FIVE-YEAR REVOLVING CREDIT AGREEMENT

EXECUTION VERSION

CSX

CORPORATION

                                                                                     

$1,200,000,000

FIVE-YEAR REVOLVING

CREDIT AGREEMENT

May 12, 2004

                                                                                     

CITIBANK, N.A.

THE BANK OF NOVA SCOTIA

as Co-Syndication Agents

CREDIT SUISSE FIRST BOSTON

MIZUHO CORPORATE BANK, LTD.

as Co-Documentation Agents

JPMORGAN CHASE BANK

as Administrative Agent

________________________

 

J.P. MORGAN SECURITIES INC.,

as Sole Advisor, Lead Arranger and Bookrunner

 

 

Table of Contents

SCHEDULES:

Schedule 2.01   —   Commitments

EXHIBITS:

Exhibit A   —   Form of Assignment and Acceptance

 

FIVE-YEAR REVOLVING CREDIT AGREEMENT, dated as of May 12, 2004, among CSX CORPORATION, a Virginia corporation, as Borrower, the LENDERS parties hereto, CITIBANK, N.A. and THE BANK OF NOVA SCOTIA, as Co-Syndication Agents, CREDIT SUISSE FIRST BOSTON and MIZUHO CORPORATE BANK, LTD., as Co-Documentation Agents, and JPMORGAN CHASE BANK, as Administrative Agent.

W   I   T   N   E   S   S   E   T   H :

WHEREAS, the Borrower and the Lenders are entering into this Agreement for the purpose of setting forth the terms and conditions on which the Lenders are willing to make extensions of credit to the Borrower as more fully described herein;

NOW, THEREFORE, in consideration of the premises and mutual covenants set forth herein, subject to the satisfaction of the conditions set forth in Section 4.01, the parties hereto agree as follows:

ARTICLE I

Definitions

 

“ 364-Day Credit Agreement ” means the 364-Day Revolving Credit Agreement, dated as of May 12, 2004, among CSX Corporation, a Virginia corporation, as borrower, the lenders parties thereto, Citibank, N.A. and The Bank of Nova Scotia, as co-syndication agents, Credit Suisse First Boston and Mizuho Corporate Bank, Ltd., as co-documentation agents, and JPMorgan Chase Bank, as administrative agent.

“ ABR ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.

“ Act ” has the meaning assigned to such term in Section 9.13.

“ Adjusted LIBO Rate ” means, with respect to any Eurodollar Revolving Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

“ Administrative Agent ” means JPMorgan Chase Bank, in its capacity as administrative agent for the Lenders hereunder.

“ Administrative Questionnaire ” means an administrative questionnaire in a form supplied by the Administrative Agent.

 

“ Affiliate ” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“ Agents ” means the collective reference to the Administrative Agent, the Co-Syndication Agents and the Co-Documentation Agents.

“ Aggregate Outstanding Extensions of Credit ” means, at any time, an amount equal to the sum of (a) the aggregate Revolving Credit Exposure of the Lenders at such time and (b) the aggregate principal amount of outstanding Competitive Loans of the Lenders at such time.

“ Agreement ” means this Five-Year Revolving Credit Agreement, as amended, supplemented or otherwise modified from time to time.

“ Allocable CSX/NS Attributable Debt ” means the allocable portion of any obligation of any CSX/NS Acquisition Sub Entity which would be “ Attributable Debt ” of the Borrower and the Subsidiaries if such CSX/NS Acquisition Sub Entity were a Subsidiary of the Borrower, with such allocable portion being equal to a percentage of such obligations equal to the percentage of the capital stock of such CSX/NS Acquisition Sub Entity which is directly or indirectly owned by the Borrower, provided that (a) the Allocable CSX/NS Attributable Debt with respect to any obligations which constitute CSX Conrail Attributable Debt shall be the entire amount of such obligations, (b) the Allocable CSX/NS Attributable Debt with respect to any obligations which constitute NS Conrail Attributable Debt shall be zero and (c) the Allocable CSX/NS Attributable Debt with respect to any obligations of any CSX/NS Acquisition Sub Entity which would be included as “ Attributable Debt ” of the Borrower and the Subsidiaries if such CSX/NS Acquisition Sub Entity were a Subsidiary of the Borrower and which would be permitted under Sections 6.03(a) and 6.03(b) shall be zero.

