LOAN AND SECURITY AGREEMENT dated as of August 30, 2016 among

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“Anti-Terrorism Order” shall mean Executive Order 13224, signed by President ▇▇▇▇▇▇ ▇. ▇▇▇▇ on September 24, 2001.

 

“Applicable Lending Office” shall mean, for each Lender, the “Lending Office” of such Lender (or an Affiliate of such Lender) designated in the Administrative Questionnaire submitted by such Lender or such other office of such Lender (or such Affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office by which its Term Loan is to be made and maintained.

 

“Approved Fund” shall mean any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers or manages a Lender.

 

“Approved Lease” shall mean the leases described on Schedule III, as now or hereafter amended, renewed, extended or replaced with a lease to an Approved Lessee..

 

“Approved Lessee” shall mean:  Schlumberger Technology Corporation; ExxonMobil Chemical, a Division of ExxonMobil Corporation; SSAB Enterprises, LLC; Argos Cement LLC; and Badger Mining Corporation; and their successors and assigns (subject to the prior consent of the Administrative Agent); and (with notice to the Administrative Agent) a Person having a senior secured credit rating or whose lease obligations are guaranteed by a Person having a senior secured credit rating of BB or higher by Standard & Poor’s Ratings Group, BB or higher by Fitch Ratings, Inc., or Ba2 or higher by ▇▇▇▇▇’▇ Investor Service;  and a Person approved by the Required Lenders.

 

“Assignment and Acceptance” shall mean an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 10.4(b)) and accepted by the Administrative Agent, in the form of Exhibit A attached hereto or any other form approved by the Administrative Agent.

 

“Beneficial Owner” shall mean, with respect to any amount paid hereunder or under any other Loan Document, the Person that is the beneficial owner, for U.S. federal income tax purposes, of such payment.

 

“Borrower” shall have the meaning set forth in the introductory paragraph hereof.

 

“Business Day” shall mean any day other than a Saturday, Sunday or legal holiday on which banks in New York and Utah are open for the conduct of their commercial banking business.

 

“Capital Stock” shall mean all shares, options, warrants, general or limited partnership interests, membership interests or other equivalents (regardless of how designated) of or in a corporation, partnership, limited liability company or equivalent entity whether voting or nonvoting, including common stock, preferred stock or any other “equity security” (as such term is defined in Rule 3a11‑1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Exchange Act).

 

“Capitalized Leases” shall mean leases under which any Guarantor or any of its Subsidiaries is the lessee or obligor, the discounted future rental payment obligations under which are required to be capitalized on the balance sheet of the lessee or obligor in accordance with GAAP.

 

“Change in Control” shall mean an event or series of events by which:

(a)

any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) other than the Equity Investors becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of thirty percent (30%) or more of the equity securities of Guarantor entitled to vote for members of the board of directors or equivalent governing body of Guarantor on a fully-diluted basis (and taking into account all such securities that such “person” or “group” has the right to acquire pursuant to any option right);

(b)

during any period of twenty-four (24) consecutive months, a majority of the members of the board of directors or other equivalent governing body of Guarantor cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body, or (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body;

(c)

any Person or two or more Persons acting in concert, other than one or more of the Equity Investors, shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation thereof, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the management or policies of Guarantor or control over the equity securities of Guarantor entitled to vote for members of the board of directors or equivalent governing body of Guarantor on a fully-diluted basis (and taking into account all such securities that such Person or Persons have the right to acquire pursuant to any option right); representing thirty percent (30%) or more of the combined voting power of such securities;

(d)

a “change of control” or any comparable term under any other document or instrument evidencing indebtedness shall have occurred; or

(e)

any event or series of events by which Guarantor shall own, directly or indirectly, less than one hundred percent (100%) of the Capital Stock of Borrower.

“Chattel Paper” shall have the meaning given to such term in the UCC.

 

“Closing Date” shall mean each date on which the conditions precedent set forth in Sections 4.1 and 4.2 have been satisfied or waived in accordance with Section 10.2.

“Code” shall mean the Internal Revenue Code of 1986, as amended and in effect from time to time.

 

“Collateral” shall have the meaning set forth in Section 3.1.

 

“Collateral Documents” shall mean, collectively, the Guaranty, the RGC Memorandum, the STB Memorandum, the Lease Memoranda, and all other instruments and agreements now or hereafter securing or perfecting the Liens securing the whole or any part of the Obligations or any Guarantee thereof, all UCC financing statements, and all other documents, instruments, agreements and certificates executed and delivered by any Loan Party to the Administrative Agent and the Lenders in connection with the foregoing.

 

“Commitment Expiration Date” shall mean December 30, 2016.

 

“Compliance Certificate” shall mean a certificate from the principal executive officer or the principal financial officer of the Borrower in the form of, and containing the certifications set forth in, the certificate attached hereto as Exhibit E.

 

“Consolidated EBITDA” shall mean with respect to any fiscal period, an amount equal to the sum of (a) Consolidated Net Income (or Deficit) of Guarantor and its Subsidiaries for such fiscal period, plus (b) in each case to the extent deducted in the calculation of such Person’s Consolidated Net Income and without duplication, (i) depreciation and amortization for such period, plus (ii) income tax expense for such period, plus (iii) Consolidated Total Interest Expense paid or accrued during such period, plus (iv) other noncash charges for such period, plus (c) principal payments received by Guarantor or any of its Subsidiaries during such period with respect to Direct Finance Leases, all as determined in accordance with GAAP.

“Consolidated EBITDAR” shall mean with respect to any fiscal period of Guarantor and its Subsidiaries, an amount equal to the sum of (a) Consolidated EBITDA for such fiscal period, plus (b) consolidated rental expense on Rental Obligations for such fiscal period, as determined in accordance with GAAP.

“Consolidated Funded Debt” shall mean at any time of determination, with respect to Guarantor and its Subsidiaries, an amount equal to the excess of (1) the sum, without duplication, of (a) the aggregate amount of Indebtedness of Guarantor and its Subsidiaries, on a consolidated basis, relating to (i) the borrowing of money or the obtaining of credit, including the issuance of notes or bonds, (ii) the deferred purchase price of assets (other than trade payables (including trade payables to manufacturers) incurred in the ordinary course of business), (iii) Capitalized Leases, (iv) Rental Obligations, and (v) the maximum drawing amount of all letters of credit outstanding plus (b) Indebtedness of the type referred to in clause (a) of another Person guaranteed by Guarantor or any of its Subsidiaries, in all cases determined in accordance with GAAP, over (2) the amount of cash and short term investments held by or on behalf of Guarantor or any of its Subsidiaries as Restricted Cash pursuant to the terms of a debt instrument entered into in connection with Indebtedness referred to in clauses (a) and (b) above.

