Exhibit 10.3
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FORM OF
INSURANCE AGREEMENT (1998-1)
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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 (the "Insurance Manager"), and General American Railcar Corporation
II, a Delaware corporation (the "Company").
W I T N E S S E T H
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A. The Company has acquired from General American Transportation
Corporation, a New York corporation ("GATC"), (i) certain railroad tank cars and
covered xxxxxx cars (each railcar individually a "Unit" and all railcars
collectively the "Equipment"), as such Units are more fully described in
Schedule 1 to the respective Participation Agreements, and (ii) all of GATC's
right, title and interest in and to any and all lease agreements respecting the
Equipment in which GATC is the lessor, such lease agreements being with
customers of GATC (such lease agreements and future lease agreements entered
into by the Manager on behalf of the Company respecting the Equipment are
hereinafter referred to as "Car Service Contracts" and such customers and future
customers under Car Service Contracts are hereinafter referred to as
"Customers").
B. 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").
C. The Company, The First National Bank of Chicago, as Collateral Agent
(the "Collateral Agent"), the Owner Trustees, the Indenture Trustees (as
hereinafter defined), the Manager and the Insurance Manager have entered into a
Collateral Agency and Intercreditor Agreement dated as of August 1, 1998 (the
"Intercreditor Agreement") providing, among other things, for the distribution
of Collections and the exercise of certain rights of the Company under the
Company Documents (as defined in the Intercreditor Agreement).
D. GATC is engaged in the business of owning, leasing and managing
railcars for itself and others, and the Company desires to retain the Insurance
Manager, on the terms and conditions set forth in this Agreement, to perform
insurance services on behalf of the Company with respect to the Equipment leased
by the Company under the Leases and the related Car Service Contracts.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the Company and the Insurance Manager hereby agree as follows:
Section 1.
Definitions
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Unless otherwise defined herein, all capitalized terms used but not defined
herein have the meanings assigned to such terms in Appendix A to the Operation,
Maintenance, Servicing and Remarketing Agreement dated as of August 1, 1998
between GATC and the Company.
Section 2.
Appointment and Duties of Insurance Manager
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Section 2.1. Appointment. The Company hereby appoints the Insurance
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Manager to act as the manager for all insurance coverage placed or maintained on
the Equipment effective as of the Closing Date and grants to the Insurance
Manager the authority to enter into, administer and terminate all such insurance
relating to the Equipment on behalf of the Company, and generally to manage and
administer the insurance on the Equipment, all on the terms and conditions
contained herein. The Insurance Manager shall manage the insurance on each Unit
from the date as of which the Company first acquires possession of such Unit
until the date the Company no longer has an ownership or leasehold interest
therein or, if a Unit suffers an Event of Loss under any Lease, until such date
as such Unit is no longer subject to the terms of such Lease. During such time
as any of the Leases remains in effect, the Insurance Manager agrees to manage
the insurance on each Unit in accordance with the terms and provisions of the
Lease to which such Unit is subject.
Section 2.2. Duties of the Insurance Manager. The Insurance Manager
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hereby accepts its appointment as manager for all insurance coverage placed or
maintained on the Equipment and agrees to use reasonable care and diligence,
consistent with customary commercial practice as would be used by a prudent
Person in the railcar leasing industry (the "Insurance Services Standard") and,
subject to the terms and conditions of this Agreement and the requirements of
the respective Leases, to maintain or cause to be maintained, with such insurers
with whom Insurance Manager or its Affiliates insure equipment owned or managed
by them (or under such program of self-insurance generally covering equipment
owned or managed by Insurance Manager), public liability insurance in respect of
the Equipment in amounts not less than and with deductibles or retentions not
greater than those customarily maintained by Insurance Manager and its
Affiliates for similar equipment owned or managed by them and casualty insurance
in amounts not less than, against risks and with deductible or retention amounts
not greater than those customarily maintained by Insurance Manager or its
Affiliates for similar equipment owned or managed by them; provided, however,
that in all events the insurance policies maintained pursuant to this Agreement
shall comply with the specific requirements of Section 2.3(a) below.
