Exhibit 4.1
OFFICER'S CERTIFICATE
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Reference is hereby made to the Indenture dated as of January 15, 1997
(as supplemented, amended or modified, including hereunder, the "Indenture")
between ABC Rail Products Corporation, a Delaware corporation (the "Company")
and First Trust National Association, Chicago, Illinois, a national banking
association (the "Trustee"), as supplemented by the First Supplemental Indenture
dated as of January 15, 1997 (the "First Supplemental Indenture") between the
Company and the Trustee. Capitalized terms used herein that are not defined
herein have the meanings assigned to such terms in the Indenture or the First
Supplemental Indenture. Pursuant to Section 301 of the Indenture, this Officer's
Certificate hereby establishes a series of Securities. All references in this
Officer's Certificate to the "Company" include its consolidated Subsidiaries
unless the context otherwise requires.
1. Pursuant to Section 301(1) of the Indenture, the title of the
Securities of the series established by this Officer's Certificate is "9-1/8%
Senior Subordinated Notes Due 2004." Such series will be hereinafter referred to
as the "Notes."
2. Pursuant to Section 301(2) of the Indenture, the limit upon the
aggregate principal amount of the Notes which may be authenticated and delivered
under the Indenture is $50,000,000.
3. Pursuant to Section 301(4) of the Indenture, the principal of the
Notes shall be payable on January 15, 2004, subject to the terms of Paragraphs 6
and 7 hereof and Articles Eleven and Fourteen of the Indenture.
4. Pursuant to Section 301(5) of the Indenture, (a) the rate at which
the Notes shall bear interest is 9-1/8%; (b) such interest will accrue from the
date of delivery of the Notes; (c) the Interest Payment Date with respect to the
Notes shall be the first day of each month, commencing March 1, 1997; provided,
however, the Interest Payment Date with respect to interest accruing from
December 16, 2003 to January 15, 2004 shall be January 15, 2004; (d) interest to
be paid on the first Interest Payment Date (March 1, 1997) will accrue from the
date of delivery of the Notes through and including the first Regular Record
Date (February 15, 1997); and (e) interest to be paid on each subsequent
Interest Payment Date will accrue through and including its respective Regular
Record Date from the day following the immediately preceding Regular Record
Date; provided, however, that interest to be paid on January 15, 2004 will
accrue from December 16, 2003.
5. Pursuant to Section 301(6) of the Indenture, the Regular Record
Date with respect to the final payment of principal of the Notes and interest
thereon is January 15, 2004.
6. Pursuant to Section 301(8) of the Indenture, the Notes are not
redeemable prior to January 15, 1999. On or after such date, the Company may, at
its option, redeem the Notes in whole or in part, from time to time, under the
circumstances set forth in this Paragraph 6 and Article Eleven of the Indenture.
At the option of the Company and upon 30 days written notice to the Trustee, the
Notes may be redeemed at any time on or after January 15, 1999 and through
January 14, 2000, in whole or in part, at 102% of the principal amount, plus
accrued and unpaid interest to the Redemption Date. Pursuant to Article Eleven
of the Indenture and at the option of the Company, and upon 30 days' written
notice to the Trustee, the Notes may be redeemed in whole or in part at any time
on or after January 15, 2000, at 100% of the principal amount, plus accrued and
unpaid interest to the Redemption Date.
7. Pursuant to Section 301(9) of the Indenture, the Company has no
obligation to redeem, repay or repurchase the Notes pursuant to any sinking
fund; however, the Company is obligated to redeem, repay or repurchase the Notes
pursuant to Articles Eleven and Fourteen of the Indenture under the following
circumstances:
If a Change of Control (defined below) occurs each Holder will have the
right to require the Company to repurchase such Holder's Notes pursuant to
Article Fourteen of the Indenture, in whole or in part in integral
multiples of $1,000, at a cash purchase price equal to 103% of the
principal amount thereof, plus accrued and unpaid interest, if any, if
prior to January 15, 2000, or 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, if on or after January 15, 2000.
