Exhibit 10.1   
 
 
 
 
 
  **AMENDED
AND RESTATED**
  **LOAN
AND SECURITY AGREEMENT**
 
 **By
and Between**
 
 **MILPI
HOLDINGS, LLC**
 
 **And**
 
 **LASALLE
BANK NATIONAL ASSOCIATION**
 
 
    **Table
of Contents**
  1 DEFINITIONS 2
 1.1  Defined
Terms 2
 1.2  Accounting
Terms 20
 1.3  Other
Terms Defined in UCC 21
 1.4  Other
Interpretive Provisions 21
  2 COMMITMENT
OF THE BANK 22
 2.1  Revolving
Loans 22
 2.2  Term
Loan 24
 2.3  Additional
LIBOR Loan Provisions 26
 2.4  Interest
and Fee Computation; Collection of Funds 28
 2.5  [Reserved] 28
 2.6  Taxes 28
 2.7  All Loans
to Constitute Single Obligation 29
  3 CONDITIONS
OF BORROWING 30
 3.1  Loan
Documents 30
 3.2  Event of
Default 31
 3.3  Material
Adverse Effect 31
 3.4  Litigation 31
 3.5  Representations
and Warranties 32
 3.6  Reserve
Deposit 32
 3.7  Delivery
of Lease Schedules 32
  4 NOTES
EVIDENCING LOANS 32
 4.1  Revolving
Note 32
 4.2  Term
Notes 33
  5 MANNER OF
BORROWING 33
 5.1  Borrowing
Procedures 33
 5.2  Conversion
and Continuation Procedures 34
 5.3  [Reserved] 34
 5.4  Certain
Conditions 34
 5.5  Automatic
Debit 35
 5.6  Discretionary
Disbursements 35
  6 SECURITY
FOR THE OBLIGATIONS 35
 6.1  Security
for Obligations 35
 6.2  Possession
and Transfer of Collateral 36
 6.3  Financing
Statements and Other Documents and Filings 36
 6.4  Performance
Under Leases 36
 6.5  Preservation
of the Collateral 36
 6.6  Other
Actions as to any and all Collateral 37
 6.7  Lockbox
Arrangement 37
 6.8  Separate
Lease Schedules; Legend 38
 6.9  Electronic
Chattel Paper and Transferable Records 38
 6.10  Power of
Attorney 39
  7 REPRESENTATIONS
AND WARRANTIES 39
 7.1  Borrower
Organization and Name 39
 7.2  Authorization 39
 7.3  Validity
and Binding Nature 39
 7.4  Consent;
Absence of Breach 39
 7.5  Ownership
of Properties; Liens 40
 7.6  Equity
Ownership 40
 7.7  Intellectual
Property 40
 7.8  Financial
Statements 40
 7.9  Litigation
and Contingent Liabilities 41
 7.10  Event of
Default 41
 7.11  Adverse
Circumstances 41
 7.12  Environmental
Laws and Hazardous Substances 41
 7.13  Solvency,
etc 42
 7.14  ERISA
Obligations 42
 7.15  Labor
Relations 43
 7.16  Security
Interest 43
 7.17  Lending
Relationship 43
 7.18  Taxes 43
 7.19  Compliance
with Regulation U 43
 7.20  Governmental
Regulation 43
 7.21  Bank
Accounts 44
 7.22  Place of
Business 44
 7.23  Complete
Information 44
 7.24  Subordinated
Debt 44
  8 AFFIRMATIVE
COVENANTS 44
 8.1  Compliance
with Bank Regulatory Requirements; Increased Costs 44
 8.2  Borrower
Existence 45
 8.3  Compliance
With Laws 45
 8.4  Payment
of Taxes and Liabilities 46
 8.5  Maintain
Property 46
 8.6  Maintain
Insurance 46
 8.7  ERISA
Liabilities; Employee Plans 47
 8.8  Financial
Statements 48
 8.9  Guarantor
Financial Statements 49
 8.10  Supplemental
Financial Statements 50
 8.11  Borrowing
Base Certificate 50
 8.12  Covenant
Compliance Certificate 50
 8.13  Additional
Reports Relating to Railcars and Leases 51
 8.14  Field
Audits 51
 8.15  Other
Reports 51
 8.16  Collateral
Records 51
 8.17  Intellectual
Property 52
 8.18  Notice of
Proceedings 52
 8.19  Notice of
Event of Default or Material Adverse Effect 52
 8.20  Environmental
Matters 52
 8.21  Further
Assurances 52
 8.22  Non-Utilization
Fee 52
 8.23  Agency
Fee 53
 8.24  Facility
Fee 53
 8.25  Amendment
Fee 53
  9 NEGATIVE
COVENANTS 53
 9.1  Debt 53
 9.2  Encumbrances 54
 9.3  Investments 54
 9.4  Transfer;
Merger; Sales 54
 9.5  Issuance
of Capital Securities 54
 9.6  Distributions 54
 9.7  Transactions
with Affiliates 55
 9.8  Unconditional
Purchase Obligations 55
 9.9  Cancellation
of Debt 55
 9.10  Inconsistent
Agreements 55
 9.11  Use of
Proceeds 55
 9.12  Business
Activities; Change of Legal Status and Organizational Documents 55
  10 FINANCIAL
COVENANTS 56
 10.1  Tangible
Net Worth 56
 10.2  Fixed
Charge Coverage 56
  11 EVENTS OF
DEFAULT 56
 11.1  Nonpayment
of Obligations 56
 11.2  Misrepresentation 56
 11.3  Nonperformance
of Financial Covenants and Negative Covenants 56
 11.4  Nonperformance
of Other Provisions Affecting Bank’s Security Interest 56
 11.5  Nonperformance
of Other Provisions Containing Grace Periods 56
 11.6  Nonperformance
of Other Provisions Not Containing Grace Periods 56
 11.7  Insufficient
Funds to Pay Debt Service and Operating Expenses 57
 11.8  Default
under Other Debt 57
 11.9  Other
Material Obligations 57
 11.10  Bankruptcy,
Insolvency, etc.  57
 11.11  Judgments  57
 11.12  Change in
Control  57
 11.13  Collateral
Impairment  57
 11.14  Material
Adverse Effect  58
 11.15  Guaranty  58
 11.16  Escrow
Agreement  58
 11.17  Leases  58
 11.18  Subordinated
Debt  58
  12 REMEDIES 58
 12.1  Possession
and Assembly of Collateral 59
 12.2  Sale of
Collateral 59
 12.3  Standards
for Exercising Remedies 60
 12.4  UCC and
Offset Rights 60
 12.5  Additional
Remedies 61
 12.6  Attorney-in-Fact 62
 12.7  No
Marshaling 62
 12.8  Application
of Proceeds 62
 12.9  No
Waiver 63
  13 MISCELLANEOUS 63
 13.1  Obligations
Absolute 63
 13.2  Entire
Agreement 63
 13.3  Amendments;
Waivers 64
 13.4  WAIVER OF
DEFENSES 64
 13.5  FORUM
SELECTION AND CONSENT TO JURISDICTION 64
 13.6  WAIVER OF
JURY TRIAL 65
 13.7  Assignability 65
 13.8  Confirmations 65
 13.9  Confidentiality 65
 13.10  Binding
Effect  66
 13.11  Governing
Law  66
 13.12  Enforceability  66
 13.13  Survival
of Borrower Representations  66
 13.14  Extensions
of Bank’s Commitment and Notes  67
 13.15  Time of
Essence  67
 13.16  Counterparts;
Facsimile Signatures  67
 13.17  Notices  67
 13.18  Release
of Claims Against Bank  68
 13.19  Costs,
Fees and Expenses  68
 13.20  INDEMNIFICATION  69
 13.21  Revival
and Reinstatement of Obligations  70
 
 Schedules
and Exhibits:
 
 Schedule  7.6  Equity
Rights
 Schedule  7.9  Litigation
 Schedule  7.21  Deposit
Accounts
 Schedule  7.22  Place of
Business
 Schedule  9.1  Existing
Debt
 Schedule  9.2  Existing
Liens
 Schedule  9.3  Investments
 
 Exhibit
A  Revolving
Note
 Exhibit
B  Term
Note
 Exhibit
C  Guaranty
 Exhibit
D  Borrowing
Base Certificate
 Exhibit
E  Form of
Canadian counsel opinion
 Exhibit
F  Sample
Trial Balance Report
 Exhibit
G  Covenant
Compliance Certificate
 Exhibit
H  Compliance
with Railcar Maintenance and Safety Standards
 Exhibit
I  Railcars
Subject to Leases
 Exhibit
J  Borrower
Joinder
 
   i
   
 **AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT**
 
 
 This
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT dated as of June __, 2005 (the
“Agreement”), is executed by and between MILPI HOLDINGS, LLC, a Delaware limited
liability company (together with any other parties who shall sign the Amended
and Restated Loan and Security Agreement Joinder in the form set forth in
Exhibit J hereto, the “Borrower”), which has its chief executive office located
at One North LaSalle Street, Suite 2700, Chicago, Illinois 60602, and LASALLE
BANK NATIONAL ASSOCIATION, a national banking association (the “Bank”), whose
address is 135 South LaSalle Street, Chicago, Illinois 60603.
 
 R  E  C  I  T  A  L  S :
 
 A.  PLM Rail
V, LLC (the “Original Borrower”) and the Bank entered into a Loan and Security
Agreement dated June 29, 2004 (the “Existing Loan Agreement”), pursuant to which
the Bank has made a revolving loan facility available to the Original Borrower
as evidenced by that certain Revolving Note dated as of June 29, 2004 in the
maximum principal amount of Fifteen Million and 00/100 Dollars ($15,000,000.00),
executed by the Original Borrower and made payable to the order of the Bank (the
“Existing Revolving Note”).
 
 B.  The
Borrower assumed all obligations of the Original Borrower under the Existing
Loan Agreement pursuant to an Assumption and Assignment Agreement dated as of
June __, 2005.
 
 C.  The
Borrower desires and the Bank is willing, on the terms and subject to the
conditions herein set forth, to amend and restate the Existing Loan Agreement in
its entirety. In connection therewith, the parties desire to amend the Existing
Revolving Note and to make certain other adjustments described
herein.
 
 D.  The
Borrower has determined that the execution, delivery and performance of this
Agreement is in its best business and pecuniary interest.
 
 NOW
THEREFORE, in consideration of the premises, the mutual covenants and agreements
set forth herein, the receipt and adequacy of which is hereby acknowledged, the
parties hereto agree to amend and restate the Existing Loan Agreement in its
entirety to read as follows:
 
 A  G  R  E  E  M  E  N  T  S :
 
 1
    DEFINITIONS.
  1.1  Defined
Terms . For the
purposes of this Agreement, the following capitalized words and phrases shall
have the meanings set forth below.
  “ ACH
Transaction ” shall
mean any interbank transfer of funds governed by the Rules of the National
Automated Clearing House.
  “ Acquisition
Cost ” shall
mean, with respect to a Railcar, the sum of (i) the purchase price of such
Railcar (including modifications, as applicable), (ii) delivery charges and
acquisition fees up to 5% of the purchase price of such Railcar, and (iii) all
applicable taxes paid by the Borrower with respect to such Railcar.
  “ Affiliate ” of any
Person shall mean (a) any other Person which, directly or indirectly, controls
or is controlled by or is under common control with such Person, (b) any officer
or director of such Person, and (c) with respect to the Bank, any entity
administered or managed by the Bank, or an Affiliate or investment advisor
thereof and which is engaged in making, purchasing, holding or otherwise
investing in commercial loans. A Person shall be deemed to be “controlled by”
any other Person if such Person possesses, directly or indirectly, power to vote
five percent (5.00%) or more of the securities (on a fully diluted basis) having
ordinary voting power for the election of directors or managers or power to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.
  “ Agency
Fee ” shall
have the meaning specified in Section
8.23 .
  “ Amendment
Fee ” shall
have the meaning specified in Section 8.25 .
  “ Applicable
Margin ” shall
mean, with respect to the any Loan, the margin set forth in the table below
opposite the Loan Type of such Loan corresponding to the interest rate option
selected by the Borrower:
 
 **Loan
      Type**
    **LIBOR
      Rate**
    **Base
      Rate**Revolving
      Loan
    2.25%
    0.50%Term
      Loan
    2.50%
    0.75%
 
