred Stock, par
value one cent ($0.01) per share.
B. Designations, Rights and Preferences of
Preferred Stock. Shares of Preferred Stock may be
issued in one or more series as the Board of
Directors may determine. Authority is hereby
expressly vested in the Board of Directors to fix
from time to time, by resolution or resolutions
providing for the issue of any series of Preferred
Stock, the designation of such series and the
powers, preferences and rights of the shares of
such series, and the qualifications, limitations or
restrictions thereof, including the following:
1. The distinctive designation and
number of shares comprising such series,
which number may (except where otherwise
provided by the Board of Directors
authorizing such series) be increased or
decreased (but not below the number of
shares then outstanding) from time to
time by like action of the Board of
Directors;
2. The dividend rate or rates, if
any, on the shares of such series and the
preferences, if any, over any other
series (or of any other series over such
series) with respect to any dividends,
the terms and conditions upon which any
dividends shall be payable, whether and
upon what conditions any such dividends
shall be cumulative and, if cumulative,
the date or dates from which any
dividends shall accumulate;
3. Whether or not the shares of
such series shall be redeemable, the
price or prices, limitations and
restrictions, and any other terms and
conditions with respect to such
redemptions;
4. The rights to which the holders
of such series shall be entitled, and the
preferences, if any, over any other
series (or of any other series over such
series), upon the voluntary or
involuntary liquidation, dissolution or
winding up of the Corporation;
5. Whether or not the shares of
such series shall be subject to the
operation of a purchase, retirement or
sinking fund, and, if so, whether and
upon what conditions such purchase,
retirement or sinking fund shall be
cumulative or noncumulative, the extent
to which and the manner in which such
fund shall be applied to the purchase or
redemption of the shares of such series
for retirement or to other corporate
purposes and the terms and provisions
relative to the operation thereof;
6. Whether or not the shares of
such series shall be convertible into or
exchangeable for shares of stock of any
other class or classes, or of any other
series of the same class and, if so
convertible or exchangeable, the price or
prices or the rate or rates of conversion
or exchange and the method, if any, of
adjusting the same, and any other terms
and conditions of such conversion or
exchange;
7. The voting powers, if any, of
the shares of such series; and whether or
not and under what conditions the shares
of such series shall be entitled to vote
separately as a single class, for the
election of one or more additional
directors of the Corporation in case of
dividend arrearages or other specified
events, or upon other matters; and
8. Any other preferences,
privileges and powers, and relative,
participating, optional or other special
rights, and qualifications, limitations
or restrictions of such series, as the
Board of Directors, or any Executive
Committee thereof, may deem advisable and
as shall not be inconsistent with the
provisions of this Restated Certificate
of Incorporation.
Shares of Preferred Stock which are redeemed or
converted, or which are issued and reacquired in
any manner and retired, shall be retired and
restored to the status of authorized and unissued
Preferred Stock and may be reissued by the Board of
Directors as shares of the same or any other
series, unless otherwise provided with respect to
any series in the resolution of the Board of
Directors creating such series.
C. Powers, Preferences and Rights of Common
Stock. The powers, preferences and rights of the
shares of common stock and the qualifications,
limitations or restrictions thereof, are set forth
below.
1. Dividends. The holders of
outstanding shares of common stock shall
be entitled to share equally and ratably
with all other holder of shares of common
stock then outstanding in any dividends
or distributions declared on outstanding
shares of common stock, when, as and if
any such dividends or distributions are
declared by the Corporation's Board of
Directors from funds legally available
therefor.
2. Liquidation, etc. The holders
of outstanding shares of common stock
shall be entitled to share equally and
ratably with all other holders of shares
of common stock then outstanding in the
assets of the Corporation to be
distributed among the holders of shares
of the common stock upon any liquidation
or winding up of the Corporation, whether
voluntary or involuntary; and
3. Voting Rights. Each holder of
common stock shall be entitled to vote
for the election and removal of the
directors of the Corporation and on all
other matters on which stockholders are
entitled to vote under the General
Corporation Law of the State of Delaware
and shall have one vote for each share of
common stock held of record.
D. Reservation of Shares. The Corporation
shall reserve for issuance such number of shares of
Common Stock or Preferred Stock as may from time to
time be required upon exercise of options or
warrants to purchase shares of Common Stock or
Preferred Stock.
ARTICLE FIVE
The Board of Directors shall have the power to
adopt, amend or repeal the by-laws of the
Corporation.
ARTICLE SIX
Election of Directors. A. The number of
directors of the Corporation shall be fixed by, or
in the manner provided in, the by-laws. The
directors shall be divided into three classes. The
initial term of office of the first class ("Class
I") shall expire at the 1992 annual meeting of
stockholders, the initial term of office of the
second class ("Class II") shall expire at the 1993
annual meeting of stockholders, and the initial
term of office of the third class ("Class III")
shall expire at the 1994 annual meeting of
stockholders. At the annual meeting at which the
initial classification occurs, the directors shall
be allocated to the three classes based upon the
nominations as made at the meeting in connection
with the election of directors. At each annual
meeting of stockholders following the initial
classification, directors elected to succeed those
directors whose terms expire shall be elected for a
term of office to expire at the third succeeding
annual meeting after their election. The foregoing
notwithstanding, each director shall serve until
his successor has been duly elected and qualified,
unless he shall cease to serve by reason of death,
resignation or other cause. Any director elected
to a particular class shall be eligible, upon
resignation, to be elected to a different class.