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Section 2.3. Certain Insurance Covenants
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(a) Insurance Manager shall cause all insurance policies required to
be maintained by Insurance Manager pursuant to Section 2.2 to comply with the
requirements of Section 12 of each of the Leases, including Sections 12.2
(physical damage insurance) and 12.3 (public liability insurance) thereof;
provided, however, that it is understood that in complying with said Section
12.3, the provisions of Section 12.3(c) of the Lease shall be available to the
Insurance Manager.
(b) Insurance Manager shall provide the Company and/or the Lessors
such documents and information as the Company and/or any Lessor may reasonably
request from time to time to evidence the maintenance of the insurance required
under Section 2.2, including annual certificates and notices of material changes
in or cancellation of such policies. Nothing herein shall be construed to
prohibit the Company or any other Person from carrying any insurance on the
Units of Equipment for its own benefit.
(c) When available, copies of policies and certificates of insurance
with respect thereto shall be furnished promptly to the Company and the Manager.
(d) If at any time the insurance maintained on the Units by Insurance
Manager on behalf of the Company shall lapse or have limits lower than as
required under any Lease for whatever reason, Insurance Manager, immediately
upon receipt of notice of the lapse of or decrease in such insurance coverage,
shall give notice to the Company, the Manager, the Owner Participants and the
Lessors of the same. Insurance Manager shall also notify the Company, the
Manager and the Lessors promptly with respect to any default in the payment of
any premium or of any other act or omission of Insurance Manager or of any other
person of which Insurance Manager has knowledge which might invalidate, render
unenforceable, result in a lapse of or reduce any insurance coverage on the
Units maintained by Insurance Manager pursuant to this Agreement.
Section 3.
Insurance Manager's Standard of Performance
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Section 3.1. Standards.
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(a) All of the functions, services, duties and obligations of the
Insurance Manager under this Agreement shall be performed by the Insurance
Manager in compliance with the Insurance Services Standard.
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(b) If the Insurance Manager is rendered unable to perform any of its
obligations under this Agreement as a result of acts beyond the reasonable
control of the Insurance Manager or its Affiliates or the control of their
agents, suppliers or subcontractors including, without limitation, acts of God,
acts of civil or military authorities, embargoes, governmental priorities, fires
or other casualties, strikes or other labor disturbances, floods, riots, war,
lack or shortage of transportation facilities, delays in transportation or
inability or difficulty in obtaining necessary labor, materials or goods then
the Insurance Manager will be excused from whatever performance is affected by
the foregoing to the extent so affected; provided that:
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(i) the Insurance Manager gives the Company, the Owner
Trustees, the Participants and the Indenture Trustees written notice of the
occurrence of the event as soon as practicable after the occurrence thereof
describing in reasonable detail the particulars of such occurrence,
including an estimation of its expected duration and probable impact on the
performance of the Insurance Manager's obligations hereunder, and
thereafter continues to furnish timely regular reports with respect thereto
during the continuation of such event (provided that the failure of the
Insurance Manager to give such notice on a timely basis shall not impose
any additional obligation on the Insurance Manager except to the extent
that such failure has a material adverse effect on the Company);
(ii) the suspension of performance hereunder shall be of no
greater scope and of no longer duration than is reasonably required by such
event;
(iii) no liability of the Insurance Manager which arose before
the occurrence of the event which caused the suspension of performance
shall be excused as a result of the occurrence;
(iv) the Insurance Manager shall exercise its reasonable efforts
to mitigate or limit damages to the Company, the Owner Trustees, the
Participants and the Indenture Trustees and shall use its reasonable
efforts to remove or terminate, as soon as practicable, the event causing
such suspension;
(v) the Insurance Manager shall use its reasonable efforts to
continue to perform its obligations hereunder; and
(vi) when the Insurance Manager is able to resume the
performance of its obligations hereunder, the Insurance Manager shall give
written notice to that effect to the Company, the Owner Trustees, the
Participants and the Indenture Trustees and shall promptly resume
performance hereunder.
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(c) The Insurance Manager shall, in connection with the performance of
the services, comply in all material respects with all laws, rules and
regulations applicable to the Insurance Manager, the Company and the Equipment.
(d) The duties and obligations of the Insurance Manager will be
limited to those expressly set forth in this Agreement, and the Insurance
Manager will not have any fiduciary or other implied duties or obligations to,
except as provided herein.