 “ Asset
Disposition ” shall
mean the sale, lease, assignment or other transfer for value (each a
“Disposition”) by the Borrower or any Subsidiary to any Person (other than the
Borrower or any Subsidiary) of any asset or right of the Borrower or any
Subsidiary (including, the loss, destruction or damage of any thereof or any
actual or threatened (in writing to the Borrower or such Subsidiary)
condemnation, confiscation, requisition, seizure or taking thereof), other than
(a) the Disposition of any asset which is to be replaced, and is in fact
replaced, within thirty (30) days of the date of such Disposition with another
asset performing the same or a similar function, and (b) the sale or lease of
inventory in the ordinary course of business; provided, however that neither (i)
payment by the Borrower for services rendered to the Borrower in the ordinary
course of its business made from sources other than the disposition of any
Lease, Lease Schedule or any Railcar, equipment or other personal property
subject thereto, nor (ii) distributions to the Borrower’s owners otherwise
permitted by this Agreement, shall constitute an Asset Disposition.
  “ Bank ” shall
have the meaning set forth in the introductory paragraph hereto.
  “ Bank
Product Agreements ” shall
mean those certain cash management service agreements entered into from time to
time by the Borrower, any Subsidiary or any of their respective Affiliates with
the Bank or any Affiliate of the Bank.
  “ Bank
Product Obligations ” shall
mean all obligations, liabilities, contingent reimbursement obligations, fees,
and expenses owing by the Borrower or any Subsidiary to the Bank or any
Affiliate of the Bank pursuant to or evidenced by the Bank Product Agreements
and irrespective of whether for the payment of money, whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising.
  “ Bank
Products ” shall
mean any service or facility extended to the Borrower or any Subsidiary or any
Affiliate by the Bank or any Affiliate of the Bank, including: (a) credit cards,
(b) credit card processing services, (c) debit cards, (d) purchase cards, (e)
ACH Transactions, (f) cash management, including controlled disbursement,
accounts or services, or (g) Hedging Agreements.
  “ Bankruptcy
Code ” shall
mean the United States Bankruptcy Code, as now existing or hereafter
amended.
  “ Base
Rate ” shall
mean the higher of (i) the Prime Rate, or (ii) the Federal Funds
Rate.
  “ Base
Rate Loan ” or
“ Base
Rate Loans ” shall
mean that portion, and collectively, those portions of the aggregate outstanding
principal balance of the Loans that will bear interest at the Base Rate plus the
Applicable Margin.
  “ Base
Tangible Net Worth ” shall
mean the Tangible Net Worth of the Borrower as of March 31, 2005.
  “ Borrowing
Base Amount ” shall
mean, at any time, an amount equal to the sum of (i) 90% of the Acquisition Cost
of Eligible Railcars constituting Tier One Railcars, and (ii) 80% of the
Acquisition Cost of Eligible Railcars constituting Tier Two
Railcars.
  “ Borrowing
Base Certificate ” shall
mean a certificate to be signed by the Borrower certifying to the accuracy of
the Borrowing Base Amounts substantially in the form of Exhibit
D to this
Agreement.
  “ Borrower ” is
defined in the recitals hereto.
  “ Business
Day ” shall
mean any day other than a Saturday, Sunday or a legal holiday on which banks are
authorized or required to be closed for the conduct of commercial banking
business in Chicago, Illinois.
  “ Capital
Expenditures ” shall
mean all expenditures (including Capitalized Lease Obligations) which, in
accordance with GAAP, would be required to be capitalized and shown on the
consolidated balance sheet of the Borrower, but excluding expenditures made in
connection with the replacement, substitution or restoration of assets to the
extent financed (i) from insurance proceeds (or other similar recoveries) paid
on account of the loss of or damage to the assets being replaced or restored or
(ii) with awards of compensation arising from the taking by eminent domain or
condemnation of the assets being replaced.
  “ Capital
Lease ” shall
mean a  lease of
any interest in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible with respect to which the lessee is required to
concurrently recognize the acquisition of an asset and the incurrence of a
liability on the financial statements of such lessee in accordance with
GAAP.
  “ Capital
Securities ” shall
mean, with respect to any Person, all shares, interests, participations or other
equivalents (however designated, whether voting or non-voting) of such Person’s
capital, whether now outstanding or issued or acquired after the date hereof,
including common shares, preferred shares, membership interests in a limited
liability company, limited or general partnership interests in a partnership or
any other equivalent of such ownership interest.
  “ Capitalized
Lease Obligations ” shall
mean, with respect to any Person and a Capital Lease, the amount of the
obligation of such Person, as lessee under such Capital Lease, which is or will,
in accordance with GAAP, be required to appear as a liability on the balance
sheet of such Person.
  “ Cash
Equivalent Investment ” shall
mean, at any time, (a) any evidence of Debt, maturing not more than one year
after such time, issued or guaranteed by the United States government or any
agency thereof, (b) commercial paper, maturing not more than one year from the
date of issue, or corporate demand notes, in each case (unless issued by the
Bank or its holding company) rated at least A-l by Standard & Poor’s Ratings
Services, a division of The McGraw-Hill Companies, Inc. or P-l by Moody’s
Investors Service, Inc., (c) any certificate of deposit, time deposit or
banker’s acceptance, maturing not more than one year after such time, or any
overnight Federal Funds transaction that is issued or sold by the Bank or its
holding company (or by a commercial banking institution that is a member of the
Federal Reserve System and has a combined capital and surplus and undivided
profits of not less than $500,000,000), (d) any repurchase agreement entered
into with the Bank, or other commercial banking institution of the nature
referred to in clause
(c) , which
(i) is secured by a fully perfected security interest in any obligation of the
type described in any of clauses
(a) through (c) above,
and (ii) has a market value at the time such repurchase agreement is entered
into of not less than 100% of the repurchase obligation of the Bank, or other
commercial banking institution, thereunder, (e) money market accounts or mutual
funds which invest exclusively in assets satisfying the foregoing requirements
and (f) other short term liquid investments approved in writing by the
Bank.
  “ Change
in Control ” shall
mean the occurrence of any of the following events: (a) PLM MILPI Holdings
LLC shall cease to own and control, directly or indirectly, 100% of the
outstanding Capital Securities of the Borrower; (b) the Borrower shall cease to,
directly or indirectly, own and control 100% of each class of the outstanding
Capital Securities of each Subsidiary; (c) the failure of Equis II Corporation,
Gary Engle or Jim Coyne, directly or indirectly, through one or more
intermediaries, to own, whether beneficially or as a trustee, guardian or other
fiduciary, fifty-one percent (51%) or more of (i) the stock having ordinary
voting power in the election of directors or (ii) the ownership interests of
either the Borrower, PLMI, FSI, TEC, TEP, IMI or an Affiliate of IMI in its
capacity as equipment manager for any of the Equipment Growth Funds (the
“Equipment Manager”), or any Owner Trustee, or (iii) the failure of Equis II
Corporation, Gary Engle or Jim Coyne, directly or indirectly, through one or
more intermediaries, to control the Borrower, PLMI, FSI, TEC, TEP, the Equipment
Manager, or any Owner Trustee. For purposes of this definition, “control” of
MILPI, PLMI, FSI, TEC, TEP, the Equipment Manager, or any Owner Trustee shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise.
  “ Collateral ” shall
have the meaning set forth in Section
6.1 hereof.
  “ Contingent
Liability ” and
“ Contingent
Liabilities ” shall
mean, respectively, each obligation and liability of the Borrower and all such
obligations and liabilities of the Borrower incurred pursuant to any agreement,
undertaking or arrangement by which the Borrower: (a) guarantees, endorses or
otherwise becomes or is contingently liable upon (by direct or indirect
agreement, contingent or otherwise, to provide funds for payment, to supply
funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor
against loss) the indebtedness, dividend, obligation or other liability of any
other Person in any manner (other than by endorsement of instruments in the
course of collection), including without limitation, any indebtedness, dividend
or other obligation which may be issued or incurred at some future time; (b)
guarantees the payment of dividends or other distributions upon the shares or
ownership interest of any other Person; (c) undertakes or agrees (whether
contingently or otherwise): (i) to purchase, repurchase, or otherwise acquire
any indebtedness, obligation or liability of any other Person or any property or
assets constituting security therefor, (ii) to advance or provide funds for the
payment or discharge of any indebtedness, obligation or liability of any other
Person (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), or to maintain solvency, assets, level of income,
working capital or other financial condition of any other Person, or (iii) to
make payment to any other Person other than for value received; (d) agrees to
lease property or to purchase securities, property or services from such other
Person with the purpose or intent of assuring the owner of such indebtedness or
obligation of the ability of such other Person to make payment of the
indebtedness or obligation; (e) to induce the issuance of, or in connection with
the issuance of, any letter of credit for the benefit of such other Person; or
(f) undertakes or agrees otherwise to assure a creditor against loss. The amount
of any Contingent Liability shall (subject to any limitation set forth herein)
be deemed to be the outstanding principal amount (or maximum permitted principal
amount, if larger) of the indebtedness, obligation or other liability guaranteed
or supported thereby.
  “ Conversion
Amount ” shall
have the meaning specified in Section
2.1(d) hereof.
  “ Covenant
Compliance Certificate ” shall
have the meaning specified in Section
8.12 hereof.
  “ Debt ” shall
mean, as to any Person, without duplication, (a) all indebtedness of such
Person; (b) all borrowed money of such Person (including principal, interest,
fees and charges), whether or not evidenced by bonds, debentures, notes or
similar instruments; (c) all obligations to pay the deferred purchase price of
property or services; (d) all obligations, contingent or otherwise, with respect
to the maximum face amount of all letters of credit (whether or not drawn),
bankers’ acceptances and similar obligations issued for the account of such
Person, and all unpaid drawings in respect of such letters of credit, bankers’
acceptances and similar obligations; (e) all indebtedness secured by any Lien on
any property owned by such Person, whether or not such indebtedness has been
assumed by such Person (provided, however, if such Person has not assumed or
otherwise become liable in respect of such indebtedness, such indebtedness shall
be deemed to be in an amount equal to the fair market value of the property
subject to such Lien at the time of determination); (f) the aggregate amount of
all Capitalized Lease Obligations of such Person; (g) all Contingent Liabilities
of such Person, whether or not reflected on its balance sheet; (h) all Hedging
Obligations of such Person; (i) all Debt of any partnership of which such Person
is a general partner; and (j) all monetary obligations of such Person under (i)
a so-called synthetic, off-balance sheet or tax retention lease, or (ii) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment). Notwithstanding the foregoing,
Debt shall not include trade payables and accrued expenses incurred by such
Person in accordance with customary practices and in the ordinary course of
business of such Person.
  “ Default
Rate ” shall
mean, with respect to an Obligation, a per annum rate of interest equal to the
rate otherwise applicable to such Obligation plus two
percent (2.00%).
  “ Depreciation ” shall
mean the total amounts added to depreciation, amortization, obsolescence,
valuation and other proper reserves, as reflected on the Borrower’s financial
statements and determined in accordance with GAAP.
  “ Designated
Lessor ” shall
mean, with respect to a Lease, a wholly-owned Subsidiary of the Borrower acting
as lessor under the Lease for the benefit of the Borrower with respect to the
Railcars and other items of equipment and personal property of the Borrower set
forth on any Lease Schedule attached thereto.
  “ EBITDA ” shall
mean, for any period, the sum for such period of: (i) consolidated Net Income, plus (ii)
Interest Charges, plus (iii)
federal and state income taxes (including the Illinois replacement tax), plus (iv)
Depreciation, plus (v) all
other non-cash charges.
  “ Eligible
Railcar ” shall
mean each Railcar that meets each of the following requirements:
  (a)  if such
Railcar is not presently subject to an Eligible Railcar Lease, that portion of
the Acquisition Cost of such Railcar funded by a Loan (the “Eligibility
Amount”), together with the Eligibility Amount of all other Railcars owned by
the Borrower not subject to Eligible Railcar Leases, does not comprise at any
time more than 33% of the Eligibility Amount of all Railcars which have been
acquired with the proceeds of a Loan and which continue to be subject to a Lien
in favor of the Bank;
  (b)  if such
Railcar is subject to an Eligible Railcar Lease, no material default, event of
default or similar event or occurrence has occurred under or with respect to
such Eligible Railcar Lease and such Eligible Railcar Lease is presently in full
force and effect subject to (to the knowledge of the Borrower) no offsets on the
part of the Eligible Lessee party thereto;
  (c)  to the
knowledge of the Borrower, such Railcar is not the subject of any casualty,
condemnation or similar occurrence;
  (d)  such
Railcar is subject to a perfected, first priority Lien in favor of the Bank and
is not subject to any other assignment, claim or Lien other than Permitted
Liens;
  (e)  such
Railcar is in good and saleable condition, ordinary wear and tear excepted, and
all maintenance required under the Railcar Maintenance and Safety Standards has
been duly performed with respect to such Railcar;
  (f)  such
Railcar is located and primarily used only in (i) the United States of America
and (ii) Canada; and
  (g)  the Bank
shall not have determined, in its reasonable discretion, that such Railcar is
otherwise unacceptable.
  “ Eligible
Railcar Lease ” shall
mean a Lease by the Borrower or a Designated Lessor, as lessor, to an Eligible
Lessee, as lessee, of an Eligible Railcar and such Lease shall (a) be
non-cancelable (other than by reason of (i) a material casualty loss or
condemnation of the Railcar(s) subject thereto, (ii) as a result of a material
default or event of default occurring on the part of Borrower or such Designated
Lessor as lessor thereunder, or (iii) the bankruptcy of the Eligible Lessee);
(b) be for a term in excess of one year; (c) provide for a rental rate
consistent with current market terms and conditions in effect at the time of the
execution and delivery of such Lease (or, with respect to any renewal thereof,
in effect at the time of such renewal); and, (d) be free and clear of all liens
other than Permitted Liens.
  “ Eligible
Lessee ” shall
mean a lessee satisfying one of the following criteria specified
below:
  (a)  a Rated
Lessee;
  (b)  a Tier
One Listed Lessee;
  (c)  a Tier
Two Listed Lessee; or
  (d)  a lessee
otherwise approved by the Bank in writing.
  “ Employee
Plan ”
includes any pension, stock bonus, employee stock ownership plan, retirement,
profit sharing, deferred compensation, stock option, bonus or other incentive
plan, whether qualified or nonqualified, or any disability, medical, dental or
other health plan, life insurance or other death benefit plan, vacation benefit
plan, severance plan or other employee benefit plan or arrangement, including,
without limitation, those pension, profit-sharing and retirement plans of the
Borrower described from time to time in the financial statements of the Borrower
and any pension plan, welfare plan, Defined Benefit Pension Plans (as defined in
ERISA) or any multi-employer plan, maintained or administered by the Borrower or
to which the Borrower is a party or may have any liability or by which the
Borrower is bound.
  “ Environmental
Laws ” shall
mean all present or future federal, state or local laws, statutes, common law
duties, rules, regulations, ordinances and codes, together with all
administrative or judicial orders, consent agreements, directed duties,
requests, licenses, authorizations and permits of, and agreements with, any
governmental authority, in each case relating to any matter arising out of or
relating to public health and safety, or pollution or protection of the
environment or workplace, including any of the foregoing relating to the
presence, use, production, generation, handling, transport, treatment, storage,
disposal, distribution, discharge, emission, release, threatened release,
control or cleanup of any Hazardous Substance.
  “ ERISA ” shall
mean the Employee Retirement Income Security Act of 1974, as amended from time
to time.
  “ Escrow
Agent ” shall
mean PLMI, in its capacity as escrow agent under the Escrow Agreement and its
successors and assigns in such capacity.
  “ Escrow
Agreement ” shall
mean the Escrow Agreement dated May 1, 2003 between and among the Escrow Agent
and the signatories identified on Exhibit A thereto or any Joinder (as defined
in the Escrow Agreement) thereto, as amended, supplemented or otherwise modified
from time to time.
  “ Event
of Default ” shall
mean any of the events or conditions which are set forth in Section
11 hereof.
  “ Existing
Loan Agreement ” is
defined in the recitals hereto.
  “ Existing
Revolving Note ” is
defined in the recitals hereto.
  “ Facility
Fee ” shall
have the meaning specified in Section
8.24 .
  “ Federal
Funds Rate ” shall
mean, for any day, a fluctuating interest rate equal for each day during such
period to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the Bank
from three Federal funds brokers of recognized standing selected by the Bank.
The Bank’s determination of such rate shall be binding and conclusive absent
manifest error.
  “ Fixed
Charge Coverage Ratio ” shall
mean, as of any date of determination (in each case measured for the fiscal
quarter ending on such date of determination), the ratio of the sum of (i) (a)
Borrower’s EBITDA plus any proceeds from the sale of any assets less the gain on
such sale, minus (b) the
sum of the Borrower’s (1) Capital Expenditures (net of financed Capital
Expenditures) and (2) Taxes paid in cash by the Borrower, **** to
(ii) the sum of the Borrower’s (a) net Interest Charges, (b) the total
expenditures by the Borrower in respect of Capitalized Lease Obligations, and
(c) principal payments on any Debt permitted under this Agreement.
  “ GAAP ” shall
mean generally accepted accounting principles set forth from time to time in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting profession), which
are applicable to the circumstances as of the date of determination, provided,
however, that interim financial statements or reports shall be deemed in
compliance with GAAP despite the absence of footnotes and fiscal year-end
adjustments as required by GAAP.
  “ Guarantor ” and
“ Guarantors ” shall
mean, respectively, each of and collectively, any Person that hereafter executes
a Guaranty in favor of the Bank guaranteeing any or all of the Obligations.
  “ Guaranty ” shall
mean a Continuing Unconditional Guaranty executed by a Guarantor to and for the
benefit of the Bank, in the form of Exhibit
C hereto.
  “ Hazardous
Substances ” shall
mean (a) any petroleum or petroleum products, radioactive materials,
asbestos in any form that is or could become friable, urea formaldehyde foam
insulation, dielectric fluid containing levels of polychlorinated biphenyls,
radon gas and mold; (b) any chemicals, materials, pollutant or substances
defined as or included in the definition of “hazardous substances”, “hazardous
waste”, “hazardous materials”, “extremely hazardous substances”, “restricted
hazardous waste”, “toxic substances”, “toxic pollutants”, “contaminants”,
“pollutants” or words of similar import, under any applicable Environmental Law;
and (c) any other chemical, material or substance, the exposure to, or
release of which is prohibited, limited or regulated by any governmental
authority or for which any duty or standard of care is imposed pursuant to, any
Environmental Law.
  “ Hedging
Agreement ” shall
mean any interest rate, currency or commodity swap agreement, cap agreement or
collar agreement, and any other agreement or arrangement designed to protect a
Person against fluctuations in interest rates, currency exchange rates or
commodity prices.
  “ Hedging
Obligation ” shall
mean, with respect to any Person, any liability of such Person under any Hedging
Agreement.
  “ Indemnified
Party ” and
“ Indemnified
Parties ” shall
mean, respectively, each of the Bank and any parent corporation, Affiliate or
Subsidiary of the Bank, and each of their respective officers, directors,
employees, attorneys and agents, and all of such parties and
entities.
  “ Intellectual
Property ” shall
mean the collective reference to all rights, priorities and privileges relating
to intellectual property, whether arising under United States, multinational or
foreign laws or otherwise, including copyrights, patents, service marks and
trademarks, and all registrations and applications for registration therefor and
all licensees thereof, trade names, domain names, technology, know-how and
processes, and all rights to sue at law or in equity for any infringement or
other impairment thereof, including the right to receive all proceeds and
damages therefrom.
  “ Interest
Charges ” shall
mean, with respect to any Person, for any period (on a consolidated basis in
accordance with GAAP), the sum of: (a) all interest, charges and related
expenses payable by such Person with respect to that fiscal period to a lender
in connection with borrowed money or the deferred purchase price of assets that
are treated as interest in accordance with GAAP, plus (b) the
portion of Capitalized Lease Obligations of such Person with respect to that
fiscal period that should be treated as interest in accordance with GAAP, plus (c) all
charges paid or payable by such Person (without duplication) during that period
with respect to any Hedging Agreements of such Person.
  “ Interest
Period ” shall
mean, with regard to any LIBOR Loan, successive one, two, three or six month
periods as selected from time to time by the Borrower by notice given to the
Bank not less than three (3) Business Days prior to the first day of each
respective Interest Period; provided, however, that: (i) each such Interest
Period occurring after the initial Interest Period of any LIBOR Loan shall
commence on the day on which the preceding Interest Period for such LIBOR Loan
expires, (ii) whenever the last day of any Interest Period would otherwise occur
on a day other than a Business Day, the last day of such Interest Period shall
be extended to occur on the next succeeding Business Day, provided, however,
that if such extension would cause the last day of such Interest Period to occur
in the next following calendar month, then the last day of such Interest Period
shall occur on the immediately preceding Business Day; (iii) whenever the first
day of any Interest Period occurs on a day of a month for which there is no
numerically corresponding day in the calendar month in which such Interest
Period terminates, such Interest Period shall end on the last Business Day of
such calendar month; (iv) the Borrower shall select an Interest Period so as not
to require a payment or prepayment of any LIBOR Loan during an Interest Period
for such Loan; and (v) the final Interest Period for any LIBOR Loan must be such
that its expiration occurs on or before the maturity date **** of such
Loan.
  “ Investment ” shall
mean, with respect to any Person, any investment in another Person, whether by
acquisition of any debt or equity security, by making any loan or advance, by
becoming obligated with respect to a Contingent Liability in respect of
obligations of such other Person (other than travel and similar advances to
employees in the ordinary course of business).
  “ Liabilities ” shall
mean, as of any date of determination, all liabilities of the Borrower that
would be shown as such on a balance sheet of the Borrower prepared in accordance
with GAAP as of such date of determination.
  “ Lease ” shall
mean a lease agreement between the Borrower or a Designated Lessor, as lessor,
and any other Person, as lessee, whereby the Borrower or such Designated Lessor,
as applicable, leases the Railcar(s) and other equipment and personal property
identified therein to such Person for the term stated therein, together with all
amendments, supplements and other modifications thereto.
  “ Lease
Schedule ” shall
have the meaning specified in Section
6.8 .
  “ LIBOR ” shall
mean a rate of interest equal to (a) the per annum rate of interest at which
United States dollar deposits in an amount comparable to the amount of the
relevant LIBOR Loan and for a period equal to the relevant Interest Period are
offered in the London Interbank Eurodollar market at 11:00 a.m. (London time)
two (2) Business Days prior to the commencement of such Interest Period (or
three (3) Business Days prior to the commencement of such Interest Period if
banks in London, England were not open and dealing in offshore United States
dollars on such second preceding Business Day), as displayed in the *Bloomberg
Financial Markets* system
(or other authoritative source selected by the Bank in its sole discretion),
divided by (b) a number determined by subtracting from 1.00 the then stated
maximum reserve percentage for determining reserves to be maintained by member
banks of the Federal Reserve System for Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D), such rate to remain fixed for such Interest Period, or as LIBOR
is otherwise determined by the Bank in its sole and absolute discretion. The
Bank’s determination of LIBOR shall be conclusive, absent manifest
error.
  “ LIBOR
Loan ” or
“ LIBOR
Loans ” shall
mean that portion, and collectively those portions, of the aggregate outstanding
principal balance of the Loans that will bear interest at the LIBOR Rate, of
which at any time, the Borrower may identify no more than six (6) advances of
the Loans which will bear interest at the LIBOR Rate.
  “ LIBOR
Rate ” shall
mean a per annum rate of interest equal to LIBOR for the relevant Interest
Period, plus the
Applicable Margin, which LIBOR Rate shall remain fixed during such Interest
Period.
  “ Lien ” shall
mean, with respect to any Person, any interest granted by such Person in any
real or personal property, asset or other right owned or being purchased or
acquired by such Person (including, without limitation, an interest in respect
of a Capital Lease) which secures payment or performance of any obligation and
shall include any mortgage, lien, encumbrance, title retention lien, charge or
other security interest of any kind, whether arising by contract, as a matter of
law, by judicial process or otherwise.
  “ Loans ” shall
mean, collectively, all Revolving Loans and all Term Loans (whether Base Rate
Loans or LIBOR Loans) made by the Bank to the Borrower, under and pursuant to
this Agreement.
  “ Loan
Documents ” shall
mean each of
the agreements, documents, instruments and certificates set forth
in Section
3.1 hereof, and any
and all such other instruments, documents, certificates and agreements from time
to time executed and delivered by the Borrower, the Guarantors, if any, or any
of their respective Subsidiaries for the benefit of the Bank pursuant to any of
the foregoing, and all amendments ,
restatements, supplements and other modifications thereto .
  “ Lockbox ” shall
have the meaning set forth in Section
6.7 hereof.
  “ Lockbox
Account ” shall
have the meaning set forth in Section
6.7 hereof.
  “ Lockbox
Agreement ” shall
mean the Lockbox Agreement, in form prepared by and acceptable to the
Bank.
  “ Management
Contract ” shall
mean each and every management, service and similar agreement between the
Borrower and any Affiliate of the Borrower, and/or any third-party providing
such management services.
  “ Material
Adverse Effect ” shall
mean (a) a material adverse change in, or a material adverse effect upon, the
assets, business, properties, prospects, condition
(financial or otherwise) or results of operations of the
Borrower and its Subsidiaries taken as a whole, (b) a material impairment of the
ability of the Borrower and its Subsidiaries to perform any of the Obligations
under any of the Loan Documents, or (c) a material adverse effect on (i) any
substantial portion of the Collateral, (ii) the legality, validity, binding
effect or enforceability against the Borrower and its Subsidiaries of any of the
Loan Documents, (iii) the
perfection or priority of any Lien granted to the Bank under any Loan Document,
or (iv) the rights or remedies of the Bank under any Loan Document .
  “ Material
Affiliate Credit Agreements ” shall
mean (a) the Amended and Restated Warehousing Credit Agreement dated as of March
17, 2004, as amended by the First Amendment to Amended and Restated Warehousing
Credit Agreement dated as of September 3, 2004, the Second Amendment to Amended
and Restated Warehousing Credit Agreement dated as of October 20, 2004 and the
Third Amendment to Amended and Restated Warehousing Credit Agreement dated as of
December 28, 2004, and the Fourth Amendment to Amended and Restated
Warehousing Credit Agreement dated as of March 24, 2005, among PLM
Equipment Growth Fund VI, PLM Equipment Growth & Income Fund VII,
Transportation Equipment-PLM, LLC, , Acquisub, LLC, Rail Investors II, LLC, ,
PLM Financial Services, Inc., the lenders identified therein and Comerica Bank
as agent for such lenders, as the same shall be amended, supplemented or
otherwise modified from time to time, and (b) that certain Non-Recourse Note
dated as of August 31, 1995, issued by Residential Based Finance Corporation,
payable to Sanwa Business Credit, which note has been assumed by PLM
Transportation Equipment Corp.
  “ Net
Cash Proceeds ” shall
mean:
  (a)  in
connection with any
Asset Disposition, the aggregate cash proceeds (including cash proceeds received
pursuant to policies of insurance or by way of deferred payment of principal
pursuant to a note, installment receivable or otherwise, but only as and when
received) received by the Borrower pursuant to such Asset Disposition net of (i)
the direct costs relating to such sale, transfer or other disposition (including
sales commissions and legal, accounting and investment banking fees), (ii) taxes
paid or reasonably estimated by the Borrower to be payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements), and (iii) amounts required to be applied to the repayment
of any Debt secured by a Lien on the asset subject to such Asset Disposition
(other than the Loans);
  (b)  with
respect to any issuance of Capital Securities, the aggregate cash proceeds
received by the Borrower pursuant to such issuance, net of the direct costs
relating to such issuance (including sales and underwriters’ commissions);
and
  (c)  with
respect to any issuance of Debt, the aggregate cash proceeds received by the
Borrower pursuant to such issuance, net of the direct costs of such issuance
(including up-front, underwriters’ and placement fees).
  “ Net
Income ” shall
mean, with respect to any Person and its Subsidiaries for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries for such
period as determined in accordance with GAAP, excluding any
extraordinary gains and any gains from discontinued operations.
  “ Non-Excluded
Taxes ” shall have the
meaning set forth in Section
2.6(a) hereof.
  “ Note ” and
shall mean the Revolving Note or a Term Note, as the context
requires.
  “ Obligations ” shall
mean (without duplication) the Loans, as evidenced by the Notes, all interest
accrued thereon (including interest which would be payable as post-petition in
connection with any bankruptcy or similar proceeding, whether or not permitted
as a claim thereunder), any fees due the Bank hereunder, any expenses incurred
by the Bank hereunder and any and all other liabilities and obligations of the
Borrower to the Bank under this Agreement and any other Loan Document, all
Hedging Obligations which are owed to the Bank or any Affiliate of the Bank by
the Borrower relating hereto, and all Bank Products Obligations relating
thereto, all in each case howsoever created, arising or evidenced, whether
direct or indirect, absolute or contingent, now or hereafter existing, or due or
to become due, together with any and all renewals or extensions
thereof.
  “ Obligor ” shall
mean the Borrower, any Guarantor, accommodation endorser, third party pledgor,
or any other party liable with respect to the Obligations.
  “ Operating
Expenses ” means
the aggregate amount of (i) all reasonable out-of-pocket costs and expenses
incurred in connection with the ownership of the Railcars, including, without
limitation, all costs and expenses relating to the following: any maintenance
activity including amounts paid to American Railcar Industries; storage;
cleaning; testing; restenciling; painting; inspections; repositioning;
switching; any property taxes, ad valorem taxes, or gross receipts taxes imposed
upon or against the Railcars; and such other costs as the Borrower and the Bank
may agree; plus (ii) a reasonable allocation of all out-of-pocket costs and
expenses for reasonable accounting fees relating to the Railcars including those
paid in connection with any audited financial statements requested by the Bank;
reasonable legal fees paid relating to the Railcars; insurance premiums paid
with respect to the Railcars; and all other charges, assessments, or levies
imposed against upon or against the Railcars in the ordinary course of
business.
  “ Organizational
Identification Number ” means,
with respect to Borrower, the organizational identification number assigned to
Borrower by the applicable governmental unit or agency of the jurisdiction of
organization of the Borrower.
  “ Original
Closing Date ” shall
mean June 29, 2004.
  “ Overage
Amount ” shall
have the meaning set forth in Section 2.1(c)(i) .
  “ PLMI ” means
PLM International, Inc., a Delaware corporation.
  “ Permitted
Acquisition ” shall
mean the acquisition of Eligible Railcars.
  “ Permitted
Disposition ” shall
mean the sale, lease or transfer of Railcars in the ordinary course of the
Borrower’s business so long as the proceeds of such sale, lease or transfer are
applied as required by the terms of this Agreement.
  “ Permitted
Liens ” shall
mean (a) **** Liens for
Taxes, assessments or other governmental charges not at the time delinquent or
thereafter payable without penalty or being contested in good faith by
appropriate proceedings and, in each case, for which the Borrower maintains
adequate reserves in accordance with GAAP and in respect of which no Lien has
been filed; (b) Liens arising in the ordinary course of business (such as
(i) Liens of carriers, warehousemen, mechanics and materialmen and other similar
Liens imposed by law, and (ii) Liens in the form of deposits or pledges incurred
in connection with worker’s compensation, unemployment compensation and other
types of social security (excluding Liens arising under ERISA) or in connection
with surety bonds, bids, performance bonds and similar obligations) for sums not
overdue or being contested in good faith by appropriate proceedings and not
involving any advances or borrowed money or the deferred purchase price of
property or services, which do not in the aggregate materially detract from the
value of the property or assets of the Borrower or materially impair the use
thereof in the operation of the Borrower’s business and, in each case, for which
it maintains adequate reserves in accordance with GAAP and in respect of which
no Lien has been filed; (c) Liens described on Schedule
9.2 as of
the Restatement Date and the replacement, extension or renewal of any such Lien
upon or in the same property subject thereto arising out of the extension,
renewal or replacement of the Debt secured thereby (without increase in the
amount thereof); (d) **** attachments,
appeal bonds, judgments and other similar Liens, for sums not exceeding
two-hundred fifty thousand and 00/100 Dollars ($250,000.00) arising in
connection with court proceedings, provided the
execution or other enforcement of such Liens is effectively stayed and the
claims secured thereby are being actively contested in good faith and by
appropriate proceedings and to the
extent such judgments or awards do not constitute an Event of Default under Section 11.11 hereof ; (e)
easements, rights of way, restrictions, minor defects or irregularities in title
and other similar Liens not interfering in any material respect with the
ordinary conduct of the business of the Borrower or any of its Subsidiaries; (f)
Liens granted to the Bank hereunder and under the Loan Documents; (g) Liens
granted to a lessee under a Lease or to a Permitted Sublessee under a Permitted
Sublease so long as, in each case, (i) no such Lien extends to any real,
personal or mixed property of the Borrower other than the Railcar(s) and related
equipment and personal property then being leased to such lessee or Permitted
Sublessee, as the case may be, under such Lease or Permitted Sublease, and (ii)
each such Lien is at all times subject and subordinate to the Liens granted to
the Bank hereunder and under the Loan Documents; and (h) Liens in Collateral
specifically released from the Lien of this Agreement (i) by the Bank in writing
in connection with Permitted Takeout Financing relating to the Collateral so
released, or (ii) in connection with the prepayment in full of all Obligations
