SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the period ended September 30, 1994
Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from to
Commission file number 1-10720
ILLINOIS CENTRAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-3545405
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
455 North Cityfront Plaza Drive, Chicago, Illinois 60611-5504
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(312) 755-7500
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
As of September 30, 1994, 42,603,079 common shares were
outstanding.
ILLINOIS CENTRAL CORPORATION
AND SUBSIDIARIES
FORM 10-Q
Three Months and Nine Month Periods Ended September 30, 1994
CONTENTS
Part I - Financial Information:
Item 1. Financial Statements:
Consolidated Statements of Income 3
Consolidated Balance Sheets 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 8
Part II - Other Information:
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures
ILLINOIS CENTRAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
($ in millions, except share data)
(Unaudited)
Revenues $146.7 $147.4 $439.4 $422.2
Operating expenses:
Labor and fringe benefits 49.7 49.3 146.6 142.6
Leases and car hire 13.5 18.0 40.6 52.0
Diesel fuel 7.6 7.3 23.1 22.3
Materials and supplies 10.1 9.3 30.2 27.4
Depreciation and amortization 6.8 5.9 19.9 17.3
Other 13.1 11.2 37.3 29.5
Operating expenses 100.8 101.0 297.7 291.1
Operating income 45.9 46.4 141.7 131.1
Other income, net 2.0 0.2 3.6 1.8
Interest expense, net (6.8) (7.1) (20.8) (25.9)
Income before income taxes,
extraordinary item and
cumulative effect of changes
in accounting principles 41.1 39.5 124.5 107.0
Provision for income taxes 15.2 18.0 46.1 41.6
Income before extraordinary
item and cumulative effect of
changes in accounting
principles 25.9 21.5 78.4 65.4
Extraordinary item, net - - - (23.4)
Cumulative effect of changes
in accounting principles - - - (0.1)
Net income $25.9 $21.5 $78.4 $41.9
Income per share:
Income before extraordinary
item and cumulative effect
of changes in accounting
principles $ 0.61 $0.50 $ 1.84 $1.53
Extraordinary item, net - - - (0.55)
Cumulative effect of changes
in accounting principles - - - -
Net income per share $0.61 $0.50 $1.84 $0.98
Weighted average
number of shares
of common stock
and common stock
equivalents
outstanding 42,705,087 42,702,929 42,720,811 42,675,351
The following notes are an integral part of the consolidated
financial statements.
-3-
ILLINOIS CENTRAL CORPORATION AND
SUBSIDIARIES
Consolidated Balance Sheets
($ in milllions)
(Unaudited)
ASSETS 9/30/94 12/31/93
Current assets:
Cash and temporary cash investments $ 31.2 $ 10.7
Receivables, net of allowance for
doubtful accounts of $2.5 in 1994
and $3.1 in 1993 34.0 80.3
Materials and supplies, at average 17.9 20.1
cost
Assets held for disposition 9.1 9.1
Deferred income taxes - current 21.5 22.8
Other current assets 4.4 3.6
Total current assets 118.1 146.6
Investment 15.8 15.7
Properties:
Transportation:
Road and structures, including land 981.1 947.9
Equipment 133.7 118.1
Other, principally land 40.2 40.4
Total properties 1,155.0 1,106.4
Accumulated depreciation (27.7) (20.9)
Net properties 1,127.3 1,085.5
Other assets 11.5 10.9
Total assets $1,272.7 $1,258.7
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 2.7 $24.3
Accounts payable 59.2 54.4
Dividends payable 8.9 9.0
Income taxes payable 9.1 1.5
Casualty and freight claims 24.9 24.7
Employee compensation and vacations14.9 15.8
Taxes other than income taxes 12.4 14.0
Accrued redundancy reserves 6.7 6.8
Other accrued expenses 27.3 28.5
Total current liabilities 166.1 179.0
Long-term debt 339.3 360.3
Deferred income taxes 206.1 202.3
Other liabilities and reserves 132.0 139.7
Contingencies and commitments
Stockholders' equity:
Common stock, par value $.001, authorized 100,000,000 shares,
42,838,564 shares issued and 42,603,079 shares outstanding
- -
Additional paid-in capital 164.9 164.2
Retained income 268.1 216.5
Treasury stock (235,485 shares) (3.8) (3.3)
Total stockholders' equity 429.2 377.4
Total liabilities and $1,272.7 $1,258.7
stockholders' equity
The following notes are an integral part of the consolidated
financial statements.
-4-
ILLINOIS CENTRAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
($ in millions)
(Unaudited)
1994 1993
Cash flows from operating activities :
Net income $ 78.4 $41.9
Reconciliation of net income to net cash
provided by (used for) operating activities :
Extraordinary item, net - 23.4
Cumulative effect of changes in
accounting principles - 0.1
Depreciation and amortization 19.9 17.2
Deferred income taxes 5.2 36.1
Equity in undistributed earnings of affiliates,
net of dividends received (0.4) (0.2)
Net gains on sales of real estate (2.0) -
Cash changes in working capital 55.5 (8.6)
Changes in other assets (0.8) (3.4)
Changes in other liabilities and
reserves (4.7) (6.9)
Net cash provided by (used for)
operating activities 151.1 99.6
Cash flows from investing activities :
Additions to properties (61.9) (48.6)
Proceeds from real estate sales 3.6 0.3
Proceeds from equipment sales 3.9 3.6
Proceeds from sales of investments 0.4 0.2
Other (1.1) (3.5)
Net cash provided by (used for) investing (55.1) (48.00
activities
Cash flows from financing activities :
Proceeds from issuance of debt 114.7 224.1
Principal payments on debt (159.8) (265.5)
Net proceeds (payments) in commercial
paper (1.1) -
Dividends paid (26.8) (19.9)
Proceeds from exercise of stock options
and warrants - 0.2
Purchase of subsidiary's common stock (2.5) (0.3)
Net cash provided by (used for)
financing activities (75.5) (61.4)
Changes in cash and temporary cash
investments 20.5 (9.8)
Cash and temporary cash investments at
beginning of period 10.7 34.6
Cash and temporary cash investments at end of
period $31.2 $24.8
Supplemental disclosure of cash flow information :
Cash paid during the year for:
Interest (net of amount capitalized) $24.4 $33.9
Income taxes $33.3 $ 5.9
The following notes are an integral part of the consolidated
financial statements.
-5-
ILLINOIS CENTRAL CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
1. Basis of Presentation
Except as described below, the accompanying unaudited
consolidated financial statements have been prepared in
accordance with accounting policies described in the
1993 Annual Report on Form 10-K and should be read in
conjunction with the disclosures therein.
In the opinion of management, these interim financial
statements reflect all adjustments, consisting of normal
recurring accruals, necessary to present fairly the
financial position, results of operations and cash flows
for the periods presented. Interim results are not
necessarily indicative of results for the full year.
Certain 1993 amounts have been reclassified to conform
with the presentation used in the 1994 financial
statements.
Income Per Share
Income per common share of the Company is based on the
weighted average number of shares of common stock and
common stock equivalents outstanding during the period.
2. Sales of Accounts Receivable
In the first quarter of 1994, the Railroad entered into
a revolving agreement to sell undivided percentage
interests in certain of its accounts receivable, with
recourse, to a financial institution. The agreement,
which expires March 1997, allows for sales of accounts
receivable up to a maximum of $50 million at any one time.
The Railroad services the accounts receivable sold under the
agreement. At September 30, 1994, $48 million in accounts
receivable had been sold pursuant to the Agreement.
The Railroad retains the same exposure to credit loss as
existed prior to the sale. Costs related to the agreement will vary
generally in correlation with changes in prevailing
interest rates. These costs, which are included in
Other Income, Net, were $.6 million and $1.5 million for
the three month and nine month periods ended September
30, 1994, respectively.
3. Common Stock and Dividends
On September 22, 1994, the Board of Directors approved
a quarterly dividend of $.21 per share which was paid
October 6, 1994. The Board intends to continue its
policy of quarterly dividends. Future dividends may be
dependent on the Railroad's ability to pay cash
dividends to the Company. Certain covenants of the
Railroad's debt agreements restrict the level of
dividends it may pay to the Company. At September 30,
1994, approximately $96 million of Railroad equity was
free of such restrictions. The Railroad declared and paid a
dividend of approximately $9.3 million to the Company in
October 1994.
4. Certain Investments in Debt and Equity Securities
Effective January 1, 1994, the Company adopted the
Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity
Securities" ("SFAS No. 115"). SFAS No. 115 expands the
use of fair value accounting for certain investments in
debt and equity securities but retains the use of the
amortized cost method for investments in debt securities
that the reporting enterprise has the positive intent
and ability to hold to maturity. All of the investments
held by the Company are temporary and held for less than
90 days. They are included in the Consolidated Balance
Sheet as part of Cash and Temporary Cash Investments.
For the periods presented, all investments were in U.S.
Corporate demand notes. It is the intent of the Company
to hold all debt securities to maturity, therefore, the
following is provided in accordance with SFAS No. 115
($ in millions):
9-30-94 1-1-94
Aggregate fair value $ 22.0 $ 5.6
Gross unrealized holding gains $ - $ -
Gross unrealized holding losses $ - $ -
Amortized cost $ 22.0 $ 5.6
5. Recent Events
On July 19, 1994, the Company and Kansas City Southern
Industries, Inc. (KCSI) announced the signing of a
letter of intent providing for the acquisition of the
Kansas City Southern Railway and certain related assets
by the Company.
On October 24, 1994, both companies announced that they
had mutually agreed to terminate the letter of intent
and the negotiations for the acquisition. The two
companies said that they had not been able to reach
definitive agreement on a number of issues.
A derailment in Kegley, Illinois in August 1994, resulted
in the spilling of more than 20,000 gallons of
Tetrachloroethylene. The Railroad is in the process of
implementing immediate response actions at the site.
To date an estimate of remediation costs has not been made.
However, based on prior experience and actions taken so far
management does not believe that this site will have a
material adverse effect on the Company's condition.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The discussion below takes into account the financial
condition and results of operations of the Company for the
periods presented in the consolidated financial statements.
Results of Operations
Three Months Ended September 30, 1994 Compared to Three Months
Ended September 30, 1993
Revenues for 1994 decreased from the prior year quarter
by $.7 million or .5% to $146.7 million. The decrease was a
result of a 7.4% decrease in gross freight revenue per carload
which was partially offset by a 4.4% increase in the number of
carloads coupled with increases in revenue other than gross
freight revenue. For the quarter, the Company experienced
carloading increases in coal (27.9%) and intermodal (61.5%),
offset by decreased grain loads (23.7%). Prior year
carloadings in coal were adversely impacted by United Mine
Workers (UMW) strike against several coal producers served by
the Railroad. However, other commodities, most notably grain
and grain mill, were positively impacted by the extensive
flooding in the Midwest in 1993.
In June 1994, the Railroad signed a marketing agreement
with Southern Pacific Railroad Corporation (SP) for the
north/south transport of intermodal units in the Chicago-
Texas-Mexico market, beginning July 1, 1994. The agreement
calls for at least 30,000 intermodal units which the SP moves
in this market annually to be routed over the Railroad's
system resulting in a more direct route to and from Chicago
through Memphis.
Operating expenses for 1994 decreased $.2 million, or
.2% as compared to 1993. Increases in labor, materials and
supplies and depreciation were offset by decreased lease and
car hire expense. The shift in expenses from leases and car
hire to depreciation reflects the Company's shift from leasing
to ownership of its fleet. For 1993, operating expenses,
other, benefited from detoured traffic as a result of the
flooding of the Mississippi River.
Operating income for 1994 decreased 1.1% ($.5 million)
to $45.9 million from $46.4 million in 1993, as a result of
decreased revenues cited above, partially offset by decreased
operating expenses.
Net interest expense decreased by 4.2% to $6.8 million
as compared to $7.1 million in 1993, primarily as a result of
utilization of commercial paper financing and the selling of
accounts receivable.
Nine Months Ended September 30, 1994 Compared to Nine Months
Ended September 30, 1993
Revenues for 1994 increased from the prior year by $17.2
million or 4.1% to $439.4 million. The increase was a result
of a 5.7% increase in the number of carloads coupled with
increases in revenue other than gross freight revenue, which
were partially offset by a decrease of 4.1% in gross freight
revenue per carload. For the first nine months of 1994 the
Company experienced carloading increases in coal (24.0%),
intermodal (46.3%) and chemicals (2.3%) offset by decreased
grain loads (18.1%). The UMW strike negatively impacted full
year 1993 coal carloadings.
Operating expenses for 1994 increased $6.6 million, or
2.3% as compared to 1993, reflecting the increased carloads cited
above for the nine months ended September 30, 1994.
Operating income for 1994 increased 8.1% ($10.6 million)
to $141.7 million from $131.1 million in 1993, as a result of
increased revenues partially offset by the increased operating
expenses.
Net interest expense decreased 19.7% to $20.8 million as
compared to $25.9 million in 1993, primarily as a result of
the 1993 refinancing of the Company's debt, utilization of
commercial paper financing and the selling of accounts
receivable.
Effective January 1, 1993, the Company adopted both the
Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions" ("SFAS No. 106") and the Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits" ("SFAS No. 112"). SFAS No. 106
requires that future costs associated with providing
postretirement benefits be recognized as expense over the
employees' requisite service period. The pay-as-you-go method
used prior to 1993 recognized the expense on a cash basis.
SFAS No. 112 establishes accounting standards for employers
who provide postemployment benefits and clarifies when the
expense is to be recognized. As a result of adopting these
two standards the Company recorded a decrease to net income of
$84,000 (net of taxes of $46,000) as a cumulative effect of
changes in accounting principles.
Liquidity and Capital Resources
Operating Data: Nine Months Ended September 30,
1994 1993
($ in millions)
Cash flows provided by (used for):
Operating activities $151.1 $ 99.6
Investing activities (55.1) (48.0)
Financing activities (75.5) (61.4)
Net change in cash and
temporary cash investments $ 20.5 $(9.8)
Operating activities in 1994 provided $151.1 million in
cash, primarily from net income before depreciation and
deferred taxes, and the $48.0 million of net proceeds from the
sales of accounts receivables.
During 1994, additions to property of $61.9 million
include approximately $28.2 million for track and bridge
rehabilitation, approximately $2.9 million for intermodal
facilities, approximately $10.7 million for signals and
communications and approximately $16.7 million for equipment
upgrades, including lease conversions. The Company
anticipates that base capital expenditures for 1994 will be
approximately $65 million and will concentrate on track
maintenance, renewal of track structures such as bridges, and
upgrading the locomotive fleet. If additional opportunities
such as equipment lease conversions or market-driven expansion
occur in 1994, the total capital spending including
capitalized leases could be approximately $90 million. To
date, capital leases and equipment lease-conversions have
totaled approximately $12.4 million. Expenditures for capital
additions and lease conversions are expected to be met from
current operations and other available sources.
Over the last three years, management has concentrated
on reducing leverage, expanding funding sources, lowering
funding costs and upgrading the debt ratings issued by the
rating services. The latest steps in this process are a first
quarter of 1994 agreement with a financial institution whereby
the Railroad sells certain of its accounts receivables and the
initiation in November 1993 of a public commercial paper
program.
In the first quarter of 1994, the Railroad entered into
a receivables purchase agreement to sell undivided percentage
interests in certain of its accounts receivable, with
recourse, to a financial institution. The agreement, which
expires March 1997, allows for sales of accounts receivable up
to a maximum of $50 million at any one time. The Railroad
services the accounts receivable sold under the agreement.
At September 30, 1994, $48 million in accounts receivable had
been sold pursuant to the Agreement. The Railroad retains the
same exposure to credit loss as existed prior to the sale.
Costs related to the agreement will vary generally in correlation
with changes in prevailing interest rates. These costs, which are
included in Other Income, Net, were $1.5 million for the nine months ended
September 30, 1994.
The commercial paper, issued by the Railroad, is rated
A2 by S&P, F2 by Fitch Investors Service, Inc. ("Fitch") and
P3 by Moody's and is supported by a $100 million Revolver with
the Railroad's bank lending group. At September 30, 1994,
$37.0 million of commercial paper was outstanding with an
average interest rate of 5.25%. During the first nine months,
the amount outstanding ranged from $13.0 million to $60.0
million. The Railroad views this program as a significant
long-term funding source and intends to issue replacement
notes as each existing issue matures and accordingly issuances
are classified as long-term.
In connection with the termination of negotiations
between the Company and KCSI, Standard and Poor's and Fitch affirmed
their BBB rating on Company securities and removed the Company's
debt from a credit watch.
At September 30, 1994, no amounts had been drawn under
either the Railroad's Revolver or Bank Line. The $100 million
available under the Revolver was limited to $60.6 million
because $37.0 million in commercial paper was outstanding and
$2.4 million in letters of credit had been issued. The Bank
Line was structured as a 364-day renewal instrument and
expired October 26, 1994. At September 30, 1994, no amounts
were outstanding. The Railroad has negotiated an amended and
restated Revolver which replaces the Bank Line and increases
the Revolver to $150 million. The new Agreement which expires
in 1999, provides for a more favorable pricing to the Railroad
recognizing the Railroad's improved credit ratings. The basis
covenants in the former Agreement continue in the new Agreement.
The Railroad also has uncommitted floating rate Credit
Facilities totalling $95 million. At September 30, 1994, no
amounts were outstanding on any of the facilities. The
Company also has a 364-day $50 million Revolver with Bank of
America which expires August 15, 1995. No amounts were
outstanding at September 30, 1994.
Certain of the Company's financing/leasing subsidiaries
have approximately $13.2 million of outstanding debt incurred
in the acquisition of 61 locomotives during 1993 and 1991.
One subsidiary used a short-term bridge financing of $21.7
million to acquire 1,522 box cars in December 1993. Such
borrowings are secured by the equipment acquired. On July 5,
1994, the bridge loan was refinanced with a seven year bank
facility (a two year revolver which converts to a five year
term facility). This facility has interest rates at either
LIBOR + 7/8 basis points or LIBOR + 1 1/8 basis points
predicated by covenant performance. Initial borrowings are at
the LIBOR + 1 1/8 rate. At September 30, 1994, $19.7 million
was outstanding.
The Company believes that its available cash, cash
generated by its operations and cash available via commercial
paper, the Revolvers, and the Credit Facilities will be
sufficient to meet foreseeable liquidity requirements.
Various borrowings of the Company's subsidiaries are
governed by agreements which contain financial and operating
covenants. All entities were in compliance with these covenant
requirements at September 30, 1994, and management does not
anticipate any difficulty in maintaining such compliance.
The Company paid its eleventh consecutive quarterly cash
dividend on October 6, 1994. The Board intends to continue a
policy of quarterly dividends. Future dividends may be
dependent on the Railroad's ability to pay cash dividends to
the Company. Certain covenants of the Railroad's debt
agreements restrict the level of dividends it may pay to the
Company. At September 30, 1994, approximately $96 million of
Railroad equity was free of such restrictions. The Railroad
declared and paid a dividend of approximately $9.3 million to the
Company in October 1994.
The Company has paid approximately $4.1 million in the
first nine months of 1994 for costs associated with the
various labor agreements signed in 1992 and 1991. The Company
anticipates that an additional $1.7 million will be required
in 1994 related to all such agreements. These requirements
are expected to be met from current operating activities or
other available sources.
The Company has expressed its intent to negotiate labor
agreements locally, i.e, with each union separately, and not
be subject to national handling whereby all railroads
negotiate as one with each union. To date, unions representing
10% of the Company's union represented workforce have ratified
new agreements. The agreements cover wage and work rule issues
through 1999 and provide annual increases of approximately 3-4%.
The Company has not reached any agreements with operating crafts.
Under the Railway Labor Act changes to the existing contracts
with the other unions can be requested by either side after
October 31, 1994.
The Railroad has entered into various hedge agreements
designed to mitigate significant changes in fuel prices. As
a result, approximately 95% of the Railroad's short-term
diesel fuel requirements through March 1995 and 47% through
June 1995 are protected against significant price changes.
The Railroad is and will continue to be subject to
extensive regulation under environmental laws concerning,
among other things, discharges into the environment and the
handling, storage, transportation and disposal of waste and
hazardous materials. Inherent in the operations and real
estate activities of the Railroad and other railroads is the
risk of environmental liabilities. As discussed in Item 3.
"Legal Proceedings," in the Company's definitive Annual Report
Form 10-K for the year ended December 31, 1993, dated March
16, 1994, Commission File No. 1-10720, several properties on
which the Railroad currently or formerly conducted operations
are subject to governmental action in connection with
environmental damage. See also Item 1 in Part II of the
Company's Form 10-Q for the three months ended June 30, 1994
and Item 1 in Part II herein. In the opinion of management,
the Company has adequate reserves to cover the costs for
investigation and remediation. However, there can be no
assurance that environmental conditions will not be discovered
which might individually or in the aggregate have a material
adverse effect on the Company's financial condition.
A derailment in Kegley, Illinois in August 1994,
resulted in the spilling of more than 20,000 gallons of
Tetrachloroethylene. The Railroad is in the process of
implementing immediate response actions at the site. To date
an estimate of remediation costs has not been made. However,
based on prior experience and actions taken so far management
does not believe that this site will have a material adverse
effect on the Company's financial condition.
Recent Event
On July 19, 1994, the Company and Kansas City Southern
Industries, Inc. (KCSI) announced the signing of a letter of
intent providing for the acquisition of the Kansas City
Southern Railway and certain related assets by the Company.
On October 24, 1994, both companies announced that they
had mutually agreed to terminate the letter of intent and the
negotiations for the acquisition. The two companies said that
they had not been able to reach definitive agreement on a
number of issues.
Recent Accounting Pronouncements
In May 1993, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards
No. 114, "Accounting by Creditors for Impairment of a Loan"
("SFAS No. 114"). In October 1994, the FASB issued Statement
of Financial Accounting Standards No. 118, "Accounting by
Creditors for Impairment of a Loan - Income Recognition and
Disclosures" (SFAS No. 118), SFAS No. 118 amends SFAS No. 114.
SFAS No. 114, as amended by SFAS No. 118, requires that
impaired loans be measured based on the present value of
expected future cash flows discounted at the loan's effective
interest rate. This statement applies to financial statements
for fiscal years beginning after December 15, 1994, with
earlier adoption encouraged. The Company is currently
evaluating the impact of this statement, if any, on its
reported results. Early adoption is not anticipated.
Also in October 1994, the FASB issued Statement of
Financial Accounting Standard No. 119, "Disclosure about
Derivative Financial Instruments and Fair Value of Financial
Instruments" (SFAS No. 119). This statement requires
disclosures about derivative financial instruments and amends
two previously standards, SFAS No. 105 and SFAS No. 107. The
new standard SFAS No. 119 is effective for years ending after
December 15, 1994.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Incorporated herein by reference is Item 3. - "Legal
Proceedings" in the Company's definitive Annual Report Form
10-K for the year ended December 31, 1993, dated March 16,
1994, and Part II Item 1. "Legal Proceedings" in the Quarterly
Report on Form 10-Q for the three months ended June 30, 1994,
dated August 8, 1994, both Commission File No. 1-10720.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
See Exhibit Index on page 15
(b) Reports on Form 8-K:
On July 20, 1994, to report the signing of a
letter of intent providing for the acquisition by
the Company of the Kansas City Southern Railway
and certain related assets.
On July 27, 1994, Form of Letter of Intent
providing for the acquisition of the Company of
the Kansas City Southern Railway and certain
related assets.
ILLINOIS CENTRAL CORPORATION
Signatures
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Company has duly caused this report to
be signed on its behalf by the undersigned hereto duly
authorized.
ILLINOIS CENTRAL CORPORATION
/s/ Dale W. Phillips
Vice President & Chief Financial
Officer
/s/ John V. Mulvaney
Controller
Date: November 10, 1994
ILLINOIS CENTRAL CORPORATION
AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Sequential
No. Descriptions Page No.
4.1 Revolving Credit Agreement between Illinois
Central Corporation and Bank of America
National Trust and Savings Association dated
August 24, 1994.
4.2 Revolving Credit and Term Loan Agreement
between IC Leasing III and the First
National Bank of Boston dated as of
July 5, 1994.
11 Computation of Income Per Common Share
27 Financial Data Schedule
ILLINOIS CENTRAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF INCOME PER COMMON SHARE
($ in millions, except share data)
Three Months Nine Months
Ended Ended
September 30, September 30,
1994 1993 1994 1993
Income before $25.9 $21.5 $78.4 $65.4
extraordinary item and
cumulative effect of
changes in acctg
principles $25.9 $21.5 $78.4 $65.4
Extraordinary item, net - - - (23.4)
Cumulative effect of
changes in accounting
principles - - - (0.1)
Net income $25.9 $21.5 $78.4 $41.9
Calculation of average
number of shares
outstanding:
Primary:
Weighted average number
of common shares
outstanding 42,603,079 42,555,066 42,602,953 42,549,489
Effect of shares
issuable under stock
options 102,008 147,863 117,858 125,862
42,705,087 42,702,929 42,720,811 42,675,351
Fully diluted:
Weighted average
number of common
shares
outstanding 42,603,079 42,555,066 42,602,953 42,549,489
Effect of shares
issuable under
stock options (1) 102,008 172,016 117,858 172,016
42,705,087 42,727,082 42,720,811 42,721,505
Income per common share:
Primary:
Before extraordinary
item and cumulative
effect of changes
in acctg principles $ 0.61 $ 0.50 $ 1.84 $ 1.53
Extraordinary item, net - - - (0.55)
Cumulative effect of
changes in accounting
principles - - - -
Net income $ 0.61 $ 0.50 $ 1.84 $ 0.98
Fully diluted:
Before extraordinary
item and cumulative
effect of changes
in acctg principles $ 0.61 $ 0.50 $ 1.84 $ 1.53
Extraordinary item, net - - - (0.55)
Cumulative effect of
changes in accounting
principles - - - -
Net income $ 0.61 $ 0.50 $ 1.84 $ 0.98
(1) Such items are included in primary calculation. Additional
shares represent difference between average price of common stock
for the period and the end of period price.
EXHIBIT 4.1
LOAN AGREEMENT
Dated as of August 24, 1994
between
ILLINOIS CENTRAL CORPORATION
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
TABLE OF CONTENTS
Section
Page
ARTICLE I.
DEFINITIONS
1.01 Defined Terms . . . . . . . . . . . . . . . . . . . . 1
1.02 Accounting Principles . . . . . . . . . . . . . . . . . 10
ARTICLE II.
THE LOANS
2.01 Amount and Terms of Commitment. . . . . . . . . . . . . 10
2.02 Notes . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.03 Procedure for Borrowing . . . . . . . . . . . . . . . . 11
2.04 Conversion and Continuation Elections . . . . . . . . . 12
2.05 Voluntary Termination or Reduction of Commitment. . . . 13
2.06 Optional Prepayments. . . . . . . . . . . . . . . . . . 13
2.07 Mandatory Prepayments of Loans. . . . . . . . . . . . . 13
2.08 Repayment . . . . . . . . . . . . . . . . . . . . . . . 14
2.09 Interest. . . . . . . . . . . . . . . . . . . . . . . . 14
2.10 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Fees Payable to the Bank 14
(b) Commitment Fees 14
2.11 Computation of Fees and Interest. . . . . . . . . . . . 15
2.12 Payments by the Company . . . . . . . . . . . . . . . . 15
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.02 Illegality. . . . . . . . . . . . . . . . . . . . . . . 18
3.03 Increased Costs and Reduction of Return . . . . . . . . 18
3.04 Funding Losses. . . . . . . . . . . . . . . . . . . . . 19
3.05 Inability to Determine Rate . . . . . . . . . . . . . . 20
3.06 Survival. . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IV.
CONDITIONS PRECEDENT
4.01 Conditions of Initial Loan. . . . . . . . . . . . . . . 21
(a) Loan Agreement 21
(b) Note. . . 21
(c) Resolutions; Incumbency 21
(d) Articles of Incorporation; By-laws and Good Standing. 21
(e) Opinion of Counsel to the Company 21
(f) Payment of Fees and Expenses 22
4.02 Conditions to All Loans . . . . . . . . . . . . . . . . 22
(a) Notice of Borrowing, Conversion or Continuation. 22
(b) Continuation of Representations and Warranties 22
(c) No Existing Default 22
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
5.01 Corporate Existence and Power . . . . . . . . . . . . . 22
5.02 Corporate Authorization; No Contravention . . . . . . . 23
5.03 Governmental Authorization. . . . . . . . . . . . . . . 23
5.04 Binding Effect. . . . . . . . . . . . . . . . . . . . . 23
5.05 Litigation. . . . . . . . . . . . . . . . . . . . . . . 24
5.06 No Default. . . . . . . . . . . . . . . . . . . . . . . 24
5.07 Liens . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.08 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.09 Financial Condition . . . . . . . . . . . . . . . . . . 24
5.10 Regulated Entities. . . . . . . . . . . . . . . . . . . 25
5.11 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . 25
5.12 Insurance . . . . . . . . . . . . . . . . . . . . . . . 25
5.13 Regulation U. . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VI.
AFFIRMATIVE COVENANTS
6.01 Notices . . . . . . . . . . . . . . . . . . . . . . . . 26
6.02 Preservation of Corporate Existence, Etc. . . . . . . . 27
6.03 Maintenance of Property . . . . . . . . . . . . . . . . 27
6.04 Environmental Compliance. . . . . . . . . . . . . . . . 28
6.05 Payment of Taxes. . . . . . . . . . . . . . . . . . . . 28
6.06 Compliance with Laws. . . . . . . . . . . . . . . . . . 28
6.07 Inspection of Property and Books and Records. . . . . . 28
6.08 Subsidiary Compliance . . . . . . . . . . . . . . . . . 29
6.09 Equal and Ratable Collateral. . . . . . . . . . . . . . 29
ARTICLE VII.
NEGATIVE COVENANTS
7.01 Limitation on Liens . . . . . . . . . . . . . . . . . . 29
7.02 Mergers, Consolidations and Dispositions of Assets. . . 33
7.03 Restrictions on Dividends . . . . . . . . . . . . . . . 34
7.04 Debt to Capitalization Ratio. . . . . . . . . . . . . . 34
ARTICLE VIII.
EVENTS OF DEFAULT
8.01 Event of Default. . . . . . . . . . . . . . . . . . . . 34
(a) Non-Payment 34
(b) Representation or Warranty 34
(c) Specific Defaults 34
(d) Other Defaults 35
(e) ICR Credit Agreement. . . . . . . . . . . . . . . . . . 35
(f) Insolvency; Voluntary Proceedings 35
(g) Involuntary Proceedings 35
8.02 Remedies. . . . . . . . . . . . . . . . . . . . . . . . 36
8.03 Rights Not Exclusive. . . . . . . . . . . . . . . . . . 36
ARTICLE IX.
MISCELLANEOUS
9.01 Amendments and Waivers. . . . . . . . . . . . . . . . . 36
9.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . 36
9.03 No Waiver; Cumulative Remedies. . . . . . . . . . . . . 36
9.04 Costs and Expenses. . . . . . . . . . . . . . . . . . . 37
9.05 Indemnity . . . . . . . . . . . . . . . . . . . . . . . 37
(a) General Indemnity 37
(b) Survival; Defense 38
9.06 Marshalling; Payments Set Aside . . . . . . . . . . . . 38
9.07 Successors and Assigns. . . . . . . . . . . . . . . . . 38
9.08 Set-off . . . . . . . . . . . . . . . . . . . . . . . . 38
9.09 Counterparts. . . . . . . . . . . . . . . . . . . . . . 39
9.10 Severability. . . . . . . . . . . . . . . . . . . . . . 39
9.11 Governing Law . . . . . . . . . . . . . . . . . . . . . 39
9.12 Confidentiality.. . . . . . . . . . . . . . . . . . . . 40
SCHEDULES
Schedule 5.09 Contingent Obligations and Partnerships
Schedule 5.11 Subsidiaries and other Equity Investments
Schedule 7.01 Permitted Liens
EXHIBITS
Exhibit A Promissory Note
Exhibit B Notice of Borrowing
Exhibit C Notice of Conversion
Continuation
Exhibit D Opinion of Counsel to Company
LOAN AGREEMENT
This LOAN AGREEMENT is entered into as of August 24,
1994, between Illinois Central Corporation, a Delaware
corporation (the "Company"), and Bank of America National
Trust and Savings Association (the "Bank").
WHEREAS, the Bank has agreed to make available to the
Company a revolving credit facility upon the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual
agreements, provisions and covenants contained herein, the
parties agree as follows:
ARTICLE I.
DEFINITIONS
1.011 Defined Terms. In addition to the terms
defined elsewhere in this Agreement, the following terms
have the following meanings:
"Agreement" means this Loan Agreement, as
amended from time to time in accordance with the terms
hereof.
"Applicable Margin" means
(i) from the Closing Date through
March 31, 1995, .625%; and
(ii) thereafter, 1.00%.
"Attorney Costs" means and includes all
reasonable fees and disbursements of any law firm or
other external counsel, the reasonable allocated cost
of internal legal services and all disbursements of
internal counsel.
"Bankruptcy Code" means the Federal Bankruptcy
Reform Act of 1978 (12 U.S.C. Sect. 101, et seq.).
"Base Rate" means the higher of:
(a) the rate of interest publicly
announced from time to time by the Bank in San
Francisco, California, as its "reference rate."
It is a rate set by the Bank based upon various
factors including the Bank's costs and desired
return, general economic conditions and other
factors, and is used as a reference point for
pricing some loans, which may be priced at,
above, or below such announced rate; and
(b) 0.50% per annum above the latest
Federal Funds Rate.
Any change in the reference rate announced by
the Bank shall take effect at the opening of business
on the day specified in the public announcement of
such change.