“Consolidated Net Income (or Deficit)” shall mean the consolidated net income (or deficit) of Guarantor and its Subsidiaries, after deduction of all expenses, taxes, and other proper charges, determined in accordance with GAAP, after eliminating therefrom all non-recurring non-cash gains or losses and any unrealized adjustment, whether positive or negative, resulting from Interest Rate Protection Agreements or Swap Contracts in respect of currency hedging entered into in the ordinary course of business.

“Consolidated Operating Cash Flow” shall mean with respect to any fiscal period of Guarantor and its Subsidiaries, an amount equal to (i) Consolidated EBITDAR for such fiscal period minus (ii) cash income taxes paid or payable in such fiscal period.

“Consolidated Tangible Net Worth” shall mean as of any date of determination, at all times in accordance with GAAP, for Guarantor and its Subsidiaries on a consolidated basis, Shareholders’ Equity of Guarantor and its Subsidiaries on such date minus the Intangible Assets of Guarantor and its Subsidiaries on such date; provided that the calculation of Consolidated Tangible Net Worth shall exclude any unrealized adjustments, whether positive or negative, resulting from Interest Rate Protection Agreements or Swap Contracts in respect to currency hedging entered into in the ordinary course of business.

“Consolidated Total Debt Service” shall mean with respect to Guarantor and its Subsidiaries and for any Reference Period, the sum, without duplication, of (a) any and all repayments or prepayments of principal during such period in respect to Indebtedness that become due and payable or that are to become due and payable during such period pursuant to any agreement or instrument to which Guarantor or any of its Subsidiaries is a party relating to (i) the borrowing of money or the obtaining of credit, including the issuance of notes or bonds, (ii) the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business), (iii) in respect of any Synthetic Leases or any Capitalized Leases, (iv) in respect of any reimbursement obligations in respect of letters of credit due and payable during such period, and (v) Indebtedness of the type referred to above of another Person guaranteed by Guarantor or any of its Subsidiaries; provided, however, that there shall be excluded from amount described in clause (a) any payment during such Reference Period to refinance such Indebtedness through the issuance or incurrence of additional Indebtedness permitted pursuant hereto, including refinancing through borrowing under existing credit facilities, plus (b) Consolidated Total Interest Expense paid or payable in cash during such Reference Period, plus (c) consolidated rental expense on Rental Obligations for such period as determined in accordance with GAAP.

“Consolidated Total Interest Expense” shall mean for any period, the aggregate amount of interest required to be paid or accrued by Guarantor or any of its Subsidiaries during such period on all Indebtedness of Guarantor or such Subsidiary outstanding during all or any part of such period, whether such interest was or is required to be reflected as an item of expense or capitalized, including payments consisting of interest in respect of any Capitalized Lease or Synthetic Lease, and including commitment fees, agency fees, facility fees, balance deficiency fees and similar fees or expenses in connection with the borrowing of money, all as determined in accordance with GAAP.

 

“Contractual Obligation” of any Person shall mean any provision of any security issued by such Person or of any agreement, instrument or undertaking under which such Person is obligated or by which it or any of the property in which it has an interest is bound.

 

“Credit Agreement” shall mean that certain Second Amended and Restated Revolving Credit Agreement dated as of October 22, 2015, by and among Borrower, Guarantor, the Lenders listed on Schedule 1 thereto, MUFG Union Bank, N.A., as Administrative Agent, MUFG Union Bank, N.A. and Bank of America, N.A., as Joint Lead Arrangers and Joint Bookrunners, Bank of America, N.A., as Syndication Agent, and ING Bank, a Branch of ING-DIBA AG and Huntington National Bank, as Co-Documentation Agents, as now or hereafter amended, and any replacement thereof

 

“Debtor Relief Laws” shall mean the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.

“Default” shall mean any condition or event that, with the giving of notice or the lapse of time or both, would constitute an Event of De-fault.

 

“Default Interest” shall have the meaning set forth in Section 2.7(b).

 

“Designated Location” shall mean, at the Administrative Agent’s option, (a) such location(s) or interchange point(s) designated by the Administrative Agent, and/or (b) a storage location pursuant to Section 8.2 hereof.

 

“Direct Finance Lease” shall mean a lease classified as a direct finance or direct financing lease in accordance with GAAP.

 

“Dollar(s)” and the sign “$” shall mean lawful money of the United States.

 

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

 

“Environmental Liability” shall mean any liability, contingent or otherwise (including any liability for damages, costs of environmental investigation and remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), of the Borrower directly or indirectly resulting from or based upon (i) any actual or alleged violation of any Environmental Law, (ii) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (iii) any actual or alleged exposure to any Hazardous Materials, (iv) the Release or threatened Release of any Hazardous Materials or (v) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“Equity Investors” shall mean ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, members of his immediate family and trusts established for the benefit of ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and members of his immediate family, senior executives of the Loan Parties, and members of the Board of Directors of the Loan Parties.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute and the regulations promulgated and rulings issued thereunder.

 

“ERISA Affiliate” shall mean any Person that for purposes of Title I or Title IV of ERISA or Section 412 of the Code would be deemed at any relevant time to be a “single employer” or otherwise aggregated with the Borrower under Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.

“ERISA Event” shall mean (i) any “reportable event” as defined in Section 4043 of ERISA with respect to a Plan (other than an event as to which the PBGC has waived under subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043 the requirement of Section 4043(a) of ERISA that it be notified of such event); (ii) any failure to make a required contribution to any Plan that would result in the imposition of a lien or other encumbrance or the provision of security under Section 430 of the Code or Section 303 or 4068 of ERISA, or the arising of such a lien or encumbrance, there being or arising any “unpaid minimum required contribution” or “accumulated funding deficiency” (as defined or otherwise set forth in Section 4971 of the Code or Part 3 of Subtitle B of Title 1 of ERISA), whether or not waived, or any filing of any request for or receipt of a minimum funding waiver under Section 412 of the Code or Section 303 of ERISA with respect to any Plan or Multiemployer Plan, or that such filing may be made, or any determination that any Plan is, or is expected to be, in at-risk status under Title IV of ERISA; (iii) any incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to any Plan or Multiemployer Plan (other than for premiums due and not delinquent under Section 4007 of ERISA); (iv) any institution of proceedings, or the occurrence of an event or condition which would reasonably be expected to constitute grounds for the institution of proceedings by the PBGC, under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan; (v) any incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan, or the receipt by the Borrower or any of its ERISA Affiliates of any notice that a Multiemployer Plan is in endangered or critical status under Section 305 of ERISA; (vi) any receipt by the Borrower or any of its ERISA Affiliates of any notice, or any receipt by any Multiemployer Plan from the Borrower or any of its ERISA Affiliates of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA; (vii) engaging in a non-exempt prohibited transaction within the meaning of Section 4975 of the Code or Section 406 of ERISA; or (viii) any filing of a notice of intent to terminate any Plan if such termination would require material additional contributions in order to be considered a standard termination within the meaning of Section 4041(b) of ERISA, any filing under Section 4041(c) of ERISA of a notice of intent to terminate any Plan, or the termination of any Plan under Section 4041(c) of ERISA.

