10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549-1004

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended August 31, 2018

or

☐ Transition Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

for the transition period from              to             

Commission File No. 1-13146

THE GREENBRIER COMPANIES, INC.

(Exact name of Registrant as specified in its charter)

Oregon	93-0816972
(State of Incorporation)	(I.R.S. Employer Identification No.)

One Centerpointe Drive, Suite 200, Lake Oswego, OR 97035

(Address of principal executive offices)

(503) 684-7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

(Title of Each Class)		(Name of Each Exchange on Which Registered)
Common Stock without par value		New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
	None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     Yes  X    No            

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15 (d) of the Act.    Yes           No  X 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  X     No       

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  X    No       

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [    ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer  X    Accelerated filer        Non-accelerated filer         Smaller reporting company       Emerging growth company      

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes          No  X 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐

Aggregate market value of the Registrant’s Common Stock held by non-affiliates as of February 28, 2018 (based on the closing price of such shares on such date) was $1,465,342,435.

The number of shares outstanding of the Registrant’s Common Stock on October 19, 2018 was 32,190,763 without par value.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the Registrant’s definitive Proxy Statement prepared in connection with the Annual Meeting of Stockholders to be held on January 9, 2019 are incorporated by reference into Parts II and III of this Report.

THE GREENBRIER COMPANIES, INC.

FORM 10-K

TABLE OF CONTENTS

		PAGE
	FORWARD-LOOKING STATEMENTS		1
PART I
Item 1.	BUSINESS		4
Item 1A.	RISK FACTORS		12
Item 1B.	UNRESOLVED STAFF COMMENTS		31
Item 2.	PROPERTIES		31
Item 3.	LEGAL PROCEEDINGS		31
Item 4.	MINE SAFETY DISCLOSURES		31
	EXECUTIVE OFFICERS OF THE REGISTRANT		32
PART II
Item 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES		33
Item 6.	SELECTED FINANCIAL DATA		35
Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		36
Item 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		50
Item 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA		52
Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE		88
Item 9A.	CONTROLS AND PROCEDURES		88
Item 9B.	OTHER INFORMATION		92
PART III
Item 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE		92
Item 11.	EXECUTIVE COMPENSATION		92
Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS		92
Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE		92
Item 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES		92
PART IV
Item 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES		93
Item 16.	FORM 10-K SUMMARY		96
	SIGNATURES		97
	CERTIFICATIONS		98

The Greenbrier Companies 2018 Annual Report

Forward-Looking Statements

From time to time, The Greenbrier Companies, Inc. and its subsidiaries (Greenbrier or the Company) or their representatives have made or may make forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, statements as to expectations, beliefs and strategies regarding the future. Such forward-looking statements may be included in, but not limited to, press releases, oral statements made with the approval of an authorized executive officer or in various filings made by us with the Securities and Exchange Commission (SEC), including this filing on Form 10-K and in the Company’s President’s letter to stockholders that is typically distributed to the stockholders in conjunction with this Form 10-K and the Company’s Proxy Statement. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Investors should not place undue reliance on forward-looking statements, which speak only as of the date they are made and are not guarantees of future performance. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

These forward-looking statements rely on a number of assumptions concerning future events and include statements relating to:

• ability to grow our businesses;

• ability to obtain lease and sales contracts which provide adequate protection against attempted modifications or cancellations, changes in interest rates and increased costs of materials and components;

• ability to convert backlog of railcar orders and obtain and execute lease syndication commitments;

• ability to recruit, train and retain adequate numbers of qualified employees

• ability to obtain adequate certification and licensing of products;

• availability of financing sources and borrowing base and loan covenant flexibility for working capital, other business development activities, capital spending and leased railcars for syndication (sale of railcars with lease attached);

• ability to utilize beneficial tax strategies;

• ability to renew, maintain or obtain sufficient credit facilities and financial guarantees on acceptable terms including loan covenants;

• ability to obtain adequate insurance coverage at acceptable rates; and

• short-term and long-term revenue and earnings effects of the above items.

The following factors, among others, could cause actual results or outcomes to differ materially from the forward-looking statements:

• fluctuations in demand for newly manufactured railcars or marine barges, for wheels, repair services and parts and for railcar management and leasing services;

• delays in receipt of orders, risks that contracts may be canceled or modified during their term, not renewed, unenforceable or breached by the customer and that customers may not purchase the amount of products or services under the contracts as anticipated;

• availability of a trained work force at a reasonable cost and with reasonable terms of employment;

• our ability to maintain good relationships with our labor force, third party labor providers and collective bargaining units representing our direct and indirect labor force;

• domestic and international economic conditions including such matters as embargoes, quotas, tariffs, or modifications to existing trade agreements;

• domestic and international political and security conditions including such matters as terrorism, war, civil disruption and crime;

• the policies and priorities of the federal government including those concerning international trade, infrastructure and corporate taxation;

• sovereign risk related to international governments that includes, but is not limited to, governments stopping payments, repudiating their contracts, nationalizing private businesses and assets or altering foreign exchange regulations;

• growth or reduction in the surface transportation industry, the enactment of policies favoring other types of surface transportation over rail transportation or the impact from technological advances;

The Greenbrier Companies 2018 Annual Report 1

• our ability to maintain sufficient availability of credit facilities and to maintain compliance with or to obtain appropriate amendments to covenants under various credit agreements;

• our ability to maintain good relationships with our customers and suppliers;

• our ability to renew or replace expiring customer contracts on satisfactory terms;

• our ability to obtain and execute suitable lease contracts for leased railcars for syndication;

• steel and specialty component price fluctuations and availability, scrap surcharges, steel scrap prices and other commodity price fluctuations and availability and their impact on product demand and margin;

• the delay or failure of acquired businesses or joint ventures, assets, start-up operations, or new products or services to compete successfully;

• our failure to successfully integrate joint ventures or acquired businesses or complete previously announced transactions;

• discovery of previously unknown liabilities associated with acquired businesses;

• changes in product mix and the mix of revenue levels among reporting segments;

• labor disputes, energy shortages or operating difficulties that might disrupt operations or the flow of cargo;

• production difficulties and product delivery delays as a result of, among other matters, costs or inefficiencies associated with expansion, start-up, or changing of production lines or changes in production rates, equipment failures, changing technologies, transfer of production between facilities or non-performance of alliance partners, subcontractors or suppliers;

• lower than anticipated lease renewal rates, earnings on utilization-based leases or residual values for owned or managed leased equipment;

• discovery of defects in railcars or services resulting in increased warranty costs or litigation;

• physical damage, business interruption or product or service liability claims that exceed our insurance coverage;

• commencement of and ultimate resolution or outcome of pending or future litigation and investigations;

• natural disasters or severe or unusual weather patterns that may affect either us, our suppliers or our customers;

• loss of business from, or a decline in the financial condition of, any of the principal customers that represent a significant portion of our total revenues;

• competitive factors, including introduction of competitive products, new entrants into certain of our markets, price pressures, limited customer base, and competitiveness of our manufacturing facilities and products;

• industry overcapacity and our manufacturing capacity utilization;

• decreases or write-downs in carrying value of inventory, goodwill, intangibles or other assets due to impairment;

• severance or other costs or charges associated with layoffs, shutdowns, or reducing the size and scope of operations;

• changes in future maintenance or warranty requirements;

• our ability to adjust to the cyclical nature of the industries in which we operate;

• changes in interest rates and financial impacts from interest rates;

• our ability and cost to maintain and renew operating permits;

• actions or failures to act by various regulatory agencies including changing tank car or other rail car regulations;

• potential environmental remediation obligations;

• changes in commodity prices, including oil and gas;

• risks associated with our intellectual property rights or those of third parties, including infringement, maintenance, protection, validity, enforcement and continued use of such rights;

• expansion of warranty and product support terms beyond those which have traditionally prevailed in the rail supply industry;

• availability and/or price of essential raw materials, specialties or components, including steel castings, to permit manufacture of units on order;

• the failure of, or our delay in implementing and using, new software or other technologies;

• the impact of cybersecurity risks and the costs of mitigating and responding to a data security breach;

• our ability to replace maturing lease and management services revenue and earnings from equipment sold from our lease fleet with revenue and earnings from new commercial transactions, including new railcar leases, additions to the lease fleet and new management services contracts;

• financial impacts from currency fluctuations and currency hedging activities in our worldwide operations;

2 The Greenbrier Companies 2018 Annual Report

• credit limitations upon our ability to maintain effective hedging programs;

• increased costs or other impacts on us or our customers due to changes in legislation, taxes, regulations or accounting pronouncements;

• our ability to effectively execute our business and operating strategies if we become the target of shareholder activism; and

• fraud, misconduct by employees and potential exposure to liabilities under the Foreign Corrupt Practices Act and other anti-corruption laws and regulations.

Any forward-looking statements should be considered in light of these factors. Words such as “anticipates,” “believes,” “forecast,” “potential,” “goal,” “contemplates,” “expects,” “intends,” “plans,” “projects,” “hopes,” “seeks,” “estimates,” “strategy,” “could,” “would,” “should,” “likely,” “will,” “may,” “can,” “designed to,” “future,” “foreseeable future” and similar expressions identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. Many of the important factors that will determine these results and values are beyond our ability to control or predict. You are cautioned not to place undue reliance on any forward-looking statements, which reflect management’s opinions only as of the date hereof. Except as otherwise required by law, we do not assume any obligation to update any forward-looking statements.

In assessing forward-looking statements contained herein, readers are urged to read carefully all cautionary statements contained in this Form 10-K, including, without limitation, those contained under the heading, “Risk Factors,” contained in Part I, Item 1A of this Form 10-K.

All references to years refer to the fiscal years ended August 31^st unless otherwise noted.

The Greenbrier Companies is a registered trademark of The Greenbrier Companies, Inc. Gunderson, Maxi-Stack, Auto-Max and YSD are registered trademarks of Gunderson LLC.

The Greenbrier Companies 2018 Annual Report 3

PART I

Item 1. BUSINESS

Introduction

We are one of the leading designers, manufacturers and marketers of railroad freight car equipment in North America, Europe and South America. We manufacture railcars in Brazil through a strategic investment that we account for under the equity method of accounting and are a manufacturer and marketer of marine barges in North America. We are a leading provider of freight railcar wheel services, parts, repair and refurbishment in North America through our wheels, repair & parts business. We also offer railcar management, regulatory compliance services and leasing services to railroads and related transportation industries in North America. Through unconsolidated affiliates, we produce industrial and rail castings, tank heads and other components.

We operate an integrated business model in North America that combines freight car manufacturing, wheel services, repair, refurbishment, component parts, leasing and fleet management services. Our model is designed to provide customers with a comprehensive set of freight car solutions utilizing our substantial engineering, mechanical and technical capabilities as well as our experienced commercial personnel. This model allows us to develop cross-selling opportunities and synergies among our various business segments and to enhance our margins. We believe our integrated model is difficult to duplicate and provides greater value for our customers.

We operate in three reportable segments: Manufacturing; Wheels, Repair & Parts; and Leasing & Services. Financial information about our business segments as well as geographic information is located in Note 19 Segment Information to our Consolidated Financial Statements. Prior to August 20, 2018, we operated in four reportable segments: Manufacturing; Wheels & Parts; Leasing & Services; and GBW Joint Venture. On August 20, 2018 we entered into an agreement with our joint venture partner to discontinue the GBW Railcar Services (GBW) railcar repair joint venture, which resulted in 12 repair shops returned to us. Beginning on August 20, 2018, GBW Joint Venture was no longer considered a reportable segment.

The Greenbrier Companies, Inc., is incorporated in Oregon. Our principal executive offices are located at One Centerpointe Drive, Suite 200, Lake Oswego, Oregon 97035, our telephone number is (503) 684-7000 and our Internet website is located at http://www.gbrx.com.

Products and Services

Manufacturing Segment

North American Railcar Manufacturing - We manufacture a broad array of railcar types in North America, which includes most railcar types other than coal cars. We have demonstrated an ability to capture high market shares in many of the car types we produce. The primary products we produce for the North American market are:

Intermodal Railcars - We manufacture a comprehensive range of intermodal railcars. Our most important intermodal product is our articulated double-stack railcar. The double-stack railcar is designed to transport containers stacked two-high on a single platform and provides significant operating and capital savings over other types of intermodal railcars.

Tank Cars - We produce a variety of tank cars, including both general and certain pressurized tank cars, which are designed for the transportation of products such as petroleum products, ethanol, liquefied petroleum gas, caustic soda, chlorine, urea ammonium nitrate, vegetable oils, bio-diesel and various other products and we continue to expand our product offerings.

Automotive - We manufacture a full line of railcar equipment specifically designed for the transportation of light vehicles. Our automotive offerings include the Auto-Max II and Multi-Max products, which are designed to carry automobiles, SUVs and trucks efficiently.

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Conventional Railcars - We produce a variety of covered hopper cars for the grain, fertilizer, sand, cement and petrochemical industries as well as gondolas and open top hoppers for the steel, metals and aggregate markets. We also produce a wide range of boxcars, which are used in the transport of paper products, perishables, general merchandise and commodities. Our flat car products include center partition cars for the forest products industry, bulkhead flat cars, heavy-duty flat cars, and solid waste service flat cars.

European Railcar Manufacturing - Our European manufacturing operations produce a variety of tank, automotive and conventional freight railcar (wagon) types, including a comprehensive line of pressurized tank cars for liquid petroleum gas and ammonia and non-pressurized tank cars for light oil, chemicals and other products. In addition, we produce flat cars, coil cars for the steel and metals market, gondolas, sliding wall cars and automobile transporter cars.

Marine Vessel Fabrication - Our Portland, Oregon manufacturing facility, located on a deep-water port on the Willamette River, includes marine vessel fabrication capabilities. The marine facilities also increase utilization of steel plate burning and fabrication capacity providing flexibility for railcar production. U.S. coastwise law, commonly referred to as the Jones Act, requires all commercial vessels transporting merchandise between ports in the U.S. to be built, owned, operated and manned by U.S. citizens and to be registered under the U.S. flag. We manufacture a broad range of Jones Act ocean-going and river barges for transporting merchandise between ports within the U.S. including conventional deck barges, double-hull tank barges, railcar/deck barges, barges for aggregates and other heavy industrial products and dump barges. Our primary focus is on the larger ocean-going vessels although the facility has the capability to compete in other marine-related products.

Wheels, Repair & Parts Segment

Wheel Services - We operate a large wheel services network in North America. Our wheel shops, operating in eight locations, provide complete wheel services including reconditioning of wheels and axles in addition to new axle machining and finishing and axle downsizing.

Railcar Repair, Refurbishment and Maintenance - We operate a railcar repair, refurbishment and maintenance network in North America including repair shops certified by the Association of American Railroads (AAR). Our repairs shops, operating at 12 locations, perform heavy railcar repair, refurbishment and routine railcar maintenance for third parties and our leased and managed railcar fleet.

Component Parts Manufacturing - Our component parts facilities, operating in four locations, recondition and manufacture railcar cushioning units, couplers, yokes, side frames, bolsters and various other parts. We also produce roofs, doors and associated parts for boxcars.

Leasing & Services Segment

Leasing - Through our North American leasing business, our relationships with financial institutions, combined with our ownership of a lease fleet of approximately 8,100 railcars (6,300 railcars held as equipment on operating leases, 1,600 held as leased railcars for syndication and 200 held as finished goods inventory), enables us to offer flexible financing programs including operating leases and “by the mile” leases to our customers. In addition, we frequently originate leases of railcars, which are either newly built or refurbished by us, or buy railcars from the secondary market, and sell the railcars and attached leases to financial institutions and subsequently provide such institutions with management services under multi-year agreements. As an equipment owner and an originator of leases, we participate principally in the operating lease segment of the market. The majority of our leases are “full service” leases whereby we are responsible for maintenance and administration. Assets from our owned lease fleet are periodically sold to take advantage of market conditions, manage risk and maintain liquidity.

Management Services - Our North American management services business offers a broad array of software and services that include railcar maintenance management, railcar accounting services (such as billing and revenue collection, car hire receivable and payable administration), total fleet management (including railcar tracking using proprietary software), administration and railcar re-marketing. We currently provide management services

The Greenbrier Companies 2018 Annual Report 5

for a fleet of approximately 357,000 railcars for railroads, shippers, carriers, institutional investors and other leasing and transportation companies in North America. In addition, we have a Regulatory Services Group which offers regulatory, engineering, process consulting and advocacy support to the tank car and petrochemical rail shipper community, among other services.

Customer Profile

	Fleet Profile (1) As of August 31, 2018
Managed Units:
Class I Railroads		178,611
Leasing Companies		105,675
Shipping Companies		51,369
Non-Class I Railroads		20,115
Off-lease		985
Total Managed Units		356,755
Total Owned Units (2)		8,070
Total Owned & Managed Units		364,825

⁽¹⁾  Each platform of a railcar is treated as a separate unit.

⁽²⁾ The percentage of owned units on lease was 94.4% at August 31, 2018 with an average remaining lease term of 2.2 years. The average age of owned units is 10 years.

Unconsolidated Affiliates

Brazilian Railcar Manufacturing - We have a 60% ownership interest in Greenbrier-Maxion Equipamentos E Serviços Ferroviários S.A. (Greenbrier-Maxion), the leading railcar manufacturer in South America, located near São Paolo, Brazil. Greenbrier-Maxion also assembles bogies and offers a range of aftermarket services including railcar overhaul and refurbishment.

Brazilian Castings and Component Parts Manufacturing - We have a 24.5% ownership interest in Amsted-Maxion Fundição E Equipamentos Ferroviários S.A. (Amsted-Maxion Cruzeiro) based in Cruzeiro, Brazil. Amsted-Maxion Cruzeiro is a manufacturer of various castings and components for railcars and other heavy industrial equipment. Amsted-Maxion Cruzeiro has a 40% ownership position in Greenbrier-Maxion and is integrated with the operations of our Brazilian railcar manufacturer.

Other Unconsolidated Affiliates - We have other unconsolidated affiliates which primarily include joint ventures that produce rail and industrial castings and tank heads.

Backlog

The following table depicts our reported third party railcar backlog in number of railcars and estimated future revenue value attributable to such backlog, at the dates shown:

	August 31,
	2018		2017		2016
New railcar backlog units (1)		27,400		28,600		27,500
Estimated future revenue value (in millions) (2)	$	2,740	$	2,800	$	3,190

⁽¹⁾  Each platform of a railcar is treated as a separate unit.

⁽²⁾  Subject to change based on finalization of product mix.

Our total manufacturing backlog of railcar units as of August 31, 2018 was approximately 27,400 units with an estimated value of $2.74 billion, of which 21,200 units are for direct sales and 6,200 units are for lease to third parties. Approximately 3% of backlog units and 2% of the estimated value as of August 31, 2018 was associated with our Brazilian manufacturing operations which is accounted for under the equity method.

6 The Greenbrier Companies 2018 Annual Report

Based on current production schedules, approximately 20,500 units in the August 31, 2018 backlog are scheduled for delivery in 2019. The balance of the production is scheduled for delivery in 2020 and beyond. Multi-year supply agreements are a part of rail industry practice. Backlog units for lease may be syndicated to third parties or held in our own fleet depending on a variety of factors. A portion of the orders included in backlog reflects an assumed product mix. Under terms of the orders, the exact mix and pricing will be determined in the future, which may impact the dollar amount of backlog. Marine backlog as of August 31, 2018 was $61 million compared to $42 million as of August 31, 2017.

Our backlog of railcar units and marine vessels is not necessarily indicative of future results of operations. Certain orders in backlog are subject to customary documentation and completion of terms. Customers may attempt to cancel or modify orders in backlog. Historically, little variation has been experienced between the quantity ordered and the quantity actually delivered, though the timing of deliveries may be modified from time to time. We cannot guarantee that our reported backlog will convert to revenue in any particular period, if at all.

Customers

Our customers include railroads, leasing companies, financial institutions, shippers, carriers and transportation companies. We have strong, long-term relationships with many of our customers. We believe that our customers’ preference for high quality products, our technological leadership in developing innovative products and competitive pricing of our railcars have helped us maintain our long-standing relationships with our customers.

In 2018, revenue from two customers, TTX Company (TTX) and Wells Fargo & Company (Wells Fargo), accounted for approximately 31% of total revenue, 36% of Manufacturing revenue, 16% of Wheels, Repair & Parts revenue and 1% of Leasing & Services revenue. No other customers accounted for greater than 10% of total revenue.

Raw Materials and Components

Our products require a supply of materials including steel and specialty components such as brakes, wheels and axles. Specialty components purchased from third parties represent a significant amount of the cost of most freight cars. Our customers often specify particular components and suppliers of such components. Although the number of alternative suppliers of certain specialty components has declined in recent years, there are at least two available suppliers for these components.

Certain materials and components are periodically in short supply which could potentially impact production at our new railcar and refurbishment facilities. In an effort to mitigate shortages and reduce supply chain costs, we have entered into strategic alliances and multi-year arrangements for the global sourcing of certain materials and components, we operate a replacement parts business and we continue to pursue strategic opportunities to protect and enhance our supply chain. We periodically make advance purchases to avoid possible shortages of material due to capacity limitations of component suppliers, shipping and transportation delays and possible price increases.

In 2018, the top ten suppliers for all inventory purchases accounted for approximately 52% of total purchases. Amsted Rail Company, Inc. accounted for 19% of total inventory purchases in 2018. No other suppliers accounted for more than 10% of total inventory purchases. We believe we maintain good relationships with our suppliers.

Competition

We are currently the second largest railcar manufacturer in North America of the seven major railcar manufacturers competing in North America. There are a handful of specialty builders who focus on niche markets. We believe that in Europe we are in the top tier of railcar manufacturers. European freight car manufacturers are largely located in central and eastern Europe where labor rates are lower and work rules are more flexible. We are the leading railcar manufacturer in South America. The railcar manufacturing industry is becoming more global as customers are purchasing railcars from manufacturers outside of their geographic region. In all railcar markets that we serve or participate in, we compete on the basis of quality, price, reliability of delivery, product design and innovation, reputation and customer service and support.

The Greenbrier Companies 2018 Annual Report 7

Competition in the marine industry is dependent on the type of product produced. There are few competitors that build product types similar to ours. We compete on the basis of price, quality, reliability of delivery, launching capacity and experience with certain product types.

Competition in the wheels, repair & parts businesses is dependent on the type of product or service provided. There are many competitors in the railcar repair and refurbishment business and an increasing number of competitors in the wheel services and other parts businesses. We compete primarily on the basis of quality, timeliness of delivery, customer service, location of shops, price and engineering expertise.

There are at least twenty institutions in North America that provide railcar leasing and services similar to ours. Many of them are also customers that buy new railcars from our manufacturing facilities and used railcars from our lease fleet, as well as utilize our management services. Many of these institutions have greater financial resources than we do. We compete primarily on the basis of quality, price, delivery, reputation, service offerings and deal structuring and syndication ability. We believe our strong servicing capability and our ability to sell railcars with a lease attached (syndicate railcars), integrated with our manufacturing, repair shops, railcar specialization and expertise in particular lease structures provide a strong competitive position.

Marketing and Product Development

In North America, we leverage an integrated marketing and sales effort to coordinate relationships in our various segments. We provide our customers with a diverse range of equipment and financing alternatives designed to satisfy each customer’s unique needs, whether the customer is buying new equipment, refurbishing existing equipment or seeking to outsource the maintenance or management of equipment. These custom programs may involve a combination of railcar products, leasing, refurbishing and remarketing services. In addition, we provide customized maintenance management, equipment management, accounting and compliance services and proprietary software solutions.

In Europe and South America, we maintain relationships with customers through market-specific sales personnel. Our engineering and technical staff works closely with their customer counterparts on the design and certification of railcars. Many European railroads are state-owned and are subject to European Union (EU) regulations covering the tender of government contracts.

Through our research and customer relationships, insights are derived into the potential need for new products and services. Marketing and engineering personnel collaborate to evaluate opportunities and develop new products and features. Recent product launches include the Dura-Max open top hopper and small pressurized tank cars optimized for the transport of chlorine. Research and development costs incurred during the years ended August 31, 2018, 2017 and 2016 were $6.0 million, $4.2 million and $2.7 million, respectively.

Patents and Trademarks

We have a number of U.S. and non-U.S. patents of varying duration, and pending patent applications, registered trademarks, copyrights and trade names that are important to our products and product development efforts. The protection of our intellectual property is important to our business and we have a proactive program aimed at protecting our intellectual property and the results from our research and development.

Environmental Matters

We are subject to national, state and local environmental laws and regulations concerning, among other matters, air emissions, wastewater discharge, solid and hazardous waste disposal and employee health and safety. Prior to acquiring facilities, we usually conduct investigations to evaluate the environmental condition of subject properties and may negotiate contractual terms for allocation of environmental exposure arising from prior uses. We operate our facilities in a manner designed to maintain compliance with applicable environmental laws and regulations. Environmental studies have been conducted on certain of our owned and leased properties that indicate additional investigation and some remediation on certain properties may be necessary.

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Portland Harbor Superfund Site

Our Portland, Oregon manufacturing facility is located adjacent to the Willamette River. In December 2000, the U.S. Environmental Protection Agency (EPA) classified portions of the Willamette River bed known as the Portland Harbor, including the portion fronting our manufacturing facility, as a federal “National Priority List” or “Superfund” site due to sediment contamination (the Portland Harbor Site). Our company and more than 140 other parties have received a “General Notice” of potential liability from the EPA relating to the Portland Harbor Site. The letter advised us that we may be liable for the costs of investigation and remediation (which liability may be joint and several with other potentially responsible parties) as well as for natural resource damages resulting from releases of hazardous substances to the site. Ten private and public entities, including us (the Lower Willamette Group or LWG), signed an Administrative Order on Consent (AOC) to perform a remedial investigation/feasibility study (RI/FS) of the Portland Harbor Site under EPA oversight, and several additional entities have not signed such consent, but nevertheless contributed money to the effort. The EPA-mandated RI/FS was produced by the LWG and cost over $110 million during a 17-year period. We bore a percentage of the total costs incurred by the LWG in connection with the investigation. Our aggregate expenditure during the 17-year period was not material. Some or all of any such outlay may be recoverable from other responsible parties. The EPA issued its Record of Decision (ROD) for the Portland Harbor Site on January 6, 2017 and accordingly on October 26, 2017, the AOC was terminated.

