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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 18, 2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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UNION TANK CAR COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of
incorporation or organization)
36-3104688
(I.R.S. Employer
Identification Number)
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225 WEST WASHINGTON STREET
CHICAGO, ILLINOIS 60606
(312) 372-9500
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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WILLIAM M. HOLZMAN, ESQ.
NEAL, GERBER & EISENBERG
TWO NORTH LASALLE STREET
CHICAGO, ILLINOIS 60602
(312) 269-8000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPIES TO:
BARRY P. BIGGAR, ESQ.
MAYER, BROWN & PLATT
1675 BROADWAY
NEW YORK, NEW YORK 10019
(212) 506-2500
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of this Registration Statement
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED
TITLE OF EACH CLASS OF MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE(1)(2) REGISTRATION FEE(3)
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Debt Securities, Pass Through Certificates and Senior
Secured Notes............................................... $250,000,000 $66,000
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(1) Estimated in accordance with Rule 457 solely for the purpose of determining
the registration fee.
(2) Any offering of Debt Securities, Pass Through Certificates or Senior Secured
Notes denominated in any foreign currency will be treated as the equivalent
in U.S. dollars based on the exchange rate applicable to the purchase of
such Debt Securities, Pass Through Certificates or Senior Secured Notes from
the registrant.
(3) Pursuant to Rule 429, two of the prospectuses filed as part of this
Registration Statement also relate to the remaining unsold $52,148,000
principal amount of Debt Securities and Pass Through Certificates previously
registered on a Registration Statement on Form S-3 (File No. 333-45105). A
filing fee of $15,384 was paid with respect to these securities.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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EXPLANATORY NOTE
This Registration Statement contains a prospectus relating to up to
$302,148,000 aggregate principal amount of debt securities, a prospectus
relating to up to $302,148,000 aggregate principal amount of pass through
certificates and a prospectus relating to up to $250,000,000 aggregate principal
amount of senior secured notes. The aggregate principal amount of each type of
security that may be offered and sold pursuant to this Registration Statement is
subject to reduction by the aggregate principal amount of each other type of
security sold pursuant to this Registration Statement; provided that the sale of
the first $52,148,000 aggregate principal amount of debt securities or pass
through certificates (which securities were previously registered on a
Registration Statement on Form S-3 (File No. 333-45105)) will not reduce the
aggregate amount of senior secured notes that may be offered and sold hereunder.
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The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is
not an offer to sell the securities and it is not soliciting an offer to
buy securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MAY 18, 2000
PROSPECTUS
UNION TANK CAR COMPANY
DEBT SECURITIES
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This prospectus relates to the issuance of unsecured debt securities and
other evidence of indebtedness by Union Tank Car Company.
ISSUANCE OF DEBT SECURITIES:
- - Series may be periodically offered;
- - Series may be denominated in U.S. dollars or other currencies or currency
units; and
- - Prices and terms will be determined at the time of sale.
The total aggregate principal amount (or, in the case of debt securities issued
at a discount, the initial offering price) will not exceed US $302,148,000 (or
the equivalent in foreign currencies or currency units).
FORMS THAT DEBT SECURITIES MAY TAKE:
- - Registered form;
- - Bearer form; or
- - Global form.
This prospectus is accompanied by a prospectus supplement which includes
additional information as to a particular series of debt securities. We may not
sell any debt securities without both this prospectus and a prospectus
supplement.
INFORMATION FOUND IN THE PROSPECTUS SUPPLEMENT:
- - Aggregate principal amount of the series of debt securities
- - Denominations
- - Maturity
- - Interest rate
- - Time of interest payments
- - Any terms for redemption
- - Any terms for sinking fund payments
- - Initial public offering price
- - Names of any underwriters or agents
- - Terms of any underwriting arrangements
- - Amounts to be purchased by underwriters or agents
- - Compensation of underwriters or agents
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is , 2000.
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a shelf registration process. Under
this shelf process, we may sell the securities described in this prospectus in
one or more offerings up to a total dollar amount of $302,148,000. This
prospectus provides you with a general description of the debt securities we may
offer.
Each time we sell debt securities, we will provide a prospectus supplement
that will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read both this prospectus and the prospectus
supplement together with additional information described in the section
entitled "Where You Can Find More Information" on page 12.
For more detail, you should read our registration statement and the
exhibits filed with our registration statement.
UNION TANK CAR COMPANY
We are principally engaged in the leasing of railway tank cars and other
rail cars to United States, Canadian and Mexican manufacturers and other
shippers of chemical products, including liquid fertilizers, petroleum products,
including liquid petroleum gas, food products and bulk plastics. We own and
operate one of the largest fleets of privately-owned railway tank cars in the
world.
We are a wholly-owned subsidiary of Marmon Industrial LLC, which is a
wholly-owned subsidiary of Marmon Holdings, Inc. Substantially all the stock of
Marmon Holdings, Inc. is owned, directly or indirectly, by trusts for the
benefit of certain members of the Pritzker family. "Pritzker family" refers to
the lineal descendants of Nicholas J. Pritzker, deceased.
Our principal executive offices are located at 225 West Washington Street,
Chicago, Illinois 60606, and our telephone number is (312) 372-9500.
USE OF PROCEEDS
We intend to use the net proceeds from the sale of debt securities for
general corporate purposes, unless otherwise specified in the prospectus
supplement relating to a specific issuance of debt securities. These general
corporate purposes may include, among other possible uses, financing the
addition of railcars to our fleet, the repayment of indebtedness, capital
expenditures and acquisitions. Pending such use, we may temporarily invest net
proceeds in short-term securities.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges of Union Tank and our consolidated subsidiaries for the periods
indicated:
YEARS ENDED DECEMBER 31,
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1999 1998 1997 1996 1995
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2.96x 3.23x 2.74x 2.84x 2.41x
The ratio of earnings to fixed charges represents the number of times that
interest expense, amortization of debt discount and the interest component of
rent expense were covered by income before income taxes and cumulative effect of
a change in accounting principle and such interest, amortization and the
interest component of rentals.
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DESCRIPTION OF DEBT SECURITIES UNION TANK MAY OFFER
GENERAL
As required by federal law for all bonds and notes of companies that are
publicly offered, the debt securities are governed by a document called an
indenture. The indenture is a contract, dated as of January 16, 1997, between
Union Tank and Harris Trust and Savings Bank, which acts as trustee.
The trustee has two main roles. First, the trustee can enforce your rights
against us if we default. There are some limitations on the extent to which the
trustee acts on your behalf, described under "Remedies If an Event of Default
Occurs" on page 13. Second, the trustee performs administrative duties for us,
such as sending you interest payments, transferring your debt securities to a
new buyer if you sell and sending you notices.
The indenture and its associated documents contain the full legal text of
the matters described in this section. A copy of the indenture may be obtained
from Union Tank as described below under "Where You Can Find More Information"
on page 12.
Union Tank may issue as many separate series of debt securities under the
indenture as it wishes. The indenture does not limit the amount of debt
securities which we can issue.
This section summarizes the material terms of the debt securities that are
common to all series, although the prospectus supplement which describes the
terms of each series of debt securities may also describe differences from the
material terms summarized here.
Because this section is a summary, it does not describe every aspect of the
debt securities. This summary is subject to and qualified in its entirety by
reference to all the provisions of the indenture, including definitions of
certain terms used in the indenture. In this summary, we described the meaning
for only the more important terms. We also have included references in
parentheses to certain sections of the indenture. Whenever Union Tank refers to
particular sections or defined terms of the indenture in this prospectus or in
the prospectus supplement, those sections or defined terms are incorporated by
reference in this prospectus or in the prospectus supplement. You must look to
the indenture for the most complete description of what we describe in summary
form in this prospectus.
This summary also is subject to, and qualified by reference to, the
description of the particular terms of the series of debt securities offered by
a prospectus supplement. Those terms may vary from the terms described in this
prospectus. The prospectus supplement relating to each series of debt securities
will be attached to the front of this prospectus. There may also be a further
prospectus supplement, known as a pricing supplement, which contains the precise
terms of debt securities that we may offer.
Union Tank may issue the debt securities as original issue discount
securities, which will be offered and sold at a substantial discount below their
stated principal amount. The prospectus supplement relating to the original
issue discount securities will describe federal income tax consequences and
other special considerations applicable to them. The debt securities may also be
issued as securities denominated in foreign currencies or currency units, as
described in more detail in the prospectus supplement relating to any of the
particular debt securities. The prospectus supplement relating to specific debt
securities will also describe any special considerations and certain additional
tax considerations applicable to those debt securities.
In addition, the specific financial, legal and other terms particular to a
series of debt securities are described in the prospectus supplement and any
pricing supplement relating to that series. The prospectus supplement relating
to a series of debt securities will describe the following terms of the
securities:
- the title of the series of debt securities;
- any limit on the aggregate principal amount of the series of debt
securities;
- the person to whom interest on a debt security is payable, if other than
the holder on the regular record date;
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- the date or dates on which the series of debt securities will mature;
- the annual rate or rates, which may be fixed or variable, at which the
series of debt securities will bear interest, if any, and the date or
dates from which that interest, if any, will accrue;
- the place or places where the principal of, premium, if any, and interest
on the debt securities is payable;
- the dates on which interest, if any, on the series of debt securities
will be payable and the regular record dates for the interest payment
dates;
- any mandatory or optional sinking funds or similar provisions or
provisions that require us to redeem the debt securities or allow us to
redeem the debt securities at our option;
- the date and prices, if any, at which the series of debt securities may
be redeemed and the other detailed terms and provisions of any optional
or mandatory redemption provisions;
- if other than denominations of $1,000 and any of its integral multiples,
the denominations in which the series of debt securities will be
issuable;
- the currency of payment of principal, premium, if any, and interest on
the series of debt securities;
- if the currency of payment is subject to the election of Union Tank or a
holder, the currencies which may be elected and the terms and conditions
upon which the election can be made;
- whether the provisions described under "Defeasance" on page 9 apply to
the debt securities;
- any event of default under the series of debt securities which is
different from those described under "What is an Event of Default?" on
page 10;
- if the series of debt securities will be issuable only in the form of a
global security, the depository or its nominee with respect to the series
of debt securities and the circumstances under which the global security
may be registered for transfer or exchange in the name of a person other
than the depositary or the nominee; and
- any other special feature of the series of debt securities.
LEGAL OWNERSHIP
STREET NAME AND OTHER INDIRECT HOLDERS
We generally will not recognize investors who hold debt securities in
accounts at banks or brokers as legal holders of debt securities. This is called
holding in street name. Instead, Union Tank will recognize only the bank or
broker, or the financial institution the bank or broker uses to hold its debt
securities. These intermediary banks, brokers and other financial institutions
pass along principal, interest and other payments on the debt securities, either
because they agree to do so in their customer agreements or because they are
legally required to do so. If you hold debt securities in street name, you
should check with your own institution to find out:
- how it handles securities payments and notices;
- whether it imposes fees or charges;
- how it would handle voting if required;
- whether and how you can instruct it to send you debt securities
registered in your own name so that you can be a direct holder as
described below; and
- how it would pursue rights under the debt securities if there were a
default or other event triggering the need for holders to act to protect
their interests.
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DIRECT HOLDERS
Our obligations, as well as the obligations of the trustee and those of any
third parties employed by Union Tank or the trustee, run only to persons who are
registered as holders of debt securities. As noted above, Union Tank does not
have obligations to you if you hold debt securities in street name or other
indirect means, either because you choose to hold debt securities in that manner
or because the debt securities are issued in the form of global securities as
described below. For example, once we make payment to the registered holder, we
have no further responsibility for the payment, even if that holder is legally
required to pass the payment along to you as a street name customer but does not
do so.
GLOBAL SECURITIES
- WHAT IS A GLOBAL SECURITY? A global security is a special type of
indirectly held security, as described above under "Street Name and Other
Indirect Holders". If Union Tank chooses to issue debt securities in the form of
global securities, the ultimate beneficial owners can only be indirect holders.
Union Tank would do this by requiring that the global security be registered in
the name of a financial institution it selects and by requiring that the debt
securities represented by the global security not be transferred to the name of
any other direct holder unless the special circumstances described below occur.
The financial institution that acts as the sole direct holder of a global
security is called the depositary. Any person wishing to own a debt security
must do so indirectly through an account with a broker, bank or other financial
institution that in turn has an account with the depositary. The prospectus
supplement will indicate whether your series of securities will be issued only
in the form of global securities.
- SPECIAL INVESTOR CONSIDERATIONS FOR GLOBAL SECURITIES. As an indirect
holder, an investor's rights relating to a global security will be governed by
the account rules of the investor's financial institution and of the depositary,
as well as general laws relating to securities transfers. We do not recognize an
indirect holder as a holder of debt securities and instead deal only with the
depositary that holds the global security.
If you are an investor, you should be aware that if debt securities are
issued only in the form of global securities:
- You cannot get debt securities registered in your own name.
- You cannot receive physical certificates for your interest in the debt
securities.
- You will be a street name holder and must look to your own bank or broker
for payments on the debt securities and protection of your legal rights
relating to the debt securities. See "Legal Ownership -- Street Name and
Other Indirect Holders" on page 4.
- You may not be able to sell interests in the debt securities to some
insurance companies and other institutions that are required by law to
own their securities in the form of physical certificates.
- The depositary's policies will govern payments, transfers, exchange and
other matters relating to your interest in the global security. Union
Tank and the trustee have no responsibility for any aspect of the
depositary's actions or for its records of ownership interest in the
global security. Union Tank and the trustee also do not supervise the
depositary in any way.
- SPECIAL SITUATIONS WHEN A GLOBAL SECURITY WILL BE TERMINATED. In a few
special situations described in the next paragraph, a global security will
terminate and interests in it will be exchanged for physical certificates
representing debt securities. After that exchange, the choice of whether to hold
debt securities directly or in street name will be up to you. You will have to
consult your own bank or broker to find out how to have your interests in debt
securities transferred to your own name, so that you will be a direct holder.
When a global security terminates, certificates will be issued in the names of
registered holders specified by the depositary, not by Union Tank or the
trustee. The rights of street name investors and direct holders in the debt
securities have been previously described in the subsections entitled "Street
Name and Other Indirect Holders" on page 4 and "Direct Holders" on page 5.
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The special situations in which a global security will be terminated are:
- When the depositary notifies Union Tank that it is unwilling, unable or
no longer qualified to continue as depositary.
- When Union Tank notifies the trustee that it wishes to terminate the
global security.
- When an event of default on the securities has occurred and has not been
cured. (Default is discussed later under "Events of Default" on page 10.)
The prospectus supplement may also describe additional situations for
terminating a global security that would apply only to the particular series of
debt securities covered by the prospectus supplement.
In the remainder of this description "you" means direct holders and not
street name or other indirect holders of debt securities. Indirect holders
should read the previous subsection on page 4 entitled "Street Name and other
Indirect Holders".
OVERVIEW OF REMAINDER OF THIS DESCRIPTION
The remainder of this description summarizes:
- Additional Mechanics relevant to the debt securities under normal
circumstances, such as how you transfer ownership and where Union Tank
makes payments;
- Your rights in several Special Situations, such as if Union Tank merges
with another company, or if Union Tank wants to change a term of the debt
securities;
- The absence in the indenture of any promises by Union Tank about how it
will run its business or any business action Union Tank promises to take,
known as a Restrictive Covenant;
- Defeasance clauses, which may allow for Union Tank to be completely
released from its payment and other obligations on the debt securities or
partially released from any restrictive covenants in the debt securities;
and
- Your rights if Union Tank Defaults or experiences other financial
difficulties.
ADDITIONAL MECHANICS
FORM, EXCHANGE AND TRANSFER
Unless otherwise specified in a prospectus supplement, the debt securities
will be issued:
- only in fully registered form;
- without interest coupons; and
- in denominations that are even multiples of $1,000. (Section 2.2).
You may have your debt securities divided into more debt securities of
smaller denominations or combined into fewer debt securities of larger
denominations, as long as the total principal is not changed. (Section 2.8).
This is called an exchange.