B. Newly created directorships resulting from
any increase in the number of directors or any
vacancies in the board of Directors resulting from
death, resignation or other cause may be filled
only by a majority vote of the directors then in
office, though less than a quorum, or a sole
remaining director. Any director so chosen shall
hold office for a term of office expiring at the
annual meeting of stockholders at which the term of
office of the class to which he or she has been
elected expires.
C. The provisions set forth in this Article
Six are subject to the rights of the holders of any
class or series of stock having a preference over
the common stock as to dividends or upon
liquidation to elect additional directors under
specified circumstances as specified in this
Restated Certificate of Incorporation or in a
resolution providing for the issuance of such stock
adopted by the Board of Directors pursuant to
authority vested in it by this Restated Certificate
of Incorporation.
D. In addition to the voting requirements
imposed by law or by any other provision of this
Restated Certificate of Incorporation, this Article
Six may not be amended, altered or repealed in any
respect, nor may any provisions inconsistent with
this Article Six be adopted, unless such action is
approved by the affirmative vote of holders of at
least two-thirds of the total voting power of all
shares of stock of the Corporation entitled to vote
in the election of directors generally, considered
for purposes of this Article Six as one class.
ARTICLE SEVEN
Liability and Indemnification of Directors.
A. 1. A director of the Corporation shall
not be liable to the Corporation or its
stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability
(i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the
General Corporation Law of the State of Delaware,
or (iv) for any transaction under which a director
derived an improper personal benefit.
2. If the General Corporation Law of the
State of Delaware is hereafter amended to further
eliminate or limit the liability of a director of a
corporation, then a director of the Corporation, in
addition to the circumstances set forth herein,
shall not be liable to the fullest extent permitted
by the General Corporation Law of the State of
Delaware as so amended.
B. 1. Each person who was or is a party or
is threatened to be made a party to, or is involved
in any threatened, pending or completed action,
suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the
fact that such person is or was a director or
officer of the Corporation or is or was serving at
the request of the Corporation as a director or
officer of another corporation, partnership, joint
venture, trust or other enterprise, shall be
indemnified and held harmless by the Corporation to
the fullest extent permitted by applicable law.
The right to indemnification conferred in this
Article Seven shall also include the right to be
paid by the Corporation the expenses incurred in
connection with any such proceeding in advance of
its final disposition to the fullest extent
authorized by applicable law. The right to
indemnification conferred in this Article Seven
shall be a contract right.
2. The Corporation shall determine the
right of any person to receive indemnification as
provided hereunder in accordance with the
provisions of applicable law.
3. The Corporation may purchase and
maintain insurance, at its expense, to protect
itself and any person who is or was a director,
officer, employee or agent of the Corporation or
who is or was serving at the request of the
Corporation as a director, officer, employee or
agent of another corporation, partnership, joint
venture, trust or other enterprise, against any
expense, liability of loss incurred by such person
in any such capacity, whether or not the
Corporation would have the power to indemnify such
person against such expense, liability or loss
under applicable law.
C. The rights and authority conferred in
this Article Seven shall not be exclusive of any
other right which any person may have or hereafter
acquire under any statute, provision of this
Restated Certificate of Incorporation or the by-
laws of the Corporation, agreement, vote of
stockholders or disinterested directors or
otherwise.
D. Neither the amendment nor repeal of this
Article Seven, nor the adoption of any provision of
this Restated Certificate of Incorporation or the
by-laws of the Corporation or of any statute
inconsistent with this Article Seven, shall
eliminate or reduce the effect of this Article
Seven in respect of any acts or omissions occurring
prior to such amendment, repeal or adoption of an
inconsistent provision.
ARTICLE EIGHT
Reserved Rights. The corporation reserves the
right to further amend this Restated Certificate of
Incorporation in any manner permitted by the
General Corporation Law of the State of Delaware,
as amended from time to time, and all rights and
powers conferred herein on stockholders, directors
and officers, if any, are subject to this reserved
power.
Exhibit 4.1
RAILCAR MANAGEMENT AGREEMENT
THIS AGREEMENT is made as of December 3 ,
1993 by and between Interail, Inc., a Kansas
corporation (hereinafter called "Manager"), and IC
Leasing Corporation III, a Nevada corporation
(herein called "Owner").
RECITALS:
A. Manager engages in the business of managing
railcars.
B. Owner intends to purchase or has purchased
certain railcars that are currently subject to
various leases to third parties.
