[CONFORMED COPY]
$3,500,000,000
5-YEAR
CREDIT AGREEMENT
dated as of
May 21, 1997
among
Norfolk Southern Corporation,
The Banks From Time to Time Parties Hereto,
Morgan Guaranty Trust Company of New York,
as Administrative Agent
and
Merrill Lynch Capital Corporation,
as Documentation Agent
------------------------
J.P. Morgan Securities Inc.
and
Merrill Lynch & Co.,
Arrangers
TABLE OF CONTENTS
---------------
PAGE
ARTICLE 1
DEFINITION
SECTION 1.1. Definitions............................1
SECTION 1.2. Accounting Terms and Determinations...12
SECTION 1.3. Types of Loans and Borrowings.........12
ARTICLE 2
THE CREDIT
SECTION 2.1. Commitments to Lend...................12
SECTION 2.2. Notice of Committed Borrowings........13
SECTION 2.3. Money Market Borrowings...............13
SECTION 2.4. Notice to Banks; Funding of Loans.....16
SECTION 2.5. Maturity of Loans.....................17
SECTION 2.6. Interest Rates........................17
SECTION 2.7. Regulation D Compensation.............20
SECTION 2.8. Facility Fees.........................20
SECTION 2.9. Optional Termination or Reduction
of Commitments......................21
SECTION 2.10. Method of Electing Interest Rates.....21
SECTION 2.11. Optional Prepayments..................22
SECTION 2.12. Scheduled Termination of Commitments..22
SECTION 2.13. General Provisions as to Payments.....23
SECTION 2.14. Funding Losses........................23
SECTION 2.15. Computation of Interest and Fees......24
SECTION 2.16. Registry..............................24
ARTICLE 3
CONDITIONS
SECTION 3.1. Closing Date..........................24
SECTION 3.2. Borrowings............................25
SECTION 3.3. Waiver by Banks.......................26
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Corporate Existence and Power.........26
SECTION 4.2. Corporate and Governmental
Authorization; No Contravention.....26
SECTION 4.3. Binding Effect........................27
SECTION 4.4. Financial Information.................27
SECTION 4.5. Litigation............................28
SECTION 4.6. Compliance with Laws..................28
SECTION 4.7. Environmental Matters.................28
SECTION 4.8. Taxes.................................28
SECTION 4.9. Significant Subsidiaries..............29
SECTION 4.10. Not an Investment Company or
a Holding Company...................29
SECTION 4.11. Full Disclosure.......................29
SECTION 4.12. No Default............................29
ARTICLE 5
COVENANTS
SECTION 5.1. Information...........................30
SECTION 5.2. Maintenance of Property; Insurance....32
SECTION 5.3. Conduct of Business and Maintenance
of Existence........................32
SECTION 5.4. Compliance with Laws..................33
SECTION 5.5. Payment of Obligations................33
SECTION 5.6. Inspection of Property, Books and
Records.............................33
SECTION 5.7. Financial Covenants...................33
SECTION 5.8. Negative Pledge.......................34
SECTION 5.9. Consolidations, Mergers and Sales
of Assets...........................35
SECTION 5.10. Use of Proceeds.......................37
SECTION 5.11. Limitation on Subsidiary Debt and
Debt of Conrail.....................37
SECTION 5.12. Transactions with Affiliates..........38
SECTION 5.13. Arrangements Regarding Conrail
Stock and Assets....................38
SECTION 5.14. Consummation..........................38
ARTICLE 6
DEFAULT
SECTION 6.1. Events of Default.....................38
SECTION 6.2. Notice of Default.....................40
ARTICLE 7
THE AGENT
SECTION 7.1. Appointment and Authorization.........41
SECTION 7.2. Agents and Affiliates.................41
SECTION 7.3. Action by Administrative Agent........41
SECTION 7.4. Consultation with Experts.............41
SECTION 7.5. Liability of Agents...................41
SECTION 7.6. Indemnification.......................41
SECTION 7.7. Credit Decision.......................42
SECTION 7.8. Successor Agent.......................42
SECTION 7.9. Agents' Fees..........................42
ARTICLE 8
CHANGE IN CIRCUMSTANCE
SECTION 8.1. Basis for Determining Interest Rate
Inadequate or Unfair................42
SECTION 8.2. Illegality............................43
SECTION 8.3. Increased Cost and Reduced Return.....43
SECTION 8.4. Taxes.................................45
SECTION 8.5. Base Rate Loans Substituted for
Affected Fixed Rate................47
SECTION 8.6. Substitution of Bank..................48
ARTICLE 9
MISCELLANEOUS
SECTION 9.1. Notices...............................48
SECTION 9.2. No Waivers............................49
SECTION 9.3. Expenses; Indemnification.............49
SECTION 9.4. Sharing of Set-Offs...................49
SECTION 9.5. Amendments and Waivers................50
SECTION 9.6. Successors and Assigns................50
SECTION 9.7. Governing Law; Submission to
Jurisdiction, WAIVER OF JURY
TRIAL...............................51
SECTION 9.8. Counterparts; Integration;
Effectiveness.......................52
SECTION 9.9. Confidentiality.......................52
SECTION 9.10. Termination...........................52
SECTION 9.11. Collateral............................52
SECTION 9.12. Representations of Banks..............53
Commitment Schedule
Pricing Schedule
Exhibit A - Note
Exhibit B-1 - Opinion of Special Counsel for the Borrower
Exhibit B-2 - Opinion of General Counsel of the Borrower
Exhibit C - Opinion of Special Counsel for the Agents
Exhibit D - Assignment and Assumption Agreement
Exhibit E - Money Market Quote Request
Exhibit F - Invitation for Money Market Quotes
Exhibit G - Money Market Quote
5-YEAR CREDIT AGREEMENT
AGREEMENT dated as of May 21, 1997, among NORFOLK SOUTHERN
CORPORATION, the BANKS from time to time parties hereto, MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, as Administrative Agent and MERRILL LYNCH CAPITAL
CORPORATION, as Documentation Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITION
SECTION 1.1. Definitions. The following terms, as used herein, have the
following meanings:
"Acquisition" means the acquisition by the Borrower and CSX, directly
or indirectly (including without limitation through the Voting Trust), of
Conrail pursuant to the Joint Offer and the Merger.
"Acquisition Sub" means the entity to be formed by the Borrower and
CSX to facilitate the Joint Offer and the Merger, the voting equity of
which will be owned 50% by the Borrower and 50% by CSX.
"Absolute Rate Auction" means a solicitation of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.3.
"Adjusted CD Rate" has the meaning set forth in Section 2.6(b).
"Adjusted Consolidated Total Capital" means at any date the sum of
(i) Consolidated Net Worth and (ii) Adjusted Consolidated Total Debt, in
each case at such date.
"Adjusted Consolidated Total Debt" means at any date, without
duplication, (i) the aggregate amount of Debt of the Borrower and its
Consolidated Subsidiaries (including without limitation the aggregate
amount of Debt of Conrail which constitutes Debt of the Borrower or any of
its Consolidated Subsidiaries pursuant to clause (viii) of the definition
of Debt (any such Debt, "Guaranteed Conrail Debt")), determined on a
consolidated basis as of such date plus (ii) (x) the aggregate amount of
Debt of Conrail and its Consolidated Subsidiaries, determined on a
consolidated basis as of such date minus the aggregate amount of Guaranteed
Conrail Debt as of such date times (y) 58%.
"Administrative Agent" means Morgan Guaranty Trust Company of New
York in its capacity as Administrative Agent for the Banks hereunder, and
its successors in such capacity.
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative
Agent and submitted to the Administrative Agent (with a copy to the
Borrower) duly completed by such Bank.
"Affiliate" means (i) any Person that directly, or indirectly through
one or more intermediaries, controls the Borrower (a "Controlling Person")
or (ii) any Person (other than the Borrower or a Subsidiary) which is
controlled by or is under common control with a Controlling Person. As used
herein, the term "CONTROL" means possession, directly or indirectly of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Agent" means the Administrative Agent or the Documentation Agent,
and "Agents" means both of them.
"Applicable Lending Office" means, with respect to any Bank, (i) in
the case of its Domestic Loans, its Domestic Lending Office, (ii) in the
case of its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in
the case of its Money Market Loans, its Money Market Lending Office.
"Applicable Margin" means, (i) with respect to Euro-Dollar Loans at
any time, the Euro-Dollar Margin at such time and (ii) with respect to CD
Loans at any time, the CD Margin at such time. The Euro-Dollar Margin and
the CD Margin applicable at any time are the respective percentage rates
per annum set forth in the Pricing Schedule which are applicable at such
time in accordance with the Pricing Schedule.
"Assessment Rate" has the meaning set forth in Section 2.6(b).
"Assignee" has the meaning set forth in Section 9.6(c).
"Bank" means each financial institution listed on the signature pages
hereof, each Assignee which becomes a Bank pursuant to Section 9.6(c), and
their respective successors.
"Base Rate" means, for any day, a rate per annum equal to the higher
of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus
Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan which bears interest at a
rate per annum based upon the Base Rate pursuant to the applicable Notice
of Borrowing or Notice of Interest Rate Election or the provisions of
Section 2.6(e) or Article .
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by
the Borrower.
"Borrower" means Norfolk Southern Corporation, a Virginia
corporation, its successors, and any Person with which the Borrower merges
or consolidates, or to which it sells substantially all of its assets, in
accordance with Section 5.9.
"Borrower's 1996 Form 10-K" means the Borrower's annual report on
Form 10-K for 1996, as filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934.
"Borrowing" has the meaning set forth in Section 1.3.
"CD Base Rate" has the meaning set forth in Section 2.6(b).
"CD Loan" means a Committed Loan which bears interest at a CD Rate
pursuant to the applicable Notice of Borrowing or Notice of Interest Rate
Election.
"CD Rate" means a rate of interest determined pursuant to Section on
the basis of an Adjusted CD Rate.
"CD Reference Banks" means The First National Bank of Chicago,
Wachovia Bank of North Carolina, N.A. and Morgan Guaranty Trust Company of
New York.
"Closing Date" mean the date on or after the Effective Date on which
all of the conditions set forth in Section 3.1 shall have been satisfied.
"Commitment" means: (i) with respect to each Bank listed on the
signature pages hereof, the amount set forth opposite the name of such Bank
in the Commitment Schedule, or (ii) with respect to each Assignee which
becomes a Bank pursuant to Section 9.6(c), the amount of the Commitment
thereby assumed by it, in each case as such amount may be reduced from time
to time pursuant to Section 2.9 or increased or reduced by reason of an
assignment to or by such Bank in accordance with Section 9.6(c).
"Commitment Schedule" means the Schedule attached hereto and
identified as such.
"Committed Loan" means a loan made by a Bank pursuant to Section 2.1.
"Conrail" means Conrail Inc., a Pennsylvania corporation, and its
successors (including, without limitation, the survivor of the Merger,
whether or not Conrail, Inc.).
"Consolidated Net Income" means, for any fiscal period, the net
income of the Borrower and its Consolidated Subsidiaries, determined on a
consolidated basis for such period.
"Consolidated Net Worth" means at any date the consolidated
stockholders' equity of the Borrower and its Consolidated Subsidiaries as
of such date.
"Consolidated Subsidiary" means at any date with respect to any
Person, any Subsidiary or other entity the accounts of which would be
consolidated with those of such Person in its consolidated financial
statements if such statements were prepared as of such date. Unless
otherwise specified, a "Consolidated Subsidiary" shall be a Consolidated
Subsidiary of the Borrower.
"Consummation Date" means the later of the Merger Date and the STB
Approval Date.
"Continuing Director" has the meaning set forth in Section 6.1(l).
"CSX" means CSX Corporation, a Virginia corporation, and its
successors.
"Debt" of any Person means at any date, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) all indebtedness of
such Person evidenced by bonds, debentures, notes, equipment trust
certificates or other similar instruments, (iii) all obligations of such
Person to pay the deferred purchase price of property or services, except
trade accounts payable arising in the ordinary course of business, (iv) all
obligations of such Person as lessee which are capitalized in accordance
with generally accepted accounting principles, (v) any obligation (whether
fixed or contingent) to reimburse any bank or other Person in respect of
amounts paid or payable under a standby letter of credit, (vi) any capital
stock of such Person which is redeemable otherwise than at the sole option
of such Person, (vii) all Debt of others secured by a Lien on any asset of
such Person, whether or not such Debt is assumed by such Person, and (viii)
all Debt of others Guaranteed by such Person.
"Derivatives Obligations" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including
any option with respect to any of the foregoing transactions) or any
combination of the foregoing transactions.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Documentation Agent" means Merrill Lynch Capital Corporation in its
capacity as Documentation Agent for the Banks hereunder.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law
to close.
"Domestic Lending Office" means, as to each Bank, its office located
at its address set forth in its Administrative Questionnaire (or identified
in its Administrative Questionnaire as its Domestic Lending Office) or such
other office as such Bank may hereafter designate as its Domestic Lending
Office by notice to the Borrower and the Administrative Agent; provided
that any Bank may so designate separate Domestic Lending Offices for its
Base Rate Loans, on the one hand, and its CD Loans, on the other hand, in
which case all references herein to the Domestic Lending Office of such
Bank shall be deemed to refer to either or both of such offices, as the
context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in Section
2.6(b).
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 9.8(b).
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment, to the effect
of the environment on human health or to emissions, discharges or releases
of pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes into the environment
including, without limitation, ambient air, surface water, ground water, or
land, or otherwise relating to the transport, manufacture, processing,
distribution, use, treatment, storage, disposal or handling of pollutants,
contaminants, petroleum or petroleum products, chemicals or industrial,
toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower, any Consolidated Subsidiary and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower or any Consolidated Subsidiary, are treated as a single employer
under Section 414 of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Euro-Dollar Lending Office
by notice to the Borrower and the Administrative Agent.
"Euro-Dollar Loan" means a Committed Loan which bears interest at a
Euro-Dollar Rate pursuant to the applicable Notice of Borrowing or Notice
of Interest Rate Election.
"Euro-Dollar Rate" means a rate of interest determined pursuant to
Section 2.6(c) on the basis of a London Interbank Offered Rate.
"Euro-Dollar Reference Banks" means the principal London offices of
The First National Bank of Chicago, Wachovia Bank of North Carolina, N.A.
and Morgan Guaranty Trust Company of New York.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.7.
"Event of Default" has the meaning set forth in Section 6.1.
"Existing Credit Agreement" means the Credit Agreement dated as of
February 10, 1997, among the Borrower, the banks parties thereto, Morgan
Guaranty Trust Company of New York, as administrative agent for such banks
and Merrill Lynch Capital Corporation, as documentation agent for such
banks, as in effect on the Closing Date.
"Facility Fee Rate" means, at any time, the applicable percentage
rate per annum set forth in the Pricing Schedule which is applicable at
such time in accordance with the Pricing Schedule.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is not
a Domestic Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Domestic Business Day as so
published on the next succeeding Domestic Business Day, and (ii) if no such
rate is so published on such next succeeding Domestic Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to Morgan
Guaranty Trust Company of New York on such day on such transactions as
determined by the Administrative Agent.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money
Market Loans (excluding Money Market LIBOR Loans bearing interest at the
Base Rate pursuant to Section 8.1(a)) or any combination of the foregoing.
"Group of Loans" means at any time a group of Loans consisting of (i)
all Loans which are Base Rate Loans at such time or (ii) all Loans which are
Euro-Dollar Loans or CD Loans having the same Interest Period at such time,
provided that, if a Loan of any particular Bank is converted to or made as
a Base Rate Loan pursuant to Article 8, such Loan shall be included in the
same Group or Groups of Loans from time to time as it would have been in if
it had not been so converted or made.
"Guarantee" by any person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i)
to purchase or pay (or advance or supply funds for the purchase or payment
of) such Debt (whether arising by virtue of partnership arrangements, by
agreement to keep-well, to purchase assets, goods, securities or services,
to take-or-pay, or to maintain financial statement conditions or otherwise)
or (ii) entered into for the purpose of assuring in any other manner the
obligee of such Debt of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part), provided that the
term Guarantee shall not include endorsements for collection or deposit in
the ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Information Memorandum" means the Information Memorandum dated April
22, 1997 furnished to the Banks in connection with this Agreement.
"Interest Period" means: (1) with respect to each Euro-Dollar Loan,
the period commencing on the date of borrowing specified in the applicable
Notice of Borrowing or on the date specified in the applicable Notice of
Interest Rate Election and ending one, two, three or six months thereafter,
as the Borrower may elect in the applicable notice; provided that:
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business
Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall, subject to clause (c) below,
end on the last Euro-Dollar Business Day of a calendar month; and
(c) no Interest Period shall extend beyond the
Termination Date.