“ Allocable CSX/NS Debt ” means the allocable portion of any obligation of any CSX/NS Acquisition Sub Entity which would be included as “ Debt ” of the Borrower if such CSX/NS Acquisition Sub Entity were a Subsidiary of the Borrower, with such allocable portion being equal to a percentage of such obligations equal to the percentage of the capital stock of such CSX/NS Acquisition Sub Entity which is directly or indirectly owned by the Borrower, provided that (a) the Allocable CSX/NS Debt with respect to any obligations which constitute CSX Conrail Debt shall be the entire amount of such obligations, (b) the Allocable CSX/NS Debt with respect to any obligations which constitute NS Conrail Debt shall be zero and (c) the Allocable CSX/NS Debt with respect to any obligations of any CSX/NS Acquisition Sub Entity which would be included as “ Debt ” of the Borrower if such CSX/NS Acquisition Sub Entity were a Subsidiary of the Borrower and which would be permitted under Sections 6.01(a), 6.01(b), 6.01(c) and 6.01(d) (assuming all CSX/NS Acquisition Sub Entities were Subsidiaries) shall be zero.

“ Allocable Railroad Revenues ” means a percentage of any Railroad Revenues of any CSX/NS Entity equal to the percentage of the capital stock of such CSX/NS Entity which is directly or indirectly owned by the Borrower, provided that the Allocable Railroad Revenues with respect to the Railroad Revenues of any CSX Conrail Subsidiary shall be the entire amount of such Railroad Revenues.

 

 

“ Alternate Base Rate ” means, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

“ Applicable Percentage ” means, with respect to any Lender, the percentage of the total Commitments represented by such Lender’s Commitment. If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments.

“ Applicable Rate ” means, for any day, with respect to any Eurodollar Revolving Loan, or with respect to the facility fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption “LIBOR Margin” or “Facility Fee”, as the case may be, based upon the ratings by Moody’s and S&P, respectively, applicable on such date to the Index Debt:

For purposes of the foregoing, (i) if neither Moody’s nor S&P shall have in effect a rating for the Index Debt (other than by reason of the circumstances referred to in the last two sentences of this definition), then both such rating agencies shall be deemed to have established a rating in Category 6; (ii) if only one of Moody’s or S&P shall have in effect a rating for the Index Debt, then the Borrower and the Lenders will negotiate in good faith to agree upon another rating agency to be substituted by an amendment to this Agreement for the rating agency which shall not have a rating in effect, and in the absence of such amendment the Applicable Rate will be determined by reference to the available rating; (iii) if the ratings established or deemed to have been established by Moody’s and S&P for the Index Debt shall fall within different Categories, the Applicable Rate shall be based on the higher of the two ratings unless one of the two ratings is two or more Categories lower than the other, in which case the Applicable Rate shall be determined by reference to the Category next below that of the higher of the two ratings; and (iv) if the ratings established or deemed to have been established by Moody’s and S&P for the Index Debt shall be changed (other than as a result of a change in the rating system of Moody’s or S&P), such change shall be effective as of the date on which it is first announced by the applicable rating agency. Each change in the Applicable Rate shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change. If the rating system of Moody’s or S&P shall change, the Borrower and the Lenders shall negotiate in good faith to amend this definition to reflect such changed rating system or the unavailability of ratings from such rating agency and, pending the effectiveness of any such amendment, the Applicable Rate shall be determined by reference

 

 

 

to the rating or ratings most recently in effect prior to such change or cessation. If both Moody’s and S&P shall cease to be in the business of rating corporate debt obligations, the Borrower and the Lenders shall negotiate in good faith to agree upon a substitute rating agency and to amend the references to specific ratings in this definition to reflect the ratings used by such substitute rating agency, and in the absence of such amendment then both such rating agencies shall be deemed to have established a rating in Category 6.