relating to the Loan related to the Collateral so released.
  “ Permitted
Sublease ” means a
sublease whereby the lessee under a Lease leases all or a portion of the
Railcar(s) and other equipment and personal property leased by the Borrower or a
Designated Lessor to such lessee under such Lease to another Person where such
lessee remains fully liable to the Borrower or such Designated Lessor for all
obligations under such Lease, together with all amendments, supplements and
other modifications thereto.
  “ Permitted
Sublessee ” means a
Person that subleases Railcar(s) or equipment or other personal property subject
to a Lease from the lessee under such Lease pursuant to a Permitted
Sublease.
  “ Permitted
Takeout Financing ” is Debt
of the Borrower with a maturity not less than five years, the net proceeds of
which will be used to pay one or more Revolving Loans or Term
Loans.
  “ Person ” shall
mean any natural person, partnership, limited liability company, corporation,
trust, joint venture, joint stock company, association, unincorporated
organization, government or agency or political subdivision thereof, or other
entity, whether acting in an individual, fiduciary or other
capacity.
  “ Prime
Rate ” shall
mean the floating per annum rate of interest which at any time, and from time to
time, shall be most recently announced by the Bank as its Prime Rate, which is
not intended to be the Bank’s lowest or most favorable rate of interest at any
one time. The effective date of any change in the Prime Rate shall for purposes
hereof be the date the Prime Rate is changed by the Bank. The Bank shall not be
obligated to give notice of any change in the Prime Rate.
  “ Railcar ” shall
mean a new or used railcar not more than 25 years old in serviceable
condition owned by the Borrower and suitable for an Eligible Railcar
Lease.
  “ Railcar
Filings ” shall
mean filings with one or more of the Railcar Filing Authorities.
  “ Railcar
Filing Authorities ” shall
mean (i) the Surface Transportation Board, and (ii) the Registrar General of
Canada.
  “ Railcar
Maintenance and Safety Standards ” shall
mean (i) maintenance standards promulgated by the American Association of
Railroads, (ii) safety standards promulgated by the U.S. Department of
Transportation, and (iii) safety standards promulgated under the Canadian
Transportation Authority.
  “ Rated
Lessee ” shall
mean a Person with a current credit rating of (i) at least Baa3 by Moody’s
Investor Service, Inc., (ii) at least BBB- by Standard & Poor’s Rating
Services, a division of the McGraw-Hill Companies, Inc., or (iii) an equivalent
rating by another nationally recognized rating agency acceptable to the
Bank.
  “ Regulatory
Change ” shall
mean the introduction of, or any change in any applicable law, treaty, rule,
regulation or guideline or in the interpretation or administration thereof by
any governmental authority or any central bank or other fiscal, monetary or
other authority having jurisdiction over the Bank or its lending
office.
  “ Reporting
Company ” shall
mean a Person required to submit its annual and quarterly financial statements
to the Securities and Exchange Commission under the terms of the Securities and
Exchange Act of 1934.
  “ Reserve
Account ” shall
have the meaning specified in Section
3.6 hereof.
  “ Reserve
Amount ” shall
have the meaning specified in Section
3.6 hereof.
  “ Restatement
Date ” shall
mean June __, 2005.
  “ Revolving
Interest Rate ” shall
mean, with respect to a Revolving Loan, during the Revolving Loan Period
applicable thereto, an interest rate (determined from time to time at the
Borrower’s option) equal to either (i) the Base Rate applicable to Revolving
Loans plus the
Applicable Margin, or (ii) the LIBOR Rate applicable to Revolving Loans plus the
Applicable Margin.
  “ Revolving
Loan ” and
“ Revolving
Loans ” shall
mean, respectively, each direct advance of funds and the aggregate of all such
direct advances, from time to time in the form of either Base Rate Loans and/or
LIBOR Loans, made by the Bank to the Borrower under and pursuant to this
Agreement, as set forth in Section
2.1 of this
Agreement.
  “ Revolving
Loan Availability ” shall
mean, at any time, an amount equal to the lesser of (a) the Revolving Loan
Commitment minus the
aggregate outstanding principal balance of all Revolving Loans and all Term
Loans, or (b) the Borrowing Base Amount minus the
aggregate outstanding principal balance of all Revolving Loans and all Term
Loans.
  “ Revolving
Loan Commitment ” shall
mean fifteen million and 00/100 Dollars ($15,000,000.00).
  “ Revolving
Loan Conversion Date ” shall
mean, with respect to a Revolving Loan that the Borrower has asked the Bank to
convert into a Term Loan in accordance with Section 2.1(d) , the
first Business Day following the Revolving Loan Maturity Date applicable to the
Revolving Loan to be so converted.
  “ Revolving
Loan Facility Termination Date ” shall
mean the earlier to occur of (i) the Term Loan Maturity Date, (ii) the date the
Revolving Loan Commitment has been reduced to zero, or (iii) the date the
Revolving Loan Commitment has otherwise been terminated in accordance with the
terms of this Agreement.
  “ Revolving
Loan Maturity Date ” shall
mean, with respect to each Revolving Loan made hereunder, one hundred eighty
(180) calendar days after the date such Revolving Loan is made by the Bank to
the Borrower hereunder.
  “ Revolving
Loan Period ” shall
mean, with respect to a Revolving Loan, the period commencing on the date such
Revolving Loan is made to the Borrower and ending on (i) with respect to a
Revolving Loan that has not been converted to a Term Loan, the Revolving Loan
Maturity Date, and (ii) with respect to a Revolving Loan that has been converted
to a Term Loan, the Revolving Loan Conversion Date applicable
thereto.
  “ Revolving
Note ” shall
have the meaning set forth in Section
4.1 hereof.
  “ Senior
Debt ” shall
mean all Debt of the Borrower and its Subsidiaries other than Subordinated Debt.
  “ Subordinated
Debt ” shall
mean, as of any date of determination, that portion of the Debt of the Borrower
and its Subsidiaries which is subordinated to the Obligations in a manner
satisfactory to the Bank, including, but not limited to, right and time of
payment of principal and interest with respect thereto. Subordinated Debt shall,
in all events, include other distributions described in Section
9.6 hereof
(whether or not the same constitute Debt).
  “ Subordination
Agreement ” shall
mean any agreement (in form and substance satisfactory to the Bank) executed and
delivered by a holder of Subordinated Debt in favor of the Bank pursuant to
which such holder subordinates payment of the Subordinated Debt held by it to
payment of the Obligations, or all of them collectively, as the context may
require, and all amendments and supplements thereto and modifications
thereof.
  “ Subsidiary ” and
“ Subsidiaries ” shall
mean, respectively, with respect to any Person, each and all such corporations,
partnerships, limited partnerships, limited liability companies, limited
liability partnerships, joint ventures or other entities of which or in which
such Person owns, directly or indirectly, such number of outstanding Capital
Securities as have more than fifty percent (50.00%) of the ordinary voting power
for the election of directors or other managers of such corporation,
partnership, limited liability company or other entity. Unless the context
otherwise requires, each reference to Subsidiaries herein shall be a reference
to Subsidiaries of the Borrower.
  “ Tangible
Assets ” shall
mean, as of any date of determination, the total of all assets appearing on a
balance sheet of the Borrower prepared in accordance with GAAP as of such date
of determination (with inventory being valued at the lower of cost or market),
after deducting all proper reserves (including reserves for Depreciation) minus
the sum of (i) goodwill, patents, trademarks, prepaid expenses, deposits,
deferred charges and other personal property which is classified as intangible
property in accordance with GAAP, and (ii) any amounts due from shareholders,
Affiliates, officers or employees of the Borrower.
  “ Tangible
Net Worth ” shall
mean at any time the total of Tangible Assets minus Liabilities plus Subordinated Debt.
  “ Taxes ” shall
mean any and all present and future taxes, duties, levies, imposts, deductions,
assessments, charges or withholdings imposed by any governmental authority and
any and all liabilities (including interest and penalties and other additions to
taxes) with respect to the foregoing.
  “ Term
Interest Rate ” shall
mean, with respect to a Term Loan, an interest rate (determined from time to
time at the Borrower’s option) equal to either (i) the Base Rate applicable
to Term Loans plus the
Applicable Margin, or (ii) the LIBOR Rate applicable to Term Loans plus the
Applicable Margin.
  “ Term
Loan ” shall
mean a Revolving Loan which has been converted into a Term Loan pursuant to Sections
2.1(d) and 2.2 hereof.
  “ Term
Loan Facility ” shall
mean the credit facility provided by the Bank to the Borrower under Section
2.2 hereof.
  “ Term
Loan Facility Termination Date ” shall
mean the earlier to occur of (i) the Term Loan Maturity Date, or (ii) the date
the Bank accelerates the Obligations pursuant to Section
12 hereof.
  “ Term
Loan Maturity Date ” shall
mean June 29, 2006.
  “ Term
Loan Prepayment Date ” shall
have the meaning set forth in Section
2.2(e)(i) .
  “ Term
Note ” shall
have the meaning set forth in Section
4.2 hereof.
  “ Tier
One Listed Lessee ” shall
mean:
  (a)  Agriliance
LLC;
  (b)  Aux Sable
Liquid Products LP;
  (c)  CF
Industries, Inc.;
  (d)  Elbow
River Resources Ltd.;
  (e)  Factor
Gas Liquids Inc.;
  (f)  International
Commodities Export Consortium;
  (g)  Kinetic
Resources (LPG);
  (h)  NGL
Supply Co. Ltd.;
  (i)  Nova
Chemicals (Canada) Ltd.;
  (j)  Tauber
Oil Company;
  (k)  Koch
Industries/Koch Nitrogen; and
  (l)  each
other person or entity from time to time approved in writing by the Bank as a
Tier One Listed Lessee.
  “ Tier
One Railcar ” shall
mean a Railcar owned by the Borrower that is 10 years old or newer.
  “ Tier
Two Listed Lessee ” shall
mean:
  (a)  Octel
Starreon LLC;
  (b)  Petromont
and Company Ltd.;
  (c)  Tesoro
Petroleum Corporation; and
  (d)  each
other person or entity from time to time approved in writing by the Bank as a
Tier Two Listed Lessee.
  “ Tier
Two Railcar ” shall
mean a Railcar owned by the Borrower that is more than 10 years
old.
  “ UCC ” shall
mean the Uniform Commercial Code in effect in the state of Illinois from time to
time.
  “ Unmatured
Event of Default ” shall
mean any event which, with the giving of notice, the passage of time or both,
would constitute an Event of Default.
  “ Voidable Transfer ” shall
have the meaning set forth in Section 13.21 hereof.
  1.2  Accounting
Terms . Any
accounting terms used in this Agreement which are not specifically defined
herein shall have the meanings customarily given them in accordance with GAAP.
Calculations and determinations of financial and accounting terms used and not
otherwise specifically defined hereunder and the preparation of financial
statements to be furnished to the Bank pursuant hereto shall be made and
prepared, both as to classification of items and as to amount, in accordance
with sound accounting practices and GAAP as used in the preparation of the
financial statements of the Borrower on the date of this Agreement. If any
changes in accounting principles or practices from those used in the preparation
of the financial statements are hereafter occasioned by the promulgation of
rules, regulations, pronouncements and opinions by or required by the Financial
Accounting Standards Board or the American Institute of Certified Public
Accountants (or any successor thereto or agencies with similar functions), which
results in a material change in the method of accounting in the financial
statements required to be furnished to the Bank hereunder or in the calculation
of financial covenants, standards or terms contained in this Agreement, the
parties hereto agree to enter into good faith negotiations to amend such
provisions so as equitably to reflect such changes to the end that the criteria
for evaluating the financial condition and performance of the Borrower will be
the same after such changes as they were before such changes; and if the parties
fail to agree on the amendment of such provisions, the Borrower will furnish
financial statements in accordance with such changes but shall provide
calculations for all financial covenants, perform all financial covenants and
otherwise observe all financial standards and terms in accordance with
applicable accounting principles and practices in effect immediately prior to
such changes. Calculations with respect to financial covenants required to be
stated in accordance with applicable accounting principles and practices in
effect immediately prior to such changes shall be reviewed and certified by the
Borrower’s accountants.
  1.3  Other
Terms Defined in UCC . All
other capitalized words and phrases used herein and not otherwise specifically
defined herein shall have the respective meanings assigned to such terms in the
UCC, to the extent the same are used or defined therein.
  1.4  Other
Interpretive Provisions .
  (a)  The
meanings of defined terms are equally applicable to the singular and plural
forms of the defined terms. Whenever the context so requires, the neuter gender
includes the masculine and feminine, the single number includes the plural, and
vice versa, and in particular the word “Borrower” shall be so
construed.
  (b)  Section
and Schedule references are to this Agreement unless otherwise specified. The
words “hereof”, “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement
  (c)  The term
“including” is not limiting, and means “including, without
limitation”.
  (d)  In the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including”; the words “to” and “until” each mean
“to but excluding”, and the word “through” means “to and
including”.
  (e)  Unless
otherwise expressly provided herein, (i) references to agreements
(including this Agreement and the other Loan Documents) and other contractual
instruments shall be deemed to include all subsequent amendments, restatements,
supplements and other modifications thereto, but only to the extent such
amendments, restatements, supplements and other modifications are not prohibited
by the terms of any Loan Document, and (ii) references to any statute or
regulation shall be construed as including all statutory and regulatory
provisions amending, replacing, supplementing or interpreting such statute or
regulation.
  (f)  To the
extent any of the provisions of the other Loan Documents are inconsistent with
the terms of this Agreement, the provisions of this Agreement shall
govern.
  (g)  This
Agreement and the other Loan Documents may use several different limitations,
tests or measurements to regulate the same or similar matters. All such
limitations, tests and measurements are cumulative and each shall be performed
in accordance with its terms.
  (h)  This
Agreement and the other Loan Documents are the result of negotiations between,
and have been reviewed by, counsel to the Borrower and the Bank and the other
parties thereto and are the products of all parties. Accordingly, this Agreement
and the other Loan Documents shall not be construed more strictly against the
Bank than against the Borrower merely because of the Bank’s involvement in their
preparation.
  2
    COMMITMENT
      OF THE BANK.
  2.1  Revolving
Loans .
  (a)  Revolving
Loan Commitment . Subject
to the terms and conditions of this Agreement and the other Loan Documents, and
in reliance upon the representations and warranties of the Borrower set forth
herein and in the other Loan Documents, the Bank agrees to make Revolving Loans
at such times and in such amounts as the Borrower may from time to time request
until, but not including, the Revolving Loan Facility Termination Date;
provided, however, that the Bank shall have no obligation to make a Revolving
Loan if (i) after giving effect to such Revolving Loan, there would then be more
than eight (8) Revolving Loans and/or Term Loans outstanding under this
Agreement, (ii) after giving effect to such Revolving Loan, the aggregate
outstanding principal balance of all Revolving Loans would then exceed Revolving
Loan Availability, or (iii) such Revolving Loan would be made in an amount less
than $1,500,000. Revolving Loans made by the Bank may be repaid and, subject to
the terms and conditions hereof, borrowed again up to, but not including the
Revolving Loan Facility Termination Date. The Revolving Loans shall be used by
the Borrower for the purpose of acquiring Railcars.
  (b)  Revolving
Loan Interest and Payments . Except
as otherwise provided in this Section
2.1(b) , the
principal amount of the Revolving Loans outstanding from time to time shall bear
interest at the applicable Revolving Interest Rate. Accrued and unpaid interest
on the unpaid principal balance of all Revolving Loans outstanding from time to
time which are Base Rate Loans, shall be due and payable monthly, in arrears,
(i) on the last Business Day of each calendar month commencing on June 30, 2004
and continuing thereafter, and (ii) on the Revolving Loan Maturity Date
applicable thereto. Accrued and unpaid interest on the unpaid principal balance
of all Revolving Loans outstanding from time to time which are LIBOR Loans shall
be payable (i) on the last Business Day of each Interest Period (provided,
however, that for Interest Periods of six months, accrued interest shall also be
paid on the date which is three months from the first day of such Interest
Period), commencing on the first such date to occur after the date hereof, (ii)
on the date of any principal repayment of a LIBOR Loan, and (iii) on the
Revolving Loan Maturity Date applicable thereto. Any amount of principal or
interest on the Revolving Loans which is not paid when due, whether at stated
maturity, by acceleration or otherwise, shall bear interest payable on demand at
the Default Rate.
  (c)  Revolving
Loan Principal Payments .
  (i)
    Revolving
      Loan Mandatory Prepayments.
      All Revolving Loans hereunder shall be converted into a Term Loan in
      accordance with the terms of this Agreement or repaid by the Borrower on
      the Revolving Loan Maturity Date applicable thereto, unless payable sooner
      pursuant to the provisions of this Agreement. In the event the aggregate
      outstanding principal balance of all Revolving Loans hereunder exceeds the
      Revolving Loan Availability (the amount of such excess herein being the
      “Overage Amount”), the Borrower shall, without notice or demand of any
      kind, immediately upon obtaining knowledge of the same, prepay a portion
      of the outstanding principal amount of Revolving Loans equal to the
      Overage Amount or take such other actions as are satisfactory to the Bank
      as shall be necessary to eliminate such Overage Amount. Also, if the
      Borrower chooses not to convert any Revolving Loans which are LIBOR Loans
      to Base Rate Loans as provided inSection
      2.3(b)andSection
      2.3(c),
      then such Revolving Loans shall immediately be due and payable on the last
      Business Day of the then existing Interest Period or on such earlier date
      as required by law (and the Borrower shall prepay the same on and as of
      such date), all without further demand, presentment, protest or notice of
      any kind, all of which are hereby waived by the
  Borrower.
  (ii)
    Mandatory
      Prepayments from Permitted Transactions.
      All Net Cash Proceeds from Permitted Dispositions or proceeds from
      Permitted Takeout Financing received by the Borrower with respect to
      Eligible Railcars subject to a Revolving Loan shall be used immediately to
      prepay said Revolving Loans.
  (iii)
    Optional
      Prepayments.
      The Borrower may from time to time prepay the Revolving Loans which are
      Base Rate Loans, in whole or in part, without any prepayment penalty
      whatsoever, subject to the following conditions: (i) each partial
      prepayment shall be in an amount equal to five hundred thousand and 00/100
      Dollars ($500,000.00), or a higher integral multiple of one hundred
      thousand 00/100 Dollars ($100,000.00); and (ii) any prepayment of the
      entire principal balance of the Base Rate Loans shall include accrued
      interest on such Base Rate Loans to the date of such
      prepayment.
  (iv)
    Release
      of Lien Upon Prepayment of Revolving Loan In Full.
      Upon prepayment by the Borrower of a Revolving Loan in full and payment of
      all other Obligations related to such Revolving Loan (and conversion of a
      Revolving Loan to a Term Loan shall not constitute prepayment thereof for
      purposes of this Section 2.1(c)(iv)), the Bank’s security interest in the
      Railcar(s), Lease(s) and Lease Schedule(s) relating to such Revolving Loan
      shall terminate and the Bank shall (at the cost and expense of the
      Borrower) execute, deliver and file such evidences of release in respect
      thereof as the Borrower shall reasonably
request.
  (d)  Conversion
of Revolving Loans to Term Loans; Amount Converted . The
Borrower may, by written request provided to the Bank not less than five
(5) days prior to the Revolving Loan Maturity Date applicable thereto,
request that the Bank convert any Revolving Loan to a Term Loan. Each such
request shall be irrevocable and the related conversion shall become effective
on the Revolving Loan Conversion Date applicable thereto. On the Revolving Loan
Conversion Date applicable to a Revolving Loan, the Borrower shall repay so much
of the outstanding principal amount of such Revolving Loan as shall be required
to cause the remaining outstanding principal balance thereof (such remaining
outstanding principal balance herein being the “Conversion Amount”) to be less
than or equal to 75% of the Acquisition Cost of the Eligible Railcars financed
by such Revolving Loan. All interest on such converted Revolving Loan which has
accrued but remains unpaid on such Revolving Loan as of the related Revolving
Loan Conversion Date shall be paid on the Revolving Loan Conversion Date. On and
after the Revolving Loan Conversion Date applicable thereto, (i) the Conversion
Amount with respect to such converted Revolving Loan, and (ii) all interest,
fees and other amounts thereafter accruing on or with respect to the Conversion
Amount shall, in each case, be paid in accordance with the terms and provisions
of this Agreement applicable to Term Loans. Notwithstanding anything to the
contrary contained in this Agreement, no conversion described in this Section
2.1(d) shall be
made if an Event of Default shall have occurred and be continuing or an
Unmatured Event of Default with respect to Section
11.4 shall
have occurred and be continuing.
  2.2  Term
Loan .
  (a)  Term
Loan Commitment . Subject
to the terms and conditions of this Agreement and the other Loan Documents, and
in reliance upon the representations and warranties of the Borrower set forth
herein and in the other Loan Documents, the Bank agrees to convert each
Revolving Loan for which the Borrower has properly requested conversion in
accordance with Section
2.1(d) hereof
into a Term Loan. On and after the Revolving Loan Conversion Date on which a
given Revolving Loan has been converted into a Term Loan, such Term Loan shall
bear interest and shall be repaid in accordance with the terms set forth in this Section
2.2 . Each
Term Loan shall be made in an original principal amount equal to the Conversion
Amount applicable to the Revolving Loan from which such Term Loan originated
and, as a consequence, no new advance of funds will be made by the Bank in
respect of any such Term Loan. Each Term Loan shall be evidenced by a separate
Term Note in an amount equal to the Conversion Amount applicable to the
Revolving Loan from which such Term Loan originated. The Term Loan may be
prepaid in whole or in part (but in amounts not less than $500,000.00 or
multiples of $100,000.00; provided, however, that such limitation shall not
apply to mandatory prepayments made under Section
2.2(d) ) at any
time without penalty, unless said Term Loan is a LIBOR Loan and the repayment is
on a date other than at the end of an Interest Period, but shall be due in full
on the Term Loan Facility Maturity Date, unless the credit extended under the
Term Loan is otherwise accelerated, terminated or extended as provided in this
Agreement.
  (b)  Term
Loan Interest Payments . Except
as otherwise provided in this Section
2.2(b) , the
principal amount of a Term Loan outstanding from time to time shall bear
interest at the applicable Term Interest Rate. Accrued and unpaid interest on
that portion of the principal balance of each Term Loan outstanding from time to
time which is a Base Rate Loan, shall be due and payable monthly, in arrears,
(i) on the last day of each calendar month commencing on June 30, 2004 and
continuing thereafter, and (ii) on the Term Loan Facility Maturity Date. Accrued
and unpaid interest on those portions of the principal balance of a Term Loan
outstanding from time to time which are LIBOR Loans shall be payable (i) on the
last Business Day of each Interest Period, commencing on the first such date to
occur after the Revolving Loan Conversion Date applicable to the Revolving Loan
from which such Term Loan has been converted, (ii) on the date of any principal
repayment of a LIBOR Loan, and (iii) on the Term Loan Facility Maturity
Date. **** Any
amount of principal or interest on a Term Loan which is not paid when due,
whether at stated maturity, by acceleration or otherwise, shall bear interest
payable on demand at the Default Rate.
  (c)  Term
Loan Principal Payments . The
original principal amount of each Term Loan relating to Tier One Railcars shall
be repaid in equal principal installments, each in the amount of .833% of such
original principal amount. The original principal amount of each Term Loan
relating to Tier Two Railcars shall be repaid in equal principal installments,
each in the amount of 1.19% of such original principal amount **,** in each
case beginning on the first day of the calendar month following the calendar
month in which the applicable Revolving Loan Conversion Date occurred and
continuing on the first day of each month thereafter, with a final payment of
all outstanding principal and accrued interest with respect to such Loan due on
the Term Loan Facility Maturity Date. Principal amounts repaid on the Term Note
may not be borrowed again. Also, if the Borrower chooses not to convert any
portion of the Term Loan which is a LIBOR Loan to a Base Rate Loan as provided
in Section
2.3(b) and Section
2.3(c) , then
the portion of the Term Loan not converted to a Base Rate Loan shall immediately
be due and payable on the last Business Day of the then existing Interest Period
or on such earlier date as required by law (and the Borrower shall prepay the
same on and as of such date), all without further demand, presentment, protest
or notice of any kind, all of which are hereby waived by the
Borrower.
  (d)  Term
Loan Mandatory Prepayments . All Net
Cash Proceeds from a Permitted Disposition or proceeds from Permitted Takeout
Financing received by the Borrower with respect to Eligible Railcars subject to
a Term Loan shall be used immediately to repay said Term Loans.
  (e)  Term
Loan Optional Prepayments .  Provided
that no Event of Default then exists under this Agreement or the Loans, the
Borrower may voluntarily prepay the principal balance of any Term Loan, in whole
or in part, at any time on or after the date hereof, subject to the following
conditions:
  (i)
    Not
      less than three (3) days prior to the date upon which the Borrower desires
      to make such prepayment, the Borrower shall deliver to the Bank written
      notice of its intention to prepay the Term Loan, which notice shall be
      irrevocable and state the prepayment amount and the prepayment date (the
      “Term Loan Prepayment Date”);
  (ii)
    The
      Borrower shall pay to the Bank all accrued and unpaid interest on the Term
      Loan through the Term Loan Prepayment Date on the principal balance being
      prepaid.****Each
      prepayment of a Term Loan shall be applied to the scheduled installments
      of such Term Loan in inverse order of
maturity.
  (f)  Release
of Lien Upon Prepayment of Term Loan In Full . Upon
prepayment by the Borrower of a Term Loan in full and payment of all other
Obligations related to such Term Loan, the Bank’s security interest in the
Railcar(s), Lease(s) and Lease Schedule(s) relating to such Term Loan shall
terminate and the Bank shall (at the cost and expense of the Borrower) execute,
deliver and file such evidences of release in respect thereof as the Borrower
shall reasonably request.
  2.3  Additional
LIBOR Loan Provisions .
  (a)  LIBOR
Loan Prepayments .
Notwithstanding anything to the contrary contained herein, the principal balance
of any LIBOR Loan may not be prepaid in whole or in part at any time. If, for
any reason, a LIBOR Loan is paid prior to the last Business Day of any Interest
Period, whether voluntary, involuntary, by reason of acceleration or otherwise,
each such prepayment of a LIBOR Loan will be accompanied by the amount of
accrued interest on the amount prepaid and any and all costs, expenses,
penalties and charges incurred by the Bank as a result of the early termination
or breakage of a LIBOR Loan, plus the amount, if any, by which (i) the
additional interest which would have been payable during the Interest Period on
such LIBOR Loan had it not been prepaid, exceeds (ii) the interest which would
have been recoverable by the Bank by placing the amount prepaid on deposit in
the domestic certificate of deposit market, the eurodollar deposit market, or
other appropriate money market selected by the Bank, for a period starting on
the date on which it was prepaid and ending on the last day of the Interest
Period for such LIBOR Loan. The amount of any such loss or expense payable by
the Borrower to the Bank under this section shall be determined in the Bank’s
sole discretion based upon the assumption that the Bank funded its loan
commitment for LIBOR Loans in the London Interbank Eurodollar market and using
any reasonable attribution or averaging methods which the Bank deems appropriate
and practical, provided, however, that the Bank is not obligated to accept a
deposit in the London Interbank Eurodollar market in order to charge interest on
a LIBOR Loan at the LIBOR Rate.
  (b)  LIBOR
Unavailability . If the
Bank determines in good faith (which determination shall be conclusive, absent
manifest error) prior to the commencement of any Interest Period that (i) the
making or maintenance of any LIBOR Loan would violate any applicable law, rule,
regulation or directive, whether or not having the force of law, (ii) United
States dollar deposits in the principal amount, and for periods equal to the
Interest Period for funding any LIBOR Loan are not available in the London
Interbank Eurodollar market in the ordinary course of business, (iii) by reason
of circumstances affecting the London Interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the LIBOR Rate to be applicable to the
relevant LIBOR Loan, or (iv) the LIBOR Rate does not accurately reflect the cost
to the Bank of a LIBOR Loan, the Bank shall promptly notify the Borrower in
writing thereof and, so long as the foregoing conditions continue, Loans may not
be advanced as a LIBOR Loan thereafter. In addition, at the Borrower’s option,
each existing LIBOR Loan shall be immediately (i) converted to a Base Rate Loan
on the last Business Day of the then existing Interest Period, or (ii) due and
payable on the last Business Day of the then existing Interest Period, without
further demand, presentment, protest or notice of any kind, all of which are
hereby waived by the Borrower.
  (c)  Regulatory
Change . In
addition, if, after the date hereof, a Regulatory Change shall, in the
reasonable determination of the Bank, make it unlawful for the Bank to make or
maintain the LIBOR Loans, then the Bank shall promptly notify the Borrower in
writing and the Loans may not be advanced as a LIBOR Loan thereafter. In
addition, at the Borrower’s option, each existing LIBOR Loan shall be
immediately (i) converted to a Base Rate Loan on the last Business Day of the
then existing Interest Period or on such earlier date as required by law, or
(ii) due and payable on the last Business Day of the then existing Interest
Period or on such earlier date as required by law, all without further demand,
presentment, protest or notice of any kind, all of which are hereby waived by
the Borrower.
  (d)  LIBOR
Loan Indemnity . If any
Regulatory Change (whether or not having the force of law) shall (a) impose,
modify or deem applicable any assessment, reserve, special deposit or similar
requirement against assets held by, or deposits in or for the account of or
loans by, or any other acquisition of funds or disbursements by, the Bank; (b)
subject the Bank or any LIBOR Loan to any tax, duty, charge, stamp tax or fee or
change the basis of taxation of payments to the Bank of principal or interest
due from the Borrower to the Bank hereunder (other than a change in the taxation
of the overall net income of the Bank); or (c) impose on the Bank any other
condition regarding such LIBOR Loan or the Bank’s funding thereof, and the Bank
shall reasonably determine (which determination shall be conclusive, absent
manifest error) that the result of the foregoing is to increase the cost to the
Bank of making or maintaining such LIBOR Loan or to reduce the amount of
principal or interest received by the Bank hereunder, then the Borrower shall
pay to the Bank, on demand, such additional amounts as the Bank shall, from time
to time, determine are sufficient to compensate and indemnify the Bank for such
increased cost or reduced amount.
  2.4  Interest
and Fee Computation; Collection of Funds . Except
as otherwise set forth herein, all interest and fees shall be calculated on the
basis of a year consisting of three hundred sixty (360) days and shall be paid
for the actual number of days elapsed. Principal payments submitted in funds not
immediately available shall continue to bear interest until collected. If any
payment to be made by the Borrower hereunder or under the Notes shall become due
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in
computing any interest in respect of such payment. Notwithstanding anything to
the contrary contained herein, the final payment due under any of the Loans must
be made by wire transfer or other immediately available funds. All payments made
by the Borrower hereunder or under any of the Loan Documents shall be made
without setoff, counterclaim, or other defense. To the extent permitted by
applicable law, all payments hereunder or under any of the Loan Documents
(including any payment of principal, interest, or fees) to, or for the benefit,
of any Person shall be made by the Borrower free and clear of, and without
deduction or withholding for, or account of, any taxes now or hereinafter
imposed by any taxing authority.
  2.5  **[Reserved]**
  2.6  Taxes .
  (a)  All
payments made by the Borrower under this Agreement shall be made free and clear
of, and without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any governmental authority, excluding net income taxes
and franchise taxes (imposed in lieu of net income taxes) imposed on the Bank as
a result of a present or former connection between the Bank and the jurisdiction
of the governmental authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such connection arising
solely from the Bank having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or any other Loan
Document). If any such non-excluded taxes, levies, imposts, duties, charges,
fees, deductions or withholdings (collectively, “Non-Excluded Taxes”) are
required to be withheld from any amounts payable to the Bank hereunder, the
amounts so payable to the Bank shall be increased to the extent necessary to
yield to the Bank (after payment of all Non-Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to the Bank with respect to any Non-Excluded
Taxes that are attributable to the Bank’s failure to comply with the
requirements of subsection 2.6(c) .
  (b)  At the
request of the Borrower and at the Borrower’s sole cost, the Bank shall take
reasonable steps to (i) contest its liability for any Non-Excluded Taxes that
have not been paid, or (ii) seek a refund of any Non-Excluded Taxes that have
been paid.
  (c)  Whenever
any Non-Excluded Taxes are payable by the Borrower, as promptly as possible
thereafter the Borrower shall send to the Bank a certified copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Bank the required receipts or other required
documentary evidence or if any governmental authority seeks to collect a
Non-Excluded Tax or Other Tax directly from the Bank for any other reason, the
Borrower shall indemnify the Bank on an after-tax basis for any incremental
taxes, interest or penalties that may become payable by the Bank, if such
amounts are payable because of the Borrower’s failure to pay when due to the
appropriate taxing authority.
  (d)  Notwithstanding
anything to the contrary contained herein, the Borrower shall not be required to
pay any additional amount in respect of an Non-Excluded Taxes pursuant to this Section 2.6 to the
extent that such withholding is required because the Bank or an assignee of the
Bank, as the case may be, has failed to submit any form or certificate that it
is entitled to submit under applicable law.
  (e)  The
agreements in this Section shall survive the satisfaction and payment of the
Obligations and the termination of this Agreement.
  2.7  All
Loans to Constitute Single Obligation . The
Loans shall constitute one general obligation of the Borrower, and shall be
secured by the Bank’s priority security interest in and Lien upon all of the
Collateral and by all other security interests, Liens, claims and encumbrances
heretofore, now or at any time or times hereafter granted by the Borrower and/or
any Subsidiary to the Bank in connection with this Agreement or the other Loan
Documents.
  3
    CONDITIONS
      OF BORROWING.
  Notwithstanding
any other provision of this Agreement, the Bank shall not be required to
disburse or make all or any portion of the Loans if any of the following
conditions shall have occurred.
 