(2) with respect to each CD Loan, the period commencing on the date
of borrowing specified in the applicable Notice of Borrowing or on the date
specified in the applicable Notice of Interest Rate Election and ending 30,
60, 90 or 180 days thereafter, as the Borrower may elect in the applicable
notice; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would otherwise end on
a day which is not a Euro-Dollar Business Day shall be extended to
the next succeeding Euro-Dollar Business Day; and
(b) no Interest Period shall extend beyond the
Termination Date.
(3) with respect to each Money Market LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending such whole number of
months thereafter as the Borrower may elect in accordance with Section 2.3;
provided that:
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business
Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall, subject to clause (c) below,
end on the last Euro-Dollar Business Day of a calendar month; and
(c) no Interest Period shall extend beyond the
Termination Date.
(4) with respect to each Money Market Absolute Rate Borrowing, the
period commencing on the date of such Borrowing and ending such number of
days thereafter (but not less than 14 days) as the Borrower may elect in
accordance with Section 2.3; provided that:
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day; and
(b) no Interest Period shall extend beyond the
Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investment" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, time deposit or otherwise.
"Joint Offer" means the offer by the Offeror to purchase all the
outstanding shares of Common Stock and Series A ESOP Convertible Junior
Preferred Stock of Conrail at $115 net per share pursuant to the Joint
Offer to Purchase.
"Joint Offer to Purchase" means the Offer to Purchase by the Offeror
to the stockholders of Conrail, as supplemented as of April 10, 1997, and
as the same may be further amended from time to time in accordance with its
terms; provided that no such amendment (other than (i) any amendment
effecting an extension of the expiration date of the Joint Offer and (ii)
any amendments effecting any modification which, in the reasonable opinion
of the Agents could not impede or delay the Merger or otherwise materially
adversely affect the Acquisition, the parties to the Acquisition or the
Banks) shall be effective for purposes of references thereto in this
Agreement unless approved in writing by the Required Banks.
"Letter Agreement" means the letter agreement dated April 8, 1997
between the Borrower and CSX, relating to the Joint Offer and the other
matters set forth therein.
"Leverage Ratio" means, at any date, the ratio (expressed as a
percentage) of Adjusted Consolidated Total Debt to Adjusted Consolidated
Total Capital, in each case at such date.
"LIBOR Auction" means a solicitation of Money Market Quotes setting
forth Money Market Margins based on the London Interbank Offered Rate
pursuant to Section 2.3.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset. For the purposes of this Agreement, the Borrower or any Subsidiary
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional
sale agreement, capital lease or other title retention agreement relating
to such asset.
"Loan" means a Base Rate Loan, a CD Loan, a Euro-Dollar Loan or a
Money Market Loan and "Loans" means any combination of the foregoing, as
the context may require; provided that, if any such Loan or Loans (or
portions thereof) are combined or subdivided pursuant to a Notice of
Interest Rate Election, the term "Loan" shall refer to the combined
principal amount resulting from such combination or to each of the separate
principal amounts resulting from such subdivision, as the case may be.
"Loan Documents" means this Agreement and any Notes delivered
pursuant hereto.
"London Interbank Offered Rate" has the meaning set forth in Section
2.6(c).
"Margin Regulations" means Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System, as amended and in effect from time
to time.
"Material Adverse Change" has the meaning specified in Section
4.4(c).
"Material Debt" means Debt (other than under the Loan Documents) of
the Borrower and/or one or more of its Subsidiaries, arising in one or more
related or unrelated transactions, in an aggregate principal amount
exceeding $50,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $100,000,000.
"Merger" means the "Merger" between Conrail and Green Merger Corp., a
wholly-owned subsidiary of the Offeror, as described and defined in the
Joint Offer to Purchase, pursuant to which Conrail shall become a
Subsidiary of the Offeror and its outstanding stock shall cease to be
"margin stock" within the meaning of the Margin Regulations.
"Merger Date" means the date of consummation of the Merger.
"Money Market Absolute Rate" has the meaning set forth in Section
2.3(d).
"Money Market Absolute Rate Loan" means a loan to be made by a Bank
pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as it
may hereafter designate as its Money Market Lending Office by notice to the
Borrower and the Administrative Agent; provided that any Bank may from time
to time by notice to the Borrower and the Administrative Agent designate
separate Money Market Lending Offices for its Money Market LIBOR Loans, on
the one hand, and its Money Market Absolute Rate Loans, on the other hand,
in which case all references herein to the Money Market Lending Office of
such Bank shall be deemed to refer to either or both of such offices, as
the context may require.
"Money Market LIBOR Loan" means a loan to be made by a Bank pursuant
to a LIBOR Auction (including such a loan bearing interest at the Base Rate
pursuant to Section 8.1(a)).
"Money Market Loan" means a Money Market LIBOR Loan or a Money Market
Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section 2.3(d).
"Money Market Quote" means an offer by a Bank to make a Money Market
Loan in accordance with Section 2.3.
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member
of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made
contributions, including for these purposes any Person which ceased to be a
member of the ERISA Group during such five year period.
"Notes" has the meaning set forth in Section 2.16(b).
"Notice of Borrowing" means a Notice of Committed Borrowing (as
defined in Section 2.2) or a Notice of Money Market Borrowing (as defined
in Section 2.3(f)).
"Notice of Interest Rate Election" has the meaning set forth in
Section 2.10.
"Offeror" means Green Acquisition Corp., a Pennsylvania corporation
the voting equity of which will all be owned by Acquisition Sub at all
times on and after the formation of Acquisition Sub.
"Parent" means, with respect to any Bank, any Person controlling such
Bank.
"Participant" has the meaning set forth in Section 9.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
"Plan" means at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Internal Revenue
Code and either (i) is maintained, or contributed to, by any member of the
ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed
to, by any Person which was at such time a member of the ERISA Group for
employees of any Person which was at such time a member of the ERISA Group.
"Pricing Schedule" means the Schedule attached hereto identified as
such.
"Prime Rate" means the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York in New York City from time to time as
its Prime Rate.
"Quarterly Dates" means each March 31, June 30, September 30 and
December 31.
"Reference Banks" means the CD Reference Banks or the Euro-Dollar
Reference Banks, as the context may require, and "Reference Bank" means any
one of such Reference Banks.
"Required Banks" means at any time Banks having at least 51% of the
aggregate amount of the Commitments at such time (or, if the Commitments
shall have terminated, Banks having at least 51% of the aggregate principal
amount of Loans outstanding at such time).
"Revolving Credit Period" means the period from and including the
Closing Date to but not including the Termination Date.
"Significant Subsidiary" means, at any time, (i) Norfolk Southern
Railway Company, (ii) Norfolk and Western Railway Company and (iii) each
other Subsidiary (x) whose assets (or, in the case of a Subsidiary which
has subsidiaries, consolidated assets) as shown on the latest financial
statements delivered by the Borrower pursuant to Section 5.1(a) or (b), as
the case may be, are (A) at least 5% of the consolidated assets of the
Borrower and its Consolidated Subsidiaries (including for such purpose
Conrail and its Subsidiaries, all as shown on such financial statements) at
such time and (B) at least $1,500,000,000 or (y) whose operating income
(or, in the case of a Subsidiary which has subsidiaries, consolidated
operating income) as shown on the latest financial statements delivered by
the Borrower pursuant to Section 5.1(a)or (b), as the case may be, is (A)
at least 5% of the consolidated operating income of the Borrower and its
Consolidated Subsidiaries (including for such purpose Conrail and its
Subsidiaries, all as shown on such financial statements) at such time and
(B) at least $150,000,000.
"STB" means the Surface Transportation Board, an agency of the
Federal Government of the United States.
"STB Approval Date" means the date of effectiveness of the order
issued by the STB approving the acquisition of control of Conrail by the
Borrower and CSX, without any terms or conditions not satisfactory to the
Borrower or to CSX.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time directly or
indirectly owned by such Person; unless otherwise specified, a "Subsidiary"
means a Subsidiary of the Borrower.
"Termination Date" means May 21, 2002 (or, if such date is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day).
"Type" has the meaning set forth in Section 1.3.
"Unfunded Liabilities" means, with respect to any Plan at any time,
the amount (if any) by which (i) the present value of all benefit
liabilities under such Plan exceeds (ii) the fair market value of all Plan
assets allocable to such benefit liabilities (excluding any accrued but
unpaid contributions), but only to the extent that such excess represents a
potential liability of a member of the ERISA Group to the PBGC or any other
Person under Title IV of ERISA.
"United States" means the United States of America, including the
States and the District of Columbia, but excluding its territories and
possessions.
"Voting Trust" means the voting trust established pursuant to the
Voting Trust Agreement.
"Voting Trust Agreement" means the CSX/NSC Voting Trust Agreement
contemplated by the Joint Offer to Purchase, as in effect on the Closing
Date and as the same may be further amended from time to time in accordance
with the provisions thereof and hereof.
SECTION 1.2 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted,
all accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from
time to time, applied on a basis consistent (except for changes concurred
in by the Borrower's independent public accountants) with the then most
recent audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Banks; provided that, if the
Borrower notifies the Administrative Agent that the Borrower wishes to
amend any covenant in Article 5 to eliminate the effect of any change in
generally accepted accounting principles on the operation of such covenant
(or if the Administrative Agent notifies the Borrower that the Required
Banks wish to amend Article 5 for such purpose), then the Borrower's
compliance with such covenant shall be determined on the basis of generally
accepted accounting principles in effect immediately before the relevant
change in generally accepted accounting principles became effective, until
either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Banks.
SECTION 1.3 Types of Loans and Borrowings. The term "Borrowing"
denotes the aggregation of Loans of one or more Banks to be made to the
Borrower pursuant to Article 2 on the same date, all of which Loans are of
the same Type (subject to Article 8) and, except in the case of Base Rate
Loans, have the same initial Interest Period. The "Type" of a Loan refers
to the determination whether such Loan is a Euro-Dollar Loan, a CD Loan, a
Base Rate Loan or a Money Market Loan, each of which constitutes a "Type".
ARTICLE 2
THE CREDIT
SECTION 2.1 Commitments to Lend. During the Revolving Credit Period,
each Bank severally agrees, on the terms and conditions set forth in this
Agreement, to make Loans to the Borrower from time to time in an aggregate
amount at any time outstanding not to exceed the amount of its Commitment.
Within the limits specified in this Agreement, the Borrower may borrow
under this Section 2.1, prepay Loans to the extent permitted by Section
2.11 and reborrow at any time during the Revolving Credit Period pursuant
to this Section 2.1. Each Borrowing under this Section 2.1 shall be in the
aggregate principal amount of $25,000,000 or any larger multiple of
$1,000,000 (except that any such Borrowing may be in the aggregate amount
of the unused Commitments) and shall be made from the several Banks ratably
in proportion to their respective Commitments.
SECTION 2.2 Notice of Committed Borrowings. The Borrower shall give
the Administrative Agent notice (a "Notice of Committed Borrowing") not
later than 10:30 A.M. (New York City time) on (x) the date of each Base
Rate Borrowing, (y) the second Domestic Business Day before each CD
Borrowing and (z) the third Euro-Dollar Business Day before each
Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic Business
Day in the case of a Domestic Borrowing or a Euro-Dollar Business Day in
the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) the initial Type of Loans comprising such Borrowing; and
(d) in the case of a Fixed Rate Borrowing, the duration of the
initial Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
SECTION 2.3 Money Market Borrowings.
(a) The Money Market Option. In addition to Committed Borrowings
pursuant to Section 2.1, but within the limitations of the Commitments as
contemplated by Section 3.2(b), the Borrower may, as set forth in this
Section, request (but is not obligated to request) the Banks from time to
time prior to the Termination Date to make offers to make Money Market
Loans to the Borrower. The Banks may make, but shall have no obligation to
make, such offers and the Borrower may accept, but shall have no obligation
to accept, any such offers in the manner set forth in this Section.
(b) Money Market Quote Request. When the Borrower wishes to request
offers to make Money Market Loans under this Section, it shall transmit to
the Administrative Agent by telex or facsimile transmission a Money Market
Quote Request substantially in the form of Exhibit E hereto so as to be
received no later than 10:30 A.M. (New York City time) on (x) the fifth
Euro-Dollar Business Day prior to the date of Borrowing proposed therein,
in the case of a LIBOR Auction or (y) the Domestic Business Day next
preceding the date of Borrowing proposed therein, in the case of an
Absolute Rate Auction (or, in either case, such other time or date as the
Borrower and the Administrative Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for
which such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic
Business Day in the case of an Absolute Rate Auction,
(ii) the proposed aggregate amount of such Borrowing, which
shall be $25,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set forth
a Money Market Margin or a Money Market Absolute Rate. The Borrower
may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money
Market Quote Request shall be given within five Euro-Dollar Business
Days (or such other number of days as the Borrower and the
Administrative Agent may agree) of any other Money Market Quote
Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt of a
Money Market Quote Request, the Administrative Agent shall send to the
Banks by telex or facsimile transmission an Invitation for Money Market
Quotes substantially in the form of Exhibit F hereto, which shall
constitute an invitation by the Borrower to each Bank to submit Money
Market Quotes offering to make the Money Market Loans to which such Money
Market Quote Request relates in accordance with this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each Bank may
submit a Money Market Quote containing an offer or offers to make Money
Market Loans in response to any Invitation for Money Market Quotes. Each
Money Market Quote must comply with the requirements of this subsection (d)
and must be submitted to the Administrative Agent by telex or facsimile
transmission at its offices specified in or pursuant to Section 9.1 not
later than (x) 2:00 P.M. (New York City time) on the fourth Euro-Dollar
Business Day prior to the proposed date of Borrowing, in the case of a
LIBOR Auction or (y) 9:30 A.M. (New York City time) on the proposed date of
Borrowing, in the case of an Absolute Rate Auction (or, in either case,
such other time or date as the Borrower and the Administrative Agent shall
have mutually agreed and shall have notified to the Banks not later than
the date of the Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effective); provided
that Money Market Quotes submitted by the Administrative Agent (or any
affiliate of the Administrative Agent) in the capacity of a Bank may be
submitted, and may only be submitted, if the Administrative Agent or such
affiliate notifies the Borrower of the terms of the offer or offers
contained therein not later than (x) one hour prior to the deadline for the
other Banks, in the case of a LIBOR Auction or (y) 15 minutes prior to the
deadline for the other Banks, in the case of an Absolute Rate Auction.
Subject to Articles 3 and 6, any Money Market Quote so made shall be
irrevocable except with the written consent of the Administrative Agent
given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the form
of Exhibit G hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for
which each such offer is being made, which principal amount (w)
may be greater than or less than the Commitment of the quoting
Bank, (x) must be $5,000,000 or a larger multiple of
$1,000,000, (y) may not exceed the principal amount of Money
Market Loans for which offers were requested and (z) may be
subject to an aggregate limitation as to the principal amount
of Money Market Loans for which offers being made by such
quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin above or
below the applicable London Interbank Offered Rate (the "Money
Market Margin") offered for each such Money Market Loan,
expressed as a percentage (specified to the nearest 1/10,000th
of 1%) to be added to or subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (specified to the nearest 1/10,000th of 1%)
(the "Money Market Absolute Rate") offered for each such Money
Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the
quoting Bank with respect to each Interest Period specified in the related
Invitation for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit G
hereto or does not specify all of the information required by
subsection (d)(ii);
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection
(d)(i).
(e) Notice to Borrower. The Administrative Agent shall promptly
notify the Borrower of the terms (x) of any Money Market Quote submitted by
a Bank that is in accordance with subsection (d) and (y) of any Money
Market Quote that amends, modifies or is otherwise inconsistent with a
previous Money Market Quote submitted by such Bank with respect to the same
Money Market Quote Request. Any such subsequent Money Market Quote shall be
disregarded by the Administrative Agent unless such subsequent Money Market
Quote is submitted solely to correct a manifest error in such former Money
Market Quote. The Administrative Agent's notice to the Borrower shall
specify (A) the aggregate principal amount of Money Market Loans for which
offers have been received for each Interest Period specified in the related
Money Market Quote Request, (B) the respective principal amounts and Money
Market Margins or Money Market Absolute Rates, as the case may be, so
offered and (C) if applicable, limitations on the aggregate principal
amount of Money Market Loans for which offers in any single Money Market
Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:30 A.M. (New
York City time) on (x) the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) the
proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the Administrative
Agent shall have mutually agreed and shall have notified to the Banks not
later than the date of the Money Market Quote Request for the first LIBOR
Auction or Absolute Rate Auction for which such change is to be effective),
the Borrower shall notify the Administrative Agent of its acceptance or
non-acceptance of the offers so notified to it pursuant to subsection (e).
