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Title: |
Equipment Lease Agreement |
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Entities: |
First National Bank of Chicago; GATX Corp.; Morgan Stanley & Co. Inc.; Salomon Smith Barney Inc.; Smith Barney Inc.; Wilmington Trust Co.; Garc II 98-A Railcar Trust; General American Railcar Corp. II |
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Date: |
1998 |
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Size: |
Preview shows 20KB of 255KB total |
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Price: |
$71 |
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ID: |
#132094 |
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EQUIPMENT LEASE AGREEMENT
(GARC II 98-A)
Dated as of September 1, 1998
between
GARC II 98-A RAILCAR TRUST,
By: Wilmington Trust Company,
not in its individual capacity except as
expressly provided herein but solely as Owner Trustee,
Lessor
and
GENERAL AMERICAN RAILCAR CORPORATION II,
Lessee
Tank Cars and Covered Hopper Cars
-------------------------
CERTAIN OF THE RIGHT, TITLE AND INTEREST OF LESSOR IN AND TO THIS LEASE,
THE EQUIPMENT COVERED HEREBY AND THE RENT DUE AND TO BECOME DUE HEREUNDER HAVE
BEEN ASSIGNED AS COLLATERAL SECURITY TO, AND ARE SUBJECT TO A SECURITY INTEREST
IN FAVOR OF, STATE STREET BANK AND TRUST COMPANY, NOT IN ITS INDIVIDUAL CAPACITY
BUT SOLELY AS INDENTURE TRUSTEE UNDER A TRUST INDENTURE AND SECURITY AGREEMENT
(GARC II 98-A), DATED AS OF SEPTEMBER 1, 1998 BETWEEN SAID INDENTURE TRUSTEE, AS
SECURED PARTY, AND LESSOR, AS DEBTOR. INFORMATION CONCERNING SUCH SECURITY
INTEREST MAY BE OBTAINED FROM THE INDENTURE TRUSTEE AT ITS ADDRESS SET FORTH IN
SECTION 20 OF THIS LEASE. SEE SECTION 25.2 FOR INFORMATION CONCERNING THE RIGHTS
OF THE ORIGINAL HOLDER AND HOLDERS OF THE VARIOUS COUNTERPARTS HEREOF
-------------------------
{PAGE}
TABLE OF CONTENTS
-----------------
{TABLE}
{CAPTION}
Page
{S} {C}
SECTION 1. Definitions......................................................... 1
SECTION 2. Acceptance and Leasing of Equipment................................. 1
SECTION 3. Term and Rent....................................................... 1
Section 3.1. Lease Term......................................... 1
Section 3.2. Basic Rent......................................... 2
Section 3.3. Supplemental Rent.................................. 2
Section 3.4. Adjustment of Rent................................. 3
Section 3.5. Manner of Payments................................. 3
SECTION 4. Ownership and Marking of Equipment.................................. 3
Section 4.1. Retention of Title................................. 3
Section 4.2. Duty to Number and Mark Equipment.................. 4
Section 4.3. Prohibition Against Certain Designations........... 4
SECTION 5. Disclaimer of Warranties............................................ 5
Section 5.1. Disclaimer of Warranties........................... 5
SECTION 6. Return of Equipment; Storage........................................ 6
Section 6.1. Return; Holdover Rent.............................. 6
Section 6.2. Condition of Equipment............................. 8
SECTION 7. Liens............................................................... 9
SECTION 8. Maintenance; Possession; Compliance with Laws....................... 9
Section 8.1. Maintenance and Operation.......................... 9
Section 8.2. Possession and Use................................. 10
Section 8.3. Sublease........................................... 11
SECTION 9. Modifications....................................................... 12
Section 9.1. Required Modifications............................. 12
Section 9.2. Optional Modifications............................. 13
Section 9.3. Removal of Property; Replacements.................. 13
SECTION 10. Voluntary Termination............................................... 14
Section 10.1. Right of Termination............................... 14
Section 10.2. Sale of Equipment.................................. 15
Section 10.3. Retention of Equipment by Lessor................... 16
Section 10.4. Termination of Lease............................... 17
Section 10.5. Funding of Accounts on Termination................. 17
{/TABLE}
{PAGE}
TABLE OF CONTENTS (cont'd)
-----------------
{TABLE}
{CAPTION}
Page
----
{S} {C}
SECTION 11. Loss, Destruction, Requisition, Etc..................................... 17
Section 11.1. Event of Loss.......................................... 17
Section 11.2. Replacement or Payment upon Event of Loss.............. 18
Section 11.3. Rent Termination....................................... 19
Section 11.4. Disposition of Equipment; Replacement of Unit.......... 20
Section 11.5. Eminent Domain......................................... 21
SECTION 12. Insurance............................................................... 22
Section 12.1. Insurance.............................................. 22
Section 12.2. Physical Damage Insurance.............................. 23
Section 12.3. Public Liability Insurance............................. 24
Section 12.4. Certificate of Insurance............................... 25
Section 12.5. Additional Insurance................................... 26