You may exchange or transfer debt securities at the office of the trustee.
The trustee acts as Union Tank's agent for registering debt securities in the
names of holders and transferring debt securities. Union Tank may change this
appointment to another entity or perform these functions itself. The entity
performing the role of maintaining the list of registered holders is called the
security registrar. It will also perform transfers. (Section 2.7).
You will not be required to pay a service charge to transfer or exchange
debt securities, but you may be required to pay for any tax or other
governmental charge associated with the exchange or transfer. The transfer or
exchange will only be made if the security registrar is satisfied with your
proof of ownership. (Section 2.8).
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If the debt securities are redeemable, neither the registrar nor Union Tank
is required to register the transfer or exchange of debt securities during the
period beginning 15 days before the day Union Tank mails the notice of
redemption and ending on the day on which the notice of redemption if first
published. Union Tank may also refuse to register transfers or exchanges of debt
securities selected for redemption, except that Union Tank will continue to
permit transfers and exchanges of the unredeemed portion of any debt security
being partially redeemed. (Section 2.8).
PAYMENT AND PAYING AGENTS
Union Tank will pay interest to you, if you are a direct holder listed in
the trustee's records at the close of business on a particular day in advance of
each due date for interest, even if you no longer own the debt security on the
date interest is actually paid. That particular day, usually about two weeks in
advance of the payment date, is called the regular record date and is stated in
the prospectus supplement. Holders buying and selling debt securities must work
out between them how to compensate for the fact that Union Tank will pay all the
interest for an interest period to the one who is the registered holder on the
regular record date. The most common manner is to adjust the sales price of the
securities to pro rate interest fairly between buyer and seller. This pro rated
interest amount is called accrued interest.
Union Tank will pay interest, principal and any other money due on the debt
securities at the corporate trust office of the trustee in New York City. You
must make arrangements to have your payments picked up at or wired from that
office. Union Tank may choose to pay interest by mailing checks.
Street name and other indirect holders should consult their banks, brokers
or other financial institutions for information on how they will receive
payments.
Union Tank may also arrange for additional payment offices, and may cancel
or change these offices, including its use of the trustee's corporate trust
office. These offices are called paying agents. Union Tank may also choose to
act as its own paying agent. Union Tank must notify the trustee of the name and
address of any paying agent that is not a party to the indenture. (Section 2.4)
NOTICES
Union Tank and the trustee will send notices regarding the debt securities
only to direct holders, using their addresses as listed in the trustee's
records. (Sections 4.2 and 7.6).
SPECIAL SITUATIONS
MERGERS AND SIMILAR EVENTS
Union Tank is generally permitted to consolidate or merge with another
person. We are also permitted to sell or lease substantially all of our assets
to another person. However, we may not take any of these actions unless the
following conditions are met:
- Where Union Tank merges out of existence or sells or leases substantially
all of its assets, the other person must be a corporation organized under
the laws of any state or the District of Columbia or under federal law,
and it must agree to be legally responsible for the debt securities.
- Immediately after giving effect to the merger, sale of assets or other
transaction, Union Tank must not be in default on the debt securities.
For purposes of this no-default test, a default would include an event of
default that has occurred and not been cured. A default for this purpose
would also include any event that would be an event of default if Union
Tank were to be given a notice of default or if the event were to exist
for a specific period of time. (Section 5.1).
Following the consolidation or merger with or sale or lease of assets to another
person, that person will be substituted for Union Tank under the indenture, and,
except in the case of a lease, all obligations of Union Tank under the indenture
and the debt securities will terminate.
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MODIFICATION AND WAIVER
There are three types of changes Union Tank can make to the indenture and
the debt securities.
CHANGES REQUIRING YOUR APPROVAL. We cannot make the following changes to
your debt securities without your specific approval:
- change the rate of interest or the time of payment of any debt security;
- change the principal amount of or the stated maturity of any debt
security;
- reduce any premium payable upon the redemption of any debt security;
- waive a default in the payment of the principal of or interest on any
debt security;
- change the currency of payment on a debt security;
- impair your right to sue for payment;
- reduce the percentage of the principal amount of debt securities the
consent of which is needed to modify or amend the indenture;
- reduce the percentage of the principal amount of debt securities the
consent of which is needed to waive compliance with certain provisions of
the indenture or to waive certain defaults; or
- modify any other aspect of the provisions dealing with modification and
waiver of the indenture. (Section 9.2).
CHANGES REQUIRING A MAJORITY VOTE. The second type of change to the
indenture and the debt securities is the kind that requires a vote in favor by
the holders of debt securities owning a majority of the principal amount of the
particular series affected. Most changes fall into this category, except for
clarifying changes and certain other changes that would not adversely affect
holders of the debt securities as described in the next paragraph. (Section
9.2). Union Tank may obtain a waiver of a past default from the holders of debt
securities owning a majority of the principal amount of the particular series
affected. However, Union Tank cannot obtain a waiver of a payment default or any
other aspect of the indenture or the debt securities listed and described
previously on page 8 under "Changes Requiring Your Approval" unless Union Tank
obtains a consent to the waiver from every holder of the affected debt
securities. (Section 9.2).
CHANGES NOT REQUIRING APPROVAL. The third type of change to the indenture
and the debt securities does not require any vote by holders of debt securities.
This type is limited to changes to:
- cure any ambiguity, defect or inconsistency in the indenture or in the
debt securities;
- provide for the assumption of all the obligations of Union Tank under the
debt securities and under the indenture by any corporation in connection
with a merger, consolidation, or transfer or lease of substantially all
of our assets;
- secure the debt securities;
- provide for uncertificated debt securities in addition to or in place of
certificated debt securities;
- make any change that does not adversely effect the rights of any holder
of a debt security;
- provide for the issuance of and establish the form and terms and
conditions of a series of debt securities; or
- add to rights of holders of debt securities. (Section 9.1).
ABSENCE OF RESTRICTIVE COVENANTS
The indenture does not contain any promises by Union Tank on how it will
operate its business and does not restrict Union Tank's ability to incur debt or
grant liens on its assets. Similarly, the indenture
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does not contain any "event risk" provisions that may afford holders of debt
securities protection in the event of a highly leveraged transaction involving
Union Tank. If Union Tank determines to include such a promise for the benefit
of a particular series of debt securities, that promise, or restrictive
covenant, will be described in the prospectus supplement relating to that series
of debt securities.
DEFEASANCE
Union Tank may be completely released from its payment and other
obligations on the debt securities or may be released from certain events of
default as described below. The following discussion of defeasance, satisfaction
and discharge will be applicable to your series of debt securities unless Union
Tank chooses not to have them apply to that series, in which case it will state
that in the prospectus supplement. (Section 8.1).
FULL DEFEASANCE
Union Tank can legally release itself from certain obligations on the debt
securities of a series, called defeasance, if Union Tank puts in place the
following arrangement for you to be repaid:
- Union Tank must deposit with the trustee, in trust, at or before
maturity, for your benefit and the benefit of all holders of the debt
securities of that series a combination of money and U.S. government
notes or bonds or notes or obligations guaranteed by the U.S. government
that, in the opinion of a nationally recognized firm of independent
public accountants chosen by Union Tank, will generate enough cash to
make interest, principal and any other payments on the debt securities on
their various due dates. (Section 8.1).
Defeasance of the debt securities would be subject to the satisfaction of
certain conditions, including:
- There cannot be an event of default on the date Union Tank makes the
deposit in trust;
- Your interest and all other holders of debt securities in the deposit
must be perfected; and
- The deposit must not result in the breach by Union Tank of any of its
material agreements. (Section 8.1).
SATISFACTION AND DISCHARGE
If we are able to defease the debt securities, as described above, and
satisfy certain other conditions, Union Tank will be released from its
obligations to pay principal and interest on the debt securities when due, and
you would have to rely solely on the money or securities deposited in trust for
repayment of the debt securities. You could not look to Union Tank for
repayment.
The conditions that must be satisfied include, except in limited
circumstances involving a deposit made within one year of maturity of the debt
securities:
- There cannot be an event of default on the date we make the deposit or on
the 91st day after we make the deposit; and
- Union Tank must deliver to the trustee a legal opinion of nationally
recognized tax counsel confirming that Union Tank may make the deposit of
money or securities without causing you to be taxed on the debt
securities any differently than if Union Tank did not make the deposit
and instead repaid the debt securities in accordance with their terms.
DEFAULT AND RELATED MATTERS
RANKING
The debt securities are not secured by any of Union Tank's property or
assets. Therefore, your ownership of debt securities means you are one of Union
Tank's unsecured creditors. The debt securities
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are not subordinated to any of Union Tank's other debt obligations and therefore
they rank equally with all of Union Tank's other unsecured and unsubordinated
indebtedness.
EVENTS OF DEFAULT
You will have special rights if an event of default occurs and is not
cured, as described later in this subsection.
WHAT IS AN EVENT OF DEFAULT? The term "Event of Default" means any of the
following:
- Union Tank does not pay the principal of a debt security on its due date.
- Union Tank does not pay interest on a debt security within 30 days of its
due date.
- Union Tank does not deposit money in a separate account, known as a
sinking fund, when a deposit is due.
- Union Tank remains in breach of any agreement of Union Tank contained in
the indenture for 90 days after we receive a notice of default stating we
are in breach. The notice must be sent by either the trustee or holders
of 25% of the outstanding principal amount of debt securities of the
affected series.
- Union Tank files for bankruptcy or certain other events of bankruptcy,
insolvency or reorganization occur.
REMEDIES IF AN EVENT OF DEFAULT OCCURS. If an event of default has occurred
and has not been cured, the trustee or the holders of at least 25% in principal
amount of the debt securities of the affected series may declare the entire
principal amount of all the debt securities of that series and any accrued
interest to be due and immediately payable. In the case of original issue
discount securities, the trustee or the required percentage of holders may
declare due and payable the portion of the principal amount that is specified in
the terms of the affected debt security. This is called a declaration of
acceleration of maturity. However, a declaration of acceleration of maturity may
be cancelled by the holders of at least a majority in principal amount of the
debt securities of the affected series if all events of default have been cured
or waived but only before a judgment or decree based on the acceleration has
been obtained. (Section 6.2).
Please refer to the prospectus supplement relating to any series of debt
securities which are original issue discount securities for the particular
provisions relating to acceleration of the maturity of original issue discount
securities upon the occurrence of an event of default.
Except in cases of default, where the trustee has some special duties, the
trustee is not required to take any action under the indenture at the request of
any holders unless the holders offer the trustee reasonable protection from
expenses and liability. This protection is called an indemnity. (Section 7.1).
If reasonable indemnity is provided, subject to some limitations, the holders of
a majority of the outstanding principal amount of the securities of the relevant
series may direct the time, method and place of conducting any lawsuit or other
formal legal action seeking any remedy available to the trustee. These majority
holders may also direct the trustee in performing any other action under the
indenture. (Section 6.5).
Before you bypass the trustee and bring your own lawsuit or other formal
legal action or take other steps to enforce your rights or protect your
interests relating to the debt securities, the following must occur:
- You must give the trustee written notice that an event of default has
occurred and remains uncured.
- The holders of 25% of the outstanding principal amount of all the
securities of the relevant series must make a written request that the
trustee take action because of an event of default, and must offer
reasonable indemnity to the trustee against the cost and other
liabilities of taking that action.
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- The trustee must have not taken action for 60 days after receipt of the
above written request and offer of indemnity and no directions
inconsistent with the above written request must have been given to the
trustee by the holders of a majority of the outstanding principal amount
of the debt securities during such period. (Section 7.6).
However, you are entitled at any time to bring a lawsuit for the payment of
money due on your debt security on or after its due date. (Section 7.7).
Street name and other indirect holders should consult their banks, brokers
or other financial institutions for information on how to give notice or
direction to or make a request of the trustee and to make or cancel a
declaration of acceleration.
OUR RELATIONSHIP TO THE TRUSTEE
Harris Trust and Savings Bank is the trustee under other indentures and
agreements to which we are a party; certain of these agreements relate to
indebtedness which is secured. If an event of default occurred under the
indenture relating to the debt securities or one of these other indentures or
agreements, Harris Trust and Savings Bank may be deemed to have a conflicting
interest with respect to the debt securities for purposes of the Trust Indenture
Act of 1939 and, therefore, may be required to resign as trustee.
PLAN OF DISTRIBUTION
Union Tank may sell debt securities:
- to or through underwriters;
- through agents;
- through dealers; or
- through a combination of these methods.
The distribution of the debt securities may be effected from time to time
in one or more transactions at (i) a fixed price or prices, which may be
changed, (ii) market prices prevailing at the time of sale, (iii) prices related
to the prevailing market prices at the time of sale, or (iv) negotiated prices.
The prospectus supplement for each series of debt securities will describe:
- the terms of the offering of those debt securities, including the names
of any agents or underwriters;
- the public offering or purchase price;
- any discounts and commissions to be allowed or paid to the agents or
underwriters and all other items which are underwriting compensation;
- any discounts and commissions to be allowed or paid to dealers; and
- other specific terms of the particular debt securities.
Only the agents or underwriters named in a particular prospectus supplement
are agents or underwriters in connection with the debt securities being offered
by that prospectus supplement.
Underwriters, agents and dealers may be entitled, under agreements with
Union Tank, to indemnification against certain civil liabilities, including
liabilities under the Securities Act of 1933.
Each series of debt securities will be a new issue of securities and will
not have an established trading market. Union Tank will not list any series of
debt securities on an exchange. No assurance can be given that you will be able
to resell any debt securities that you may purchase.
Underwriters, dealers or agents may engage in transactions with, or perform
services for, Union Tank or its affiliates in the ordinary course of business.
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LEGAL OPINIONS
Unless otherwise indicated in the applicable prospectus supplement, the
validity of the debt securities offered hereby will be passed upon for us by
Neal, Gerber & Eisenberg, Chicago, Illinois, and for any agents, dealers or
underwriters by Mayer, Brown & Platt, New York, New York.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-K for the year
ended December 31, 1999, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports and other information with
the Securities and Exchange Commission. You may read and copy any documents we
file at the SEC's public reference room, 450 Fifth Street, N.W., Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference room. Our SEC filings are also available to the public on the
SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information as well as
the information included in this prospectus. We incorporate by reference the
documents listed below and any future filing we make with the SEC under Sections
13(a), 13(c) or 15(d) of the Securities Exchange Act of 1934 until we sell all
the debt securities. This prospectus is part of a registration statement we
filed with the SEC.
- Annual Report on Form 10-K for the fiscal year ended December 31, 1999;
and
- Quarterly Report on Form 10-Q for the quarter ended March 31, 2000.
We will provide without charge to each person to whom this prospectus is
delivered, upon written request, a copy (without exhibits) of any or all
documents incorporated by reference in this Prospectus. Requests for such copies
should be directed to the General Counsel and Secretary, Union Tank Car Company,
225 West Washington Street, Chicago, Illinois 60606, telephone (312) 372-9500.
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The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is
not an offer to sell securities and it is not soliciting an offer to buy
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MAY 18, 2000
PROSPECTUS
UNION TANK CAR COMPANY
PASS THROUGH CERTIFICATES
-------------------------
This prospectus relates to the issuance of pass through certificates by one
or more pass through trusts to be formed by Union Tank.
THE CERTIFICATES:
- - Will be issued in one or more series with distribution rates and distribution
dates specified in the prospectus supplement;
- - Will represent interests in the relevant pass through trust only and will be
repaid only from the assets of that trust, and will not represent obligations
of, or be guaranteed by, Union Tank; and
- - Will be issued in registered form and may be issued through a book-entry
system.
The aggregate public offering price of the certificates will not exceed
$302,148,000.
EACH PASS THROUGH TRUST:
- - Will issue one or more series of certificates;
- - Will use the proceeds of each series of certificates to purchase equipment
notes of one or more series, each with an interest rate equal to the rate on
that series of certificates and with a maturity date on or prior to the final
distribution date for that series of certificates; and
- - Will pass through to certificateholders the principal and interest paid on the
equipment notes that it owns.