"Base Rate Loan" means a Loan that bears
interest based on the Base Rate.
"Business Day" means any day other than a
Saturday, Sunday or other day on which commercial
banks in New York City or San Francisco are authorized
or required by law to close and, if the applicable
Business Day relates to an Offshore Rate Loan, such
day shall also be a day on which dealings are carried
on in the applicable offshore dollar interbank market.
"Capital Adequacy Regulation" means any
guideline, request or directive of any central bank or
other Governmental Authority, or any other law, rule
or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any bank
or of any corporation controlling a bank.
"Capital Lease Obligations" means all monetary
obligations of the Company or any of its Subsidiaries
under any leasing or similar arrangement which, in
accordance with GAAP, is classified as a capital
lease.
"Closing Date" means August 24, 1994.
"Commitment" means $50,000,000 or such lesser
amount to which such sum is reduced pursuant to
Section 2.05.
"Consolidated Funded Debt" means, as to the
Company and its Subsidiaries as of any date of
determination, an amount equal to the sum of all
consolidated Indebtedness of the Company and its
Subsidiaries, as such amounts are outstanding or would
be calculated on the date as of which Consolidated
Funded Debt is to be determined and determined in
accordance with GAAP.
"Consolidated Net Worth" means, as to the
Company and its Subsidiaries, as of any date of
determination, the sum of (a) the capital accounts
(including common stock, preferred stock and other
paid-in capital, but excluding treasury stock) of the
Company and its Subsidiaries on a consolidated basis,
plus (b) the earned surplus and capital surplus of the
Company and its Subsidiaries, in each case as
reflected in the Company's consolidated books of
account as of the date Consolidated Net Worth is to be
determined, in each case as determined in accordance
with GAAP.
"Contingent Obligation" means, as to the Company
or any of its Subsidiaries, without duplication,
(a) any Guaranty Obligation of that Person; (b) any
reimbursement obligation of that Person with respect
to a standby letter of credit, surety bond, banker's
acceptance or similar instrument; (c) any obligation
of that Person to purchase any materials, supplies or
other property from, or to obtain the services of,
another Person (other than the Company or one of its
Subsidiaries) if the relevant contract or other
related document or obligation requires that payment
for such materials, supplies or other property, or for
such services, shall be made regardless of whether
delivery of such materials, supplies or other property
is ever made or tendered, or such services are ever
performed or tendered (other than any such contracts,
documents or obligations entered into the Ordinary
Course of Business); and (d) all Indebtedness (other
than that of the Company or any of its Subsidiaries)
secured by (or for which the holder of such
Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property
(including accounts and contract rights) owned by the
Company or any such Subsidiary; but in all events
excluding obligations of the type described in clauses
(a) through (d) above to the extent that reserves or
liabilities have been established therefor in the
Company's consolidated financial statements.
"Contractual Obligations" means, as to any
Person, any provision of any security issued by such
Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other
instrument, document or agreement to which such Person
is a party or by which it or any of its property is
bound.
"Conversion Date" means any date on which the
Company elects to convert a Base Rate Loan to an
Offshore Rate Loan or to convert an Offshore Rate Loan
to a Base Rate Loan.
"Default" means any event or circumstance which,
with the giving of notice, the lapse of time, or both,
would (if not cured or otherwise remedied during such
time) constitute an Event of Default.
"Distribution" means the payment by any Person
of any dividends, distributions or other payments to
its shareholders as such, other than distributions or
allocations of common stock of such Person; the
declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of
any Person, other than dividends payable solely in
shares of common stock of such Person; or the purchase
or other retirement of any shares of any class of
capital stock of any Person, directly or indirectly,
through a Subsidiary or otherwise, other than solely
through the issuance of the capital stock of such
Person; the return of capital by any Person to its
shareholders as such; or any other distribution on or
in respect of any shares of any class of capital stock
of any Person.
"Dollars", "dollars" and "$" each mean lawful
money of the United States.
"Environmental Claims" means all claims by any
Governmental Authority or other Person alleging
potential liability or responsibility for violation of
any Environmental Law or for release or injury to the
environment or threat to public health, personal
injury (including sickness, disease or death),
property damage, natural resources damage, or
otherwise alleging liability or responsibility for
damages (punitive or otherwise), cleanup, removal,
remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type
of relief, resulting from or based upon (a) the
alleged or actual presence, placement, migration,
spillage, leakage, disposal, discharge, emission or
release of any Hazardous Material at, in, or from
property, whether or not owned by the Company, or (b)
any other circumstances forming the basis of any
violation, or alleged violation, of any Environmental
Law.
"Environmental Laws" means all federal, state or
local laws, statutes, rules, regulations, ordinances
and codes, together with all administrative orders,
decrees, licenses, registration requirements and
permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental
and land use matters or health and safety matters
involving Hazardous Materials.
"Eurodollar Reserve Percentage" has the meaning
specified in the definition of "Offshore Rate".
"Event of Default" means any of the events or
circumstances specified in Section 8.01.
"Exchange Act" means the Securities Exchange Act
of 1934, and regulations promulgated thereunder.
"Federal Funds Rate" means, for any period, the
rate set forth in the weekly statistical release
designated as H.15(519), or any successor publication,
published by the Federal Reserve Board (including any
such successor, "H.15(519)") for such day opposite the
caption "Federal Funds (Effective)". If on any
relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set
forth in the daily statistical release designated as
the Composite 3:30 p.m. Quotations for U.S. Government
Securities, or any successor publication, published by
the Federal Reserve Bank of New York (including any
such successor, the "Composite 3:30 p.m. Quotation")
for such day under the caption "Federal Funds
Effective Rate". If on any relevant day the
appropriate rate for such previous day is not yet
published in either H.15(519) or the Composite 3:30
p.m. Quotations, the rate for such day will be the
arithmetic mean of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m.
(New York time) on that day by each of three leading
brokers of Federal funds transactions in New York City
selected by the Bank.
"Federal Reserve Board" means the Board of
Governors of the Federal Reserve System, or any
successor thereto.
"GAAP" means generally accepted accounting
principles set forth from time to time in the opinions
and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public
Accountants and statements and pronouncements of the
Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority
within the accounting profession), or in such other
statements by such other entity as may be in general
use by significant segments of the U.S. accounting
profession, which are applicable to the circumstances
as of the date of determination.
"Governmental Authority" means any nation or
government, any state or other political subdivision
thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or
administrative functions of or pertaining to
government, and any corporation or other entity owned
or controlled, through stock or capital ownership or
otherwise, by any of the foregoing.
"Guaranty Obligation" means, as applied to the
Company or any of its Subsidiaries, without
duplication, any agreement of the Company or any such
Subsidiary to guarantee the Indebtedness of a Person
other than the Company or any of its Subsidiaries (the
"primary obligor"), or any obligation or undertaking
of the Company or any such Subsidiary which, in
economic effect, is substantially equivalent to a
guarantee of the primary obligor's Indebtedness
("primary obligations"), including any obligation of
the Company or any such Subsidiary, whether or not
contingent, (a) to purchase, repurchase or otherwise
acquire such primary obligations or any property
constituting direct or indirect security therefor, or
(b) to advance or provide funds (i) for the payment or
discharge of any such primary obligation, or (ii) to
maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth
or solvency or any balance sheet item, level of income
or financial condition of the primary obligor, or
(c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary
obligor to make payment of such primary obligation, or
(d) otherwise to assure or hold harmless the holder of
any such primary obligation against loss in respect
thereof.
"Hazardous Materials" means all those substances
which are regulated by, or which may form the basis of
liability under, any Environmental Law, including all
substances identified under any Environmental Law as a
pollutant, contaminant, hazardous waste, hazardous
constituent, hazardous chemicals, special waste,
hazardous substance, hazardous material, regulated
substance, or toxic substance, or petroleum or
petroleum derived substance or waste.
"ICR" means Illinois Central Railroad Company, a
Delaware corporation.
"ICR Credit Agreement" means that certain
Amended and Restated Revolving Credit Agreement, dated
as of April 2, 1993 and amended and restated as of
October 27, 1993 among ICR, as borrower, certain other
banks (including the Bank), with The First National
Bank of Boston as administrative agent and the Bank as
co-agent, as amended from time to time.
"Indebtedness" of any Person means, without
duplication, (a) all borrowed money, advances and
other extensions of credit (other than trade credit
extended in the ordinary course of business) and
similar monetary obligations, whether direct or
indirect (including, without limitation, Capital Lease
Obligations); (b) all Indebtedness of others secured
by any mortgage, pledge, security interest, lien,
charge, or other encumbrance existing on property
owned or acquired subject thereto, whether or not the
Indebtedness secured thereby shall have been assumed;
(c) all guarantees, endorsements and other contingent
obligations, whether direct or indirect, in respect of
Indebtedness of others, including any obligation to
supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase
Indebtedness, or to assure the owner of Indebtedness
against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the
debtor to make payment of the Indebtedness held by
such owner or otherwise; and (d) the obligations to
reimburse the issuer in respect of any letters of
credit.
"Indemnified Person" has the meaning specified
in subsection 9.05(a).
"Indemnified Liabilities" has the meaning
specified in subsection 9.05(a).
"Insolvency Proceeding" means, as to any Person,
(a) any case, action or proceeding before any court or
other Governmental Authority relating to its
bankruptcy, reorganization, insolvency, liquidation,
receivership, dissolution, winding-up or relief of its
debtors, or (b) any general assignment for the benefit
of its creditors, composition, marshalling of assets
for its creditors or other, similar arrangement in
respect of its creditors generally or any substantial
portion of its creditors; in each case (a) and (b)
undertaken under U.S. Federal, State or foreign law,
including the Bankruptcy Code.
"Interest Payment Date" means, with respect to
any Offshore Rate Loan, the last day of each Interest
Period applicable to such Loan and, with respect to
Base Rate Loans, (a) the first Business Day of
January, April, July and October for Base Rate Loans
outstanding during the preceding quarter, (b) the
Termination Date and (c) each date a Base Rate Loan is
converted into an Offshore Rate Loan.
"Interest Period" means, with respect to any
Offshore Rate Loan, the period commencing on the
Business Day the Loan is disbursed or continued or on
the Conversion Date on which the Loan is converted to
an Offshore Rate Loan and ending on the date one, two,
three or six months thereafter, as selected by the
Company in its Notice of Borrowing or Notice of
Conversion/Continuation; provided that:
(a) if any Interest Period pertaining to
an Offshore Rate Loan would
otherwise end on a day which is not
a Business Day, that 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 pertaining to an
Offshore Rate Loan 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 the
calendar month at the end of such
Interest Period; and
(c) no Interest Period shall extend
beyond the Termination Date.
"Lending Office" means the office of the Bank
specified as its "Lending Office" opposite its name on
the signature page hereto, or such other office of the
Bank as it may from time to time notify the Company.
"Lien" means any mortgage, lien, charge,
security interest or other encumbrance of any kind
upon any property or assets of any character, or upon
the income or profits therefrom, any conditional sale
or other title retention agreement, device or
arrangement (including capitalized leases), or any
sale, assignment, pledge or other transfer for
security of any accounts, general intangibles or
chattel paper, with or without recourse.
"Loan" means an extension of credit by the Bank
to the Company pursuant to Article II, and may be a
Base Rate Loan or an Offshore Rate Loan.
"Margin Stock" means "margin stock" as such term
is defined in Regulation G, T, U or X of the Federal
Reserve Board.
"Material Adverse Effect" means a material
adverse change in, or a material adverse effect upon,
the business, assets or financial condition of the
Company and its Subsidiaries, taken as a whole.
"Material Subsidiary" means each of ICR, Chicago
Intermodal Company, Waterloo Railway Company and any
other Subsidiary of the Company (a) with total assets
having a fair market value, as at any date of
determination, in excess of $5,000,000 or (b) which is
material to the business, assets or financial
condition of the Company and its Subsidiaries, taken
as a whole.
"Note" means a promissory note of the Company
payable to the order of the Bank, substantially in the
form of Exhibit A, evidencing the aggregate
Indebtedness of the Company to the Bank resulting from
Loans made by the Bank.
"Notice of Borrowing" means a notice given by
the Company to the Bank pursuant to Section 2.03, in
substantially the form of Exhibit B.
"Notice of Conversion/Continuation" means a
notice given by the Company to the Bank pursuant to
Section 2.04, in substantially the form of Exhibit C.
"Obligations" means all Loans, indebtedness,
payment obligations and liabilities of the Company to
the Bank, whether or not evidenced by any note,
guaranty or other instrument, in each case arising
under this Agreement or the Note, whether arising by
reason of an extension of credit, indemnification or
in any other manner, whether direct or indirect,
absolute or contingent, due or to become due, now
existing or hereafter arising and however arising.
"Offshore Rate" means, for each Interest Period
in respect of a Loan, an interest rate per annum
(rounded upward to the nearest 1/16th of 1%)
determined pursuant to the following formula:
Offshore Rate = IBOR
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means the
maximum reserve percentage (expressed as a
decimal, rounded upward to the nearest 1/100th
of 1%) in effect on the date IBOR for such
Interest Period is determined (whether or not
applicable to the Bank) under regulations issued
from time to time by the Federal Reserve Board
for determining the maximum reserve requirement
(including any emergency, supplemental or other
marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as
"Eurocurrency liabilities") having a term
comparable to such Interest Period; and
"IBOR" means the rate of interest per
annum at which dollar deposits in the
approximate amount of the Loan and having a
maturity comparable to such Interest Period
would be offered by the Bank's Grand Cayman
Branch, Grand Cayman B.W.I., to banks having
deposits exceeding $1,000,000,000 in the
offshore dollar interbank market upon request of
such banks at approximately 11:00 a.m. (New York
City time) two Business Days prior to the
commencement of such Interest Period.
The Offshore Rate shall be adjusted
automatically as of the effective date of any
change in the Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears
interest based on the Offshore Rate.
"Ordinary Course of Business" means, in respect
of any transaction of any Person, the ordinary course
of such Person's business, as previously conducted or
contemplated to be conducted in the future, and
undertaken by such Person in good faith and not for
purposes of evading any covenant or restriction in any
agreement, note or document.
"Organization Documents" means, for any
corporation, the certificate or articles of
incorporation, the bylaws, any certificate of
determination or instrument relating to the rights of
preferred shareholders of such corporation, and all
applicable resolutions of the board of directors (or
any committee thereof) of such corporation.
"Other Taxes" has the meaning specified in
subsection 3.01(b).
"Person" means an individual, partnership,
corporation, business trust, joint stock company,
trust, unincorporated association, joint venture or
Governmental Authority.
"Responsible Officer" means the chief executive
officer, the chief financial officer, the president,
any executive vice president, the controller or the
treasurer of the Company.
"SEC" means the Securities and Exchange
Commission, or any successor thereto.
"Subsidiary" of a Person means any corporation,
association, partnership, joint venture or other
business entity of which more than 50% of the voting
stock or other equity interests (in the case of
Persons other than corporations), is owned or
controlled directly or indirectly by the Person, or
one or more of the Subsidiaries of the Person, or a
combination thereof.
"Taxes" has the meaning specified in subsection
3.01(a).
"Termination Date" means the earlier to occur
of:
(a) August 21, 1995; and
(b) the date on which the Commitment
terminates in accordance with Section 2.05 or
Section 8.02.
"Total Capitalization" means, as at any date of
determination, an amount equal to the sum of (a)
Consolidated Funded Debt plus (b) Consolidated Net
Worth, in each case determined in accordance with
GAAP.
"United States" and "U.S." each means the United
States of America.
1.012 Accounting Principles. All accounting terms
not expressly defined herein shall be construed in
accordance with GAAP as in effect from time to time.
ARTICLE II.
THE LOANS
1.021 Amount and Terms of Commitment. During the
period from the Closing Date to the Termination Date, the
Bank agrees, on the terms and conditions hereinafter set
forth, to make Loans in an aggregate amount to the Company
in an amount not in excess at any time of the Commitment.
This is a revolving credit facility, and the Company may
borrow, repay and reborrow Loans hereunder.
1.022 Notes.
(a) The Loans shall be evidenced by a Note
payable to the order of the Bank in the principal amount of
the Commitment.
(b) The Bank shall endorse on the schedule
annexed to the Note the date, amount, type, interest rate,
Interest Period (if applicable) and maturity of each Loan
and the amount of each payment of principal made by the
Company with respect thereto. The Bank is irrevocably
authorized by the Company to make such endorsements, and its
Note and records shall be conclusive, absent manifest error;
provided, however, that the failure of the Bank to make, or
an error in making, a notation thereon with respect to any
Loan shall not limit or otherwise affect the obligations of
the Company hereunder or under the Note.
1.023 Procedure for Borrowing.
(a) Each Loan shall be made upon the Company's
irrevocable written notice (or telephonic notice, promptly
confirmed by a writing) delivered to the Bank in the form of
a Notice of Borrowing (which notice must be received by the
Bank (i) prior to 11:00 a.m. (Chicago time) two Business
Days prior to the requested borrowing date, in the case of
Offshore Rate Loans and (ii) not later than 11:00 a.m.
(Chicago time) on the Business Day for which the Borrower
requests such Loan, in the case of Base Rate Loans,
specifying:
(A) the amount of the Loan, which
shall be in a minimum principal amount of One
Million Dollars ($1,000,000) or any multiple of
Five Hundred Thousand Dollars ($500,000) in
excess thereof;
(B) the requested borrowing date,
which shall be a Business Day;
(C) whether the Loan is to be an
Offshore Rate Loan or a Base Rate Loan; and
(D) with respect to Offshore Rate
Loans, the duration of the Interest Period
applicable thereto. If the Notice of Borrowing
fails to specify the duration of the Interest
Period for any Loan, such Loan shall be a Base
Rate Loan, regardless of the type of Loan
requested by the Company.
(b) The Bank will make the Loan available to
the Company at the Bank's Lending Office by Noon (Chicago
time) on the borrowing date requested by the Company in
immediately available funds.
(c) During the existence of a Default or Event
of Default, the Company may not elect to have a Loan be made
as, converted into or continued as an Offshore Rate Loan.
(d) After giving effect to any Loan,
conversion or continuation, there shall not be more than
five different Interest Periods in effect.
1.024 Conversion and Continuation Elections.
(a) Prior to the Termination Date, the Company
may, upon irrevocable written notice (or telephonic notice,
promptly confirmed by a writing) to the Bank in accordance
with subsection 2.04(b):
(i) elect to convert on any Business
Day, any Base Rate Loan (or any part
thereof in an amount not less than
$1,000,000 or an integral multiple
of $500,000 in excess thereof) into
an Offshore Rate Loan; or
(ii) elect to convert any Offshore Rate
Loan (or any part thereof in an
amount not less than $1,000,000 or
that is in an integral multiple of
$500,000 in excess thereof) to a
Base Rate Loan, provided the Company
makes any payments required by
Section 3.04; or
(iii) elect to continue on any Interest
Payment Date any Offshore Rate Loan
maturing on such Interest Payment
Date (or any part thereof in an
amount not less than $1,000,000, or
that is in an integral multiple of
$500,000 in excess thereof).
(b) The Company shall deliver a Notice of
Conversion/Continuation to the Bank (i) not later than 11:00
a.m. (Chicago time) at least two Business Days in advance
of the Conversion Date or continuation date, if any Loan is
to be converted to or continued as an Offshore Rate Loan;
and (ii) not later than 11:00 a.m. (Chicago time) on the
Business Day on which Offshore Rate Loans are to be
converted to Base Rate Loans, specifying:
(A) the proposed Conversion Date or
continuation date;
(B) the aggregate amount of Loans to be
converted or continued;
(C) the nature of the proposed
conversion or continuation; and
(D) the duration of the requested
Interest Period (if applicable).
(c) If, upon the expiration of any Interest
Period, the Company has failed to select a new Interest
Period to be applicable to such Loans or if any Default or
Event of Default shall then exist, the Company shall be
deemed to have elected to convert such Offshore Rate Loan
into a Base Rate Loan effective as of the expiration date of
such current Interest Period.
1.025 Voluntary Termination or Reduction of
Commitment. The Company may, at any time or from time to
time, upon not less than three Business Days' prior written
or telephonic (promptly confirmed with a writing) notice to
the Bank, terminate or permanently reduce the Commitment by
an amount not less than $1,000,000; provided that no such
reduction or termination shall be permitted if, after giving
effect thereto and to any prepayments of the Loans made on
the effective date thereof, the sum of the then outstanding
principal amount of the Loans would exceed the Commitment
then in effect and, provided, further, that once reduced in
accordance with this Section 2.05, the Commitment may not be
increased. All accrued commitment and other fees to, but
not including the effective date of any reduction or
termination of the Commitment, shall be paid on the
effective date of such reduction or termination.
1.026 Optional Prepayments. Subject to Section 3.04,
the Company may, at any time or from time to time, upon at
least one Business Day's irrevocable notice to the Bank with
respect to Base Rate Loans and at least three Business Days'
irrevocable notice to the Bank with respect to Offshore Rate
Loans, specifying the date and amount of prepayment, prepay
Loans in whole or in part, in an aggregate amount of
$1,000,000 or any multiple of $500,000 in excess thereof.
Each such notice shall be delivered no later than Noon
(Chicago time). Such notice may be given by telephone,
promptly confirmed by a writing. If such notice is given by
the Company, the Company shall make such prepayment and the
payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued
interest to each such date on the amount prepaid and any
amounts required pursuant to Section 3.04.
1.027 Mandatory Prepayments of Loans. If at any time
the aggregate outstanding principal amount of Loans exceeds
the Commitment, the Company shall immediately pay to the
Bank an amount equal to such excess amount plus accrued but
unpaid interest thereon to the date of payment. Any
payments of principal shall be applied to such Loans as the
Company may direct or, if the Company fails to provide any
such direction, such payments shall be applied to any
outstanding Base Rate Loans and, only after all Base Rate
Loans have been paid in full, to the Offshore Rate Loans.
1.028 Repayment. The Company shall repay to the Bank
in full on the Termination Date the aggregate principal
amount of the Loans outstanding on the Termination Date.
1.029 Interest.
(a) Subject to subsection 2.09(c), each Loan
shall bear interest on the outstanding principal amount
thereof from the date when made until it becomes due at a
rate per annum equal to (i) in the case of an Offshore Rate
Loan, the Offshore Rate for the Interest Period in effect
for such Loan plus the Applicable Margin or (ii) in the case
of a Base Rate Loan, the Base Rate.
(b) Interest on each Loan shall be paid in
arrears on each Interest Payment Date, and if any Interest
Period for an Offshore Rate Loan exceeds three months,
interest shall also be paid on the date which falls three
months after the beginning of such Interest Period.
Interest shall also be paid on the date of any prepayment of
Loans pursuant to Section 2.06 and 2.07 for the portion of
the Loans so prepaid and upon payment (including prepayment)
in full thereof and, during the existence of any Event of
Default, interest shall be paid on demand.
(c) After acceleration of the Loans, the
Company shall pay interest (after as well as before entry of
judgment thereon to the extent permitted by law) on the
principal amount of all Obligations due and unpaid at a rate
per annum equal to the Base Rate plus 2%.
2.10 Fees.
(a) Fees Payable to the Bank. The Company
shall pay to the Bank a fee of .10% of the Commitment in
effect as of the Closing Date, 50% of which is payable on
the Closing Date and 50% of which is payable on December 30,
1994.
(b) Commitment Fees. The Company shall pay to
the Bank a commitment fee of .20% per annum on the average
daily unused portion of the Commitment, computed as of the
end of each calendar quarter in arrears based upon the daily
utilization for that quarter. Such commitment fee shall
accrue from the Closing Date to the Termination Date and
shall be due and payable quarterly in arrears on the
fifteenth day after the end of each calendar quarter through
the Termination Date, with the first payment due on
October 15, 1994 and the final payment to be made on the
Termination Date; provided that, (i) in connection with any
reduction of the Commitment pursuant to Section 2.05, the
accrued commitment fee calculated for the period ending on
such date shall be paid on the date of such reduction, with
the next succeeding quarterly payment being calculated on
the basis of the period from the reduction date to the end
of the quarter in which such reduction occurs and (ii) in
connection with any termination of the Commitment pursuant
to Section 2.05 or Article VIII, the accrued commitment fee
shall be paid on the date on which the termination takes
place. The commitment fee provided in this subsection shall
accrue at all times after the Closing Date, including at any
time during which one or more conditions in Article IV are
not met.
2.11 Computation of Fees and Interest.
(a) All computations of fees hereunder and all
computations of interest on Base Rate Loans shall be made on
the basis of a 365 or 366 day year, as applicable, and
actual days elapsed. All computations of interest on
Offshore Rate Loans shall be made on the basis of a 360-day
year and actual days elapsed.
(b) The Bank will, with reasonable promptness,
notify the Company of each determination of an Offshore
Rate; provided that any failure to do so shall not relieve
the Company of any liability hereunder or provide the basis
for any claim against the Bank. Any change in the interest
rate on a Loan resulting from a change in the Eurodollar
Reserve Percentage shall become effective as of the opening
of business on the day on which such change in the
Eurodollar Reserve Percentage becomes effective. The Bank
will with reasonable promptness notify the Company of the
effective date and the amount of each such change, provided
that any failure to do so shall not relieve the Company of
any liability hereunder or provide the basis for any claim
against the Bank.
(c) Each determination of an interest rate by
the Bank pursuant hereto shall be conclusive and binding on
the Company in the absence of manifest error.
2.12 Payments by the Company.
(a) All payments (including prepayments) to be
made by the Company on account of principal, interest, fees
and other amounts required hereunder shall be made without
set-off, recoupment or counterclaim and shall, except as
otherwise expressly provided herein, be made to the Bank for
the account of the Bank at the Bank's Lending Office, in
dollars and in immediately available funds, no later than
Noon (Chicago time) on the dates specified herein. Any
payment which is received by the Bank later than Noon
(Chicago time) shall be deemed to have been received on the
immediately succeeding Business Day and any applicable
interest or fee shall continue to accrue.
(b) Whenever any payment hereunder shall be
stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in
the computation of interest or fees, as the case may be;
subject to the provisions set forth in the definition of
"Interest Period" herein.
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
1.031 Taxes.
(a) Any and all payments by the Company to the
Bank under this Agreement shall be made free and clear of,
and without deduction or withholding for, any and all
present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect
thereto, excluding such taxes (including income taxes or
franchise taxes) imposed on or measured by the Bank's net
income, capitalization or franchise taxes (all such
non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to
as "Taxes"), unless the Company is compelled by law to make
such deduction or withholding.
(b) In addition, the Company shall pay any
present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to,
this Agreement or the Note (hereinafter referred to as
"Other Taxes").
(c) The Company shall indemnify the Bank and
hold it harmless for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 3.01)
paid by the Bank and any liability (including penalties,
interest, additions to tax and expenses) arising therefrom
or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted, such that the Bank
receives from the Company an amount equal to the sum the
Bank would have received had the Bank not paid such Taxes.
Payment under this indemnification shall be made within 30
days from the date the Bank makes written demand therefor,
except that the Company is not required to make such payment
within 30 days if (i) no Default or Event of Default has
occurred and is continuing and (ii) the Company is
diligently contesting such Taxes or Other Taxes and has
agreed in writing to the satisfaction of the Bank to pay all
such penalties, fines and interest incurred by the Bank as a
result of the Company's actions and the resulting delay in
payment. Notwithstanding the foregoing, if at any time a
Default or Event of Default occurs and is continuing, the
Bank may request the Company, and the Company shall, make
payment under this indemnification within 10 days from the
date the Bank makes written demand therefor. In any event,
the obligations owed by the Company under this subsection
(c) shall be paid not later than the Termination Date,
unless otherwise agreed by the Bank and the Company. Any
such demand for indemnification under this subsection (c)
shall set forth in reasonable detail (including
calculations) the full amount of Taxes or Other Taxes paid
by the Bank and any related interest, penalties, additions
to tax and similar amounts, including expenses, relating
thereto.
(d) If the Company is required by law to
deduct or withhold any Taxes or Other Taxes from or in
respect of any sum payable hereunder to the Bank, then:
(i) the sum payable shall be increased
as necessary so that after making
all required deductions (including
deductions applicable to additional
sums payable under this Section
3.01) the Bank receives an amount
equal to the sum it would have
received had no such deductions been
made;
(ii) the Company shall make such
deductions, and
(iii) the Company shall pay the full
amount deducted to the relevant
taxation authority or other
authority in accordance with
applicable law.
(e) Within 30 days after receiving a receipt
for the payment by the Company of Taxes or Other Taxes, the
Company shall furnish to the Bank the original or a
certified copy of such receipt evidencing payment thereof,
or other evidence of payment reasonably satisfactory to the
Bank.
(f) The Bank agrees (consistent with legal and
regulatory restrictions) to take appropriate action
(including, without limitation, changing the jurisdiction of
its Lending Office) so as to eliminate or reduce any
additional tax payments required to be made by the Company
hereunder, provided, however, that the Bank shall not be
required to take any action (or to change the jurisdiction
of its Lending Office) if in the judgment of the Bank and
its tax counsel, such change is otherwise disadvantageous to
the tax planning of the Bank.
(g) To the extent that the Bank or any other
Person which is indemnified or paid any amount under this
Section 3.01 thereafter receives any payment (including any
deduction, offset, credit or other similar reduction in
Taxes) as a refund for any Taxes or Other Taxes from the
taxing authority imposing such Tax or Other Tax and in
respect of which the Bank or such other Person was
indemnified or paid any amount by the Company hereunder, and
such payment is identified by the Bank or such other Person
in the normal course of its administrative procedures as
relating to the amounts indemnified or paid by the Company
under this Section 3.01, the Bank or such other Person, as
the case may be, shall return to the Company such payment,
provided that the Bank shall not be required to institute
any special procedures to determine whether or not any
refund received by the Bank was related to payments made
pursuant to this Agreement and the Note.
1.032 Illegality.
(a) If the Bank determines that the
introduction of any law or regulation, or any change in any
law or regulation or in the interpretation or administration
thereof, has made it unlawful, or that any central bank or
other Governmental Authority has asserted that it is
unlawful, for the Bank or its Lending Office to make
Offshore Rate Loans, then, on notice thereof by the Bank to
the Company, the obligation of the Bank to make Offshore
Rate Loans shall be suspended until the Bank shall have
notified the Company that the circumstances giving rise to
such determination no longer exists.
(b) If the Bank determines that it is unlawful
to maintain any Offshore Rate Loan, the Bank shall notify
the Company thereof and the Company shall prepay in full all
Offshore Rate Loans then outstanding, together with interest
accrued thereon, either on the last day of the Interest
Period thereof if the Bank may lawfully continue to maintain
such Offshore Rate Loans to such day, or immediately, if the
Bank may not lawfully continue to maintain such Offshore
Rate Loans and has notified the Company thereof, together
with any amounts required to be paid in connection therewith
pursuant to Section 3.04.
(c) If the Company is required to prepay any
Offshore Rate Loan immediately as provided in subsection
3.02(b), such Offshore Rate Loan which is required to be
prepaid shall be converted, without further action, to a
Base Rate Loan, unless the Company irrevocably notifies the
Bank that the Company intends to prepay such Loan. Any such
conversion shall be subject to the provisions of Section
3.04.
1.033 Increased Costs and Reduction of Return.
(a) If the Bank determines that, due to either
(i) the introduction of or any change (other than any change
by way of imposition of or increase in reserve requirements
included in the calculation of the Offshore Rate) in or in
the interpretation of any law or regulation after the
Closing Date or (ii) the compliance with any guideline or
request from any central bank or other Governmental
Authority (whether or not having the force of law), which
guideline was not in effect and applicable to the Bank or
which request was not made prior to the Closing Date, there
is any increase in the cost to the Bank of agreeing to make
or making, funding or maintaining any Offshore Rate Loans,
then the Company shall be liable for, and shall from time to
time, upon demand therefor by the Bank, pay to the Bank,
upon receipt of a certificate from the Bank, additional
amounts as are sufficient to compensate the Bank for such
increased costs. Such certificate shall set forth the
amount owed to the Bank by the Company under this subsection
(a) in reasonable detail (including calculations), shall
explain the reason the payment is required and shall be
conclusive absent manifest error.
(b) If the Bank shall have determined that
(i) the introduction of any Capital Adequacy Regulation
after the Closing Date, (ii) any change in any Capital
Adequacy Regulation after the Closing Date, (iii) any change
in the interpretation or administration of any Capital
Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or
administration thereof after the Closing Date, or (iv)
compliance by the Bank (or its Lending Office) or any
corporation controlling the Bank, with any Capital Adequacy
Regulation which was not in effect and applicable prior to
the Closing Date; reduces or would reduce the rate of return
on the Bank's capital as a consequence of the Commitment or
the Loans to a level below that which the Bank could have
achieved but for such introduction, change or compliance
(taking into consideration the Bank's or such corporation's
policies with respect to capital adequacy) then, upon demand
of the Bank, the Company shall pay to the Bank, from time to
time as specified by the Bank, upon receipt of a certificate
from the Bank, additional amounts sufficient to compensate
the Bank for such reduction if such additional costs to the
Bank are not already reflected in the interest rates charged
by the Bank to the Company. Such certificate shall set
forth the amount owed to the Bank by the Company under this
subsection (b), shall explain in reasonable detail (with
calculations) the reason the payment is required and shall
be conclusive absent manifest error.
(c) If the Company disagrees with the Bank on
the additional amount to be paid to the Bank, the Company
shall promptly advise the Bank of same, and the Company and
the Bank shall thereafter attempt to resolve such difference
in good faith. If the Company and the Bank are unable to
resolve such difference within 30 days after the day on
which the Company receives the demand for payment of
additional amounts from the Bank, then the Company shall pay
to the Bank the additional compensation demanded, provided
that the Company shall not be liable to the Bank for any
costs incurred more than ninety days prior to receipt by the
Company of the demand for such additional amounts.
