Document:

ariiex101acfpurchaseands

       CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document         have been omitted pursuant to a request for confidential treatment and, where applicable,         have been marked with an asterisk (“[*****]”) to denote where omissions have been         made. The confidential material has been filed separately with the Securities and         Exchange Commission.                             RAILCAR PURCHASE AND SALE AGREEMENT          This Railcar Purchase and Sale Agreement (the “Agreement”) is entered into as of June 28, 2018, by and  between ACF Industries, LLC, a limited liability company organized under the laws of Delaware (the “Seller”) and  ARI Leasing, LLC, a limited liability company organized under the laws of Delaware (the “Buyer”). Seller and  Buyer are collectively referred to herein as “Parties”, in singular or plural usage, as required by context.          WHEREAS, Seller has agreed to construct and assemble for and sell and deliver to Buyer certain railcars  and railroad equipment subject to the terms and conditions provided herein; and          WHEREAS, Buyer has agreed to purchase and accept delivery of such railcars and railroad equipment  subject to the terms and conditions provided herein.          NOW, THEREFORE, in consideration of the premises and mutual promises, terms and conditions  hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which is hereby  acknowledged, the Parties, intending to be legally bound, do hereby agree as follows:    1.    PURCHASE AND SALE OF THE RAILCARS          1.1    Quantities and Types of Railcars. Seller shall construct and assemble for and sell to Buyer, and                 Buyer shall purchase from Seller, the number and types of tank railcars enumerated on Exhibit A                 attached hereto (the “Railcars”).          1.2    Term. The term of this Agreement (the “Term”) shall commence on the date hereof and end on                 the date of the Delivery of the final Railcar manufactured hereunder, except as extended or sooner                 terminated pursuant to the terms hereof.    2.    INVOICE PRICE; TAXES; SELLER’S COST          2.1    Invoice Price. The price to be paid by Buyer for each Railcar shall be calculated by dividing the                 total amount of Seller’s Cost (subject to Section 2.3) for such Railcar as set forth in Seller’s initial                 quote with respect to such Railcar by the difference between one (1) and the applicable margin for                 such Railcar set forth on Exhibit A, plus (i) any applicable Taxes (subject to Section 2.2), plus (ii)                 any applicable Regulatory Increases, [*****] (iii) [*****] (subject to Section 4.1) (the                “Invoice Price”)          2.2    Taxes.  Seller shall not impose on Buyer any responsibility for payment or reimbursement of any                 tax or taxes now or hereafter imposed by federal, state, municipal or other government authority,                 including political subdivisions of the foregoing (collectively, “Taxes”), upon the transaction(s)                 herein, unless Seller in its initial quote with respect to the Railcars expressly specifies the nature                 and amount of such Taxes to be added thereto and such additional amount is further agreed to by                 Buyer.  Seller shall be responsible for remitting to the applicable taxing authority any Taxes                 assessed on the Railcars.          2.3    Seller’s Cost.  “Seller’s Cost” is defined as, on a per Railcar basis, Seller’s standard cost for                 materials, parts, labor and overhead and shall be calculated as set forth in Exhibit D hereto                 (“Seller’s Cost”).  For [*****] Railcars to be Delivered hereunder, “Seller’s Cost” shall also                include Seller’s start-up expenses, which shall be calculated as set forth in Exhibit E hereto                 (“Start-Up Expenses”). For clarification, none of the following shall be included in the                calculation of Seller’s Cost: pensions, retiree medical costs, costs related to environmental                proceedings, costs related to labor proceedings, and costs related to any labor strike, stoppage or                slowdown, or depreciation.                                                     1  

 

      CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document        have been omitted pursuant to a request for confidential treatment and, where applicable,        have been marked with an asterisk (“[*****]”) to denote where omissions have been        made. The confidential material has been filed separately with the Securities and        Exchange Commission.                          2.4    Access and Audit Rights.  Buyer shall have the right to audit the calculation of Seller’s Cost, Start-               Up Expenses, and Invoice Price, and in connection with such audits, Seller shall provide access to                representatives of Buyer, at all reasonable times by appointment during regular business hours, to                Seller’s Plant and, regardless of where located, to all written records and documents with respect                to the calculation of Seller’s Cost, Start-Up Expenses, and Invoice Price.   3.    CONSTRUCTION AND ASSEMBLY OF RAILCARS         3.1    Specifications; Modifications. The manufacture, quality and component parts of each Railcar shall                conform, on the date of completion of construction and assembly thereof, to the specifications                attached hereto as Exhibit B (hereinafter, the “Specifications”), and to all applicable industry                standards for new equipment, including but not limited to all applicable statutes, rules, regulations,               directives and requirements of the United States Department of Transportation and the Federal               Railroad Administration, and to the applicable specifications and all final standards of the               Association of American Railroads (“AAR”) (collectively, “Regulations”), in each case as may               be in effect on the date of construction of the Railcar.  Any changes in the Specifications desired               by Buyer must be requested in writing, and Seller shall use commercially reasonable efforts to               comply with such requests. The Parties agree that any such changes to the Specifications shall be               implemented by Seller only upon the written agreement of Seller and Buyer, which written               agreement may include email correspondence, and which specifies the precise changes and the               amount of any reasonable adjustment in Seller’s Cost.  Notwithstanding anything to the contrary,               if any changes to the Specifications are dictated by changes to Regulations or other similar               industry-imposed requirements enacted after such date that Seller provides Buyer with Seller’s               initial quote with respect to the Railcars, then Buyer hereby agrees (i) that Seller may make any               such changes, and (ii) to pay, or cause to be paid, such additional costs and expenses of Seller               incurred by Seller in making and implementing any such changes (such payment obligation, the               “Regulatory Increase”).         3.2    Designs, Engineering, and Purchasing Support.  The terms and conditions of the Purchasing and                Engineering Services Agreement and License dated January 7, 2013 between ACF Industries LLC                and American Railcar Industries, Inc., as amended, shall be inapplicable to the Railcars produced                pursuant to this agreement.  Buyer shall provide Seller with designs, engineering, and purchasing                support necessary to manufacture the Railcars (collectively, the “Design and Engineering                Services”, including, but not limited to, (1) sourcing all of the materials and components (other                than shop-level materials such as welding wire) (the “Materials”) and (2) calculating material               escalation costs and surcharges to be passed along to Buyer.  Notwithstanding the foregoing, in the               event that any Materials are scarce, limited, or in short supply, Buyer shall under no circumstances               be required to give Seller any priority of Buyer’s good faith requirements with respect to such               Materials in connection with the manufacture of railcars by Buyer; provided, however, that Buyer               shall give Seller priority to such Materials over any third party.         3.3    Purchasing Support for Materials Supplied by Third Parties.  Certain materials to be used by Seller                in the production of Railcars shall be ordered from third parties by Buyer on behalf of Seller.  The                purchase orders for such materials shall reflect that (i) Seller is the purchaser and shall be                responsible for the payment of the third-party supplier’s invoice (including freight and related                charges), (ii) such materials shall be shipped to, and maintained in inventory at the Seller’s Plant,                and (iii) title and risk of loss shall pass to Seller at the time of delivery FOB third party’s facility.                 Seller shall insure such Materials against all risk of loss or damage due to fire, with extended                coverage over such other risks as are customarily insured against.  Any and all discounts, rebates,                and price reductions applicable to such materials that results from Buyer’s arrangements with the                suppliers shall accrue solely to Buyer.  Buyer shall not be liable for the shortage or unavailability                of such materials or for any accumulated excess amounts of such materials in Seller’s inventory.                 Moreover, Buyer shall under no circumstances be required to favor Seller’s requirements for                                                 2  

