Exhibit 4.6
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FORM OF
_____________________________________________
COLLATERAL AGENCY AND
INTERCREDITOR AGREEMENT
Dated as of August 1, 1998
among
General American Railcar Corporation II,
as Company,
The First National Bank of Chicago,
as Collateral Agent,
[Owner Trustee,
as Initial Owner Trustee (Trust No. 1998-1),]
[Owner Trustee,
as Initial Owner Trustee (Trust No. 1998-2),]
[Owner Trustee,
as Initial Owner Trustee (Trust No. 1998-3),]
The First National Bank of Chicago,
as Initial Indenture Trustee (Trust No. 1998-1),
[The First National Bank of Chicago,
as Initial Indenture Trustee (Trust No. 1998-2),]
[The First National Bank of Chicago,
as Initial Indenture Trustee (Trust No. 1998-3),]
General American Transportation Corporation,
as Manager, and
General American Transportation Corporation,
as Insurance Manager
_____________________________________________
Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz
Chicago, Illinois
TABLE OF CONTENTS
Page
SECTION 1.
DEFINITIONS.............................................................................................. 2
SECTION 2.
THE COLLATERAL.......................................................................................... 16
Section 2.1. Security Interest and Collateral Assignment...................................... 16
Section 2.2. Priority......................................................................... 17
Section 2.3. Continuance of Security.......................................................... 17
Section 2.4. No Transfer of Duties............................................................ 18
Section 2.5. Maintenance of Collateral........................................................ 19
Section 2.6. Releases......................................................................... 19
Section 2.7. Termination and Release of Rights................................................ 20
SECTION 3.
THE ACCOUNTS............................................................................................ 20
Section 3.1. Establishment of Accounts........................................................ 20
Section 3.2. Deposits to the Collection Account and Non-Shared Payments Account............... 21
Section 3.3. Application of Amounts on Deposit in the Non-Shared Payments Account............. 21
Section 3.4. Application of Amounts on Deposit in the Collection Account ..................... 22
Section 3.5. Application of Amounts in the Stipulated Loss Value Deficiency Account........... 27
Section 3.6. Application of Amounts in the Liquidity Reserve Account.......................... 27
Section 3.7. Application of Amounts in the Special Reserves Account........................... 27
Section 3.8. Release of Amounts in Cash Trapping Account...................................... 27
Section 3.9. Application of Amounts in Excess Cash Account................................... 28
Section 3.10. Security Interest in Accounts.................................................... 28
Section 3.11. Notice of Amounts Owed........................................................... 28
Section 3.12. Investment of Funds in the Accounts.............................................. 28
Section 3.13. Disposition of Accounts Upon Retirement of Secured Obligations .................. 29
Section 3.14. Account Balance Statements....................................................... 29
SECTION 4.
CERTAIN AGREEMENTS AMONG THE SECURED PARTIES............................................................ 29
Section 4.1. Priority of Security Interests................................................... 29
Section 4.2. Exercise of Rights............................................................... 29
i
Section 4.3. Actions Upon a Trigger Event..................................................... 30
Section 4.4. Exercise of Remedies and Application of Proceeds................................. 31
Section 4.5. Receipt of Money or Proceeds..................................................... 31
Section 4.6. Additional Beneficiaries......................................................... 32
SECTION 5.
THE COLLATERAL AGENT.................................................................................... 32
Section 5.1. Appointment and Duties of Collateral Agent....................................... 32
Section 5.2. Rights of Collateral Agent; Limitation of Liability.............................. 32
Section 5.3. Lack of Reliance on the Collateral Agent......................................... 35
Section 5.4. Indemnification; Bankruptcy...................................................... 35
Section 5.5. Resignation or Removal of the Collateral Agent................................... 35
Section 5.6. Relationships with Collateral Agent.............................................. 36
SECTION 6.
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE COMPANY.......................................................................................... 36
Section 6.1. Representations and Warranties................................................... 36
Section 6.2. General Covenants................................................................ 38
Section 6.3. Covenants........................................................................ 43
Section 6.4. Operation of Equipment; Leases................................................... 44
SECTION 7.
REPRESENTATIONS AND WARRANTIES
OF THE BENEFICIARIES.................................................................................... 45
Section 7.1. Representations and Warranties................................................... 45
SECTION 8.
MISCELLANEOUS........................................................................................... 46
Section 8.1. Agreement for Benefit of Parties Hereto.......................................... 46
Section 8.2. Severability..................................................................... 47
Section 8.3. Notices.......................................................................... 47
Section 8.4. Successors and Assigns........................................................... 48
Section 8.5. Counterparts..................................................................... 49
Section 8.6. Governing Law.................................................................... 49
Section 8.7. Consent To Jurisdiction.......................................................... 49
Section 8.8. Waiver of Jury Trial............................................................. 49
Section 8.9. Amendment; Waiver................................................................ 50
Section 8.10. Headings........................................................................ 50
ii
Section 8.11. Termination..................................................................... 50
Section 8.12. Entire Agreement................................................................ 50
Section 8.13. Limitation of Liability......................................................... 50
Section 8.14. Conflict With Other Agreements.................................................. 51
Section 8.15. Consequential Damages........................................................... 51
Section 8.16. No Petition in Bankruptcy....................................................... 51
Section 8.17. No Partnership Created.......................................................... 51
ANNEXES
Annex A - Form of Designation Letter
COLLATERAL AGENCY AND
INTERCREDITOR AGREEMENT
This COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT (this "Agreement")
dated as of August 1, 1998, among General American Railcar Corporation II, a
Delaware corporation (the "Company"), The First National Bank of Chicago, acting
in its capacity as the trustee under the Initial Indenture (1998-1) (the
"Initial Indenture Trustee (1998-1)"), [The First National Bank of Chicago,
acting in its capacity as the trustee under the Initial Indenture (1998-2) (the
"Initial Indenture Trustee (1998-2)"), The First National Bank of Chicago,
acting in its capacity as the trustee under the Initial Indenture (Trust No.
1998-3) (the "Initial Indenture Trustee (1998-3)"),] [Owner Trustee], acting in
its capacity as the trustee under the Initial Trust Agreement (Trust No. 1998-1)
(the "Initial Owner Trustee (1998-1)"), [Owner Trustee], acting in its capacity
as the trustee under the Initial Trust Agreement (Trust No. 1998-2) (the
"Initial Owner Trustee (Trust No. 1998-2)"), [Owner Trustee], acting in its
capacity as the trustee under the Initial Trust Agreement (Trust No. 1998-3)
(the "Initial Owner Trustee (Trust No. 1998-3)"),] General American
Transportation Corporation ("GATC"), acting in its capacity as Manager under the
Management Agreement (the "Manager"), GATC, acting as Insurance Manager (the
"Insurance Manager") under the Insurance Agreement and The First National Bank
of Chicago, acting in its capacity as the collateral agent appointed hereunder
for the Beneficiaries, (the "Collateral Agent").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company is a special purpose subsidiary of GATC organized to
engage in the full service railcar leasing business, to lease the Equipment from
the Lessors pursuant to the Leases and sublease the Equipment to Sublessees
pursuant to the Subleases;
WHEREAS, the Lenders will make loans to the Lessors for the purpose of
financing Equipment to be leased to the Company;
WHEREAS, the Company has entered into a Management Agreement and Insurance
Agreement pursuant to which the Manager and the Insurance Manager will provide
certain services to the Company as provided in such agreements;
WHEREAS, the parties hereto desire to enter into this Agreement to set
forth their mutual understanding with respect to (a) the distribution of
Collections, (b) the exercise of certain rights of the Company under the Company
Documents, (c) the appointment of the Collateral Agent and (d) certain other
matters set forth herein.
NOW, THEREFORE, for and in consideration of the premises and mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby covenant and agree as follows:
SECTION 1.
DEFINITIONS
Section 1.1. Definitions. The following terms shall have the meanings
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herein specified. Such definitions shall be equally applicable to the singular
and plural forms of the terms defined. All terms used herein which are not
defined herein and are defined in the New York Uniform Commercial Code shall
have the meanings therein stated. Unless otherwise stated, any agreement,
contract or document defined or referred to herein shall mean such agreement,
contract or document and all schedules, exhibits and attachments thereto as in
effect as of the date hereof, as the same may thereafter be amended,
supplemented or otherwise modified from time to time. Any reference to any
Person shall include its permitted successors and assigns, and in the case of
any Governmental Authority, any Persons succeeding to its functions and
capacities. Unless the context otherwise requires, references in Article 5
hereof to the "Beneficiaries" shall exclude the Collateral Agent.
"Acceptable GIC Provider" means a provider of a Guaranteed Investment
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Contract whose short-term unsecured senior debt is rated at least "AA" by S&P or
"Aa2" by ▇▇▇▇▇'▇ (or equivalent ratings by another nationally recognized credit
rating agency if both of such corporations are not in the business of rating
short-term unsecured senior debt at the time of issuance) or who has provided
collateral in acceptable form to S&P and ▇▇▇▇▇'▇ with respect to such Guaranteed
Investment Contract such that the rating with respect to such Guaranteed
Investment Contract is at least "AA" by S&P or "Aa2" by ▇▇▇▇▇'▇.
"Acceptable Letter of Credit" means one or more irrevocable, direct pay
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letters of credit, (i) issued to the Collateral Agent on behalf of the
Beneficiaries by a commercial bank, acceptable to the Collateral Agent, having a
short-term unsecured senior debt rating of at least "AA" by S&P or "Aa2" by
▇▇▇▇▇'▇ (or equivalent ratings by another nationally recognized credit rating
agency if both of such corporations are not in the business of rating short-term
unsecured senior debt of commercial banks at the time of issuance), (ii) in form
and substance acceptable to the Collateral Agent, (iii) providing for the amount
thereof to be available to the Collateral Agent in drawings conditioned only
upon presentation of sight drafts accompanied by the applicable certificate in
the form attached to such letter of credit and (iv) automatically extending
unless the issuing bank provides at least thirty days' prior written notice of
termination or non-renewal to the Collateral Agent.
"Accounts" means the Collection Account, the Operating Account, the
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Liquidity Reserve Account, the Special Reserves Account, the Non-Shared Payments
Account, the Stipulated Loss Value Deficiency Account, the Cash Trapping Account
and the Excess Cash Account.
"Administrative Services Agreement" means the Administrative Services
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Agreement dated as of August 1, 1998, between GATC and the Company.
2
"Affiliate" of any specified Person means any other Person directly or
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indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" means each Lender Agent and each Lessor Agent.
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"Agreement" has the meaning specified in the first paragraph of this
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Agreement.
"Assumed Debt" means any Lender Loan which, subject to Section 6.4(e),
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shall have been assumed by the Company in connection with the exercise of any
purchase option pursuant to any Lease.
"Authorized Representative" of any entity means the person or persons
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authorized to act on behalf of such entity.
"Available Amounts" means, as of any Calculation Date, the amount on
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deposit in the Collection Account as of such Calculation Date less the amounts
which would be allocated on the next succeeding Monthly Transfer Date pursuant
to clauses (i), (ii), (iii), (v) and (vi) of Section 3.4 without giving effect
to any transfers from any other Account.
"Base Component" shall have the meaning set forth in Section 5.2 of the
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Management Agreement.
"Basic Rent" has the meaning set forth in the related Lease.
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"Beneficiaries" means each Lessor, the Manager and the Insurance Manager
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and any other Person that becomes a Beneficiary hereunder pursuant to a
Designation Letter.
"Business Day" means any day other than a Saturday, a Sunday, or a day on
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which commercial banking institutions in ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
or the city and state in which the Collateral Agent maintains its corporate
trust office are authorized or obligated by law, regulation or executive order
to be closed.
"Calculation Date" means the last Business Day of each calendar month.
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"Cash Trapping Account" means the account of that name established pursuant
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to Section 3.1.
3
"Cash Trapping Cap" means as of any Monthly Transfer Date an amount equal
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to $5,000,000.
"Cash Trapping Event" means as of any Calculation Date, the occurrence of
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any of the following:
(a) The Monthly Average Lease Rate as of such Calculation Date shall
have decreased by 10% or more as compared to the Monthly Average Lease Rate
calculated as of the Calculation Date for the same month of the immediately
preceding year; or
(b) The Monthly Average Lease Rate as of such Calculation Date shall
have decreased by 20% or more as compared to the Monthly Average Lease Rate
calculated in the same month of the second preceding year, third preceding year,
fourth preceding year or fifth preceding year; or
(c) The Monthly Utilization Rate for the immediately preceding
calendar month shall have been 75% or less; or
(d) Any Coverage Ratio shall be less than 1.15:1.
"Cash Trapping Hold" means as of any Calculation Date when there has
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previously been a Cash Trapping Event, and with respect to such Cash Trapping
Event, the occurrence of any of the following:
(a) if such Cash Trapping Event is related to the Monthly Average
Lease Rate, the Monthly Average Lease Rate on such Calculation Date is less than
the Monthly Average Lease Rate as of the Closing Date, or
(b) if such Cash Trapping Event is related to the Monthly Utilization
Rate, the Monthly Utilization Rate is less than 85% for any of the twelve
immediately preceding consecutive monthly periods, or
(c) if such Cash Trapping Event is related to a Coverage Ratio, any
Coverage Ratio on such Calculation Date is less than 1.175:1.
"Category 1 Supplemental Expenses" means all Supplemental Rent payable
--------------------------------
under a Lease for (a) payments due from the Company to each Indenture Trustee,
each Loan Participant, each Lender Agent and each Owner Trustee in respect of
fees and expenses payable pursuant to Sections 2.5(b) and (e) of each
Participation Agreement; and (b) payments due from the Company to each Indenture
Trustee, each Loan Participant, each Lender Agent, each Owner Trustee and each
Owner Participant in respect of indemnities contained in Section 7 of each
Participation Agreement.
4
"Category 2 Supplemental Expenses" means all Supplemental Rent payable
--------------------------------
under a Lease to pay any Late Rent Premium due and payable under such Lease and
all Late Rent Premium due and payable under the Loan Documentation in respect of
any Assumed Debt.
"Category 3 Supplemental Expenses" means all Supplemental Rent or other
--------------------------------
amounts payable under a Lease, a Loan Document, any other Operative Agreement to
which the Company is a party or any Company Document to pay any and all other
amounts, liabilities, indemnities and obligations (other than Basic Rent,
Renewal Rent, principal, interest and other amounts included in other Categories
of Supplemental Expenses) which the Company assumes or agrees to pay to any
Person under any Lease, any Loan Document any other Operative Agreement to which
the Company is a party or any Company Document.
"Collateral" has the meaning set forth in Section 2.1.
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"Collateral Agent" has the meaning specified in the first paragraph of this
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Agreement.
"Collection Account" means the account of that name established pursuant to
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Section 3.1. The Collection Account shall initially be funded with $[1,300,000]
from the Company.
"Collections" for any period means, without duplication, (i) all amounts
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paid to the Collection Account in respect of the Subleases, including amounts
received in respect of claims for damages or in respect of breaches of contract
or nonpayment of any amount due thereunder, (ii) all income earned on amounts on
deposit in the Accounts and (iii) all other payments of whatever kind (other
than Non-Shared Payments and amounts distributed to the Company pursuant to
Section 3.9 hereof) received by the Company pursuant to any other Company
Document, but, excluding the proceeds from the sale of the Equipment Units to
the Lessors pursuant to the Participation Agreements on the Closing Date.
"Combined Exposure" means, as of any date of determination, the sum
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(calculated without duplication) of all the Transaction Exposures as of such
date.
"Company" has the meaning specified in the first paragraph of this
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Agreement.
"Company Documents" means each Sublease, the Insurance Agreement, the
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Management Agreement, the Administrative Services Agreement, the Transfer and
Contribution Agreement and any other agreement or document (other than an
Operative Agreement) to which the Company is or becomes a party or under which
the Company has rights as third party beneficiary or otherwise.
"Company Fleet" means, collectively, all Equipment owned or leased by the
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Company.
5
"Coverage Ratio" means the Historical Coverage Ratio or the Projected
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Coverage Ratio.
"Damages" has the meaning specified in Section 5.4.