In the case of acceptance, such notice (a "Notice of Money Market
Borrowing") shall specify the aggregate principal amount of offers for each
Interest Period that are accepted. The Borrower may accept any Money Market
Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the
related Money Market Quote Request,
(ii) the aggregate principal amount of each Money Market
Borrowing must be $25,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the
case may be, and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(g) Allocation by Administrative Agent. If offers are made by two or
more Banks with the same Money Market Margins or Money Market Absolute
Rates, as the case may be, for a greater aggregate principal amount than
the amount in respect of which such offers are accepted for the related
Interest Period, the principal amount of Money Market Loans in respect of
which such offers are accepted shall be allocated by the Administrative
Agent among such Banks as nearly as possible (in such multiples, not
greater than $1,000,000, as the Administrative Agent may deem appropriate)
in proportion to the aggregate principal amounts of such offers.
Determinations by the Administrative Agent of the amounts of Money Market
Loans shall be conclusive in the absence of manifest error.
SECTION 2.4 Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Administrative Agent
shall promptly notify each Bank participating therein of the contents
thereof and of such Bank's share (if any) of such Borrowing and such Notice
of Borrowing shall not thereafter be revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the date of
each Borrowing, each Bank participating therein shall make available its
share of such Borrowing, in Federal or other funds immediately available in
New York City, to the Administrative Agent at its address specified in or
pursuant to Section 9.1. Unless the Administrative Agent determines that
any applicable condition specified in Article 3 has not been satisfied, the
Administrative Agent will make the funds so received from the Banks
available to the Borrower at the Administrative Agent's aforesaid address.
(c) Unless the Administrative Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make
available to the Administrative Agent such Bank's share of such Borrowing,
the Administrative Agent may assume that such Bank has made such share
available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (b) of this Section 2.4 and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount. If and to the extent that such Bank
shall not have so made such share available to the Administrative Agent,
such Bank and the Borrower severally agree to repay to the Administrative
Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Administrative Agent,
at (i) in the case of the Borrower, a rate per annum equal to the higher of
the Federal Funds Rate and the interest rate applicable thereto pursuant to
Section 2.6 and (ii) in the case of such Bank, the Federal Funds Rate. If
such Bank shall repay to the Administrative Agent such corresponding
amount, such amount so repaid shall constitute such Bank's Loan included in
such Borrowing for purposes of this Agreement.
SECTION 2.5 Maturity of Loans. (a) Each Committed Loan shall mature,
and the principal amount thereof shall be payable in full together with
accrued interest thereon, on the Termination Date.
(b) Each Money Market Loan included in any Money Market Borrowing
shall mature, and the principal amount thereof shall be payable in full
together with accrued interest thereon, on the last day of the Interest
Period applicable to such Borrowing.
SECTION 2.6 Interest Rates. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the
day such Loan is made to but excluding the day it becomes due, at a rate
per annum equal to the Base Rate for such day. Such interest shall be
payable at maturity, quarterly in arrears on each Quarterly Date prior to
maturity and, with respect to the principal amount of any Base Rate Loan
converted to a Fixed Rate Loan, on the date such Loan is so converted. Any
overdue principal of or interest on any Base Rate Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the
sum of 2% plus the Base Rate for such day.
(b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for each day during each Interest Period applicable
thereto, at a rate per annum equal to the sum of the Applicable Margin for
such day plus the Adjusted CD Rate applicable to such Interest Period;
provided that if any CD Loan or any portion thereof shall, as a result of
the definition of Interest Period, have an Interest Period of less than 30
days, such portion shall bear interest for each day during such Interest
Period at the rate applicable to Base Rate Loans for such day. Such
interest shall be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than 90 days, 90 days after the
first day thereof. Any overdue principal of or interest on any CD Loan
shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of 2% plus the higher of (i) the Base Rate for
such day and (ii) the sum of the Applicable Margin plus the Adjusted CD
Rate applicable to such Loan on the day before such payment was due. The
"Adjusted CD Rate" applicable to any Interest Period means a rate per annum
determined pursuant to the following formula:
____________
[ CDBR ] *
ACDR = [1.00 - DRP] + AR
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
----------
* The amount in brackets being rounded upward, if necessary,
to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the rate of
interest determined by the Administrative Agent to be the average (rounded
upward, if necessary, to the next higher 1/100 of 1%) of the prevailing
rates per annum bid at 10:00 A.M. (New York City time) (or as soon
thereafter as practicable) on the first day of such Interest Period by two
or more New York certificate of deposit dealers of recognized standing for
the purchase at face value from each CD Reference Bank of its certificates
of deposit in an amount comparable to the principal amount of the CD Loan
of such CD Reference Bank to which such Interest Period applies and having
a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation
any basic, supplemental or emergency reserves) for a member bank of the
Federal Reserve System in New York City with deposits exceeding five
billion dollars in respect of new non-personal time deposits in dollars in
New York City having a maturity comparable to the related Interest Period
and in an amount of $100,000 or more. The Adjusted CD Rate shall be
adjusted automatically on and as of the effective date of any change in the
Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate in
effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or
a comparable successor assessment risk classification) within the meaning
of 12 C.F.R. ss. 327.4(a) (or any successor provision) to the Federal
Deposit Insurance Corporation (or any successor) for such Corporation's (or
such successor's) insuring time deposits at offices of such institution in
the United States. The Adjusted CD Rate shall be adjusted automatically on
and as of the effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period
applicable thereto, at a rate per annum equal to the sum of the Applicable
Margin for such day plus the London Interbank Offered Rate applicable to
such Interest Period. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than
three months, three months after the first day thereof. The "London
Interbank Offered Rate" applicable to any Interest Period means the average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the
respective rates per annum at which deposits in dollars are offered to each
of the Euro-Dollar Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before
the first day of such Interest Period in an amount approximately equal to
the principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference
Bank to which such Interest Period is to apply and for a period of time
comparable to such Interest Period.
(d) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the higher of (i) the sum of 2% plus the Applicable
Margin for such day plus the London Interbank Offered Rate applicable to
such Loan on the day before such payment was due and (ii) the sum of 2%
plus the Applicable Margin for such day plus a rate per annum equal to the
average (rounded upward, if necessary, to the next higher 1/16 of 1%) of
the respective rates per annum at which one day (or, if such amount due
remains unpaid more than three Euro-Dollar Business Days, then for such
other period of time not longer than three months as the Administrative
Agent may select) deposits in dollars in an amount approximately equal to
such overdue payment due to each of the Euro-Dollar Reference Banks are
offered to such Euro-Dollar Reference Bank in the London interbank market
for the applicable period determined as provided above (or, if the
circumstances described in clause (a) or (b) of Section 8.1 shall exist, at
a rate per annum equal to the sum of 2% plus the Base Rate for such day).
(e) Subject to Section 8.1(a), each Money Market LIBOR Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the sum of the
London Interbank Offered Rate for such Interest Period (determined in
accordance with Section 2.6(c) as if the related Money Market LIBOR
Borrowing were a Euro-Dollar Borrowing) plus (or minus) the Money Market
Margin quoted by the Bank making such Loan in accordance with Section 2.3.
Each Money Market Absolute Rate Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a
rate per annum equal to the Money Market Absolute Rate quoted by the Bank
making such Loan in accordance with Section 2.3. Such interest shall be
payable for each Interest Period on the last day thereof and, if such
Interest Period is longer than three months, at intervals of three months
after the first day thereof. Any overdue principal of or interest on any
Money Market Loan shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the sum of 2% plus the Base Rate
for such day.
(f) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give
prompt notice to the Borrower and the participating Banks of each rate of
interest so determined, and its determination thereof shall be conclusive
in the absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Administrative Agent as contemplated by this Section. If
any Reference Bank does not furnish a timely quotation, the Administrative
Agent shall determine the relevant interest rate on the basis of the
quotation or quotations furnished by the remaining Reference Bank or Banks
or, if none of such quotations is available on a timely basis, the
provisions of Section 8.1 shall apply.
SECTION 2.7 Regulation D Compensation. Each Bank may require the
Borrower to pay, contemporaneously with each payment of interest on the
Euro-Dollar Loans, additional interest on the related Euro-Dollar Loan of
such Bank at a rate per annum determined by such Bank up to but not
exceeding the excess of (i) (A) the applicable London Interbank Offered
Rate divided by (B) one minus the Euro-Dollar Reserve Percentage over (ii)
the applicable London Interbank Offered Rate. Any Bank wishing to require
payment of such additional interest (x) shall so notify the Borrower and
the Administrative Agent, in which case such additional interest on the
Euro-Dollar Loans of such Bank shall be payable to such Bank at the place
indicated in such notice with respect to each Interest Period commencing at
least three Euro-Dollar Business Days after the giving of such notice and
(y) shall notify the Borrower at least five Euro-Dollar Business Days prior
to each date on which interest is payable on the Euro-Dollar Loans of the
amount then due it under this Section.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the
Federal Reserve System in New York City with deposits exceeding five
billion dollars in respect of "Eurocurrency liabilities" (or in respect of
any other category of liabilities which includes deposits by reference to
which the interest rate on Euro-Dollar Loans is determined or any category
of extensions of credit or other assets which includes loans by a
non-United States office of any Bank to United States residents). The
compensation payable pursuant to this Section shall be adjusted
automatically on and as of the effective date of any change in the
Euro-Dollar Reserve Percentage.
SECTION 2.8 Facility Fees. The Borrower shall pay to the
Administrative Agent a facility fee calculated for each day at the Facility
Fee Rate for such day (determined in accordance with the Pricing Schedule).
Such facility fee shall accrue for each day (i) from and including the
Effective Date to but excluding the date on which the Commitments terminate
in their entirety, on the aggregate amount of the Commitments (whether used
or unused) then in effect and (ii) from and including such date of
termination to but excluding the date on which no Loans are outstanding, on
the aggregate outstanding principal amount of the Loans on such day. Such
facility fee shall be allocated among the Banks ratably in proportion to
their Commitments; provided that any facility fee accruing after the
Commitments terminate in their entirety shall be allocated among the Banks
ratably in proportion to the unpaid principal amounts of their respective
Loans. Accrued fees under this Section shall be payable quarterly in
arrears on each Quarterly Date and on the Termination Date; provided that
fees accruing after the Termination Date shall be payable on demand.
Section 2.9 Optional Termination or Reduction of Commitments. The
Borrower may, upon at least three Domestic Business Days' notice to the
Administrative Agent, (i) terminate the Commitments at any time, if no
Loans are outstanding at such time (after giving effect to any optional
prepayments to be made at such time) or (ii) ratably reduce from time to
time by an aggregate amount of $25,000,000 or a larger multiple of
$1,000,000, the aggregate amount of the Commitments in excess of the
aggregate outstanding amount of the Loans.
SECTION 2.10 Method of Electing Interest Rates. (a) The Committed
Loans included in each Borrowing shall bear interest initially at the type
of rate specified by the Borrower in the applicable Notice of Borrowing.
Thereafter, the Borrower may from time to time elect to change or continue
the type of interest rate borne by each Group of Loans (subject in each
case to the provisions of Article 8 and the last sentence of this
subsection (a)), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect
to convert such Loans to CD Loans as of any Domestic Business Day or
to Euro-Dollar Loans as of any Euro-Dollar Business Day;
(ii) if such Loans are CD Loans, the Borrower may elect to
convert such Loans to Base Rate Loans or Euro-Dollar Loans or elect
to continue such Loans as CD Loans for an additional Interest Period,
in either case effective on the last day of the then current Interest
Period applicable to such Loans; and
(iii) if such Loans are Euro-Dollar Loans, the Borrower may
elect to convert such Loans to Base Rate Loans or CD Loans or elect
to continue such Loans as Euro-Dollar Loans for an additional
Interest Period, in either case effective on the last day of the then
current Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice of
Interest Rate Election") to the Administrative Agent not later than 10:30
A.M. (New York City time) on the third Euro-Dollar Business Day before the
conversion or continuation selected in such notice is to be effective. A
Notice of Interest Rate Election may, if it so specifies, apply to only a
portion of the aggregate principal amount of the relevant Group of Loans;
provided that (i) such portion is allocated ratably among the Loans
comprising such Group and (ii) the portion to which such Notice applies,
and the remaining portion to which it does not apply, are each $25,000,000
or any larger multiple of $1,000,000. If no such notice is timely received
prior to the end of an Interest Period, the Borrower shall be deemed to
have elected that all Loans having such Interest Period be converted to
Base Rate Loans. Notwithstanding the foregoing, the Borrower may not elect
to convert any Loan to, or continue any Loan as, a Fixed Rate Loan pursuant
to any Notice of Interest Rate Election if at the time such notice is
delivered a Default shall have occurred and be continuing.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation selected
in such notice is to be effective, which shall comply with the
applicable clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted,
the new Type of Loans and, if the Loans being converted are to be
Fixed Rate Loans, the duration of the next succeeding Interest Period
applicable thereto; and
(iv) if such Loans are to be continued as Fixed Rate Loans for
an additional Interest Period, the duration of such additional
Interest Period. Each Interest Period specified in a Notice of
Interest Rate Election shall comply with the provisions of the
definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the
Borrower pursuant to subsection (a) above, the Administrative Agent shall
promptly notify each Bank of the contents thereof and such notice shall not
thereafter be revocable by the Borrower.
(d) An election by the Borrower to change or continue the rate of
interest applicable to any Group of Loans pursuant to this Section shall
not constitute a "Borrowing" subject to the provisions of Section 3.2.
SECTION 2.11 Optional Prepayments. (a) The Borrower may, (i) upon at
least one Domestic Business Day's notice to the Administrative Agent,
prepay the Group of Base Rate Loans (or any Money Market Borrowing bearing
interest at the Base Rate pursuant to Section 8.1(a)) or (ii) upon at least
(x) in the case of CD Loans, one Domestic Business Day's notice to the
Administrative Agent and (y) in the case of Euro-Dollar Loans, three
Euro-Dollar Business Days' notice to the Administrative Agent, and subject,
in each case, to Section 2.14, prepay any Group of Fixed Rate Loans, in
each case in whole at any time, or from time to time in part in amounts
aggregating $25,000,000 or any larger multiple of $1,000,000, by paying the
principal amount to be prepaid together with accrued interest thereon to
the date of prepayment. Each such optional prepayment of a Group of Loans
shall be applied to prepay ratably the Loans of the Banks included in such
Group.
(b) Except as provided in subsection (a) of this Section 2.11, the
Borrower may not prepay all or any portion of the principal amount of any
Money Market Loan prior to the maturity thereof without the consent of the
Bank holding such Loan.
(c) Upon receipt of a no ice of prepayment pursuant to this Section,
the Administrative Agent shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share (if any) of such prepayment and
such notice shall not thereafter be revocable by the Borrower.
SECTION 2.12 Scheduled Termination of Commitments. The Commitments
shall terminate on the Termination Date.
SECTION 2.13 General Provisions as to Payments. (a) The Borrower
shall make each payment of principal of, and interest on, the Loans and of
fees hereunder, not later than 12:00 Noon (New York City time) on the date
when due, in Federal or other funds immediately available in New York City,
to the Administrative Agent at its address referred to in Section 9.1. The
Administrative Agent will promptly distribute to each Bank, for the account
of its Applicable Lending Office, its ratable share of each such payment
received by the Administrative Agent for the account of the Banks. Whenever
any payment of principal of, or interest on, the Domestic Loans or of fees
shall be due on a day which is not a Domestic Business Day, the date for
payment thereof shall be extended to the next succeeding Domestic Business
Day. Whenever any payment of principal of, or interest on, the Euro-Dollar
Loans shall be due on a day which is not a Euro-Dollar Business Day, the
date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case the date for payment thereof shall be
the next preceding Euro-Dollar Business Day. Whenever any payment of
principal of, or interest on, the Money Market Loans shall be due on a day
which is not a Euro-Dollar Business Day, the date for payment thereof shall
be extended to the next succeeding Euro-Dollar Business Day, unless such
Euro-Dollar Business Day falls in another calendar month, in which case the
date for payment thereof shall be the next preceding Euro-Dollar Business
Day. If the date for any payment of principal is extended by operation of
law or otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Banks
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to each Bank
on such due date an amount equal to the amount then due such Bank. If and
to the extent that the Borrower shall not have so made such payment, each
Bank shall repay to the Administrative Agent forthwith on demand such
amount distributed to such Bank together with interest thereon, for each
day from the date such amount is distributed to such Bank until the date
such Bank repays such amount to the Administrative Agent, at the Federal
Funds Rate.