 

“Event of Default” shall have the meaning set forth in Section 8.1.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended and in effect from time to time.

 

“Excluded Payments” shall mean payments under an Approved Lease to indemnify Borrower and reimburse Borrower for taxes, maintenance expense and other indemnified expenses, to the extent incurred by or on behalf of Borrower.

 

“Excluded Taxes” shall mean, with respect to any Recipient (or, if such Recipient is not the Beneficial Owner, the Beneficial Owner) of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) the Recipient’s (or Beneficial Owner’s) net income by the United States, by the jurisdiction under the laws of which such Recipient (or Beneficial Owner) is organized or in which its principal office is located or, in the case of any Lender, in which its Applicable Lending Office is located, or other jurisdiction as a result of a present or former connection between the Recipient (or Beneficial Owner) and the jurisdiction imposing such tax, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which such Recipient (or Beneficial Owner) is located or with which such Recipient (or Beneficial Owner) has a present or former connection, and (c) any withholding taxes that (i) are imposed on amounts payable to such Recipient (or Beneficial Owner) at the time such Recipient (or Beneficial Owner) becomes a Recipient (or Beneficial Owner) under this Agreement or designates a new lending office, except in each case to the extent that amounts with respect to such taxes were payable to such Recipient’s (or Beneficial Owner’s) assignor immediately before such Recipient (or Beneficial Owner) became a Recipient (or Beneficial Owner) under this Agreement, or (ii) are attributable to such Recipient’s (or Beneficial Owner’s) failure to comply with Section 2.10(e), and (iv) any taxes, including withholding taxes, that are imposed under FATCA.

 

“Exxon Lease” shall have the meaning set forth in Schedule III.

 

“FATCA” shall mean Sections 1471 through 1474 of the Code as of the date of this Agreement and any current or future regulations or official interpretations thereof.

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

 

“Fiscal Quarter” shall mean any fiscal quarter of the Borrower or any other Loan Party, as applicable.

 

“Fiscal Year” shall mean any fiscal year of the Borrower or any other Loan Party, as applicable.

 

“Foreign Person” shall mean any Person that is not a U.S. Person.

 

“FRA” shall mean the Federal Railroad Administration.

 

“GAAP” shall mean generally accepted accounting principles in the United States applied on a consistent basis and subject to the terms of Section 1.2.

 

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

 

“Guarantee” of or by any Person (the “guarantor”) shall mean any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly and including any obligation, direct or indirect, of the guarantor (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (ii) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (iv) as an account party in respect of any letter of credit or letter of guaranty issued in support of such Indebtedness or obligation; provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business.  The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or, if not so stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.  The term “Guarantee” used as a verb has a corresponding meaning.

 

“Guarantor” shall mean CAI International, Inc. and its successors and permitted assigns.

 

“Guaranty” shall mean the Agreement of Guaranty, dated as of the date hereof and substantially in the form of Exhibit B, made by Guarantor in favor of the Administrative Agent for the benefit of the Lenders.

“Hazardous Materials” shall mean any hazardous waste, as defined by 42 U.S.C. §6903(5), any hazardous substances as defined by 42 U.S.C. §9601(14), any pollutant or contaminant as defined by 42 U.S.C. §9601(33) and any toxic substances, oil or hazardous materials or other chemicals or substances regulated by any Environmental Law.

 

 “Indebtedness” of any Person and whether recourse is secured by or is otherwise available against all or only a portion of the assets of such Person and whether or not contingent, but without duplication:

(a)	every obligation of such Person for money borrowed,

(b)	every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses,

(c)	every reimbursement obligation of such Person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such Person,

(d)

every obligation of such Person issued or assumed as the deferred purchase price of property or services (including securities repurchase agreements but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business which are not overdue or which are being contested in good faith),

(e)	every obligation of such Person under any Capitalized Lease,

(f)	every obligation of such Person under any Synthetic Lease,

(g)

all sales by such Person of (i) accounts or general intangibles for money due or to become due, (ii) chattel paper, instruments or documents creating or evidencing a right to payment of money or (iii) other receivables (collectively “receivables”), whether pursuant to a purchase facility or otherwise, other than in connection with the disposition of the business operations of such Person relating thereto or a disposition of defaulted receivables for collection and not as a financing arrangement, and together with any obligation of such Person to pay any discount, interest, fees, indemnities, penalties, recourse, expenses or other amounts in connection therewith,

(h)	every obligation of such Person (an “equity related purchase obligation”) to purchase, redeem, retire or otherwise acquire for value any shares of Capital Stock issued by such Person or any rights measured by the value of such Capital Stock,

(i)

every obligation of such Person under any forward contract, futures contract, swap, option or other financing agreement or arrangement (including, without limitation, caps, floors, collars, and similar agreements), the value of which is dependent upon interest rates, currency exchange rates, commodities or other indices (a “derivative contract”), including the obligation of such Person under a Swap Contract or an Interest Rate Protection Agreement,

(j)

every obligation in respect of Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent that such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent that the terms of such Indebtedness provide that such Person is not liable therefor and such terms are enforceable under applicable law,

(k)

every obligation, contingent or otherwise, of such Person guaranteeing, or having the economic effect of guarantying or otherwise acting as surety for, any obligation of a type described in any of clauses (a) through (j) (the “primary obligation”) of another Person (the “primary obligor”), in any manner, whether directly or indirectly, and including, without limitation, any obligation of such Person (i) to purchase or pay (or advance or supply funds for the purchase of) any security for the payment of such primary obligation, (ii) to purchase property, securities or services for the purpose of assuring the payment of such primary obligation, or (iii) to maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such primary obligation, and

(l)	all Rental Obligations of such Person;

provided, however, that, for the avoidance of doubt, any trade payables owing to manufacturers incurred in the ordinary course of business that is not delinquent shall not be deemed Indebtedness for the purposes of this definition.