Section 3.2. Similar Services. It is expressly understood and agreed
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that nothing herein shall be construed to prevent, prohibit or restrict the
Insurance Manager or any Affiliate of the Insurance Manager from providing the
same or similar services as those provided under this Agreement to any other
Person; provided that no such activity shall in any way diminish the obligations
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of the Insurance Manager hereunder.
Section 4.
Reimbursement and Compensation of the Insurance Manager
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Section 4.1. Reimbursement. The Company shall reimburse the Insurance
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Manager in connection with its services hereunder an amount equal to the greater
of (i) an appropriate share of Insurance Manager's insurance costs (including
any allocation thereof to Insurance Manager from its Affiliates) for all
railcars owned, leased or managed by Insurance Manager, allocated on such basis
as is customarily used by Insurance Manager or its Affiliates in allocating
insurance costs, or (ii) Insurance Manager's marginal insurance costs resulting
from such insurance coverage on behalf of the Company, as reasonably determined
by Insurance Manager, provided, however, that in no event shall the amount to be
reimbursed hereunder be greater than the premiums which would have been payable
by the Company for comparable insurance; and, provided, further, that if
insurance coverage is effected through a separate policy, whether obtained by,
or on behalf of, the Company, the cost thereof shall be borne by the Company.
There shall be no apportionment of premiums in respect of insurance maintained
by Insurance Manager hereunder for periods extending beyond the termination of
this Agreement if coverage is effected through blanket insurance policies which
also cover other property or assets owned, leased or managed by Insurance
Manager or its Affiliates. Insurance Manager may cancel any such blanket
insurance policies at any time and obtain any premium refunds incident thereto,
and Insurance Manager shall be entitled to any premium refund or dividend
received by the Company or Insurance Manager on account of any such blanket
insurance policy maintained by Insurance Manager, unless such premium refund or
dividend, or a portion thereof, represents a refund of Insurance Manager's
identifiable marginal insurance costs as set forth in the immediately preceding
clause (ii), in which event such identifiable amount shall be paid by Insurance
Manager to the Company or retained by the Company, as the case may be.
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Section 4.2. Payment. Insurance Manager shall xxxx the Company monthly
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for its charges for insurance under Section 4.1, which amount shall be payable
to the Insurance Manager from the Collection Account in accordance with the
terms of the Intercreditor Agreement.
Section 4.3. Compensation. The compensation to the Insurance Manager
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for the performance of its services hereunder shall be included in the Base
Component under the Management Agreement so long as the Insurance Manager is
acting as Manager under the Management Agreement. Such Base Component is
intended, so long as the Insurance Manager is acting as Manager under the
Management Agreement, to include all direct costs and expenses related to the
performance by the Insurance Manager of its services, duties and obligations
under this Agreement other than the charges for insurance covered by Section
4.1. In the event that the Insurance Manager is terminated as Manager under the
Management Agreement, the Company and the Manager shall agree upon a mutually
acceptable compensation arrangement based on the then current market rate for
such services.
Section 5.
Reports and Information
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Section 5.1. Annual Certificate. The Insurance Manager shall furnish to
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the Company, the Owner Trustees, the Owner Participants, the Collateral Agent
and the Rating Agencies a copy of the certificate of insurance and other
information required by Section 12.4 of each Lease.
Section 5.2. Rights of Inspection. The Company shall be entitled to
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inspect from time to time upon reasonable notice during regular business hours
the books and records of the Insurance Manager relating to the insurance
maintained on the Equipment hereunder. The Intercreditor Agent, any Indenture
Trustee and any Participant shall be entitled to inspect those books and records
of the Insurance Manager relating to the insurance maintained on the Equipment
to the extent permitted in any applicable Participation Agreement or Lease.
Section 6.
Term of Agreement; Termination
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Section 6.1. Term. The term of this Agreement shall commence on the
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Closing Date and shall continue until the latest termination date under any of
the Leases (as any thereof may be renewed or otherwise extended); provided,
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however, that the obligation of the Insurance Manager to provide insurance for
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any Unit under this Agreement shall terminate on the date such Unit is no longer
subject to its applicable Lease.