1.034 Funding Losses. The Company agrees to
reimburse the Bank and to hold the Bank harmless from any
loss or expense which the Bank may sustain or incur as a
consequence of:
(a) the failure of the Company to make any
payment or required prepayment of principal of any Offshore
Rate Loan (including payments made after any acceleration
thereof);
(b) the failure of the Company to borrow or
continue an Offshore Rate Loan or convert a Base Rate Loan
to an Offshore Rate Loan after the Company has given a
Notice of Borrowing or a Notice of Conversion/Continuation;
(c) the failure of the Company to make any
prepayment after the Company has given a notice in
accordance with Section 2.06;
(d) the payment (including a prepayment
pursuant to Section 2.07) of an Offshore Rate Loan on a day
which is not the last day of the Interest Period with
respect thereto; or
(e) the conversion of any Offshore Rate Loan
to a Base Rate Loan on a day that is not the last day of the
relevant Interest Period;
including any such loss or expense arising from the
liquidation or reemployment of funds obtained by it to
maintain its Offshore Rate Loans hereunder or from fees
payable to terminate the deposits from which such funds were
obtained. Solely for purposes of calculating amounts
payable by the Company to the Bank under this Section 3.04,
each Offshore Rate Loan (and each related reserve, special
deposit or similar requirement) shall be conclusively deemed
to have been funded at the IBOR rate used in determining the
Offshore Rate for such Loan by a matching deposit or other
borrowing in the interbank eurodollar market for a
comparable amount and for a comparable period, whether or
not such Offshore Rate Loan is in fact so funded.
1.035 Inability to Determine Rate. If the Bank
determines that for any reason beyond its control that (a)
adequate and reasonable means do not exist for ascertaining
the Offshore Rate for any requested Interest Period with
respect to a proposed Offshore Rate Loan or (b) the Offshore
Rate applicable pursuant to subsection 2.09(a) for any
requested Interest Period with respect to a proposed
Offshore Rate Loan does not adequately and fairly reflect
the cost to the Bank of funding such Loan, the Bank will
forthwith give notice of such determination to the Company.
Thereafter, the obligation of the Bank, in the case of a
determination under clause (a), to make or continue any
Offshore Loan or convert any Base Rate Loan to an Offshore
Loan, or, in the case of any determination under clause (b),
to make, continue or maintain any Offshore Rate Loan or
convert any Base Rate Loan to an Offshore Loan, shall be
suspended until such condition no longer exists. Upon
receipt of such notice, the Company may revoke any Notice of
Borrowing or Notice of Conversion/Continuation. If the
Company does not revoke such notice, the Bank shall make,
convert or continue the Loans, as proposed by the Company,
in the amount specified in the applicable notice submitted
by the Company, but such Loans shall be made, converted or
continued as Base Rate Loans instead of Offshore Rate Loans.
1.036 Survival. The agreements and obligations of
the Company in this Article III shall survive the payment of
all other Obligations.
ARTICLE IV.
CONDITIONS PRECEDENT
1.041 Conditions of Initial Loan. The obligation of
the Bank to make its initial Loan hereunder is subject to
the condition that the Bank shall have received on or before
the Closing Date the items set forth in subsections (a)
through (f) in form and substance satisfactory to the Bank:
(a) Loan Agreement. This Agreement, executed
by the Company and the Bank;
(b) Note. The Note, executed by the Company;
(c) Resolutions; Incumbency.
(i) A resolution of the board of
directors of the Company or any duly
authorized committee thereof
approving and authorizing the
execution, delivery and performance
by the Company of this Agreement and
the Note and authorizing the Loans,
certified as of the Closing Date by
the Secretary or an Assistant
Secretary of the Company; and
(ii) A certificate of the Secretary or
Assistant Secretary of the Company
certifying the names and true
signatures of the officers of the
Company authorized to execute,
deliver and perform, as applicable,
this Agreement and the Note;
(d) Articles of Incorporation; By-laws and
Good Standing. Each of the following documents:
(i) The articles or certificate of
incorporation and bylaws of the
Company as in effect on the Closing
Date, certified by the Secretary or
Assistant Secretary of the Company
as of the Closing Date; and
(ii) A good standing certificate for the
Company from the Secretary of State
of Delaware as of a date not earlier
than fifteen days prior to the
Closing Date;
(e) Opinion of Counsel to the Company. An
opinion of Schiff Hardin & Waite, counsel to the Company,
addressed to the Bank, substantially in the form of
Exhibit D; and
(f) Payment of Fees and Expenses. The Company
shall have paid all fees due on the Closing Date, together
with the Bank's Attorney Costs incurred up to and including
the Closing Date.
1.042 Conditions to All Loans. The obligation of the
Bank to make any Loan hereunder is subject to the
satisfaction of the following conditions precedent on the
date of such Loan:
(a) Notice of Borrowing, Conversion or
Continuation. With respect to each Loan, except as
specifically provided in this Agreement, the Bank shall have
received a Notice of Borrowing or a Notice of
Conversion/Continuation, as applicable;
(b) Continuation of Representations and
Warranties. The representations and warranties made by the
Company contained in Article V shall be true and correct on
and as of the date each Loan is made under Section 2.03 with
the same effect as if made on and as of such date (except to
the extent such representations and warranties expressly
refer to an earlier date, in which case they shall be true
and correct as of such earlier date); and
(c) No Existing Default. No Default or Event
of Default shall exist or shall result from the making of
any Loan pursuant to Section 2.03, nor shall there be any
Default or Event of Default existing on the date any
Offshore Rate Loan is continued or any Base Rate Loan is
converted to an Offshore Rate Loan.
Each Notice of Borrowing submitted by the Company hereunder
shall constitute a representation and warranty by the
Company hereunder, as of the date of each Loan that the
conditions in Section 4.02 are satisfied. Each Notice of
Conversion/ Continuation submitted by the Company hereunder
shall constitute a representation and warranty by the
Company hereunder, as of the date that any Offshore Rate
Loan is continued or any Base Rate Loan is converted to an
Offshore Rate Loan, that no Default or Event of Default
exists or would result from such continuation or conversion.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Bank that:
1.051 Corporate Existence and Power. Each of the
Company and its Subsidiaries:
(a) is a corporation duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its incorporation;
(b) has adequate corporate power and authority
to own its assets and carry on its business;
(c) is duly qualified as a foreign
corporation, licensed 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 in jurisdictions in which the failure
to qualify will not (i) have a Material Adverse Effect or
(ii) have a material adverse effect on the Company's ability
to perform its obligations hereunder and under the Note; and
(d) has complied with all laws and regulations
applicable to it except to the extent that failure to so
comply will not have a Material Adverse Effect.
1.052 Corporate Authorization; No Contravention. The
Company has adequate corporate power and authority to
execute, deliver and perform its obligations under this
Agreement and the Note. The execution, delivery and
performance by the Company of this Agreement and the Note
have been duly authorized by all necessary corporate action
by the Company, and do not and will not:
(a) contravene the terms of any of the
Company's Organization Documents;
(b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any
document evidencing any Contractual Obligation to which the
Company is a party or any order, injunction, writ or decree
of any Governmental Authority to which the Company or its
property is subject; or
(c) violate any law or regulation applicable
to the Company.
1.053 Governmental Authorization. No approval,
consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority is
necessary or required on the part of the Company in
connection with the execution, delivery or performance by
the Company of the Agreement or the Note.
1.054 Binding Effect. This Agreement and the Note,
when executed and delivered, will constitute the legal,
valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective
terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
laws relating to or affecting generally the enforcement of
creditors' rights, and except to the extent that
enforceability is subject to general principles of equity
(regardless of whether such enforceability is considered in
a proceeding in equity or at law).
1.055 Litigation. As of the Closing Date and except
as set forth in the Company's filings with the SEC for the
year ended December 31, 1993, and for the fiscal quarters
ending March 31 and June 30, 1994 (copies of which have been
delivered to the Bank), there are no actions, suits,
proceedings, claims or disputes pending, or to the best
knowledge of the Company, threatened, at law, in equity, in
arbitration or before any Governmental Authority, against
the Company, or its Subsidiaries or any of their respective
Properties which:
(a) purport to affect or pertain to the
enforceability or validity of this Agreement or the Note, or
any Loan made or to be made hereunder; or
(b) in which there is a significant
possibility of an adverse decision which would have a
Material Adverse Effect. No injunction, writ, temporary
restraining order or any order of any nature has been issued
by any court or other Governmental Authority purporting to
enjoin or restrain the execution, delivery and performance
of this Agreement or the Note, or directing that the Loans
to be made herein not be made as herein provided.
1.056 No Default. No Default or Event of Default
exists on the date of delivery of this Agreement. Neither
the Company nor any of its Subsidiaries is in default under
or with respect to any of its Contractual Obligations in any
respect which, individually or together with all such
defaults, could reasonably be expected to have a Material
Adverse Effect.
1.057 Liens. As of the Closing Date, the property of
the Company and its Subsidiaries is not subject to any
Liens, other than as permitted by Section 7.01.
1.058 Taxes. The Company and its Subsidiaries have
filed all material Federal and state tax returns and reports
required to be filed, and have paid all Federal and other
material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties,
income or assets, due and payable as shown or determined to
be due on such tax returns or reports, except those which
are being contested in good faith by appropriate proceedings
and for which adequate reserves have been provided in
accordance with GAAP. To the knowledge of the Company,
there is no proposed tax assessment against the Company or
any of its Subsidiaries which would, if the assessment were
made, have a Material Adverse Effect.
1.059 Financial Condition.
(a) The audited consolidated financial
statements of the Company and its Subsidiaries dated
December 31, 1993, and the unaudited consolidated financial
statements of the Company and its Subsidiaries dated
June 30, 1994:
(i) were prepared in accordance with
GAAP consistently applied throughout
the period covered thereby, except
as otherwise expressly noted
therein; and
(ii) fairly present the financial
condition of the Company and its
Subsidiaries as of the date thereof
and results of operations for the
period covered thereby, subject to
year-end adjustments and the absence
of footnotes.
(b) Since June 30, 1994, there has been no
Material Adverse Effect.
(c) Attached hereto as Schedule 5.09 is a list
of (i) all Contingent Obligations of the Company and its
consolidated Subsidiaries as of the Closing Date and (ii)
all general partnership interests owned by the Company and
its consolidated Subsidiaries as of the Closing Date;
provided, however, that (i) the Company shall not be
required to list any Contingent Obligations that have been
included in the calculation of Indebtedness for purposes of
Section 7.05 hereof (or excluded from such calculation by
reason of principles of consolidation or by reason of
duplication) and (ii) the Company shall not be deemed to be
in breach of this subsection (c) if it fails to report
Contingent Obligations or general partnership interests so
long as the aggregate amount of (x) all such Contingent
Obligations so omitted and (y) the fair market value of all
such general partnership interests so omitted does not
exceed $5,000,000.
5.10 Regulated Entities. None of the Company, any Person
controlling the Company, or any Subsidiary of the Company,
is a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company",
as such terms are defined in the Public Utility Holding
Company Act of 1935; nor is any of such Persons a
"registered investment company" or an "affiliated company"
or a "principal underwriter" of a "registered investment
company", as such terms are defined in the Investment
Company Act of 1940, as amended.
5.11 Subsidiaries. As of the Closing Date, the
Company has no Subsidiaries other than those specifically
disclosed in Part A of Schedule 5.11 hereto and has no
material equity investments in any other corporation or
entity other than those specifically disclosed in Part B of
Schedule 5.11.
5.12 Insurance. As of the Closing Date, the
properties of the Company and its Subsidiaries (other than
properties on lease to Persons other than the Company or its
Subsidiaries if the leases do not obligate the lessor to
insure such properties) are insured with financially sound
and reputable insurance companies, funds or underwriters and
are of the kinds and covers such risks and are in such
amounts and with such deductibles and exclusions as are
consistent with the prudent business practice of similarly
structured and similarly Companies of similar size in the
Company's industry.
5.13 Regulation U. The Company will not violate
Regulation X of the Federal Reserve Board in connection with
the use of the proceeds of the Loans, nor will the use of
the proceeds of the Loans by the Company for their intended
purpose cause the Bank to violate Regulation U of the
Federal Reserve Board. Although the Loans may be used for,
among other things, the purpose of purchasing or carrying
common stock of the Company or Margin Stock and for the
payment of commissions and fees related thereto, the
aggregate amount of Margin Stock that would be owned by the
Company after giving effect to the use of the proceeds of
the Loans would not constitute 25% of the value of the
Company's assets.
ARTICLE VI.
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as the
Bank has any Commitment hereunder, or any Loan or the
interest thereon or any amount of fees due hereunder remains
unpaid:
1.061 Notices. The Company shall promptly notify the
Bank:
(a) upon obtaining knowledge of the occurrence
of any Default or Event of Default, specifying the nature
and period of existence thereof and what action the Company
proposes to take with respect thereto;
(b) of (i) any breach or non-performance by
the Company or any of its Subsidiaries of, or any default by
the Company or any of its Subsidiaries under, any
Contractual Obligation of the Company or any of its
Subsidiaries which could reasonably be anticipated to result
in a Material Adverse Effect; and (ii) any pending
litigation or proceeding or, to the knowledge of the
Company, any investigation or dispute which may exist at any
time between the Company or any of its Subsidiaries and any
Governmental Authority in which there is a reasonable
likelihood of an adverse decision which would have a
Material Adverse Effect;
(c) of the issuance of any restraining order
or injunction or the commencement of any action, suit,
proceeding or, to the knowledge of the Company, any claim or
investigation of any kind against the Company or any of its
Subsidiaries in which there is a reasonable likelihood of an
adverse decision which would either by itself, or taken
together with other such matters, have a Material Adverse
Effect, or which questions the validity or enforceability of
this Agreement or the Note; and
(d) upon receipt of any notice of material
non-compliance or knowledge of material non-compliance with
Environmental Laws by the Company or any of its Subsidiaries
(other than Environmental Laws relating to compliance with
permits, registration requirements or agreements with
Governmental Authorities, which are not material to the
business of the Company and its Subsidiaries, taken as a
whole), or upon receipt of any notice of an Environmental
Claim for which there is a reasonable likelihood of an
adverse decision which would have a Material Adverse Effect,
promptly send copies of such notice or communicate its
knowledge of such non-compliance or such Environmental Claim
to the Bank.
Each notice pursuant to this Section shall be
accompanied by a written statement by a Responsible Officer
of the Company setting forth details of the occurrence
referred to therein, and stating what action the Company
proposes to take with respect thereto and at what time.
1.062 Preservation of Corporate Existence, Etc. The
Company shall, and shall cause each of its Material
Subsidiaries to:
(a) preserve and maintain in full force and
effect its corporate existence and good standing under the
laws of its state or jurisdiction of incorporation;
(b) maintain its qualification to do business
in each state in which the failure to qualify would have a
Material Adverse Effect; and
(c) preserve and maintain in full force and
effect all material rights, privileges, qualifications,
permits, licenses and franchises necessary to the normal
conduct of its business.
The provisions of this Section 6.02 notwithstanding, any
Subsidiary of the Company may merge or consolidate with any
other Subsidiary of the Company.
1.063 Maintenance of Property. The Company shall
maintain, and shall cause each of its Subsidiaries to
maintain, and preserve all its property which is used or
deemed by it useful in its business in good working order
and condition for its intended use, ordinary wear and tear
excepted, make all necessary repairs thereto and renewals
and replacements thereof, except where the failure to so
maintain, preserve, repair, renew or replace such property
would not have a Material Adverse Effect. The Company shall
cause ICR and each of ICR's Subsidiaries to, maintain the
operation of its rail lines in a manner sufficient to
conduct railroad operations at a level of performance which
is in all material respects the equivalent of or superior to
the operation of such lines prior to the Closing Date and in
a manner consistent with good railroad operating procedures.
1.064 Environmental Compliance. The Company shall,
and shall cause each of its Subsidiaries to, comply with all
Environmental Laws, including, without limitation, those
concerning the establishment and maintenance of underground
tanks and other underground storage receptacles for the
transportation of Hazardous Materials, except where non-
compliance with such Environmental Laws would not have a
Material Adverse Effect.
1.065 Payment of Taxes. The Company shall, and shall
cause its Subsidiaries to, pay and discharge as the same
shall become due and payable, all their respective tax
liabilities, assessments and governmental charges or levies
upon any such Person or its properties or assets, unless (a)
such tax, assessment charge or levy is not then due or can
be paid thereafter without penalty or (b) the same are being
contested in good faith by appropriate proceedings and
adequate reserves in accordance with GAAP are being
maintained by the Company or such Subsidiary;
1.066 Compliance with Laws. The Company shall, and
shall cause each of its Subsidiaries to:
(a) comply with all provisions of its
Organization Documents and all laws, rules,
regulations, orders, writs, judgments, injunctions,
decrees or awards to which it is or becomes subject
and non-compliance with which would have a Material
Adverse Effect or would have a material adverse effect
on the ability of the Company to fulfill its
obligations under this Agreement and the Note; and
(b) promptly obtain, maintain, apply for
renewal, and not allow to lapse, any authorization,
consent, approval, license or order for, and
accomplish any filing or registration with, any
Governmental Authority or any other Person which is or
becomes necessary in order that the Company perform in
all material respects all of its obligations under
this Agreement and the Note and in order that the same
are valid and binding and effective in accordance with
their terms.
1.067 Inspection of Property and Books and Records.
The Company shall maintain and shall cause each of its
Subsidiaries to maintain proper books of record and account,
in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business
of the Company and such Subsidiaries. The Company shall
permit, and shall cause each of its Subsidiaries to permit,
representatives and independent contractors of the Bank at
the expense of the Bank (except as provided below) to visit
and inspect any of their respective properties, to examine
their respective corporate, financial and operating records,
and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with
their respective officers and independent public accountants
at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance
notice to the Company; provided, however, when a Default
exists, (i) the Bank may do any of the foregoing at any time
during normal business hours and without advance notice and
(ii) such inspection, examination and meetings shall be at
the Company's expense. Notwithstanding the foregoing, the
Bank shall not communicate with the Company's independent
public accountants unless the Bank has given the Company
reasonable prior notice of its intention to so communicate
and permits the Company, at its option, to attend or
participate in such communications.
1.068 Subsidiary Compliance. During any time that a
trustee holds the stock of ICR owned by the Company pursuant
to a voting trust pending the Interstate Commerce
Commission's approval of the acquisition of control of an
additional railroad by the Company, the Company shall, to
the extent such action is permitted by the voting trust and
applicable law, regulation, order or decree (including any
directives of the ICC) and would not violate 49 USC SECT. 11343
(or any similar or successor statute) or any ICC policy
against unauthorized control of a regulated carrier, use its
best efforts to cause ICR and its Subsidiaries to comply
with the terms of this Agreement.
1.069 Equal and Ratable Collateral. If the Company
makes, creates, incurs, assumes or suffers to exist a Lien
on any stock of ICR owned by the Company, or when acquired
by the Company, any stock of the Kansas City Southern
Railway Company to secure any Indebtedness or Contingent
Obligation, the Company shall, simultaneously with the
attaching of such Lien, grant an equal and ratable Lien on
the same property to the Bank.
ARTICLE VII.
NEGATIVE COVENANTS
The Company hereby covenants and agrees that, so long
as the Bank has any Commitment hereunder or any Loan or the
interest thereon or any amount of fees due hereunder remains
unpaid:
1.071 Limitation on Liens. The Company shall not
make, create, incur, assume or suffer to exist any Lien on
or with respect to the stock owned by the Company of ICR
and, when acquired, the stock of the Kansas City Southern
Railway Company, except in each case as may arise (x) under
subsections (a) and (b)(iv) of this Section 7.01 and (y)
under subsection (c) of this Section 7.01, so long as the
Liens attaching to such stock relate solely to attachments,
judgments and awards which do not exceed an aggregate amount
of $100,000,000; and the Company shall not, and shall not
permit any of its Subsidiaries to, make, create, incur,
assume or suffer to exist any Lien on any other property or
asset of any of such Persons, other than:
(a) Liens for taxes or assessments or
governmental charges or levies if
payment shall not at the time be
past due or can be paid thereafter
without penalty which are being
contested in good faith by
appropriate proceedings; and Liens
in respect of unpaid taxes that are
past due, and penalties and interest
with respect thereto, so long as the
aggregate amount of such past due
taxes and penalties and interest
related thereto does not exceed
$2,000,000;
(b) Liens in respect of property or
assets of the Company or any of its
Subsidiaries (i) under workers'
compensation, unemployment or other
insurance, old age pensions or other
Social Security benefits or other
similar laws or similar legislation;
(ii) in connection with surety,
appeal and similar bonds incidental
to the conduct of litigation;
(iii) in connection with bid,
performance or similar bonds which
do not exceed in the aggregate
$10,000,000; mechanics', laborers',
materialmen's and similar liens not
then delinquent or which are being
contested in good faith by
appropriate proceedings; and (iv)
Liens incidental to the conduct of
the business of the Company or any
of its Subsidiaries which were not
incurred in connection with the
borrowing of money or the obtaining
of advances or credit, all of which
Liens permitted by this paragraph
(b) do not in the aggregate
materially detract from the value of
the property of the Company or any
of its Subsidiaries or materially
impair the use thereof in the
operation of the business of the
Company and its Subsidiaries;
(c) Liens in respect of attachments,
judgments or awards which have been
in force for less than the
applicable period for taking an
appeal so long as execution is not
levied thereunder, or in respect of
which the applicable Person shall at
the time in good faith be
prosecuting an appeal or proceedings
for review and in respect of which a
stay of execution shall have been
obtained pending such appeal or
review;
(d) encumbrances and liens consisting of
easements, rights of way, general
real estate taxes not yet due and
payable, municipal and zoning
restrictions, restrictions on the
use of real property and defects and
irregularities in the title thereto,
landlord's or lessor's liens under
leases to which the Company or any
of its Subsidiaries is a party, and
other minor liens or encumbrances
none of which interferes materially
with the use of the property so
encumbered in the ordinary conduct
of the business of the Company and
its Subsidiaries and which do not
individually or in the aggregate
have a Material Adverse Effect;
(e) (i) Liens securing purchase money
Indebtedness (but not in excess of
the purchase price) for real or
personal property purchased by the
Company or any Subsidiary of the
Company for use in the Ordinary
Course of Business of such Person,
provided that such Liens are limited
solely to the property so purchased,
(ii) Liens in respect of Capitalized
Lease Obligations, the Indebtedness
with respect to which is permitted
hereby, provided that such Liens are
limited solely to the property
subject to such Capitalized Lease
Obligations and (iii) Liens relating
to operating leases of the Company
and its Subsidiaries;
(f) Liens on certain property of the
Company or any of its Subsidiaries,
which are existing on the Closing
Date, as listed and described on
Schedule 7.01 attached hereto, and
Liens existing on the Closing Date
which relate to obligations or
liabilities not so listed or
described provided they do not
individually or in the aggregate
exceed $5,000,000, and Liens on the
same property securing renewals,
extensions and refinancings of the
related existing Indebtedness,
provided that such renewals,
extensions or refinancings of such
Indebtedness shall not increase the
amount of collateral securing such
Indebtedness; and
(g) Liens on accounts receivable of the
Company or any of its Subsidiaries
that are the subject of, and that
secure, an accounts receivable
financing facility which is
otherwise permitted hereunder;
(h) any Lien, loss of title or other
effects on the Company's or any of
its Subsidiary's title to railcars,
locomotives or other rolling stock
on lease to lessees resulting from
any loss or total destruction of any
such railcars, locomotives or other
rolling stock, or damage to any
extent which makes the repair of
such railcars, locomotives, or other
rolling stock uneconomical or
renders such railcars, locomotives
or other rolling stock unfit for
normal use or from any casualty
occurrence, event of loss or similar
occurrence under any such lease;
(i) Liens on railcars, locomotives or
other rolling stock of the Company
or any of its Subsidiaries
consisting of, or arising under,
leases, subleases or similar
arrangements granting usage rights
as to such railcars, locomotives or
other rolling stock to third party
lessees or other such users granted
by the Company or any of its
Subsidiaries (or their lessees) in
the ordinary course of business;
(j) Liens or other defects of title on
rolling stock, leases and related
assets acquired by IC Leasing
Corporation III, a Nevada
corporation ("IC Leasing III"), from
Allied Railcar Company, an Illinois
corporation ("Allied"), arising or
incurred prior to the acquisition
thereof by IC Leasing III;
(k) Liens on railcars of IC Leasing III
arising by, through or under any
leases, subleases, or similar
arrangements with respect to usage
of railcars, locomotives or other
rolling stock and which Liens are
required to be released, paid or
discharged by any lessee of railcars
of IC Leasing III under the terms of
any lease; or
(l) Liens in favor of The First National
Bank of Boston securing obligations
of IC Leasing III or its
Subsidiaries under interest rate
protection arrangements provided by
such bank to IC Leasing III;
(m) Liens on property and assets of IC
Leasing Corporation I, a Nevada
corporation ("IC Leasing I"),
granted in connection with any
credit facilities provided to such
corporation or any renewals,
extensions or refinancings thereof;
(n) Liens resulting from the trust
agreement between IC Leasing
Corporation II, a Nevada corporation
("IC Leasing II") and Wilmington
Trust Company or the IC Leasing
Trust II, a Delaware trust ("the
Trust"), created thereunder;
(o) Liens on property and assets of IC
Leasing II or held by the Trust
granted in connection with any
credit facilities provided to such
corporation or such trust or any
renewals, extensions or refinancings
thereof;
(p) Liens on property and assets of IC
Leasing III granted in connection
with any credit facilities provided
to such corporation or any renewals
or extensions or refinancings
thereof;
(q) Liens on stock held by IC Financial
Services Corporation, a Delaware
corporation, and the other property
or assets of such corporation
granted in connection with any
credit facilities provided to IC
Leasing I, IC Leasing II, or IC
Leasing III or any renewals,
extensions or refinancings thereof;
(r) Liens on property granted prior to
the merger of Kansas City Southern
Industries Inc. with and into the
Company by any Persons which become
Subsidiaries of the Company as a
result of such merger;
(s) Liens on property and assets of IC
Leasing III granted to Interail,
Inc. under that certain Railcar
Management Agreement dated as of
December 3, 1993 between Interail,
Inc. and IC Leasing III, as the same
may be amended, modified or
supplemented from time to time; and
(t) Liens granted by a Subsidiary of the
Company in favor of the Company or
another Subsidiary of the Company to
secure intercompany Indebtedness or
other intercompany obligations;
provided, however, that the aggregate amount of Indebtedness
and other obligations of the Company and its Subsidiaries on
a consolidated basis secured by Liens permitted hereunder
(other than Liens described in subsections (a), (b), (d),
(s) and (t) of this Section 7.01) shall not at any time
exceed 20% of the total assets of the Company and its
Subsidiaries, determined on a consolidated basis. Nothing
in this Section 7.01 shall prevent the Company from placing
the stock of ICR in a voting trust.
1.072 Mergers, Consolidations and Dispositions of
Assets. The Company shall not (a) sell, assign, lease,
convey, transfer or otherwise dispose of (whether in one or
a series of related transactions) any property or assets
(including accounts and notes receivable, with or without
recourse) (collectively, "transfer") to any Person except in
the Ordinary Course of Business and except for transfers
which the Company determines in good faith are desirable, in
the best interests of the Company and would not result in a
Material Adverse Effect or (b) consolidate with or merge
with or into any other Person other than Kansas City
Southern Industries, Inc., provided that the Company is the
surviving company.
1.073 Restrictions on Dividends. The Company shall
not permit any of its Subsidiaries, directly or indirectly,
to, make any Distribution other than to the Person owning
the shares of stock of such Subsidiary. The Company shall
not permit its Subsidiaries to enter into agreements
containing restrictions on the payments of dividends by ICR
and the Subsidiaries of ICR to Persons owning the shares of
such Subsidiaries, if such restrictions are more stringent
than those contained in Section 9.4 of the ICR Credit
Agreement or Section 8.11 of that certain Note Purchase
Agreement, dated July 23, 1991 and amended as of April 1,
1993, among the ICR and the purchasers named therein, both
as in effect on the date hereof.
1.074 Debt to Capitalization Ratio. The Company will
not permit the ratio, calculated on a consolidated basis for
the Company and its Subsidiaries, of Consolidated Funded
Debt to Total Capitalization to exceed 0.60:1.00 at any
time.
ARTICLE VIII.
EVENTS OF DEFAULT
1.081 Event of Default. Any of the following shall
constitute an "Event of Default":
(a) Non-Payment. The Company fails to pay (i)
when and as required to be paid herein the amount of
principal of any Loan or (ii) within three Business Days
after the due date therefor any interest, fee or other
amount payable hereunder or under the Note; or
(b) Representation or Warranty. Any
representation or warranty by the Company made or deemed
made herein or which is contained in any certificate,
document or financial or other statement by the Company,
furnished at any time under this Agreement, shall prove to
have been incorrect in any material respect on or as of the
date made or deemed made; or
(c) Specific Defaults. The Company fails to
perform or observe any term, covenant or agreement contained
in Article VI (except Sections 6.03, 6.04, 6.06 and 6.07) or
in Article VII; provided, however, that during any time that
a trustee holds the stock of ICR owned by the Company
pursuant to a voting trust pending the Interstate Commerce
Commission's approval of the acquisition of control of an
additional railroad by the Company, it shall not be a
Default or Event of Default under this subsection (c) if the
Company fails to cause ICR or its Subsidiaries to comply
with the terms of Section 6.05 or if the Company fails to
comply with Section 6.01 solely because information relating
to ICR or its Subsidiaries with respect to the matters
requiring notification under Section 6.01 has not been
furnished to the Company unless the Company has otherwise
obtained knowledge of such matters; or
(d) Other Defaults. The Company fails to
perform or observe any term or covenant contained in this
Agreement other than those specified in subsections (a), (b)
and (c) hereof and such default continues unremedied for a
period of 30 days. Such 30-day period shall commence after
the Bank gives written notice of such default to the Company
if the Company has complied with Section 6.01(a); and if the
Company has failed to give such notice pursuant to Section
6.01(a), such 30-day period shall commence on the date the
Company has knowledge of such default. Notwithstanding the
foregoing, during any time that a trustee holds the stock of
the Illinois Central Railroad Company owned by the Company
pursuant to a voting trust pending the Interstate Commerce
Commission's approval of the acquisition of an additional
railroad by the Company, it shall not be a Default or Event
of Default under this subsection (d) if the Company fails to
cause ICR or its Subsidiaries to comply with the terms of
this Agreement; or
(e) ICR Credit Agreement. An "Event of
Default" occurs under the ICR Credit Agreement, or the ICR
Credit Agreement is terminated or otherwise ceases to be in
full force and effect; or
(f) Insolvency; Voluntary Proceedings. The
Company or any Material Subsidiary of the Company
(i) generally fails to pay, or admits in writing its
inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity
or otherwise; (ii) voluntarily ceases to conduct its
business in the ordinary course; (iii) commences any
Insolvency Proceeding with respect to itself; or (iv) takes
any action to effectuate or authorize any of the foregoing;
or
(g) Involuntary Proceedings. (i) Any
involuntary Insolvency Proceeding is commenced or filed
against the Company, or any Material Subsidiary of the
Company, or any writ, judgment, warrant of attachment,
execution or similar process, is issued or levied against a
substantial part of the Company's or any of its Material
Subsidiaries' properties, and any such proceeding or
petition shall not be dismissed, or such writ, judgment,
warrant of attachment, execution or similar process shall
not be released, vacated or fully bonded within 60 days
after commencement, filing or levy; (ii) the Company or any
of its Material Subsidiaries admits the material allegations
of a petition against it in any Insolvency Proceeding, or an
order for relief (or similar order under non-U.S. law) is
ordered in any Insolvency Proceeding; or (iii) the Company
or any of its Material Subsidiaries acquiesces in the
appointment of a receiver, trustee, custodian, conservator,
liquidator, mortgagee in possession (or agent therefor), or
other similar Person for itself or a substantial portion of
its property or business.
1.082 Remedies. If any Event of Default occurs and
is continuing, the Bank may upon notice to the Company
terminate the Commitment, and the Bank may declare the
unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts
owing or payable hereunder or under the Note to be
immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby
expressly waived by the Company, and exercise all rights and
remedies available to it under the Note or applicable law;
provided, however, that upon the occurrence of any event
specified in paragraph (f) or (g) of Section 8.01 above (in
the case of clause (i) of paragraph (g) upon the expiration
of the 60-day period mentioned therein), the obligation of
the Bank to make Loans shall automatically terminate without
notice to the Company and the unpaid principal amount of all
outstanding Loans and all interest and other amounts as
aforesaid shall automatically become due and payable without
further act of the Bank and without notice to the Company.
1.083 Rights Not Exclusive. The rights provided for
in this Agreement and the Note are cumulative and are not
exclusive of any other rights, powers, privileges or
remedies provided by law or in equity, or under any other
instrument, document or agreement now existing or hereafter
arising.
ARTICLE IX.
MISCELLANEOUS
1.091 Amendments and Waivers. No amendment or waiver
of any provision of this Agreement or the Note, and no
consent with respect to any departure by the Company
therefrom, shall be effective unless the same shall be in
writing and signed by the Bank and the Company, and then
such waiver shall be effective only in the specific instance
and for the specific purpose for which given.