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"Designation Letter" means any letter executed and delivered pursuant to
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Section 4.6 hereof and substantially in the form of Annex A hereto.
"Equipment" means all of the Equipment Units leased by the Company from a
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Lessor pursuant to a Lease.
"Equipment Cost" with respect to any Equipment Unit, has the meaning set
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forth in the related Operative Agreements.
"Equipment Notes" means the equipment notes issued on a nonrecourse basis
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by the Initial Owner Trustees pursuant to the Initial Indentures.
"Equipment Unit" means an individual railcar.
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"Event of Default" means a "Default" under the Management Agreement and an
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"event of default" (or correlative term) under any other Company Document or
Operative Agreement to which the Company is a party, in each case after the
giving of any required notice thereunder and/or the expiration of any applicable
cure period provided therein.
"Event of Loss", with respect to any Equipment Unit, has the meaning set
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forth in the related Lease or Loan Documentation.
"Excess Cash Account" means the account of that name established pursuant
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to Section 3.1 or such other account as shall be designated to the Collateral
Agent by the Company.
"Final Termination Date" means the last to occur of the Termination Dates
----------------------
with respect to each of the Beneficiaries.
"GATC Fleet" means all railcars owned, leased or managed by GATC in the
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United States.
"Historical Coverage Ratio" as of any Calculation Date, means the ratio of
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(i) the sum of the Available Amounts for each of the six consecutive calendar
months ending with such Calculation Date to (ii) the sum of the Basic Rent and
principal and interest on the Assumed Debt that was paid or payable on the six
consecutive Rent Payment Dates (or corresponding dates in respect of the Assumed
Debt) which occurred or occur immediately after the
6
Calculation Dates included in the six month period referred to in clause (i), as
such amounts are certified to by an Authorized Representative of each of the
Company and the Manager.
"Incentive Component" shall have the meaning set forth in Section 5.3 of
-------------------
the Management Agreement.
"Indemnified Party" has the meaning specified in Section 5.4 of this
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Agreement.
"Indenture" means, in respect of each Lease, the Initial Indenture related
---------
thereto and each other trust indenture and security agreement entered into from
time to time between the related Lessor and the related Indenture Trustee with
respect to the issuance of Securities, as each such agreement may be amended or
supplemented in accordance with its terms.
"Indenture Trustee" means, in respect of each Initial Indenture, the
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Initial Indenture Trustee related thereto and, when used with respect to any
other Security or the related Indenture, Indenture Trustee means the bank or
trust company designated as indenture trustee with respect to such Security or
related Indenture, and any successor to such Indenture Trustee as such trustee.
"Initial Indenture" means any of (a) the Trust Indenture and Security
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Agreement (1998-1), dated as of August 1, 1998, between the Initial Owner
Trustee (1998-1) and the Initial Indenture Trustee (1998-1), [(b) the Trust
Indenture and Security Agreement (1998-2), dated as of August 1, 1998, between
the Initial Owner Trustee (1998-2) and the Initial Indenture Trustee (1998-2)
and (c) the Trust Indenture and Security Agreement (1998-3), dated as of August
1, 1998, between the Initial Owner Trustee (1998-3) and the Initial Indenture
Trustee (1998-3)].
"Initial Indenture Trustee" means any of (a) the Initial Indenture Trustee
-------------------------
(1998-1), [(b) the Initial Indenture Trustee (1998-2) and (c) the Initial
Indenture Trustees (1998-3)].
"Initial Lease" means any of (a) the Equipment Lease Agreement (1998-1)
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dated as of August 1, 1998, between the Initial Owner Trustee (1998-1), as
lessor, and the Company, as lessee[, (b) the Equipment Lease Agreement (1998-2)
dated as of August 1, 1998, between the Initial Owner Trustee (1998-2), as
lessor, and the Company, as lessee and (c) the Equipment Lease Agreement (1998-
3) dated as of August 1, 1998, between the Initial Owner Trustee (1998-3), as
lessor, and the Company, as lessee].
"Initial Owner Trustee" means any of (a) [Owner Trustee], as owner trustee
---------------------
pursuant to the Initial Trust Agreement (1998-1)[, (b) [Owner Trustee], as owner
trustee pursuant to the Initial Trust Agreement (1998-2) and (c) [Owner
Trustee], as owner trustee pursuant to the Initial Trust Agreement (1998-3)].
7
"Initial Participation Agreement" means any of (a) the Participation
-------------------------------
Agreement (1998-1), dated as of August 1, 1998, among the Company, the Manager,
the Initial Owner Trustee (1998-1), the related Owner Participant, the Initial
Indenture Trustee (1998-1) and the Initial Pass Through Trustee[, (b) the
Participation Agreement (1998-2), dated as of August 1, 1998, among the Company,
the Manager, the Initial Owner Trustee (1998-2), the related Owner Participant,
the Initial Indenture Trustee (1998-2) and the Initial Pass Through Trustee and
(c) the Participation Agreement (1998-3), dated as of August 1, 1998, among the
Company, the Manager, the Initial Owner Trustee (1998-3), the related Owner
Participant, the Initial Indenture Trustee (1998-3) and the Initial Pass Through
Trustee].
"Initial Pass Through Trust Agreement" means the Pass Through Trust
------------------------------------
Agreement dated as of August 1, 1998 between the Company and the Initial Pass
Through Trustee.
"Initial Pass Through Trustee" means The First National Bank of Chicago as
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pass through trustee pursuant to the Initial Pass Through Trust Agreement.
"Initial Trust Agreement" means any of (a) the Trust Agreement dated as of
-----------------------
August 1, 1998, between the related Owner Participant and the Initial Owner
Trustee (1998-1), [(b) the Trust Agreement dated as of August 1, 1998, between
the related Owner Participant and the Initial Owner Trustee (1998-2), and (c)
the Trust Agreement dated as of August 1, 1998, between the related Owner
Participant and the Initial Owner Trustee (1998-3)].
"Insurance Agreement" means the insurance agreement dated August __, 1998
-------------------
between GATC and the Company.
"Late Rent Premium" means (x) with respect to any Lease and on any Monthly
-----------------
Transfer Date, any supplemental rent or premium on rent due under such Lease, in
an amount sufficient to pay the sum of (i) the premiums, if any, due on any
overdue portions of principal and interest in respect of any related Lender
Loan, at the late payment rate set forth in the related Lender Documents; (ii)
the default rate interest, if any, due on any defaulted principal or interest in
respect of any related Lender Loan, at the default interest rate set forth in
the related Lender Document; and (iii) default interest, if any, due on any
unpaid cash distributions to the related Owner Participants at the rate set
forth in such Lease, and (y) with respect to any Assumed Debt and on any Monthly
Transfer Date, the sum of (i) the premiums, if any, due on any overdue portions
of principal and interest in respect of any Assumed Debt at the late payment
rate set forth in the related Loans and (iii) the default rate interest, if any,
due on any defaulted principal or interest in respect of any Related Assumed
Debt, at the default interest rate set forth in the related Loan Documentation.
"Lease" means each Initial Lease and each other lease agreement entered
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into with respect to one or more Equipment Units between a Lessor and the
Company as each such lease agreement may from time to time be amended or
supplemented.
8
"Lease Event of Default" has the meaning set forth in the related Lease or,
----------------------
if applicable, the Loan Documentation related to the issuance of the related
Assumed Debt.
"Lender" means, with respect to any Lease, each Person who makes a loan to
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a Lessor to finance all or any part of the Equipment Cost with respect to any
Equipment Unit leased to the Company pursuant to such Lease.
"Lender Agent" means any agent which is acting on behalf of holders of
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Assumed Debt which, so long as any Assumed Debt is the Equipment Notes, means
the Person acting as Indenture Trustee with respect to such Equipment Notes or
such other agent as the Indenture Trustee shall have notified to the Lessor, the
Manager and the Collateral Agent.
"Lender Document" means any Indenture, loan agreement or other document
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pursuant to which a Lender makes a Lender Loan to a Lessor.
"Lender Loan" means, with respect to any Lease, any Security issued by or
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loan made to a Lessor to finance all or any part of the Equipment Cost with
respect to any Equipment Unit leased to the Company pursuant to such Lease.
"Lessor" means each Initial Owner Trustee and each other owner trustee or
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other Person who may from time to time lease Equipment to the Company pursuant
to a Lease.
"Lessor Agent" means, with respect to each Lease, the Lessor thereunder,
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and, so long as any Equipment Notes of such Lessor are issued and outstanding,
the Indenture Trustee with respect to such Equipment Notes or such other agent
as such Indenture Trustee shall have notified to the Lessor, the Company, the
Manager and the Collateral Agent.
"Lien" means, as applied to the property or assets (or the income,
----
proceeds, products, rents or profits therefrom) of any Person, in each case
whether the same is consensual or nonconsensual or arises by contract, operation
of law, legal process or otherwise: (a) any mortgage, lien, right of detention,
pledge, attachment, charge, lease, conditional sale or other title retention
agreement, or other security interest or encumbrance of any kind; or (b) any
arrangement, express or implied, under which such property or assets (or such
income, proceeds, products, rents or profits) are transferred, sequestered or
otherwise identified for the purpose of subjecting or making available the same
for payment of debt or performance of any other obligation in priority to the
payment of the general, unsecured creditors of such Person.
"Liquidity Reserve Account" means the account of that name established
-------------------------
pursuant to Section 3.1.
"Loan Documentation" means the documentation evidencing the Assumed Debt.
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9
"LockBox Change Notice" means the notice attached as Annex A to the letter
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agreement dated August __, 1998 among GATC, the Company, the Collateral Agent
and First Chicago National Processing Corporation with respect to the LockBox
and LockBox Account (as defined therein), a copy of which is attached hereto as
Annex B.
"Management Agreement" means the Operation, Maintenance, Servicing and
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Remarketing Agreement, dated as of August 1, 1998 between GATC and the Company.
"Management Fee" shall have the meaning set forth in Section 5.1 of the
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Management Agreement.
"Manager" means GATC, acting in its capacity as Manager under the
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Management Agreement, or any Person succeeding to the responsibilities of the
Manager in accordance with the terms thereof.
"Manager's Fleet" means the GATC Fleet if GATC is the Manager and, if a
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Successor Manager shall have been appointed pursuant to the Management
Agreement, Manager's Fleet means all railcars owned, leased or managed by such
Manager or its Affiliates, other than railcars in the Company Fleet.
"Monthly Average Lease Rates" means for any calendar month, the aggregate
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Sublease monthly rental rates with respect to the Total Managed Fleet for such
calendar month divided by the number of Equipment Units in the Total Managed
Fleet which are subject to a lease or a sublease on the last day of such
calendar month.
"Monthly Report" means the monthly report prepared by the Company pursuant
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to Section 7.1 of the Management Agreement.
"Monthly Report Date" means, with respect to any Monthly Transfer Date, the
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second preceding Business Day prior to such Monthly Transfer Date.
"Monthly Transfer Date" means the [___] day of each calendar month;
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provided, however, that if any such day shall not be a Business Day, then the
Monthly Transfer Date shall mean the next succeeding Business Day.
"Monthly Utilization Rate," for any calendar month, means the percentage
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determined by dividing (i) the total number of railcars in the Total Managed
Fleet, which are subject to a Lease or a sublease on the last day of such
calendar month, by (ii) the total number of railcars in the Total Managed Fleet
on the last day of such calendar month.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor to such
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corporation's business of rating securities, which is then providing a rating
for any Securities.
10
"Non-Shared Payments" means any (a) contribution of capital by GATC to the
-------------------
Company subsequent to the Closing Date, made expressly for the purpose of paying
the Stipulated Loss Value or Termination Value of any Equipment Unit pursuant to
a Lease, (b) prior to the payment of Stipulated Loss Value or Termination Value
with respect to any Equipment, insurance proceeds received with respect to any
loss or damage to any Equipment, (c) prior to the payment of Stipulated Loss
Value or Termination Value with respect to any Equipment, proceeds of the sale
of the Equipment or (d) excess cash available to the Company pursuant to clause
(xiv) of Section 3.4 that the Company requests the Collateral Agent to transfer
to the Non-Shared Payments Account for the express purpose of paying the
Stipulated Loss Value or Termination Value pursuant to a Lease.
"Non-Shared Payments Account" means the account of that name established
---------------------------
pursuant to Section 3.1.
"Operating Account" means the account of that name established pursuant to
-----------------
Section 3.1.
"Operating Expenses" mean (a) payments due to the Collateral Agent in
------------------
respect of fees, expenses or indemnities pursuant to this Agreement, (b) any
payments in respect of insurance premiums required to be paid in respect of the
Insurance Agreement or other insurance maintained by the Company, (c) any
payments in respect of Reimbursable Services pursuant to the Management
Agreement, (d) the fees and expenses payable pursuant to the Administrative
Services Agreement, (e) maintenance or repair expenses related to damage to any
Equipment Unit, [(f) the payment of Stipulated Loss Value or the cost of
replacement Equipment in connection with any Event Loss, not in excess of
$100,000 in any calendar month and] (g) expenses in connection with Optional
Modifications to the Equipment (other than Programmatic Optional Modifications).
"Operative Agreements" with respect to any Lease, has the meaning set forth
--------------------
or referenced in the related Lease, and with respect to any Assumed Debt, has
the meaning set forth or referenced in the related Loan Documentation, provided
that the Management Agreement, the Administrative Services Agreement, the
Insurance Agreement, the Transfer and Contribution Agreement and the Subleases
shall be Company Documents notwithstanding any such definition of Operative
Agreement.
"Optional Modifications" means, with respect to any Lease, all
----------------------
modifications to the related Equipment other than Required Modifications or
Programmatic Optional Modifications.
"Owner Participant" means each owner participant or other person for whose
-----------------
benefit a Lessor owns Equipment leased to the Company pursuant to a Lease, and
its permitted successors and assigns.
11
"Participation Agreement" means each Initial Participation Agreement and
-----------------------
each other participation agreement entered into from time to time among the
Company and the other parties thereto in connection with a Lease, as each such
agreement may be amended or supplemented in accordance with its terms.
"Permitted Investments" means (i) direct obligations of, and obligations
---------------------
fully guaranteed as to timely payment by, the United States of America (having
remaining maturities of no more than the number of days to the Business Day next
preceding the next Monthly Transfer Date), (ii) commercial paper (having
remaining maturities of no more than the number of days to the Business Day next
preceding the next Monthly Transfer Date), having, at the time of the investment
or contractual commitment to invest therein, a rating from each Rating Agency in
its highest investment category, (iii) a Guaranteed Investment Contract (a
"GIC") from an Acceptable GIC provider, (iv) a GIC provided by GATX, provided
that such obligations are supported by an Acceptable Letter of Credit, (v)
investments in funds rated in the highest investment category by each Rating
Agency and (vi) repurchase agreements and similar short term instruments.
"Person" means an individual, a corporation, a partnership, a trust, an
------
unincorporated organization, a limited liability company, or a government or
political subdivision thereof.
"Premium Amount" means the premium, if any, due in certain circumstances
--------------
upon the prepayment of any Lender Loan pursuant to the related Lender Document.
"Programmatic Optional Modification" means any Optional Modification to one
----------------------------------
or more Equipment Units in the Company Fleet the cost of implementation for
which in any calendar year is reasonably expected to exceed $750,000.
"Projected Coverage Ratio" as of any Calculation Date means the ratio of
------------------------
(i) the sum of projected Available Amounts for the six-month period immediately
succeeding such Calculation Date to (ii) the sum of the Basic Rent and principal
and interest on the Assumed Debt due or to become due and payable on the six
consecutive Rent Payment Dates (or corresponding dates in respect of the Assumed
Debt) which occur following such Calculation Date, as such amounts are certified
by an Authorized Representative of each of the Company and the Manager.
"Railroad Mileage Credits" means the mileage credit payments made by
------------------------
railroads under their applicable tariffs to the registered owner of identifying
marks on the railcars.
"Rated Rent" means, as of any Rent Payment Date with respect to any Lease,
----------
the portion of accrued and unpaid Basic Rent payable by the Company on such Rent
Payment Date under any Lease which if not paid by the Company within the number
of days specified in such Lease would constitute a Lease Event of Default under
such Lease.
