Exhibit 10.2
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FORM OF
ADMINISTRATIVE SERVICES AGREEMENT (1998-1)
This Agreement, dated as of the 1st day of August, 1998, is made and
entered into between General American Transportation Corporation, a New York
corporation (together with any successor administrator, the "Administrator"),
and General American Railcar Corporation II, a Delaware corporation (the
"Company"). Capitalized terms used in this Agreement and not otherwise defined
herein shall have the respective meanings given thereto in Appendix A of the
Operation, Maintenance, Servicing and Remarketing Agreement (1998-1), dated as
of the date hereof (as amended from time to time), between the Company and the
Administrator (the "Management Agreement").
W I T N E S S E T H
WHEREAS, the Company has acquired from General American Transportation
Corporation, a New York corporation ("GATC"), (i) certain railroad tank cars and
covered ▇▇▇▇▇▇ cars (each railcar individually a "Unit" and all railcars
collectively the "Equipment"), and (ii) all of GATC's right, title and interest
in and to the lease agreements respecting the Equipment in which GATC is the
lessor, such lease agreements being with customers of GATC;
WHEREAS, the Company has sold the Equipment to [Owner Trustee], as Owner
Trustee under [three] separate Trust Agreements, each dated as of August 1,
1998, with the Owner Participants therein named (such Owner Trustees under each
Trust Agreement being herein referred to collectively as the "Owner Trustees"
and, individually, as an "Owner Trustee"), and the Owner Trustees have
simultaneously leased the Equipment to the Company pursuant to the terms of
[three] separate Equipment Lease Agreements, each dated as of August 1, 1998
(collectively, the "Leases" and, individually, a "Lease"); and
WHEREAS, to enable the Company to carry out its corporate functions,
Administrator has agreed to furnish clerical and bookkeeping services, prepare
financial statements and tax returns, provide office space and perform other
ancillary services for the Company;
NOW THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Company and the Administrator hereby agree as follows:
Section 1. Administrative Services.
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The Administrator hereby agrees to provide the following administrative
management services to the Company:
(a) designate one or more individuals who are directors, officers or
employees of the Administrator and who are available to serve, from time to
time, as directors of the Company;
(b) upon request by the Board of Directors of the Company, designate
one or more individuals who are directors, officers or employees of the
Administrator to serve, from time to time, as officers of the Company;
(c) through directors, officers and employees of the Administrator
who are directors or officers of the Company;
(i) furnish the Company with ordinary clerical and bookkeeping
services;
(ii) take such actions on behalf of the Company as are necessary
or desirable for the Company to remain organized in its jurisdiction of
incorporation and qualified (in those foreign jurisdictions in which it
becomes qualified) and to carry out its business, including, without
limitation, the filing of such reports and payment of such fees and
expenses as may be required;
(iii) maintain the general ledger of the Company, and on a timely
basis, and in cooperation with the Manager acting pursuant to the
Management Agreement, prepare the financial statements and tax returns of
the Company, subject to year-end audit, in accordance with generally
accepting accounting principles;
(iv) direct and, in cooperation with the Manager acting pursuant
to the Management Agreement, prepare the auditing staff of the Company's
independent accountants to facilitate the timely completion of the year-end
audit review;
(v) provide, or cause to be provided, notice to each of the
Rating Agencies and the Collateral Agent in the event that:
(A) any action, suit or proceeding is pending against the
Company;
(B) any amendment occurs with respect to the Certificate of
Incorporation or By-Laws of the Company;
in each of the above instances, such notice shall be provided by the
Administrator within 30 days of the Administrator's obtaining knowledge of
such event; and
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(vi) defend, at the direction of the Company's Board of
Directors, any action, suit or proceeding to cause a substantive
consolidation of the assets and liabilities of the Company with the
Administrator, the Manager, the Parent or any other Person.
(d) provide separately identified office space, stationery and
telephone numbers and such other reasonable ancillary services as may be
necessary for the Company to carry out its obligations under Sections 1(a)
through (c) hereof, including telecopying, duplicating and word processing
services;
(e) provide such other services as are incidental to the foregoing or
as the Company and the Administrator may agree; provided such services do not
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conflict with the services to be provided by the Manager pursuant to the
Management Agreement; and
(f) provide notice to each of the Rating Agencies in the event that
any Independent Director is removed or appointed.
In providing the services under this Section 1 and as otherwise provided
under this Agreement, the Administrator agrees to comply with the Services
Standard and will not knowingly take any actions on behalf of the Company which
would cause the Company to be in violation of any federal law of the United
States of America or any law of any state, territory or domicile of the United
States.
Section 2. Compensation of the Administrator.
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The compensation to the Administrator for the performance of its services
hereunder shall be included in the Base Component under the Management Agreement
so long as the Administrator remains as the Manager thereunder. Such Base
Component is intended, so long as the Administrator is acting as Manager under
the Management Agreement, to include all direct costs and expenses relating to
the performance by the Administrator of its services, duties and obligations
under this Agreement. In the event that the Administrator is terminated as
Manager under the Management Agreement, the Company and the Administrator shall
agree upon a mutually acceptable compensation arrangement based on the then
current market rate for such services.
Section 3. Term of Agreement
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This Agreement shall commence on August 1, 1998 and shall be terminable by
the Administrator or the Company upon ninety (90) days written notice after the
Management Agreement is no longer continuing in effect (as it may be renewed or
otherwise extended).
