Document:

trinityagreement

                                                        EXECUTION VERSION                                                                                  Portions of this Exhibit have been redacted because they are both (i) not material and (ii)  would be competitively harmful if publicly disclosed. Information that was omitted has  been noted in this document with a placeholder identified by the mark “[***]”.                                                                        SUPPLY AGREEMENT          This Supply Agreement (this “Agreement”) is made as of this 3rd day of November, 2014  (the “Effective Date”), by and between GATX Corporation, a corporation organized under the  laws  of  the  State  of  New  York  (“Buyer”),  and  Trinity  Rail  Group,  LLC,  a  limited  liability  company organized under the laws of the State of Delaware (“Seller”) (collectively, the “Parties”  and individually, a “Party”).                In  consideration  of  the  mutual  promises  contained  herein  and  other  good  and  valuable  consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer  agree as follows:           1.    TERM.  Except to the extent earlier terminated pursuant to the terms hereof, the term         of this Agreement shall commence on the Effective Date and end on March 13, 2020;         provided, that if Seller has not Delivered (as hereinafter defined) all of the Railcars (as         hereinafter  defined)  ordered  by  Buyer  hereunder  on  or  before  such  end  date,  this         Agreement shall expire on the date the last Railcar is Delivered (the “Term”).           2.    PURCHASE  COMMITMENT  AND  QUANTITY.   Except  to  the  extent  earlier         terminated pursuant to the terms hereof, (i) Buyer hereby commits to purchase during         the Term a total of eight thousand nine hundred fifty (8,950) Railcars (the “Base Order         Quantity”)  and to submit  to Seller, pursuant  to the terms of this Agreement, Buyer’s         purchase orders to fulfill such commitment, and (ii) Seller agrees to manufacture, sell         and  Deliver  to  Buyer  during  the  Term  the  8,950  Railcars  as  ordered  by  Buyer.          Notwithstanding anything to the contrary contained herein, Buyer shall not be required         to  purchase,  and  Seller  shall  not  be  required  to  manufacture,  sell  and  Deliver,  any         Railcars in excess of the Base Order Quantity under the terms of this Agreement.       3.    RAILCARS AVAILABLE FOR PURCHASE.           3.1.  Except to the extent later removed from Exhibits A, B or C pursuant to Section              3.5,  Seller  shall  make  available  for  sale,  and  Buyer  shall  purchase,  Railcars              consisting of one or more of (i) the types of Railcar listed in Exhibits A, B, and C              (the  “Railcar  Types”)  as  of  the  Effective  Date;  (ii)  the  Modified  Railcars              (including those Railcars and Railcar Types treated as a Modified Railcar under              Section 3.4); and (iii) those railcars  and railcar types,  if  any, that  are added to              Exhibits A, B, or C after the Effective Date in accordance with Sections 3.3 or              3.4, or by mutual written agreement of the Parties (collectively, “Railcars” and              individually,  a  “Railcar”).   For  the  avoidance  of  doubt,  each  unit  within  an              articulated  or  drawbar-coupled  string  of  railcars  shall  be  considered  a  single              Railcar for all purposes hereunder.                                              US-DOCS\118388455.1

 

      3.2.  Buyer may purchase from Seller hereunder, Railcar Types (i) that, on or after the              Effective  Date, [***](each  of  the  foregoing  described  in  clauses  (i)  and  (ii)              above, individually, a “Modified Railcar” and collectively, “Modified Railcars”),              and Exhibit A, B, and/or C, respectively, shall be amended without further action              by the Parties to include each such Modified Railcar.  [***]         3.3.  Buyer  may  not  purchase  “Excluded  Railcars”  as  defined  in  this  Section  3.3.               “Excluded Railcars” are (i) railcars or railcar types that are not listed on Exhibits              A, B, or C; (ii) railcars and railcar types [***] (each of the foregoing described in              clause  (ii)  above,  individually,  a  “Developed  Railcar”  and  collectively,              “Developed Railcars”); or [***].                 [***], then, in any such case, such Excluded Railcar shall thereafter constitute a              Railcar  which  Buyer  may  purchase  from  Seller  and  Exhibit  A,  B  or  C  (as              applicable) shall be amended without further action by the Parties to include such              Excluded Railcar (except, in the case of clause (y) above, to the extent prohibited              under a written agreement between Seller and the Third Party that had previously              been the exclusive purchaser of such Excluded Railcar); [***].         3.4.  If a Railcar and/or Railcar Type meet the definition of a Developed Railcar set              out  in  Section  3.3  as  well  as  the  definition  of  a  Modified  Railcar  set  out  in              Section 3.2, the Railcar shall be a Developed Railcar for all purposes under this              Agreement.          3.5.  Once a Railcar is included on Exhibit A, B or C, Buyer may submit an Order for              such Railcar from Seller hereunder until such time that the Parties mutually agree              to remove such Railcar from such Exhibit.         3.6.  For purposes of this Agreement:              3.6.1. “Third Party” shall mean any Person that is not a (i) Party to this Agreement                  or (ii) an Affiliate (as hereinafter defined) of a Party to this Agreement;             3.6.2. “Affiliate”  shall  mean,  with  respect  to  any  Person,  any  other  Person                  controlling, controlled by, or under common control with the first Person.             3.6.3. “Control”  (including  the  terms  “controlling,”  “controlled  by”  and  “under                  common  control  with”)  means  the  possession,  directly  or indirectly,  of the                  power to direct or cause the direction of the management or the policies of a                  Person,  whether  through  the  ownership  of  at  least  51%  of  the  voting                  securities, by contract or otherwise; and              3.6.4. “Person” shall mean an individual, partnership, limited partnership, limited                  liability company, trust, business trust, estate, corporation, custodian, trustee,                  executor,  administrator,  nominee,  business  trust,  registered  limited  liability                  partnership,  association,  government,  governmental  subdivision,                                         2    US-DOCS\118388455.1 

 

                governmental  agency,  governmental  instrumentality  and  any  other  legal  or                  commercial entity in its own or in a representative capacity.    4.    SPECIFICATION.                  4.1.  With  respect  to  each  Railcar  Type  set  forth  on  Exhibits  A,  B,  and  C  as  of  the              Effective Date, including a Railcar Type added pursuant to Section 3 hereof or by              mutual  agreement  of  the  Parties  after  the  Effective  Date,  the  applicable  Railcar              “Specification” shall consist of (i) Seller’s then-current standard specification as              of the date of the applicable Seller’s Order Confirmation (as hereinafter defined)              for such Railcar  as designated by the  applicable “Seller Spec. No.” (hereinafter              referred  to  as  “Seller  Specification”),  (ii)  any  materials,  parts,  Components,  or              railcar configuration alternatives requested by Buyer (subject to Seller’s consent,              such  consent  not  to  be  unreasonably  withheld  or  delayed)  specified  in  the              applicable  Seller’s  Order  Confirmation  (“Alternates”)  and  (iii)  as  subsequently              modified after the date of Seller’s Order Confirmation in any Change Orders (as              defined in Section 9.8), if applicable.  The Seller Specification shall not provide              for, and Seller may not use, non-new parts (other than non-new Buyer-Supplied              Components)  on  Railcars  manufactured  for  Buyer  hereunder  without  Buyer’s              prior written consent.          4.2.  As of the Effective Date, Seller has provided a copy of the Seller Specification for              each Railcar Type set forth on Exhibits A, B, and C to Buyer (and, in the case of              Railcar Types added to Exhibits A, B, or C after the Effective Date, a copy will be              promptly  provided  to  Buyer  after  such  Railcar  Type  is  added  to  the  applicable              Exhibit).  Seller may reasonably modify the Seller Specification from time to time              during  Term,  which  updates  to  the  Seller  Specification  shall  be  identifiable  by              revision date and version number and copies of which will be made available to              Buyer upon Buyer’s written request.  Notwithstanding the foregoing, at least sixty              (60) days prior to implementation, Seller shall notify Buyer in writing and provide              a copy of any updated Seller Specification that would reasonably be considered a              significant or material change to such Seller Specification, e.g., structural changes              to  the  Railcar  Type,  changes  in  Component  manufacturer,  make  or  model,  and              changes to safety systems.     5.    RAILCAR PRICING.          5.1.  Pricing for Railcars Listed on Exhibit A.                         5.1.1. Buyer’s Estimated Base Sales Price and Seller’s Order Confirmation                    Price  for  Railcars  listed  on  Exhibit  A.   The  “Buyer’s  Estimated  Base                    Sales Price” for Railcars listed on Exhibit A shall be calculated by [***].                     “Seller’s Order Confirmation Price” for Railcars listed on Exhibit A shall                    equal [***].                                                          3    US-DOCS\118388455.1 

 

            5.1.2. Invoice Price for Railcars on Exhibit A.  Seller’s “Invoice Price” for a                    Railcar listed on Exhibit A shall be [***].                      5.1.3. [***]                            5.2.  Pricing for Railcars Listed on Exhibits B and C.                        5.2.1. Buyer’s Price for Railcars Listed on Exhibits B and C.  “Seller’s Order                    Confirmation Price” for Railcars listed on Exhibits B or C shall be [***].                                    5.2.2. [***].                                  5.2.3. Invoice Prices for Railcars on Exhibits B and C.  The “Invoice Price”                    for a Railcar listed on Exhibits B or C shall be equal to [***].                                        5.2.4. [***].              5.2.5. [***]         5.3.  Pricing Examples.  The Parties agree that the pricing examples dated as of the              Effective  Date  and  initialed  by  the  Parties  reflect  the  methodology  by  which              calculations  shall  be  made  for  Railcar  pricing  pursuant  to  Sections  5  and  6              hereunder.         5.4.  Review  of  Margin  Schedule.   During  the  period  of  January  1,  2017  through              January 31, 2017, either Party may deliver a written notice (a “Review Notice”)              to  the  other  Party  requesting  a  meeting  if  it  believes  that  the  pricing  in  the              Margin Schedule is not reflective of then-current market pricing.  Upon the other              Party’s receipt of the Review Notice, the Parties shall (a) schedule a meeting to              occur no later than ten (10) business days after the date of such notice, and (b)              work  in  good  faith  to  agree  on  a  revised  Margin  Schedule  reflective  of  then-             current market pricing, with the understanding that such revised pricing should              reflect an appropriate discount to the then-current pricing that Seller offers to its              best customers.  If, within thirty (30) days of the date of the Review Notice, the              Parties have not agreed (a) on a revised Margin Schedule or (b) that the Margin              Schedule does not need to be revised, then either Party may, at its sole option,              give  irrevocable  written  notice  of  its  intention  to  terminate  the  Agreement  (an              “Intent  to  Terminate  Notice”).   The  Agreement  shall  automatically  terminate              thirty (30) days after the date of such notice, except that the Parties’ obligations              shall  survive  with  respect  to  (x) all  Scheduled  Cars  with  Allocated  Production              Slots  scheduled  to  Deliver  on  or  before  December  31,  2017,  and  (y)  all              Unscheduled Cars for which Buyer had submitted an Order as of the date of the              Intent to Terminate Notice, unless the Party receiving such Intent to Terminate              Notice agrees in writing before the effective date of such termination to revise              the Margin Schedule as follows:                                            4    US-DOCS\118388455.1 

 

         5.4.1. If Buyer is the recipient of the Intent to Terminate Notice, Buyer must agree                 in writing to increase each of the Margins set forth in the Margin Schedule                 by [***]for all tank cars on Exhibit A ordered as (A) Scheduled Cars with                 Allocated Production Slots scheduled to Deliver on or after January 1, 2018,                 and (B) Unscheduled Cars for which the date of the applicable Order is on or                 after the effective date of such increase of the Margins; or              5.4.2. If Seller is the recipient of the Intent to Terminate Notice, Seller must agree                 in writing to decrease each of the Margins set forth in the Margin Schedule                 by [***] for all tank cars on Exhibit A ordered as (A) Scheduled Cars with                 Allocated Production Slots scheduled to Deliver on or after January 1, 2018,                 and (B) Unscheduled Cars for which the date of the applicable Order is on or                 after the effective date of such decrease of the Margins; or             5.4.3. Irrespective of which Party is the recipient of the Intent to Terminate Notice,                  the Parties mutually agree in writing to revise the Margin Schedule.                              5.4.4. For clarity and by means of example only, if one of the Margins was equal to                  twenty  percent  (20%)  before  Seller’s  receipt  of  an  Intent  to  Terminate                  Notice,  and  Seller  agreed  to  decrease  the  Margins  by [***]  pursuant  to                  Section  5.4.2  above,  the  resulting  Margin  in  this  example  would  be [***].                   Similarly, if Buyer received an Intent to Terminate Notice, and Buyer agreed                  to  increase  the  Margins  by [***]  pursuant  to  Section  5.4.1  above,  the                  resulting Margin in this example would be [***].     6.    SELLER’S STANDARD MANUFACTURING COST.                  6.1.  Except  as  otherwise  expressly  provided  herein,  all  calculations  of  Seller’s              Standard Manufacturing Cost (as defined below) shall conform to and be made              using Seller’s Cost Accounting Policy and Procedure, dated and current as of the              Effective Date and initialed by the Parties (“Seller’s Costing Policy”).                      6.1.1. Seller may modify Seller’s Costing Policy to the extent necessary to comply                  with any changes in U.S. generally accepted accounting procedures (GAAP),                  international  financial  reporting  standards  (IFRS)  or  other  applicable                  accounting regulatory mandates.                      6.1.2. [***].                       6.1.3. Following any modifications to Seller’s Costing Policy pursuant to Section                  6.1.1, [***],  Seller  shall  promptly  provide  an  updated  copy  (which  shall                  indicate the date of most recent revision) of Seller’s Costing Policy to Buyer,                  which  shall  be  initialed  by  the  Parties  and  replace  the  prior  version  of                  Seller’s Costing Policy as of the date of such revision without further action                  of the Parties.                                                       5    US-DOCS\118388455.1 

 

          6.1.4. Notwithstanding  anything  to  the  contrary  contained  in  Seller’s  Costing                  Policy, in the event of any conflicts between this Agreement and the Seller’s                  Costing Policy, the terms of this Agreement shall control.                        6.2.  “Seller’s  Standard  Manufacturing  Cost”  means,  with  respect  to  any  Railcar,  an              amount equal to [***] for such Railcar.           6.3.  [***].  “Components” means, for all Railcars, wheels, axles, sideframes, bolsters,              couplers, draft gear, air brake equipment, bearings and  yokes and, as applicable              for  certain  Railcar  Types,  heads,  nozzles,  valves,  fittings,  gates,  hatches  and              doors.  [***].                 7.    THIRD  PARTY  REVIEW.   Seller’s  compliance  with  Sections  5  and  6  of  this         Agreement is subject to Third Party review (“Third Party Review”), and the terms and         conditions of such Third Party Review are set forth on Exhibit G attached hereto.              8.    [***].      9.    ORDERS.          9.1.  Order Quantities.              9.1.1. “Order Year” means from March 14, 2016 through March 13, 2017 for the                 first  Order  Year,  and  thereafter  each  following  period  of  twelve  (12)                 consecutive months.              9.1.2. Buyer shall place orders for tank cars from Exhibit A that will be scheduled                 to  deliver  at  the  rate  of  150  tank  cars  per  month  between  the  months  of                 August  2016  through  December  2019,  inclusive  (the  “Monthly  Order                 Quantity”) for a total of 6,150 tank cars (“Scheduled Cars”).               9.1.3. During each Order Year, Buyer will order 700 Railcars, which can be a mix                  of either tank cars or  freight  cars  from Exhibits A,  B, and C for a total of                  2,800 Railcars (“Unscheduled Cars”).                  9.2.  Production  Slot  Allocation  for  Scheduled  Cars.   Seller  shall  schedule [***]              production slots in each month for the months of August 2016 through December              2019,  inclusive,  for  Scheduled  Cars  (“Allocated  Production  Slots”).               Notwithstanding  the  foregoing  or  anything  to  the  contrary  contained  in  this              Agreement, Seller will have no obligation to schedule more than [***] Allocated              Production Slots in any one month during the Term.  For the avoidance of doubt,              accepted Orders for Unscheduled Cars are not eligible for Allocated Production              Slots  and  shall  not  impact  the  scheduling  or  Delivery  of  Scheduled  Cars  in              accordance with Section 9.6.1.                9.3.  Unscheduled Cars.   Buyer’s  Order(s) accepted  by Seller’s  Order Confirmation              for  Unscheduled  Cars  will  be  placed  in  the  next  available  production  slot  in                                        6    US-DOCS\118388455.1 

 

            Seller’s  then  current  backlog.   Buyer’s  obligation  to  order  the [***]  per  Order              Year  is  firm  and  the  duration  of  Seller’s  railcar  backlog  and  the  effect  such              backlog  has  on  Delivery  of  Unscheduled  Cars  shall  not  permit  Buyer  to  avoid              placing its required Order per Order Year for Unscheduled Cars.  [***].                9.4.  Monthly Price Lists; Pricing Proposals.  At the beginning of each Order Year,              Seller  and  Buyer  shall  mutually  agree  to  a  list  totaling [***]  Railcars  from              Exhibits A, B and C for which Seller shall provide Buyer with monthly updates,              as  to  Exhibit  A  Railcars,  to  Buyer’s  Estimated  Base  Sales  Price(s),  and  as  to              Exhibit B and C Railcars, to the [***] for such Railcars under then-current market              conditions,  during  the  Order  Year  (the  “Monthly  Price  List”).   In  the  event  a              Railcar  is  not  listed  on  the  Monthly  Price  List,  upon  Buyer’s  written  request,              Seller  shall  provide  Buyer  with  a  written  pricing  proposal  for  the  requested              Railcars  within  ten  (10)  business  days  following  such  request,  which  pricing              proposal shall be consistent with the terms of this Agreement.                9.5.  Order Form.  Each order submitted by Buyer shall be in the form set forth on              Exhibit E attached hereto and shall be subject to the terms and conditions of this              Agreement  (“Order”).   Each  Order  shall  specify  (i)  the  Railcar  Type;  (ii)  the              quantity  of  Railcars  for  each  Railcar  Type;  (iii)  any  Alternates  for  the  Railcars              ordered; (iv) any new Buyer-Supplied Components that Buyer will be providing;              (v) any non-new Buyer-Supplied Components that Buyer will be providing; and              (vi)  the  price  agreed  upon  by  the  Parties  pursuant  to  Section  5.2.1  for  the              Railcar(s) ordered.  Subject to Seller’s rights of rejection under Section 9.7, upon              Seller’s  reasonable  written  request,  Buyer  will  correct  any  Order  that  does  not              conform to the form set forth on Exhibit E.                9.6.  Order Placement.                            9.6.1. Orders  for  Scheduled  Cars  must  be  placed  by  Buyer [***]prior  to  their                  Allocated Production Slots by delivering each such Order per the instructions                  on  the  Order  form.  [***].   Unless  otherwise  agreed  by  the  Parties,  such                  Orders for Scheduled Cars shall be (i) filled in the order in which they were                  placed, and (ii) Delivered by Seller within the final month of the applicable                  Scheduled Car Lead Times.  Seller shall Deliver at least [***].  If Buyer fails                  to  place  one  or  more  Orders  for  all  or  any  portion  of  the  Scheduled  Cars                  within  the  Scheduled  Car  Lead  Times,  Seller  shall  place  the  Order(s)  for                  Buyer  consistent  with  Buyer’s  default  instructions  for  orders  of  Scheduled                  Cars  (“Default  Scheduled  Car  Order  Instructions”)  set  forth  on  Exhibit  K                  hereto;  which  Exhibit  shall  identify  specific  Railcar(s).   Subject  to Section                  9.7 (unless otherwise agreed by the Parties), Buyer may update the Default                  Scheduled Car Order Instructions at any time by delivery of written notice to                  Seller, provided each such update identifies specific Railcars, in which case                  Exhibit K shall be amended without further action by the Parties to include                  such  updated  Default  Scheduled  Car  Order  Instructions  in  Exhibit  K  and                  such update shall be effective for all Orders following each such update.                                           7    US-DOCS\118388455.1 