 3.1  Loan
Documents . The
Borrower shall have failed to perform, or cause to be performed, any of the
following or shall have failed to execute and deliver, or cause to be executed
and delivered to the Bank any of the following Loan Documents, all of which must
be satisfactory to the Bank and the Bank’s counsel in form, substance and
execution:
  (a)  Loan
Agreement . Two
original copies of this Agreement duly executed by the Borrower.
  (b)  Revolving
Note . A
Revolving Note duly executed by the Borrower, in the form of Exhibit
A hereto.
  (c)  Term
Note . A Term
Note (as and when each Term Loan is made hereunder) duly executed by the
Borrower, in the form of Exhibit
B hereto.
  (d)  Borrowing
Base Certificate . A
Borrowing Base Certificate in the form of Exhibit
D hereto,
certified as accurate in all material respects by the Borrower.
  (e)  Search
Results . Copies
of search reports (and/or, in the sole discretion of the Bank, opinions of
counsel), dated as of a date reasonably acceptable to the Bank, with respect to
(i) effective UCC financing statements in all applicable jurisdictions which
names the Borrower under its present name and previous names as debtor, together
with copies of such UCC financing statements, and (ii) such Railcar Filings as
the Bank shall reasonably require to determine the ownership of any one or more
of the Railcars.
  (f)  Filings . Such
UCC filings and Railcar Filings as the Bank shall have required to (i) establish
a first priority lien in favor of the Bank in and to all Collateral, or (ii) to
establish the Borrower’s ownership of any Railcar.
  (g)  Organizational
and Authorization Documents . On the
Restatement Date, copies of (i) resolutions of the members of the Borrower and
of the authorized principal governing body of each other Obligor approving and
authorizing such Person’s execution, delivery and performance of the Loan
Documents to which it is party and the transactions contemplated thereby; (ii)
signature and incumbency certificates of the officers of the Borrower and of
each other Obligor executing any of the Loan Documents, it being understood that
the Bank may conclusively rely on each such document and certificate until
formally advised by the Borrower or an Obligor, as applicable, of any changes
therein; and (iii) good standing certificates in the state of formation of the
Borrower and each other Obligor and in each other state requested by the Bank.
  (h)  Insurance .
Evidence satisfactory to the Bank of the existence of insurance required to be
maintained pursuant to Section
8.6 ,
together with evidence that the Bank has been named as a lender’s loss payee
with respect to each policy of property or casualty insurance and as an
additional insured with respect to all liability policies.
  (i)  Bank
Accounts . On or
prior to the Restatement Date, Borrower or an Affiliate of the Borrower shall
have opened a demand deposit account at the Bank and shall have opened and
established a segregated Reserve Account pursuant to Section 3.6 .
  (j)  Escrow
Agreement and Related Access . On or
prior to the Restatement Date, the Borrower shall have caused the Escrow Agent
to (i) deliver a true, correct and complete copy of the Escrow Agreement to the
Bank, and (ii) execute and deliver a letter agreement with the Bank consenting
to the grant of the security interest contained herein and agreeing to provide
the Bank with such access to the Escrow Agent’s records with respect to the
Escrow Agreement as the Bank shall reasonably require to determine the nature
and scope of the Borrower’s interests under the Escrow Agreement and to the
accounts and property from time to time subject thereto.
  (k)  Comerica
Letter Agreement . On or
prior to the Restatement Date, the Borrower shall provide the Bank with a letter
agreement satisfactory to the Bank executed by Comerica Bank acknowledging the
Bank’s security interest in the Railcars, the Leases, and the Escrow
Account.
  (l)  Opinion
of Canadian Counsel . In the
event that proceeds of any Revolving Loan will be used to acquire Railcars that
will be used in Canada, the Borrower shall deliver an opinion of counsel from
McCarthy Tetrault (or other Canadian counsel approved by the Bank) in the form
attached hereto as Exhibit E .
  (m)  Additional
Documents . Such
other certificates, financial statements, schedules, resolutions, opinions of
counsel, notes and other documents which are provided for hereunder or which the
Bank shall reasonably require.
  3.2  Event
of Default . Any
Event of Default shall have occurred and be continuing or an Unmatured Event of
Default with respect to Section
11.4 shall
have occurred and be continuing.
  3.3  Material
Adverse Effect . The
occurrence of any event having a Material Adverse Effect upon the
Borrower.
  3.4  Litigation . Any
litigation or governmental proceeding shall have been instituted against the
Borrower or any of its officers or shareholders having a Material Adverse Effect
upon the Borrower.
  3.5  Representations
and Warranties . Any
representation or warranty of the Borrower contained herein or in any Loan
Document shall be untrue or incorrect in any material respect as of the date of
any Loan as though made on such date, except to the extent such representation
or warranty expressly relates to an earlier date.
  3.6  Reserve
Deposit .
Concurrently with the request for a Revolving Loan, the Borrower shall deposit
an amount equal to ten percent (10%) of the requested Revolving Loan (the
“Reserve Amount”) in a segregated deposit account with the Bank (the “Reserve
Account”). All amounts on deposit in the Reserve Account shall serve as
additional Collateral for the Loans. The Borrower shall use the funds in the
Reserve Account as a last option to make payment of the Obligations, in whole or
in part, as necessary. If the Borrower shall fail to do so, the Bank has the
option to use funds in the Reserve Account for payment of the Obligations. If
the Borrower shall have repaid all Obligations with respect to a given Revolving
Loan (which, for purposes of this Section
3.6 , shall
require the repayment of all Obligations with respect to any Term Loan into
which such Revolving Loan has been converted), the Bank shall promptly, upon
written request to do so by the Borrower, remit the Reserve Amount with respect
to such Revolving Loan to the Borrower. Funds remaining in the Reserve Account
on the Term Loan Facility Termination Date will be promptly returned to the
Borrower after all Obligations to the Bank have been indefeasibly paid to the
Bank in full.
  3.7  Delivery
of Lease Schedules . On or
prior to the funding of each Revolving Loan, each Railcar and each other item of
equipment or other personal property owned by the Borrower and subject to a
Lease shall be set forth and described on a Lease Schedule and a true, correct
and complete copy of each such Lease or Lease Schedule shall have been delivered
to the Bank.
  4
    NOTES
      EVIDENCING LOANS.
  4.1  Revolving
Note . The
Revolving Loans shall be evidenced by a single Revolving Note (together with any
and all renewal, extension, modification or replacement notes executed by the
Borrower and delivered to the Bank and given in substitution therefor, the
“Revolving Note”) in the form of Exhibit
A hereto,
duly executed by the Borrower and payable to the order of the Bank. At the time
of the initial disbursement of a Revolving Loan and at each time any additional
Revolving Loan shall be requested hereunder or a repayment made in whole or in
part thereon, a notation thereof shall be made on the books and records of the
Bank. All amounts recorded shall be, absent manifest error, conclusive and
binding evidence of (i) the principal amount of the Revolving Loans advanced
hereunder, (ii) any accrued and unpaid interest owing on the Revolving Loans,
and (iii) all amounts repaid on the Revolving Loans. The failure to record any
such amount actually advanced to, actually accruing on or actually received from
the Borrower or any error in recording such amounts shall not, however, limit or
otherwise affect the obligation of the Borrower under the Revolving Note to
repay the principal amount of the Revolving Loans actually advanced to the
Borrower, together with all interest accruing thereon.
  4.2  Term
Notes . Each
Term Loan shall be evidenced by a separate Term Note (together with any and all
renewals, extension, modification, substitute or replacement notes executed by
the Borrower and given in substitution therefor, a “Term Note” and collectively
the “Term Notes”) in the form of Exhibit
B hereto,
duly executed by the Borrower and payable to the order of the Bank. Each Term
Note shall be in an original principal amount equal to the Conversion Amount
applicable thereto and, as and when each payment, whether in whole or in part,
is made in respect of such Term Note, a notation thereof shall be made on the
books and records of the Bank. All amounts recorded shall be, absent
demonstrable error, conclusive and binding evidence of (i) the principal amount
of the related Term Loan advanced hereunder, (ii) any accrued and unpaid
interest owing on the related Term Loan and (iii) all amounts repaid on the
related Term Loan. The failure to record any such amount actually advanced to,
actually accruing on or actually received from the Borrower or any error in
recording such amounts shall not, however, limit or otherwise affect the
obligations of the Borrower under any Term Note to repay the principal amount of
the related Term Loan actually advanced (or, as applicable, the actual principal
amount of any Revolving Loan converted into such Term Loan) to the Borrower,
together with all interest accruing thereon.
  5
    MANNER
      OF BORROWING.
  5.1  Borrowing
Procedures . Each
Loan may be advanced either as a Base Rate Loan or a LIBOR Loan, provided,
however, that at any time, no more than eight (8) Loans may be LIBOR Loans. Each
Loan shall be made available to the Borrower (in immediately available funds at
the times described below) upon any written, verbal, electronic, telephonic or
telecopy loan request which the Bank in good faith believes to emanate from a
properly authorized representative of the Borrower, whether or not that is in
fact the case. Each such notice shall be effective upon receipt by the Bank,
shall be irrevocable, and shall specify the date, amount and type of borrowing
and, in the case of a LIBOR Loan, the initial Interest Period therefor. A
request for a Base Rate Loan must be received by the Bank no later than 11:00
a.m. Chicago, Illinois **** time, on
the day it is to be funded. A request for a LIBOR Loan must be received by the
Bank no later than 11:00 a.m. Chicago, Illinois time, three (3) days before the
day it is to be funded. Each Revolving Loan must be in an amount equal to
$1,500,000 or a higher integral multiple of $100,000 in excess thereof. Each
Term Loan shall be in the amount of the related Conversion Amount. If for any
reason the Borrower shall fail to select timely an Interest Period for an
existing LIBOR Loan, then such LIBOR Loan shall be immediately converted to a
Base Rate Loan on the last Business Day of the then existing Interest Period,
all without demand, presentment, protest or notice of any kind, all of which are
hereby waived by the Borrower. The proceeds of each Revolving Loan shall be made
available at the office of the Bank by credit to the account of the Borrower or
by other means requested by the Borrower and acceptable to the Bank. The
Borrower does hereby irrevocably confirm, ratify and approve all such advances
by the Bank and does hereby indemnify the Bank against losses and expenses
(including court costs, attorneys’ and paralegals’ fees) and shall hold the Bank
harmless with respect thereto.
  All
requests for Loans shall include (i) a statement by the Borrower detailing (a)
the Railcars to be financed by the requested Loans, (b) whether or not such
Railcars are Eligible Railcars, and (c) whether or not such Railcars are Tier
One Railcars or Tier Two Railcars, and (ii) a schedule listing the Eligible
Railcars by car initial and number included as Collateral, their Acquisition
Cost and a copy of the Lease and Lease Schedule(s) related thereto and such
other documentation as necessary to determine, in the Bank’s reasonable
judgment, that the Lease is an Eligible Lease and the Tier One or Tier Two
status of the lessees.
  Requests
for Loans against Eligible Tier Two Railcars will require a certificate of the
Borrower that includes copies of all inspection reports prepared by or on behalf
of the Borrower with respect to such Railcars, which reports shall verify the
existence and serviceable condition of such Railcars and their suitability for
leasing; *provided* , that
notwithstanding anything to the contrary contained herein or in any other Loan
Document, the inspection reports relating to such Railcars required herein may
be based upon a sampling of the subject Railcars so long as the Borrower or the
inspector, as the case may be, performing the applicable inspection and/or
investigation with respect to such Railcars reasonably determines that the size
of the sample of Railcars examined is sufficient to render the opinions relating
to the Railcars described in this paragraph.
  5.2  Conversion
and Continuation Procedures . Upon
notice to the Bank as set forth above, the Borrower may, subject to terms and
conditions of this Agreement, (a) elect, as of any Business Day, to convert any
Base Rate Loan into a LIBOR Loan; or (b) elect, as of the last day of the
applicable Interest Period, to continue any LIBOR Loans having Interest Periods
expiring on such day for a new Interest Period, or to convert any such LIBOR
Loan into a Base Rate Loan. Such notice shall, in the case of a conversion into
a Base Rate Loan, be given before 11:00 a.m., Chicago time, on the proposed date
of such conversion, and in the case of conversion into, or continuation of,
LIBOR Loans, be given before 11:00 a.m., Chicago time, at least three (3)
Business Days prior to the proposed date of such conversion or continuation,
specifying in each case: (i) the proposed date of conversion or
continuation; (ii) the aggregate amount of Loans to be converted or continued;
(iii) the type of Loans resulting from the proposed conversion or continuation;
and (iv) in the case of conversion into, or continuation of, LIBOR Loans, the
duration of the requested Interest Period therefor. If upon the expiration of
any Interest Period applicable to LIBOR Loans, the Borrower has failed to select
timely a new Interest Period to be applicable to such LIBOR Loans, the Borrower
shall be deemed to have elected to convert such LIBOR Loans into Base Rate Loans
effective on the last day of such Interest Period. Any conversion of a LIBOR
Loan on a day other than the last day of an Interest Period therefor shall be
subject to Section
2.3(a) .
  5.3  **[Reserved]**
  5.4  Certain
Conditions .
Notwithstanding any other provision of this Agreement, the Bank shall have no
obligation to make any Loan, or to permit the continuation of, or any conversion
into, any LIBOR Loan if an Event of Default shall have occurred and be
continuing or an Unmatured Event of Default with respect to Section
11.4 shall
have occurred and be continuing or if any of the conditions set forth in Section
3 shall
not have been met.
  5.5  Automatic
Debit . In
order to effectuate the timely payment of any of the Obligations when due, the
Borrower hereby authorizes and directs the Bank, at the Bank’s option, to (a)
debit the amount of the Obligations to any ordinary deposit account of the
Borrower held at the Bank, or (b) make a Revolving Loan hereunder (which
Revolving Loan shall not be subject to the minimum amounts described in Section
5.1 above)
to pay the amount of the Obligations.
  5.6  Discretionary
Disbursements . The
Bank, in its sole and absolute discretion, may immediately upon notice to the
Borrower, disburse any or all proceeds of the Loans made or available to the
Borrower pursuant to this Agreement to pay any fees, costs, expenses or other
amounts required to be paid by the Borrower hereunder and not so paid. All
monies so disbursed shall be a part of the Obligations, payable by the Borrower
on demand from the Bank.
  6
    SECURITY
      FOR THE OBLIGATIONS.
  6.1  Security
for Obligations . As
security for the payment and performance of the Obligations, the Borrower does
hereby pledge, assign, transfer and deliver to the Bank and does hereby grant to
the Bank a continuing and unconditional first priority security interest in and
to any and all of the following property of the Borrower, wheresoever located
and whether now existing or hereafter arising or acquired, together with the
products and proceeds thereof, all accessions and accessories thereto and all
warehouse receipts and documents of title covering any and all of the foregoing
(all such property collectively herein being the “Collateral”):
  (a)  each
Lease (whether or not also constituting an Eligible Railcar Lease) and each
Lease Schedule related thereto and all rights of the Borrower under or with
respect to each such Lease and Lease Schedule financed by the Bank;
  (b)  each
railcar (whether or not also constituting a Railcar or an Eligible Railcar)
financed by the Bank;
  (c)  all other
items of equipment or personal property owned by the Borrower that are used or
useful in connection with a railcar which constitutes Collateral or which are
subject to a Lease which constitutes Collateral;
  (d)  all
rights of the Borrower under any purchase agreement, bill of sale or similar
agreement whereby the Borrower acquired any railcar which constitutes Collateral
or any of the equipment or personal property described in subsection (c) above
which constitutes Collateral and all deposits of the Borrower made in connection
with any such purchase or acquisition;
  (e)  all
manufacturer’s warranties, manuals and related records relating to any Railcar
which constitutes Collateral or any of the equipment or personal property
described in subsection
(c) above
which constitutes Collateral;
  (f)  all
maintenance records maintained with respect to the Railcars and the equipment
and personal property described in subsection
(c) above
which constitutes Collateral;
  (g)  all
rights of the Borrower under any maintenance agreements and deposits with
respect to the railcars and the equipment and personal property described in subsection
(c) above
which constitutes Collateral;
  (h)  the
Reserve Account and all amounts from time to time held therein; and
  (i)  all
rights of the Borrower in and to the Escrow Agreement and in and to all accounts
and property subject thereto.
  6.2  Possession
and Transfer of Collateral . The
Borrower shall not execute, conduct or permit any Asset Disposition with respect
to any Collateral unless (i) the Borrower notifies the Bank of such Asset
Disposition in writing five (5) Business Days before such Asset Disposition; and
(ii) all Net Cash Proceeds or proceeds from Permitted Takeout Financing related
to such Asset Disposition are applied to repay the Loans related to the
Collateral that is the subject of such Asset Disposition.
  6.3  Financing
Statements and Other Documents and Filings . The
Borrower shall (at its own expense), at the Bank’s request, at any time and from
time to time, execute and deliver to the Bank such financing statements, Railcar
Filings, amendments and other documents and do such acts as the Bank deems
necessary in order to establish and maintain valid, attached and perfected first
priority security interests in the Collateral in favor of the Bank, free and
clear of all Liens and claims and rights of third parties whatsoever, except
Permitted Liens. The Borrower shall also make appropriate entries on its books
and records disclosing the Bank’s security interests in the
Collateral.
  6.4  Performance
Under Leases .
Notwithstanding the security interest granted to the Bank under this Article VI
or any other provision of this Agreement, the Borrower hereby agrees that it (or
a Designated Lessor) is and will remain responsible for the performance of all
duties as lessor with respect to each Lease and each Railcar and all equipment
and other personal property subject to each Lease and the Bank shall have no
duty or obligation to perform any duty or obligation of Borrower (or any
Designated Lessor) as lessor under any Lease or with respect to any Railcar or
any equipment or other personal property subject to any Lease.
  6.5  Preservation
of the Collateral . In
addition to the other rights granted to the Bank under this Article VI, the Bank
may, but shall not be obligated to, take such actions from time to time as the
Bank deems appropriate to maintain or protect the Collateral. T he Bank
shall be deemed to have exercised reasonable care in the safekeeping of any
Collateral in its possession or under its control if the Bank has treated the
Collateral with care that is substantially equal to that which the Bank accords
its own property . In
addition, any failure of the Bank to preserve or protect any rights with respect
to the Collateral against prior or third parties, or to do any act with respect
to preservation of the Collateral shall not be deemed a failure to exercise
reasonable care in the custody or preservation of the Collateral. The Borrower
shall have the sole responsibility for taking such action as may be necessary,
from time to time, to preserve all rights of the Borrower and the Bank in the
Collateral against prior or third parties.
  6.6  Other
Actions as to any and all Collateral . **** The
Borrower further agrees to take any other action reasonably requested by the
Bank to ensure the attachment, perfection and first priority of, and the ability
of the Bank to enforce, the Bank’s security interest in any and all of the
Collateral including, without limitation, (a) executing, delivering and, where
appropriate, filing financing statements, continuations thereof and amendments
relating thereto under the UCC, to the extent, if any, that the Borrower’s
signature thereon is required therefor, (b) causing all appropriate Railcar
Filings to be made with any and all appropriate Railcar Filing Authorities, and
(c) obtaining governmental and other third party consents and approvals. The
Borrower further agrees to indemnify and hold the Bank harmless against claims
of any Persons not a party to this Agreement concerning disputes arising over
the Collateral.
  6.7  Lockbox
Arrangement . After
the occurrence and during the continuance of an Event of Default under Section
11.1 or 11.10, the Bank may require the Borrower to cause each lessee or other
obligor under a Lease Schedule to make all payments in respect of such Lease
Schedule directly to a post office box (the “Lockbox”) designated by, and under
the exclusive control of, the Bank. Pursuant to the Lockbox Agreement, the
Borrower shall establish the Lockbox and an account (the “Lockbox Account”) in
the Borrower’s name with the Bank into which all payments received in the
Lockbox shall be deposited. If the Borrower, a Subsidiary or any director,
officer, employee, agent or the Borrower or any Subsidiary, or any other Person
acting for or in concert with the Borrower (including, without limitation, any
Designated Lessor) shall receive any monies, checks, notes, drafts or other
payments under or in respect of any Lease Schedule, the Borrower and each such
Person shall receive all such items in trust for, and as the sole and exclusive
property of, the Bank and, immediately upon receipt thereof, shall remit the
same (or cause the same to be remitted) in kind to the Lockbox Account. The
Borrower agrees that all payments made to such Lockbox and Lockbox Account or
otherwise received by the Bank will be applied on account of the Revolving Loans
or Term Loans, as applicable, in accordance with Section
12.8 of this
Agreement. The Borrower agrees to pay all fees, costs and expenses which the
Bank incurs in connection with opening and maintaining the Lockbox and the
Lockbox Account and depositing for collection by the Bank any check or other
item of payment received by the Bank on account of the Obligations. All of such
fees, costs and expenses shall constitute Obligations hereunder, shall be
payable to the Bank by the Borrower upon demand, and, until paid, shall bear
interest at the Default Rate. All checks, drafts, instruments and other items of
payment under or with respect to a Lease Schedule shall be endorsed by the
Borrower (or the Borrower’s agent) to the Bank, and, if that endorsement of any
such item shall not be made for any reason, the Bank is hereby irrevocably
authorized to endorse or cause the endorsement of the same on the Borrower’s
behalf. For the purposes of this Section, upon the occurrence and during the
continuance of an Event of Default, the Borrower irrevocably hereby makes,
constitutes and appoints the Bank (and all Persons designated by the Bank for
that purpose) as the Borrower’s true and lawful attorney and agent-in-fact
(which appointment is coupled with an interest) (i) to endorse the Borrower’s
name upon said items of payment; (ii) to take control in any manner of any such
item of payment; and (iii) to have access to any lockbox or postal box into
which any Collateral or any proceeds of Collateral have been or are deposited,
and to open and process all mail bearing the return address of an Eligible
Lessee and addressed to the Borrower (or the Borrower’s agent) deposited
therein.
  6.8  Separate
Lease Schedules; Legend . The
Borrower represents, warrants and covenants that each Railcar and each other
item of equipment or other personal property owned by the Borrower and subject
to a Lease is listed on a lease schedule meeting each of the following criteria
(each a “Lease Schedule”): (a) such Lease Schedule lists each Railcar and each
other item of equipment or personal property owned by the Borrower and subject
to such Lease, (b) such Lease Schedule does not include any item of personal
property owned by any Person other than the Borrower, (c) such Lease Schedule
incorporates all terms of the related Lease, and (d) each counterpart of such
Lease Schedule contains a conspicuous legend at the top of the first page
thereof in substantially the following form: “THIS LEASE SCHEDULE AND ALL
EQUIPMENT AND OTHER PERSONAL PROPERTY LISTED HEREON IS SUBJECT TO A SECURITY
INTEREST IN FAVOR OF LASALLE BANK NATIONAL ASSOCIATION (THE “BANK”) AND ANY
SALE, TRANSFER OR OTHER DISPOSITION OF THIS LEASE SCHEDULE OR ANY OF THE
EQUIPMENT OR OTHER PERSONAL PROPERLY LISTED HEREON WITHOUT THE EXPRESS WRITTEN
CONSENT OF THE BANK VIOLATES THE BANK’S RIGHTS AS SECURED PARTY WITH RESPECT TO
THIS LEASE SCHEDULE AND THE EQUIPMENT AND OTHER PERSONAL PROPERTY LISTED
HEREON.”
  6.9  Electronic
Chattel Paper and Transferable Records . If the
Borrower at any time holds or acquires an interest in any electronic chattel
paper or any “transferable record”, as that term is defined in Section 201 of
the federal Electronic Signatures in Global and National Commerce Act, or in
Section 16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction, the Borrower shall promptly notify the Bank thereof and,
at the request of the Bank, shall take such action as the Bank may reasonably
request to vest in the Bank control under Section 9-105 of the UCC of such
electronic chattel paper or control under Section 201 of the federal Electronic
Signatures in Global and National Commerce Act or, as the case may be, Section
16 of the Uniform Electronic Transactions Act, as so in effect in such
jurisdiction, of such transferable record. The Bank agrees with the Borrower
that the Bank will arrange, pursuant to procedures satisfactory to the Bank and
so long as such procedures will not result in the Bank’s loss of control, for
the Borrower to make alterations to the electronic chattel paper or transferable
record permitted under Section 9-105 of the UCC or, as the case may be, Section
201 of the federal Electronic Signatures in Global and National Commerce Act or
Section 16 of the Uniform Electronic Transactions Act for a party in control to
make without loss of control.
  6.10  Power
of Attorney . In
addition to the rights and powers otherwise granted to the Bank in this Article
VI, the Borrower, for purposes of the Bank’s performance of any or all of the
Borrower’s duties, rights and obligations described in this Article VI (which
the Bank is authorized, but not obligated to do), hereby irrevocably makes,
constitutes and appoints the Bank (and all Persons designated by the Bank for
that purpose) as the Borrower’s true and lawful attorney and agent-in-fact for
purposes of performing and completing all such duties, rights and
obligations.
  7
    REPRESENTATIONS
      AND WARRANTIES.
  To induce
the Bank to make the Loans, the Borrower makes the following representations and
warranties to the Bank, each of which shall survive the execution and delivery
of this Agreement:
  7.1  Borrower
Organization and Name . The
Borrower is a limited liability company duly organized, existing and in good
standing under the laws of the State of Delaware, with full and adequate power
to carry on and conduct its business as presently conducted. The Borrower is
duly licensed or qualified in all foreign jurisdictions wherein the nature of