“ Assignment and Acceptance ” means an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent and the Borrower.

“ Attributable Debt ” means, at any date with respect to any Sale/Leaseback Transaction in respect of which the obligations of the Borrower, any Subsidiary or any CSX Conrail Subsidiary do not constitute Capital Lease Obligations, the aggregate amount of rental payments due from the Borrower, such Subsidiary or such CSX Conrail Subsidiary, as the case may be, under the lease entered into in connection with such Sale/Leaseback Transaction during the remaining term of such lease, net of rental payments which have been defeased or secured by deposits, discounted from the respective due dates thereof to such date using a discount rate equal to the discount rate that would then be used to calculate the amount of Capital Lease Obligations with respect to a comparable capital lease.

“ Availability Period ” means the period from and including the Closing Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.

“ Board ” means the Board of Governors of the Federal Reserve System of the United States of America.

“ Borrower ” means CSX Corporation, a Virginia corporation.

“ Borrowing ” means (a) Revolving Loans of the same Type made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect or (b) a Competitive Loan or group of Competitive Loans of the same Type made on the same date and as to which a single Interest Period is in effect.

“ Borrowing Request ” means a request by the Borrower for a Revolving Borrowing in accordance with Section 2.03.

“ Business Day ” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

“ Capital Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and

 

“ Cash Collateral Account ” has the meaning assigned to such term in Section 2.10(c).

“ Change in Control ” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), of shares representing more than 30% of the aggregate ordinary voting power represented by the issued and outstanding capital stock of the Borrower, (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were neither (i) nominated by the board of directors of the Borrower nor (ii) appointed by directors so nominated, or (c) the acquisition of direct or indirect Control of the Borrower by any Person or group.

“ Change in Law ” means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or any Issuing Bank (or, for purposes of Section 2.14(b), by any lending office of such Lender or by such Lender’s or Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.

“ Class ” refers, when used in reference to any Loan or Borrowing, to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans or Competitive Loans.

“ Closing Date ” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02), which date shall be no later than May 12, 2004.

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

“ Co-Documentation Agents ” means the collective reference to Credit Suisse First Boston and Mizuho Corporate Bank, Ltd., in their respective capacities as co-documentation agents hereunder.

“ Commitment ” means, with respect to each Lender, the commitment of such Lender to make Revolving Loans and to acquire participations in Letters of Credit hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable.

“ Competitive Bid ” means an offer by a Lender to make a Competitive Loan in accordance with Section 2.04.

“ Competitive Bid Rate ” means, with respect to any Competitive Bid, the Margin or the Fixed Rate, as applicable, offered by the Lender making such Competitive Bid.

“ Competitive Bid Request ” means a request by the Borrower for Competitive Bids in accordance with Section 2.04.

“ Competitive Loan ” means a Loan made pursuant to Section 2.04.

“ Competitive Loan Note ” has the meaning assigned to such term in Section 2.09(e).

“ Conrail ” means Conrail Inc., a Pennsylvania corporation.

“ Conrail Shares ” means the collective reference to all of the issued and outstanding shares of common stock of Conrail.

“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“ Co-Syndication Agents ” means the collective reference to Citibank, N.A. and The Bank of Nova Scotia, in their respective capacities as co-syndication agents hereunder.

“ CSX Conrail Assets ” means any assets of any CSX/NS Acquisition Sub Entity made available for the separate use and benefit of the Borrower and/or any Subsidiary pursuant to the CSX/NS Agreement (or the definitive documentation referred to therein).

“ CSX Conrail Attributable Debt ” means any Attributable Debt of any CSX/NS Acquisition Sub Entity which is to be paid in full directly or indirectly by the Borrower and the Subsidiaries and/or by any CSX Conrail Subsidiaries.