1.092 Notices.
(a) Except as provided in subsection (c), all
notices, requests and other communications provided for
hereunder shall be in writing (including, unless the context
expressly otherwise provides, by facsimile transmission,
provided that any matter transmitted by the Company by
facsimile (i) shall be immediately confirmed by a telephone
call to the recipient at the number specified on the
applicable signature page hereof, and (ii) shall be followed
promptly by a hard copy original thereof) and mailed, faxed
or delivered, to the address or facsimile number specified
for notices on the applicable signature page hereof; or, as
directed to the Company or the Bank, to such other address
as shall be designated by such party in a written notice to
the other party, and as directed to each other party, at
such other address as shall be designated by such party in a
written notice to the Company and the Bank.
(b) All such notices, requests and
communications shall, when transmitted by overnight
delivery, or faxed, be effective when delivered for
overnight (next day) delivery, or transmitted by facsimile
machine, respectively, or if delivered, upon delivery,
except that notices pursuant to Article II shall not be
effective until actually received by the Bank.
(c) The Company acknowledges and agrees that
any agreement of the Bank in Article II herein to receive
certain notices by telephone and facsimile is solely for the
convenience and at the request of the Company. The Bank
shall be entitled to rely on the authority of any Person
purporting to be a Person authorized by the Company to give
such notice and the Bank shall not have any liability to the
Company or other Person on account of any action taken or
not taken by the Bank in reliance upon such telephonic or
facsimile notice. The obligation of the Company to repay
the Loans shall not be affected in any way or to any extent
by any failure by the Bank to receive written confirmation
of any telephonic or facsimile notice or the receipt by the
Bank of a confirmation which is at variance with the terms
understood by the Bank to be contained in the telephonic or
facsimile notice.
1.093 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the
Bank, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.
1.094 Costs and Expenses. The Company shall, whether
or not the transactions contemplated hereby shall be
consummated:
(a) pay or reimburse the Bank within twenty
Business Days after demand (subject to subsection 4.01(f))
for all reasonable out-of-pocket costs and expenses incurred
by the Bank in connection with the development, preparation,
delivery, administration and execution of, and any
amendment, supplement, waiver or modification to (in each
case, whether or not consummated), this Agreement, the Note
and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions
contemplated hereby and thereby, including the reasonable
Attorney Costs (except that the Bank's allocated costs of
staff counsel shall be paid by the Company whether or not
out-of-pocket) incurred by the Bank with respect thereto;
and
(b) pay or reimburse the Bank within twenty
Business Days after demand (subject to subsection 4.01(f))
for all costs and expenses incurred by it in connection with
the enforcement, attempted enforcement, or preservation of
any rights or remedies (including in connection with any
"workout" or restructuring regarding the Loans, and
including in any Insolvency Proceeding or appellate
proceeding) under this Agreement or the Note, including
Attorney Costs incurred by the Bank.
1.095 Indemnity. Whether or not the transactions
contemplated hereby shall be consummated:
(a) General Indemnity. The Company shall pay,
defend, indemnify, and hold the Bank and each of its
respective officers, directors, employees, counsel, agents
and attorneys-in-fact (each, an "Indemnified Person")
harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, the court costs associated therewith, and from and
against all reasonable costs, charges, expenses or
disbursements (including cleanup costs and engineering
consulting costs in respect of Environmental Claims and
Attorney Costs) of any kind or nature whatsoever, with
respect to the execution, delivery, enforcement, performance
and administration of this Agreement and the Note, or the
transactions contemplated hereby and thereby, and with
respect to any investigation, litigation or proceeding
(including any Insolvency Proceeding, Environmental Claim
proceedings or appellate proceeding) related to this
Agreement or the Loans or the use of the proceeds thereof,
whether or not any Indemnified Person is a party thereto
(all the foregoing, collectively, the "Indemnified
Liabilities"); provided, however, that the Company shall
have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities arising from the gross
negligence or willful misconduct of such Indemnified Person,
and, provided, further, however, that no Indemnified Person
shall settle or compromise any claim, investigation,
litigation or proceeding without the prior written consent
of the Company if the Company is required to indemnify the
Bank or such other Indemnified Person therefor.
(b) Survival; Defense. The obligations in
this Section 9.05 shall survive payment and cancellation of
all other Obligations. At the election of any Indemnified
Person, the Company shall defend such Indemnified Person
using legal counsel satisfactory to such Indemnified Person
(and reasonably satisfactory to the Company), at the sole
cost and expense of the Company.
1.096 Marshalling; Payments Set Aside. The Bank
shall not be under any obligation to marshall any assets in
favor of the Company or any other Person or against or in
payment of any or all of the Obligations. To the extent
that the Company makes a payment or payments to the Bank, or
the Bank exercises its rights of set-off, and such payment
or payments or the proceeds of such enforcement or set-off
or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party in
connection with any Insolvency Proceeding, or otherwise,
then to the extent of such recovery the obligation or part
thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment
had not been made or such enforcement or set-off had not
occurred.
1.097 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and
assigns, except that (a) the Company may not assign or
transfer any of its rights or obligations under this
Agreement without the prior written consent of the Bank and
(b) the Bank may not assign or transfer any of its rights or
obligations under this Agreement or the Note without the
prior written consent of the Company (which consent shall
not be unreasonably withheld or delayed). The Bank may also
grant participations in the Loans and any such participant
shall have the same rights as the Bank under Section 9.08
with respect to its participation. In connection with any
assignment or participation of the Loans, the Bank agrees
not to assign or participate the Loans to any Person which
is a foreign Person (i.e., a Person other than a United
States Person for United States federal income tax purposes)
unless such Person agrees to deliver to the Company a signed
original of Internal Revenue Service Form 1001, 4224 or any
successor thereto, or such other forms or documents as may
be reasonably requested by the Company, as appropriate,
indicating that such Person is entitled to receive payments
under this Agreement free from withholding of United States
federal income tax.
1.098 Set-off. In addition to any rights and
remedies of the Bank provided by law, if an Event of Default
exists, the Bank is authorized at any time and from time to
time, without prior notice to the Company, any such notice
being waived by the Company 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 by, and other indebtedness at any time owing to,
the Bank to or for the credit or the account of the Company
against any and all Obligations owing to the Bank, now or
hereafter existing, whether or not the Bank shall have made
demand under this Agreement or the Note and although such
Obligations may be contingent or unmatured. The Bank agrees
promptly to notify the Company after any such set-off and
application; provided, however, that the failure to give
such notice shall not affect the validity of such set-off
and application. The rights of the Bank under this Section
9.08 are in addition to the other rights and remedies
(including other rights of set-off) which the Bank may have.
1.099 Counterparts. This Agreement may be executed
in any number of separate counterparts, each of which, when
so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute
but one and the same instrument.
9.10 Severability. The illegality or unenforceability of
any provision of this Agreement or any instrument or
agreement required hereunder shall not in any way affect or
impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement
required hereunder.
9.11 Governing Law. THIS AGREEMENT AND THE NOTE
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF ILLINOIS; PROVIDED THAT THE BANK SHALL
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
9.12 Confidentiality. All confidential information
and documents concerning the Company and its Subsidiaries
supplied by the Company to the Bank shall be held in
confidence by the Bank, and the Bank shall not disclose such
information and documents, except to participants and
assignees and potential participants and assignees who have
agreed to be bound by the confidentiality provisions of this
Agreement, to legal counsel for the Bank, to consultants of
the Bank who have agreed to be bound by the confidentiality
provisions of this Agreement, to employees of and agents for
the Bank in their ongoing business, to any independent
auditors of the Bank and to all appropriate Governmental
Authorities or courts to the extent requested or subpoenaed.
Upon receipt of a request to disclose any information to
Governmental Authorities or courts other than governmental
bank examiners and independent auditors of the Bank, the
Bank will notify the Company, to the extent permitted by
applicable law and regulations, of such request and, to the
extent reasonably practicable, permit the Company to seek a
protective order with respect thereto.
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.
ILLINOIS CENTRAL CORPORATION
By:
Title:
Address for notices:
455 North Cityfront Plaza Drive
Chicago, Illinois 60611-5504
Attention: Treasury Department
Facsimile: (312) 755-7917
Telephone: (312) 755-7935
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:
Title:
LENDING OFFICE:
1850 Gateway Boulevard
Concord, California 94520
Attention: Lorraine Johnson
Facsimile: (510) 675-7531
Telephone: (510) 675-7784
Address for notices:
1850 Gateway Boulevard
Concord, California 94520
Attention: Lorraine Johnson
Facsimile: (510) 675-7531
Telephone: (510) 675-7784
With a copy to:
1230 Peachtree Street, Suite 3600
Atlanta, Georgia 30309
Attention: Glenn Edwards
Facsimile: (404) 249-6938
Telephone: (404) 249-6906
Schedule 5.09
Contingent Obligations
General Partnership Interests
Schedule 5.11
PART A
The following entities are the sole Subsidiaries of the
Company:
PART B
The Company has no material equity investments other than
those listed below:
Schedule 7.01
Permitted Liens
EXHIBIT 4.2
REVOLVING CREDIT
AND
TERM LOAN AGREEMENT
DATED as of July 5, 1994
between
IC LEASING CORPORATION III,
THE FIRST NATIONAL BANK OF BOSTON,
as Agent for itself and the Banks listed on Schedule 1 (the "Banks"),
and
THE BANKS
1. DEFINITIONS AND RULES OF INTERPRETATION. 1
1.1. Definitions. 1
1.2. Rules of Interpretation. 16
2. THE REVOLVING CREDIT FACILITY. 17
2.1. Commitment to Lend. 17
2.2. Commitment Fee. 17
2.3. Reduction of Total Commitment. 17
2.4. The Notes. 18
2.5. Interest on Revolving Credit Loans. 18
2.6. Requests for Revolving Credit Loans. 20
2.7. Conversion Options. 20
2.7.1. Conversion to Different Type of Revolving Credit Loan. 20
2.7.2. Continuation of Type of Revolving Credit Loan. 21
2.7.3. Eurodollar Rate Loans. 21
2.8. Funds for Revolving Credit Loans. 21
2.8.1. Funding Procedures. 21
2.8.2. Advances by Agent. 22
2.9. Change in Borrowing Base. 22
3. REPAYMENT OF THE REVOLVING CREDIT LOANS. 22
3.1. Mandatory Repayments of Revolving Credit Loans. 22
3.2. Optional Repayments of Revolving Credit Loans. 22
4. THE TERM LOAN. 23
4.1. Conversion to Term Loan on Term Out Date. 23
4.2. The Notes. 23
4.3. Mandatory Payments of Principal of Term Loan. 23
4.4. Optional Prepayment of Term Loan. 24
4.5. Interest on Term Loan. 24
4.5.1. Interest Rates. 24
4.5.2. Notification by Borrower. 25
4.5.3. Amounts, etc. 25
5. CERTAIN GENERAL PROVISIONS. 25
5.1. Funds for Payments. 25
5.1.1. Payments to Agent. 25
5.1.2. No Offset, etc. 25
5.2. Computations. 26
5.3. Inability to Determine Eurodollar Rate. 26
5.4. Illegality. 26
5.5. Additional Costs, etc. 27
5.6. Capital Adequacy. 28
5.7. Certificate. 29
5.8. Indemnity. 29
5.9. Interest on Overdue Amounts. 29
6. SECURITY. 30
6.1. Security of Borrower. 30
6.2. Other Security. 30
7. REPRESENTATIONS AND WARRANTIES. 30
7.1. Corporate Authority. 30
7.1.1. Incorporation; Good Standing. 30
7.1.2. Authorization. 30
7.1.3. Enforceability. 31
7.2. Governmental Approvals. 31
7.3. Title to Properties; Leases. 31
7.4. Projections. 31
7.5. No Material Changes, etc. 31
7.6. Franchises, Patents, Copyrights, etc. 32
7.7. Litigation. 32
7.8. No Materially Adverse Contracts, etc. 32
7.9. Compliance With Other Instruments, Laws, etc. 32
7.10. Tax Status. 32
7.11. No Event of Default. 33
7.12. Holding Company and Investment Company Acts. 33
7.13. Absence of Financing Statements, etc. 33
7.14. [Intentionally Omitted].33
7.15. Certain Transactions. 33
7.16. Employee Benefit Plans. 34
7.16.1. In General. 34
7.16.2. [Intentionally Omitted]34
7.16.3. Guaranteed Pension Plans. 34
7.16.4. Multiemployer Plans. 35
7.17. Use of Proceeds; Regulations U and X. 35
7.18. Environmental Compliance. 35
7.19. Subsidiaries, etc. 37
7.20. Bank Accounts. 37
7.21. Fiscal Year. 37
8. AFFIRMATIVE COVENANTS OF THE BORROWER. 37
8.1. Punctual Payment. 37
8.2. Maintenance of Office. 37
8.3. Records and Accounts. 37
8.4. Financial Statements, Certificates and Information. 37
8.5. Notices. 39
8.5.1. Defaults. 39
8.5.2. Environmental Laws and Events. 39
8.5.3. [Intentionally Omitted].40
8.5.4. Notice of Litigation and Judgments. 40
8.6. Corporate Existence; Maintenance of Properties. 40
8.7. Insurance. 40
8.8. Taxes. 40
8.9. Inspection of Properties and Books, etc. 41
8.9.1. General. 41
8.9.2. Appraisals. 41
8.9.3. Communication with Accountants. 42
8.10. Compliance with Laws, Contracts, Licenses, and Permits. 42
8.11. Employee Benefit Plans. 42
8.12. Use of Proceeds. 42
8.13. Bank Accounts. 43
8.14. Advantageous Agreements. 43
8.15. Further Assurances. 43
8.16. Opinion of Counsel. 43
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. 44
9.1. Restrictions on Indebtedness. 44
9.2. Restrictions on Liens. 45
9.3. Restrictions on Investments. 47
9.4. Distributions. 47
9.5. Merger, Consolidation. 48
9.5.1. Mergers and Acquisitions. 48
9.5.2. Disposition of Assets. 48
9.6. Sale and Leaseback. 48
9.7. [Intentionally Omitted].49
9.8. Employee Benefit Plans. 49
9.9. Bank Accounts. 49
9.10. Approved Leases. 49
9.11. Fiscal Year. 50
10. FINANCIAL COVENANTS OF THE BORROWER. 50
10.1. Earnings Before Interest and Taxes to Total
Interest Expense Ratio. 50
10.2. Debt Service Coverage Ratio. 50
10.3. Liabilities to Tangible Net Worth Ratio. 50
10.4. Consolidated Tangible Net Worth. 51
10.5. Lease Value Ratio. 51
11. CLOSING CONDITIONS. 51
11.1. Loan Documents. 51
11.2. Certified Copies of Charter Documents. 51
11.3. Corporate Action. 51
11.4. Incumbency Certificate. 51
11.5. Validity of Liens. 51
11.6. UCC Search Results. 52
11.7. Certificates of Insurance. 52
11.8. Borrowing Base Report. 52
11.9. [Intentionally Omitted]. 52
11.10. Disbursement Instructions. 52
11.11. Fees and Expenses. 52
11.12. Certificate Regarding Lease Value Ratio and Rating. 52
11.13. Notices Under Acquisition Documents. 52
11.14. Proceedings and Documents. 53
12. CONDITIONS TO ALL BORROWINGS. 53
12.1. Representations True; No Event of Default. 53
12.2. No Legal Impediment. 53
12.3. Loan Request. 53
12.4. [Intentionally Omitted].54
12.5. Borrowing Base Report. 54
13. EVENTS OF DEFAULT; ACCELERATION; ETC. 54
13.1. Events of Default and Acceleration. 54
13.2. Termination of Commitments. 58
13.3. Remedies. 58
13.4. Distribution of Collateral Proceeds. 58
14. SETOFF. 59
15. THE AGENT. 60
15.1. Authorization. 60
15.2. Employees and Agents. 60
15.3. No Liability. 60
15.4. No Representations. 60
15.5. Payments. 61
15.5.1. Payments to Agent. 61
15.5.2. Distribution by Agent. 61
15.5.3. Delinquent Banks. 61
15.6. Holders of Notes. 62
15.7. Indemnity. 62
15.8. Agent as Bank. 62
15.9. Resignation. 62
15.10. Notification of Defaults and Events of Default. 63
16. EXPENSES. 63
17. INDEMNIFICATION. 63
18. SURVIVAL OF COVENANTS, ETC. 64
19. ASSIGNMENT AND PARTICIPATION. 65
19.1. Conditions to Assignment by Banks. 65
19.2. Certain Representations and Warranties;
Limitations; Covenants. 65
19.3. Register. 66
19.4. New Notes. 67
19.5. Participations. 67
19.6. Disclosure. 67
19.7. Assignee or Participant Affiliated with the Borrower. 68
19.8. Miscellaneous Assignment Provisions. 68
19.9. Assignment by Borrower. 69
20. NOTICES, ETC. 69
21. GOVERNING LAW. 69
22. HEADINGS. 70
23. COUNTERPARTS. 70
24. ENTIRE AGREEMENT, ETC. 70
25. WAIVER OF JURY TRIAL. 70
26. CONSENTS, AMENDMENTS, WAIVERS, ETC. 70
27. SEVERABILITY. 71
REVOLVING CREDIT
AND
TERM LOAN AGREEMENT
This REVOLVING CREDIT AND TERM LOAN AGREEMENT (this "Credit
Agreement") is made as of July 5, 1994, by and among IC LEASING
CORPORATION III (the "Borrower"), a Nevada corporation having its
principal place of business at 6900 Westcliff Drive, Las Vegas,
Nevada 89128, THE FIRST NATIONAL BANK OF BOSTON, a national banking
association and the other lending institutions listed on Schedule
1, and THE FIRST NATIONAL BANK OF BOSTON as agent for itself and
such other lending institutions.
DEFINITIONS AND RULES OF INTERPRETATION.
Definitions.
The following terms shall have the meanings set forth in this Sect.1
or elsewhere in the provisions of this Credit Agreement referred to
below:
Acquired Chrysler Assets. Certain rolling stock, leases
and related assets acquired by the Borrower pursuant to the
Acquisition Documents.
Acquisition Documents. That certain Asset Purchase Agreement,
dated as of December 3, 1993, by and between CRTC and Allied, the
CFC Guaranty referred to therein, the related Asset Sale Agreement,
dated as of December 3, 1993, by and between Allied and the
Borrower, and all other agreements and documents required to be
entered into or delivered pursuant to any of such agreements or in
connection with the acquisition by the Borrower of the Acquired
Chrysler Assets, as any of the same may be from time to time
amended, modified, supplemented or restated and in effect.
Adjustment Date. See Sect.2.5(e).
Affiliate. In relation to any particular Person, any other Person
which, directly or indirectly, controls, or is controlled by, or is
under common control with, such Person. For purposes of this
definition, "control" (including, with correlative meanings, the
terms "controlled by" and "under common control with") shall mean
the power, directly or indirectly, to (a) vote 10% or more of the
outstanding stock having ordinary voting power for the election of
directors of such Person, or (b) direct the management or policies
of such Person, whether by contract or otherwise.
Agency Account Agreement(s). Those certain Agency Account
Agreements entered into pursuant to the provisions of Sect.8.13 hereof
from time to time by the Borrower, the Agent and certain financial
institutions with which the Borrower maintains depository accounts,
as any of the same may be from time to time amended, modified,
supplemented or restated and in effect.
Agent's Head Office. The Agent's head office located at 100
Federal Street, Boston, Massachusetts 02110, or at such other
location as the Agent may designate from time to time.
Agent. The First National Bank of Boston acting as agent for the
Banks.
Agent's Special Counsel. Bingham, Dana & Gould or such other
counsel as may be approved by the Agent.
Allied. Allied Railcar Company, an Illinois corporation.
Applicable Margin. See Sect.2.5(d).
Approved Leases.
Leases of railcars owned by the Borrower which are (a) leased to
ICR under an existing fixed rate net lease agreement heretofore
approved by the Agent having a term which extends at least three
(3) years after the Closing Date and which may be subject to (i)
existing rights of car hire by ICR or by third parties or (ii)
existing leases or subleases from the Borrower to third parties,
(b) leased to Waterloo under an existing fixed rate net lease
agreement heretofore approved by the Agent having a term extending
at least three (3) years after the Closing Date and which may be
subject to (i) existing rights of car hire by ICR or by third
parties or (ii) existing leases or subleases from the Borrower to
third parties, or (c) such other leases according to such terms and
with such lessees as shall have been approved by the Agent in
writing prior to the Borrower having entered into such leases.
Assignment and Acceptance. See Sect.19.1.
Banks. FNBB and the other lending institutions listed on Schedule
1 hereto and any other Person who becomes an assignee of any rights
and obligations of a Bank pursuant to Sect.19.
Base Rate. The higher of (i) the annual rate of interest announced
from time to time by FNBB at its head office in Boston,
Massachusetts, as its "base rate" and (ii) one-half of one percent
(1/2%) above the Federal Funds Effective Rate. For the purposes of
this definition, "Federal Funds Effective Rate" shall mean, for any
day, the rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for
such day (or if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such
transactions received by the Agent from three funds brokers of
recognized standing selected by the Agent.
Base Rate Loans. Revolving Credit Loans and all or any portions of
the Term Loan bearing interest calculated by reference to the Base
Rate.
Borrower. As defined in the preamble hereto.
Borrowing Base. At the relevant time of reference thereto, an
amount equal to the sum of (A) an amount determined by the Agent by
reference to the most recent Borrowing Base Report delivered to the
Banks and the Agent pursuant to Sect.8.4(e), which is equal to the sum
of 80% of the net book value, as determined in accordance with
generally accepted accounting principles, of all railcars owned
by the Borrower which are, to the best of the Borrower's knowledge
(a) located in the United States of America (except for temporary
or incidental use in Canada or Mexico), (b) subject to a
first-priority perfected security interest in favor of the Agent,
(c) subject to no other Liens other than Permitted Liens (excluding
for this purpose Permitted Liens referred to in clauses (e), (f),
(i) or (j) of Sect.9.2 hereof), and (d) in good, usable condition;
provided, however, that for purposes of determining the net book
value of such railcars, such railcars shall in any event be
depreciated on a straight line basis over a period of no more than
twenty (20) years, plus (B) only during the period commencing on
July 6, 1994, and ending on August 5, 1994, cash collateral
provided by the Borrower to the Agent, not exceeding $365,000, held
in a blocked account with the Agent.
Borrowing Base Report. A Borrowing Base Report signed by the chief
financial officer of the Borrower and in substantially the form of
Exhibit A hereto.
Bridge Loan. The loan made by FNBB to the Borrower in two advances
pursuant to that certain Amended and Restated Demand Promissory
Note dated as of December 3, 1993, amended and restated as of
January 3, 1994, executed by the Borrower in favor of FNBB in the
principal amount of $21,715,000.
Business Day. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business
and, in the case of Eurodollar Rate Loans, also a day which is a
Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as land,
buildings, fixtures, machinery and equipment) and intangible (such
as patents, copyrights, trademarks, franchises and good will);
provided that Capital Assets shall not include (a) any item
customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with
generally accepted accounting principles or (b) any goods intended
to be sold or leased to others.
Capital Expenditures. Amounts paid or indebtedness incurred by the
Borrower or any of its Subsidiaries in connection with the purchase
or lease by the Borrower or any of its Subsidiaries of Capital
Assets that would be required to be capitalized and shown on the
balance sheet of such Person in accordance with generally accepted
accounting principles, excluding, whether or not classified as
capital expenditures under generally accepted accounting
principles, amounts paid in respect of the purchase of railcars or
other assets to be held for sale or lease to others.
Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental
payment obligations under which are required to be capitalized on
the balance sheet of the lessee or obligor in accordance with
generally accepted accounting principles.
Casualty Occurrence. (a) the loss or total destruction of any
railcars of the Borrower, (b) damage to any such railcar to any
extent which makes the repair of such railcar uneconomical or which
renders such railcar unfit for normal use, or (c) any casualty
occurrence, event of loss or similar occurrence under any lease by
the Borrower to any other Person.
CERCLA. See Sect.7.18.
CFC. Chrysler Financial Corporation.
Closing Date. The first date on which the conditions set forth in
Sect. 11 have been satisfied, or otherwise waived in writing by the
Agent, and on which any Revolving Credit Loans are to be made.
Code. The Internal Revenue Code of 1986.
Collateral. All of the property, rights and interests of the
Borrower (excluding the Borrower's rights under and in respect of
the Option Agreements) that are or are intended to be subject to
the security interests created by the Security Documents.
Collateral Assignment of Acquisition Documents. The Collateral
Assignment of Acquisition Documents dated as of the date hereof between
the Borrower and the Agent and in form and substance satisfactory
to the Banks and the Agent, as the same may be amended, modified,
supplemented or restated and in effect from time to time.
Commitment. With respect to each Bank at any time, the amount set
forth at such time on Schedule 1 hereto as the amount of such
Bank's commitment to make Loans to the Borrower, as the same may be
reduced by the Borrower from time to time; or if such commitment is
terminated pursuant to the provisions hereof, zero.
Commitment Percentage. With respect to each Bank at any time, the
percentage set forth at such time on Schedule 1 hereto as such
Bank's percentage of the aggregate Commitments of all of the Banks.
Consolidated or consolidated. With reference to any term defined
herein, shall mean thatterm as applied to the accounts of the
Borrower and its Subsidiaries, consolidated in accordance with
generally accepted accounting principles.
Consolidated Maturing Debt. With respect to any period, an amount
equal to the sum of all payments of principal on Indebtedness
(other than as described in Sect.9.1(b) hereof and other than
Indebtedness in respect of the Loans) that become due and payable
or that are to become due and payable during such period pursuant
to any agreement or instrument to which the Borrower or any of its
Subsidiaries is a party relating to the borrowing of money, the
obtaining of credit, the deferred portion of the purchase price for
any property, or in respect of Capitalized Leases. Demand
obligations shall be deemed to be due and payable during any fiscal
period during which such obligations are outstanding.
Consolidated Net Income (or Deficit). The consolidated net income
(or deficit) of the Borrower and its Subsidiaries, after deduction
of all expenses, taxes, and other proper charges, determined in
accordance with generally accepted accounting principles.
Consolidated Net Operating Income (or Deficit). Consolidated Net
Income (or Deficit), after eliminating therefrom all extraordinary
nonrecurring items of income or loss.
Consolidated Operating Cash Flow. For any period, an amount equal
to (i) the sum of (A) Earnings Before Interest and Taxes for such
period, plus (B) depreciation, amortization and all other noncash
charges for such period, less (ii) the sum of (A) cash payments for
all taxes (or cash payments in respect of taxes made pursuant to
the Tax Sharing Agreement to the extent not already deducted from
Earnings Before Interest and Taxes) paid during such period, plus
(B) Capital Expenditures (excluding Capital Expenditures financed
through the incurrence of purchase money indebtedness permitted
under Sect.9.1(g) or through Loans made to the Borrower hereunder)
made during such period.
Consolidated Tangible Net Worth. The excess of Consolidated Total
Assets over Consolidated Total Liabilities, and less the sum of:
(a) the total book value of all assets of the Borrower and its
Subsidiaries properly classified as intangible assets under
generally accepted accounting principles, including such items as
goodwill, the purchase price of acquired assets in excess of the
fair market value thereof, trademarks, trade names, service marks,
brand names, copyrights, patents and licenses, and rights with
respect to the foregoing; plus
(b) all amounts representing any write-up in the book value of any
assets of the Borrower or its Subsidiaries resulting from a
revaluation thereof subsequent to December 31, 1993, excluding
adjustments to translate foreign assets and liabilities for changes
in foreign exchange rates made in accordance with Financial
Accounting Standards Board Statement No. 52; plus
(c) to the extent otherwise includable in the computation of
Consolidated Tangible Net Worth, any subscriptions receivable.
Consolidated Total Assets. All assets of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with
generally accepted accounting principles.
Consolidated Total Interest Expense. For any period, the aggregate
amount of interest required to be paid or accrued by the Borrower
and its Subsidiaries (without duplication) during such period on
all Indebtedness of the Borrower and its Subsidiaries outstanding
during all or any part of such period as determined in accordance
with generally accepted accounting principles, including payments
consisting of interest in respect of Capitalized Leases and
including, to the extent classified as interest expense under
generally accepted accounting principles, all commitment fees,
agency fees, facility fees, and similar fees or expenses in
connection with the borrowing of money.
Consolidated Total Liabilities. All liabilities of the Borrower
and its Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles.
Conversion Request. A notice given by the Borrower to the Agent of
the Borrower's election to convert or continue a Loan in accordance
with Sect.2.7.
Credit Agreement. This Revolving Credit and Term Loan Agreement,
including the Schedules and Exhibits hereto, as the same may be
amended, modified, supplemented or restated and in effect from time
to time.
Credit Agreement Maturing Debt. For purposes of calculating the
ratio described in Sect.10.2 hereof (the "Debt Service Coverage
Ratio") for any fiscal period described in such Sect.10.2 and ending
on any date of calculation described in the following clauses (a)
through (h), Credit Agreement Maturing Debt shall be calculated as
follows:
(a) for the purpose of calculating the Debt Service Coverage
Ratio as of September 30, 1994, the Credit Agreement Maturing Debt
shall be equal to the average daily amount of aggregate Revolving
Credit Loans outstanding during the fiscal quarter ended as of such
date multiplied by 1/20;
(b) for the purpose of calculating the Debt Service Coverage
Ratio as of December 31, 1994, the Credit Agreement Maturing Debt
shall be equal to the average daily amount of aggregate Revolving
Credit Loans outstanding during the two consecutive fiscal quarters
ended as of such date multiplied by 1/10;
(c) for the purpose of calculating the Debt Service Coverage
Ratio as of March 31, 1995, the Credit Agreement Maturing Debt
shall be equal to the average daily amount of aggregate Revolving
Credit Loans outstanding during the three consecutive fiscal
quarters ended as of such date multiplied by 3/20;
(d) for the purpose of calculating the Debt Service Coverage
Ratio as of June 30, 1995 and as of each fiscal quarter ending
date occurring thereafter prior to September 30, 1996, the Credit
Agreement Maturing Debt shall be equal to the average daily amount
of aggregate Revolving Credit Loans outstanding during the four
consecutive fiscal quarters ended as of any such fiscal quarter
ending date of calculation multiplied by 1/5;
(e) for the purpose of calculating the Debt Service Coverage
Ratio as of September 30, 1996, the Credit Agreement Maturing Debt
shall be equal to the sum of (i) the average daily amount of
aggregate Revolving Credit Loans outstanding during the three
consecutive fiscal quarters ended as of June 30, 1996 multiplied by
3/20 plus (ii) all amounts of principal with respect to the Term
Loan which shall be due and payable during the fiscal quarter
ending as of September 30, 1996;
(f) for the purpose of calculating the Debt Service Coverage
Ratio as of December 31, 1996, the Credit Agreement Maturing Debt
shall be equal to the sum of (i) the average daily amount of aggregate
Revolving Credit Loans outstanding during the two consecutive fiscal
quarters ended as of June 30, 1996 multiplied by 1/10 plus (ii) all
amounts of principal with respect to the Term Loan which shall be due
and payable during the two consecutive fiscal quarters ending as of
December 31, 1996;
(g) for the purpose of calculating the Debt Service Coverage
Ratio as of March 31, 1997, the Credit Agreement Maturing Debt
shall be equal to the sum of (i) the average daily amount of
aggregate Revolving Credit Loans outstanding during the fiscal
quarter ended as of June 30, 1996 multiplied by
1/20 plus (ii) all amounts of principal with respect to the Term
Loan which shall be due and payable during the three consecutive
fiscal quarters ending as of March 31, 1996; and
(h)for the purpose of calculating the Debt Service Coverage Ratio
as of June 30, 1997 and as of each fiscal quarter ending date occurring
thereafter, the Credit Agreement Maturing Debt shall be equal to
all amounts of principal with respect to the Term Loan which shall
be due and payable during the four consecutive fiscal quarters
ending as such fiscal quarter ending date of calculation;
CRTC. Chrysler Rail Transportation Corporation, a Delaware
corporation.
Debt Service Coverage Ratio. See the definition of Credit
Agreement Maturing Debt.
Default. See Sect.13.
Distribution. The payment by any Person of any dividends,
distributions or other payments to its shareholders as such, other
than distributions or allocations of common stock of such Person;
the declaration or payment of any dividend on or in respect of any
shares of any class of capital stock of any Person, other than
dividends payable solely in shares of common stock of such Person;
or the purchase, redemption, or other retirement of any shares of
any class of capital stock of any Person, directly or indirectly,
through a Subsidiary or otherwise, other than solely through the
issuance of the capital stock of such Person; the return of capital
by any Person to its shareholders as such; or any other
distribution on or in respect of any shares of any class of capital
stock of any Person.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other
office of such Bank, if any, located within the United States that
will be making or maintaining Base Rate Loans.
Drawdown Date. The date on which any Revolving Credit Loan or the
Term Loan is made or is to be made, and the date on which any
Revolving Credit Loan is converted or continued in accordance with
Sect.2.7 or all or any portion of the Term Loan is converted or
continued in accordance with Sect.4.5.2.
Earnings Before Interest and Taxes. The Consolidated Net Operating
Income (or Deficit) of the Borrower and its Subsidiaries for any
period (but excluding therefrom all income or loss from the sale of
railcars by the Borrower whether or not such income or loss is
classified as extraordinary) before payment or provision for any
income taxes, income tax expenses, payments in respect of taxes
pursuant to the Tax Sharing Agreement, interest expense or other
Consolidated Total Interest Expense (all without duplication) for
such period, determined in accordance with generally accepted
accounting principles.