C. Owner desires to retain Manager as independent
contractor for the purpose of managing railcars on
Owner's behalf, on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the
premises and the mutual promises made herein, Owner
and Manager, intending to be legally bound, hereby
agree as follows:
1. Engagement of Manager. Subject to the
terms and conditions set forth herein, Owner hereby
engages Manager as independent contractor to manage
those certain railcars as more particularly
described in Schedule 1 attached hereto, and in any
additional schedules subsequently agreed to by the
parties and attached hereto (the "Cars"), and
Manager accepts such engagement and agrees to act
as independent contractor and to perform in
accordance with the terms and conditions hereof.
2. Term. Subject to the conditions of
termination set forth in Section 11, the term of
this Agreement with respect to any Car (the "Term")
shall commence as of the date that Owner acquires
any interest in the Car and shall terminate on the
date on which all administrative activities with
respect to the Car cease after the Car ceases to be
subject to any of the leases, use agreements,
assignments and other similar arrangements
identified on Schedule 2 attached hereto (referred
to herein collectively as the "Leases" and
individually as a "Lease"), including any extension
of any Lease or any new lease with the same lessee
or any other lease entered into during the Term
with the consent of Owner. Any extensions (other
than those for which the lessor has no discretion)
or new leases will be made only with the prior
written consent of Owner, which consent will
specifically subject such lease to this Agreement.
3. Duties of Manager. In consideration of
the compensation to be paid to Manager by Owner
pursuant to Section 7, the agreement of Owner to
reimburse Manager pursuant to Section 6 and the
other obligations of Owner herein, subject to any
provisions herein requiring Manager to obtain the
consent of Owner, Manager shall, and is hereby
authorized to, provide and perform the following
services on behalf of Owner, unless otherwise
expressly set forth, and to take the action
described below during the Term:
(a) Use best efforts to collect all rental
payments, car hire, mileage allowances and any
other revenues due Owner with respect to the
Cars, and disperse funds owed by Owner in
payment of Operating Expenses (as hereinafter
defined) with respect to the Cars, identifying
itself as Manager acting as independent
contractor, for these purposes, and account
for and remit to Owner all sums due to Owner
as hereinafter provided and enforce Owner's
rights and remedies under any Lease;
(b) Perform, on behalf of Owner, all of
Owner's responsibilities under any Lease,
except to the extent such responsibilities are
expressly reserved by Owner or assumed by some
other party with Owner's consent;
(c) Register the Cars, identify itself as
Manager acting as independent contractor, and
file all required initial and ongoing reports
with the Association of American Railroads
("AAR"), Interstate Commerce Commission
("ICC"), United States Department of
Transportation ("DOT") and any other
regulatory authority having jurisdiction over
the Cars or any Lease in order to ensure that
the Cars will at all times be entitled to
generate the maximum possible revenue subject
to the provisions of any Lease;
(d) Manage the Cars in conformance with all
applicable rules and regulations of the AAR,
ICC, DOT, or any other regulatory authority
having jurisdiction over the Cars;
(e) Use its best efforts (i) to cause the
Cars to be properly maintained and repaired,
keeping the Cars in compliance with all
requirements of the AAR rules for interchange
service and in compliance with the terms of
the relevant Leases, and (ii) when necessary,
after notice to and consultation with Owner,
to cause to be performed any alteration,
modification, improvement or addition to the
Cars required to comply with applicable laws
or regulations (a "Mandated Alteration");
(f) Review, audit, approve, or if not
reasonable and proper, reject each invoice
submitted with respect to the maintenance,
repair and remarking of the Cars;
(g) Pay in Owner's name and on Owner's behalf
all personal property taxes, sales and use
taxes based upon revenues of the Cars, and
other taxes, charges, assessments, or levies
imposed upon or against the Cars of whatever
kind or nature; any costs associated with the
filing or payment of above taxes or levies
shall be for Owner's account;
(h) Monitor the usage of the Cars and report
to Owner any default by any lessee or any
triggering of any termination rights (or
so-called pull rights) of the lessor under a
Lease promptly after Manager learns of such
default or triggering event;
(i) Maintain or cause to be maintained
separate, complete and accurate records
relating solely to the management of the Cars
(including, without limitation, repairs,
maintenance, mileage and registration of the
Cars) and revenues and expenses attributable
to the Cars and make such records available
for inspection by Owner or any representative
of Owner during reasonable business hours, so
long as such does not unreasonably interfere
with the operations of Manager, and provide
copies of all such records in Manager's
possession to Owner, at Owner's expense;
(j) Use reasonable efforts to cause the Cars
to be moved to required destination points, as
may be provided in any Lease, at substantially
the lowest obtainable transportation cost to
Owner, consistent with the operating needs of
the lessee and the Owner;
(k) Use its best efforts, subject to Section 4
below, to collect all sums due from any
railroad or other party as the result of
damage to, or loss or total destruction of, a
Car during the Term, and account for and remit
to Owner in a timely manner all sums due to
Owner as hereinafter provided (and in any
event within thirty (30) days after receipt);
(l) At the request of Owner and at Owner's
expense perform inspections of Cars at the end
of the relevant Leases to ascertain compliance
with return provisions under the Leases; and
(m) Provide such advice and perform such
services incidental to the foregoing for Owner
in connection with the provisions hereof as
may from time to time be reasonably necessary
in respect of the purchase, leasing, and
operation of the Cars.
