CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been omitted pursuant to a request for confidential treatment and, where applicable, have been marked with an asterisk (“[*****]”) to denote where omissions have been made. The...
Exhibit 10.2
CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document
have been omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have been
made. The confidential material has been filed separately with the Securities and
Exchange Commission.
63000804 v1
RAILCAR MANAGEMENT AGREEMENT
Dated as of April 17, 2018
between
LONGTRAIN LEASING III, LLC
and
AMERICAN RAILCAR INDUSTRIES, INC.
CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document
have been omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have been
made. The confidential material has been filed separately with the Securities and
Exchange Commission.
3
“Determination Date” shall have the meaning set forth in the Indenture.
“Dollars” or “$” shall mean lawful money of the United States of America.
“Effective Date” shall have the meaning set forth in the initial paragraph hereof.
“Encumbrance” shall have the meaning set forth in the Indenture.
“Encumbrance Claim” shall have the meaning set forth in Section 4.4 hereof.
“Environmental Law” shall mean all applicable federal, state, local and foreign laws,
statutes, ordinances, codes, rules, standards and regulations relating to human health, safety,
natural resources, or the environment or the generation, use, treatment, transport, handling,
storage, disposal, or release of any materials into the environment, including, but not limited to,
CERCLA, RCRA, the Clean Air Act, the Clean Water Acts, the Hazardous Materials
Transportation Act (49 U.S.C. Sections 1801 et seq.), and the Toxic Substances Control Act (15
U.S.C. Sections 2601 et seq.), and the regulations promulgated pursuant to any of the foregoing
and similar state and local statutes.
“Excluded Expenses” means (a) salary, bonuses, company cars and benefits of the
Manager’s employees, (b) office, office equipment and office rental expenses of the Manager, (c)
telecommunications expenses of the Manager, (d) taxes on the income, receipts, profits, gains,
net worth or franchise of the Manager and payroll, employment and social security taxes for
employees of the Manager, (e) any and all financing costs (including interest and fees) relating to
any indebtedness of the Manager, and (f) all other overhead expenses of the Manager.
“GAAP” shall mean those generally accepted accounting principles and practices which
are recognized as such by the American Institute of Certified Public Accountants acting through
its Accounting Principles Board or by the Financial Accounting Standards Board or through
other appropriate boards or committees thereof consistently applied as to the party in question.
“Governmental Authority” shall mean any federal, state, local or foreign government or
any court, agency, authority, instrumentality or regulatory body thereof.
“Hazardous Substance” shall mean any hazardous substance, pollutant, contaminant,
waste, or material designated, regulated, or defined under or with respect to which any
requirement or liability may be imposed pursuant to any Environmental Law.
“Impositions” shall have the meaning set forth in Section 5.7 hereof.
“Indenture” shall mean the Indenture, dated as of January 29, 2015, between the Owner
and the Indenture Trustee, as supplemented or amended from time to time.
“Indenture Trustee” shall mean U.S. Bank National Association or any permitted
successor thereto in such capacity under and pursuant to the Indenture.
CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document
have been omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have been
made. The confidential material has been filed separately with the Securities and
Exchange Commission.
4
“Initial Administration Agreement” shall mean the Amended and Restated Lease
Administration Agreement, dated as of October 2, 2006, among Owner, the other Tranche II
Owners (as defined therein) identified therein, ARL Lease Administrators, LLC, ARL, and the
Account Bank.
“Initial Lease Administrator” shall mean ARL Lease Administrators LLC, a Delaware
limited liability company.
“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.
“Lease” shall have the same meaning set forth in the Indenture.
“Lease Administrator” shall mean, individually and collectively, the Initial Lease
Administrator and any New Lease Administrator, provided that upon and following the Owner’s
withdrawal as Tranche II Owner from the Initial Administration Agreement, it shall mean only
the New Lease Administrator.
“Maintenance” shall have the meaning set forth in Section 5.5 hereof.
“Management Fee” shall have the meaning set forth in Section 8.2 hereof.
“Management Term” shall have the meaning set forth in Section 3.1 hereof.
“Manager” shall have the meaning set forth in the initial paragraph hereof.