The “amount” or “principal amount” of any Indebtedness at any time of determination represented by (i) any Indebtedness, issued at a price that is less than the principal amount at maturity thereof, shall be the amount of the liability in respect thereof determined in accordance with GAAP, (ii) any Capitalized Lease shall be the principal component of the aggregate of the rental obligation under such Capitalized Lease payable over the term thereof that is not subject to termination by the lessee, (iii) any sale of receivables shall be the amount of unrecovered capital or principal investment of the purchaser (other than the Borrower of any of its wholly-owned Subsidiaries) thereof, excluding amounts representative of yield or interest earned on such investment, (iv) any Synthetic Lease shall be the stipulated loss value, termination value or other equivalent amount, (v) any derivative contract shall be the maximum amount of any termination of loss payment required to be paid by such Person if such derivative contract were, at the time of determination, to be terminated by reason of any event of default or early termination event thereunder, whether or not such event of default or early termination event has in fact occurred, (vi) any equity related purchase obligation shall be the maximum fixed redemption or purchase price thereof inclusive of any accrued and unpaid dividends to be comprised in such redemption or purchase price, and (vii) any guaranty or other contingent liability referred to in clause (k) shall be an amount equal to the stated or determinable amount of the primary obligation in respect of which such guaranty or other contingent obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

 

“Intangible Assets” shall mean assets that are considered to be intangible assets under GAAP, including customer lists, goodwill, computer software, copyrights, trade names, trademarks, patents, franchises, licenses, unamortized deferred charges, unamortized debt discount and capitalized research and development costs.

 

“Interest Rate Protection Agreement” shall mean any agreement entered into between the Borrower, on one hand, and the Administrative Agent, any Lender (or an Affiliate of a Lender), on the other, that relates to an interest rate swap, cap, collar, or other interest rate hedging mechanism which agreement states that it relates to interest payable on the Indebtedness evidenced by this Agreement.

“Lease Memoranda” shall mean, collectively, a Memorandum of Lease Agreement filed with the Registrar General of Canada pursuant to Section 105 of the Canada Transportation Act or filed with the Surface Transportation Board pursuant to 48 U.S.C. §11301, with respect to each Approved Lease, in form and substance satisfactory to the Lenders.

“Lenders” shall have the meaning set forth in the introductory paragraph hereof.

 

“Lien” shall mean any mortgage, pledge, security interest, lien (statutory or otherwise), charge, encumbrance, hypothecation, assignment, deposit arrangement, or other arrangement having the practical effect of any of the foregoing or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having the same economic effect as any of the foregoing).

 

“Loan Documents” shall mean, collectively, this Agreement, the Term Notes, the Collateral Documents, all Compliance Certificates, and any and all other instruments, agreements, documents and writings executed in connection with any of the foregoing.

 

“Loan Parties” shall mean the Borrower and the Guarantor.

 

“Material Adverse Effect” shall mean, with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singularly or in conjunction with any other event or events, act or acts, condition or conditions, occurrence or occurrences whether or not related, resulting in a material adverse change in, or a material adverse effect on, (i) the ability of the Loan Parties to perform any of their respective obligations under the Loan Documents, (ii) the rights and remedies of the Administrative Agent or the Lenders under any of the Loan Documents or (iii) the legality, validity or enforceability of any of the Loan Documents.

 

“Material Indebtedness” shall mean any Indebtedness (other than the Term Loans) of any Person individually or in an aggregate committed or outstanding principal amount exceeding $20,000,000.

 

“Maturity Date” shall mean the earlier of the date specified as the Maturity Date in the Term Note, and (ii) the date on which the principal amount of all outstanding Term Loans have been declared or automatically have become due and payable (whether by acceleration or otherwise).

 

“Multiemployer Plan” shall mean any “multiemployer plan” as defined in Section 4001(a)(3) of ERISA, which is contributed to by (or to which there is or may be an obligation to contribute of) the Borrower or an ERISA Affiliate of the Borrower, and each such plan for the five-year period immediately following the latest date on which the Borrower or an ERISA Affiliate of the Borrower contributed to or had an obligation to contribute to such plan.

 

“Non-Severable Modification” shall mean any modification or improvement to a Railcar not required pursuant to Section 6.20(a) that is not readily removable without impairing the value, utility or useful life of such Railcar immediately prior to such notification, other than in a de minimis nature.

 

“Non-U.S. Plan” shall mean any plan, fund (including, without limitation, any superannuation fund) or other similar program established, contributed to (regardless of whether through direct contributions or through employee withholding) or maintained outside the United States by the Borrower primarily for the benefit of employees of the Borrower residing outside the United States, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement, or payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code.

“Notice of Assignment” shall mean a Notice of Assignment by Borrower, in substantially the form attached hereto as Exhibit D.

 

“Obligations” shall mean all amounts owing by the Loan Parties to the Administrative Agent or any Lender pursuant to or in connection with this Agreement or any other Loan Document or otherwise with respect to any Term Loan  including, without limitation, all principal, interest (including any interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), Prepayment Fees, reimbursement obligations, fees, expenses, indemnification and reimbursement payments, costs and expenses (including all fees and expenses of counsel to the Administrative Agent and/or any Lender incurred pursuant to this Agreement or any other Loan Document), whether direct or indirect, absolute or contingent, liquidated or unliquidated, now existing or hereafter arising hereunder or thereunder.

 

“OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets Control.

 

“OSHA” shall mean the Occupational Safety and Health Act of 1970, as amended from time to time, and any successor statute.

 

“Other Taxes” shall mean any and all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made hereunder or under any other Loan Document or from the execution, delivery, performance or enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement or any other Loan Document.

 

“Participant” shall have the meaning set forth in Section 10.4(d).

 

“Patriot Act” shall mean the USA PATRIOT Improvement and Reauthorization Act of 2005 (Pub. L. 109-177 (signed into law March 9, 2006)), as amended and in effect from time to time.

 

“Payment Office” shall mean the office of the Administrative Agent located at ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇  ▇▇▇▇▇, or such other location as to which the Administrative Agent shall have given written notice to the Borrower and the other Lenders.

 

“PBGC” shall mean the U.S. Pension Benefit Guaranty Corpora-tion referred to and defined in ERISA, and any successor entity performing similar functions.

 

“Permitted Encumbrances” shall mean:

 

 

 

“Person” shall mean any individual, partnership, firm, corporation, association, joint venture, limited liability company, trust or other entity, or any Governmental Authority.

 

“Plan” shall mean any “employee benefit plan” as defined in Section 3 of ERISA (other than a Multiemployer Plan) maintained or contributed to by either Borrower or any ERISA Affiliate or to which either Borrower or any ERISA Affiliate has or may have an obligation to contribute, and each such plan that is subject to Title IV of ERISA for the five-year period immediately following the latest date on which either Borrower or any ERISA Affiliate maintained, contributed to or had an obligation to contribute to (or is deemed under Section 4069 of ERISA to have maintained or contributed to or to have had an obligation to contribute to, or otherwise to have liability with respect to) such plan.

 

“Prepayment Amount” shall mean collectively, the entire unpaid principal balance of all Term Notes as of any particular date, together with (a) all accrued interest and other charges then owing under such Term Notes, and (b) the Prepayment Fee.