12
"Rated Security" means the Pass Through Trust Certificates issued by The
--------------
First National Bank of Chicago as Pass Through Trustee for General American
Railcar Corporation II 1998-1 Pass Through Trust, pursuant to the Pass Through
Trust Agreement dated August 1, 1998 between the Company and the Pass Through
Trustee.
"Rating Agencies" means, at any time, S&P and Moody's.
---------------
"Reimbursable Services" has the meaning set forth in Section 5.4 of the
---------------------
Management Agreement.
"Rent Payment Date" has the meaning set forth in the Related Lease.
-----------------
"Required Beneficiaries" means, at any time, Beneficiaries that at such
----------------------
time hold at least 66-2/3% of the Combined Exposure.
"Required Cash Trapping Amount" means an amount equal to:
-----------------------------
(i) if no Cash Trapping Event exists with respect to such Monthly
Transfer Date, an amount equal to $200,000; or
(ii) if for such Monthly Transfer Date a Cash Trapping Event exists,
an amount equal to $5,000,000.
"Required Liquidity Reserve Amount" means (x) as of the Closing Date,
---------------------------------
$500,000, and thereafter increasing by $42,000 per month until such time as such
amount shall equal or exceed $2,000,000 and thereafter $2,000,000 or (y) such
other amount agreed to in accordance with Section 8.9.
"Required Modification" with respect to any Equipment Unit the definition
---------------------
of such term in the related Lease, whether expressly set forth therein or by
reference to another related document.
"Required Special Reserves Amount" means:
--------------------------------
(i) if the Company is required to make any Required
Modifications to any Equipment (which Required Modifications are not
contemplated by the Company as of the Closing Date), an amount with
respect to each Required Modification one-third of the total cost of
implementing such Required Modification will be on deposit in the
Special Reserves Account by the date implementation of such Required
Modification is scheduled to begin;
13
(ii) if the Company has elected to implement any Programmatic
Optional Modification to any Equipment, an amount sufficient to fund
the cost of such Programmatic Optional Modification; plus
(iii) if an event shall occur with respect to which the
Insurance Manager determines that the Company will be required to pay
any applicable insurance deductible set forth in the Insurance
Agreement, an amount (to be payable in level installments commencing
with the first Monthly Transfer Date after the Insurance Manager shall
have determined that the insurance deductible will be required to be
paid) that will result in (A) 100% of the then current insurance
deductible or (B) such other amount (including legal costs) as the
Insurance Manager deems sufficient being on deposit in the Special
Reserves Account by the date the insurance deductible is required to be
paid;
(iv) if any event shall occur or obligation shall arise
pursuant to which the Company will be required to pay Stipulated Loss
Value with respect to one or more Equipment Units (other than in
connection with Events of Loss as to which the payment of Stipulated
Loss Value is separately reserved for pursuant to clause (v) of Section
3.4 or as an Operating Expense), an amount with respect to each such
event or obligation (payable in level installments commencing with the
first Monthly Transfer Date after the Company becomes aware of such
payment obligation) that will result in the Stipulated Loss Value
required to be paid being on deposit in the Special Reserves Account on
the date such Stipulated Loss Value must be paid.
"Required Stipulated Loss Value Deficiency Amount" as of any Calculation
------------------------------------------------
Date and with respect to any Lease or Assumed Debt, means the aggregate of the
Stipulated Loss Value Deficiency Amounts due and payable as of the next
succeeding Monthly Transfer Date.
"Responsible Officer" means the president or any vice president, assistant
-------------------
vice president, any trust officer at its corporate trust office or any other
officer of the Collateral Agent to whom any matter has been referred because of
such officer's knowledge and familiarity with the particular subject.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
---
Inc. or any successor to such corporation's business of rating securities, which
is then providing a rating for any Securities.
"Scheduled Rent" means, as of any Rent Payment Date with respect to any
--------------
Lease, the difference, if any, between accrued and unpaid Basic Rent and accrued
and unpaid Rated Rent.
14
"Secured Obligations" has the meaning assigned to such term in Section 2.1
-------------------
of this Agreement.
"Security" means any note, debenture, promissory note or other evidence of
--------
indebtedness issued pursuant to an Indenture.
"Security Interests" means the Liens and other security interest granted or
------------------
expressed to be granted in the Collateral pursuant to this Agreement.
"Special Reserves Account" means the account of that name established
------------------------
pursuant to Section 3.1.
"Special Transfer Date" means each date on which Non-Shared Payments will
---------------------
be distributed.
"Stipulated Loss Value" with respect to each Lease, has the meaning set
---------------------
forth in such Lease.
"Stipulated Loss Value Deficiency Account" means the Account of that name
----------------------------------------
established pursuant to Section 3.1.
"Stipulated Loss Value Deficiency Amount" with respect to each Event of
---------------------------------------
Loss under a Lease, means the Stipulated Loss Value which will become due and
payable with respect to such Event of Loss within 120 days after such Event of
Loss occurs.
"Sublease" means each of the lease agreements entered into from time to
--------
time with respect to the Equipment by or on behalf of the Company and a
Sublessee, as each such lease agreement may from time to time be amended or
supplemented.
"Sublessee" means any Person who subleases Equipment from the Company
---------
pursuant to a Sublease.
"Termination Date" means, with respect to any Beneficiary, the date on
----------------
which all the Secured Obligations owing to such Beneficiary by the Company, have
been paid and performed in full.
"Total Managed Fleet" means the Manager's Fleet and the Company Fleet.
-------------------
"Transaction Exposure" means as of any date of determination and with
--------------------
respect to each Lease, the present value [(discounted at the interest rate on
the related Lender Loan)] of all the remaining payments of Basic Rent under such
Lease through the remaining term of such Lease, plus (ii) if all or a portion of
a Lender Loan related to such Lease shall at the
15
time be Assumed Debt, the [present value (discounted at the interest rate on
such Assumed Debt)] of all the remaining payments of principal of such Assumed
Debt through the remaining term of such Assumed Debt.
"Trigger Event" means an Event of Default (i) by the Company under any
-------------
Operative Agreement to which the Company is a party (other than a Tax Indemnity
Agreement) or (ii) under any Company Document (other than the Subleases).
SECTION 2.
THE COLLATERAL
Section 2.1. Security Interest and Collateral Assignment.
-------------------------------------------
(a) The Company hereby assigns and grants to the Collateral
Agent, for the benefit and security of the Beneficiaries, a security interest in
and general lien upon all of its right, title and interest in and to (a) each
Company Document and all payments thereon or with respect thereto (other than
any Non-Shared Payments), (b) the Accounts (other than the Non-Shared Payments
Account and the Excess Cash Account), including, without limitation, any
securities purchased with funds on deposit therein, and all income from the
investment of funds therein and (c) all proceeds, accessions, profits, income
benefits, substitutions and replacements, whether voluntary or involuntary, of
and to any of the property, now owned or hereafter acquired, of the Company
described in the preceding clauses (including, without limitation, the Company's
claims for indemnity thereunder and payments with respect thereto) (the
"Collateral"). Such Security Interests are made, in trust and subject to the
terms and conditions of this Agreement, to secure the payment by the Company of
amounts due under the Company Documents and the Operative Agreements to which
the Company is a party (collectively, the "Secured Obligations"), all as
provided in this Agreement.
(b) The Collateral Agent acknowledges such Security Interests,
accepts the trusts created hereby in accordance with the provisions hereof and
agrees to hold and administer all Collateral in trust for the use and benefit of
all present and future Beneficiaries.
Section 2.2. Priority. The Company intends the Security Interests in
--------
favor of the Collateral Agent to be prior to all other Liens in respect of the
Collateral, and the Company shall take or cause to be taken all actions
necessary to obtain and maintain, in favor of the Collateral Agent, for the
benefit of the Beneficiaries, a first priority, perfected security interest in
the Collateral; provided, however, that with respect to the Subleases the
requirement of perfection shall not apply. The Collateral Agent shall have all
of the rights, remedies and recourses with respect to the Collateral afforded a
secured party under all applicable law in addition to, and not in limitation of,
the other rights, remedies and recourses granted to the
16
Collateral Agent by this Agreement or any law relating to the creation and
perfection of liens on, and security interests in, the Collateral.
Section 2.3. Continuance of Security. (a) Except as otherwise provided in
-----------------------
Section 2.6, Section 2.7 or Section 3.9, the Security Interests contained in
this Agreement shall remain in force as continuing security to the Collateral
Agent, for the benefit of the Beneficiaries, until the Final Termination Date
with respect to all Secured Obligations (subject to the provisions of Section
8.11) notwithstanding any intermediate payment or satisfaction of any part of
the Secured Obligations or any settlement of account or any other act, event or
matter whatsoever and shall secure the ultimate balance of the moneys and
liabilities hereby secured.
(b) No assurance, security or payment which may be avoided or
adjusted under the law, including under any enactment relating to bankruptcy or
insolvency and no release, settlement or discharge given or made by the
Collateral Agent on the faith of any such assurance, security or payment, shall
prejudice or affect the right of the Collateral Agent to recover the Secured
Obligations from the Company (including any moneys which it may be compelled to
pay or refund under the provisions of any applicable insolvency legislation of
any applicable jurisdiction and any costs payable by it pursuant to or otherwise
incurred in connection therewith) or to enforce the Security Interests contained
in this Agreement to the full extent of the Secured Obligations and accordingly,
if any release, settlement or discharge is or has been given pursuant to Section
2.7 and there is subsequently any such avoidance or adjustment under the law, it
is expressly acknowledged and agreed that such release, settlement or discharge
shall be void and of no effect whatsoever.
(c) If the Collateral Agent shall have grounds in its absolute
discretion for believing that the Company may be insolvent pursuant to the
provisions of any applicable insolvency legislation in any relevant jurisdiction
as at the date of any payment made by the Company to the Collateral Agent, the
Collateral Agent shall retain the Security Interests contained in or created
pursuant to this Agreement until the expiration of a period of one month plus
such statutory period within which any assurance, security, guarantee or payment
can be avoided or invalidated after the payment and discharge in full of all
Secured Obligations notwithstanding any release, settlement, discharge or
arrangement which may be given or made by the Collateral Agent on, or as a
consequence of, such payment or discharge of liability provided that, if at any
time within such period, the Company shall commence a voluntary winding-up or
other voluntary case or other preceding under any bankruptcy, reorganization,
liquidation or insolvency law or statute now or hereafter in effect in any
jurisdiction seeking liquidation, reorganization or other relief with respect to
the Company or the Company's debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect in any jurisdiction or seeking the
appointment of an administrator, a trustee, receiver, liquidator, custodian or
other similar official of the Company or any substantial part of its property or
if the Company shall consent to any such relief or to the appointment of or
taking
17
possession by any such official in an involuntary case or other proceeding
commenced against the Company, or making a general assignment for the benefit of
any creditor of the Company under any bankruptcy, reorganization, liquidation or
insolvency law or statute now or hereafter in effect in any jurisdiction, the
Collateral Agent shall continue to retain such security for such further period
as the Collateral Agent may determine and such security shall be deemed to have
continued to have been held as security for the payment and discharge to the
Collateral Agent of all Secured Obligations.
Section 2.4. No Transfer of Duties. The Security Interests are granted as
---------------------
security only and shall not (i) transfer or in any way affect or modify, or
relieve the Company from, any obligation to perform or satisfy any term,
covenant, condition or agreement to be performed or satisfied by the Company
under or in connection with this Agreement or any Company Document or any
Collateral or (ii) impose any obligation on any of the Beneficiaries or the
Collateral Agent to perform or observe any such term, covenant, condition or
agreement or impose any liability on any of the Beneficiaries or the Collateral
Agent for any act or omission on the part of the Company relative thereto or for
any breach of any representation or warranty on the part of the Company
contained therein or made in connection therewith.
Section 2.5. Maintenance of Collateral. (a) Safekeeping. The Collateral
------------------------- -----------
Agent agrees to maintain the Collateral received by it and all records and
documents relating thereto at such address or addresses as may from time to time
be specified by the Collateral Agent in writing to each Beneficiary and the
Company. The Collateral Agent shall keep all Collateral and related
documentation in its possession separate and apart from all other property that
it is holding in its possession and from its own general assets and shall
maintain accurate records pertaining to the Permitted Investments and Accounts
included in the Collateral in such a manner as shall enable the Collateral
Agent, the Beneficiaries and the Company to verify the accuracy of such
recordkeeping. The Collateral Agent's books and records shall at all times show
that the Collateral is held by the Collateral Agent as agent of the
Beneficiaries and is not the property of the Collateral Agent. The Collateral
Agent will promptly report to each Beneficiary and the Company any failure on
its part to hold the Collateral as provided in this Section 2.5(a) and will
promptly take appropriate action to remedy any such failure. It is understood
and agreed that possession of the Subleases will be maintained by the Manager on
behalf of the Collateral Agent.
(b) [Access. The Collateral Agent shall permit the Company and each
------
of the Beneficiaries, or their respective duly authorized representatives,
attorneys, auditors or designees, to inspect the Collateral in the possession of
or otherwise under the control of the Collateral Agent pursuant hereto at such
reasonable times during normal business hours as the Company or any such
Beneficiary may reasonably request with prior written notice.]
18
(c) Notifications. The Collateral Agent at the expense of the
-------------
Company shall promptly forward to the Company and the Manager a copy of each
notice, request, report, or other document relating to any Company Document
included in the Collateral that is received by a Responsible Officer of the
Collateral Agent from any Person other than the Company or the Manager on and
after the date hereof.
Section 2.6. Releases. If at any time all or any part of the Collateral
--------
is to be sold, transferred, assigned or otherwise disposed of by the Company or
the Collateral Agent or any Person on its or their behalf, the Collateral Agent
shall, on or prior to the date of such sale, transfer, assignment or disposal,
at the expense of the Company, execute such instruments of release prepared by
the Company, in recordable form, if necessary, in favor of the Company or any
other Person as the Company may reasonably request, deliver the relevant part of
the Collateral in its possession to the Company, otherwise release the Security
Interest constituted by this Agreement and each other Company Document on such
Collateral and release and deliver such Collateral to the Company and issue
confirmation, to the relevant purchaser, transferee, assignee, insurers and such
other Persons as the Collateral Agent shall determine to be appropriate upon
being requested to do so by the Company, that the relevant Collateral is no
longer subject to the Security Interests. Any release to the Company shall
release or reassign as appropriate in respect of the Collateral such grants and
assignments arising pursuant to Section 2.1 of this Agreement and/or under each
other Company Document. The parties hereto hereby authorize the Collateral Agent
to release, reconvey, retransfer or reassign (as appropriate) any Permitted
Investments sold by the Collateral Agent, the proceeds of which the Collateral
Agent causes to be credited to the Account in which such Permitted Investment
was held.
Section 2.7. Termination and Release of Rights. (a) On the Termination
---------------------------------
Date with respect to any Beneficiary, the rights, remedies, powers, duties,
authority and obligations conferred upon such Beneficiary pursuant to this
Agreement shall terminate and be of no further force and effect and all rights,
remedies, powers, duties, authority and obligations of such Beneficiary with
respect to the Collateral shall be automatically released; provided that any
indemnity provided to such Beneficiary herein or in any other Company Document
shall survive such Termination Date if so provided.
(b) On the Final Termination Date, the rights, remedies, powers,
duties, authority and obligations conferred upon the Collateral Agent and each
Beneficiary pursuant to this Agreement shall terminate and be of no further
force and effect and all rights, remedies, powers, duties, authority and
obligations of the Collateral Agent and each Beneficiary with respect to the
Collateral shall be automatically released. On the Final Termination Date, the
Collateral Agent agrees, at the expense of the Company, to execute such
instruments of release, in recordable form if necessary, in favor of the Company
as the Company may reasonably request, to deliver any Collateral in its
possession to the Company, to otherwise release the security interests
constituted by this Agreement release and deliver the
19
Collateral to the Company and to issue confirmation, to such Persons as the
Collateral Agent shall determine to be appropriate upon being requested to do so
by the Company, that the Collateral is no longer subject to the Security
Interests.
SECTION 3.