“Manager Advance” shall mean any funds that the Manager advances to the Owner with
respect to delinquent rental payments in respect of the Owner Cars provided that (i) the Manager,
reasonably and in good faith, considers such amounts to be recoverable from the User under the
Lease and (ii) the aggregate amount of such Manager Advances outstanding at any point in time
does not exceed an amount equal to the lesser of (x) fifty percent (50%) of the then unpaid
balance of all of the Owner’s rental receivables which are delinquent (but less than sixty (60)
days delinquent) and (y) one percent (1%) of the then aggregate Adjusted Value.
“Manager Indemnified Persons” shall have the meaning set forth in Section 12.2 hereof.
“Manager Malfeasance” shall have the meaning set forth in Section 4.4 hereof.
“Material Adverse Effect” shall mean a material adverse effect on the ability of Owner or
Manager to perform any of its obligations hereunder.
“Monthly Report” shall mean a report substantially in the form of Exhibit C hereto.
CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document
have been omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have been
made. The confidential material has been filed separately with the Securities and
Exchange Commission.
5
“New Administration Agreement” shall mean any Lease Administration Agreement
among ARI, the New Lease Administrator, and the other parties set forth therein.
“New Lease Administrator” shall mean ARI or a Subsidiary of ARI.
“Officer’s Certificate” shall mean, with respect to any Person, a certificate signed by an
Authorized Officer of such Person.
“Operating Expense” shall have the meaning set forth in Section 8.3 hereof.
“Other Railcar” shall have the meaning set forth in Section 2.3 hereof.
“Owner” shall have the meaning set forth in the initial paragraph hereof.
“Owner Cars” shall mean the covered xxxxxx and tank railcars listed on Exhibit A hereto
plus any railcars that replace such railcars pursuant to Section 9.3(a) plus any railcars that are
added to coverage under this Agreement as a result of delivery of a notice from Owner to
Manager to such effect pursuant to Section 9.3(b) less any railcars that are subject to a Casualty
Occurrence less any railcars that are terminated from coverage under this Agreement as a result
of delivery of a notice from Owner to Manager to such effect pursuant to Section 9.3(b).
“Owner Indemnified Persons” shall have the meaning set forth in Section 12.1 hereof.
“Owner Encumbrance Claim Amount” shall have the meaning set forth in Section 4.4
hereof.
“Payment Date” shall have the meaning set forth in the Indenture.
“Permitted Encumbrances” shall have the meaning set forth in the Indenture.
“Permitted Lessees” shall have the meaning set forth in the Indenture.
“Person” shall mean any natural person, firm, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, unincorporated organization,
government or any political subdivision thereof or any other legal entity, including public bodies.
“Railroad Mileage Credits” shall mean the cash credits the registered owners of the XXX
Xxxxx receive from the railroads based on railcar mileage traveled over track owned by the
railroads.
“Regulatory Authorities” shall mean the Office of the Registrar General of Canada, the
United States Surface Transportation Board, the United States Department of Transportation, the
United States Department of Labor, the AAR or any other Governmental Authority or industry
agency or authority which has proper jurisdiction to regulate the ownership, leasing, operation,
maintenance or use of the Owner Cars.
CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document
have been omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have been
made. The confidential material has been filed separately with the Securities and
Exchange Commission.
14
defense costs, subject, in each case, to compliance with certain insurance-related provisions in
the Leases, in the Indenture, and in other provisions of this Section 5.6. Such insurance shall be
in addition to any insurance provided by a User pursuant to the terms of any lease to which such
Owner Car is then subject. Owner reserves the right to request Manager to provide or obtain
insurance in addition to the insurance provided pursuant to the preceding sentence, which
insurance the Manager shall use reasonable efforts to obtain or provide. All insurance obtained
by Manager with respect to the Owner Cars may (to the extent reasonably practicable unless
Owner or the Indenture Trustee objects) be maintained under policies of insurance that Manager
obtains for itself and the Other Railcars, so long as Owner and the Indenture Trustee, for the
benefit of the Noteholders, are named as additional insureds and loss payees, as their interests
may appear, with respect to the insurance on the Owner Cars. Such insurance may be placed
through insurers who are Affiliates of Manager so long as the prices and terms thereof are
consistent with the Services Standard and are comparable to those that could be obtained from
unaffiliated insurers. Copies of policies or certificates of insurance with respect thereto shall be
furnished promptly to Owner and the Indenture Trustee. If at any time the insurance maintained
by Manager on the Owner Cars shall lapse or have limits lower than as described therein for
whatever reason, Manager, promptly upon receipt of notice of the lapse of or decrease in such
insurance coverage, shall give notice to Owner and the Indenture Trustee of the same. Manager
shall also notify Owner and the Indenture Trustee promptly with respect to any default in the
payment of any premium or of any other act or omission of Manager or of any other person of
which Manager has knowledge that might invalidate, render unenforceable, result in a lapse of or
reduce any insurance coverage on the Owner Cars maintained by Manager pursuant to this
Agreement. Manager shall collect any amounts due from the insurers under such policies and
deposit any such amounts in accordance with the terms of the Administration Agreement.