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Section 6.2. Termination of Insurance Manager. The services of the
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Insurance Manager under this Agreement may be terminated as to all Equipment
(or, at the option of the Company, as to all Units as to which a default under
clause (a), below, relates) by the Company upon giving notice to the Insurance
Manager in any of the following events:
(a) Except as provided in clause (b) below, if the Insurance Manager
fails in any material respect to perform any of its obligations under this
Agreement which failure materially and adversely affects the rights of the
holders of the Equipment Notes or the Certificateholders and fails to cure or
remedy such failure to perform within sixty (60) days following the earlier of
the Insurance Manager becoming aware of such failure or delivery to the
Insurance Manager of a written notice of the alleged failure to perform;
provided, however, that if the cause of such failure to perform can be cured,
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but cannot reasonably be cured within such 60 day period, the period for
remedying such failure to perform shall be extended by the time necessary to
effect such cure (but not in excess of 60 additional days);
(b) If an Event of Default has occurred and is continuing under
Section 14(c) of any of the Leases;
(c) If the Insurance Manager shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect, or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or consent to any such relief or to the appointment of or taking
possession by any such official in any voluntary case or other proceeding
commenced against it, or admit in writing its inability to pay its debts
generally as they come due, or make a general assignment for the benefit of
creditors, or take any corporate action to authorize any of the foregoing;
provided, however, that in the event the Insurance Manager as debtor in a
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proceeding under Chapter 11 of the Bankruptcy Code (or any trustee appointed for
the Insurance Manager as debtor in any such bankruptcy case) shall have assumed
this Agreement with the approval of the bankruptcy court having jurisdiction
over such case, under Section 365 of the Bankruptcy Code or any amended or
successor version thereof, the Company shall refrain from terminating the
Insurance Manager or exercising such other remedies hereunder based solely on
the bankruptcy of the Insurance Manager;
(d) If an involuntary case or other proceeding shall be commenced
against the Insurance Manager seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect, or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or
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(e) If the Insurance Manager ceases to be an Affiliate of the Company.
Notwithstanding anything to the contrary contained in this Agreement, any
failure of the Manager to perform or observe any of its obligations under this
Agreement shall not constitute a default under this Section 6.2 if such failure
is caused solely by reason of an event referred to in the definition of "Event
of Loss" so long as the Insurance Manager is continuing to comply on the
Company's behalf with the terms of the applicable Lease with respect to such
Event of Loss.
Section 6.3. Replacement of the Insurance Manager. So long as the
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Insurance Manager is an Affiliate of the Company, and any Equipment is subject
to a Lease, the Insurance Manager may not resign from its obligations and duties
as the Insurance Manager with respect to such Equipment or any liabilities
associated therewith without the consent of the Required Beneficiaries. Without
limiting the foregoing, the Insurance Manager may not resign or be terminated in
whole or in part, unless a successor Insurance Manager ("Successor Insurance
Manager") has been appointed by the Company and the Owner Trustees, the Owner
Participants and the Indenture Trustees and has accepted such appointment and
the Company has received written confirmation from the Rating Agencies that,
after giving effect to the selection of the Successor Insurance Manager, no
lowering or withdrawal of the then current ratings on the Certificates will
occur. Any Successor Insurance Manager, however appointed, shall execute and
deliver to the Company and to the predecessor Insurance Manager an instrument
accepting such appointment, including customary confidentiality provisions in
favor of the predecessor Insurance Manager and the Company, and thereupon such
Successor Insurance Manager, without further act, shall become vested with all
the rights, powers, duties and trusts of the predecessor Insurance Manager
hereunder with like effect as if originally named the Insurance Manager herein.
Section 6.4. Merger or Sale. Any corporation into which the Insurance
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Manager may be merged or with which it may be consolidated, or any corporation
to which substantially all the business of the Insurance Manager may be
transferred, shall be the Insurance Manager under this Agreement without further
act.
Section 7.
Indemnification
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Section 7.1. Indemnification by Insurance Manager. The Insurance
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Manager agrees to indemnify the Company, the Owner Trustees, the Owner
Participants, the Indenture Trustees, the Collateral Agent and their respective
affiliates and the directors, officers, employees and agents of each thereof
(the "Indemnified Parties") against, and agrees to hold each Indemnified Party
harmless from, any and all Claims incurred or suffered by such Indemnified Party
relating to or arising out of or in connection with (i) any breach of or
inaccuracy in any representation made by the Insurance Manager in this Agreement
or in the Participation Agreement or in any certificate delivered pursuant
thereto; (ii) any breach or failure by the Insurance Manager to
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perform any covenant or obligation of the Insurance Manager set out or
contemplated in this Agreement; or (iii) the negligence, recklessness or willful
misconduct of the Insurance Manager.