Separate from the process described above, which focused on the type of remediation to be performed at the Portland Harbor Site and the schedule for such remediation, 83 parties, including the State of Oregon and the federal government, entered into a non-judicial mediation process to try to allocate costs associated with remediation of the Portland Harbor site. Approximately 110 additional parties signed tolling agreements related to such allocations. On April 23, 2009, we and the other AOC signatories filed suit against 69 other parties due to a possible limitations period for some such claims; Arkema Inc. et al v. A & C Foundry Products, Inc. et al, U.S. District Court, District of Oregon, Case #3:09-cv-453-PK. All but 12 of these parties elected to sign tolling agreements and be dismissed without prejudice, and the case has been stayed by the court until January 16, 2020. The allocation process is continuing in parallel with the process to define the remediation steps.

The EPA’s January 6, 2017 ROD identifies a clean-up remedy that the EPA estimates will take 13 years of active remediation, followed by 30 years of monitoring with an estimated undiscounted cost of $1.7 billion. The EPA typically expects its cost estimates to be accurate within a range of -30% to +50%, but this ROD states that changes in costs are likely to occur as a result of new data it wants to collect over a 2-year period prior to final remedy design. The ROD identifies 13 Sediment Decision Units. One of the units, RM9W, includes the nearshore area of the river sediments offshore of our Portland, Oregon manufacturing facility as well as upstream and downstream of the facility. It also includes a portion of our riverbank. The ROD does not break down total remediation costs by Sediment Decision Unit. The EPA’s ROD concluded that more data was needed to better define clean-up scope and cost. On December 8, 2017, the EPA announced that Portland Harbor is one of 21 Superfund sites targeted for greater attention. On December 19, 2017, the EPA announced that it had entered a new AOC with a group of four potentially responsible parties to conduct additional sampling during 2018 and 2019 to provide more certainty about clean-up costs and aid the mediation process to allocate those costs. The parties to the mediation, including us, have agreed to help fund the additional sampling.

The ROD does not address responsibility for the costs of clean-up, nor does it allocate such costs among the potentially responsible parties. Responsibility for funding and implementing the EPA’s selected cleanup remedy will be determined at an unspecified later date. Based on the investigation to date, we believe that we did not contribute in any material way to contamination in the river sediments or the damage of natural resources in the Portland Harbor Site and that the damage in the area of the Portland Harbor Site adjacent to our property precedes our ownership of the Portland, Oregon manufacturing facility. Because these environmental investigations are still underway, including the collection of new pre-remedial design sampling data by EPA, sufficient information is currently not available to determine our liability, if any, for the cost of any required remediation or restoration of the Portland Harbor Site or to estimate a range of potential loss. Based on the results of the pending investigations and future assessments of natural resource damages, we may be required to incur costs associated with additional phases of investigation or remedial action, and may be liable for damages to natural resources. In addition, we may be required to perform periodic maintenance dredging in order to continue

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to launch vessels from our launch ways in Portland, Oregon, on the Willamette River, and the river’s classification as a Superfund site could result in some limitations on future dredging and launch activities. Any of these matters could adversely affect our business and Consolidated Financial Statements, or the value of our Portland property.

On January 30, 2017 the Confederated Tribes and Bands of Yakama Nation sued 33 parties including us as well as the United States and the State of Oregon for costs it incurred in assessing alleged natural resource damages to the Columbia River from contaminants deposited in Portland Harbor. Confederated Tribes and Bands of the Yakama Nation v. Air Liquide America Corp., et al., United States Court for the District of Oregon Case No. 3i17-CV-00164-SB. We, along with many of the other defendants, moved to dismiss the case. That motion is pending. The complaint does not specify the amount of damages the Plaintiff will seek.

Oregon Department of Environmental Quality (DEQ) Regulation of Portland Manufacturing Operations

We have entered into a Voluntary Cleanup Agreement with the DEQ in which we agreed to conduct an investigation of whether, and to what extent, past or present operations at our Portland property may have released hazardous substances into the environment. We have also signed an Order on Consent with the DEQ to finalize the investigation of potential onsite sources of contamination that may have a release pathway to the Willamette River. Interim precautionary measures are also required in the order and we are discussing with the DEQ potential remedial actions which may be required. Our aggregate expenditure has not been material, however we could incur significant expenses for remediation. Some or all of any such outlay may be recoverable from other responsible parties.

Regulation

We must comply with the rules of the U.S. Department of Transportation (USDOT) and the administrative agencies it oversees including the Federal Railroad Administration in the U.S. and Transport Canada in Canada who administer and enforce laws and regulations relating to railroad safety. These regulations govern equipment and safety appliance standards for freight cars and other rail equipment used in interstate and international commerce throughout North America. The AAR promulgates rules and regulations governing the safety and design of equipment, relationships among railroads and other railcar owners with respect to railcars in interchange, and other matters. The AAR also certifies railcar builders and component manufacturers that provide equipment for use on North American railroads. These regulations require maintaining certifications with the AAR as a railcar builder, repair and service provider and component manufacturer, and products sold and leased by us in North America must meet AAR, Transport Canada, and Federal Railroad Administration standards.

The primary regulatory and industry authorities involved in the regulation of the ocean-going barge industry are the U.S. Coast Guard, the Maritime Administration of the USDOT, and private industry organizations such as the American Bureau of Shipping.

The regulatory environment in Europe consists of a combination of EU regulations and country specific regulations, including a harmonized set of Technical Standards for Interoperability of freight wagons throughout the EU. The regulatory environment in Brazil consists of oversight from the Ministry of Transportation, the National Agency of Ground Transportation and the National Association of Railroad Transporters. In all other countries, we conform to country specific regulations where applicable.

Employees

As of August 31, 2018, we had approximately 13,400 full-time employees at our consolidated entities, consisting of 12,100 employees in Manufacturing, 1,000 in Wheels, Repair & Parts and 300 employees in Leasing & Services and corporate. In Manufacturing, 7,300 employees, all of whom are located in Mexico and Europe, are represented by unions. At our Wheels, Repair & Parts locations, 73 employees are represented by a union. We believe that our relations with our employees are generally good.

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Additional Information

We are a reporting company and file annual, quarterly, current and special reports, proxy statements and other information with the SEC. Through a link on the Investor Relations section of our website, http://www.gbrx.com, we make available the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the SEC: our Annual Report on Form 10-K; Quarterly Reports on Form 10-Q; Current Reports on Form 8-K; and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended. All such filings are available free of charge. Copies of our Audit Committee Charter, Compensation Committee Charter, Nominating and Corporate Governance Committee Charter and the Company’s Corporate Governance Guidelines are also available on our web site at http://www.gbrx.com. In addition, each of the reports and documents listed above are available free of charge by contacting our Investor Relations Department at The Greenbrier Companies, Inc., One Centerpointe Drive, Suite 200, Lake Oswego, Oregon 97035.

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Item 1A. RISK FACTORS

In addition to the risks outlined in this annual report under the heading “Forward-Looking Statements,” as well as other comments included herein regarding risks and uncertainties, the following risk factors should be carefully considered when evaluating our company. Our business, financial condition or financial results could be materially and adversely affected by any of these risks. In addition, new risks may emerge at any time, and we cannot predict those risks or estimate the extent to which they may affect us.

The cyclical nature of our business, economic downturns or a rising interest rate environment can result in lower demand for our products and services and reduced revenue.

Our business is cyclical. Overall economic conditions and the purchasing practices of buyers have a significant effect upon our business due to the impact on demand for our products and services. As a result, during downturns, we could operate with a lower level of backlog and may slow down or halt production at some or all of our facilities. Economic conditions that result in higher interest rates increase the cost of new leasing arrangements, which could cause some of our leasing customers to lease fewer of our railcars or demand shorter lease terms. An economic downturn or increase in interest rates may reduce demand for our products and services, resulting in lower sales volumes, lower prices, lower lease utilization rates and decreased profits.

Interest rates remain at relatively low levels. Higher interest rates could increase the cost of, or potentially deter, new leasing arrangements with our customers, reduce our ability to syndicate railcars under lease to financial institutions, or impact the sales price we may receive on such syndications, any of which could materially adversely affect our business, financial condition and results of operations.

A change in our product mix due to shifts in demand or fluctuations in commodity and energy prices could have an adverse effect on our profitability.

We manufacture, lease and repair a variety of railcars. The demand for specific types of these railcars and mix of repair and refurbishment work varies from time to time. Instability and changes in the global economy, volatility in the industries that our products serve or adverse changes in the financial condition of our customers could adversely impact the demand for our railcars. In addition, fluctuations in commodity and energy prices, including crude oil and gas prices, could negatively impact the activities of our customers resulting in a corresponding adverse effect on the demand for our products and services. These shifts in demand could affect our results of operations and could have an adverse effect on our profitability. Demand for railcars that are used to transport crude oil and other energy related products is dependent on the demand for these commodities. Prices for oil and gas are subject to large fluctuations in response to relatively minor changes in the supply of, and demand for, oil and gas, market uncertainty and a variety of other economic factors that are beyond our control.

A decline in performance of the rail freight industry would have an adverse effect on our financial condition and results of operations.

Our future success depends in part upon the performance of the rail freight industry, which in large part depends on the health of the economy. If railcar loadings, railcar and railcar components replacement rates or refurbishment rates or industry demand for our railcar products weaken or otherwise do not materialize, if railcar transportation becomes more efficient from an increase in velocity or a decrease in dwell times, if there is a negative impact due to technological advances or if the rail freight industry becomes oversupplied, our financial condition and results of operations would be adversely affected.

Our backlog is not necessarily indicative of the level of our future revenues.

Our manufacturing backlog represents future production for which we have written orders from our customers in various periods, and estimated potential revenue attributable to those orders. Some of this backlog is subject to

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certain conditions, including potential adjustment to prices due to changes in prevailing market prices, or due to lower prices for new orders accepted by us from other customers for similar cars on similar terms and conditions during relevant time periods. Our reported backlog may not be converted to revenue in any particular period and some of our contracts permit cancellations with limited compensation that would not replace lost revenue or margins. In addition, some customers may attempt to cancel or modify a contract even if the contract does not allow for such cancellation or modification, and we may not be able to recover all revenue or earnings lost due to a breach of contract. The likelihood of attempted cancellations or modifications of contracts generally increases during periods of market weakness. Actual revenue from such contracts may not equal our anticipated revenues based on our backlog, and therefore, our backlog is not necessarily indicative of the level of our future revenues.

We derive a significant amount of our revenue from a limited number of customers, the loss of or reduction of business from one or more of which could have an adverse effect on our business.

A significant portion of our revenue is generated from a few major customers. Although we have some long-term contractual relationships with our major customers, we cannot be assured that our customers will continue to purchase or lease our products or services or that they will continue to do so at historical levels. A reduction in the purchasing or leasing of our products or a termination of our services by one or more of our major customers could have an adverse effect on our business and operating results.

We could be unable to lease railcars at satisfactory rates, remarket leased railcars on favorable terms upon lease termination or realize the expected residual values for end of life railcars due to changes in scrap prices, which could reduce our revenue and decrease our overall return or effect our ability to sell leased assets in the future.

The profitability of our railcar leasing business depends on our ability to lease railcars to our customers at satisfactory rates, and to remarket, sell or scrap railcars we own or manage upon the expiration of existing lease terms. The total rental payments we receive under our operating leases do not fully amortize the acquisition costs of the leased equipment, which exposes us to risks associated with remarketing the railcars and the risk of not realizing the expected residual values. Our ability to lease or remarket leased railcars profitably is dependent upon several factors, including, but not limited to, market and industry conditions, cost of and demand for competing used or newer models, costs associated with the refurbishment of the railcars, market demand or governmental mandate for refurbishment, assumptions related to expected residual values and interest rates. A downturn in the industries in which our lessees operate and decreased demand for railcars could also increase our exposure to remarketing risk because lessees may demand shorter lease terms, requiring us to remarket leased railcars more frequently. Furthermore, the resale market for previously leased railcars has a limited number of potential buyers. From August 31, 2015 to August 31, 2018, the percentage of railcars in the fleet on lease has declined from approximately 97% to 94%. Our inability to lease, remarket or sell leased railcars on favorable terms could result in reduced revenues and margins or net gain on disposition of equipment and decrease our overall returns and affect our ability to syndicate railcars to investors.

Risks related to our operations outside of the U.S. could adversely affect our operating results.

Our current operations outside of the U.S. and any future expansion of our international operations are subject to the risks associated with foreign and cross-border business transactions and activities. Political, legal, trade, financial market or economic changes or instability could limit or curtail our foreign business activities and operations. Some foreign countries in which we operate or may operate have regulatory authorities that regulate railroad safety, railcar design and railcar component part design, performance and manufacturing. If we fail to obtain and maintain certifications of our railcars and railcar parts within the various foreign countries where we operate or may operate, we may be unable to market and sell our railcars in those countries. In addition, unexpected changes in regulatory requirements, tariffs and other trade barriers, more stringent rules relating to labor or the environment, adverse tax consequences and currency and price exchange controls could limit operations and make the manufacture and distribution of our products difficult. Sovereign risk exists related to

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international governments that include, but may not be limited to, governments stopping payments or repudiating, renegotiating or nullifying their contracts, nationalizing private businesses and assets or altering banking, foreign exchange or tax regulations. The uncertainty of the legal environment or geo-political risks in these and other areas could limit our ability to enforce our rights effectively. We may experience longer customer payment cycles, difficulty in collecting accounts receivable or an inability to effectively protect intellectual property. Because we have operations outside the U.S., we could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-corruption laws. We operate in parts of the world that have experienced governmental corruption to some degree, and in certain circumstances, strict compliance with anti-corruption laws may conflict with local customs and practices. The failure to comply with laws governing international business practices may result in substantial penalties and fines. Any international expansion or acquisition that we undertake could amplify these risks related to operating outside of the U.S. Our development of customer relationships in areas outside of the U.S. may expose us to uncertainties arising from local business practices, judicial processes, cultural considerations and international political and trade tensions and our limited knowledge of foreign markets or our inability to protect our interests.

If we are unable to successfully manage the risks associated with our international business, our results of operations, financial condition, liquidity and cash flows may be negatively impacted.

Changes impacting international trade and corporate tax provisions related to the production and sales of our products may have an adverse effect on our financial condition and results of operations.

We own, lease, operate or have invested in joint ventures or entities which have manufacturing facilities in Mexico, Brazil and Europe. Our business benefits from free trade agreements such as the North American Free Trade Agreement (NAFTA) and we also rely on various U.S. corporate tax provisions related to international commerce as we build, market and sell our products internationally. NAFTA and future import taxes have been under scrutiny by the U.S. administration. On September 30, 2018 the President of the U.S. and the U.S. Trade Representative announced a new trade pact with the governments of Canada and Mexico called the United States-Mexico-Canada Agreement (USMCA). We believe the benefits we currently receive under NAFTA will continue under the USMCA. To take effect, the USMCA must be enacted by the U.S. Congress under laws governing Trade Promotion Authority. It is expected NAFTA will remain effective until this occurs. Any changes in trade treaties, corporate tax policy, import taxes and foreign policies could adversely and significantly affect our financial condition and results of operations.

Shortages of skilled labor or increased labor costs could adversely affect our operations.

We depend on skilled labor in the manufacture of railcars and marine barges, repair, refurbishment and maintenance of railcars and provision of wheel services and supply of parts. Some of our facilities are located in areas where demand for skilled laborers often exceeds supply. Shortages of some types of skilled laborers such as welders and machine operators could restrict our ability to maintain or increase production rates, lead to production inefficiencies and increase our labor costs. Due to the competitive nature of the labor markets in which we operate and the cyclical nature of the railcar industry, the resulting employment cycle increases our risk of not being able to recruit, train and retain the employees we require, particularly when the economy expands, production rates are high or competition for such skilled labor increases. Our costs to recruit, train and retain necessary, qualified employees may exceed our expectations. If we are unable to recruit, train and retain adequate numbers of qualified employees on a timely basis could materially adversely affect our business and results of operations.

The rail freight industry could become oversupplied and the use of railcars as a significant mode of transporting freight could decline, become more efficient over time, experience a shift in types of modal transportation, and/or certain railcar types could become obsolete.

The rail freight industry could become oversupplied, which could have a significant impact on the pricing, lease rates or demand for new railcars. In addition, if railcar transportation becomes more efficient from an increase in

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velocity or a decrease in idle times, especially if coupled with lower freight volumes, some of which may be permanent due to a reduction in coal volumes, this could significantly reduce the demand for our products and could adversely affect our results of operations. As the freight transportation markets we serve continue to evolve and become more efficient or are disrupted through technological developments, the use of railcars may decline in favor of other more economic modes of transportation. Features and functionality specific to certain railcar types could result in those railcars becoming obsolete as customer requirements for freight delivery change. Our operations may be adversely impacted by changes in the preferred method used by customers to ship their products or changes in demand for particular products. The industries in which our customers operate are driven by dynamic market forces and trends, which are in turn influenced by economic and political factors. Demand for our railcars may be significantly affected by changes in the markets in which our customers operate. A significant reduction in customer demand for transportation or manufacture of a particular product or change in the preferred method of transportation used by customers to ship their products could result in reduced demand for railcars and the economic obsolescence of our railcars, including those leased by our customers.

We face aggressive competition by a concentrated group of competitors and a number of factors may influence our performance. If we are unable to compete successfully, our market share, margin and results of operations may be adversely affected.

We face aggressive competition by a concentrated group of competitors in all geographic markets and in each area of our business. In addition, other companies may attempt to enter markets in which we compete. Some of these competitors are owned or financially supported by foreign countries or sovereign wealth funds, and may potentially sell products and services below cost, or otherwise compete unfairly, in order to gain market share. These markets are intensely competitive and we expect it to remain so in the foreseeable future. Competitive factors, including introduction of competitive products, new entrants into certain of our markets, price pressures, limited customer base and the relative competitiveness of our manufacturing facilities and products affect our ability to compete effectively. In addition, new technologies or the introduction of new railcars or other product offerings by our competitors could render our products obsolete or less competitive. If we do not compete successfully, our market share, margin and results of operations may be adversely affected.

We may pursue strategic opportunities, including new joint ventures, acquisitions and new business endeavors that involve inherent risks, any of which may cause us not to realize anticipated benefits and we could have difficulty integrating the operations of companies that we acquire or joint ventures we enter into, which could adversely affect our results of operations.

We may not be able to successfully identify suitable joint venture, acquisition and new business endeavors to invest in or complete potential transactions on acceptable terms. Our identification of suitable joint venture opportunities, acquisition candidates and new business endeavors involve risks inherent in assessing the values, strengths, weaknesses, risks and profitability of these opportunities. Our failure to identify suitable joint ventures, acquisition opportunities and new business endeavors may restrict our ability to grow our business. If we are successful in pursuing such opportunities, we may be required to expend significant funds or incur additional debt, which could materially adversely affect our results of operations and limit our ability to obtain financing for working capital or other purposes and we may be more vulnerable to economic downturns and competitive pressures.

The success of our acquisition and joint venture strategies depends upon our ability to successfully complete acquisitions, to enter into joint ventures and to integrate any businesses that we acquire into our existing business. The integration of acquired business operations could disrupt our business by causing unforeseen operating difficulties, diverting management’s attention from day-to-day operations and requiring significant financial resources that would otherwise be used for the ongoing development of our business. The difficulties of integration could be increased by the necessity of coordinating geographically dispersed organizations, integrating personnel with disparate business backgrounds and combining different corporate cultures. Each of these circumstances could be more likely to occur or be more severe in consequence in the case of an acquisition or joint venture involving a business that is outside of our core areas of expertise. In addition, we could be unable

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to retain key employees or customers of the combined businesses. We could face integration issues including those related to operations, internal controls, information systems and operational functions of the acquired companies and we also could fail to realize cost efficiencies or synergies that we anticipated when selecting our acquisition candidates and joint ventures. Any of these items could adversely affect our results of operations.

If we or our joint ventures fail to complete capital expenditure projects on time and within budget, or if these projects, once completed, fail to operate as anticipated, such failure could adversely affect our business, financial condition and results of operations.

From time-to-time, we, or our joint ventures, undertake strategic capital projects in order to enhance, expand and/or upgrade facilities and operational capabilities. Our ability, and our joint ventures’ ability, to complete these projects on time and within budget, and for us to realize the anticipated increased revenues or otherwise realize acceptable returns on these investments or other strategic capital projects that may be undertaken is subject to a number of risks. Many of these risks are beyond our control, including a variety of market, operational, permitting, and labor related factors. In addition, the cost to implement any given strategic capital project ultimately may prove to be greater than originally anticipated. If we, or our joint ventures, are not able to achieve the anticipated results from the implementation of any of these strategic capital projects, or if unanticipated implementation costs are incurred, our business, financial condition and results of operations may be adversely affected.

A failure to design or manufacture products or technologies or to achieve timely certification or market acceptance of new products or technologies could have an adverse effect on our profitability.

We continue to introduce new railcar product innovations and technologies, and we periodically accept orders prior to receipt of railcar certification or proof of ability to manufacture a quality product that meets customer standards. We could be unable to successfully design or manufacture these new railcar product innovations or technologies. Our inability to develop and manufacture such new product innovations or technologies in a timely fashion and profitable manner, obtain timely certification, or achieve market acceptance, or the existence of quality problems in our new products, could have a material adverse effect on our revenue and results of operations and subject us to penalties, cancellation of orders and/or other damages.

Our relationships with our joint venture and alliance partners could be unsuccessful, which could adversely affect our business.

We have entered into several joint venture agreements and other alliances or investments with other companies to increase our sourcing alternatives, reduce costs and produce new railcars or components. We may seek to expand our relationships or enter into new agreements with other companies. If our joint venture or alliance partners are unable to fulfill their contractual obligations or if these relationships are otherwise not successful in the future, our manufacturing and other costs could increase, we could encounter production disruptions, growth opportunities could fail to materialize, or we could be required to fund such joint ventures or alliances in amounts significantly greater than initially anticipated, any of which could adversely affect our business.

If any of our joint ventures generate significant losses, including future potential intangible asset or goodwill impairment charges, it could adversely affect our results of operations or cause our investment to be impaired.

We have potential exposure to environmental liabilities, which could increase costs or have an adverse effect on results of operations.

We are subject to extensive national, state, foreign, provincial and local environmental laws and regulations concerning, among other things, air emissions, water discharge, solid waste and hazardous substances handling and disposal and employee health and safety. These laws and regulations are complex and frequently change. We

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could incur unexpected costs, penalties and other civil and criminal liability if we, or in certain circumstances others, fail to comply with environmental laws or permits issued pursuant to those laws. We also could incur costs or liabilities related to off-site waste disposal or remediating soil or groundwater contamination at our properties, including as set forth below. In addition, future environmental laws and regulations may require significant capital expenditures or changes to our operations, or may impose liability on us in the future for actions that complied with then applicable laws and regulations when the action was taken.

Portland Harbor Superfund Site

Our Portland, Oregon manufacturing facility is located adjacent to the Willamette River. In December 2000, the U.S. Environmental Protection Agency (EPA) classified portions of the Willamette River bed known as the Portland Harbor, including the portion fronting our manufacturing facility, as a federal “National Priority List” or “Superfund” site due to sediment contamination (the Portland Harbor Site). We, along with more than 140 other parties, have received a “General Notice” of potential liability from the EPA relating to the Portland Harbor Site. The letter advised us that we may be liable for the costs of investigation and remediation (which liability may be joint and several with other potentially responsible parties) as well as for natural resource damages resulting from releases of hazardous substances to the site. Ten private and public entities, including us (the Lower Willamette Group or LWG), signed an Administrative Order on Consent (AOC) to perform a remedial investigation/feasibility study (RI/FS) of the Portland Harbor Site under EPA oversight, and several additional entities have not signed such consent, but nevertheless contributed money to the effort. The EPA-mandated RI/FS was produced by the LWG and cost over $110 million during a 17-year period. We bore a percentage of the total costs incurred by the LWG in connection with the investigation. We cannot provide assurance that some or all of any such outlay will be recoverable from other responsible parties. The EPA issued its ROD for the Portland Harbor Site on January 6, 2017 and accordingly on October 26, 2017, the AOC was terminated.

Separate from the process described above, which focused on the type of remediation to be performed at the Portland Harbor Site and the schedule for such remediation, 83 parties, including the State of Oregon and the federal government, have entered into a non-judicial mediation process to try to allocate costs associated with remediation of the Portland Harbor Site. Approximately 110 additional parties have signed tolling agreements related to such allocations. On April 23, 2009, we and the other AOC signatories filed suit against 69 other parties due to a possible limitations period for some such claims; Arkema Inc. et al v. A & C Foundry Products, Inc. et al, U.S. District Court, District of Oregon, Case #3:09-cv-453-PK. All but 12 of these parties elected to sign tolling agreements and be dismissed without prejudice, and the case was stayed by the court until January 16, 2020. The allocation process is continuing in parallel with the process to define the remediation steps.