its activities require such qualification or licensing, except for such
jurisdictions where the failure to so qualify could not reasonably be expected
to have a Material Adverse Effect. The Borrower’s Organizational Identification
Number is 22-3770420. The exact legal name of the Borrower is as set forth in
the first paragraph of this Agreement, and the Borrower currently does not
conduct, nor has it during the last five (5) years conducted, business under any
other name or trade name.
  7.2  Authorization . The
Borrower has full right, power and authority to enter into this Agreement, to
make the borrowings hereunder and execute and deliver the Loan Documents as
provided herein and to perform all of its duties and obligations under this
Agreement and the other Loan Documents. The execution and delivery of this
Agreement and the other Loan Documents will not, nor will the observance or
performance of any of the matters and things herein or therein set forth,
violate or contravene any provision of law or of the articles of organization or
operating agreement of the Borrower. All necessary and appropriate action has
been taken on the part of the Borrower to authorize the execution and delivery
of this Agreement and the Loan Documents.
  7.3  Validity
and Binding Nature . This
Agreement and the other Loan Documents are the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
their terms, subject to bankruptcy, insolvency and similar laws affecting the
enforceability of creditors’ rights generally and to general principles of
equity.
  7.4  Consent;
Absence of Breach . The
execution, delivery and performance of this Agreement, the other Loan Documents
and any other documents or instruments to be executed and delivered by the
Borrower in connection therewith or with the Loans, and the borrowings by the
Borrower hereunder, do not and will not (a) require any consent, approval, authorization
of, or filings with, notice to or other act by or in respect of, any
governmental authority or any other Person (other than any consent or approval
which has been obtained and is in full force and effect); (b) conflict with (i)
any provision of law or any applicable regulation, order, writ, injunction or
decree of any court or governmental authority, (ii) the articles of
organization, operating agreement or similar organizational document of the
Borrower, or (iii) any agreement, indenture, instrument or other document
(including, without limitation, any Material Affiliate Credit Agreement), or any
judgment, order or decree, which is binding upon the Borrower or any of its
respective properties or assets; or (c) require, or result in, the creation or
imposition of any Lien on any asset of Borrower, other than Permitted
Liens.
  7.5  Ownership
of Properties; Liens . The
Borrower is the sole owner of all of its properties and assets, real and
personal, tangible and intangible, of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights), free and clear of all
Liens, charges and claims (including infringement claims with respect to
patents, trademarks, service marks, copyrights and the like), other than
Permitted Liens.
  7.6  Equity
Ownership . All
issued and outstanding Capital
Securities **** of the
Borrower are duly authorized and validly issued, fully paid, non-assessable, and
free and clear of all Liens other than Permitted Liens, if any, and such
securities were issued in compliance with all applicable state and federal laws
concerning the issuance of securities. As of the date hereof, there are no
pre-emptive or other outstanding rights, options, warrants, conversion rights or
other similar agreements or understandings for the purchase or acquisition of
any Capital
Securities **** of the
Borrower except those, if any, set forth on Schedule
7.6 hereto.
  7.7  Intellectual
Property . The
Borrower owns and possesses or has a license or other right to use all
Intellectual Property , as are
necessary for the conduct of the businesses of the Borrower (including, without
limitation, such access to the records and software of the Escrow Agent as shall
be reasonably required to determine the nature of the Borrower’s interest in the
Escrow Agreement and the accounts and other property subject thereto), without
any infringement upon rights of others which could reasonably be expected to
have a Material Adverse Effect upon the Borrower, and no
material claim has been asserted and is pending by any Person challenging or
questioning the use of any Intellectual Property or the validity or
effectiveness of any Intellectual Property nor does the Borrower know of any
valid basis for any such claim .
  7.8  Financial
Statements . All
financial statements submitted to the Bank have been prepared in accordance with
sound accounting practices and GAAP on a basis, except as otherwise noted
therein, consistent with the previous fiscal year and present fairly in all
material respects the financial condition of the Borrower and the results of the
operations for the Borrower as of such date and for the periods indicated. Since
the date of the most recent financial statement submitted by the Borrower to the
Bank, there has been no change in the financial condition or in the assets or
liabilities of the Borrower having a Material Adverse Effect on the
Borrower.
  Financial
statements shall consist of an income statement, balance sheet and cash flow
statement for the fiscal period and the sum of results for all fiscal periods
year-to-date.
  7.9  Litigation
and Contingent Liabilities . There
is no litigation, arbitration proceeding, demand, charge, claim, petition or
governmental investigation or proceeding pending, or, to the Borrower’s
knowledge, threatened, against the Borrower, which, if adversely determined,
might reasonably be expected to have a Material Adverse Effect upon the
Borrower, except as set forth in Schedule
7.9 . Other
than any liability incident to such litigation or proceedings, the Borrower has
no material guarantee
obligations, contingent
liabilities, liabilities
for taxes, or any long-term leases or unusual forward or long-term commitments,
including any interest rate or foreign currency swap or exchange transaction or
other obligation in respect of derivatives, that are not fully-reflected or
fully reserved for in the most recent audited financial statements delivered
pursuant to subsection 8.8(a) or
fully-reflected or fully reserved for in the most recent quarterly financial
statements delivered pursuant to subsection 8.8(b) and  not
permitted by Section
9.1 .
  7.10  Event
of Default . No
Event of Default or Unmatured Event of Default exists or would result from the
incurrence by the Borrower of any of the Obligations hereunder or under any of
the other Loan Document, and the Borrower is not in default (without regard to
grace or cure periods) under any other contract or agreement to which it is a
party.
  7.11  Adverse
Circumstances . Without
limiting the representations and warranties made in Section
7.9 hereof,
to the Borrower’s knowledge, no condition, circumstance, proceeding, event,
agreement, document, instrument or restriction, exists which (a) would have a
Material Adverse Effect upon the Borrower, or (b) would constitute an Event of
Default or an Unmatured Event of Default.
  7.12  Environmental
Laws and Hazardous Substances . (i) The
Borrower has not generated, used, stored, treated, transported, manufactured,
handled, produced or disposed of any Hazardous Substances, on or off any of the
premises of the Borrower (whether or not owned by it) in any manner which at any
time violates any Environmental Law or any license, permit, certificate,
approval or similar authorization thereunder, (ii) the operations of the
Borrower comply in all material respects with all Environmental Laws and all
licenses, permits certificates, approvals and similar authorizations thereunder,
(iii) there has been no investigation, proceeding, complaint, order, directive,
claim, citation or notice by any governmental authority or any other Person, nor
is any pending or, to the best of the Borrower’s knowledge, threatened, and the
Borrower shall promptly notify the Bank upon becoming aware of any such
investigation, proceeding, complaint, order, directive, claim, citation or
notice, and shall take prompt and appropriate actions to respond thereto, with
respect to any non-compliance with, or violation of, the requirements of any
Environmental Law by the Borrower or the release, spill or discharge, threatened
or actual, of any Hazardous Substance or the generation, use, storage,
treatment, transportation, manufacture, handling, production or disposal of any
Hazardous Substance or any other environmental, health or safety matter, which
materially affects the Borrower or its business, operations or assets or any
properties at which the Borrower has transported, stored or disposed of any
Hazardous Substances, and (iv) the Borrower has no material liability,
contingent or otherwise, in connection with a release, spill or discharge,
threatened or actual, of any Hazardous Substances or the generation, use,
storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Substance. The Borrower further agrees to allow the
Bank or its agent access to the properties of the Borrower to confirm compliance
with all Environmental Laws (provided, however, that such access rights with
respect to Railcars and other property subject to Leases shall be subject to the
terms of such Leases; provided, further, that if the Bank reasonably requires
access to a given Railcar or other property subject to a Lease for purposes of
assessing the Borrower’s compliance with Environmental Laws and the related
Lease prevents the Bank from gaining such access, the Borrower shall cooperate
with and assist the Bank in obtaining such access), and the Borrower shall,
following determination by the Bank that there is non-compliance, or any
condition which requires any action by or on behalf of the Borrower in order to
avoid any non-compliance, with any Environmental Law, at the Borrower’s sole
expense, cause an independent environmental engineer acceptable to the Bank to
conduct such tests of the relevant site as are appropriate, and prepare and
deliver a report setting forth the result of such tests, a proposed plan for
remediation and an estimate of the costs thereof.
  7.13  Solvency,
etc . As of
the date hereof, and immediately prior to and after giving effect to each Loan
hereunder and the use of the proceeds thereof, (a) the fair value of the
Borrower’s assets is greater than the amount of its liabilities (including
disputed, contingent and unliquidated liabilities) as such value is established
and liabilities evaluated, (b) the present fair saleable value of the Borrower’s
assets is not less than the amount that will be required to pay the probable
liability on its debts as they become absolute and matured, (c) the Borrower is
able to realize upon its assets and pay its debts and other liabilities
(including disputed, contingent and unliquidated liabilities) as they mature in
the normal course of business, (d) the Borrower does not intend to, and does not
believe that it will, incur debts or liabilities beyond its ability to pay as
such debts and liabilities mature, and (e) the Borrower is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which its property would constitute unreasonably small
capital.
  7.14  ERISA
Obligations . All
Employee Plans of the Borrower meet the minimum funding standards of Section 302
of ERISA and 412 of the Internal Revenue Code where applicable, and each such
Employee Plan that is intended to be qualified within the meaning of Section 401
of the Internal Revenue Code of 1986 is qualified. No withdrawal liability has
been incurred under any such Employee Plans and no “Reportable Event” or
“Prohibited Transaction” (as such terms are defined in ERISA), has occurred with
respect to any such Employee Plans, unless approved by the appropriate
governmental agencies. The Borrower has promptly paid and discharged all
obligations and liabilities arising under ERISA of a character which if unpaid
or unperformed might result in the imposition of a Lien against any of its
properties or assets.
  7.15  Labor
Relations . Except
as could not reasonably be expected to have a Material Adverse Effect, (i) there
are no strikes, lockouts or other labor disputes against the Borrower or, to the
knowledge of the Borrower, threatened, (ii) hours worked by and payment made to
employees of the Borrower have not been in violation of the Fair Labor Standards
Act or any other applicable law, and (iii) no unfair labor practice complaint is
pending against the Borrower or, to the knowledge of the Borrower, threatened
before any governmental authority.
  7.16  Security
Interest . This
Agreement creates a valid security interest in favor of the Bank in the
Collateral and, when properly perfected by filing in the appropriate
jurisdictions (including, without limitation any appropriate Railcar Filings),
or by possession or control of such Collateral by the Bank or delivery of such
Collateral to the Bank, shall constitute a valid, perfected, first-priority
security interest in such Collateral.
  7.17  Lending
Relationship . The
Borrower acknowledges and agrees that the relationship hereby created with the
Bank is and has been conducted on an open and arm’s length basis in which no
fiduciary relationship exists and that the Borrower has not relied and is not
relying on any such fiduciary relationship in executing this Agreement and in
consummating the Loans. The Bank represents that it will receive the Notes
payable to its order as evidence of a bank loan.
  7.18  Taxes . The
Borrower has timely filed all tax returns and reports required by law to have
been filed by it and has paid all taxes, governmental charges and assessments
due and payable with respect to such returns, except any such taxes or charges
which are being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have been set
aside on its books, are
insured against or bonded over to the satisfaction of the Bank and the
contesting of such payment does not create a Lien on the Collateral which is not
a Permitted Lien . There
is no controversy or objection pending, or, to the knowledge of the Borrower,
threatened in respect of any tax returns of the Borrower. The Borrower has made
adequate reserves on its books and records in accordance with GAAP for all taxes
that have accrued but which are not yet due and payable.
  7.19  Compliance
with Regulation U . No
portion of the proceeds of the Loans shall be used by the Borrower, or any
Affiliate of the Borrower, either directly or indirectly, for the purpose of
purchasing or carrying any margin stock, within the meaning of Regulation U as
adopted by the Board of Governors of the Federal Reserve System or any successor
thereto.
  7.20  Governmental
Regulation . Neither
the Borrower nor any Guarantor are, or after giving effect to any Loan, will be,
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the ICC
Termination Act of 1995 or the
Investment Company Act of 1940 or to any federal or state statute or regulation
limiting its ability to incur indebtedness for borrowed money.
  7.21  Bank
Accounts . The
Borrower has Deposit Accounts and operating bank accounts located at the Bank as
provided in Section 3.1(i) . The
Borrower has other Deposit Accounts which are listed on Schedule
7.21 attached
hereto.
  7.22  Place
of Business . The
principal place of business and books and records of the Borrower is set forth
in the preamble to this Agreement, and the location of all Collateral (other
than Railcars), if other than at such principal place of business, is as set
forth on Schedule
7.22 attached
hereto and made a part hereof, and the Borrower shall promptly notify the Bank
of any change in such locations. The Borrower will not remove or permit the
Collateral to be removed from such locations without the prior written consent
of the Bank, except that Railcars may be located elsewhere within the United
States and Canada.
  7.23  Complete
Information . This
Agreement and all financial statements, schedules, certificates, confirmations,
agreements, contracts, and other materials and information heretofore or
contemporaneously herewith furnished in writing by the Borrower to the Bank for
purposes of, or in connection with, this Agreement and the transactions
contemplated hereby is, and all written information hereafter furnished by or on
behalf of the Borrower to the Bank pursuant hereto or in connection herewith
will be, true and accurate in every material respect on the date as of which
such information is dated or certified, and none of such information is or will
be incomplete by omitting to state any material fact necessary to make such
information not misleading in light of the circumstances under which made (it
being recognized by the Bank that any projections and forecasts provided by the
Borrower are based on good faith estimates and assumptions believed by the
Borrower to be reasonable as of the date of the applicable projections or
assumptions and that actual results during the period or periods covered by any
such projections and forecasts may differ from projected or forecasted
results).
  7.24  Subordinated
Debt . To the
knowledge of the Borrower, the subordination provisions of the Subordinated Debt
are enforceable against the holders of the Subordinated Debt by the Bank. To the
knowledge of the Borrower, the Obligations constitute Senior Debt entitled to
the benefits of the subordination provisions contained in the Subordinated Debt.
  8
    AFFIRMATIVE
      COVENANTS.
  8.1  Compliance
with Bank Regulatory Requirements; Increased Costs . If,
after the date hereof, the adoption of, or any change in, any applicable law,
rule or regulation, or any change in the interpretation or administration of any
applicable law, rule or regulation by any governmental authority, central bank
or comparable agency charged with the interpretation or administration thereof,
or compliance by the Bank with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency: (a)
shall impose, modify or deem applicable any reserve (including any reserve
imposed by the Board of Governors of the Federal Reserve System, or any
successor thereto, but excluding any reserve included in the determination of
the LIBOR Rate), special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by the Bank; or (b)
shall impose on the Bank any other condition affecting its LIBOR Loans, the
Notes or its obligation to make LIBOR Loans; and the result of anything
described in subsections (a) and (b) above is to increase the cost to (or to
impose a cost on) the Bank of making or maintaining any LIBOR Loan, or to reduce
the amount of any sum received or receivable by the Bank under this Agreement or
under the Notes with respect thereto, then upon demand by the Bank (which demand
shall be accompanied by a statement setting forth the basis for such demand and
a calculation of the amount thereof in reasonable detail), the Borrower shall
pay directly to the Bank such additional amounts as will compensate the Bank for
such increased cost or such reduction with respect to the Loans extended to such
Borrower, so long as such amounts have accrued on or after the day which is one
hundred eighty (180) days prior to the date on which the Bank first made demand
therefor.
  If the
Bank shall reasonably determine that any change in, or the adoption or phase-in
of, any applicable law, rule or regulation regarding capital adequacy, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or the compliance by the Bank or any Person controlling
the Bank with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
Bank’s or such controlling Person’s capital as a consequence of the Bank’s
obligations hereunder or under any Letter of Credit to a level below that which
the Bank or such controlling Person could have achieved but for such change,
adoption, phase-in or compliance (taking into consideration the Bank’s or such
controlling Person’s policies with respect to capital adequacy) by an amount
deemed by the Bank or such controlling Person to be material, then from time to
time, upon demand by the Bank (which demand shall be accompanied by a statement
setting forth the basis for such demand and a calculation of the amount thereof
in reasonable detail), the Borrower shall pay to the Bank such additional
amounts as will compensate the Bank or such controlling Person for such
reduction with respect to the Loans so long as such amounts have accrued on or
after the day which is one hundred eighty (180) days prior to the date on which
the Bank first made demand therefor.
  8.2  Borrower ** Existence . The
Borrower shall at all times preserve and maintain (a) its existence and good
standing in the jurisdiction of its organization, and (b) its qualification to
do business and good standing in each jurisdiction where the nature of its
business makes such qualification necessary (other than such jurisdictions in
which the failure to be qualified or in good standing could not reasonably be
expected to have a Material Adverse Effect), and shall at all times continue as
a going concern in the business which the Borrower is presently conducting. If
the Borrower does not have an Organizational Identification Number on the
Restatement Date and later obtains one, the Borrower shall promptly notify the
Bank of such Organizational Identification Number.
  8.3  Compliance
With Laws . The
Borrower shall use the
proceeds of the Loans for working capital and other general corporate or
business purposes not in contravention of any requirements of law and not in
violation of this Agreement, and shall comply in
all respects, including the conduct of its business and operations and the use
of its properties and assets, with all applicable laws, rules, regulations
(including, without limitation, all Railcar Maintenance and Safety Standards),
decrees, orders, judgments, licenses and permits, except where failure to comply
could not reasonably be expected to have a Material Adverse Effect. In addition,
and without limiting the foregoing sentence, the Borrower shall (a) ensure
that no person who owns a controlling interest in or otherwise controls the
Borrower is or shall be listed on the Specially Designated Nationals and Blocked
Person List or other
similar lists maintained
by the Office of Foreign Assets Control (“OFAC”), the Department of the Treasury or
included in any Executive Orders, (b) not
use or permit the use of the proceeds of the Loans to violate any of the foreign
asset control regulations of OFAC or any enabling statute or Executive Order
relating thereto, and (c)
comply, and cause each Subsidiary to comply, with all applicable Bank Secrecy
Act (“BSA”) laws and regulations, as amended.
  8.4  Payment
of Taxes and Liabilities . The
Borrower and each of its Subsidiaries shall pay and discharge, prior to
delinquency and before penalties accrue thereon, all property and other taxes,
and all governmental charges or levies against it or any of the Collateral, as
well as claims of any kind which, if unpaid, could become a Lien on any of its
property; provided that the foregoing shall not require the Borrower to pay any
such tax or charge so long as it shall contest the validity thereof in good
faith by appropriate proceedings and shall set aside on its books adequate
reserves with respect thereto in accordance with GAAP and, in the case of a
claim which could become a Lien on any of the Collateral, such contest
proceedings stay the foreclosure of such Lien or the sale of any portion of the
Collateral to satisfy such claim.
  8.5  Maintain
Property . The
Borrower and each of its Subsidiaries **** shall at
all times maintain, preserve and keep, or cause to be maintained, preserved and
kept, its plant, and material properties and equipment, including, but not
limited to, any Collateral, in good repair, working order and saleable
condition, ordinary wear and tear excepted, and shall from time to time make, or
cause to be made, all needful and proper repairs, renewals, replacements, and
additions thereto so that at all times the efficiency thereof shall be fully
preserved and maintained. Without limiting the generality of the foregoing, the
Borrower shall at all times cause each Railcar to be used and maintained in
accordance with the Railcar Maintenance and Safety Standards. Subject to the
terms of the Leases, the Borrower shall permit the Bank or its agent to examine
and inspect such plant, properties and equipment, including, but not limited to,
any Collateral. If the terms of any Lease shall prevent the Bank or its agent
from conducting the foregoing examinations and inspections with respect to a
given Railcar or other property subject to a Lease, the Borrower shall cooperate
with and assist the Bank in obtaining such access to such Railcars and other
property as the Bank shall reasonably require to conduct the applicable
examination or inspection. The Bank agrees to provide reasonable prior notice of
any such inspection so long as no Event of Default or Unmatured Event of Default
then exists.
  8.6  Maintain
Insurance . The
Borrower shall at all times maintain, with insurance companies reasonably
acceptable to the Bank, such insurance coverage as may be required by any law or
governmental regulation or court decree or order applicable to it and such other
insurance, to such extent and against such hazards and liabilities, including
employers’, public and professional liability risks, as is customarily
maintained by companies similarly situated, and shall have insured amounts no
less than, and deductibles no higher than, are reasonably acceptable to the
Bank. The Borrower shall furnish to the Bank a certificate setting forth in
reasonable detail the nature and extent of all insurance maintained by the
Borrower, which shall be reasonably acceptable in all respects to the Bank. The
Borrower shall cause each issuer of an insurance policy to provide the Bank with
an endorsement (i) showing the Bank as lender’s loss payee with respect to each
policy of property or casualty insurance; (ii) naming the Bank as an additional
insured with respect to all liability policies, and (iii) providing that thirty
(30) days notice will be given to the Bank prior to any cancellation of,
material reduction or change in coverage provided by or other material
modification to such policy. The Borrower shall execute and deliver to the Bank
a collateral assignment, in form and substance satisfactory to the Bank, of each
business interruption insurance policy, if any, maintained by the
Borrower.
  IN THE
EVENT THE BORROWER EITHER FAILS TO PROVIDE THE BANK WITH EVIDENCE OF THE
INSURANCE COVERAGE REQUIRED BY THIS SECTION OR AT ANY TIME HEREAFTER SHALL FAIL
TO OBTAIN OR MAINTAIN ANY OF THE POLICIES OF INSURANCE REQUIRED ABOVE, OR TO PAY
ANY PREMIUM IN WHOLE OR IN PART RELATING THERETO, THEN THE BANK, WITHOUT WAIVING
OR RELEASING ANY OBLIGATION OR DEFAULT BY THE BORROWER HEREUNDER, MAY AT ANY
TIME (BUT SHALL BE UNDER NO OBLIGATION TO SO ACT), OBTAIN AND MAINTAIN SUCH
POLICIES OF INSURANCE AND PAY SUCH PREMIUMS AND TAKE ANY OTHER ACTION WITH
RESPECT THERETO, WHICH THE BANK DEEMS ADVISABLE. THIS INSURANCE COVERAGE (A)
MAY, BUT NEED NOT, PROTECT THE BORROWER’S INTERESTS IN SUCH PROPERTY, INCLUDING,
BUT NOT LIMITED TO, THE COLLATERAL, AND (B) MAY NOT PAY ANY CLAIM MADE BY, OR
AGAINST, THE BORROWER IN CONNECTION WITH SUCH PROPERTY, INCLUDING, BUT NOT
LIMITED TO, THE COLLATERAL. THE BORROWER MAY LATER CANCEL ANY SUCH INSURANCE
PURCHASED BY THE BANK, BUT ONLY AFTER PROVIDING THE BANK WITH EVIDENCE THAT THE
BORROWER HAS OBTAINED THE INSURANCE COVERAGE REQUIRED BY THIS SECTION. IF THE
BANK PURCHASES INSURANCE FOR THE COLLATERAL, THE BORROWER WILL BE RESPONSIBLE
FOR THE COSTS OF THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT
MAY BE IMPOSED WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF
THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY
BE ADDED TO THE PRINCIPAL AMOUNT OF THE LOANS OWING HEREUNDER. THE COSTS OF THE
INSURANCE MAY BE MORE THAN THE COST OF THE INSURANCE THE BORROWER MAY BE ABLE TO
OBTAIN ON ITS OWN.
  8.7  ERISA
Liabilities; Employee Plans . The
Borrower and each of its Subsidiaries **** shall (i)
keep in full force and effect any and all Employee Plans which are presently in
existence or may, from time to time, come into existence under ERISA, and not
withdraw from any such Employee Plans, unless such withdrawal can be effected or
such Employee Plans can be terminated without liability to the Borrower; (ii)
make contributions to all of such Employee Plans in a timely manner and in a
sufficient amount to comply with the standards of ERISA; including the minimum
funding standards of ERISA; (iii) comply with all material requirements of ERISA
which relate to such Employee Plans; (iv) notify the Bank promptly upon receipt
by the Borrower of any notice concerning the imposition of any withdrawal
liability or of the institution of any proceeding or other action which may
result in the termination of any such Employee Plans or the appointment of a
trustee to administer such Employee Plans; (v) promptly advise the Bank of the
occurrence of any “Reportable Event” or “Prohibited Transaction” (as such terms
are defined in ERISA), with respect to any such Employee Plans; and (vi) amend