4. Authority and Powers of Manager. Manager
shall have the responsibility and authority, in the
name of and on behalf of Owner: (i) to enforce or
defend any claim resulting from the deployment or
recovery of or damage to the Cars; (ii) upon the
prior written consent of Owner, to contest any
property, sales or use taxes with respect to the
Cars; and (iii) to enforce the terms of any Lease.
Except as otherwise provided below the reasonable
expenses for such actions shall be Operating
Expenses (as hereinafter defined). Owner hereby
appoints Manager its attorney-in-fact, with power
of substitution to take any action and to sign any
document in the name of and on behalf of Owner that
may be necessary or appropriate in furtherance of
the rights and duties of Manager provided in this
Agreement. Whenever Manager takes any action or
makes any payment at Owner's sole expense pursuant
to this Agreement, the Manager may, subject to the
provision below, request authority from the Owner
to retain such attorneys as it deems necessary, in
connection with such action or payment and the cost
of attorney's services consented to by Owner shall
be at the sole expense of the Owner; provided,
however, that if Owner withholds authorization to
retain an attorney, Owner shall be deemed to have
released Manager from any responsibility with
regard to any matter for which such attorney was to
be retained.
In addition to the limitations set forth in
Section 5, Manager shall not have the authority to
offer for sale, contract or agree to sell any Cars
or settle any claims (except as provided in Section
5(b) hereof), except with the consent or at the
direction of Owner.
5. Additions, Repairs, Alterations,
Modifications and Improvements; Destruction.
(a) Notice of Damage, Destruction or Claim.
In the event:
(i) a Car is destroyed; or
(ii) a Car is damaged to an extent
requiring repairs (excluding any
related transportation costs)
costing in excess of the Maximum
Individual Disbursement Amount (as
such term is defined below); or
(iii) Manager shall have received
written notice of a claim with
respect to a Car,
Manager shall notify Owner in writing of the
occurrence of such event within seven (7) days
of the date on which Manager determines that
such Car was destroyed or so damaged (which
determination shall be made by Manager with
reasonable promptness after Manager has
obtained the facts necessary for it to make
such determination) or received such notice.
(b) Claims Regarding Damage or Destruction.
Manager shall have the authority to settle on
Owner's behalf any claim against any third
party relating to a damaged or destroyed Car
that (i) in the case of a destroyed Car,
provides for the payment of either (x) the
depreciated value of such Car in accordance
with AAR rules or any successor rules then in
effect or (y) the stipulated loss or other
agreed settlement value provided in the
applicable Lease, or (ii) in the case of a
damaged Car, assures the full repair of the
Car. Any other settlement with a third party
relating to a damaged or destroyed Car
requires Owner's written consent and shall
comply with any reasonable written
instructions of Owner with respect to any such
claim.
(c) Manager's Authority Regarding Maintenance
Activities. Manager shall not have the
authority or obligation, without the prior
written consent of Owner, to authorize the
performance of any Discretionary Maintenance
Activity (as such term is defined below) with
respect to any Car unless either:
(i) the cost of such Discretionary
Maintenance Activity does not exceed the
Maximum Individual Disbursement Amount
(as such term is defined below) for any
single event; or
(ii) Owner has contractually obligated
itself to perform such Discretionary
Maintenance Activity by the terms of the
Lease to which such Car is subject or
otherwise.
In the case of any Discretionary Maintenance
Activity authorized by Manager without Owner's
consent pursuant to clause (ii) above, Manager
shall give Owner prompt written notice of
Manager's authorization thereof. In the case
of any request by Manager for Owner's consent
to the performance of a Discretionary
Maintenance Activity, if Manager has not
received instructions to the contrary from
Owner within seven (7) days after the receipt
by Owner of a written request (including a
telexed or telecopied request) for such
consent (specifying in reasonable detail the
nature of the proposed repair and the
estimated cost thereof), Owner shall be deemed
to have consented to the performance thereof.
It is understood that, if at any time, Owner
declines to grant its consent to the
performance of a Discretionary Maintenance
Activity, any costs which may have been
incurred in moving the Car to a repair
facility and in obtaining an estimate of the
cost of the proposed Discretionary Maintenance
Activity shall be treated as an Operating
Expense. Manager will use its best efforts to
have maintenance performed at facilities of
Owner or Owner's shareholders to the extent
reasonably feasible.