THE EQUIPMENT NOTES:
- - Will be issued in series;
- - Will be issued in connection with one or more leveraged lease transactions to
finance or refinance a portion of the cost of certain railcars leased to us;
- - Will not be our obligation and will not be guaranteed by us, but amounts
unconditionally payable by us under the equipment lease will be sufficient to
make all payments required under those equipment notes when due; and
- - Will be secured by the railcars specified in the prospectus supplement and by
the interest of the lessor in that lease.
This prospectus is accompanied by a prospectus supplement which includes
additional information as to the particular series of certificates being sold
and the underlying equipment notes. We may not sell any certificates without
both this prospectus and a prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is , 2000.
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a shelf registration process. Under
this shelf process, the certificates described in this prospectus may be sold in
one or more offerings up to a total dollar amount of $302,148,000. This
prospectus provides you with a general description of the certificates that may
be offered.
Each time certificates are sold, we will provide a prospectus supplement
that will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read both this prospectus and any prospectus
supplement together with additional information described in the section
entitled "Where You Can Find More Information" on page 23.
For more detail, you should read our registration statement and the
exhibits filed with our registration statement.
UNION TANK CAR COMPANY
We are principally engaged in the leasing of railway tank cars and other
rail cars to United States, Canadian and Mexican manufacturers and other
shippers of chemical products, including liquid fertilizers, petroleum products,
including liquid petroleum gas, food products and bulk plastics. We own and
operate one of the largest fleets of privately-owned railway tank cars in the
world.
We are a wholly-owned subsidiary of Marmon Industrial LLC, which is a
wholly-owned subsidiary of Marmon Holdings, Inc. Substantially all of the stock
of Marmon Holdings, Inc. is owned, directly or indirectly, by trusts for the
benefit of certain members of the Pritzker family. "Pritzker family" refers to
the lineal descendants of Nicholas J. Pritzker, deceased.
Our principal executive offices are located at 225 West Washington Street,
Chicago, Illinois 60606, and our telephone number is (312) 372-9500.
GENERAL OUTLINE
The certificates are securities that evidence an ownership interest in a
pass through trust. The holders of the certificates issued by a trust will be
the beneficiaries of that trust. The beneficial interest in a trust represented
by a certificate will be a percentage interest in the property of that trust.
The beneficial interest will be equal to the original face amount of that
certificate divided by the original face amount of all the certificates issued
by that trust. Each certificate will represent a beneficial interest only in the
property of the trust that issued that certificate. Multiple series of
certificates may be issued. If more than one series of certificates is issued,
each series of certificates will be issued by a separate trust.
The property that will be held by each trust will include equipment notes
secured by certain railcars leased to us. Payments of principal and interest on
the equipment notes owned by a trust will be passed through to holders of the
certificates issued by that trust in accordance with the terms of the trust
supplement for that trust.
We have entered into a pass through trust agreement with Bank One, National
Association, as trustee, in anticipation of offerings of certificates. In
connection with issuance of each series of certificates, we will enter into a
separate trust supplement. The trust supplement with respect to each series of
certificates will form a separate trust for that series.
The trustee will enter into one or more purchase or participation
agreements in connection with each series of certificates relating to one or
more leveraged lease transactions. Under a participation agreement, the trustee
will agree to purchase one or more equipment notes to be issued under an
indenture. Each equipment note will relate to certain railcars or "equipment
units" that are leased to us, as described in the applicable prospectus
supplement.
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The equipment notes in each trust will have an interest rate equal to the
rate applicable to the certificates issued by that trust. Also, the equipment
notes in each trust will have identical priority of payment relative to any
other equipment notes issued under the same indenture. The maturity dates of the
equipment notes in each trust will occur on or before the final distribution
date applicable to the certificates that will be issued by that trust.
The trustee will distribute the amount of payments of principal, premium,
if any, and interest received by it as holder of the equipment notes to the
registered holders of certificates of the trust in which those equipment notes
are held.
Each series of equipment notes will be issued by an owner trustee under an
indenture between the owner trustee and an indenture trustee. The owner trustee
and the indenture trustee for each series of equipment notes will be specified
in the related prospectus supplement.
The owner trustee will not be acting in its individual capacity, but solely
as owner trustee of a separate trust for the benefit of one or more
institutional investors, called "owner participants." With respect to the
equipment units purchased by an owner trustee, the related owner participant(s)
will provide, from sources other than the equipment notes, a portion of the cost
of the related equipment units. No owner participant will be personally liable
for any amount payable under the related indenture or the related equipment
notes.
All equipment units will be leased by the related owner trustee to us
pursuant to a separate lease agreement.
USE OF PROCEEDS
The trustee will use the proceeds of the certificates for the purchase of
one or more equipment notes. The equipment notes will be issued to finance or
refinance the debt portion of one or more separate leveraged lease transactions
entered into by us, as lessee of certain equipment units.
To the extent that any proceeds of any offering of certificates are not
used to purchase equipment notes on the date of issuance of those certificates,
those proceeds will be held for the benefit of certificateholders. If those
proceeds are not used to purchase equipment notes by the date specified in the
applicable prospectus supplement, they will be returned to the
certificateholders. See "Description of Certificates -- Delayed Purchase of
Equipment Notes" on page 14 for a description of the procedure for delayed
purchase of equipment notes.
The prospectus supplement with respect to each series of certificates will
provide additional details regarding the use of proceeds of the certificates and
the use of proceeds of the equipment notes to be purchased by the trust.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges of Union Tank and its consolidated subsidiaries for the periods
indicated:
YEARS ENDED DECEMBER 31,
- -------------------------------------
1999 1998 1997 1996 1995
- ---- ---- ---- ---- ----
2.96x 3.23x 2.74x 2.84x 2.41x
The ratio of earnings to fixed charges represents the number of times that
interest expense, amortization of debt discount and the interest component of
rent expense were covered by income before income taxes and cumulative effect of
a change in accounting principle and such interest, amortization and the
interest component of rentals.
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DESCRIPTION OF THE CERTIFICATES
In connection with each offering under this prospectus and accompanying
prospectus supplement, we will form one or more separate trusts and those trusts
will issue one or more series of certificates. Each series of certificates will
be issued pursuant to the pass through trust agreement and a trust supplement
between the trustee and us. The statements made under this caption are summaries
of detailed provisions of the pass through trust agreement.
We have filed a copy of the pass through trust agreement with the
Securities and Exchange Commission ("SEC") as an exhibit to the registration
statement. In addition, we will file with the SEC forms of each of the
agreements listed below and discussed in this prospectus or the accompanying
prospectus supplement.
- trust supplement
- participation agreement
- indenture
- lease; and
- trust agreement.
You should refer to those agreements for more information regarding the terms
discussed in this prospectus and accompanying prospectus supplement. See "Where
You Can Find More Information" on page 23 for information on documents we file
with the SEC. The summaries contained in this prospectus and the accompanying
prospectus supplement are qualified in their entirety by reference to those
filed agreements.
The certificates offered pursuant to this prospectus will be limited to
$302,148,000 aggregate public offering price.
To the extent that any provision in the accompanying prospectus supplement
is inconsistent with this summary, the prospectus supplement will control.
GENERAL
WHAT THE CERTIFICATES REPRESENT
Each certificate will represent a fractional undivided interest in the
trust created by the pass through trust agreement and the related trust
supplement. All payments and distributions will be made only from the property
of the related trust, called the "trust property". The trust property will
include:
- The equipment notes held in that trust;
- All monies at any time paid, due and to become due on those equipment
notes; and
- Funds from time to time deposited with the trustee for the account of the
trust.
The certificates will be issued in minimum denominations of $1,000 or an
integral multiple of that amount. One certificate of each series, however, may
be issued in a different denomination.
WHAT THE CERTIFICATES DO NOT REPRESENT
The certificates do not represent an interest in or an obligation of Union
Tank, the trustee, any of the indenture trustees or owner trustees in their
individual capacities, any owner participant or any of their respective
affiliates. By accepting a certificate, you agree to look solely to the income
and proceeds from the trust property as provided in the pass through trust
agreement and the applicable trust supplement.
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ISSUANCE OF EQUIPMENT NOTES
The equipment notes issued under a particular indenture may be held in more
than one trust. One trust may hold equipment notes issued under more than one
indenture.
PASS THROUGH OF INTEREST PAID ON EQUIPMENT NOTES
Interest paid on the equipment notes will be passed through to
certificateholders of each trust. The rate of payment to certificateholders will
be the same annual rate payable on the equipment notes held by that trust. This
rate will be set forth for each trust on the cover page of the applicable
prospectus supplement.
DESCRIPTION OF INFORMATION CONTAINED IN PROSPECTUS SUPPLEMENTS
You should consult the related prospectus supplement for a description of
the specific series of certificates. The information in the related prospectus
supplement will include the following:
- Specific designation and title of the certificates;
- Aggregate principal amount of each series of certificates;
- Regular distribution dates and special distribution dates applicable to
those certificates;
- Distribution rates on those certificates;
- Currency or currencies in which the certificates may be denominated;
- Specific form of the certificates, including whether or not the
certificates are to be issued through a book-entry system;
- Any related lease arrangements;
- Description of the equipment notes to be purchased by the trust,
including:
-- the terms and conditions upon which the equipment notes may or must be
redeemed or defeased by the owner trustee, and
-- the interest rate and payment dates of the equipment notes.
- Description of the equipment units;
- Description of the related indentures, including:
-- a description of the events of default under the indentures,
-- the remedies exercisable upon the occurrence of events of default, and
-- any limitations on the exercise of those remedies with respect to the
related equipment notes;
- A description of the related leases, trust agreements and participation
agreements, including:
-- the names of the related owner trustees,
-- a description of the events of default under the leases, the remedies
exercisable upon the occurrence of those events of default and any
limitations on the exercise of those remedies,
-- a description of the events of loss with respect to the related
equipment units and any right we may have to replace equipment units,
and
-- any rights of the owner trustee or owner participant to cure our
failures to pay rent under the related lease;
- Description of the terms of any underwriting arrangement, including:
-- the names of any underwriters or agents, and
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-- the amounts of be purchased by underwriters or agents, and
-- the compensation of underwriters or agents;
- The extent, if any, to which the documents governing the equipment notes
may be amended by the parties to those documents and whether the consent
of the holders of the equipment notes is necessary for amendment; and
- Any other special terms pertaining to the relevant certificates.
BOOK-ENTRY REGISTRATION
GENERAL
The prospectus supplement for each series of certificates will state
whether those certificates will be subject to the following provisions and the
provisions under the caption "Definitive Certificates" on page 8.
Upon issuance, each series of certificates will be represented by one or
more fully registered global certificates. Unless otherwise provided in a
prospectus supplement, each global certificate will be deposited with, or on
behalf of, The Depository Trust Company ("DTC") and registered in the name of
DTC's nominee, Cede & Co. ("Cede"). No person acquiring an interest in
certificates (a "certificate owner") will be entitled to receive a certificate
representing their interest in those certificates unless and until a definitive
certificate is issued, as described under "Definitive Certificates" on page 8.
Unless and until definitive certificates are issued, all references to
actions by certificateholders will refer to actions taken by DTC upon
instructions from DTC Participants. All references to distributions, notices,
reports and statements to certificateholders will refer, as the case may be, to
distributions, notices, reports and statements to DTC or Cede, as the registered
holder of those certificates, or to DTC Participants for distribution to
certificate owners in accordance with DTC procedures.
DTC AND DTC PARTICIPANTS
DTC is:
- A limited purpose trust company organized under the laws of the State of
New York;
- A member of the Federal Reserve System;
- A "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and
- A "clearing agency" registered pursuant to section 17A of the Exchange
Act.
DTC was created to hold securities for its participants ("DTC
Participants") and to facilitate the clearance and settlement of securities
transactions between DTC Participants through electronic book-entries, thereby
eliminating the need for physical transfer of certificates. DTC Participants
include:
- Securities brokers and dealers
- Banks
- Trust companies
- Clearing corporations
Indirect access to the DTC system also is available to Indirect
Participants that clear through or maintain a custodial relationship with a DTC
Participant either directly or indirectly. Indirect Participants may include:
- Banks
- Brokers
- Dealers
- Trust companies
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PROCEDURES FOR TRANSFERS AND PAYMENTS
Certificate owners that are not DTC Participants or Indirect Participants
but desire to purchase, sell or otherwise transfer ownership of, or other
interests in, the certificates may do so only through DTC Participants and
Indirect Participants. In addition, certificate owners will receive all
distributions of principal and interest from the trustee through DTC, DTC
Participants or Indirect Participants, as the case may be.
Under a book-entry format, certificate owners may experience some delay in
their receipt of payments, because the payments will be forwarded by the trustee
to Cede, as nominee for DTC. DTC will forward those payments in same-day funds
to DTC Participants who are credited with ownership of the certificates. The
amounts forwarded to DTC Participants will be proportionate to the principal
amount of each DTC Participant's respective holdings of beneficial interests in
the certificates. Subsequently, DTC Participants will forward payments to
Indirect Participants or certificate owners, as the case may be, in accordance
with customary industry practices. The forwarding of these distributions to the
certificate owners will be the responsibility of the appropriate DTC
Participants.
Unless and until, if ever, the definitive certificates are issued, the only
"certificateholder" will be Cede. Certificate owners will not be recognized by
the trustee as certificateholders, as the term is used in the pass through trust
agreement, and certificate owners will be permitted to exercise the rights of
certificateholders only indirectly through DTC and DTC Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
the certificates among the DTC Participants for whom it is acting with respect
to the certificates. DTC also is required to receive and transmit distributions
of principal, premium, if any, and interest with respect to the certificates.
Similarly, the DTC Participants and Indirect Participants, with which
certificate owners have accounts for their certificates, are required to make
book-entry transfers and receive and transmit applicable payments on behalf of
their respective customers. Accordingly, although certificate owners will not
possess the certificates, the Rules provide a mechanism by which certificate
owners will receive payments and will be able to transfer their interests.
Because DTC can only act on behalf of DTC Participants, who in turn act on
behalf of Indirect Participants, the ability of a certificate owner to pledge
its certificates to persons or entities that do not participate in the DTC
system, or to otherwise act with respect to its certificates, may be limited due
to the lack of a physical certificate for those certificates.
DTC has advised Union Tank that it will take any action permitted to be
taken by a certificateholder under the pass through trust agreement only at the
direction of one or more of the DTC Participants to whose accounts the
certificates are credited. Additionally, in the event any action requires
approval by certificateholders of a particular percentage of beneficial interest
in each trust, DTC will take such action only at the direction of and on behalf
of DTC Participants whose holdings include undivided interests that satisfy that
percentage. DTC may take conflicting actions with respect to the undivided
interests of DTC Participants who hold those undivided interests.
Neither Union Tank nor the trustee will have any liability for:
- Any aspect of the records relating to or payments made on account of
beneficial ownership interests in the certificates held by Cede, as
nominee for DTC; or
- For maintaining, supervising or reviewing any records relating to those
beneficial ownership interests.
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DEFINITIVE CERTIFICATES
Certificates will be issued in certificated form, called "definitive
certificates", to certificate owners or their nominees, rather than to DTC or
its nominee, only if:
- Union Tank advises the trustee in writing that DTC is no longer willing
or able to discharge properly its responsibilities as depository with
respect to the certificates and Union Tank is unable to locate a
qualified successor;
- Union Tank, at its option, elects to terminate the book-entry system
through DTC; or
- After the occurrence of particular events specified in the related
prospectus supplement, certificate owners with fractional undivided
interests aggregating at least a majority in interest in the applicable
trust advise the trustee, Union Tank and DTC through DTC Participants in
writing that the continuation of a book-entry system through DTC, or its
successor, is no longer in the certificate owners' best interest.
Upon the occurrence of any of these events, the trustee will be required to
notify all certificate owners through DTC Participants of the availability of
definitive certificates. Upon surrender by DTC of the global certificates
representing the certificates and receipt of instructions for re-registration,
the trustee will reissue the certificates as definitive certificates to
certificate owners.