SECTION 2.14 Funding Losses. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan or any Fixed Rate Loan is
converted (pursuant to Article 6 or 8 or otherwise) on any day other than
the last day of the Interest Period applicable thereto, or if the Borrower
fails to borrow, prepay, convert or continue any Fixed Rate Loans after
notice has been given to any Bank in accordance with Section 2.4(a),
2.10(c) or 2.11(c), the Borrower shall reimburse each Bank within 15 days
after demand for any resulting loss or expense incurred by it (or by an
existing or prospective Participant in the related Loan), including
(without limitation) any loss incurred in obtaining, liquidating or
employing deposits from third parties, but excluding loss of margin for the
period after any such payment or failure to borrow, provided that such Bank
shall have delivered to the Borrower a certificate as to the amount of such
loss or expense indicating in reasonable detail the computation thereof,
which certificate shall be conclusive in the absence of manifest error.
SECTION 2.15 Computation of Interest and Fees. Interest based on the
Prime Rate hereunder shall be computed on the basis of a year of 365 days
(or 366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest
and fees shall be computed on the basis of a year of 360 days and paid for
the actual number of days elapsed (including the first day but excluding
the last day).
SECTION 2.16 Registry. (a) The Administrative Agent shall maintain a
register (the "Register") on which it will record the Commitment of each
Bank, each Loan made by such Bank and each repayment of any Loan made by
such Bank. Any such recordation by the Administrative Agent on the Register
shall be conclusive, absent manifest error. With respect to any Bank, the
assignment or other transfer of the Commitment of such Bank and the rights
to the principal of, and interest on, any Loan made and Note issued
pursuant to this Agreement shall not be effective until such assignment or
other transfer is recorded on the Register and otherwise complies with
Section 9.6(c). The registration of assignment or other transfer of all or
part of the Commitment, Loans and Notes for a Bank shall be recorded by the
Administrative Agent on the Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement referred to in Section 9.6(c). The Register shall be
available at the offices where kept by the Administrative Agent for
inspection by the Borrower and any Bank at any reasonable time upon
reasonable prior notice to the Administrative Agent. The Borrower may not
replace any Bank pursuant to Section 8.6 unless, with respect to any Notes
held by such Bank, the requirements of this subsection have been satisfied.
Each Bank shall record on its internal records (including computerized
systems) the foregoing information as to its own Commitment and Loans.
Failure to make any such recordation, or any error in such recordation,
shall not affect the obligations of the Borrower under the Loan Documents.
(b) The Borrower hereby agrees that, upon the request of any Bank at
any time, such Bank's Loans shall be evidenced by a promissory note or
notes of the Borrower (each a "Note"), substantially in the form of Exhibit
A hereto, payable to the order of such Bank and representing the obligation
of the Borrower to pay the unpaid principal amount of the Loans made by
such Bank, with interest as provided herein on the unpaid principal amount
from time to time outstanding.
ARTICLE 3
CONDITIONS
SECTION 3.1 Closing Date. The Closing Date hereunder shall occur on
the first date on which each of the following conditions shall have been
satisfied:
(a) receipt by the Administrative Agent, to the extent requested by
any Bank not less than five Domestic Business Days prior to the Closing
Date, of any Notes so requested duly executed by the Borrower;
(b) the fact that all fees and expenses payable on or before the
Closing Date by the Borrower for the account of the Banks and their
affiliates in connection with this Agreement shall have been paid in full
on or before such date in the amounts previously agreed upon in writing;
(c) receipt by the Administrative Agent of opinions of (i) Skadden,
Arps, Slate, Meagher & Flom LLP, special counsel for the Borrower and (ii)
Gary Lane, General Counsel-Corporate of the Borrower (or another counsel
for the Borrower reasonably satisfactory to the Administrative Agent)
substantially in the respective forms of Exhibits B-1 and B-2 hereto;
(d) receipt by the Administrative Agent of an opinion of Davis Polk &
Wardwell, special counsel for the Agents, substantially in the form of
Exhibit C hereto;
(e) the fact that the Borrower shall have (i) terminated the
commitments of the banks under the Existing Credit Agreement, (ii) repaid
in full all loans (if any) outstanding thereunder and all interest (if any)
accrued thereon and (iii) paid all facility fees accrued thereunder to but
not including the date on which such commitments terminated;
(f) receipt by the Administrative Agent of a certificate of the chief
executive officer or the chief financial officer of the Borrower that the
Joint Offer has been consummated in accordance with the Joint Offer to
Purchase, without, unless consented to in writing by the Required Banks,
waiver of any of the conditions thereof other than the financing condition;
(g) the fact that the Administrative Agent shall not have received
notice from the Required Banks that, in their reasonable determination, any
of the conditions of the Joint Offer has not been fulfilled other than the
financing condition;
(h) the fact that (i) the Letter Agreement shall be in full force and
effect in substantially the form distributed to the Banks prior to the date
hereof and (ii) all obligations to be performed by each party thereto on or
prior to the Closing Date shall have been performed in full;
(i) the fact that the Voting Trust Agreement shall have been executed
and delivered and shall be substantially in the form distributed to the
Banks prior to the date hereof; and
(j) receipt by the Administrative Agent of all documents it may
reasonably request relating to the existence of the Borrower, the corporate
authority for and the validity of the Loan Documents and any other matters
relevant thereto, all in form and substance satisfactory to the
Administrative Agent.
SECTION 3.2 Borrowings. The obligation of any Bank to make a Loan on
the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) receipt by the Administrative Agent of a Notice of Borrowing as
required by Section 2.2 or 2.3, as the case may be;
(b) the fact that, immediately after such Borrowing and application
of the proceeds thereof, the aggregate outstanding principal amount of the
Loans will not exceed the aggregate amount of the Commitments;
(c) the fact that, immediately before and after such Borrowing, no
Default shall have occurred and be continuing;
(d) the fact that the representations and warranties of the Borrower
contained in this Agreement shall be true in all material respects on and
as of the date of such Borrowing; and (e) the fact that the Closing Date
shall have occurred on or prior to June 30, 1997.
Each Borrowing hereunder shall be deemed to be a representation and
warranty by the Borrower on the date of such Borrowing as to the facts
specified in clauses (b), (c) and (d) of this Section.
SECTION 3.3 Waiver by Banks. In order to facilitate the satisfaction
of the condition set forth in Section .1(e) above, (x) each of the parties
hereto which is a party to the Existing Credit Agreement waives (i) the
requirement in Section 2.9 thereof that a notice terminating the
commitments of the banks thereunder must be given at least three Domestic
Business Days prior to such termination and (ii) to the extent necessary,
the requirement in Section 2.11(a) thereof that a notice of prepayment of
any Base Rate Borrowing (as defined in the Existing Credit Agreement) must
be given at least one Domestic Business Day prior to such prepayment and
(y) each Bank hereunder which is the holder of any Money Market Loan (as
defined in the Existing Credit Agreement), to the extent necessary, hereby
consents to the prepayment by the Borrower of such Money Market Loan prior
to the maturity thereof. The waivers granted under this Section are subject
to the obligations of the Borrower to pay to each bank party to the
Existing Credit Agreement all amounts payable by the Borrower to such bank
pursuant to Section 2.14 of the Existing Credit Agreement as a result of
any prepayment.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants on the date hereof that:
SECTION 4.1 Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under
the laws of Virginia (or, if another corporation has become the Borrower as
permitted by Section 5.9, the laws of its jurisdiction of incorporation).
The Borrower has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, except where the failure to have such licenses,
authorizations, consents and approvals could not be reasonably expected to
result in a Material Adverse Change.
SECTION 4.2 Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of
the Loan Documents are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official
(except for filings with governmental agencies (x) which filings are
necessary or desirable in order for the Borrower to comply with disclosure
obligations under applicable laws or with Section 5.14 and (y) which
filings, if not made, would not have any effect on the validity or
enforceability of the Loan Documents and the obligations of the Borrower
thereunder) and do not contravene, or constitute a default under, any
provision of law or regulation applicable to the Borrower (including
without limitation the Margin Regulations) or of the articles of
incorporation or by-laws of the Borrower, or of any agreement under which
Debt may be incurred or any other material agreement, judgment, injunction,
order, decree or other instrument binding upon the Borrower or any of its
Consolidated Subsidiaries or result in the creation or imposition of any
Lien on any asset of the Borrower or any of its Consolidated Subsidiaries.
SECTION 4.3 Binding Effect. This Agreement constitutes, and when
executed and delivered in accordance with this Agreement, each Note will
constitute, a valid and binding obligation of the Borrower, enforceable
against it in accordance with its terms, subject to (i) applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally from time to time in effect and (ii)
equitable principles of general applicability.
SECTION 4.4 Financial Information.
(a) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 1996 and the related
consolidated statements of income, cash flows and changes in stockholders'
equity for the fiscal year then ended, reported on by KPMG Peat Marwick and
set forth in the Borrower's 1996 Form 10-K, a copy of which has been
delivered to each of the Banks, fairly present, in conformity with
generally accepted accounting principles, the consolidated financial
position of the Borrower and its Consolidated Subsidiaries as of such date
and their consolidated results of operations, cash flows and changes in
stockholders' equity for such fiscal year.
(b) The unaudited pro forma condensed balance sheet of the Borrower
and Conrail as of December 31, 1996 set forth in the Information Memorandum
has been prepared on the basis described therein and otherwise in
conformity with generally accepted accounting principles applied on a basis
consistent with the financial statements referred to in subsection (a) of
this Section and shows the financial position of the Borrower and its
Consolidated Subsidiaries as if the Consummation Date had occurred on
December 31, 1996 and the operating arrangements between the Borrower and
Conrail contemplated by the Letter Agreement had been fully implemented on
such date.
(c) Except as reflected in the pro forma condensed balance sheet
referred to in subsection (b) or elsewhere in the Information Memorandum,
since the respective dates as of which information is stated in the
Information Memorandum, there has been no material adverse change in the
consolidated financial condition, operations, assets, business or prospects
of the Borrower and its Consolidated Subsidiaries, taken as a whole (a
"Material Adverse Change").
SECTION 4.5 Litigation. There is no action, suit or proceeding
(including any rate-setting hearing) pending against, or to the knowledge
of the Borrower threatened against or affecting, the Borrower or any of its
Consolidated Subsidiaries before any court or arbitrator or any
governmental body, agency or official which could reasonably be expected to
result in a Material Adverse Change or which in any manner draws into
question the validity or enforceability of the Loan Documents.
SECTION 4.6 Compliance with Laws. (a) The Borrower and its
Consolidated Subsidiaries are in compliance in all material respects with
all applicable provisions of the United States Interstate Commerce Act, as
amended, and all regulations, orders, rulings and interpretations
thereunder, except where the failure to so comply could not reasonably be
expected to result in a Material Adverse Change.
(b) Each member of the ERISA Group has fulfilled its obligations
under the minimum funding standards of ERISA and the Internal Revenue Code
with respect to each Plan and is in compliance in all material respects
with the presently applicable provisions of ERISA and the Internal Revenue
Code with respect to each Plan. No member of the ERISA Group has (i) sought
a waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code in respect of any Plan, (ii) failed to make any material
contribution or payment due under any Multiemployer Plan in which more than
100 employees of members of the ERISA Group participate or under any Plan
or in respect of any Benefit Arrangement, or made any amendment to any Plan
or Benefit Arrangement, any of which has resulted in the imposition of a
Lien under Section 412(n) of the Internal Revenue Code or Section 302(f) of
ERISA or could reasonably be expected to result in the posting of a bond or
other security under Section 401(a)(29) of the Internal Revenue Code or
Section 307 of ERISA or (iii) incurred any material liability under Title
IV of ERISA other than a liability to the PBGC for premiums under Section
4007 of ERISA.
SECTION 4.7 Environmental Matters. In the ordinary course of its
business, the Borrower reviews the effect of applicable Environmental Laws
on the business and operations and properties of the Borrower and its
Consolidated Subsidiaries, in the course of which it identifies and
evaluates actual and potential associated liabilities and costs (including,
without limitation, any capital or operating expenditures required for
clean-up or closure of properties presently or previously owned or as a
result of accidents or occurrences involving property or employees of the
Borrower and its Consolidated Subsidiaries, any capital or operating
expenditures required to achieve or maintain compliance with environmental
protection standards imposed by law or as a condition of any license,
permit or contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility, restriction
on transportation of any substance or reduction in the level of or change
in the nature of operations and any actual or potential liabilities to
third parties, including employees, and any related costs and expenses). On
the basis of its review, the Borrower has reasonably concluded that
applicable Environmental Laws, as they relate to matters known to the
Borrower, cannot reasonably be expected to result in a Material Adverse
Change.
SECTION 4.8 Taxes. United States consolidated Federal income tax
returns of the Borrower and its Subsidiaries as of the Closing Date have
been examined and revenue agent reports have been received for all years up
to and including the fiscal year ended December 31, 1992. United States
consolidated Federal income tax returns of (i) Norfolk and Western Railway
Company and its consolidated subsidiaries have been examined and revenue
agent reports have been received through the fiscal year ended December 31,
1981 and (ii) Southern Railway Company and its consolidated subsidiaries
have been examined and closed through the fiscal year ended May 31, 1982.
The Borrower and its Subsidiaries have filed all United States Federal
income tax returns and all other material tax returns which are required to
be filed by them and have paid all taxes due pursuant to such returns or
pursuant to any assessment received by the Borrower or any Subsidiary or
are contesting such assessment in good faith by appropriate proceedings,
except where the failure to so pay or file could not be reasonably expected
to result in a Material Adverse Change. The charges, accruals and reserves
on the books of the Borrower and its Subsidiaries in respect of taxes or
other governmental charges are, in the opinion of the Borrower, adequate.
SECTION 4.9 Significant Subsidiaries. Each of the Borrower's
Significant Subsidiaries is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, franchises, consents and approvals required to
carry on its business as now conducted, except where the failure to have
such licenses, authorizations, franchises, consents and approvals could not
be reasonably expected to result in a Material Adverse Change.
SECTION 4.10 Not an Investment Company or a Holding Company. The
Borrower is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended. The Borrower is not a "holding
company", a "subsidiary company" of a "holding company" or an "affiliate"
of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
SECTION 4.11 Full Disclosure. All written information, taken as a
whole, heretofore furnished by the Borrower to any Agent or Bank for
purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all such information hereafter furnished by the
Borrower to the Administrative Agent or any Bank will be, true and accurate
in all material respects on the date as of which such information is stated
or certified, it being understood that any such representation and warranty
as to the accuracy of information in respect of Conrail and its
Subsidiaries with respect to any period ending, or at any time, prior to
the Consummation Date is limited to the Borrower's having no actual
knowledge that such information is not accurate. The Borrower has disclosed
to the Banks or to the Administrative Agent for circulation to the Banks
pursuant to Section 5.1 in writing any and all facts known to the Borrower
which materially and adversely affect the business, operations or financial
condition of the Borrower and its Consolidated Subsidiaries, taken as a
whole, or the ability of the Borrower to perform its obligations under this
Agreement.