any Employee Plan that is intended to be qualified within the meaning of Section
401 of the Internal Revenue Code of 1986 to the extent necessary to keep the
Employee Plan qualified, and to cause the Employee Plan to be administered and
operated in a manner that does not cause the Employee Plan to lose its qualified
status.
  8.8  Financial
Statements . The
Borrower shall at all times maintain accurate and adequate books and records, on
the accrual basis of accounting and in all respects in accordance with GAAP, and
shall furnish to the Bank or its authorized representatives such information
regarding the business affairs, operations and financial condition of the
Borrower, including, but not limited to:
  (a)  promptly
when available, and in any event, within one hundred twenty (120) days after the
close of each of its fiscal years, a copy of (i) the annual audited ** financial
statements of the Borrower, including balance sheet, statement of income and
retained earnings, statement of cash flows for the fiscal year then ended and
such other information (including nonfinancial information) as the Bank may
reasonably request, in reasonable detail, prepared and certified without adverse
reference to going concern value and without qualification by an independent
auditor of recognized standing, selected by the Borrower and reasonably
acceptable to the Bank as accurate and certified as true and correct by the
Borrower’s treasurer, chief financial officer, president or vice president -
finance or other officer acceptable to the Bank;
  (b)  promptly
when available, and in any event, within sixty (60) days following the end of
each fiscal quarter, a copy of the financial statements of the Borrower
regarding such fiscal quarter, including balance sheet, statement of income and
retained earnings, statement of cash flows for the fiscal quarter then ended and
such other information (including nonfinancial information) as the Bank may
reasonably request, in reasonable detail, prepared and certified as true and
correct by the Borrower’s treasurer, chief financial officer, president or vice
president - finance or other officer acceptable to the Bank;
  (c)  within
twenty (20) days after the end of each calendar month, a report of the Escrow
Agent in the form of the trial balance report attached hereto as Exhibit F (including a summary of account codes used in such report) detailing the
Borrower’s interest in all accounts and other property governed by the terms of
the Escrow Agreement, together with such supporting documentation as the Bank
shall reasonably require to verify the substance of such report; and
  (d)  within
ten (10) days after the filing due date (as such date may be extended in
accordance with properly granted extensions) each year, a signed copy of the
complete income tax returns filed with the Internal Revenue Service by the
Borrower.
  No change
with respect to such accounting principles shall be made by the Borrower without
giving prior notification to the Bank. The Borrower represents and warrants to
the Bank that the financial statements delivered to the Bank at or prior to the
execution and delivery of this Agreement and to be delivered at all times
thereafter accurately reflect and will accurately reflect the financial
condition of the Borrower in all material respects. The Bank shall have the
right at all times during business hours to inspect the books and records of the
Borrower and make extracts therefrom. The Bank agrees to provide reasonable
prior notice of any such inspection so long as no Event of Default or Unmatured
Event of Default then exists. The Borrower agrees to advise the Bank immediately
of any material adverse change in the financial condition, the operations or any
other status of the Borrower.
  8.9  Guarantor
Financial Statements . The
Borrower shall furnish, or cause to be furnished, to the Bank or its authorized
representatives such information regarding the business affairs, operations and
financial condition of each Guarantor, if any, including, but not limited
to:
  (a)  promptly
when available, and in any event, within one hundred twenty (120) days after the
close of each of its fiscal years, a copy of the annual audited ** financial
statements of such Guarantor, including balance sheet, statement of income and
retained earnings, statement of cash flows for the fiscal year then ended (and
the financial statements included in such Guarantor’s 10-K filings with the
Securities and Exchange Commission for the applicable fiscal year shall be
satisfactory for the purposes herein so long as such Guarantor remains a
Reporting Company provided that the same are delivered to the Bank at the times
required above) and such other information (including nonfinancial information)
as the Bank may reasonably request, in reasonable detail, prepared and certified
without adverse reference to going concern value and without qualification by an
independent auditor of recognized standing, selected by such Guarantor and
reasonably acceptable to the Bank as accurate and certified as true and correct
by the treasurer, chief financial officer, president or vice president - finance
of such Guarantor or the general partner or member of such Guarantor or some
other officer acceptable to the Bank; and
  (b)  promptly
when available, and in any event, within sixty (60) days following the end of
each fiscal quarter, a copy of the financial statements of each Guarantor
regarding such fiscal quarter, including balance sheet, statement of income and
retained earnings, statement of cash flows for the fiscal quarter then ended
(and the financial statements included in such Guarantor’s 10-Q filings with the
Securities and Exchange Commission for the applicable fiscal quarter shall be
satisfactory for the purposes provided herein so long as such Guarantor remains
a Reporting Company provided that the same are delivered to the Bank at the
times required above) and such other information (including nonfinancial
information) as the Bank may reasonably request, in reasonable detail, prepared
and certified as true and correct by the treasurer, chief financial officer,
president or vice president - finance of such Guarantor or the general partner
or member of such Guarantor or some other officer acceptable to the
Bank.
  The
Borrower represents and warrants to the Bank that (i) each Guarantor shall
at all times maintain accurate and adequate books and records, on the accrual
basis of accounting and in all respects in accordance with GAAP, (ii) no change
with respect to such accounting principles shall be made by each Guarantor
without giving prior notification to the Bank, (iii) the financial
statements of each Guarantor delivered to the Bank at or prior to the execution
and delivery of this Agreement and to be delivered at all times thereafter
accurately reflect and will fairly and accurately reflect the financial
condition of each Guarantor in all material respects, (iv) the Bank shall have
the right at all times during business hours to inspect the books and records of
each Guarantor and make extracts therefrom (and the Bank agrees to provide
reasonable prior notice to the Borrower and such Guarantor of any such
inspection so long as no Event of Default or Unmatured Event of Default then
exists), and (v) the Borrower agrees to advise the Bank immediately of any
material adverse change in the financial condition, the operations or any other
status of any Guarantor.
  8.10  Supplemental
Financial Statements . The
Borrower shall promptly upon receipt thereof, provide to the Bank copies of
interim and supplemental reports if any, submitted to the Borrower by
independent accountants in connection with any interim audit or review of the
books of the Borrower.
  8.11  Borrowing
Base Certificate . The
Borrower shall, (a) within ten (10) days after the end of each month in which
any Loan remains outstanding **,** and (b)
at any time the Borrower shall request a Loan hereunder, deliver to the Bank a
Borrowing Base Certificate dated as of the last Business Day of such month,
certified as true and correct by an authorized representative of the Borrower,
provided, however, at any time an Event of Default exists, the Bank may require
the Borrower to deliver Borrowing Base Certificates more frequently, but not
more frequently than weekly.
  8.12  Covenant
Compliance Certificate . The
Borrower shall, contemporaneously with the furnishing of the financial
statements pursuant to Section
8.8 , deliver
to the Bank a duly completed compliance certificate in the form of Exhibit G hereto
(a “Covenant Compliance Certificate”), dated the date of such financial
statements and certified as true and correct by an appropriate officer of the
Borrower, containing a computation of each of the financial covenants set forth
in Section
10 and
stating that the Borrower has not become aware of any Event of Default or
Unmatured Event of Default that has occurred and is continuing or, if there is
any such Event of Default or Unmatured Event of Default describing it and the
steps, if any, being taken to cure it.
  8.13  Additional
Reports Relating to Railcars and Leases . In
addition to the reports elsewhere described in this Agreement, the Borrower
shall provide the following information at the following times with respect to
the Railcars (i) prior to or concurrent with the Borrower’s acquisition of any
Railcar (a) such information as the Bank shall reasonably require to demonstrate
the Borrower’s acquisition and ownership thereof free and clear of all Liens
other than Permitted Liens, (b) the Acquisition Cost of such Railcars, together
with such supporting documentation as the Bank shall reasonably require relating
to the determination of such Acquisition Cost, (c) at the Bank’s request, copies
of all warranties, maintenance records, appraisals and related materials, if
any, obtained by the Borrower from the seller of such Railcars, (ii) periodic
reports (at reasonable intervals) as to the Borrower’s compliance with the
Railcar Maintenance and Safety Standards in the form of Exhibit H attached
hereto, (iii) monthly reports as to which Railcars are presently subject to
Leases and Eligible Railcar Leases and as to whether or not, to the best of the
Borrower’s knowledge, any default, event of default, casualty loss or similar
event or occurrence has occurred with respect to any such Lease or Eligible
Railcar Lease or any Railcar subject to any of the foregoing in the form of Exhibit I attached
hereto, and (iv) such other reports relating to the Leases, the Eligible Railcar
Leases and the Railcars as the Bank shall from time to time reasonably require.
  8.14  Field
Audits . The
Borrower shall, subject to the terms of the Leases, permit the Bank or its agent
to inspect the Railcars, other tangible assets and/or other business operations
of the Borrower, to perform appraisals of the Railcars and to inspect, audit,
check and make copies of, and extracts from, the books, records, computer data,
computer programs, journals, orders, receipts, correspondence and other data
relating to the Railcars and any other Collateral, the results of which must be
satisfactory to the Bank in the Bank’s sole and absolute discretion. If the
terms of any Lease shall prevent the Bank or its agent from conducting the
inspections, appraisals and other reviews and audits described in the preceding
sentence, the Borrower shall cooperate with and assist the Bank, at the
Borrower’s own expense, in obtaining such access to the Railcars, books and
records or other assets as the Bank shall reasonably require to conduct the
applicable inspection, appraisal or other review or audit. Provided no Event of
Default or Unmatured Event of Default exists, all such inspections or audits by
the Bank shall be at the Bank’s expense.
  8.15  Other
Reports . The
Borrower shall, within such period of time as the Bank may specify, deliver to
the Bank such other schedules and reports as the Bank may reasonably
require.
  8.16  Collateral
Records . The
Borrower shall keep full and accurate books and records relating to the
Collateral and shall mark such books and records to indicate the Bank’s Lien in
the Collateral, including, without limitation, placing any legend or other
indication of the Bank’s security interest thereon as required under Article
VI.
  8.17  Intellectual
Property . The
Borrower shall maintain, preserve and renew all Intellectual Property (including,
without limitation, such access to the records and software of the Escrow Agent
as shall be reasonably required to determine the nature of the Borrower’s
interest in the Escrow Agreement and the accounts and other property subject
thereto) necessary
for the conduct of its business as and where the same is currently located as
heretofore conducted by it or as hereafter conducted by it except to the extent
that the Borrower’s failure to do so would not have a Material Adverse
Effect.
  8.18  Notice
of Proceedings . The
Borrower, promptly upon becoming aware, shall give written notice to the Bank of
any litigation, arbitration or governmental investigation or proceeding not
previously disclosed by the Borrower to the Bank which has been instituted or,
to the knowledge of the Borrower, is threatened against the Borrower or to which
any of its properties is subject which might reasonably be expected to have a
Material Adverse Effect;
  8.19  Notice
of Event of Default or Material Adverse Effect . The
Borrower shall, immediately after obtaining knowledge thereof, give notice to
the Bank in writing of the occurrence of any Event of Default or any Unmatured
Event of Default, or the occurrence of any condition or event having a Material
Adverse Effect.
  8.20  Environmental
Matters . If any
release or threatened release or other disposal of Hazardous Substances shall
occur or shall have occurred on any real property of the Borrower, the Borrower
shall cause the prompt containment and removal of such Hazardous Substances and
the remediation of such real property or other assets as necessary to comply
with all Environmental Laws and to preserve the value of such real property or
other assets. Without limiting the generality of the foregoing, the Borrower
shall comply with any federal or state judicial or administrative order
requiring the performance at any real property of the Borrower **** of
activities in response to the release or threatened release of a Hazardous
Substance. The Borrower agrees to cause each Lease to require that the lessee
thereunder conduct its business operations in conformity with all applicable
Environmental Laws.
  8.21  Further
Assurances . The
Borrower shall take such actions as are necessary or as the Bank may reasonably
request from time to time to ensure that the Obligations under the Loan
Documents are secured by Collateral, in each case as the Bank may determine,
including (a) the execution and delivery of security agreements, pledge
agreements, mortgages, deeds of trust, financing statements, Railcar Filings and
other documents, and the filing or recording of any of the foregoing, (b)
obtaining possession or control of any Collateral for which a superior priority
can be obtained by obtaining such possession or control.
  8.22  Non-Utilization
Fee . The
Borrower agrees to pay to the Bank a non-utilization fee equal to one half of
one percent (0.50%) of the total of (a) the Revolving Loan Commitment, minus (b) the
sum of (i) the daily average of the aggregate principal amount of all Revolving
Loans outstanding, plus (ii) the
daily average of the aggregate principal amount of all Term Loans outstanding,
which non- utilization fee shall be (A) calculated on the basis of a year
consisting of three hundred sixty (360) days, (B) paid for the actual number of
days elapsed, and (C) payable quarterly in arrears on the last day of each
March, June, September and December, commencing on June 30, 2004, and on
the Revolving Loan Facility Termination Date.
  8.23  Agency
Fee . The
Borrower agrees to pay to the Bank an annual agency fee (the “Agency Fee”) of
$5,000 per annum. The initial installment of the Agency Fee shall be due and
payable on the Original Closing Date and subsequent installments shall be due
and payable on each anniversary of the Original Closing Date. Each installment
of the Agency Fee shall be deemed fully earned on the date such fee is due. The
Agency Fee is nonrefundable and will not be credited to any other fee payable
under this Agreement or any other Loan Document.
  8.24  Facility
Fee . The
Borrower agrees to pay to the Bank a one time facility fee (the “Facility Fee”)
of $135,000 on the Original Closing Date. The Facility Fee shall be deemed fully
earned by the Bank by its execution and delivery of this Agreement on the
Original Closing Date. The Facility Fee is nonrefundable and will not be
creditable against any other fee payable under this Agreement or any other Loan
Document.
  8.25  Amendment
Fee . The
Borrower agrees to pay to the Bank an amendment fee (the “Amendment Fee”) of
$5,000 on the Restatement Date. The Amendment Fee shall be deemed fully earned
by the Bank by its execution and delivery of this Agreement on the Restatement
Date. The Amendment Fee is nonrefundable and will not be creditable against any
other fee payable under this Agreement or any other Loan Document.
  9
    NEGATIVE
      COVENANTS.
  9.1  Debt . The
Borrower shall not, either directly or indirectly, create, assume, incur or have
outstanding any Debt (including purchase money indebtedness), or become liable,
whether as endorser, guarantor, surety or otherwise, for any debt or obligation
of any other Person, except:
  (a)  the
Obligations under this Agreement and the other Loan Documents (including any
Obligations under any Guaranty);
  (b)  Permitted
Takeout Financing;
  (c)  obligations
of the Borrower for Taxes, assessments, municipal or other governmental
charges;
  (d)  obligations
of the Borrower for accounts payable, other than for money borrowed, incurred in
the ordinary course of business;
  (e)  Subordinated
Debt;
  (f)  Hedging
Obligations incurred in favor of the Bank or an Affiliate thereof for bona fide
hedging purposes and not for speculation; and
  (g)  Debt
described on Schedule
9.1 and any
extension, renewal or refinancing thereof so long as the principal amount
thereof is not increased.
  9.2  Encumbrances . The
Borrower shall not, either directly or indirectly, create, assume, incur or
suffer or permit to exist any Lien or charge of any kind or character upon any
asset of the Borrower, whether owned at the date hereof or hereafter acquired,
except for Permitted Liens.
  9.3  Investments . The
Borrower shall not, either directly or indirectly, make or have outstanding any
Investment, except:
  (a)  Investments
constituting Debt permitted by Section
9.1 ;
  (b)  Contingent
Liabilities constituting Debt permitted by Section
9.1 or Liens
permitted by Section
9.2 ;
  (c)  Cash
Equivalent Investments;
  (d)  Investments
in securities of Account Debtors received pursuant to any plan of reorganization
or similar arrangement upon the bankruptcy or insolvency of such account
debtors; and
  (e)  Investments
listed on Schedule
9.3 as of
the Restatement Date.
  provided,
however, that (i) any Investment which when made complies with the requirements
of the definition of the term “Cash Equivalent Investment” may continue to be
held notwithstanding that such Investment if made thereafter would not comply
with such requirements; and (ii) no Investment otherwise permitted by subsections
(a) or (b) shall be
permitted to be made if, immediately before or after giving effect thereto, any
Event of Default or Unmatured Event of Default exists.
  9.4  Transfer;
Merger; Sales . The
Borrower shall not, whether in one transaction or a series of related
transactions, (a) be a party to any merger or consolidation, or purchase or
otherwise acquire all or substantially all of the assets or any Capital
Securities of any class of, or any partnership or joint venture interest in, any
other Person, except for (i) Permitted Acquisitions, and (ii) purchases of
assets in the ordinary course of business, or (b) sell, transfer, convey or
lease all or any substantial part of its assets or Capital Securities, except
for Permitted Dispositions.
  9.5  Issuance
of Capital Securities . The
Borrower shall not issue any Capital Securities without the prior written
consent of the Bank.
  9.6  Distributions . Unless
no Event of Default or Unmatured Event of Default shall have occurred and be
continuing and will not result therefrom, the Borrower shall not (i) make any
distribution or dividend (other than stock dividends), whether in cash or
otherwise, to any of its equityholders, (ii) purchase or redeem any of its
equity interests or any warrants, options or other rights in respect thereof, or
(iii) set aside funds for any of the foregoing. The Borrower shall not pay
any management or similar fees to any Affiliate, any of its equityholders or any
Affiliate thereof
  9.7  Transactions
with Affiliates . The
Borrower shall not, directly or indirectly, enter into or permit to exist any
transaction with any of its Affiliates or with any director, officer or employee
of the Borrower, other than transactions in the ordinary course of, and pursuant
to the reasonable requirements of, the business of the Borrower and upon fair
and reasonable terms which are fully disclosed to the Bank and are no less
favorable to the Borrower than would be obtained in a comparable arm’s length
transaction with a Person that is not an Affiliate of the Borrower. The Borrower
shall not, directly or indirectly, enter into any Management
Contract.
  9.8  Unconditional
Purchase Obligations . The
Borrower shall not, without the prior written consent of the Bank, enter into or
be a party to any contract for the purchase of materials, supplies or other
property or services if such contract requires that payment be made by it
regardless of whether delivery is ever made of such materials, supplies or other
property or services.
  9.9  Cancellation
of Debt . The
Borrower shall not cancel any claim or debt owing to it, except for reasonable
consideration or in the ordinary course of business.
  9.10  Inconsistent
Agreements . The
Borrower shall not enter into any agreement containing any provision which would
(a) be violated or breached by any borrowing by the Borrower hereunder or by the
performance by the Borrower of any of its Obligations hereunder or under any
other Loan Document, (b) prohibit the Borrower from granting to the Bank a
Lien on any of its Collateral.
  9.11  Use of
Proceeds . Neither
the Borrower nor any of its Affiliates shall use any portion of the proceeds of
the Loans, either directly or indirectly, for the purpose of purchasing any
securities underwritten by ABN AMRO Incorporated, an Affiliate of the
Bank.
  9.12  Business
Activities; Change of Legal Status and Organizational Documents . The
Borrower shall not (a) engage in any line of business other than the businesses
engaged in on the date hereof and businesses reasonably related thereto,
(b) without the prior written consent of the Bank (which consent shall not
be unreasonably withheld), change its name, its Organizational Identification
Number, if it has one, its type of organization, its jurisdiction of
organization or other legal structure, or (b) permit its charter, bylaws or
other organizational documents to be amended or modified in any way which could
reasonably be expected to have a Material Adverse Effect.
  10
    FINANCIAL
      COVENANTS.
  10.1  Tangible
Net Worth . As of
the end of each fiscal quarter of the Borrower ending on or after June 30, 2005,
the sum of the Borrower’s Base Tangible Net Worth plus any deferred incomes
taxes shall not be less than $30,900,000.
  10.2  Fixed
Charge Coverage .
Beginning June 30, 2005, as of the end of each of its fiscal quarters, the
Borrower shall maintain a Fixed Charge Coverage Ratio of not less than 1.2 to
1.00.
  11
    EVENTS
      OF DEFAULT.
  The
Borrower, without notice or demand of any kind, shall be in default under this
Agreement upon the occurrence of any of the following events (each an “Event of
Default”).
  11.1  Nonpayment
of Obligations . Any
amount due and owing on the Notes or any of the Obligations, whether by its
terms or as otherwise provided herein, is not paid when due.
  11.2  Misrepresentation . Any
oral or written warranty, representation, certificate or statement of any
Obligor in this Agreement, the other Loan Documents or any other agreement with
the Bank to which such Obligor is a party shall be false in any material respect
when made or at any time thereafter, or if any financial data or any other
information now or hereafter furnished to the Bank by or on behalf of any
Obligor shall prove to be false, inaccurate or misleading in any material
respect.
  11.3  Nonperformance
of Financial Covenants and Negative Covenants . Any
failure to comply with or any default in the performance of any covenant or
agreement set forth in Articles 9 or 10 or in Section
8.6 or 8.11 of this
Agreement.
  11.4  Nonperformance
of Other Provisions Affecting Bank’s Security Interest . Any
failure to perform or default in the performance of any covenant, condition or
agreement (other than those described in Sections
11.1 , 11.2 and 11.3 )
contained in this Agreement or the other Loan Documents that affects the Bank’s
security interest in the Collateral or any other collateral or the priority
thereof and the expiration of any grace period (if any) specifically provided in
the applicable covenant, condition or agreement.
  11.5  Nonperformance
of Other Provisions Containing Grace Periods . Any
failure to perform or default in the performance of any covenant, condition or
agreement contained in this Agreement or the other Loan Documents (other than
those described in Sections
11.1 , 11.2 , 11.3 and 11.4 ) that
contains a grace period specific to such covenant, condition or agreement and
the expiration of such grace period.
  11.6  Nonperformance
of Other Provisions Not Containing Grace Periods . Any
failure to perform or default in the performance of any covenant, condition or
agreement contained in this Agreement (other than those described in Sections
11.1, 11.2, 11.3, 11.4 and 11.5 ) or the
other Loan Documents and such failure or default continues for more than thirty
(30) days.
  11.7  Insufficient
Funds to Pay Debt Service and Operating Expenses . The
Borrower’s cash and Cash Equivalent Investments shall be insufficient to pay all
Operating Expenses of the Borrower as and when the same shall are due.
  11.8  Default
under Other Debt . Any
default by any Obligor in the payment of any obligation with respect to any Debt
(other than the Obligations), where the outstanding principal amount, notional
amount or other applicable measure of exposure or liability with respect to such
Debt is $250,000 or greater, beyond any period of grace provided with respect
thereto or in the performance of any other term, condition or covenant contained
in any agreement (including, but not limited to any capital or operating lease
or any agreement in connection with the deferred purchase price of property)
under which any such obligation is created, the effect of which default is to
cause or permit the holder of such obligation (or the other party to such other
agreement) to cause such obligation to become due prior to its stated maturity
or terminate such other agreement.
  11.9  Other
Material Obligations . Any
default in the payment when due, or in the performance or observance of, any
material obligation of, or condition agreed to by, any Obligor, beyond any grace
period provided with respect thereto, with respect to any material purchase or
lease of goods or services where such default, singly or in the aggregate with
all other such defaults, might reasonably be expected to have a Material Adverse
Effect.
  11.10  Bankruptcy,
Insolvency, etc. Any
Obligor becomes insolvent or generally fails to pay, or admits in writing its
inability or refusal to pay, debts as they become due; or any Obligor applies
for, consents to, or acquiesces in the appointment of a trustee, receiver or
other custodian for such Obligor or any property thereof, or makes a general
assignment for the benefit of creditors; or, in the absence of such application,
consent or acquiescence, a trustee, receiver or other custodian is appointed for
any Obligor or for a substantial part of the property of any thereof; or any
bankruptcy, reorganization, debt arrangement, or other case or proceeding under
any bankruptcy or insolvency law, or any dissolution or liquidation proceeding,
is commenced in respect of any Obligor; or any Obligor takes any action to
authorize, or in furtherance of, any of the foregoing.
  11.11  Judgments . The
entry of any final judgment, decree, levy, attachment, garnishment or other
process, or the filing of any Lien against any Obligor which is not fully
covered by insurance and which would have a Material Adverse Effect on the
Borrower or any Obligor.
  11.12  Change
in Control . The
occurrence of any Change in Control.
  11.13  Collateral
Impairment . The
entry of any judgment, decree, levy, attachment, garnishment or other process,
or the filing of any Lien against, any of the Collateral or any collateral under
a separate security agreement securing any of the Obligations, or the loss,