(d) Owner's Inspection Rights. Nothing herein
shall be construed as limiting or restricting
the right of Owner to conduct, at its own
expense, inspections of the Cars, or to cause
its agent or representative to conduct such
inspections on its behalf or to allow
potential purchasers to conduct inspections,
so long as:
(i) the manner and frequency of such
inspections do not unreasonably interfere
with the operations of any user of the
Cars; and
(ii) prior notice of any proposed
inspection is given to Manager by Owner.
(e) Certain Definitions. The following terms
shall have the following meanings:
"Discretionary Maintenance Activity"
shall mean any Maintenance Activity other
than a Running Repair.
"Maintenance Activity" shall mean any
addition, repair (including painting),
alteration, modification or improvement
(including, without limitation, any
Running Repair performed or to be
performed with respect to a Car).
"Maximum Individual Disbursement Amount"
shall mean $750.00.
"Running Repairs" shall mean those
repairs delineated by the AAR and the
Canadian Transport Commission performed
with respect to the Cars (i) by persons
other than Manager and Affiliates of
Manager and (ii) without prior specific
authorization by Manager (other than
general authorization by operation of the
Interchange Rules of the Mechanical
Division of the Association of American
Railroads). It is understood that
neither Owner nor Manager will have the
ability to approve Running Repairs in
advance.
6. Payment of Costs and Expenses.
(a) Certain Definitions. The following terms
shall have the following meanings when used in
this Agreement:
"Gross Revenues" for any period shall
mean all revenues in the form of rents,
car hire payments of any kind or any
similar payments in respect of the Cars
received during such period (unreduced by
any expenses or costs) collected by
Manager from any source in connection
with the ownership, use, lease or
operation of the Cars, less any amounts
then payable as rebates, reclaims, or
incentive load fees with respect to the
Cars and less any applicable Canadian
withholding taxes. It is expressly
agreed that Gross Revenues shall not
include any payments received as the
result of damage to or destruction of any
Car.
"Operating Expenses" for any period shall
mean all expenses and costs incurred
during such period in connection with the
ownership, management, use, lease or
operation of all Cars including but not
limited to: (i) expenses, including
inspection expenses, travel and related
expenses and fees of lawyers, incurred in
connection with repossessing Cars or
enforcing any rights or other contractual
arrangements in connection with the
operation or ownership of the Cars or in
marketing any of the Cars at the request
of Owner; (ii) charges, assessments, or
levies imposed upon or against the Cars
of whatever kind or nature as are levied
by a railroad, government, agency of the
AAR or are incurred on a basis arising
out of the operation or ownership of the
Cars; (iii) sales or use taxes based upon
revenues of the Cars; (iv) losses from
liabilities arising from the use and
ownership of the Cars (including losses
referred to in Section 9 hereof) except
to the extent any such losses are caused
by the gross negligence, bad faith or
willful misconduct of Manager; (v) ad
valorem, gross receipts and other
property taxes which are levied against
or in respect of the Cars; (vi) expenses
arising in connection with the
transportation, storage, restenciling,
maintenance or repair of the Cars; (vii)
the costs of alterations, modifications,
improvements or additions to the Cars;
(viii) any charges of Railcar Management,
Inc. ("RMI") pursuant to the guarantee of
fees in Section 10 of the Agreement
between RMI and Chrysler Rail
Transportation Corporation ("CRTC") dated
April 30, 1990 (i.e., the excess of
minimum fee over the fee if calculated on
a per car basis) resulting from Owner's
removal of Cars from management under
this Agreement or from removal due to
action by the Owner or at Owner's request
of Cars from the RMI agreement (as
opposed, in each case to removal of cars
owned by others); and (ix) any other
costs relating exclusively and directly
to the operation of the Cars, including
charges of railroads and others for use
of reporting marks (including MPA marks);
provided, however, that Operating
Expenses shall not include any allocation
of overhead costs of Manager.
"Total Expenses" for any period shall
mean the sum of: (i) all Operating
Expenses for such period; and (ii) all
compensation attributable to the Cars due
and payable to Manager under Section 7
not theretofore paid.
"Net Earnings" for any period shall mean
the Gross Revenues less Total Expenses
for such period.
Gross Revenues or Operating Expenses
attributable to any period which are received
or disbursed by Manager after the close of
such period shall be included in subsequent
distributions and accounted for as Gross
Revenues or Operating Expenses of that
subsequent period. If received or disbursed
after the Term for any Car, the parties will
promptly settle such revenues or expenses.
(b) Payment and Priority of Expenses. Manager
shall apply Gross Revenues to the payment of
Total Expenses (including, without limitation,
to the reimbursement of Manager for any
Operating Expenses previously paid by
Manager). In the event that the Gross
Revenues are insufficient to pay Total
Expenses, Manager shall apply Gross Revenues
to all such expenses in the following
priorities: (i) any applicable taxes included
in Operating Expenses; (ii) management fees
provided for under Section 7; and (iii)
miscellaneous Operating Expenses payable to
third parties.