THE ACCOUNTS
Section 3.1. Establishment of Accounts. The Collateral Agent hereby
-------------------------
establishes the following accounts (the "Accounts") in the form of non-interest
bearing accounts, which shall be maintained at all times until the termination
of this Agreement:
(a) Collection Account;
(b) Operating Account;
(c) Stipulated Loss Value Deficiency Account;
(d) Liquidity Reserve Account;
(e) Special Reserves Account;
(f) Cash Trapping Account;
(g) Excess Cash Account; and
(f) Non-Shared Payments Account.
The Collateral Agent shall establish a sub-account in the Stipulated Loss
Value Deficiency Account and the Non-Shared Payments Account for each Lease. In
addition, certain additional sub-accounts within certain of the Accounts may be
established and created by the Collateral Agent from time to time to facilitate
compliance with this Agreement.
All amounts from time to time held in each Account (other than amounts in
the Non-Shared Payments Account and the Excess Cash Account) shall be held (a)
in the name of the Collateral Agent, for the benefit of the Beneficiaries and
(b) in the custody of the Collateral Agent for the purposes and on the terms set
forth in this Agreement and all such amounts shall constitute a part of the
Collateral and shall not constitute payment of any Secured Obligation or any
other obligation of the Company until applied as hereinafter provided. All
amounts held from time to time in a sub-account of the Non-Shared Payments
Account shall be held in the name of the Collateral Agent for the benefit of the
related Beneficiary for which such Non-Shared Payment was made. In respect of
any Secured Obligation owed to the Beneficiaries, each Beneficiary hereby
acknowledges and agrees to look solely to the amounts on deposit in the Accounts
to the extent amounts are available for distribution to such Beneficiary in the
priority of payments set forth in Section 3.4, subject, however, to the
provisions of Sections 4.3 and 4.4.
20
Section 3.2. Deposits to the Collection Account and Non-Shared Payments
----------------------------------------------------------
Account. (a) The Collateral Agent shall, upon receipt thereof, deposit in the
-------
Collection Account all Collections or other payments received by it, except any
Non-Shared Payments.
(b) The Collateral Agent shall, on each date when one or more Non-
Shared Payments are made to the Collateral Agent, deposit in the applicable sub-
account of the Non-Shared Payments Account the aggregate amount of the related
Non-Shared Payments.
Section 3.3. Application of Amounts on Deposit in the Non-Shared Payments
------------------------------------------------------------
Account. (a) The Company shall provide the Collateral Agent, all Lender Agents,
-------
Lessor Agents and Participants with written notice of any Non-Shared Payment to
be made by, on behalf of, or with respect to obligations of, the Company not
less than ten Business Days prior to the date on which such payment is expected
to be received and in any event not less than two Business Days before the
Payment Date on which such Non-Shared Payment is to be distributed in accordance
with the Operative Agreement or Agreements pursuant to which it is to be
received. Such notice shall set out (i) the total amount of such Non-Shared
Payment, and (ii) the Lender Agent or Lessor Agent to and related Lease in
respect of which it is to be paid.
(b) By [10:00] a.m. (Chicago, Illinois time) on the applicable
Payment Date, the Collateral Agent shall withdraw all amounts on deposit in the
applicable sub-account of the Non-Shared Payments Account and shall distribute
such amounts to the applicable Lender Agent or Lessor Agent in an amount not in
excess of the aggregate amount to be allocated to such agent pursuant to the
written notice provided to the Collateral Agent pursuant to Section 3.3(a)
above, for application in accordance with the terms of the related Loan
Documentation or Lease and the Transaction Exposure relating to such Agent shall
be recalculated following such distribution to reflect the Basic Rent payments
then payable over the remaining term of the applicable Lease.
Section 3.4. Application of Amounts on Deposit in the Collection Account.
-----------------------------------------------------------
By [10:00] a.m. (Chicago, Illinois time) on each Monthly Transfer Date, using
the information provided in the applicable Monthly Report and the notices
provided pursuant to Section 3.11, the Collateral Agent will withdraw all
amounts on deposit in the Collection Account as of the immediately preceding
Calculation Date and distribute such amounts in the order of priority set forth
below but, in each case, only to the extent that all amounts ranking prior
thereto have been paid in full:
(1) to the Manager, for distribution to the Sublessees, if
any, whose payments in respect of the applicable Subleases are not made net
of any Railroad Mileage Credits due and owing to such Sublessee, an amount
equal to the Railroad Mileage Credits due to such Sublessees for which an
allocation has not previously
21
been made pursuant to this clause (i), as certified to the Collateral Agent
by the Manager not later than the Monthly Report Date;
(2) to the Operating Account, an amount which together with
any amounts on deposit therein, is sufficient to pay (a) all Operating
Expenses of the Company which the Manager certifies to the Collateral Agent
not later than the applicable Monthly Report Date are due or to become due
on or before such Monthly Transfer Date, (b) the Base Component of the fee
payable pursuant to the Management Agreement [(provided, that if a Lease
Default or a Lease Event of Default shall have occurred and be continuing
during any time when GATC is the Manager, then the Base Component of the
fee payable pursuant to the Management Agreement shall be paid pursuant to
clause (xii) of this Section 3.4)] and (c) any amounts that have been
previously requested to pay Operating Expenses that have not been paid;
provided, that if the amounts available in the Collection Account as of the
applicable Calculation Date are insufficient to make the transfers required
pursuant to this clause (ii), the Collateral Agent shall make up such
insufficiency by withdrawing an amount equal to such insufficiency first,
from the Cash Trapping Account and then from the Liquidity Reserve Account,
if necessary, and transferring such amount pursuant to this clause (ii);
(3) to each Lessor Agent and Lender Agent, if any, an
amount sufficient to pay (a) the amount certified to the Collateral Agent
by an Authorized Representative of each such Lender Agent or Lessor Agent
not later than the applicable Monthly Report Date to be the amount of
Category 1 Supplemental Expenses due or to become due pursuant to its
related Lender Document or Lease on or before such Monthly Transfer Date,
and which are not payable to the Person to which such expenses are owed
directly from the proceeds of insurance obtained by or on behalf of the
Company pursuant to any Operative Agreement and (b) any amounts that have
been previously requested pursuant to this clause (iii) and not paid, [less
amounts, if any, than on deposit in the Special Reserves Account for such
purpose;] provided, that if the amounts available in the Collection Account
as of the applicable Calculation Date are insufficient to make the
transfers required pursuant to this clause (iii), the Collateral Agent
shall make up such insufficiency first by withdrawing an amount equal to
such insufficiency from the Cash Trapping Account and then from the
Liquidity Reserve Account, if necessary, and transferring such amount
pursuant to this clause (iii); provided, further, that if the aggregate of
all amounts available for transfer pursuant to this clause (iii) shall
continue to be insufficient to make all transfers required pursuant to this
clause (iii), then the Collateral Agent shall transfer the amounts then
available for transfer pro rata among the Lender Agents and the Lessor
Agents in the same proportion that the Category 1 Supplemental Expenses
requested by each Lender Agent and Lessor Agent bears to the total amount
of
22
Category 1 Supplemental Expenses requested by all Agents with respect to
such Monthly Transfer Date;
(4) (a) to each Lessor Agent an amount sufficient to pay
any Rated Rent certified to the Collateral Agent by an Authorized
Representative of each such agent not later than the applicable Monthly
Report Date to be the amount of Rated Rent due or to become due pursuant to
its related Lease on or before such Monthly Transfer Date, (b) to each
Lender Agent any principal and interest due in respect of any Assumed Debt
certified to the Collateral Agent by an Authorized Representative of each
such Lender Agent not later than the applicable Monthly Report Date to be
the amount of principal and interest due or to become due pursuant to the
Lender Documents related to such Assumed Debt on or before such Monthly
Transfer Date (but only to the extent the failure to pay such principal or
interest prior to the next succeeding Monthly Transfer Date would result in
an Event of Default with respect to such Assumed Debt), and (c) to each
Lessor Agent and each Lender Agent any amounts pursuant to this clause (iv)
that have been previously requested in respect of Rated Rent or Assumed
Debt and not paid; provided, that if the amounts available in the
Collection Account as of the applicable Calculation Date are insufficient
to make the transfers required pursuant to this clause (iv), the Collateral
Agent shall make up such insufficiency by withdrawing an amount equal to
such insufficiency first, from the Cash Trapping Account and then from the
Liquidity Reserve Account, if necessary, and transferring such amount
pursuant to this clause (iv), provided, further, that if the aggregate
amount available for transfer pursuant to this clause (iv) shall continue
to be insufficient to make all transfers required pursuant to this clause
(iv), then the Collateral Agent shall transfer the amounts then available
for transfer pro rata among the Lender Agents and the Lessor Agents in the
same proportion that the Transaction Exposure related to each agent bears
to the Combined Exposure on such Calculation Date.
(5) to the appropriate sub-account of the Stipulated Loss
Value Deficiency Account, an amount certified to the Collateral Agent by an
Authorized Representative of the Company not later than the applicable
Monthly Report Date to be sufficient to cause the amount on deposit in such
sub-account to be at least equal to the Required Stipulated Loss Value
Deficiency Amount; provided, that, if the amounts available in the
Collection Account as of the applicable Calculation Date are insufficient
to make the transfers required pursuant to this clause (v), the Collateral
Agent shall make up such insufficiency by withdrawing an amount equal to
such insufficiency from the Cash Trapping Account and depositing such
amount to the applicable sub-accounts of the Stipulated Loss Value
Deficiency Account; provided, further that, if failure to pay such Required
Stipulated Loss Value Deficiency Amount on or before such Monthly Transfer
Date would result in a Lease Event of Default under the related Lease or
Assumed Debt, then the Collateral Agent will make up such
23
insufficiency by withdrawing from the Liquidity Reserve Account, an amount
which, after making the other transfers required pursuant to this clause
(v), would prevent such Lease Event of Default and depositing such amount
to the applicable sub-account of the Stipulated Loss Value Deficiency
Account;
(6) to the Liquidity Reserve Account, an amount certified
to the Collateral Agent by an Authorized Representative of the Company not
later than the applicable Monthly Report Date to be sufficient to cause the
amount on deposit therein to be at least equal to the Required Liquidity
Reserve Amount; provided, that if the amounts available in the Collection
Account are insufficient to make the transfers required pursuant to this
clause (vi), the Collateral Agent shall make up such insufficiency by
withdrawing an amount equal to such insufficiency from the Cash Trapping
Account and depositing such amount in the Liquidity Reserve Account;
(7) (a) to each Lessor Agent an amount sufficient to pay
that portion of any Scheduled Rent corresponding to the Scheduled
Amortization on a related Lender Loan as certified to the Collateral Agent
by an Authorized Representative of each Lessor Agent not later than the
applicable Monthly Report Date to be the amount of Scheduled Rent due or
become due pursuant to its related Lease on or before such Monthly Transfer
Date (but only to the extent such amount has not been paid pursuant to
clause (iv) above), (b) to each Lender Agent, an amount sufficient to pay
any principal or interest due in respect of any Assumed Debt certified to
the Collateral Agent by an Authorized Representative of such Lender Agent
to be the amount of principal and interest due or to become due pursuant to
the Loan Documentation related to such Assumed Debt on or before such
Monthly Transfer Date (but only to the extent such amount has not been paid
pursuant to clause (iv) above) and (c) to each Lessor Agent and Lender
Agent any amounts pursuant to this clause (vii) that have been previously
requested and not paid; provided, that if the amounts available in the
Collection Account as of the applicable Calculation Date are insufficient
to make the transfers required pursuant to this clause (vii), the
Collateral Agent shall make up such insufficiency by withdrawing an amount
equal to such insufficiency from the [Cash Trapping Account] and
transferring such amount pursuant to this clause (viii), provided, further,
that if the aggregate amount available for transfer pursuant to this clause
(viii) shall continue to be insufficient to make all transfers required
pursuant to this clause (viii), then the Collateral Agent shall transfer
the amounts then available for transfer pro rata among the Lender Agents
and the Lessor Agents in the same proportion that the Transaction Exposure
related to each agent bears to the Combined Exposure on such Calculation
Date;
(8) (a) to each Lessor Agent an amount sufficient to pay
that portion of any Scheduled Rent, to the extent constituting the Equity
Portion of Basic Rent (as defined in each Lease) certified to the
Collateral Agent by an Authorized
24
Representative of such Lessor Agent not later than the applicable Monthly
Report Date to be the amount of Scheduled Rent due or become due pursuant
to its related Lease on or before such Monthly Transfer Date, and (b) to
each Lessor Agent any amounts pursuant to this clause (viii) that have been
previously requested and not paid; provided, that if the amounts available
in the Collection Account as of the applicable Calculation Date are
insufficient to make the transfers required pursuant to this clause (viii),
the Collateral Agent shall make up such insufficiency by withdrawing an
amount equal to such insufficiency from the Cash Trapping Account and
transferring such amount pursuant to this clause (vii), provided, further,
that if the aggregate amount available for transfer pursuant to this clause
(vii) shall continue to be insufficient to make all transfers required
pursuant to this clause (vii), then the Collateral Agent shall transfer the
amounts then available for transfer pro rata among the Lessor Agents in
the same proportion that the Transaction Exposure related to each agent
bears to the Combined Exposure on such Calculation Date;
(9) to the Special Reserves Account, an amount certified to
the Collateral Agent by an Authorized Representative of the Company not
later than the applicable Monthly Report Date to be sufficient to cause the
amount on deposit therein to be at least equal to the Required Special
Reserves Amount; provided, that if the amounts available in the Collection
Account as of the applicable Calculation Date are insufficient to make the
transfers required pursuant to this clause (viii), the Collateral Agent
shall make up such insufficiency by withdrawing an amount equal to such
insufficiency from the Cash Trapping Account and depositing such amount in
the Special Reserves Account;
(10) to each Lender Agent or Lessor Agent an amount
certified to the Collateral Agent by an Authorized Representative of each
such agent not later than the applicable Monthly Report Date to be the
amount sufficient to pay (a) Category 2 Supplemental Expenses due or to
become due pursuant to its related Lease or Lender Document on or before
such Monthly Transfer Date, and (b) any amounts of Category 2 Supplemental
Expenses that have been previously requested and not paid; provided, that
if the amounts available in the Collection Account as of the applicable
Calculation Date are insufficient to make the transfers required pursuant
to this clause (ix), the Collateral Agent shall pay such amounts pro rata
among the agents in the same proportion that the Category 2 Supplemental
Expenses requested by each Lender Agent and Lessor Agent bears to the total
amount of Category 2 Supplemental Expenses requested by all Agents with
respect to such Monthly Transfer Date;
(11) to the Cash Trapping Account, an amount certified to
the Collateral Agent by an Authorized Representative of the Company not
later than the applicable Monthly Report Date to be sufficient to cause the
amount on deposit therein to be at least equal to the Required Cash
Trapping Amount;
25
(12) to each Person entitled to receive Category 3
Supplemental Expenses an amount certified to the Collateral Agent by an
Authorized Representative of such Person not later than the applicable
Monthly Report Date to be the amount sufficient to pay (a) Category 3
Supplemental Expenses due or to become due pursuant to any Company Document
or Operative Agreement to which the Company is a party on or before such
Monthly Transfer Date, and (b) any amounts of Category 3 Supplemental
Expenses that have been previously certified and not paid; provided, that
if the amounts available in the Collection Account as of the applicable
Calculation Date are insufficient to make the transfers required pursuant
to this clause (xi), the Collateral Agent shall pay such amounts pro rata
among such Persons in the same proportion that the Category 3 Supplemental
Expenses requested by each Person bears to the total amount of Category 3
Supplemental Expenses requested by all Persons with respect to such Monthly
Transfer Date;
(13) to the Manager, an amount certified to the Collateral
Agent by the Manager not later than the applicable Calculation Date to be
sufficient to pay [(a) the Base Component of the Management Fee if not paid
pursuant to clause (ii) of this Section 3.4 as a result of a Lease Default
or a Lease Event of Default having occurred and continuing during a time
when GATC is the Manager,] (b) the Incentive Component of the Management
Fee due or to become due on or prior to such Monthly Transfer Date, and (c)
any portion of the Incentive Component of the Management Fee previously
requested and not paid; and
(14) if (a) the amounts on deposit in the Stipulated Loss
Value Deficiency Account (including each sub-account thereof), the
Liquidity Reserve Account, the Special Reserves Account and the Cash
Trapping Account are at least equal to the Required Stipulated Loss Value
Deficiency Amount, Required Liquidity Reserve Amount, the Required Special
Reserves Amount and the Required Cash Trapping Amount, respectively and (b)
no Trigger Event shall have occurred and be continuing, to the Excess Cash
Account any remaining amounts on deposit in the Collection Account;
provided that if any Trigger Event shall have occurred and be continuing,
all remaining amounts shall remain on deposit in the Collection Account for
application in accordance with this Section 3.4 on the next succeeding
Monthly Transfer Date.