Eligible Assignee. Any of (i) a commercial bank or finance company
organized under the laws of the United States, or any State thereof
or the District of Columbia, and having total assets in excess of
$1,000,000,000; (ii) a savings and loan association or savings bank
organized under the laws of the United States, or any State thereof
or the District of Columbia, and having a net worth of at least
$100,000,000, calculated in accordance with generally accepted
accounting principles; (iii) a commercial bank organized under the
laws of any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a political
subdivision of any such country, and having total assets in excess
of $1,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or
another country which is also a member of the OECD; (iv) the
central bank of any country which is a member of the OECD; and (v)
if, but only if, an Event of Default has occurred and is
continuing, any other bank, insurance company, commercial finance
company or other financial institution or other Person approved by
the Agent, such approval not to be unreasonably withheld.
Employee Benefit Plan. Any employee benefit plan within the
meaning of Sect.3(3) of ERISA maintained or contributed to by the
Borrower or any ERISA Affiliate, other than a Multiemployer Plan.
Environmental Laws. See Sect.7.18(a).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer
with the Borrower under Sect.414 of the Code.
ERISA Reportable Event. A reportable event with respect to a
Guaranteed Pension Plan within the meaning of Sect.4043 of ERISA and
the regulations promulgated thereunder as to which the requirement
of notice has not been waived.
Eurocurrency Reserve Rate. For any day with respect to a
Eurodollar Rate Loan, the maximum rate (expressed as a decimal) at
which a member bank of the Federal Reserve System in New York City
with deposits exceeding $1 billion would be required to maintain
reserves under Regulation D of the Board of Governors of the
Federal Reserve System (or any successor or similar regulations
relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such
liabilities were outstanding. The Eurocurrency Reserve Rate shall
be adjusted automatically on and as of the effective date of any
change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are
open for international business (including dealings in Dollar
deposits) in London or such other eurodollar interbank market as
may be selected by the Agent in its sole discretion acting in good
faith.
Eurodollar Lending Office. Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other
office of such Bank, if any, that shall be making or maintaining
Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a
Eurodollar Rate Loan, the rate of interest equal to (i) the
arithmetic average of the rates per annum for each Reference Bank
(rounded upwards to the nearest 1/16 of one percent) of the rate at
which such Reference Bank's Eurodollar Lending Office is offered
Dollar deposits two Eurodollar Business Days prior to the beginning
of such Interest Period in the interbank eurodollar market where
the eurodollar and foreign currency and exchange operations of such
Eurodollar Lending Office are customarily conducted at or about
10:00 a.m., local time in such interbank eurodollar market, for
delivery on the first day of such Interest Period for the number of
days comprised therein and in an amount comparable to the amount of
the Eurodollar Rate Loan of such Reference Bank to which such
Interest Period applies, divided by (ii) a number equal to 1.00
minus the Eurocurrency Reserve Rate, if applicable.
Eurodollar Rate Loans. Revolving Credit Loans and all or any
portion of the Term Loan bearing interest calculated by reference
to the Eurodollar Rate.
Event of Default. See Sect.13.
FNBB. The First National Bank of Boston in its individual
capacity.
Generally accepted accounting principles. (i) When used in Sect.10,
whether directly or indirectly through reference to a capitalized
term used therein, means (A) principles that are consistent with
the principles promulgated or adopted by the Financial Accounting
Standards Board and its predecessors, in effect for the fiscal year
ended on December 31, 1993, and (B) to the extent consistent with
such principles, the accounting practice of the Borrower
reflected in its financial statements for the year ended December
31, 1993, and (ii) when used in general, other than as provided
above, means principles that are (A) consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board
and its predecessors, as in effect from time to time and (B)
consistently applied with past financial statements of the Borrower
adopting the same principles, provided that in each case referred
to in this definition of "generally accepted accounting principles"
a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an
unqualified opinion (other than a qualification regarding changes
in generally accepted accounting principles) as to financial
statements in which such principles have been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within
the meaning of Sect.3(2) of ERISA maintained or contributed to by the
Borrower or any ERISA Affiliate the benefits of which are
guaranteed on termination in full or in part by the PBGC pursuant
to Title IV of ERISA, other than a Multiemployer Plan.
Hazardous Substances. See Sect.7.18(b).
HAZMAT. See Sect.7.18(a).
IC. Illinois Central Corporation, a Delaware corporation.
ICR. Illinois Central Railroad Company, a Delaware corporation
Indebtedness. (a) all debt and similar monetary obligations,
whether direct or indirect (including, without limitation,
obligations under Capitalized Leases); (b) all Indebtedness of
others secured by any mortgage, pledge, security interest, lien,
charge, or other encumbrance existing on property owned or acquired
subject thereto, whether or not the Indebtedness secured thereby
shall have been assumed; (c) all guarantees, endorsements and other
contingent obligations, whether direct or indirect, in respect of
Indebtedness of others, including any obligation to supply funds to
or in any manner to invest in, directly or indirectly, the debtor,
to purchase Indebtedness, or to assure the owner of Indebtedness
against loss, through an agreement to purchase goods, supplies, or
services for the purpose of enabling the debtor to make payment of
the Indebtedness held by such owner or otherwise; and (d) the
obligations to reimburse the issuer in respect of any letters of
credit.
Interest Payment Date. (i) As to any Base Rate Loan, the last
day of each calendar quarter, including without limitation, the
calendar quarter which includes the Drawdown Date thereof; and (ii)
as to any Eurodollar Rate Loan, the last day of the Interest Period
in respect thereof.
Interest Period. With respect to each Revolving Credit Loan and
the applicable portions of the Term Loan, (i) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last
day of one of the periods set forth below, as selected by the
Borrower in a Loan Request (A) for any Base Rate Loan, the last day
of the calendar quarter; and (B) for any Eurodollar Rate Loan, 1,
2, or 3 months; and (ii) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to such
Loan and ending on the last day of one of the periods set forth
above, as selected by the Borrower in a Conversion Request;
provided that all of the foregoing provisions relating to Interest
Periods are subject to the following:
(a) if any Interest Period with respect to a Eurodollar Rate Loan
would otherwise end on a day that is not a Eurodollar Business Day,
that Interest Period shall be extended to the next succeeding
Eurodollar Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the immediately
preceding Eurodollar Business Day;
(b) if any Interest Period with respect to a Base Rate Loan would
end on a day that is not a Business Day, that Interest Period shall
end on the next succeeding Business Day;
(c) if the Borrower does not give notice as provided in Sect.2.7, the
Borrower shall be deemed to have requested a conversion of the
affected Eurodollar Rate Loan to a Base Rate Loan and the
continuance of all Base Rate Loans as Base Rate Loans on the last
day of the then current Interest Period with respect thereto;
(d) any Interest Period that begins on the last Eurodollar
Business Day of a calendar
month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall
end on the last Eurodollar Business Dayof a calendar month; and
(e) any Interest Period relating to any Eurodollar Rate Loan that
would otherwise extend beyond the Maturity Date shall end on the
Maturity Date.
Investments. The aggregate of all expenditures made for the
acquisition of stock (except redemptions or repurchases by a
corporation of any shares of its capital stock) or Indebtedness of
any Person, all loans, advances, capital contributions to any
Person and all guarantees (or other commitments as described under
Indebtedness) of obligations of, any Person, except accounts
receivable arising in the ordinary course of business. In
determining the aggregate amount of Investments outstanding at any
particular time, (a) the amount of any Investment represented by a
guarantee shall be taken at not less than the aggregate amount of
the obligations guaranteed and still outstanding, (b) there shall
be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such
interest is paid, (c) there shall be deducted in respect of each
such Investment any amount received as a return of capital, (d)
there shall not be deducted in respect of any Investment any
amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest
included as provided in the foregoing clause (b) may be deducted
when paid, and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Lease Value Ratio. At any time of reference, the ratio of the Net
Present Value of Scheduled Lease Payments to the aggregate
outstanding principal amount of all Loans at such time of
reference.
Lien. Any mortgage, lien, charge, security interest or other
encumbrance of any kind upon any property or assets of any
character, or upon the income or profits therefrom, any conditional
sale or other title retention agreement, device or arrangement
(including capitalized leases), or any sale, assignment, pledge or
other transfer for security of any accounts, general intangibles or
chattel paper, with or without recourse.
Loan Documents. This Credit Agreement, the Notes and the Security
Documents.
Loan Request. See Sect.2.6.
Loans. The Revolving Credit Loans and the Term Loan.
Majority Banks. As of any date, the Banks holding at least sixty
percent (60%) of the outstanding principal amount of the Notes on
such date; and if no such principal is outstanding, the Banks whose
aggregate Commitments constitutes at least sixty percent (60%) of
the Total Commitment.
Maturity Date. June 30, 2001.
Moody's. Moody's Investors Service, Inc.
Multiemployer Plan. Any multiemployer plan within the meaning of
Sect.3(37) of ERISA maintained or contributed to by the Borrower or
any ERISA Affiliate.
Net Present Value of Scheduled Lease Payments. As of any date of
reference, the net present value of all present or future
obligations of ICR, Waterloo and all other lessees under any
Approved Leases of railcars owned by the Borrower, other than
obligations that can be terminated by the giving of notice without
liability to ICR, Waterloo or such other lessee, as the case may
be, in excess of the liability for rent due as of the date on which
such notice is given and under which no penalty or premium is paid
as a result of any such termination. Such net present value shall
be calculated by the Borrower in accordance with generally accepted
financial practices by reference to a discount rate equal to the
Treasury Rate (as hereinafter defined) plus one percent (1%) per
annum. For the purposes of this provision, "Treasury Rate" means
the yield to maturity (based on a 365 or 366 day year and rounded
to three decimal places), as of such date of reference, of the most
recently auctioned issue of direct obligations of the United States
which is then actively traded in a recognized market and which has
a five (5) year maturity.
Notes. See Sect.2.4.
Obligations. All indebtedness, obligations and liabilities of the
Borrower to any of the Banks and the Agent, whether existing on the
date of this Credit Agreement or arising thereafter, direct or
indirect, joint or several, absolute or contingent, matured or
unmatured, liquidated or unliquidated, secured or unsecured,
arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan
Documents or in respect of any of the Loans or any of the Notes or
other instruments at any time evidencing any thereof.
Option Agreements. Those certain Option Agreements dated as of the
date hereof etween the Borrower and ICR, and as any of them may
be amended, modified, supplemented or restated from time to time.
outstanding. With respect to the Loans, the aggregate unpaid
principal thereof as of any date of determination.
PBGC. ThePension Benefit Guaranty Corporation created by Sect.4002
of ERISA and any successor entity or entities having similar
responsibilities.
Perfection Certificate. The Perfection Certificate delivered to
the Agent on the Closing Date in connection with the Security
Agreement. Permitted Liens. Liens, security interests and other
encumbrances permitted by Sect.9.2.
Person. Any individual, corporation, partnership, trust,
unincorporated association, business, or other legal entity, and
any government or any governmental agency or political subdivision
thereof.
Pledgor. IC Financial Services Corporation, a Delaware
corporation.
Rated Debt. ICR's 1993 Senior Notes (as defined in the Amended and
Restated Revolving Credit Agreement dated as of October 27, 1993
among ICR, the Agent and certain other lenders, as in effect on the
date hereof).
Rating. The lower of the rating by Moody's or by S&P of the Rated
Debt, provided that (i) if either Moody's or S&P shall not have in
effect a Rating for the Rated Debt (other than because such rating
agency shall no longer be in the business of rating corporate debt
obligations), the Rating shall be deemed to be the Rating of the
other rating agency in respect of Rated Debt, (ii) if both Moody's
and S&P shall not have in effect a Rating for the Rated Debt
(other than because such rating agencies shall no longer be in the
business of rating corporate debt obligations or because no Rated
Debt shall be outstanding), then no Rating shall be deemed to be
available for purposes of determining the Applicable Margin, (iii)
if the rating system of Moody's or S&P shall change, or if either
such rating agency shall cease to be in the business of rating
corporate debt obligations, or if no Rated Debt shall be
outstanding, then the Borrower and the Banks shall negotiate in
good faith to amend the references to specific ratings in the
provisions hereof for determining the Applicable Margin to reflect
such changed rating system, the non-availability of ratings from
such rating agency, or the repayment of all Rated Debt outstanding,
as applicable, and (iv) to determine the lower of the rating of
Rated Debt by Moody's and by S&P, the S&P ratings set forth in the
chart below shall be deemed to be equivalent to the Moody's rating
set forth opposite such S&P rating:
S&P Moody's
A A2
A- A3
BBB+ Baa1
BBB Baa2
BBB- Baa3
BB+ Ba1
BB Ba2
Ratio Calculation Date. See Sect.2.5(d).
Real Estate. All real property at any time owned or leased (as
lessee or sublessee) by the Borrower or any of its Subsidiaries.
Record. The grid attached to a Note, or the continuation of such
grid, or any other similar record, including computer records,
maintained by any Bank with respect to any Loan referred to in such
Note.
Reference Banks. FNBB and any other Bank which shall from time to
time be appointed to act as Reference Bank pursuant to the
provisions of Sect.19.8 hereof. Revolving Credit Loans. Revolving
credit loans made or to be made by the Banks to the
Borrower pursuant to Sect.2.
S&P. Standard & Poors Corporation.
Security Agreement. The Amended and Restated Security Agreement
and Chattel Mortgage dated as of the date hereof between the
Borrower and the Agent, in form and substance satisfactory to the
Banks and the Agent, and as the same may be amended, modified,
supplemented or restated and in effect from time to time.
Security Documents. The Security Agreement, the Agency Account
Agreements, the Stock Pledge Agreement, and the Collateral
Assignment of Acquisition Documents.
Stock Pledge Agreement. The Stock Pledge Agreement dated as of the
date hereof between the Pledgor and the Agent and in form and
substance satisfactory to the Banks and the Agent, and as the same
may be amended, modified, supplemented or restated and in effect
from time to time. Subsidiary. Any corporation, association,
trust, or other business entity of which the designated parent
shall at any time own directly or indirectly through a Subsidiary
or Subsidiaries at least a majority (by number of votes) of the
outstanding Voting Stock. Tax Sharing Agreement. That certain Tax
Sharing Agreement to be entered into among IC and each of its
Subsidiaries, in form and substance reasonably satisfactory to the
Agent, and as the same may be from time to time amended, modified,
supplemented or restated from time to time. Term Loan. The term
loan made or deemed to be made by the Banks to the Borrower on the
Term Out Date in an amount equal to the aggregate outstanding
principal amount of the Revolving Credit Loans as of the Term Out
Date pursuant to Sect.4.1.
Term Out Date. July 5, 1996.
Total Commitment. The sum of the Commitments of the Banks, as in
effect from time to time. The initial amount of the Total
Commitment is $25,000,000, as of the date hereof.
Type. As to any Revolving Credit Loan or all or any portion of the
Term Loan, its nature as a Base Rate Loan or a Eurodollar Rate
Loan.
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time
entitled, as such holders, to vote for the election of a majority
of the directors (or persons performing similar functions) of the
corporation, association, trust or other business entity involved,
whether or not the right so to vote exists by reason of the
happening of a contingency.
Waterloo. Waterloo Railway Company, a Delaware corporation.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this
Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification
to such law.
(d) A reference to any Person includes its permitted successors
and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting
principles applied on a consistent basis by the accounting entity
to which they refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the
Uniform Commercial Code as in effect in the Commonwealth of
Massachusetts, have the meanings assigned to them therein, with the
term "instrument" being that defined under Article 9 of the Uniform
Commercial Code.
(h) Reference to a particular "Sect." refers to that section of this
Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Credit Agreement as a whole and not to
any particular section or subdivision of this Credit Agreement.
THE REVOLVING CREDIT FACILITY.
Commitment to Lend.
Subject to the terms and conditions set forth in this Credit
Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time
to time between the Closing Date and the Term Out Date upon notice
by the Borrower to the Agent given in accordance with Sect.2.6, such
sums as are requested by the Borrower up to a maximum aggregate
principal amount outstanding (after giving effect to all amounts
requested) at any one time equal to such Bank's Commitment,
provided that the sum of the outstanding amount of the Revolving
Credit Loans (after giving effect to all amounts requested) shall
not at any time exceed the lesser of
(i) the Total Commitment and (ii) the Borrowing Base. The
Revolving Credit Loans shall be made pro rata in accordance with
each Bank's Commitment Percentage. Each request for a Revolving
Credit Loan hereunder shall constitute a representation and
warranty by the Borrower that the conditions set forth in Sect.11 and
Sect.12, in the case of the initial Revolving Credit Loans to be made
on the Closing Date, and Sect.12, in the case of all other Revolving
Credit Loans, have been satisfied on the date of such request.
Commitment Fee.
The Borrower agrees to pay to the Agent for the accounts of the
Banks in accordance with their respective Commitment Percentages a
commitment fee calculated at the rate of three eighths of one
percent (3/8%) per annum on the average daily amount during each
calendar quarter or portion thereof from the Closing Date to the
Term Out Date by which the Total Commitment exceeds the outstanding
amount of Revolving Credit Loans during such calendar quarter. The
commitment fee shall be payable quarterly in arrears on the first
day of each calendar quarter for the immediately preceding calendar
quarter commencing on the first such date following the date
hereof, with a final payment on the Term Out Date or any earlier
date on which the Commitments shall terminate.
Reduction of Total Commitment.
The Borrower shall have the right at any time and from time to time
upon five (5) Business Days prior written notice to the Agent to
reduce by $1,000,000 or an integral multiple of $500,000 in excess
thereof or terminate entirely the unborrowed portion of the Total
Commitment, whereupon the Commitments of the Banks shall be reduced
pro rata in accordance with their respective Commitment Percentages
of the amount specified in such notice or, as the case may be,
terminated. Promptly after receiving any notice of the Borrower
delivered pursuant to this Sect.2.3, the Agent will notify the Banks
of the substance thereof. Upon the effective date of any such
reduction or termination, the Borrower shall pay to the Agent for
the respective accounts of the Banks the full amount of any
commitment fee then accrued on the amount of the reduction. No
reduction of the Commitments may be reinstated.
The Notes.
The Revolving Credit Loans shall be evidenced by separate
promissory notes of the Borrower in substantially the form of
Exhibit B hereto (as any of the same may be from time to time
amended, modified, supplemented and in effect, each a "Note" and
collectively, the "Notes"), dated as of the Closing Date and
completed with appropriate insertions. One Note shall be payable
to the order of each Bank in a principal amount equal to such
Bank's Commitment or, if less, the outstanding amount of all
Revolving Credit Loans made by such Bank, plus interest accrued
thereon, as set forth below. The Borrower irrevocably authorizes
each Bank to make or cause to be made, at or about the time of the
Drawdown Date of any Revolving Credit Loan or at the time of
receipt of any payment of principal on such Bank's Note, an
appropriate notation on such Bank's Record reflecting the making of
such Revolving Credit Loan or (as the case may be) the receipt of
such payment. The outstanding amount of the Revolving Credit Loans
set forth on such Bank's Record shall be prima facie evidence of
the principal amount thereof owing and unpaid to such Bank, but the
failure to record, or any error in so recording, any such amount on
such Bank's Record shall not limit or otherwise affect the
obligations of the Borrower hereunder or under any Note to make
payments of principal of or interest on any Note when due.
Interest on Revolving Credit Loans.
Except as otherwise provided in Sect.5.9,
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last
day of the Interest Period with respect thereto at the annual
percentage rate of interest determined by the Agent to be the sum
of (i) the Applicable Margin (as hereinafter defined) from time to
time in effect plus (ii) the Base Rate.
(b) Each Eurodollar Rate Loan shall bear interest for the period
commencing with the
Drawdown Date thereof and ending on the last day of the Interest
Period with respect thereto at the annual percentage rate of
interest determined by the Agent to be the sum of (i) the
Applicable Margin from time to time in effect plus (ii) the
Eurodollar Rate determined for such Interest Period.
(c) The Borrower promises to pay interest on each Revolving Credit
Loan in arrears on each Interest Payment Date with respect thereto.
(d) From the Closing Date until the initial Adjustment Date (as
hereinafter defined), the
Applicable Margin with respect to Eurodollar Rate Loans shall mean
1.125% per annum, and the Applicable Margin with respect to Base
Rate Loans shall mean 0% per annum. Thereafter, the Applicable
Margin (the "Applicable Margin") shall be the percentage rate per
annum in effect from time to time in accordance with the following
provisions of this Sect.2.5. From time to time the Applicable Margin
shall be so determined by the Agent following the time of delivery
to the Agent of the required quarterly and annual certificates of
the principal financial or accounting officer of the Borrower
pursuant to Sect.8.4(c) hereof, based upon the Lease Value Ratio
determined as of the last day of the fiscal quarter or year (each,
a "Ratio Calculation Date") covered by such certificate of the
principal financial or accounting officer. The initial Ratio
Calculation Date shall be September 30, 1994. The Applicable
Margin as so determined shall mean (i) with respect to Eurodollar
Rate Loans, (A) if the Lease Value Ratio as so determined shall be
equal to or greater than 1.0:1.0, 0.875% per annum, and (B) if the
Lease Value Ratio as so determined shall be less than 1.0:1.0,
1.125% per annum, and (ii) with respect to Base Rate Loans, 0% per
annum; provided, however, that notwithstanding the foregoing
clauses (i) and (ii), if the Rating in effect on any Ratio
Calculation Date shall be (a) less than BBB- or Baa3 (as
applicable) or if no Rating is available, then the Applicable
Margin as so determined with respect to all Loans shall be equal to
the sum of the percentage as determined pursuant to the foregoing
clauses (i) or (ii), as the case may be, plus an additional 0.25%
per annum.
(e) The Applicable Margin so determined pursuant to the foregoing
Sect.2.5(d) shall become effective as of the date (the "Adjustment
Date") which is the day immediately following the applicable Ratio
Calculation Date and shall apply as of such Adjustment Date to all
outstanding Loans. The initial Adjustment Date shall be October 1,
1994. The Applicable Margin which becomes effective on each such
Adjustment Date shall remain in effect (subject to the other
provisions of this Sect.2.5 and except as otherwise provided in Sect.5.9
hereof) with respect to all Loans outstanding from time to time
until the next Adjustment Date. Notwithstanding the provisions of
the preceding two sentences, if at any time, the Lease Value Ratio
or the Rating as of any applicable Ratio Calculation Date was
actually a ratio or a Rating, as the case may be, other than the
ratio or Rating, as the case may be, on the basis of which there
was determined the rate of interest in effect hereunder on any
date, then such interest rate determination shall be adjusted
retroactively to the appropriate Adjustment Date on the basis of
such corrected determination of the actual Lease Value Ratio or
Rating, as the case may be, as of such Ratio Calculation Date, and
within three (3) Business Days after notice thereof in reasonable
detail requesting a retroactive adjustment of interest previously
paid given by the Borrower, the Agent or any Bank, the Borrower, as
the case may be, shall pay to the several Banks, or the Banks
severally, on a ratable basis, shall credit the Borrower with, as
the case may be, the amount of the appropriate retroactive
adjustment in respect of such adjusted interest rate for any
portion of any Interest Period as to which interest has been paid.
Requests for Revolving Credit Loans.
The Borrower shall give to the Agent written notice in the form of
Exhibit C hereto (or telephonic notice confirmed in a writing in
the form of Exhibit C hereto) of each Revolving Credit Loan
requested hereunder (a "Loan Request") (i) no later than 10:00 a.m.
(Boston time) on the proposed Drawdown Date of any Base Rate Loan
and (ii) no later than 11:00 a.m. (Boston time) three (3)
Eurodollar Business Days prior to the proposed Drawdown Date of any
Eurodollar Rate Loan. Each such notice shall specify (A) the
principal amount of the Revolving Credit Loan requested, (B) the
proposed Drawdown Date of such Revolving Credit Loan, (C) the
Interest Period for such Revolving Credit Loan and (D) the Type of
such Revolving Credit Loan. Promptly upon receipt of any such
notice, the Agent shall notify each of the Banks thereof. Each
such notice shall be irrevocable and binding on the Borrower and
shall obligate the Borrower to accept the Revolving Credit Loan
requested from the Banks on the proposed Drawdown Date. Each Loan
Request shall be in a minimum aggregate amount of $1,000,000 or an
integral multiple of $500,000 in excess thereof.
Conversion Options.
Conversion to Different Type of Revolving Credit Loan.
The Borrower may elect from time to time to convert any outstanding
Revolving Credit Loan to a Revolving Credit Loan of another Type,
provided that (i) with respect to any such conversion of a
Revolving Credit Loan to a Base Rate Loan, the Borrower may give
the Agent prior written notice of such election no later than 10:00
a.m. (Boston time) on the proposed date of conversion (if no such
notice is given, such Revolving Credit Loan shall be automatically
converted to a Base Rate Loan in accordance with the provisions of
Sect.2.7.2); (ii) with respect to any such conversion of a Eurodollar
Rate Loan into a Revolving Credit Loan of another Type, such
conversion shall only be made on the last day of the Interest
Period with respect thereto; (iii) with respect to any such
conversion of a Base Rate Loan to a Eurodollar Rate Loan, the
Borrower shall give the Agent prior written notice of such election
no later than 11:00 a.m. (Boston time) three (3) Eurodollar
Business Days prior to the proposed date of conversion; and (iv) no
Loan may be converted into a Eurodollar Rate Loan when any Default
or Event of Default has occurred and is continuing. On the date on
which such conversion is being made each Bank shall take such
action as is necessary to transfer its Commitment Percentage of
such Revolving Credit Loans to its Domestic Lending Office or its
Eurodollar Lending Office, as the case may be. All or any part of
outstanding Revolving Credit Loans of any Type may be converted as
provided herein, provided that partial conversions shall be in an
aggregate principal amount of $1,000,000 or a whole multiple of
$500,000 in excess thereof. Each Conversion Request relating to
the conversion of a Revolving Credit Loan to a Eurodollar Rate
Loan shall be irrevocable by the Borrower.
Continuation of Type of Revolving Credit Loan.
Any Revolving Credit Loans of any Type may be continued as such
upon the expiration of an Interest Period with respect thereto by
compliance by the Borrower with the notice provisions contained in
Sect.2.7.1; provided that no Eurodollar Rate Loan may be continued as
such when any Default or Event of Default has occurred and is
continuing, but shall be automatically converted to a Base Rate
Loan on the last day of the first Interest Period relating thereto
ending during the continuance of any Default or Event of Default of
which the officers of the Agent active upon the Borrower's account
have actual knowledge. In the event that the Borrower fails to
provide any such notice with respect to the continuation of any
Eurodollar Rate Loan as such, then such Eurodollar Rate Loanshall
be automatically converted to a Base Rate Loan on the last day of
the first Interest Period relating thereto. The Agent shall notify
the Banks promptly when any such automatic conversion contemplated
by this Sect.2.7 is scheduled to occur.
Eurodollar Rate Loans.
Any conversion to or from Eurodollar Rate Loans shall be in such
amounts and be made pursuant to such elections so that, after
giving effect thereto, the aggregate principal amount of all
Eurodollar Rate Loans having the same Interest Period shall not be
less than $1,000,000 or a whole multiple of $500,000 in excess
thereof.
Funds for Revolving Credit Loans.
Funding Procedures.
Not later than 1:00 p.m. (Boston time) on the proposed Drawdown
Date of any Revolving Credit Loans, each of the Banks will make
available to the Agent, at its Head Office, in immediately
available funds, the amount of such Bank's Commitment Percentage of
the amount of the requested Revolving Credit Loans. Upon receipt
from each Bank of such amount, and upon receipt of the documents
required by Sects.11 and 12 and the satisfaction of the other
conditions set forth therein, to the extent applicable, the Agent
will make available to the Borrower the aggregate amount of such
Revolving Credit Loans made available to the Agent by the Banks.
The failure or refusal of any Bank to make available to the Agent
at the aforesaid time and place on any Drawdown Date the amount of
its Commitment Percentage of the requested Revolving Credit Loans
shall not relieve any other Bank from its several obligation
hereunder to make available to the Agent the amount of such other
Bank's Commitment Percentage of any requested Revolving Credit
Loans.
Advances by Agent.
The Agent may, unless notified to the contrary by any Bank prior to
a Drawdown Date, assume that such Bank has made available to the
Agent on such Drawdown Date the amount of such Bank's Commitment
Percentage of the Revolving Credit Loans to be made on such
Drawdown Date, and the Agent may (but it shall not be required to),
in reliance upon such assumption, make available to the Borrower a
corresponding amount. If any Bank makes available to the Agent
such amount on a date after such Drawdown Date, such Bank shall
pay to the Agent on demand an amount equal to the product of (i)
the average computed for the period referred to in clause (iii)
below, of the weighted average interest rate paid by the Agent for
federal funds acquired by the Agent during each day included in
such period, times (ii) the amount of such Bank's Commitment
Percentage of such Revolving Credit Loans, times (iii) a fraction,
the numerator of which is the number of days that elapse from and
including such Drawdown Date to the date on which the amount of
such Bank's Commitment Percentage of such Revolving Credit Loans
shall become immediately available to the Agent, and the
denominator of which is 365. A statement of the Agent submitted to
such Bank with respect to any amounts owing under this paragraph
shall be prima facie evidence of the amount due and owing to the
Agent by such Bank. If the amount of such Bank's Commitment
Percentage of such Revolving Credit Loans is not made available to
the Agent by such Bank within three (3) Business Days following
such Drawdown Date, the Agent shall be entitled to recover such
amount from the Borrower on demand, with interest thereon (payable
to the Agent in lieu of and not in addition to any interest payable
by the Borrower to such Bank) at the rate per annum applicable to
the Revolving Credit Loans made on such Drawdown Date.
Change in Borrowing Base.
The Borrowing Base shall be determined monthly by the Agent by
reference to the Borrowing Base Report.
REPAYMENT OF THE REVOLVING CREDIT LOANS.
Mandatory Repayments of Revolving Credit Loans.
If at any time the sum of the outstanding amount of the Revolving
Credit Loans exceeds the lesser of (i) the Total Commitment and
(ii) the Borrowing Base, then the Borrower shall pay the amount of
such excess to the Agent for application to the Revolving Credit
Loans within five (5) Business Days after the earlier of (x)
receipt of notice of such excess from the Agent or (y) the
Borrower otherwise having knowledge of such excess.
Optional Repayments of Revolving Credit Loans.
The Borrower shall have the right, at its election, to repay the
outstanding amount of the Revolving Credit Loans, as a whole or in
part, at any time without penalty or premium, provided that the
full or partial prepayment of the outstanding amount of any
Eurodollar Rate Loans pursuant to this Sect.3.2 may be made only on
the last day of the Interest Period relating thereto. The Borrower
shall give the Agent, (a) no later than 10:00 a.m., Boston time, on
the day of any proposed repayment pursuant to this Sect.3.2 of Base
Rate Loans, and (b) no later than 11:00 a.m. (Boston time) three
(3) Eurodollar Business Days prior written notice of any proposed
repayment pursuant to this Sect.3.2 of Eurodollar Rate Loans, in each
case specifying the proposed date of payment of Revolving Credit
Loans and the principal amount to be paid. Each such partial
prepayment of the Loans shall be in an integral multiple of
$500,000, shall be accompanied by the payment of accrued interest
on the principal repaid to the date of payment and shall be applied
first to the principal of Base Rate Loans and then to the principal
of Eurodollar Rate Loans. Each partial prepayment shall be
allocated among the Banks, in proportion, as nearly as
practicable, to the respective unpaid principal amount of each
Bank's Note, with adjustments to the extent practicable to equalize
any prior repayments not exactly in proportion.
THE TERM LOAN.
Conversion to Term Loan on Term Out Date.
The aggregate principal amount of Revolving Credit Loans
outstanding as of the Term Out Date shall automatically on such
Term Out Date be converted to a term loan made by the several
Banks, ratably in accordance with their respective Commitment
Percentages, in favor of the Borrower in an amount equal to such
aggregate principal amount of Revolving Credit Loans outstanding.
The Notes.
The Term Loan shall be evidenced by the Notes payable to the order
of each Bank and representing the obligation of the Borrower to pay
to such Bank its Commitment Percentage of the initial principal
amount of the Term Loan or, if less, the outstanding amount of such
Bank's Commitment Percentage of the Term Loan, plus interest
accrued thereon, as set forth below. The Borrower irrevocably
authorizes each Bank to make or cause to be made a notation on such
Bank's Record reflecting the original principal amount of such
Bank's Commitment Percentage of the Term Loan and, at or about the
time of such Bank's receipt of any principal payment on such Bank's
Note, an appropriate notation on such Bank's Record reflecting such
payment. The aggregate unpaid amount set forth on such Bank's
Record shall be prima facie evidence of the principal amount
thereof owing and unpaid to such Bank, but the failure to record,
or any error in so recording, any such amount on such Bank's Record
shall not affect the obligations of the Borrower hereunder or under
any Note to make payments of principal of and interest on any Note
when due.
Mandatory Payments of Principal of Term Loan.
The Borrower promises to pay to the Agent for the account of the
Banks the principal amount of the Term Loan in twenty (20) consecutive
quarterly payments each in an amount equal to one twentieth (1/20) of the
principal amount of the Term Loan as of the Term Out Date, such
installments to be due and payable on the last day of each calendar
quarter of each calendar year, commencing on September 30, 1996,
with a final payment on the Maturity Date in an amount equal to the
unpaid balance of the Term Loan.
Optional Prepayment of Term Loan.
The Borrower shall have the right at any time to prepay the Notes
on or before the Maturity Date, as a whole, or in part, upon not
less than five (5) Business Days prior written notice to the Agent,
without premium or penalty, provided that (i) each partial
prepayment shall be in the principal amount of $500,000 or an
integral multiple thereof, (ii) no portion of the Term Loan bearing
interest at the Eurodollar Rate may be prepaid pursuant to this
Sect.4.4 except on the last day of the Interest Period relating
thereto, and (iii) each partial prepayment shall be allocated among
the Banks, in proportion, as nearly as practicable, to the
respective outstanding amount of each Bank's Note, with adjustments
to the extent practicable to equalize any prior prepayments not
exactly in proportion. Any prepayment of principal of the Term
Loan shall include all interest accrued to the date of prepayment
and shall be applied against the scheduled installments of
principal due on the Term Loan in the inverse order of maturity.