Pursuant to Article Fourteen of the Indenture, the Repurchase Date will be
no earlier than 30 days nor more than 60 days from the date the holders of
the Notes are notified of the occurrence of a Change of Control. If a
Change of Control Default Event (defined below) occurs, the Company must
redeem all of the Notes pursuant to Article Eleven of the Indenture, at a
cash purchase price equal to 103% of the principal amount thereof, plus
accrued and unpaid interest, if any, if prior to January 15, 2000 or 101%
of the principal amount thereof, plus accrued and unpaid interest, if any,
if on or after January 15, 2000. Pursuant to Article Eleven of the
Indenture, the Redemption Date will be no earlier than 30 days nor more
than 60 days from the date the holders of the Notes are notified of the
occurrence of a Change of Control Default Event.
The Trustee shall be under no obligation to ascertain the occurrence of a
Change of Control or a Change of Control Default Event, or to give notice
with respect thereto other than as may be required under certain
circumstances described in Articles Eleven and Fourteen of the Indenture,
upon receipt of the written notice of Change of Control or Change of
Control Default Event from the Company. The
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Trustee may conclusively assume, in the absence of written notice to the
contrary from the Company, that no Change of Control or Change of Control
Default Event has occurred.
"Change of Control" means the occurrence of one or more of the
following events, whether or not approved by the Board of Directors:
(1) any Person or any Persons acting together that would constitute a
"group" for purposes of Section 13(d) of the Securities Exchange Act, as
amended (a "Group"), together with any Affiliates thereof, other than any
employee stock ownership plan of the Company or the trusts for any other
employee stock ownership, benefit or pension plans of the Company or any
Subsidiary, shall beneficially own (as defined in Rule 13d-3 of the
Commission) at least 50% of the Voting Stock of the Company;
(2) any one Person or Group (other than the Board of Directors as it
may be constituted from time to time), or any Affiliates thereof, shall
succeed in having sufficient of its or their nominees elected to the Board
of Directors such that such nominees, when added to any existing director
remaining on the Board of Directors after such election who is an Affiliate
of such Group, shall constitute a majority of the Board of Directors;
(3) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or substantially all, the
assets of the Company to any Person or Group;
(4) the shareholders of the Company shall approve any plan for the
liquidation or dissolution of the Company; or
(5) the merger or consolidation of the Company with or into another
corporation or the merger of another corporation into the Company with the
effect that immediately after such transaction any Person or Group holds
more than 50% of the Voting Stock of the surviving corporation of such
merger or consolidation.
"Change of Control Default Event" means (i) the Company or the
successor corporation, as the case may be, is immediately after the Change
of Control, in default in the performance of any covenant or condition
under the Indenture or the Notes or (ii) after giving effect to the Change
of Control, an Event of Default or an event that, after notice or lapse of
time or both, would become an Event of Default, shall have occurred or be
continuing.
8. Pursuant to Section 301(15) of the Indenture, Section 1302 and
Section 1303 of the Indenture will apply to the Notes.
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9. Pursuant to Section 301(16) of the Indenture, in addition to the
Events of Default described in Section 501 of the Indenture, the following
events will constitute Events of Default with respect to the Notes:
(a) the entry by a court having jurisdiction in the premises of a decree or
order or decrees or orders adjudging the Company or any of its Subsidiaries
liable for the payment of money of at least in the aggregate $6,000,000,
and the continuance of any such decrees or orders unstayed, unbonded or
uncontested and in effect for a period of 90 consecutive days; and (b) if
because of an event of default as defined in any mortgage, indenture, bond,
debenture, note, or instrument under which there may be issued, or by which
there may be secured or evidenced, any indebtedness of the Company or any
of its Subsidiaries for money borrowed, whether such indebtedness now
exists or shall hereafter be created, more than $6,000,000 (either
individually or in the aggregate) (or its equivalent in any other currency)
in principal amount of such indebtedness becomes or is declared due and
payable before the date on which it would otherwise become due and payable
(in which case the Company shall give notice to the Trustee of such default
as soon as is reasonably practicable), and that acceleration shall not be
rescinded or annulled, or such indebtedness shall not have been discharged,
within a period of 30 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the
Trustee by holders of at least 25% in principal amount of Notes a written
notice specifying such acceleration and requiring the Company to cause the
acceleration to be rescinded or annulled or to cause that indebtedness to
be discharged and stating that the notice is a Notice of Default under the
Indenture.