Section 3.5. Application of Amounts in the Stipulated Loss Value
---------------------------------------------------
Deficiency Account. (a) With respect to any Event of Loss under a Lease with
------------------
respect to which the Company has not exercised its right to replace the related
equipment, amounts on deposit in the related sub-account of the Stipulated Loss
Value Deficiency Account shall be used to pay Stipulated Loss Value Deficiency
under such Lease if by the [120]th day following the occurrence of such Event of
Loss the Stipulated Loss Value applicable to such Event of Loss
26
shall not have been previously paid out of amounts on deposit in the sub-account
of the Non-Shared Payments Account related to such Event of Loss.
(b) If on any Monthly Transfer Date the amount on deposit in any sub-
account of the Stipulated Loss Value Deficiency Account shall not be required to
remain on deposit therein because the related Stipulated Loss Value shall have
been previously paid in full, then such amount shall be withdrawn from such sub-
account and deposited in the Collection Account for application in accordance
with Section 3.4.
Section 3.6. Application of Amounts in the Liquidity Reserve Account.
-------------------------------------------------------
Amounts on deposit in the Liquidity Reserve Account shall be applied solely in
accordance with Section 3.4.
Section 3.7. Application of Amounts in the Special Reserves Account.
------------------------------------------------------
Amounts on deposit in the Special Reserves Account shall be made available to
the Company to pay for Required Modifications, Programmatic Optional
Modifications or to pay expenses not covered by any insurance deductibles
pursuant to the Company's insurance policies upon certification by an Authorized
Representative of the Company.
Section 3.8. Release of Amounts in Cash Trapping Account. (a) On each
-------------------------------------------
Monthly Transfer Date, amounts on deposit in the Cash Trapping Account shall be
applied as provided in Section 3.4. In addition, on each Calculation Date,
amounts on deposit in the Cash Trapping Account in excess of the amounts
required pursuant to the definition of Required Cash Trapping Amount shall,
provided that no Cash Trapping Event or Cash Trapping Hold shall exist on such
Calculation Date, be released from the Cash Trapping Account and transferred by
the Collateral Agent to the Collection Account for application on the next
succeeding Monthly Transfer Date.
Section 3.9. Application of Amounts in Excess Cash Account. So long as
----------------------------------------------
no Lease Event of Default shall have occurred and be continuing, on each Monthly
Transfer Date the Company shall have the right to withdraw any amounts on
deposit in the Excess Cash Account, if any, free and clear of the Security
Interests.
Section 3.10. Security Interest in Accounts. All amounts in the Accounts
-----------------------------
(other than the Non-Shared Payments Account and the Excess Cash Account) shall
be held in trust by the Collateral Agent on behalf of the Beneficiaries. The
Company and the Beneficiaries acknowledge and agree that the Collateral Agent
shall have exclusive possession of and sole dominion and control over and the
exclusive right of withdrawal from the Accounts as provided herein. The Company
shall have no right to withdraw, or to cause the withdrawal of funds held in the
Accounts or to direct the investment of such funds or the liquidation of any
Permitted Investments, in each case other than as expressly provided herein.
Amounts deposited in the Accounts shall be applied exclusively as provided in
this Agreement. In the
27
event either the Company or any Beneficiary receives any amounts which should
have been deposited to the Collection Account, the Company or such Beneficiary,
as the case may be, shall hold the same in trust for and on behalf of the
Beneficiaries and promptly deliver the same to the Collateral Agent in the form
received (with any necessary endorsement) for deposit in the Collection Account
and application in accordance with this Agreement.
Section 3.11. Notice of Amounts Owed. Not less than three Business Days
----------------------
before each Monthly Report Date, an Authorized Representative of each Lender
Agent and Lessor Agent shall certify to the Collateral Agent in writing, the
amounts owed pursuant to each clause of Section 3.4(a) with respect to its
related Lease or Loan Documentation for the next occurring Monthly Transfer
Date. Each Lender Agent and Lessor Agent hereby agrees to include in such
certification amounts which are owed to any other Person pursuant to the related
Operative Agreements and which are so certified to such Lender Agent or Lessor
Agent.
Section 3.12. Investment of Funds in the Accounts. Funds on deposit in
-----------------------------------
the Accounts, including any sub-account thereof, shall be invested and
reinvested in Permitted Investments at the written direction of the Company (or
the Manager on behalf of the Company). If at any time the Company, or the
Manager on behalf of the Company, fails to direct investment, the Collateral
Agent is hereby authorized to invest funds held in any of the Accounts in its
Corporate Trust Short Term Investment Fund so long as such fund otherwise
qualifies as a Permitted Investment. All Permitted Investments shall be
maintained in the name of the Collateral Agent and held by the Collateral Agent
in its name for the benefit of the Beneficiaries. Possession of a certificate
evidencing any Permitted Investment shall be maintained by the Collateral Agent.
All such investments made with funds on deposit in any Account shall mature not
later than the Business Day next preceding the Monthly Transfer Date next
succeeding the day such investment is made. Investment earnings on funds on
deposit in any Account (net of losses and investment expenses) shall be
deposited in the Collection Account monthly and treated as Collections. Any
losses shall be charged to the applicable account.
Section 3.13. Disposition of Accounts Upon Retirement of Secured
--------------------------------------------------
Obligations. Upon termination of this Agreement and after payment in full of all
-----------
amounts due in respect of all Secured Obligations and any other amounts required
to be paid hereunder, all amounts remaining in any Account established in
Section 3.1 shall at the written direction of the Company be paid by the
Collateral Agent to or upon the order of the Company.
Section 3.14. Account Balance Statements. The Collateral Agent shall, on
--------------------------
a monthly basis and at such other times as a Beneficiary or the Company may from
time to time reasonably request, provide to the Beneficiary or the Company,
Account balance statements in respect of each of the Accounts and sub-accounts,
if any. Such balance statements shall also include deposits, withdrawals and
transfers from and to any Account and sub-account, if any.
28
SECTION 4.
CERTAIN AGREEMENTS AMONG THE SECURED PARTIES
Section 4.1. Priority of Security Interests. (a) Each Beneficiary
------------------------------
agrees that the Security Interest of such Beneficiary in any Collateral ranks
and will rank equally in priority with the Security Interest of the other
Beneficiaries in the Collateral, subject to the priority of payments set forth
in Section 3.4 and subject to Section 4.3 and 4.4.
(b) The priorities specified in this Agreement with respect to (i) the
Collateral, (ii) all proceeds of the Collateral and (iii) all amounts and funds
on deposit in the Accounts, in each case are applicable irrespective of any
statement to the contrary in any Operative Agreement or any Company Document,
the time or order or method of attachment or perfection of Liens, the time or
order of filing of financing statements, or the giving or failure to give notice
of the acquisition or expected acquisition of purchase money or other security
interests and to the extent not provided for in this Agreement, the rights and
priorities of the Beneficiaries shall be determined in accordance with
applicable law.
Section 4.2. Exercise of Rights. So long as any Secured Obligations
------------------
remain outstanding, each of the Beneficiaries hereby acknowledges and agrees as
follows:
(a) Subject to Section 5.2 hereof until a Trigger Event shall have
occurred, the Collateral Agent shall administer the Collateral in the manner
contemplated by this Agreement, including, in particular Article 3 hereof, and
only upon the occurrence and continuance of a Trigger Event, the Collateral
Agent shall exercise and only upon the written instruction of, and on behalf of,
the Required Beneficiaries in accordance with this Section 4.2 and Sections 4.3
and 4.4 hereof, such rights and remedies with respect to the Collateral as are
granted to it under this Agreement and applicable law.
(b) No Beneficiaries and no class or classes of Beneficiaries shall
have any right, other than in accordance with this Section 4.2 and Sections 4.3
and 4.4 hereof, to (i) sell, exchange, release, not perfect and otherwise deal
with any property at any time pledged, assigned or mortgaged to secure the
Secured Obligations, (ii) exercise or refrain from exercising any rights to
direct the Collateral Agent to take any action in respect of the Collateral, or
(iii) take any other action with respect to the Collateral (A) independently of
the Collateral Agent or (B) other than to direct the Collateral Agent to take
action in accordance with this Section 4.2 and Sections 4.3 and 4.4 hereof. Any
of the Beneficiaries or the Collateral Agent may, at any time and from time to
time (i) amend in any manner any outstanding Company Documents to which they are
a party in accordance with the terms thereof, (ii) release anyone liable in any
manner under or in respect of such Beneficiary's Secured Obligations in
accordance with the terms of the Company Documents to which they
29
are a party and (iii) apply any sums from time to time received for payment or
satisfaction of such Beneficiary's Secured Obligations except as otherwise
provided in Section 4.5 hereof.
(c) Each Beneficiary hereby agrees that upon the request of the
Collateral Agent it will give the Collateral Agent notice of the outstanding
Secured Obligations owed by the Company to such Beneficiary in connection with
the related Lease and any other information that the Collateral Agent may
reasonably request.
Section 4.3. Actions Upon a Trigger Event. So long as any Secured
----------------------------
Obligations remain outstanding, the following provisions shall apply:
(a) Each Beneficiary hereby agrees to give each other Beneficiary and
the Collateral Agent written notice of the occurrence of an Event of Default or
Lease Event of Default under such related Lease or Company Document and of the
occurrence of the termination of such related Lease or Company Document or an
acceleration of a Lender Loan under such Beneficiary's related Lender Documents,
wherein such Beneficiary's Secured Obligations have been declared to be or have
become due and payable earlier than the scheduled term or maturity thereof and
setting forth the aggregate amount of Secured Obligations that have been so
accelerated under such related Lease, Company Document or related Lender
Documents, in each case, as soon as practicable after such Beneficiary obtains
actual knowledge of the occurrence thereof; provided, however, that the failure
to provide such notice shall not limit or impair the rights of the Beneficiaries
hereunder, or under the related Lender Documents, related Operative Agreements
or related Company Documents. No Beneficiary shall be deemed to have knowledge
or notice of the occurrence of any Event of Default or Lease Event of Default
until such Beneficiary has received a written notice of such Event of Default or
related Lease Event of Default from the Company or any other Person, if any, for
whom such Beneficiary is acting as agent or trustee.
(b) The Company hereby agrees that if a Trigger Event shall have
occurred and is continuing, the Collateral Agent and any agent described in
Section 5.2 hereof is here by irrevocably authorized and empowered to act as the
attorney-in-fact for the Company with respect to the giving of any instructions
or notices under this Agreement.
Section 4.4. Exercise of Remedies and Application of Proceeds. So long
------------------------------------------------
as any Secured Obligations remain outstanding to more than one Beneficiary, the
following provisions shall apply:
(a) If a Trigger Event shall have occurred and is continuing, upon
the written request of the Required Beneficiaries, the Collateral Agent shall
render an accounting of the current balance of each Account.
30
(b) If a Trigger Event shall have occurred and is continuing, and
only in such event, upon the written request of the Required Beneficiaries the
Collateral Agent shall be authorized to take any and all actions and to exercise
any and all rights, remedies and options which it may have under this Agreement
and which the Required Beneficiaries direct it to take under this Agreement,
including realization and foreclosure on the Collateral.
(c) If a Trigger Event relating to a default by the Manager under the
Management Agreement shall have occurred and is continuing, and GATC is
terminated as Manager under the Management Agreement, the Collateral Agent shall
be authorized to send the LockBox Change Notice to the LockBox Bank.
(d) The proceeds of any sale, disposition or other realization or
foreclosure by the Collateral Agent upon the Collateral or any portion thereof
shall be governed by this Section 4.4(d). Any non-cash proceeds resulting from
such liquidation of the Collateral shall be held by the Collateral Agent for the
benefit of the Beneficiaries until later sold or otherwise converted into cash,
at which time the Collateral Agent shall transfer any cash proceeds net of
expenses resulting from liquidation of the Collateral (i) in accordance with
Section 3.4 hereof so long as any Lender Loan or Assumed Debt are outstanding
and (ii) thereafter, at the direction of the Required Beneficiaries.
Section 4.5. Receipt of Money or Proceeds. Each Beneficiary hereby
----------------------------
agrees that if, at any time during the term of this Agreement, such Beneficiary
receives any payment or distribution of assets of the Company of any kind or
character, whether monies or cash proceeds resulting from liquidation of the
Collateral, other than in accordance with the terms of this Agreement, such
Beneficiary shall hold such payment or distribution in trust for the benefit of
the Collateral Agent on behalf of all Beneficiaries and shall immediately remit
such payment or distribution to the Collateral Agent.
Section 4.6. Additional Beneficiaries. Each Person replacing any of the
------------------------
Beneficiaries and each Person (or trustee or agent thereof) to which the Company
incurs an obligation for the payment of any Lease obligations or Assumed Debt,
is required to become a party to this Agreement, and any person which executes
and delivers a counterpart to this Agreement and is designated as a Beneficiary
pursuant to the terms of the Designation Letter, shall become a party hereto,
shall be bound by and subject to the terms and conditions hereof and the
covenants, stipulations and agreements contained herein.
SECTION 5.
THE COLLATERAL AGENT
Section 5.1. Appointment and Duties of Collateral Agent. (a) Subject to
------------------------------------------
Section 5.2 hereof, each Beneficiary hereby designates and appoints The First
National Bank of Chicago
31
to act as the Collateral Agent under this Agreement, and each of the
Beneficiaries hereby authorizes The First National Bank of Chicago, as the
Collateral Agent, to take such actions on its behalf under the provisions of
this Agreement and to exercise such powers and perform such duties as are
expressly delegated to the Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in the Lender Documents,
Operative Agreements or the Company Documents, the Collateral Agent shall not
have any duties or responsibilities, except those expressly set forth in this
Agreement, and no implied covenants, functions or responsibilities shall be read
into this Agreement or otherwise exist against the Collateral Agent. The
Collateral Agent shall not be liable for any action taken or omitted to be taken
by it hereunder or under any Company Document, or in connection herewith or
therewith, or in connection with the Collateral, unless caused by its gross
negligence or willful misconduct.
(b) Notwithstanding anything to the contrary in this Agreement or any
Lender Document, Operative Agreement or Company Document, the Collateral
Agent shall not exercise any rights or remedies under this Agreement, or
give any consent under any Company Documents or this Agreement, or enter
into any agreement amending, modifying, supplementing or waiving any
provision of any Company Document or including this Agreement unless it
shall have been directed to do so in writing by the Required Beneficiaries.
Section 5.2. Rights of Collateral Agent; Limitation of Liability. (a)
---------------------------------------------------
The Collateral Agent may at any time, both before and after any Trigger Event,
delegate any of its duties under this Agreement to agent(s) or attorney(s)-in-
fact, and shall be entitled to rely fully on the advice of counsel or other
experts (including accountants, broker-dealers, investment bankers, and similar
professionals) concerning all matters. If the Collateral Agent elects to utilize
an agent, it shall not have any duty to monitor nor be responsible for the
misconduct or negligence of any agent appointed with due care. Except as
otherwise expressly provided in this Agreement, at no time shall the Collateral
Agent have any duty or responsibility with respect to the safekeeping,
management, administration, preservation, operation, sufficiency, value, or
condition of any Collateral, nor any duty or responsibility to take any action,
including any execution or filing, to perfect or maintain any security interest
in any Collateral or any priority, nor to monitor the same.