Manager shall provide Owner with such reasonable assistance as Owner may request in any
dealings that Owner may have with such insurers, including the pursuit of any claims under such
policies. To the extent that Manager, consistent with the Services Standard, elects to maintain a
self-insured retention against certain risks with respect to the Owner Cars, then upon the
occurrence of a Casualty Occurrence or other applicable insurable event with respect to an
Owner Car, Manager will, consistent with the Services Standard, pursue any appropriate claims,
dispute any claims, or make all payments within the retention, as appropriate, and notify the
Issuer when there is a loss. Manager shall notify Owner and the Indenture Trustee not later than
forty-five (45) days prior to the implementation of any determination to increase any self-insured
retention. Such notification shall describe any proposed increase in any self-insured retention.
(b) Each insurance policy maintained by Manager pursuant to the provisions of this
Section 5.6 shall (i) expressly provide that no cancellation or termination thereof or material
change therein shall be effective unless at least thirty (30) days’ prior written notice shall have
been given to the Owner and the Indenture Trustee in accordance with the terms of such policy,
(ii) expressly provide that if such insurance shall be cancelled for any reason whatsoever, or if
any substantial changes are made in the coverage that affect the interest of Owner, the Indenture
Trustee (for the benefit of the Noteholders) as an additional insured or loss payee, or if such
insurance shall be allowed to lapse for nonpayment of premium, such cancellation, change or
CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document
have been omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have been
made. The confidential material has been filed separately with the Securities and
Exchange Commission.
30
appointed by Owner (with the consent of the Indenture Trustee acting at the direction of the
Requisite Majority except when an Affiliate of the Owner is appointed as described below) or
the Indenture Trustee (acting at the direction of the Requisite Majority), and such Successor
Manager has accepted such appointment. For the avoidance of doubt, it is understood that the
foregoing limitation shall not be read or interpreted to affect the determination of the existence of
any Event of Default under the Indenture relating to the failure to implement the appointment of
a Successor Manager within a specified period of time following a Manager Termination Event.
any Successor Manager shall be a Person that is engaged in the railcar leasing or management
business that has a tangible net worth on the date of its appointment of not less than [*****] and
shall be capable of performing the services under this Agreement. The Issuer may appoint any
Affiliate of the Issuer as Successor Manager without the consent or direction of the Indenture
Trustee, provided such Affiliate meets the requirements for serving as Successor Manager, as
provided in this Agreement. Any Successor Manager, however appointed, shall execute and
deliver to Owner, the Indenture Trustee and to the predecessor Manager an instrument accepting
such appointment, including customary confidentiality provisions in favor of the predecessor
Manager and Owner, and thereupon such Successor Manager, without further act, shall become
vested with all the rights, powers, duties, responsibilities, obligations, and trusts of the
predecessor Manager under this Agreement with like effect as if originally named the manager
herein; provided that all liabilities of Manager to Owner, Indenture Trustee or any other
indemnified party hereunder, contingent or otherwise, for damages incurred by Owner resulting
from any uncured Manager Termination Event shall remain the liability of Manager until so
cured, and the Successor Manager shall have no liability therefor. Upon the occurrence and
during the continuation of any Manager Termination Event, Owner and the Indenture Trustee are
authorized and empowered to execute and deliver, on behalf of Manager, as attorney-in-fact or
otherwise, any and all documents and perform any and all other acts or things necessary or
appropriate to effect the termination of Manager and the appointment of a Successor Manager.