 

“Prepayment Fee” shall mean a fee equal to five percent (5%) of the amount being prepaid if such prepayment occurs prior to the first anniversary of the applicable Term Note to be issued hereunder, four percent (4%) of the amount being prepaid if such prepayment occurs on or after the first anniversary of the applicable Term Note to be issued hereunder but prior to the second anniversary, three percent (3%) of the amount being prepaid if such prepayment occurs on or after the second anniversary of the applicable Term Note to be issued hereunder but prior to the third anniversary, two percent (2%) of the amount being prepaid if such prepayment occurs on or after the third anniversary of the applicable Term Note to be issued hereunder but prior to the fourth anniversary, one percent (1%) of the amount being prepaid if such prepayment occurs on or after the fourth anniversary of the applicable Term Note to be issued hereunder but prior to fourteen (14) days before the fifth anniversary, and zero percent (0%) thereafter; provided, however, that if such prepayment is made as a result of (i) the Lenders’ failure to approve a new or replacement lease for any of the Railcars (other than in connection with Section 2.6(c)), the prepayment fee shall be zero percent (0%) of the amount being prepaid; (ii) the Lenders’ failure to approve the replacement Collateral pursuant to Section 2.6(c), the prepayment fee shall be one percent (1%) of the amount being prepaid; and (iii) a casualty to one or more of the Railcars in a situation where Borrower did not offer a substitute replacement  Railcar in accordance with Section 2.6(a), the prepayment fee shall be one percent (1%) of the amount being prepaid.

 

“Proceeds” shall have the meaning given such term in the Uniform Commercial Code.

“Pro Rata Share” shall mean with respect any Lender at any time, the percentage specified on Schedule I hereto with respect to such Lender.

 

“Railcars” shall mean the railcars (consisting of ▇▇▇▇▇▇ cars and flat cars) described on Schedule IV and all replacements and substitutions thereof and accessions thereto.

 

“Recipient” shall mean, as applicable, (a) the Administrative Agent, and (b) any Lender.

 

“Reference Period” shall mean as of any date of determination with respect to any Person, the period of four (4) consecutive Fiscal Quarters of such Person and its Subsidiaries ending on such date, or if such date is not a Fiscal Quarter end date, the period of four (4) consecutive Fiscal Quarters most recently ended (in each case treated as a single accounting period.

 

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.

 

“Regulation T” shall mean Regulation T of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.

 

“Regulation U” shall mean Regulation U of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.

 

“Regulation X” shall mean Regulation X of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.

 

“Regulation Y” shall mean Regulation Y of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.

 

“Related Parties” shall mean, with respect to any specified Person, such Person’s Affiliates and the respective managers, administrators, trustees, partners, directors, officers, employees, agents, advisors or other representatives of such Person and such Person’s Affiliates.

 

“Release” shall mean any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within any building, structure, facility or fixture.

 

“Rental Obligations” shall mean all present or future obligations of any Guarantor or any of its Subsidiaries under any rental agreements or leases of real or personal property, other than (a) obligations that can be terminated by the giving of notice without liability to Guarantor or such Subsidiary in excess of the liability for rent due as of the date on which such notice is given and under which no penalty or premium is paid as a result of any such termination, (b) obligations under rental agreements relating to equipment other than Equipment having an aggregate value of, in the case of Guarantor, less than Five Million Dollars ($5,000,000) for all such agreements or, in the case of the Borrower and its Subsidiaries, less than Two Million Five Hundred Thousand Dollars ($2,500,000) for all such agreements, (c) obligations in respect of any Capitalized Leases, (d) any obligations incurred in a lease transaction where the obligation of Guarantor or its Subsidiaries to pay rent thereunder is limited to a pass-through of net rental amounts received by Guarantor or its Subsidiaries from a sublessee or container equipment under such transaction (“net sublease rentals”), so that if there are no net sublease rental amounts received by Guarantor or its Subsidiaries from a sublessee then Guarantor or its Subsidiaries would have no obligation to make any rental payment under or in connection with such transaction, shall not constitute a Rental Obligation hereunder; and (e) obligations under the lease of commercial office properties in the conduct of the business of any Guarantor or any of its Subsidiaries shall not be deemed a Rental Obligation hereunder.  For purposes of this Agreement, the aggregate amount of Rental Obligations of Guarantor and its Subsidiaries shall, as at any date of determination, be an amount equal to the net present value, calculated at a discount rate of nine percent (9.00%) per annum, of the future Rental Obligations of such Person.

“Required Lenders” shall mean at any time Lenders holding, in the aggregate, 66⅔% or more of the principal amount of the aggregate outstanding Term Loans at such time.

 

“Requirement of Law” for any Person shall mean the articles or certificate of incorporation, bylaws, partnership certificate and agreement, or limited liability company certificate of organization and agreement, as the case may be, and other organizational and governing documents of such Person, and any law, treaty, rule or regulation, or determination of a Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

“Responsible Officer” shall mean (x) with respect to certifying compliance with the financial covenants set forth in Article VI, the president, chief financial officer or the treasurer of the Borrower and (y) with respect to all other provisions, any of the president, the chief executive officer, the chief operating officer, the chief financial officer, the treasurer or a vice president of the Borrower or such other representative of the Borrower as may be designated in writing by any one of the foregoing with the consent of the Administrative Agent.

 

“Restricted Cash” shall mean the portion of the cash accounts and short term investment accounts classified as such on the annual audited and quarterly unaudited consolidated financial statements of the Borrower or the Guarantor that are related to the payment of debt obligations of Borrower, the Guarantor or their respective Subsidiaries and are classified as (a) a restricted cash account held by a securitization entity as part of a permitted securitization or (b) without duplication of clause (a), cash held by variable interest entities that have been consolidated in the consolidated financial statements of the Guarantor.  In this regard, cash and short term investments shall be “restricted” if (i) it is pledged to, subject to any Lien in favor of, or held in one or more accounts under the control of one or more creditors or trustee of the Guarantor or any Subsidiary (other than pursuant to this Agreement), (ii) are otherwise segregated from the general assets of the Guarantor and its Subsidiaries, in one or more special accounts or otherwise, for the purpose of securing or providing a source of payment for Indebtedness that or is or from time to time may be owed to one or more creditors of the Guarantor or any Subsidiary and (iii) are not otherwise generally available for use by the Guarantor or any Subsidiary.

 

“RGC Memorandum” shall mean the Memorandum of Agreement filed with the Registrar General of Canada pursuant to Section 105 of the Canada Transportation Act, in the form attached hereto as Exhibit F.

 

“Sanctioned Country” shall mean a country subject to a sanctions program identified on the list maintained by OFAC and available at ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇-▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇/▇▇▇▇▇/
default.aspx, or as otherwise published from time to time.

 

“Sanctioned Person” shall mean (i) a Person named on the list of “Specially Designated Nationals and Blocked Persons” maintained by OFAC available at ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇-▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇/▇▇▇-▇▇▇▇/▇▇▇▇▇/▇▇▇▇▇▇▇.▇▇▇▇, or as otherwise published from time to time, or (ii) (A) an agency of the government of a Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or (C) a person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC.