 

                  9.6.2. Orders  for  Railcars  on  Exhibits  B  and  C  that  constitute  Unscheduled  Cars                  (“Exhibit B and C Unscheduled Cars”) will be placed by Buyer from time to                  time by delivering each such Order per the instructions on the Order form.                   In accordance with the procedures set forth in Section 9.6.3, such Exhibit B                  and C Unscheduled Cars shall be added to Seller’s next available production                  slots and added to Buyer’s Delivery Schedule.  [***].  If Buyer fails to place                  one  or  more  Orders  for  all  or  any  portion  of  the  Order  Year  Unscheduled                  Cars requirement by the first day of the last month of an Order Year, Seller                  shall place the Order for Buyer with Buyer’s default instructions for orders                  of  Unscheduled  Cars  (“Default  Unscheduled  Car  Order  Instructions”)  set                  forth  on  Exhibit  K  hereto;  which  Exhibit  shall  identify  specific  Railcar(s),                  and unless otherwise agreed by the Parties, shall consist of Railcar(s) from                  Exhibit  A  only.   Subject  to  Section  9.7  (unless  otherwise  agreed  by  the                  Parties), Buyer may update the Default Unscheduled Car Order Instructions                  at any time by delivery of written notice to Seller, provided each such update                  identifies  specific  Railcar(s),  in  which  case  Exhibit  K  shall  be  amended                  without  further  action  by  the  Parties  to  include  such  updated  Default                  Unscheduled Car  Order  Instructions in Exhibit K and such update shall be                  effective for all Orders following each such update.                                 9.6.3. Within five (5) business days after Seller’s receipt of an Order, and provided                  Seller has not rejected the Order pursuant to Section 9.7, Seller shall provide                  Buyer with an order confirmation, substantially in the form of Exhibit L and                  in  accordance  with  the  terms  hereof,  confirming  (i)  the  Seller’s  Order                  Confirmation Price for Railcars on Exhibits A, B, or C and (ii) the month the                  Railcars  will  commence  Delivery  (the  “Seller’s  Order  Confirmation”).                   Within ten (10) business days of Seller’s issuance of an Order Confirmation,                  Seller shall add Buyer’s Order to the Buyer Delivery schedule (the “Buyer’s                  Delivery Schedule”) indicating the quantity of Railcars to be Delivered each                  month  (the  “Committed  Delivery  Month”),  a  copy  of  which  shall  be                  promptly  provided  to  Buyer.   Within  sixty  (60)  days  of  the  first  Railcar                  Delivery  in  a  Committed  Delivery  Month,  Seller  shall  update  Buyer’s                  Delivery  Schedule  to  reflect  the  week  in  which  such  Railcar  will  be                  Delivered (the “Committed Delivery Date”), a copy of which update shall be                  promptly provided to Buyer.  Any change to Buyer’s Delivery Schedule shall                  require the written agreement of both Buyer and Seller.                                9.6.4. Each Order for Railcars that (i) complies with  this Section 9, (ii) has been                  delivered to Seller in accordance with this Section 9, and (iii) which has not                  been  rejected  by  Seller  within  five  (5)  business  days  of  its  placement                  pursuant to Section 9.7, shall be deemed to have been accepted by Seller and                  shall  represent  a  firm  commitment  by  Seller  to  manufacture,  sell,  and                  Deliver,  and  for  Buyer  to  purchase  and  take  Delivery  of,  the  Railcars                  specified in such Order in accordance herewith, regardless of whether Seller                                         8    US-DOCS\118388455.1 

 

                has  complied  with  its  obligation  to  return  a  signed  Order  Confirmation  to                  Buyer in the time specified under Section 9.6.3.                          9.6.5. Except to the extent the Parties otherwise mutually agree in a writing signed                  by  an  officer  of  each  Party,  if  any  term  or  condition  in  Buyer’s  Order,                  Seller’s Order Confirmation, or other documentation by or from either Party                  relating to the subject matter of the Order or of this Agreement conflicts with                  or adds to or supplements a term or condition of this Agreement, the terms or                  conditions of this Agreement shall control and the conflicting, additional or                  supplemental term or condition, as the case may be, shall be without force or                  effect with respect to such subject matter or Order.                9.7.  Seller Order Rejection.  In the event that Seller does not have a production line              operating to produce Unscheduled Railcars on Exhibits B or C ordered by Buyer,              Seller shall notify Buyer within five (5) business days following receipt of such              Order that it cannot manufacture such Railcars, in which case Buyer shall place its              Order  for  different  Railcars  to  replace  such  Railcars  that  Seller  cannot              manufacture.  Notwithstanding anything to the contrary in this Agreement, Seller              shall ensure that, during the Term of this Agreement, [***].                  9.8.  Change Order.  Once a Seller’s Order Confirmation has been issued to Buyer,              Buyer  may  request  in  writing  a  change  in  an  Order  specifying  the  particular              Railcars that are subject to Buyer’s request and the requested change.  Within ten              (10) business days following receipt of such request, Seller shall provide Buyer              with a Change Order quote (“Change Order Quote”) comprised of (i) any change              to  the  Buyer’s  Delivery  Schedule  and  (ii)  any  price  adjustment  for  the  Change              Order Request.  If Buyer accepts Seller’s Change Order Quote, Buyer shall issue              a  confirming  change  Order (“Change  Order”)  to  Seller  within  five  (5) business              days after receipt of the Change Order Quote.  If Seller does not receive a timely              Change Order from Buyer accepting Seller’s Change Order Quote, Buyer’s Order              will not be modified, and the affected Railcars shall be built in accordance with              the  original  Specification  and  subject  to  the  original  Seller  Order  Confirmation              Price.                 9.9.  Regulation-Mandated  Changes.   Seller  will  promptly  notify  Buyer  of  any              changes  or  additions  to  the  Seller  Specification  mandated  by  changes  in  the              Regulations and provide to Buyer a copy of any such updated or additional Seller              Specification.   Any  such  changes  or  additions  to  the  Specification  that  arise              between the date of the Seller’s Order Confirmation for a Railcar and the date of              Delivery for such Railcar shall be treated as a Change Order in accordance with              the procedures set forth in Section 9.8.            9.10. Lead  Time  Estimates.  Upon  Buyer’s  reasonable  written  request,  Seller  shall              provide Buyer with its then-current estimate of the next available delivery dates              for a Railcar Type as of the date of such request.                                         9    US-DOCS\118388455.1 

 

   10.   DELIVERY AND SHIPMENT.                 10.1. Delivery and Title.              10.1.1. Unless otherwise agreed to in writing and signed by both Seller and Buyer,                 “Delivery” (including the terms “Deliver” and “Delivered”) of the Railcars                 shall  be  defined  as  (i)  in  the  case  of  Railcars  manufactured  in  the  United                 States,  actual  delivery  of  such  Railcars,  F.O.B.  Seller’s  plant  or  (ii)  in  the                 case  of  Railcars  manufactured  in  Mexico,  actual  delivery  of  such  Railcars,                 F.O.B. site on the United States side of the border at a site to be mutually                 agreed between Buyer and Seller or, if no agreement has been reached by the                 time such Railcar is ready for Delivery, at a site on the United States side of                 the border determined by Seller.  Unless otherwise agreed to in writing and                 signed  by  both  Seller  and  Buyer,  Buyer  agrees  to  Delivery  of  all  or  any                 number of the Railcars as they are accepted pursuant to Section 11.1.              10.1.2. Subject  to  Section  10.1.3  below,  exclusive  ownership,  rights  of  possession                 and control, and risk of loss to each Railcar manufactured by Seller, whether                 in the United States or Mexico, will pass to Buyer at the time of Delivery of                 such Railcar.               10.1.3. Unless otherwise agreed to in writing and signed by both Seller and Buyer,                  with  respect  to  Railcars  manufactured  in  Mexico,  the  acceptance  of  such                  Railcars  pursuant  to  Section  11.1  (i)  represents  Buyer’s  authorization  for                  Seller to ship such Railcars to Buyer for Delivery, and (ii) shall not transfer                  title or risk of loss of such Railcars until they have been Delivered by Seller                  to Buyer at the F.O.B. site on the United States side of the border set forth in                  Section 10.1.1 above.                      10.2. After  Delivery  of  a  Railcar  to  Buyer  as  provided  in  Section  10.1,  at  Buyer’s              written  request,  Seller  will  ship  such  finished  Railcar  to  Buyer  or  Buyer’s              customer  at  the  place  designated  by  Buyer  to  Seller  and  any  resulting  freight              charges shall be for Buyer’s account.  Such freight charges may appear as a line              item  on  Seller’s  invoice  for  the  Railcars  if  Seller  pays  such  freight  charges  for              Buyer’s account.                10.3. [***].                      10.4. Force Majeure Events.                      10.4.1. Seller shall not be liable for any delay or failure to perform in whole or in part                  caused by “Force Majeure Events” which adversely impact the performance                  of  Seller’s  obligations  regardless  of  when  occurring,  including,  but  not                  limited  to,  restrictions  or  Regulations  imposed  by  the  federal  or  any  state                  government or any subdivision or agency thereof or by acts of God; acts of                                         10    US-DOCS\118388455.1 

 

                Buyer, its officers, directors, employees, agents or contractors, including, but                  not  limited  to,  Buyer’s  failure  to  provide  in  a  timely  manner  any  parts,                  Components,  equipment  or  labor,  including  plans,  drawings  or  engineers,                  which  it  has  agreed  to  supply;  war,  preparation  for  war  or  the  acts  or                  interventions  of  naval  or  military  executives  or  other  agencies  of                  government;  acts  of  terrorists;  blockade,  sabotage,  vandalism,  malicious                  mischief,  bomb  scares,  insurrection  or  threats  thereof;  rain  that  requires  a                  shutdown of a substantial portion of Seller’s facility where the Railcars are                  being manufactured and/or the painting/coating area of such facility prior to                  12:00  noon  (local  time)  on  a  regularly  scheduled  work  day;  landslides,                  hurricanes, earthquakes or other natural calamity; delays of subcontractors or                  of  carriers  by  land,  sea  or  air;  delays  due  to  changes  in  drawings  or                  Specification; collisions or fires, floods, strikes, work stoppages, shortage of                  labor,  lockouts  or  other  industrial  disturbances,  accidents,  casualties,                  shortages  or  late  delivery  of  supplies  (including,  without  limitation,  fuel                  supplies)  or  raw  materials  (including,  without  limitation,  steel)  from  usual                  sources  at  customary  pricing,  or  other  causes  beyond  Seller’s  reasonable                  control.                    10.4.2. In  the  event  of  any  Force  Majeure  Event,  the  Parties  agree  the  date  of                  Delivery or performance shall be extended for a period equal to the time lost                  by reason of the delay; provided, however, that if the period of delay exceeds                  one hundred eighty (180) days from the original Committed Delivery Date,                  Buyer may cancel the Delivery of such Railcar subject to the delay due to the                  Force Majeure Event.  Any cancelled Railcar shall be treated as having been                  validly  ordered  for  the  purposes  of  Buyer’s  obligations  hereunder  with                  respect  to  the  Base  Order  Quantity  required  under  Section  2  and  the                  applicable Monthly Order Quantity required under Section 9.1.  If delivery                  of any items necessary for the Delivery of such Railcars is delayed by Buyer                  for more than thirty (30) days, Seller may adjust the Invoice Price payable                  hereunder  to  reflect  the  direct  damages  attributable  to  such  delay  (e.g.,                  increases  in  cost  of  supplies,  shipping  and  the  like),  but  not  to  include                  indirect or consequential damages.  Nothing hereunder shall require Seller to                  arrange for shipment and acceptance of any required materials in advance of                  Seller’s actual needs.   In  the event  that the occurrence of  a Force Majeure                  Event  affects  a  Party’s  performance  of  its  obligations  hereunder  for  more                  than  240  consecutive  days,  the  other  Party  may  terminate  this  Agreement                  thereafter upon 30 days advance written notice.       11.   QUALITY OF RAILCARS.           11.1. Inspection  and  Acceptance.   In  the  case  of  Railcars,  Seller  shall  give  Buyer              reasonable  access  to  Seller’s  manufacturing  facilities  to  inspect  the  Railcars              during  construction.   Such  inspections  shall  be  so  conducted  as  to  not  interfere              unreasonably with Seller’s operations.  Acceptance or rejection of a Railcar shall              be made by Buyer before shipment of the Railcars manufactured in Mexico and                                         11    US-DOCS\118388455.1 

 

            before Delivery of Railcars manufactured in the United States.  In the event Buyer              chooses to inspect the Railcars, upon completion of such inspection, Buyer shall              execute a certificate of acceptance covering all Railcars found to be completed in              accordance  with  the  Specification  and  shall  deliver  the  executed  certificates  of              acceptance to Seller (each, a “Certificate of Acceptance”).  Each Certificate of              Acceptance,  with  respect  to  Railcars  covered  thereby,  shall  indicate  that,  based              upon  such  inspection,  such  Railcars  conform  in  workmanship,  material  and              construction,  and  in  all  other  respects,  to  the  applicable  Specification  and  the              requirements  and  provisions  of  the  applicable  Order.   If  Buyer,  upon  receiving              notice of when the Railcars will be ready for inspection and provided that such              Railcars  are  available  for  inspection,  chooses  not  to  have  an  inspector  present              within three (3) business days after the date that the notice states that the Railcars              shall  be  ready  for  inspection  or  Buyer’s  inspector  fails  to  inspect  the  Railcars              within three (3) business days after the date that the notice states the Railcars will              be ready  for inspection,  Buyer shall  be deemed to have accepted the  applicable              Railcars at the close of business on the day that is three (3) business days after the              date  that  such  Railcars  were  ready  for  inspection  and  Seller  will  execute,  on              behalf of Buyer, a Certificate of Acceptance dated as of the day that is three (3)              business  days  after  the  date  that  such  Railcars  were  ready  for  inspection.               Notwithstanding the foregoing, Seller may ship Railcars at any time upon Buyer’s              notification to Seller that it will not inspect Railcars for which Seller has provided              notice that Railcars are available for inspection.  The execution of a Certificate of              Acceptance  shall  not  relieve  the  Seller  of  any  of  its  obligations  under  the              Agreement nor shall it constitute a waiver by the Buyer with respect to any defect              or deficiency of workmanship, materials, construction or other deviation from the              terms and conditions of this Agreement.  Once a Certificate of Acceptance with              respect to a Railcar has been executed, Buyer shall have no rights of inspection              under this Section 11.1, nor any rights of rejection and cancellation under Section              11.2 with respect to such Railcar.           11.2. [***].                         11.3. Premises Liability Indemnification.  BUYER AGREES TO DEFEND, HOLD              HARMLESS  AND  INDEMNIFY  SELLER  AND  ITS  AFFILIATES,              SUBSIDIARIES,  RELATED  ENTITIES,  OFFICERS,  DIRECTORS,              SHAREHOLDERS,  AGENTS  AND  EMPLOYEES  (COLLECTIVELY              REFERRED  TO  AS  THE  “SELLER  INDEMNITEES”),  FROM  AND              AGAINST  ANY  AND  ALL  CAUSES  OF  ACTION,  SUITS,  DEBTS,              CLAIMS,  LIABILITIES,  LOSSES,  BODILY  INJURIES  OR  DEATH,              DAMAGE  TO  REAL  OR  PERSONAL  PROPERTY  (INCLUDING  THE              LOSS  OR  USE  THEREOF),  JUDGMENTS,  COSTS,  INCLUDING,  BUT              NOT LIMITED TO, ACTUAL, INCIDENTAL AND COVER DAMAGES,              ATTORNEYS’ FEES, COURT COSTS AND EXPENSES OF WHATEVER              NATURE  OR  KIND,  IN  LAW  OR  IN  EQUITY,  INCURRED  IN  THE              DEFENSE OF THE SELLER INDEMNITEES OR OTHERWISE, TO THE              EXTENT  ARISING  OUT  OF,  OR  RESULTING  FROM  ANY  ACT,                                         12    US-DOCS\118388455.1 

 

            ERROR,  OMISSION,  NEGLIGENCE  OR  MISCONDUCT  OF  BUYER,              BUYER’S  EMPLOYEES,  AGENTS  (OTHER  THAN  ANY  AGENT  OF              BUYER  WHO  IS  EMPLOYED  BY  SELLER)  OR  SUBCONTRACTORS,              OR  ANY  EMPLOYEE  OF  BUYER’S  AGENT  (OTHER  THAN  ANY              AGENT  OF  BUYER  WHO  IS  EMPLOYED  BY  SELLER)  OR              SUBCONTRACTOR WHILE ON SELLER’S PROPERTY.     12.   PAYMENT AND CLOSING.          12.1. Payment of Purchase Price and Closing of Sale.  On or before ten (10) business              days following Buyer’s receipt of (i) the shipping report for a Railcar, including              the lightweight of each Railcar shipped and each Railcar’s assigned number, (ii) a              Certificate of Acceptance executed by Buyer’s inspector, or the acceptance of any              such  Railcar  has  been  deemed  pursuant  to  Section  11.1  hereof,  (iii)  Seller’s              invoice  for  such  Railcar(s)  with  the  Invoice  Price  broken  down  to  detail  the              components thereof, if applicable, and substantially in the form attached hereto as              Exhibit M hereof, and (iv) Seller’s executed Bill of Sale substantially in the form              attached hereto as Exhibit H, Buyer shall pay the Invoice Price for each Railcar              manufactured and Delivered by Seller and accepted by Buyer via wire transfer to              Seller (pursuant to such wire transfer instructions as Seller shall provide to Buyer              in advance of the due date for such amounts).                  12.2. Taxes.   Buyer  is  solely  responsible  for  all  international,  federal,  state,  or  local              VAT, GST, sales, use, or other taxes, tariffs, duties, or charges imposed by any              governmental  authority  or  agency,  foreign  or  domestic,  upon  any  Railcar              purchased and sold hereunder or upon the manufacture, sale, transportation, use,              or  Delivery  thereof  (collectively,  “Taxes”);  provided,  however,  that  Taxes  shall              not include any Seller property taxes or taxes based on Seller’s income.  While it              is the intent of the Parties that Seller’s invoice for Railcars will include a line item              for Taxes, in the event an amount for applicable Taxes is not included in Seller’s              invoice  for  Buyer’s  account,  Buyer  shall  remain  solely  responsible  for  the              payment of such Taxes.  For the avoidance of doubt, no Taxes shall be included in              Seller’s  Standard  Manufacturing  Cost  for  such  Railcar.   Seller  shall  provide              receipts to Buyer evidencing Seller’s payment of any such Taxes.                 12.3. Late Payments.  Other than with respect to amounts disputed up to a maximum              of $[***] of unpaid disputed amounts, if any payment is not received by a Party              on  the  due  date  for  such  payment,  and  such  failure  continues  for  five  (5)  days              after such due date, such Party shall charge the other Party interest on any unpaid              balance  at  the  prime  rate  per  annum  in  effect  on  such  due  date  at  Bank  of              America, Illinois, plus [***]percent ([***]%) or the highest rate permitted by law,              whichever is lower, from the date such payment was due through and including              the date on which actual payment in full is made by such other Party.                                              13    US-DOCS\118388455.1 