Section 7.2. Indemnification by Company. The Company agrees to
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indemnify the Insurance Manager against, and agrees to hold it harmless from,
any and all Claims incurred or suffered by the Insurance Manager relating to or
arising out of or in connection with (i) any breach of or any inaccuracy in any
representation or warranty made by the Company in this Agreement; (ii) any
breach of or failure by the Company to perform any covenant or obligation of the
Company set out or contemplated in this Agreement, or (iii) the negligence,
recklessness or willful misconduct of the Company.
Section 7.3. Claims Excluded. There are excluded from the agreements to
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indemnify under Sections 7.01 and 7.02 with respect to any particular
indemnified Person, Claims to the extent resulting from the breach, failure to
perform, negligence, recklessness or willful misconduct of such indemnified
Person.
Section 7.4. Third Party Claims. In the event any party to be
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indemnified is entitled to indemnification hereunder based upon a Claim asserted
by a third party, the indemnifying party shall be given prompt notice thereof in
reasonable detail; provided, however, the failure to give prompt notice shall
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not relieve the indemnifying party of any liability hereunder. The indemnifying
party shall have the right (without prejudice to the right of any party to be
indemnified to participate at its expense through counsel of its own choosing)
to defend such Claim at its expense and through counsel of its own choosing
which is reasonably acceptable to the party to be indemnified if the
indemnifying party gives notice of its intention to do so not later than twenty
(20) days following its receipt of notice of such Claim from the party to be
indemnified (or such shorter time period as is required so that the interests of
the party to be indemnified would not be materially prejudiced as a result of
its failure to have received such notice from the indemnifying party); provided,
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however, the indemnifying party shall not be entitled to control and assume
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responsibility for the defense of any Claim if in the good faith opinion of the
party to be indemnified, there exists an actual or potential conflict of
interest such that it is advisable for such party to retain control of such
proceeding, in which circumstances the party to be indemnified shall be entitled
to control and assume responsibility for the defense of such Claim at the
expense of the indemnifying party. The indemnifying party shall not have the
power to bind the indemnified party, without the indemnified party's prior
written consent, which shall not be unreasonably withheld, with respect to any
settlement pursuant to which anything is required other than the payment of
money and then only to the extent that the indemnifying party shall make full
payment of such money. If the indemnifying party does not so choose to defend
any such claim asserted by a third party for which the party to be indemnified
would be entitled to indemnification hereunder, then the party to be indemnified
shall be entitled to recover from the indemnifying party, on a monthly basis,
all of its reasonable attorneys' fees and other costs and expenses of litigation
of any nature whatsoever incurred in the defense of such claim. If the
indemnifying party assumes the defense of any such claim, the
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indemnifying party will hold the party to be indemnified harmless from and
against any and all damages arising out of any settlement approved by such
indemnifying party or any judgment in connection with such claim or litigation.
Notwithstanding the assumption of the defense of any claim by an indemnifying
party pursuant to this paragraph, the party to be indemnified shall have the
right to approve the terms of any settlement of a claim (which approval shall
not be unreasonably withheld or delayed). Notwithstanding anything to the
contrary contained herein, an indemnifying party will not be liable for any
settlement of a claim effected without its prior written consent.
Section 7.5. Cooperation. The indemnifying party and the party to be
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indemnified shall cooperate in furnishing evidence and testimony and in any
other manner which the other may reasonably request, and shall in all other
respects have an obligation of good faith dealing, one to the other, so as not
to unreasonably expose the other to an undue risk of loss. The party to be
indemnified shall be entitled to reimbursement for out-of-pocket expenses
reasonably incurred by it in connection with such cooperation. Except for fees
and expenses for which indemnification is provided pursuant to Sections 7.01 or
7.02 hereof, as the case may be, and as provided in the preceding sentence, each
party shall bear its own fees and expenses incurred pursuant to this Section
7.05.
Section 8.
Miscellaneous
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Section 8.1. Table of Contents and Headings. The table of contents and
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the descriptive headings of the several subsections and sections of this
Agreement are inserted for convenience only and do not constitute part of this
Agreement.