Section 12.6. Post Lease Term Insurance.............................. 26
SECTION 13. Reports; Inspection..................................................... 27
Section 13.1. Duty of Lessee to Furnish.............................. 27
Section 13.2. Lessor's Inspection Rights............................. 27
SECTION 14. Lease Events of Default................................................. 28
SECTION 15. Remedies................................................................ 30
Section 15.1. Remedies............................................... 30
Section 15.2. Cumulative Remedies.................................... 33
Section 15.3. No Waiver.............................................. 33
Section 15.4. Notice of Lease Default................................ 33
Section 15.5. Lessee's Duty to Return Equipment Upon Default......... 33
Section 15.6. Specific Performance; Lessor Appointed Lessee's Agent.. 34
SECTION 16. Filings; Further Assurances............................................. 35
Section 16.1. Filings................................................ 35
Section 16.2. Further Assurances..................................... 35
Section 16.4. Expenses............................................... 35
SECTION 17. Lessor's Right to Perform............................................... 36
SECTION 18. Assignment.............................................................. 36
Section 18.1. Assignment by Lessor................................... 36
Section 18.2. Assignment by Lessee................................... 36
Section 18.3. Sublessee's or Others Performance and Rights........... 36
{/TABLE}
ii
{PAGE}
TABLE OF CONTENTS (cont'd)
-----------------
{TABLE}
{CAPTION}
Page
----
{S} {C}
SECTION 19. Net Lease, etc............................................................. 37
SECTION 20. Notices.................................................................... 38
SECTION 21. Concerning the Indenture Trustee........................................... 39
Section 21.1. Limitation of the Indenture Trustee's Liabilities......... 39
Section 21.2. Right, Title and Interest of the Indenture Trustee Under
Lease..................................................... 39
SECTION 22. Purchase Options; Renewal Options; and Deemed Renewals..................... 40
Section 22.1. Early Purchase Option..................................... 40
Section 22.2. Election to Retain or Return Equipment at End of Basic or
Renewal Term.............................................. 41
Section 22.3. Purchase Option........................................... 42
Section 22.4. Renewal Option............................................ 42
Section 22.5. Rent; Appraisal; Outside Renewal Date..................... 43
Section 22.6. Stipulated Loss Value and Termination Value During
Renewal Term.............................................. 44
Section 22.7. Deemed Renewals........................................... 44
Section 22.8. Funding of Accounts on Purchase........................... 44
SECTION 23. Limitation of Lessor's Liability........................................... 44
SECTION 24. Investment of Security Funds............................................... 45
SECTION 25. Miscellaneous.............................................................. 45
Section 25.1. Governing Law; Severability............................... 45
Section 25.2. Execution in Counterparts................................. 45
Section 25.3. Headings and Table of Contents; Section References........ 45
Section 25.4. Successors and Assigns.................................... 45
Section 25.5. True Lease................................................ 46
Section 25.6. Amendments and Waivers.................................... 46
Section 25.7. Survival.................................................. 46
Section 25.8. Business Days............................................. 46
Section 25.9. Directly or Indirectly; Performance by Managers........... 46
Section 25.10. Incorporation by Reference................................ 47
{/TABLE}
iii
{PAGE}
TABLE OF CONTENTS (cont'd)
-----------------
{TABLE}
{CAPTION}
Page
----
APPENDICES AND EXHIBITS
{S} {C}
Exhibit A -- Form of Lease Supplement............................................. A-1
Appendix A -- Definitions
{/TABLE}
iv
{PAGE}
EQUIPMENT LEASE AGREEMENT
(GARC II 98-A)
This Equipment Lease Agreement (GARC II 98-A), dated as of September 1,
1998 (this "Lease"), is by and between GARC II 98-A Railcar Trust by Wilmington
Trust Company, not in its individual capacity except as expressly provided
herein (in its individual capacity referred to as "WTC"), but solely as trustee
under the Trust Agreement ("Lessor"), and General American Railcar Corporation
II, a Delaware corporation ("Lessee").
In consideration of the mutual agreements herein contained and other good
and valuable consideration, receipt of which is hereby acknowledged, the parties
hereto agree as follows:
SECTION 1. Definitions.
-----------
Unless otherwise defined herein or required by the context, all capitalized
terms used herein shall have the respective meanings assigned to such terms in
Appendix A hereto for all purposes of this Lease.
SECTION 2. Acceptance and Leasing of Equipment.