 

 13.   MANUFACTURING WARRANTIES AND DISCLAIMERS; IP INDEMNITY                 13.1. Manufacturing Warranties.                    13.1.1. Seller  warrants  solely  to  Buyer  that  the  assembly,  construction  and                  manufacture  of  the  Railcars  by  Seller,  Seller’s  employees  and  Seller’s                  subcontractors will be in accordance with the Specification and Regulations                  (as  defined  in  Section  13.1.8)  for  a  period  of [***]  after  Delivery  of  the                  applicable Railcars, and  that the material and  workmanship of the Railcars                  furnished  by  Seller,  Seller’s  employees  and  Seller’s  subcontractors  will  be                  free from defects under normal use and service for the [***] warranty period.                   This warranty shall not apply to, and Seller shall not be responsible for, any                  failure  of  any  Railcar  purchased  hereunder  which  has  been  subjected  to                  misuse, negligence,  alteration, accident, misloading, mishandling,  improper                  or deficient maintenance, or physical abuse.  Further, this warranty by Seller                  shall not apply to, and Seller shall not be responsible for, the deterioration of                  any  Railcar  purchased  hereunder  which  results  from  normal  wear  and  tear                  during  the [***]  warranty  period.   Seller’s  only  obligation  to  Buyer  under                  this Section 13.1.1 is limited to promptly repairing or replacing, at Seller’s                  exclusive option, the material and workmanship of the Railcar that is not in                  conformity  with  this  warranty.   Transportation  charges  and  charges                  associated  with  the  removal  of  any  commodity  shall  be  prepaid  by  Buyer.                   Seller shall determine, in its sole discretion, the place where any  defective                  Railcar will be replaced or repaired.  Seller shall not be required to repair or                  replace  any  defective  Railcar,  however,  unless  Buyer  first  provides  the                  defective  Railcar  to  Seller  for  an  examination  by  Seller  within  sixty  (60)                  days of Buyer’s written notice of a potential defect and Seller’s examination                  of the part or parts confirms the existence of a warranted defect.  [***].                  13.1.2. With respect to interior and exterior primers, paints, coatings, linings, and/or                  sealants  (the  “Coatings”),  Seller  warrants  that  it  will  apply  the  Coatings                  selected  by  Buyer  in  accordance  with  the  Coating  manufacturer’s                  specifications and recommendations, and, except as set forth in this Section                  13.1.2, Seller makes no other warranty, express or implied, with respect to                  the Coatings or the adequacy of such Coating manufacturer’s specifications                  and  recommendations.   Seller  may  offer  various  choices  of  Coatings  at                  various  prices  and  of  various  qualities.   The  Coatings  actually  applied  by                  Seller shall be chosen by Buyer at Buyer’s sole discretion, subject to Seller’s                  agreement  to  apply  such  Coatings,  based  on,  but  not  limited  to,  Seller’s                  ability  to  obtain  and  apply  such  Coatings.   Buyer’s  choice  of  Coatings  is                  made  at  Buyer’s  sole  risk  and,  except  as  set  forth  below  in  this  Section                  13.1.2,  Seller  makes  no  warranty,  express  or  implied,  regarding  the                  suitability  or  effectiveness  of any  Coatings.   With  respect  to  the  Coatings,                  Seller’s  sole  obligation  under  this  Section  13.1.2  is  limited  to  repair  or                  replacement, at the election of Seller, at Seller’s railcar repair shop or at  a                  shop selected by Seller, of the Coatings installed by Seller in any Railcar that                                         14    US-DOCS\118388455.1 

 

                shall,  within [***]  after  Delivery  be  returned  to  Seller  with  transportation                  charges and charges associated with the removal of any commodity prepaid                  by  Buyer;  provided,  however,  that  Buyer  provides  such  Railcar  for  an                  examination by Seller within sixty (60) days of written notification by Buyer                  of  a  potential  defective  installation  of  Coatings  and  such  an  examination                  confirms that the Coatings were defectively installed by Seller.  [***].               13.1.3. In the event that Buyer sells, leases, or otherwise assigns the Railcars, any                  such transaction shall not otherwise modify or terminate Seller’s warranty.               13.1.4. In no event and under no circumstances shall Seller ever be liable to Buyer                  for  a  breach  of  the  warranty  set  forth  herein  in  any  amount  greater  than                  Seller’s actual cost of repairing or replacing the defective Railcar that Buyer                  purchased  from  Seller.  Under  no  circumstances  shall  Seller  ever  have                  liability  to  any  Third  Party  who  asserts  any  claim  by  or  through  Buyer                  alleging  a  breach  of  the  warranty  expressly  set  forth  herein,  which  Seller                  makes solely and exclusively to Buyer.  Any repair or replacement by Seller                  pursuant to this warranty will not serve to extend the warranty in any way                  beyond [***] from the date the Railcar is Delivered to Buyer.                13.1.5. SELLER MAKES NO EXPRESS OR IMPLIED WARRANTY THAT ANY                  PARTS,  MATERIAL,  EQUIPMENT  OR  COMPONENTS  PURCHASED                  FROM    THIRD   PARTY     SUPPLIERS   OR    MANUFACTURERS                  (HEREINAFTER,  EACH  A  “SUPPLIER  OR  MANUFACTURER”)  AND                  INSTALLED IN OR ON THE RAILCARS ARE FREE FROM DEFECTS.                   ANY   PARTS,   MATERIAL,     EQUIPMENT     OR   COMPONENTS                  PURCHASED  FROM  SUPPLIERS  OR  MANUFACTURERS  AND                  INSTALLED IN OR ON THE RAILCARS WILL BE COVERED UNDER                  THE  WARRANTY  GIVEN  BY  THE  SPECIFIC  SUPPLIER  OR                  MANUFACTURER AND THE TERMS SET FORTH THEREIN. SELLER                  AGREES TO COOPERATE WITH BUYER TO ENFORCE ANY SUCH                  SUPPLIER  OR  MANUFACTURER  WARRANTIES,  BUT  WILL  NOT                  FILE ANY  LAWSUIT  OR  INSTITUTE OTHER  LEGAL PROCEEDING                  ON BUYER’S BEHALF AND/OR INCUR OTHER LEGAL FEES, COSTS                  OR EXPENSES.  TO THE EXTENT EXPRESSLY PERMITTED BY ANY                  SUCH  SUPPLIER  OR  MANUFACTURER,  SELLER  AGREES  TO                  TRANSFER  AND  ASSIGN  TO  BUYER,  WITHOUT  WARRANTY  OR                  ASSUMPTION  BY  SELLER  WITH  RESPECT  THEREOF,  SUCH                  SUPPLIER’S  OR  MANUFACTURER’S  WARRANTIES  COVERING                  PARTS,  MATERIAL,  EQUIPMENT  OR  COMPONENTS  FURNISHED                  BY  SUCH  SUPPLIER  OR  MANUFACTURER.   AS  TO  SELLER’S                  INSTALLATION  OF  PARTS,  COMPONENTS  OR  EQUIPMENT                  MANUFACTURED BY SUPPLIERS OR MANUFACTURERS, IF SUCH                  SUPPLIER OR MANUFACTURER HAS A REPRESENTATIVE AT THE                  JOB  SITE  DURING  SUCH  INSTALLATION,  AND  IF  THE                  INSTALLATION IS COMPLETED TO THE SATISFACTION OF SUCH                                         15    US-DOCS\118388455.1 

 

                REPRESENTATIVE,  IT  SHALL  BE  PRESUMED,  SUBJECT  TO                  REBUTTAL  BY  BUYER,  THAT  SELLER’S  INSTALLATION  HAS                  BEEN  COMPLETED  BY  SELLER  IN  ACCORDANCE  WITH  SUCH                  SUPPLIER’S  OR  MANUFACTURER’S  RECOMMENDATIONS  IN  A                  GOOD  AND  WORKMANLIKE  MANNER  AND  IN  ACCORDANCE                  WITH THE TERMS OF THIS AGREEMENT.                          13.1.6. SELLER DOES NOT  WARRANT ANY  COMPONENTS, EQUIPMENT,                  ENGINEERING,  DESIGNS,  PLANS  OR  WORKMANSHIP  SPECIFIED                  OR  FURNISHED  BY  BUYER,  BUYER’S  SUBCONTRACTORS,                  EMPLOYEES,  ARCHITECTS  OR  ENGINEERS,  OR  ANY  LABOR                  PERFORMED  BY  OTHERS  AT  THE  DIRECTION  OR  REQUEST  OF                  BUYER    OR   BUYER’S    REPRESENTATIVE(S)     AND    SELLER                  SPECIFICALLY  DISCLAIMS  ANY  AND  ALL  WARRANTIES,                  EXPRESS OR IMPLIED, IN CONNECTION THEREWITH.               13.1.7. THE  WARRANTIES  STATED  HEREIN  ARE  EXCLUSIVE  AND  ARE                  MADE  BY  SELLER  SOLELY  TO  BUYER  EXPRESSLY  IN  LIEU  OF                  ANY  AND  ALL  OTHER  WARRANTIES  AND  REMEDIES:  (1)                  EXPRESS  OR  IMPLIED;  (2)  WRITTEN  OR  ORAL;  (3)  AT  LAW,  IN                  EQUITY    OR   UNDER    CONTRACT,     INCLUDING     WITHOUT                  LIMITATION  ANY  IMPLIED  WARRANTY  OF  MERCHANTABILITY                  OR   FITNESS   FOR    A  PARTICULAR     PURPOSE;    AND    (4)                  NOTWITHSTANDING  ANY  COURSE  OF  DEALING  BETWEEN  THE                  PARTIES  OR  CUSTOM  AND  USAGE  IN  THE  TRADE  TO  THE                  CONTRARY.   OTHER  THAN  AS  EXPRESSLY  SET  FORTH  IN                  SECTION  13.1.1,  SELLER  SHALL  HAVE  NO  LIABILITY  TO  BUYER                  AND BUYER SHALL NOT MAKE ANY CLAIM AGAINST SELLER OR                  RECOVER ANY AMOUNT WHATSOEVER FROM SELLER FOR ANY                  INDIRECT, SPECIAL, CONSEQUENTIAL, INCIDENTAL, COVER, OR                  PUNITIVE DAMAGES THAT ARISE OUT OF OR RESULT FROM ANY                  BREACH  BY  SELLER  OF  THE  WARRANTIES  EXPRESSLY  SET                  FORTH IN THIS AGREEMENT.              13.1.8. For  purposes  of  this  Agreement,  “Regulations”  shall  mean  all  industry                 standards for new railcar equipment, including without limitation, all rules,                 statutes,  regulations,  directives  and  requirements  of  the  United  States  of                 America (including without limitation those of the United States Department                 of Transportation) and the specifications and standards of the Association of                 American  Railroads  applicable  to  new  railroad  equipment,  in  each  case  as                 may be in effect on the date of construction of the applicable Railcars.             13.1.9. With  respect  to  any  material  and  workmanship  of  a  Railcar  that  is  not  in                 conformity  with  Seller’s  warranty  under  Section  13.1.1,  Seller  shall  (i)                 develop and implement a corrective action plan, and (ii) deliver to Buyer’s                 engineering  or  quality  group  and  be  reasonably  available  to  discuss  the                                         16    US-DOCS\118388455.1 

 

               specifics of such corrective action plan, in each case within thirty (30) days                 of Seller’s receipt of written notice of a warranty claim from Buyer.         13.2. Intellectual Property Infringement.                        13.2.1. Subject to Section 13.2.2 below, Seller shall defend any suit or proceeding                    brought against Buyer based on a claim that the Railcars, or any product,                    accessory,  part,  component,  or  attachment  thereof,  furnished  by  Seller                    under  this  Agreement,  constitute  an  infringement  of  any  patent  of  the                    United States; provided that Seller is notified promptly, in writing, and is                    given  authority,  information  and  assistance,  at  Seller’s  expense,  for  the                    defense of same.                             13.2.2. Seller’s obligation under Section 13.2.1 shall not cover or apply to (i) any                    product,  accessory,  part,  component,  or  attachment  that  is  not                    manufactured  by  Seller  (including  any  Buyer-Supplied  Component),                    except to the extent, and only to the extent, that the manufacturer of any                    such item provides an indemnity against patent infringement to Seller and                    (ii) the Railcars, or any part thereof, manufactured or supplied to Buyer's                    design;  and,  as  to  such  Railcars,  or  any  part  thereof,  Seller  assumes  no                    liability whatsoever for patent infringement.                              13.2.3. Subject to Section 13.2.4 below, Buyer shall defend any suit or proceeding                    brought  against  Seller  based  on  a  claim  that  Railcars,  or  any  product,                    accessory,  part,  component  or  attachment  (including  Buyer-Supplied                    Components),  manufactured  or  supplied  by  Seller  to  Buyer’s  designs,                    constitute an infringement of any patent of the United States; provided that                    Buyer is notified promptly, in writing, and is given authority, information                    and assistance, at Buyer’s expense, for the defense of same.                            13.2.4. Buyer’s obligation under Section 13.2.3 shall not cover or apply to (i) any                    product,  accessory,  part,  component,  or  attachment  that  is  not                    manufactured by Buyer or (ii) a Buyer-Supplied Component, except to the                    extent,  and  only  to  the  extent,  that  the  manufacturer  or  supplier  of  any                    such item provides an indemnity against patent infringement to Buyer.                              13.2.5. Seller  shall  pay  all  damages  and  costs  awarded  against  Buyer  in  an                    infringement claim covered under Sections 13.2.1 and 13.2.2.  In case the                    Railcars, or any part thereof covered under Section 13.2.1, are involved in                    such  a  suit,  and  are  held  to  constitute  infringement,  and  the  use  of  the                    Railcars,  or  any  part  thereof  covered  under  Section  13.2.1,  is  enjoined,                    Seller shall, at its own expense, and at its option, either procure for Buyer                    the right to continue using said Railcar, replace same with non-infringing                    equipment,  modify  said  Railcar  so  that  it  becomes  non-infringing,  or                    refund the Invoice Price of said Railcar.                                                         17    US-DOCS\118388455.1 

 

            13.2.6. Buyer  shall  pay  all  damages  and  costs  awarded  against  Seller  in  an                    infringement claim covered under Sections 13.2.3 and 13.2.4.  In case the                    Railcars, or any part thereof covered under Section 13.2.3, are involved in                    such  a  suit,  and  are  held  to  constitute  infringement,  and  the  use  of  the                    Railcars,  or  any  part  thereof  covered  under  Section  13.2.3,  is  enjoined,                    Buyer shall, at its own expense, and at its option, either procure for itself                    the right to continue using said Railcar or part thereof, replace same with                    non-infringing equipment or modify said Railcar or part thereof so that it                    becomes non-infringing.                              13.2.7. This Section 13.2 states the sole and entire liability of Seller and/or Buyer,                    as applicable, for patent infringement by the Railcars, or any part thereof.                     In  case  of any  claim  for  defense and  indemnity  under  this  Section  13.2,                    Seller  and/or  Buyer,  as  applicable,  shall  undertake  to  conduct  any                    proceedings  which  Seller  or  Buyer,  as  applicable,  deems  necessary  to                    defend the other Party in respect of such matter.  The indemnified Party                    shall have the right to participate in those proceedings, at its own expense,                    but  control  of  the  defense,  the  litigation,  the  negotiation,  and  any                    settlement shall remain with the indemnifying Party.  This indemnity shall                    be void if the indemnified Party fails to provide reasonable cooperation in                    connection with any such defense or shall take any action without the prior                    written  consent  of  indemnifying  Party  that  unreasonably  or  materially                    prejudices  the  defense  of  any  such  matter.   In  no  event  shall  the                    indemnifying Party be required to employ more than one firm of attorneys                    in  defense  of  any  one  matter,  but  nothing  herein  shall  prevent  the                    indemnifying Party from doing so, at its option.                        14.   LIMITATION  OF  LIABILITY.    WITH RESPECT TO ANY BREACH OF THIS         AGREEMENT,  IN  NO  EVENT  SHALL  EITHER  PARTY  HAVE  LIABILITY  TO         THE  OTHER  PARTY  AND  NEITHER  PARTY  SHALL  MAKE  ANY  CLAIM         AGAINST  THE  OTHER  OR  RECOVER  ANY  AMOUNT  WHATSOEVER  FROM         THE OTHER FOR INDIRECT, CONSEQUENTIAL, SPECIAL, AND/OR PUNITIVE         DAMAGES.       15.   LOCK-UP, RIGHT OF FIRST REFUSAL AND LAST LOOK.           15.1. Lock-Up.   Buyer  shall  not  sell  a  Railcar  for  a  period  of  at  least  one  hundred              eighty  (180)  days  following  Delivery,  provided,  however,  the 180-day  lock-up              period shall not apply to (i) any asset-backed financing transaction for the benefit              of  Buyer  or  any  of  its  Affiliates,  (ii)  any  merger,  consolidation,  business              combination, restructuring, reorganization, sale of all or substantially all of the              assets of Buyer, or any of its Affiliates or other transaction or series of related              transactions in which Buyer’s stockholders do not own or control a majority of              the outstanding voting shares of the continuing or surviving entity immediately              after such transaction(s), (iii) any sale of a Railcar to one of Buyer’s Affiliates,              (iv) any lease of a Railcar by Buyer to one of Buyer’s customers that includes a                                         18    US-DOCS\118388455.1 