(c) Payment of Operating Deficits. In the
event that Gross Revenues for any month are
insufficient to pay Total Expenses, Owner
shall pay to Manager the amount, if any, by
which Total Expenses for any month shall
exceed Gross Revenues for such month. Such
payment shall be made: (i) in the case of
expenses already paid by Manager, not later
than five (5) days after written notice to
Owner from Manager specifying in reasonable
detail the Gross Revenue and Total Expenses
applicable to such month and specifying which
expenses have previously been paid; and (ii)
in the case of expenses which have not already
been paid by Manager, not later than a date
sufficiently in advance of the date set forth
in such notice as the date upon which payment
for such expense is due so that Manager will
have available funds on such date. Manager
shall be entitled to apply against any amount
owed by Owner to Manager any monies held by
Manager for the account of, or amounts owed by
Manager to, Owner.
(d) Payment for Certain Property Damage.
Unless such responsibilities have been assumed
by another party, the cost of repairs for
damage to any Car is the sole responsibility
of Owner. Any payments, including, without
limitation, insurance benefits or railroad or
lessee indemnity or settlement payments,
received to cover the damage to or loss or
destruction of any Car shall be solely for the
account and benefit of Owner (and shall not be
included within the term "Gross Revenues").
Except in the case of payments applied in
accordance with this Agreement, all such
payments shall be remitted to Owner promptly
after receipt by Manager and in no event later
than ten (10) business days after Manager's
receipt thereof.
7. Compensation.
(a) Manager shall be entitled to ten dollars
($10.00) per Car for each calendar month
falling in whole or in part within the Term.
Such compensation shall be earned monthly, in
advance, and shall continue throughout the
Term for each Car and thereafter for those
months in which any Gross Revenues or bills
for Operating Expenses continue to be received
by Manager.
(b) Manager anticipates that it will manage,
on behalf of Allied Railcar Company, IC
Leasing Corporation III and Wisconsin Central,
Ltd., the number of railcars indicated on the
schedule attached hereto as Schedule 3 for the
months shown. Notwithstanding any contrary
provision in this Section 7, in any calendar
month in which the total number of cars
managed by Manager for Allied Railcar Company,
IC Leasing Corporation III and Wisconsin
Central, Ltd. exceeds the number indicated for
such month on Schedule 3, the compensation per
Car due to Manager from Owner will determined
by the following formula:
(N x $10.00) + ((X-N) x $6.00)
X
where N is the number indicated for such month
on Schedule 3 and X is the actual total number
of cars managed by Manager that are owned by
Allied Railcar Company, IC Leasing Corporation
III and Wisconsin Central, Ltd.
For example, if 500 is the number for a given
month on Schedule 3, but Manager actually
manages 600 cars during that month for Allied
Railcar Company, IC Leasing Corporation III
and Wisconsin Central, Ltd., the per Car fee
due to Manager from Owner will be $9.33,
determined as follows:
(500 x $10.00) + (100 x $6.00)
600
(c) Any difference between the fee collected
in advance and the actual fee provided herein
will be credited to the appropriate party for
the following month.
8. Bank Account; Collection and Distribution
of Revenues.
(a) Manager shall cause to be maintained a
bank account (the "Trust Account") into which
Manager shall deposit the funds received by it
and generated by the operation of the Cars,
pending disbursement of such funds in
accordance with this Agreement. The Trust
Account may also receive and disburse monies
for the benefit of other owners of railcars.
Manager shall maintain the Trust Account only
at a bank which agrees in writing that such
account is not subject to a right of offset or
any other claim or lien arising from any
relationship between such bank and Manager or
any of its affiliates.
(b) Net Earnings for any month will be
remitted to Owner by the last day of the
succeeding month; provided, however, Net
Earnings under net leases (as opposed to per
diem leases) will be remitted to Owner after
collection and processing on the 15th and last
day of each month.
9. Indemnification.
(a) Owner shall indemnify and hold Manager
harmless from and against any and all claims,
actions, judgments, settlements, damages,
expenses (including reasonable attorney's fees
and other costs of collection or defense),
losses or liabilities (collectively "Losses")
incurred by or asserted against Manager
(either alone or jointly or severally) as a
result of the use, operation, possession,
control, maintenance, repair or storage of the
Cars; provided, however, that Owner shall not
be required to defend, indemnify or hold
Manager harmless from any Loss to the extent
such Loss results solely from the gross
negligence, bad faith or willful misconduct of
Manager or from Manager's breach of this
Agreement.
(b) Manager shall indemnify and hold Owner
harmless from and against any and all Losses
incurred by or asserted against Owner (either
alone or jointly or severally) to the extent
such Losses result solely from gross
negligence, bad faith or willful misconduct of
Manager or from Manager's breach of this
Agreement.