No amount repaid with respect to the Term Loan may be reborrowed.
Interest on Term Loan.
Interest Rates.
Except as otherwise provided in Sect.5.9, the Term Loan shall bear
interest during each Interest Period relating to all or any portion
of the Term Loan at the following rates:
(a) To the extent that all or any portion of the Term Loan bears
interest during such Interest Period at a rate determined by reference
to the Base Rate, the Term Loan or such portion shall bear interest
during such Interest Period at the annual percentage rate of interest
determined by the Agent to be the sum of (i) the Base Rate, plus
(ii) the Applicable Margin from time to time otherwise in effect as
determined in accordance with Sect.2.5 (reflecting the Rating), plus
(iii) an additional 0.25% per annum.
(b) To the extent that all or any portion of the Term Loan bears
interest during such Interest Period at a rate determined by
reference to the Eurodollar Rate, the Term Loan or such portion
shall bear interest during such Interest Period at the annual
percentage rate of interest determined by the Agent to be the sum
of (i) the Eurodollar Rate determined for each Interest Period,
plus (ii) the Applicable Margin from time to time otherwise in
effect as determined in accordance with Sect.2.5 (reflecting the
Rating and the Lease Value Ratio), plus (iii) an additional 0.25%
per annum. The Borrower promises to pay interest on the Term Loan or any
portion thereof outstanding during each Interest Period in
arrears on each Interest Payment Date applicable to such
Interest Period.
Notification by Borrower.
From and after the time the Term Loan has been made, the provisions
of Sect.2.7 shall apply mutatis mutandis with respect to all or any
portion of the Term Loan so that the Borrower may have the same
interest rate options with respect to all or any portion of the
Term Loan as it would be entitled to with respect to the Revolving
Credit Loans.
Amounts, etc.
Any portion of the Term Loan bearing interest at a rate determined
by reference to the Eurodollar Rate relating to any Interest Period
shall be in the amount of $1,000,000 or an integral multiple of $500,000
in excess thereof. No Interest Period relating to the Term Loan or any
portion thereof bearing interest at a rate determined by reference
to the Eurodollar Rate (or otherwise extending past the Term Out
Date with respect to any Eurodollar Rate Loans) shall extend beyond
the date on which a regularly scheduled installment payment of the
principal of the Term Loan is to be made unless a portion of the
Term Loan at least equal to such installment payment bears interest
at a rate determined by reference to the Base Rate or has an
Interest Period ending on such date.
CERTAIN GENERAL PROVISIONS.
Funds for Payments.
Payments to Agent.
All payments of principal, interest, commitment fees and any other
amounts due hereunder or under any of the other Loan Documents
shall be made to the Agent, for the respective accounts of the
Banks and the Agent, at the Agent's Head Office or at such other
location in the Boston, Massachusetts, area that the Agent may from
time to time designate, in each case in immediately available
funds.
No Offset, etc.
Subject to compliance by the Banks with the requirements of Sect.19.8 hereof,
all payments by the Borrower hereunder and under any of the other
Loan Documents shall be made without setoff or counterclaim and
free and clear of and without deduction for any taxes, levies,
imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or
hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless the
Borrower is compelled by law to make such deduction or withholding.
If any such obligation is imposed upon the Borrower with respect to
any amount payable by it hereunder or under any of the other Loan
Documents, the Borrower will pay to the Agent, for the account of
the Banks or (as the case may be) the Agent, on the date on which
such amount is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars as shall be necessary
to enable the Banks or the Agent to receive the same net amount
which the Banks or the Agent would have received on such due date
had no such obligation been imposed upon the Borrower. The
Borrower will deliver promptly to the Agent certificates or other
valid vouchers for all taxes or other charges deducted from or paid
with respect to payments made by the Borrower hereunder or under
such other Loan Document.
Computations.
All computations of interest in respect of Base Rate Loans and of
commitment or other fees shall, unless otherwise expressly provided
herein, be based on a 365/366-day year and paid for the actual
number of days elapsed.
All computations of interest in respect of Eurodollar Rate Loans
shall be based on a 360-day year and paid for the actual number of
days elapsed. Except as otherwise provided in the definition of
the term "Interest Period" with respect to Eurodollar Rate Loans,
whenever a payment hereunder or under any of the other Loan
Documents becomes due on a day that is not a Business Day, the due
date for such payment shall be extended to the next succeeding
Business Day, and interest shall accrue on the principal of any
Loans during such extension. The outstanding amount of the Loans
as reflected on the Records from time to time shall be considered
correct and binding on the Borrower unless within five (5) Business
Days after receipt of any notice by the Agent or any of the Banks
of such outstanding amount, the Agent or such Bank shall notify the
Borrower to the contrary.
Inability to Determine Eurodollar Rate.
In the event, prior to the commencement of any Interest Period
relating to any Eurodollar Rate Loan, the Agent shall determine or
be notified by the Majority Banks that adequate and reasonable
methods do not exist for ascertaining the Eurodollar Rate that
would otherwise determine the rate of interest to be applicable to
any Eurodollar Rate Loan during any Interest Period, the Agent
shall forthwith give notice of such determination (which shall be
conclusive and binding on the Borrower and the Banks) to the
Borrower and the Banks. In such event (i) any Loan Request or
Conversion Request with respect to Eurodollar Rate Loans shall be
automatically withdrawn and shall be deemed a request for Base Rate
Loans, (ii) each Eurodollar Rate Loan will automatically, on the
last day of the then current Interest Period thereof, become a Base
Rate Loan, and (iii) the obligations of the Banks to make
Eurodollar Rate Loans shall be suspended until the Agent or the
Majority Banks determine that the circumstances giving rise to such
suspension no longer exist, whereupon the Agent or, as the case may
be, the Agent upon the instruction of the Majority Banks, shall so
notify the Borrower and the Banks.
Illegality.
Notwithstanding any other provisions herein, if any change in any
present law or any future applicable law, regulation, treaty or
directive or in the interpretation or application thereof shall
make it unlawful for any Bank to make or maintain Eurodollar Rate
Loans, such Bank shall forthwith give notice of such circumstances
to the Borrower and the other Banks and thereupon (i) the
commitment of such Bank to make Eurodollar Rate Loans or convert
Loans of another Type to Eurodollar Rate Loans shall forthwith be
suspended and (ii) such Bank's Eurodollar Rate Loans then
outstanding, if any, shall be converted automatically to Base Rate
Loans on the last day of each Interest Period applicable to such
Eurodollar Rate Loans or within such earlier period as may be
required by law. The Borrower hereby agrees promptly to pay the
Agent for the account of such Bank, upon demand by such Bank, any
additional amounts necessary to compensate such Bank for any costs
incurred by such Bank in making any conversion in accordance with
this Sect.5.4, including any interest or fees payable by such Bank to
lenders of funds obtained by it in order to make or maintain its
Eurodollar Loans hereunder.
Additional Costs, etc.
If any change in any present law or any future applicable law,
which expression, as used herein, includes statutes, rules and
regulations thereunder and interpretations thereof by any competent
court or by any governmental or other regulatory body or official
charged with the administration or the interpretation thereof and
requests, directives, instructions and notices at any time or from
time to time hereafter made upon or otherwise issued to any Bank or
the Agent by any central bank or other fiscal, monetary or other
authority (whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to
this Credit Agreement, the other Loan Documents, such Bank's
Commitment or the Loans (other than taxes based upon or measured by
the income or profits of such Bank or the Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the
principal of or the interest on any Loans or any other amounts
payable to any Bank or the Agent under this Credit Agreement or the
other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit
Agreement) any special deposit, reserve, assessment, liquidity,
capital adequacy or other similar requirements (whether or not
having the force of law) against assets held by, or deposits in or
for the account of, or loans by, or commitments of an office of any
Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, the Loans, such Bank's Commitment, or any class of loans
or commitments of which any of the Loans or such Bank's Commitment
forms a part, and the result of any of the foregoing is:
(i) to increase the cost to any Bank of making, funding, issuing,
renewing, extending or maintaining any of the Loans or such
Bank's Commitment, or
(ii) to reduce the amount of principal, interest or other amount
payable to such Bank or the Agent hereunder on account of such
Bank's Commitment or any of the Loans, or
(iii) to require such Bank or the Agent to make any payment or to
forego any interest or other sum payable hereunder, the amount of
which payment or foregone interest or other sum is calculated by
reference to the gross amount of any sum receivable or deemed
received by such Bank or the Agent from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by
such Bank or (as the case may be) the Agent at any time and from
time to time and as often as the occasion therefor may arise, pay
to such Bank or the Agent such additional amounts as will be
sufficient to compensate such Bank or the Agent for such additional
cost, reduction, payment or foregone interest or other sum.
Capital Adequacy.
If after the date hereof any Bank or the Agent determines that (i)
the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not
having the force of law) regarding capital
requirements for banks or bank holding companies or any change in
the interpretation or application thereof by a court or
governmental authority with appropriate jurisdiction, or (ii)
compliance by such Bank or the Agent or any corporation controlling
such Bank or the Agent with any law, governmental rule, regulation,
policy, guideline or directive (whether or not having the force of
law) of any such entity regarding capital adequacy, has the effect
of reducing the return on such Bank's or the Agent's commitment
with respect to any Loans to a level below that which such Bank or
the Agent could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's or the Agent's
then existing policies with respect to capital adequacy and
assuming full utilization of such entity's capital) by any amount
reasonably deemed by such Bank or (as the case may be) the Agent
to be material, then such Bank or the Agent may notify the Borrower
of such fact. To the extent that the amount of such reduction in
the return on capital is not reflected in the Base Rate, the
Borrower and such Bank shall thereafter attempt to negotiate in
good faith, within thirty (30) days of the day on which the
Borrower receives such notice, an adjustment payable hereunder that
will adequately compensate such Bank in light of these
circumstances. If the Borrower and such Bank are unable to agree
to such adjustment within thirty (30) days of the date on which the
Borrower receives such notice, then commencing on the date of such
notice (but not earlier than the effective date of any such
increased capital requirement), the fees payable hereunder shall
increase by an amount that will, in such Bank's reasonable
determination, provide adequate compensation. Each Bank shall
allocate such cost increases among its customers in good faith and
on an equitable basis.
Certificate.
A certificate signed by an officer of any Bank or the Agent,
setting forth any additional amount required to be paid by the
Borrower to such Bank or to the Agent for the accounts of the Banks
under Sects.5.5 or 5.6 hereof and the basis therefor, shall be
delivered by such Bank or the Agent to the Borrower in connection
with each demand made at any time by such Bank or the Agent upon
the Borrower under any of such sections, and each such certificate
shall constitute conclusive evidence, in the absence of manifest
error, of the additional amount required to be paid by the Borrower
to such Bank or the Agent. Each such certificate shall set forth
in reasonable detail any reasonable averaging or attribution
methods used by such Bank in connection with the calculation of
such additional amount. A claim by any Bank or the Agent for all
or any part of any additional amount required to be paid by the
Borrower under Sects.5.5 or 5.6 hereof may be made at any time and
from time to time as often as the occasion therefor may arise.
Indemnity.
The Borrower agrees to indemnify each Bank and to hold each Bank
harmless from and against any loss, cost or expense (including loss
of anticipated profits) that such Bank may sustain or incur as a
consequence of (i) default by the Borrower in payment of the
principal amount of or any interest on any Eurodollar Rate Loans as
and when due and payable, including any such loss or expense
arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Eurodollar Rate
Loans, (ii) default by the Borrower in making a borrowing after the
Borrower has given (or is deemed to have given) a Loan Request or
a Conversion Request relating thereto in accordance with Sect.2.6,
Sect.2.7 or Sect.4.5 or (iii) the making of any payment of a Eurodollar
Rate Loan or the making of any conversion of any such Loan to a
Base Rate Loan on a day that is not the last day of the applicable
Interest Period with respect thereto, including interest or fees
payable by such Bank to lenders of funds obtained by it in order to
maintain any such Loans.
5.9. Interest on Overdue Amounts.
Overdue principal of the Loans and (to the extent permitted by
applicable law) interest on the Loans and all other overdue amounts
that are payable hereunder shall bear interest at a rate per annum
equal to the greater of (i) two percent (2%) above the Base Rate,
or (ii) two percent (2%) above the rate of interest otherwise
applicable thereto; if any such amounts shall be overdue, such
interest shall compound monthly and be payable on demand until such
amounts shall be paid in full (in each case, after as well as
before judgment, if applicable).
SECURITY.
Security of Borrower.
The Obligations shall be secured by a perfected first priority
security interest (subject only to Permitted Liens entitled to
priority under applicable law) in all of the assets of the Borrower
(excluding the Borrower's rights under and in respect of the Option
Agreements and excluding the Borrower's rights as lessee under a
certain real property lease with respect to the Borrower's
principal office located in Las Vegas, Nevada), whether now owned
or hereafter acquired (including, without limitation, all rolling
stock, and all of the Borrower's rights under the Approved Leases
and all other leases of property, and under the Acquisition
Documents), pursuant to the terms of the Security Documents to
which the Borrower is a party.
Other Security.
The Obligations shall also be secured by a pledge of all of the
capital stock of the Borrower by the Pledgor pursuant to the Stock
Pledge Agreement.
REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Banks and the Agent as
follows:
Corporate Authority.
Incorporation; Good Standing.
Each of the Borrower and its Subsidiaries (i) is a corporation duly
organized, validly existing and in good standing under the laws of
its state of incorporation, (ii) has all requisite corporate power
to own its property and conduct its business as now conducted and
as presently contemplated, and (iii) is in good standing as a
foreign corporation and is duly authorized to do business in each
jurisdiction where such qualification is necessary except where a
failure to be so qualified would not have a materially adverse
effect on the business, assets or financial condition of the
Borrower and its Subsidiaries taken as a whole.
Authorization.
The execution, delivery and performance of this Credit Agreement
and the other Loan Documents to which the Borrower, any of its
Subsidiaries or the Pledgor is or is to become a party and the
transactions contemplated hereby and thereby (i) are within the
corporate authority of such Person, (ii) have been duly authorized
by all necessary corporate proceedings, (iii) do not conflict with
or result in any breach or contravention of any provision of law,
statute, rule or regulation to which the Borrower, any of its
Subsidiaries or the Pledgor is subject or any judgment, order,
writ, injunction, license or permit applicable to the Borrower, any
of its Subsidiaries or the Pledgor and (iv) except as set forth on
Schedule 7.1, do not conflict with any provision of the corporate
charter or bylaws of, or any agreement or other instrument binding
upon, the Borrower, any of its Subsidiaries or the Pledgor.
Enforceability.
The execution and delivery of this Credit Agreement and the other
Loan Documents to which the Borrower, any of its Subsidiaries or
the Pledgor is or is to become a party will result in valid and
legally binding obligations of such Person enforceable against it
in accordance with the respective terms and provisions hereof and
thereof, except as enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and except
to the extent that availability of the remedy of specific
performance or injunctive relief is subject to the discretion of
the court before which any proceeding therefor may be brought.
Governmental Approvals.
The execution, delivery and performance by any of the Borrower, its
Subsidiaries and the Pledgor of this Credit Agreement and the other
Loan Documents to which any of the Borrower, its Subsidiaries or
the Pledgor is or is to become a party and the transactions
contemplated hereby and thereby do not require the approval or
consent of, or filing with, any governmental agency or authority
other than those already obtained.
Title to Properties; Leases.
Except for Permitted Liens and except for Liens the Indebtedness in
respect of which is not material to the business, assets or
financial condition of the Borrower and its Subsidiaries taken as
a whole, the Borrower owns all of the assets reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries as
at December 31, 1993 or acquired since that date (except property
and assets sold or otherwise disposed of in the ordinary course of
business since that date), subject to no rights of others,
including any mortgages, leases, conditional sales agreements,
title retention agreements, or other Liens.
Projections.
The projections of the annual operating budget of the Borrower and
its Subsidiaries on a consolidated basis, with projected balance
sheets, income statements, and cash flow statements for certain
future fiscal years, prepared on a projected quarterly basis,
copies of which have been delivered to each Bank prior to the date
hereof, represent good faith estimations as of the date thereof.
As of the date hereof, to the knowledge of the Borrower or any of
its Subsidiaries, no facts exist that (individually or in the
aggregate) would result in any material change in any of such
projections. The projections are based upon good faith estimates
and assumptions and reflect the good faith estimates of the
Borrower of the results of operations and other information
projected therein.
No Material Changes, etc.
Since December 3, 1993, there has occurred no materially adverse
change in the financial condition or business of the Borrower and
its Subsidiaries, taken as a whole, other than changes in the
ordinary course of business that have not had any materially
adverse effect on the business or financial condition of the
Borrower and its Subsidiaries, taken as a whole. Since December 3,
1993, the Borrower has not made any Distribution with the exception
of Distributions made after the date hereof in accordance with the
provisions of Sect.9.4 hereof.
Franchises, Patents, Copyrights, etc.
Each of the Borrower and its Subsidiaries possesses all material
franchises, patents, copyrights, trademarks, trade names, licenses
and permits, and rights in respect of the foregoing, adequate for
the conduct of its business substantially as now conducted without
known conflict with any rights of others except for conflicts which
do not have a materially adverse effect on the business, assets or
financial condition of the Borrower and its Subsidiaries, taken as
a whole.
Litigation.
There is no restraining order, injunction, claim, action,
suit, proceeding or investigation of any kind pending or, to the
best knowledge of the Borrower, threatened against or, as of the
Closing Date, affecting, the Borrower or any of its Subsidiaries
before any court, tribunal, governmental or regulatory authority,
commission, administrative agency or board in which there is a
significant possibility of an adverse decision which would, either
by itself or taken together with other such matters, materially
adversely affect the business, assets or financial condition of the
Borrower and its Subsidiaries, taken as a whole, or which questions
the validity or enforceability of this Credit Agreement or any of
the other Loan Documents.
No Materially Adverse Contracts, etc.
Neither the Borrower nor any of its Subsidiaries is subject to any
charter, corporate or other legal restriction, or any judgment,
decree, order, rule or regulation which in the judgment of the
Borrower's officers has or is expected in the future to have a
materially adverse effect on the business, assets or financial
condition of the Borrower and its Subsidiaries, taken as a whole,
or on the Borrower's ability to perform its obligations under the
Loan Documents. Neither the Borrower nor any of its Subsidiaries
is a party to any contract or agreement which in the judgment of
the Borrower's officers has or is expected to have a materially
adverse effect on the Borrower's ability to perform its obligations
under the Loan Documents.
Compliance With Other Instruments, Laws, etc.
Neither the Borrower nor any of its Subsidiaries is in violation of
any provision of its charter documents, bylaws, or any agreement or
instrument to which it may be subject or by which it or any of its
properties may be bound or any decree, order, judgment, statute, license,
rule or regulation, in any of the foregoing cases in a manner that could
result in the imposition of substantial penalties or materially and
adversely affect the financial condition, properties or business of
the Borrower and its Subsidiaries, taken as a whole.
Tax Status.
As of the date hereof, each of the Borrower and its Subsidiaries
has (a) made or filed all material federal and state tax returns,
reports and declarations required by any jurisdiction to which it
is subject, (b) paid all taxes and other governmental assessments
and charges, as shown or determined to be due on such tax returns,
reports and declarations, except for taxes the amount,
applicability or validity of which is currently being contested by
it in good faith by appropriate proceedings and with respect to
which it has set aside on its books reserves reasonably deemed by
it to be adequate therefor, and (c) set aside on its books
provisions reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or
declarations apply. As of the date hereof, there are no unpaid
taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction.
No Event of Default.
No Default or Event of Default exists at the delivery of this
Credit Agreement.
Holding Company and Investment Company Acts.
Neither the Borrower nor any of its Subsidiaries is a "holding
company", or a "subsidiary company" of a "holding company", or an
affiliate" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal
underwriter" of an "investment company", as such terms are defined
in the Investment Company Act of 1940.
Absence of Financing Statements, etc.
Except with respect to Permitted Liens, (a) there is no financing
statement, security agreement, chattel mortgage, real estate
mortgage or other document filed or recorded with any filing
records, registry, or other public office, that names the Borrower
as a debtor and that purports to cover, affect or give notice of
any present or possible future lien on, or security interest in,
any assets or property of the Borrower or any of its Subsidiaries
or rights thereunder, and (b) to the knowledge of the Borrower,
there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded
with any filing records, registry, or other public office, that
purports to cover, affect or give notice of any present or possible
future lien on, or security interest in, any assets or property of
the Borrower or any of its Subsidiaries or rights thereunder.
[Intentionally Omitted].
Certain Transactions.
Except as set forth on Schedule 7.15 hereto, the Option Agreements,
the Approved Leases, the Tax Sharing Agreement and except for arm's
length transactions pursuant to which the Borrower or any of its
Subsidiaries makes payments in the ordinary course of business upon
terms no less favorable than the Borrower or
such Subsidiary could obtain from third parties, none of the
Borrower, its Subsidiaries or any officers, directors, or employees
of the Borrower or any of its Subsidiaries is presently a party to
any transaction or arrangement with the Borrower or any of its
Subsidiaries (or any of its Affiliates) (other than for services as
employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any
of the Borrower, its Subsidiaries, any Affiliates of the Borrower
or any such officer, director or employee or, to the knowledge of
the Borrower, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or
partner.
Employee Benefit Plans.
In General.
Each Employee Benefit Plan has been maintained and operated in
compliance in all material respects with the provisions of ERISA
and, to the extent applicable, the Code, including but not limited
to the provisions thereunder respecting prohibited transactions.
The Borrower has heretofore delivered to the Agent the most
recently completed annual report, Form 5500, with all required
attachments, and actuarial statement required to be submitted under
Sect.103(d) of ERISA, with respect to each Guaranteed Pension Plan.
[Intentionally Omitted]
Guaranteed Pension Plans.
The Borrower and its ERISA Affiliates have fulfilled their
obligations (if any) under the minimum funding standards of ERISA
and the Code with respect to each Guaranteed Pension Plan, and
neither the Borrower nor any ERISA Affiliate has failed to make any
contribution to any Guaranteed Pension Plan which has resulted or
could reasonably be expected to result in the imposition of a Lien
under Sect.302(f) of ERISA. No waiver of an accumulated funding
deficiency or extension of amortization periods has been received
with respect to any Guaranteed Pension Plan. No liability to the
PBGC (other than required insurance premiums, all of which have
been paid) has been incurred by the Borrower or any ERISA Affiliate
with respect to any Guaranteed Pension Plan, and there has not been
any ERISA Reportable Event (other than an Event as to which the
requirement of 30 days notice has been waived), or any other event
or condition which presents a material risk of termination of any
Guaranteed Pension Plan by the PBGC. Based on the latest
valuation of each Guaranteed Pension Plan (which in each case
occurred within twelve months of the date of this representation)
and on the actuarial methods and assumptions employed for that
valuation, the aggregate benefit liabilities of all such Guaranteed
Pension Plans within the meaning of Sect.4001 of ERISA did not exceed
the aggregate value of the assets of all such Plans by more than
$5,000,000, all of which excess (if any) relates to Guaranteed
Pension Plans maintained by ICR and for which ICR is primarily
liable; disregarding for this purpose the benefit liabilities and
assets of any Guaranteed Pension Plan with assets in excess of
benefit liabilities.
Multiemployer Plans.
Neither the Borrower nor any ERISA Affiliate has incurred any
material liability (including secondary liability) to any
Multiemployer Plan as a result of a complete or partial withdrawal
from such Multiemployer Plan under Sect.4201 of ERISA or as a result
of a sale of assets described in Sect.4204 of ERISA. Neither the
Borrower nor any ERISA Affiliate has been notified that any
Multiemployer Plan is in reorganization or insolvent under and
within the meaning of Sect.4241 or Sect.4245 of ERISA or that any
Multiemployer Plan intends to terminate or has been terminated
under Sect.4041A of ERISA.
Use of Proceeds; Regulations U and X.
The proceeds of the Loans shall be used for refinancing the Bridge
Loan, to finance the purchase of additional rail cars by the
Borrower and for general working capital purposes. No portion of
any Loan is to be used for the purpose of purchasing or carrying
any "margin security" or "margin stock" as such terms are used in
Regulations U and X of the Board of Governors of the Federal
Reserve System, 12 C.F.R. Parts 221 and 224.
Environmental Compliance.
The Borrower has taken all appropriate steps to investigate the
past and present condition and usage of the Real Estate and the
operations conducted thereon and, based upon such diligent
investigation, has determined that:
(a) except as set forth on Schedule 7.18 attached hereto, none of
the Borrower, its Subsidiaries or any operator of the Real Estate
in its capacity as such or any operations thereon is in violation,
or alleged violation, of any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters, including
without limitation, those arising under the Resource Conservation
and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended
("CERCLA"), the Superfund Amendments and Reauthorization Act of
1986 ("SARA"), the Federal Clean Water Act, the Federal Clean Air
Act, the Toxic Substances Control Act, the Hazardous Materials
Transportation Act ("HAZMAT"), or any state or local statute,
regulation, ordinance, order or decree relating to health, safety
or the environment (hereinafter "Environmental Laws"), which
violation would have a material adverse effect on the environment
or the business, assets or financial condition of the Borrower and
its Subsidiaries, taken as a whole;
(b) except as set forth on Schedule 7.18 attached hereto, neither
the Borrower nor any of its Subsidiaries has received notice from
any third party including, without limitation: any federal, state
or local governmental authority, (i) that any one of them has been
identified by the United States Environmental Protection Agency
("EPA) as a potentially responsible party under CERCLA with respect
to a site listed on the National Priorities List, 40 C.F.R. Part
300 Appendix B; (ii) that any hazardous waste, as defined by 42
U.S.C. Sect.6903(5), any hazardous substances as defined by 42 U.S.C.
Sect.9601(14), any pollutant or contaminant as defined by 42 U.S.C.
Sect.9601(33) and any toxic substances, oil or hazardous materials or
other chemicals or substances regulated by any Environmental Laws
("Hazardous Substances") which any one of them has generated,
transported or disposed of has been found at any site at which a
federal, state or local agency or other third party has conducted
or has ordered that the Borrower or any of its Subsidiaries conduct
a remedial investigation, removal or other response action pursuant
to any Environmental Law; or (iii) that it is or shall be a named
party to any claim, action, cause of action, complaint, or legal or
administrative proceeding (in each case, contingent or otherwise)
arising out of any third party's incurrence of costs, expenses,
losses or damages of any kind whatsoever in connection with the
release of Hazardous Substances which, in the case of each of (i)
or (ii), the effect of which, or in the case of (iii) above, if
adversely determined to the Borrower, would have a material adverse
effect on the Borrower and its Subsidiaries, taken as a whole;
(c) except as set forth on Schedule 7.18 attached hereto: (i) no
portion of the Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws; and no underground
tank or other underground storage receptacle for Hazardous
Substances is located on any portion of the Real Estate; (ii) in
the course of any activities conducted by the Borrower, its
Subsidiaries or operators of its properties, no Hazardous
Substances have been generated or are being used on the Real Estate
except in accordance with applicable Environmental Laws or where
non-compliance with applicable Environmental Laws would not have a
material adverse effect on the Borrower and its Subsidiaries, taken
as a whole; (iii) there have been no releases (i.e. any past
or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, disposing or
dumping) or threatened releases of Hazardous Substances on, upon,
into or from the properties of the Borrower or its Subsidiaries,
which releases would have a material adverse effect on the
financial condition of the Borrower and its Subsidiaries, taken as
a whole; and (iv) in addition, any Hazardous Substances that have
been generated on the properties of the Borrower or any of its
Subsidiaries have been transported or disposed of in accordance
with applicable laws and regulations by transporters and to
disposal facilities, which, to the best knowledge of the Borrower
(without independent inquiry), are operating in compliance in all
material respects with applicable permits and laws;
(d) none of the Real Estate is or shall be subject to any
applicable environmental cleanup responsibility law or
environmental restrictive transfer law or regulation by virtue of
the transactions set forth herein and contemplated hereby; and
(e) each of the Borrower and its Subsidiaries is in compliance
with HAZMAT and the regulations thereunder (49 C.F.R. Parts 100
through 199).
Subsidiaries, etc.
All of the Subsidiaries (if any) of the Borrower are listed on
Schedule 7.19 hereto. Except as set forth on Schedule 7.19 hereto,
neither the Borrower nor any Subsidiary of the Borrower is engaged
in any joint venture or partnership with any other person.
Bank Accounts.
Schedule 7.20 sets forth the account numbers and location of all
bank accounts of the Borrower or any of its Subsidiaries as of the
date hereof.
7.21. Fiscal Year.
Each of the Borrower and its Subsidiaries has a fiscal year which
is the twelve months ending on December 31 of each calendar year.
AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note
is outstanding or any Bank has any obligation to make any Loans:
Punctual Payment.
The Borrower will duly and punctually pay or cause to be paid the
principal and intereston the Loans and the commitment fees provided
for in this Credit Agreement, all in accordance with the terms of
this Credit Agreement and the Notes.
Maintenance of Office.
The Borrower will maintain its chief executive office in Las Vegas,
Nevada, or at such other place in the United States of America as
the Borrower shall designate upon written notice to the Agent,
where notices, presentations and demands to or upon the Borrower in
respect of the Loan Documents may be given or made.
Records and Accounts.
The Borrower will (i) keep, and cause each of its Subsidiaries to
keep, true and accurate
records and books of account in which full, true and correct
entries will be made in accordance with good accounting practices
and (ii) maintain adequate accounts and reserves for all taxes
(including income taxes), depreciation, depletion, obsolescence and
amortization of its properties and the properties of its
Subsidiaries, contingencies, and other reserves.
Financial Statements, Certificates and Information.
The Borrower will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries as
at the end of such year, and the related consolidated statement of
income and consolidated statement of cash flow for such year, each
setting forth in comparative form the figures for the previous
fiscal year and all such consolidated statements to be in
reasonable detail, prepared in accordance with generally accepted
accounting principles, and certified without qualification by the
Borrower's independent certified public accountants satisfactory to
the Agent, together with a written statement from such accountants
to the effect that they have read a copy of this Credit Agreement,
and that, in making the examination necessary to said
certification, they have obtained no knowledge of any Default or
Event of Default, or, if such accountants shall have obtained
knowledge of any then existing Default or Event of Default they
shall disclose in such statement any such Default or Event of
Default; provided that such accountants shall not be liable to the
Banks for failure to obtain knowledge of any Default or Event of
Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the fiscal quarters
of the Borrower, copies of the unaudited consolidated balance sheet
of the Borrower and its Subsidiaries as at the end of such quarter,
and the related consolidated statement of income and consolidated
statement of cash flow for the portion of the Borrower's fiscal
year then elapsed, all in reasonable detail and prepared in all
material respects in accordance with generally accepted accounting
principles, together with a certification on behalf of the Borrower
by the principal financial or accounting officer of the Borrower
that the information contained in such financial statements fairly
presents the financial position of the Borrower and its
Subsidiaries on the date thereof (subject to the lack of footnotes
and year-end adjustments);
(c) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified
on behalf of the Borrower by the principal financial or accounting
officer of the Borrower in substantially the form of Exhibit D
hereto and setting forth in reasonable detail computations
evidencing compliance with the covenants contained in Sect.10 and (if
applicable) reconciliations to reflect changes in generally
accepted accounting principles since December 31, 1993;
(d) contemporaneously with the filing or mailing thereof, copies
of all material of a financial nature filed by the Borrower with
the Securities and Exchange Commission or the Interstate Commerce
Commission or sent to the stockholders of the Borrower;
(e) within fifteen (15) days after the end of each calendar month,
a Borrowing Base Report setting forth the Borrowing Base as at the
end of such calendar month;
(f) annually, no later than thirty (30) days after the beginning
of each fiscal year of the Borrower, projections of the
consolidated annual operating budget of the Borrower and its
Subsidiaries prepared on a projected quarterly basis (including the
related projected consolidated balance sheets, statements of income
and statements of cash flows); and
(g) from time to time such other financial data and information
(including accountants' management letters) as the Agent or any
Bank may reasonably request.
All confidential information and documents concerning the
Borrower and its Subsidiaries supplied by the Borrower to the Banks
shall be held in confidence by the Banks and the Banks shall not
disclose such information and documents, except the Borrower hereby
authorizes the Banks to disclose any information obtained pursuant
to this Credit Agreement or the other Loan Documents to assignees
or participants and potential assignees and participants as
provided in Sect.19.6 hereof, to legal counsel for the Banks, to
consultants of the Banks who have agreed to be bound by the
confidentiality provisions of this Agreement, to employees of and
agents for the Banks in their ongoing business, and to any
independent auditors of the Banks and to all appropriate
governmental regulatory authorities or courts to the extent
requested or subpoenaed, but only to the extent permitted by
applicable laws and regulations, including those applying to
classified material. Upon receipt of a request to disclose any
information to governmental authorities or courts other than
governmental bank examiners and independent auditors of the Banks,
the Banks will notify the Borrower, to the extent permitted by
applicable law and regulations, of such request and, to the extent
practicable, permit the Borrower to seek a protective order with
respect thereto.
Notices.
Defaults.
The Borrower will promptly notify the Agent and each of the Banks
in writing of the occurrence of any Default or Event of Default of
which any executive officer of the Borrower is aware.
Environmental Laws and Events.