 

            purchase option exercisable by such customer after such lock-up period, or (v)              the  sale  of such  Railcar  to  a  Third  Party  subject  to  a  lease  with  another  Third              Party.                      15.2. Right  of  First  Refusal.   In  the event  that,  during  the  period  beginning  on  the              181st day following the Delivery of a Railcar purchased hereunder and ending on              the  one  (1)  year  anniversary  of  such  Delivery  (the  “Option  Period”),  Buyer              desires  to  sell  such  Railcar  to  a  Third  Party,  Buyer  shall  deliver  to  Seller  a              written notice of the proposed sale (a “Sale Notice”) accompanied by a written              offer (the “Offer”) to sell such Railcar to Seller, on an “as is”, “where is” basis,              for an amount in cash equal to the Invoice Price paid by Buyer to Seller for such              Railcar  pursuant  to  this  Agreement,  provided,  however,  no  Sale  Notice  be              required  to  be  delivered  to  Seller  in  connection  with,  and  such  right  of  first              refusal  shall  not  apply  to,  (i)  any  asset-backed  financing  transaction  for  the              benefit of Buyer or any of its Affiliates, (ii) any merger, consolidation, business              combination, restructuring, reorganization, sale of all or substantially  all of the              assets of Buyer, or any of its Affiliates or other transaction or series of related              transactions in which Buyer’s stockholders do not own or control a majority of              the outstanding voting shares of the continuing or surviving entity immediately              after such transaction(s), (iii) any sale of a Railcar to one of Buyer’s Affiliates,              (iv) any lease of a Railcar by Buyer to one of Buyer’s customers that includes a              purchase option exercisable by such customer after the lock-up period described              in Section 15.1, or (v) the sale of such Railcar to a Third Party subject to a lease              with  another  Third  Party.   Each  Sale  Notice  shall  reasonably  identify  the              Railcar(s) that Buyer desires to sell to a Third Party during the Option Period but              shall not include the name of the proposed Third Party purchaser or any of the              terms  or  conditions  of  the  proposed  sale.   Seller  may  accept  the  Offer  by              delivering written notice (an “Offer Notice”) to Buyer by no later than 5:00 p.m.,              Chicago  time,  on  the  tenth  (10th)  business  day  following  the date  of  such  Sale              Notice.  If Seller fails to timely deliver an Offer Notice to Buyer, Seller shall be              deemed to have rejected the Offer.  If Seller accepts the Offer, Seller shall close              on the purchase of such Railcar by no later than 5:00 p.m., Chicago time, on the              thirtieth  (30th)  day  (or,  if  such  day  is  not  a  business  day,  the  immediately              following business day) following the date of such Offer Notice.  The purchase              price for such Railcar shall be paid in full on the closing date by wire transfer of              immediately  available  funds  to  an  account  specified  by  Buyer  at  least  two  (2)              days  prior  to  the  closing  date.   In  the  event  Seller  does  not  accept  the  Offer,              Buyer may sell the Railcar that was the subject of such Sale Notice to any Third              Party purchaser following Seller’s rejection of the Offer.  If, at any time, Buyer              includes  a  Railcar  in  a  “request  for  proposal”  or  other  multiple-bid  auction              process during the Option Period, in lieu of making the Offer otherwise required              hereby,  Buyer  shall  provide  Seller  with  the  opportunity  to  participate  in  such              process  and  submit  a  bid  to  purchase  such  Railcar,  in  each  case  subject  to  the              terms and conditions of such process that are no less favorable to Seller in the              aggregate than the terms and conditions applicable to other participants in such              process.                                          19    US-DOCS\118388455.1 

 

      15.3. [***].           16.   REPRESENTATIONS AND OTHER WARRANTIES OF SELLER.  Seller hereby         represents and warrants to and in favor of Buyer that:                        16.1. at the time Seller Delivers each Railcar hereunder, Seller shall hold and convey              to  Buyer  good  and  marketable  title  to  such  Railcar  free  and  clear  of  all              indentures, deeds of trust, mortgages, security interests, liens, claims, demands,              encumbrances,  privileges,  pledges,  residual  interests,  re-marketing  rights,              purchase  options  and  other  charges  of  every  nature  and  kind  whatsoever,               excepting  (i)  any  such  encumbrances  resulting  from  the  acts  or  omissions  of              Buyer (or those acting under the authority of Buyer), and (ii) any rights of Seller              to a purchase money security interest applicable to such Railcars;                16.2. Seller  is  duly  formed,  validly  existing  and  in  good  standing  in  the  State  of              Delaware and has all requisite limited liability company power and authority to              own, operate or lease the properties and assets now owned, operated or leased by              it and to carry on its business as currently conducted.  Seller is duly qualified or              licensed  to  do  business  as  a  foreign  entity  and  is  in  good  standing  in  each              jurisdiction where the character of its properties and assets owned, operated or              leased or the nature of its activities makes such qualification or license necessary,              except where the failure to be so qualified or licensed or in good standing does              not materially and adversely affect Seller’s ability to perform hereunder;                16.3. this  Agreement  and  all  certificates,  documents,  instruments  and  agreements              delivered  under  or  in  connection  with  this  Agreement  (i)  have  been  properly              authorized  by  all  necessary  limited  liability  company  action  and  (ii)  do  not              require  the  approval  of  any  holder  of  units,  membership  interests,  bonds,              debentures  or  other  securities  issued  by  Seller  or  outstanding  under  any              agreement, indenture or other instrument to which Seller is a party or by which              Seller or its property may be charged or affected;                16.4. Seller’s  execution,  delivery  and  performance  of  this  Agreement  and  all              certificates, documents, instruments and agreements delivered by Seller under or              in  connection  with  this  Agreement,  and  Seller’s  compliance  with  the  terms,              conditions and provisions hereof and thereof do not, and will not, (i) constitute a              breach of any existing contractual obligation of Seller, (ii) violate any provision              of the certificate of formation or limited liability company agreement of Seller,              (iii)  require  the  approval  or  the  giving  of  prior  notice  to  any  Third  Party  or              government  agency,  (iv)  breach  or  result  in  the  breach  of,  constitute  a  default              under  any  of  the  provisions  of,  or  result  in  the  creation  of  any  lien,  charge,              encumbrance or security interest upon any property or assets of Seller, (v) violate              any  judgment,  order,  injunction,  decree  or  award  of  any  court,  administrative              agency or governmental body against, or binding upon, Seller, or (vi) constitute a              violation by Seller of any law, order or regulation applicable to Seller, in each                                         20    US-DOCS\118388455.1 

 

            case  so  as  to  materially  and  adversely  affect  Seller’s  ability  to  perform  or              Buyer’s enjoyment of its rights hereunder;                16.5. this  Agreement  and  all  certificates,  documents,  instruments  and  agreements              delivered under or in connection with this Agreement, or in connection with the              consummation of the transactions contemplated hereunder, constitute legal, valid              and  binding  obligations  of  Seller,  enforceable  in  accordance  with  their  terms              except  as  enforceability  may  be  limited  by  bankruptcy,  insolvency,              reorganization, moratorium or other similar laws affecting the rights of creditors              generally and by general principles of equity; and                16.6. there are no legal or governmental investigations, actions or proceedings pending              or,  to  the  knowledge  of  Seller,  threatened  in  writing  against  Seller  before  any              court, administrative agency or tribunal which, if determined adversely, would,              individually  or  in  the  aggregate,  materially  adversely  affect  the  transactions              contemplated by this Agreement or the ability of Seller to perform its obligations              hereunder.            17.   REPRESENTATIONS AND WARRANTIES OF BUYER.  Buyer hereby represents         and warrants to and in favor of Seller that:                  17.1. Buyer is duly incorporated, validly existing and in good standing in the State of              New York and has all requisite corporate power and authority to own, operate or              lease the properties and assets now owned, operated or leased by it and to carry              on its business as currently conducted.  Buyer is duly qualified or licensed to do              business  as  a  foreign  corporation  and  is  in  good  standing  in  each  jurisdiction              where the character of its properties and assets owned, operated or leased or the              nature  of  its  activities  makes  such  qualification  or  license  necessary,  except              where  the  failure  to  be  so  qualified  or  licensed  or  in  good  standing  does  not              materially and adversely affect Buyer’s ability to perform hereunder;                17.2. this  Agreement  and  all  certificates,  documents,  instruments  and  agreements              delivered  under  or  in  connection  with  this  Agreement  (i)  have  been  properly              authorized by all necessary corporate action and (ii) do not require the approval              of any holder of shares, stocks, bonds, debentures or other securities issued by              Buyer  or  outstanding  under  any  agreement,  indenture  or  other  instrument  to              which  Buyer  is  a  party  or  by  which  Buyer  or  its  property  may  be  charged  or              affected;                17.3. Buyer’s  execution,  delivery  and  performance  of  this  Agreement  and  all              certificates, documents, instruments and agreements delivered by Buyer under or              in  connection  with  this  Agreement,  and  Buyer’s  compliance  with  the  terms,              conditions and provisions hereof and thereof do not, and will not, (i) constitute a              breach of any existing contractual obligation of Buyer, (ii) violate any provision              of the charter or by-laws of Buyer, (iii) require the approval or the giving of prior              notice  to  any  Third  Party  or  government  agency,  (iv)  breach  or  result  in  the                                         21    US-DOCS\118388455.1 

 

            breach  of,  constitute  a  default  under  any  of  the  provisions  of,  or  result  in  the              creation of any lien, charge, encumbrance or security interest upon any property              or assets of Buyer, (v) violate any judgment, order, injunction, decree or award              of  any  court,  administrative  agency  or  governmental  body  against,  or  binding              upon,  Buyer,  or  (vi)  constitute  a  violation  by  Buyer  of  any  law,  order  or              regulation  applicable  to  Buyer,  in  each  case  so  as  to  materially  and  adversely              affect Buyer’s ability to perform or Seller’s enjoyment of its rights hereunder;                17.4. this  Agreement  and  all  certificates,  documents,  instruments  and  agreements              delivered under or in connection with this Agreement, or in connection with the              consummation of the transactions contemplated hereunder, constitute legal, valid              and  binding  obligations  of  Buyer,  enforceable  in  accordance  with  their  terms              except  as  enforceability  may  be  limited  by  bankruptcy,  insolvency,              reorganization, moratorium or other similar laws affecting the rights of creditors              generally and by general principles of equity; and                  17.5. there  are  no  legal  or  governmental  investigations,  actions,  or  proceedings              pending  or,  to  the  knowledge  of  Buyer,  threatened  in  writing  against  Buyer              before  any  court,  administrative  agency  or  tribunal  which,  if  determined              adversely, would, individually or in the aggregate, materially adversely affect the              transactions contemplated by this Agreement or the ability of Buyer to perform              its obligations hereunder.     18.   DEFAULT.  Subject to Section 10.4 addressing Force Majeure Events, the occurrence         of any one or more of the following events shall constitute an event of default (“Event         of Default”) hereunder by a Party:                  18.1. the failure of such Party to perform a material obligation hereunder; provided, that              such  failure  to  perform  is  not  cured  by  such  Party  within  thirty  (30)  days  after              receipt of written notice from the other Party specifying such failure to perform;                  18.2. the failure by such Party to pay any amount due and payable pursuant to the terms              of this Agreement, other than amounts disputed by such Party up to a maximum              of  $[***]  of  unpaid  disputed  amounts;  provided  that  such  failure  to  pay  is  not              cured  by  such  Party  within [***]  after  receipt  of  written  notice  from  the  other              Party specifying such failure to pay;                18.3. the (i) filing by such Party of a voluntary petition in bankruptcy, (ii) adjudication              of such Party as a bankrupt or insolvent, (iii) filing by such Party of any petition              seeking any reorganization, arrangement, composition, readjustment, liquidation,              dissolution,  or  similar  relief  for  itself  under  the  federal  bankruptcy  laws,  (iv)              consent  or acquiescence of such Party to the appointment of a trustee, receiver,              conservator, or liquidator of such Party for all, or any substantial portion of such              Party’s property or assets, or (v) filing of any involuntary petition in bankruptcy              against  either  Party  (provided  that  any  such  filing  is  not  withdrawn,  vacated,              removed, discharged, or stayed within sixty (60) days thereafter);                                         22    US-DOCS\118388455.1 

 

              18.4. the  admission  in  writing  by  such  Party  of  its  inability  to  pay  its  debts  as  they              become due;                18.5. the notification in writing to a governmental agency by such Party of its pending              insolvency, or suspension or pending suspension of its operations;                 18.6. the making by such Party of any general assignment for the benefit of its creditors              or the taking of similar actions for the protection or benefit of its creditors;                 18.7. in the case of Seller, in the event that, during any rolling [***] period during the              Term, [***]  percent  ([***]%)  or  more  of  the  Railcars  have  been  rejected  by              Buyer pursuant to Section 11.2; or                  18.8. in the case of Seller, in the event that, during any rolling [***] period during the              Term, [***]  percent  ([***]%) or more  of  the  Railcars  have  not  been  Delivered              within [***]  of  their  respective  Committed  Delivery  Dates  (excluding  delayed              deliveries resulting from Force Majeure Events and those resulting from quality              rejection pursuant to Section 11.2).                The  Parties  agree  that  either  Party’s  initiation  of  the  dispute  resolution  provisions        described  in  Section  21.9  will  not  be  a  prerequisite  for  a  Party  to  give  a  notice  of  an        Event of Default or act to delay any of the time periods for cure specified above.           19.   TERMINATION.  In  addition  to  any  other  rights  and  remedies  available  under this         Agreement or at law, in equity or otherwise, but subject to Section 14 addressing the         limitation  of  liability,  and  in  addition  to  the  termination  rights  relating  to  a  Force         Majeure Event as set forth in Section 10.4 and the delivery of an Intent to Terminate         Notice as set forth in Section 5.4, upon the occurrence of an Event of Default, the non-        defaulting  Party  may  terminate  this  Agreement  on  a  date  that  is [***]  after  the  date         appearing in a written notice to the other Party regarding such termination.  In the event         of Agreement termination under this Section 19, such termination shall not affect any         Party’s rights or obligations that accrued prior to the date of such termination, and any         Order  of  Railcars  placed  prior  thereto  shall  be  Delivered  by  Seller,  and  Buyer  shall         accept Delivery of such Railcars that comply with the Specification as provided under         Section 11.1, in accordance with the terms of this Agreement regardless of the effective         date  of  the  termination;  provided  that  Buyer  shall  not  be  required  to  place  any  new         Orders after the date of  the written notice of such termination (regardless of whether         Buyer has placed Orders for Railcars equal to the Base Order Quantity, or the Monthly         Order  Quantity  for  the  Order  Month  in  which  such  termination  occurs).          Notwithstanding the foregoing, in the event  of a written notice of termination of this         Agreement  by  either  Party  as  a  result  of  the  occurrence  of  an  Event  of  Default         described in Section 18.3, the non-defaulting Party shall not have any further obligation         to  Deliver  Railcars  (in  the  case  of  Seller) or to  accept  any  Railcars  (in  the case of         Buyer),  in  either  case  arising  under  Orders  pending  as  of  the  date  of  the  Event  of         Default.                                          23    US-DOCS\118388455.1 

 

   20.   SUPPLY OF SPARE PARTS.  For a period beginning on the date hereof and ending         on  the [***]of  the  date  hereof,  or,  if  Seller  (or  Seller’s  successor)  discontinues  the         manufacturing  of  railcars  for  Third  Parties  or  discontinues  the  manufacturing  of         aftermarket  railcar  parts  and  Components  before  the  expiration  of  such [***]  period         (“Discontinued Operations”), up to the date of Discontinued Operations, Seller (or such         successor)  shall  make  spare  parts,  fixtures  and  assemblies  for  the  Railcars  that  are         proprietary to Seller or Seller’s successors (“Spare Parts”) and shall be made available         to  Buyer  for  purchase  at  Seller’s  then  market  price.   In  the  event  the  date  of         Discontinued  Operations  is  before  the  expiration  of  such [***]  period,  Seller  (or         Seller’s  successor)  shall  give  Buyer  as  much  advance  written  notice  of  such         Discontinued  Operations  as  possible,  but  in  no  event  less  than [***]  notice.    In         addition,  if  Seller  learns  in  writing  that  any  of  its  Suppliers  will  cease  to  make  any         Spare Parts, Seller shall give Buyer written notice of such Supplier’s decision promptly         upon learning of same.     21.   MISCELLANEOUS.            21.1. Further  Assurances.  Following  acceptance  of  and  payment  for  any  Railcar              hereunder, Seller  shall  make,  do,  and  execute  or  cause  to  be  made,  done,  and              executed all such further acts, deeds and assurances as Buyer or Buyer’s counsel              may,  at  any  time  or  from  time  to  time,  reasonably  require  to  confirm  Buyer’s              right, title, and interest in and to such Railcar in accordance with the intent and              meaning of this Agreement.                21.2. Records Provided to Buyer; UMLER Reporting.  Within thirty (30) days after              the transfer by Bill of Sale of any Railcar to Buyer, Seller will furnish Buyer with              copies,  in  electronic  form,  of documents  described  on  Exhibit  I  attached  hereto              (collectively, “Records”).  Prior to Delivery of any Railcar hereunder, Seller will              file an application with the AAR for a certificate of construction (a “Certificate of              Construction”) for each Railcar and shall provide Buyer with such Certificate of              Construction in electronic form, in each case as required by 49 CFR 179.5.            21.2.1. Prior  to  the  Delivery  of  each  Railcar,  Seller  shall  report  the  following                 information in UMLER:                       21.2.1.1.   Air brake test date;                     21.2.1.2.   Reflectorization application date;                     21.2.1.3.   Comprehensive  equipment  performance  monitoring                                (CEPM)  component  identification  (CID)  numbers  as                                required  by  applicable  Regulations  (as  of  the  date  of  this                                Agreement, CID numbers must be reported for each wheel                                set, and effective as of January 1, 2016, CID numbers must                                be reported for couplers, bolsters and side frames).                                         24    US-DOCS\118388455.1 

 

      21.3. Communication and Correspondence.  Seller shall furnish to Buyer, promptly              upon Seller’s receipt thereof, copies of any notice or correspondence received by              Seller from any Third Party, including any governmental agency, with respect to              any Railcar manufactured by Seller for Buyer pursuant to the terms hereof.  Seller              shall also furnish to Buyer, promptly upon Seller’s receipt thereof, copies of any              notice or correspondence received by Seller from any manufacturer or supplier of              any  part,  material,  equipment,  or  component  installed  in  or  on  any  Railcar              manufactured by Seller for Buyer pursuant to this Agreement.                21.4. Confidentiality.   In  the  course  of  performance  hereunder,  each  of  Buyer  and              Seller  (with  respect  to  information  disclosed  by  such  Party,  the  “Disclosing              Party”)  will  disclose  to  the  other  Party  (the  “Receiving  Party”),  whether  in              written,  electronic,  or  oral  form,  information  regarding  the  Disclosing  Party’s              business  plans,  strategies,  and  processes  that  the  Disclosing  Party  reasonably              regards  as  proprietary  and  confidential  (“Confidential  Information”).               Confidential  Information  shall  include,  but  not  be  limited  to,  (1)  delivery              schedules, (2) pricing, (3) margins, (4) Specification, (5) Orders, and the identities              of,  and  the  requirements  and  pricing  and  delivery  schedules  for  Buyer’s              customers, and (6) terms of this Agreement redacted by the Parties prior to public              disclosure.   The  Receiving  Party  agrees  to  hold  the  Confidential  Information              disclosed  to  it  by  or  on  behalf  of  the  Disclosing  Party  in  confidence,  to  take              commercially  reasonable  precautions  to  protect  such  Confidential  Information              from disclosure and to use the Confidential Information only in connection with              the performance of its obligations under this Agreement, in each case for a period              of five (5) years from the date of disclosure.  Subject to Section 21.4.4 hereof, the              Receiving  Party  shall  not  disclose  any  Confidential  Information  to  any  of  its              employees unless such employees need to know such Confidential Information in              order  for  the  Receiving  Party  to  perform  its  obligations  or  exercise  its  rights              hereunder;  provided,  however,  that  the  Receiving  Party  takes  commercially              reasonable precautions to prevent such employee from (i) disclosing Confidential              Information  to  other  employees  who  do  not  need  to  know  such  Confidential              Information in order for the Receiving Party to perform its obligations or exercise              its rights hereunder,  and (ii) using Confidential  Information in such employee’s              business decisions that are unrelated to the Receiving Party’s performance of its              obligations or exercise of its rights under this Agreement.  Notwithstanding  the              foregoing,  but  subject  to  Section  21.4.1,  the  Receiving  Party  may  disclose              Confidential  Information  to  any  of  its  legal,  financial  or  tax  planning              representatives  (“Representatives”)  who  need  to  know  such  Confidential              Information in order for the Receiving Party to carry out its obligations or enforce              its rights hereunder and who have been informed of, and the Receiving Party shall              cause  such  Representatives  to  abide  by  this  Section  21.4;  provided,  that  Buyer              may also disclose Records that constitute Confidential Information to any Third              Party  for  the  sole  purpose  of  permitting,  and  only  to  the  extent  necessary  to              enable,  such  Third  Party  to  safely  operate,  repair,  maintain  or  modify  Railcars              purchased  under  this  Agreement  (the  “Permitted  Purpose”)  so  long  as  prior  to              such  disclosure,  such  Third  Party  enters  into  a  confidentiality  agreement  with                                         25    US-DOCS\118388455.1 