theft, destruction, seizure or forfeiture, or the occurrence of any material
deterioration or impairment of any of the Collateral or any of the collateral
under any security agreement securing any of the Obligations, or any material
decline or depreciation in the value or market price thereof, which causes the
Collateral, in the sole opinion of the Bank acting in good faith, to become
unsatisfactory as to value or character, or which causes the Bank to reasonably
believe that it is insecure and that the likelihood for repayment of the
Obligations is or will soon be impaired, time being of the essence. The cause of
such deterioration, impairment, decline or depreciation shall include, but is
not limited to, the failure by the Borrower to do any act deemed necessary by
the Bank to preserve and maintain the value and collectability of the
Collateral.
  11.14  Material
Adverse Effect . The
occurrence of any event which has a Material Adverse Effect on the
Borrower.
  11.15  Guaranty . There
is a discontinuance by any Guarantor of its Guaranty **** or any
Guarantor shall contest the validity of its Guaranty.
  11.16  Escrow
Agreement . Any
Person to whom an interest in the Escrow Agreement or any account subject to the
Escrow Account has been pledged shall (i) accelerate any obligations secured by
such interest, (ii) foreclose against such interest, or (iii) otherwise commence
the exercise of any remedy in respect of such interest.
  11.17  Leases . Any
Person to whom an interest in a Lease or any lease schedule thereunder
(including, without limitation any Lease Schedule) has been pledged shall (i)
accelerate any obligations secured by such interest, (ii) foreclose against such
interest, or (iii) shall otherwise commence the exercise of any remedy following
any default with respect to the obligations secured by such
interest.
  11.18  Subordinated
Debt . The
subordination provisions of any Subordinated Debt shall for any reason be
revoked or invalid or otherwise cause to not be in full force and effect. The
Borrower shall contest in any manner, or any other holder thereof shall contest
in any judicial proceeding, the validity or enforceability of the Subordinated
Debt or deny that it has any further liability or obligation thereunder, or the
Obligations shall for any reason not have the priority contemplated by the
subordination provisions of the Subordinated Debt.
  12
    REMEDIES.
  Upon the
occurrence of an Event of Default, the Bank shall have all rights, powers and
remedies set forth in the Loan Documents, in any written agreement or instrument
(other than this Agreement or the Loan Documents) relating to any of the
Obligations or any security therefor, as a secured party under the UCC or as
otherwise provided at law or in equity. Without limiting the generality of the
foregoing, the Bank may, at its option upon the occurrence of an Event of
Default, declare its commitments to the Borrower to be terminated and all
Obligations to be immediately due and payable, provided, however, that upon the
occurrence of an Event of Default under Section
11.10 , all
commitments of the Bank to the Borrower shall immediately terminate and all
Obligations shall be automatically due and payable, all without demand, notice
or further action of any kind required on the part of the Bank. The Borrower
hereby waives any and all presentment, demand, notice of dishonor, protest, and
all other notices and demands in connection with the enforcement of Bank’s
rights under the Loan Documents, and hereby consents to, and waives notice of
release, with or without consideration, of any of the Borrower or any Guarantor
of any Collateral, notwithstanding anything contained herein or in the Loan
Documents to the contrary. In addition to the foregoing, upon the occurrence of
an Event of Default:
  12.1  Possession
and Assembly of Collateral . Subject
to the terms of the Leases, the Bank may, without notice, demand or legal
process of any kind, take possession of any or all of the Collateral (in
addition to Collateral of which the Bank already has possession), wherever it
may be found, and for that purpose may pursue the same wherever it may be found,
and may at any time enter into any of the Borrower’s premises where any of the
Collateral may be or is supposed to be, and search for, take possession of,
remove, keep and store any of the Collateral until the same shall be sold or
otherwise disposed of and the Bank shall have the right to store and conduct a
sale of the same in any of the Borrower’s premises without cost to the Bank. At
the Bank’s request, the Borrower will, at the Borrower’s sole expense, assemble
the Collateral within sixty (60) days and make it available to the Bank at
a place or places to be designated by the Bank which is reasonably convenient to
the Bank and the Borrower.
  12.2  Sale
of Collateral . The
Bank may sell any or all of the Collateral at public or private sale, upon such
terms and conditions as the Bank may deem proper, and the Bank may purchase any
or all of the Collateral at any such sale. The Borrower acknowledges that the
Bank may be unable to effect a public sale of all or any portion of the
Collateral because of certain legal and/or practical restrictions and provisions
which may be applicable to the Collateral and, therefore, may be compelled to
resort to one or more private sales to a restricted group of offerees and
purchasers. The Borrower consents to any such private sale so made even though
at places and upon terms less favorable than if the Collateral were sold at
public sale. The Bank shall have no obligation to clean-up or otherwise prepare
the Collateral for sale. The Bank may apply the net proceeds, after deducting
all costs, expenses, attorneys’ and paralegals’ fees incurred or paid at any
time in the collection, protection and sale of the Collateral and the
Obligations, to the payment of the Notes and/or any of the other Obligations,
returning the excess proceeds, if any, to the Borrower. The Borrower shall
remain liable for any amount remaining unpaid after such application, with
interest on such amount at the Default Rate. Any notification of intended
disposition of the Collateral required by law shall be conclusively deemed
reasonably and properly given if given by the Bank at least ten (10) calendar
days before the date of such disposition. The Borrower hereby confirms, approves
and ratifies all acts and deeds of the Bank relating to the foregoing, and each
part thereof, and expressly waives any and all claims of any nature, kind or
description which it has or may hereafter have against the Bank or its
representatives, by reason of taking, selling or collecting any portion of the
Collateral. The Borrower consents to releases of the Collateral at any time
(including prior to default) and to sales of the Collateral in groups, parcels
or portions, or as an entirety, as the Bank shall deem appropriate. The Borrower
expressly absolves the Bank from any loss or decline in market value of any
Collateral by reason of delay in the enforcement or assertion or nonenforcement
of any rights or remedies under this Agreement.
  12.3  Standards
for Exercising Remedies . **** To the
extent that applicable law imposes duties on the Bank to exercise remedies in a
commercially reasonable manner, the Borrower acknowledges and agrees that it is
not commercially unreasonable for the Bank (a) to fail to incur expenses
reasonably deemed significant by the Bank to prepare Collateral for disposition
or otherwise to complete raw material or work-in-process into finished goods or
other finished products for disposition, (b) to fail to obtain third party
consents for access to Collateral to be disposed of, or to obtain or, if not
required by other law, to fail to obtain governmental or third party consents
for the collection or disposition of Collateral to be collected or disposed of,
(c) to fail to exercise collection remedies against Account Debtors or other
Persons obligated on Collateral or to remove liens or encumbrances on or any
adverse claims against Collateral, (d) to exercise collection remedies against
Account Debtors and other Persons obligated on Collateral directly or through
the use of collection agencies and other collection specialists, (e) to
advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (f) to
contact other Persons, whether or not in the same business as the Borrower, for
expressions of interest in acquiring all or any portion of the Collateral, (g)
to hire one or more professional auctioneers to assist in the disposition of
Collateral, whether or not the collateral is of a specialized nature, (h) to
dispose of Collateral by utilizing internet sites that provide for the auction
of assets of the types included in the Collateral or that have the reasonable
capability of doing so, or that match buyers and sellers of assets, (i) to
dispose of assets in wholesale rather than retail markets, (j) to disclaim
disposition warranties, including, without limitation, any warranties of title,
(k) to purchase insurance or credit enhancements to insure the Bank against
risks of loss, collection or disposition of Collateral or to provide to the Bank
a guaranteed return from the collection or disposition of Collateral, or (l) to
the extent deemed appropriate by the Bank, to obtain the services of other
brokers, investment bankers, consultants and other professionals to assist the
Bank in the collection or disposition of any of the Collateral. The Borrower
acknowledges that the purpose of this section is to provide non-exhaustive
indications of what actions or omissions by the Bank would not be commercially
unreasonable in the Bank’s exercise of remedies against the Collateral and that
other actions or omissions by the Bank shall not be deemed commercially
unreasonable solely on account of not being indicated in this section. Without
limitation upon the foregoing, nothing contained in this section shall be
construed to grant any rights to the Borrower or to impose any duties on the
Bank that would not have been granted or imposed by this Agreement or by
applicable law in the absence of this section.
  12.4  UCC
and Offset Rights . The
Bank may exercise, from time to time, any and all rights and remedies available
to it under the UCC or under any other applicable law in addition to, and not in
lieu of, any rights and remedies expressly granted in this Agreement or in any
other agreements between any Obligor and the Bank related hereto, and may,
without demand or notice of any kind, appropriate and apply toward the payment
of such of the Obligations, whether matured or unmatured, including costs of
collection and attorneys’ and paralegals’ fees, and in such order of application
as the Bank may, from time to time, elect, any indebtedness of the Bank to any
Obligor, however created or arising, including, but not limited to, balances,
credits, deposits, accounts or moneys of such Obligor in the possession, control
or custody of, or in transit to the Bank. The Borrower, on behalf of itself and
each Obligor, hereby waives the benefit of any law that would otherwise restrict
or limit the Bank in the exercise of its right, which is hereby acknowledged, to
appropriate at any time hereafter any such indebtedness owing from the Bank to
any Obligor.
  12.5  Additional
Remedies . The
Bank shall have the right and power to:
  (a)  instruct
the Borrower, at its own expense, to notify any parties obligated on any of the
Collateral, including, but not limited to, any Account Debtors, to make payment
directly to the Bank of any amounts due or to become due thereunder, or the Bank
may directly notify such obligors of the security interest of the Bank, and/or
of the assignment to the Bank of the Collateral and direct such obligors to make
payment to the Bank of any amounts due or to become due with respect thereto,
and thereafter, collect any such amounts due on the Collateral directly from
such Persons obligated thereon;
  (b)  enforce
collection of any of the Collateral, including, but not limited to, any
Accounts, by suit or otherwise, or make any compromise or settlement with
respect to any of the Collateral, or surrender, release or exchange all or any
part thereof, or compromise, extend or renew for any period (whether or not
longer than the original period) any indebtedness thereunder;
  (c)  take
possession or control of any proceeds and products of any of the Collateral,
including the proceeds of insurance thereon;
  (d)  extend,
renew or modify for one or more periods (whether or not longer than the original
period) the Notes, any other of the Obligations, any obligation of any nature of
any other obligor with respect to the Notes or any of the
Obligations;
  (e)  grant
releases, compromises or indulgences with respect to the Notes, any of the
Obligations, any extension or renewal of any of the Obligations, any security
therefor, or to any other obligor with respect to the Notes or any of the
Obligations;
  (f)  make an
election with respect to the Collateral under Section 1111 of the Bankruptcy
Code or take action under Section 364 or any other section of the Bankruptcy
Code; provided, however, that any such action of the Bank as set forth herein
shall not, in any manner whatsoever, impair or affect the liability of the
Borrower hereunder, nor prejudice, waive, nor be construed to impair, affect,
prejudice or waive the Bank’s rights and remedies at law, in equity or by
statute, nor release, discharge, nor be construed to release or discharge, the
Borrower, any guarantor or other Person liable to the Bank for the Obligations;
and
  (g)  at any
time, and from time to time, accept additions to, releases, reductions,
exchanges or substitution of the Collateral, without in any way altering,
impairing, diminishing or affecting the provisions of this Agreement, the Loan
Documents, or any of the other Obligations, or the Bank’s rights hereunder,
under the Notes or under any of the other Obligations.
  The
Borrower hereby ratifies and confirms whatever the Bank may do with respect to
the Collateral and agrees that the Bank shall not be liable for any error of
judgment or mistakes of fact or law with respect to actions taken in connection
with the Collateral.
  12.6  Attorney-in-Fact . The
Borrower hereby irrevocably makes, constitutes and appoints the Bank (and any
officer of the Bank or any Person designated by the Bank for that purpose) as
the Borrower’s true and lawful proxy and attorney-in-fact (and agent-in-fact) in
the Borrower’s name, place and stead, with full power of substitution, to (i)
take such actions as are permitted in this Agreement, (ii) execute such
financing statements and other documents and to do such other acts as the Bank
may require to perfect and preserve the Bank’s security interest in, and to
enforce such interests in the Collateral, and (iii) carry out any remedy
provided for in this Agreement, including, without limitation, endorsing the
Borrower’s name to checks, drafts, instruments and other items of payment, and
proceeds of the Collateral, executing change of address forms with the
postmaster of the United States Post Office serving the address of the Borrower,
changing the address of the Borrower to that of the Bank, opening all envelopes
bearing a return address of an Eligible Lessee and addressed to the Borrower (or
the Borrower’s agent) and applying any payments contained therein relating to
any Collateral to the Obligations. The Borrower hereby acknowledges that the
constitution and appointment of such proxy and attorney-in-fact are coupled with
an interest and are irrevocable. The Borrower hereby ratifies and confirms all
that said attorney-in-fact may do or cause to be done by virtue of any provision
of this Agreement.
  12.7  No
Marshaling . The
Bank shall not be required to marshal any present or future collateral security
(including but not limited to this Agreement and the Collateral) for, or other
assurances of payment of, the Obligations or any of them or to resort to such
collateral security or other assurances of payment in any particular order. To
the extent that it lawfully may, the Borrower hereby agrees that it will not
invoke any law relating to the marshaling of collateral which might cause delay
in or impede the enforcement of the Bank’s rights under this Agreement or under
any other instrument creating or evidencing any of the Obligations or under
which any of the Obligations is outstanding or by which any of the Obligations
is secured or payment thereof is otherwise assured, and, to the extent that it
lawfully may, the Borrower hereby irrevocably waives the benefits of all such
laws.
  12.8  Application
of Proceeds . The
Bank will within three (3) business days after receipt of cash or solvent
credits from collection of items of payment, proceeds of Collateral or any other
source, apply the whole or any part thereof against the Obligations secured
hereby. The Bank shall further have the exclusive right to determine how, when
and what application of such payments and such credits shall be made on the
Obligations, and such determination shall be conclusive upon the Borrower. Any
proceeds of any disposition by the Bank of all or any part of the Collateral may
be first applied by the Bank to the payment of expenses incurred by the Bank in
connection with the Collateral, including attorneys’ fees and legal expenses as
provided for in Section
13 hereof.
  12.9  No
Waiver . No
Event of Default shall be waived by the Bank except in writing. No failure or
delay on the part of the Bank in exercising any right, power or remedy hereunder
shall operate as a waiver of the exercise of the same or any other right at any
other time; nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder. There shall be no obligation on the part
of the Bank to exercise any remedy available to the Bank in any order. The
remedies provided for herein are cumulative and not exclusive of any remedies
provided at law or in equity. The Borrower agrees that in the event that the
Borrower fails to perform, observe or discharge any of its Obligations or
liabilities under this Agreement or any other agreements with the Bank, no
remedy of law will provide adequate relief to the Bank, and further agrees that
the Bank shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.
  13
    MISCELLANEOUS.
  13.1  Obligations
Absolute . None of
the following shall affect the Obligations of the Borrower to the Bank under
this Agreement or the Bank’s rights with respect to the Collateral:
  (a)  acceptance
or retention by the Bank of other property or any interest in property as
security for the Obligations;
  (b)  release
by the Bank of the Borrower, any Guarantor or all or any part of the Collateral
or of any party liable with respect to the Obligations;
  (c)  release,
extension, renewal, modification or substitution by the Bank of the Notes, or
any note evidencing any of the Obligations, or the compromise of the liability
of any Guarantor of or other person liable with respect to the Obligations;
or
  (d)  failure
of the Bank to resort to any other security or to pursue the Borrower or any
other obligor liable for any of the Obligations before resorting to remedies
against the Collateral.
  13.2  Entire
Agreement . This
Agreement and the other Loan Documents (i) are valid, binding and enforceable
against the Borrower and the Bank in accordance with their respective provisions
and no conditions exist as to their legal effectiveness; (ii) constitute the
entire agreement between the parties with
respect to the subject matter hereof and thereof ; and
(iii) are the final expression of the intentions of the Borrower and the Bank.
No promises, either expressed or implied, exist between the Borrower and the
Bank, unless contained herein or therein. This Agreement, together with the
other Loan Documents, supersedes all negotiations, representations, warranties,
commitments, term sheets, discussions,
negotiations, offers or
contracts (of any kind or nature, whether oral or written) prior to or
contemporaneous with the execution hereof with
respect to any matter, directly or indirectly related to the terms of this
Agreement and the other Loan Documents . This
Agreement and the other Loan Documents are the result of negotiations among the
Bank, the Borrower and the other parties thereto, and have been reviewed (or
have had the opportunity to be reviewed) by counsel to all such parties, and are
the products of all parties. Accordingly, this Agreement and the other Loan
Documents shall not be construed more strictly against the Bank merely because
of the Bank’s involvement in their preparation.
  13.3  Amendments;
Waivers . No
delay on the part of the Bank in the exercise of any right, power or remedy
shall operate as a waiver thereof, nor shall any single or partial exercise by
the Bank of any right, power or remedy preclude other or further exercise
thereof, or the exercise of any other right, power or remedy. No amendment,
modification or waiver of, or consent with respect to, any provision of this
Agreement or the other Loan Documents shall in any event be effective unless the
same shall be in writing and acknowledged by the Borrower and the Bank, and then
any such amendment, modification, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
  13.4  WAIVER
OF DEFENSES . THE
BORROWER, ON BEHALF OF ITSELF AND ANY GUARANTOR OF ANY OF THE OBLIGATIONS,
WAIVES EVERY PRESENT AND FUTURE DEFENSE, CAUSE OF ACTION, COUNTERCLAIM OR SETOFF
WHICH THE BORROWER MAY NOW HAVE OR HEREAFTER MAY HAVE TO ANY ACTION BY THE BANK
IN ENFORCING THIS AGREEMENT. PROVIDED THE BANK ACTS IN GOOD FAITH, THE BORROWER
RATIFIES AND CONFIRMS WHATEVER THE BANK MAY DO PURSUANT TO THE TERMS OF THIS
AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK GRANTING ANY
FINANCIAL ACCOMMODATION TO THE BORROWER.
  13.5  FORUM
SELECTION AND CONSENT TO JURISDICTION . ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED THAT NOTHING IN
THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE BANK FROM BRINGING
SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION. THE BORROWER HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE
OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. THE BORROWER
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS.
THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
  13.6  WAIVER
OF JURY TRIAL . THE
BANK AND THE BORROWER, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT
WITH COUNSEL, EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE IRREVOCABLY,
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT, ANY OF THE
OTHER OBLIGATIONS, THE COLLATERAL, OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN
CONNECTION WITH ANY OF THE FOREGOING, OR ANY COURSE OF CONDUCT OR COURSE OF
DEALING IN WHICH THE BANK AND THE BORROWER ARE ADVERSE PARTIES, AND EACH AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK GRANTING ANY
FINANCIAL ACCOMMODATION TO THE BORROWER.
  13.7  Assignability . The
Bank may at any time assign the Bank’s rights in this Agreement, the other Loan
Documents, the Obligations, or any part thereof and transfer the Bank’s rights
in any or all of the Collateral, and the Bank thereafter shall be relieved from
all liability with respect to such Collateral. In addition, the Bank may at any
time sell one or more participations in the Loans. The Borrower may not sell or
assign this Agreement, or any other agreement with the Bank or any portion
thereof, either voluntarily or by operation of law, without the prior written
consent of the Bank. This Agreement shall be binding upon the Bank and the
Borrower and their respective legal representatives and successors. All
references herein to the Borrower shall be deemed to include any successors,
whether immediate or remote. In the case of a joint venture or partnership, the
term “Borrower” shall be deemed to include all joint venturers or partners
thereof, who shall be jointly and severally liable hereunder.
  13.8  Confirmations . The
Borrower and the Bank agree from time to time, upon written request received by
it from the other, to confirm to the other in writing the aggregate unpaid
principal amount of the Loans then outstanding under such Note.
  13.9  Confidentiality . As
required by federal law and the Bank’s policies and practices, the Bank may need
to collect certain customer identification information and documentation in
connection with opening or maintaining accounts, or establishing or continuing
to provide services. The Bank agrees to use commercially reasonable efforts
(equivalent to the efforts the Bank applies to maintain the confidentiality of
its own confidential information) to maintain as confidential all information
provided to them by the Borrower and designated as confidential, except that the
Bank may disclose such information (a) to Persons employed or engaged by the
Bank in evaluating, approving, structuring or administering the Loans; (b) to
any assignee or participant or potential assignee or participant that has agreed
to comply with the covenant contained in this Section
13.9 (and any
such assignee or participant or potential assignee or participant may disclose
such information to Persons employed or engaged by them as described in clause
(a) above); (c) as required or requested by any federal or state regulatory
authority or examiner, or any insurance industry association, or as reasonably
believed by the Bank to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, on the advice of the Bank’s counsel, is
required by law; (e) in connection with the exercise of any right or remedy
under the Loan Documents or in connection with any litigation to which the Bank
is a party; (f) to any nationally recognized rating agency that requires access
to information about the Bank’s investment portfolio in connection with ratings
issued with respect to the Bank; (g) to any
Affiliate of the Bank who may provide Bank Products to the Borrower or any
Subsidiary, or (h) that
ceases to be confidential through no fault of the Bank.
  13.10  Binding
Effect . This
Agreement shall become effective upon execution by the Borrower and the Bank. If
this Agreement is not dated or contains any blanks when executed by the
Borrower, the Bank is hereby authorized, without notice to the Borrower, to date
this Agreement as of the date when it was executed by the Borrower, and to
complete any such blanks according to the terms upon which this Agreement is
executed.
  13.11  Governing
Law . This
Agreement, the Loan Documents and the Notes shall be delivered and accepted in
and shall be deemed to be contracts made under and governed by the internal laws
of the State of Illinois (but giving effect to federal laws applicable to
national banks) applicable to contracts made and to be performed entirely within
such state, without regard to conflict of laws principles.
  13.12  Enforceability .
Wherever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by, unenforceable or invalid under any
jurisdiction, such provision shall as to such jurisdiction, be severable and be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other
jurisdiction.
  13.13  Survival
of Borrower Representations . All
covenants, agreements, representations and warranties made by the Borrower
herein shall, notwithstanding any investigation by the Bank, be deemed material
and relied upon by the Bank and shall survive the making and execution of this
Agreement and the Loan Documents and the issuance of the Notes, until such time
as the Borrower has fulfilled all of its Obligations to the Bank, and the Bank
has been indefeasibly paid in full in cash. The Bank, in extending financial
accommodations to the Borrower, is expressly acting and relying on the aforesaid
representations and warranties.
  13.14  Extensions
of Bank’s Commitment and Notes . This
Agreement shall secure and govern the terms of any extensions or renewals of the
Bank’s commitment hereunder and the Notes pursuant to the execution of any
modification, extension or renewal note executed by the Borrower and accepted by
the Bank in its sole and absolute discretion in substitution for the
Notes.
  13.15  Time
of Essence . Time is
of the essence in making payments of all amounts due the Bank under this
Agreement and in the performance and observance by the Borrower of each
covenant, agreement, provision and term of this Agreement.
  13.16  Counterparts;
Facsimile Signatures . This
Agreement may be executed in any number of counterparts and by the different
parties hereto on separate counterparts and each such counterpart shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same Agreement. Receipt of an executed signature page to this
Agreement by facsimile or other electronic transmission shall constitute
effective delivery thereof. Electronic
records of executed Loan Documents maintained by the Bank shall deemed to be
originals thereof.
  13.17  Notices . Except
as otherwise provided herein, the Borrower waives all notices and demands in
connection with the enforcement of the Bank’s rights hereunder. All notices,
requests, demands and other communications provided for hereunder shall be in
writing and addressed as follows:
  If to the
Borrower:   MILPI
Holdings, LLC
 One North
LaSalle Street
 Suite
2700
 Chicago,
Illinois 60602
 Attention:
Mr. Scott Smith, Vice President - Finance
 