“Servicing Obligations” shall mean all obligations to be performed by the “Lessor” pursuant to an Approved Lease.

 

“Severable Modification” shall mean any modification or improvement to a Railcar not required pursuant to Section 6.20(a) that is readily removable without impairing the value, utility or useful life of the Railcar immediately prior to such notification.

 

“Shareholders’ Equity” shall mean as of any date of determination, consolidated shareholders’ equity of Guarantor and its Subsidiaries as of that date determined in accordance with GAAP.

 

“Solvent” shall mean, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including subordinated and contingent liabilities, of such Person; (b) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts and liabilities, including subordinated and contingent liabilities as they become absolute and matured; (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (d) such Person is not engaged in a business or transaction, and is not about to engage in a business or transaction, for which such Person’s property would constitute an unreasonably small capital.  The amount of contingent liabilities (such as litigation, guaranties and pension plan liabilities) at any time shall be computed as the amount that, in light of all the facts and circumstances existing at the time, represents the amount that would reasonably be expected to become an actual or matured liability.

 

“STB Memorandum” shall mean the Memorandum of Agreement filed with the Surface Transportation Board pursuant to 48 U.S.C. §11301, in the form attached hereto as Exhibit F.

 

“Subsidiary” shall mean, with respect to any Person (the “parent”) at any date, any corporation, partnership, joint venture, limited liability entity, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, partnership, joint venture, limited liability company, association or other entity (i) of which securities or other ownership interests representing more than fifty percent (50%) of the equity or more than fifty percent (50%) of the ordinary voting power or, in the case of a partnership, more than fifty percent (50%) of the general partnership interests are, as of such date, owned, controlled or held, or (ii) that is, as of such date, otherwise controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

 

“Swap Contract” shall mean (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement; and (b) any and all transactions of any kind, and related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc. any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

“Synthetic Lease” shall mean a lease transaction under which the parties intend that (i) the lease will be treated as an “operating lease” by the lessee pursuant to Accounting Standards Codification Sections 840-10 and 840-20, as amended, and (ii) the lessee will be entitled to various tax and other benefits ordinarily available to owners (as opposed to lessees) of like property.

 

“Synthetic Lease Obligations” shall mean, with respect to any Person, the sum of (i) all remaining rental obligations of such Person as lessee under Synthetic Leases which are attributable to principal and, without duplication, (ii) all rental and purchase price payment obligations of such Person under such Synthetic Leases assuming such Person exercises the option to purchase the lease property at the end of the lease term.

 

“Tax Credit” shall have the meaning set forth in Section 2.10(f).

 

“Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions, assessments, fees, charges or withholdings imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“Term Loan” shall mean a term loan made by Lenders to the Borrower pursuant to Section 2.1.

 

“Term Loan Commitment” shall mean, with respect to each Lender, the obligation of such Lender to make a Term Loan hereunder on the Closing Date, in a principal amount not exceeding the amount set forth with respect to such Lender on Schedule I.  The aggregate principal amount of all Lenders’ Term Loan Commitments as of the Closing Date is $100,000,000.00.

 

“Term Notes” shall mean, collectively, the promissory notes of the Borrower evidencing the Term Loans, together with all amendments or replacements thereto. The Term Notes shall be in substantially the form of Exhibit C attached hereto.

 

“Trading with the Enemy Act” shall mean the Trading with the Enemy Act of the United States of America (50 U.S.C. App. §§ 1 et seq.), as amended and in effect from time to time.

 

“Unfunded Pension Liability” of any Plan shall mean the amount, if any, by which the value of the accumulated plan benefits under the Plan, determined on a plan termination basis in accordance with actuarial assumptions at such time consistent with those prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds the fair market value of all Plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions).

 

“Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York.

 

“United States” or “U.S.” shall mean the United States of America.

 

“U.S. Person” shall mean any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.

 

“U.S. Tax Compliance Certificate” shall have the meaning set forth in Section 2.10(e)(ii)(C).

 

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

“Withholding Agent” shall mean the Borrower, any other Loan Party or the Administrative Agent, as applicable.

 

 

 

ARTICLE II  

AMOUNT AND TERMS OF THE TERM LOAN COMMITMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

So long as no Event of Default shall have occurred and be continuing, all amounts received by Administrative Agent under this Agreement or the other Loan Documents shall be applied as follows:  first, to all fees and reimbursable expenses of the Administrative Agent then due and payable pursuant to any of the Loan Documents; second, to all reimbursable expenses of the Lenders, pro rata to the Lenders based on their respective pro rata shares of such fees and expenses; third, to all interest and fees (including, without limitation, Prepayment Fees) then due and payable hereunder; and fourth, to all principal of the Term Loans then due and payable hereunder.

 

 

 

ARTICLE III  

GRANT OF SECURITY INTEREST

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Without limiting the generality of the provisions of this Section, for purposes of determining compliance with the conditions specified in this Section, each Lender that has signed this Agreement shall be deemed to have consented to, approved of, accepted or been satisfied with each document or other matter required thereunder to be consented to, approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

 

 

ARTICLE V  

 

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Administrative Agent and each Lender as follows, as of the date hereof and as of each Closing Date:

 

 

(b)  The Guarantor (i) is duly organized, validly existing and in good standing as a corporation under the laws of the jurisdiction of its organization, (ii) has all requisite power and authority to carry on its business as now conducted, and (iii) is duly qualified to do business, and is in good standing, in each jurisdiction where such qualification is required, except where a failure to be so qualified could not reasonably be expected to result in an Adverse Effect.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE VI 

 

AFFIRMATIVE COVENANTS

 

The Borrower covenants and agrees that so long as any Obligation remains unpaid or outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Borrower will furnish to the Administrative Agent and each Lender, promptly and in any event at least thirty (30) days prior thereto, notice of any change (i) in any Loan Party’s legal name, (ii) in any Loan Party’s chief executive office, its principal place of business, any office in which it maintains books or records or any office or facility at which Collateral owned by it is located (including the establishment of any such new office or facility), (iii) in any Loan Party’s identity or legal structure, (iv) in any Loan Party’s federal taxpayer identification number or organizational number or (v) in any Loan Party’s jurisdiction of organization.

 

The Borrower will furnish to the Administrative Agent notice not less than ninety (90) days prior to the scheduled expiration or anticipated replacement of any Approved Lease and of the steps being undertaken by the Borrower to replace any such expiring Approved Lease.