 

            Seller on customary terms to be negotiated and agreed upon by such Third Party              and Seller, with Seller’s agreement not to be unreasonably withheld, conditioned              or delayed.  Notwithstanding the foregoing, Buyer may also disclose Records that              constitute Confidential Information to any Third Party via electronic portal solely              for the Permitted Purpose, so long as (1) prior to such disclosure, such Third Party              enters  into  a  confidentiality  agreement  with  Buyer,  which  terms  shall,  in  all              material respects, be no less restrictive than the terms set forth in this Section 21.4              and (2) Seller is stipulated in such confidentiality  agreement to be a third party              beneficiary thereof and thereunder.  Each Party shall be responsible for any action              or failure to act that would constitute a breach or other violation of this Section              21.4 by its Representatives.                      21.4.1. From and after the Effective Date, the Margin Schedule may not be disclosed                  to any of Buyer’s directors, officers, employees or Representatives who are                  not  members  of  Buyer’s  Clean  Team.   For  purposes  of  this  Agreement,                  “Buyer’s Clean Team” shall mean those officers, directors or employees of                  Buyer  identified  by  title  or  Buyer’s  Representatives,  in  each  case  as                  reasonably  agreed  to  by  the  Parties  prior  to  the  Effective  Date,  but  at  a                  minimum,  Buyer’s  Clean  Team  shall  always  consist  of  at  least  Buyer’s                  highest  ranking  legal,  finance  and  compliance  officers;  provided,  that  (a)                  Buyer  may  remove  individuals  from  Buyer’s  Clean  Team  at  any  time  and                  from  time  to  time  without  advance  notice  to  Seller,  and  (b)  in  the  event                  Buyer desires to add any individuals to Buyer’s Clean Team subsequent to                  the date hereof,  Buyer shall provide Seller with the name and title of such                  individuals, and such individuals will only be added to Buyer’s Clean Team                  with Seller’s written approval.  Upon the request  of one Party to the other                  Party, the Parties shall  enter into a Confidentiality Agreement substantially                  in the form of the Parties’ Confidentiality Agreement, dated as of September                  12,  2014  (the  “Margin  Schedule  Review  Confidentiality  Agreement”)  in                  order  to  facilitate  the  consideration,  evaluation  and  negotiation  of  any                  adjustments to the Margin Schedule as  contemplated in Section 5.4 of this                  Agreement  (“Margin  Schedule  Review”).   Notwithstanding  the  foregoing,                  provided that the Parties have first entered into the Margin Schedule Review                  Confidentiality  Agreement,  the  provisions  of  this  Section  21.4.1  related  to                  the  Buyer’s  Clean  Team  shall  not  apply  with  respect  to,  and  during  the                  pendency of, the Margin Schedule Review.                                     21.4.2. Seller’s Standard Manufacturing Cost and Seller’s actual cost for Railcars,                    or any component thereof, shall only be disclosed to Buyer’s Third Party                    Reviewer as set forth in Exhibit G.                              21.4.3. Confidential  Information  does  not  include  information  that:  (i)  the                    Receiving  Party  can  demonstrate  was  in  its  possession  prior  to  being                    disclosed  by  the  Disclosing  Party  hereunder  and  the  source  of  the                    information  was  not  under  an  obligation  of  confidentiality  to  the                    Disclosing  Party;  (ii)  is  now,  or  hereafter  becomes,  through  no  act  or                                         26    US-DOCS\118388455.1 

 

                  failure  to act on the part of the Receiving Party, generally known to the                    public; (iii) is rightfully obtained from a Third Party not bound under an                    obligation  of  confidentiality  to  the  Disclosing  Party;  or  (iv)  is                    independently  developed  by  the  Receiving  Party  without  reference  to  or                    use  of  any  Confidential  Information.   The  foregoing  restrictions  on                    disclosure of Confidential  Information do not apply to  any disclosure of                    Confidential  Information  with  respect  to  which  the  Receiving  Party  is                    advised by legal counsel that such disclosure is necessary or compelled (a)                    under the federal securities laws or other applicable law, or by the rules                    and regulations of the Securities and Exchange Commission (the “SEC”)                    or of any stock exchange on which the Receiving Party’s stock is listed, or                    (b) pursuant to the terms of any deposition, interrogatory, formal litigation                    discovery  request,  subpoena,  civil  investigative  demand,  court  order  or                    similar process to which the Receiving Party is subject; provided, that the                    Receiving  Party  notifies  the  Disclosing  Party  (x)  as  promptly  as                    reasonably  possible  following  its  determination  that  such  disclosure  is                    necessary or compelled under sub-clause (a) above, and (y) as promptly as                    reasonably  possible  after  service  of  such  legal  process  and  to  the  extent                    legally permissible so that the Disclosing Party  may seek an appropriate                    protective order, confidential treatment, or other remedy.  In the event the                    Receiving  Party  is  required  or  compelled  to  disclose  Confidential                    Information  pursuant  to  the  immediately  preceding  sentence,  the                    Receiving  Party  may  disclose  only  that  portion  of  such  Confidential                    Information with respect to which  the Receiving Party  has been  advised                    by its counsel is required or compelled to be disclosed.                            21.4.4. Upon  the  request  of  the  Disclosing  Party  following  the  expiration  or                    termination of this Agreement, the Receiving Party will return or destroy                    all  of  the  Disclosing  Party’s  Confidential  Information,  except  that  the                    Receiving  Party  may  retain  Confidential  Information  of  the  Disclosing                    Party  that  is  (i)  necessary  in  connection  with  the  enforcement  of  the                    Receiving  Party’s  rights  under  this  Agreement,  (ii)  required  to  be                    maintained by the Receiving Party’s internal document retention policies                    or  (iii)  contained  in  an  archived  computer  system  backup  in  accordance                    with  the  Receiving  Party’s  security  or  disaster  recovery  procedures;                    provided that any such retained or archived Confidential Information shall                    remain  subject  to  the  provisions  of  this  Section 21.4  for  so  long  as  it  is                    maintained or archived; provided, further, a Receiving Party’s legal or IT                    employees may access such retained or archived Confidential Information                    solely  to  the  extent  necessary  to  perform  their  respective  functions                    described under this Section 21.4.4.                            21.4.5. Except  as  may  be  required  by  the  federal  securities  laws  or  other                    applicable law, or by the rules and regulations of the SEC or of any stock                    exchange on which a Party’s stock is listed, no Party will make public the                    existence  or  content  of  this  Agreement  or  the  negotiations  leading  to  or                                         27    US-DOCS\118388455.1 

 

                  pursuant to this Agreement without the prior written consent of the other                    Party;  provided,  that  no  Party  will  be  prohibited  from  disclosing  the                    general nature of the business relationship established hereby at any time;                    provided,  further,  that  the  Parties  agree that  Buyer  shall  be  permitted  to                    file a copy of this Agreement with the SEC and in connection therewith                    shall request confidential treatment for certain portions of this Agreement                    and certain of the Exhibits attached hereto as agreed by the Parties.                21.5. Broker’s Commission.  Each Party agrees to indemnify and hold the other Party              harmless from and against any claims for commissions arising out of the acts of              such  Party  and  for  expenses  (including  reasonable  attorneys’  fees)  and  costs              relating  to  such  claims  or  otherwise  relating  to  such  Party’s  retention  of  any              broker, finder or other Person relating to a sale of the Railcars.                21.6. Successors and Permitted Assigns.  Neither Party may assign, transfer, sell, or              convey this Agreement to a Third Party without the prior written consent of the              other Party, which consent will not be unreasonably withheld or delayed.  In the              event  of  a  merger,  consolidation  or  change  in  Control  of  a  Party  whereby  this              Agreement  transfers  by  operation  of  law  (a  “Transaction”)  to  such  Party’s              successor in interest (the “Transferee”), then:                    21.6.1. In  the  case  of  a  Transaction  involving  Seller,  the  Invoice  Price  for  any                  Exhibit A Railcar that is charged by Transferee to Buyer shall not increase as                  a result of the Transaction or be greater than what Seller’s Invoice Price for                  any such Exhibit A Railcar would have been absent the Transaction and in                  the  ordinary  course  of  Seller’s  operation  of  its  business  (in  either  case,  an                  “impermissible  increase”).   For  purposes  of  determining  impermissible                  increases,  upon  reasonable  request  from  Buyer,  Transferee  shall  permit                  Buyer or Buyer’s agent access to Transferee’s relevant books and records as                  to an Exhibit A Railcar on commercially reasonable and confidential terms                  and  conditions  (excluding  direct  access  by  Buyer  to  Transferee’s                  manufacturing cost information, which access and review shall be handled in                  a  manner  similar  to  that  described  under  Exhibit  G  hereto  but  without                  limitation  as  to  the  number  of  reviews).   Buyer  may  terminate  this                  Agreement with [***] advance written notice in the [***]                     21.6.2. In  the  case  of  a  Transaction  involving  Buyer,  Seller  may  terminate  this                  Agreement  with  sixty  (60)  days  advance  written  notice  in  the  event  (i)  a                  Transaction occurs prior to Buyer’s first acceptance of Railcars hereunder, or                  (ii)  after  the  Transaction,  the  Transferee  competes  with  Seller  in  railcar                  manufacturing in North America.                   21.7. Severability.  Any term, condition or provision of this Agreement which is, or is              deemed to be, void, prohibited, or unenforceable in any jurisdiction shall be, as to              such  jurisdiction,  severable  here  from  and  ineffective  to  the  extent  of  such              avoidance, prohibition, and unenforceability without in any way invalidating the                                         28    US-DOCS\118388455.1 

 

            remaining  terms,  conditions,  and  provisions  hereof.   Any  such  avoidance,              prohibition, and unenforceability in any jurisdiction shall not invalidate or render              unenforceable such term, condition, or provision in any other jurisdiction.                21.8. Governing Law.  THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN              MADE IN THE STATE OF DELAWARE AND SHALL BE CONSTRUED IN              ACCORDANCE  WITH,  AND  THE  RIGHTS  AND  LIABILITIES  OF  THE              PARTIES HEREUNDER SHALL BE GOVERNED BY, THE LAWS OF SUCH              STATE WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICT              OF LAW THEREOF.                21.9. Dispute Resolution.  Each dispute, claim or controversy arising out of or in any              manner related to this Agreement or the breach thereof (a “Dispute”) between the              Parties  will  be  resolved  or  adjudicated  in  accordance  with  the  provisions              described in this Section 21.9.                       21.9.1. In the event of a Dispute, either Party may, but is not required to, provide                    written notice of such Dispute to the other Party (a “Dispute Notice”) and                    in such event, representatives at the vice president level of each Party shall                    meet  in  person  to  attempt  to  resolve  such  Dispute  (a  “Dispute                    Negotiation”).   Each  Dispute  Negotiation  will  take  place  at  a  time  and                    place agreed to by such representatives, within thirty (30) days  after the                    date of the Dispute Notice.  At any time after delivery of a Dispute Notice,                    either  Seller  or  Buyer  may,  at  its  discretion,  either  in  addition  or  as  an                    alternative  to  such  Dispute  Negotiation,  initiate  mediation  in  Delaware,                    administered by the American Arbitration Association (the “AAA”) under                    its  commercial  mediation  procedures  then  in  effect.   While  Buyer  and                    Seller shall have an obligation to participate in each Dispute Negotiation                    and any mediation (provided the mediation is scheduled within sixty (60)                    days  after  the  date  of  the  Dispute  Notice  and  at  a  time  and  place                    reasonably acceptable to Buyer and Seller), nothing herein shall obligate                    Buyer or Seller to enter into any agreement or reach any conclusion as a                    result of such Dispute Negotiation or mediation.                            21.9.2. In the event that a Dispute Notice is provided and the Parties are unable to                    reach a mutually satisfactory resolution of the Dispute within ninety (90)                    days  after  the  date  through  Dispute  Negotiation  or  mediation  of  such                    Dispute  Notice,  or  at  any  time  in  the  event  that  no  Dispute  Notice  is                    provided,  either  Party  may,  upon  written  notice  to  the  other  (an                    “Arbitration  Demand”)  initiate  a  binding  arbitration,  to  take  place  in                    Delaware,  administered  by  the  AAA  (the  “Arbitration”)  under  the  AAA                    Commercial Arbitration Rules and Procedures (“AAA Rules”); provided,                    however, that in the event of a conflict between the AAA Rules and the                    provisions  of  this  Section  21.9,  the  provisions  of  this  Section  21.9  shall                    control.  The Arbitration shall be heard and determined by a panel of three                    (3) arbitrators (each an “Arbitrator”).  Within ten (10) business days after                                         29    US-DOCS\118388455.1 

 

                  the Arbitration Demand, each Party shall select, and provide written notice                    to  the  other  Party  of  the  identity  of,  a  single  Arbitrator  who  shall  be                    deemed non-neutral and not subject to the provisions of Rule R-17 of the                    AAA  Rules.   The  third  Arbitrator  shall  be  selected  in  accordance  with                    Rule R-11 of the AAA Rules within twenty  (20) business days after the                    Arbitration Demand; provided, however, that the third Arbitrator must be                    a licensed attorney, have experience in manufacturing and be listed on the                    AAA’s Large, Complex Commercial Case Panel (or such other equivalent                    replacement  roster  of  experienced  arbitrators  that  the  AAA  designates),                    unless the matter of dispute arises under or relates to Exhibit G, in which                    case such third Arbitrator must be an accountant with cost accounting and                    manufacturing experience.                             21.9.3. Any  issue  concerning  the  extent  to  which  any  Dispute  is  subject  to                    Arbitration,  or  concerning  the  applicability,  interpretation,  enforceability                    or  validity  of  these  procedures,  shall  be  governed  by  the  United  States                    Federal  Arbitration  Act  and  not  by  any  state  arbitration  law.   Except  in                    connection with a Party’s application to a court of competent jurisdiction                    for  interim  or  conservatory  injunctive  relief,  to  preserve  a  claim,  to                    preserve  a  position  superior  to  other  creditors,  to  resolve  any  issue                    concerning  jurisdiction,  the  existence  or  validity  of  the  Arbitration                    provisions  of  this  Section  21.9,  or  the  extent  to  which  any  Dispute  is                    subject  to  Arbitration,  or  to  compel  Arbitration  in  accordance  with  this                    Section 21.9, or to enforce judgment on the Arbitrators’ award, all of the                    foregoing which shall be decided by a court of competent jurisdiction, no                    Party  may  institute  legal  proceedings  related  to  a  Dispute.   Any  legal                    proceeding permitted by the foregoing will be heard and determined only                    in  a  state  or  federal  court  sitting  in  Delaware  and  the  Parties  hereby                    irrevocably submit to the exclusive jurisdiction of such courts in any such                    legal proceeding, irrevocably waive any objection to venue, including the                    defense  of  an  inconvenient  forum,  to  the  maintenance  of  any  such  legal                    proceeding,  and  irrevocably  agree  that  written  notice  of  such  legal                    proceeding  in  compliance  with  the  notice  provisions  of  this  Agreement                    constitutes  valid  and  lawful  service  of  process  against  them  without  the                    necessity for service by any other means; provided, that, notwithstanding                    the  foregoing,  the  Parties  have  the  right  to  enforce  judgment  on  the                    arbitrators’ award in any court of competent jurisdiction.                            21.9.4. In any Arbitration initiated pursuant to this Section 21.9, the Parties shall                    be permitted to take the following discovery without seeking leave of the                    Arbitrators and each Party agrees to cooperate in producing all discovery                    contemplated by this Section 21.9 or otherwise ordered by the Arbitrators.                     The  scope  of  discovery  in  the  Arbitration  shall  be  that  each  Party  may                    obtain  discovery  regarding  any  non-privileged  matter  that  is  relevant  to                    any Party’s claim or defense.                                                         30    US-DOCS\118388455.1 

 

            21.9.5. Each  Party  may  serve  requests  for  production  of  documents  and  other                    tangible  things  and  such  requests  and  the  responses  thereto  shall  be  in                    accordance  with  the  provisions  of  Rule  34  of  the  FRCP,  as  if  such                    provisions  applied  to  the  Arbitration,  and  such  requests  may  include                    requests  for  electronically  stored  information,  which  requests  and                    responses shall be in accordance with the provisions of Rule 34 and Rule                    26(b)(2)(b)  of  the  FRCP  as  if such  provisions  applied  to  the  Arbitration                    proceeding.  Each Party may serve interrogatories and such interrogatories                    and  the  responses  thereto  shall  be  in  accordance  with  the  provisions  of                    Rule 33 of the FRCP as if such provisions applied to the Arbitration.  Each                    Party  may  serve  requests  for  admission  and  such  requests  and  the                    responses thereto shall be in accordance with the provisions of Rule 36 of                    the FRCP as if such provisions applied to the Arbitration.  Each Party may                    take  up  to  10  depositions  of  the  other  Party  by  serving  a  notice  of                    deposition and the other Party must produce the deponents as requested in                    accordance with  the  provisions  of Rule  30  of the FRCP,  including  Rule                    30(b)(6),  as  if  such  provisions  applied  to  the  Arbitration;  provided,                    however, that a Party that seeks to present the testimony of a third-party                    witness at the Arbitration must produce such witness for deposition prior                    to  the  Arbitration  and  such  deposition  shall  not  count  towards  the                    foregoing 10 deposition limit; provided, further, that a Party that seeks to                    present the opinion testimony of an expert witness at the Arbitration must                    produce a written expert report in accordance with the provisions of Rule                    26(a)(2) of the FRCP as if such provisions applied to the Arbitration and                    produce  such  expert  witness  for  deposition  prior  to  the  Arbitration  and                    such deposition shall not count towards the foregoing 10 deposition limit.                              21.9.6. The Parties agree that in the event of Arbitration and before engaging in                    any discovery, they will execute a Confidentiality Agreement and Agreed                    Protective  Order  in  the  form  attached  hereto  as  Exhibit  J,  which  shall                    govern the exchange of information produced by any party or non-party in                    the Arbitration.  In such event, the Parties agree that they will request that                    the  Arbitrators  enter  the  fully-executed  Confidentiality  Agreement  and                    Agreed Protective Order and that, in the case of any conflict between its                    terms and the terms of this Agreement, the Confidentiality Agreement and                    Agreed Protective Order shall control.  The Arbitrators may, upon written                    request  of  any  Party,  limit  the  amount  or  scope  of  written  discovery                    described above only after all Parties have been given the opportunity to                    oppose such request in writing.  In no event, however, may the Arbitrator                    reduce the number of depositions provided for above.  The Arbitrator may                    compel  a  Party  to  comply  with  discovery  or  its  obligations  under  the                    Confidentiality  Agreement  and  Agreed  Protective  Order,  including  by                    awarding  attorneys’  fees,  assessing  monetary  sanctions,  and  limiting  a                    Party’s use of evidence at hearing.  Any Party has the right to have any                    hearing  recorded  by  stenographic  and  video  means  with  such  Party                    bearing  the  costs  of  the  stenographer  and  videographer;  provided,                                         31    US-DOCS\118388455.1 