SECTION 4.12 No Default. No Default has occurred and is continuing
and neither the Borrower nor any of its Subsidiaries is in default under or
with respect to any material contract, agreement, lease or other instrument
to which it is a party or by which its property is bound or affected where
such default could reasonably be expected to result in a Material Adverse
Change.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any principal of or interest on any Loan remains unpaid:
SECTION 5.1 Information. The Borrower will deliver to the
Administrative Agent for circulation to each of the Banks:
(a) (i) promptly after they are publicly available, and in any event
within 105 days after the end of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such fiscal year and the related consolidated
statements of income, cash flows and changes in stockholders' equity for
such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on in accordance with
regulations of the Securities and Exchange Commission by KPMG Peat Marwick
or other independent public accountants of nationally recognized standing
and (ii) promptly after they are available, and in any event within 105
days after the end of each fiscal year of Conrail (but solely if such
fiscal year ended on or prior to the Consummation Date) a consolidated
balance sheet of Conrail and its Consolidated Subsidiaries as of the end of
such fiscal year and the related consolidated statements of income, cash
flows and changes in stockholders' equity for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal
year;
(b) (x) promptly after they are publicly available, and in any event
within 60 days after the end of each of the first three quarters of each
fiscal year of the Borrower, (i) a consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such quarter,
setting forth in comparative form the figures at the end of the Borrower's
previous fiscal year, (ii) the related consolidated statement of income for
such quarter and for the portion of the Borrower's fiscal year ended at the
end of such quarter, setting forth in comparative form the figures for the
corresponding quarter and the corresponding portion of the Borrower's
previous fiscal year, and (iii) the related consolidated statement of cash
flows for the portion of the Borrower's fiscal year ended at the end of
such quarter, setting forth in comparative form the figures for the
corresponding portion of the Borrower's previous fiscal year, certified by
the chief financial officer or the chief accounting officer of the Borrower
(subject to normal year-end adjustments) as to fairness of presentation,
generally accepted accounting principles and consistency (except for
changes in generally accepted accounting principles concurred in by the
Borrower's independent public accountants) and (y) promptly after they are
available, and in any event within 60 days after the end of each of the
first three quarters of each fiscal year of Conrail (but solely if such
fiscal quarter ended on or prior to the Consummation Date) (i) a
consolidated balance sheet of Conrail and its Consolidated Subsidiaries as
of the end of such quarter, setting forth in comparative form the figures
at the end of Conrail's previous fiscal year, (ii) the related consolidated
statement of income for such quarter and for the portion of Conrail's
fiscal year ended at the end of such quarter, setting forth in comparative
form the figures for the corresponding quarter and the corresponding
portion of Conrail's previous fiscal year, and (iii) the related
consolidated statement of cash flows for the portion of Conrail's fiscal
year ended at the end of such quarter, setting forth in comparative form
the figures for the corresponding portion of Conrail's previous fiscal
year;
(c) simultaneously with the delivery of the financial statements
referred to in clauses (a) and (b) above, a certificate of the chief
financial officer, the chief accounting officer, treasurer or any assistant
treasurer of the Borrower (i) setting forth in reasonable detail the
calculations required to establish whether the Borrower was in compliance
with the requirements of Section 5.7 on the date of such financial
statements and (ii) stating whether any Default exists on the date of such
certificate and, if any Default then exists, setting forth the details
thereof and the action which the Borrower is taking or proposes to take
with respect thereto;
(d) within ten days after any officer of the Borrower obtains
knowledge of any Default, if such Default is then continuing, a certificate
of the chief financial officer or the chief accounting officer of the
Borrower setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto;
(e) promptly after the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(f) promptly after the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) which the Borrower shall have filed with the Securities
and Exchange Commission;
(g) if and within ten days after the date any member of the ERISA
Group (i) gives or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA) with respect to
any Plan which could reasonably be expected to constitute grounds for a
termination of such Plan under Title IV of ERISA or knows that the plan
administrator of any Plan has given or is required to give notice of any
such reportable event, in each case which could, when considered together
with all other such reportable events which have occurred after the date
hereof, reasonably be expected to give rise in the aggregate to a liability
of members of the ERISA Group in excess of $50,000,000, a copy of the
notice of such reportable event given or required to be given to the PBGC;
(ii) receives notice of complete or partial withdrawal liability under
Title IV of ERISA or notice that any Multiemployer Plan in which more than
100 employees of members of the ERISA Group participate is in
reorganization, is insolvent or has been terminated, a copy of such notice;
(iii) receives notice from the PBGC under Title IV of ERISA of an intent to
terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan, a copy
of such notice; (iv) applies for a waiver of the minimum funding standard
under Section 412 of the Internal Revenue Code, a copy of such application;
(v) gives notice of intent to terminate any Plan under Section 4041(c) of
ERISA, a copy of such notice and other information filed with the PBGC;
(vi) gives notice of withdrawal from any Plan pursuant to Section 4063 of
ERISA, a copy of such notice; or (vii) fails to make any payment or
contribution due under any Multiemployer Plan in which more than 100
employees of members of the ERISA Group participate or any Plan or in
respect of any Benefit Arrangement or makes any amendment to any Plan or
Benefit Arrangement, any of which has resulted in the imposition of a Lien
under Section 412(n) of the Internal Revenue Code or Section 302(f) of
ERISA or could reasonably be expected to result in the posting of a bond or
other security under Section 401(a)(29) of the Internal Revenue Code or
Section 307 of ERISA, a certificate of the chief financial officer or the
chief accounting officer of the Borrower setting forth details as to such
occurrence and action, if any, which the Borrower or applicable member of
the ERISA Group is required or proposes to take;
(h) as soon as reasonably practicable after any officer of the
Borrower obtains knowledge of the commencement of, or of a threat of the
commencement of, any actions, suits or proceedings against the Borrower or
any of its Subsidiaries before any court or arbitrator or any governmental
body, agency or official which could reasonably be expected to result in a
Material Adverse Change or which in any manner questions the validity or
enforceability of the Loan Documents, a certificate of the chief financial
officer or the chief accounting officer of the Borrower setting forth the
nature of such pending or threatened action, suit or proceeding and such
additional information with respect thereto as may be reasonably requested
by any Bank; and
(i) from time to time such additional publicly available information
regarding the financial position or business of the Borrower and its
Consolidated Subsidiaries as any Bank through the Administrative Agent may
reasonably request.
SECTION 5.2 Maintenance of Property; Insurance.
(a) The Borrower will keep, and will cause each Consolidated
Subsidiary to keep, all property deemed by the Borrower to be useful and
necessary to its business in such order and condition as the Borrower shall
consider prudent.
(b) The Borrower will maintain purchased insurance and self-insurance
consistent with prudent industry and financial practice, covering (without
limitation) the risk of (i) physical damage to real and personal property
of the Borrower and each of its Subsidiaries on an all risks basis and (ii)
public liability of the Borrower and each of its Subsidiaries. The Borrower
will maintain sufficient purchased insurance to prevent a material increase
in the Leverage Ratio as a result of a property or casualty loss or as a
result of the imposition of any reasonably foreseeable liability.
SECTION 5.3 Conduct of Business and Maintenance of Existence. The
Borrower will preserve, renew and keep in full force and effect its
corporate existence, except as permitted by Section 5.9, and its rights,
privileges and franchises reasonably deemed by the Borrower to be necessary
or desirable in the normal conduct of business, except where the failure to
maintain such rights, privileges and franchises could not be reasonably
expected to result in a Material Adverse Change. The Borrower will cause
each of its Significant Subsidiaries to continue to engage in business of
the same general type as now conducted by it, and will cause each of them
to preserve, renew and keep in full force and effect their respective
corporate existence and their respective rights, privileges and franchises
reasonably deemed by the Borrower to be necessary or desirable in the
normal conduct of business, except where the failure to maintain such
rights, privileges and franchises could not be reasonably expected to
result in a Material Adverse Change. Nothing in this Section 5.3 shall
prohibit a merger, consolidation or share exchange pursuant to which any
two corporations shall be combined into a single corporation or the
acquisition by any corporation of substantially all of the assets of
another corporation.
SECTION 5.4 Compliance with Laws. The Borrower will comply, and cause
each Subsidiary to comply, in all material respects with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, the Interstate Commerce Act,
Environmental Laws and ERISA and the rules and regulations thereunder)
except where the necessity of compliance therewith is contested in good
faith by appropriate proceedings or where such failure could not be
reasonably expected to result in a Material Adverse Change.
SECTION 5.5 Payment of Obligations. (a) The Borrower will pay and
discharge, and will cause each Significant Subsidiary to pay and discharge,
at or before maturity, all their respective material obligations and
liabilities (including, without limitation, tax liabilities and claims of
materialmen, warehousemen and the like which if unpaid would by law give
rise to a Lien not permitted by this Agreement), except, subject to
subsection (b), where the same may be contested in good faith by
appropriate proceedings or could not be reasonably expected to result in a
Material Adverse Change, and will maintain, and will cause each Significant
Subsidiary to maintain, in accordance with generally accepted accounting
principles, appropriate reserves for the accrual of any of the same.
(b) The Borrower will, and will cause each Subsidiary to, make all
payments when due under lease agreements entered into (if any) and other
operating arrangements entered into (if any) between the Borrower or such
Subsidiary and Conrail or any of its Subsidiaries and contemplated by the
terms of the Letter Agreement and will, and will cause each Subsidiary to,
comply with all other material obligations thereunder.
SECTION 5.6 Inspection of Property, Books and Records. The Borrower
will keep, and will cause each Significant Subsidiary to keep, proper books
of record and account in which full, true and correct entries shall be made
of all transactions in relation to its business and activities; and will
permit, and will cause each Subsidiary to permit, representatives
designated in writing by any Bank at such Bank's expense, and subject to
such limitations as the Borrower may reasonably impose to insure safety or
compliance with any applicable legal or contractual restrictions, to visit
and inspect any of their respective properties, to examine and make
abstracts from any of their corporate books and financial records and to
discuss their respective affairs, finances and accounts with their
respective principal officers, all at such reasonable times during normal
business hours, after reasonable prior notice and as often as may
reasonably be desired.
SECTION 5.7 Financial Covenants.
(a) Minimum Consolidated Net Worth. At no date on or after the
Effective Date will Consolidated Net Worth plus the Net Worth Add Back, in
each case at such date, be less than an amount equal to the sum of (i)
$4,050,000,000 plus (ii) an amount equal to 25% of Adjusted Consolidated
Net Income for each fiscal quarter of the Borrower commencing on or after
the Effective Date and ending on or prior to the date of determination, in
each case, for which Adjusted Consolidated Net Income is positive (but with
no deduction on account of negative Adjusted Consolidated Net Income for
any fiscal quarter of the Borrower). For purposes of this subsection (a),
the following terms have the following meanings:
"Net Worth Add Back" means, at any date, an amount equal to the
lesser of (A) $400,000,000 and (B) the aggregate amount of Adjustment
Amounts for all fiscal quarters of the Borrower commencing on or after the
Effective Date and ending on or prior to the date of determination.
"Adjustment Amount" means, for any fiscal quarter, an amount equal to
the absolute amount by which Consolidated Net Income for such quarter was
reduced by reason of special charges taken by the Borrower and its
Consolidated Subsidiaries in connection with the Acquisition.
"Adjusted Consolidated Net Income" means, (x) for any fiscal quarter
ended on or within 12 calendar months after the STB Approval Date, an
amount equal to Consolidated Net Income for such fiscal quarter plus the
Adjustment Amount, if any, for such fiscal quarter; provided that the
aggregate amount of the Adjustment Amounts added to Consolidated Net Income
for purposes of such computations hereunder shall not exceed $400,000,000
and (y) for any other fiscal quarter, an amount equal to Consolidated Net
Income for such fiscal quarter.
(b) Leverage Ratio. The Leverage Ratio will not exceed, at any time
on or after the Effective Date during any period set forth below, the
percentage set forth below for such period:
PERIOD PERCENTAGE
Effective Date-3/30/98 67%
3/31/98-3/30/99 65%
3/31/99-3/30/00 62%
3/31/00-3/30/01 58%
Thereafter 55%
SECTION 5.8 Negative Pledge. The Borrower will not create, assume or
suffer to exist any Lien on any Investment in a Subsidiary now directly
owned or hereafter directly acquired by he Borrower, except Liens described
in clause (h) below. Neither the Borrower nor any Subsidiary will create,
assume or suffer to exist any Lien on any other asset now owned or
hereafter acquired by it except:
(a) Liens existing on the date of this Agreement that have attached
(or that hereafter attach, pursuant to agreements in effect on the date
hereof, to assets not owned by Persons subject to such agreements on the
date hereof), securing Debt in an aggregate principal amount not exceeding
$900,000,000;
(b) any Lien existing on any asset of any Person at the time such
Person becomes a Subsidiary and not created in contemplation of such event;
(c) any Lien (created pursuant to an equipment trust agreement,
conditional sale agreement, chattel mortgage or lease or otherwise) on any
asset securing Debt incurred or assumed for the purpose of financing all or
any part of the cost of acquiring, constructing or rebuilding such asset;
(d) any Lien on any asset of any Person existing at the time such
Person is merged or consolidated with or into the Borrower or a Subsidiary
and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition thereof
by the Borrower or a Subsidiary and not created in contemplation of such
acquisition;
(f) Liens created, assumed or existing on assets associated with real
estate development projects or development joint ventures;
(g) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, provided that such Debt is not increased and is
not secured by any additional assets;
(h) inchoate tax Liens;
(i) Liens arising in the ordinary course of its business which (i) do
not secure Debt or Derivatives Obligations, (ii) do not secure any
obligation in an amount exceeding $600,000,000 and (iii) do not in the
aggregate materially detract from the value of its material assets or
materially impair the use thereof in the operation of its business;
(j) Liens on "margin stock" (as defined in the Margin Regulations),
if and to the extent that the value of such margin stock exceeds 25% of the
total assets of the Borrower and its Subsidiaries subject to this Section;
(k) Liens on cash and cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash
equivalents subject to such Liens may at no time exceed $100,000,000; and
(l) Liens not otherwise permitted by the foregoing clauses of this
Section securing Debt in an aggregate principal amount at any time
outstanding not in excess of $600,000,000.
SECTION 5.9 Consolidations, Mergers and Sales of Assets. (a) The
Borrower will not (i) consolidate or merge with or into any other Person or
(ii) sell, lease or otherwise transfer, directly or indirectly, all or
substantially all of its assets to any other Person; provided that the
Borrower may merge or consolidate with another Person or sell all or
substantially all of its assets to another Person if:
(A) the Person surviving such merger or consolidation, or
the Person that acquires substantially all of the Borrower's
assets, is a business corporation incorporated under the laws
of a State of the United States of America;
(B) the Person surviving such merger or consolidation, if
not the Borrower, or the Person that acquires substantially all
of the Borrower's assets, (i) executes and delivers to the
Administrative Agent and each of the Banks an instrument in
form reasonably satisfactory to the Administrative Agent
pursuant to which such Person assumes all of the Borrower's
obligations under the Loan Documents as theretofore amended or
modified, including the full and punctual payment (whether at
stated maturity, upon acceleration or otherwise) of the
principal of and interest on each Loan made to the Borrower
pursuant to this Agreement, the full and punctual payment of
all other amounts payable hereunder and the performance of all
of the other covenants and agreements contained herein and (ii)
if requested by the Required Banks, delivers an opinion of
counsel satisfactory to the Required Banks covering the matters
set forth in Exhibits B-1 and B-2, in each case after giving
effect to such merger, consolidation or sale of assets, as the
case may be; and
(C) immediately after giving effect to such merger,
consolidation or sale of assets, no Default shall have occurred
and be continuing and the representations and warranties of the
Borrower contained in this Agreement shall be true in all
material respects as if made immediately after such merger,
consolidation or sale of assets.
It is understood that: (i) the reference in Section 4.4(c) to changes
in respect of the Borrower and its Consolidated Subsidiaries refers to
changes from the business and consolidated financial position of Norfolk
Southern Corporation and its Consolidated Subsidiaries at such date,
including changes that occur as a result of another Person becoming the
Borrower pursuant to such a merger, consolidation or sale of assets and
(ii) the references in Section 6.1(l) to individuals who were directors of
the Borrower at any time before such a merger, consolidation or sale of
assets refers only to individuals who were directors of the Person who was
the Borrower at that time. No Person who was the Borrower shall be released
from any of its obligations hereunder upon the assumption of such
obligations by another Person. For purposes of this Section, the term
"consolidate with" means a transaction in which the Borrower and another
corporation consolidate to form a new corporation pursuant to the laws of
their jurisdictions of incorporation and in which the Borrower and such
other corporation cease to exist as separate corporate entities.
(b) Subject to subsection (c) below, the Borrower and its
Subsidiaries will not sell, lease or otherwise transfer, directly or
indirectly, all or any substantial part of the assets of the Borrower and
its Subsidiaries, taken as a whole, to any other Person.
(c) The Borrower will at all times own, directly or indirectly (x)
all of the shares of capital stock or other ownership interests of Norfolk
Southern Railway Company, or the successor thereto by merger, consolidation
or share exchange or the Person, if any, who has acquired substantially all
of such corporation's assets ("NSRC"), except (i) directors' qualifying
shares and (ii) not more than 1,100,000 shares of such corporation's $2.60
Cumulative Preferred Stock, Series A, (y) all of the shares of capital
stock or other ownership interests of Norfolk and Western Railway Company,
or the successor thereto by merger, consolidation or share exchange or the
Person, if any, who has acquired substantially all of such corporation's
assets ("NWRC"), except directors' qualifying shares and (z) at least 50%
of the outstanding shares of voting stock of the Offeror or its successor.