 

      CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document        have been omitted pursuant to a request for confidential treatment and, where applicable,        have been marked with an asterisk (“[*****]”) to denote where omissions have been        made. The confidential material has been filed separately with the Securities and        Exchange Commission.                                  Materials over Buyer’s good faith requirements for Materials in connection with the manufacture                of railcars by Buyer; provided, however, that Buyer shall favor Seller’s requirements for Materials                over the requirements of any third party.         3.4    Materials Supplied by Buyer.  The Materials that are supplied directly to Seller by Buyer will be                purchased by Seller from Buyer at [*****].  Seller agrees to pay for Materials supplied by Buyer                [*****] upon receipt of an invoice relating to such Materials.  Seller shall use good faith efforts                (taking into consideration and failure by Buyer to supply Materials in the event Materials are                scarce, limited or in short supply) to maintain and inventory of such Materials that is sufficient to                manufacture Buyer’s requirements for Railcars; provided, however, that Buyer shall under no                circumstances be required to favor Seller’s requirements of Buyer’s good faith requirements in                connection with the manufacture of railcars, but Buyer shall favor Seller’s requirements for                Materials over the requirements of any third party.  Title and risk of loss of such Materials shall                pass to Seller FOB Buyer’s facility.  Seller shall pay all freight costs and related charges, and                insure such Materials against all risks of loss or damage due to fire, with extended coverage over                such other risks as are customarily insured against.           3.5    License of Intellectual Property                (a)     Buyer hereby grants for the Term hereof a personal, non-exclusive, non-assignable                       license to Seller of certain of Buyer’s intellectual property, including, but not limited to,                       the designs, specifications, concepts, processes, trade secrets, and manufacturing know-                      how for the Railcars and components thereof, including any improvements thereto                       developed during the term hereof by any person or entity (the “Licensed Intellectual                       Property”), solely as necessary for Seller to manufacture at the Plant and sell the Railcars                       hereunder during the Term hereof (the “License”).                (b)     Seller covenants and agrees that it will, at any time upon request, execute and deliver any                       and all documents requested by Buyer to evidence Buyer’s title and ownership in and to                       such Licensed Intellectual Property, including any improvements thereto used or                       developed by Seller and/or any of its employees, officers, or agents, and take any and all                       other steps, that may be necessary or desirable to perfect the title to such intellectual                       property in Buyer, is successors and assigns.         3.6    Construction Location. Except as otherwise agreed to in writing by the parties, all Railcars shall be                constructed and assembled at Seller’s Milton, Pennsylvania facility (“Seller’s Plant”).   4.    DELIVERY         4.1    Delivery Requirements.  Pursuant to the terms and conditions hereof, Seller shall Deliver the                Railcars to Buyer in accordance with the delivery schedule set forth in Exhibit A, subject to any                Excused Delay as provided in Section 4.4. The Parties agree that time is of the essence of this                Agreement.  For the purposes of this Section 4.1, any Railcar that is not delivered within thirty                (30) days after the applicable Delivery date set forth in Exhibit A for such Railcar (the                “Committed Delivery Date”), excluding delays resulting from (i) Excused Delays, (ii) Buyer’s                rejection of a Railcar pursuant to Section 5.3, or (iii) the failure of Seller to obtain AAR                Certification after using its best efforts as required in 9.1(f), shall be considered “Delayed                Railcars”.[*****]         4.2    Notice of Completion of Manufacture. Seller shall notify Buyer no later than ten (10) days prior to                the completion of the manufacture and assembly of any Railcar so that Buyer may inspect such                Railcar in accordance with Section 5.1 hereof.                                                  3  

 

      CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document        have been omitted pursuant to a request for confidential treatment and, where applicable,        have been marked with an asterisk (“[*****]”) to denote where omissions have been        made. The confidential material has been filed separately with the Securities and        Exchange Commission.                          4.3    Exclusivity. Except with Buyer’s written consent, Seller shall not, during the Term, be engaged in                the manufacturing or assembly of any railcars other than the Railcars to be purchased by Buyer                hereunder or any other activity that may affect timely delivery of the Railcars hereunder.         4.4    Excused Delays. The Seller shall not be liable to Buyer for any damages for any delay in the                Delivery of or for the failure to Deliver any Railcar if, and to the extent, such delay or failure is                due to acts of God, acts of civil, governmental or military authorities, embargoes, fire or other                casualty, strikes or other labor disturbances, floods, riots, war, delay in delivery of materials                ordered by or from Buyer pursuant to Section 3.3 or 3.4, lack or shortage of transportation                facilities or delays in transportation or any other cause beyond the reasonable control of Seller.                The time of Delivery as specified in Seller’s Delivery schedule shall be extended by the period of                delay resulting from any of the foregoing causes or conditions (each an “Excused Delay”) on a                day by day basis.  If any consecutive period of Excused Delay(s) continues for one hundred and                eighty (180) days or more, either Party shall have the right to terminate this Agreement upon thirty                (30) days advance written notice to the other. Buyer’s notice shall not be effective for any Railcar               that has commenced production.  In such event, neither Party shall have any further obligation to               the other hereunder, except for obligations that have accrued prior to the date of such termination,               and, in the case of Buyer’s notice of termination, obligations as to Railcars which have               commenced production. If the Delivery of any Railcar is delayed by more than twelve (12) weeks               due to an Excused Delay, Buyer shall have the option of refusing to purchase any such Railcar.                Buyer may exercise such option by written notice to Seller any time after the expiration of such               twelve-week period until the first day on which manufacture of such Railcar commences               thereafter. Buyer’s obligation to purchase Railcars from Seller hereunder shall be reduced by the               number of Railcars for which Buyer exercises such option. Unless the Agreement is terminated as               provided above, upon the termination of any period of Excused Delay, Seller will make a               reasonable good faith effort to commence manufacturing Railcars such that Delivery of any               Railcar remaining to be manufactured and Delivered pursuant hereto is Delivered as soon as               reasonably possible.   5.    INSPECTION AND ACCEPTANCE         5.1    Inspection. Upon reasonable advance notice to Seller, Buyer shall, at its sole cost and expense,                have the right to inspect, including by parties designated by Buyer, Seller’s manufacturing                facilities and any Railcars multiple times during regular business hours before, during and after the                completion of construction thereof until the final Railcar to be manufactured hereunder is accepted                by Buyer. Seller shall grant to Buyer’s inspectors reasonable access to its plants, facilities,                statistical process control and other data related to the construction and assembly of the Railcars,                including its quality assurance and responsiveness data, to enable the inspectors to adequately                perform such inspection. Without limiting the foregoing, upon the completion of each Railcar,                Buyer shall also have an opportunity for a post-completion inspection thereof at Seller’s facility.                Buyer agrees to cooperate with Seller in the inspection of the Railcars in order to avoid, to the                extent practicable, delays and disruptions at Seller’s facility. In no event shall the inspection occur                more than three (3) business days beyond the completion of the Railcar, unless the parties agree                otherwise. If Buyer fails to complete its post-completion inspection within three (3) business days               following completion of the Railcar, such Railcar shall be deemed accepted by Buyer without the               requirement of a Certificate of Acceptance referenced in Section 5.2         5.2    Accepted Railcar. If Buyer’s post-completion inspection of the Railcar determines that the                assembly and construction of the Railcar has been completed in accordance with the                Specifications and Regulations or Buyer fails to conduct its post-completion inspection within the                time period set forth in Section 5.1 above, Buyer shall promptly execute and deliver a Certificate                of Acceptance to Seller, in a form reasonably acceptable to both parties.  If Buyer fails to conduct                its post-completion inspection with the time period set forth in Section 5.1 above, and fails to                                                  4  