 

                  however, that any other Party shall have to right to obtain transcripts from                    the transcriber at such other Party’s own cost; provided, further, however,                    that the Parties shall share equally the cost of any transcript requested by                    the Arbitrators.                            21.9.7. The Arbitrators have the right to award or include in their award any relief                    that they deem proper, including money damages (with interest on unpaid                    amounts  from  the  date  due),  specific  performance,  injunctive  relief,                    monetary  sanctions,  and  attorneys’  fees  and  costs;  provided,  that  the                    Arbitrators  shall  have  no  power  to  award  punitive  damages  or  damages                    inconsistent  with  this  Agreement,  and  the  Parties  expressly  waive  their                    right to obtain such damages in the Arbitration or in any other forum.  In                    no  event  shall  the  Arbitrators  have  any  right,  power,  or  authority  to                    change, alter, detract from, or add to the provisions of this Agreement, but                    they shall have the power only to apply and interpret the provisions of this                    Agreement.  The Arbitrators may not consider any settlement discussions                    or offers that might have been made by  the  either Party, whether or not                    made in connection with a Dispute Negotiation or mediation.  All aspects                    of  the  Arbitration  (including  the  existence,  content  and  result  of  the                    Arbitration) shall be treated as Confidential Information.  The Arbitrators’                    decision shall be final and binding upon both Parties.  Each Party shall be                    responsible for its own attorneys’ fees and costs, including filing fee and                    final  fee  of  the  AAA,  in  connection  with  any  such  mediation  or                    Arbitration,  subject  to  any  award  of  attorneys’  fees  and  costs,  and  the                    Parties  shall  share equally  the  costs  of the mediator,  the  Arbitrators,  the                    AAA  (to  the  extent  in  excess  of  filing  and  final  fees),  the  mediation                    location, and the Arbitration location.                            21.9.8. The  Arbitration  award  shall  be  a  reasoned  award,  made  within  the  time                    limits  imposed  by  R-41  of  the  AAA  Rules;  provided,  however,  that  the                    Arbitrators  may  extend  the  time  limits  of  R-41  as  they  deem  necessary.                     After the award is received by the Parties and all time periods provided for                    in R-46 have expired, one or both of the Parties may present the award to a                    court of competent jurisdiction for confirmation.  The court’s confirmation                    of the award shall be governed by Section 9 of the Federal Arbitration Act                    (the “Act”), and the grounds for the court to vacate, modify, or correct the                    award shall be limited to the grounds articulated in Sections 10 and 11 of                    the Act.                21.10. Notices.  Unless otherwise expressly provided herein, all communications, notices              and  requests  under  this  Agreement  shall  be  in  writing  and  shall  be  deemed              received either (i) one (1) business day after being deposited, all charges prepaid,              with  Federal  Express  or  other  commercial  delivery  service  that  guarantees  next              business day delivery and provides a written confirmation of delivery, or (ii) on              the date of transmission, if sent by facsimile (receipt confirmed) or email.  The                                         32    US-DOCS\118388455.1 

 

            addresses, facsimile numbers and email addresses for notice, unless changed by              notice, are as follows:                      If to Seller:    Trinity Rail Group, LLC                                      2525 Stemmons Freeway                                      Dallas, TX  75207                                      Attn:  Dale Hill                                      Fax:  214-589-8819                                      Email:  Dale.Hill@trin.net                                                          If to Buyer:     GATX Corporation                                      222 West Adams Street                                      Chicago, IL  60661                                      Attn:  VP Fleet Management                                      Fax:  (312) 499-7536                                      Email:  vp-fpm@gatx.com               For any notice relating to matters under Sections 8, 10.4, 11.3, 13, 14, 15, 16, 17,              18, 19 or 21 of this Agreement, copies of such notice shall also be delivered to the              Parties’  respective legal  counsel  in  the  manner  set  forth  above.   The  addresses,              facsimile numbers and email addresses for notices, unless changed by notice, are              as follows:                                                          If to Seller:    Trinity Industries, Inc.                                      2525 Stemmons Freeway                                      Dallas, TX  75207                                      Attn: Heather Randall                                      Fax:  214-589-8824                                      Email:  Heather.Randall@trin.net                                        If to Buyer:     GATX Corporation                                      222 West Adams Street                                      Chicago, IL  60661                                      Attn:  General Counsel                                      Fax:  (312) 621-6648                                      Email:  Deborah.Golden@gatx.com                            21.11. Counterparts.  This Agreement may be executed in any number of counterparts              (including  by  means  of  facsimile  or  .PDF)  each  of  which  will  be  deemed  an              original  but  all  of  such  counterparts  together  shall  constitute  one  and  the  same              instrument.                21.12. Entire  Agreement  and  Amendments.  This  Agreement,  together  with  each              Exhibit  attached  hereto,  and  the  other  documents  explicitly  referenced  herein              contain the entire agreement and understanding between the Parties with respect              to the subject matter hereof and, as of the execution hereof, supersedes all prior                                         33    US-DOCS\118388455.1 

 

            agreements, understandings, and representations, whether oral or written, related              to  the  subject  matter  hereof,  including  that  certain  Confidentiality  Agreement,              dated September 12, 2014, by and between Buyer and Seller, each of which are              hereby  terminated  and  shall  be  of  no  further  force  and  effect  following  the              execution  and  delivery  hereof,  provided  that  any  confidential  information              disclosed  under  the  Confidentiality  Agreement  dated  September  12,  2014  will              also  be  deemed  to  be  Confidential  Information  under  this  Agreement.   No              amendment, modification, supplement, waiver, or release of any of the terms and              conditions  contained  herein  shall  be  made  except  by  mutual  agreement  to  that              effect in writing and signed by all Parties.                  21.13. Survival.  Regardless  of  the  expiration  or  termination  for  any  reason  of  this              Agreement, the rights and obligations set forth in this Agreement that require or              contemplate  performance  by  a  Party  after  such  expiration  or  termination  shall              remain in full force and effect to the extent required for their full observance and              performance,  including,  but  not  limited  to,  Sections  5.1.3,  5.2.4,  5.2.5,  5.4,  7,              11.3, 12, 13, 14, 15.1, 15.2, 16, 17, 19, 20 and 21.                21.14. Expenses.  Except as otherwise expressly set forth in this Agreement, each Party              will bear all of its own costs and expenses incurred in negotiating and complying              with such Party’s obligations arising pursuant to this Agreement.                21.15. No Agency Relationship.  Nothing contained in this Agreement will create any              agency, fiduciary, joint venture, or partnership relationship between the Parties.                21.16. No  Third-Party  Beneficiaries.   This  Agreement  will  not  confer  any  rights  or              remedies upon any Person other than the Parties.                21.17. Headings.  The  Section  headings  contained  in  this  Agreement  are  inserted  for              convenience only and will not affect in any way the meaning or interpretation of              this Agreement.                21.18. Construction.   The  Parties  have  participated  jointly  in  the  negotiation  and              drafting  of  this  Agreement.   In  the  event  an  ambiguity  or  question  of  intent  or              interpretation arises, this Agreement will be construed as if drafted jointly by the              Parties, and no presumption or burden of proof will arise favoring or disfavoring              any Party by virtue of the authorship of any of the provisions of this Agreement.               Unless the context requires otherwise, singular includes plural and vice versa and              any  gender  includes  every  gender,  and  where  any  word  or  phrase  is  given  a              defined meaning, any other grammatical form of that word or phrase will have a              corresponding meaning.  The word “including” (and its variants, e.g. “includes”,              “include”)  will  mean  “including  without  limitation”  unless  otherwise  stated.               Unless the context requires otherwise, the words “hereof,” “herein,” “hereunder,”              “hereby,” or words of similar import refer to this Agreement as a whole and not to              any  particular  Section,  subparagraph,  clause  or  other  subdivision  hereof.   The              word  “or”  will  be  disjunctive  but  not  exclusive.   Each  reference  to  a  Section                                         34    US-DOCS\118388455.1 

 

            herein  is  to  a  Section  of  this  Agreement.   Each  Schedule,  Exhibit,  and  Annex              attached hereto is incorporated herein and made a part hereof as if fully set forth              herein.                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]                                            35    US-DOCS\118388455.1 

 

         IN WITNESS WHEREOF, Seller and  Buyer  have executed this Agreement  as of the  Effective Date.                                              GATX CORPORATION                                                                                                                                                        By:                                         Name:                                         Title:                                                                                                                     TRINITY RAIL GROUP, LLC                                                                                                                                                        By:                                         Name:                                         Title:                                     [Signature page to Supply Agreement]  US-DOCS\118388455.1

 

                                     Exhibit A                                      [***]                                                                                         US-DOCS\118388455.1

 

                                      Exhibit B                                       [***]                                                                                                                                  US-DOCS\118388455.1

 

                                                     Exhibit C                                                      [***]                                                                                                                          US-DOCS\118388455.1

 

                                                     Exhibit D                                                       [***]         US-DOCS\118388455.1

 

                                     Exhibit E                                    Order Form   RAILCAR ORDER FORM   To:    Company:   Telephone:   Order Date:   GATX CPP/BO#:     Car Type(s):     Quantity:     Alternates:    New Buyer-Supplied Components:    Non-New Buyer-Supplied Components:    Price:    Terms and Conditions:  This Order Form is subject to the terms and conditions of  the Supply Agreement dated November 3, 2014.     Executed by:    GATX Corporation      By: Name: ________________________________    Title: _________________________________    Signature: _____________________________            US-DOCS\118388455.1

 

                                                    Exhibit F                                      Form of Certificate of Acceptance              CERTIFICATE OF ACCEPTANCE                                                        GATX PO                                                         SELLER’S JOB           NUMBER                                         NUMBER                                                                                     RAILCAR DESCRIPTION                                                           In accordance with the Supply Agreement (“Agreement”) between GATX Corporation ("Buyer") and Trinity Rail Group, LLC   ("Seller"),  dated  November  3,  2014,  the  undersigned  hereby  certifies  that  on  the  date  of  this  Certificate  the  following   Railcars were accepted by the Buyer in accordance with the Agreement.  The execution of this Certificate of Acceptance   shall not relieve the Seller of any of its obligations under the Agreement nor shall it constitute a waiver by the Buyer with   respect to any of its rights and remedies under the Agreement.                                                                                                             DATE                                                   AVAILABLE                         LIGHT                         FOR                      DATE    CAR NUMBER                      GALLONS                                                           BO#                        WEIGHT                    INSPECTION                 ACCEPTED                                                     OR RE-                                                 INSPECTION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       Accepted                                                        Cumulative Accepted by        Today:                                                                               BO#:                                                                                                                                                                                                                                                                                             US-DOCS\118388455.1

 

                                     Exhibit G                                 Third Party Review   1.    General.            (a)   Pursuant  to  Section  7  of  the  Agreement  between  Buyer  and  Seller  dated        November  3,  2014,  upon  written  notice  to  Seller,  Buyer  may  initiate  a  Third  Party        Review with respect to the matters set forth in Section 6 of this Exhibit G.          (b)   Buyer  may  initiate  a  Third  Party  Review  after  the  first  Order  Year  of  this        Agreement.  Thereafter, Buyer may request [***].      2.    Selection of Third Party Reviewer.  Within 30 days after Buyer’s notice to undertake a  Third Party Review, Buyer will appoint a reputable accounting firm to conduct the Third Party  Review, subject to Seller’s consent, such consent not to be unreasonably withheld or delayed (the  “Reviewer”), to the extent that such Reviewer does not have ethical conflicts given their then- current or past dealings with either Party.  Seller agrees that [***] is an acceptable Reviewer as  of the Effective Date.    3.    Confidentiality.  The Parties agree that the Seller may require the Reviewer to enter into  and be bound by a confidentiality agreement in the form attached hereto as Schedule 1 to this  Exhibit  G  (the  “Reviewer  Confidentiality  Agreement”).   Buyer  acknowledges  that  all  information the Reviewer receives from Seller will be considered “Evaluation Material” as set  forth  in  the  Reviewer  Confidentiality  Agreement  and,  except  to  the  extent  otherwise  provided  under this Exhibit G or the Reviewer Confidentiality Agreement, the Reviewer will be prohibited  from disclosing any of such Evaluation Material, whether in writing or orally, to Buyer or any  other  Person  (other  than  to  Reviewer’s  employees  who  need  to  know  such  information  for  purposes  of  the  Third  Party  Review  and  who  the  Reviewer  shall  cause  to  comply  with  the  provisions of the Reviewer Confidentiality Agreement) or using such Evaluation Material other  than for purposes of its Third Party Review.  The Parties agree that the Reviewer may disclose  such  Evaluation  Material  if  (but  only  to  the  extent)  required  by  applicable  law or  regulation,  including  any  subpoena  or  other  similar  form  of  process;  provided,  that  the  Reviewer  will  provide,  unless  prohibited  by  law,  Seller  with  prompt  notice of  any  request  that  they  disclose  Seller’s Evaluation Material so that Seller may object to the request and/or seek an appropriate  protective order.     4.    Recordkeeping; Access.            (a)  During  the  Term  of  this  Agreement  and  continuing  thereafter  for  the  longer  of        [***]  or  the  period  necessary  to  (i)  resolve  any  pending  Dispute  or  (ii)  complete  any        Third Party Review authorized under the Agreement, Seller shall maintain a [***].           (b)  Seller will  provide  the  Reviewer  with  access  to  the  Seller  Records  and  Seller’s        personnel, accountants, and any other information that is reasonably necessary to perform        a Third Party Review and for the Reviewer to prepare and issue the Report (as defined in        Section 7 of this Exhibit G).  The Third Party Review will take place at Seller’s place of     US-DOCS\118388455.1

 

         business in Dallas, Texas and the Reviewer will not be permitted to (i) remove any of the        books, records, and information provided by Seller to the Reviewer from Seller’s place of        business or (ii) copy such books, records, or information for any purpose.  The Reviewer        may  keep  its  working  papers,  reports  and  copies  of  information  obtained  from  Seller        and/or Buyer in connection with the Third Party Review to comply with applicable law,        statute,  rule,  regulation,  or  professional  standards  promulgated  by  AICPA.   Any  such        information  so  kept  shall  be  retained  in  accordance  with  the  terms  of  the  Reviewer        Confidentiality Agreement.    5.    Conduct of Review.  All Third Party Reviews will be performed during Seller’s normal  business hours and in a manner so as not to unreasonably interfere with Seller’s operations and  personnel.   Reviewer  and  Seller  will  cooperate  with  each  other  as  necessary  for  Reviewer  to  perform  the  Third  Party  Review  in  an  expeditious  and  efficient  manner.   Reviewer’s  onsite  access to Seller’s place of business will be limited to a maximum of [***]per Third Party Review  performed hereunder; provided, that Seller promptly responds to Reviewer’s reasonable requests  for access and information necessary to perform the Third Party Review.    6.    Scope of Third Party Review.           (a)  In  connection  with  the  Third  Party  Review,  the  Reviewer  shall  review  Seller’s        Records to determine whether there were any discrepancies between (i) the [***].          (b)  In addition to its obligations set forth in Section 4 of this Exhibit G, Seller will, at        a minimum, prepare and deliver to the Reviewer, within thirty (30) days of its receipt of        notice that Buyer has elected to initiate a Third Party Review, the following information:                      (i)  A “Price Calculation List” for each Order of a Railcar listed on Exhibit A              to  the  Agreement  for  which  Buyer  received  an  invoice.   The  Price  Calculation              List shall consist of [***].                                  (ii)  [***].                            (iii) [***].                      (c)   [***].    7.    Report.            (a)  The Reviewer shall prepare a written report (the “Report”) [***].        (b)   [***]                (c)   [***]              US-DOCS\118388455.1

 

   8.    Settlement Procedures.            (a)  If  the  Report  discloses  any  discrepancies  (whether  related  to  Seller’s [***],  or        otherwise),  Buyer  may,  at  its  option,  request  in  writing  a  refund  or  credit  for  such        discrepancies, which shall include a description of the basis for Buyer’s request founded        upon the Report.                  (b)  Seller shall have thirty (30) days from its receipt of Buyer’s request to respond.  If        Seller does not respond by the end of such thirty (30) day period or if Seller concurs with        any or all of the Reviewer’s findings, it shall issue a refund or credit to Buyer within ten        (10) business days in the full amount of Buyer’s request, unless Seller disputes a portion        of the Reviewer’s findings, in which case it shall issue a refund or credit to Buyer in the        amount that is not disputed by Seller.                  (c)  If Seller disputes any or all of the Reviewer’s findings, the Parties shall promptly        discuss the Reviewer’s findings under dispute and attempt to reach a settlement.  If the        Parties reach a settlement on any or all of the disputed findings, Seller shall issue a refund        or  credit  to  Buyer  within  ten  (10)  business  days  in  the  agreed  amount.   If  the  Parties        cannot reach a settlement on the remaining disputed findings within sixty (60) days from        the date of Buyer’s request for a refund or credit, Buyer may pursue such dispute under        the dispute resolution provisions set forth in Section 21.9 of the Agreement.      9.    Buyer’s Access to the Report.  Buyer shall be permitted to retain copies of the Report.   Notwithstanding  anything  to  the  contrary  contained  in  this  Agreement,  Buyer  may  utilize and  disclose the Report in connection with any Dispute.      10.   Review Cost.  Buyer shall be solely responsible for all of its costs related to the Third  Party Review and the costs of the Reviewer.      US-DOCS\118388455.1

 