 

Each notice or other document delivered under this Section shall be accompanied by a written statement of a Responsible Officer setting forth the details of the event or development requiring such notice or other document and any action taken or proposed to be taken with respect thereto.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE VII  

 

 

The Borrower covenants and agrees that so long as any Obligation remains outstanding:

 

 

 

 

 

 

 

 

 

ARTICLE VIII  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

then, and in every such event (other than an event with respect to the Borrower described in subsection (i) or (j) of this Section) and at any time thereafter during the continuance of such event, the Administrative Agent may, and upon the written request of the Required Lenders shall, by notice to the Borrower, take any or all of the follow-ing actions, at the same or different times: (i) declare the Prepayment Amount, and all other Obligations owing hereunder, to be, whereupon the same shall become, due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower, (ii) exercise all remedies contained herein or in any other Loan Document, and (iii) exercise any other remedies available at law or in equity; provided that, if an Event of Default specified in either subsection (i) or (j) shall occur, the principal of the Term Loans then outstanding, together with accrued interest thereon, and all fees and all other Obligations shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

Any sale or transfer by the Administrative Agent either to itself or to any other Person shall be subject to the rights of quiet enjoyment of lessees under Approved Leases, but otherwise absolutely free from any claim of right by the Borrower, including any equity or right of redemption, stay or appraisal which the Borrower has or may have under any rule of law, regulation or statute now existing or hereafter adopted.  Upon any such sale or transfer, subject to any rights of quiet enjoyment of lessees under Approved Leases, the Administrative Agent shall have the right to deliver, assign and transfer to the purchaser or transferee thereof the Collateral so sold or transferred.  The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this Section, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Administrative Agent and the Lender hereunder, including, without limitation, reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the Obligations, in accordance with Section 8.8 of this Agreement, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, including, without limitation, Section 9-615 of the UCC, need the Administrative Agent account for the surplus, if any, to the Borrower.  To the extent permitted by applicable law, the Borrower waives all claims, damages and demands it may acquire against the Administrative Agent or any Lender arising out of the exercise by them of any rights hereunder.  If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least ten (10) days before such sale or other disposition.  In the event that the Administrative Agent elects not to sell the Collateral, the Administrative Agent retains its rights to dispose of or utilize the Collateral or any part or parts thereof in any manner authorized or permitted by law or in equity and to apply the proceeds of the same towards payment of the Obligations.  Each and every method of disposition of the Collateral described in this Agreement shall constitute disposition in a commercially reasonable manner.  The Administrative Agent may appoint any Person as agent to perform any act or acts necessary or incident to any sale or transfer of the Collateral.

 

 

 

 

 

 

 

 

 

 

 

 

All amounts allocated pursuant to the foregoing clauses third through fifth to the Lenders as a result of amounts owed to the Lenders under the Loan Documents shall be allocated among, and distributed to, the Lenders pro rata based on their respective Pro Rata Shares.

 

ARTICLE IX  

 

THE ADMINISTRATIVE AGENT

 

 

 

 

 

 

 

 

 

 

 

 

 

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

 

 

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release its interest in particular types or items of property, or to release any Loan Party from its obligations under the applicable Collateral Documents pursuant to this Section.  In each case as specified in this Section, the Administrative Agent is authorized, at the Borrower’s expense, to execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the Liens granted hereunder or under the applicable Collateral Documents, or to release such Loan Party from its obligations under the applicable Collateral Documents, in each case in accordance with the terms of the Loan Documents and this Section.

 

 

 

 

 

Anything in this subsection to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this subsection unless an Event of Default shall have occurred and be continuing.

 

 

 

 

 

 

ARTICLE X  

 

MISCELLANEOUS

 

 

 

 

Any party hereto may change its applicable address for notices and other communications hereunder by notice to the other parties hereto.  All such notices and other communications shall be effective upon actual receipt by the relevant Person or, if delivered by overnight courier service, upon the first Business Day after the date deposited with such courier service for overnight (next-day) delivery, if mailed, upon the third Business Day after the date deposited into the mail or, if delivered by hand, upon delivery and if delivered by electronic communication, upon compliance with the procedures in Section 10.1(b); provided that notices delivered to the Administrative Agent shall not be effective until actually received by such Person at its address specified in this Section.

 

 

 

 

 

 

 

 

 

 

 

 

Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Term Loan at the time owing to it); provided that any such assignment shall be subject to the following conditions:

 

 

 

 

 

 

 

 

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Loan and Security Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

CAI RAIL INC.

By: /s/ ▇▇▇▇▇▇▇ ▇. Page

Name: ▇▇▇▇▇▇▇ ▇. Page

Title: Chief Financial Officer

BANK OF UTAH

as the Administrative Agent

and Collateral Agent

By: /s/ ▇▇▇▇ ▇▇▇▇▇▇

Name: ▇▇▇▇ ▇▇▇▇▇▇

Title: Vice President

FIFTH THIRD BANK

as a Lender

By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇

Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇

Title: Vice President

PNC EQUIPMENT FINANCE, LLC

as a Lender

By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇

Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇

Title: Assistant Vice President

BMO ▇▇▇▇▇▇ EQUIPMENT FINANCE COMPANY

as a Lender

By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇

Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇

Title: Vice President

BANC OF AMERICA LEASING & CAPITAL, LLC

as a Lender

By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇

Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇

Title: Vice President

 

SCHEDULE I

SCHEDULE II

Legal Name: CAI Rail Inc.

Jurisdiction of Organization: Delaware

FEIN: ▇▇-▇▇▇▇▇▇▇

Chief Executive Office: ▇▇▇▇▇▇▇ Tower, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

SCHEDULE V

▇▇▇▇▇▇▇ Tower

▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇

▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇  ▇▇▇▇▇

Attention:

E-mail:

Payment Instructions:

Beneficiary Name: CAI Rail Inc.

Beneficiary Account No.:

Bank Name:

Bank Address:

ABA No.:

Swift Code:

▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇▇▇ ▇▇▇

▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇  ▇▇▇▇▇

Attention:

E-mail:

Telephone:

Payment Instructions:

Intermediary Bank:

Bank Name:

Swift Code:

Address:

Bank Name:

ABA/Routing #:

Beneficiary:

Account Name:

Account #:

Reference:

 

To the Lenders:

Notice Address:

Fifth Third Bank

▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇

▇▇▇▇▇▇▇▇

▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇  ▇▇▇▇▇

Payment Instructions:

Bank Name:

ABA Routing #:

Account No.:

Account Name:

Reference:

Attention:

Notice Address:

PNC Equipment Finance, LLC

▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇  ▇▇▇▇▇

Payment Instructions:

Bank Name:

ABA Routing #:

Account No.:

Account Name:

Reference:

Attention:

 

2

Notice Address:

BMO ▇▇▇▇▇▇ Equipment Finance Company

▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇

8^th Floor (NW8)

▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇  ▇▇▇▇▇

Payment Instructions:

Bank Name:

ABA Routing #:

Account No.:

Account Name:

Reference:

Notice Address:

Banc of America Leasing & Capital, LLC

▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇  ▇▇▇▇▇

Payment Instructions:

Bank:

ABA Routing #:

Account No.:

Account Name:

 

3

 

EXHIBIT A


FORM OF ASSIGNMENT AND ACCEPTANCE

 

[date to be supplied]

Reference is made to the Loan and Security Agreement dated as of August __, 2016 (as amended and in effect on the date hereof, the “Loan Agreement”), among CAI RAIL INC., the Lenders from time to time party thereto and BANK OF UTAH, as Administrative Agent and Collateral Agent for such Lenders. Terms defined in the Loan Agreement are used herein with the same meanings.