The Borrower will cause each of NSRC and NWRC to continue to own and
operate the railroads and related assets owned and operated by each of them
on the date hereof; provided that nothing in this Section shall prohibit
dispositions (by sale, merger or otherwise) by either NSRC or NWRC of (A)
assets in the ordinary course of business or (B) obsolete or unproductive
assets.
SECTION 5.10 Use of Proceeds. The proceeds of the Loans will be used
by the Borrower to finance the Acquisition, to pay related fees and
expenses and, at the option of the Borrower, to refinance Debt of any
Subsidiary incurred in reliance on Section 5.11(i), to refinance a portion
of the existing bank debt of the Borrower (including the Existing Credit
Agreement), and for other general corporate purposes and may be used by the
Borrower to repay maturing commercial paper.
SECTION 5.11 Limitation on Subsidiary Debt and Debt of Conrail. (a)
The Borrower will not permit any of its Subsidiaries to incur or at any
time be liable with respect to any Debt except:
(i) Debt owing to the Borrower or a Subsidiary all of the outstanding
common stock of which (other than directors' qualifying shares) is owned
directly or indirectly by the Borrower;
(ii) Debt of Subsidiaries not otherwise permitted by this Section in
an aggregate principal amount at any time outstanding not exceeding
$500,000,000;
(iii) Guarantees by any Subsidiary of Debt of its own Subsidiaries,
provided that the Guaranteed Debt is permitted under this Section;
(iv) Debt of any Person at the time such Person becomes a Subsidiary
and not incurred in contemplation of such event;
(v) Debt of a Subsidiary in existence on the Effective Date and
extensions, renewals and refinancings thereof;
(vi) Debt of a Subsidiary incurred in connection with the financing
of any asset, but solely to the extent that under the terms of such Debt
the obligations of such Subsidiary with respect to such Debt may be
satisfied by recourse only to such asset and the proceeds thereof;
(vii) Debt of a Subsidiary assumed by such Subsidiary (or for which
such Subsidiary has otherwise become liable) and required to be assumed by
such Subsidiary (or for which such Subsidiary is otherwise required to
become liable) under the terms (as in effect on the Closing Date) of any
Debt of Conrail or any of its Subsidiaries in existence on the Closing Date
and permitted by Section 5.11(b), as a result of any operating arrangements
or other transactions entered into between such Subsidiary and Conrail or
any of its Subsidiaries and contemplated by the terms of the Letter
Agreement; and
(viii) Debt of Subsidiaries incurred or assumed (in connection with
an equipment trust agreement, conditional sale agreement, chattel mortgage
or lease or otherwise) for the purpose of directly or indirectly financing
all or any part of the cost of acquiring, constructing or rebuilding any
asset and any renewal, extension or refinancing thereof; provided that the
aggregate principal amount of such Debt (other than extensions, renewals
and refinancings) incurred or assumed in any fiscal year of the Borrower
pursuant to this clause (viii) shall not exceed $350,000,000.(b) Total Debt
of Conrail and its Subsidiaries (other than Debt owed to Conrail or any of
its Subsidiaries) will at no time exceed $2,750,000,000.
SECTION 5.12 Transactions with Affiliates. The Borrower will not, and
will not permit any Subsidiary to, directly or indirectly, pay any funds to
or for the account of, make any Investment in, lease, sell, transfer or
otherwise dispose of any assets, tangible or intangible, to, or participate
in, or effect, any transaction with, any Affiliate except on an
arm's-length basis on terms no less favorable in any material respect to
the Borrower or such Subsidiary than could have been obtained from a third
party who was not an Affiliate; provided that the foregoing provisions of
this Section shall not prohibit (i) the declaration or payment of any
lawful dividend or other payment ratably in respect of all of its capital
stock of the relevant class, (ii) transactions entered into in the ordinary
course of business with joint ventures in which the Borrower has a direct
or indirect interest to the extent the Borrower has determined in its
reasonable judgment that the business purpose achieved by such transactions
renders the terms thereof reasonable or (iii) the transactions contemplated
by the Letter Agreement.
SECTION 5.13 Arrangements Regarding Conrail Stock and Assets. The
Borrower will not, and will not permit any of its Subsidiaries to, consent
to or solicit any amendment or supplement to, or any waiver or other
modification of, the Letter Agreement or the Voting Trust Agreement in any
manner which could reasonably be expected to materially adversely affect the
rights of the Banks under the Loan Documents or their ability to enforce
the same, provided that nothing in this Section 5.13 shall be deemed to
restrict Borrower's right to enter into the definitive documentation
contemplated by the Letter Agreement.
SECTION 5.14 Consummation. The Borrower will use its commercially
reasonable best efforts to cause the Consummation Date to occur at the
earliest practicable time.
ARTICLE 6
DEFAULT
SECTION 6.1 Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall default in the payment when due of any
principal of any Loan, or shall default in the payment, within five days of
the due date thereof, of any interest, fees or other amount payable
hereunder;
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.7 to 5.14, inclusive;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in any Loan Document (other than those covered by
clause (a) or (b) above) for 10 Domestic Business Days after written notice
thereof has been given to the Borrower by the Administrative Agent at the
request of any Bank;
(d) any representation, warranty or certification made (or deemed
made) by the Borrower in any Loan Document or in any certificate, financial
statement or other document delivered pursuant to any Loan Document shall
prove to have been incorrect in any material respect when made (or deemed
made);
(e) the Borrower or any of its Subsidiaries shall fail to make any
payment in respect of any Material Debt when due or within any applicable
grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables the holder of
such Debt or any Person acting on such holder's behalf to accelerate the
maturity thereof;
(g) the Borrower or any Significant Subsidiary (including for
purposes of this subsection Conrail and, to the extent they would meet the
criteria specified in the definition of Significant Subsidiary, its
Subsidiaries) shall commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any corporate action to authorize
any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Significant Subsidiary (including for purposes
of this subsection Conrail and, to the extent they would meet the criteria
specified in the definition of Significant Subsidiary, its Subsidiaries)
seeking liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Significant Subsidiary
under the federal bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $50,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title IV of ERISA by any
member of the ERISA Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA
to terminate, to impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or to cause a trustee to be appointed to
administer any Material Plan; or a condition shall exist by reason of which
the PBGC would be entitled to obtain a decree adjudicating that any
Material Plan must be terminated; or there shall occur a complete or
partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans
which, in any such case, could reasonably be expected to cause one or more
members of the ERISA Group to incur a current payment obligation in excess
of $100,000,000;
(j) a judgment or order for the payment of money in excess of
$50,000,000 shall be rendered against the Borrower or any Significant
Subsidiary and such judgment or order shall continue unsatisfied,
unreversed, unvacated, undischarged and unstayed for a period of 30 days;
(k) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said Act) of 30% or more of
the outstanding shares of common stock of the Borrower; or
(l) at any time Continuing Directors shall not constitute a majority
of the board of directors of the Borrower ("Continuing Director" means at
any time each (i) individual who was a director of the Borrower 24 months
before such time or (ii) individuals who were nominated or elected to be a
director of the Borrower by at least two-thirds of the Continuing Directors
at the time of such nomination or election);
then, and in every such event, the Administrative Agent shall (i) if
requested by the Required Banks by notice to the Borrower terminate the
Commitments and they shall thereupon terminate, and (ii) if requested by
the Required Banks, by notice to the Borrower declare the Loans (together
with accrued interest thereon) to be, and the Loans (together with accrued
interest thereon) shall thereupon become, immediately due and payable
without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower; provided that in the case of any
of the Events of Default specified in clause (g) or (h) above with respect
to the Borrower, without any notice to the Borrower or any other act by the
Administrative Agent or the Banks, the Commitments shall thereupon
terminate and the Loans (together with accrued interest thereon) shall
become immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
SECTION 6.2 Notice of Default. Administrative Agent shall give notice
to the Borrower under Section 6.1(c) promptly upon being requested to do so
by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE 7
THE AGENT
SECTION 7.1 Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Administrative Agent by the terms thereof, together with
all such powers as are reasonably incidental thereto.
SECTION 7.2 Agents and Affiliates. Morgan Guaranty Trust Company of
New York and Merrill Lynch Capital Corporation shall have the same rights
and powers under the Loan Documents as any other Bank and may exercise or
refrain from exercising the same as though it were not an Agent, and Morgan
Guaranty Trust Company of New York and Merrill Lynch Capital Corporation
and their respective affiliates may engage in any kind of business with the
Borrower or any Subsidiary or affiliate of the Borrower as if each of them
were not an Agent hereunder.
SECTION 7.3 Action by Administrative Agent. The obligations of the
Administrative Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Administrative Agent
shall not be required to take any action with respect to any Default,
except as expressly provided in Article 6.
SECTION 7.4 Consultation with Experts. The Administrative Agent may
consult with legal counsel (who may be counsel for the Borrower),
independent public accountants and other experts selected by it and shall
not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or
experts.
SECTION 7.5 Liability of Agents. Neither Agent nor any of their
respective affiliates nor any of the respective directors, officers, agents
or employees of the foregoing shall be liable for any action taken or not
taken by it in connection herewith (i) with the consent or at the request
of the Required Banks or (ii) in the absence of its own gross negligence or
willful misconduct. Neither Agent nor any of their respective affiliates
nor any of the respective directors, officers, agents or employees of the
foregoing shall be responsible for or have any duty to ascertain, inquire
into or verify (i) any statement, warranty or representation made in
connection with this Agreement or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements of the
Borrower; (iii) the satisfaction of any condition specified in Article 3,
except, in the case of the Administrative Agent, receipt of items required
to be delivered to it; or (iv) the validity, effectiveness or genuineness
of any Loan Document or any other instrument or writing furnished in
connection therewith. The Administrative Agent shall not incur any
liability by acting in reliance upon any notice, consent, certificate,
statement, or other writing (which may be a bank wire, telex or similar
writing) believed by it to be genuine or to be signed by the proper party
or parties.
SECTION 7.6 Indemnification. Each Bank shall, ratably in accordance
with its Commitment (or, if the Commitments shall have terminated, the
aggregate outstanding principal amount of its Loans), indemnify each Agent,
its affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by the Borrower) against any cost,
expense (including reasonable counsel fees and disbursements), claim,
demand, action, loss or liability (except such as result from such
indemnitee's gross negligence or willful misconduct) that such indemnitee
may suffer or incur in connection with this Agreement or any action taken
or omitted by such indemnitee hereunder.
SECTION 7.7 Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon any Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each
Bank also acknowledges that it will, independently and without reliance
upon any Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking any action under this
Agreement.
SECTION 7.8 Successor Agent. The Administrative Agent may resign at
any time by giving written notice thereof to the Banks and the Borrower.
Upon any such resignation, the Required Banks shall have the right to
appoint a successor Administrative Agent reasonably acceptable to the
Borrower. If no successor Agent shall have been so appointed by the
Required Banks, and shall have accepted such appointment, within 30 days
after the retiring Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the Banks, appoint a successor
Administrative Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $500,000,000.
Upon the acceptance of its appointment as Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Agent's resignation hereunder as Administrative Agent, the provisions of
this Article shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent.
SECTION 7.9 Agents' Fees. The Borrower shall pay to each Agent for
its own account fees in the amounts and at the times previously agreed upon
between the Borrower and the Agents.
ARTICLE 8
CHANGE IN CIRCUMSTANCE
SECTION 8.1 Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period for any Fixed Rate
Loan:
(a) the Administrative Agent is advised by the Reference Banks that
deposits in dollars (in the applicable amounts) are not being offered to
the Reference Banks in the relevant market for such Interest Period, or
(b) in the case of a Committed Borrowing, Banks having 50% or more of
the aggregate amount of the Commitments advise the Administrative Agent
that the Adjusted CD Rate or the London Interbank Offered Rate, as the case
may be, as determined by the Administrative Agent will not adequately and
fairly reflect the cost to such Banks of funding their CD Loans or
Euro-Dollar Loans, as the case may be, for such Interest Period, the
Administrative Agent shall forthwith give notice thereof to the Borrower
and the Banks, whereupon until the Administrative Agent notifies the
Borrower that the circumstances giving rise to such suspension no longer
exist (which notice the Administrative Agent shall deliver forthwith upon
its becoming aware thereof), (i) the obligations of the Banks to make CD
Loans or Euro-Dollar Loans, as the case may be, or to continue or convert
outstanding Loans as or into CD Loans or Euro-Dollar Loans, as the case may
be, shall be suspended and (ii) each outstanding CD Loan or Euro-Dollar
Loan, as the case may be, shall be converted into a Base Rate Loan on the
last day of the then current Interest Period applicable thereto. Unless the
Borrower notifies the Administrative Agent at least two Domestic Business
Days before the date of any Fixed Rate Borrowing for which a Notice of
Borrowing has previously been given that it elects not to borrow on such
date, (i) if such Fixed Rate Borrowing is a Committed Borrowing, such
Borrowing shall instead be made as a Base Rate Borrowing and (ii) if such
Fixed Rate Borrowing is a Money Market LIBOR Borrowing, the Money Market
LIBOR Loans comprising such Borrowing shall bear interest for each day from
and including the first day to but excluding the last day of the Interest
Period applicable thereto at the Base Rate for such day.
SECTION 8.2 Illegality. If, on or after the date of this Agreement,
the adoption of any applicable law, rule or regulation, or any change in
any applicable law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Euro-Dollar Lending Office) with
any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its Euro-Dollar Lending Office) to make,
maintain or fund its Euro-Dollar Loans and such Bank shall so notify the
Administrative Agent, the Administrative Agent shall forthwith give notice
thereof to the other Banks and the Borrower, whereupon until such Bank
notifies the Borrower and the Administrative Agent that the circumstances
giving rise to such suspension no longer exist (which notice such Bank
shall give forthwith upon its becoming aware thereof), the obligation of
such Bank to make Euro-Dollar Loans, or to convert outstanding Loans into
Euro-Dollar Loans, shall be suspended. Before giving any notice to the
Administrative Agent pursuant to this Section, such Bank shall designate a
different Euro-Dollar Lending Office if such designation will avoid the
need for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. If such notice is given, each
Euro-Dollar Loan of such Bank then outstanding shall be converted to a Base
Rate Loan either (a) on the last day of the then current Interest Period
applicable to such Euro-Dollar Loan if such Bank may lawfully continue to
maintain and fund such Loan to such day or (b) immediately if such Bank
shall determine that it may not lawfully continue to maintain and fund such
Loan to such day.
SECTION 8.3 Increased Cost and Reduced Return. (a) If on or after (x)
the date hereof, in the case of any Committed Loan or any obligation to
make Committed Loans or (y) the date of the related Money Market Quote, in
the case of any Money Market Loan, the adoption of any applicable law, rule
or regulation, or any change in any applicable law, rule or regulation, or
any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency shall impose, modify or deem applicable any reserve, special
deposit, insurance assessment or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors of the
Federal Reserve System, but excluding (i) with respect to any CD Loan any
such requirement included in an applicable Domestic Reserve Percentage or
Assessment Rate and (ii) with respect to any Euro-Dollar Loan, any such
requirement with respect to which such Bank is entitled to compensation
during the relevant Interest Period under Section 2.7) against assets of,
deposits with or for the account of, or credit extended by, any Bank (or
its Applicable Lending Office) or shall impose on any Bank (or its
Applicable Lending Office) or on the United States market for certificates
of deposit or the London interbank market any other condition affecting its
Fixed Rate Loans or its obligation to make Fixed Rate Loans, and the result
of any of the foregoing is to increase the cost to such Bank (or its
Applicable Lending Office) of making or maintaining any Fixed Rate Loan, or
to reduce the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after
demand by such Bank (with a copy to the Administrative Agent), the Borrower
shall pay to such Bank such additional amount or amounts as will compensate
such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or directive
regarding capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on capital of such Bank (or its
Parent) as a consequence of such Bank's obligations hereunder to a level
below that which such Bank (or its Parent) could have achieved but for such
adoption, change, request or directive (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by such Bank
to be material, then from time to time, within 15 days after demand by such
Bank (with a copy to the Administrative Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will compensate such Bank
(or its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the
Administrative Agent of any event, past or prospective, of which it has
knowledge which will entitle such Bank to compensation pursuant to this
Section, or which such Bank believes is reasonably likely to entitle such
Bank to compensation pursuant to this Section, and will designate a
different Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. A
certificate of any Bank claiming compensation under this Section (for
itself or for a Participant) and setting forth the additional amount or
amounts to be paid to it hereunder and indicating in reasonable detail the
computation thereof shall be conclusive in the absence of manifest error.