 

      CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document        have been omitted pursuant to a request for confidential treatment and, where applicable,        have been marked with an asterisk (“[*****]”) to denote where omissions have been        made. The confidential material has been filed separately with the Securities and        Exchange Commission.                                  deliver a Certificate of Acceptance to Seller, in a form reasonably acceptable to both parties, such                Railcar shall be deemed accepted by Buyer as set forth in Section 5.1 above.         5.3    Rejected Railcar. If a Railcar is not manufactured and assembled by Seller in accordance with the                Specifications and Regulations, Buyer may reject such non-conforming Railcar and, in such event,                Buyer shall notify Seller in writing no later than the business day immediately following the day                upon which the post-completion inspection is completed, specifying in reasonable detail the               reasons for the rejection. Within a reasonable time thereafter, Seller shall correct all defects               identified by Buyer and thereafter, shall make the Railcar available to Buyer for re-inspection.               Buyer shall inspect the corrected Railcar as soon as reasonably practical but in no event more than               five (5) business days after the Railcar has been tendered for re-inspection. If the corrected Railcar               is reasonably acceptable to the Buyer, Buyer shall promptly advise Seller accordingly and execute               and deliver a Certificate of Acceptance. If the corrected Railcar is not reasonably acceptable to               Buyer, Buyer shall so advise Seller in writing specifying in reasonable detail the reasons for the               rejection, and Seller shall again attempt to correct all noted defects.         5.4    Certificate of Acceptance. The issuance of a Certificate of Acceptance by Buyer shall not relieve                Seller of any of its contractual obligations hereunder, nor shall it constitute a waiver by Buyer of                any defect or deficiency in the materials, workmanship, construction or other deviation from the                terms and conditions of this Agreement.         5.5    Shipment and Delivery. “Delivery” (including the terms “Deliver” and “Delivered”) of the                Railcars shall be defined as providing disposition to the railroad for the first forwarding of a                Railcar, FOB Seller’s Plant. Seller will Deliver the Railcars in accordance with Section 4.1                towards Buyer or Buyer’s customer at the place designated by Buyer, and any resulting freight                charges shall be for Buyer’s account.  Buyer shall provide disposition for Delivery of each Railcar                within two (2) business days after Buyer has accepted such Railcar. Exclusive ownership, rights of                possession and control, and risk of loss and title to each Railcar manufactured by Seller will pass                to Buyer at the time of Delivery of such Railcar.   6.    PAYMENT OF PURCHASE PRICE AND CLOSING OF SALE         6.1    Acceptance Date, Conditions Precedent. Buyer shall pay, or cause to be paid, the applicable                Invoice Price as set forth in Section 2 hereof to Seller for each Railcar constructed, assembled,                accepted by Buyer and Delivered by Seller, within five (5) business days after all of the conditions                precedent listed below have been met for such Railcar:                 (a)    Buyer has received a Shipping Report with the lightweight of the Railcar and the Railcar                       number assigned to such Railcar and affixed thereon.                (b)     Buyer has received a Certificate of Acceptance from Buyer’s inspector with respect to the                       inspection of such Railcar confirming that workmanship and processes used in the                       construction and assembly of the Railcar have been used and performed in accordance                       with the Specifications and Regulations and that such Railcar has been constructed,                       assembled and Delivered in accordance with the terms hereof.                 (c)    Buyer has received an invoice from Seller in the amount of the Invoice Price for the                       Railcar as set forth herein and which references a Railcar number for such Railcar that                       corresponds to the Railcar number for such Railcar on the Shipping Report.         6.2    Wire Transfer Instructions. Buyer shall pay, or cause to be paid, the Invoice Price for each Railcar                via wire transfer to Seller pursuant to such wire transfer instructions as Seller shall provide to                Buyer.                                                 5  

 

      CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document        have been omitted pursuant to a request for confidential treatment and, where applicable,        have been marked with an asterisk (“[*****]”) to denote where omissions have been        made. The confidential material has been filed separately with the Securities and        Exchange Commission.                          6.3    Bill of Sale. Seller will provide Buyer a Bill of Sale in the form attached hereto as Exhibit C and                hereby made a part hereof promptly after receipt of payment.   7.    SELLER’S WARRANTIES         7.1    Manufacturing Warranty.                 (a)    Subject to Section 7.2, Seller warrants, for a period of five (5) years after Delivery (the                       “Warranty Period”) that all Railcars shall be manufactured in accordance with the                       Specifications and Regulations and that each Railcar and the installation of parts                       incorporated into such Railcar will be free from defects in materials and workmanship.                       Seller’s sole obligation under the warranties set forth herein shall be limited to, in Seller’s                       sole discretion, the prompt repair or replacement at a shop of Seller’s choosing of any                       Railcar or parts incorporated therein that is not in conformity with this warranty during                       the Warranty Period. Transportation and storage charges to deliver the Railcar or parts                       incorporated therein to a shop for repair shall be the responsibility of Buyer [*****].  In                       no event shall Seller be liable to Buyer for any warranty claims for any sum in excess of                       the cost of repairs or replacements as specified herein. Buyer will not repair, replace or                       discard the affected Railcar or parts incorporated therein until Seller has first been given a                       reasonable opportunity to inspect and repair or replace such Railcar or parts incorporated                       therein, if necessary. Any warranty claim must be brought by Buyer within five (5) years                       from the date a senior executive of Buyer knows or reasonably should have known of                       such cause of action.         7.2    This warranty shall extend only to Buyer, and shall not extend to any successor or transferee of               Buyer without Seller’s express written consent, which consent will not be unreasonably delayed or               withheld. Exclusivity of Warranty and Disclaimers.                  (a)    EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THE WARRANTIES                       SET FORTH IN SECTION 7.1(a) ARE EXCLUSIVE AND EXPRESSLY IN LIEU OF                       ALL OTHER WARRANTIES WITH RESPECT TO THE RAILCARS OR PARTS                       INCORPORATED THEREIN, EXPRESS OR IMPLIED, INCLUDING WARRANTIES                       OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE.                       SELLER’S LIABILITY AND BUYER’S EXCLUSIVE REMEDY FOR BREACH OF                       SELLER’S WARRANTY WILL BE LIMITED TO REPAIR OR REPLACEMENT.                       NEITHER BUYER (NOR ITS OFFICERS, DIRECTORS OR AFFILIATES) NOR                       SELLER (NOR ITS OFFICERS, DIRECTORS OR AFFILIATES) SHALL HAVE                       LIABILITY TO THE OTHER UNDER THIS AGREEMENT FOR ANY PUNITIVE,                       INCIDENTAL OR CONSEQUENTIAL DAMAGES, SUCH AS EXCESS COSTS                       INCURRED, COMMODITY LOSS OR LOST PROFITS OR REVENUE.                (b)     The warranties set forth in Section 7.1(a) shall not apply to any Railcar or parts                       incorporated therein which has been involved in an accident, misused, negligently                       handled, altered or modified by Buyer or any other third party, repaired by a party                       besides Seller, or improperly maintained or improperly manufactured by any party                       besides Seller.  The warranties set forth in Section 7.1(a) are also conditioned upon                       compliance with loading, use, and handling procedures that qualify as good commercial                       practices of the trade and that are consistent with the Specifications and Regulations.                       Seller shall not be responsible for any failure caused by normal wear and tear.                 (c)    PARTS NOT MANUFACTURED BY SELLER ARE COVERED ONLY BY THE                       WARRANTY, IF ANY, OF THE MANUFACTURER THEREOF AND SELLER                       SHALL HAVE NO OTHER OBLIGATION WITH RESPECT TO SUCH PARTS NOT                                                 6  