If and when definitive certificates are issued to owners, distributions of
principal, premium, if any, and interest with respect to certificates will be
made in accordance with the procedures set forth in the pass through trust
agreement and the applicable trust supplements. The trustee will make these
distributions directly to holders in whose names the definitive certificates
were registered at the close of business on the applicable record date. The
distributions will be made by check mailed to the address of each applicable
holder as it appears on the register maintained by the trustee. The final
payment on any certificate, however, will be made only upon presentation and
surrender of the certificate at the office or agency specified in the notice of
final distribution to certificateholders.
Definitive certificates will be freely transferable and exchangeable at the
office of the trustee upon compliance with the requirements set forth in the
pass through trust agreement and the applicable trust supplements. No service
charge will be imposed for any registration of transfer or exchange, but payment
of a sum sufficient to cover any tax or other governmental charge will be
required.
PAYMENTS AND DISTRIBUTIONS
GENERAL
Payments of principal, premium, if any, and interest on the equipment notes
held in a trust will be distributed by the trustee, upon receipt, to the
certificateholders of that trust on the dates specified in the applicable
prospectus supplement, except in certain cases. Payments may be affected when
some or all of the equipment notes are in default as described in the applicable
prospectus supplement.
SCHEDULED PAYMENTS
Scheduled payments of principal of, and interest on, the unpaid principal
amount of the equipment notes held in each trust will be scheduled to be
received by the trustee on the regular distribution dates specified in the
applicable prospectus supplement. These are called "scheduled payments." Each
certificateholder of each trust will be entitled to receive a proportional share
of any distribution of scheduled payments of principal and interest made on the
equipment notes held in that trust.
SPECIAL PAYMENTS
Special payments include all payments, other than scheduled payments
received on a regular distribution date or within five days thereafter. Special
payments would include payments of principal,
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premium, if any, and interest received by the trustee on account of the early
redemption or purchase, if any, of the equipment notes relating to one or more
equipment units held in a trust.
Special payments received by the trustee relating to one or more equipment
units will be distributed on the "special distribution date" determined by the
method described in the applicable prospectus supplement. The trustee will mail
notice of any anticipated special distribution date to the certificateholders of
record of the applicable trust.
POOL FACTORS
Certificateholders will receive periodic statements of the pool balance and
pool factor with respect to the relevant trust. Those statements will provide
information with respect to the remaining principal portion of the certificates
issued by that trust. The "pool balance" indicates, as of any given date, the
original aggregate face amount of the certificates of a trust less the aggregate
amount of all principal payments made in relation to those certificates.
The "pool factor" for each trust as of any date is the pool balance for
that trust divided by the aggregate original face amount of certificates of that
trust (rounded to the seventh decimal place).
The pool factor for a trust will initially be 1.0000000 and will decline as
a result of reductions in the pool balance of that trust. The amount of a
certificateholder's proportional share of the pool balance of a trust will be
the original denomination of the holder's certificate of that trust multiplied
by the pool factor for that trust.
The pool factor and the pool balance for each trust will be computed and
mailed to the certificateholders on a regular distribution date or special
distribution date. Each computation will give effect to (1) the payment of
principal, if any, on the equipment notes or other trust property held in the
trust and (2) the distribution of principal to be made on that date.
In the event of an early redemption, a purchase of an issue of equipment
notes by the related owner trustee after an indenture default or a default in
the payment of principal in respect of one or more issues of the equipment notes
held in a trust (if the applicable payment is not made within five days of the
regular distribution date), the pool factor and the pool balance of each trust
affected will be recomputed, after giving appropriate effect to that event.
Notice of the recomputation will be mailed to the certificateholders of that
trust.
REPORTS TO CERTIFICATEHOLDERS
With each distribution of a scheduled payment or a special payment, the
trustee will send to the certificateholders a statement giving effect to that
distribution and setting forth the following information:
- The amount of distribution allocable to principal and the amount
allocable to premium, if any, per $1,000 aggregate principal amount of
certificate for that trust, if any;
- The amount of distribution allocable to interest, per $1,000 aggregate
principal amount of certificate for that trust; and
- The pool balance and the pool factor for that trust.
If the certificates are registered in the name of DTC or its nominee, on
the record date prior to each regular distribution date and special distribution
date, the trustee will request from DTC a securities position listing setting
forth the names of all DTC Participants reflected on DTC's books as holding
interests in the certificates on that date. On each regular distribution date
and special distribution date, the applicable trustee will mail to each of these
DTC Participants the described statement and will make available additional
copies as requested by them for forwarding to certificate owners.
In addition, after the end of each calendar year, the trustee will prepare
a report for each certificateholder of each trust at any time during the
preceding calendar year. Each report will contain the sum of the distributions
allocable to principal, premium, if any, and interest with respect to the trust
for
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that calendar year. In the event a person was a certificateholder during only a
portion of that calendar year, the report will contain the sum for the
applicable portion of that calendar year. The report will also contain other
items readily available to the trustee and which a certificateholder reasonably
requests as necessary for the purpose of that certificateholder's preparation of
its federal income tax return. The report and other items will be prepared on
the basis of information supplied to the trustee by the DTC Participants and
will be delivered by the trustee to those DTC Participants. The report will then
be available for forwarding by DTC Participants to certificate owners.
At the time, if any, certificates are issued in the form of definitive
certificates, the trustee will prepare and deliver the information described
above to each certificateholder of record of each trust as the name and period
of ownership of that certificateholder appears on the records of the registrar
of the certificates.
VOTING OF EQUIPMENT NOTES
The trustee, as holder of the equipment notes held in each trust, has the
right to vote, give consents or waivers or otherwise exercise rights as the
holder of those equipment notes. The pass through trust agreement sets forth:
- The circumstances under which the trustee will direct any action or case
any vote as the holder of the equipment notes held in the applicable
trust at its own discretion;
- The circumstances in which the trustee will seek instructions from the
certificateholders of the trust before taking action as the holder of
equipment notes; and
- If applicable, the percentage of certificateholders required to direct
the trustee to take any action.
Prior to an event of default with respect to any trust, the principal
amount of the equipment notes held in that trust directing any action or being
voted for or against any proposal will be in proportion to the principal amount
of certificates held by the certificateholders of that trust taking the
corresponding position. Whenever the pass through trust agreement requires or
permits actions to be taken based upon instructions or directions of
certificateholders holding a specified percentage interest of a trust, DTC will
be deemed to represent such percentage interest only to the extent that it has
received instructions from certificate owners and/or DTC Participants owning or
representing, respectively, the required percentage interest and has delivered
such instructions to the trustee.
EVENTS OF DEFAULT AND CERTAIN RIGHTS UPON AN EVENT OF DEFAULT
You will have special rights if an event of default occurs and is not
cured, as described later in this subsection. The prospectus supplement will
specify the events of default under the pass through trust agreement and under
the related indentures. The indenture defaults will include events of default
under the related leases.
Unless otherwise provided in a prospectus supplement, all of the equipment
notes issued under the same indenture will relate to specific equipment units
and there will be no cross-collateralization or cross-default provisions in the
indentures. Accordingly, events resulting in an indenture default under any
particular indenture would not necessarily result in an indenture default
occurring under any other indenture.
The ability of the owner trustee or owner participant under an indenture to
cure indenture defaults, including an indenture default that results from the
occurrence of a lease event of default under the related lease, will be
described in the prospectus supplement.
The prospectus supplement related to a series of certificates will describe
the circumstances under which the trustee of a trust may vote some or all of the
equipment notes held in that trust. The prospectus supplement also will set
forth the percentage of certificateholders of the trust entitled to direct the
trustee to take any action with respect to the equipment notes of that trust. If
the equipment notes outstanding under an indenture are held by more than one
trust, then the ability of the certificateholders of any one trust to cause the
indenture trustee with respect to any equipment notes held in the trust to
accelerate
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those equipment notes or to direct the exercise of remedies by the indenture
trustee under the applicable indenture will depend upon the proportion of the
aggregate principal amount of the equipment notes outstanding under the
applicable indenture and trust to the aggregate principal amount of all
equipment notes outstanding under the indenture.
If the equipment notes outstanding under an indenture are held by more than
one trust, then each trust will hold equipment notes with different terms from
the equipment notes held in the other trusts. The certificateholders of each
trust may, therefore, have divergent or conflicting interests from those of the
certificateholders of the other trusts holding equipment notes issued under the
same indenture. For the same reason, so long as the same institution acts as
trustee of each trust, in the absence of instructions from the
certificateholders of any trust, the trustee for the trust might be faced with a
potential conflict of interest upon an indenture default. In the event this sort
of conflict of interest occurs, the trustee has indicated that it would resign
as trustee of one or all of the related trusts, and a successor trustee would be
appointed in accordance with the terms of the pass through trust agreement.
The prospectus supplement for a series of certificates will specify whether
and under what circumstances the trustee may sell all or part of the equipment
notes held in the related trust. A "special payments account" will be
established by the trustee for the benefit of the certificateholders of the
applicable trust, and any proceeds received by the trustee upon any such sale
will be deposited into that special payments account and distributed to the
certificateholders of the applicable trust on a special distribution date.
The market for equipment notes in default may be very limited, and the
trustee may not be able to sell such equipment notes for a reasonable price.
Furthermore, if the same institution acts as trustee of multiple trusts, it may
be faced with a conflict in deciding from which trust to sell equipment notes to
available buyers. If the trustee sells any equipment notes in default for less
than their outstanding principal amount, the certificateholders of that trust
will receive a smaller amount of principal distributions than anticipated and
will not have any claim for the shortfall against Union Tank, any owner trustee,
any owner participant or the trustee. Furthermore, unless otherwise specified in
the applicable prospectus supplement, neither the trustee nor the
certificateholders of that trust could take any action with respect to any
remaining equipment notes held in that trust, so long as no related indenture
defaults exist.
The trustee will deposit in the special payments account for a trust, and
will distribute to the certificateholders of that trust on a special
distribution date, any amount, other than scheduled payments received on a
regular distribution date or within five days of a regular distribution date,
distributed to the trustee of that trust under any indenture on account of the
equipment notes held in that trust. In addition, a prospectus supplement may
provide that the applicable owner trustee may, under some circumstances, redeem
or purchase the outstanding equipment notes issued under the applicable
indenture. If any equipment notes are so redeemed or purchased, the price paid
by the owner trustee to the trustee of any trust for those equipment notes will
be deposited in the special payments account for that trust and will be
distributed to the certificateholders of that trust on a special distribution
date.
The trustee will invest and reinvest, to the extent practicable, any funds
held by the trustee in the special payments account for the related trust,
pending the distribution of those funds on a special distribution date. Those
investments would be made in "permitted investments" specified in the related
prospectus supplement.
The pass through trust agreement provides that the trustee of each trust
will, within 90 days after the occurrence of a default in respect of that trust,
mail to the certificateholders of that trust notice of all uncured or unwaived
defaults with respect to that trust which are known to the trustee. Except in
the case of default in the payment of principal, premium, if any, or interest on
any of the equipment notes held in that trust, the trustee may withhold that
notice if the trustee in good faith determines that the withholding of notice is
in the interests of those certificateholders. The term "default" as used in this
paragraph only means the occurrence of an indenture default with respect to
equipment notes held in a trust, except that in determining whether any
indenture default has occurred, any related grace period or notice will be
disregarded.
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The pass through trust agreement contains a provision entitling the trustee
of each trust, subject to the duty of the trustee during a default to act with
the required standard of care, to demand reasonable security or indemnity from
the certificateholders of that trust before proceeding to exercise any right or
power under the pass through trust agreement at the request of those
certificateholders.
The prospectus supplement for a series of certificates will specify the
percentage of certificateholders entitled to waive, or to instruct the trustee
to waive, any past event of default related to that trust. The prospectus
supplement for a series of certificates also will specify the percentage of
certificateholders entitled to waive, or to instruct the trustee or the
indenture trustee to waive, any past indenture default, and whether that
percentage includes certificateholders of any other trust holding equipment
notes issued under related indentures. A waiver by the relevant
certificateholders of, or instruction by the relevant certificateholders to the
trustee to waive, any past indenture default will annul any direction previously
given.
MERGERS AND SIMILAR EVENTS
We are generally permitted to consolidate or merge with another person. We
are also permitted to sell or lease substantially all of our assets to another
person or to buy or lease substantially all of the assets of another person.
However, we may not take any of these actions unless all of the following
conditions are met:
- The surviving, successor or transferee person will:
-- be organized and validly existing under the laws of the United States
or any of its states or the District of Columbia;
-- expressly assume all of our obligations contained in the pass through
trust agreement and any trust supplement, the participation agreements,
and the leases, and any other operative documents; and
- Union Tank will have delivered a certificate and an opinion or opinions
of counsel indicating that the relevant transaction, in effect, complies
with these conditions.
MODIFICATIONS OF THE PASS THROUGH TRUST AGREEMENT
SUPPLEMENTAL AGREEMENTS ENTERED WITHOUT CONSENT
The pass through trust agreement contains provisions permitting us,
together with the trustee of each trust, to enter into supplemental trust
agreements without the consent of the certificateholders of that trust to, among
other things:
- Provide for the formation of that trust and the issuance of a series of
certificates;
- Evidence the succession of another corporation to Union Tank and the
assumption by that corporation of or obligations under the pass through
trust agreement and the applicable trust supplement;
- Add to our covenants for the benefit of the certificateholders, or to
surrender any of our rights or powers under the pass through trust
agreement;
- Cure any ambiguity or correct or supplement any defective or inconsistent
provision of the pass through trust agreement or the applicable trust
supplement or to make any other provisions necessary to address related
matters or questions that arise, provided that doing so does not
materially adversely affect the interests of the certificateholders;
- Cure any ambiguity or correct any mistake or to give effect or provide
for replacement liquidity facilities, if applicable to the relevant
certificates;
- Comply with any requirement of the SEC, applicable law, rules or
regulations of any exchange or quotation system on which any certificates
may be listed or of any regulatory body;
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- Modify, eliminate or add to the provisions of the pass through trust
agreement to the extent necessary to continue the qualification of the
pass through trust agreement, including any supplemental agreement, under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act")
and to add to the pass through trust agreement any other provisions
expressly permitted by the Trust Indenture Act, with some exceptions;
- Provide for a successor trustee or to add to or change any provision of
the pass through trust agreement as necessary to facilitate the
administration of the related trusts by more than one trustee; and
- Make any other amendments or modifications to the pass through trust
agreement, provided the amendments or modifications will only apply to
certificates issued after the relevant amendment.
No supplemental trust agreement entered into under any of these provisions,
however, will be permitted if it adversely affects the status of any trust as a
grantor trust for U.S. federal income tax purposes.
SUPPLEMENTAL AGREEMENTS ENTERED WITH CONSENT
The pass through trust agreement also contains provisions permitting us,
together with the trustee of each trust, and with the consent of the
certificateholders of that trust evidencing fractional undivided interests
aggregating not less than a majority in interest of that trust, to execute
supplemental trust agreements that add any provisions to or change or eliminate
any of the provisions of the pass through trust agreement relating to that trust
or the applicable trust supplement, or modify the rights of the
certificateholders. No such supplemental trust agreement may, however, without
the consent of each certificateholder to be affected:
- Reduce in any manner the amount of, or delay the timing of, any receipt
by the trustee of payments on the equipment notes held in the applicable
trust or distributions related to any certificate, or change the date or
place of any payment related to any certificate, or make distributions
payable in coin or currency other than that provided for in the
certificates, or impair the right of any certificateholder of the trust
to institute suit for the enforcement of any applicable payment when due;
- Permit the disposition of any equipment note held in the trust, except as
provided in the pass through trust agreement or the applicable trust
supplement, or otherwise deprive any certificateholder of the benefit of
the ownership of the applicable equipment notes;
- Reduce the percentage of the aggregate fractional undivided interests of
the trust provided for in the pass through trust agreement or the
applicable trust supplement, as the consent of the certificateholders of
that trust required for any related supplemental trust agreement or for
any waiver provided for in the pass through trust agreement or applicable
trust supplement;
- Modify any of the provisions relating to the rights of the relevant
certificateholders with regard to the waiver of events of default or
supplemental agreements, with some limited exceptions; or
- Adversely affect the status of any trust as a grantor trust for U.S.
federal income tax purposes.