(b) Neither the Collateral Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall (i) be liable for
any action lawfully taken or omitted to be taken by it under or in
connection with this Agreement or any Company Document (except for its
gross negligence or willful misconduct), or (ii) be responsible in any
manner to any of the Beneficiaries for any recitals, statements,
representations or warranties made by the Company or any representative
thereof contained in this Agreement or any Company Document or in any
certificate, report, statement or other document referred to or provided
for in, or received by the
32
Collateral Agent under or in connection with, this Agreement or any Company
Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any Company Document or
for any failure of the Company to perform their obligations hereunder or
thereunder. The Collateral Agent shall not be under any obligation to any
Beneficiary to ascertain or to inquire as to the observance or performance
of any of the agreements contained in, or conditions of, this Agreement or
any Company Document, or to inspect the properties, books or records of the
Company.
(c) The Collateral Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, facsimile, cablegram, telegram,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Company), independent accountants and other experts selected by the
Collateral Agent. In connection with any request of the Required
Beneficiaries, the Collateral Agent shall be fully protected in relying on
a certificate of any Person, signed by an Authorized Representative of such
Person, which certificate shall state that the Person signing such
certificate is an Authorized Representative of such Person and shall state
specifically the Company Document and provision thereof pursuant to which
the Collateral Agent is being directed to act. The Collateral Agent shall
be entitled to rely, and shall be fully protected in relying on such
certificate. The Collateral Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any Company Document
(i) if such action would, in the reasonable opinion of the Collateral
Agent, be contrary to law or the terms of this Agreement or the Company
Document, (ii) if such action is not specifically provided for in this
Agreement or such Company Document, it shall not have received any such
advice or concurrence of the Required Beneficiaries as it deems appropriate
or (iii) if, in connection with the taking of any such action that would
constitute an exercise of remedies under this Agreement or any Company
Document, it shall not first be indemnified to its satisfaction by the
Beneficiaries against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action.
The Collateral Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any Company Document in
accordance with a request of the Required Beneficiaries (to the extent that
the Required Beneficiaries are expressly authorized to direct the
Collateral Agent to take or refrain from taking such action), and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Beneficiaries.
(d) The Collateral Agent shall not be deemed to have actual,
constructive, direct or indirect knowledge or notice of the occurrence of
any Event of Default,
33
Lease Event of Default or Trigger Event unless and until a Responsible
Officer of the Collateral Agent has received a written notice or a
certificate from a Beneficiary stating that an Event of Default, Lease
Event of Default or Trigger Event has occurred under their respective
Lender Documents, Operative Agreements or Company Documents. The Collateral
Agent shall have no obligation whatsoever either prior to or after
receiving such notice or certificate to inquire whether an Event of
Default, Lease Event of Default or a Trigger Event has in fact occurred and
shall be entitled to rely conclusively, and shall be fully protected in so
relying, on any such notice or certificate so furnished to it. No provision
of this Agreement shall require the Collateral Agent to expend or risk its
own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder or under any Company Document or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it. In the
event that the Collateral Agent receives such a notice of or certificate
regarding the occurrence of any Trigger Event, the Collateral Agent shall
give notice thereof to the Beneficiaries. The Collateral Agent shall take
such action with respect to such Trigger Event as so requested pursuant to
Sections 4.2, 4.3 and 4.4 hereof.
(e) The Company will pay the Collateral Agent upon demand the amount
of any and all compensation for its services as may be agreed with the
Company from time to time and reasonable out-of-pocket expenses, including
the reasonable fees and expenses of its counsel (and any local counsel) and
of any experts and agents, which the Collateral Agent may reasonably incur
in connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement
(whether through negotiations, legal proceedings or otherwise) of any of
the rights of the Collateral Agent or the Beneficiaries hereunder or under
the Company Documents or (iv) the failure by the Company to perform or
observe any of the provisions hereof or of any Company Document.
Section 5.3. Lack of Reliance on the Collateral Agent. Each of the
----------------------------------------
Beneficiaries expressly acknowledges that neither the Collateral Agent nor any
of its officers, directors, employees, agents or attorneys-in-fact has made any
representations or warranties to it and that no act by the Collateral Agent
hereinafter taken, including, without limitation, any review of the affairs of
the Company, shall be deemed to constitute any representation or warranty by the
Collateral Agent to any Beneficiary. Each Beneficiary represents that it is not
relying on the Collateral Agent to grant, perfect and maintain the pledge of,
security interest in, and priority of, the Collateral; provided that the
Collateral Agent shall be required to perform its obligations under this
Agreement. Except for notices, reports and other documents expressly required to
be furnished to the Beneficiaries by the Collateral Agent hereunder, the
Collateral Agent shall not have any duty or responsibility to provide any
Beneficiary with any credit or
34
other information concerning the business, operations, property, financial and
other condition or creditworthiness of the Company which may come into the
possession of the Collateral Agent or any of its officers, directors, employees,
agents or attorneys-in-fact.
Section 5.4. Indemnification; Bankruptcy. The Company hereby agrees to
---------------------------
indemnify the Collateral Agent and each of its officers, directors,
shareholders, controlling persons, employees, agents and servants (each an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities, obligations penalties, actions, causes of action, judgments, suits,
costs, expenses or disbursements (including, without limitation, reasonable
attorneys' and consultants' fees and expenses) (collectively "Damages") of any
kind or nature whatsoever which may at any time be imposed on, incurred by or
asserted against any Indemnified Party (or which may be claimed against any
Indemnified Party by any Person) by reason of, in connection with or in any way
relating to or arising out of any Collateral or any other documents or
transactions in connection with or relating thereto, unless due to the gross
negligence or willful misconduct of such Indemnified Party. The Company further
shall, upon demand by any Indemnified Party, pay to such Indemnified Party all
reasonable costs and expenses incurred by such Indemnified Party in enforcing
any rights under Company Documents, including reasonable fees and expenses of
counsel. The agreements in this Section 5.4 shall survive the payment or
satisfaction in full of the Secured Obligations and the resignation or removal
of the Collateral Agent or the termination of this Agreement and shall be
without duplication of any amounts due to an Indemnified Party under any other
Company Document, Lender Document or Operation Agreement.
Section 5.5. Resignation or Removal of the Collateral Agent. The
----------------------------------------------
Collateral Agent may resign as Collateral Agent upon ninety (90) days' notice to
the Beneficiaries and may be removed at any time with or without cause by the
Required Beneficiaries, with any such resignation or removal to become effective
only upon the appointment of a successor Collateral Agent under this Section
5.5. If no successor Collateral Agent shall have been so appointed within ninety
(90) days, the resigning Collateral Agent may petition any court of competent
jurisdiction for the appointment of a new Collateral Agent. The Company shall
have the right to remove the Collateral Agent upon ninety (90) days' notice to
the Beneficiaries with or without cause, effective upon the appointment of a
successor Collateral Agent under this Section 5.5, which is reasonably
acceptable to the Required Beneficiaries. If the Collateral Agent shall resign
or be removed as Collateral Agent by the Required Beneficiaries or the Company,
as applicable, then the Required Beneficiaries shall (and if no such successor
shall have been appointed within ninety (90) days of the Collateral Agent's
resignation or removal, the Collateral Agent may) appoint a successor agent for
the Beneficiaries, which successor agent shall be reasonably acceptable to the
Company, whereupon such successor agent shall succeed to the rights, powers and
duties of the "Collateral Agent", and the term "Collateral Agent" shall mean
such successor agent effective upon its appointment, and except as provided in
Section 5.4 above, the former Collateral Agent's rights, powers and duties as
Collateral Agent shall be terminated, without any other
35
or further act or deed on the part of such former Collateral Agent (except that
the resigning Collateral Agent shall deliver all Collateral then in its
possession to the successor Collateral Agent) or any of the Beneficiaries. After
any retiring Collateral Agent's resignation or removal hereunder as Collateral
Agent, the provisions of this Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Collateral Agent.
Section 5.6. Relationships with Collateral Agent. The Collateral Agent
-----------------------------------
and its Affiliates may make loans to, accept deposits from and generally engage
in any kind of business with any party to any of the Operative Agreements or any
of their Affiliates as though the Collateral Agent were not the Collateral Agent
hereunder.
SECTION 6.
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE COMPANY
Section 6.1. Representations and Warranties. The Company represents and
------------------------------
warrants to the Collateral Agent and the Beneficiaries as follows:
(a) Due Organization. The Company is a corporation duly organized,
----------------
validly existing, and in good standing under the laws of the State of Delaware,
is duly licensed or qualified and in good standing in each jurisdiction in which
the failure to so qualify would have a material adverse effect on its ability to
carry on its business as now conducted or to enter into and perform its
obligations under the Company Documents and the Operative Agreements to which
the Company is a party, has the corporate power and authority to carry on its
business as now conducted, and has the requisite power and authority to execute,
deliver and perform its obligations under the Company Documents and the
Operative Agreements to which the Company is a party.
(b) Special Purpose Status. The Company has not engaged in any
----------------------
activities since its incorporation other than those incidental to its
incorporation and other appropriate corporate steps including the issue of
shares and arrangements for the payment of fees to its directors, the leasing
and subleasing of the Equipment and the execution of the Company Documents and
the Operative Agreements to which the Company is a party and the activities
referred to in or contemplated by such agreements.
(c) Non-Contravention. The creation of the Security Interests and
-----------------
the execution, delivery and performance by the Company of this Agreement and
compliance by the Company with all of the provisions hereof do not and will not
contravene any law or regulation, or any order of any court or governmental
authority or agency applicable to or binding on the Company or any of its
properties, or contravene the provisions of, or constitute a default by the
Company under, or result in the creation of any Lien (except for Permitted
36
Liens) upon the property of the Company under its certificate of incorporation
or by-laws or any indenture, mortgage, contract or other agreement or instrument
to which the Company is a party or by which the Company or any of its property
is bound or affected.
(d) Due Authorization, Validity and Enforceability. This Agreement
----------------------------------------------
has been duly authorized by all necessary corporate action executed and
delivered by the Company, and constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity.
(e) No Trigger Event. No Trigger Event has occurred and is
----------------
continuing and to the knowledge of the Company, no event with which the giving
of notice and/or the passage of time or both would constitute a Trigger Event
has occurred.
(f) No Liens. There exists no Lien other than the security interests
--------
created by or pursuant to this Agreement and the other Company Documents and the
Operative Agreements to which the Company is a party over the assets or
undertaking of the Company which, had this Agreement been executed, would rank
in priority to or pari passu with the Security Interests.
(g) No Consents. All consents, approvals (including shareholder
-----------
approval, if necessary), authorizations or other orders of all regulatory
authorities required for or in connection with the execution and performance of
this Agreement by the Company and the creation of the security therefor have
been obtained and are in full force and effect and not contingent upon
fulfillment of any condition.
(h) No Litigation. There are no proceedings pending or, to the
-------------
knowledge of the Company, threatened against the Company in any court or before
any governmental authority or arbitration board or tribunal.
(i) Employees, Subsidiaries. The Company has no employees or
-----------------------
subsidiaries.
(j) Security Interests. The Company is or will be, at the point at
------------------
which the Collateral becomes subject to the Security Interests for the Secured
Obligations created by this Agreement, the beneficial owner of all of such
Collateral free from all Liens and claims whatsoever other than Permitted Liens.
(k) [On or before [August __], 1998, all filings, recordings,
registrations and other actions have been made, obtained and taken in all
relevant jurisdictions that are
37
necessary to create and perfect the Liens in all right, title, estate and
interest of the Company in the Collateral covered, subject to no prior, equal or
junior Liens.]
(l) No Other Conditions. All acts, conditions and things required to
-------------------
be done, fulfilled and performed in order (a) to enable the Company to enter
into, exercise its rights under and perform and comply with the obligations
expressed to be assumed by it in this Agreement, (b) to ensure that the
obligations expressed to be assumed by it in this Agreement are legal and
binding and (c) to make this Agreement admissible in evidence in its
jurisdiction of incorporation and operation have been done, fulfilled and
performed.
(m) No Filing. Under the law of New York and the United States in
---------
force at the date hereof, it is not necessary or desirable that this Agreement
be filed, recorded or enrolled with any court or other authority in any such
jurisdictions or that any stamp, registration or similar tax be paid on or in
relation to this Agreement.
(n) Lockbox Bank and Accounts. The Lockbox Bank is the only
-------------------------
institution holding any lockbox accounts for the receipt of payments from
obligors in respect of the Collateral. On or before [August __], 1998, all
obligors of the Collateral will have been instructed by invoice or otherwise to
make payments only to a Lockbox or the Collection Account, as applicable, and
such instructions are in full force and effect.
Section 6.2. General Covenants. The Company covenants with the
-----------------
Collateral Agent and the Beneficiaries as follows:
(a) No Liens. The Company will not incur, create, assume or suffer
--------
to exist upon any of the Collateral any Lien whatsoever, except for the rights
of the Sublessees under the Subleases and the Security Interests pursuant to
this Agreement.
(b) No Disposition. Except with the prior written consent of the
--------------
Collateral Agent and the Required Beneficiaries or as contemplated by this
Agreement or the Operative Agreements, the Company will not sell or otherwise
dispose of any of the Collateral or any interest therein or agree or attempt or
purport to do so. [Except with the prior written consent of the Collateral Agent
and the Required Beneficiaries, the Company will not sell, transfer, pledge,
assign or otherwise dispose of the [1998-1 SUBI Certificate] (as defined in the
Supplement 98-1 to the Management and Services Agreement dated as of [September
30, 1997] between GATC and the General American Marks Company (the "Marks
Company")) evidencing an undivided 100% interest in the [1998-1 SUBI Portfolio]
of the Marks Company, a Delaware business trust. Amounts received by the Company
in respect of such certificate shall be deposited in the Collection Account and
applied as provided in Section 3.4.
(c) No Accounts. Except as contemplated herein, the Company will not
-----------
have an interest in any bank account (other than the Accounts and other than any
account
38
which may be required to be established as a necessary consequence of or in
order to invest in or otherwise acquire a Permitted Investment) unless (i) any
such further account and the Company's interest therein shall be further charged
or otherwise secured in favor of the Collateral Agent on terms consistent with
the Accounts and (ii) there shall have been delivered to the Collateral Agent
and each Rating Agency an opinion of counsel reasonably satisfactory to them to
the effect that the Collateral Agent has a duly perfected security interest in
such account, subject to customary exceptions which are no more extensive than
those indicated in any opinion of counsel to the Company delivered on the
Closing Date.
(d) Notices. If at any time any creditor of the Company seeks to
-------
enforce any judgment or order of any competent court or other competent tribunal
against any of the Collateral, the Company shall (i) promptly give written
notice to such creditor and to such court or tribunal of the Collateral Agent's
interests therein; (ii) if at any time an examiner, administrator,
administrative receiver, receiver, trustee, custodian, sequestrator, conservator
or other similar appointee (an "Insolvency Appointee") is appointed in respect
of any secured creditor or any of their assets, promptly give notice to such
appointee of the Collateral Agent's interests therein; and (iii) notify the
Collateral Agent thereof in either case. The Company will not voluntarily
appoint or cause to be appointed or commence any proceeding to appoint any
Insolvency Appointee over all or any of its property.
(e) Compliance with Relevant Documents. The Company will comply with
----------------------------------
and perform all its obligations under this Agreement, the other Company
Documents and the Operative Agreements to which the Company is a party and the
Company will use its commercially reasonable efforts to procure that the
Manager, the Insurance Manager and each other party to a Company Document each
complies with their respective obligations thereunder and forthwith give notice
in writing to the Collateral Agent of any breach by the Company or any of such
other parties (of which it has knowledge) of any of the covenants or provisions
contained in the Company Documents and the Operative Agreements to which the
Company is a party, except in each case to the extent that any such breach could
not reasonably be expected to have a material adverse effect on the Company or
the Company's ability to perform its obligations under the Company Documents or
the Operative Agreements to which the Company is a party.
(f) Information. The Company will at all times give to the
-----------
Collateral Agent such information as the Collateral Agent may reasonably require
for the purpose of the discharge of the trusts, powers, rights, duties,
authorities and discretions vested in it hereunder, under any other Company
Document or by operation of law.