“ CSX Conrail Debt ” means, as to any CSX/NS Acquisition Sub Entity at any date of determination thereof, any obligation of such CSX/NS Acquisition Sub Entity to the extent that (a) such obligation should be reflected in “Short Term Debt” or “Long Term Debt” on a consolidated balance sheet or statement of financial position of such CSX/NS Acquisition Sub Entity at such date in accordance with GAAP and (b) such obligation is to be paid in full directly or indirectly by the Borrower and the Subsidiaries and/or by any CSX Conrail Subsidiaries.

“ CSX Conrail Railroad Subsidiary ” means any CSX/NS Entity which is a Class I common carrier by rail under the rules of the Surface Transportation Board or has Allocable Railroad Revenues for the most recent period of four fiscal quarters of the Borrower that exceed an amount equal to 5% of the sum of, without duplication, (a) the aggregate Railroad Revenues of the Borrower and the Subsidiaries for such period and (b) the aggregate Allocable Railroad Revenues of the CSX/NS Entities for such period.

“ CSX Conrail Shares ” means the Conrail Shares owned directly or indirectly by the Borrower.

“ CSX Conrail Subsidiary ” means any CSX/NS Acquisition Sub Entity whose sole assets consist of CSX Conrail Assets.

“ CSX/NS Acquisition Sub ” means CRR Holdings LLC, a Delaware limited liability company.

“ CSX/NS Acquisition Sub Entity ” means CSX/NS Acquisition Sub or any of its subsidiaries.

“ CSX/NS Agreement ” means the Letter Agreement dated April 8, 1997 between the Borrower and NS providing for the joint acquisition of Conrail.

“ CSX/NS Entity ” means CSX/NS Acquisition Sub or any of its subsidiaries (other than any NS Conrail Subsidiaries).

“ Debt ” means, as to the Borrower, any Subsidiary or any CSX Conrail Subsidiary at any date of determination thereof, any obligation of the Borrower, such Subsidiary or such CSX Conrail Subsidiary, as the case may be, to the extent that such obligation should be reflected in “Short Term Debt” or “Long Term Debt” on a consolidated balance sheet or statement of financial position of the Borrower, such Subsidiaries and such CSX Conrail Subsidiaries at such date in accordance with GAAP and, for such purposes, the amount of any obligation of any CSX Conrail Subsidiary which shall be included as “ Debt ” of the Borrower shall be equal to the Allocable CSX/NS Debt of such CSX Conrail Subsidiary (except that, for purposes of Section 6.05, the Allocable CSX/NS Debt of any CSX Conrail Subsidiary shall be calculated without giving effect to clause (c) of the proviso to the definition of Allocable CSX/NS Debt).

“ Default ” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“ Disclosed Matters ” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 3.06.

“ dollars ” or “ $ ” refers to lawful money of the United States of America.

“ Environmental Laws ” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources or the management, release or threatened release of any Hazardous Material.

“ Environmental Liability ” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, any Subsidiary or any CSX/NS Entity directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the

environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ ERISA Event ” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

“ Eurodollar ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate (or, in the case of a Competitive Loan, the LIBO Rate).

“ Event of Default ” has the meaning assigned to such term in Article VII.

“ Excluded Taxes ” means, with respect to the Administrative Agent, any Lender, any Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) income and any branch profits taxes imposed as a result of a present or former connection between the Administrative Agent, any Lender, any Issuing Bank or other recipient of such payment and the jurisdiction of the governmental authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Administrative Agent, such Lender or such Issuing Bank having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement) and (b) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 2.18(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement or is attributable to such Foreign Lender’s failure or inability to comply with Section 2.16(e), except to the extent that such Foreign Lender’s assignor (if any) was entitled, at the time of assignment, to receive

 

 

 

additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.16(a).