MODIFICATION OF INDENTURE AND RELATED AGREEMENTS
The prospectus supplement will specify the trustee's obligations in the
event the trustee, as the holder of any equipment notes held in a trust,
receives a request for its consent to any amendment, modification or waiver
under the indenture or other documents relating to the equipment notes,
including any lease.
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TERMINATION OF THE TRUSTS
Our obligations and the obligations of the trustee with respect to a trust
will terminate upon the distribution to certificateholders of that trust of:
- All amounts required to be distributed to them pursuant to the pass
through trust agreement and the applicable trust supplement; and
- The disposition of all property held in that trust.
Before termination, the trustee will send notice of the termination of that
trust to each certificateholder of record. That notice will specify the amount
of the proposed final payment and the proposed date for the distribution of the
final payment for that trust.
The final distribution to any certificateholder of a terminating trust will
be made only upon surrender of that certificateholder's certificates at the
office or agency of the trustee specified in the applicable notice of
termination.
DELAYED PURCHASE OF EQUIPMENT NOTES
In the event that, on the issuance date of any certificates, all of the
proceeds from the sale of those certificates are not used to purchase the
equipment notes contemplated to be held in the related trust, the equipment
notes may be purchased by the trustee at any time on or prior to the date
specified in the applicable prospectus supplement. If such a delay occurs, any
proceeds from the sale of certificates which are not used to purchase equipment
notes will be held under an arrangement described in the applicable prospectus
supplement pending the purchase of those equipment notes. The arrangements with
respect to the payment of interest on funds being held will be described in the
applicable prospectus supplement. If the proceeds are not used to purchase the
equipment notes by the relevant date specified in the applicable prospectus
supplement, they will be returned to the holders of the applicable certificates.
THE TRUSTEE
REPRESENTATIONS, LIABILITIES, OBLIGATIONS AND POWERS
Unless otherwise provided in the prospectus supplement for any series of
certificates, the trustee for each series of certificates will be Bank One,
National Association. The trustee makes no representations as to the validity or
sufficiency of the pass through trust agreement, any trust supplement, any
equipment notes or any other operative document. Unless otherwise specified in a
Prospectus Supplement, Bank One, National Association will also be the indenture
trustee under the indentures pursuant to which the equipment notes are issued.
The trustee will not be liable with respect to any series of certificates
for any action taken or omitted to be taken by it in good faith under the
direction of the holders of a majority in principal amount of outstanding
certificates of the series. If provided by the prospectus supplement, the
trustee will not have any obligation to exercise any of its rights or powers
under the pass through trust agreement at the request of any certificateholders,
unless they have offered to the trustee indemnity satisfactory to it.
The pass through trust agreement provides that the trustee, in its
individual or fiduciary capacity, may acquire and hold certificates and, subject
to some conditions, may otherwise deal with us and with any owner trustee with
the same rights it would have if it were not the trustee.
The trustee may resign from its position as trustee of any or all of the
trusts at any time. Under some circumstances, the trustee could be faced with a
potential conflict of interest as a result of its acting as trustee of one or
more trusts and as indenture trustee with respect to one or more series of
equipment notes. In such event, the trustee either would be required by the
Trust Indenture Act of 1939 to resign as trustee of one or all of the trusts or
has indicated that it would voluntarily so resign as trustee. If the trustee
resigns for any reason, we will appoint a successor trustee. If the trustee
ceases to be eligible to continue as trustee for any trust or becomes incapable
of acting as trustee or becomes insolvent, we may
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remove that trustee. Also, any certificateholder holding certificates of that
trust for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of an
ineligible, incapable, or insolvent trustee and the appointment of a successor
trustee. Any resignation or removal of the trustee and appointment of a
successor does not become effective until acceptance of the appointment by the
successor trustee. Under the resignation and successor trustee provisions, it is
possible that different trustees could be appointed to act as successor trustees
for each trust. All references in this prospectus to the trustee should be read
to take into account the possibility that the trusts could have different
successor trustees in the event of a resignation or removal.
FEES, EXPENSES AND INDEMNIFICATION
The pass through trust agreement provides that we will pay the trustee's
fees and expenses and will indemnify the trustee in accordance with each
participation agreement with respect to certain taxes. To the extent not
indemnified by the Company with respect to such taxes, the pass through trustee
may be entitled to be reimbursed by the applicable trust.
OUR RELATIONSHIP TO THE TRUSTEE
Bank One, National Association is the trustee under certain indentures and
equipment trust agreements to which Union Tank is a party. These agreements
relate to indebtedness which is secured. If an event of default occurred under
the pass through trust agreement or one of the other agreements under which Bank
One, National Association acts as trustee, Bank One, National Association may be
deemed to have a conflicting interest with respect to the certificates for
purposes of the Trust Indenture Act of 1939 and, therefore, may be required to
resign as trustee. Bank One, National Association also provides customary
banking services, including commercial credit facilities and standby letters of
credit to Union Tank and certain of our affiliates. In 1998, Union Tank entered
into a sale-leaseback transaction with a trust for the benefit of an affiliate
of the trustee in which we sold to and leased back from the trust approximately
$130,000,000 in rail cars. In 1992, we entered into a sale-leaseback transaction
with a trust for the benefit of, among others, a subsidiary of Bank One,
National Association's parent. In that transaction, Union Tank sold to and
leased back from the trust approximately $118,000,000 in rail cars.
DESCRIPTION OF THE EQUIPMENT NOTES
The statements made under this caption are summaries of detailed provisions
of the indentures and equipment notes. For more complete and detailed
information, you should consult the entire prospectus and the applicable
prospectus supplement. Additionally, we will file with the SEC forms of the
indenture and equipment notes. You should refer to those agreements for more
information regarding the terms discussed in this prospectus and the
accompanying prospectus supplement. See "Where You Can Find More Information" on
page 23 for more information on documents we file with the SEC. The summaries
contained in this prospectus and the accompanying prospectus supplement are
qualified in their entirety by reference to those filed agreements.
To the extent that any provision in the accompanying prospectus supplement
is inconsistent with any provision in this summary, the prospectus supplement
will control.
GENERAL
Equipment notes will be issued under an indenture between an owner trustee
and an indenture trustee that will be entered into in connection with a
leveraged lease arrangement relating to equipment units. The owner trust
administered by the owner trustee will be the owner of the equipment units. An
owner participant will be the beneficiary of the owner trust. Equipment notes
issued under an indenture will be nonrecourse obligations of the owner trust.
Equipment notes will not be our obligations or the obligations of the applicable
owner participant, and will not be enforceable against us or that owner
participant. Equipment notes will be secured by the equipment units described in
the applicable prospectus supplement and by certain rights of the owner trust
under the related lease.
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PRINCIPAL AND INTEREST PAYMENTS
Interest received by the trustee on the equipment notes held in each trust
will be passed through to the certificateholders of that trust on the dates and
at the annual rate set forth in the applicable prospectus supplement until the
final distribution for that trust. Similarly, principal payments received by the
trustee on the equipment notes held in each trust will be passed through to the
certificateholders of that trust in scheduled amounts on the dates set forth in
the applicable prospectus supplement until the final distribution date for that
trust.
REDEMPTION
The applicable prospectus supplement will describe the circumstances,
whether voluntary or involuntary, under which the equipment notes may be
redeemed or purchased prior to their stated maturity date, in whole or in part.
If the equipment notes can be redeemed or purchased prior to their stated
maturity, the prospectus supplement will describe the premium, if any, payable
upon redemption or purchase, and any other terms applying to the redemption or
purchase of the equipment notes.
SECURITY
The equipment notes will be secured by:
- An assignment by the owner trustee to the related indenture trustee of
the owner trustee's rights under the lease or leases relating to the
equipment units, including the right to receive payments of rent under
the related lease; and
- A perfected security interest granted to the indenture trustee in the
applicable equipment units, subject to our rights under the applicable
lease.
Under the terms of each lease, our obligations with respect to the
equipment units will be those of a lessee under a "net lease." Accordingly, we
will be obligated, among other things, to pay all costs of operating the
equipment units and to maintain and repair them at our expense.
The assignment by the related owner trustee to the related indenture
trustee of its rights under the related lease will exclude, among other things:
- Rights of that owner trustee and the related owner participant relating
to indemnification from us for some matters;
- Insurance proceeds payable to that owner trustee in its individual
capacity and to the related owner participant under liability insurance
maintained by us as required by that lease or by that owner trustee or
related owner participant;
- Insurance proceeds payable to that owner trustee in its individual
capacity or to the related owner participant under casualty insurance
maintained by that owner trustee or related owner participant pursuant to
that lease; and
- Any rights of the related owner participant or that owner trustee to
enforce payment of these amounts and their respective rights to the
related proceeds of the foregoing.
INSURANCE COVERAGE
The prospectus supplement will describe the insurance coverage we are
required to maintain under the relevant lease.
RECOGNITION OF THE INDENTURE TRUSTEE'S SECURITY INTEREST
We will be required to file each indenture, any indenture supplement, each
lease and any lease supplement with respect to the related equipment units with
the Surface Transportation Board of the U.S. Department of Transportation and to
deposit those documents with the Registrar General of Canada under
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the Railway Act of Canada and to publish notice of the deposit in accordance
with that Act. The filing with the Surface Transportation Board will give the
indenture trustee a perfected security interest in (i) each such equipment unit
whenever it is located in the United States and (ii) the applicable lease. The
deposit and publication in Canada will be done in order to protect the lien of
the indenture trustee in and to the lease and the equipment units subject to the
indenture in Canada and any province or territory of any Canada, to the extent
provided for in the Railway Act of Canada.
Each equipment unit may be operated by us or, subject to some limitations,
under sublease or interchange arrangements in the United States, Canada or
Mexico. The extent to which the indenture trustee's security interest would be
recognized in an equipment unit located in countries other than the United
States and Canada is uncertain.
The equipment notes issued under different indentures will not be
cross-collateralized, and consequently the equipment notes issued in relation to
certain equipment units will not be secured by any other equipment units or the
lease related to any other equipment units. Unless and until an indenture
default relating to an equipment unit occurs and is continuing, the indenture
trustee may exercise only limited rights of the related owner trustee under the
related lease.
INVESTMENT AND REINVESTMENT OF FUNDS
The indenture trustee will invest and reinvest funds, if any, relating to
any equipment units and held by that indenture trustee, including funds held as
a result of the loss or destruction of those equipment units or termination of
the lease, pending distribution of those funds. Investments will be described in
the applicable indenture. We will direct the investment and reinvestment of
those funds. We will not, however, direct investment and reinvestment if a lease
event of default exists under the applicable lease.
The net amount of any loss resulting from any of the investments made at
our direction will be paid by us.
PAYMENTS AND LIMITATION OF LIABILITY
PAYMENTS
The owner trustee will lease equipment units to us for a term commencing on
the date those equipment units are delivered to the owner trustee. The term will
expire on a date after the latest maturity date of the related equipment notes,
unless previously terminated as permitted by the terms of the related lease. We
will pay some payments, such as basic rent, under each related lease. Also, the
related owner trustee under the applicable indenture will assign our payments to
the related indenture trustee to provide the funds necessary to pay principal
of, premium, if any, and interest due from the owner trustee on the equipment
notes issued under the related indenture.
In certain cases, the basic rent payments under a lease may be adjusted,
but each lease will provide that under no circumstances will our rent payments
be less than the scheduled payments on the related equipment notes. The balance
of any basic rent payment under each lease, after payment of amounts due on the
equipment notes issued under the indenture corresponding to the applicable
lease, will be paid over to the applicable owner trustee. Our obligation to pay
rent and to cause other payments to be made under each lease will be our general
obligations.
LIMITATION OF LIABILITY
The equipment notes will not be our obligations and will not be guaranteed
by us, except in some specified circumstances involving our purchase of
equipment units and our assumption of some specified obligations, including the
obligation to make payments on the related equipment notes. None of the owner
trustees, the owner participants or the indenture trustees will be personally
liable to any holder of the equipment notes for amounts payable under those
equipment notes, or, except as provided in the related indentures in the case of
the owner trustees and the indenture trustees, for any liability under those
indentures.
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Except in the circumstances mentioned, all amounts payable under any
equipment notes, other than payments made in connection with an optional
redemption or purchase by the related owner trustee or the related owner
participant, will be made only from the assets secured by the lien of the
applicable indenture with respect to the related equipment units or the income
and proceeds received by the related indenture trustee from the applicable
indenture, including rent payable by us under the related lease.
Except as otherwise provided in the applicable indenture, no owner trustee
will be personally liable for any amount payable or for any statements,
representations, warranties, agreements or obligations under any indenture or
equipment notes except for its own willful misconduct or gross negligence. None
of the owner participants will have any duty or responsibility under the
indentures or under the related equipment notes to the related indenture trustee
or to any holder of those equipment notes.
DEFEASANCE OF THE INDENTURES AND THE EQUIPMENT NOTES IN CERTAIN CIRCUMSTANCES
Unless otherwise specified in the applicable prospectus supplement, each
indenture will provide that the obligations of the owner trustee and the
indenture trustee under that indenture will be deemed to have been discharged
and paid in full on the 91st day after the date of irrevocable deposit with the
related indenture trustee of:
- Money; or
- Obligations of the United States or any agency or instrumentality of the
United States the payment of which is backed by the full faith and credit
of the United States which, through the payment of principal and interest
on those obligations and complying with their terms, will provide money
in an aggregate amount sufficient to pay when due, including as a
consequence of redemption in respect of which notice is given on or prior
to the date of irrevocable deposit, the:
-- principal of,
-- premium, if any, and
-- interest on all equipment notes issued under the applicable indenture.
Discharge may occur only if, among other things:
- No event of default or event which with the giving of notice or lapse of
time, or both, would become an event of default under the indenture has
occurred and is continuing on the date of irrevocable deposit; and
- We have delivered an opinion of counsel to the effect that holders of the
equipment notes will not recognize income, gain or loss for federal
income tax purposes as a result of the deposit, defeasance and discharge
and will be subject to federal income tax on the same amount and in the
same manner and at the same time as would have been the case if the
deposit, defeasance and discharge had not occurred.
The deposit of cash or securities as described will not discharge some
obligations, including the obligations:
- To register the transfer or exchange of equipment notes;
- To replace stolen, lost, destroyed or mutilated equipment notes; and
- To maintain paying agencies and hold money for payment in trust.
Upon defeasance, or upon payment in full of the principal of, premium, if
any, and interest on all equipment notes issued under any indenture on its
maturity date or deposit with the applicable indenture trustee of money
sufficient to satisfy those payment obligations no earlier than one year prior
to the maturity of those equipment notes, the holders of the equipment notes
will have no beneficial interest in or other rights related to the equipment
units or other assets subject to the lien of the indenture. As a result, the
lien will terminate.
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OUR ASSUMPTION OF OBLIGATIONS
Unless otherwise specified in the applicable prospectus supplement, upon
our exercise of any options to purchase equipment units we may have under a
lease prior to the end of the term of that lease, we may assume on a full
recourse basis all of the obligations of the owner trustee, other than its
obligations in its individual capacity under the indenture with respect to the
purchased equipment units, including the obligations to make payments on the
related equipment notes.
If we assume the obligations of the owner trustee, relevant provisions of
the related lease, including provisions relating to maintenance, possession and
use of the related equipment units, liens, insurance and events of default, will
be incorporated into the indenture. Also, the equipment notes issued under that
indenture will not be redeemed and will continue to be secured by the equipment
units.
INDENTURE EVENTS OF DEFAULT AND REMEDIES
The prospectus supplement will describe the events of default under the
related indentures, the remedies that the indenture trustee may exercise with
respect to the related equipment units, either at its own initiative or upon
instruction from holders of the equipment notes, and other provisions relating
to the occurrence of an event of default and the exercise of remedies. There
will be no cross-default provisions in the indentures and events resulting in an
event of default under any particular indenture will not necessarily result in
an event of default under any other indenture. Similarly, there will be no
cross-default provisions in the indenture relating to defaults under any of
Union Tank's indebtedness.