 

      CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document        have been omitted pursuant to a request for confidential treatment and, where applicable,        have been marked with an asterisk (“[*****]”) to denote where omissions have been        made. The confidential material has been filed separately with the Securities and        Exchange Commission.                                         MANUFACTURED BY SELLER. Notwithstanding the foregoing, to the extent                       available, Seller agrees to transfer and assign to Buyer, without warranty of Seller with                       respect thereof, any manufacturer’s warranties covering parts furnished by third parties                       for the Railcars and Seller further agrees to reasonably assist Buyer in enforcing any                       manufacturer’s warranties, short of instituting legal action on Buyer’s behalf and/or                       incurring other legal fees. Seller’s cooperation shall, however include making a good                       faith effort to pursue Buyer’s claim on its behalf directly with such third-party                       manufacturer or supplier; provided, that, any costs associated with such effort shall be                       paid by Buyer, subject to Buyer’s advance approval thereof.    8.    INDEPENDENT CONTRACTORS.         8.1    Disclaimer of Intent to Become Partners. Buyer and Seller shall not by virtue of this Agreement be                deemed partners or members of a joint venture.  It is expressly understood that each of the parties                is acting as an independent contractor.         8.2    No Agency. Nothing contained herein shall create an agency whereby either Party may bind the                other Party.  Without limiting the generality of the foregoing, neither Party shall, by virtue of this                Agreement, have the right to (a) enter into contracts or commitments on behalf of or in the name                of the other Party; (b) sign the other Party’s name to any commercial paper, contract or other                instrument; (c) contract any debt or enter into any agreement, either express or implied, binding                the other Party to the payment of money; (d) receive or make payment for or on behalf of the other                Party; or (e) make promises or representations on behalf of the other Party.   9.    REPRESENTATIONS AND WARRANTIES         9.1    Representations and Warranties of Seller.  Seller hereby makes the following representations and                warranties to Buyer, each of which shall be true as of the date hereof and throughout the Term of                this Agreement:                   (a)    Authorization to Conduct Business. Seller is duly authorized to transact business in the                       manner contemplated by this Agreement;                 (b)    Adherence to Laws.  Seller shall materially adhere to all applicable Regulations relating                       to Seller’s performance of its obligations under this Agreement;                 (c)    Authority. Seller has full power and authority to enter into and perform (i) this                       Agreement and (ii) all documents and instruments to be executed by Seller pursuant to                       this Agreement.  This Agreement has been duly executed and delivered by Seller and is                       enforceable in accordance with its terms;                 (d)    Permit. Seller has obtained, or prior to the time it commences production of the Railcars,                       will have obtained, any permits required in connection with the production and sale of                       Railcars, and will furnish copies or other evidence satisfactory to Buyer of all such                       approvals upon the request of Buyer.                  (e)    Litigation. There is no pending litigation or outstanding court orders of any governmental                       authority that would materially impact or affect this Agreement or Seller’s execution or                       performance hereof. There are no outstanding court orders of any governmental authority                       against or involving Seller, or proceedings pending or threatened against or involving                       Seller, which are reasonably likely to materially adversely affect Seller’s rights to                       manufacture and sell Railcars.                                                  7  

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document  have been omitted pursuant to a request for confidential treatment and, where applicable,  have been marked with an asterisk (“[*****]”) to denote where omissions have been  made. The confidential material has been filed separately with the Securities and  Exchange Commission.                            (f)    AAR. As of such date that Seller commences production of the Railcars to be purchased                 by Buyer hereunder, Seller shall use commercially reasonable efforts to obtain all                 appropriate certifications required by the AAR for the manufacturing and sale of Railcars                 hereunder (“AAR Certification”), and, as of such date that the first Railcar is Delivered                 to Buyer hereunder, Seller shall have obtained, and shall maintain through the end of the                 Term, such AAR Certification as well as good standing with the AAR and shall provide                 evidence thereof to Buyer upon request.           (g)    Insurance. Seller will maintain, at its expense, insurance coverages of the types, and in                 the amounts, that are reasonably prudent for the operation of its business, the sale of the                 Railcars and performance under this Agreement, including by way of example, but not of                 limitation, comprehensive commercial general liability (including products liability),                 employer’s liability and worker’s compensation.  All insurance requirements of Seller                 under this Agreement may be satisfied in whole or in part through self-insurance or self-                retention by Seller, to the extent permissible under the applicable law.           (h)    Limitations.  Except for the specific representations and warranties expressly made by                 Seller in this Agreement, Seller makes no other warranty or representation, express or                 implied, at law or in equity, in respect of the Railcars and the parts incorporated therein.    9.2    Representations and Warranties of Buyer.  Buyer hereby makes the following representations and          warranties to Seller, each of which shall be true as of the date hereof and throughout the Term of          this Agreement:             (a)    Authorization to Conduct Business. Buyer is duly authorized to transact business in the                 manner contemplated by this Agreement;           (b)    Adherence to Laws. Buyer will materially adhere to all applicable Regulations relating to                 Buyer’s performance of its obligations under this Agreement;           (c)    Authority.  Buyer has full power and authority to enter into and perform (i) this                 Agreement and (ii) all documents and instruments to be executed by Buyer pursuant to                 this Agreement.  This Agreement has been duly executed and delivered by Buyer and is                 enforceable in accordance with its terms;           (d)    Permit. No Permit is required for the execution and delivery by Buyer of this Agreement                 and the consummation by Buyer of the transactions contemplated by this Agreement.           (e)    Litigation. There is no pending litigation or outstanding court orders of any governmental                 authority that would materially impact or affect this Agreement or Buyer’s execution or                 performance thereof.           (f)    Insurance. Buyer will maintain, at its expense, insurance coverages of the types, and in                 the amounts, that are reasonably prudent for the operation of its business, and                 performance under this Agreement, including by way of example, but not of limitation,                 comprehensive commercial general liability (including products liability).  All insurance                 requirements of Buyer under this Agreement may be satisfied in whole or in part through                 self-insurance or self-retention by Buyer, to the extent permissible under the applicable                 law.           (g)    Limitations.  Except for the specific representations and warranties expressly made by                 Buyer in this Section 9.2, Buyer makes no other warranty or representation, express or                 implied, at law or in equity.                                            8  

 

      CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document        have been omitted pursuant to a request for confidential treatment and, where applicable,        have been marked with an asterisk (“[*****]”) to denote where omissions have been        made. The confidential material has been filed separately with the Securities and        Exchange Commission.                    10.   DEFAULT AND TERMINATION         10.1   Default. The occurrence of any one or more of the following events shall constitute an event of                default (“Event of Default”) hereunder by either Party:                 (a)    The failure of either Party to pay, or cause to be paid, any amount due pursuant to the                       terms of this Agreement, provided that such failure to pay, or cause a payment to be                       made, has not been cured by the non-paying Party within five (5) business days of receipt                       of written notice of such failure from the other Party;                (b)     As to Seller, Seller’s failure to comply with Section 9.1(f) hereof;                  (c)    The failure of either Party to perform a non-monetary material obligation hereunder,                       provided that such failure to perform has not been cured by such non-performing Party                       within thirty (30) days after receipt of written notice from the other Party specifying such                       failure;                (d)     The (i) filing by either Party hereto of a voluntary petition in bankruptcy, (ii) the                       adjudication of either Party hereto as a bankrupt or insolvent, (iii) the filing by either                       Party hereto of any petition seeking any reorganization, arrangement, composition,                       readjustment, liquidation, dissolution, or similar relief for itself under the federal                       bankruptcy laws, or (iv) the consent or acquiescence of either Party hereto to the                       appointment of a trustee, receiver, conservator or liquidator of such Party for all, or any                       substantial portion of its property or assets, provided that, any such filing, adjudication,                       consent or acquiescence is not withdrawn, vacation, removed, discharged or stayed                       within thirty (30) days thereof;                 (e)    The admission in writing by either Party hereto of its inability to pay its debts as they                       become due;                (f)     The notification in writing to a governmental agency by either Party hereto of its pending                       insolvency, or suspension or pending suspension of its operations; or                (g)     The making by either Party hereto of any assignment for the benefit of its creditors or the                       taking of similar actions for the protection or benefit of its creditors.         10.2   Termination. Upon the occurrence of an Event of Default on behalf of the other Party hereto, such                non-defaulting Party in addition to all other remedies available to it hereunder, at law or in equity,                may terminate this Agreement upon thirty (30) days’ written notice to the other Party provided                such default has not been cured during such period. In the event of termination, (i) Seller shall                complete Delivery of any Railcars accepted by Buyer pursuant to the terms hereof regardless of                the effective date of the termination and (ii) Buyer shall pay, or cause to be paid, the applicable                Invoice Price for such Railcar.  Upon the failure of Seller to obtain AAR Certification after using                its commercially reasonable efforts as required in 9.1(f), Seller may terminate this agreement upon                10 days written notice to the other party without further liability.   11.   SELLER’S SECURITY INTEREST AND REMEDIES:          It is mutually agreed that the time of payment of charges is of the essence of this Agreement.  Buyer hereby        transfers, assigns, and grants to Seller a security interest and general lien in and to all Equipment and all        proceeds (including insurance proceeds), products, replacements, exchanges and substitutions,        modifications, additions, attachments, accessories, and accessions thereto to secure payment in full of all        amounts due Seller pursuant to the Agreement.  Buyer authorizes Seller at any time and from time to time                                                 9  

 

      CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document        have been omitted pursuant to a request for confidential treatment and, where applicable,        have been marked with an asterisk (“[*****]”) to denote where omissions have been        made. The confidential material has been filed separately with the Securities and        Exchange Commission.                          to file and record any document necessary to perfect Seller’s security interest and general lien in and to the        Equipment without the signature of Buyer, and Buyer shall execute and deliver such other instruments and        documents as may be required by Seller to perfect, confirm, and further evidence the security interest and        general lien in the Equipment.  If Buyer shall default in the payment of charges for Equipment at the time        when same become due and payable or shall default in the performance or observance of any of the other        agreements herein contained and by Buyer to be performed or observed, or if Buyer shall file a voluntary        petition in bankruptcy under Title 11 of the United States Code, or an order for relief shall be issued against        Buyer in any involuntary petition in bankruptcy under Title 11 of the United States Code, or Buyer shall        file any petition or answer seeking or acquiescing in any reorganization, arrangement, composition,        readjustment, liquidation, dissolution, or similar relief for itself under any present or future federal, state, or        other law or regulation relating to bankruptcy, insolvency, or other relief of debtors, or Buyer shall seek or        consent to or acquiesce in the appointment of any custodian, trustee, receiver, conservator, or liquidator of        Buyer or of all or any substantial part of its property, or Buyer shall make an assignment for the benefit of        creditors, or Buyer shall fail generally to pay its debts as such debts become due, or Buyer shall give notice        to any governmental authority or body of insolvency or pending insolvency or suspension of operations,        then and in any of said events, Seller at its election, may immediately terminate the Agreement in addition        to any other remedy.  In addition to any other remedy provided by law or the Agreement, Seller reserves        the right to repossess or foreclose on the Equipment or any Unit delivered by Seller until paid for by Buyer        as provided in the Agreement or as otherwise agreed in writing.  Upon payment for the Equipment, Seller        shall promptly terminate any security interest, general lien, or recordation made against said Equipment.   12.   RECORDS         Records to be Provided to the Buyer. Within ninety (90) days after the transfer of any Railcar to Buyer,        Seller will furnish Buyer with copies in electronic form of the documents related to the manufacture and        assembly of the Railcar, including without limitation, major assembly drawings. In addition, Seller will file        an application with the AAR for a Certificate of Construction for each Railcar within thirty (30) days of the        transfer of such Railcar to Buyer and shall provide Buyer with such Certificate in electronic form within        thirty (30) days of Seller’s receipt thereof. If the AAR has failed to issue a Certificate of Construction for        any Railcar within ninety (90) days of the date Seller’s application therefor was filed with the AAR, Seller        will provide written notification thereof to Buyer. If such delay is attributable in whole or in part to a Seller        error or omission, Seller shall remedy such error or omission as soon as practical.   13.   CONFIDENTIALITY         13.1   Confidential Information. “Confidential Information” means any and all: (a) trade secrets                concerning the business and affairs of a Party, product specifications, data, know-how, formulae,               compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions               and ideas, past, current, and planned research and development, current and planned               manufacturing or distribution methods and processes, customer lists, current and anticipated               customer requirements, price lists, market studies, business plans (and related formulae,               compositions, processes, improvements, devices, know-how, inventions, discoveries, concepts,               ideas, designs, methods, and information) and any other information, however documented, that is               a trade secret within the meaning of The Missouri Uniform Trade Secrets Act (§§417.450 to               417.467 of the Missouri Revised Statutes, as amended); and (b) information concerning the               business and affairs of a Party (which includes historical financial statements, financial results and               position, financial projections and budgets, historical and projected sales, capital spending budgets               and plans, the names and backgrounds of key personnel, personnel training, techniques, and               materials) however documented; and (c) notes, analysis, compilations, studies, summaries, and               other material prepared by or for a Party containing or based, in whole or in part, on any               information included in the foregoing.                                                 10  