The Borrower will and will cause each of its Subsidiaries to comply
with all Environmental Laws, including, without limitation, those
concerning the establishment and maintenance of underground tanks
and other underground storage receptacles or the transportation of
hazardous materials, except where noncompliance with such
Environmental Laws would not have a material adverse effect on the
business, assets or financial condition of the Borrower and its
Subsidiaries, taken as a whole, and will, upon receipt of any
notice of material non-compliance or knowledge of material non-
compliance, promptly send copies of such notice or communicate its
knowledge of such non-compliance to the Agent.
[Intentionally Omitted].
Notice of Litigation and Judgments.
The Borrower will and will cause each of its Subsidiaries promptly
to notify the Banks of the issuance of any restraining order or
injunction or the commencement of any claim, action, suit,
proceeding or investigation of any kind against any of the Borrower
or any of its Subsidiaries in which there is a reasonable
likelihood of an adverse decisionwhich would either by itself or
taken together with other such matters, materially adversely affect
the business, assets or financial condition of the Borrower and its
Subsidiaries, taken as a whole, or which question the validity or
enforceability of this Agreement or the other Loan Documents.
Corporate Existence; Maintenance of Properties.
The Borrower will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence,
rights and franchises and those of its Subsidiaries, except where
the failure to keep in full force and effect any such rights or
franchises would not have a materially adverse effect on the
business of the Borrower and its Subsidiaries, taken as a whole.
It will, and will cause each of its Subsidiaries to, continue to
engage primarily in the businesses now conducted by them and in
related businesses; provided that nothing in this Sect.8.6 shall
prevent the Borrower from discontinuing the operation and
maintenance of any of its properties or those of its Subsidiaries
if such discontinuance is, in the judgment of the Borrower,
desirable in the conduct of its or their business and that do not
in the aggregate materially adversely affect the business of the
Borrower and its Subsidiaries on a consolidated basis.
Insurance. The Borrower will, and will cause each of
its Subsidiaries to, maintain with financially sound and reputable
insurers insurance with respect to its properties and business
against such casualties and contingencies as shall be in accordance
with the general practices of businesses engaged in similar
activities in similar geographic areas and in amounts, containing
such terms, in such forms and for such periods as may be reasonable
and prudent and as shall be in accordance with the applicable terms
of the Security Documents, except with respect to railcars on lease
to other Persons (other than railcars subject to a lease as to
which the Borrower has retained the obligation to insure the
railcars subject thereto).
Taxes.
The Borrower will, and will cause each of its Subsidiaries to, duly
pay and discharge, or cause to be paid and discharged, before the
same shall become overdue, all taxes, assessments and other
governmental charges (other than (a) taxes, assessments and other
governmental charges that in the aggregate are not material to the
business or assets of the Borrower and its Subsidiaries on a
consolidated basis and (b) taxes that are required to be paid by
any lessee of railcars of the Borrower under the terms of any
railcar lease, provided that the Borrower will pay and discharge
all such taxes to the extent that they are not paid by any such
lessee within thirty (30) days after such non-payment shall give
rise to an event of default (or like occurrence) under the
respective lease if a Lien upon any property of the Borrower shall
arise as a result of such nonpayment by such lessee, proceedings to
foreclose such Lien have commenced, and such Lien is in respect of
property having a net book value, when combined with all other
property of the Borrower and its Subsidiaries subject to other such
Liens arising from and after the date hereof as to which
foreclosure proceedings have commenced, which is in excess of
$1,000,000, taken on an aggregate cumulative basis) imposed upon it
and its real properties, sales and activities, or any part thereof,
or upon the income or profits therefrom; provided that any such
tax, assessment, charge, levy or claim need not be paid if the
validity or amount thereof shall currently be contested in good
faith by appropriate proceedings and if the Borrower or such
Subsidiary shall have set aside on its books adequate reserves with
respect thereto; and provided further that the Borrower and each
Subsidiary of the Borrower will pay all such taxes, assessments,
charges, levies or claims forthwith upon the commencement of
proceedings to foreclose any Lien that may have attached as
security therefor, except for any Lien which is in respect of
property having a total net book value, when combined with all
other property of the Borrower and its Subsidiaries subject to such
Liens arising from and after the date hereof as to which
foreclosure proceedings have commenced, that is not in excess of
$1,000,000, taken on an aggregate cumulative basis.
Inspection of Properties and Books, etc.
General.
The Borrower shall permit the Banks, through the Agent or any of
the Banks' other designated representatives, to visit and inspect
any of the properties (other than railcars on lease) of the
Borrower or any of its Subsidiaries, to examine the books of
account of the Borrower and its Subsidiaries (and to make copies
thereof and extracts therefrom), and to discuss the affairs,
finances and accounts of the Borrower and its Subsidiaries with,
and to be advised as to the same by, its and their officers, all at
such reasonable times and intervals as the Agent or any Bank may
reasonably request.
Appraisals.
If an Event of Default shall have occurred and be continuing, upon
the request of the Agent, the Borrower will obtain and deliver to
the Agent from time to time appraisal reports in form and substance
and from appraisers satisfactory to the Agent with respect to the
Borrower and its assets. All such appraisals shall be conducted
and made at the expense of the Borrower.
Communication with Accountants.
The Borrower authorizes the Agent and, if accompanied by the Agent,
the Banks to communicate directly with the Borrower's independent
certified public accountants and authorizes such accountants to
disclose to the Agent and the Banks any and all financial
statements and other supporting financial documents and schedules
including copies of any management letter with respect to the
business, financial condition and other affairs of the Borrower or
any of its Subsidiaries; provided, that prior to the occurrence of
any Event of Default, the Agent shall give reasonable prior notice
to the Borrower of its intention to so communicate with the
Borrower's independent certified public accountants. At the
request of the Agent, the Borrower shall deliver a letter addressed
to such accountants instructing them to comply with the provisions
of this Sect.8.9.3.
Compliance with Laws, Contracts, Licenses, and Permits.
The Borrower will and will cause each of its Subsidiaries to (a)
comply with all provisions of its charter documents and by-laws and
all laws (including all Environmental Laws), rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which
it is or becomes subject and noncompliance with which would have a
material adverse effect on the business, assets, financial
condition or operations of the Borrower and its Subsidiaries, taken
as a whole, or on the ability of the Borrower to fulfill its
obligations under this Credit Agreement or the other Loan
Documents; and (b) promptly obtain, maintain, apply for renewal,
and not allow to lapse, any authorization, consent, approval,
license or order for, and accomplish any filing or registration
with, any court or judicial, administrative or governmental
authority or any other Person which is or becomes necessary in
order that it perform in all material respects all of its
obligations under this Credit Agreement, the other Loan Documents
and in order that the same are valid and binding and effective in
accordance with their terms.
Employee Benefit Plans.
The Borrower will (i) promptly upon the request of the Agent,
furnish to the Agent a copy of the most recent actuarial statement
required to be submitted under Sect.103(d) of ERISA and Annual Report,
Form 5500, with all required attachments, in respect of each
Guaranteed Pension Plan and (ii) promptly upon the request of the
Agent, furnish to the Agent any notice, report or demand sent or
received in respect of a Guaranteed Pension Plan under Sects.302,
4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect
of a Multiemployer Plan, under Sects.4041A, 4202, 4219, 4242, or 4245
of ERISA.
Use of Proceeds.
The Borrower will use the proceeds of the Loans solely for
refinancing the Bridge Loan, to finance the purchase of additional
railcars and for general working capital purposes.
Bank Accounts.
Within thirty (30) days following the date hereof, the Borrower
shall enter into an Agency Account Agreement with each depository
bank at whch the Borrower maintains or shall maintain any deposits
constituting proceeds of any Approved Leases (it being understood
that Agency Account Agreements shall not be required for any
payroll accounts listed on Schedule 7.20 hereto), and such Agency
Account Agreements shall be in form and substance satisfactory to
the Banks and the Agent. The Borrower will direct each lessee
under any Approved Lease to make all payments of rent and other
obligations under any such Approved Lease directly into an account
maintained by the Borrower with any bank which shall have executed
such an Agency Account Agreement prior to such deposit and which
account shall be subject to such Agency Account Agreement at the
time of such deposit . Except during the continuance of any Event
of Default, the Borrower shall be entitled to withdraw any such
amounts deposited and to use such amounts for any purpose. During
the continuance of an Event of Default, such amounts so deposited
shall be transferred daily to the Agent for application to pay down
the Obligations in accordance with Sect.13.4 hereof and the terms and
conditions of such Agency Account Agreements (and the Agent shall
then be entitled to give the applicable notices provided for in the
Agency Account Agreements to require the other parties thereto to
transfer such amounts to the Agent on a daily basis); and during
the continuance of an Event of Default, the Borrower shall have no
right to withdraw any such amounts. During the continuance of any
such Event of Default, the Borrower will, and will cause each of
its Subsidiaries to, together with the employees, agents and other
Persons acting on behalf of the Borrower or such Subsidiary,
receive and hold in trust for the Agent and the Banks all payments
constituting proceeds of Approved Leases or other Collateral which
may come into their possession or under their control and,
immediately upon receipt thereof, deposit such payments in the form
received, with any appropriate endorsements, (and cause all Persons
who are payors of such payments to deposit such payments directly,
in each case) directly to any such account subject to an Agency
Account Agreement or directly to the Agent as it may specify during
the continuance of any such Event of Default.
8.14. Advantageous Agreements.
The Borrower shall at all times maintain in full force and effect,
and not permit early termination or lapse of, each of its
advantageous agreements which is material to the business, assets
or financial condition of the Borrower or its ability to repay the
Obligations.
8.15. Further Assurances.
The Borrower will, and will cause each of its Subsidiaries to,
cooperate with the Banks and the Agent and execute such further
instruments and documents as the Banks or the Agent shall
reasonably request to carry out to their satisfaction the
transactions contemplated by this Credit Agreement and the other
Loan Documents.
8.16. Opinion of Counsel.
On or before July 11, 1994, the Borrower shall have delivered to
the Banks and the Agent a favorable legal opinion addressed to the
Banks and the Agent, dated as of the date hereof, in form and
substance satisfactory to the Banks and the Agent, from counsel to
the Borrower and the Pledgor.
CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note
is outstanding or any Bank has any obligation to make any Loans:
Restrictions on Indebtedness.
The Borrower will not, and will not permit any of its Subsidiaries
to, create, incur, assume, guarantee or be or remain liable,
contingently or otherwise, with respect to any Indebtedness other
than:
(a) Indebtedness to the Banks and the Agent arising under any of
the Loan Documents;
(b)Indebtedness incurred in the ordinary course of business and not
incurred through the borrowing of money or the obtaining of credit
or the leasing of property, except that unsecured credit on an open
account basis customarily extended in connection with purchases of
goods or services in the ordinary course of business shall be
permitted;
(c)Indebtedness in respect of taxes, including withholding and
payroll taxes, assessments, governmental charges, and claims for labor,
materials or supplies and liabilities under employee benefit plans,
including pension plans, to the extent that
payment thereof is not yet due or to the extent that the amount,
applicability or validity of such Indebtedness is being contested
by the applicable Person in good faith by appropriate proceedings
diligently pursued and adequate reserves therefor are being
maintained in accordance with generally accepted accounting
principles;
(d) Indebtedness in respect of attachments or similar proceedings,
judgments or awards
that have been in force for less than the applicable period for
taking an appeal so long as execution is not levied thereunder or
in respect of which the Borrower shall at the time in good faith be
prosecuting an appeal or proceedings for review and in respect of
which a stay of execution shall have been obtained pending such
appeal or review;
(e) endorsements for collection, deposit or negotiation and
warranties of products orservices, in each case incurred in the
ordinary course of business;
(f) obligations under Capitalized Leases not exceeding $2,000,000
in aggregate amount at any time outstanding;
(g) purchase money Indebtedness for real or personal property
purchased by the Borrower or any Subsidiary of the Borrower for use
in the ordinary course of such Person's business, but only to the
extent that such Indebtedness does not exceed 100% of the fair
market value of the property so purchased as at the date of
purchase, provided that the aggregate principal amount of such
Indebtedness of the Borrower and its Subsidiaries shall not exceed
the aggregate amount of $2,000,000 at any one time;
(h) Indebtedness (if any) existing on the date of this Credit
Agreement and listed and described on Schedule 9.1 hereto, and
renewals, extensions, or refinancings thereof, provided that such
renewals, extensions or refinancings shall not increase (x) the
collateral securing such indebtedness, (y) the aggregate amount of
such Indebtedness, or (z) if such Indebtedness is renewed,
extended, or refinanced prior
to the maturity thereof, the aggregate annual debt service
requirement during the period prior to the original maturity with
respect thereto; and
(i) Indebtedness to FNBB in respect of interest rate protection
arrangements.
Restrictions on Liens.
The Borrower will not, and will not permit any of its Subsidiaries
to, create, incur or permit to exist any Lien on any property or
asset of any such Persons, other than:
(a) Liens for taxes or assessments and other government charges or
levies if payment shall not at the time be required to be made in
accordance with Sect.8.8 hereof or liens on properties to secure
claims for labor, material or supplies in respect of obligations
not overdue;
(b)Liens in respect of property or assets of the Borrower or any of
its Subsidiaries (i) under workers' compensation, unemployment or
other insurance, old age pensions or other Social Security benefits
or other similar laws or similar legislation, (ii) in connection
with surety, appeal and similar bonds incidental to the conduct of
litigation, and (iii) in connection with bid, performance or
similar bonds which do not exceed in the aggregate $500,000;
mechanics', laborers', materialmen's and similar liens in existence
less than 120 days from the date of creation thereof which are not
then delinquent or which are being contested in good faith by
appropriate proceedings; all of which Liens permitted by this
paragraph (b) do not in the aggregate materially detract from the
value of the Borrower's property or materially impair the use
thereof in the operation of the business of the Borrower and its
Subsidiaries;
(c) Liens on properties in respect of judgments or awards, the
Indebtedness with respect to which is permitted by Sect.9.1(d);
(d) encumbrances consisting of easements, rights of way, zoning
restrictions, restrictions on the use of real property and defects
and irregularities in the title thereto, landlord's or lessor's
liens under leases to which the Borrower or a Subsidiary of the
Borrower is a party, and other minor liens or encumbrances none of
which in the opinion of the Borrower interferes materially with the
use of the property affected in the ordinary conduct of the
business of the Borrower or its Subsidiaries, which defects do not
individually or in the aggregate have a materially adverse effect
on the business of the Borrower and its Subsidiaries, taken as a
whole;
(e) presently outstanding Liens listed on Schedule 9.2 hereto and
Liens on the same property securing renewals, extensions, and
refinancings of the Indebtedness described in Sect.9.1(h) hereof,
subject to all of the provisions contained therein;
(f) Liens securing the purchase price of purchase money
Indebtedness permitted by Sect.9.1(g) hereof, provided that such Liens
are limited solely to the property so purchased;
(g) Liens in favor of the Agent for the benefit of the Banks and
the Agent under the Loan Documents;
(h) Liens in favor of FNBB securing obligations of the Borrower or
its Subsidiaries under interest rate protection arrangements
permitted under Sect.9.1(i) hereof;
(i) Liens in respect of Capitalized Leases, the Indebtedness with
respect to which is permitted by Sect.9.1(f) hereof, provided, that
such liens are limited solely to the property subject to such
Capitalized Leases;
(j) any Lien, loss of title or other effects on the Borrower's
title to railcars on lease to lessees directly resulting from any
Casualty Occurrence;
(k) Liens on railcars of the Borrower consisting of, or arising
under, leases, subleases or similar arrangements granting usage
rights as to such railcars to third party lessees or other such
users granted by the Borrower (or its lessee) in the ordinary
course of business;
(l) Liens or other defects of title on the Acquired Chrysler
Assets arising or incurred prior to the acquisition thereof by the
Borrower from Allied; or
(m) Liens on railcars of the Borrower arising by, through or under
any leases, subleases, or similar arrangements with respect to
usage of railcars and which Liens are required to be released, paid
or discharged by any lessee of railcars of the Borrowerunder the
terms of any railcar lease, provided that the Borrower will
release, pay or discharge all such Liens to the extent that they
are not released, paid or discharged by any such lessee within
thirty (30) days after the same shall give rise to an event of
default (or like occurrence) under the respective lease if
foreclosure proceedings have commenced with respect thereto and
such Lien is in respect of property having a net book value, when
combined with all other property of the Borrower subject to such
Liens arising from and after the date hereof as to which
foreclosure proceedings have commenced which is in excess of
$1,000,000 taken on an aggregate cumulative basis.
Restrictions on Investments.
The Borrower will not, and will not permit any of its Subsidiaries
to, make or permit to exist or to remain outstanding any Investment
except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of
purchase by the Borrower;
(b)deposits with or certificates of deposit issued by any Bank, or
any other bank whose commercial paper is rated not less than
prime-one or A-1 or their equivalents by Moody's or S&P or their
successors and having capital and unimpaired surplus of at least
$500,000,000, and written agreements under which any Bank or any other
bank described in this Sect.9.3(b) sells and agrees to repurchase marketable
direct obligations of the United States of America;
(c)commercial paper or finance company paper which is rated not
less than prime-one or A-1 or their equivalents by Moody's or S&P
or their successors;
(d) Investments existing on the date hereof and listed on Schedule
9.3 hereto;
(e) Investments in, or advances by the Borrower to, IC consisting
of intercompany advances to IC in order to consolidate cash
balances for investment purposes, provided, however, that such
Investments shall not exceed $2,000,000 in aggregate principal
amount at any time outstanding; and
(f) Investments consisting of promissory notes received as
proceeds of asset dispositions permitted by Sect.9.5.2.
Distributions.
The Borrower will not make any Distributions except that after the
Term Out Date, the Borrower may make Distributions but only if all
of the following requirements are satisfied in connection with each
such Distribution (w) no Default or Event of Default shall then
exist and none will result from or exist after giving effect to
such Distribution, (x) the Lease Value Ratio, as of the end of the
most recent fiscal quarter for which financial statements shall
have been required to be delivered under Sect.8.4 hereof, shall have
been greater than or equal to 1.0 to 1.0, and (y) after giving
effect to such Distribution, the ratio of Consolidated Total
Liabilities to Consolidated Tangible Net Worth shall not exceed 1.0
to 1.0 and, (z) the Borrower shall have furnished reasonably
satisfactory written evidence of such calculations to the Bank in
form and detail reasonably satisfactory to the Bank.
Merger, Consolidation.
Mergers and Acquisitions.
The Borrower will not, and will not permit any of its Subsidiaries
to, become a party to any merger or consolidation, or agree to or
effect any asset acquisition or stock acquisition (other than the
acquisition of railcars and interests in leases of railcars in the
ordinary course of business and generally in accordance with
railcar leasing industry practices) except the merger or
consolidation of one or more of the Subsidiaries of the Borrower
with and into the Borrower, or the merger or consolidation of two
or more Subsidiaries of the Borrower.
Disposition of Assets.
The Borrower will not, and will not permit any of its Subsidiaries
to, become a party to or agree to or effect any disposition of
assets; provided, that the Borrower may lease and otherwise dispose
of assets in the ordinary course of business generally in
accordance with railcar leasing industry practices
(including without limitation the
disposition of worn out equipment or the occurrence of any Casualty
Occurrence with respect to railcars on lease to lessees), but only
if, after giving effect thereto, (a) no Default or Event of Default
shall have occurred and be continuing and none would result from
such disposition, and (b) the outstanding amounts of Loans does not
exceed the Borrowing Base remaining after such disposition. The
Borrower will be obligated to apply the net cash proceeds of any
such permitted asset dispositions (including all insurance proceeds
or indemnity claims made in respect of any Casualty Occurrence), if
made on or after the Term Out Date, solely to prepay the principal
amount of the Term Loan, within five (5) Business Days after
receipt thereof, for application to the unpaid installments of the
Term Loan (ratably among such unpaid installments), in each case in
an amount equal to such net cash proceeds.
Sale and Leaseback.
The Borrower will not, and will not permit any of its Subsidiaries
to, enter into any arrangement, directly or indirectly, whereby the
Borrower or any Subsidiary of the Borrower shall sell or transfer
any property owned by it in order then or thereafter to lease such
property or lease other property that the Borrower or any
Subsidiary of the Borrower intends to use for substantially the
same purpose as the property being sold or transferred.
[Intentionally Omitted].
Employee Benefit Plans.
Neither the Borrower nor any ERISA Affiliate will:
(a) engage in any "prohibited transaction" within the meaning of
Sect.406 of ERISA or Sect.4975 of the Code which could result in a
material liability for the Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in Sect.302 of ERISA,
whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which,
could result in the imposition of a lien or encumbrance on the
assets of the Borrower or any of its Subsidiaries pursuant to
Sect.302(f) or Sect.4068 of ERISA; or
(d) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of Sect.4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate
assets of such Plans, disregarding for this purpose the benefit
liabilities and assets of any such Plan with assets in excess of
benefit liabilities, by more than $10,000,000, all of which excess
(if any) relates to Guaranteed Pension Plans maintained by ICR and
for which ICR is primarily liable.
Bank Accounts.
The Borrower will not, and will not permit any of its Subsidiaries
to, (a) establish any bank accounts for the deposit of any amounts
constituting proceeds of Approved Leases or other Collateral other
than those accounts listed on Schedule 7.20 unless the bank with
which such account is established shall have executed and delivered
to the Agent an Agency Account Agreement in form and substance
satisfactory to the Agent to the extent that such an Agency Account
Agreement shall at the time be required under the provisions of
Sect.8.13 hereof, (b) violate any Agency Account Agreement, or (c)
deposit into any of the payroll accounts listed on Schedule 7.20
(for which Agency Account Agreements shall not be required) any
amounts in excess of amounts necessary to pay current payroll
obligations from such accounts.
9.10. Approved Leases.
The Borrower will not enter into any leases with respect to any
railcars owned by it other
than (a) Approved Leases or (b) other leases of railcars having an
aggregate net book value not in excess of $2,000,000 at any time.
9.11. Fiscal Year.
The Borrower will not change its fiscal year without the prior
written consent of the Majority Banks.
FINANCIAL COVENANTS OF THE BORROWER.
Earnings Before Interest and Taxes to Total Interest Expense
Ratio.
The Borrower will not permit the ratio of Earnings Before Interest
and Taxes to Consolidated Total Interest Expense for any period of four
consecutive fiscal quarters (or such lesser number of fiscal
quarters as shall have ended since the Closing Date) ending during
any period described in the table set forth below to be less than
the ratio set forth opposite such period in such table:
Period Ratio
Closing Date - June 30, 1995 3.50:1.00
July 1, 1995 and thereafter 4.00:1.00
Debt Service Coverage Ratio.
(a)The Borrower will not permit the ratio of (i) Consolidated
Operating Cash Flow to (ii) the sum of (A) Consolidated Total
Interest Expense plus (B) Consolidated Maturing Debt plus (C)
Credit Agreement Maturing Debt for any fiscal period described in
the table set forth below to be less than 1.10 to 1.00:
Period July 1, 1994 - September 30, 1994 July 1, 1994 - December 31,
1994 July 1, 1994 - March 31, 1995 July 1, 1994 - June 30, 1995
(b)The Borrower will not permit the ratio of (i) Consolidated
Operating Cash Flow to (ii) the sum of (A) Consolidated Total
Interest Expense plus (B) Consolidated Maturing Debt plus (C)
Credit Agreement Maturing Debt for any period of four consecutive
fiscal quarters ending after June 30, 1995 to be less than 1.15 to
1.00.
Liabilities to Tangible Net Worth Ratio.
The Borrower will not permit the ratio of Consolidated Total
Liabilities to Consolidated Tangible Net Worth at any time during
any period described in the table set forth below to exceed the
ratio set forth opposite such period in such table:
Period Ratio
Closing Date - June 30, 1995 5.00:1.00
July 1, 1995 - June 30, 1996 3.50:1.00
July 1, 1996 and thereafter 2.50:1.00
Consolidated Tangible Net Worth.
The Borrower will not permit Consolidated Tangible Net Worth to be
less than the sum of $5,500,000 plus, on a cumulative basis, 50% of
positive Consolidated Net Income for each fiscal quarter ending
subsequent to the Closing Date.
10.5. Lease Value Ratio.
The Borrower shall not permit the Lease Value Ratio to be less than
0.70 to 1.00 as of the end of any fiscal quarter.
CLOSING CONDITIONS.
The obligations of the Banks to make the initial Revolving Credit
Loans shall be subject to the satisfaction of the following
conditions precedent:
Loan Documents. Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto,
shall be in full force and effect and shall be in form and
substance satisfactory to each of the Banks. Each Bank shall
have received a fully executed copy of each such document
(except that with respect to the Notes, each Bank shall have
received a fully executed copy of its Note only).
Certified Copies of Charter Documents.
Each of the Banks shall have received from the Borrower and each
Affiliate of the Borrower which is a party to any Loan Document a
copy, certified by a duly authorized officer of such Person to be
true and complete on the Closing Date, of each of (i) its charter
or other incorporation documents as in effect on such date of
certification, and (ii) its by-laws as in effect on such date.
Corporate Action.
All corporate action necessary for the valid execution, delivery
and performance by the Borrower and each of its Affiliates of this
Credit Agreement and the other Loan Documents to which it is or is
to become a party shall have been duly and effectively taken, and
evidence thereof satisfactory to the Banks shall have been provided
to each of the Banks.
Incumbency Certificate.
Each of the Banks shall have received from the Borrower and each of
its Affiliates which is a party to any Loan Document an incumbency
certificate, dated as of the Closing Date, signed by a duly
authorized officer of the Borrower or such Affiliate, and giving
the name and bearing a specimen signature of each individual who
shall be authorized: (i) to sign, in the name and on behalf of
Master Document 64602 each of the Borrower or such Affiliate,
each of the Loan Documents to which the
Borrower or such Affiliate is or is to become a party; (ii) in the
case of the Borrower, to make Loan Requests and Conversion
Requests; and (iii) to give notices and to take other action on its
behalf under the Loan Documents.
Validity of Liens.
The Security Documents shall be effective to create in favor of the
Agent a legal, valid and enforceable first (except for Permitted
Liens entitled to priority under applicable law) security interest
in the Collateral. All UCC, Interstate Commerce Commission, and
other filings, recordings, deliveries of stock certificates,
undated stock powers executed in blank, and other instruments and
other actions necessary or desirable in the opinion of the Agent
to protect and preserve such security interests shall have been
duly effected, or, with respect to UCC and Interstate Commerce
Commission filings, arrangements satisfactory to the Agent for the
filing thereof shall have been made. The Agent shall have received
evidence thereof in form and substance satisfactory to the Agent.
UCC Search Results.
The Agent shall have received from the Borrower the results of UCC
lien searches with respect to its Collateral, indicating no liens
other than Permitted Liens and otherwise in form and substance
satisfactory to the Agent.
Certificates of Insurance.
The Agent shall have received (i) a certificate of insurance from
an independent insurance broker dated as of the Closing Date,
identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained in
accordance with the provisions of the Security Documents, if any is
required, and (ii) certified copies of all policies evidencing such
insurance (or certificates therefore signed by the insurer or an
agent authorized to bind the insurer).
Borrowing Base Report.
The Agent shall have received from the Borrower the initial
Borrowing Base Report dated as of the Closing Date.
[Intentionally Omitted].
Disbursement Instructions.
The Agent shall have received disbursement instructions from the
Borrower, indicating that a portion of the proceeds of the initial
Revolving Credit Loan, in an amount equal to the aggregate loan
obligations of the Borrower to FNBB relating to the Bridge Loan are
paid to FNBB on the Closing Date.
11.11. Fees and Expenses.
The Borrower shall have paid to the Agent, for the account of the
Banks, all fees, expenses and other amounts due and payable as of
the Closing Date under this Agreement, including without limitation
all fees, expenses and disbursements of the Agent and the Agent's
Special Counsel payable pursuant to Sect.16 hereof.
11.12. Certificate Regarding Lease Value Ratio and Rating.
The Agent shall have received, if requested on the Closing Date, a
certificate from an officer of the Borrower specifying the Lease
Value Ratio and the Rating as of the Closing Date.
11.13. Notices Under Acquisition Documents.
The Borrower shall have made or caused to be made all notices as to
its execution and delivery of this Agreement and the other Loan Documents
and as to its granting of security interests in the Collateral pursuant
to the Security Documents which notices are required to be made to any
Person under the provisions of the Acquisition Documents.
11.14. Proceedings and Documents.
All proceedings in connection with the transactions contemplated by
this Credit Agreement, the other Loan Documents and all other documents
incident thereto shall be satisfactory in substance and in form to
the Banks and to the Agent and the Agent's Special Counsel, and the
Banks, the Agent and such counsel shall have received
all information and such counterpart originals or certified or other
copies of such documents as the Agent may reasonably request.
CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Revolving Credit Loan,
whether on or after the Closing Date, shall also be subject to the
satisfaction of the following conditions precedent (provided that such
conditions precedent shall not be required to be satisfied in
connection with any conversion or continuation of any Revolving
Credit Loan (not involving the making of any Loan) pursuant to
Sect.2.7.1 or Sect.2.7.2 hereof):
Representations True; No Event of Default.
Each of the representations and warranties of any of the Borrower
and its Subsidiaries contained in this Credit Agreement, the other
Loan Documents or in any document or
instrument delivered pursuant to or in connection with this Credit
Agreement shall be true in all material respects as of the date as
of which they were made and shall also be true in all material
respects at and as of the time of the making of such Revolving
Credit Loan, with the same effect as if made at and as of that time
(except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and the other
Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially
adverse, and to the extent that such representations and warranties
relate expressly to an earlier date) and no Default or Event of
Default shall have occurred and be continuing.
No Legal Impediment.
No change shall have occurred in any law or regulations thereunder
or interpretations thereof that in the reasonable opinion of any
Bank would make it illegal for such Bank to make such Revolving
Credit Loan, provided that those Banks to whom such change
in law is not applicable shall continue to be obligated to make
Loans hereunder, notwithstanding the fact that one or more other
Banks are affected by such change in law.
Loan Request.
The Borrower shall have delivered a Loan Request in accordance with
the provisions of Sect.2.6 hereof. The Loan Request shall constitute
a certification by the Borrower that the conditions set forth in
this Sect.12 will be satisfied as of the date of such Revolving Credit
Loan.
[Intentionally Omitted].
Borrowing Base Report.
The Agent shall have received the most recent Borrowing Base Report
required to be delivered to the Agent in accordance with Sect.8.4(e).
EVENTS OF DEFAULT; ACCELERATION; ETC.
Events of Default and Acceleration.