(g) Further Assurances. The Company will comply with all reasonable
------------------
directions given to it by the Collateral Agent to perfect the Security Interests
in the Collateral. The Company will execute such further documents and do all
acts and things as the Collateral Agent may require at any time or times to give
effect to the Company Documents.
39
(h) No Effect on Security Interest. Except as otherwise provided in
------------------------------
this Agreement, the Company will not agree to the amendment of any Company
Document unless the Collateral Agent has confirmed to the Company that it has
received from legal counsel acceptable to it an opinion to the effect that such
amendment will not result in the Security Interests being prejudiced.
(i) Restrictions on Certain Actions. The Company (i) will not take,
-------------------------------
or knowingly permit to be taken, any action which would amend, terminate or
discharge or prejudice the validity or effectiveness or priority of the Security
Interests or permit any party to any of the Company Documents whose obligations
form part of the security created by this Agreement to be released from such
obligations except, in each case as permitted or contemplated by this Agreement,
or the other Company Documents or the Operative Agreements to which the Company
is a party and (ii) will not knowingly take, or knowingly permit to be taken,
any action which, subject to the performance of its obligations under the
Company Documents and the fiduciary obligations of the members of its board of
directors, would reasonably be expected to result in the lowering or withdrawal
of the then current rating of any Rated Security.
(j) Subsidiaries. Except with the consent of the Required
------------
Beneficiaries, the Company will not have or establish any subsidiaries.
(k) Restrictions on Dividends. The Company shall not declare or pay
-------------------------
any dividend or make any other payment on its share capital or to the holders of
its share capital, as such (other than dividends payable in share capital), or
purchase, redeem or otherwise acquire or retire for value, any such share
capital of the Company except out of funds available to the Company pursuant to
clause (xiii) of Section 3.4.
(l) Business Restrictions. The Company shall not engage in any
---------------------
business activity other than leasing and subleasing the Equipment pursuant to
the Leases and the Subleases, maintaining the insurance provided for in the
Insurance Agreement relating to the Equipment, preserving, exercising or
enforcing its rights, under any Company Documents or Operative Agreements to
which the Company is a party, entering into and performing its obligations under
the Company Documents and such Operative Agreements, applying its funds and
making payments in accordance with the Company Documents and such Operative
Agreements and engaging in any transaction reasonably incidental thereto.
(m) Restriction on Loans and Guarantees. The Company shall not make
-----------------------------------
any loan, advance or guarantee to any Person other than (i) indemnities under
the Company Documents, (ii) indemnities under the Operative Agreements to which
the Company is a party, and (iii) advances as may be made in the ordinary course
of business in favor of Sublessees under the Subleases.
40
(n) Restriction on Consolidation and Merger. The Company (a) shall
---------------------------------------
not consolidate or merge into any other Person; (b) shall not permit any other
Person to consolidate with or merge into the Company; (c) shall not, directly or
indirectly, transfer, convey, sell (other than pursuant to the Participation
Agreements on the Closing Date), lease (other than pursuant to a Sublease) or
otherwise dispose of all or substantially all of its properties and assets as an
entirety; and (d) shall not (i) acquire capital stock or other ownership
interests of any other Person such that such Person becomes a subsidiary of the
Company or (ii) directly or indirectly, purchase, lease, or otherwise acquire
all or substantially all of the property and assets of any Person as an entirety
or any existing business (whether existing as a separate entity, subsidiary,
division, unit or otherwise) of any Person.
(o) Restriction on Assets Dealings. Subject to the last sentence of
------------------------------
this Section 6.2, the Company shall not sell, transfer, release or otherwise
dispose of any of, or grant options, warrants or other rights with respect to,
any of its assets to any Person.
(p) Dealings with Stock. The Company shall not issue, deliver or sell
-------------------
any additional shares or other capital stock of the Company, except to GATC.
(q) Constituent Documents. The Company shall not amend, modify or
---------------------
supplement its By-laws and Certificate of Incorporation without the consent of
the Required Beneficiaries.
(r) Directors' Remuneration. The Company shall not pay any fees to
-----------------------
its directors other than its independent directors.
(s) Management. The Company shall at all times be a party to the
----------
Management Agreement and shall, if necessary, take any steps required of it in
connection with the appointment of any Successor Manager thereunder. The
Company shall at all times procure that it is party to the Administrative
Services Agreement or a substitute agreement substantially similar thereto.
(t) Insurance Agreement. The Company shall at all times be a party to
-------------------
the Insurance Agreement and shall maintain the insurance provided for under the
Leases, and shall, if necessary, take any steps required of it in connection
with the appointment of any Successor Insurance Manager thereunder.
(u) Existence. The Company will do or cause to be done all things
---------
necessary to preserve and keep in full force and effect its existence and form,
rights (charter and statutory) and franchises.
41
(v) Limitation on Transactions with Affiliates and Related Persons.
--------------------------------------------------------------
Other than the Company Documents and the Operative Agreements to which the
Company is a party on the Closing Date, the Company shall not directly or
indirectly enter into any transaction (including, without limitation, the
purchase, sale, lease or exchange of property, the rendering of any service or
the making of any loan or advance, with any Affiliate, unless its Board of
Directors shall determine in its good faith judgment and evidenced by a Board
Resolution that:
(1) the terms of such transaction are in the best interests of
the Company; and
(2) such transaction is on terms no less favorable to the Company
than those that could be obtained in a comparable arm's length transaction
with an entity that is not an Affiliate of the Company.
(w) Limitation on Indebtedness. The Company shall not create or incur
--------------------------
or suffer to exist any additional indebtedness other than in accordance with the
Company Documents and the Operative Agreements to which the Company is a party.
Notwithstanding anything to the contrary contained in this Section 6.2, it
is understood and agreed that the Company shall have full right, power and
authority to deal with the Equipment Units, the Subleases and the other Company
Documents in the ordinary course of its railcar leasing business, including,
without limitation, the right, power and authority from time to time to amend,
modify, supplement, terminate, and extend Subleases, to enter into new or
additional Subleases and to release Sublessees from all or any part of their
obligations under Subleases, subject, however, to the security interest granted
in Section 2.1(a), the express provisions of Sections 6.3 and 6.4 hereof and the
express provisions of the Leases and the Operative Agreements.
Section 6.3. Covenants. The Company shall at all times:
---------
(a) not commingle its assets with those of any Person, including any
Affiliate, except with respect to the Lockbox Accounts.
(b) conduct its business separate from any direct or ultimate parent
of the Company.
(c) maintain separate financial statements from those of any other
Person.
(d) pay its own expenses and liabilities and pay the salaries of its
own employees, if any, from its own funds.
42
(e) maintain an "arm's-length relationship" with its Affiliates.
(f) not guarantee or become obligated for the debts of any other
Person and not hold out its credit as being available to satisfy the obligations
of others.
(g) use separate stationery, invoices and checks and hold itself out
as a separate and distinct entity from any other Person.
(h) observe all corporate formalities required by the law of its
jurisdiction of incorporation.
(i) not acquire obligations or securities of any Person, except
Permitted Investments.
(j) allocate fairly and reasonably overhead for shared office space,
if any.
(k) except as for the Security Interests, not pledge its assets
(except cash available to the Company in the Excess Cash Account) for the
benefit of any other Person (other than to the related Indenture Trustee in
connection with the assumption of the Equipment Notes pursuant to Section 3.6 of
any Initial Indenture) or make any loans or advances to any Person.
(l) correct any known misunderstanding regarding its separate identity
from other Persons.
(m) maintain adequate capital in light of its contemplated business
operations.
(n) maintain books and records (in accordance with generally accepted
accounting principle in the United States) separate from any other Person at its
principal office which show a true and accurate record in United States dollars
of all business transactions arising out of and in connection with the conduct
of the Company and the operation of its business in sufficient detail to allow
preparation of tax returns required to be prepared and the maintenance of the
Accounts.
(o) maintain accounts separate from any other person or entity other
than the Lockbox.
(p) conduct its business in its own name.
43
Section 6.4. Operation of Equipment; Leases. The Company covenants with
------------------------------
the Collateral Agent and the Beneficiaries as follows with respect to the
operation of each Equipment Unit and the Leases:
(a) Licenses, etc. The Company shall obtain or cause to be obtained
-------------
all necessary certificates, licenses, permits and authorizations required for
the use and operation by the Company of the Equipment from time to time and will
maintain or cause to be maintained each such certificate, license, permit and
authorization in full force and effect for so long as the same shall be
required; provided, however, that the Company may, in good faith and by
appropriate proceedings diligently conducted, contest the validity or
application of any such certificate, license, permit or authorization in any
reasonable manner which does not (i) materially interfere with the use,
possession, operation or return of the Equipment, or (ii) materially adversely
affect the rights or interests of Lessor and the Indenture Trustee in the
Equipment or under the Leases, (iii) otherwise expose Lessor, the Indenture
Trustee or any Participant to criminal sanctions or (iv) release the Company
from the obligation to return the Equipment in compliance with the applicable
provisions of any Lease.
(b) Operation Outside the United States. The Company shall not allow
-----------------------------------
more than 49% of the Company Fleet (as allocated on a pro-rata basis from
mileage records provided annually to the Manager by the AAR for the Total
Managed Fleet) to be operated outside the United States at the same time.
(c) [Subleases with Mexican Entities. The Company shall not, nor
-------------------------------
shall the Company permit the Manager on its behalf to, at any time, (A) sublease
to a sublessee organized under the laws of Mexico or any state thereof (a
"Mexican Sublessee") if, after giving effect to such sublease, the percentage of
[the Company Fleet] subleased to Mexican Sublessees exceeds the lesser of 20%
and the percentage of Manager's Fleet (including for this purpose, railcars
owned or managed by Manager) leased to Mexican Sublessees, or (B) sublease more
than 50 Equipment Units to any single Mexican Sublessee or Mexican Sub-Sublessee
(other than a Mexican Affiliate or a Mexican Sub-Sublessee [with satisfactory
credit quality to be agreed upon]).]
(d) Restriction on Exercise of Lease Options. The Company will not
----------------------------------------
exercise any purchase option or obsolescence termination option under any Lease
(i) if any Lease Event of Default or an Event of Default under any Lender
Document shall have occurred and be continuing (ii) unless all amounts required
to be on deposit in the Accounts are on deposit therein, or (iii) unless funds
for the payment of the Termination Value and any Premium Amount, break funding
costs, swap breakage costs, or other prepayment or early payment premium
pursuant to the related Operative Agreements and other amounts payable in
connection therewith shall be available to the Company from (a) the proceeds
from the sale of such Equipment Units, (b) insurance proceeds (c) a capital
contribution from GATC, or (c) monies available to the Company from the Excess
Cash Account.
44
(e) Assumption of Debt. The Company shall not assume any debt
------------------
pursuant to any option in any lease unless, after giving effect to the
assumption of such debt by the Company, (i) each of the Rating Agencies shall
have confirmed (x) its initial rating with respect to any Rated Security and (y)
that the assumption of such debt by the Company will not result in the lowering
of its then current rating on any Rated Security, and (ii) the Rating Agencies
shall have received a "bring-down" opinion from counsel to the Company with
respect to the non-consolidation of the Company in the event of a bankruptcy of
GATC.
(f) Additional Leases. The Company shall not enter into any Lease or
-----------------
related documents other than the Initial Leases, the related Operative
Agreements and the Subleases without the prior written consent of each Lessor
which is then a Beneficiary under this Agreement and unless each of the Rating
Agencies, after giving effect to such transaction, shall have confirmed (x)
their initial ratings with respect to any Rated Security and (y) that the
Company entering into such Lease and related documents will not result in the
lowering of their rating on any Rated Security.
SECTION 7.
REPRESENTATIONS AND WARRANTIES
OF THE BENEFICIARIES
Section 7.1. Representations and Warranties. Each of the Beneficiaries
------------------------------
hereby makes the following representations and warranties as of the date hereof
or as of any date such Beneficiary executes and delivers a counterpart of this
Agreement and is designated as a Beneficiary pursuant to the Designation Letter,
with respect to itself and for the benefit of the other Beneficiaries:
(a) It is a corporation (or other such entity as applicable) duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, as the case may be, and is duly
qualified to do business in, and is in good standing in all jurisdictions where
the nature of its business makes such qualification necessary, except where the
failure to effect such qualification would not have a material adverse effect
upon its ability to perform its obligations pursuant to this Agreement.
(b) It has all necessary corporate or other relevant power, as the
case may be, to execute, deliver and perform under this Agreement. All action
on its part that is required for the authorization, execution, delivery and
performance of this Agreement has been duly and effectively taken; and the
execution, delivery and performance of this Agreement do not require the
approval or consent of any shareholder or other owner or the holder or trustee
of any debt or other of its obligations which has not been obtained.
45
(c) This Agreement has been duly executed and delivered by it, and
constitutes the valid and binding obligation of it, enforceable against it in
accordance with the terms hereof, except as such enforceability (i) may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws of general applicability
affecting the enforcement of creditors' rights and remedies generally and (ii)
is subject to general principles of equity and the effect of public policy
(regardless of whether enforceability is considered in a proceeding in equity or
at law).
(d) Neither the execution, delivery and performance of this Agreement
nor the consummation of any of the transactions contemplated hereby nor
performance of or compliance with the terms and conditions hereof (i)
contravenes any material requirement of law applicable to it or (ii) constitutes
(x) a default under or results in the violation of the provisions in its
charter, certificate of incorporation, by-laws, or other formation or governance
document, as applicable, or (y) a material default of any indenture, loan or
credit agreement or any other agreement, lease, instrument or document to which
it is a party or by which it or its properties may be bound.
(e) To the best of its knowledge, there are no actions, suits or
proceedings at law or in equity or by or before any Governmental Authority now
pending or threatened which could reasonably be expected to have a material and
adverse effect on its performance of its obligations hereunder or which
questions the validity, binding effect or enforceability hereof, any action to
be taken pursuant hereto or any transactions contemplated hereby.
SECTION 8.
MISCELLANEOUS
Section 8.1. Agreement for Benefit of Parties Hereto. Nothing in this
---------------------------------------
Agreement, express or implied, is intended or shall be construed to confer upon,
or to give to, any Person other than the parties hereto (including any Persons
who have executed and delivered a Designation Letter) and their respective
successors and assigns and Persons for whom the parties hereto are acting as
agents or representatives, any right, remedy or claim under or by reason of this
Agreement or any covenant, condition or representation hereof, and the
covenants, representations and agreements contained in this Agreement are and
shall be for the sole and exclusive benefit of the parties hereto and their
respective successors and assigns and Persons for whom the parties hereto are
acting as agents or representatives.
Section 8.2. Severability. In case any one or more of the provisions
------------
contained in this Agreement shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected and/or impaired thereby.
46
Section 8.3. Notices. All notices, demands, certificates or other
-------
communications hereunder shall be in writing and shall be deemed sufficiently
given or served for all purposes when delivered personally, when sent by
certified or registered mail, postage prepaid, return receipt requested, or by
private courier service, or, if followed and confirmed by mail or courier
service notice, when telecopied, in each case, with the proper address as
indicated below or as set forth in any effective Designation Letter. Each party
may, by written notice given to the other parties, designate any other address
or addresses to which notices, certificates or other communications to them
shall be sent as contemplated by this Agreement. Notices shall be deemed to have
been given if and when received by an officer, manager or supervisor in the
department of the addressee specified for attention (unless the addressee
refuses to accept delivery, in which case they shall be deemed to have been
given when first presented to the addressee for acceptance). Until otherwise so
provided by the respective parties, and as otherwise provided in the relevant
Designation Letter, all notices, certificates and communications to each of them
shall be addressed as follows:
If to the Collateral Agent:
The First National Bank of Chicago
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Services Division
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company:
General American Railcar Corporation II
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
If to any Initial Indenture Trustee:
The First National Bank of Chicago
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Services Division
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
47
If to any Initial Owner Trustee:
[Owner Trustee]
____________________________________
____________________________________
____________________________________
Attention: ________________________
Fax No.: _____________________
Confirmation No.: ________________
If to the Manager:
General American Transportation Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
If to the Insurance Manager:
General American Transportation Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
Section 8.4. Successors and Assigns. Whenever in this Agreement any of
----------------------
the parties hereto is named or referred to, the successors and assigns of such
party shall be deemed to be included and all covenants, promises and agreements
in this Agreement by or on behalf of the respective parties hereto shall bind
and inure to the benefit of the respective successors and assigns of such
parties, whether so expressed or not.