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document  have been omitted pursuant to a request for confidential treatment and, where applicable,  have been marked with an asterisk (“[*****]”) to denote where omissions have been  made. The confidential material has been filed separately with the Securities and  Exchange Commission.                    13.2   Each of the parties acknowledges that: (a) during the Term and as a part of each Party’s         performance as contemplated hereunder, the parties will be afforded access to Confidential         Information; (c) unauthorized disclosure of such Confidential Information could have an adverse         effect on the Parties and their respective businesses; and (d) the provisions of this Section 12 are         reasonable and necessary to prevent the improper use or disclosure of Confidential Information.   13.3   Each Party is permitted to disclose any Confidential Information as required by law; provided,          however, that in any event that a Party or any of its representatives becomes legally compelled to          disclose any such information, such Party shall provide the other Party with prompt written notice          before such disclosure, to the extent legally permissible and feasible, sufficient to enable the Party          whose information is so required to be disclosed to either seek a protective order or confidential          treatment, at its expense, or other appropriate remedy preventing or prohibiting such disclosure or          to waive compliance with the provisions of this Section 12, or both; provided, further, however,          that no such notice will be required to be given by Buyer to Seller with respect to any Confidential          Information that is required to be disclosed pursuant to binding rules and regulations of the United          States Securities and Exchange Commission.   13.4   During and following the Term, each Party receiving Confidential Information hereunder (in such         capacity, the “Receiving Party”) will hold in confidence the Confidential Information of the other         Party hereto (in such capacity, the “Disclosing Party”) and will not disclose Confidential         Information to any person except with the specific prior written consent of the Disclosing Party or         except as required by law or as otherwise expressly permitted by the terms of this Agreement.  The         Receiving Party will not use the Confidential Information of the Disclosing Party, except during         the Term in the course of performing the Receiving Party’s duties under or as contemplated         pursuant to, this Agreement.  This confidentiality obligation shall apply to all Confidential         Information whether in its original form or a derivative form, and to all Confidential Information         whether received or observed by the Receiving Party prior to, on or after the commencement of         the Term.  The Parties agree that no warranties are made expressly or implicitly regarding         accuracy or completeness of Confidential Information provided under this Agreement.   13.5   None of the foregoing obligations and restrictions shall apply to any part of the Confidential         Information that the Receiving Party demonstrates was or became generally available to the public         other than as a result of a disclosure by the Receiving Party.   13.6   During the Term, the Receiving Party will safeguard each tangible embodiment of the         Confidential Information (whether in the form of a document, record, notebook, plan, model,         component, device, or computer software or code, whether embodied in a disk or in any other         form (collectively, the “Proprietary Items”)).  The Parties recognize that, as between themselves,         all of the Proprietary Items, whether or not developed by the Receiving Party, are the exclusive         property of the Disclosing Party.  Upon termination of this Agreement by either Party, or upon the         request of the Disclosing Party during the Term, the Receiving Party will return to the Disclosing         Party or destroy all of the Proprietary Items in the Receiving Party’s possession or subject to the         Receiving Party’s control, and the Receiving Party shall not retain any copies, abstracts, sketches,         or other physical embodiment of any of the Proprietary Items.   13.7   Any trade secrets of the Parties hereto will be entitled to all of the protections and benefits under         The Missouri Uniform Trade Secrets Act (§§417.450 to 417.467 of the Missouri Revised Statutes,         as amended) and any other applicable law.  If any information that a Party deems to be a trade         secret is found by a court of competent jurisdiction not to be a trade secret for purposes of this         Agreement, such information will, nevertheless, be considered Confidential Information for         purposes of this Agreement.  Each Party hereby waives any requirement that the other Party         submit proof of the economic value of any trade secret or post a bond or other security.                                           11  

 

      CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document        have been omitted pursuant to a request for confidential treatment and, where applicable,        have been marked with an asterisk (“[*****]”) to denote where omissions have been        made. The confidential material has been filed separately with the Securities and        Exchange Commission.                          13.8   No license or right is granted hereby to either Party, by implication or otherwise, with respect to or               under any patent application, patent, claims of patent or proprietary rights of the other Party.                Without limiting the generality of the foregoing and except as expressly set forth in this               Agreement, neither Party shall have the right to use the other Party’s name, intellectual property or               Confidential Information without such other Party’s prior written consent.   14.   INDEMNIFICATION.         Buyer will indemnify, defend and hold harmless Seller and Seller’s Affiliates against all Damages arising        from (a) any breach of any representation, warranty or covenant of Buyer under this Agreement or any        Purchase Order; or (b) any injury to persons or property from the Railcars that results from (i) defects in        designs or specifications provided by Buyer, (ii) the Design and Engineering Services, or (iii) the License.   15.   MATERIAL, EQUIPMENT, FACILITIES AND SPECIAL TOOLING         Except as otherwise agreed in writing, all equipment, facilities and special tooling (which term includes but        is not limited to jigs, dies, fixtures, molds, patterns, special test equipment, manufacturing aids and        replacements thereof) used in the manufacture of the Railcars covered hereby shall be and remain the        property of Seller.    16.   MISCELLANEOUS         16.1   Governing Law.  This Agreement shall be governed by and construed in accordance with the                domestic laws of the State of Missouri without giving effect to any choice or conflict of law                provision or rule that would cause the application of the laws of any jurisdiction other than the                State of Missouri.         16.2   Jurisdiction; Service of Process.  Any action or proceeding seeking to enforce any provision of, or                based on any right arising out of, this Agreement shall be brought against either of the parties in                the courts of the State of Missouri, County of St. Louis, or, if it has or can acquire jurisdiction, in               the United States District Court for the Eastern District of Missouri and each of the parties               consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such                action or proceeding and waives any objection to venue laid therein.  Process in any action or               proceeding referred to in the preceding sentence may be served on any party anywhere in the                world.         16.3   Waiver of Jury Trial. EACH PARTY KNOWINGLY, VOLUNTARILY, AND                INTENTIONALLY WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING TO                RESOLVE ANY DISPUTE OR CLAIM BETWEEN THE PARTIES ARISING OUT OF OR                RELATING TO THIS AGREEMENT, INCLUDING ANY QUESTION REGARDING ITS                EXISTENCE, VALIDITY, INTERPRETATION, BREACH, OR TERMINATION, AND                INCLUDING ANY NON-CONTRACTUAL CLAIM. The Parties further agree that in the event                of any claim or proceeding arising out of or relating to this Agreement, this clause will serve as                conclusive evidence of their intent to waive their right to trial by jury.          16.4   Further Assurances.  The Parties agree (i) to furnish upon request to each other such further                information, (ii) to execute and deliver to each other such other documents, and (iii) to do such               other acts and things, all as the other Party may reasonably request for the purpose of carrying out               the intent of this Agreement and the documents referred to in this Agreement.         16.5   Waiver. The rights and remedies of the Parties to this Agreement are cumulative and not                alternative.  Neither the failure nor any delay by any Party in exercising any right, power, or                privilege under this Agreement or the documents referred to in this Agreement will operate as a                                                12  

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document  have been omitted pursuant to a request for confidential treatment and, where applicable,  have been marked with an asterisk (“[*****]”) to denote where omissions have been  made. The confidential material has been filed separately with the Securities and  Exchange Commission.                            waiver of such right, power, or privilege, and no single or partial exercise of any such right,         power, or privilege will preclude any other or further exercise of such right, power, or privilege or          the exercise of any other right, power, or privilege.  To the maximum extent permitted by          applicable law, (i) no claim or right arising out of this Agreement or the documents referred to in         this Agreement can be discharged by one Party, in whole or in part, by a waiver or renunciation of          the claim or right unless in writing signed by the other Party; (ii) no waiver that may be given by a         Party will be applicable except in the specific instance for which it is given; and (iii) no notice to          or demand on one Party will be deemed to be a waiver of any obligation of such Party or of the         right of the Party giving such notice or demand to take further action without notice or demand as          provided in this Agreement or the documents referred to in this Agreement.   16.6   Entire Agreement and Modification.  This Agreement and the exhibits and schedules attached          hereto are the entire Agreement between the Parties with respect to the subject matter of this          Agreement and may not be amended except by a written agreement executed by each of the          Parties hereto.   16.7   Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the          parties hereto, and their respective successors, administrators and assigns. Either Party hereto may          assign this Agreement by merger or other fundamental change or in connection with          reorganization without the consent of the other Party hereto to any individual, corporation,          partnership, limited liability company, association, trust, unincorporated organization, or other          legal entity or organization owned or controlled by, or under common control with, the assigning         Party or to a purchaser of all or substantially all of the assets of such assigning Party.  For the         purposes of clarification, the assignment contemplated by this Section 14.7 is an assignment of         Buyer’s rights and warranties in this Agreement, in contrast to the assignments provided for in          Section 7.1(c), which are assignments of Buyer’s rights and warranties for individual Railcars.    16.8   Severability.  If any provision of this Agreement is held invalid or unenforceable by any court of          competent jurisdiction, the other provisions of this Agreement will remain in full force and effect.          Any provision of this Agreement held invalid or unenforceable only in part or degree will remain         in full force and effect to the extent not held invalid or unenforceable.   16.9   Section Headings, Construction.  The headings of Sections in this Agreement are provided for          convenience only and will not affect its construction or interpretation.  All references to “Section”         or “Sections” refer to the corresponding Section or Sections of this Agreement.  All words used in         this Agreement will be construed to be of such gender or number as the circumstances require.           Unless otherwise expressly provided, the word “including” does not limit the preceding words or         terms.  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 shall be         construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise          favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this          Agreement.   16.10  Counterparts. This Agreement may be executed in one or more counterparts, each of which will be          deemed to be an original copy of this Agreement and all of which, when taken together, will be         deemed to constitute one and the same agreement.   16.11  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.                                           13  