In the event of the bankruptcy of an owner participant, it is possible
that, although the related equipment units are owned by an owner trustee in
trust, those equipment units, the related lease and the related equipment notes
might become part of the bankruptcy proceeding. In that event, payments on those
equipment notes might be interrupted and the ability of the indenture trustee to
exercise its remedies under the indenture might be restricted, although the
indenture trustee would retain its status as a secured creditor in relation to
the lease and the related equipment units. In addition, in the event of an owner
participant bankruptcy, the estate might seek court approval to reject the
related lease as an executory contract. A lease rejection, if successful, would
leave the indenture trustee as a secured creditor in relation to the related
equipment units with a claim for damages against the estate.
If we were to become a debtor in a bankruptcy or reorganization case under
the Bankruptcy Code, we or our bankruptcy trustee could reject any or all
leases. In that event, there could be no assurance that the amount of any claim
for damages under those leases that would be allowed in the bankruptcy case
would be in an amount sufficient to provide for the repayment of the related
equipment notes. In any case, rejection of a lease by us or our bankruptcy
trustee would not deprive the related indenture trustee of its security interest
in the related equipment units.
We are not a railroad, and the protections against the automatic stay in
bankruptcy under Section 1168 of the Bankruptcy Code which are granted to
lessors, conditional vendors and purchase money financiers of rolling stock to a
common carrier by railroad will not be available to an indenture trustee upon
the occurrence of a bankruptcy-related event of default by us under a lease.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
GENERAL
Unless otherwise indicated in the applicable prospectus supplement, this
summary describes the principal United States federal income tax consequences of
owning the certificates. This summary is the opinion of Neal, Gerber &
Eisenberg, tax counsel to Union Tank. It applies to you only if you acquire
certificates in the initial offering at the initial offering price and you own
your certificates as capital assets
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for tax purposes. This summary does not apply to you if you are a member of a
class of holders subject to special rules, such as:
- A dealer in securities or currencies;
- A trader in securities that elects to use a mark-to-market method of
accounting;
- A bank;
- A life insurance company;
- A tax-exempt organization;
- A person that owns certificates that are a hedge or that are hedged
against interest rate risks;
- A person that owns certificates as part of a straddle or conversion
transaction for tax purposes; or
- A foreign investor.
This summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), its legislative history, existing and proposed regulations under the
Internal Revenue Code, published rulings and court decisions, all as currently
in effect. These laws are subject to change, possibly on a retroactive basis.
Please consult your own tax advisor concerning the consequences of owning
these certificates in your particular circumstances under the Code and laws of
any other taxing jurisdiction.
This summary describes the tax consequences to a U.S. certificateholder.
You are a U.S. certificateholder if you are a beneficial owner of a certificate
and you are:
- A citizen or resident of the United States;
- A domestic corporation;
- An estate whose income is subject to United States federal income tax
regardless of its source; or
- A trust if a United States court can exercise primary supervision over
the trust's administration and one or more U.S. persons are authorized to
control all substantial decisions of the trust.
If you are not a U.S. certificateholder, this summary does not apply to you and
you should consult with your own tax advisor regarding the consequences of
owning a certificate.
TAX STATUS OF THE TRUSTS
Each trust will be classified as a grantor trust for United States federal
income tax purposes.
TAXATION OF CERTIFICATEHOLDERS GENERALLY
As a certificateholder, you will be treated as owning your proportional
undivided interest in each of the equipment notes and any other property held by
the related trust. Accordingly, your share of interest paid on the equipment
notes will be taxable as ordinary income, as it is paid or accrued, in
accordance with your method of accounting for United States federal income tax
purposes. If we were to assume an owner trust's obligations under any equipment
notes, that assumption would be treated for United States federal income tax
purposes as a taxable exchange of those equipment notes, resulting in
recognition of gain or loss by you.
You will be entitled to deduct, consistent with your method of accounting,
your proportional share of fees and expenses paid or incurred by the
corresponding trust as provided in Section 162 or 212 of the Code. Some fees and
expenses, including fees paid to the trustee, will be borne by parties other
than the certificateholders. Certain of these fees and expenses will be treated
as constructively received by the trust, in which case a certificateholder will
be required to include in income and will be entitled to deduct its proportional
share of those fees and expenses. If a certificateholder is an individual,
estate or trust, the deduction for the relevant holder's share of fees or
expenses will be allowed only to the extent that all of
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that holder's miscellaneous itemized deductions, including that holder's share
of such fees and expenses, exceed 2% of that holder's adjusted gross income. In
addition, in the case of certificateholders who are individuals, certain
otherwise allowable itemized deductions will be subject generally to additional
limitations on itemized deductions under applicable provisions in the Code.
ORIGINAL ISSUE DISCOUNT
The equipment notes may be issued with original issue discount ("OID"). The
applicable prospectus supplement will state whether any equipment notes to be
held by the related trust will be issued with OID and, if applicable, will
describe the special United States federal income tax rules governing debt
instruments issued with OID. Generally, a holder of a debt instrument issued
with OID that is not de minimis must include that OID in income for United
Stated federal income tax purposes as it accrues, in advance of the receipt of
the cash attributable to that income, under a method that takes into account the
compounding of interest.
SALE OR OTHER DISPOSITION OF THE CERTIFICATES
Upon the sale, exchange or other disposition of a certificate, you will
generally recognize capital gain or loss equal to the difference between the
amount realized on the disposition (other than any amount attributable to
accrued interest which will be taxable as ordinary income) and your adjusted tax
basis in the related equipment notes any other property held by the
corresponding trust. Any gain or loss will be long-term capital gain or loss to
the extent that gain or loss is attributable to property held by the trust for
more than one year. Long-term capital gain of a noncorporate U.S.
certificateholder is generally taxed at a maximum rate of 20%.
BACKUP WITHHOLDING AND INFORMATION REPORTING
In general, if you are a noncorporate certificateholder, all payments on an
equipment note will be reported to the Internal Revenue Service. In addition,
the proceeds of the sale of your certificate before maturity within the United
States will be reported to the Internal Revenue Service. Additionally, backup
withholding at a rate of 31% will apply to any payments if you fail to provide
an accurate taxpayer identification number, or you are notified by the Internal
Revenue Service that you have failed to report all interest and dividends
required to be shown on your federal income tax returns.
CERTAIN ILLINOIS TAXES
The trustee is a national banking association with its principal corporate
trust office in Chicago, Illinois. This summary is the opinion of Neal, Gerber &
Eisenberg, our tax counsel. Under currently applicable law, (i) the trusts will
not be subject to any tax (including, without limitation, net or gross income,
tangible or intangible property, net worth, capital, franchise or doing business
tax), fee or other governmental charge under the laws of the State of Illinois
or any of its political subdivisions and (ii) certificate owners who are not
residents of Illinois or otherwise subject to tax in Illinois will not be
subject to any tax (including, without limitation, net or gross income, tangible
or intangible property, net worth, capital, franchise or doing business tax),
fee or other governmental charge under the laws of the State of Illinois or any
of its political subdivisions solely as a result of purchasing, holding
(including receiving payments under) or disposing of a certificate, except to
the extent (a) the indenture trustee forecloses on equipment units and any of
those equipment units are located in Illinois, or (b) a trust engages in
business in Illinois as a result of such foreclosure. Neither the trusts nor the
certificate owners will be indemnified for any state or local taxes imposed on
them, and therefore, the imposition of any such taxes on a trust could reduce
the amounts available for distribution to the certificate owners of the trust.
In general, if a certificate owner or a trust is subject to any state or local
tax which would not be imposed if the trustee were located in a different
jurisdiction in the United States, the trustee will resign and a new trustee in
that other jurisdiction will be appointed.
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ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable prospectus supplement,
certificates may be purchased by or with assets of an employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). A fiduciary of the plan must determine that the purchase of a
certificate is consistent with its fiduciary duties under ERISA and does not
result in a non-exempt prohibited transaction as defined in Section 406 of ERISA
or Section 4975 of the Code. Employee benefit plans which are governmental plans
and certain church plans are not subject to the fiduciary responsibility
provisions of ERISA. Any plan that purchases a certificate must be an
"accredited investor" as defined in Rule 501(a)(1) of Regulation D promulgated
under the Securities Act.
PLAN OF DISTRIBUTION
The certificates may be sold to or through underwriters, directly to
dealers or other purchasers, through agents or through a combination of these
methods. The distribution of the certificates may be effected from time to time
in one or more transactions at:
- A fixed price or prices, which may be changed;
- Market prices prevailing at the time of sale;
- Prices related to the prevailing market prices at the time of sale; or
- Negotiated prices.
In connection with the sale of certificates, underwriters or agents may
receive compensation from us or from purchasers of certificates for whom they
may act as agents in the form of discounts, concessions or commissions.
Underwriters may sell certificates to or through dealers, and those dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers and agents that participate in the distribution of
certificates may be deemed to be underwriters, and any discounts or commissions
received by them from us, and any profit on the resale of certificates by them,
may be deemed to be underwriting discounts and commissions under the Securities
Act. Any outright or deemed underwriter or agent will be identified, and any
related compensation received form us will be described, in the applicable
prospectus supplement.
Under agreements which we may enter into, underwriters and agents who
participate in the distribution of certificates may be entitled to
indemnification by us against some liabilities, including liabilities under the
Securities Act.
We do not intend to apply for the listing of any series of certificates on
a national securities exchange. If the certificates of any series are sold to or
through underwriters, the underwriters may make a market in those certificates,
as permitted by applicable laws and regulations. No underwriter would be
obligated however, to make a market in those certificates, and any market-making
that is done could be discontinued at any time at the sole discretion of the
underwriters. Accordingly, no assurance can be given as to the liquidity of, or
trading markets for, the certificates of any series.
Some of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for us in the ordinary
course of business.
LEGAL OPINIONS
Unless otherwise indicated in the applicable prospectus supplement, the
validity of the certificates will be passed upon for us by Neal, Gerber &
Eisenberg, Chicago, Illinois, and for any agents, dealers or underwriters by
Mayer, Brown & Platt, New York, New York. Both Neal, Gerber & Eisenberg and
Mayer, Brown & Platt will rely on the opinion of the Law Department of Bank One,
National Association
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as to matters relating to the authorization, execution, authentication, issuance
and delivery of the certificates under the pass through trust agreement.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-K for the year
ended December 31, 1999, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports and other information with
the SEC. You may read and copy any documents we file at the SEC's public
reference room 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference room. Our
SEC filings are also available to the public on the SEC's web site at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information as well as
the information included in this prospectus. We incorporate by reference the
documents listed below and any future filings made with the SEC under Sections
13(a), 13(c) or 15(d) of the Securities Exchange Act of 1934 until we sell all
the certificates. This prospectus is part of a registration statement we filed
with the SEC.
- Annual Report on Form 10-K for the fiscal year ended December 31, 1999;
and
- Quarterly Report on Form 10-Q for the quarter ended March 31, 2000.
Union Tank will provide without charge to each person to whom this
prospectus is delivered, upon written request, a copy (without exhibits) of any
or all documents incorporated by reference in this Prospectus. Requests for such
copies should be directed to the General Counsel and Secretary, Union Tank Car
Company, 225 West Washington Street, Chicago, Illinois 60606, telephone (312)
372-9500.
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The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is
not an offer to sell the securities and it is not soliciting an offer to
buy securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MAY 18, 2000
PROSPECTUS
UNION TANK CAR COMPANY
SENIOR SECURED NOTES
-------------------------
This prospectus relates to the issuance of senior secured notes by Union
Tank Car Company.
ISSUANCE OF SENIOR SECURED NOTES:
- - Series may be periodically offered;
- - Series may be denominated in U.S. dollars or other currencies or currency
units;
- - The notes will rank senior to all of Union Tank's existing and future
subordinated indebtedness;
- - The notes will be secured by a first priority lien on some of our railway tank
cars and other rail cars;
- - Prices and terms will be determined at the time of sale; and
- - The total aggregate principal amount (or, in the case of debt securities
issued at a discount, the initial offering price) will not exceed US
$250,000,000 (or the equivalent in foreign currencies or currency units).
FORMS THAT SENIOR SECURED NOTES MAY TAKE:
- - Registered form;
- - Bearer form; or
- - Global form.
This prospectus is accompanied by a prospectus supplement which includes
additional information as to a particular series of senior secured notes. We may
not sell senior secured notes without both this prospectus and a prospectus
supplement.
INFORMATION FOUND IN THE PROSPECTUS SUPPLEMENT:
- - Aggregate principal amount of the series of senior secured notes
- - Description of the collateral securing the notes
- - Denominations
- - Maturity
- - Interest rate
- - Time of interest payments
- - Any terms for redemption
- - Any terms for sinking fund payments
- - Initial public offering price
- - Names of any underwriters or agents
- - Terms of any underwriting arrangements
- - Amounts to be purchased by underwriters or agents
- - Compensation of underwriters or agents
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is , 2000.
39
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a shelf registration process. Under
this shelf process, we may sell the securities described in this prospectus in
one or more offerings up to a total dollar amount of $250,000,000. This
prospectus provides you with a general description of the senior secured notes
we may offer.
Each time we sell senior secured notes, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or change information
contained in this prospectus. You should read both this prospectus and the
prospectus supplement together with additional information described in the
section entitled "Where You Can Find More Information" on page 13.
For more detail, you should read our registration statement and the
exhibits filed with our registration statement.
UNION TANK CAR COMPANY
We are principally engaged in the leasing of railway tank cars and other
rail cars to United States, Canadian and Mexican manufacturers and other
shippers of chemical products, including liquid fertilizers, petroleum products,
including liquid petroleum gas, food products and bulk plastics. We own and
operate one of the largest fleets of privately-owned railway tank cars in the
world.
We are a wholly-owned subsidiary of Marmon Industrial LLC, which is a
wholly-owned subsidiary of Marmon Holdings, Inc. Substantially all the stock of
Marmon Holdings, Inc. is owned, directly or indirectly, by trusts for the
benefit of certain members of the Pritzker family. "Pritzker family" refers to
the lineal descendants of Nicholas J. Pritzker, deceased.
Our principal executive offices are located at 225 West Washington Street,
Chicago, Illinois 60606, and our telephone number is (312) 372-9500.
USE OF PROCEEDS
We intend to use the net proceeds from the sale of senior secured notes for
general corporate purposes, unless otherwise specified in the prospectus
supplement relating to a specific issuance of notes. These general corporate
purposes may include, among other possible uses, financing the addition of
railcars to our fleet, the repayment of indebtedness, capital expenditures and
acquisitions. Pending such use, we may temporarily invest net proceeds in
short-term securities.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
Union Tank and our consolidated subsidiaries for the periods indicated:
YEAR ENDED DECEMBER 31,
-------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
2.96x 3.23x 2.74x 2.84x 2.41x
The ratio of earnings to fixed charges represents the number of times that
interest expense, amortization of debt discount and the interest component of
rent expense were covered by income before income taxes and cumulative effect of
a change in accounting principle and such interest, amortization and the
interest component of rentals.
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DESCRIPTION OF SENIOR SECURED NOTES UNION TANK MAY OFFER
GENERAL
As required by federal law for all bonds and notes of companies that are
publicly offered, the senior secured notes are governed by a document called an
indenture and security agreement. The indenture is a contract, dated as of May
17, 2000, between Union Tank and Bank One, National Association, which acts as
trustee.
The trustee has two main roles. First, the trustee can enforce your rights
against us if we default. There are some limitations on the extent to which the
trustee acts on your behalf, described under "Remedies If an Event of Default
Occurs" on page 11. Second, the trustee performs administrative duties for us,
such as sending you interest payments, transferring your debt securities to a
new buyer if you sell and sending you notices.
The indenture and its associated documents contain the full legal text of
the matters described in this section. A copy of the indenture may be obtained
from Union Tank as described below under "Where You Can Find More Information"
on page 13.
Union Tank may issue as many separate series of senior secured notes under
the indenture as it wishes. The indenture does not limit the amount of notes
which can be issued by Union Tank.