(c) As promptly as practicable after receipt
by a party (the "indemnified party") of notice
of the commencement of any action, suit or
proceeding or the assertion of any claim with
respect to which the other party (the
"indemnifying party") is or may be required to
indemnify, the indemnified party shall give
written notice thereof to the indemnifying
party, whereupon the indemnifying party shall
undertake the defense and satisfaction
thereof. The indemnified party shall give the
indemnifying party such cooperation as the
indemnifying party may reasonably request, and
the indemnifying party shall have the right to
defend and settle any such action, suit,
proceeding or claim either in its name or the
name of the indemnified party (so long as the
indemnified party shall be indemnified and
held harmless as provided herein). The
indemnified party shall have the right to
participate in the defense of any such action,
suit, proceeding or claim. If the
indemnifying party fails to take timely action
to defend any such action, suit, proceeding or
claim, the indemnified party shall have the
right to defend or settle the same as the
indemnified party may deem appropriate at the
indemnifying party's cost and expense.
(d) The indemnifications set forth in this
Section 9 shall survive termination of this
Agreement.
10. Default. The occurrence of any of the
following events shall be an Event of Default under
this Agreement:
(a) The failure by a party to pay to the other
any amount required to be paid hereunder
within ten (10) days after written notice that
any such payment is overdue.
(b) The breach by either party of any other
term, covenant, or condition of this Agreement
(other than requiring the payment of money
from one party to the other), if (i) in the
case of any breach susceptible to cure within
a thirty (30) day period, such breach is not
cured within thirty (30) days after receipt of
written notification of such breach, or (ii)
in the case of any breach not susceptible to
cure within a thirty (30) day period and so
long as such party is making all reasonable
efforts to cure such breach, such breach is
not cured within ninety (90) days after
receipt of written notification of such
breach.
(c) Any act of insolvency by either party or
the filing of any petition or action under any
bankruptcy, reorganization, insolvency or
moratorium law, or any other law or laws for
the relief of, or relating to, debtors.
(d) The filing of any involuntary petition
under any bankruptcy, reorganization,
insolvency or moratorium law against either
party that is not dismissed within sixty (60)
days thereafter, or the appointment of any
receiver or trustee to take possession of the
properties of such party unless such petition
or appointment is set aside or withdrawn or
ceases to be in effect within sixty (60) days
from the date of such filing or appointment.
11. Conditions and Consequences of
Termination.
(a) This Agreement shall terminate with
respect to any Car as provided in Section 2
hereto. In addition, either Owner or Manager
may terminate this Agreement with respect to
any Cars that would not, after the effective
date of such termination, be subject to any
lease under which any other cars owned or
controlled by Manager would then be subject
effective thirty (30) days after written
notice from one to the other.
(b) Notwithstanding anything in this Agreement
to the contrary, Owner shall have the right
with respect to any and all Cars to terminate
this Agreement at any time by notice in
writing to Manager if an Event of Default has
occurred and is continuing with respect to
Manager hereunder.
(c) Notwithstanding anything in this Agreement
to the contrary, Manager shall have the right
with respect to any and all Cars to terminate
this Agreement at any time by notice in
writing to Owner if an Event of Default has
occurred and is continuing with respect to
Owner hereunder.
(d) Upon termination of this Agreement, so
long as Owner is in compliance with its
obligations hereunder, (i) Manager shall pay
to Owner all Gross Revenues then held by
Manager after deduction of any accrued
management fees payable under Section 7 and
reimbursement of any Operating Expenses
previously paid by Manager or expected to
become due in accordance with this Agreement;
(ii) Manager shall deliver to Owner all
records (or copies thereof) relating to the
Cars, and (iii) Owner shall have the right to
instruct, and to cause Manager to instruct,
any lessee of the Cars to pay all future Gross
Revenues and other sums directly to Owner.
Subsequent to termination of this Agreement
with respect to any Car Manager agrees to
continue to collect all rental payments and
other sums (including insurance benefits or
railroad indemnity payments payable in
connection with any damage to or loss or total
destruction of a Car), and to pay or arrange
for payment of all expenses, taxes and other
charges on Cars due for or with respect to
periods prior to termination of this
Agreement.
(e) Upon termination of this Agreement,
Manager shall cooperate with Owner to effect
an orderly transition of the management or use
of the Cars to Owner or any new user or
manager thereof, as the case may be. Upon
termination of this Agreement Manager agrees
upon request to assist Owner to (i) cause the
marks on the Cars to be changed, if necessary;
(ii) take control of the Cars; (iii) arrange
for removal of the Cars from the railroad
tracks where the Cars are located, if
necessary; (iv) transport such Cars to a
location designated by Owner. Owner shall
cause all reporting marks within Manager's
control to be removed from each Car promptly
upon termination. The expenses for all such
actions shall be borne by Owner; provided,
however, if such termination is due to default
by Manager, Manager shall bear the expense of
remarking Cars, if necessary.
12. Reports. At the time of each payment of
Net Earnings to Owner, Manager will distribute to
Owner an unaudited report with respect to each
group of Cars listed in any schedule attached
hereto, stating the Gross Revenues, the fees paid
or payable to Manager and any Operating Expenses
received attributable to the Cars, including the
computation and the allocation of any property
taxes.