“ Existing Credit Agreement ” means the Five-Year Revolving Credit Agreement, dated as of June 8, 2001, as amended by the First Amendment, dated as of May 17, 2002 and the Second Amendment, dated as of May 14, 2003, among CSX Corporation, as borrower, the lenders parties thereto, Citibank, N.A. and The Bank of Nova Scotia, as co-syndication agents, Credit Suisse First Boston and Mitzuho Corporate Bank, Ltd., as co-documentation agents, and JPMorgan Chase Bank, as administrative agent.

“ Federal Funds Effective Rate ” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“ Financial Officer ” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.

“ Fixed Rate ” means, with respect to any Competitive Loan (other than a Eurodollar Competitive Loan), the fixed rate of interest per annum specified by the Lender making such Competitive Loan in its related Competitive Bid.

“ Fixed Rate Loan ” means a Competitive Loan bearing interest at a Fixed Rate.

“ Foreign Lender ” means any Lender that is organized under the laws of a jurisdiction other than the United States of America, any State thereof or the District of Columbia.

“ Foreign Subsidiary ” means any Subsidiary that is organized under the laws of a jurisdiction other than the United States of America, any State thereof or the District of Columbia.

“ GAAP ” means generally accepted accounting principles in the United States of America.

“ Governmental Authority ” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct

 

 

or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any collateral security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided , that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

“ Granting Lender ” has the meaning assigned to such term in Section 9.04(h).

“ Hazardous Materials ” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“ Hedging Agreement ” means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.

“ Indebtedness ” of any Person means, without duplication, (a) all payment obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all payment obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all payment obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all payment obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all payment obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (j) all payment obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

“ Indemnified Taxes ” means Taxes arising directly from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement other than Excluded Taxes and Other Taxes.

 

“ Index Debt ” means senior, unsecured, long-term indebtedness for borrowed money of the Borrower that is not guaranteed by any other Person or subject to any other credit enhancement.

“ Information ” has the meaning assigned to such term in Section 9.12.

“ Interest Election Request ” means a request by the Borrower to convert or continue a Revolving Borrowing in accordance with Section 2.07.

“ Interest Payment Date ” means (a) with respect to any ABR Loan, the last day of each March, June, September and December, (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period and (c) with respect to any Fixed Rate Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Fixed Rate Borrowing with an Interest Period of more than 90 days’ duration (unless otherwise specified in the applicable Competitive Bid Request), each day prior to the last day of such Interest Period that occurs at intervals of 90 days’ duration after the first day of such Interest Period, and any other dates that are specified in the applicable Competitive Bid Request as Interest Payment Dates with respect to such Borrowing.

“ Interest Period ” means (a) with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect, and (b) with respect to any Fixed Rate Borrowing, the period (which shall not be less than 7 days or more than 360 days) commencing on the date of such Borrowing and ending on the date specified in the applicable Competitive Bid Request; provided , that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and, in the case of a Revolving Borrowing, thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“ Issuing Bank ” means each of Citibank, N.A., The Bank of Nova Scotia, Credit Suisse First Boston, Mizuho Corporate Bank, Ltd. and JPMorgan Chase Bank, and their respective Affiliates, in their respective capacities as issuers of Letters of Credit hereunder, and their respective successors in such capacity as provided in Section 2.05(i).

“ LC Disbursement ” means a payment made by an Issuing Bank pursuant to a Letter of Credit.

“ LC Exposure ” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC

 

 

Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.

“ Lender Affiliate” means (a) with respect to any Lender, (i) an Affiliate of such Lender or (ii) any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender and (b) with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

“ Lenders ” means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Acceptance, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Acceptance or pursuant to Section 2.18.

“ Letter of Credit ” means any letter of credit issued pursuant to this Agreement.

“ LIBO Rate ” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

“ Lien ” means, (a) with respect to any asset, (i) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, or (ii) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (b) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities (other than with respect to the capital stock of any Foreign Subsidiary, any such option or right granted consistent with the past practice of the Borrower and the Subsidiaries).