 If to the
Bank:   LaSalle
Bank National Association
 135 South
LaSalle Street
 Chicago,
Illinois 60603
 Attention:
Mr. Robert Hart, Senior Vice President
 
 or, as to
each party, at such other address as shall be designated by such party in a
written notice to each other party complying as to delivery with the terms of
this subsection. All notices addressed as above shall be deemed to have been
properly given (i) if served in person, upon acceptance or refusal of delivery;
(ii) if mailed by certified or registered mail, return receipt requested,
postage prepaid, on the third (3rd) day following the day such notice is
deposited in any post office station or letter box; or (iii) if sent by
recognized overnight courier, on the first (1st) day following the day such
notice is delivered to such carrier. No notice to or demand on the Borrower in
any case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances.
  13.18  Release
of Claims Against Bank . In
consideration of the Bank making the Loans, the Borrower and all other Obligors
do each hereby release and discharge the Bank of and from any and all claims,
harm, injury, and damage of any and every kind, known or unknown, legal or
equitable, which any Obligor may have against the Bank relating hereto from the
date of their respective first contact with the Bank until the date of this
Agreement including, but not limited to, any claim arising from any reports
(environmental reports, surveys, appraisals, etc.) prepared by any parties hired
or recommended by the Bank; provided that the waiver hereunder shall not operate
to waive any claim of any Obligor against the Bank attributable to the gross
negligence or willful misconduct of the Bank in any matter not related to this
Agreement, the Loan Documents or the transactions contemplated hereby. The
Borrower and all other Obligors confirm to Bank that they have reviewed the
effect of this release with competent legal counsel of their choice, or have
been afforded the opportunity to do so, prior to execution of this Agreement and
the Loan Documents and do each acknowledge and agree that the Bank is relying
upon this release in extending the Loans to the Borrower.
  13.19  Costs,
Fees and Expenses . The
Borrower shall pay or reimburse the Bank for all reasonable costs, fees and
expenses incurred by the Bank or for which the Bank becomes obligated in
connection with the negotiation, preparation, consummation, collection of the
Obligations or enforcement of this Agreement, the other Loan Documents and all
other documents provided for herein or delivered or to be delivered hereunder or
in connection herewith (including any amendment, supplement or waiver to any
Loan Document),  or during
any workout, restructuring or negotiations in respect thereof, including,
without limitation, reasonable consultants’ fees and attorneys’ fees and time
charges of counsel to the Bank, which shall also include attorneys’ fees and
time charges of attorneys who may be employees of the Bank or any Affiliate of
the Bank, plus costs and expenses of such attorneys or of the Bank; search fees,
costs and expenses; and all taxes payable in connection with this Agreement or
the other Loan Documents, whether or not the transaction contemplated hereby
shall be consummated. In furtherance of the foregoing, the Borrower shall pay
any and all stamp and other taxes, UCC search fees, Railcar Filing Authority
search fees, filing fees and other costs and expenses in connection with the
execution and delivery of this Agreement, the Notes and the other Loan Documents
to be delivered hereunder, and agrees to save and hold the Bank harmless from
and against any and all liabilities with respect to or resulting from any delay
in paying or omission to pay such costs and expenses. That portion of the
Obligations consisting of costs, expenses or advances to be reimbursed by the
Borrower to the Bank pursuant to this Agreement or the other Loan Documents
which are not paid on or prior to the date hereof shall be payable by the
Borrower to the Bank on demand. If at any time or times hereafter the Bank:
(a) employs counsel for advice or other representation (i) with
respect to this Agreement or the other Loan Documents, (ii) to represent
the Bank in any litigation, contest, dispute, suit or proceeding or to commence,
defend, or intervene or to take any other action in or with respect to any
litigation, contest, dispute, suit, or proceeding (whether instituted by the
Bank, the Borrower, or any other Person) in any way or respect relating to this
Agreement, the other Loan Documents or the Borrower’s business or affairs, or
(iii) to enforce any rights of the Bank against the Borrower or any other
Person that may be obligated to the Bank by virtue of this Agreement or the
other Loan Documents; (b) takes any action to protect, collect, sell,
liquidate, or otherwise dispose of any of the Collateral; and/or
(c) attempts to or enforces any of the Bank’s rights or remedies under the
Agreement or the other Loan Documents, the costs and expenses incurred by the
Bank in any manner or way with respect to the foregoing, shall be part of the
Obligations, payable by the Borrower to the Bank on demand.
  13.20  INDEMNIFICATION . THE
BORROWER AGREES TO DEFEND (WITH COUNSEL SATISFACTORY TO THE BANK), PROTECT,
INDEMNIFY, EXONERATE AND HOLD HARMLESS EACH INDEMNIFIED PARTY FROM AND AGAINST
ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, CLAIMS, COSTS, EXPENSES AND DISTRIBUTIONS OF ANY KIND OR
NATURE (INCLUDING, WITHOUT LIMITATION, THE DISBURSEMENTS AND THE REASONABLE FEES
OF COUNSEL FOR EACH INDEMNIFIED PARTY THERETO, WHICH SHALL ALSO INCLUDE, WITHOUT
LIMITATION, ATTORNEYS’ FEES AND TIME CHARGES OF ATTORNEYS WHO MAY BE EMPLOYEES
OF ANY INDEMNIFIED PARTY), WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED
AGAINST, ANY INDEMNIFIED PARTY (WHETHER DIRECT, INDIRECT OR CONSEQUENTIAL AND
WHETHER BASED ON ANY FEDERAL, STATE OR LOCAL LAWS OR REGULATIONS, INCLUDING,
WITHOUT LIMITATION, SECURITIES, ENVIRONMENTAL LAWS AND COMMERCIAL LAWS AND
REGULATIONS, UNDER COMMON LAW OR IN EQUITY, OR BASED ON CONTRACT OR OTHERWISE)
IN ANY MANNER RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE LOAN
DOCUMENTS, OR ANY ACT, EVENT OR TRANSACTION RELATED OR ATTENDANT THERETO, THE
PREPARATION, EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE LOAN DOCUMENTS,
INCLUDING, BUT NOT LIMITED TO, THE MAKING OR ISSUANCE AND MANAGEMENT OF THE
LOANS, THE USE OR INTENDED USE OF THE PROCEEDS OF THE LOANS, THE ENFORCEMENT OF
THE BANK’S RIGHTS AND REMEDIES UNDER THIS AGREEMENT, THE LOAN DOCUMENTS, THE
NOTE[S], ANY OTHER INSTRUMENTS AND DOCUMENTS DELIVERED HEREUNDER, OR UNDER ANY
OTHER AGREEMENT BETWEEN THE BORROWER AND THE BANK; PROVIDED, HOWEVER, THAT THE
BORROWER SHALL NOT HAVE ANY OBLIGATIONS HEREUNDER TO ANY INDEMNIFIED PARTY WITH
RESPECT TO MATTERS DETERMINED
BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE
BEEN CAUSED BY
OR RESULTING FROM THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF SUCH INDEMNIFIED
PARTY. TO THE EXTENT THAT THE UNDERTAKING TO INDEMNIFY SET FORTH IN THE
PRECEDING SENTENCE MAY BE UNENFORCEABLE BECAUSE IT VIOLATES ANY LAW OR PUBLIC
POLICY, THE BORROWER SHALL SATISFY SUCH UNDERTAKING TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAW. ANY LIABILITY, OBLIGATION, LOSS, DAMAGE, PENALTY,
COST OR EXPENSE COVERED BY THIS INDEMNITY SHALL BE PAID TO EACH INDEMNIFIED
PARTY ON DEMAND, AND FAILING PROMPT PAYMENT, TOGETHER WITH INTEREST THEREON AT
THE DEFAULT RATE FROM THE DATE INCURRED BY EACH INDEMNIFIED PARTY UNTIL PAID BY
THE BORROWER, SHALL BE ADDED TO THE OBLIGATIONS OF THE BORROWER AND BE SECURED
BY THE COLLATERAL. THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE SATISFACTION
AND PAYMENT OF THE OTHER OBLIGATIONS AND THE TERMINATION OF THIS
AGREEMENT.
  13.21  Revival
and Reinstatement of Obligations . If the
incurrence or payment of the Obligations by any Obligor or the transfer to the
Bank of any property should for any reason subsequently be declared to be void
or voidable under any state or federal law relating to creditors’ rights,
including provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (collectively, a “Voidable Transfer”), and if the Bank is required to
repay or restore, in whole or in part, any such Voidable Transfer, or elects to
do so upon the reasonable advice of its counsel, then, as to any such Voidable
Transfer, or the amount thereof that the Bank is required or elects to repay or
restore, and as to all reasonable costs, expenses, and attorneys fees of the
Bank, the Obligations shall automatically shall be revived, reinstated, and
restored and shall exist as though such Voidable Transfer had never been
made.
  
 M1:1204748.06
 [ *Signature
Page Follows* ]
 
   
   IN
WITNESS WHEREOF, the Borrower and the Bank have executed this Loan and Security
Agreement as of the date first above written.
 
 
 **MILPI
HOLDINGS, LLC,**
 a
Delaware limited liability company
 
 By:  ________________________________
 Name:  ________________________________
 Title:  ________________________________
 
 
 Agreed
and accepted:
 
 **LASALLE
BANK NATIONAL**
 **ASSOCIATION** , a
national banking association
 
 By:  ________________________________
 Name:  ________________________________
 Title:  ________________________________
 
 
 *[Signature
Page to MILPI Credit Agreement]*