                               Schedule 1 to Exhibit G                                                                  Reviewer Confidentiality Agreement                                                                 CONFIDENTIALITY AGREEMENT          This Confidentiality Agreement (this “Agreement”) is between Trinity Rail Group, LLC,  2525 Stemmons Freeway, Dallas, TX 75207 (“TRail”), and PricewaterhouseCoopers LLP, 300  Madison Avenue, New York, NY 10017 (“Reviewer”).  Reviewer and TRail are sometimes  referred to herein individually as a “Party” and collectively as the “Parties”.          WHEREAS, Reviewer has been engaged by GATX Corporation (“GATX”) to perform  certain “Third Party Review” services (the “Services”) as provided for in that certain Supply  Agreement, by and between GATX and TRail, dated November 3, 2014 (the “Supply  Agreement”); and          WHEREAS, TRail is agreeable to Reviewer’s performance of the Services subject to the  terms and conditions of this Agreement;          NOW, THEREFORE, in consideration of the mutual covenants contained herein and  other good and valuable consideration the receipt and sufficiency of which are hereby  acknowledged, the Parties hereby agree as follows:        1. Evaluation Material.  “Evaluation Material” shall consist of any and all disclosures by        TRail to Reviewer with respect to Reviewer’s performance of the Services.                Notwithstanding the foregoing, Evaluation Material shall not include any information        that:                   a. is or becomes publicly available other than by a breach of this Agreement by              Reviewer;             b. is acquired by Reviewer from a third party that is not, to Reviewer’s knowledge,              under any confidentiality obligation to TRail regarding such information;             c. is developed independently by Reviewer or GATX without reference to the              Evaluation Material; or                   d. is disclosed by TRail to any person or entity free of confidentiality obligations to              TRail.                   e. is known to Reviewer prior to the date of this Agreement.                   f. is disclosed by Reviewer with the written approval of TRail.        US-DOCS\118388455.1

 

      2. Disclosure to GATX.   Reviewer agrees not to disclose Evaluation Material to GATX or        GATX’s other representatives without TRail’s prior written consent.  TRail agrees that:        Reviewer may (i) disclose to GATX the report containing the information described in        Section 7(a) of Exhibit G to the Supply Agreement (“Exhibit G”) (the “Report”), and (ii)        may conduct general discussions with GATX and GATX’s representatives regarding the        overall scope or progress in the performance of the Services; provided, that with respect        to (ii) above, such disclosures or general discussions do not include any Evaluation        Material.  Subject to TRail’s execution of a release letter in a form acceptable to        Reviewer, Reviewer will provide any draft or final Report to TRail to review prior to        Reviewer disclosing such draft or final Report to GATX.  If TRail determines that such        Report needs to be redacted to avoid disclosure of Evaluation Material in accordance        with Section 7 of Exhibit G, Reviewer will redact the Reports in accordance with TRail’s        instructions.  After any version of the Report has been redacted, TRail will provide its        consent for Reviewer to disclose the Report to GATX, which consent shall not be        unreasonably withheld or delayed and shall include an acknowledgement that Reviewer has        complied with the requirements of this Agreement.             3. Responsibility.  Except for Reviewer’s obligations of confidentiality and restricted use        expressly set forth herein, Reviewer has no obligation towards TRail in relation to the        Services and TRail has no obligation to Reviewer.       4. Confidentiality and Use.  Subject to Section 2 of this Agreement, Reviewer agrees to        keep confidential the Evaluation Material and shall disclose such information only to its        agents and those personnel at Reviewer and its agents who have a need to know such        information for performance of the Services, and shall use such Evaluation Material        solely for the purpose of performing its Services.  Reviewer will be responsible for any        breach of this Agreement by its personnel and Reviewer’s agents and any employee of        Reviewer’s agents.       5. Disclosure Required by Law.  Notwithstanding anything to the contrary in this        Agreement, Reviewer may disclose Evaluation Material that Reviewer is advised by legal        counsel that such disclosure is required or compelled by law, statute, rule, or regulation,        including any subpoena or other legal process, but only to the extent such law, statute,        rule, or regulation, subpoena, or other legal process requires disclosure.  To the extent        reasonably possible, Reviewer will provide TRail with prompt notice of any request that        Reviewer has been advised to disclose Evaluation Material (so long as such notice is not        prohibited by such law, statute, rule, or regulation, subpoena or other legal process), so        that TRail may have the opportunity to object to the request and/or seek an appropriate        protective order.  If TRail is unable to obtain or does not timely seek a protective order        and Reviewer is legally requested or required to disclose such Evaluation Material,        disclosure of such Evaluation Material may be made by Reviewer without liability.       6. Return of Information.  Reviewer shall, upon TRail’s written request, return to TRail or        destroy all Evaluation Material in its possession; provided, however, that Reviewer may        keep a set of Evaluation Material in its working papers, reports and copies of information        solely and specifically to comply with applicable law, statute, rule, regulation or     US-DOCS\118388455.1

 

         professional standards promulgated by the AICPA or other regulatory body with        jurisdiction.         7. Remedies.  Reviewer recognizes the confidential and proprietary nature of the Evaluation        Material and acknowledges that, in the event it is determined by a court that a breach of        the confidentiality provisions of this Agreement has occurred or is likely to occur, TRail        may suffer irreparable harm.  Accordingly, TRail shall be entitled to seek preliminary and        permanent injunctive relief in the event of a breach or threatened breach of this        Agreement, as well as all other applicable remedies at law or equity, including but not        limited to injunction or specific performance.       8. Term.  Other than as expressed in Section 6 above, Reviewer’s confidentiality obligations        under this Agreement will terminate five (5) years from the last date that the Services are        performed.       9. Governing Law.  This Agreement shall be governed and construed pursuant to the laws        of the State of Delaware, without giving effect to its conflict-of-laws principles.       10. Agreement.  This Agreement constitutes the only agreement between TRail and Reviewer        regarding the Evaluation Material and its disclosure and use with respect to the Services,        and supersedes any and all prior agreements, arrangements, and understandings between        the Parties as to such subject matter.         11. Modification.  This Agreement may not be modified, altered, or amended except in a        writing signed by the Parties.             12. Counterparts.  This Agreement may be executed in any number of counterparts        (including by means of facsimile or .PDF) each of which will be deemed an original but        all of such counterparts together shall constitute one and the same instrument.    IN WITNESS WHEREOF, authorized representatives of the Parties have signed this Agreement  as of the ___ day of _________________, 201__.      TRINITY RAIL GROUP, LLC                  PRICEWATERHOUSECOOPERS LLP      By:____________________________          By:_______________________________    Name:__________________________          Name:_____________________________    Title:___________________________        Title:______________________________          US-DOCS\118388455.1

 

                                     Exhibit H                                 Form of Bill of Sale         THIS  BILL  OF  SALE  is  made  and  effective  this  _____  day  of  ________________,  20___ by TRINITY RAIL GROUP, LLC (“Seller”) to GATX CORPORATION (“Buyer”).                                      WITNESSETH:                                                 FOR AND IN CONSIDERATION of the sum of Ten Dollars ($10) and other good and  valuable consideration, the sufficiency of which is hereby acknowledged, Seller bargains, grants,  sells, conveys, and transfer to Buyer all of Seller’s right, title and interest in and to those railcars  listed on Schedule A attached hereto (the “Cars”), to have and to hold the same, together with  appurtenances  and privileges thereunto belonging or appertaining, for the benefit of Buyer, its  successors and assigns, forever.          Seller hereby makes such representations and gives such warranties with respect to the  Cars as set forth in the Supply Agreement between Buyer and Seller dated November 3, 2014  (the  “Agreement”).   EXCEPT  AS  OTHERWISE  PROVIDED  IN  THE  AGREEMENT,  THE  WARRANTIES  IN  THE  AGREEMENT  ARE  EXCLUSIVE  AND  ARE  IN  LIEU  OF  ALL  OTHER  WARRANTIES,  EXPRESS,  IMPLIED,  OR  STATUTORY,  INCLUDING  ANY  WARRANTY OF TITLE, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR USE.          IN WITNESS WHEREOF, this Bill of Sale has been executed and delivered effective as  of the day and year first written above.                                                            TRINITY RAIL GROUP, LLC                                    By:__________________________________________                                   Name:________________________________________                                   Title:_________________________________________                                                                                              US-DOCS\118388455.1

 

                                     SCHEDULE A                                TO BILL OF SALE                                                                                           I.    Invoice No.                II.   Car Type:           III.  Quantity of Cars:                      IV.  Car Marks:          V.        Running Numbers:                                                 US-DOCS\118388455.1

 

                                      Exhibit I                                      Records          DOCUMENT TYPE                 FORMAT REQUIRED             Required for                                                                  New Built Railcar  Certificate of Construction    Adobe PDF                             Yes  Car Specification Sheet - to include Microsoft Word or Excel or Adobe  PDF  Yes  Builder file number (BO#)  Drawings- including but not limited to:  One drawing per file in (*.dwg or *.dxf All upper level                                 drawing files) Adobe PDF files.  Electronic arrangement and                                 drawing files names to include drawing assembly drawings                                 number, sheet and revision.      used to build the                                                                    Railcar, in     1. Arrangement                                               electronic format.      2. Assembly                                                 Seller will provide     3. Part                                                        Buyer with     4. Calculation                                               reasonable access                                                                  to, but not copies                                                                 of, parts drawings.  Drawing List                   HTML, Adobe PDF, Microsoft Excel or   yes                                 Plain Text (*.txt) file with entries that                                 include the drawing number, sheet, revision                                 and drawing title.  Bill of Materials - to include Builder file HTML, Microsoft Word or Excel or Adobe yes  number                         PDF file of the entire BOM.  Specialty List of additional vendor HTML, Adobe PDF, Microsoft Excel or yes  components used to build the car. To Plain Text (*.txt) file of the entire Specialty  include lot and model number for:  list to include vendor name, component                                 name, component model number,     1. Trucks                   component lot number.     2. Couplers                 Any drawings to follow drawing     3. Brakes                   requirements above.     4. Running Gear   Photograph - To include one full side and Digital high resolution color photograph or yes  A & B end views.               8x10 color print.  TCID                           Adobe PDF                             yes  Qualification Acceptance Criteria  Adobe PDF                         yes      RECORDS REQUIREMENTS:             1. All data listed herein for new built Railcars is to be in electronic format unless              otherwise agreed to by Buyer.           2. All electronic Railcar data outlined in this Exhibit will be compiled onto a data              CD with all data placed into a folder that carries the name of Document Type              listed above, i.e., Drawings, Photos, etc.  A sample CD detailing all folders and     US-DOCS\118388455.1

 

               document formats is available upon request from GATX Rail Engineering.  This              is a sample of the typical CD contents and folder names.           3. The CD will be presented to Buyer as the close-out package for new built              Railcars.           4. The foregoing Records requirements and electronic Railcar data is subject to              change from time to time in accordance with Buyer’s Fleet Maintenance              Instruction (ETSD-15.0) and Seller’s acceptance of those changes.         US-DOCS\118388455.1

 

                                      Exhibit J                              Confidentiality Agreement   __________________,                  §                                                           §                                       §                    Claimant,          §        AMERICAN ARBITRATION                                       §         ASSOCIATION CASE NO.        v.                             §                                                           §             _______________  __________________,                  §                                                           §                                                           §                    Respondent.        §           CONFIDENTIALITY AGREEMENT AND AGREED PROTECTIVE ORDER       The parties to this arbitration (the “Parties”), Claimant ______________ (“Claimant” or  “Party”)  and  Respondent  _____________________  (“Respondent”  or  “Party”)  enter  into  this  Confidentiality Agreement and Agreed Protective Order (“Agreement”) as follows:        1.    The  term  “Discovery  Material”  shall  mean  all  information,  tangible  items,  electronic material and documents produced by any Party or non-party in response to discovery  in the arbitration proceeding, _______________________, AAA Case No. ________________  (the  “Arbitration”).   For  purposes  of  this  Agreement,  “Discovery  Material”  shall  also  include  any  affidavit,  motion,  memorandum,  pleading,  image,  or  other  material  presented  to  the  arbitration  panel  that  discloses  Discovery  Material  designated  “Confidential”  and  retaining  its  confidential  designation.   This  Agreement  shall  govern  the  handling  of  all  such  Discovery  Material.        2.    The term “Confidential Discovery Material” shall refer to all Discovery Material  which  has  been  designated  by  the  producing  Party  (the  “Producing  Party”)  as  “Confidential”  because  such  Discovery  Material  contains  Confidential  Information.   “Confidential  Discovery  Material”  shall  also  include  Discovery  Material  designated  by  the  Producing  Party  as  “Confidential – Attorney Eyes Only.”  In designating information as “Confidential – Attorney  Eyes Only,” the Producing Party will make such a designation only as to that information that it                                            US-DOCS\118388455.1

 

   believes  contains  highly  sensitive  business  or  technical  information  of  the  producing  or  designation Party.  The “Confidential – Attorney Eyes Only” category is more fully explained in  paragraph 15 below, but is identified here as being part of “Confidential Discovery Material.”   For purposes of this Agreement, “Party” shall include each Party’s respective affiliates defined  as any person or entity (or sub-unit of any entity) that, directly or indirectly through one or more  intermediaries,  controls,  is  controlled  by,  or  is  under  common  control  with  a  Party.   “Confidential Information” is information in the possession of, prepared by, compiled by, or that  is used by a Party and (1) is proprietary to or about, or created by a Party; (2) gives a Party some  competitive  business  advantage,  the  opportunity  of  obtaining  such  advantage,  disclosure  of  which  would  be  detrimental  to  the  interest  of  the  Party  or  contains  business  planning  information;  or  (3)  is  not  typically  disclosed  by  a  Party,  or  known  by  persons  who  are  not  employed by a Party or are not independent contractors of a Party.  Confidential Information is  also information regarding former and current employees, officers, and independent contractors  of  a  Party,  including  information  regarding  their  employment  and/or  termination  therefrom,  performance  and  compensation.   Confidential  Information  shall  also  include  information  pertaining  to  past,  current,  and  potential  transactions  engaged  in  or  considered  by  a  Party.   Confidential  Information  shall  also  include  any  information  pertaining  to  current,  former,  and  prospective  customers  of  a  Party.   Confidential  Information  shall  also  include  any  financial  statements  as  to  a  Party  to  the  extent  that  such  information  has  not  already  been  publicly  disclosed.   Confidential  Information  shall  also  include  any  other  information  that  is  “Confidential  Information”  under  Section  21.4  of  the  Supply  Agreement  dated  November  3,  2014 between Claimant and Respondent (the “Supply Agreement”).          3.   No Discovery Material designated as “Confidential” or “Confidential – Attorney   Eyes Only” hereunder or any copy, image,  excerpt, or summary thereof shall be delivered or   disclosed  to  any  person  except  as  hereafter provided.   The  contents  of  any  such  Confidential   Discovery Material shall not be revealed except to persons authorized hereunder and except as   so provided.  This Agreement does not apply to information furnished by Parties or non-parties                                            US-DOCS\118388455.1

 

   that  (i) the Receiving Party (as defined below) can demonstrate was in its possession prior to   being  disclosed  by  the  Producing  Party  hereunder  and  the  source  of  the  information  was  not   under an obligation of confidentiality to the Producing Party; (ii) is now, or hereafter becomes,   through no act or failure to act on the part of the Receiving Party, generally known to the public;   (iii) is rightfully obtained from a Third Party not bound under an obligation of confidentiality to   the  Producing  Party;  or  (iv)  is  independently  developed  by  the  Receiving  Party  without   reference to or use of any Confidential Information.         4.    All Confidential Discovery Material produced in the Arbitration shall be used   only  for  the  prosecution  and/or  defense  of  the  Arbitration,  and  any  person  in  possession  of   Confidential Discovery Material shall maintain those materials in a reasonably secure manner   so  as  to  avoid  disclosure  of their  contents  and  in  a  manner  no  less  secure  than  that  used  to   protect its own information of similar sensitivity or importance.        5.   Unless otherwise provided herein, the “Confidential” designation set forth in this  Agreement must be made at or prior to the time of production of documents by, to the extent  possible,  stamping  the word  “Confidential”  on  the  first  page of  the  Discovery  Materials  to  be  deemed Confidential. Information provided in electronic format, to the extent possible, should be  designated as “Confidential” by correspondence between counsel.  Discovery Material produced  prior to entry of this Agreement may be designated as “Confidential” by referencing the Bates- label  of  such  information  in  correspondence  between  counsel  or,  if  the  material  contains  no  Bates-label,  by  describing  the  information  in  correspondence  between  counsel.   Discovery  Material in the form of testimony in deposition or otherwise may be designated as “Confidential”  by counsel so stating on the record at the time of such testimony or in correspondence between  counsel delivered within thirty (30) days after a transcript containing such testimony is delivered  to the Parties.  All testimony shall be treated as Confidential until the expiration of thirty (30)  days after a transcript containing such testimony is delivered to the Parties and thereafter only  such testimony designated as Confidential in accordance with the foregoing shall be treated as  Confidential.                                            US-DOCS\118388455.1

 

         6.   The inadvertent or unintentional production of discovery containing Confidential  Information  that  is  not  designated  as  Confidential  Discovery  Material  at  the  time  of  the  production or disclosure shall not be deemed a waiver in whole or in part of a Party’s claim of  confidentiality, either as to the specific discovery produced or as to any other discovery relating  thereto or on the same related subject matter.  Documents containing Confidential Information  inadvertently  or  unintentionally  produced  without  being  designated  as  Confidential  Discovery  Material  may  be  retroactively  designated  by  notice in  writing  of  the  designated  class  of  each  document by Bates number or other adequate description and shall be treated appropriately from  the date written notice of the designation is provided to the Receiving Party.  To the extent that,  prior  to  such  notice,  a  Party  receiving  the  document  or  information  may  have  disclosed  it  to  others outside the parameters of this Agreement, the Party shall not be deemed to have violated  this Agreement, but the Party shall cooperate with the designating Party’s effort to retrieve any  document or information promptly from such person and to limit any further disclosure pursuant  to this Agreement.       7.    A  Party  who  has  received  Discovery  Material  (the  “Receiving  Party”)  that  is  designated as “Confidential” and who objects to the designation of any Discovery Material as  Confidential Discovery  Material, shall notify counsel for the Producing Party in writing of its  objection.  The Producing Party and the objecting Receiving Party shall attempt to resolve all  objections  by  agreement.   If  any  objections  cannot  be  resolved  by  agreement,  the  Receiving  Party shall have fourteen (14) business days from the time in which the Receiving Party delivers  its  written  objection  to  apply  to  the  arbitration  panel  for  a  determination  as  to  whether  the  Confidential designation is appropriate.  Until an objection has been resolved by agreement of  counsel  or  by  order  of  the  arbitration  panel,  the  Discovery  Material  shall  be  treated  as  Confidential Discovery Material subject to this Agreement.  In the event that a Receiving Party  fails  to  apply  to  the  arbitration  panel  for  a  determination  as  to  whether  the  Confidential  designation is appropriate within fourteen (14) business days of delivery of the written objection,  the Discovery Material to which the Receiving  Party objected shall be treated as Confidential                                            US-DOCS\118388455.1

 