“ Loans ” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

“ Majority Lenders ” means, at any time, Lenders having Revolving Credit Exposures and unused Commitments representing at least 51% of the sum of the total Revolving

 

 

 

Credit Exposures and unused Commitments at such time; provided that, for purposes of declaring the Loans to be due and payable pursuant to Article VII, and for all purposes after the Loans become due and payable pursuant to Article VII or the Commitments expire or terminate, the outstanding Competitive Loans of the Lenders shall be included in their respective Revolving Credit Exposures in determining the Majority Lenders.

“ Margin ” means, with respect to any Competitive Loan bearing interest at a rate based on the LIBO Rate, the marginal rate of interest, if any, to be added to or subtracted from the LIBO Rate to determine the rate of interest applicable to such Loan, as specified by the Lender making such Loan in its related Competitive Bid.

“ Margin Stock ” has the meaning assigned to such term in Regulation U (including, so long as the same constitute Margin Stock under Regulation U, the Shares).

“ Material Adverse Effect ” means an adverse effect on the business, assets, operations or condition, financial or otherwise, of the Borrower and the Subsidiaries, taken as a whole, in an aggregate amount in excess of an amount equal to 3% of Total Shareholders’ Equity.

“ Material Indebtedness ” means Indebtedness (other than the Loans and Letters of Credit) of any one or more of the Borrower, the Subsidiaries and the CSX/NS Entities in an aggregate principal amount exceeding $75,000,000.

“ Maturity Date ” means the fifth anniversary of the Closing Date.

“ Moody’s ” means Moody’s Investors Service, Inc. or any successor to its corporate debt ratings business.

“ Multiemployer Plan ” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“ Net Cash Proceeds ” means, with respect to any sale or other disposition of Shares, the cash proceeds (including cash equivalents and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received) of such sale or other disposition received by the Borrower or any Subsidiary, net of all attorneys’ fees, accountants’ fees, investment banking fees and other customary fees actually incurred by the Borrower or any Subsidiary and documented in connection therewith and net of taxes paid or reasonably expected to be payable by the Borrower or any Subsidiary as a result thereof.

“ Notes ” means the collective reference to any Competitive Loan Notes and Revolving Loan Notes.

“ NS ” means Norfolk Southern Corporation, a Virginia corporation.

“ NS Conrail Assets ” means any assets of any CSX/NS Acquisition Sub Entity made available for the separate use and benefit of NS or any of its subsidiaries pursuant to the CSX/NS Agreement (or the definitive documentation referred to therein).

“ NS Conrail Attributable Debt ” means any Attributable Debt of any CSX/NS Acquisition Sub Entity which is to be paid in full directly or indirectly by NS and its subsidiaries and/or by any NS Conrail Subsidiaries.

“ NS Conrail Debt ” means, as to any CSX/NS Acquisition Sub Entity at any date of determination thereof, any obligation of such CSX/NS Acquisition Sub Entity to the extent that (a) such obligation should be reflected in “Short Term Debt” or “Long Term Debt” on a consolidated balance sheet or statement of financial position of such CSX/NS Acquisition Sub Entity at such date in accordance with GAAP and (b) such obligation is to be paid in full directly or indirectly by NS and its subsidiaries and/or by any NS Conrail Subsidiaries.

“ NS Conrail Subsidiary ” means any CSX/NS Acquisition Sub Entity whose sole assets consist of NS Conrail Assets.

“ Other Taxes ” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising directly from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement.

“ Participant ” has the meaning assigned to such term in Section 9.04(e).

“ PBGC ” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“ Permitted Encumbrances ” means:

provided that the term “Permitted Encumbrances” shall not include any Lien securing Debt.

“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“ Plan ” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“ Prime Rate ” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

“ Railroad Revenues ” means, with respect to any Person for any period, all revenues of such Person from third parties which should, in accordance with GAAP, be included in operating revenues of such Person’s railroad subsidiaries as reflected in the consolidated financial statements (or in the “Management’s Discussion and Analysis” section of the report on Form 10-K or 10-Q related thereto) of such Person for such period.