-----------------------------------
Lessor hereby agrees (subject to satisfaction or waiver of the conditions
set forth in Sections 4.1 and 4.3 of the Participation Agreement) to accept
delivery of each Unit from Lessee and to lease such Unit to Lessee hereunder,
and Lessee hereby agrees (subject to satisfaction or waiver of the conditions
set forth in Section 4.4 of the Participation Agreement), immediately following
such acceptance by Lessor, to lease from Lessor hereunder such Unit, such
acceptance by Lessor and lease by Lessee to be evidenced by the execution and
delivery by Lessee and Lessor of a Lease Supplement covering such Unit, all in
accordance with Section 2.3(b) of the Participation Agreement. Lessee hereby
agrees that its execution and delivery of a Lease Supplement covering any Unit
shall, without further act, irrevocably constitute acceptance by Lessee of such
Unit for all purposes of this Lease.
SECTION 3. Term and Rent.
-------------
Section 3.1 Lease Term. The basic term of this Lease (the "Basic Term")
----------
shall commence on the Basic Term Commencement Date and, subject to earlier
termination pursuant to Section 10, 11, 15 or 22.1, shall expire at 11:59 p.m.
(Chicago, Illinois time) on the Basic Term Expiration Date. Subject and
pursuant to Section 22.4, Lessee may elect one or more Renewal Terms and, as
provided in Section 22.7 hereof, in certain circumstances a Renewal Term shall
be deemed to have occurred with respect to some or all of the Units.
{PAGE}
Section 3.2 Basic Rent. Lessee hereby agrees to pay Lessor Basic Rent
----------
for each Unit throughout the Basic Term applicable thereto in consecutive
monthly installments payable on each Rent Payment Date. Each such monthly
payment of Basic Rent shall be in an amount equal to the product of the
Equipment Cost for such Unit multiplied by the Basic Rent percentage for such
Unit set forth opposite such Rent Payment Date on Schedule 3 to the
Participation Agreement (as such Schedule 3 shall be adjusted pursuant to
Section 2.6 of the Participation Agreement). Basic Rent shall be payable in
advance on certain Rent Payment Dates and in arrears on certain Rent Payment
Dates, as specified in Schedule 3 to the Participation Agreement, as so
adjusted, such Schedule 3 as so adjusted from time to time being incorporated
herein by reference. Each installment of Basic Rent that is indicated as
payable in advance will be allocated over the month beginning on the Rent
Payment Date on which such advance payment is scheduled to be made, and each
installment of Basic Rent that is indicated as payable in arrears will be
accrued over the month ending on the Rent Payment Date on which such arrears
payment is scheduled to be made. It is the intention of Lessor and Lessee that
the allocations of Basic Rent set forth on Schedule 3 to the Participation
Agreement constitute specific allocations of fixed rent within the meaning of
Prop. Treas. Reg. (S) 1.467-1 (c)(2)(ii).
Notwithstanding anything to the contrary contained herein or in the
Participation Agreement, each installment of Basic Rent (both before and after
any adjustment pursuant to Section 2.6 of the Participation Agreement) shall be,
under any circumstances and in any event, in an amount at least sufficient for
Lessor to pay in full as of the due date of such installment, any payment of
principal of and interest on the Equipment Notes required to be paid by Lessor
pursuant to the Indenture on such due date in accordance with the Scheduled
Amortization.
Section 3.3 Supplemental Rent. Lessee also agrees to pay to Lessor, or
-----------------
to whomsoever shall be entitled thereto, any and all Supplemental Rent, promptly
as the same shall become due and owing, or where no due date is specified,
promptly after demand by the Person entitled thereto, and in the event of any
failure on the part of Lessee to pay any Supplemental Rent, Lessor shall have
all rights, powers and remedies provided for herein or by law or equity or
otherwise as in the case of nonpayment of Basic Rent. Lessee will also pay, as
Supplemental Rent, (i) on demand, to the extent permitted by applicable law, an
amount equal to Late Payment Interest on any part of any installment of Basic
Rent not paid when due for any period for which the same shall be overdue and on
any payment of Supplemental Rent not paid when due or demanded, as the case may
be, for the period from such due date or demand until the same shall be paid,
(ii) as and when due in accordance with the Trust Indenture or the Participation
Agreement, any Make-Whole Amount payable with respect to any Equipment Note,
including, without limitation, amounts of Make-Whole Amount due in the case of
the termination of this Lease with respect to any Unit pursuant to Section 10,
in the case of the purchase of any Unit pursuant to Section 22.1 or Section 6.9
of the Participation Agreement, and in the case of any refinancing of the
Equipment Notes pursuant to Section 10.2 of the Participation Agreement and
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