In determining such amount, such Bank may use any reasonable averaging and
attribution methods.
(d) The Borrower shall not be liable pursuant to this Section to any
Bank to compensate it for any cost or reduction incurred or suffered more
than 45 days before receipt by the Borrower of a notice from such Bank
referring to the event that gave rise to such cost or reduction.
(e) This Section 8.3 shall not require the Borrower to reimburse any
Bank for any Taxes or Other Taxes which are otherwise covered by the
payment of additional amounts or the indemnity set forth in Section 8.4(b)
or (c), respectively.
SECTION 8.4 Taxes. (a) For the purposes of this Section 8.4 the
following terms have the following meanings:
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by
the Borrower pursuant to this Agreement or under any Note, and all
liabilities with respect thereto, excluding (i) in the case of each Bank and
the Administrative Agent, taxes imposed on its income, and franchise,
branch profits or similar taxes imposed on it, by a jurisdiction under the
laws of which such Bank or the Administrative Agent (as the case may be) is
organized or in which its principal executive office is located or, in the
case of each Bank, in which its Applicable Lending Office is located and
(ii) in the case of each Bank, any United States withholding tax imposed on
such payments but only to the extent that such Bank is subject to United
States withholding tax at the time such Bank first becomes a party to this
Agreement.
"Other Taxes" means any present or future stamp or documentary taxes
and any other excise or property taxes, or similar charges or levies, which
arise from any payment made pursuant to this Agreement or under any Note or
from the execution or delivery of, or otherwise with respect to, this
Agreement or any Note.
(b) Any and all payments by the Borrower to or for the account of any
Bank or the Administrative Agent hereunder or under any Note shall be made
without deduction for any Taxes or Other Taxes; provided that, if the
Borrower shall be required by law to deduct any Taxes or Other Taxes from
any such payments, (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable
to additional sums payable under this Section) such Bank or the
Administrative Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions, (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) the Borrower shall furnish to the
Administrative Agent, at its address referred to in Section 9.1, the
original or a certified copy of a receipt evidencing payment thereof.
(c) The Borrower agrees to indemnify each Bank and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by such Bank or
the Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect
thereto; provided, however, that the Borrower shall not be required to
indemnify any Bank or the Administrative Agent under this Section 8.4 for
any liability arising as a result of such Bank's or Administrative Agent's
willful misconduct or gross negligence. This indemnification shall be paid
within 30 days after such Bank or the Administrative Agent (as the case may
be) makes written demand therefor (which demand shall identify the nature
and the amount of Taxes and Other Taxes for which indemnification is being
sought).
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of
this Agreement in the case of each Bank listed on the signature pages
hereof and on or prior to the date on which it becomes a Bank in the case
of each other Bank, and from time to time thereafter if requested in
writing by the Borrower (but only so long as such Bank remains lawfully
able to do so), shall provide the Borrower and the Administrative Agent
with true, accurate and complete (i) Internal Revenue Service forms 1001 or
4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, executed in duplicate, certifying that such Bank is
entitled to benefits under an income tax treaty to which the United States
is a party which exempts the Bank from United States withholding tax or
reduces the rate of withholding tax on payments of interest for the account
of such Bank or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business
in the United States or (ii) if the interest payments made to a Bank
constitute "portfolio interest" as defined under Section 881(c) of the
Internal Revenue Code, Internal Revenue Service form W-8, or any successor
form prescribed by the Internal Revenue Service, executed in duplicate, and
a certificate representing that such Bank is not a bank for purposes of
Section 881(c) of the Internal Revenue Code, is not a 10 percent
shareholder of the Borrower (within the meaning of Section 871(h)(3)(B) of
the Internal Revenue Code) and is not a "controlled foreign corporation"
related to the Borrower (within the meaning of Section 864(d)(4) of the
Internal Revenue Code). Each such Bank further agrees (but only so long as
such Bank is lawfully able to do so) to deliver to the Borrower and the
Administrative Agent duly completed copies of the above-mentioned Internal
Revenue Service forms on or before the earlier of (i) the date that any
such form expires or becomes obsolete or otherwise is required to be
resubmitted as a condition to obtaining an exemption from withholding of
U.S. federal income tax and (ii) 30 days after the occurrence of any event
which would require a change in the most recent form previously delivered
to the Borrower and the Administrative Agent.
(e) For any period with respect to which a Bank has failed to provide
the Borrower or the Administrative Agent with the appropriate form or
certificate pursuant to Section 8.4(d) (unless such failure is due to a
change in treaty, law or regulation occurring subsequent to the date on
which such form or certificate originally was required to be provided), or
with respect to which any representation or certification on any such form
or certificate is, or proves to be, materially incorrect, false or
misleading when so made such Bank shall not be entitled to receive
additional amounts or indemnification under Section 8.4(b) or (c),
respectively with respect to Taxes imposed by the United States and such
Bank shall indemnify and reimburse the Borrower for any Taxes or Other
Taxes which were required to be withheld but which were not withheld as a
result of such Bank's failure to provide the appropriate form or
certificate or such Bank's materially incorrect, false or misleading
representations or certifications; provided that if a Bank, which is
otherwise exempt from or subject to a reduced rate of withholding tax,
becomes subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps (at such Bank's cost and
expense) as such Bank shall reasonably request to assist such Bank to
recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Bank pursuant to this Section, then (i) such Bank will
change the jurisdiction of its Applicable Lending Office if, in the
judgment of such Bank, such change (x) will eliminate or reduce any such
additional payment which may thereafter accrue and (y) is not otherwise
disadvantageous to such Bank or (ii) if such Bank does not change the
jurisdiction of its Applicable Lending Office pursuant to (i), the Borrower
shall have the right to designate a substitute bank or banks pursuant to
Section 8.6 hereof.
(g) Upon the reasonable request of the Borrower, and at the
Borrower's expense, each Bank shall use reasonable efforts to cooperate
with the Borrower with a view to obtain a refund of any Taxes which were
not correctly or legally imposed and for which the Borrower has indemnified
such Bank under this Section 8.4 if obtaining such refund would not, in the
sole judgment of such Bank, be disadvantageous to such Bank; provided that
nothing in this Section 8.4(g) shall be construed to require any Bank to
institute any administrative proceeding (other than the filing of a claim
for any such refund) or judicial proceeding to obtain any such refund. If a
Bank shall receive a refund from a taxing authority (as a result of any
error in the imposition of Taxes by such taxing authority) of any Taxes
paid by the Borrower pursuant to subsection (b) or (c) above, such Bank
shall promptly pay to the Borrower the amount so received without interest
(other than interest received from the taxing authority with respect to
such refund) and net of out-of-pocket expenses; provided that such Bank
shall only be required to pay to the Borrower such amounts as such Bank in
its sole discretion determines are attributable to Taxes paid by the
Borrower. In the event such Bank or the Administrative Agent is required to
repay the amount of such refund (including interest, if any), the Borrower,
upon the request of such Bank or the Administrative Agent (as the case may
be), agrees to promptly return to such Bank or the Administrative Agent the
amount of such refund and interest, if any (plus penalties, interest and
other charges imposed in connection with the repayment of such amounts by
such Bank or the Administrative Agent).
(h) Notwithstanding the foregoing, nothing in this Section 8.4 shall
be construed to (i) entitle the Borrower or any other Persons to any
information determined by any Bank or the Administrative Agent, in its sole
discretion, to be confidential or proprietary information of such Bank or
the Administrative Agent, to any tax or financial information of any Bank
or the Administrative Agent or to inspect or review any books and records
of any Bank or the Administrative Agent, or (ii) interfere with the rights
of any Bank or the Administrative Agent to conduct its fiscal or tax
affairs in such manner as it deems fit.
SECTION 8.5 Base Rate Loans Substituted for Affected Fixed Rate. If
(i) the obligation of any Bank to make, or convert outstanding Loans to,
Euro-Dollar Loans has been suspended pursuant to Section 8.2 or (ii) any
Bank has demanded compensation under Section 8.3(a) or 8.4, or the Borrower
is required to make any additional payments under Section 8.4 in respect of
any payments to any Bank, in either case with respect to its Euro-Dollar
Loans or its CD Loans, and the Borrower shall, by at least five Euro-Dollar
Business Days' prior notice to such Bank through the Administrative Agent,
have elected that the provisions of this Section shall apply to such Bank,
then, unless and until such Bank notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer apply:
(a) all Loans which would otherwise be made by such Bank as (or
continued as or converted into) CD Loans or Euro-Dollar Loans, as the case
may be, shall instead be Base Rate Loans (on which interest and principal
shall be payable contemporaneously with the related Fixed Rate Loans of the
other Banks), and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case may
be, has been repaid (or converted to a Base Rate Loan), all payments of
principal which would otherwise be applied to repay such Fixed Rate Loans
shall be applied to repay its Base Rate Loans instead.
If such Bank notifies the Borrower that the circumstances giving rise
to such notice no longer apply, the principal amount of each such Base Rate
Loan shall be converted into a CD Loan or Euro-Dollar Loan, as the case may
be, on the first day of the next succeeding Interest Period applicable to
the related CD Loans or Euro-Dollar Loans of the other Banks.
SECTION 8.6 Substitution of Bank. If any Bank has demanded
compensation under Section 8.3 or 8.4, the Borrower is required to make any
additional payments under Section 8.4 in respect of any payment to any Bank
or any Bank defaults in any of its obligations to make any Loan, the
Borrower shall have the right to designate a substitute bank or banks
reasonably acceptable to the Administrative Agent (which may be one or more
of the Banks) to purchase the Loans and assume the Commitments of such Bank
and each Bank agrees in such event, if the Borrower so designates a
substitute or substitutes, it will sell its Loans and assign its rights
under this Agreement to such a substitute or substitutes as soon as
reasonably possible (and in any event within 30 days) after such
designation on substantially the terms set forth in Exhibit D for a payment
equal to the principal amount of its Loans plus all interest on such Loans
and all facility fees accrued but unpaid to but excluding the date of such
payment plus any loss or expense incurred by it (or by an existing or
prospective Participant in the related Loan), in connection with such
payment, including (without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but excluding loss of
margin for the period after any such payment, as reasonably determined by
it.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, facsimile
transmission or similar writing) and shall be given to such party: (x) in
the case of the Borrower or the Administrative Agent, at its address set
forth on the signature pages hereof, (y) in the case of any Bank, at its
address set forth in its Administrative Questionnaire or (z) in the case of
any party, such other address as such party may hereafter specify for the
purpose by notice to the Administrative Agent and the Borrower. Each such
notice, request or other communication shall be effective (i) if given by
mail, 72 hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (ii) if given by any
other means, when delivered at the address specified in this Section;
provided that notices to the Administrative Agent under Article 2 or
Article 8 shall not be effective until received.
SECTION 9.2 No Waivers. No failure or delay by any party hereto in
exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies provided in the Loan Documents
shall be cumulative and not exclusive of any rights or remedies provided by
law.
SECTION 9.3 Expenses; Indemnification. (a) The Borrower shall pay (i)
all reasonably incurred out-of-pocket expenses of the Agents, including
fees and disbursements of special counsel for the Agents, in connection
with the preparation and administration of this Agreement, any waiver or
consent hereunder or any amendment hereof or any Default or alleged Default
hereunder and (ii) if an Event of Default occurs, all out-of-pocket
expenses incurred by the Administrative Agent and each Bank, including fees
and disbursements of counsel, in connection with such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings
resulting therefrom.
(b) The Borrower agrees to indemnify each Agent and Bank, their
respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an ""Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs
and expenses of any kind, including, without limitation the reasonable fees
and disbursements of counsel, which may be incurred by such Indemnitee in
connection with any investigative, administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party thereto)
brought or threatened relating to or arising out of this Agreement or any
actual or proposed use of proceeds of Loans hereunder; provided that no
Indemnitee shall have the right to be indemnified hereunder for such
Indemnitee's gross negligence or willful misconduct.
SECTION 9.4 Sharing of Set-Offs. Each Bank agrees that if it shall,
by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest
due with respect to any Loan payable to it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to any Loan payable to such other
Bank, the Bank receiving such proportionately greater payment shall
purchase such participations in the Loans payable to the other Banks, and
such other adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to the Loans shall be
shared by the Banks pro rata; provided that nothing in this Section shall
impair the right of any Bank to exercise any right of set-off or
counterclaim it may have against the Borrower and to apply the amount
subject to such exercise to the payment of indebtedness of the Borrower
other than its indebtedness under the Loan Documents. The Borrower agrees,
to the fullest extent it may effectively do so under applicable law, that
any holder of a participation in a Loan acquired pursuant to the foregoing
arrangements may exercise rights of set-off or counterclaim and other
rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the amount of such
participation.
SECTION 9.5 Amendments and Waivers. Any provision of this Agreement
or any Note may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of any Agent are affected thereby, by such
Agent); provided that no such amendment or waiver shall, unless signed by
all the Banks, (i) increase any Commitment of any Bank or subject any Bank
to any additional obligation, (ii) reduce the principal of or rate of
interest on any Committed Loan or any fees hereunder, (iii) postpone the
date fixed for any payment of principal of or interest on any Committed
Loan or any fees hereunder or for the termination of any Commitment or (iv)
change the percentage of the Banks which shall be required for the Banks to
take any action under this Section or any other provision of the Loan
Documents, and provided further that no such amendment or waiver shall
reduce the principal of or rate of interest on any Money Market Loan or
postpone the date fixed for any payment of principal of or interest on any
Money Market Loan unless signed by the Bank which has made such Money
Market Loan.
SECTION 9.6 Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, provided that the
Borrower may not assign or otherwise transfer any of its rights under this
Agreement except as contemplated by Section 5.9 or with the prior written
consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in any or all
of its Commitments or Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Administrative Agent, such Bank shall remain responsible
for the performance of its obligations hereunder, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations under this
Agreement. Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall retain the sole
right and responsibility to enforce the obligations of the Borrower
hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement;
provided that such participation agreement may provide that such Bank will
not agree to any modification, amendment or waiver of this Agreement
described in clause (i), (ii) or (iii) of Section 9.5 without the consent
of the Participant. The Borrower agrees that each Participant shall, to the
extent provided in its participation agreement, be entitled to the benefits
of Section 2.7 and Article 8 with respect to its participating interest. An
assignment or other transfer which is not permitted by subsection (c) or
(d) below shall be given effect for purposes of this Agreement only to the
extent of a participating interest granted in accordance with this
subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all or a portion of its rights and
obligations under this Agreement, and such Assignee shall assume such
rights and obligations, pursuant to an Assignment and Assumption Agreement
in substantially the form of Exhibit D hereto executed by such Assignee and
such transferor Bank; provided that after giving effect to such assignment,
(x) the Commitment (or, if the Commitments shall have terminated, the
aggregate principal amount of the Loans) of the assignor Bank (together
with its affiliates) shall be either zero or $10,000,000 or more and (y)
the Commitment (or, if the Commitments shall have terminated, the aggregate
principal amount of the Loans) of the assignee Bank (together with its
affiliates) shall be $10,000,000 or more. Each such assignment shall be
made with (and subject to) the subscribed consent of the Borrower and the
Administrative Agent (which shall not, in either case, be unreasonably
withheld); provided that if an Assignee is an affiliate of such transferor
Bank or is a Bank immediately prior to such assignment, or if at the time
an Event of Default shall have occurred and be continuing, no such consent
shall be required. Upon execution and delivery of such instrument,
recording of such instrument as provided in Section 2.16(a), obtainment of
the foregoing required consents (if any) and payment by such Assignee to
such transferor Bank of an amount equal to the purchase price agreed
between such transferor Bank and such Assignee, such Assignee shall be a
Bank party to this Agreement and shall have all the rights and obligations
of a Bank with a Commitment (or, if the Commitments shall have terminated,
Loans in an aggregate principal amount) as set forth in such instrument of
assumption, and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by
any party shall be required. In connection with any such assignment, the
transferor Bank shall pay to the Administrative Agent an administrative fee
for processing such assignment in the amount of $3,000. If the Assignee is
not incorporated under the laws of the United States of America or a state
thereof, it shall, prior to the first date on which interest or fees are
payable hereunder for its account, deliver to the Borrower and the
Administrative Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with
Section 8.4.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement to a Federal Reserve Bank. No such assignment shall
release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 8.3 or 8.4,
(and the Borrower shall not incur any greater liability for Taxes or Other
Taxes pursuant to Section 8.4), than such Bank would have been entitled to
receive with respect to the rights transferred (or than the Borrower was
liable for with respect to the transferor Bank), unless such transfer is
made with the Borrower's prior written consent or by reason of the
provisions of Section 8.2, 8.3 or 8.4 requiring such Bank to designate a
different Applicable Lending Office under certain circumstances or at a
time when the circumstances giving rise to such greater payment did not
exist.