This section summarizes the material terms of the senior secured notes that
are common to all series, although the prospectus supplement which describes the
terms of each series of notes may also describe differences from the material
terms summarized here.
Because this section is a summary, it does not describe every aspect of the
senior secured notes. This summary is subject to and qualified in its entirety
by reference to all the provisions of the indenture, including definitions of
certain terms used in the indenture. In this summary, we described the meaning
for only the more important terms. We also have included references in
parentheses to certain sections of the indenture. Whenever Union Tank refers to
particular sections or defined terms of the indenture in this prospectus or in
the prospectus supplement, such sections or defined terms are incorporated by
reference in this prospectus or in the prospectus supplement. You must look to
the indenture for the most complete description of what Union Tank describes in
summary form in this prospectus.
This summary also is a subject to, and qualified by reference to, the
description of the particular terms of the series of senior secured notes
offered by a prospectus supplement. Those terms may vary from the terms
described in this prospectus. The prospectus supplement relating to each series
of notes will be attached to the front of this prospectus. There may also be a
further prospectus supplement, known as a pricing supplement, which contains the
precise terms of notes that Union Tank may offer.
Union Tank may issue the senior secured notes as original issue discount
securities, which will be offered and sold at a substantial discount below their
stated principal amount. The prospectus supplement relating to original issue
discount securities will describe federal income tax consequences and other
special considerations applicable to them. The notes may also be issued as
securities denominated in foreign currencies or currency units, as described in
more detail in the prospectus supplement relating to any of the particular
notes. The prospectus supplement relating to specific notes will also describe
any special considerations and certain additional tax considerations applicable
to such notes.
In addition, the specific financial, legal and other terms particular to a
series of senior secured notes are described in the prospectus supplement and
any pricing supplement relating to the series. The prospectus supplement
relating to a series of debt securities will describe the following terms of the
securities:
- the title of the series of senior secured notes.
- any limit on the aggregate principal amount of the series of senior
secured notes;
- a description of the collateral securing the notes;
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- the person to whom interest on a note is payable, if other than the
holder on the regular record date;
- the date or dates on which the series of notes will mature;
- the annual rate or rates, which may be fixed or variable, at which the
series of notes will bear interest, if any, and the date or dates from
which that interest, if any, will accrue;
- the place or places where the principal of, premium, if any, and interest
on the senior secured notes is payable;
- the dates on which interest, if any, on the series of notes will be
payable and the regular record dates for the interest payment dates;
- any mandatory or optional sinking funds or similar provisions, or
provisions for redemption of the notes at our option;
- the date, if any, after which and the price or prices at which the series
of notes may be redeemed and the other detailed terms and provisions of
those optional or mandatory redemption provisions, if any;
- if other than denominations of $1,000 and any of its integral multiples,
the denominations in which the series of notes will be issuable;
- the currency of payment of principal, premium, if any, and interest on
the series of notes;
- if the currency is subject to the election of Union Tank or a holder, the
currencies which may be elected and the terms and conditions upon which
the election can be made;
- whether the provisions described under "Defeasance" on page 10 apply to
the notes;
- any event of default under the series of senior secured notes which is
different from those described under "What is an Event of Default?" on
page 11;
- if the series of notes will be issuable only in the form of a global
security, the depository or its nominee with respect to the series of
notes and the circumstances under which the global security may be
registered for transfer or exchange in the name of a person other than
the depositary or the nominee; and
- any other special feature of the series of senior secured notes.
LEGAL OWNERSHIP
STREET NAME AND OTHER INDIRECT HOLDERS
We generally will not recognize investors who hold notes in accounts at
banks or brokers as legal holders of notes. This is called holding in street
name. Instead, Union Tank would recognize only the bank or broker, or the
financial institution the bank or broker uses to hold its notes. These
intermediary banks, brokers and other financial institutions pass along
principal, interest and other payments on the notes, either because they agree
to do so in their customer agreements or because they are legally required to do
so. If you hold notes in street name, you should check with your own institution
to find out:
- how it handles securities payments and notices;
- whether it imposes fees or charges;
- how it would handle voting if required;
- whether and how you can instruct it to send you notes registered in your
own name so that you can be a direct holder as described below; and
- how it would pursue rights under the notes if there were a default or
other event triggering the need for holders to act to protect their
interests.
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DIRECT HOLDERS
Our obligations, as well as the obligations of the trustee and those of any
third parties employed by Union Tank or the trustee, run only to persons who are
registered as holders of notes. As noted above, Union Tank does not have
obligations to you if you hold notes in street name or other indirect means,
either because you choose to hold notes in that manner or because the notes are
issued in the form of global securities as described below. For example, once we
make payment to the registered holder, we have no further responsibility for the
payment, even if that holder is legally required to pass the payment along to
you as a street name customer but does not do so.
GLOBAL SECURITIES
- WHAT IS A GLOBAL SECURITY? A global security is a special type of
indirectly held security, as described above under "Street Name and Other
Indirect Holders". If Union Tank chooses to issue notes in the form of
global securities, the ultimate beneficial owners can only be indirect
holders. Union Tank would do this by requiring that the global security
be registered in the name of a financial institution it selects and by
requiring that the notes represented by the global security not be
transferred to the name of any other direct holder unless the special
circumstances described below occur. The financial institution that acts
as the sole direct holder of a global security is called the depositary.
Any person wishing to own a note must do so indirectly through an account
with a broker, bank or other financial institution that in turn has an
account with the depositary. The prospectus supplement indicates whether
your series of senior secured notes will be issued only in the form of
global securities.
- SPECIAL INVESTOR CONSIDERATIONS FOR GLOBAL SECURITIES. As an indirect
holder, an investor's rights relating to a global security will be
governed by the account rules of the investor's financial institution and
of the depositary, as well as general laws relating to securities
transfers. We do not recognize an indirect holder as a holder of notes
and instead deal only with the depositary that holds the global security.
If you are an investor, you should be aware that if notes are issued only
in the form of global securities:
- You cannot get notes registered in your own name.
- You cannot receive physical certificates for your interest in the notes.
- You will be a street name holder and must look to your own bank or broker
for payments on the notes and protection of your legal rights relating to
the notes. See "Legal Ownership -- Street Name and Other Indirect
Holders" on page 4.
- You may not be able to sell interests in the notes to some insurance
companies and other institutions that are required by law to own their
securities in the form of physical certificates.
- The depositary's policies will govern payments, transfers, exchange and
other matters relating to your interest in the global security. Union
Tank and the trustee have no responsibility for any aspect of the
depositary's actions or for its records of ownership interest in the
global security. Union Tank and the trustee also do not supervise the
depositary in any way.
- SPECIAL SITUATIONS WHEN A GLOBAL SECURITY WILL BE TERMINATED. In a few
special situations described in the next paragraph, a global security
will terminate and interests in it will be exchanged for physical
certificates representing notes. After that exchange, the choice of
whether to hold notes directly or in street name will be up to you. You
will have to consult your own bank or broker to find out how to have your
interests in notes transferred to your own name, so that you will be a
direct holder. When a global security terminates, certificates will be
issued in the names of registered holders specified by the depositary,
not by Union Tank or the trustee. The rights of street name investors and
direct holders of notes have been previously described in the subsections
entitled "Street Name and Other Indirect Holders" on page 4 and "Direct
Holders" on page 5.
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The special situations in which a global security will be terminated are:
- When the depositary notifies Union Tank that it is unwilling, unable or
no longer qualified to continue as depositary.
- When Union Tank notifies the trustee that it wishes to terminate the
global security.
- When an event of default on the notes has occurred and has not been
cured. (Default is discussed later under "Events of Default" on page 10.)
The prospectus supplement may also describe additional situations for
terminating a global security that would apply only to the particular series of
notes covered by the prospectus supplement.
In the remainder of this description "you" means direct holders and not
street name or other indirect holders of notes. Indirect holders should read the
previous subsection on page 4 entitled "Street Name and Other Indirect Holders".
OVERVIEW OF REMAINDER OF THIS DESCRIPTION
The remainder of this description summarizes:
- Additional Mechanics relevant to the notes under normal circumstances,
such as how you transfer ownership and where Union Tank makes payments;
- Your rights in several Special Situations, such as if Union Tank merges
with another company, or if Union Tank wants to change a term of the
notes;
- Except for its obligations relating to the collateral securing a series
of notes, the absence in the indenture of any promises by Union Tank
about how it will run its business or any business action Union Tank
promises to take, known as a Restrictive Covenant;
- Defeasance clauses, which may allow for Union Tank to be completely
released from its payment and other obligations on the notes or partially
released from any restrictive covenants in the indenture; and
- Your rights if Union Tank Defaults or experiences other financial
difficulties.
ADDITIONAL MECHANICS
FORM, EXCHANGE AND TRANSFER
Unless otherwise specified in a prospectus supplement, the notes will be
issued:
- only in fully registered form;
- without interest coupons; and
- in denominations that are even multiples of $1,000. (Section 2.2).
You may have your notes divided into more notes of smaller denominations or
combined into fewer notes of larger denominations, as long as the total
principal is not changed. (Section 2.8). This is called an exchange.
You may exchange or transfer notes at the office of the trustee. The
trustee acts as Union Tank's agent for registering notes in the names of holders
and transferring notes. Union Tank may change this appointment to another entity
or perform these functions itself. The entity performing the role of maintaining
the list of registered holders is called the security registrar. It will also
perform transfers. (Section 2.7).
You will not be required to pay a service charge to transfer or exchange
notes, but you may be required to pay for any tax or other governmental charge
associated with the exchange or transfer. The
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transfer or exchange will only be made if the security registrar is satisfied
with your proof of ownership. (Section 2.8).
If the notes are redeemable, neither the registrar nor Union Tank is
required to register the transfer or exchange of notes during the period
beginning 15 days before the day Union Tank mails the notice of redemption and
ending on the day on which the notice of redemption is first published. Union
Tank may also refuse to register transfers or exchanges of notes selected for
redemption, except that Union Tank will continue to permit transfers and
exchanges of the unredeemed portion of any note being partially redeemed.
(Section 2.8).
PAYMENT AND PAYING AGENTS
Union Tank will pay interest to you, if you are a direct holder listed in
the trustee's records at the close of business on a particular day in advance of
each due date for interest, even if you no longer own the note on the date
interest is actually paid. That particular day, usually about two weeks in
advance of the payment date, is called the regular record date and is stated in
the prospectus supplement. Holders buying and selling debt securities must work
out between them how to compensate for the fact that Union Tank will pay all the
interest for an interest period to the one who is the registered holder on the
regular record date. The most common manner is to adjust the sales price of the
securities to pro rate interest fairly between buyer and seller. This prorated
interest amount is called accrued interest.
Union Tank will pay interest, principal and any other money due on the
notes at the corporate trust office of the trustee in New York City. You must
make arrangements to have your payments picked up at or wired from that office.
Union Tank may choose to pay interest by mailing checks.
Street Name and other indirect holders should consult their banks, brokers
or other financial institutions for information on how they will receive
payments.
Union Tank may also arrange for additional payment offices, and may cancel
or change these offices, including its use of the trustee's corporate trust
office. These offices are called paying agents. Union Tank may also choose to
act as its own paying agent. Union Tank must notify the trustee of the name and
address of any paying agent that is not a party to the indenture. (Section 2.4).
NOTICES
Union Tank and the trustee will send notices regarding the notes only to
direct holders, using their addresses as listed in the trustee's records.
(Sections 5.2 and 8.6).
SPECIAL SITUATIONS
MERGERS AND SIMILAR EVENTS
Union Tank is generally permitted to consolidate or merge with another
person. We are also permitted to sell or convey all or substantially all of our
assets to another person. However, we may not take any of these actions unless
the following conditions are met:
- Where Union Tank merges out of existence or sells or conveys all or
substantially all of its assets, the other person must be organized under
the laws of any state or the District of Columbia or under federal law,
and it must agree to be legally responsible for the notes.
- Immediately after giving effect to the merger, sale of assets or other
transaction, Union Tank must not be in default on the notes. For purposes
of this no-default test, a default would include an event of default that
has occurred and not been cured. A default for this purpose would also
include any event that would be an event of default if Union Tank were to
be given a default notice or if the event were to exist for a specific
period of time. (Section 6.1).
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Following the consolidation or merger with or sale or lease of assets to another
person, that person will be substituted for Union Tank under the indenture, and,
except in the case of a lease, all obligations of Union Tank under the indenture
and the debt securities will terminate.
MODIFICATION AND WAIVER
There are three types of changes Union Tank can make to the indenture and
the notes.
CHANGES REQUIRING YOUR APPROVAL. We cannot make the following changes to
your notes without your specific approval:
- change the rate of interest or the time of payment of any note;
- change the principal amount of or the stated maturity of any note;
- reduce any premium payable upon the redemption of any note;
- waive a default in the payment of the principal of or interest on any
note;
- change the currency of payment on a note;
- impair your right to sue for payment;
- permit the disposition of the collateral securing the notes except as
permitted by the indenture;
- reduce the percentage of the principal amount of notes the consent of
which is needed to modify or amend the indenture;
- reduce the percentage of the principal amount of notes the consent of
which is needed to waive compliance with certain provisions of the
indenture or to waive certain defaults; or
- modify any other aspect of the provisions dealing with modification and
waiver of the indenture. (Section 10.2).
CHANGES REQUIRING A MAJORITY VOTE. The second type of change to the
indenture and the notes is the kind that requires a vote in favor by the holders
of notes owning a majority of the principal amount of the particular series
affected. Most changes fall into this category, except for clarifying changes
and certain other changes that would not adversely affect holders of the notes
described in the next paragraph. (Section 10.2). Union Tank may obtain a waiver
of a past default from the holders of notes owning a majority of the principal
amount of the particular series affected. However, Union Tank cannot obtain a
waiver of a payment default or any other aspect of the indenture or the notes
listed and described previously under "Changes Requiring Your Approval" unless
Union Tank obtains a consent to the waiver from every holder. (Section 10.2).
CHANGES NOT REQUIRING APPROVAL. The third type of change to the indenture
and the notes does not require any vote by holders of notes. This type is
limited to:
- cure any ambiguity, defect or inconsistency in the indenture or in the
debt securities;
- provide for the assumption of all the obligations of Union Tank under the
debt securities and under the indenture by any corporation in connection
with a merger, consolidation, or transfer or lease of substantially all
of our assets;
- to secure the debt securities;
- provide for uncertificated debt securities in addition to or in place of
certificated debt securities;
- make any change that does not adversely effect the rights of any holder
of a debt security;
- provide for the issuance of and establish the form and terms and
conditions of a series of debt securities; or
- add to rights of holders of debt securities. (Section 10.1).
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ABSENCE OF RESTRICTIVE COVENANTS
Except for its obligations relating to the collateral as described below
under "Security," the indenture does not contain any promises by Union Tank on
how it will operate its business and does not restrict Union Tank's ability to
incur debt or grant liens on its assets. Similarly, the indenture does not
contain any "event risk" provisions that may afford holders of notes protection
in the event of a highly leveraged transaction involving Union Tank. If Union
Tank determines to include such a promise for the benefit of a particular series
of notes, such promise, or restrictive covenant, will be described in the
prospectus supplement relating to that series of notes.
SECURITY
Each series of notes will be secured by a first priority lien on some of
our railway tank cars and other rail cars of the types used in our business. The
specific collateral that secures a series of notes, the cost of the collateral
and the earliest date on which any of the collateral was put in use, will be
described in the prospectus supplement for that series. The cost of any unit of
equipment included in the collateral that is built by us or our subsidiary will
be the so-called "car builder's cost." This includes our cost of labor and
material and overhead, but does not include any manufacturing profit. The cost
of any unit of equipment included in the collateral that we purchase from
another manufacturer will be our actual cost.
The indenture contains provisions requiring us to record the indenture and
each indenture supplement promptly after they are executed and delivered with
the Surface Transportation Board of the U.S. Department of Transportation and
the Registrar General of Canada. We will be required to take similar actions in
all other jurisdictions required by law or reasonably requested by the trustee
in order to protect the trustee's security interest in the collateral and your
rights, but we will not be required to recorded in any jurisdiction if:
- in our opinion the recording would be too burdensome, and
- after taking into account our failure to record, we have done everything
required by law to protect the trustee's security interest in collateral
with a value of not less than 90% of the value of all collateral securing
the particular series of notes. The indenture defines "value" as the
greater of the fair market value of the collateral and the cost of the
collateral reduced by 1/20 of the cost for each year the collateral has
been in use.