10. Pursuant to Section 301(17) of the Indenture, with respect to the
Notes, the following covenants will be added to the covenants set forth in
Article Ten of the Indenture:
(a) The Company will not pay dividends or other distributions of its
capital stock or purchase such capital stock (whether through redemption or
purchase), unless after giving effect thereto, the aggregate amount
expended for those purposes subsequent to October 31, 1996, does not exceed
the sum of (i) $8.6 million (the aggregate Consolidated Net Income for
fiscal 1996), plus (ii) 50% of the aggregate Consolidated Net Income for
each fiscal year commencing subsequent to fiscal 1996, plus (iii) 100% of
the aggregate net proceeds received by the Company on account of any
capital stock offering subsequent to January 1, 1997, plus (iv) 100% of the
aggregate net proceeds received by the Company on account of any
disposition of property received by the Company from such sales, less (v)
100% of the aggregate Consolidated Net Loss for each fiscal year commencing
subsequent to fiscal 1996. Notwithstanding the
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foregoing, the Company is not prohibited from (1) (a) issuing capital stock
or (b) purchasing its capital stock (whether through redemption or
purchase) in connection with the investment by the Company in another asset
or business or (2) paying dividends or making other distributions with
respect to its capital stock pursuant to the Rights Agreement, dated as of
September 29, 1995 (the "Rights Agreement"), between the Company and
LaSalle National Trust, N.A., as Rights Agent (the "Rights Agent") as
amended by Amendment Number One to the Rights Agreement, dated as of
November 18, 1996, between the Company and the Rights Agent;
(b) The Company will maintain Consolidated Net Worth at the end of
each of its fiscal quarters at an amount not less than the sum of (i) $55.1
million, plus (ii) 35% of Consolidated Net Income for each of its fiscal
quarters occurring after October 31, 1996 plus (iii) 85% of the amount of
the net proceeds from the sale of any of the Company's or its Subsidiaries'
capital stock, options or warrants computed on a cumulative basis;
(c) The Company will not, and will not permit any Subsidiary to, Incur
any Funded Debt if, immediately after giving effect to any such creation,
incurrence, assumption or guarantee (including the retirement of any
existing Indebtedness from the proceeds of such additional Funded Debt),
the aggregate amount of Funded Debt outstanding would exceed 75% of
Consolidated Capitalization;
(d) The Company will maintain, at the end of each of its fiscal
quarters, an Operating Coverage Ratio with respect to the four consecutive
fiscal quarters then ended taken as a whole of at least 2.4:1.0; and
(e) The Company will not, directly or indirectly, incur any
Indebtedness that by its terms (or by the terms of the agreement governing
such Indebtedness) is subordinate in right of payment to any other
Indebtedness of the Company unless such Indebtedness is also by its terms
(or the terms of the agreement governing such Indebtedness) made expressly
either (i) Pari Passu in right of payment with the Notes or (ii)
subordinate in right of payment to the Notes in the same manner and at
least to the same extent as the Notes are subordinate to Senior
Indebtedness.
The following defined terms relate to the covenants that will be added
to the covenants currently set forth in Article Ten of the Indenture pursuant to
this Paragraph 10:
"Consolidated Capitalization" means at any time the sum of (i) Funded
Debt plus (ii) Consolidated Net Worth.