The EPA’s January 6, 2017 ROD identifies a remedy that the EPA estimates will take 13 years of active remediation, followed by 30 years of monitoring, with an estimated undiscounted cost of $1.7 billion. The EPA expects its cost estimates to be within a range of -30% to +50%, but this ROD states that changes in costs are likely to occur as a result of new data it wants to collect over a 2-year period prior to final remedy design. The ROD identifies 13 Sediment Decision Units. One of the units, RM9W, includes the nearshore area of the river sediments offshore of our Portland, Oregon manufacturing facility as well as upstream and downstream of the facility. The ROD does not break down total remediation costs by unit.

The ROD does not assign responsibility for the costs of clean-up, nor does it allocate such costs among the potentially responsible parties. Responsibility for funding and implementing the EPA’s selected cleanup option will be determined at an unspecified later date. Based on the investigation to date, we believe that we did not contribute in any material way to contamination in the river sediments or the damage of natural resources in the Portland Harbor Site and that the damage in the area of the Portland Harbor Site adjacent to our property precedes our ownership of the Portland, Oregon manufacturing facility. Because these environmental investigations are still underway, including the collection of new pre-remedial design sampling data by the EPA, sufficient information is currently not available to determine our liability, if any, for the cost of any required remediation or restoration of the Portland Harbor Site or to estimate a range of potential loss. Based on the results of the pending investigations and future assessments of natural resource damages, we may be required to incur costs associated with additional phases of investigation or remedial action, and may be liable for damages to

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natural resources. In addition, we may be required to perform periodic maintenance dredging in order to continue to launch vessels from our launch ways in Portland, Oregon, on the Willamette River, and the river’s classification as a Superfund site could result in some limitations on future dredging and launch activities. Any of these matters could adversely affect our business and Consolidated Financial Statements, or the value of our Portland property.

On January 30, 2017 the Confederated Tribes and Bands of Yakama Nation sued 33 parties including our company as well as the United States and the State of Oregon for costs it incurred in assessing alleged natural resource damages to the Columbia River from contaminants deposited in Portland Harbor. Confederated Tribes and Bands of the Yakama Nation v. Air Liquide America Corp., et. al., United States Court for the District of Oregon Case No. 3i17-CV-00164-SB. We, along with many of the other defendants, have moved to dismiss the case. That motion is pending. The complaint does not specify the amount of damages the Plaintiff will seek.

Oregon Department of Environmental Quality (DEQ) Regulation of Portland Manufacturing Operations

We have entered into a Voluntary Cleanup Agreement with the DEQ in which we agreed to conduct an investigation of whether, and to what extent, past or present operations at our Portland property may have released hazardous substances into the environment. We have also signed an Order on Consent with the DEQ to finalize the investigation of potential onsite sources of contamination that may have a release pathway to the Willamette River. Interim precautionary measures are also required in the order and we are currently discussing with the DEQ potential remedial actions which may be required. We could incur significant expenses for remediation and we cannot provide assurance that some or all of any such outlay will be recoverable from other responsible parties.

The timing of our asset sales and related revenue recognition could cause significant differences in our quarterly results and liquidity.

We may build railcars or marine barges in anticipation of a customer order, or that are leased to a customer and ultimately planned to be sold to a third party. The difference in timing of production and the ultimate sale subjects our company to operational and market risks. In addition, we periodically sell railcars from our own lease fleet and the timing and volume of such sales is difficult to predict. As a result, comparisons of our manufacturing revenue, deliveries, quarterly net gain on disposition of equipment, income and liquidity between quarterly periods within one year and between comparable periods in different years may not be meaningful and should not be relied upon as indicators of our future performance.

We depend on our senior management team and other key employees, and significant attrition within our management team or unsuccessful succession planning for members of our senior management team and other key employees who are at or nearing retirement age, could adversely affect our business.

Our success depends in part on our ability to attract, retain and motivate senior management and other key employees. Achieving this objective may be difficult due to many factors, including fluctuations in global economic and industry conditions, competitors’ hiring practices, cost reduction activities, and the effectiveness of our compensation programs. Competition for qualified personnel can be very intense. We must continue to recruit, retain and motivate senior management and other key employees sufficient to maintain our current business and support our future projects and growth objectives. We are vulnerable to attrition among our current senior management team and other key employees. A loss of any such personnel, or the inability to recruit and retain qualified personnel in the future, could have an adverse effect on our business, financial condition and results of operations.

Many members of our senior management team and other key employees are at or nearing retirement age. If we are unsuccessful in our succession planning efforts, the continuity of our business and results of operations could be adversely affected.

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Changes in the credit markets and the financial services industry could negatively impact our business, results of operations, financial condition or liquidity.

The credit markets and the financial services industry may experience volatility which can result in tighter availability of credit on more restrictive terms and limit our ability to sell railcar assets. Our liquidity, financial condition and results of operations could be negatively impacted if our ability to borrow money to finance operations, obtain credit from trade creditors, offer leasing products to our customers or sell railcar assets were to be impaired. In addition, scarcity of capital could also adversely affect our customers’ ability to purchase or pay for products from us or our suppliers’ ability to provide us with product, either of which could negatively affect our business and results of operations.

Volatility in the global financial markets may adversely affect our business, financial condition and results of operations.

During periods of volatility in the global financial markets, certain of our customers could delay or otherwise reduce their purchases of railcars and other products and services. If volatile conditions in the global credit markets impact our customers’ access to credit, product order volumes may decrease or customers may default on payments owed to us.

Likewise, if our suppliers face challenges obtaining credit, or otherwise operating their businesses, the supply of materials we purchase from them to manufacture our products may be interrupted. Any of these conditions or events could result in reductions in our revenues, increased price competition, or increased operating costs, which could adversely affect our business, financial condition and results of operations.

Our actual results may differ significantly from our announced expectations.

From time to time, we have released, and may continue to release guidance estimates in our quarterly and annual earnings releases, quarterly and annual earnings conference calls, or otherwise, regarding our future performance that represent our management’s estimates as of the date of release. Although we believe that any such guidance or estimates would provide investors and analysts with a better understanding of management’s expectations for the future and could be useful to our shareholders and potential shareholders, such guidance or estimates would consist of forward-looking statements subject to the risks and uncertainties described in this report and in our other public filings and public statements. Guidance and estimates are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the guidance or estimates may not materialize or may vary significantly from actual results. Our actual results may not always be in line with or exceed any guidance or estimates we may provide, especially in times of economic uncertainty. If our financial results for a particular period do not meet our guidance or estimates or the expectations of investors or research analysts, or if we reduce our guidance or estimates for future period, the trading volume or market price of our common stock may decline. In light of the foregoing, investors are urged not to unduly rely upon any guidance or estimates in making an investment decision regarding our common stock.

Fluctuations in the availability and price of energy, freight transportation, steel and other raw materials, and our fixed price contracts could have an adverse effect on our ability to manufacture and sell our products on a cost effective basis and could adversely affect our margins and revenue.

A significant portion of our business depends upon the adequate supply of steel, components and other raw materials at competitive prices and a small number of suppliers provide a substantial amount of our requirements. The cost of steel and all other materials used in the production of our railcars represents more than half of our direct manufacturing costs per railcar and in the production of our marine barges represents more than 30% of our direct manufacturing costs per marine barge. Our cost of acquiring steel, components and other raw materials to manufacture our railcars and marine barges are impacted by tariffs. If we are not able to purchase these materials at competitive prices, it could adversely impact our ability to produce and sell our products on a cost effective basis which could affect our revenue and profitability.

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Our businesses also depend upon an adequate supply of energy at competitive prices. When the price of energy increases, it adversely impacts our operating costs and could have an adverse effect upon our ability to conduct our businesses on a cost-effective basis. We cannot be assured that we will continue to have access to supplies of energy or necessary components for manufacturing railcars and marine barges. Our ability to meet demand for our products could be adversely affected by the loss of access to any of these supplies, the inability to arrange alternative access to any materials, or suppliers limiting allocation of materials to us.

In some instances, we have fixed price contracts that anticipate material price increases and surcharges, or contracts that contain actual or formulaic pass-through of material price increases and surcharges. However, if the price of steel or other raw materials were to fluctuate in excess of anticipated increases on which we have based our fixed price contracts, or if we were unable to adjust our selling prices or have adequate protection in our contracts against changes in material prices, or if we are unable to reduce operating costs to offset any price increases, our margins would be adversely affected. The loss of suppliers or their inability to meet our price, quality, quantity and delivery requirements could have an adverse effect on our ability to manufacture and sell our products on a cost-effective basis.

Decreases in the price of scrap adversely impact our Wheels, Repair & Parts margins and revenue and the residual value and future depreciation of our leased assets. A portion of our Wheels, Repair & Parts businesses involve scrapping steel parts and the resulting revenue from such scrap steel increases our margins and revenues. When the price of scrap steel declines, our revenues and margins in such business would decrease.

We rely on limited suppliers for certain components and services needed in our production. If we are not able to procure specialty components or services on commercially reasonable terms or on a timely basis, our business, financial condition and results of operations would be adversely affected.

Our manufacturing operations depend in part on our ability to obtain timely deliveries of materials, components and services in acceptable quantities and quality from our suppliers. In 2018, the top ten suppliers for all inventory purchases accounted for approximately 52% of total purchases. Amsted Rail Company, Inc. accounted for 19% of total inventory purchases in 2018. No other suppliers accounted for more than 10% of total inventory purchases. Certain components of our products, particularly specialized components like castings, bolsters, trucks, wheels and axels, and certain services, such as lining capabilities, are currently only available from a limited number of suppliers. Increases in the number of railcars manufactured could increase the demand for such components and services and strong demand may cause industry-wide shortages if suppliers are in the process of ramping up production or reach capacity production. Our dependence on a limited number of suppliers involves risks, including limited control over pricing, availability and delivery schedules. If any one or more of our suppliers cease to provide us with sufficient quantities of our components or services in a timely manner or on terms acceptable to us, or cease to provide services or manufacture components of acceptable quality, we could incur disruptions or be limited in our production of our products and we could have to seek alternative sources for these components or services. We could also incur delays while we attempt to locate and engage alternative qualified suppliers and we might be unable to engage acceptable alternative suppliers on favorable terms, if at all. In addition, we are increasing the number of components and services we manufacture or provide ourselves, directly or through joint ventures. If we are not successful at manufacturing such components or providing such services or have production problems after transitioning to self-produced supplies, we may not be able to replace such components or services from third party suppliers in a timely manner. Any such disruption in our supply of specialized components and services or increased costs of those components or services could harm our business and adversely affect our results of operations.

Train derailments or other accidents or claims could subject us to legal claims that adversely impact our business, financial condition and our results of operations.

We provide a number of services which include the manufacture and supply of new railcars, wheels, components and parts and the lease and repair of railcars for our customers that transport a variety of commodities, including tank railcars that transport hazardous materials such as crude oil, ethanol and other products. In addition, we have

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a Regulatory Services Group which offers regulatory, engineering, process consulting and advocacy support to the tank car and petrochemical rail shipper community, among other services. We could be subject to various legal claims, including claims for negligence, personal injury, physical damage and product or service liability, or in some cases strict liability, as well as potential penalties and liability under environmental laws and regulations, in the event of a derailment or other accident involving railcars, including tank railcars. Additionally, the severity of injury or property damage arising from an incident may influence the causation responsibility analysis exposing us to potentially greater liability. If we become subject to any such claims and are unable successfully to resolve them or have inadequate insurance for such claims, our business, financial condition and results of operations could be materially adversely affected.

Changes in or failure to comply with legal and regulatory requirements applicable to the industries in which we operate may adversely impact our business, financial condition and results of operations.

Our operations and the industry we serve, including our customers, are subject to extensive regulation by governmental, regulatory and industry authorities and by federal, state, local and foreign agencies. These organizations establish rules and regulations for the railcar industry, including construction specifications and standards for the design and manufacture of railcars; mechanical, maintenance and related standards; and railroad safety. New rules and administrative regulations from these entities could impact our financial results, demand for our products and the economic value of our assets. In addition, if we fail to comply with the requirements and regulations of these entities, we could face sanctions and penalties that could negatively affect our financial results.

The risks of substantial costs and liabilities related to compliance with these laws and regulations are an inherent part of our business. Despite our intention to comply with these laws and regulations, we cannot guarantee that we will be able to do so at all times and compliance may prove to be more costly and limiting than we currently anticipate and compliance requirements could increase in future years. These laws and regulations are complex, change frequently and may become more stringent over time, which could impact our business, financial condition and results of operations.

In North America regulatory changes, along with prevailing market conditions, could materially affect new tank railcar manufacturing and retrofitting activities industry-wide, including negative impacts to customer demand for our products and services. In North America additional laws and regulations have been proposed or adopted that will potentially have a significant impact on railroad operations, including the implementation of “positive train control” (PTC) requirements. PTC is a collision avoidance technology intended to override engineer controlled locomotives and stop certain types of train accidents. While certain of these legal and regulatory changes could result in increased levels of railcar repair or refurbishment work and/or new tank car manufacturing activity, if we are unable to manage to adapt our business successfully to changing regulations, our business and results of operations could be adversely affected.

In Europe, changes to the process for obtaining regulatory approval for the operation of new or modified railcars may make it more difficult for us to deliver products to our customers in a timely manner. Effective in June of 2019, issuance of railway vehicle authorizations will be centralized with the European Union Agency for Railways, rather than being the responsibility of railway safety authorities in each European Union member country. This change may result in delays of several months for obtaining required regulatory approvals, when compared to the current system, which may have an adverse effect on our business and results of operations.

An adverse outcome in any pending or future litigation could negatively impact our business and results of operations.

We are a defendant in several pending cases in various jurisdictions. If we are unsuccessful in resolving these claims, our business and results of operations could be adversely affected. In addition, future claims that may arise relating to any pending or new matters, whether brought against us or initiated by us against third parties, could distract management’s attention from business operations and increase our legal and related costs, which could also negatively impact our business and results of operations.

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Risks related to potential misconduct by employees may adversely impact us.

Our employees may engage in misconduct or other improper activities, including noncompliance with our policies or regulatory standards and requirements, which could subject us to regulatory sanctions and reputational damage and materially harm our business. It is not always possible to deter employee misconduct, and the precautions we take to prevent and detect this activity may not be effective in controlling unknown or unmanaged risks or losses, including risks associated with harassment, as well as whistleblower complaints and litigation. There can be no assurance that we will succeed in preventing misconduct by employees in the future. In addition, the investigation of alleged misconduct disrupts our operations and may harm the public’s perception of our company, which may be costly. Any such events in the future may have a material adverse impact on our financial condition or results of operations.

Some of our employees belong to labor unions and strikes or work stoppages could adversely affect our operations.

We are a party to collective bargaining agreements with various labor unions at some of our operations. Disputes with regard to the terms and conditions of these agreements or our potential inability to negotiate acceptable contracts with these unions in the future could result in, among other things, strikes, work stoppages or other slowdowns by the affected workers. We cannot be assured that our relations with our workforce will remain positive. Union organizers are actively working to organize employees at some of our other facilities. If our workers were to engage in a strike, work stoppage or other slowdown, or other employees were to become unionized or the terms and conditions in future labor agreements were renegotiated, or if union representation is implemented at such sites and we are unable to agree with the union on reasonable employment terms, including wages, benefits, and work rules, we could experience a significant disruption of our operations and incur higher ongoing labor costs. In addition, we could face higher labor costs in the future as a result of severance or other charges associated with lay-offs, shutdowns or reductions in the size and scope of our operations or due to the difficulties of restarting our operations that have been temporarily suspended.

Our stock price has been volatile and may continue to experience large fluctuations.

The price of our common stock has experienced rapid and significant price fluctuations. Our stock price ranged from a low of $41.95 per share to a high of $60.90 per share for the year ended August 31, 2018 and a low of $28.95 per share to a high of $51.25 per share for the year ended August 31, 2017. The price for our common stock is likely to continue to be volatile and subject to price and volume fluctuations in response to market and other factors, including the factors discussed elsewhere in these risk factors and the following:

• quarter-to-quarter variations in our operating results;

• the depth and liquidity of the market for our common stock;

• shortfalls in revenue or earnings from levels expected by securities analysts and investors, including the level of our backlog and number of orders received during the period;

• changes in securities analysts’ estimates of our future performance;

• shareholder activism;

• dissemination of false or misleading statements through the use of social and other media to discredit us, disparage our products or to harm our reputation;

• any developments that materially impact investors’ or customers’ perceptions of our business prospects;

• dilution resulting from our sale of additional shares of common stock or from the conversion of convertible notes;

• changes in governmental regulation;

• significant railcar industry announcements or developments;

• the introduction of new products or technologies by us or our competitors;

• actual or anticipated variations in our or our competitors’ quarterly or annual financial results;

• the general health and outlook of our industry;

• general financial and other market conditions; and

• domestic and international economic conditions.

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In addition, public stock markets have experienced, and may in the future experience, extreme price and trading volume volatility. This volatility has significantly affected the market prices of securities of many companies for reasons frequently unrelated to, or that disproportionately impact, the operating performance of these companies and may adversely affect the price of our common stock. These broad market fluctuations may adversely affect the market price of our common stock in the future.

A material decline in the price of our common stock may result in the assertion of certain claims against us, and/or the commencement of inquiries and/or investigations against us. A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock, a reduction in our ability to raise capital, and the inability of investors to obtain a favorable selling price for their shares. Any reduction in our ability to raise equity capital in the future may force us to reallocate funds from other planned uses and could have a significant negative effect on our business plans and operations.

Following periods of volatility in the market price of their stock, historically many companies have been the subject of securities class action litigation. If we became involved in securities class action litigation in the future, it could result in substantial costs and diversion of our management’s attention and our resources and could harm our stock price, business, prospects, financial condition and results of operations.

Our product and service warranties could expose us to potentially significant claims.

We offer our customers limited warranties for many of our products and services. Accordingly, we may be subject to significant warranty claims in the future, such as multiple claims based on one defect repeated throughout our production or servicing processes or claims for which the cost of repairing the defective part is highly disproportionate to the original cost of the part. These types of warranty claims could result in costly product recalls, customers seeking monetary damages, significant repair costs and damage to our reputation.

If warranty claims attributable to actions of third party component manufacturers are not recoverable from such parties due to their poor financial condition or other reasons, we could be liable for warranty claims and other risks for using these materials in our products.

Many of our products are sold to third parties who may misuse, improperly install or improperly or inadequately maintain or repair such products thereby potentially exposing us to claims that could increase our costs and weaken our financial condition.

The products we manufacture are designed to work optimally when properly operated, installed, repaired, maintained and used to transport the intended cargo. When this does not occur, we may be subjected to claims or litigation associated with product damage, injuries or property damage that could increase our costs and weaken our financial condition.

Our financial performance and market value could cause future write-downs of goodwill or intangibles in future periods.

We are required to perform an annual impairment review of goodwill and indefinite lived assets which could result in an impairment charge if it is determined that the carrying value of the asset is in excess of the fair value. We perform a goodwill impairment test annually during our third quarter. Goodwill is also tested more frequently if changes in circumstances or the occurrence of events indicates that a potential impairment exists.

When we have continued underperforming operations or changes in circumstances, such as a decline in the market price of our common stock, changes in demand or in the numerous variables associated with the judgments, assumptions and estimates made in assessing the appropriate valuation of goodwill indicate the carrying amount of certain indefinite lived assets may not be recoverable, the assets are evaluated for impairment. Among other things, our assumptions used in the valuation of goodwill include growth of revenue

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and margins and increased cash flows over time. If actual operating results were to differ from these assumptions, it may result in an impairment of goodwill. As of August 31, 2018, we had $51.1 million of goodwill in our Wheels, Repair & Parts segment and $27.1 million in our Manufacturing segment. Impairment charges to our goodwill or our indefinite lived assets would impact our results of operations. Future write-downs of goodwill and intangibles could affect certain of the financial covenants under debt instruments and could restrict our financial flexibility. In the event of goodwill impairment, we may have to test other assets for impairment.

The conversion of our outstanding convertible notes could result in substantial dilution to our current stockholders.

We have the option to settle outstanding convertible notes in cash, although if we opt not to or do not have the ability to, the conversion of some or all of our convertible notes may dilute the ownership interests of existing stockholders. Any sales in the public market of the common stock issuable upon the conversion of the notes could adversely affect prevailing market prices of our common stock. In addition, the existence of the notes may encourage short selling by market participants, because the conversion of the notes could depress the price of our common stock.

We are a holding company with no independent operations. Our ability to meet our obligations depends upon the performance of our subsidiaries and our joint ventures and their ability to make distributions to us.

As a holding company, we are dependent on the earnings and cash flows of, and dividends, distributions, loans or advances from, our subsidiaries and joint ventures to generate the funds necessary to meet certain of our obligations including the payment of principal, of premium, if any, and interest on debt obligations. Any payment of dividends, distributions, loans or advances to us by our subsidiaries could be subject to statutory restrictions on dividends or repatriation of earnings under applicable local law and monetary transfer restrictions in the jurisdictions in which our subsidiaries operate. In addition, many of our subsidiaries and our joint ventures are parties to credit facilities that contain restrictions on the timing and amount of any payment of dividends, distributions, loans or advances that our subsidiaries may make to us. Under certain circumstances, some or all of our subsidiaries may be prohibited from making any such payments.

Our governing documents, the indentures governing our 2024 Convertible Notes, and Oregon law contain certain provisions that could prevent or make more difficult an attempt to acquire us.

Our Articles of Incorporation and Bylaws, as currently in effect, contain certain provisions that may have anti-takeover effects, including:

• a classified Board of Directors, with each class containing as nearly as possible one-third of the total number of members of the Board of Directors and the members of each class serving for staggered three-year terms;

• a vote of at least 55% of our voting securities to amend, repeal or adopt an inconsistent provision of certain provisions of our Articles of Incorporation;

• no less than 120 days’ advance notice with respect to nominations of directors or other matters to be voted on by stockholders other than by or at the direction of the Board of Directors;

• removal of directors only for cause;

• the calling of special meetings of stockholders only by the president, a majority of the Board of Directors or the holders of not less than 25% of all votes entitled to be cast on the matters to be considered at such meeting;

• the issuance of preferred stock by our board without further action by the shareholders; and

• the availability under the Articles of Series A participating preferred stock that may be issuable.

The provisions discussed above could have anti-takeover effects because they may delay, defer or prevent an unsolicited acquisition proposal that some, or a majority, of our stockholders might believe to be in their best interests or in which stockholders might receive a premium for their common stock over the then-prevailing market price.

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The Oregon Control Share Act and business combination law could limit parties who acquire a significant amount of voting shares from exercising control over us for specific periods of time. These acts could lengthen the period for a proxy contest or for a stockholder to vote their shares to elect the majority of our Board and change management. Additionally, the indentures governing our 2024 Convertible Notes provide for the acceleration, at the lenders option, of all outstanding principal and interest owed on the notes upon a change of control of our company. The rights afforded to our creditors under these indentures could increase the cost of any potential acquisition of our company and have a resulting chilling effect on interest in acquiring our company.

These restrictions and provisions could have the effect of dissuading other stockholders or third parties from contesting director elections or attempting certain transactions with us, including, without limitation, acquisitions, which could cause investors to view our securities as less attractive investments and reduce the market price of our common stock and the notes.

Payments of cash dividends on our common stock may be made only at the discretion of our Board of Directors and may be restricted by Oregon law.

Any decision to pay dividends will be at the discretion of our Board of Directors and will depend upon our operating results, strategic plans, capital requirements, financial condition, provisions of our borrowing arrangements and other factors our Board of Directors considers relevant. Furthermore, Oregon law imposes restrictions on our ability to pay dividends. Accordingly, we may not be able to continue to pay dividends in any given amount in the future, or at all.

Fluctuations in foreign currency exchange rates could lead to increased costs and lower profitability.

Outside of the U.S., we primarily conduct business in Mexico and Europe and our non-U.S. businesses conduct their operations in local currencies and other regional currencies. We also source materials worldwide. Fluctuations in exchange rates may affect demand for our products in foreign markets or our cost competitiveness and may adversely affect our profitability. Although we attempt to mitigate a portion of our exposure to changes in currency rates through currency rate hedge contracts and other activities, these efforts cannot fully eliminate the risks associated with the foreign currencies. In addition, some of our borrowings are in foreign currency, giving rise to risk from fluctuations in exchange rates. A material or adverse change in exchange rates could result in significant deterioration of profits or in losses for us.

We have indebtedness, which could have negative consequences to our business or results of operations.

As of August 31, 2018, our total consolidated indebtedness was approximately $469.7 million (excluding $26.6 million of debt discount and $6.9 million of debt issuance costs). As of August 31, 2018, approximately $179.9 million (excluding $0.5 million of debt issuance costs) of our consolidated indebtedness was secured. Our indebtedness consists of convertible notes, a senior secured revolving credit facility and term loans. Our level of indebtedness could have a material adverse effect on our business and make it more difficult for us to satisfy our obligations under our outstanding indebtedness and the notes. As a result of our debt and debt service obligations, we face increased risks regarding, among other things, the following:

• our ability to borrow additional amounts or refinance existing indebtedness in the future for working capital, capital expenditures, acquisitions, debt service requirements, investments, stock repurchases, execution of our growth strategy, or other purposes may be limited or such financing may be more costly;

• our availability of cash flow to fund working capital requirements, capital expenditures, investments, acquisitions or other strategic initiatives and other general corporate purposes because a portion of our cash flow is needed to pay principal and interest on our debt;

• our vulnerability to competitive pressures and to general adverse economic or industry conditions, including fluctuations in market interest rates or a downturn in our business;

• our being at a competitive disadvantage relative to our competitors that have greater financial resources than us or more flexible capital structures than us;

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• our ability to satisfy our financial obligations related to our consolidated indebtedness;

• our additional exposure to the risk of increased interest rates as certain of our borrowings are at variable rates of interest, which could result in higher interest expense in the event of an increase in interest rates;

• our restrictions under the restrictive covenants in our North American senior secured credit facility, our secured term loan, our other credit agreements, and any of the agreements governing our future indebtedness adversely restricting our financial and operating flexibility and subjecting us to other risks; and

• the possibility we may suffer a material adverse effect on our business and financial condition if we are unable to service our debt or obtain additional financing, as needed.