MAINTENANCE, RELEASE AND SUBSTITUTION OF COLLATERAL
We will be required to maintain the collateral in good condition until it
becomes worn out, unsuitable for use, lost or destroyed. This is called a
casualty occurrence. The indenture provides that whenever collateral securing a
particular series of notes with a value of $750,000 or 1% of the principal
amount of that series of notes then outstanding, whichever is less, has suffered
a casualty occurrence, we must either deposit with the trustee cash equal to the
value of the collateral that suffered the casualty occurrence as of the date of
the casualty occurrence or deliver to the trustee collateral with a value at
least equal to the value of the collateral that suffered the casualty
occurrence.
The indenture provides for the release by the trustee of collateral
securing a particular series of notes at our request provided that we:
- grant to the trustee a first priority lien on other units of equipment,
regardless of when those units were first put into use with a value at
least equal to the value of the collateral to be released, or
- pay to the trustee cash equal to the value of the collateral to be
released.
Any cash we deposit with the trustee in connection with a casualty occurrence or
a release of collateral will be paid by the trustee to us if we elect to
exchange additional units of equipment with a value at least equal to the amount
of cash to be paid by the trustee.
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RANKING OF THE SENIOR SECURED NOTES
The notes will rank senior in right of payment to all of our existing and
future subordinated indebtedness. "Subordinated indebtedness" means all of our
indebtedness that is expressly subordinate in right of payment to the notes.
Each series of senior secured notes will rank equal in right of payment to all
other series of notes issued under the indenture and to our other indebtedness
which is not subordinated.
DEFEASANCE
Union Tank may be completely released from its payment and other
obligations on the notes or may be released from certain events of default as
described below. The following discussion of defeasance, satisfaction and
discharge will be applicable to your series of notes unless Union Tank chooses
not to have them apply to that series, in which case it will state that in the
prospectus supplement. (Section 9.1).
FULL DEFEASANCE
Union Tank can legally release itself from certain obligations on the notes
of a series, called defeasance, if Union Tank puts in place the following
arrangement for you to be repaid:
- Union Tank must deposit with the trustee, in trust, at or before
maturity, for your benefit and the benefit of all holders of the debt
securities of that series a combination of money and U.S. government
notes or bonds or notes or obligations guaranteed by the U.S. government
that, in the opinion of a nationally recognized firm of independent
public accountants chosen by Union Tank, will generate enough cash to
make interest, principal and any other payments on the notes on their
various due dates. (Section 8.1).
Defeasance of the notes would be subject to the satisfaction of certain
conditions, including:
- There cannot be an event of default on the date Union Tank makes the
deposit in trust;
- Your interest and all other holders of notes in the deposit must be
perfected; and
- The deposit must not result in the breach by Union Tank of any of its
material agreements.
SATISFACTION AND DISCHARGE
If we are able to defease the notes, as described above, and satisfy
certain other conditions, Union Tank will be released from its obligations to
pay principal and interest on the notes when due, and you would have to rely
solely on the money or securities deposited in trust for repayment of the notes.
You could not look to Union Tank for repayment.
The conditions that must be satisfied include, except in limited
circumstances involving a deposit made within one year of maturity of the notes:
- There cannot be an event of default on the date we make the deposit or on
the 91st day after we make the deposit; and
- Union Tank must deliver to the trustee a legal opinion of nationally
recognized tax counsel confirming that Union Tank may make the deposit of
money or securities without causing you to be taxed on the notes any
differently than if Union Tank did not make the deposit and instead
repaid the notes in accordance with their terms.
DEFAULT AND RELATED MATTERS
EVENTS OF DEFAULT
You will have special rights if an event of default occurs and is not
cured, as described later in this subsection. Unless otherwise specified in a
prospectus supplement, all of the senior secured notes issued under the same
indenture supplement will relate to specific collateral and there will be no
cross-collateralization or cross-default provisions in the indenture
supplements.
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WHAT IS AN EVENT OF DEFAULT? The term "Event of Default" means any of the
following:
- Union Tank does not pay the principal of a note on its due date.
- Union Tank does not pay interest on a note within 30 days of its due
date.
- Union Tank does not deposit money in a separate account, known as a
sinking fund, when a deposit is due.
- Union Tank remains in breach of any agreement of Union Tank contained in
the indenture for 90 days after we receive a notice of default stating we
are in breach. The notice must be sent by either the trustee or holders
of 25% of the outstanding principal amount of notes of the affected
series.
- Union Tank files for bankruptcy or certain other events of bankruptcy,
insolvency or reorganization occur. (Section 7.1).
REMEDIES IF AN EVENT OF DEFAULT OCCURS. If an event of default has occurred
and has not been cured, the trustee or the holders of at least 25% in principal
amount of the notes of the affected series may declare the entire principal
amount of all the notes of that series and any accrued interest to be due and
immediately payable. In the case of original issue discount securities, the
trustee or the required percentage of holders may declare due and payable the
portion of the principal amount that is specified in the terms of the affected
debt security. This is called a declaration of acceleration of maturity.
However, a declaration of acceleration of maturity may be cancelled by the
holders of at least a majority in principal amount of the notes of the affected
series if all events of default have been cured or waived but only before a
judgment or decree based on the acceleration has been obtained. (Section 7.2).
Please refer to the prospectus supplement relating to any series of notes
which are original issue discount securities for the particular provisions
relating to acceleration of the maturity of original issue discount securities
upon the occurrence of an event of default.
Except in cases of default, where the trustee has some special duties, the
trustee is not required to take any action under the indenture at the request of
any holders unless the holders offer the trustee reasonable protection from
expenses and liability. This protection is called an indemnity. (Section 8.1).
If reasonable indemnity is provided, subject to some limitations, the holders of
a majority of the outstanding principal amount of the notes of the relevant
series may direct the time, method and place of conducting any lawsuit or other
formal legal action seeking any remedy available to the trustee. These majority
holders may also direct the trustee in performing any other action under the
indenture. (Section 7.6).
Before you bypass the trustee and bring your own lawsuit or other formal
legal action or take other steps to enforce your rights or protect your
interests relating to the notes, the following must occur:
- You must give the trustee written notice that an event of default has
occurred and remains uncured.
- The holders of 25% of the outstanding principal amount of all the notes
of the relevant series must make a written request that the trustee take
action because of an event of default, and must offer reasonable
indemnity to the trustee against the cost and other liabilities of taking
that action.
- The trustee must have not taken action for 60 days after receipt of the
above written request and offer of indemnity and no directions
inconsistent with the above written request must have been given to the
trustee by the holders of a majority of the outstanding principal amount
of the notes during such period. (Section 7.7).
However, you are entitled at any time to bring a lawsuit for the payment of
money due on your notes on or after its due date. (Section 7.8).
Street name and other indirect holders should consult their banks, brokers
or other financial institutions for information on how to give notice or
direction to or make a request of the trustee and to make or cancel a
declaration of acceleration.
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OUR RELATIONSHIP TO THE TRUSTEE
Bank One, National Association is the trustee under certain indentures,
equipment trust agreements and a pass through trust agreement to which Union
Tank is a party. Certain of these agreements relate to indebtedness which is
secured. If an event of default occurred under the indenture relating to the
senior secured notes or one of the other agreements under which Bank One,
National Association acts as trustee, Bank One, National Association may be
deemed to have a conflicting interest with respect to the notes for purposes of
the Trust Indenture Act of 1939 and, therefore, may be required to resign as
trustee. First Chicago also provides customary banking services, including
commercial credit facilities and standby letters of credit to Union Tank and
certain of our affiliates. In 1998, Union Tank entered into a sale-leaseback
transaction with a trust for the benefit of an affiliate of the trustee in which
we sold to and leased back from the trust approximately $130,000,000 in rail
cars. In 1992, we entered into a sale-leaseback transaction with a trust for the
benefit of, among others, a subsidiary of Bank One, National Association's
parent. In that transaction, Union Tank sold to and leased back from the trust
approximately $118,000,000 in rail cars.
PLAN OF DISTRIBUTION
Union Tank may sell senior secured notes:
- to or through underwriters;
- through agents;
- through dealers; or
- through a combination of these methods.
The distribution of the notes may be effected from time to time in one or
more transactions at (i) a fixed price or prices, which may be changed, (ii)
market prices prevailing at the time of sale, (iii) prices related to the
prevailing market prices at the time of sale, or (iv) negotiated prices.
The prospectus supplement for each series of notes will describe:
- the terms of the offering of those notes, including the names of any
agents or underwriters;
- the public offering or purchase price;
- any discounts and commissions to be allowed or paid to the agents or
underwriters and all other items which are underwriting compensation;
- any discounts and commissions to be allowed or paid to dealers; and
- other specific terms of the particular notes.
Only the agents or underwriters named in a particular prospectus supplement
are agents or underwriters in connection with the notes being offered by that
prospectus supplement.
Underwriters, agents and dealers may be entitled, under agreements with
Union Tank, to indemnification against certain civil liabilities, including
liabilities under the Securities Act of 1933.
Each series of senior secured notes will be a new issue of securities and
will not have an established trading market. Union Tank will not list any series
of notes on an exchange. No assurance can be given that you will be able to
resell any notes that you may purchase.
Underwriters, dealers or agents may engage in transactions with, or perform
services for, Union Tank or its affiliates in the ordinary course of business.
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LEGAL OPINIONS
Unless otherwise indicated in the applicable prospectus supplement, the
validity of the senior secured notes offered hereby will be passed upon for us
by Neal, Gerber & Eisenberg, Chicago, Illinois, and for any agents, dealers or
underwriters by Mayer, Brown & Platt, New York, New York.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-K for the year
ended December 31, 1999, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports and other information with
the Securities and Exchange Commission. You may read and copy any documents we
file at the SEC's public reference room, 450 Fifth Street, N.W., Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference room. Our SEC filings are also available to the public on the
SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information as well as
the information included in this prospectus. We incorporate by reference the
documents listed below and any future filing we make with the SEC under Sections
13(a), 13(c) or 15(d) of the Securities Exchange Act of 1934 until we sell all
the senior secured notes. This prospectus is part of a registration statement we
filed with the SEC.
- Annual Report on Form 10-K for the fiscal year ended December 31, 1999;
and
- Quarterly Report on Form 10-Q for the quarter ended March 31, 2000.
We will provide without charge to each person to whom this prospectus is
delivered, upon written request, a copy (without exhibits) of any or all
documents incorporated by reference in this prospectus. Requests for such copies
should be directed to the General Counsel and Secretary, Union Tank Car Company,
225 West Washington Street, Chicago, Illinois 60606, telephone (312) 372-9500.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses (other than
underwriting discounts and commissions) to be incurred by the registrant in
connection with the offering described in this Registration Statement:
Securities and Exchange Commission registration fee......... $ 66,000*
Trustees' fees and expenses................................. 13,000
Printing expenses........................................... 75,000
Auditors' fees and expenses................................. 15,000
Attorneys' fees and expenses................................ 75,000
Rating agency fees.......................................... 125,000
Miscellaneous............................................... 11,000
--------
Total................................................ $380,000
========
- -------------------------
* Actual. All other amounts are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law, Article Sixth of Union
Tank's Restated Certificate of Incorporation and Article VIII of Union Tank's
By-Laws authorize and empower Union Tank to indemnify its directors, officers,
employees and agents against liabilities incurred in connection with, and
related expenses resulting from, any claim, action or suit brought against any
such person as a result of such person's relationship with Union Tank, provided
that such persons acted in accordance with a stated standard of conduct in
connection with the acts or events on which such claim, action or suit is based.
The finding of either civil or criminal liability on the pan of such persons in
connection with such acts or events is not necessarily determinative of the
question of whether such persons have met the required standard of conduct and
are, accordingly, entitled to be indemnified.
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENTS
- ------- ------------------------
1(a) -- Form of Underwriting Agreement (Debt Securities).*
1(b) -- Form of Underwriting Agreement (Pass Through Certificates).*
1(c) -- Form of Underwriting Agreement (Senior Secured Notes).*
4(a)(1) -- Indenture dated as of January 16, 1997 between Union Tank
and Harris Trust and Savings Bank. Incorporated by reference
to Exhibit 4(b) to Union Tank's Registration Statement on
Form S-3 (Registration No. 333-17121).
4(a)(2) -- Pass Through Trust Agreement dated as of May 17, 2000
between Union Tank and Bank One, National Association.
4(a)(3) -- Indenture and Security Agreement dated as of May 17, 2000
between Union Tank and Bank One, National Association.
5(a) -- Opinion of Neal, Gerber & Eisenberg, counsel for Union Tank,
relating to Debt Securities.
5(b) -- Opinion of Neal, Gerber & Eisenberg, counsel for Union Tank,
relating to Pass Through Certificates.
5(c) -- Opinion of Neal, Gerber & Eisenberg, counsel for Union Tank,
relating to Senior Secured Notes.
II-1
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EXHIBIT
NUMBER DESCRIPTION OF DOCUMENTS
- ------- ------------------------
8 -- Tax Opinion of Neal, Gerber & Eisenberg, counsel for the
Company.
12 -- Computation of Ratios of Earnings to Fixed Charges for the
five years ended December 31, 1999. Incorporated by
reference to Exhibit 12 to Union Tank's Annual Report on
Form 10-K for the year ended December 31, 1999.
23(a) -- Consent of Ernst & Young LLP, Independent Auditors.
23(b) -- Consent of Neal, Gerber & Eisenberg (included in Exhibits
5(a), 5(b), 5(c) and 8(a)).
24 -- Powers of Attorney (included on the signature pages to this
Registration Statement).
25(a) -- Statement of Eligibility on Form T-1 of Harris Trust and
Savings Bank as trustee for the Debt Securities.
Incorporated by reference to Exhibit 25(b) to Union Tank's
Registration Statement on Form S-3 (Registration No.
333-17121).
25(b) -- Statement of Eligibility on Form T-1 of Bank One, National
Association, as trustee under the Pass Through Trust
Agreement and under the Indenture and Security Agreement.
- -------------------------
* To be filed by amendment or as an exhibit to a Current Report on Form 8-K.
ITEM 17. UNDERTAKINGS
A. Undertakings Regarding Rule 415 Offering.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, that paragraphs 1(i) and 1(ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
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(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. Undertaking Regarding Documents Subsequently Filed Under the Exchange
Act.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new Registration Statement relating to the securities
offered herein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
C. Undertaking in Respect of Indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
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54
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Union Tank Car
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, State of Illinois on the 17th day of May,
2000.
UNION TANK CAR COMPANY
/s/ R.C. GLUTH
--------------------------------------
Robert C. Gluth,
Executive Vice President,
Treasurer and Director
Each person whose signature appears below hereby constitutes and appoints
Robert C. Gluth, Robert W. Webb and Kenneth P. Fischl, and each of them, the
true and lawful attorneys-in-fact and agents of the undersigned, with full power
of substitution and resubstitution, for and in the name, place and stead of the
undersigned and to file the same, with all exhibits thereto, in any and all
capabilities, to sign any and all amendments and any registration statement
filed pursuant to Rule 462(b) of the Securities Act of 1933, as amended
(including post-effective amendments thereto and other documents in connection
therewith), with the Securities and Exchange Commission, and hereby grants to
such attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done,
as fully to all intents and purposes as the undersigned might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the 17th day of May, 2000.
SIGNATURE TITLE
--------- -----
/s/ ROBERT A. PRITZKER President and Director (principal executive
- --------------------------------------------------- officer)
Robert A. Pritzker
/s/ R.C. GLUTH Executive Vice President, Treasurer and
- --------------------------------------------------- Director (principal financial and accounting
Robert C. Gluth officer)
/s/ K.P. FISCHL Director
- ---------------------------------------------------
K.P. Fischl
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