Section 8.2. The Insurance Manager as Independent Contractor. Except to
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the extent specifically set forth in this Agreement, all of the functions,
duties and services performed by the Insurance Manager under this Agreement
shall be performed by the Insurance Manager as an independent contractor and not
as agent of the Company.
Section 8.3. Relations Among Parties. The parties intend, in entering
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into this Agreement, that the Insurance Manager is an independent contractor and
that no partnership relationship exists among the Insurance Manager and the
Company; that the Insurance Manager 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 Insurance Manager, in its capacity as
such, does not, except as specifically set forth in this Agreement, have the
authority to bind the Company; that the Company, as such, does not have
liability for the acts of the Insurance Manager; and that any fees or other
compensation payable by the Company to the Insurance Manager are ordinary and
necessary business expenses of the Company.
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Section 8.4. Governing Law. This Agreement shall be in all respects
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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.
Section 8.5. Notices. Any notice, certificate, document, acceptance or
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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 the Company: General American Railcar Corporation II
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
If the Insurance Manager: General American Transportation Corporation
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
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.
Section 8.6. Entire Agreement; Amendment; Waivers. This Agreement
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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 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.
Section 8.7. Assignment.
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(a) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
Except as otherwise provided in Section 6.03, the Insurance Manager will not,
without the prior written consent of the Lessors and the Indenture Trustees
(which consent shall not be unreasonably withheld), assign any of its rights
hereunder, except as provided herein and in the Participation Agreement;
provided that the Insurance Manager may assign any or all of its rights and/or
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obligations hereunder without any
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such consent to (i) any Person which shall consolidate with the Insurance
Manager, which the Insurance Manager shall merge into or to which the Insurance
Manager shall convey, transfer or lease all or substantially all of its assets,
or (ii) any corporation which is an Affiliate of the Insurance Manager; provided
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further that in the case of an assignment to an Affiliate, (a) the Insurance
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Manager shall have received an instrument or instruments reasonably satisfactory
to it, the Owner Participant and the Indenture Trustee under which such
Affiliate assumes the obligations of the Insurance Manager hereunder, and (b)
the Insurance Manager irrevocably and unconditionally guarantees, pursuant to an
agreement in form and substance reasonably satisfactory to the Lessor, the Owner
Participant and the Indenture Trustee, such assignee's performance of all of
such obligations as primary obligor and not as a surety.
(b) The Insurance Manager and the Company hereby confirm that
concurrently with the execution and delivery of this Agreement, (i) the Company
has executed and delivered to the Owner Trustee the Intercreditor Agreement
which, among other things, assigns as collateral security and grants a security
interest in favor of the Collateral Agent in the rights of the Company hereunder
for the benefit of, among others, the Owner Trustees and (ii) each of the Owner
Trustees has executed and delivered to the related Indenture Trustee an
Indenture which assigns as collateral security and grants a security interest in
favor of such Indenture Trustee in the rights of such Owner Trustee under the
Intercreditor Agreement, all as more explicitly set forth in the Intercreditor
Agreement and the Indentures. The Company agrees that it shall not otherwise
assign or convey its right, title and interest in and to this Agreement except
as expressly permitted by and subject to the provisions of the Participation
Agreements.
Section 8.8. Further Assurances. If at any time the parties hereto
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shall consider or be advised that any further assignments, conveyances or
assurances are necessary or desirable to carry out the provisions hereof and the
transactions contemplated hereby, the parties hereto shall execute and deliver
any and all documents, instruments, contracts, leases, assignments and
assurances and do all things necessary or proper to carry out fully the
provisions hereof.
Section 8.9. Third Party Beneficiary. The Company and the Insurance
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Manager hereby agree that the Collateral Agent, each Owner Trustee, each
Participant, any Indenture Trustee and any Indemnified Party referred to in
Section 7.1 shall each be a third party beneficiary of this Agreement.
Section 8.10. Counterparts. This Agreement may be executed in two or
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more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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Section 8.11. Severability. Any provision of this Agreement that may be
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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 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
binding 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.
Section 8.12. No Petition in Bankruptcy. The Insurance Manager hereby
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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
Insurance Manager 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.
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IN WITNESS WHEREOF, the Company and the Insurance Manager 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:________________________________
14