"Consolidated EBITDA" means the sum of (i) Consolidated Net Income for
a period (which excludes special charges or gains (including income taxes
thereon), the cumulative effect of
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accounting changes and extraordinary items), plus (ii) provision for income
taxes of the Company during such period, plus (iii) depreciation and
amortization expense of the Company accrued during such period (but only to the
extent not included in Consolidated Interest Expense) plus (iv) Consolidated
Interest Expense during such period.
"Consolidated Interest Expense" means the sum of (i) interest expense
for borrowed money for a period, plus (ii) imputed interest expense on
capitalized leases for such period plus (iii) one-third of rent expense under
operating leases for such period.
"Consolidated Net Income" means the amount of net income (loss) of the
Company and its Subsidiaries, for a period; provided, however, that there shall
not be included in Consolidated Net Income (i) any net income (loss) of a
Subsidiary for any period during which it was not a consolidated Subsidiary,
(ii) any net income (loss) of businesses, properties or assets acquired or
disposed of (by way of merger, consolidation, purchase, sale or otherwise) by
the Company or any Subsidiary for any period prior to the acquisition thereof or
subsequent to the disposition thereof, (iii) the cumulative effect of accounting
changes and extraordinary items during such period or (iv) special charges or
gains during such period.
"Consolidated Net Worth" means at any time the excess, after making
appropriate deductions for any minority interest in the net worth of
consolidated Subsidiaries, of (i) the assets of the Company and its consolidated
Subsidiaries over (ii) the liabilities of the Company and its consolidated
Subsidiaries; provided, however, that any write-up in the book value of any
assets acquired subsequent to the date of this Officer's Certificate other than
a write-up required for assets acquired in connection with the purchase of a
Person or business and taken at the time of such acquisition) shall not be taken
into account.
"Funded Debt" means any of the following obligations of the Company or
any Subsidiary which by its terms matures at or is extendible or renewable at
the sole option of the obligor without requiring the consent of the obligee to a
date more than twelve months after the date of the creation of incurrence of
such obligation: (i) any Obligations (including all Senior Indebtedness),
contingent or otherwise, for borrowed money or for the deferred purchase price
of property or services (including, without limitation, any interest accrued
subsequent to any Event of Default), (ii) all Obligations (including the Notes)
evidenced by bonds, notes, debentures or other similar instruments, (iii) all
Indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired (even though the rights
and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), except any such
obligation that constitutes a trade payable or an accrued liability arising in
the ordinary course of business, if and to
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the extent any of the Indebtedness under this clause (iii) would appear as a
liability upon a balance sheet prepared in accordance with generally accepted
accounting principles, (iv) all capitalized lease Obligations, (v) all
Indebtedness of the type referred to in clause (i), (ii), (iii) or (iv) above
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon property of the Company
or any Subsidiary (including, without limitation, accounts and contract rights),
even though the Company or any Subsidiary has not assumed or become liable for
the payment of such Indebtedness and (vi) any guarantee of any obligation of the
type referred to in any of the foregoing clauses (i) through (v), regardless of
whether such obligation would appear on a balance sheet.
"Operating Coverage Ratio" means the ratio of (i) Consolidated EBITDA
during any period to (ii) Consolidated Interest Expense during any such period.
11. Pursuant to Section 301(18) of the Indenture, the Notes shall be
issuable in whole or in part in the form of one or more Global Securities and
The Depository Trust Company will be the Depositary for such Global Security or
Global Securities.
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IN WITNESS WHEREOF, the undersigned duly authorized officers of the
Company have caused this Officer's Certificate to be executed in their names as
of January 28, 1997.
ABC RAIL PRODUCTS CORPORATION
By:
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Name: D. Chisholm MacDonald
Title: Senior Vice President and
Chief Financial Officer
By:
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Name: Charles E. Self
Title: Treasurer