SECTION 9.7 Governing Law; Submission to Jurisdiction, WAIVER OF JURY
TRIAL. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York State court sitting in
New York City for purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby. The
Borrower irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient
forum. EACH OF THE BORROWER, THE AGENTS AND THE BANKS HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 9.8 Counterparts; Integration; Effectiveness. (a) This
Agreement may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signature thereto and hereto
were upon the same instrument. The Loan Documents constitute the entire
agreement and understanding among the parties hereto and supersede any and
all prior agreements and understandings, oral or written, relating to the
subject matter hereof.
(b) This Agreement shall become effective on the date that the
Administrative Agent shall have received counterparts hereof signed by each
of the parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Administrative
Agent in form satisfactory to it of telegraphic, telex or other written
confirmation from such party of execution of a counterpart hereof by such
party).
SECTION 9.9 Confidentiality. Each Agent and each Bank agrees to keep
any information delivered or made available by the Borrower pursuant to the
Loan Documents confidential from anyone other than persons employed or
retained by such Bank and its affiliates who are engaged in evaluating,
approving, structuring or administering the credit facility contemplated
hereby; provided that nothing herein shall prevent either Agent or any Bank
from disclosing such information (a) to any other Bank or to any Agent, (b)
to any other Person if reasonably incidental to the administration of the
credit facility contemplated hereby, (c) upon the order of any court or
administrative agency, (d) upon the request or demand of any regulatory
agency or authority, (e) which had been publicly disclosed other than as a
result of a disclosure by any Agent or any Bank prohibited by this
Agreement, (f) in connection with any litigation to which any Agent, any
Bank or its subsidiaries or Parent may be a party, (g) to the extent
necessary in connection with the exercise of any remedy hereunder, (h) to
such Bank's or Agent's legal counsel and independent auditors and (i)
subject to provisions substantially similar to those contained in this
Section, to any actual or proposed Participant or Assignee.
SECTION 9.10 Termination. This Agreement shall terminate upon the
termination of all Commitments and repayment in full of the aggregate
outstanding principal amount of the Loans, accrued interest thereon, and
all fees and expenses and other amounts due and payable at such time;
provided that the provisions of Sections 7.6, 8.3, 8.4 and 9.3 shall
survive such termination.
SECTION 9.11 Collateral. Each of the Banks represents to the Agent
and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in the Margin Regulations) as collateral in the
extension or maintenance of the credit provided for in this Agreement. Each
of the Banks acknowledges that the proceeds of the Loans hereunder will be
used as described in Section 5.10.
SECTION 9.12 Representations of Banks. (a) Each of the Banks
represents and warrants to the Borrower that it is a corporation or
association duly incorporated or organized and validly existing under the
laws of its jurisdiction of incorporation or organization, as the case may
be.
(b) Each of the Banks represents and warrants to the Borrower that
this Agreement constitutes a valid and binding agreement of it enforceable
against it in accordance with the terms hereof subject to (i) applicable
receivership, insolvency, reorganization, moratorium and other laws
affecting the rights of creditors of banks or other institutions generally
from time to time in effect and (ii) equitable principles of general
applicability.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
NORFOLK SOUTHERN CORPORATION
By /s/ William J. Romig
---------------------------------------
Title: Vice President & Treasurer
Three Commercial Place
Norfolk, Virginia 23510-2191
Attention: William J. Romig
Vice President and Treasurer
Facsimile number: 804-629-2798
BANKS
-----
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By /s/ Patricia P. Lunka
---------------------------------------
Title: Vice President
MERRILL LYNCH CAPITAL CORPORATION
By /s/ Christopher Birosak
---------------------------------------
Title: Vice President
THE BANK OF NEW YORK
By /s/ Gregory P. Shefrin
---------------------------------------
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD.
ATLANTA AGENCY
By /s/ Bill Otott
---------------------------------------
Title: Vice President
BANKERS TRUST COMPANY
By /s/ Mary Kay Coyle
---------------------------------------
Title: Assistant Vice President
THE DAI-ICHI KANGYO BANK LTD.,
NEW YORK BRANCH
By /s/ Robert P. Gallagher Jr.
---------------------------------------
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Gregory J. Sjullie
---------------------------------------
Title: Vice President
FIRST UNION NATIONAL BANK OF VIRGINIA
By /s/ Louis E. Ellis
---------------------------------------
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED
NEW YORK BRANCH
By /s/ John V. Veltri
---------------------------------------
Title: Senior Vice President
ROYAL BANK OF CANADA
By /s/ Brian Bolotin
---------------------------------------
Title: Manager
THE TOKAI BANK, LIMITED,
NEW YORK BRANCH
By /s/ Stuart M. Schulman
---------------------------------------
Title: Deputy General Manager
WACHOVIA BANK OF NORTH CAROLINA, N.A.
By /s/ W. Charles Blocker, Jr
---------------------------------------
Title: Vice President
BANCA COMMERCIALE ITALIANA -
NEW YORK BRANCH
By /s/ Charles Dougherty
---------------------------------------
Title: Vice President
By /s/ Karen Purelis
---------------------------------------
Title: Vice President
CANADIAN IMPERIAL BANK OF COMMERCE
By /s/ Paul T. LaHiff, Jr.
---------------------------------------
Title: Managing Director
FLEET NATIONAL BANK
By /s/ Dorothy E. Bambach
---------------------------------------
Title: Senior Vice President
PNC BANK, NATIONAL ASSOCIATION
By /s/ Daniel K. Fitzpatrick
---------------------------------------
Title: Vice President
SUNTRUST BANK, ATLANTA
By /s/ Frank R. Callison
---------------------------------------
Title: Vice President
By /s/ Ruth E. Whitner
---------------------------------------
Title: Vice President
BAYERISCHE LANDESBANK GIROZENTRALE
By /s/ Wilfried Freudenberger
---------------------------------------
Title: Executive Vice President and
General Manager
By /s/ Alexander Kohnert
---------------------------------------
Title: Vice President
BANK OF MONTREAL, CHICAGO BRANCH
By /s/ R.J. McClorey
---------------------------------------
Title: Director
COMERICA BANK
By /s/ Tamara J. Gurne
---------------------------------------
Title: Account Officer
CORESTATES BANK, N.A.
By /s/ Beverly J. Coller
---------------------------------------
Title: Vice President
CRESTAR BANK
By /s/ Bruce W. Nave
---------------------------------------
Title: Vice President
KEYBANK NATIONAL ASSOCIATION
By /s/ Michael J. Landini
---------------------------------------
Title: Assistant Vice President
MELLON BANK, N.A.
By /s/ Martin J. Randal
---------------------------------------
Title: Banking Officer
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By /s/ Patricia Loret de Mola
---------------------------------------
Title: Senior Vice President
THE ROYAL BANK OF SCOTLAND PLC
By /s/ Derek Bonnar
---------------------------------------
Title: Vice President
TORONTO DOMINION (TEXAS), INC.
By /s/ Neva Nesbit
---------------------------------------
Title: Vice President
THE ASAHI BANK, LTD.
By /s/ S. Furukawa
---------------------------------------
Title: SDGM
By /s/ Wit Derby
---------------------------------------
Title: Vice President
CITIBANK N.A.
By /s/ David L. Harris
---------------------------------------
Title: Vice President
CAISSE NATIONALE DE CREDIT AGRICOLE
By /s/ David Bouhl
---------------------------------------
Title: First Vice President, Head of
Corporate Banking
THE FUJI BANK, LIMITED
NEW YORK BRANCH
By /s/ Toshiaki Yakura
---------------------------------------
Title: Senior Vice President
THE SAKURA BANK, LTD.
By /s/ Yoshikazu Nagura
---------------------------------------
Title: Vice President
THE SUMITOMO BANK, LIMITED
By /s/ John C. Kissinger
---------------------------------------
Title: Joint General Manager
UNION BANK OF SWITZERLAND
NEW YORK BRANCH
By /s/ Robert L. Wells
---------------------------------------
Title: Vice President
By /s/ Samuel Azizo
---------------------------------------
Title: Vice President
BANK AUSTRIA AG
By /s/ J. Anthony Seay
---------------------------------------
Title: Vice President
By /s/ Jeanine Ball
---------------------------------------
Title: Assistant Vice President
BANCA NAZIONALE DEL LAVORO SPA
By /s/ Giuliano Violetta
---------------------------------------
Title: First Vice President
By /s/ Miguel J. Medida
---------------------------------------
Title: Vice President
DG BANK
By /s/ Norah McCann
---------------------------------------
Title: Senior Vice President
By /s/ Karen A. Brinkman
---------------------------------------
Title: Vice President
DRESDNER BANK - NEW YORK AND
GRAND CAYMAN BRANCHES
By /s/ Robert Grella
---------------------------------------
Title: Vice President
By /s/ B. Craig Erickson
---------------------------------------
Title: Vice President
BANCA MONTE DEI PASCHI DI SIENA SPA
By /s/ G. Natalicchi
---------------------------------------
Title: Senior Vice President and
General Manager
By /s/ Brian R. Landy
---------------------------------------
Title: Vice President
THE SANWA BANK, LIMITED
By /s/ William M. Plough
---------------------------------------
Title: Vice President
By /s/ Andrew N. Hammond
---------------------------------------
Title: Vice President
THE TOYO TRUST & BANKING CO., LTD.
By /s/ T. Mikumo
---------------------------------------
Title: Vice President
WESTDEUTSCHE LANDESBANK
By /s/ Cynthia M. Niesen
---------------------------------------
Title: Managing Director
By /s/ Karen E. Hoplock
---------------------------------------
Title: Vice President
ARAB BANK PLC, GRAND CAYMAN
By /s/ Nofal S. Barbar
---------------------------------------
Title: EVP - Regional Manager
STAR BANK, N.A.
By /s/ Rick Neltner
---------------------------------------
Title: Vice President
THE SUMITOMO TRUST AND BANKING CO., LTD.,
NEW YORK BRANCH
By /s/ Suraj P. Bhatia
---------------------------------------
Title: Senior Vice President, Manager
Corporate Finance Department
per pro BROWN BROTHERS HARRIMAN & CO.
By /s/ W. Carter Sullivan, III
---------------------------------------
Title: Senior Manager
MORGAN GUARANTY TRUST COMPANY NEW YORK,
as Administrative Agent
By /s/ Patricia P. Lunka
---------------------------------------
Title: Vice President
60 Wall Street
New York, New York 10260
Attention: Loan Department
Facsimile number: 212-648-5336
Telex number: 177615 MGT UT
MERRILL LYNCH CAPITAL CORPORATION,
as Documentation Agent
By /s/ Christopher Birosak
---------------------------------------
Title: Vice President
World Financial Center
North Tower
250 Vesey Street
New York, New York 10281
Attention: Loan Department
Facsimile number: 212-449-8230
COMMITMENT SCHEDULE
BANKS COMMITMENTS
- ----- -----------
Morgan Guaranty Trust Company of New York $ 250,000,000
Merrill Lynch Capital Corporation $ 250,000,000
The Bank of New York $ 135,000,000
The Bank of Tokyo-Mitsubishi, Ltd. Atlanta Agency $ 135,000,000
Bankers Trust Company $ 135,000,000
The Dai-Ichi Kangyo Bank Ltd., New York Branch $ 135,000,000
The First National Bank of Chicago $ 135,000,000
First Union National Bank of Virginia $ 135,000,000
The Industrial Bank of Japan, Limited New York Branch $ 135,000,000
Royal Bank of Canada $ 135,000,000
The Tokai Bank, Limited, New York Branch $ 135,000,000
Wachovia Bank of North Carolina, N.A. $ 135,000,000
Banca Commerciale Italiana - New York Branch $ 100,000,000
Canadian Imperial Bank of Commerce $ 100,000,000
Fleet National Bank $ 100,000,000
PNC Bank, National Association $ 100,000,000
SunTrust Bank, Atlanta $ 100,000,000
Bayerische Landesbank Girozentrale $ 75,000,000
Bank of Montreal, Chicago Branch $ 62,500,000
Comerica Bank $ 62,500,000
CoreStates Bank, N.A. $ 62,500,000
Crestar Bank $ 62,500,000
KeyBank National Association $ 62,500,000
Mellon Bank, N.A. $ 62,500,000
The Mitsubishi Trust and Banking Corporation $ 62,500,000
The Royal Bank of Scotland plc $ 62,500,000
Toronto Dominion (Texas), Inc. $ 62,500,000
The Asahi Bank, Ltd. $ 37,500,000
Citibank N.A. $ 37,500,000
Caisse Nationale de Credit Agricole $ 37,500,000
The Fuji Bank, Limited New York Branch $ 37,500,000
The Sakura Bank, Ltd. $ 37,500,000
The Sumitomo Bank, Limited $ 37,500,000
Union Bank of Switzerland New York Branch $ 37,500,000
Bank Austria AG $ 25,000,000
Banca Nazionale del Lavoro SpA $ 25,000,000
DG Bank $ 25,000,000
Dresdner Bank - New York and Grand Cayman Branches $ 25,000,000
Banca Monte dei Paschi di Siena SpA $ 25,000,000
The Sanwa Bank, Limited $ 25,000,000
The Toyo Trust & Banking Co., Ltd. $ 25,000,000
Westdeutsche Landesbank $ 25,000,000
Arab Bank plc, Grand Cayman $ 15,000,000
Star Bank, N.A. $ 12,500,000
The Sumitomo Trust and Banking Co., Ltd.,
New York Branch $ 12,500,000
per pro Brown Brothers Harriman & Co. $ 10,000,000
TOTAL $3,500,000,000
PRICING SCHEDULE
"Euro-Dollar Margin", "CD Margin" and "Facility Fee Rate" means,
for any day, the rate set forth below in the row opposite such term and in
the column corresponding to the Status that applies on such day:
=========================================================================================
Level Level Level Level Level Level
Status I II III IV V VI
=========================================================================================
Euro-Dollar Margin 0.135% 0.15% 0.185% 0.215% 0.265% 0.45%
- -----------------------------------------------------------------------------------------
CD Margin 0.26% 0.275% 0.31% 0.34% 0.39% 0.575%
- -----------------------------------------------------------------------------------------
Facility Fee Rate 0.065% 0.075% 0.09% 0.11% 0.135 % 0.20%
=========================================================================================
For purposes of this Schedule, the following terms have the
following meanings, subject to the final paragraph of this Schedule:
"Level I Status" exists at any date if, at such date, the
Borrower's senior unsecured long-term debt is rated A/A2 or higher.
"Level II Status" exists at any date if, at such date, the
Borrower's senior unsecured long-term debt is rated A-/A3.
"Level III Status" exists at any date if, at such date, the
Borrower's senior unsecured long-term debt is rated BBB+/Baa1.
"Level IV Status" exists at any date if, at such date, the
Borrower's senior unsecured long-term debt is rated BBB/Baa2.
"Level V Status" exists at any date if, at such date, the
Borrower's senior unsecured long-term debt is rated BBB-/Baa3.
"Level VI Status" exists at any date if, at such date, no other
Status exists.
"Moody's" means Moody's Investors Service, Inc.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.
"Status" refers to the determination of which of Level I Status,
Level II Status, Level III Status, Level IV Status, Level V Status or Level
VI Status exists at any date.
The credit ratings to be utilized for purposes of this Schedule
are those assigned to the senior unsecured long-term debt securities of the
Borrower without third-party credit enhancement, and any rating assigned
to any other debt security of the Borrower shall be disregarded. In the
event of split ratings from Moody's and S&P, (i) if the ratings are one
full rating category apart, Status shall be determined by the higher of the
two ratings (unless the lower of such two ratings is BB+(Ba1) or lower, in
which case Status shall be determined by the lower of such two ratings) and
(ii) if the ratings are more than one full rating category apart, Status
shall be determined based on the rating at the midpoint between the two
ratings, provided that if there is no rating at the midpoint between the
two ratings, the higher of the two intermediate ratings (unless the lower
of such two ratings is BB+(Ba1) or lower, in which case Status shall be
determined by the lower of such two ratings) shall apply (e.g., BBB+/Baa2
results in Level III Status, BBB+/Baa3 and BBB/Baa3 both result in Level IV
Status and BBB+/Ba1 results in Level V Status).