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document  have been omitted pursuant to a request for confidential treatment and, where applicable,  have been marked with an asterisk (“[*****]”) to denote where omissions have been  made. The confidential material has been filed separately with the Securities and  Exchange Commission.                    16.12  Notices. All notices, requests, demands, claims, and other communications hereunder will be in          writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed          duly given if (and then two (2) business days after) it is sent by registered or certified mail, return         receipt requested, postage prepaid, and addressed to the intended recipient as set forth below:                  If to Seller:  ACF Industries, LLC                                101 Clark Street,                                 St. Charles, MO 63301                                Attention:                                E-mail: mcrinnion@acfindustries.com                                Attention: Mark Crinnion, General Counsel                                  If to Buyer:   American Railcar Industries, Inc.                                100 Clark Street                                                                                           St. Charles, Missouri 63301                                                                               E-mail: YFundler@americanrailcar.com                                Attention: Yevgeny Fundler, General Counsel                   Any Party may send any notice, request, demand, claim, or other communication hereunder to the         intended recipient at the address set forth above using any other means (including personal delivery,         expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such         notice, request, demand, claim, or other communication shall be deemed to have been duly given         unless and until it actually is received by the intended recipient. Any Party may change the address         to which notices, requests, demands, claims, and other communications hereunder are to be         delivered by giving the other Party notice in the manner herein set forth.                          [Remainder of page intentionally left blank]                                                                                                                                                                                                                                                                 14  

 

      CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document        have been omitted pursuant to a request for confidential treatment and, where applicable,        have been marked with an asterisk (“[*****]”) to denote where omissions have been        made. The confidential material has been filed separately with the Securities and        Exchange Commission.          IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of the day, month and year  first above written.                                                                               ACF INDUSTRIES, LLC                                                                                                                     By:                                                                                                                                                       Name: Michael G. Farmakis                                        Title: President and CEO                                                                                                                     ARI LEASING, LLC                                                                                                                        By:                                                                                                                   Name: Luke M. Williams                                                                              Title: Sr. Vice President and CFO                                                                                                             15  

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document  have been omitted pursuant to a request for confidential treatment and, where applicable,  have been marked with an asterisk (“[*****]”) to denote where omissions have been  made. The confidential material has been filed separately with the Securities and  Exchange Commission.                                              Exhibit A                            Delivery Schedule                                                                  [*****]                                                       16  

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document  have been omitted pursuant to a request for confidential treatment and, where applicable,  have been marked with an asterisk (“[*****]”) to denote where omissions have been  made. The confidential material has been filed separately with the Securities and  Exchange Commission.                                              Exhibit B                                                                  [*****]                                                                                                                                17  

 

       CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document         have been omitted pursuant to a request for confidential treatment and, where applicable,         have been marked with an asterisk (“[*****]”) to denote where omissions have been         made. The confidential material has been filed separately with the Securities and         Exchange Commission.                                         Exhibit C                                                                       WARRANTY BILL OF SALE      American Railcar Industries, Incorporated (“ARI”), a North Dakota corporation (the “Seller”), in   consideration of the sum of [*****] and other good and valuable consideration, the receipt and  sufficiency of which are hereby acknowledged, from <Company name>, a <State> corporation  (“Company”), hereby grants, sells, assigns, conveys, transfers, delivers and sets over unto Buyer, all of  Seller’s right, title and interest in and to the equipment identified in Schedule 1 attached hereto and made  a part hereof, together with all parts, appurtenances or other property attached or installed on such items  of equipment (collectively with and including such parts, appurtenances and other property, the  “Equipment”), per Lot # XX-XXXXX (ARI Est. #18-ARI-XXX-A1 dated <Month, day, year).    To have and to hold to Buyer and its successors and assigns forever.    Seller hereby warrants to Buyer and its successors and assigns on the date hereof that Seller is the lawful  owner of good and marketable legal and beneficial title to the Equipment, that Seller has the right to sell  the same, that good and marketable title to the Equipment is conveyed to Buyer free and clear of all  claims, liens, security interests, encumbrances and rights of others of any nature whatsoever arising prior  to the delivery of the Equipment hereunder, except any claims, liens, security interests and other  encumbrances arising from, through or under Buyer, and Seller covenants that it shall warrant and defend  such title to the Equipment against all such claims and demands whatsoever.    IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be duly executed by its officer thereunto  duly authorized as of this _____ day of <Month>, 20XX.                                        AMERICAN RAILCAR INDUSTRIES, INC.                                          By: __________________________                                      Name: Luke M. Williams                                      Title:   Sr. Vice President, CFO, and Treasurer      STATE OF ______________ )                          )      SS:  COUNTY OF ___________   )            On this _____ day of <Month>, 20XX, before me personally appeared Luke M. Williams to me   personally known, who, being by me duly sworn, says that he is an Executive of American Railcar   Industries, Inc., and that the foregoing Warranty Bill of Sale was signed on behalf of said corporation by   authority of its Board of Directors.  Further, he acknowledged that the execution of the foregoing   Warranty Bill of Sale was the free act and deed of said corporation.                                                   ______________________________                                             Notary Public                                               18  

 

       CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document         have been omitted pursuant to a request for confidential treatment and, where applicable,         have been marked with an asterisk (“[*****]”) to denote where omissions have been         made. The confidential material has been filed separately with the Securities and         Exchange Commission.         [Notarial Seal]      My commission expires: ____________________                                                             19  

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document  have been omitted pursuant to a request for confidential treatment and, where applicable,  have been marked with an asterisk (“[*****]”) to denote where omissions have been  made. The confidential material has been filed separately with the Securities and  Exchange Commission.                                              Exhibit D                       Estimated Sellers Cost Calculation                                                                  [*****]                                                                                          20  

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document  have been omitted pursuant to a request for confidential treatment and, where applicable,  have been marked with an asterisk (“[*****]”) to denote where omissions have been  made. The confidential material has been filed separately with the Securities and  Exchange Commission.                                              Exhibit E                         Startup Expense Calculation                                                                 [*****]                                    21Exhibit 10.5

 

 

 

February
20, 2018

 

STRICTLY
PRIVATE

AND
CONFIDENTIAL

 

Roy
Teng

Vice
President

c/o:
Mandelbaum Salsburg P.C.