   Discovery Material.  The burden of proof in any proceeding regarding whether the designation  of  any  document  as  “Confidential”  is  appropriate  is  at  all  times  on  the  Party  designating  the  document as “Confidential.”        8.   No  Receiving  Party  shall  disclose,  summarize,  describe,  characterize,  or   otherwise  communicate  Confidential  Discovery  Material  except  as  permitted  by  this   Agreement.  Confidential Discovery Material shall not be disclosed, summarized, described,   characterized, or otherwise communicated in any way to anyone except:                      a.   The arbitration panel, all arbitration personnel (including all court reporters                   employed in connection with this action) and all mediators;                            b.  Counsel of record in this action, and attorneys, paralegals, and other persons                  employed or retained by such counsel who are assisting in the conduct of                  this action;                           c.   Employees of the Parties or their Affiliates;                          d.   Actual and potential witnesses and deponents (and their counsel);                          e.   Experts, consultants and/or litigation support personnel (and employees of                  such experts or consultants) who are not employees of any Party and who                  are retained or consulted for the purpose of being retained by any Party in                  connection with this action;                          f.   Any  other  person  upon  order  of  the  arbitration  panel  or  upon  all  Parties’                  written agreement; and                          g.   Any  person who was either  an original author or  recipient  of a document                  containing or constituting the Confidential Discovery Material.               All  persons  to  whom  Confidential  Discovery  Material  is  disclosed  pursuant  to  Paragraphs  8  (c)-(g)  above  shall,  prior  to  disclosure:  (i)  be  advised  that  the  Discovery  Material  is  being  disclosed  pursuant  to  and  subject  to  the  terms  of  this  Agreement  and  may  not  be  disclosed  other than pursuant to the terms hereof; and (ii) expressly agree to be bound by the terms of the  Agreement.   Execution  of  an  Acknowledgement  in  the  form  attached  hereto  as  Exhibit  J-1  shall evidence such notification and agreement.                                             US-DOCS\118388455.1

 

         9.   All  pleadings,  including  appendices  that  attach  Confidential  Discovery  Material   as  evidence  and  are  presented  to  the  arbitration  panel  shall  be  delivered  in  sealed  envelopes   marked with the style and number of this action.          10.   Nothing in this Agreement will be construed as limiting the Parties’ right to object   to any discovery or to object to the authenticity or admissibility of any evidence.        11.  This  Agreement  will  continue  to  be  binding  throughout  and  after  the  final  disposition of this action.  Within ninety (90) days after receiving notice of the entry of an award,  order,  judgment  or  decree  finally  disposing  of  this  action,  all  persons  having  received  Confidential Discovery Material will either return all Confidential Discovery Material and any  copies  thereof  (including  summaries  and  excerpts)  to  the  opposing  Party  or  its  attorney  or  destroy all such Confidential Discovery Material and certify in writing to the opposing Party and  its  attorney  to  that  fact.   With  regard  to  electronic  copies  of  Confidential  Discovery  Material,  there is no obligation to return or destroy copies that are not reasonably accessible because of  undue burden or cost.         12.  This Agreement shall not be construed to affect in any way the use, presentation,  introduction,  or  admissibility  of  any  document,  testimony,  or  other  evidence  at  a  deposition,  trial, or hearing in this arbitration; provided that any Party may ask the arbitration panel to hold  any  proceeding  in  this  action  in  camera  on  the  grounds  that  such  proceeding  will  involve  or  relate to Confidential Discovery Material.        13.  Nothing in this Agreement shall operate to require the production of documents,  testimony, and other materials and information that are privileged or otherwise protected from  discovery.        14.  If any Party to this Agreement (a) is subpoenaed in another action, or (b) is served  with a demand in another action to which he or it is a Party, or (c) is served with any other legal  process  by  one  not  a  party  to  this  litigation  seeking  Confidential  Discovery  Material,  the  Receiving Party shall give written notice to the Producing Party of such subpoena, demand, or  legal  process  within  five  (5)  business  days  of  receipt,  and  shall  not  produce  any  Discovery                                            US-DOCS\118388455.1

 

   Material, unless Court-ordered, for a period of at least ten (10) business days after providing the  required notice to Producing Party.  If, within ten business (10) days of receiving such notice, the  Producing Party gives notice to the Receiving Party that the Producing Party opposes production  of  its  Confidential  Discovery  Material,  the  Receiving  Party  shall  not  thereafter  produce  such  Confidential Discovery Material except pursuant to a Court order requiring compliance with the  subpoena, demand, or other legal process.  The Producing Party shall be solely responsible for  asserting  any  objection  to  the  requested  production.   Nothing  herein  shall  be  construed  as  requiring  the  Receiving  Party  to  challenge  or  appeal  any  order  requiring  production  of  Confidential Discovery Material covered by this Agreement, or to subject himself or itself to any  penalties  for  compliance  with  any  legal  process  or  order,  or  to  seek  any  relief  from  the  arbitration panel.  Nothing herein shall prohibit the Receiving Party from producing Confidential  Discovery Material to any law enforcement or governmental agency which is within the scope of  such agency’s request and after providing at least five (5) business days’ notice to the Producing  Party  and  after  providing  the  Producing  Party  a  reasonable  opportunity  to  object  to  such  production, provided that the production of any Confidential Discovery Material shall be at the  Producing Party’s cost and expense.        15.  The  Receiving  Party  may  not  disclose,  summarize,  describe,  characterize,  or  otherwise communicate documents or information designated as “Confidential – Attorney Eyes  Only” to any persons other than those identified in paragraphs 8(a), 8(b) and 8(e), who are the  only persons allowed to review such material.  This category of documents is reserved for a very  select group of documents and information and may only be used for that group of documents  that  have  not  been  disclosed  to  the  public  and  that,  if  disclosed  to  the  public,  may  cause  irreparable harm or damage to a Party.  The procedures for designating documents (paragraph 5),  objecting  to  any  designation  (paragraph  7),  designating  deposition  testimony  as  confidential  (paragraphs 1 and 5) and filing “Confidential Materials” under seal (paragraph 9), shall apply to  documents  designated  “Confidential  –  Attorneys  Eyes  Only.”   Likewise,  the  duties  and  responsibilities  the  Parties  have  to  agree  to  permit  retroactive  designation  (paragraph  6),  to                                            US-DOCS\118388455.1

 

   notify the other Party of a subpoena or order (paragraph 14) and to return or destroy documents  (paragraph 11) shall apply to documents designated as “Confidential – Attorney Eyes Only.”        16.  The rights and obligations of the Parties to this Agreement are in addition to and  not  in  lieu  of  the  rights  and  obligations  of  the  Parties  pursuant  to  the  Supply  Agreement,  including, without limitation, Section 21.4 thereof, which shall remain in full force and effect in  accordance with the terms thereof.          The  provisions  of  this  Agreement  may  be  modified  only  upon  written  agreement  of  the  Parties.      AGREED:   Claimant ___________________________   ___________________________________   By: ________________________________      Respondent ___________________________   ___________________________________   By: ________________________________                                                      US-DOCS\118388455.1

 

                                    EXHIBIT J-1                                                                        ACKNOWLEDGEMENT    1.    My name is _______________________________________________________.   I live        at______________________________________________________________________.    2.   I  am  aware  that  the  Confidentiality  Agreement  and  Agreed  Protective  Order  (the        “Agreement  and  Order”)  have  been  entered  in  the  Arbitration  styled:        ________________________, AAA Case No. __________________ and a copy of the        Agreement and Order have been given to me.    3.   I agree and promise that any documents, information, materials, or testimony, which are        protected  under  the  Agreement  and  Order  entered  in  this  case  and  designated  as        “Confidential Discovery Materials” will be used by me only in connection with the        above-captioned matter.    4.    I agree and promise that I will not disclose or discuss such protected materials with        any  person  other  than  those  individuals  permitted  by  the  Agreement  and  Order  to        review such materials.    5.   I  understand  and  agree  that  any  use  of  such  confidential  documents,  information,        materials,  or  testimony  obtained  by  me  (or  any  portions  or  summaries  thereof)  in  any        manner contrary to the provisions of the Agreement and Order may cause damage to one        or more of the Parties to the Arbitration and that I may be held responsible in a court of        law for causing such damage.                                       __________________________________                                     Signature                                       Printed Name:______________________      SWORN TO AND SUBSCRIBED BEFORE ME this _________ day of ____________, 20____.                                         __________________________________                                     NOTARY PUBLIC, STATE OF ________.                                       __________________________________                       NOTARY’S PRINTED NAME                         MY COMMISSION EXPIRES:___________________                                             US-DOCS\118388455.1

 

                          Exhibit K – Default Order Instructions      (I)  Default Scheduled Car Order Instructions          In the event that Buyer fails to place one or more Orders for all or any portion of the  Scheduled Cars necessary to meet a Monthly Order Quantity by the applicable deadline, Seller  shall Order on Buyer’s behalf the number of Railcars necessary to fulfill such Monthly Order  Quantity by the applicable deadline.  All of such Railcars shall be the following Railcar Type:                Railcar Type – [***]              Seller Specification No. – [***]              Gross Rail Load – [***]              Typical Commodity – [***]              Car Class – [***]    (II)  Default Unscheduled Car Order Instructions          In the event that Buyer fails to place one or more Orders for all or any portion of the  Unscheduled Cars required to be Ordered during an Order Year by the first day of the last month  of such Order Year, Seller shall Order on Buyer’s behalf the number of Railcars necessary to  fulfill the Unscheduled Car requirement for such Order Year.  All of such Railcars shall be the  following Railcar Type:                Railcar Type – [***]               Seller Specification No. – [***]              Gross Rail Load – [***]              Typical Commodity – [***]              Car Class – [***]      US-DOCS\118388455.1 

 

                                      Exhibit L                                                                  Form of Seller’s Order Confirmation    [Date]      [Customer]  [Address]    Description of Railcar Types:    Railcar Type – Quantity:    Estimated Base Sales Price (per Railcar):      $    Estimated Scrap Surcharges (Included in Price):    $     Alternates:        1.         2.              Total – Alternates:                 $    Seller’s Order Confirmation Price:             $    The Seller’s Order Confirmation Price is subject to adjustment in accordance with the terms and  conditions of the Supply Agreement dated November 3, 2014.    Delivery:  Commencing ______________         US-DOCS\118388455.1 

 

                                                    Exhibit M                                                Form of Invoice                                           TRINITY RAIL GROUP, LLC                                 2525 Stemmons Freeway - Box 568887 - Dallas, Texas  75356-8887                                                214-631-4420 - Fax 214-589-8939                                                     FREIGHT CAR/TANK CAR     Sold To:                                                               Invoice Date:                                                                           Invoice No:                                                                           Cust No:                                                                           Cust PO No:                                                                           Our Order No:                                                                                                                                                                                        Bill of Lading:    Ship To:                                                               Date Shipped:                                                                           Shipped Via:                                                                                                                                                                                                                                                                                                     Plant #___________                            Salesman:                   Terms:         Shipped                Description                                    Unit Price         Amount           2            3311 PD CAR, 5660 CF                            RUNNING #'S:                           GACX                           9413                           9414             2                                                                                            $0.00     Remarks:                                           Remit To:       Trinity Industries, Inc.                                                                       P. O. Box 951716                                                                       Dallas, Texas  75395-1716                                                        Wire Transfer To: Wachovia Bank                                                                       Atlanta, Georgia                                                                       ABA Routing #061-000-227                                                                       Trinity Industries, Inc.                                                                       Account #2000143245898           ** The total amount set out above is payable at the office of Trinity Industries, Inc. at Dallas, Dallas County, Texas.   Past due accounts will bear interest.  Invoice - DHL                                           ORIGINAL - CUSTOMER                                                      US-DOCS\118388455.1Subscription
Rights Statement

 

IMPORTANT:
Retain a copy of this statement for your investment, tax and cost-basis records.

 

	 	Subscription
    Rights	[Date]
	Account
    Summary	 	Account
    # 9999999999

 

 

1110
Centre Pointe Curve, Suite 101

Mendota
Heights, MN 55120-4100

 

	DATE	 	Transaction
    Type	 	Number
    of Rights
	[  ]/[  ]/20	 	Issuance	 	[         ]

 

THE
TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE COMPANY’S PROSPECTUS DATED                     , 2020 (THE
“PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE THROUGH THE
SEC’S INTERNET SITE AT HTTP://WWW.SEC.GOV AND AS SET FORTH IN THE “INSTRUCTIONS AS TO USE OF XTANT MEDICAL
HOLDINGS, INC. SUBSCRIPTION RIGHTS STATEMENT” ACCOMPANYING THIS RIGHTS STATEMENT.

 

THE
SUBSCRIPTION RIGHTS WILL EXPIRE IF NOT EXERCISED ON OR BEFORE 5:00 P.M., EASTERN TIME, ON DECEMBER 4, 2020,

SUBJECT
TO EXTENSION OR EARLIER TERMINATION

 

THIS
CERTIFIES THAT the registered owner whose name is inscribed hereon is the owner of the number of subscription rights (“Subscription
Rights”) set forth above. Each Subscription Right entitles the holder thereof to subscribe for and purchase (the “Basic
Subscription Right”) 0.194539 shares of common stock, par value $0.000001 (“Common Stock”), of Xtant Medical
Holdings, Inc., a Delaware corporation, at a subscription price of $1.07 per share (the “Subscription Price”), pursuant
to a rights offering (the “Rights Offering”), on the terms and subject to the conditions set forth in the Prospectus
and the “Instructions as to Use of Subscription Rights Statements” accompanying this Rights Statement. Holders who
fully exercise their Basic Subscription Rights are entitled to subscribe for additional shares of Common Stock that remain unsubscribed
for as a result of any unexercised Basic Subscription Rights pursuant to the terms and conditions of the Rights Offering, subject
to proration, as described in the Prospectus (the “Over-subscription Privilege”). The Subscription Rights represented
by this Rights Statement may be exercised by completing the appropriate forms on the reverse side hereof and by returning the
full payment of the subscription price for each share of Common Stock. If the subscriber attempts to exercise its Over-subscription
Privilege and the Company is unable to issue the subscriber the full amount of shares of Common Stock requested, the Subscription
Agent will return to the subscriber any excess funds submitted as soon as practicable, without interest or deduction. The Subscription
Rights may be exercised by duly completing Section 1 on the reverse side hereof and by returning the full payment of the exercise
price. THE RIGHTS EVIDENCED BY THIS RIGHTS STATEMENT MAY NOT BE EXERCISED UNLESS THE REVERSE SIDE HEREOF IS PROPERLY COMPLETED
AND DULY SIGNED, WITH A SIGNATURE MEDALLION GUARANTEE, IF APPLICABLE.

 

By
completing and delivering this rights statement, the registered owner represents and warrants that they have the right, power
and authority, and have taken all action necessary, to exercise these rights pursuant to the rights offering and to execute, deliver
and exercise the rights, and that they are not a person otherwise prevented by legal or regulatory restrictions from exercising
or acting on behalf of any such person on a non-discretionary basis.

 

	[  ]	Please
    change my address as indicated.
	 	All
    registered holders MUST sign in Section 2 on reverse of statement.

 

    	 

    	 

    

 

SECTION
1. EXERCISE OF RIGHTS TO PURCHASE

 

The
registered holder of this Subscription Rights Certificate is entitled to exercise the number of Subscription Rights shown in the
upper right hand corner of the Rights Statement and may subscribe for additional shares of Common Stock upon the terms and conditions
specified in the Prospectus. The undersigned hereby notifies the Subscription Agent of its irrevocable election to subscribe for
shares of Common Stock in the following amounts. To subscribe for shares of Common Stock pursuant to your Basic Subscription Right,
please complete lines (a) and (c) below. To subscribe for additional shares of Common Stock pursuant to your Over-subscription
Privilege, please also complete line (b).

 

(a)
EXERCISE OF BASIC SUBSCRIPTION RIGHT:

 

											
	Basic Subscription
    Right:	 	 	 	X	 	$1.07	 	=	 	$
	 	 	 	 	 	 	 	 	 	 	 
	 	 	Shares of Common Stock	 	 	 	Subscription price	 	 	 	Payment enclosed

 

(b)
EXERCISE OF OVER-SUBSCRIPTION PRIVILEGE: If you have exercised your Basic Subscription Right in full, you may subscribe for
additional shares of Common Stock pursuant to your Over-subscription Privilege

 

											
	Over-Subscription Privilege:	 	 	 	X	 	$1.07	 	=	 	$
	 	 	 	 	 	 	 	 	 	 	 
	 	 	Shares of Common Stock	 	 	 	Subscription price	 	 	 	Payment enclosed

 

Method
of Payment:

 

A
cashier’s check, drawn against a U.S. bank payable to “EQ Shareowner Services, as Subscription Agent for Xtant Medical
Holdings, Inc.”

 

Wire
transfer of immediately available funds directly to the account maintained by EQ Shareowner Services, as Subscription Agent, for
purposes of accepting subscriptions in this Rights Offering at Wells Fargo Bank, N.A., ABA # 121000248, Credit: Stock Transfer
Clearing Account, Account # 000-10-67-899, for further credit to Xtant Medical Holdings, Inc., and name of Subscription Rights
holder.

 

FULL
PAYMENT MUST ACCOMPANY THIS FORM AND MUST BE MADE IN UNITED STATES DOLLARS BY A CASHIER’S CHECK DRAWN AGAINST A U.S. BANK
PAYABLE TO THE RIGHTS AGENT OR A WIRE TRANSFER MUST BE RECEIVED IN ACCORDANCE WITH THE ENCLOSED INSTRUCTIONS. PERSONAL CHECKS
WILL NOT BE ACCEPTED.

 

SECTION
2. SIGNATURE(S)

 

IMPORTANT:
THE SIGNATURE(S) MUST CORRESPOND IN EVERY PARTICULAR, WITHOUT ALTERATION, WITH THE NAME(S) AS PRINTED ON THE FRONT OF THIS RIGHTS
STATEMENT. IF YOU ARE SIGNING ON BEHALF OF A REGISTERED SHAREHOLDER OR ENTITY, YOU MUST SIGN IN YOUR LEGAL CAPACITY WITH YOUR
SIGNATURE MEDALLION GUARANTEED. YOUR GUARANTOR (BANK/BROKER) WILL REQUIRE PROOF OF YOUR AUTHORITY TO ACT. CONSULT YOUR GUARANTOR
FOR THEIR SPECIFIC REQUIREMENTS. YOU OR YOUR GUARANTOR MAY ACCESS THE SECURITIES TRANSFER ASSOCIATION (STA) RECOMMENDED REQUIREMENTS
ON-LINE AT www.stai.org.

 

	 	 	 	APPLY
    MEDALLION GUARANTEE STAMP HERE
	 	 	 
	Signature(s) of Subscriber(s)	 	 
	 	 	 
	 	 	 
	 	 	 
	Name(s):
    	 	 	 
	 	 	 	 
	Capacity
    (Full Title): 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

OVERNIGHT
DELIVERY TO THE STREET ADDRESS BELOW BEST ENSURES RECEIPT BY THE EXPIRATION DATE.

 

EQ
Shareowner Services

1110
Centre Pointe Curve, Suite 101

Mendota
Heights, MN 55120

Attn:
Corporate Actions Dept.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00316-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00316-of-00352.parquet"}]]