If any of the following events ("Events of Default" or, if the
giving of notice or the lapse of time or both is required, then,
prior to such notice or lapse of time, "Defaults") shall occur:
(a) the Borrower shall fail to pay any principal of the Loans when
the same shall become due and payable, whether at the stated date
of maturity or any accelerated date of maturity or at any other
date fixed for payment;
(b) the Borrower shall fail to pay any interest on the Loans, the
commitment fee, or other sums due hereunder or under any of the other
Loan Documents, within three (3) Business Days of the date when the same
shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for
payment;
(c) the Borrower shall fail to comply with any of its covenants
contained in Sects.8, 9 or 10 (other than Sect.8.1, Sect.8.4, the second
sentence of Sect.8.6, or Sect.8.9);
(d) the Borrower, any of its Subsidiaries or the Pledgor shall
fail to perform any term, covenant or agreement contained herein or
in any of the other Loan Documents (other than those specified
elsewhere in this Sect.13) for thirty (30) days after written notice
of such failure has been given to the Borrower by the Agent;
(e) any representation or warranty of the Borrower or the Pledgor
in this Credit Agreement or any of the other Loan Documents or in
any other document or instrument delivered pursuant to or in
connection with this Credit Agreement shall prove to have been
false in any material respect upon the date when made or deemed to
have been made or repeated;
(f) the Borrower or any of its Subsidiaries shall fail to pay at
maturity, or within any applicable period of grace, Indebtedness in an
aggregate principal amount in excess of $100,000, or shall fail to observe
or perform any material term, covenant or agreement contained in any
agreement by which it is bound, evidencing or securing Indebtedness in an
aggregate principal amount in excess of $100,000 for such period of
time as would permit (assuming the giving of appropriate notice if
required) the holder or holders thereof or of any obligations
issued thereunder to accelerate the maturity thereof;
(g) Waterloo shall fail to pay at maturity, or within any
applicable period of grace, Indebtedness in an aggregate principal
amount in excess of $500,000, or Waterloo shall fail to observe or
perform any material term, covenant or agreement contained in any
agreement by which it is bound, evidencing or securing Indebtedness
in an aggregate principal amount in excess of $500,000 for such
period of time as would permit (assuming the giving of appropriate
notice if required) the holder or holders thereof or of any
obligations issued thereunder to accelerate the maturity thereof;
(h) ICR shall fail to pay at maturity, or within any applicable
period of grace, Indebtedness in an aggregate principal amount in
excess of $1,000,000, or ICR shall fail to observe or perform any
material term, covenant or agreement contained in any agreement by
which it is bound, evidencing or securing Indebtedness in an
aggregate principal amount in excess of $10,000,000 for such period
of time as would permit (assuming the giving of appropriate notice
if required) the holder or holders thereof or of any obligations
issued thereunder to accelerate the maturity thereof;
(i) the Borrower, any of its Subsidiaries, the Pledgor, ICR or
Waterloo shall make an assignment for the benefit of creditors, or
admit in writing its inability to pay or generally fail to pay its
debts as they mature or become due, or shall petition or apply for
the appointment of a trustee or other custodian, liquidator or
receiver of the Borrower, any of its Subsidiaries, the Pledgor, ICR
or Waterloo or of any substantial part of the assets of the
Borrower, any of its Subsidiaries, the Pledgor, ICR or Waterloo or
shall commence any case or other proceeding relating to the
Borrower, any of its Subsidiaries, the Pledgor, ICR or Waterloo
under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of
any jurisdiction, now or hereafter in effect, or shall take any
action to authorize or in furtherance of any of the foregoing, or
if any such petition or application shall be filed or any such case
or other proceeding shall be commenced against the Borrower, any of
its Subsidiaries, the Pledgor, ICR or Waterloo and the Borrower,
any of its Subsidiaries, the Pledgor, ICR or Waterloo shall
indicate its approval thereof, consent thereto or acquiescence
therein or such petition, application, case or other proceeding
shall not have been dismissed within forty-five (45) days following
the commencement or filing thereof;
(j) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower, any
of its Subsidiaries, the Pledgor, ICR or Waterloo bankrupt or
insolvent, or approving a petition in any such case or other
proceeding, or a decree or order for relief is entered in respect
of the Borrower, any of its Subsidiaries, the Pledgor, ICR or
Waterloo in an involuntary case under federal bankruptcy laws as
now or hereafter constituted;
(k) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty consecutive days, any final judgment
against the Borrower or any of its Subsidiaries that, with such
other outstanding final judgments, undischarged, against the
Borrower or any of its Subsidiaries exceeds in the aggregate
$500,000;
(l) if any of the Loan Documents shall be canceled, terminated,
revoked or rescinded or the Agent's security interests, mortgages
or liens in substantially all of the Collateral shall cease to be
perfected, or shall cease to have the priority contemplated by the
Security Documents, in each case otherwise than in accordance with
the terms thereof or with the express prior written agreement,
consent or approval of the Majority Banks, or any action at law,
suit or in equity or other legal proceeding to cancel, revoke or
rescind any of the Loan Documents shall be commenced by or on
behalf of the Borrower or the Pledgor, or any court or any other
governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue a judgment,
order, decree or ruling to the effect that, any one or more of the
Loan Documents is illegal, invalid or unenforceable in accordance
with the terms thereof;
(m) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and the Majority Banks shall
have determined in their reasonable discretion that such event
reasonably could be expected to result in liability to the PBGC or
such Guaranteed Pension Plan in an aggregate amount exceeding
$500,000 for which the Borrower is reasonably likely to be
primarily liable and such event in the circumstances occurring
reasonably could constitute grounds for the termination of such
Guaranteed Pension Plan by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer
such Guaranteed Pension Plan; or a trustee shall have been
appointed by the United States District Court to administer such
Guaranteed Pension Plan; or the PBGC shall have instituted
proceedings to terminate such Guaranteed Pension Plan;
(n) there shall occur any material damage to, or loss, theft or
destruction of, any material portion of the Collateral, whether or
not insured (excluding any Casualty Occurrence with respect to
railcars on lease to lessees);
(o) (i) IC shall at any time, legally or beneficially, directly or
indirectly, own less than one hundred percent (100%) of the capital
stock of (A) the Borrower, (B) the Pledgor, (C) Waterloo, or (D)
ICR, in each case as adjusted pursuant to any stock split, stock
dividend or recapitalization or reclassification of any such
Person, or (ii) any of the Borrower's capital stock shall at any
time fail to be owned by the Pledgor and pledged to the Agent, for
the benefit of the Banks, pursuant to the Stock Pledge Agreement,
or such pledge shall at any time cease to constitute a first
priority perfected security interest, subject to no other liens or
encumbrances;
(p) either of the Borrower or ICR shall exercise its "put" or
"call" rights, as the case may be, under any of the Option
Agreements;
(q) except with respect to Liens of the types permitted to be
incurred by the Borrower and its Subsidiaries pursuant to clauses
(a) through (e), (j), (k), (1), and (m) of Sect.9.2 hereof, and
certain existing Liens as to Waterloo described on Schedule 13.1
hereof (and Liens on the same property securing renewals,
extensions, and refinancings of the Indebtedness in respect of such
Liens listed on Schedule 13.1 hereof), Waterloo shall create,
assume or permit to exist any Lien on any of its property or
assets; or
(r) there shall occur under any Approved Lease (i) any uncured
payment default, after applicable grace periods, (ii) the giving of
any notice of termination by either party under such Approved
Lease, (iii) any actual termination or lapse of such Approved
Lease, (iv) the giving of any notice of termination of the lessee's
right to possession of the leased property under such Approved
Lease whether or not any notice of termination of the lease has
been given or any actual termination of the lease has occurred, (v)
any actual termination of the lessee's right to possession of the
leased property under such Approved Lease, or (vi) the giving of
any notice of an intention not to renew by either party under
such Approved Lease; then, and in any such event, so long as the same
may be continuing, the Agent may, and upon the request of the Majority
Banks shall, by notice in writing to the Borrower declare all amounts
owing with respect to this Credit Agreement, the Notes and the other Loan
Documents to be, and they shall thereupon forthwith become, immediately
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Borrower;
provided that in the event of any Event of Default specified in
Sect.13.1(i), 13.1(j) or 13.1(l), all such amounts shall become
immediately due and payable automatically and without any
requirement of notice from the Agent or any Bank.
Termination of Commitments.
If any one or more of the Events of Default specified in Sect.13.1(i),
Sect.13.1(j) or Sect.13.1(l) shall occur, any unused portion of the
credit hereunder shall forthwith terminate and each of the Banks
shall be relieved of all obligations to make Loans to the Borrower.
If any other Event of Default shall have occurred and be
continuing, the Agent shall, at the direction of the Majority
Banks, by notice to the Borrower, terminate the unused portion of
the credit hereunder, and upon such notice being given such unused
portion of the credit hereunder shall terminate immediately and
each of the Banks shall be relieved of all further obligations to
make Loans. If any such notice is given to the Borrower the Agent
will forthwith furnish a copy thereof to each of the Banks. No
termination of the credit hereunder shall relieve the Borrower of
any of the Obligations or any of its existing obligations to any of
the Banks arising under other agreements or instruments.
Remedies.
In case any one or more of the Events of Default shall have
occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to Sect.13.1, each
Bank, if owed any amount with respect to the Loans, may, with the
consent of the Majority Banks but not otherwise, proceed to protect
and enforce its rights by suit in equity, action at law or other
appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in this Credit Agreement and the
other Loan Documents or any instrument pursuant to which the
Obligations to such Bank are evidenced, and, if such amount shall
have become due, by declaration or otherwise, proceed to enforce
the payment thereof or any other legal or equitable right of such
Bank. No remedy herein conferred upon any Bank or the Agent or the
holder of any Note is intended to be exclusive of any other remedy
and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute or any other provision
of law.
Distribution of Collateral Proceeds.
In the event that, following the occurrence or during the
continuance of any Event of Default, the Agent or any Bank, as the
case may be, receives any monies in connection with the enforcement
of any of the Security Documents, or otherwise with respect to the
realization upon any of the Collateral, such monies shall be
distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable
costs, expenses, disbursements and losses which shall have been
incurred or sustained by the Agent in connection with the
collection of such monies by the Agent, or the exercise, protection
or enforcement by the Agent of all or any of the rights, remedies,
powers and privileges of the Agent under this Credit Agreement or
any of the other Loan Documents or in respect of the Collateral and
to provide for adequate indemnity to the Agent against all taxes or
liens which by law shall have, or may have, priority over the
rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or preference
as the Majority Banks may determine; provided, however, that Obligations
owing to the Banks with respect to each type of Obligation such as interest,
principal, fees and expenses, shall be made among the Banks pro
rata; and provided, further, that the Agent may in its discretion
make proper allowance to take into account any Obligations not then
due and payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Banks and the
Agent of all of the Obligations, to the payment of any obligations
required to be paid pursuant to Sect.9-504(1)(c) of the Uniform
Commercial Code of the Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrower
or to such other Persons as are entitled thereto.
SETOFF.
Regardless of the adequacy of any collateral, during the
continuance of any Event of Default, any deposits or other sums
credited by or due from any of the Banks to the Borrower and any
securities or other property of the Borrower in the possession of
such Bank may be applied to or set off by such Bank against the
payment of the Obligations. Each of the Banks agrees with each
other Bank that (i) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than Indebtedness
evidenced by the Notes held by such Bank, such amount shall be
applied ratably to such other Indebtedness and to the Indebtedness
evidenced by all such Notes held by such Bank, and (ii) if such
Bank shall receive from the Borrower, whether by voluntary payment,
exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by such Bank
by proceedings against the Borrower at law or in equity or by proof
thereof in bankruptcy, reorganization, liquidation, receivership or
similar proceedings, or otherwise, and shall retain and apply to
the payment of the Note or Notes held by such Bank any amount in
excess of its ratable portion of the payments received by all of
the Banks with respect to the Notes held by all of the Banks, such
Bank will make such disposition and arrangements with the other
Banks with respect to such excess, either by way of distribution,
pro tanto assignment of claims, subrogation or otherwise as shall
result in each Bank receiving in respect of the Notes held by its
proportionate payment as contemplated by this Credit Agreement;
provided that if all or any part of such excess payment is
thereafter recovered from such Bank, such disposition and
arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.
THE AGENT.
Authorization.
The Agent is authorized to take such action on behalf of each of
the Banks and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably
incident thereto, provided that no duties or responsibilities not
expressly assumed herein or therein shall be implied to have been
assumed by the Agent. The relationship between the Agent and the
Banks is and shall be that of agent and principal only, and nothing
contained in this Credit Agreement or any of the other Loan
Documents shall be construed to constitute the Agent as a trustee
for any Bank.
Employees and Agents.
The Agent may exercise its powers and execute its duties by or
through employees or agents and shall be entitled to take, and to
rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Credit Agreement and the other Loan
Documents. The Agent may utilize the services of such Persons as
the Agent in its sole discretion may reasonably determine, and all
reasonable fees and expenses of any such Persons shall be paid by
the Borrower.
No Liability.
Neither the Agent nor any of its shareholders, directors, officers
or employees nor any other Person assisting them in their duties
nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be
taken, in good faith by it or them hereunder or under any of the
other Loan Documents, or in connection herewith or therewith, or be
responsible for the consequences of any oversight or error of judgment
whatsoever, except that the Agent or such other Person, as the case may
be, may be liable for losses due to its willful misconduct or gross
negligence.
No Representations.
The Agent shall not be responsible for the execution or validity or
enforceability of this Credit Agreement, the Notes, any of the
other Loan Documents or any instrument at anytime constituting, or
intended to constitute, collateral security for the Notes, or for
the value of any such collateral security or for the validity,
enforceability or collectability of any such amounts owing with
respect to the Notes, or for any recitals or statements, warranties
or representations made herein or in any of the other Loan
Documents or in any certificate or instrument hereafter furnished
to it by or on behalf of the Borrower, or be bound to ascertain or
inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein or in any instrument at
any time constituting, or intended to constitute, collateral
security for the Notes or to inspect any of the properties, books
or records of the Borrower or any of its Subsidiaries. The Agent
shall not be bound to ascertain whether any notice, consent, waiver
or request delivered to it by the Borrower or any holder of any of
the Notes shall have been duly authorized or is true, accurate and
complete. The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it
assume any liability to the Banks, with respect to the credit
worthiness or financial conditions of the Borrower or any of its
Subsidiaries. Each Bank acknowledges that it has, independently
and without reliance upon the Agent or any other Bank, and based
upon such information and documents as it has deemed appropriate,
made its own credit analysis and decision to enter into this Credit
Agreement.
Payments.
Payments to Agent.
A payment by the Borrower to the Agent hereunder or any of the
other Loan Documents for the account of any Bank shall constitute
a payment to such Bank. The Agent agrees promptly to distribute to
each Bank such Bank's pro rata share of payments received by the
Agent for the account of the Banks except as otherwise expressly
provided herein or in any of the other Loan Documents.
Distribution by Agent.
If in the opinion of the Agent the distribution of any amount
received by it in such capacity hereunder, under the Notes or under
any of the other Loan Documents might involve it in liability, it
may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent
jurisdiction. If a court of competent jurisdiction shall adjudge
that any amount received and distributed by the Agent is to be
repaid, each Person to whom any such distribution shall have been
made shall either repay to the Agent its proportionate share of the
amount so adjudged to be repaid or shall pay over the same in such
manner and to such Persons as shall be determined by such court.
Delinquent Banks.
Notwithstanding anything to the contrary contained in this Credit
Agreement or any of the other Loan Documents, any Bank that fails
(i) to make available to the Agent its pro rata share of any Loan
or (ii) to comply with the provisions of Sect.14 with respect to
making dispositions and arrangements with the other Banks, where
such Bank's share of any payment received, whether by setoff or
otherwise, is in excess of its pro rata share of such payments due
and to payable to all of the Banks, in each case as, when and to
the full extent required by the provisions of this Credit
Agreement, shall be deemed delinquent (a "Delinquent Bank") and
shall be deemed a Delinquent Bank until such time as such
delinquency is satisfied. A Delinquent Bank shall be deemed to
have assigned any and all payments due to it from the Borrower,
whether on account of outstanding Loans, interest, fees or
otherwise, to the remaining nondelinquent Banks for application to,
and reduction of, their respective pro rata shares of all
outstanding Loans. The Delinquent Bank hereby authorizes the
Agent to distribute such payments to the
nondelinquent Banks in proportion to their respective pro rata
shares of all outstanding Loans. A Delinquent Bank shall be deemed
to have satisfied in full a delinquency when and if, as a result of
application of the assigned payments to all outstanding Loans of
the nondelinquent Banks, the Banks' respective pro rata shares of
all outstanding Loans have returned to those in effect immediately
prior to such delinquency and without giving effect to the
nonpayment causing such delinquency.
Holders of Notes.
The Agent may deem and treat the payee of any Note as the absolute
owner thereof for all purposes hereof until it shall have been
furnished in writing with a different name by such payee or by a
subsequent holder.
Indemnity.
The Banks ratably agree hereby to indemnify and hold harmless the
Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses
(including any expenses for which the Agent has not been reimbursed
by the Borrower as required by Sect.16), and liabilities of every
nature and character arising out of or related to this Credit
Agreement, the Notes, or any of the other Loan Documents or the
transactions contemplated or evidenced hereby or thereby, or the
Agent's actions taken hereunder or thereunder, except to the extent
that any of the same shall be directly caused by the Agent's
willful misconduct or gross negligence.
Agent as Bank.
In its individual capacity, FNBB shall have the same obligations
and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of
the Notes, as it would have were it not also the Agent.
Resignation.
The Agent may resign at any time by giving sixty (60) days prior
written notice thereof to the Banks and the Borrower. Upon any
such resignation, the Majority Banks shall have the right to
appoint a successor Agent from among the Banks. Unless a Default
or Event of Default shall have occurred and be continuing, the
appointment of such successor Agent shall be subject to the
approval of the Borrower (such approval not to be unreasonably
withheld). If no successor Agent shall have been so appointed by
the Majority Banks (with the approval of the Borrower) and shall
have accepted such appointment within thirty (30) days after the
retiring Agent's giving of notice of resignation, then the retiring
Agent in any event may, on behalf of the Banks, appoint a successor
Agent, which shall be a financial institution having a rating of
not less than A or its equivalent by S&P Corporation. Upon the
acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. After any retiring Agent's
resignation, the provisions of this Credit Agreement and the other
Loan Documents shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was
acting as Agent.
Notification of Defaults and Events of Default.
Each Bank hereby agrees that, upon learning of the existence of a
Default or an Event of Default, it shall promptly notify the Agent
thereof. The Agent hereby agrees that upon receipt of any notice
under this Sect.15.10 it shall promptly notify the other Banks of the
existence of such Default or Event of Default.
EXPENSES.
The Borrower agrees to pay (i) the reasonable out-of-pocket
costs of producing and reproducing this Credit Agreement, the other
Loan Documents and the other agreements and instruments mentioned
herein, (ii) any transfer taxes, documentary taxes, assessments or
charges payable to any governmental authority by reason of
the execution and delivery of the
Loan Documents (the Borrower hereby agreeing to indemnify the Banks
with respect thereto), (iii) the reasonable fees, expenses and
disbursements of the Agent's Special Counsel or any local counsel
to the Agent incurred in connection with the preparation of the
Loan Documents and other instruments mentioned herein, and
amendments, modifications, approvals, consents or waivers hereto or
hereunder, (iv) the fees, expenses and disbursements of the Agent
incurred by the Agent in connection with the preparation of the
Loan Documents and other instruments mentioned herein; (v) any
out-of-pocket fees, costs, expenses and bank charges, including
bank charges for returned checks, incurred by the Agent in
establishing, maintaining or handling agency accounts,
concentration or lock box accounts and other accounts for the
collection of any of the Collateral; (vi) all reasonable
out-of-pocket expenses (including without limitation reasonable
attorneys' fees and costs, which attorneys may be employees of
either Bank or the Agent, and reasonable consulting, accounting,
appraisal, investment banking and similar professional fees and
charges) incurred by any Bank or the Agent in connection with (A)
the enforcement of rights under any of the Loan Documents against
the Borrower or any of its Subsidiaries or the administration
thereof after the occurrence and during the continuance of a
Default or Event of Default and (B) any litigation, proceeding or
dispute whether arising hereunder or otherwise, in any way related
to any Bank's or the Agent's relationship with the Borrower or any
of its Subsidiaries, other than as directly caused by the gross
negligence or willful misconduct of the Agent or such Bank or their
violation of this Credit Agreement and (vii) all reasonable
out-of-pocket expenses and disbursements of either Bank or the
Agent incurred in connection with UCC searches, UCC filings or
filings with the Interstate Commerce Commission. The covenants of
this Sect.16 shall survive payment or satisfaction of payment of
amounts owing with respect to the Notes.
INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless the Agent and
the Banks from and against any and all claims, actions and suits
whether groundless or otherwise, and from and against any and all
liabilities, losses, damages and expenses of everynature and
character arising out of this Credit Agreement or any of the other
Loan Documents or the transactions contemplated hereby including,
without limitation, (i) any actual or proposed use by the Borrower
or any of its Subsidiaries of the proceeds of any of the Loans,
(ii) the reversal or withdrawal of any provisional credits granted
by the Agent upon the transfer of funds from bank agency or lock
box accounts or in connection with the provisional honoring of
checks or other items, (iii) the Borrower or any of its
Subsidiaries entering into or performing this Credit Agreement or
any of the other Loan Documents or (iv) with respect to the
Borrower and its Subsidiaries and their respective properties and
assets, the violation of any Environmental Law, the presence,
disposal, escape, seepage, leakage, spillage, discharge, emission,
release or threatened release of any Hazardous Substances or any
action, suit, proceeding or investigation brought or threatened
with respect to any Hazardous Substances (including, but not
limited to claims with respect to wrongful death, personal injury
or damage to property), in each case including, without limitation,
the reasonable fees and disbursements of counsel and allocated
costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding; provided, however,
that the foregoing indemnification shall not apply to any loss,
cost or expense resulting directly from the gross negligence or
willful misconduct of the Agent or any Bank or their violation of
this Credit Agreement or any other Loan Document. In litigation,
or the preparation therefor, the Banks and the Agent shall be
entitled to select their own counsel and, in addition to the
foregoing indemnity, the Borrower agrees to pay promptly the
reasonable fees and expenses of such counsel. If, and to the
extent that the obligations of the Borrower under this Sect.17 are
unenforceable for any reason, the Borrower hereby agrees to make
the maximum contribution to the payment in satisfaction of such
obligations which is permissible under applicable law. The
covenants contained in this Sect.17 shall survive payment of
satisfaction in full of all other obligations.
SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made
herein, in the Notes, in any of the other Loan Documents or in any
documents or other papers delivered by or on behalf of the Borrower
or any of its Subsidiaries pursuant hereto shall be deemed to have
been relied upon by the Banks and the Agent, notwithstanding any
investigation heretofore or hereafter made by any of them, and
shall survive the making by the Banks of the Loans, as herein
contemplated, and shall continue in full force and effect so long
as any amount due under this Credit Agreement or the Notes or any
of the other Loan Documents remains outstanding or any Bank has
any obligation to make any Loans, and for such further time as may
be otherwise expressly specified in this Credit Agreement. All
representations and warranties contained in any certificate or
other document delivered to any Bank or the Agent at any time by or
on behalf of the Borrower or any of its Subsidiaries pursuant
hereto or in connection with the transactions contemplated hereby
shall constitute representations and warranties by the Borrower or
such Subsidiary hereunder.
ASSIGNMENT AND PARTICIPATION.
Conditions to Assignment by Banks.
Except as provided herein, each Bank may assign to one or more
Eligible Assignees all or a portion of its interests, rights and
obligations under this Credit Agreement (including all or a portion
of its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it) and the Notes held by it;
provided that (i) each of the Agent and the Borrower shall have
given its prior written consent to such assignment, which consents,
in either case, will not be unreasonably withheld, (ii) each such
assignment shall be of a constant, and not a varying, percentage of
all the assigning Bank's rights and obligations under this Credit
Agreement, (iii) each assignment shall be in an amount that is a
whole multiple of $5,000,000 and (iv) the parties to such
assignment shall execute and deliver to the Agent, for recording in
the Register (as hereinafter defined), an Assignment and
Acceptance, substantially in the form of Exhibit E hereto (an
"Assignment and Acceptance"), together with any Notes subject to
such assignment. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least
five (5) Business Days after the execution thereof, (i) the
assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder, and (ii) the assigning Bank shall,
to the extent provided in such assignment and upon payment to the
Agent of the registration fee referred to in Sect.19.3, be released
from its obligations under this Credit Agreement.
Certain Representations and Warranties; Limitations; Covenants.
By executing and delivering an Assignment and Acceptance, the
parties to the assignment thereunder confirm to and agree with each
other and the other parties hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim, the assigning Bank makes no
representation or warranty, express or implied, and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement
or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest or mortgage;
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition
of the Borrower and its Subsidiaries or any other Person primarily
or secondarily liable in respect of any of the Obligations, or the
performance or observance by the Borrower and its Subsidiaries or
any other Person primarily or secondarily liable in respect of any
of the Obligations of any of their obligations under this Credit
Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in Sect.7.4 and Sect.8.4 and such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon
the assigning Bank, the Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Credit Agreement;
(e) such assignee represents and warrants that it is an Eligible
Assignee;
(f) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under
this Credit Agreement and the other Loan Documents as are delegated
to the Agent by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto;
(g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Credit
Agreement are required to be performed by it as a Bank; and
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance.
Register.
The Agent shall maintain a copy of each Assignment and Acceptance
delivered to it and a register or similar list (the "Register")
for the recordation of the names and addresses of the Banks and the
Commitment Percentage of, and principal amount of the Revolving
Credit Loans owing to the Banks from time to time. The entries in
the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Agent and the Banks may treat each Person
whose name is recorded in the Register as a Bank hereunder for all
purposes of this Credit Agreement. The Register shall be available
for inspection by the Borrower and the Banks at any reasonable time
and from time to time upon reasonable prior notice. Upon each such
recordation, the assigning Bank (except if such Bank is FNBB, and
FNBB is also the Agent at such time) agrees to pay to the Agent a
registration fee in the sum of $2500.
New Notes.
Upon its receipt of an Assignment and Acceptance executed by the
parties to such assignment, together with each Note subject to such
assignment, the Agent shall (i) record the information contained
therein in the Register, and adjust Schedule 1 accordingly, and
(ii) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five (5) Business Days
after receipt of such notice, the Borrower, at its own expense,
shall execute and deliver to the Agent, in exchange for each
surrendered Note, a new Note to the order of such Eligible Assignee
in an amount equal to the amount assumed by such Eligible Assignee
pursuant to such Assignment and Acceptance and, if the assigning
Bank has retained some portion of its obligations hereunder, a new
Note to the order of the assigning Bank in an amount equal to the
amount retained by it hereunder. Such new Notes shall provide that
they are replacements for the surrendered Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount
of the surrendered Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially
the form of the assigned Notes.
Participations.
Each Bank may sell participations to one or more banks or other
entities in all or a portion of such Bank's rights and obligations
under this Credit Agreement and the other Loan Documents; provided
that (i) each such participation shall be in an amount of not less
than $3,000,000 (or $1,000,000 in the case of an Affiliate of any
Bank) (ii) any such sale or participation shall not affect the
rights and duties of the selling Bank hereunder to the Borrower and
(iii) the only rights granted to the participant pursuant to such
participation arrangements with respect to waivers, amendments or
modifications of the Loan Documents shall be the rights to approve
waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Loans, extend the term or
increase the amount of the Commitment of such Bank as it relates to
such participant, reduce the amount of any commitment fees to which
such participant is entitled or extend any regularly scheduled
payment date for principal or interest.
Disclosure.
The Borrower agrees that in addition to disclosures made in
accordance with standard and customary banking practices any Bank
may disclose information obtained by such Bank pursuant to this
Credit Agreement to assignees or participants and potential
assignees or participants hereunder; provided that such assignees
or participants or potential assignees or participants shall
agree (i) to treat in confidence such information unless such
information otherwise becomes public knowledge, (ii) not to
disclose such information to a third party, except as required by
law or legal process and (iii) not to make use of such information
for purposes of transactions unrelated to such contemplated
assignment or participation.
Assignee or Participant Affiliated with the Borrower.
If any assignee Bank is an Affiliate of the Borrower, then any such
assignee Bank shall have no right to vote as a Bank hereunder or
under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or
other modifications to any of the Loan Documents or for purposes of
making requests to the Agent pursuant to Sect.13.1 or Sect.13.2, and the
determination of the Majority Banks shall for all purposes of this
Agreement and the other Loan Documents be made without regard to
such assignee Bank's interest in any of the Loans. If any Bank
sells a participating interest in any of the Loans to a
participant, and such participant is the Borrower or an Affiliate
of the Borrower, then such transferor Bank shall promptly notify
the Agent of the sale of such participation. A transferor Bank
shall have no right to vote as a Bank hereunder or under any of the
other Loan Documents for purposes of granting consents or waivers
or for purposes of agreeing to amendments or modifications to any
of the Loan Documents or for purposes of making requests to the
Agent pursuant to Sect.13.1 or Sect.13.2 to the extent that such
participation is beneficially owned by the Borrower or any
Affiliate of the Borrower, and the determination of the Majority
Banks shall for all purposes of this Agreement and the other Loan
Documents be made without regard to the interest of such transferor
Bank in the Loans to the extent of such participation.
Miscellaneous Assignment Provisions.
Any assigning Bank shall retain its rights to be indemnified
pursuant to Sect.16 with respect to any claims or actions arising
prior to the date of such assignment. If any assignee Bank is not
incorporated under the laws of the United States of America or any
state thereof, it shall, prior to the date on which any interest or
fees are payable hereunder or under any of the other
Loan Documents for its account, deliver to the
Borrower and the Agent certification as to its exemption from
deduction or withholding of any United States federal income taxes,
and no Bank shall at any time permit itself to become subject to
withholding at the source of any taxes in respect of amounts
payable under this Credit Agreement. If any Reference Bank
transfers all of its interest, rights and obligations under this
Credit Agreement, the Agent shall, in consultation with the
Borrower and with the consent of the Borrower and the Majority
Banks, appoint another Bank to act as a Reference Bank hereunder.
Anything contained in this Sect.19 to the contrary notwithstanding,
any Bank may at any time pledge all or any portion of its interest
and rights under this Credit Agreement (including all or any
portion of its Notes) to any of the twelve Federal Reserve Banks
organized under Sect.4 of the Federal Reserve Act, 12 U.S.C. Sect.341.
No such pledge or the enforcement thereof shall release the pledgor
Bank from its obligations hereunder or under any of the other Loan
Documents. Upon the recordation of any assignments in the Register
pursuant to Sect.19.3 hereof, Schedule 1 to this Credit Agreement
shall be revised to reflect the name and address of each new Bank
hereunder and to reflect each Bank's new Commitment Percentage
after giving effect to such assignment.
Assignment by Borrower.
The Borrower shall not assign or transfer any of its rights or
obligations under any of the Loan Documents without the prior
written consent of each of the Banks.
NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement,
all notices and other communications made or required to be given
pursuant to this Credit Agreement or the Notes shall be in writing
and shall be delivered in hand, mailed by United States registered
or certified first class mail, postage prepaid, sent by overnight
courier, or sent by telegraph, telecopy, telefax or telex and
confirmed by delivery via courier or postal service, addressed as
follows:
(a) if to the Borrower, at 6900 Westcliff Drive, Las Vegas, Nevada
89128, Attention: Treasurer, telecopier number (702) 654-6927, or
at such other address for notice as the Borrower shall last have
furnished in writing to the Person giving the notice;
(b) if to the Agent, at 100 Federal Street, Boston, Massachusetts
02110, USA, Attention: Dexter Freeman, Vice President, telecopier
number (617) 434-1955, or such other address for notice as the
Agent shall last have furnished in writing to the Person giving the
notice; and
(c) if to any Bank, at such Bank's address set forth on Schedule
1 hereto, or such other address for notice as such Bank shall have
last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given
or made and to have become effective (i) if delivered by hand,
overnight courier, telex or facsimile to a responsible officer of
the party to which it is directed, at the time of the receipt
thereof by such officer, or the sending of such facsimile or telex
transmission (if such facsimile or telex transmission is sent
during normal business hours on a Business Day) and (ii) if sent by
registered or certified first-class mail, postage prepaid, on the
third Business Day following the mailing thereof.
GOVERNING LAW.
THIS CREDIT AGREEMENT AND EACH OF THE OTHER LOAN
DOCUMENTS, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE
BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE
COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT
SITTING THEREIN AND CONSENT TO THE NONEXCLUSIVE JURISDICTION OF
SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE
UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SECT.20. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH
SUIT IS BROUGHT IN AN INCONVENIENT COURT.
HEADINGS.
The captions in this Credit Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart,
each of which when so executed and delivered shall be an original,
and all of which together shall constitute one instrument. In
proving this Credit Agreement it shall not be necessary to produce
or account for more than one such counterpart signed by the party
against whom enforcement is sought.
ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the
parties with respect to the transactions contemplated hereby.
Neither this Credit Agreement nor any term hereof may be changed,
waived, discharged or terminated, except as provided in Sect.26.
WAIVER OF JURY TRIAL.
Each of the Borrower, the Agent and the Banks hereby waives its
right to a jury trial with respect to any action or claim arising
out of any dispute in connection with this Credit Agreement, the
Notes or any of the other Loan Documents, any rights or obligations
hereunder or thereunder or the performance of such rights and
obligations.
CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly provided in this Credit Agreement,
any consent or approval required or permitted by this Credit
Agreement to be given by one or more or all of the Banks may be
given, and any term of this Credit Agreement or of any other
instrument related hereto or mentioned herein may be amended, and
the performance or observance by the Borrower of any terms of this
Credit Agreement or such other instrument or the continuance of any
Default or Event of Default may be waived (either generally or in
a particular instance and either retroactively or prospectively)
with, but only with, the written consent of the Borrower and the
written consent of the Majority Banks. Notwithstanding the
foregoing, the rate of interest on the Notes (other than interest
accruing pursuant to Sect.5.9 following the effective date of any
waiver by the Majority Banks of the Default or Event of Default
relating thereto), the Maturity Date, the due date for any payment
required by this Agreement, the amount of the Commitments of the
Banks, and the amount of commitment fee hereunder may not be
changed without the written consent of the Borrower and the written
consent of each Bank affected thereby; the definitions of Term Out
Date, Maturity Date, and Majority Banks and the provisions of this
Sect.26 may not be amended without the written consent of all of the
Banks; and Sect.15 may not be amended without the written consent of
the Agent. No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon. No course
of dealing or delay or omission on the part of either Bank in
exercising any right shall operate as a waiver thereof or otherwise
be prejudicial thereto. No notice to or demand upon the Borrower
shall entitle the Borrower to other or further notice or demand in
similar or other circumstances.
SEVERABILITY.
The provisions of this Credit Agreement are severable and if any
one clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such
invalidity or unenforceability shall affect only such clause or
provision, or part thereof, in such jurisdiction, and shall not in
any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Credit
Agreement in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
IC LEASING CORPORATION III
By:
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON, individually and as Agent
By:
Name:
Vice President
- --
EXHIBIT A
BORROWING BASE REPORT
- --
EXHIBIT B
FORM OF NOTE
- --
EXHIBIT C
REVOLVING CREDIT LOAN REQUEST
- --
EXHIBIT D
PRINCIPAL FINANCIAL OFFICER CERTIFICATE
- --
EXHIBIT E
ASSIGNMENT AND ACCEPTANCE
- --
SCHEDULE 1
- --
SCHEDULE 7.1
None
- --
SCHEDULE 7.15
1.Advances to Affiliates permitted by this Credit Agreement.
2.Reimbursements of expenses attributable to the Borrower but paid
by Affiliates.
3.Reasonable management fees not to exceed $150,000 in any fiscal year.
- --
SCHEDULE 7.18
None
- --
SCHEDULE 7.19
None
- --
SCHEDULE 7.20
Account No. 210-225-199
Bank of America - Nevada
Las Vegas, Nevada
- --
SCHEDULE 9.1
None
- --
SCHEDULE 9.2
The rights of Interail, Inc. under that certain Railcar Management
Agreement dated as of December 3, 1993 between Interail, Inc. and
the Borrower, as the same may be amended, modified or supplemented
from time to time.
- --
SCHEDULE 9.3
None
SCHEDULE 13.1
Waterloo Liens
Liens in existence on the date hereof with respect to certain real
property (and certain fixtures, equipment, and other assets and
property not relating to railcars or railcar leases), securing that
certain Loan Agreement dated as of September 1, 1988 among
Waterloo, ICR, and Century Life of America, as the same is amended,
modified, supplemented, or restated and in effect from time to time.
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