“ Railroad Subsidiary ” means any Subsidiary that is a Class I common carrier by rail under the rules of the Surface Transportation Board or any other Subsidiary the Railroad Revenues of which for the most recent period of four fiscal quarters of the Borrower exceed an amount equal to 5% of the sum of, without duplication, (a) the aggregate Railroad Revenues of the Borrower and the Subsidiaries for such period and (b) the aggregate Allocable Railroad Revenues of the CSX/NS Entities for such period.

“ Register ” has the meaning assigned to such term in Section 9.04(c).

“ Regulation U ” means Regulation U of the Board.

“ Related Parties ” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

“ Restricted Margin Stock ” means Margin Stock owned by the Borrower or any Subsidiary which represents not more than 33-1/3% of the aggregate value (determined in accordance with Regulation U), on a consolidated basis, of the property and assets of the Borrower and the Subsidiaries (other than any Margin Stock) that is subject to the provisions of Article 6 (including Section 6.02).

“ Revolving Credit Exposure ” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure at such time.

“ Revolving Loan ” means a Loan made pursuant to Section 2.03.

“ Revolving Loan Note ” has the meaning assigned to such term in Section 2.09(e).

“ Sale/Leaseback Transaction ” has the meaning assigned to such term in Section 6.03.

“ S&P ” means Standard & Poor’s Ratings Group or any successor to its corporate debt ratings business.

“ SEC ” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission.

“ Securitization Subsidiary ” means any Subsidiary which (i) engages in no activities other than in connection with Securitization Transactions permitted by this Agreement and activities incidental thereto and owns no assets other than a pool of accounts receivable and the proceeds thereof, or (ii) whose primary purpose is to hold title or ownership interests in a pool of accounts receivable and the proceeds thereof in connection with Securitization Transactions.

“ Securitization Transaction ” means (i) any transaction or series of transactions that may be entered into by the Borrower or any Subsidiary pursuant to which the Borrower or such Subsidiary may sell, convey or otherwise transfer a pool of accounts receivable and the proceeds thereof (whether now existing or arising in the future) to (a) a Securitization Subsidiary (in the case of a transfer by the Borrower or any Subsidiary other than a Securitization Subsidiary) or (b) any other Person (in the case of a transfer by a Securitization Subsidiary), for the purpose of the incurrence by such other Person of Indebtedness secured by a Lien on such accounts receivable and the proceeds thereof (or on beneficial interests of such accounts receivable and the proceeds thereof) or the issuance of certificates representing beneficial interests in such accounts receivable and the proceeds thereof, or (ii) any transaction or series of transactions (including, without limitation, borrowings pursuant to any credit agreement) that may be entered into by any Securitization Subsidiary pursuant to which such Securitization Subsidiary may grant a security interest in its assets (whether now existing or arising in the future) in connection with the incurrence of Indebtedness by such Securitization Subsidiary.

“ Shares ” means the issued and outstanding shares of common stock of Conrail and of CSX/NS Acquisition Sub and any subsidiary of CSX/NS Acquisition Sub which directly or indirectly owns the common stock of Conrail.

“ Significant CSX/NS Entity ” means any CSX/NS Entity (other than any CSX Conrail Subsidiary) that, assuming such CSX/NS Entity were a Subsidiary, would be a “significant subsidiary” of the Borrower within the meaning of the SEC’s Regulation S-X (based upon the Borrower’s direct or indirect proportionate beneficial ownership of the assets and income of such CSX/NS Entity) and any other CSX/NS Entity that the Borrower may from time to time designate as a “Significant CSX/NS Entity” by written notice to such effect to the Administrative Agent.