Despite our current indebtedness levels and the restrictive covenants set forth in the agreements governing our indebtedness, if we, our subsidiaries and our joint ventures are in compliance with the covenants, we, our subsidiaries and our joint ventures may be able to incur substantially more indebtedness, including secured indebtedness, and other obligations and liabilities that do not constitute indebtedness. This could increase the risks associated with our indebtedness. As of August 31, 2018, after giving effect to issued but undrawn letters of credit, we had approximately $392.6 million of availability under our North American senior secured credit facility (based on our borrowing base as of such date) and approximately $57.5 million of availability under our European and Mexican joint venture senior secured credit facilities.

We may need to raise additional capital to operate our business and achieve our business objectives, which could result in dilution to investors.

We require substantial working capital to fund our business. If additional funds are raised through the issuance of equity securities, the percentage ownership held by our stockholders will be reduced and these equity securities may have rights, preferences or privileges senior to those of our common stock. We evaluate opportunities to access the capital markets taking into account our financial condition and other relevant considerations. Additional financing may not be available when needed, on terms favorable to us or at all. If adequate funds are not available or are not available on acceptable terms, we may be unable to develop or enhance our business, take advantage of future opportunities or respond to competitive pressures, which would harm our business, financial condition and results of operations.

Our business and operations could be negatively affected if we become subject to shareholder activism, which could cause us to incur significant expense, hinder execution of our business strategy and impact our stock price.

Shareholder activism, which could take many forms and arise in a variety of situations, has been increasing in publicly traded companies recently. Shareholder activism, including potential proxy contests, could result in substantial costs and divert management’s and our Board of Directors’ attention and resources from our business. Additionally, such shareholder activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with service providers and make it more difficult to attract and retain qualified personnel. Also, we may be required to incur significant legal fees and other expenses related to activist shareholder matters. Our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any shareholder activism.

We are subject to cybersecurity risks and may incur increasing costs in an effort to minimize those risks.

Our business employs systems and websites that allow for the storage and transmission of proprietary or confidential information regarding our customers, employees, job applicants and other parties, including financial information, intellectual property and personal identification information. Security breaches and other disruptions could compromise our information, expose us to liability and harm our reputation and business. The steps we take to deter and mitigate these risks may not be successful. We may not have the resources or technical sophistication to anticipate or prevent current or rapidly evolving types of cyber-attacks. Attacks may be targeted at us, our customers, or others who have entrusted us with information. Actual or anticipated attacks may cause

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us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees, and engage third-party experts or consultants. Advances in computer capabilities, or other technological developments may result in the technology and security measures used by us to protect transaction or other data being breached or compromised. In addition, data and security breaches can also occur as a result of non-technical issues, including intentional or inadvertent breach by our employees or by persons with whom we have commercial relationships. Any compromise or breach of our security could result in a violation of applicable privacy and other laws, legal and financial exposure, negative impacts on our customers’ willingness to transact business with us and a loss of confidence in our security measures, which could have an adverse effect on our results of operations and our reputation.

Updates or changes to our information technology systems may result in problems that could negatively impact our business.

We have information technology systems, comprising hardware, network, software, people, processes and other infrastructure that are important to the operation of our businesses. We continue to evaluate and implement upgrades and changes to information technology systems that support substantially all of our operating and financial functions. We could experience problems in connection with such implementations, including compatibility issues, training requirements, higher than expected implementation costs and other integration challenges and delays. A significant problem with an implementation, integration with other systems or ongoing management and operation of our systems could negatively impact our business by disrupting operations. Such a problem could also have an adverse effect on our ability to generate and interpret accurate management and financial reports and other information on a timely basis, which could have a material adverse effect on our financial reporting system and internal controls and adversely affect our ability to manage our business.

If we are unable to protect our intellectual property and prevent its improper use by third parties or if third parties assert that our products or services infringe their intellectual property rights, our ability to compete in the market may be harmed, and our business and financial condition may be adversely affected.

The protection of our intellectual property is important to our business. We rely on a combination of trademarks, copyrights, patents and trade secrets to protect our intellectual property. However, these protections might be inadequate. Our pending or future trademark, copyright and patent applications might not be approved or, if allowed, might not be sufficiently broad. If our intellectual property rights are not adequately protected we may not be able to commercialize our technologies, products or services and our competitors could commercialize our technologies, which could result in a decrease in our sales and market share and could materially adversely affect our business, financial condition and results of operations. Conversely, third parties might assert that our products, services, or other business activities infringe their patents or other intellectual property rights. Infringement and other intellectual property claims and proceedings brought against us, whether successful or not, could result in substantial costs and harm our reputation. Such claims and proceedings can also distract and divert our management and key personnel from other tasks important to the success of our business. In addition, intellectual property litigation or claims could force us to cease selling or using products that incorporate the asserted intellectual property, which would adversely affect our revenues, or cause us to pay substantial damages for past use of the asserted intellectual property or to pay substantial fees to obtain a license from the holder of the asserted intellectual property, which license may not be available on reasonable terms, if at all. In the event of an adverse determination in an intellectual property suit or proceeding, or our failure to license essential technology or redesign our products so as not to infringe third party intellectual property rights, our sales could be harmed and our costs could increase, which could materially adversely affect our business, financial condition and results of operations.

We could be liable for physical damage, business interruption or product liability claims that exceed our insurance coverage.

The nature of our business subjects us to physical damage, business interruption and product liability claims, especially in connection with the repair and manufacture of products that carry hazardous or volatile materials.

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Although we maintain liability insurance coverage at commercially reasonable levels compared to similarly sized heavy equipment manufacturers, an unusually large physical damage, business interruption or product liability claim or a series of claims based on a failure repeated throughout our production process could exceed our insurance coverage or result in damage to our reputation, which could materially adversely impact our financial condition and results of operations.

We could be unable to procure adequate insurance on a cost-effective basis in the future.

The ability to insure our businesses, facilities and rail assets is an important aspect of our ability to manage risk. As there are only limited providers of this insurance to the railcar industry, there is no guarantee that such insurance will be available on a cost-effective basis in the future. In addition, we cannot assure that our insurance carriers will be able to pay current or future claims.

Changes in accounting standards or inaccurate estimates or assumptions in the application of accounting policies could adversely affect our financial results.

Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. Some of these policies require use of estimates and assumptions that may affect the reported value of our assets or liabilities and financial results and are critical because they require management to make difficult, subjective, and complex judgments about matters that are inherently uncertain. Accounting standard setters and those who interpret the accounting standards (such as the Financial Accounting Standards Board, the SEC, and our independent registered public accounting firm) may amend or even reverse their previous interpretations or positions on how these standards should be applied. In some cases, we could be required to apply a new or revised standard retrospectively, resulting in the revision of prior period financial statements. Changes in accounting standards can be hard to predict and can materially impact how we record and report our financial condition and results of operations.

Fires, natural disasters, severe weather conditions or public health crises could disrupt our business and result in loss of revenue or higher expenses.

Any serious disruption at any of our facilities due to fire, hurricane, earthquake, flood, other severe weather events or any other natural disaster, or an epidemic or other public health crisis, or a panic reaction to a perceived health risk, could impair our ability to use our facilities and have a material adverse impact on our revenues and increase our costs and expenses. If there is a natural disaster or other serious disruption at any of our facilities, particularly at any of our Mexican facilities, it could impair our ability to adequately supply our customers, cause a significant disruption to our operations, cause us to incur significant costs to relocate or reestablish these functions and negatively impact our operating results. While we insure against certain business interruption risks, such insurance may not adequately compensate us for any losses incurred as a result of natural or other disasters.

Unusual weather conditions may reduce demand for our wheel-related parts and repair services.

Performing railcar wheel repair and replacing railcar wheels represents a portion of our business. Seasonal fluctuations in weather conditions may lead to greater variation in our quarterly operating results as unusually mild weather conditions will generally lead to lower demand for our wheel-related products and services. In addition, unusually mild weather conditions throughout the year may reduce overall demand for our wheel-related products and repair services. If occurring for prolonged periods, such weather could have an adverse effect on our business, results of operations and financial condition.

28 The Greenbrier Companies 2018 Annual Report

Business, regulatory, and legal developments regarding climate change may affect the demand for our products or the ability of our critical suppliers to meet our needs.

Scientific studies have suggested that emissions of certain gases, commonly referred to as greenhouse gases (GHGs) including carbon dioxide and methane, may be contributing to warming of the Earth’s atmosphere and other climate changes. Legislation and new rules to regulate emission of GHGs have been introduced in numerous state legislatures, the U.S. Congress, and by the EPA. Some of these proposals would require industries to meet stringent new standards that may require substantial reporting of GHGs and other carbon intensive activities in addition to potentially mandating reductions in our carbon emissions. While we cannot assess the direct impact of these or other potential regulations, we recognize that new climate change reporting or compliance protocols could affect our operating costs, the demand for our products and/or affect the price of materials, input factors and manufactured components which could impact our margins. Potential opportunities could include greater demand for certain types of railcars, while potential challenges could include decreased demand for certain types of railcars or other products and higher energy costs. Other adverse consequences of climate change could include an increased frequency of severe weather events and rising sea levels that could affect operations at our manufacturing facilities, the price of insuring company assets, or other unforeseen disruptions of our operations, systems, property or equipment.

Repercussions from terrorist activities or armed conflict could harm our business.

Terrorist activities, anti-terrorist efforts, and other armed conflict involving the U.S. or its interests abroad may adversely affect the U.S. and global economies, potentially preventing us from meeting our financial and other obligations. In particular, the negative impacts of these events may affect the industries in which we operate. This could result in delays in or cancellations of the purchase of our products or shortages in raw materials, parts, or components. Any of these occurrences could have a material adverse impact on our financial results.

Unanticipated changes in our tax provisions or exposure to additional income tax liabilities could affect our financial condition and profitability and we may take tax positions that the Internal Revenue Service or other tax authorities may contest.

We are subject to income taxes in both the United States and foreign jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes. Changes in estimates of projected future operating results, loss of deductibility of items, recapture of prior deductions (including related to interest on convertible notes), our ability to utilize tax net operating losses in the future or changes in assumptions regarding our ability to generate future taxable income could result in significant increases to our tax expense and liabilities that could adversely affect our financial condition and profitability.

We have in the past and may in the future take tax positions that the Internal Revenue Service (IRS) or other tax authorities may contest. We are required by an IRS regulation to disclose particular tax positions to the IRS as part of our tax returns for that year and future years. If the IRS or other tax authorities successfully contests a tax position that we take, we may be required to pay additional taxes, interest or fines that may adversely affect our results of operations and financial position.

Some of our customers place orders for our products in reliance on their ability to utilize tax benefits or tax credits.

There is no assurance that tax authorities will reauthorize, modify, or otherwise not allow the expiration of such tax benefits, tax credits, or reimbursement policies, and in cases where such subsidies and policies are materially modified to reduce the available benefit, credit, or reimbursement or are otherwise allowed to expire, the demand for our products could decrease, thereby creating the potential for a material adverse effect on our financial condition or results of operations.

The Greenbrier Companies 2018 Annual Report 29

Our share repurchase program is intended to enhance long-term shareholder value although we cannot guarantee this will occur and this program may be suspended or terminated at any time.

The Board of Directors has authorized our company to repurchase our common stock through a share repurchase program. Our share repurchase program may be modified, suspended or discontinued at any time without prior notice. Although the share repurchase program is intended to enhance long-term shareholder value, we cannot provide assurance that this will occur.

30 The Greenbrier Companies 2018 Annual Report

Item 1B. UNRESOLVED STAFF COMMENTS

None.

Item 2. PROPERTIES

We operate at the following primary facilities as of August 31, 2018:

Description	Location	Status
Manufacturing Segment
Operating facilities:	Portland, Oregon	Owned
	3 locations in Mexico	Owned – 2 locations Leased – 1 location
	3 locations in Poland	Owned
	3 locations in Romania	Owned
	1 location in Turkey	Owned
Administrative offices:	Colleyville, Texas	Leased
Wheels, Repair & Parts Segment
Operating facilities:	25 locations in the U.S.	Leased – 14 locations Owned – 9 locations Customer premises – 2 locations
Administrative offices:	Birmingham, Alabama	Leased
Leasing & Services Segment
Corporate offices, railcar marketing and leasing activities:	Lake Oswego, Oregon	Leased

We believe that our facilities are in good condition and that the facilities, together with anticipated capital improvements and additions, are adequate to meet our operating needs for the foreseeable future. We continually evaluate our facilities in order to remain competitive and to take advantage of market opportunities.

Item 3. LEGAL PROCEEDINGS

There is hereby incorporated by reference the information disclosed in Note 22 to Consolidated Financial Statements, Part II, Item 8 of this Form 10-K.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

The Greenbrier Companies 2018 Annual Report 31

Executive Officers of the Registrant

Current information regarding our executive officers is presented below.

William A. Furman, 74, is Chief Executive Officer and Chairman of the Board of Directors. Mr. Furman has served as Chief Executive Officer since 1994, and as Chairman of the Board of Directors since January 2014. Mr. Furman was Vice President of the Company, or its predecessor company, from 1974 to 1994.

Martin R. Baker, 62, is Senior Vice President, General Counsel and Chief Compliance Officer, a position he has held since joining the Company in May 2008. Prior to joining the Company, Mr. Baker was Corporate Vice President, General Counsel and Secretary of Lattice Semiconductor Corporation.

Alejandro Centurion, 62, is Executive Vice President of the Company and President of Global Manufacturing Operations, a position he has held since January 2015. Mr. Centurion has served in various management positions for the Company since 2005, most recently as President of North American Manufacturing Operations.

Brian J. Comstock, 56, is Executive Vice President, Sales and Marketing, a position he has held since April 2018. Mr. Comstock has served in various management positions for the Company since 1998, most recently as Senior Vice President and General Manager of Commercial, Americas.

Adrian J. Downes, 55, is Senior Vice President, Chief Accounting Officer and Acting Chief Financial Officer. Mr. Downes has served as Senior Vice President and Chief Accounting Officer since joining the Company in March 2013, and as Acting Chief Financial Officer since August 2018.

Anne T. Manning, 55, is Vice President and Corporate Controller, a position she has held since November 2007. Ms. Manning has served in various financial management positions for the Company since 1995.

Mark J. Rittenbaum, 61, is Executive Vice President, Chief Commercial and Leasing Officer, a position he has held since February 2016. Mr. Rittenbaum has served in various management positions for the Company since 1990, most recently as Executive Vice President and Chief Financial Officer.

Lorie L. Tekorius, 51, is Executive Vice President and Chief Operating Officer. Ms. Tekorius has served as Executive Vice President since April 2017 and was promoted to Chief Operating Officer in August 2018. Ms. Tekorius has served in various management positions for the Company since 1995, most recently as Executive Vice President and Chief Financial Officer.

Executive officers are designated by the Board of Directors. There are no family relationships among any of the executive officers of the Company.

32 The Greenbrier Companies 2018 Annual Report

PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock has been traded on the New York Stock Exchange under the symbol GBX since July 14, 1994. There were approximately 348 holders of record of common stock as of October 19, 2018. The following table shows the reported high and low sales prices of our common stock on the New York Stock Exchange and dividends declared for the fiscal periods indicated.

	High		Low		Dividends Declared
2018
Fourth quarter	$	60.90	$	45.70	$	0.25
Third quarter	$	52.65	$	43.05	$	0.25
Second quarter	$	54.45	$	44.75	$	0.23
First quarter	$	52.75	$	41.95	$	0.23
2017
Fourth quarter	$	51.25	$	41.45	$	0.22
Third quarter	$	49.00	$	40.45	$	0.22
Second quarter	$	49.50	$	39.00	$	0.21
First quarter	$	39.05	$	28.95	$	0.21

Dividends

Any determination to pay cash dividends to our shareholders is at the discretion of our Board of Directors and will depend upon our financial condition, operating results, capital requirements, customary debt covenant restrictions, legal requirements and other factors that our Board of Directors deems relevant. As a result, there is no assurance as to the payment of future dividends.

Issuer Purchases of Equity Securities

Since October 2013, the Board of Directors has authorized the Company to repurchase in aggregate up to $225 million of the Company’s common stock. The program may be modified, suspended or discontinued at any time without prior notice and currently has an expiration date of March 31, 2019. Under the share repurchase program, shares of common stock may be purchased on the open market or through privately negotiated transactions from time-to-time. The timing and amount of purchases will be based upon market conditions, securities law limitations and other factors. The share repurchase program does not obligate the Company to acquire any specific number of shares in any period.

There were no shares repurchased under the share repurchase program during the quarter ended August 31, 2018.

Period	Total Number of Shares Purchased		Average Price Paid Per Share (Including Commissions)		Total Number of Shares Purchased as Part of Publically Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
June 1, 2018 – June 30, 2018		–		–		–	$	87,989,491
July 1, 2018 – July 31, 2018		–		–		–	$	87,989,491
August 1, 2018 – August 31, 2018		–		–		–	$	87,989,491
		–				–

The Greenbrier Companies 2018 Annual Report 33

Performance Graph

The following graph demonstrates a comparison of cumulative total returns for the Company’s Common Stock, the Dow Jones U.S. Industrial Transportation Index and the Standard & Poor’s (S&P) 500 Index. The graph assumes an investment of $100 on August 31, 2013 in each of the Company’s Common Stock and the stocks comprising the indices. Each of the indices assumes that all dividends were reinvested and that the investment was maintained to and including August 31, 2018, the end of the Company’s 2018 fiscal year.

The comparisons in this table are required by the SEC, and therefore, are not intended to forecast or be indicative of possible future performance of our Common Stock.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

Among The Greenbrier Companies, Inc., the S&P 500 Index

and the Dow Jones US Industrial Transportation Index

The Greenbrier Companies, Inc. S&P 500 Dow Jones US Industrial Transportation

*$100 invested on 8/31/13 in stock or index, including reinvestment of dividends.

Fiscal year ending August 31.

Copyright^© 2018 Standard & Poor’s, a division of S&P Global. All rights reserved.

Copyright^© 2018 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved.

Equity Compensation Plan Information

Equity Compensation Plan Information is hereby incorporated by reference to the “Equity Compensation Plan Information” table in Registrant’s definitive Proxy Statement to be filed pursuant to Regulation 14A, which Proxy Statement is anticipated to be filed with the Securities and Exchange Commission within 120 days after the end of the Registrant’s year ended August 31, 2018.

34 The Greenbrier Companies 2018 Annual Report

Item 6. SELECTED FINANCIAL DATA

	YEARS ENDED AUGUST 31,
(In thousands, except unit and per share data)	2018			2017			2016		2015		2014
Statement of Operations Data
Revenue:
Manufacturing	$	2,044,586		$	1,725,188		$	2,096,331	$	2,136,051	$	1,624,916
Wheels, Repair & Parts		347,023			312,679			322,395		371,237		495,627
Leasing & Services		127,855			131,297			260,798		97,990		83,419
	$	2,519,464		$	2,169,164		$	2,679,524	$	2,605,278	$	2,203,962
Earnings from operations	$	252,985		$	260,432		$	408,552	$	386,892	$	239,520
Net earnings attributable to Greenbrier	$	151,781	(1)	$	116,067	(1)	$	183,213	$	192,832	$	111,919	(2)
Basic earnings per common share attributable to Greenbrier:	$	4.92		$	3.97		$	6.28	$	6.85	$	3.97
Diluted earnings per common share attributable to Greenbrier:	$	4.68		$	3.65		$	5.73	$	5.93	$	3.44
Weighted average common shares outstanding:
Basic		30,857			29,225			29,156		28,151		28,164
Diluted		32,835			32,562			32,468		33,328		34,209
Cash dividends paid per share	$	0.96		$	0.86		$	0.81	$	0.60	$	0.15
Balance Sheet Data
Total assets	$	2,465,464		$	2,397,705		$	1,835,774	$	1,787,452	$	1,511,199
Revolving notes and notes payable, net	$	463,930		$	562,552		$	301,853	$	374,258	$	452,203
Total equity	$	1,384,215		$	1,178,893		$	1,016,827	$	863,489	$	573,721
Other Operating Data
New railcar units delivered		19,000			15,700			20,300		21,100		16,200
New railcar backlog (units)		27,400			28,600			27,500		41,300		31,500
New railcar backlog	$	2,740,000		$	2,800,000		$	3,190,000	$	4,710,000	$	3,330,000
Lease fleet:
Units managed		357,000			336,000			264,000		260,000		238,000
Units owned		8,100			8,300			8,900		9,300		8,600
Cash Flow Data
Capital expenditures:
Manufacturing	$	59,707		$	54,973		$	51,294	$	84,354	$	55,979
Wheels, Repair & Parts		5,204			3,129			10,190		9,381		8,774
Leasing & Services		111,937			27,963			77,529		12,254		5,474
	$	176,848		$	86,065		$	139,013	$	105,989	$	70,227
Proceeds from sale of assets	$	153,224		$	24,149		$	103,715	$	5,295	$	54,235
Depreciation and amortization:
Manufacturing	$	44,225		$	33,807		$	27,137	$	20,668	$	15,341
Wheels, Repair & Parts		10,771			11,143			11,971		11,748		12,582
Leasing & Services		19,360			20,179			24,237		12,740		12,499
	$	74,356		$	65,129		$	63,345	$	45,156	$	40,422

⁽¹⁾ 2018 and 2017 includes the Company’s portion of non-cash goodwill impairment charges taken by GBW. As the Company accounted for GBW under the equity method of accounting, its 50% share of the non-cash goodwill impairment losses recognized by GBW was $9.5 million after-tax in 2018 and $3.5 million after-tax in 2017.

⁽²⁾ 2014 includes a non-cash gain on contribution to joint venture of $13.6 million net of tax and a restructuring charge of $1.0 million net of tax. The gain related to the Company contributing its repair operations to GBW.

The Greenbrier Companies 2018 Annual Report 35

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Summary

We operate in three reportable segments: Manufacturing; Wheels, Repair & Parts; and Leasing & Services. Prior to August 20, 2018, we operated in four reportable segments: Manufacturing; Wheels & Parts; Leasing & Services; and GBW Joint Venture. On August 20, 2018 we entered into an agreement with our joint venture partner to discontinue the GBW railcar repair joint venture, which resulted in 12 repair shops returned to us.

Our segments are operationally integrated. The Manufacturing segment, which currently operates from facilities in the U.S., Mexico, Poland, Romania and Turkey, produces double-stack intermodal railcars, tank cars, conventional railcars, automotive railcar products and marine vessels. The Wheels, Repair & Parts segment performs wheel and axle servicing; railcar repair, refurbishment and maintenance; as well as production of a variety of parts for the railroad industry in North America. The Leasing & Services segment owns approximately 8,100 railcars (6,300 railcars held as equipment on operating leases, 1,600 held as leased railcars for syndication and 200 held as finished goods inventory) and provides management services for approximately 357,000 railcars for railroads, shippers, carriers, institutional investors and other leasing and transportation companies in North America as of August 31, 2018. Through unconsolidated affiliates we produce rail and industrial castings, tank heads and other components and we have an ownership stake in a railcar manufacturer in Brazil and a lease financing warehouse.

Our total manufacturing backlog of railcar units as of August 31, 2018 was approximately 27,400 units with an estimated value of $2.74 billion, of which 21,200 units are for direct sales and 6,200 units are for lease to third parties. Approximately 3% of backlog units and 2% of the estimated value as of August 31, 2018 was associated with our Brazilian manufacturing operations which is accounted for under the equity method. Backlog units for lease may be syndicated to third parties or held in our own fleet depending on a variety of factors. Multi-year supply agreements are a part of rail industry practice. A portion of the orders included in backlog reflects an assumed product mix. Under terms of the orders, the exact mix and pricing will be determined in the future, which may impact the dollar amount of backlog. Marine backlog as of August 31, 2018 was $61 million compared to $42 million as of August 31, 2017.

Our backlog of railcar units and marine vessels is not necessarily indicative of future results of operations. Certain orders in backlog are subject to customary documentation and completion of terms. Customers may attempt to cancel or modify orders in backlog. Historically, little variation has been experienced between the quantity ordered and the quantity actually delivered, though the timing of deliveries may be modified from time to time. We cannot guarantee that our reported backlog will convert to revenue in any particular period, if at all.

In August 2018, Greenbrier-Astra Rail entered into an agreement to take an approximately 68% ownership stake in Rayvag, a railcar manufacturing company based in Adana, Turkey that also provides maintenance services for railcars and manufactures bogies and spare parts for railcars in that region. The amount paid to acquire our ownership stake in Rayvag was not material to our consolidated financial statements.

36 The Greenbrier Companies 2018 Annual Report

Overview

Revenue, cost of revenue, margin and operating profit presented below, include amounts from external parties and exclude intersegment activity that is eliminated in consolidation.