1270
Avenue of the Americas, Suite 1808,

New
York, NY 10016

 

Dear
Mr. Teng

 

This
is to acknowledge and confirm the terms of our corporate finance representation agreement (the “Agreement”) as follows:

 

	1.	PBG
                                         Water Solutions International Inc., its subsidiaries and affiliates (the “Company”)
                                         hereby engages Rebus Capital Group, LLC (“Rebus”) and its affiliate, registered
                                         investment banking firm Pluris Capital Group, Inc. (“Pluris”), collectively
                                         (the “Bankers”), and the Bankers hereby agree to render services to the Company,
                                         as its exclusive corporate finance advisor and investment banker on the terms and for
                                         the services specified herein.

 

As
the Company’s exclusive corporate finance advisor and investment banker, Rebus will provide general financial advice to the Company,
including advice related to investor relations and entering the U.S. capital markets. Additionally, Rebus will provide the Company
with approximately 800 square feet of office space at 1501 Broadway, New York, NY, 15th floor, as well as related services
during the term of the Engagement Period, defined hereinafter. Pluris will undertake specific investment banking transactions
for the Company, which will be covered by separate agreements between the parties.

 

The
Company will ensure the accuracy of any information provided to the Bankers during the term of this Agreement and that it will
not contain any untrue statement of a material fact or omit to state a material fact required to make the information not misleading.
The Company will advise the Bankers immediately of the occurrence of any event or any other change known to the Company which
results in the information containing an untrue statement of a material fact or omitting to state a material fact required to
be stated or necessary to make the information not misleading.

 

	2.	The
                                         term of this engagement shall be for a period of five years (the “Engagement Period”)
                                         commencing with the execution of this Agreement by the Company (the “Effective
                                         Date”), subject to cancelation by six months written notice any time after the
                                         initial Engagement Period.

 

	3.	The
                                         Company will remit to Rebus a non-refundable quarterly payment, at the beginning of each
                                         quarter, in the amount of $30,000 USD, beginning on the beginning of the second quarter
                                         from the Effective Date through the Engagement Period of this Agreement. The fee for
                                         the first quarter shall be waived by Rebus.

 

Any
fees not paid when due will accrue interest to the extent permitted by applicable law, at a rate of 9% per year and the Company
will be responsible for all legal fees incurred by Pluris in collecting such fees.

 

	4.	Indemnification
                                         is incorporated by reference to Addendum I.

 

	5.	The
                                         benefits of this Agreement shall inure to the parties hereto and their respective successors
                                         and assigns, and the obligations and liabilities assumed in this Agreement shall be binding
                                         upon the parties hereto and their respective successors and assigns. Notwithstanding
                                         anything contained herein to the contrary, the Company shall not assign to an unaffiliated
                                         third party any of its rights or obligations hereunder without the express written consent
                                         of the Bankers.

 

     

     

    

 

Mr. Roy Teng

February 20, 2018

Page 2

 

	6.	Any
                                         dispute between the parties to this Agreement shall be settled by arbitration before
                                         the facilities of the Financial Industry Regulatory Authority (“FINRA”) in
                                         the City of New York and will be conducted pursuant to applicable federal laws, the laws
                                         of the State of New York, without regard to conflicts of laws, and the rules of the selected
                                         arbitral facility. The parties understand that the award of the arbitrators, or of a
                                         majority of them, will be final and that a judgment upon any award rendered may be entered
                                         in any court having jurisdiction.

 

	7.	All
                                         notices provided hereunder shall be given in writing and either delivered personally
                                         or by overnight courier service or sent by certified mail, return receipt requested,
                                         if to the Bankers, to 204 E. 3rd Street, Brooklyn, NY 11218 Attention: William
                                         J. McCluskey; and if to the Company, to 1501 Broadway, New York, NY 10036, Attention:
                                         Roy Teng .

 

	8.	The
                                         Company represents and warrants to the Bankers that Roy Teng is the Chief Executive Officer
                                         of the Company and is authorized on behalf of the Company to execute the Agreement, and
                                         the execution of this Agreement will not conflict with or breach the certificate or articles
                                         of incorporation or by-laws of the Company or any agreement to which the Company is a
                                         party.

 

	9.	The
                                         Agreement sets forth the entire understanding of the parties relating to the subject
                                         matter hereof, and supersedes and cancels any prior communications, understandings and
                                         agreements between the parties. This Agreement cannot be modified, or changed, nor can
                                         any of its provisions be waived, except by written agreement signed by all parties.

 

Please
confirm that the foregoing is in accordance with your understanding by signing and returning this letter to the Bankers and keeping
a duplicate for your files. This Agreement shall be effective after your acceptance below and its receipt by the Bankers at its
address set forth on this letter.

 

	REBUS CAPITAL GROUP, LLC and

PLURIS CAPITAL GROUP, INC.

	 
	 	 	 
	By:	/s/ William J. McCluskey	 
	 	William J. McCluskey	 
	 	Chairman and CEO	 

 

Accepted and agreed to as of

the ______ day of ____________, 2018.

 

	PBG Water Solutions International Inc.	 
	 	 	 
	By: 	/s/ Roy Teng	 
	 	Roy Teng	 
	 	Vice President	 

 

     

     

    

 

Mr. Roy Teng

February 20, 2018

Page 3

 

Addendum
I - Indemnification

 

The
Company shall:

 

	a.	Indemnify
                                         the Bankers, its affiliates and each of their respective officers, directors, employees
                                         and agents (collectively, the “Indemnified Parties”) and hold them harmless
                                         against any losses, claims, damages, expenses or liabilities to which the Indemnified
                                         Parties may become subject arising in any manner out of or in connection with the rendering
                                         of services by the Bankers hereunder unless it is finally judicially determined, without
                                         any further right to appeal, that such losses, claims, damages, expenses or liabilities
                                         resulted primarily from the gross negligence, bad faith or willful misconduct of the
                                         Bankers; and

 

	b.	Reimburse
                                         the Indemnified Parties for any legal or other expenses reasonably incurred by them in
                                         connection with investigating, preparing to defend or defending lawsuits, claims or other
                                         proceedings arising in any manner out of or in connection with the rendering of services
                                         by the Bankers hereunder; provided, however, that in the event a final judicial determination
                                         is made to the effect specified in subparagraph (a) above, the Indemnified Parties will
                                         remit to the Company any amount reimbursed under this paragraph (b).

 

The
Company agrees that the indemnification and reimbursement commitments set forth in this paragraph shall apply whether or not the
Indemnified Parties are a formal party of any such lawsuits, claims or other proceedings, that the Indemnified Parties are entitled
to retain separate counsel of their choice in connection with any of the matters to which such commitments relate and that such
commitments shall extend upon the terms set forth in this paragraph to any Indemnified Party.

 

Further,
the Company and the Bankers agree that if any indemnification or reimbursement sought by the Bankers of the Company is finally
judicially determined to be unavailable then, whether or not the Bankers is entitled to indemnification or reimbursement, the
Company and Bankers shall contribute to the losses, claims, damages, liabilities and expenses for which such indemnification is
held unavailable in such proportion as is appropriate to reflect the relative benefits to the Company on the one hand, and Bankers
on the other, in connection with the transaction to which such indemnification or reimbursement related, and other equitable considerations;
provided, however, that in no event shall the amount to be contributed by the Indemnified Parties exceed the amount of the fee
actually received by Bankers hereunder. The provisions hereof shall survive any termination of this Agreement.

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