(b) Upon the occurrence and during the continuation of any Manager Termination
Event and the termination of the Management Term as provided in Section 13.2(a) hereof,
Owner may (i)(A) demand and be entitled to delivery of each Owner Car then in the possession
or control of Manager, but not subject to a Lease, (and that the costs and expenses of assembly,
delivery, storage and transportation of such Owner Cars in such case shall be at the expense of
Manager, or otherwise payable or reimbursable to the Indenture Trustee in accordance with the
Indenture) or (B) enter upon any premises where such Owner Cars not subject to a Lease may be
located and take possession of them free from any rights of Manager and (ii) demand and be
entitled to receive copies of all of Manager’s records regarding Owner Cars. Manager (x) agrees
to cooperate fully with Owner in connection with the transfer of Manager’s rights and duties
hereunder to a third Person and (y) expressly waives any and all claims against Owner and the
Indenture Trustee for damages of whatever nature arising out of or resulting from the termination
of Manager’s management rights as to the Owner Cars as properly permitted hereunder. With
respect to any Owner Car that is subject to a Lease on the date on which the Management Term
is terminated, the Manager shall provide to the Owner and Indenture Trustee a report regarding
the expected termination date of such Lease and the return location for each such Owner Car.
CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document
have been omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have been
made. The confidential material has been filed separately with the Securities and
Exchange Commission.
32
reasonable control, including acts of God, riots, strikes, fires, storms, wars, terrorism,
insurrections, or public disturbances, or any regulation of any Federal, state or local government
or any agency thereof.
SECTION 15. ENTIRE AGREEMENT; MODIFICATION AND
WAIVER.
This Agreement (including the recitals herein and any schedules or exhibits hereto, each of
which is an integral part of this Agreement) sets forth the entire agreement and understanding
between Owner and Manager with respect to the subject matter hereof. This Agreement may be
amended, modified or waived only by a written instrument signed by the Manager and the
Owner and with the prior written consent of the Indenture Trustee, acting at the direction of the
Requisite Majority and, except to the extent such amendment, modification or waiver could not
be reasonably be expected to materially and adversely affect the performance by the Manager of
its obligations under this Agreement, only after the Rating Agency Confirmation has been
obtained with respect to any such amendment, modification, or waiver. Failure of a party to
enforce one or more of the provisions of this Agreement or to exercise any option or other rights
hereunder or to require at any time performance of any of the obligations hereof shall not in any
manner be construed (a) to be a waiver of such provisions by such party, (b) to affect the validity
of this Agreement or such party’s right thereafter to enforce each and every provision of this
Agreement, or (c) to preclude such party from taking any other action at any time that it would
be legally entitled to take.
SECTION 16. COMMUNICATIONS.
All notices, requests, demands, consents, approvals, reports, statements and other
communications under this Agreement shall be in writing and shall be deemed to have been
given (a) upon receipt when delivered by hand, overnight delivery service or facsimile
transmission with respect to which receipt has been acknowledged or (b) three (3) Business Days
after mailing, by registered or certified mail, postage prepaid, return receipt requested, and
addressed to the party for whom intended at the following addresses or such changed address as
such parties may have fixed by notice:
To Manager:
American Railcar Industries, Inc.
000 Xxxxx Xxxxxx
Xx. Xxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
To Owner:
CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document
have been omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have been
made. The confidential material has been filed separately with the Securities and
Exchange Commission.
33
Longtrain Leasing III, LLC
000 Xxxxx Xxxxxx
Xx. Xxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Icahn Associates Corp.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Legal Department
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
To Indenture Trustee:
At the address specified in the Indenture
provided, however, that any notice of change of address of any party shall be effective only upon
receipt.
SECTION 17. CONSTRUCTION AT OWNER’S EXPENSE.
Any action required to be performed by Manager at Owner’s expense pursuant to this Agreement
(a) shall be performed at Manager’s cost without markup (since the amount of the Management
Fees were determined on that basis) and (b) shall only be required to be performed by Manager if
Owner pays or adequately provides the Manager assurance of amounts for the reimbursement of
such cost (which shall include the existence of a Required Expense Reserve deposit allocable for
such purpose) before Manager is required to make any payments to third parties with respect
thereto.
SECTION 18. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE
OF NEW YORK (WITHOUT REGARD TO CHOICE OF LAW PRINCIPLES)
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
SECTION 19. SEVERABILITY.
Any provision of this Agreement that may be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability
CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document
have been omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have been
made. The confidential material has been filed separately with the Securities and
Exchange Commission.
IN WITNESS WHEREOF, the parties hereto have executed this Railcar Management
Agreement as of the date first above written.
LONGTRAIN LEASING III, LLC
By: American Railcar Industries, Inc.,
its sole member
By:
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President, Chief
Financial Officer and Treasurer
AMERICAN RAILCAR INDUSTRIES,
INC.
By:
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President, Chief
Financial Officer and Treasurer