(In thousands)	2018			2017			2016
Revenue:
Manufacturing	$	2,044,586		$	1,725,188		$	2,096,331
Wheels, Repair & Parts		347,023			312,679			322,395
Leasing & Services		127,855			131,297			260,798
		2,519,464			2,169,164			2,679,524
Cost of revenue:
Manufacturing		1,727,407			1,373,967			1,630,554
Wheels, Repair & Parts		318,330			288,336			293,751
Leasing & Services		64,672			85,562			203,782
		2,110,409			1,747,865			2,128,087
Margin:
Manufacturing		317,179			351,221			465,777
Wheels, Repair & Parts		28,693			24,343			28,644
Leasing & Services		63,183			45,735			57,016
		409,055			421,299			551,437
Selling and administrative		200,439			170,607			158,681
Net gain on disposition of equipment		(44,369	)		(9,740	)		(15,796	)
Earnings from operations		252,985			260,432			408,552
Interest and foreign exchange		29,368			24,192			13,502
Earnings before income tax and earnings (loss) from unconsolidated affiliates		223,617			236,240			395,050
Income tax expense		(32,893	)		(64,014	)		(112,322	)
Earnings before earnings (loss) from unconsolidated affiliates		190,724			172,226			282,728
Earnings (loss) from unconsolidated affiliates		(18,661	)		(11,764	)		2,096
Net earnings		172,063			160,462			284,824
Net earnings attributable to noncontrolling interest		(20,282	)		(44,395	)		(101,611	)
Net earnings attributable to Greenbrier	$	151,781		$	116,067		$	183,213
Diluted earnings per common share	$	4.68		$	3.65		$	5.73

Performance for our segments is evaluated based on operating profit. Corporate includes selling and administrative costs not directly related to goods and services and certain costs that are intertwined among segments due to our integrated business model. Management does not allocate Interest and foreign exchange or Income tax expense for either external or internal reporting purposes.

(In thousands)	2018			2017			2016
Operating profit:
Manufacturing	$	240,901		$	295,334		$	415,094
Wheels, Repair & Parts		16,731			14,984			19,948
Leasing & Services		88,481			31,904			51,723
Corporate		(93,128	)		(81,790	)		(78,213	)
	$	252,985		$	260,432		$	408,552

The Greenbrier Companies 2018 Annual Report 37

Consolidated Results

	Years ended August 31,						2018 vs 2017						2017 vs 2016
(In thousands)	2018		2017		2016		Increase (Decrease)			% Change			Increase (Decrease)			% Change
Revenue	$	2,519,464	$	2,169,164	$	2,679,524	$	350,300			16.1	%	$	(510,360	)		(19.0%)
Cost of revenue	$	2,110,409	$	1,747,865	$	2,128,087	$	362,544			20.7	%	$	(380,222	)		(17.9%)
Margin (%)		16.2%		19.4%		20.6%		(3.2%	)		*			(1.2%	)		*
Net earnings attributable to Greenbrier	$	151,781	$	116,067	$	183,213	$	35,714			30.8	%	$	(67,146	)		(36.6%)

* Not meaningful

Through our integrated business model, we provide a broad range of products and services in each of our segments, which have various average selling prices and margins. The demand for and mix of products and services delivered changes from period to period, which causes fluctuations in our results of operations.

The 16.1% increase in revenue for the year ended August 31, 2018 as compared to the year ended August 31, 2017 was primarily due to an 18.5% increase in Manufacturing revenue. The increase in Manufacturing revenue was primarily due to a 21.0% increase in the volume of railcar deliveries and a change in product mix. The increase was also attributed to an 11.0% increase in Wheels, Repair & Parts revenue primarily as a result of higher wheel set and component volumes due to an increase in demand and an increase in scrap metal pricing. The 19.0% decrease in revenue for the year ended August 31, 2017 as compared to the year ended August 31, 2016 was primarily due to a 17.7% decrease in Manufacturing revenue. The decrease in Manufacturing revenue was primarily due to a 22.7% decrease in the volume of railcar deliveries which was partially offset by a higher average selling price. The decrease was also due to a 49.7% decrease in Leasing & Services revenue, primarily the result of a decrease in the sale of railcars which we had purchased from third parties with the intent to resell them.

The 20.7% increase in cost of revenue for the year ended August 31, 2018 as compared to the year ended August 31, 2017 was primarily due to a 25.7% increase in Manufacturing cost of revenue. The increase in Manufacturing cost of revenue was primarily due to a 21.0% increase in the volume of railcar deliveries and a change in product mix. The increase was also attributed to a 10.4% increase in Wheels, Repair & Parts cost of revenue primarily due to higher wheel set and component costs associated with increased volumes. The overall increase in cost of revenue was partially offset by a 24.4% decrease in Leasing & Services cost of revenue primarily due to a decline in the volume of railcars sold that we purchased from third parties, lower maintenance and transportation costs and fewer railcars on operating leases as we rebalance our lease portfolio. The 17.9% decrease in cost of revenue for the year ended August 31, 2017 as compared to the year ended August 31, 2016 was primarily due to a 15.7% decrease in Manufacturing cost of revenue. The decrease in Manufacturing cost of revenue was primarily due to a 22.7% decrease in the volume of railcar deliveries which was partially offset by a product mix which had a higher average labor and material content. The decrease was also due to a 58.0% decrease in Leasing & Services cost of revenue primarily due to a decrease in costs associated with a decline in the volume of railcars sold that we purchased from third parties.

Margin as a percentage of revenue was 16.2% for the year ended August 31, 2018 and 19.4% for the year ended August 31, 2017. The overall margin as a percentage of revenue was negatively impacted by a decrease in Manufacturing margin to 15.5% from 20.4% primarily attributed to a change in product mix. This was partially offset by an increase in Leasing & Services margin to 49.4% from 34.8%. Leasing & Services margin percentage in 2018 benefited from fewer sales of railcars that we purchased from third parties which have lower margin percentages, lower maintenance costs, a higher average volume of rent-producing leased railcars for syndication and lower transportation costs. Margin as a percentage of revenue was 19.4% for the year ended August 31, 2017 and 20.6% for the year ended August 31, 2016. The overall margin as a percentage of revenue was negatively impacted by a decrease in Manufacturing margin to 20.4% from 22.2% primarily due to a change in product mix and a reduction in the volume of railcar deliveries. In addition, the overall margin as a percentage of revenue was negatively impacted by a decrease in Wheels, Repair & Parts margin to 7.8% from 8.9%, primarily due to lower wheel set and component volumes. The overall margin as a percentage of revenue was positively impacted by an

38 The Greenbrier Companies 2018 Annual Report

increase in Leasing & Services margin to 34.8% from 21.9% which was primarily a result of a decrease in the syndication, or sale, of railcars that we purchased from third parties which have lower margin percentages.

The $35.7 million increase in net earnings attributable to Greenbrier for the year ended August 31, 2018 as compared to the year ended August 31, 2017 was primarily attributable to a higher Net gain on disposition of equipment and a reduction in the tax rate due to the Tax Cuts and Jobs Act (Tax Act). See Note 18 – Income Taxes for further discussion of the impact of the Tax Act. The $67.1 million decrease in net earnings for the year ended August 31, 2017 as compared to the year ended August 31, 2016 was primarily attributable to a decrease in margin, net of tax, due to lower railcar deliveries, which was partially offset by lower Net earnings attributable to noncontrolling interest in 2017 as a result of our Mexican railcar manufacturing 50/50 joint venture operating at lower volumes and margins.

Manufacturing Segment

	Years ended August 31,						2018 vs 2017						2017 vs 2016
(In thousands)	2018		2017		2016		Increase (Decrease)			% Change			Increase (Decrease)			% Change
Revenue	$	2,044,586	$	1,725,188	$	2,096,331	$	319,398			18.5%		$	(371,143	)		(17.7%)
Cost of revenue	$	1,727,407	$	1,373,967	$	1,630,554	$	353,440			25.7%		$	(256,587	)		(15.7%)
Margin (%)		15.5%		20.4%		22.2%		(4.9%	)		*			(1.8%	)		*
Operating profit ($)	$	240,901	$	295,334	$	415,094	$	(54,433	)		(18.4%	)	$	(119,760	)		(28.9%)
Operating profit (%)		11.8%		17.1%		19.8%		(5.3%	)		*			(2.7%	)		*
Deliveries		19,000		15,700		20,300		3,300			21.0%			(4,600	)		(22.7%)

* Not meaningful

As of June 1, 2017, the Manufacturing segment included the results of Greenbrier-Astra Rail which is consolidated for financial reporting purposes. The results of Greenbrier-Astra Rail were included for 12 months in 2018, but only for three months in 2017 which partially contributed to the increase in Manufacturing revenue and cost of revenue in 2018 compared to 2017.

Manufacturing revenue increased $319.4 million or 18.5% in 2018 compared to 2017. The increase in revenue was primarily attributed to a 21.0% increase in the volume of railcar deliveries and a change in product mix. Manufacturing revenue decreased $371.1 million or 17.7% in 2017 compared to 2016 primarily due to a 22.7% decrease in the volume of railcar deliveries and a change in product mix.

Manufacturing cost of revenue increased $353.4 million or 25.7% in 2018 compared to 2017. The increase in cost of revenue was primarily attributed to a 21.0% increase in the volume of railcar deliveries and a change in product mix. Manufacturing cost of revenue decreased $256.6 million or 15.7% in 2017 compared to 2016 due to a decrease of 22.7% in the volume of railcar deliveries and a change in product mix.

Manufacturing margin as a percentage of revenue decreased 4.9% in 2018 compared to 2017 primarily due to a change in product mix. Manufacturing margin as a percentage of revenue decreased 1.8% in 2017 compared to 2016 primarily due to a change in product mix partially offset by customer order renegotiation fees received during the year ended August 31, 2017.

Manufacturing operating profit decreased $54.4 million or 18.4% in 2018 compared to 2017 primarily attributed to a lower margin percentage from a change in product mix and increased costs associated with expanded international operations. This was partially offset by an increase in the volume of railcar deliveries. Manufacturing operating profit decreased $119.8 million or 28.9% in 2017 compared to 2016 primarily attributed to a decrease in margin due to lower railcar deliveries.

The Greenbrier Companies 2018 Annual Report 39

Wheels, Repair & Parts Segment

	Years ended August 31,						2018 vs 2017					2017 vs 2016
(In thousands)	2018		2017		2016		Increase (Decrease)		% Change			Increase (Decrease)			% Change
Revenue	$	347,023	$	312,679	$	322,395	$	34,344		11.0	%	$	(9,716	)		(3.0%)
Cost of revenue	$	318,330	$	288,336	$	293,751	$	29,994		10.4	%	$	(5,415	)		(1.8%)
Margin (%)		8.3%		7.8%		8.9%		0.5%		*			(1.1%	)		*
Operating profit ($)	$	16,731	$	14,984	$	19,948	$	1,747		11.7	%	$	(4,964	)		(24.9%)
Operating profit (%)		4.8%		4.8%		6.2%		0.0%		*			(1.4%	)		*

* Not meaningful

On August 20, 2018 we entered into an agreement with our joint venture partner to discontinue the GBW railcar repair joint venture, which resulted in 12 repair shops returned to us. Beginning on August 20, 2018, the results of operations from our repair shops are included in the Wheels, Repair & Parts segment as these repair operations are now consolidated for financial reporting purposes.

Wheels, Repair & Parts revenue increased $34.3 million or 11.0% in 2018 compared to 2017 primarily as a result of higher wheel set and component volumes due to an increase in demand and an increase in scrap metal pricing. Revenue decreased $9.7 million or 3.0% in 2017 compared to 2016 primarily as a result of lower wheel set and component volumes due to a decrease in demand partially offset by an increase in parts volume.

Wheels, Repair & Parts cost of revenue increased $30.0 million or 10.4% in 2018 compared to 2017 primarily due to higher wheel set and component costs associated with increased volumes. Cost of revenue decreased $5.4 million or 1.8% in 2017 compared to 2016 primarily due to lower wheel set and component costs associated with decreased volumes.

Wheels, Repair & Parts margin as a percentage of revenue increased 0.5% in 2018 compared to 2017 due to efficiencies from operating at higher wheel set and component volumes and an increase in scrap metal pricing. This was partially offset by a less favorable parts product mix. Margin as a percentage of revenue decreased 1.1% in 2017 compared to 2016 due to lower wheel set and component volumes. This was partially offset by a more favorable parts product mix and an increase in scrap metal pricing.

Wheels, Repair & Parts operating profit increased $1.7 million or 11.7% in 2018 compared to 2017 primarily attributable to higher margins due to an increase in wheel set and component volumes and an increase in efficiencies. Operating profit decreased $5.0 million or 24.9% in 2017 compared to 2016 primarily attributable to a decrease in margin due to a decrease in wheel set and component volumes.

Leasing & Services Segment

	Years ended August 31,						2018 vs 2017						2017 vs 2016
(In thousands)	2018		2017		2016		Increase (Decrease)			% Change			Increase (Decrease)			% Change
Revenue	$	127,855	$	131,297	$	260,798	$	(3,442	)		(2.6%	)	$	(129,501	)		(49.7%)
Cost of revenue	$	64,672	$	85,562	$	203,782	$	(20,890	)		(24.4%	)	$	(118,220	)		(58.0%)
Margin (%)		49.4%		34.8%		21.9%		14.6%			*			12.9%			*
Operating profit ($)	$	88,481	$	31,904	$	51,723	$	56,577			177.3%		$	(19,819	)		(38.3%)
Operating profit (%)		69.2%		24.3%		19.8%		44.9%			*			4.5%			*

* Not meaningful

The Leasing & Services segment primarily generates revenue from leasing railcars from its lease fleet and providing various management services. We also earn revenue from rent-producing leased railcars for syndication, which are held short term and classified as Leased railcars for syndication on our Consolidated Balance Sheet. From time to time, railcars are purchased from third parties with the intent to resell them. The gross proceeds from the sale of these railcars are recorded in revenue and the cost of purchasing these railcars are recorded in cost of revenue.

40 The Greenbrier Companies 2018 Annual Report

Leasing & Services revenue decreased $3.4 million or 2.6% in 2018 compared to 2017. The change in revenue was primarily attributed to a decrease in the sale of railcars which we had purchased from third parties with the intent to resell them and a decline in leasing revenue due to fewer railcars on operating leases as we rebalance our lease portfolio. This was partially offset by higher management services revenue from new service agreements and a higher average volume of rent-producing leased railcars for syndication. Leasing & Services revenue decreased $129.5 million or 49.7% in 2017 compared to 2016 primarily as the result of a $116.5 million decrease in the sale of railcars which we had purchased from third parties with the intent to resell them. The decrease in revenue was also due to lower average volume of rent-producing leased railcars held for syndication.

Leasing & Services cost of revenue decreased $20.9 million or 24.4% in 2018 compared to 2017 primarily due to a decline in the volume of railcars sold that we purchased from third parties, lower maintenance and transportation costs and fewer railcars on operating leases as we rebalance our lease portfolio. Leasing & Services cost of revenue decreased $118.2 million or 58.0% in 2017 compared to 2016 primarily due to a decrease in costs associated with a decline in the volume of railcars sold that we purchased from third parties. This was partially offset by higher transportation and storage costs.

Leasing & Services margin as a percentage of revenue increased 14.6% in 2018 compared to 2017. Margin percentage for 2018 benefited from fewer sales of railcars that we purchased from third parties which have lower margin percentages, lower maintenance costs, a higher average volume of rent-producing leased railcars for syndication and lower transportation costs. Leasing & Services margin as a percentage of revenue increased 12.9% in 2017 compared to 2016 primarily as a result of a benefit from fewer sales of railcars that we purchased from third parties which have lower margin percentages which was partially offset by higher transportation and storage costs.

Leasing & Services operating profit increased $56.6 million or 177.3% in 2018 compared to 2017 primarily attributed to a $40.8 million increase in net gain on disposition of equipment and an $17.4 million increase in margin. The net gain on disposition of equipment for 2018 related to higher volumes of equipment sales as we rebalance our lease portfolio. Leasing & Services operating profit decreased $19.8 million or 38.3% in 2017 compared to 2016 primarily attributed to a $11.3 million decrease in margin and a $7.7 million decrease in net gain on disposition of equipment.

The percentage of owned units on lease was 94.4% at August 31, 2018, 92.1% at August 31, 2017 and 91.0% at August 31, 2016.

GBW Joint Venture Segment

To reflect our 50% share of GBW’s results, we recorded a net loss of $15.9 million and $9.7 million for the years ended August 31, 2018 and 2017, respectively, and earnings of $3.2 million for the year ended August 31, 2016.

The losses for the years ended August 31, 2018 and 2017 primarily related to non-cash goodwill impairment losses recorded by GBW. GBW recorded a pre-tax goodwill impairment loss of $26.4 million in 2018 and $11.2 million in 2017. As we account for GBW under the equity method of accounting, our 50% share of the non-cash goodwill impairment loss recognized by GBW was $9.5 million after-tax in 2018 and $3.5 million after-tax in 2017 which were included as part of Earnings (loss) from unconsolidated affiliates on our Consolidated Statement of Income.

On August 20, 2018 we entered into an agreement with our joint venture partner to discontinue the GBW railcar repair joint venture, which resulted in 12 repair shops returned to us. Beginning on August 20, 2018, GBW Joint Venture was no longer considered a reportable segment.

Selling and Administrative

	Years ended August 31,						2018 vs 2017					2017 vs 2016
(In thousands)	2018		2017		2016		Increase (Decrease)		% Change			Increase (Decrease)		% Change
Selling and Administrative	$	200,439	$	170,607	$	158,681	$	29,832		17.5	%	$	11,926		7.5	%

The Greenbrier Companies 2018 Annual Report 41

Selling and administrative expense was $200.4 million or 8.0% of revenue for the year ended August 31, 2018, $170.6 million or 7.9% of revenue for the year ended August 31, 2017 and $158.7 million or 5.9% of revenue for the year ended August 31, 2016.

The $29.8 million increase in 2018 compared to 2017 was primarily attributed to a $10.1 million increase in professional fees, consulting and related costs associated with strategic business development, litigation and IT initiatives, $8.8 million from the addition of Astra Rail’s selling and administrative costs and a $6.0 million increase in employee costs.

The $11.9 million increase in 2017 compared to 2016 was primarily attributed to a $9.2 million increase in legal and consulting costs primarily associated with strategic business development, litigation and IT initiatives. The increase was also attributed to the addition of Astra Rail’s selling and administrative costs which totaled $2.6 million since its acquisition on June 1, 2017 and a $0.8 million increase in research and development costs primarily related to our European manufacturing operations. This was partially offset by a $1.7 million decrease in the revenue-based fees paid to our joint venture partner in Mexico.

Net Gain on Disposition of Equipment

Net gain on disposition of equipment was $44.4 million, $9.7 million and $15.8 million for the years ended August 31, 2018, 2017 and 2016, respectively. Net gain on disposition of equipment primarily includes the sale of assets from our lease fleet (Equipment on operating leases, net) that are periodically sold in the normal course of business in order to take advantage of market conditions and to manage risk and liquidity and disposition of property, plant and equipment.

The net gain on disposition of equipment in 2018 was higher than for the prior year primarily due to greater volumes of equipment sales as we rebalance our lease portfolio. The gain for the year ended August 31, 2017 primarily consisted of $5.2 million in insurance proceeds received in excess of net book value on assets destroyed in fires at two of our manufacturing facilities and $4.5 million in gains realized on the disposition of leased assets and property, plant and equipment. The gain for the year ended August 31, 2016 primarily consisted of $12.0 million in gains realized on the disposition of leased assets and property, plant and equipment and $3.5 million in insurance proceeds received in excess of net book value on assets destroyed in fires at a manufacturing facility and a Wheels, Repair & Parts facility.

Interest and Foreign Exchange

Interest and foreign exchange expense was composed of the following:

	Years ended August 31,								Increase (decrease)
(In thousands)	2018			2017		2016			2018 vs 2017			2017 vs 2016
Interest and foreign exchange:
Interest and other expense	$	30,946		$	23,519	$	17,268		$	7,427		$	6,251
Foreign exchange loss (gain)		(1,578	)		673		(3,766	)		(2,251	)		4,439
	$	29,368		$	24,192	$	13,502		$	5,176		$	10,690

Interest and foreign exchange increased $5.2 million in 2018 from 2017 primarily due to interest expense associated with our $275 million convertible senior notes due 2024 issued in February 2017 and additional interest expense due to the addition of Astra Rail. This was partially offset by the maturity of the $119 million convertible senior notes in April 2018 and higher foreign exchange gain in 2018. The change in foreign exchange loss (gain) was primarily attributed to the change in the Mexican Peso relative to the U.S. Dollar and the change in the Polish Zloty exchange rates relative to the Euro.

Interest and foreign exchange increased $10.7 million in 2017 from 2016 primarily attributed to interest expense associated with our $275 million convertible senior notes due 2024 which we issued in February 2017. In addition, the increase in interest and foreign exchange was attributed to a $0.7 million foreign exchange loss in

42 The Greenbrier Companies 2018 Annual Report

2017 compared to $3.8 million gain in 2016. The change in foreign exchange loss (gain) was primarily attributed to the change in the Mexican Peso and Polish Zloty exchange rates relative to the U.S. Dollar and the change in the Polish Zloty exchange rates relative to the Euro.

Income Tax

In 2018 our income tax expense was $32.9 million on $223.6 million of pre-tax earnings for an effective tax rate of 14.7%. In 2017 our income tax expense was $64.0 million on $236.2 million of pre-tax earnings for an effective tax rate of 27.1%. In 2016 our income tax expense was $112.3 million on $395.0 million of pre-tax earnings for an effective tax rate of 28.4%.

The reduction in the 2018 tax rate from that of earlier years was primarily due to the enactment of the Tax Act on December 22, 2017. The Tax Act made significant changes to U.S. federal income tax laws, including, but not limited to, a reduction of the corporate tax rate from 35% to 21% and a transition tax on foreign earnings not previously subject to U.S. taxation. Deferred income taxes were remeasured as a result of the new statutory rate. This resulted in a tax benefit of $33.6 million during 2018. As a result of our fiscal year end, our blended statutory rate is 25.7% for 2018. See Note 18 – Income Taxes for further discussion of the impact of the Tax Act.

The tax rate can fluctuate year-to-year due to changes in the mix of foreign and domestic pre-tax earnings. It can also fluctuate with changes in the proportion of pre-tax earnings attributable to our Mexican railcar manufacturing joint venture because the joint venture is predominantly treated as a partnership for tax purposes and, as a result, the partnership’s entire pre-tax earnings are included in Earnings before income taxes and earnings from unconsolidated affiliates, whereas only our 50% share of the tax is included in Income tax expense.

Earnings (Loss) From Unconsolidated Affiliates

Earnings (loss) from unconsolidated affiliates primarily included our share of after-tax results from the GBW joint venture, our Brazil operations which include a castings joint venture and a railcar manufacturing joint venture, our lease financing warehouse investment, our North American castings joint venture and our tank head joint venture.

Earnings (loss) from unconsolidated affiliates was a loss of $18.7 million and $11.8 million for the years ended August 31, 2018 and 2017, respectively, and earnings of $2.1 million for the year ended August 31, 2016. Earnings (loss) from unconsolidated affiliates decreased $6.9 million in 2018 and $13.9 million in 2017 primarily due to goodwill impairment losses recorded by GBW. GBW recorded a pre-tax goodwill impairment loss of $26.4 million in 2018 and $11.2 million in 2017. As we account for GBW under the equity method of accounting, our 50% share of the non-cash goodwill impairment loss recognized by GBW was $9.5 million after-tax in 2018 and $3.5 million after-tax in 2017, which were included as part of Earnings (loss) from unconsolidated affiliates on our Consolidated Statement of Income.

Net Earnings Attributable to Noncontrolling Interest

The years ended August 31, 2018, 2017 and 2016 include Net earnings attributable to noncontrolling interest of $20.3 million, $44.4 million and $101.6 million, respectively, which primarily represents our joint venture partner’s share in the results of operations of our Mexican railcar manufacturing joint venture, adjusted for intercompany sales and our European partner’s share of the results of Greenbrier-Astra Rail.

The decrease of $24.1 million in 2018 compared to 2017 is primarily a result of a decrease in earnings due to lower margins at our Mexican railcar manufacturing joint venture and a loss at our Greenbrier-Astra Rail operations in Europe. The decrease of $57.2 million in 2017 compared to 2016 is primarily a result of a decrease in the volume of railcar deliveries and lower margins at our Mexican railcar manufacturing joint venture.

The Greenbrier Companies 2018 Annual Report 43

Liquidity and Capital Resources

	Years Ended August 31,
(In thousands)	2018			2017			2016
Net cash provided by operating activities	$	103,341		$	285,604		$	337,170
Net cash used in investing activities		(80,219	)		(113,738	)		(55,708	)
Net cash provided by (used in) financing activities		(89,267	)		204,422			(227,415	)
Effect of exchange rate changes		(14,666	)		12,499			(4,298	)
Net increase (decrease) in cash and cash equivalents	$	(80,811	)	$	388,787		$	49,749

We have been financed through cash generated from operations and borrowings. At August 31, 2018 cash and cash equivalents was $530.7 million, a decrease of $80.8 million from $611.5 million at the prior year end.

The decrease in cash provided by operating activities in 2018 compared to 2017 was primarily due to a net change in working capital, a change in cash flows associated with leased railcars for syndication, a change in deferred revenue, an increase in net gain on disposition of equipment and a change in deferred income taxes as a result of the Tax Act. The decrease in cash provided by operating activities in 2017 compared to 2016 was primarily due to lower earnings and a net change in working capital.

Cash used in investing activities primarily related to capital expenditures net of proceeds from the sale of assets. The change in cash used in investing activities in 2018 compared to 2017 was primarily attributable to higher proceeds from the sale of assets partially offset by an increase in capital expenditures. The change in cash used in investing activities in 2017 compared to 2016 was primarily attributable to lower proceeds from the sale of assets, investment related to the Greenbrier-Astra Rail transaction and an increase in investment in and advances to unconsolidated affiliates, primarily related to our Brazil operations. This was partially offset by lower capital expenditures for the year ended August 31, 2017 compared to 2016 and less restricted cash compared to the prior year.