“ Significant Subsidiary ” means any Subsidiary that would be a “significant subsidiary” of the Borrower within the meaning of the SEC’s Regulation S-X, any CSX Conrail Subsidiary that, if such CSX Conrail Subsidiary were a Subsidiary, would be a “significant subsidiary” of the Borrower within the meaning of the SEC’s Regulation S-X and any other Subsidiary that the Borrower may from time to time designate as a “Significant Subsidiary” by written notice to such effect to the Administrative Agent.

“ SPC ” has the meaning assigned to such term in Section 9.04(h).

“ Statutory Reserve Rate ” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject for eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“ subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date.

“ Subsidiary ” means any subsidiary of the Borrower, provided that no CSX/NS Acquisition Sub Entity shall be a Subsidiary for purposes of this Agreement.

“ Successor Corporation ” has the meaning assigned to such term in Section 6.04.

“Swap Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or any of its Subsidiaries shall be a “Swap Agreement”.

“ Taxes ” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

“ Total Capitalization ” means, at any date of determination thereof, the sum of Total Debt at such date plus Total Shareholders’ Equity at such date.

“ Total Debt ” means, at any date of determination thereof, without duplication, (a) all Debt of the Borrower and the Subsidiaries at such date plus (b) the Allocable CSX/NS Debt of the CSX/NS Acquisition Sub Entities at such date (calculated without giving effect to clause (c) of the proviso to the definition of Allocable CSX/NS Debt).

“ Total Shareholders’ Equity ” means, as to the Borrower at any date of determination thereof, (a) the sum of all items which would be included under shareholders’ equity on a consolidated balance sheet or statement of financial position of the Borrower at such date in accordance with GAAP plus , without duplication, (b) the excess, if any, of (i) the aggregate purchase price of all CSX Conrail Shares and all Conrail Shares directly or indirectly

 

 

 

owned by the Borrower and the Subsidiaries over (ii) the Allocable CSX/NS Debt of the CSX/NS Acquisition Sub Entities at such date (calculated without giving effect to clause (c) of the proviso to the definition of Allocable CSX/NS Debt). In the event that any CSX Conrail Assets become assets of the Borrower or any Subsidiary, Total Shareholders’ Equity shall for all purposes of this Agreement continue to be computed as if such assets had not become assets of the Borrower or such Subsidiary.

“ Transactions ” means the execution, delivery and performance by the Borrower of this Agreement and any Notes, the borrowing of Loans, the use of the proceeds thereof and the request for the issuance of Letters of Credit hereunder.

“ Type ”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate, the Alternate Base Rate or, in the case of a Competitive Loan or Borrowing, the LIBO Rate or a Fixed Rate.

“ Unrestricted Margin Stock ” means any Margin Stock owned by the Borrower or any Subsidiary which is not Restricted Margin Stock.

“ Withdrawal Liability ” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

ARTICLE II

The Credits

If no election as to the Type of Revolving Borrowing is specified, then the requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

Promptly following receipt of a Competitive Bid Request in accordance with this Section, the Administrative Agent shall notify the Lenders of the details thereof by telecopy, inviting the Lenders to submit Competitive Bids.

Neither the Administrative Agent, the Lenders nor any Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder, including any of the circumstances specified in clauses (i) through (vi) above, as well as any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of such Issuing Bank; provided that the foregoing shall not be construed to excuse any Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by such Issuing Bank’s failure to exercise the agreed standard of care (as set forth below) in determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that each Issuing Bank shall have exercised the agreed standard of care in the absence of gross negligence or willful misconduct on the part of such Issuing Bank, except to the extent that applicable law requires a different standard of care. Without limiting the generality of the foregoing, it is understood that an Issuing Bank may accept documents that appear on their face to be in substantial compliance with the terms of a Letter of Credit, without responsibility for further investigation, regardless of any notice or information to the contrary, and may make payment upon presentation of documents that appear on their face to be in substantial compliance with the terms of such Letter of Credit; provided that such Issuing Bank shall have the right, in its sole discretion, to decline to accept such documents and to make such payment if such documents are not in strict compliance with the terms of such Letter of Credit.