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Section 4. The Administrator's Liability
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The Administrator and its directors, officers and employees who serve as
directors and officers of the Company assume no liability for anything other
than to render or stand ready to render the services specifically called for
herein, and neither the Administrator nor any of its directors, officers,
employees or subsidiaries or Persons controlling, controlled by or under common
control or affiliated with the Administrator shall be responsible for any action
of the Company under any of the Company Documents or Operative Agreements to
which the Company is a party. Neither the Administrator nor any director,
officer or employee of the Administrator who serves as a director or officer of
the Company shall be liable for or shall have any obligation with regard to any
of the liabilities, whether direct or indirect, absolute or contingent, of the
Company in connection with such Company Documents or Operative Agreements,
instruments or documents. The directors, officers and employees of the
Administrator who serve as directors and officers of the Company shall act in
accordance with the standards of conduct imposed on officers and directors under
Delaware law. Notwithstanding anything to the contrary contained in this Section
4, the Administrator hereby agrees that if it or any of its officers, employees,
directors or agents shall fail to observe any of its obligations under this
Agreement and as a result of such failure the Company incurs (whether as a
result of any action so taken or omitted to be taken in violation of terms
hereof) any costs, expenses, actions, suits, judgments, demands, damages, losses
or liabilities (including, without limitation, reasonable attorneys' fees and
expenses) (collectively, the "Indemnified Expenses"), then the Administrator
shall indemnify and hold harmless the Company for such Indemnified Expenses;
provided, however, that the Administrator shall only be liable for any such
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Indemnified Expense to the extent arising in connection with, or as a result of,
its or its officers', employees', directors' or agents' negligence or willful
misconduct. The indemnities set forth in the preceding sentence shall survive
the termination of this Agreement.
Section 5. Miscellaneous
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(a) The descriptive headings of the several subsections and articles
of this Agreement are inserted for convenience only and do not constitute part
of this Agreement.
(b) All of the functions, duties and services performed by the
Administrator under this Agreement shall be performed by the Administrator as an
independent contractor and not as agent of the Company.
(c) The parties intend, in entering into this Agreement, that the
Administrator is an independent contractor and that no partnership relationship
exists among the Administrator and the Company; that the Administrator does not
have the authority to act as agent of, or partner or co-venturer with, the
Company except to the extent specifically provided herein; that the
Administrator, in its capacity as such, does not, except as specifically set
forth in this
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Agreement, have the authority to bind the Company; that the Company, as such,
does not have liability for the acts of the Administrator; and that any fees or
other compensation payable by the Company to the Administrator are ordinary and
necessary business expenses of the Company.
(d) This Agreement shall be in all respects governed by and construed
in accordance with the laws of the State of New York, including all matters of
construction, validity and performance, without regard to principles of
conflicts of laws.
(e) Any notice, certificate, document, acceptance or report required
or permitted to be given by either party hereto to the other party shall be in
writing and shall be deemed delivered when deposited in the United States mails,
first-class postage prepaid, or when delivered personally, by facsimile
transmission or reputable air courier, addressed as follows:
If to the Company: General American Railcar Corporation II
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
If to the Administrator: General American Transportation Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
or addressed to either party at such other address as such party shall hereafter
furnish to the other party by written notice as provided above.
(f) This Agreement constitutes, with respect to the subject matter
hereof, the entire agreement of the parties and supersedes and cancels all prior
agreements, discussions, negotiations, memoranda or correspondence with respect
to such subject matter, and may not be amended orally, but only by an agreement
in writing signed by the party against which the enforcement of such amendment
is sought. The failure of either party hereto at any time or times to require
performance of any provision hereof shall in no manner affect its right at a
later time to enforce the same. No waiver by either party hereto of the breach
of any term or agreement contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be, or construed as,
a further or continuing waiver of any breach, or a waiver of the breach of any
other term or agreement contained herein. The parties hereto reserve the right
to amend, modify, supersede and cancel this Agreement, or waive the terms or
conditions hereof, without the consent of any other person or entity.
(g) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns,
provided that the Administrator will
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not, without the prior written consent of the Collateral Agent, assign any of
its rights hereunder, except as provided herein, in the Intercreditor Agreement
and in the Participation Agreement.
(h) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(i) Any provision of this Agreement that may be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof so long as the economic or legal substance of the
transactions contemplated thereby is not affected in any manner adverse to any
party. Any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. To
the fullest extent permitted by law, the parties hereby waive any provision of
law that renders any provision of this Agreement prohibited or unenforceable in
any respect. In addition, in the event of any such prohibition or
unenforceability, the parties agree that it is their intention and agreement
that any such provision which is held or determined to be prohibited or
unenforceable, as written, in any jurisdiction shall nonetheless be in force and
to the fullest extent permitted by the law of such jurisdiction as though such
provision had been written in such a manner and to such an extent as to be
enforceable therein under the circumstances.
(j) The Administrator hereby agrees that, prior to the date which is
one year and one day after the payment in full of all outstanding Equipment
Notes and Pass Through Certificates, the Administrator will not institute
against, or join any other Person in instituting against, the Company an action
in bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or similar proceeding under the laws of the United States or any
state of the United States.
[Signatures on Next Page]
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IN WITNESS WHEREOF, the Company and the Administrator have caused this
Agreement to be duly executed and delivered on the day and year first above
written.
GENERAL AMERICAN RAILCAR
CORPORATION II
By:_______________________________
Its:_________________________
GENERAL AMERICAN
TRANSPORTATION CORPORATION
By:_______________________________
Its:_________________________
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