Capital expenditures totaled $176.8 million, $86.1 million and $139.0 million for the years ended August 31, 2018, 2017 and 2016, respectively. Manufacturing capital expenditures were approximately $59.7 million, $55.0 million and $51.3 million for the years ended August 31, 2018, 2017 and 2016, respectively. Capital expenditures for Manufacturing are expected to be approximately $75 million in 2019 and primarily relate to enhancements of our existing manufacturing facilities. Wheels, Repair & Parts capital expenditures were approximately $5.2 million, $3.1 million and $10.2 million for the years ended August 31, 2018, 2017 and 2016, respectively. Capital expenditures for Wheels, Repair & Parts are expected to be approximately $15 million in 2019 for enhancements of our existing facilities, including our repair shops. Leasing & Services and corporate capital expenditures were approximately $111.9 million, $28.0 million and $77.5 million for the years ended August 31, 2018, 2017 and 2016, respectively. Leasing & Services and corporate capital expenditures for 2019 are expected to be approximately $90 million. Proceeds from sales of leased railcar equipment are expected to be approximately $120 million for 2019. The asset additions and dispositions for Leasing & Services in 2018 primarily relate to higher volumes of equipment purchases and sales as we rebalance our lease portfolio. Assets from our lease fleet are periodically sold in the normal course of business in order to take advantage of market conditions and to manage risk and liquidity.

Proceeds from the sale of assets, which primarily related to sales of railcars from our lease fleet within Leasing & Services, were approximately $153.2 million, $24.1 million and $103.7 million for the years ended August 31, 2018, 2017 and 2016, respectively. These proceeds included approximately $7.7 million and $44.1 million of equipment sold pursuant to sale leaseback transactions for the years ended August 31, 2017 and 2016, respectively. The gain resulting from the sale leaseback transactions was deferred and is being recognized over the lease term in Net gain on disposition of equipment. In addition, proceeds from the sale of assets for the years ended August 31, 2017 and 2016 included $6.2 million and $3.8 million, respectively, of insurance proceeds associated with our Manufacturing segment in 2017 and 2016 and Wheels, Repair & Parts segment in 2016.

The change in cash provided by (used in) financing activities in 2018 compared to 2017 was primarily attributed to a decrease in the proceeds of debt, net of repayments and a change in the net activities with joint venture

44 The Greenbrier Companies 2018 Annual Report

partners. The change in cash provided by (used in) financing activities in 2017 compared to 2016 was primarily attributed to proceeds from the issuance of convertible senior notes, a reduction in cash distribution to our joint venture partner and reduced share repurchases.

A quarterly dividend of $0.25 per share was declared on October 24, 2018.

The Board of Directors has authorized our company to repurchase in aggregate up to $225 million of our common stock. We did not repurchase any shares during the year ended August 31, 2018. As of August 31, 2018, we had cumulatively repurchased 3,206,226 shares for approximately $137.0 million since October 2013 and had $88.0 million available under the share repurchase program with an expiration date of March 31, 2019.

In September 2018, we refinanced approximately $170 million of existing senior term debt, due in March 2020, secured by a pool of leased railcars with new 5-year $225 million senior term debt also secured by a pool of leased railcars. The new debt bears a floating interest rate of LIBOR plus 1.50% or Prime plus 0.50%. The term loan is to be repaid in equal quarterly installments of $1.97 million with the remaining outstanding amounts, plus accrued interest, to be paid on the maturity date in September 2023. An interest rate swap agreement was entered into on 50% of the initial balance to swap the floating interest rate to a fixed rate of 2.99%.

Our 3.5% convertible senior notes due 2018 matured on April 1, 2018. The conversion of these notes resulted in the issuance of an additional 3.4 million shares of our common stock. These additional shares have historically been included in the calculation of diluted earnings per share.

In February 2017, we issued $275 million of convertible senior notes due 2024. The notes are senior unsecured obligations and rank equally with other senior unsecured debt. The notes bear interest at an annual rate of 2.875% payable semiannually in arrears on February 1 and August 1 of each year, commencing August 1, 2017. The notes will mature on February 1, 2024, unless earlier repurchased or converted in accordance with their terms.

Senior secured credit facilities, consisting of three components, aggregated to $635.3 million as of August 31, 2018. We had an aggregate of $450.1 million available to draw down under committed credit facilities as of August 31, 2018. This amount consists of $392.6 million available on the North American credit facility, $7.5 million on the European credit facilities and $50.0 million on the Mexican railcar manufacturing joint venture credit facilities.

As of August 31, 2018, a $550.0 million revolving line of credit, maturing October 2020, secured by substantially all of our assets in the U.S. not otherwise pledged as security for term loans, was available to provide working capital and interim financing of equipment, principally for the U.S. and Mexican operations. Advances under this facility bear interest at LIBOR plus 1.75% or Prime plus 0.75% depending on the type of borrowing. Available borrowings under the credit facility are generally based on defined levels of inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated capitalization and fixed charges coverage ratios. In September 2018, this revolving line of credit was renewed on terms similar to the existing facility and increased to $600.0 million with a new maturity date of September 2023. In addition, advances under this renewed facility bear interest at LIBOR plus 1.50% or Prime plus 0.50% depending on the type of borrowing.

As of August 31, 2018, lines of credit totaling $35.3 million secured by certain of our European assets, with variable rates that range from Warsaw Interbank Offered Rate (WIBOR) plus 1.2% to WIBOR plus 1.3% and Euro Interbank Offered Rate (EURIBOR) plus 1.1%, were available for working capital needs of our European manufacturing operation. European credit facilities are continually being renewed. Currently, these European credit facilities have maturities that range from December 2018 through June 2019.

As of August 31, 2018, our Mexican railcar manufacturing joint venture had two lines of credit totaling $50.0 million. The first line of credit provides up to $30.0 million and is fully guaranteed by us and our joint venture partner. Advances under this facility bear interest at LIBOR plus 2.0%. The Mexican railcar manufacturing joint venture will be able to draw against this facility through January 2019. The second line of credit provides up to $20.0 million, of which we and our joint venture partner have each guaranteed 50%. Advances under this facility bear interest at LIBOR plus 2.0%. The Mexican railcar manufacturing joint venture will be able to draw amounts available under this facility through July 2019.

The Greenbrier Companies 2018 Annual Report 45

As of August 31, 2018, outstanding commitments under the senior secured credit facilities consisted of $72.2 million in letters of credit under our North American credit facility and $27.7 million outstanding under our European credit facilities.

The revolving and operating lines of credit, along with notes payable, contain covenants with respect to us and our various subsidiaries, the most restrictive of which, among other things, limit our ability to: incur additional indebtedness or guarantees; pay dividends or repurchase stock; enter into capital leases; create liens; sell assets; engage in transactions with affiliates, including joint ventures and non U.S. subsidiaries, including but not limited to loans, advances, equity investments and guarantees; enter into mergers, consolidations or sales of substantially all our assets; and enter into new lines of business. The covenants also require certain maximum ratios of debt to total capitalization and minimum levels of fixed charges (interest plus rent) coverage. As of August 31, 2018, we were in compliance with all such restrictive covenants.

From time to time, we may seek to repurchase or otherwise retire or exchange securities, including outstanding notes, borrowings and equity securities, and take other steps to reduce our debt or otherwise improve our balance sheet. These actions may include open market repurchases, unsolicited or solicited privately negotiated transactions or other retirements, repurchases or exchanges. Such retirements, repurchases or exchanges, if any, will depend on a number of factors, including, but not limited to, prevailing market conditions, trading levels of our debt, our liquidity requirements and contractual restrictions, if applicable. The amounts involved in any such transactions may, individually or in the aggregate, be material and may involve all or a portion of a particular series of notes or other indebtedness which may reduce the float and impact the trading market of notes or other indebtedness which remain outstanding.

We have global operations that conduct business in their local currencies as well as other currencies. To mitigate the exposure to transactions denominated in currencies other than the functional currency, we enter into foreign currency forward exchange contracts with established financial institutions to protect the margin on a portion of foreign currency sales in firm backlog. Given the strong credit standing of the counterparties, no provision has been made for credit loss due to counterparty non-performance.

As of August 31, 2018, we had a $10.0 million note receivable from Amsted-Maxion Cruzeiro, our unconsolidated Brazilian castings and components manufacturer and a $7.2 million note receivable balance from Greenbrier-Maxion, our unconsolidated Brazilian railcar manufacturer. These note receivables are included on the Consolidated Balance Sheet in Accounts receivable, net. In the future, we may make loans to or provide guarantees for Amsted-Maxion Cruzeiro or Greenbrier-Maxion.

We expect existing funds and cash generated from operations, together with proceeds from financing activities including borrowings under existing credit facilities and long-term financings, to be sufficient to fund expected debt repayments, working capital needs, planned capital expenditures, additional investments in our unconsolidated affiliates and dividends during the next year.

The following table shows our estimated future contractual cash obligations as of August 31, 2018:

	Years Ending August 31,
(In thousands)	Total		2019		2020		2021		2022		2023		Thereafter
Notes payable	$	469,721	$	26,775	$	167,086	$	413	$	413	$	34	$	275,000
Interest (1)		58,078		14,850		11,604		7,906		7,906		7,906		7,906
Railcar leases		18,341		6,287		4,839		1,821		1,792		1,792		1,810
Operating leases		17,744		6,048		4,437		3,286		1,915		1,862		196
Revolving notes		27,725		27,725		–		–		–		–		–
Other		148		129		19		–		–		–		–
	$	591,757	$	81,814	$	187,985	$	13,426	$	12,026	$	11,594	$	284,912

⁽¹⁾  A portion of the estimated future cash obligation relates to interest on variable rate borrowings.

Due to uncertainty with respect to the timing of future cash flows associated with our unrecognized tax benefits at August 31, 2018, we are unable to estimate the period of cash settlement with the respective taxing authority.

46 The Greenbrier Companies 2018 Annual Report

Therefore, approximately $1.8 million in uncertain tax positions, including interest, have been excluded from the contractual table above. See Note 18 to the Consolidated Financial Statements for a discussion on income taxes.

Off Balance Sheet Arrangements

We do not currently have off balance sheet arrangements that have or are likely to have a material current or future effect on our Consolidated Financial Statements.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires judgment on the part of management to arrive at estimates and assumptions on matters that are inherently uncertain. These estimates may affect the amount of assets, liabilities, revenue and expenses reported in the financial statements and accompanying notes and disclosure of contingent assets and liabilities within the financial statements. Estimates and assumptions are periodically evaluated and may be adjusted in future periods. Actual results could differ from those estimates.

Income taxes - For financial reporting purposes, income tax expense is estimated based on amounts anticipated to be reported on tax return filings. Those anticipated amounts may change from when the financial statements are prepared to when the tax returns are filed. Further, because tax filings are subject to review by taxing authorities, there is risk that a position taken in preparation of a tax return may be challenged by a taxing authority. If a challenge is successful, differences in tax expense or between current and deferred tax items may arise in future periods. Any material effect of such differences would be reflected in the financial statements when management considers the effect more likely than not of occurring and the amount reasonably estimable. Valuation allowances reduce deferred tax assets to amounts more likely than not that will be realized based on information available when the financial statements are prepared. This information may include estimates of future income and other assumptions that are inherently uncertain.

Maintenance obligations - We are responsible for maintenance on a portion of the managed and owned lease fleet under the terms of maintenance obligations defined in the underlying lease or management agreement. The estimated maintenance liability is based on maintenance histories for each type and age of railcar. These estimates involve judgment as to the future costs of repairs and the types and timing of repairs required over the lease term. As we cannot predict with certainty the prices, timing and volume of maintenance needed in the future on railcars under long-term leases, this estimate is uncertain and could be materially different from maintenance requirements. The liability is periodically reviewed and updated based on maintenance trends and known future repair or refurbishment requirements. These adjustments could be material due to the inherent uncertainty in predicting future maintenance requirements.

Warranty accruals - Warranty costs to cover a defined warranty period are estimated and charged to operations. The estimated warranty cost is based on historical warranty claims for each particular product type. For new product types without a warranty history, preliminary estimates are based on historical information for similar product types. These estimates are inherently uncertain as they are based on historical data for existing products and judgment for new products. If warranty claims are made in the current period for issues that have not historically been the subject of warranty claims and were not taken into consideration in establishing the accrual or if claims for issues already considered in establishing the accrual exceed expectations, warranty expense may exceed the accrual for that particular product. Conversely, there is the possibility that claims may be lower than estimates. The warranty accrual is periodically reviewed and updated based on warranty trends. However, as we cannot predict future claims, the potential exists for the difference in any one reporting period to be material.

Environmental costs - At times we may be involved in various proceedings related to environmental matters. We estimate future costs for known environmental remediation requirements and accrue for them when it is probable that we have incurred a liability and the related costs can be reasonably estimated based on currently available information. If further developments in or resolution of an environmental matter result in facts and circumstances that are significantly different than the assumptions used to develop these reserves, the accrual for environmental remediation could be materially understated or overstated. Adjustments to these liabilities are made when

The Greenbrier Companies 2018 Annual Report 47

additional information becomes available that affects the estimated costs to study or remediate any environmental issues or when expenditures for which reserves are established are made. Due to the uncertain nature of environmental matters, there can be no assurance that we will not become involved in future litigation or other proceedings or, if we were found to be responsible or liable in any litigation or proceeding, that such costs would not be material to us.

Revenue recognition - Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured.

Railcars are generally manufactured, repaired or refurbished and wheels and parts produced under firm orders from third parties. Revenue is recognized when these products or services are completed, accepted by an unaffiliated customer and contractual contingencies removed. Certain leases are operated under car hire arrangements whereby revenue is earned based on utilization, car hire rates and terms specified in the lease agreement. Car hire revenue is reported from a third party source two months in arrears; however, such revenue is accrued in the month earned based on estimates of use from historical activity and is adjusted to actual when reported to us. These estimates are inherently uncertain as they involve judgment as to the estimated use of each railcar. Adjustments to actual have historically not been significant. Revenue from the construction of marine barges is either recognized on the percentage of completion method during the construction period or on the completed contract method based on the terms of the contract. Under the percentage of completion method, judgment is used to determine a definitive threshold against which progress towards completion can be measured to determine timing of revenue recognition. Under the percentage of completion method, revenue is recognized based on the progress toward contract completion measured by actual costs incurred to date in relation to the estimate of total expected costs. Under the completed contract method, revenue is not recognized until the project has been fully completed.

We will periodically sell railcars with attached leases to financial investors. Revenue and cost of revenue associated with railcars that the Company has manufactured are recognized in Manufacturing once sold. Revenue and cost of revenue associated with railcars which were obtained from a third party with the intent to resell them which are subsequently sold are recognized in Leasing & Services. In addition we will often perform management or maintenance services at market rates for these railcars. Pursuant to the guidance in Accounting Standards Codification (ASC) 840-20-40, we evaluate the terms of any remarketing agreements and any contractual provisions that represent retained risk and the level of retained risk based on those provisions. We determine whether the level of retained risk exceeds 10% of the individual fair value of the railcars with leases attached that are delivered. If retained risk exceeded 10%, the transaction would not be recognized as a sale until such time as the retained risk declined to 10% or less. For any contracts with multiple elements (i.e. railcars, maintenance, management services, etc.) we allocate revenue among the deliverables primarily based upon objective and reliable evidence of the fair value of each element in the arrangement. If objective and reliable evidence of fair value of any element is not available, we will use the element’s estimated selling price for purposes of allocating the total arrangement consideration among the elements.

Impairment of long-lived assets - When changes in circumstances indicate the carrying amount of certain long-lived assets may not be recoverable, the assets are evaluated for impairment. If the forecast of undiscounted future cash flows are less than the carrying amount of the assets, an impairment charge to reduce the carrying value of the assets to fair value would be recognized in the current period. These estimates are based on the best information available at the time of the impairment and could be materially different if circumstances change. If the forecast of undiscounted future cash flows exceeds the carrying amount of the assets it would indicate that the assets were not impaired.

Goodwill and acquired intangible assets - We periodically acquire businesses in purchase transactions in which the allocation of the purchase price may result in the recognition of goodwill and other intangible assets. The determination of the value of such intangible assets requires management to make estimates and assumptions. These estimates affect the amount of future period amortization and possible impairment charges.

Goodwill and indefinite-lived intangible assets are tested for impairment annually during the third quarter. Goodwill and indefinite-lived intangible assets are also tested more frequently if changes in circumstances or the

48 The Greenbrier Companies 2018 Annual Report

occurrence of events indicates that a potential impairment exists. When changes in circumstances, such as a decline in the market price of our common stock, changes in demand or in the numerous variables associated with the judgments, assumptions and estimates made in assessing the appropriate valuation of goodwill indicate the carrying amount of certain indefinite lived assets may not be recoverable, the assets are evaluated for impairment. Among other things, our assumptions used in the valuation of goodwill include growth of revenue and margins, market multiples, discount rates and increased cash flows over time. If actual operating results were to differ from these assumptions, it may result in an impairment of our goodwill.

The provisions of ASC 350, Intangibles - Goodwill and Other, require that we perform an annual impairment test on goodwill. We compare the fair value of each reporting unit with its carrying value. We determine the fair value of our reporting units based on a weighting of income and market approaches. Under the income approach, we calculate the fair value of a reporting unit based on the present value of estimated future cash flows. Under the market approach, we estimate the fair value based on observed market multiples for comparable businesses. An impairment loss is recorded to the extent that the reporting unit’s carrying amount exceeds the reporting unit’s fair value. An impairment loss cannot exceed the total amount of goodwill allocated to the reporting unit. Our goodwill balance was $78.2 million as of August 31, 2018 of which $51.1 million related to our Wheels, Repair & Parts segment and $27.1 million related to our Manufacturing segment. We performed our annual goodwill impairment test during the third quarter of 2018 and we concluded that goodwill was not impaired.

New Accounting Pronouncements

See Note 2 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

The Greenbrier Companies 2018 Annual Report 49

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Exchange Risk

We have global operations that conduct business in their local currencies as well as other currencies. To mitigate the exposure to transactions denominated in currencies other than the functional currency of each entity, we enter into foreign currency forward exchange contracts to protect revenue or margin on a portion of forecast foreign currency sales and expenses. At August 31, 2018 exchange rates, forward exchange contracts for the purchase of Polish Zlotys and the sale of Euros; the purchase of Mexican Pesos and the sale of U.S. Dollars; and for the purchase of US Dollars and the sale of Saudi Riyals and Euros aggregated to $145.4 million. Because of the variety of currencies in which purchases and sales are transacted and the interaction between currency rates, it is not possible to predict the impact a movement in a single foreign currency exchange rate would have on future operating results.

In addition to exposure to transaction gains or losses, we are also exposed to foreign currency exchange risk related to the net asset position of our foreign subsidiaries. At August 31, 2018, net assets of foreign subsidiaries aggregated $187.7 million and a 10% strengthening of the U.S. Dollar relative to the foreign currencies would result in a decrease in equity of $18.8 million, or 1.4% of Total equity – Greenbrier. This calculation assumes that each exchange rate would change in the same direction relative to the U.S. Dollar.

Interest Rate Risk

We have managed a portion of our variable rate debt with interest rate swap agreements, effectively converting $85.1 million of variable rate debt to fixed rate debt. As a result, we are exposed to interest rate risk relating to our revolving debt and a portion of term debt, which are at variable rates. At August 31, 2018, 74% of our outstanding debt had fixed rates and 26% had variable rates. At August 31, 2018, a uniform 10% increase in variable interest rates would result in approximately $0.4 million of additional annual interest expense.

50 The Greenbrier Companies 2018 Annual Report

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

The Greenbrier Companies, Inc. and subsidiaries:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of The Greenbrier Companies, Inc. and subsidiaries (the Company) as of August 31, 2018 and 2017, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three year period ended August 31, 2018, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of August 31, 2018 and 2017, and the results of its operations and its cash flows for each of the years in the three year period ended August 31, 2018, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of August 31, 2018, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated October 26, 2018 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company’s auditor since 2011.

/s/ KPMG LLP

Portland, Oregon

October 26, 2018

The Greenbrier Companies 2018 Annual Report 51

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Consolidated Balance Sheets

AS OF AUGUST 31,

(In thousands)	2018			2017
Assets
Cash and cash equivalents	$	530,655		$	611,466
Restricted cash		8,819			8,892
Accounts receivable, net		348,406			279,964
Inventories		432,314			400,127
Leased railcars for syndication		130,926			91,272
Equipment on operating leases, net		322,855			315,941
Property, plant and equipment, net		457,196			428,021
Investment in unconsolidated affiliates		61,414			108,255
Intangibles and other assets, net		94,668			85,177
Goodwill		78,211			68,590
	$	2,465,464		$	2,397,705
Liabilities and Equity
Revolving notes	$	27,725		$	4,324
Accounts payable and accrued liabilities		449,857			415,061
Deferred income taxes		31,740			75,791
Deferred revenue		105,954			129,260
Notes payable, net		436,205			558,228
Commitments and contingencies (Notes 21 & 22)
Contingently redeemable noncontrolling interest		29,768			36,148
Equity:
Greenbrier
Preferred stock – without par value; 25,000 shares authorized; none outstanding		–			–
Common stock – without par value; 50,000 shares authorized; 32,191 and 28,503 outstanding at August 31, 2018 and 2017		–			–
Additional paid-in capital		442,569			315,306
Retained earnings		830,898			709,103
Accumulated other comprehensive loss		(23,366	)		(6,279	)
Total equity – Greenbrier		1,250,101			1,018,130
Noncontrolling interest		134,114			160,763
Total equity		1,384,215			1,178,893
	$	2,465,464		$	2,397,705

The accompanying notes are an integral part of these financial statements.

52 The Greenbrier Companies 2018 Annual Report

Consolidated Statements of Income

YEARS ENDED AUGUST 31,

(In thousands, except per share amounts)	2018			2017			2016
Revenue
Manufacturing	$	2,044,586		$	1,725,188		$	2,096,331
Wheels, Repair & Parts		347,023			312,679			322,395
Leasing & Services		127,855			131,297			260,798
		2,519,464			2,169,164			2,679,524
Cost of revenue
Manufacturing		1,727,407			1,373,967			1,630,554
Wheels, Repair & Parts		318,330			288,336			293,751
Leasing & Services		64,672			85,562			203,782
		2,110,409			1,747,865			2,128,087
Margin		409,055			421,299			551,437
Selling and administrative		200,439			170,607			158,681
Net gain on disposition of equipment		(44,369	)		(9,740	)		(15,796	)
Earnings from operations		252,985			260,432			408,552
Other costs
Interest and foreign exchange		29,368			24,192			13,502
Earnings before income tax and earnings (loss) from unconsolidated affiliates		223,617			236,240			395,050
Income tax expense		(32,893	)		(64,014	)		(112,322	)
Earnings before earnings (loss) from unconsolidated affiliates		190,724			172,226			282,728
Earnings (loss) from unconsolidated affiliates		(18,661	)		(11,764	)		2,096
Net earnings		172,063			160,462			284,824
Net earnings attributable to noncontrolling interest		(20,282	)		(44,395	)		(101,611	)
Net earnings attributable to Greenbrier	$	151,781		$	116,067		$	183,213
Basic earnings per common share	$	4.92		$	3.97		$	6.28
Diluted earnings per common share	$	4.68		$	3.65		$	5.73
Weighted average common shares:
Basic		30,857			29,225			29,156
Diluted		32,835			32,562			32,468
Dividends declared per common share	$	0.96		$	0.86		$	0.81

The accompanying notes are an integral part of these financial statements.

The Greenbrier Companies 2018 Annual Report 53

Consolidated Statements of Comprehensive Income

YEARS ENDED AUGUST 31,

(In thousands)	2018			2017			2016
Net earnings	$	172,063		$	160,462		$	284,824
Other comprehensive income
Translation adjustment		(16,159	)		15,488			(2,204	)
Reclassification of derivative financial instruments recognized in net earnings 1		(415	)		3,729			2,544
Unrealized gain (loss) on derivative financial instruments 2		(197	)		1,944			(5,842	)
Other (net of tax effect)		(335	)		(665	)		(84	)
		(17,106	)		20,496			(5,586	)
Comprehensive income		154,957			180,958			279,238
Comprehensive income attributable to noncontrolling interest		(20,263	)		(44,417	)		(101,573	)
Comprehensive income attributable to Greenbrier	$	134,694		$	136,541		$	177,665

¹  Net of tax of effect of $3 thousand, $1.0 million and $1.2 million for the years ended August 31, 2018, 2017 and 2016, respectively.

²  Net of tax of effect of $0.1 million, $0.8 million and $2.1 million for the years ended August 31, 2018, 2017 and 2016, respectively.

The accompanying notes are an integral part of these financial statements.