13. Notices. Except as otherwise provided
herein, any notice required or permitted hereunder
shall be in writing and shall be valid, sufficient
and deemed given if delivered personally or
dispatched in any post office of the United States
by registered or certified mail postage prepaid, or
sent by any other express mail service receipt of
which can be verified, addressed to the other party
as follows:
If to Manager: Interail, Inc.
One Foxfield Square
St. Charles, IL 60174
Fax: (708) 377-9934
Attention: President
If to Owner: IC Leasing Corporation III
455 N. Cityfront Plaza Dr.
Chicago, IL 60611-5504
Fax: (312)
Telex: 25-3637
Attention: Chief
Financial Officer
Either party may change such address by notice
given to the other party in the manner set forth
above.
14. Other Customers; Standard of Care. It is
expressly understood and agreed that nothing herein
contained shall be construed to prohibit Manager
from providing similar services to any person or
organization not a party to this Agreement.
Manager may own, or manage for any other party,
railcars which are similar to the Cars. In
managing, maintaining, leasing, releasing,
repairing, offering for sale, or selling Cars
pursuant to this Agreement, Manager shall perform
all its duties, services and obligations hereunder
in accordance with the same standards, care,
diligence, and good faith observed by Manager in
performing comparable duties, services, and
obligations with respect to all other railcars
owned, leased, or managed by Manager.
15. Miscellaneous.
(a) Counterparts. This Agreement may be
executed in two counterparts, each of which
shall be deemed an original, but both of which
together shall constitute one and the same
instrument.
(b) Headings. Titles and headings of the
Sections and Subsections of this Agreement are
for convenience of reference only and do not
form a part of this Agreement and shall not in
any way affect the interpretation hereof.
(c) Amendment. No explanation or information
by either of the parties hereto shall alter or
affect the meaning or interpretation of this
Agreement and no modification or amendment to
this Agreement shall be valid unless in
writing and executed by both parties hereto.
(d) Successor and Assigns. The terms and
conditions of this Agreement shall inure to
the benefit of and be binding upon the
respective successors and assigns of the
parties hereto; provided, however, that
neither Owner nor Manager shall have the right
to assign its rights or obligations under this
Agreement without the prior written consent of
the other, which shall not be unreasonably
withheld, except that no consent shall be
necessary for either party to assign its
interest in this Agreement as security to a
senior lender.
(e) Force Majeure. Either party shall not be
deemed to be in breach or in violation of this
Agreement so long as such party is prevented
from performing any of its obligations
hereunder for any reason beyond its reasonable
control including and without limitation acts
of God, riots, strikes, fires, storms, public
disturbances, or any regulation, ruling, order
or determination by any Federal, state or
local government, or any department or agency
thereof.
(f) Parties' Intentions. Each party hereto
represents to the other that it has been duly
incorporated and is in good standing in the
jurisdiction of its incorporation and that the
execution and delivery of this Agreement has
been duly authorized as an act of such
corporation, and each party covenants and
agrees that it will not take any action during
the Term which would be inconsistent with the
terms of this Agreement.
(g) Waiver. The waiver of any breach of any
term or condition hereof shall not be deemed a
waiver of any other or subsequent breach,
whether of like or different nature.
(h) Severability. If any term or provision of
this Agreement or the performance thereof
shall to any extent be invalid or
unenforceable, such invalidity or
unenforceability shall not affect or render
invalid or unenforceable any other provision
of this Agreement, and this Agreement shall be
valid and enforceable to the fullest extent
permitted by law.
(i) Expenses. The prevailing party in any
action or proceeding brought to enforce the
terms hereof shall be entitled to recover from
the losing party the reasonable costs and
expenses (including attorney's fees) incurred
by the prevailing party in such action or
proceeding.
(j) Governing Law. This Agreement shall be
governed by and construed in accordance with
the laws of the State of Illinois without
regard to such state's conflicts of laws
rules.
(k) Days; Years. Unless otherwise
specifically provided herein, all references
herein to days or years shall mean,
respectively, calendar days or calendar years.
If the day upon which any covenant or
obligation herein is required to be performed
or paid falls on a Saturday, Sunday or other
day upon which banking institutions are
authorized or required to close in Chicago, or
the state of Manager's or Owner's principal
office, the performance of such covenant or
the payment of such obligation shall be deemed
timely performed if paid on the next business
day thereafter.
(l) Merger. This Agreement represents the
entire agreement between the parties with
regard to the subject matter hereof and
supersedes any prior or contemporaneous
agreement, whether written or oral.
IN WITNESS WHEREOF, Manager and Owner have
each caused this Railcar Management Agreement to be
duly executed as of the date first above written,
and the undersigned signatories each hereby declare
that the foregoing is a true and correct document
and was executed on the date indicated below its
signature.
INTERAIL, INC.
("MANAGER")
By:
Title: President
Date: December 2, 1993
IC LEASING CORPORATION III
("OWNER")
By:
Title: President
Date: December 2, 1993