 

The [name of assignor] (the “Assignor”) hereby sells and assigns, without recourse, to [name of assignee] (the “Assignee”), and the Assignee hereby purchases and assumes, without recourse, from the Assignor, effective as of the Assignment Date set forth below, the interests set forth below (the “Assigned Interest”) in the Assignor’s rights and obligations under the Loan Agreement, including, without limitation, the interests set forth below in the Term Loan of the Assignor on the Assignment Date, but excluding accrued interest and fees to and excluding the Assignment Date. The Assignee hereby acknowledges receipt of a copy of the Loan Agreement. From and after the Assignment Date (i) the Assignee shall be a party to and be bound by the provisions of the Loan Agreement and, to the extent of the Assigned Interest, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent of the Assigned Interest, relinquish its rights and be released from its obligations under the Loan Agreement.

 

This Assignment and Acceptance is being delivered to the Administrative Agent together with (i) if the Assignee is a Foreign Person, any documentation required to be delivered by the Assignee pursuant to Section 2.10(e) of the Loan Agreement, duly completed and executed by the Assignee, and (ii) if the Assignee is not already a Lender under the Loan Agreement, an Administrative Questionnaire in the form supplied by the Administrative Agent, duly completed by the Assignee. The Assignee shall pay the fee payable to the Administrative Agent pursuant to Section 10.4(b) of the Loan Agreement.

 

The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (ii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby, and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Loan Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, the Guarantor or any of their respective Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document, or (iv) the performance or observance by the Borrower, the Guarantor any of their respective Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

 

The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby and to become a Lender under the Loan Agreement, (ii) from and after the Effective Date, it shall be bound by the provisions of the Loan Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iii) it has received a copy of the Loan Agreement, together with copies of the most recent financial statements delivered pursuant to Section 6.1 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (iv) if it is a Foreign Person, attached to the Assignment and Acceptance is any documentation required to be delivered by it pursuant to the terms of the Loan Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

 

From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date, unless otherwise agreed in writing by the Administrative Agent.

 

This Assignment and Acceptance shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Acceptance may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Acceptance by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance. This Assignment and Acceptance shall be governed by and construed in accordance with the laws of the State of New York.

 

Assignment Date:

 

Legal Name of Assignor:

 

Legal Name of Assignee:

Assignee’s Address for Notices:

Effective Date of Assignment:

(“Effective Date”):

 

The terms set forth above are hereby agreed to:

[Name of Assignor], as Assignor

By: ______________________________

Name:

Title:

[Name of Assignee], as Assignee

By: ______________________________

Name:

Title:

The undersigned hereby consents to the within assignment¹:

 

	BANK OF UTAH, as Administrative Agent
	By:
	Name:
	Title:

---

¹ Consents to be included to the extent required by Section 10.4(b) of the Loan Agreement.

EXHIBIT E

_________________, 20_____

Ladies and Gentlemen:

Pursuant to Section 6.1(c) of that certain Loan and Security Agreement dated as of August ____, 2016 (as amended, modified, supplemented or restated and in effect from time to time, the “Loan Agreement”), by and among CAI Rail Inc. (the "Borrower"), Bank of Utah, as administrative agent (hereinafter, in such capacity, the “Administrative Agent”) for itself and the other lending institutions (collectively, the “Lenders”), the undersigned principal financial or accounting officer of the Borrower hereby certifies that (a) the information furnished below in this report was true and correct as of the last day of the Reference Period ended on the date indicated above, (b) as of the date hereof, no Default or Event of Default under the Loan Agreement has occurred and is continuing, and (c) the quarterly financial statements delivered to the Administrative Agent herewith were prepared in compliance with Section 6.1 of the Loan Agreement.

Except as otherwise specified in this Compliance Certificate, the capitalized terms used herein shall have the same meanings ascribed to them in the Loan Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

COMPLIANCE CERTIFICATE WORKSHEET

 

 

¹ Excluding maturity date payments that have been refinanced or renewed during such Reference Period.

EXHIBIT F

---

FORM OF MEMORANDUM OF AGREEMENT

dated as of August ____, 2016

between

CAI RAIL INC.

as Borrower,

and

BANK OF UTAH

as Administrative and Collateral Agent

---

MEMORANDUM OF AGREEMENT

THIS MEMORANDUM OF AGREEMENT is made and entered into as of August ___, 2016, by and between BANK OF UTAH, as Administrative and Collateral Agent ("Administrative Agent ") and CAI RAIL INC. ("Borrower"), with reference to the following:

1.

Administrative Agent, Borrower and certain Lenders party thereto (the “Lenders”) have executed that certain Loan and Security Agreement dated as of August ____, 2016 (together with all of the schedules and other attachments thereto, collectively, the “Agreement”), pursuant to which Lenders have agreed to make loans to Borrower, and Borrower has agreed to borrow certain sums from Lenders, secured by: (a) those certain railcars described on Schedule IV to the Agreement and on Exhibit No. 1 attached hereto (the “Railcars”); and (b) those certain leases described on Schedule III to the Agreement and on Exhibit No. 2 attached hereto (the “Approved Leases”).

Borrower hereby grants to Administrative Agent a first priority security interest in all of Borrower’s right, title and interest in and to the Railcars and the Approved Leases, and agrees that such Railcars and the Approved Leases shall constitute Collateral (as such term is defined in the Agreement) subject to the grant of security by Borrower set forth in Article III of the Agreement.

2.

The Agreement shall be effective as of the date hereof.

This Memorandum of Agreement may be executed in any number of counterparts, each executed counterpart constituting an original but all together only one Memorandum of Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties hereto have executed or caused this Memorandum of Agreement to be executed as of the date first above written.

	BANK OF UTAH,
	as Administrative and Collateral Agent
	By:
	Name:
	Title:

) ss.

On this _____ day of August, 2016, before me appeared _________________________________, the person who signed this instrument, who acknowledged that (s)he is the ___________________ of BANK OF UTAH, as Administrative and Collateral Agent, and that, being duly authorized, (s)he signed such instrument as a free act on behalf of said corporation.

	Notary Public

   

My commission expires:

_________________________, ____

 

 

EXHIBIT NO. 1

TO MEMORANDUM OF AGREEMENT

EXHIBIT NO. 2

TO

MEMORANDUM OF AGREEMENT