54 The Greenbrier Companies 2018 Annual Report

Consolidated Statements of Equity

	Attributable to Greenbrier
(In thousands)	Common Stock Shares			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total Attributable to Greenbrier			Attributable to Noncontrolling Interest			Total Equity			Contingently Redeemable Noncontrolling Interest
Balance September 1, 2015		28,907		$	295,444		$	458,599		$	(21,205	)	$	732,838		$	130,651		$	863,489		$	–
Net earnings		–			–			183,213			–			183,213			101,611			284,824			–
Other comprehensive loss, net		–			–			–			(5,548	)		(5,548	)		(38	)		(5,586	)		–
Noncontrolling interest adjustments		–			–			–			–			–			526			526			–
Purchase of noncontrolling interest		–			–			–			–			–			(1,195	)		(1,195	)		–
Joint venture partner distribution declared		–			–			–			–			–			(94,439	)		(94,439	)		–
Investment by joint venture partner		–			–			–			–			–			5,400			5,400			–
Restricted stock awards (net of cancellations)		353			6,055			–			–			6,055			–			6,055			–
Unamortized restricted stock		–			(11,555	)		–			–			(11,555	)		–			(11,555	)		–
Restricted stock amortization		–			22,502			–			–			22,502			–			22,502			–
Excess tax benefit from restricted stock awards		–			2,813			–			–			2,813			–			2,813			–
Dividends		–			–			(23,634	)		–			(23,634	)		–			(23,634	)		–
Repurchase of stock		(1,055	)		(32,373	)		–			–			(32,373	)		–			(32,373	)		–
Balance August 31, 2016		28,205		$	282,886		$	618,178		$	(26,753	)	$	874,311		$	142,516		$	1,016,827		$	–
Net earnings (excluding contingently redeemable noncontrolling interest)		–			–			116,067			–			116,067			46,535			162,602			(2,140	)
Other comprehensive income, net		–			–			–			20,474			20,474			22			20,496			–
Noncontrolling interest adjustments		–			–			–			–			–			(677	)		(677	)		–
Joint venture partner distribution declared		–			–			–			–			–			(28,027	)		(28,027	)		–
Acquisition of minority interest		–			–			–			–			–			394			394			–
Contingently redeemable noncontrolling interest		–			–			–			–			–			–			–			38,288
Restricted stock awards (net of cancellations)		298			5,520			–			–			5,520			–			5,520			–
Unamortized restricted stock		–			(10,734	)		–			–			(10,734	)		–			(10,734	)		–
Restricted stock amortization		–			19,826			–			–			19,826			–			19,826			–
Tax deficiency from restricted stock awards		–			(2,339	)		–			–			(2,339	)		–			(2,339	)		–
Dividends		–			–			(25,142	)		–			(25,142	)		–			(25,142	)		–
2024 Convertible Senior Notes – equity component, net of tax		–			20,818			–			–			20,818			–			20,818			–
2024 Convertible Senior Notes issuance costs – equity component, net of tax		–			(671	)		–			–			(671	)		–			(671	)		–
Balance August 31, 2017		28,503		$	315,306		$	709,103		$	(6,279	)	$	1,018,130		$	160,763		$	1,178,893		$	36,148
Net earnings		–			–			151,781			–			151,781			26,662			178,443			(6,380	)
Other comprehensive income, net		–			–			–			(17,087	)		(17,087	)		(19	)		(17,106	)		–
Noncontrolling interest adjustments		–			–			–			–			–			2,864			2,864			–
Joint venture partner distribution declared		–			–			–			–			–			(62,649	)		(62,649	)		–
Investment by joint venture partner		–			–			–			–			–			6,500			6,500			–
Noncontrolling interest acquired		–			–			–			–			–			(7	)		(7	)		–
Restricted stock awards (net of cancellations)		336			7,334			–			–			7,334			–			7,334			–
Unamortized restricted stock		–			(15,058	)		–			–			(15,058	)		–			(15,058	)		–
Restricted stock amortization		–			16,100			–			–			16,100			–			16,100			–
Dividends		–			–			(29,986	)		–			(29,986	)		–			(29,986	)		–
Conversion of 2018 Convertible Senior Notes		3,352			118,887			–			–			118,887			–			118,887			–
Balance August 31, 2018		32,191		$	442,569		$	830,898		$	(23,366	)	$	1,250,101		$	134,114		$	1,384,215		$	29,768

The accompanying notes are an integral part of these financial statements.

The Greenbrier Companies 2018 Annual Report 55

Consolidated Statements of Cash Flows

YEARS ENDED AUGUST 31,

(In thousands)	2018			2017			2016
Cash flows from operating activities:
Net earnings	$	172,063		$	160,462		$	284,824
Adjustments to reconcile net earnings to net cash provided by operating activities:
Deferred income taxes		(40,496	)		4,377			(8,935	)
Depreciation and amortization		74,356			65,129			63,345
Net gain on disposition of equipment		(44,369	)		(9,740	)		(15,796	)
Stock based compensation expense		29,314			26,427			24,037
Accretion of debt discount		4,171			2,340			–
Noncontrolling interest adjustments		2,864			(677	)		526
Other		1,688			(845	)		560
Decrease (increase) in assets:
Accounts receivable, net		(83,551	)		(25,272	)		(32,051	)
Inventories		(26,592	)		(2,787	)		53,711
Leased railcars for syndication		(54,023	)		41,015			19,154
Other		34,115			17,558			(16,989	)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities		54,032			(25,422	)		(85,928	)
Deferred revenue		(20,231	)		33,039			50,712
Net cash provided by operating activities		103,341			285,604			337,170
Cash flows from investing activities:
Acquisitions, net of cash acquired		(34,874	)		(27,127	)		–
Proceeds from sales of assets		153,224			24,149			103,715
Capital expenditures		(176,848	)		(86,065	)		(139,013	)
Decrease (increase) in restricted cash		73			15,387			(15,410	)
Investment in and advances to unconsolidated affiliates		(26,455	)		(40,632	)		(12,855	)
Cash distribution from joint ventures		4,661			550			7,855
Net cash used in investing activities		(80,219	)		(113,738	)		(55,708	)
Cash flows from financing activities:
Net changes in revolving notes with maturities of 90 days or less		23,401			4,324			(49,000	)
Repayments of revolving notes with maturities longer than 90 days		–			–			(1,888	)
Proceeds from issuance of notes payable		13,771			276,093			–
Repayments of notes payable		(22,269	)		(8,297	)		(22,299	)
Debt issuance costs		–			(9,082	)		(4,161	)
Repurchase of stock		–			–			(33,498	)
Dividends		(29,914	)		(24,890	)		(23,303	)
Cash distribution to joint venture partner		(73,033	)		(28,511	)		(95,092	)
Investment by joint venture partner		6,500			–			5,400
Tax payments for net share settlement of restricted stock		(7,723	)		(5,215	)		(5,500	)
Excess tax benefit from restricted stock awards		–			–			2,813
Other		–			–			(887	)
Net cash provided by (used in) financing activities		(89,267	)		204,422			(227,415	)
Effect of exchange rate changes		(14,666	)		12,499			(4,298	)
Increase (decrease) in cash and cash equivalents		(80,811	)		388,787			49,749
Cash and cash equivalents
Beginning of period		611,466			222,679			172,930
End of period	$	530,655		$	611,466		$	222,679
Cash paid during the period for:
Interest	$	18,878		$	13,962		$	12,277
Income taxes, net	$	66,423		$	45,280		$	125,455
Non-cash activity
Conversion of 2018 Senior Convertible Notes	$	118,887		$	–		$	–
Transfer from Leased railcars for syndication and Inventories to Equipment on operating leases, net	$	20,945		$	8,668		$	73,165
Capital expenditures accrued in Accounts payable and accrued liabilities	$	13,534		$	16,145		$	8,408
Change in Accounts payable and accrued liabilities associated with cash distributions to joint venture partner	$	14		$	484		$	652
Change in Accounts payable and accrued liabilities associated with dividends declared	$	(72	)	$	(252	)	$	(331	)
Change in Accounts payable and accrued liabilities associated with repurchase of stock	$	–		$	–		$	1,125
Transfer of Property, plant and equipment, net to (from) Intangibles and other assets, net	$	–		$	(63	)	$	588

The accompanying notes are an integral part of these financial statements.

56 The Greenbrier Companies 2018 Annual Report

Notes to Consolidated Financial Statements

Note 1 - Nature of Operations

The Company operates in three reportable segments: Manufacturing; Wheels, Repair & Parts; and Leasing & Services. Prior to August 20, 2018, the Company operated in four reportable segments: Manufacturing; Wheels & Parts; Leasing & Services; and GBW Joint Venture. On August 20, 2018 the Company entered into an agreement with its joint venture partner to discontinue the GBW railcar repair joint venture which resulted in 12 repair shops returned to the Company. Beginning on August 20, 2018, GBW Joint Venture was no longer considered a reportable segment.

The segments are operationally integrated. The Manufacturing segment, which currently operates from facilities in the U.S., Mexico, Poland, Romania and Turkey, produces double-stack intermodal railcars, tank cars, conventional railcars, automotive railcar products and marine vessels. The Wheels, Repair & Parts segment performs wheel and axle servicing; railcar repair, refurbishment and maintenance; as well as production of a variety of parts for the railroad industry in North America. The Leasing & Services segment owns approximately 8,100 railcars (6,300 railcars held as equipment on operating leases, 1,600 held as leased railcars for syndication and 200 held as finished goods inventory) and provides management services for approximately 357,000 railcars for railroads, shippers, carriers, institutional investors and other leasing and transportation companies in North America as of August 31, 2018. Through unconsolidated affiliates the Company produces rail and industrial castings, tank heads and other components and has an ownership stake in a railcar manufacturer in Brazil and a lease financing warehouse.

Note 2 - Summary of Significant Accounting Policies

Principles of consolidation - The financial statements include the accounts of the Company and its subsidiaries in which it has a controlling interest. All intercompany transactions and balances are eliminated upon consolidation.

Unclassified balance sheet - The balance sheets of the Company are presented in an unclassified format as a result of significant leasing activities for which the current or non-current distinction is not relevant. In addition, the activities of the Manufacturing; Wheels, Repair & Parts; and Leasing & Services segments are so intertwined that in the opinion of management, any attempt to separate the respective balance sheet categories would not be meaningful and may lead to the development of misleading conclusions by the reader.

Foreign currency translation - Certain operations outside the U.S., primarily in Europe, prepare financial statements in currencies other than the U.S. Dollar. Revenues and expenses are translated at monthly average exchange rates during the year, while assets and liabilities are translated at year-end exchange rates. Translation adjustments are accumulated as a separate component of equity in other comprehensive income (loss). The net foreign currency translation adjustment balances were $21.5 million, $5.4 million and $20.8 million as of August 31, 2018, 2017 and 2016, respectively.

Cash and cash equivalents - Cash may temporarily be invested primarily in money market funds. All highly-liquid investments with a maturity of three months or less at the date of acquisition are considered cash equivalents.

Restricted cash - Restricted cash primarily relates to amounts associated with funds temporarily held in connection with a performance guarantee as part of a 2016 transaction, amounts held to support a target minimum rate of return on certain agreements and a pass through account for activity related to management services provided for certain third party customers.

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Accounts receivable - Accounts receivable includes receivables from related parties (see Note 17 – Related Party Transactions) and is stated net of allowance for doubtful accounts of $2.7 million and $1.8 million as of August 31, 2018 and 2017, respectively.

	As of August 31,
(In thousands)	2018			2017			2016
Allowance for doubtful accounts
Balance at beginning of period	$	1,768		$	2,215		$	2,449
Additions, net of reversals		938			370			70
Usage		(54	)		(891	)		(277	)
Currency translation effect		49			74			(27	)
Balance at end of period	$	2,701		$	1,768		$	2,215

Inventories - Inventories are valued at the lower of cost or market using the first-in first-out method. Work-in-process includes material, labor and overhead. Finished goods includes completed wheels, parts and railcars not on lease or in transit.

Leased railcars for syndication - Leased railcars for syndication consist of newly-built railcars manufactured at one of the Company’s facilities or railcars purchased from third parties, which have been placed on lease to a customer and which the Company intends to sell to an investor with the lease attached. These railcars are generally anticipated to be sold within six months of delivery of the last railcar in a group or six months from when the Company acquires the railcar from a third party and are typically not depreciated during that period as the Company does not believe any economic value of a railcar is lost in the first six months. In the event the railcars are not sold in the first six months, the railcars are either held in Leased railcars for syndication and are depreciated or are transferred to Equipment on operating leases and are depreciated. As of August 31, 2018, Leased railcars for syndication was $130.9 million compared to $91.3 million as of August 31, 2017.

Equipment on operating leases, net - Equipment on operating leases is stated net of accumulated depreciation. Depreciation to estimated salvage value is provided on the straight-line method over the estimated useful lives of up to thirty-five years. Management periodically reviews salvage value estimates based on current scrap prices and what the Company expects to receive upon disposal.

Investment in unconsolidated affiliates - Investment in unconsolidated affiliates includes the Company’s interests which are accounted for under the equity method of accounting. See Note 7 - Investments in Unconsolidated Affiliates for additional information.

Property, plant and equipment - Property, plant and equipment is stated at cost, net of accumulated depreciation. Depreciation is provided on the straight-line method over estimated useful lives which are as follows:

	Depreciable Life
Buildings and improvements		10 – 25 years
Machinery and equipment		3 – 15 years
Other		3 – 7 years

Goodwill - Goodwill is recorded when the purchase price of an acquisition exceeds the fair market value of the net assets acquired. Goodwill is not amortized and is tested for impairment at least annually and more frequently if material changes in events or circumstances arise. The provisions of ASC 350, Intangibles – Goodwill and Other, require the Company to perform an annual impairment test on goodwill. The Company compares the fair value of each reporting unit with its carrying value. An impairment loss is recorded to the extent that the reporting unit’s carrying amount exceeds the reporting unit’s fair value. An impairment loss cannot exceed the total amount of goodwill allocated to the reporting unit.

58 The Greenbrier Companies 2018 Annual Report

Intangible and other assets, net - Intangible assets are recorded when a portion of the purchase price of an acquisition is allocated to assets such as customer contracts and relationships and trade names. Intangible assets with finite lives are amortized using the straight line method over their estimated useful lives and primarily include long-term customer agreements which are amortized over 5 to 20 years. Other assets include revolving note fees and debt acquisition costs which are capitalized and amortized as interest expense over the life of the related borrowings.

Impairment of long-lived assets - When changes in circumstances indicate the carrying amount of certain long-lived assets may not be recoverable, the assets are evaluated for impairment. If the forecasted undiscounted future cash flows are less than the carrying amount of the assets, an impairment charge to reduce the carrying value of the assets to estimated realizable value is recognized in the current period. No impairment was recorded in the years ended August 31, 2018, 2017 and 2016.

Maintenance obligations - The Company is responsible for maintenance on a portion of the managed and owned lease fleet under the terms of maintenance obligations defined in the underlying lease or management agreement. The estimated liability is based on maintenance histories for each type and age of railcar. The liability, included in Accounts payable and accrued liabilities, is reviewed periodically and updated based on maintenance trends and known future repair or refurbishment requirements.

Warranty accruals - Warranty costs are estimated and charged to operations to cover a defined warranty period. The estimated warranty cost is based on history of warranty claims for each particular product type. For new product types without a warranty history, preliminary estimates are based on historical information for similar product types. The warranty accruals, included in Accounts payable and accrued liabilities, are reviewed periodically and updated based on warranty trends.

Income taxes - The liability method is used to account for income taxes. Deferred income taxes are provided for the temporary effects of differences between assets and liabilities recognized for financial statement and income tax reporting purposes. Valuation allowances reduce deferred tax assets to an amount that will more likely than not be realized. We recognize liabilities for uncertain tax positions based on whether evidence indicates that it is more likely than not that the position will be sustained on audit. It is inherently difficult and subjective to estimate such amounts, as this requires us to estimate the probability of various possible outcomes. The Company reevaluates these uncertain tax positions on a quarterly basis. Changes in assumptions may result in the recognition of a tax benefit or an additional charge to the tax provision.

Deferred revenue - Cash payments received prior to meeting revenue recognition criteria are recorded in Deferred revenue. Amounts are reclassified out of Deferred revenue once the revenue recognition criteria have been met. Deferred revenue primarily consists of customer prepayments and the unrecognized portion of the $40 million upfront fee from MUL. The Company also has a 40% interest in the common equity of an entity that buys and sells railcar assets that are leased to third parties. Deferred revenue includes 40% of the revenue and margin of railcars sold to this entity until the railcars are ultimately sold to a third party. The Deferred revenue balance was $106.0 million and $129.3 million as of August 31, 2018 and 2017, respectively.

Noncontrolling interest and Contingently redeemable noncontrolling interest - The Company has a joint venture with Grupo Industrial Monclova, S.A. (GIMSA) that manufactures new railroad freight cars for the North American marketplace at GIMSA’s existing manufacturing facility located in Frontera, Mexico. Each party owns a 50% interest in the joint venture. The financial results of this operation are consolidated for financial reporting purposes as the Company maintains a controlling interest as evidenced by the right to appoint the majority of the Board of Directors, control over accounting, financing, marketing and engineering and approval and design of products. The noncontrolling interest related to the partner’s 50% interest in the joint venture is included in Noncontrolling interest in the equity section of the Company’s Consolidated Balance Sheet.

Greenbrier-Astra Rail was formed in 2017 between the Company’s existing European operations headquartered in Swidnica, Poland and Astra Rail, based in Arad, Romania. Greenbrier-Astra Rail is controlled by the Company with an approximate 75% interest. The Company consolidates Greenbrier-Astra Rail for financial reporting purposes and includes the noncontrolling interest in the mezzanine section of the Consolidated Balance Sheet in Contingently redeemable noncontrolling interest (see Note 3 – Acquisitions).

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In August 2018, Greenbrier-Astra Rail entered into an agreement to take an approximately 68% ownership stake in Rayvag, a railcar manufacturing company based in Adana, Turkey. Rayvag is controlled by the Company. The Company consolidates Rayvag for financial reporting purposes. The noncontrolling interest related to the partner’s interest is included in Noncontrolling interest in the equity section of the Company’s Consolidated Balance Sheet.

The Company has a joint venture with Summit Railroad Products, Inc. to provide axle services. Each party owns a 50% interest in the joint venture. The financial results of this operation are consolidated for financial reporting purposes as the Company has the power to direct the activities which most significantly impact the economic performance of the entity. The noncontrolling interest related to the partner’s 50% interest in the joint venture is included in Noncontrolling interest in the equity section of the Company’s Consolidated Balance Sheet.

Net earnings attributable to noncontrolling interest on the Company’s Consolidated Statement of Income represents the Company’s partners’ share of results from operations.

Accumulated other comprehensive loss - Accumulated other comprehensive loss, net of tax as appropriate, consisted of the following:

(In thousands)	Unrealized Gain (Loss) on Derivative Financial Instruments			Foreign Currency Translation Adjustment			Other			Accumulated Other Comprehensive Loss
Balance, August 31, 2017	$	181		$	(5,366	)	$	(1,094	)	$	(6,279	)
Other comprehensive loss before reclassifications		(197	)		(16,140	)		(335	)		(16,672	)
Amounts reclassified from accumulated other comprehensive loss		(415	)		–			–			(415	)
Balance, August 31, 2018	$	(431	)	$	(21,506	)	$	(1,429	)	$	(23,366	)

The amounts reclassified out of Accumulated other comprehensive loss into the Consolidated Statements of Income, with the financial statement caption, were as follows:

	Year Ended August 31,						Financial Statement Caption
(In thousands)	2018			2017
(Gain) loss on derivative financial instruments:
Foreign exchange contracts	$	(716	)	$	3,644		Revenue and Cost of revenue
Interest rate swap contracts		298			1,057		Interest and foreign exchange
		(418	)		4,701		Total before tax
		3			(972	)	Tax benefit
	$	(415	)	$	3,729		Net of tax

Revenue recognition - Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured.

Railcars are generally manufactured, repaired or refurbished under firm orders from third parties. Revenue is recognized when new, used, refurbished or repaired railcars are completed, accepted by an unaffiliated customer and contractual contingencies removed. Marine revenue is either recognized on the percentage of completion method during the construction period or on the completed contract method based on the terms of the contract. Under the percentage of completion method, revenue is recognized based on the progress toward contract completion measured by actual costs incurred to date in relation to the estimate of total expected costs. Under the completed contract method, revenue is not recognized until the project has been fully completed. Cash payments received prior to meeting revenue recognition criteria are accounted for in Deferred revenue. Operating lease revenue is recognized as earned under the lease terms. Certain leases are operated under car hire arrangements whereby revenue is earned based on utilization, car hire rates and terms specified in the lease agreement.

60 The Greenbrier Companies 2018 Annual Report

The Company sells railcars with attached leases to financial investors. Revenue and cost of revenue associated with railcars that the Company has manufactured are recognized in Manufacturing once sold. Revenue and cost of revenue associated with railcars which were obtained from a third party with the intent to resell them and subsequently sold are recognized in Leasing & Services. In addition the Company will often perform management or maintenance services at market rates for these railcars. The Company evaluates the terms of any remarketing agreements and any contractual provisions that represent retained risk and the level of retained risk based on those provisions. The Company applies a 10% threshold to determine whether the level of retained risk exceeds 10% of the individual fair value of the rail cars delivered. If retained risk exceeded 10%, the transaction would not be recognized as a sale until such time as the retained risk declined to 10% or less. For any contracts with multiple elements (i.e. railcars, maintenance, management services, etc.) the Company allocates revenue among the deliverables primarily based upon objective and reliable evidence of the fair value of each element in the arrangement. If objective and reliable evidence of fair value of any element is not available, the Company will use its estimated selling price for purposes of allocating the total arrangement consideration among the elements.

Interest and foreign exchange - Interest and foreign exchange includes foreign exchange transaction gains and losses, amortization of loan fee expense, accretion of debt discounts and external interest expense.

(In thousands)	Years ended August 31,
	2018			2017		2016
Interest and foreign exchange:
Interest and other expense	$	30,946		$	23,519	$	17,268
Foreign exchange (gain) loss		(1,578	)		673		(3,766	)
	$	29,368		$	24,192	$	13,502

Research and development - Research and development costs are expensed as incurred. Research and development costs incurred for new product development during the years ended August 31, 2018, 2017 and 2016 were $6.0 million, $4.2 million and $2.7 million, respectively, included in Selling and administrative expenses.

Forward exchange contracts - Foreign operations give rise to risks from changes in foreign currency exchange rates. Forward exchange contracts with established financial institutions are used to hedge a portion of such risk. Realized and unrealized gains and losses on effective hedges are deferred in other comprehensive income (loss) and recognized in earnings concurrent with the hedged transaction or when the occurrence of the hedged transaction is no longer considered probable. Ineffectiveness is measured and any gain or loss is recognized in foreign exchange gain or loss. Even though forward exchange contracts are entered into to mitigate the impact of currency fluctuations, certain exposure remains, which may affect operating results. In addition, there is risk for counterparty non-performance.

Interest rate instruments - Interest rate swap agreements are used to reduce the impact of changes in interest rates on certain debt. The net cash amounts paid or received under the agreements are recognized as an adjustment to interest expense.

Net earnings per share - Basic earnings per common share (EPS) excludes the potential dilution that would occur if additional shares were issued upon conversion of bonds. Restricted share grants are treated as outstanding when issued and restricted stock units are not treated as outstanding when issued. Restricted share grants and restricted stock units that are considered participating securities, including some grants subject to certain performance criteria, are included in weighted average basic common shares outstanding when calculating EPS when the Company is in a net earnings position.

Diluted EPS is calculated using the more dilutive of two approaches. The first approach includes the dilutive effect, using the treasury stock method, associated with shares underlying the 2024 Convertible notes, restricted stock units that are not considered participating securities and performance based restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved. The second

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approach supplements the first by including the “if converted” effect of the 2018 Convertible notes during the periods in which they were outstanding. Under the “if converted” method, debt issuance and interest costs, both net of tax, associated with the convertible notes are added back to net earnings and the share count is increased by the shares underlying the convertible notes. The 2024 Convertible notes are included in the calculation of both approaches using the treasury stock method when the average stock price is greater than the applicable conversion price.

Stock-based compensation - The value of stock based compensation awards is amortized as compensation expense from the date of grant through the earlier of the vesting period or the recipient’s eligible retirement date. Awards are expensed upon grant when the recipient’s eligible retirement date precedes the grant date. Stock based compensation expense consists of restricted stock units, restricted stock and phantom stock units awards. Stock based compensation expense for the years ended August 31, 2018, 2017 and 2016 was $29.3 million, $26.4 million and $24.0 million, respectively and was recorded in Selling and administrative on the Consolidated Statements of Income.

Restricted stock units and restricted stock are accounted for as equity based awards (see Note 15 – Equity). Phantom stock units are accounted for as liability based awards.

The Company began granting phantom stock units during the year ended August 31, 2016. Every phantom stock unit entitles the participant to receive a cash payment equal to the value of a single share of the Company’s common stock upon vesting. The holders of unvested phantom stock units are entitled to participate in dividend equivalents.

There were no phantom stock units awarded during the year ended August 31, 2018. During the years ended August 31, 2017 and 2016, the Company awarded 151,634 and 268,161 phantom stock units, respectively, which include performance-based grants. As of August 31, 2018, there were a total of 200,686 phantom stock units associated with unvested performance-based grants. The actual number of phantom stock units that will vest associated with performance-based phantom stock units will vary depending on the Company’s performance. Approximately 200,686 additional phantom stock units may be granted if performance-based phantom stock units vest at stretch levels of performance. These additional units are associated with phantom stock unit awards granted during the years ended August 31, 2016 and 2017. The grant date fair value of phantom stock awards was $6.7 million and $7.9 million for the years ended August 31, 2017 and 2016, respectively.

Our phantom stock unit grants are considered liability based awards and therefore are re-measured at the end of each reporting period. Compensation expense is recognized through the earlier of the vesting period or the recipient’s eligible retirement date. Time-based awards to employees are expensed upon grant when the recipient’s eligible retirement date precedes the grant date or during the vesting period if the grantee becomes retirement eligible before the vesting period is complete. Compensation expense related to phantom stock unit grants is recorded in Selling and administrative expense and Cost of revenue on the Company’s Consolidated Statements of Income. Compensation expense recognized related to phantom stock units for the years ended August 31, 2018, August 31, 2017 and 2016 was $12.1 million, $6.2 million and $1.5 million, respectively. Unamortized compensation cost related to phantom stock unit grants was $5.9 million, $10.9 million and $7.5 million as of August 31, 2018, 2017 and 2016, respectively.