Section 8.5. Counterparts. This Agreement may be executed in any number
------------
of counterparts, each executed counterpart constituting an original but all
counterparts together constituting only one instrument.
SECTION 8.6. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL
-------------
GOVERN THIS AGREEMENT, EXCLUDING (TO THE GREATEST EXTENT A NEW YORK COURT WOULD
PERMIT) ANY RULE OF LAW THAT WOULD CAUSE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
48
Section 8.7. Consent To Jurisdiction.
-----------------------
Each of the parties hereto hereby irrevocably and unconditionally:
(1) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Company Document, or for
recognition and enforcement of any judgment in respect hereof or thereof,
to the nonexclusive general jurisdiction of the courts of the State of New
York, the courts of the United States of America for the Southern District
of New York, and the appellate courts from any thereof;
(2) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
(3) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form and mail), postage
prepaid, to each party hereto at its address set forth in Section 8.3
hereof, or at such other address of which the other parties shall have been
notified pursuant thereto; and
(4) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to ▇▇▇ in any other jurisdiction.
Section 8.8. Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY
--------------------
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT OR COUNTERCLAIM ARISING IN CONNECTION WITH THIS AGREEMENT.
Section 8.9. Amendment; Waiver. No amendment or waiver of any provision
-----------------
of this Agreement shall be effective unless the same shall be in writing and
signed by all the Beneficiaries, the Company and all other parties hereto, which
consents from all such parties shall not be unreasonably withheld, and any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, that any decrease in the Required
Liquidity Reserve Amount or the Required Cash Trapping Amount may only be made
if, after giving effect to any such decrease, each of the Rating Agencies shall
have confirmed (x) its initial rating with respect to any Rated Security and (y)
that the decrease in the Required Liquidity Reserve Amount and/or the Required
Cash Trapping Amount, as the case may be, will not result in the lowering of its
then current rating on any Rated Security. No delay on the part of any
Beneficiary in the exercise of any right, power or remedy shall
49
operate as a waiver thereof, nor shall any single or partial waiver by such
Beneficiary of any right, power or remedy preclude any further exercise thereof,
or the exercise of any other right, power or remedy.
Section 8.10. Headings. Headings herein are for convenience only and
--------
shall not be relied upon in interpreting or enforcing this Agreement.
Section 8.11. Termination. This Agreement shall remain in full force and
-----------
effect until the Final Termination Date. Following the Final Termination Date,
Section 5.4(a) and (b) of this Agreement shall continue in full force and
effect.
Section 8.12. Entire Agreement. This Agreement, including the documents
----------------
referred to herein, embodies the entire agreement and understanding of the
parties hereto and supersedes all prior agreements and understandings of the
parties hereto relating to the subject matter herein contained.
Section 8.13. Limitation of Liability. Notwithstanding anything to the
-----------------------
contrary contained in this Agreement, the Company Documents and the Operative
Agreements, the liability and obligation of the Company to perform and observe
and make good the obligations contained in this Agreement and the Company
Documents shall not be enforced by any action or proceeding wherein damages or
any money judgment or any deficiency judgment or any judgment establishing any
personal obligation or liability shall be sought, collected or otherwise
obtained against any officer, director or shareholder (solely by reason of being
a shareholder but without prejudice to the obligations any shareholder may have
under any Company Document) or related Person of the Company or any Beneficiary,
and the Collateral Agent, for itself and its successors and assigns, and on
behalf of the other Beneficiaries and the Company, irrevocably waives any and
all right to ▇▇▇ for, seek or demand any such damages, money judgment,
deficiency judgment or personal judgment against any officer, director or
shareholder or related Person of the Company under or by reason of or in
connection with this Agreement and agrees to look solely to the Company and the
security and Collateral held under or in connection with the Company Documents
for the enforcement of such liability and obligation of the Company.
Section 8.14. Conflict With Other Agreements. Notwithstanding any other
------------------------------
provision hereof, in the event of any conflict between the terms of this
Agreement and the other Lender Documents, Operative Agreements or Company
Documents, the provisions of this Agreement shall control.
Section 8.15. Consequential Damages. In no event shall the Collateral
---------------------
Agent or any agent described in Section 5.2 hereof be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the
50
Collateral Agent has been advised of the likelihood of such loss or damage and
regardless of the form of action.
Section 8.16. No Petition in Bankruptcy. The Beneficiaries hereby agree
-------------------------
that, prior to the date which is one year and one day after the payment in full
of all outstanding Secured Obligations, (i) no Beneficiary shall authorize the
Company to commence a voluntary winding-up or other voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
the Company or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect in any jurisdiction or seeking the appointment of an
administrator, a trustee, receiver, liquidator, custodian or other similar
official of the Company or any substantial part of its property or to 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 the
Company, or to make a general assignment for the benefit of any Beneficiary or
any other creditor of the Company, and (ii) none of the Beneficiaries shall
commence or join with any other Person in commencing any proceeding against the
Company under any bankruptcy, reorganization, liquidation or insolvency law or
statute now or hereafter in effect in any jurisdiction.
Section 8.17. No Partnership Created. The parties hereto do not intend
----------------------
to create, and nothing herein shall be construed as creating, a partnership
under any applicable law.
* * *
51
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed by their duly authorized officers, all as of the date first
written above.
GENERAL AMERICAN RAILCAR
CORPORATION II, as Company
By:__________________________________
Name:________________________________
Title:_______________________________
GENERAL AMERICAN TRANSPORTATION
COMPANY, as Manager
By:__________________________________
Name:________________________________
Title:_______________________________
GENERAL AMERICAN TRANSPORTATION
COMPANY, as Insurance Manager
By:__________________________________
Name:________________________________
Title:_______________________________
THE FIRST NATIONAL BANK OF CHICAGO,
as the Initial Indenture Trustee (1998-1)
By:__________________________________
Name:________________________________
Title:_______________________________
[OWNER TRUSTEE],
as the Initial Owner Trustee (1998-1)
By:__________________________________
Name:________________________________
52
Title:_______________________________
THE FIRST NATIONAL BANK OF CHICAGO,
as the Initial Indenture Trustee (1998-2)
By:__________________________________
Name:________________________________
Title:_______________________________
[OWNER TRUSTEE],
as the Initial Owner Trustee (1998-2)
By:__________________________________
Name:________________________________
Title:_______________________________
THE FIRST NATIONAL BANK OF CHICAGO,
as the Initial Indenture Trustee (1998-3)
By:__________________________________
Name:________________________________
Title:_______________________________
[OWNER TRUSTEE],
as the Initial Owner Trustee (1998-3)
By:__________________________________
Name:________________________________
Title:_______________________________
THE FIRST NATIONAL BANK OF CHICAGO,
as the Collateral Agent
By:__________________________________
Name:________________________________
Title:_______________________________
53
Annex A
[FORM OF DESIGNATION LETTER]
[Date]
The First National Bank
of Chicago
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: General American Railcar Corporation II
Ladies and Gentlemen:
Reference is made to (i) the Collateral Agency and Intercreditor Agreement
(the "Intercreditor Agreement") dated as of August 1, 1998 among General
American Railcar Corporation II (the "Company"), General American Transportation
Corporation (the "Manager") (as defined in the Intercreditor Agreement), General
American Transportation Corporation, as Manager and Insurance Manager, the
Initial Owner Trustees, the Initial Indenture Trustees, any trustees or agents
under any other Company Documents and the Collateral Agent (as defined in the
Intercreditor Agreement) and (ii) [Describe New Company Documents]. Capitalized
terms used herein and not defined herein shall have the meanings set forth in
the Intercreditor Agreement.
The undersigned is the [Title] [Agent for the [Title] under the [New
Company Documents]].
The undersigned is delivering this Designation Letter pursuant to Section
4.6 of the Intercreditor Agreement in order to permit the undersigned [Insert
party to become Beneficiary] under the [New Company Documents] to become
Beneficiaries under the Intercreditor Agreement and to benefit from the
Collateral in accordance with the terms of the Intercreditor Agreement.
Attached hereto is a copy of the certificate to be delivered by the
Company.
1
The undersigned [on behalf of itself and the [Title] accedes to and agrees
to be bound by all of the terms and provisions of the Intercreditor Agreement.
In furtherance thereof, the undersigned [on behalf of itself and the [Title]
agrees to execute a counterpart of the Intercreditor Agreement.
Our address for notices is:
[Insert Information]
Our wire transfer instructions are:
[Insert Information]
This Designation Letter may be executed in any number of counterparts, each
executed counterpart constituting an original but all counterparts together
constituting only one instrument.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS AGREEMENT, EXCLUDING
(TO THE GREATEST EXTENT A NEW YORK COURT WOULD PERMIT) ANY RULE OF LAW THAT
WOULD CAUSE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
NEW YORK.
[BENEFICIARY]
By:__________________________________
Name:________________________________
Title:_______________________________
Consented to by:
THE FIRST NATIONAL BANK
OF CHICAGO, as Collateral Agent
By:__________________________________
Name:________________________________
Title:_______________________________
2
CERTIFICATE OF GENERAL AMERICAN RAILCAR CORPORATION II
I, [name], [title] of General American Railcar Corporation II, a Delaware
corporation (the "Company"), DO HEREBY CERTIFY on behalf of the Company that
-------
[ ] is the [ ] under the [New Company Documents].
WITNESS my hand this _____ day of _________, ______.
________________________________
Name:___________________________
Title:__________________________
3
Schedule 1
GATC Affiliates Whose Railcars are Excluded from
Definition of GATC Fleet
1
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
On this, the _____ day of August, 1998, before me, a Notary Public in
and for said County and State, personally appeared ___________________________,
who being by me duly sworn, says that he is the ______________________________
of GENERAL AMERICAN RAILCAR CORPORATION II, that said instrument was signed on
August __, 1998 on behalf of said corporation by authority of its Board of
Directors, and he acknowledged that the execution of the foregoing instrument
was the free act and deed of said association.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal on
the date above mentioned.
______________________________
Name:
Notary Public
My Commission Expires:
Residing in___________________
▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS:
COUNTY OF NEW YORK )
On this, the ____ day of August, 1998, before me, a Notary Public in
and for said County and State, personally appeared ___________________, who
being by me duly sworn, says that he is the __________________ of GENERAL
AMERICAN TRANSPORTATION CORPORATION II, that said instrument was signed on
August __, 1998 on behalf of said corporation as Manager by authority of its
Board of Directors, and he acknowledged that the execution of the foregoing
instrument was the free act and deed of said corporation as Manager.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal on
the date above mentioned.
______________________________
Name:_________________________
Notary Public Expires:
My Commission Expires:
Residing in___________________
▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS:
COUNTY OF NEW YORK )
On this, the ____ day of August, 1998, before me, a Notary Public in
and for said County and State, personally appeared ________________, who being
by me duly sworn, says that he is the ___________________ of GENERAL AMERICAN
TRANSPORTATION CORPORATION II, that said instrument was signed on August __,
1998 on behalf of said corporation as Insurance Manager by authority of its
Board of Directors, and he acknowledged that the execution of the foregoing
instrument was the free act and deed of said corporation as Insurance Manager.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal on
the date above mentioned.
______________________________
Name:
Notary Public
My Commission Expires:
Residing in___________________
▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS:
COUNTY OF NEW YORK )
On this, the _____ day of ____________, 1998, before me, a Notary
Public in and for said County and State, personally appeared __________________,
who being by me duly sworn, says that he is the ____________ of THE FIRST
NATIONAL BANK OF CHICAGO, that said instrument was signed on August __, 1998
behalf of said bank as Initial Indenture Trustee (1998-1) by authority of its
Board of Directors, and he acknowledged that the execution of the foregoing
instrument was the free act and deed of said bank as Initial Indenture Trustee
(1998-1).
IN WITNESS WHEREOF, I have hereunto set my hand and official seal on
the date above mentioned.
______________________________
Name:
Notary Public
My Commission Expires:
Residing in___________________
▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS:
COUNTY OF NEW YORK )
On this, the ____ day of August, 1998, before me, a Notary Public in
and for said County and State, personally appeared _________________, who being
by me duly sworn, says that he is the _____________ of [OWNER TRUSTEE], that
said instrument was signed on August __, 1998 on behalf of said bank as Initial
Owner Trustee (1998-1) by authority of its Board of Directors, and he
acknowledged that the execution of the foregoing instrument was the free act and
deed of said bank as Initial Owner Trustee (1998-1).
IN WITNESS WHEREOF, I have hereunto set my hand and official seal on
the date above mentioned.
______________________________
Name:
Notary Public
My Commission Expires:
Residing in___________________
▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS:
COUNTY OF NEW YORK )
On this, the ____ day of August, 1998, before me, a Notary Public in
and for said County and State, personally appeared _________________, who being
by me duly sworn, says that he is the _________________ of THE FIRST NATIONAL
BANK OF CHICAGO, that said instrument was signed on August __, 1998 on behalf of
said bank as Initial Indenture Trustee (1998-2) by authority of its Board of
Directors, and he acknowledged that the execution of the foregoing instrument
was the free act and deed of said bank as Initial Indenture Trustee (1998-2).
IN WITNESS WHEREOF, I have hereunto set my hand and official seal on
the date above mentioned.
______________________________
Name:
Notary Public
My Commission Expires:
Residing in___________________
▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS:
COUNTY OF NEW YORK )
On this, the ___ day of August, 1998 before me, a Notary Public in and
for said County and State, personally appeared __________________, who being by
me duly sworn, says that he is the _________________ of [OWNER TRUSTEE], that
said instrument was signed on August __, 1998 on behalf of said bank as Initial
Owner Trustee (1998-2) by authority of its Board of Directors, and he
acknowledged that the execution of the foregoing instrument was the free act and
deed of said bank as Initial Owner Trustee (1998-2).
IN WITNESS WHEREOF, I have hereunto set my hand and official seal on
the date above mentioned.
______________________________
Name:
Notary Public
My Commission Expires:
Residing in___________________
▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS:
COUNTY OF NEW YORK )
On this, the _____ day of August, 1998, before me, a Notary Public in
and for said County and State, personally appeared ______________________, who
being by me duly sworn, says that he is the ______________________ of THE FIRST
NATIONAL BANK OF CHICAGO, that said instrument was signed on August __, 1998 on
behalf of said bank as Initial Indenture Trustee (1998-3) by authority of its
Board of Directors, and he acknowledged that the execution of the foregoing
instrument was the free act and deed of said bank as Initial Indenture Trustee
(1998-3).
IN WITNESS WHEREOF, I have hereunto set my hand and official seal on
the date above mentioned.
______________________________
Name:
Notary Public
My Commission Expires:
Residing in___________________
▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS:
COUNTY OF NEW YORK )
On this, the ____ day of August, 1998, before me, a Notary Public in
and for said County and State, personally appeared ___________________, who
being by me duly sworn, says that he is the ______________________ of [OWNER
TRUSTEE], that said instrument was signed on August __, 1998 behalf of said bank
as Initial Owner Trustee (1998-3) by authority of its Board of Directors, and he
acknowledged that the execution of the foregoing instrument was the free act and
deed of said bank as Initial Owner Trustee (1998-3).
IN WITNESS WHEREOF, I have hereunto set my hand and official seal on
the date above mentioned.
______________________________
Name:
Notary Public
My Commission Expires:
Residing in___________________
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS:
COUNTY OF NEW YORK )
On this, the ____ day of August, 1998, before me, a Notary Public in
and for said County and State, personally appeared ____________________, who
being by me duly sworn, says that he is the ___________________ of THE FIRST
NATIONAL BANK OF CHICAGO, that said instrument was signed on August __, 1998 on
behalf of said bank as Collateral Agent by authority of its Board of Directors,
and he acknowledged that the execution of the foregoing instrument was the free
act and deed of said bank as Collateral Agent.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal on
the date above mentioned.
______________________________
Name:
Notary Public
My Commission Expires:
Residing in___________________
11