Management estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires judgment on the part of management to arrive at estimates and assumptions on matters that are inherently uncertain. These estimates may affect the amount of assets, liabilities, revenue and expenses reported in the financial statements and accompanying notes and disclosure of contingent assets and liabilities within the financial statements. Estimates and assumptions are periodically evaluated and may be adjusted in future periods. Actual results could differ from those estimates.

Initial Adoption of Accounting Policies - In the first quarter of 2018, the Company adopted Accounting Standards Update 2016-09, Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). This changes how companies account for certain aspects of share-based payments to employees. Excess tax benefits or deficiencies related to vested awards which were previously recognized in stockholders’ equity are now

62 The Greenbrier Companies 2018 Annual Report

recognized in the income statement when awards vest. For the year ended August 31, 2018, the impact of adopting this new guidance was immaterial. Prior to adopting the updated standard, excess tax benefits were reported as financing activities and are now reported as operating activities in the statement of cash flows. In addition, cash paid by an employer when directly withholding shares for tax withholding purposes were reported as operating activities and are now classified as financing activities.

Prospective Accounting Changes - In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (ASU 2014-09), providing a common revenue recognition model under U.S. GAAP. Under ASU 2014-09, an entity recognizes revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or services. It also requires additional disclosures to sufficiently describe the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB issued a one year deferral and the new standard is effective for fiscal years and interim periods within those years beginning after December 15, 2017. The Company plans to adopt this new standard beginning September 1, 2018 using the modified retrospective method. The Company has substantially completed our evaluation of the requirements of the new standard and is implementing slight modifications to our affected processes and controls in the first quarter of fiscal 2019. The majority of our revenue recognition timing will remain unchanged, while we expect certain minor changes related to maintenance and repair services. Costs incurred while fulfilling maintenance contracts will now be recognized as incurred while the related revenue will continue to be recognized over time. Additionally, our repair service revenue, while previously recognized upon completion of a repair order, will now be recognized as costs are incurred. As a result of these changes, the Company expects to record an increase to retained earnings of approximately $5.4 million and a reclassification from accrued maintenance to contract liabilities of $2.4 million as of September 1, 2018.

In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (ASU 2016-02). The new guidance supersedes existing guidance on accounting for leases in Topic 840 and is intended to increase the transparency and comparability of accounting for lease transactions. ASU 2016-02 requires most leases to be recognized on the balance sheet. Lessees will need to recognize a right-of-use asset and a lease liability for virtually all leases. The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Lessor accounting remains similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. The ASU will require both quantitative and qualitative disclosures regarding key information about leasing arrangements. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will include a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The Company plans to adopt this guidance beginning September 1, 2019. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.

In December 2016, the FASB issued Accounting Standards Update 2016-18, Restricted Cash (ASU 2016-18). This update requires additional disclosure and that the Statement of Cash Flow explain the change during the period in the total cash, cash equivalents and amounts generally described as restricted cash. Therefore, amounts generally described as restricted cash should be included with cash & cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Statement of Cash Flows. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 with early adoption permitted. The Company plans to adopt this guidance beginning September 1, 2018.

In August 2017, the FASB issued Accounting Standards Update 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12). This update improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements and make certain targeted improvements to simplify the application of the hedge accounting guidance. The guidance expands the ability to hedge non-financial and financial risk components, reduces complexity in fair value hedges of interest rate risk, eliminates the requirement to separately measure and report

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hedge ineffectiveness, as well as eases certain hedge effectiveness assessment requirements. The new guidance is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company plans to adopt this guidance beginning September 1, 2019. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.

Note 3 - Acquisitions

GBW

On August 20, 2018, the Company entered into a dissolution agreement with Watco Companies, LLC, its previous joint venture partner, to discontinue their GBW Railcar Services railcar repair joint venture. Pursuant to the dissolution agreement, previously operated Greenbrier repair shops and associated employees were returned to the Company. Additionally, the dissolution agreement provides that certain agreements entered into in connection with the original creation of GBW in 2014 will be terminated as of the transaction date, including the leases of real and personal property, service agreements, and certain employment-related agreements. GBW is expected to exist as a formal legal entity at least through December 31, 2018 to complete its cessation of activities in an orderly manner.

Beginning on August 20, 2018, the repair shops and their activity are being reported in the Company’s consolidated financial statements as part of the Wheels, Repair & Parts segment.

As the assets received and liabilities assumed from GBW meet the definition of a business, the Company has accounted for this transaction as a business combination. The total net assets acquired were approximately $56.8 million. Additionally, the Company removed the book value of its remaining equity method investment in, and note receivable due from, the joint venture. The accumulated deficit reflected in GBW’s balance sheet as of August 31, 2018 will be funded by its parents. The Company has included this assumed liability within the purchase price allocation in the table below. The impact of the acquisition was not material to the Company’s results of operations, therefore pro forma financial information has not been included. See Note 17 – Related Party Transactions for additional information.

The preliminary allocation of the purchase price based on the fair value of the net assets acquired was as follows as of August 31, 2018:

(in thousands)
Cash and cash equivalents	$	5,000
Accounts receivable, net		12,230
Inventories		18,106
Property, plant and equipment, net		16,748
Intangibles and other assets, net		9,200
Goodwill		7,863
Total assets acquired		69,147
Accounts payable and accrued liabilities		12,394
Total liabilities assumed		12,394
Net assets acquired	$	56,753

As of August 31, 2018, certain liabilities in the table above are estimates and the Company will adjust the purchase price allocation as they are settled.

Greenbrier Astra Rail

On June 1, 2017, Greenbrier and Astra Holding GmbH (Astra) contributed its European operations to a newly formed company, Greenbrier-Astra Rail (GAR), a Europe-based freight railcar manufacturing, engineering and repair business. As consideration for an approximate 75% controlling interest, Greenbrier agreed to pay Astra €30 million at closing, an additional €30 million which was paid on June 1, 2018 and issue an approximate 25% noncontrolling interest in the new company. The total net assets acquired of $115.8 million includes $38.3 million representing the fair value of the noncontrolling interest at the acquisition date.

64 The Greenbrier Companies 2018 Annual Report

Astra also received a put option to sell its entire noncontrolling interest to Greenbrier at an exercise price equal to the higher of fair value or a defined EBITDA multiple as measured on the exercise date. The option is exercisable 30 days prior to and up until June 1, 2022. Due to Astra’s redemption right under the put option, the noncontrolling interest has been classified as a Contingently redeemable noncontrolling interest in the mezzanine section of the Consolidated Balance Sheets. The carrying value of the noncontrolling interest cannot be less than the maximum redemption amount, which is the amount Greenbrier will settle the put option for if exercised. Adjustments to reconcile the carrying value to the maximum redemption amount are recorded to retained earnings. There were no such adjustments during the year ended August 31, 2018.

For the year ended August 31, 2018, the European operations contributed by Astra generated revenues of $136.8 million and a loss from operations of $11.5 million, which are reported in the Company’s consolidated financial statements as part of the Manufacturing segment. The impact of the acquisition was not material to the Company’s consolidated results of operations for the twelve-month period ended August 31, 2017, therefore pro forma financial information has not been included.

The purchase price of the net assets acquired from Astra was allocated as follows:

(in thousands)
Cash and cash equivalents	$	6,562
Accounts receivable, net		10,984
Inventories		30,454
Property, plant and equipment, net		75,296
Intangibles and other assets, net		17,300
Goodwill		25,746
Total assets acquired		166,342
Accounts payable and accrued liabilities		17,879
Deferred income taxes		7,292
Deferred revenue		964
Notes payable, net		24,382
Total liabilities assumed		50,517
Net assets acquired	$	115,825

On August 2, 2018, GAR entered in to an agreement with Rayvag Vagon Sanavi ve Ticaret A.S. (Rayvag) to take an approximately 68% ownership stake in Rayvag. Rayvag is a railcar manufacturer and provider of railcar repair and parts services based in Adana, Turkey. The amount paid to acquire the 68% ownership stake in Rayvag and the impact of the acquisition were not material to the Company’s consolidated balance sheet and results of operations, therefore pro forma financial information has not been included.

Note 4 - Inventories

	As of August 31,
(In thousands)	2018			2017
Manufacturing supplies and raw materials	$	278,726		$	222,080
Work-in-process		105,021			86,794
Finished goods		54,181			95,389
Excess and obsolete adjustment		(5,614	)		(4,136	)
	$	432,314		$	400,127

The Greenbrier Companies 2018 Annual Report 65

	As of August 31,
(In thousands)	2018			2017			2016
Excess and obsolete adjustment
Balance at beginning of period	$	4,136		$	3,257		$	2,679
Charge to cost of revenue		4,023			2,781			2,422
Disposition of inventory		(2,455	)		(2,003	)		(1,792	)
Currency translation effect		(90	)		101			(52	)
Balance at end of period	$	5,614		$	4,136		$	3,257

Note 5 - Equipment on Operating Leases, net

Equipment on operating leases is reported net of accumulated depreciation of $64.9 million and $91.1 million as of August 31, 2018 and 2017, respectively. Depreciation expense was $11.2 million, $12.1 million and $16.6 million as of August 31, 2018, 2017 and 2016, respectively. In addition, certain railcar equipment leased-in by the Company on operating leases (see Note 21 – Lease Commitments) is subleased to customers under non-cancelable operating leases. Aggregate minimum future amounts receivable under all non-cancelable operating leases and subleases are as follows:

(In thousands)
Year ending August 31,
2019	$	26,246
2020		19,898
2021		13,311
2022		11,311
2023		8,562
Thereafter		14,733
	$	94,061

Certain equipment is also operated under daily, monthly or car hire utilization arrangements. Associated revenue amounted to $12.8 million, $13.0 million and $14.7 million for the years ended August 31, 2018, 2017 and 2016, respectively.

Note 6 - Property, Plant and Equipment, net

	As of August 31,
(In thousands)	2018			2017
Land and improvements	$	84,432		$	84,594
Machinery and equipment		414,865			378,311
Buildings and improvements		202,973			186,960
Construction in progress		48,406			39,417
Other		68,452			60,747
		819,128			750,029
Accumulated depreciation		(361,932	)		(322,008	)
	$	457,196		$	428,021

Depreciation expense was $54.5 million, $45.5 million and $39.2 million for the years ended August 31, 2018, 2017 and 2016, respectively.

Note 7 - Investments In Unconsolidated Affiliates

GBW

The Company has a 50% ownership interest in GBW which performed railcar repair, refurbishment and maintenance until August 20, 2018, on which date the Company entered in to a dissolution agreement (See Note 3 – Acquisitions). The Company accounts for its interest in GBW under the equity method of accounting.

66 The Greenbrier Companies 2018 Annual Report

The assets and liabilities shown below as of August 31, 2018 primarily represent one remaining repair shop and other corporate related obligations while the summarized income statement for the year ended August 31, 2018 is for GBW’s full year of activity.

Summarized financial data for GBW is as follows:

	As of August 31,
(In thousands)	2018		2017
Current assets	$	8,531	$	81,860
Total assets	$	8,531	$	206,009
Current liabilities	$	23,283	$	33,033
Total liabilities	$	23,283	$	111,384

	Years ended August 31,
(In thousands)	2018			2017			2016
Revenue	$	238,033		$	253,436		$	373,490
Margin	$	(6,047	)	$	(4,058	)	$	33,929
Net income (loss) (1)	$	(51,679	)	$	(36,947	)	$	4,006

⁽¹⁾  In 2018 and 2017, GBW recorded a pre-tax goodwill impairment loss of $26.4 million and $11.2 million, respectively, which reduced the goodwill balance to $15.1 million at the time of the dissolution.

Greenbrier-Maxion

In May 2017, the Company completed a $20 million investment in Greenbrier-Maxion, a railcar manufacturer in Brazil resulting in an increase in the Company’s ownership interest from 19.5% to 60%. Greenbrier-Maxion also assembles bogies and offers a range of aftermarket services including railcar overhaul and refurbishment. The Company does not consolidate Greenbrier-Maxion for financial reporting purposes and accounts for its interest under the equity method of accounting as the entity’s governance provisions require that all significant decisions of Greenbrier-Maxion are subject to shared consent of its shareholders.

Summarized financial data for Greenbrier-Maxion is as follows:

	As of August 31,
(In thousands)	2018		2017
Current assets	$	41,619	$	48,012
Total assets	$	61,034	$	71,455
Current liabilities	$	38,027	$	38,055
Total liabilities	$	41,539	$	42,197

	Years ended August 31,
(In thousands)	2018			2017		2016
Revenue	$	187,664		$	228,510	$	168,465
Margin	$	10,086		$	24,372	$	14,245
Net income (loss)	$	(3,006	)	$	1,378	$	(4,051	)

Amsted-Maxion Cruzeiro

In May 2017, the Company increased its ownership interest in Amsted-Maxion Cruzeiro, a manufacturer of castings and components for railcars and other heavy equipment, from 19.5% to 24.5% for $3.25 million. Proceeds from the Company’s increased ownership, along with loans from each of the partners, were used to retire third-party debt at Amsted-Maxion Cruzeiro. The Company retains an option to increase its ownership to 29.5% subject to certain conditions. Amsted-Maxion Cruzeiro has a 40% ownership position in Greenbrier-Maxion. The Company accounts for its interest in Amsted-Maxion Cruzeiro under the equity method of accounting.

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Summarized financial data for Amsted-Maxion Cruzeiro is as follows:

	As of August 31,
(In thousands)	2018		2017
Current assets	$	21,463	$	23,777
Total assets	$	111,589	$	142,583
Current liabilities	$	27,981	$	28,084
Total liabilities	$	83,407	$	94,846

	Years ended August 31,
(In thousands)	2018			2017			2016
Revenue	$	96,490		$	90,114		$	87,833
Margin	$	8,001		$	5,983		$	8,256
Net income (loss)	$	(9,590	)	$	(20,114	)	$	(12,640	)

Other Unconsolidated Affiliates

The Company has eight other unconsolidated affiliates which are accounted for under the equity method of accounting. For the year ended August 31, 2018, the Company recognized earnings of $1.8 million from these other unconsolidated affiliates.

Summarized financial information, shown as 100% of these other unconsolidated affiliates in aggregate are as follows:

	As of August 31,
(In thousands)	2018		2017
Current assets	$	32,168	$	16,996
Total assets	$	239,535	$	283,895
Current liabilities	$	3,647	$	3,003
Total liabilities	$	52,852	$	90,064

	Years ended August 31,
(In thousands)	2018		2017		2016
Revenue	$	25,549	$	39,161	$	75,851
Margin	$	11,360	$	8,015	$	11,087
Net income (loss)	$	6,988	$	5,202	$	6,051

Note 8 - Goodwill

Changes in the carrying value of goodwill are as follows:

(In thousands)	Manufacturing		Wheels, Repair & Parts		Leasing & Services		Total
Balance August 31, 2017	$	25,325	$	43,265	$	–	$	68,590
Additions (1)		839		7,863		–		8,702
Translation		919		–		–		919
Balance August 31, 2018	$	27,083	$	51,128	$	–	$	78,211

⁽¹⁾ Additions to goodwill relate to the GBW repair shop transaction and Manufacturing includes final adjustments to the Astra purchase price allocation. See Note 3 – Acquisitions.

(In thousands)	Goodwill
Gross goodwill balance before accumulated goodwill impairment losses and other reductions	$	230,736
Accumulated goodwill impairment losses		(128,209	)
Accumulated other reductions		(24,316	)
Balance August 31, 2018	$	78,211

68 The Greenbrier Companies 2018 Annual Report

The Company performs a goodwill impairment test annually during the third quarter. Goodwill is also tested more frequently if changes in circumstances or the occurrence of events indicates that a potential impairment exists. The provisions of ASC 350, Intangibles – Goodwill and Other, require the performance of an impairment test on goodwill. The Company compares the fair value of each reporting unit with its carrying value. The Company determines the fair value of the reporting unit based on a weighting of income and market approaches. Under the income approach, the Company calculates the fair value of a reporting unit based on the present value of estimated future cash flows. Under the market approach, the Company estimates the fair value based on observed market multiples for comparable businesses. An impairment loss is recorded to the extent that the reporting unit’s carrying amount exceeds the reporting unit’s fair value. An impairment loss cannot exceed the total amount of goodwill allocated to the reporting unit. Goodwill was tested during the third quarter of 2018 and the Company concluded that goodwill was not impaired.

Note 9 - Intangibles and Other Assets, net

Intangible assets that are determined to have finite lives are amortized over their useful lives. Intangible assets with indefinite useful lives are not amortized and are periodically evaluated for impairment.

The following table summarizes the Company’s identifiable intangible and other assets balance:

	As of August 31,
(In thousands)	2018			2017
Intangible assets subject to amortization:
Customer relationships	$	72,521		$	64,521
Accumulated amortization		(43,576	)		(40,153	)
Other intangibles		16,300			20,207
Accumulated amortization		(6,400	)		(4,866	)
		38,845			39,709
Intangible assets not subject to amortization		5,115			912
Prepaid and other assets		18,935			16,914
Nonqualified savings plan investments		26,299			20,974
Debt issuance costs, net		1,824			2,623
Assets held for sale		3,650			4,045
	$	94,668		$	85,177

Amortization expense for the years ended August 31, 2018, 2017 and 2016 was $5.3 million, $4.8 million and $6.3 million, respectively. Amortization expense for the years ending August 31, 2019, 2020, 2021, 2022 and 2023 is expected to be $5.2 million, $5.2 million, $4.8 million, $3.4 million and $3.2 million, respectively.

Note 10 - Revolving Notes

Senior secured credit facilities, consisting of three components, aggregated to $635.3 million as of August 31, 2018.

As of August 31, 2018, a $550.0 million revolving line of credit, maturing October 2020, secured by substantially all the Company’s assets in the U.S. not otherwise pledged as security for term loans, was available to provide working capital and interim financing of equipment, principally for the U.S. and Mexican operations. Advances under this facility bear interest at LIBOR plus 1.75% or Prime plus 0.75% depending on the type of borrowing. Available borrowings under the credit facility are generally based on defined levels of inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated capitalization and fixed charges coverage ratios. After August 31, 2018 this revolving line of credit agreement was amended (see Note 25 – Subsequent Events).

As of August 31, 2018, lines of credit totaling $35.3 million secured by certain of the Company’s European assets, with variable rates that range from Warsaw Interbank Offered Rate (WIBOR) plus 1.2% to WIBOR plus

The Greenbrier Companies 2018 Annual Report 69

1.3% and Euro Interbank Offered Rate (EURIBOR) plus 1.1%, were available for working capital needs of the European manufacturing operation. European credit facilities are continually being renewed. Currently, these European credit facilities have maturities that range from December 2018 through June 2019.

As of August 31, 2018, the Company’s Mexican railcar manufacturing joint venture had two lines of credit totaling $50.0 million. The first line of credit provides up to $30.0 million and is fully guaranteed by the Company and its joint venture partner. Advances under this facility bear interest at LIBOR plus 2.0%. The Mexican railcar manufacturing joint venture will be able to draw against this facility through January 2019. The second line of credit provides up to $20.0 million, of which the Company and its joint venture partner have each guaranteed 50%. Advances under this facility bear interest at LIBOR plus 2.0%. The Mexican railcar manufacturing joint venture will be able to draw amounts available under this facility through July 2019.

As of August 31, 2018, outstanding commitments under the senior secured credit facilities consisted of $72.2 million in letters of credit under the North American credit facility and $27.7 million outstanding under the European credit facilities.

As of August 31, 2017, outstanding commitments under the senior secured credit facilities consisted of $77.6 million in letters of credit under the North American credit facility and $4.3 million outstanding under the European credit facilities.

Note 11 - Accounts Payable and Accrued Liabilities

	As of August 31,
(In thousands)	2018		2017
Trade payables	$	226,405	$	180,592
Other accrued liabilities		73,273		107,002
Accrued payroll and related liabilities		105,111		84,749
Accrued warranty		27,395		20,737
Accrued maintenance		9,090		17,667
Income taxes payable		4,771		–
Other		3,812		4,314
	$	449,857	$	415,061

Note 12 - Maintenance and Warranty Accruals

	As of August 31,
(In thousands)	2018			2017			2016
Accrued maintenance
Balance at beginning of period	$	17,667		$	18,646		$	18,642
Charged to cost of revenue		(389	)		10,609			12,926
Payments		(8,188	)		(11,588	)		(12,922	)
Balance at end of period	$	9,090		$	17,667		$	18,646
Accrued warranty
Balance at beginning of period	$	20,737		$	12,159		$	11,512
Charged to cost of revenue		12,323			6,872			6,069
Acquisition		–			3,526			–
Payments		(5,217	)		(2,649	)		(5,299	)
Currency translation effect		(448	)		829			(123	)
Balance at end of period	$	27,395		$	20,737		$	12,159

70 The Greenbrier Companies 2018 Annual Report

Note 13 - Notes Payable, net

	As of August 31,
(In thousands)	2018			2017
Convertible senior notes, due 2018	$	–		$	119,063
Convertible senior notes, due 2024		275,000			275,000
Term loans		179,923			184,001
Other notes payable		14,798			19,540
	$	469,721		$	597,604
Debt discount and issuance costs		(33,516	)		(39,376	)
	$	436,205		$	558,228

The Company’s 3.5% convertible senior notes due 2018 with a conversion price of $35.47 matured on April 1, 2018 with a balance of $119.1 million prior to conversion. The conversion of these notes resulted in the issuance of an additional 3.4 million shares of the Company’s common stock.

Convertible senior notes, due 2024, bear interest at a fixed rate of 2.875%, paid semi-annually in arrears on February 1^st and August 1^st. The convertible notes mature on February 1, 2024, unless earlier repurchased by the Company or converted in accordance with their terms. Upon the satisfaction of certain conditions, holders may convert at their option prior to the business day immediately preceding the stated maturity date. The convertible notes are senior unsecured obligations and rank equally with other senior unsecured debt. The convertible notes are convertible into shares of the Company’s common stock, at an initial conversion rate of 16.6234 shares per $1,000 principal amount of the notes (which is equal to an initial conversion price of $60.16 per share). The initial conversion rate and conversion price are subject to adjustment upon the occurrence of certain events, such as distributions, dividends or stock splits. There were $33.1 million of initial debt discount and $8.0 million of original debt issuance costs included in Notes Payable, net on the Company’s Consolidated Balance Sheet. The debt discount represents the difference between the debt principal and the value of a similar debt instrument that does not have a conversion feature at issuance. The debt discount is being amortized using the effective interest rate method through February 2024 and the amortization expense is included in Interest and Foreign exchange on the Company’s Consolidated Statement of Income. In accordance with ASC 470-20, the Company separately accounts for the liability component (debt principal net of debt discount) and equity component. The liability component is recognized as the fair value of a similar instrument that does not have a conversion feature at issuance. To determine the fair value of the liability component, the Company assumed an interest rate of approximately 5% which resulted in a fair value of $241.9 million. The equity component, which is the conversion feature at issuance, is recognized as the difference between the proceeds from the issuance of the notes ($275 million) and the fair value of the liability component ($241.9 million). As of August 31, 2018 and 2017, the equity component was $33.1 million which was recorded on the Company’s Consolidated Balance Sheet in Additional paid-in capital, net of tax of $12.3 million.

Term loans are primarily composed of:

• $200 million of senior term debt, with a maturity date of March 2020, which is secured by a pool of leased railcars. The debt bears a floating interest rate of LIBOR plus 1.75% with principal of $1.75 million paid quarterly in arrears and a balloon payment of $159.8 million due at maturity. An interest rate swap agreement was entered into on 50% of the initial balance to swap the floating interest rate of LIBOR plus 1.75% to a fixed rate of 3.74%. The principal balance as of August 31, 2018 was $170.3 million. After August 31, 2018 this senior term debt agreement was amended (see Note 25 – Subsequent Events).

• Other term loans with an aggregate balance of $9.7 million as of August 31, 2018 and maturity dates ranging from April 2020 to September 2022.

• Other notes payable includes $14.8 million of unsecured debt with a maturity date of June 2019.

The notes payable, along with the revolving and operating lines of credit, contain certain covenants with respect to the Company and various subsidiaries, the most restrictive of which, among other things, limit the ability to: incur additional indebtedness or guarantees; pay dividends or repurchase stock; enter into capital leases; create liens; sell assets; engage in transactions with affiliates, including joint ventures and non U.S. subsidiaries,

The Greenbrier Companies 2018 Annual Report 71

including but not limited to loans, advances, equity investments and guarantees; enter into mergers, consolidations or sales of substantially all the Company’s assets; and enter into new lines of business. The covenants also require certain maximum ratios of debt to total capitalization and minimum levels of fixed charges (interest and rent) coverage.

As of August 31, 2018 principal payments on the notes payable are expected as follows:

(In thousands)
Year ending August 31,
2019	$	26,775
2020		167,086
2021		413
2022		413
2023		34
Thereafter (1)		275,000
	$	469,721

(1) The repayment of the $275.0 million of Convertible senior notes due 2024 is assumed to occur at the scheduled maturity in 2024 instead of assuming an earlier conversion by the holders.

Note 14 - Derivative Instruments

Foreign operations give rise to market risks from changes in foreign currency exchange rates. Foreign currency forward exchange contracts with established financial institutions are utilized to hedge a portion of that risk. Interest rate swap agreements are used to reduce the impact of changes in interest rates on certain debt. The Company’s foreign currency forward exchange contracts and interest rate swap agreements are designated as cash flow hedges, and therefore the effective portion of unrealized gains and losses is recorded in accumulated other comprehensive income or loss.

At August 31, 2018 exchange rates, forward exchange contracts for the purchase of Polish Zlotys and the sale of Euros; the purchase of Mexican Pesos and the sale of U.S. Dollars; and for the purchase of U.S. Dollars and the sale of Saudi Riyals and Euros aggregated to $145.4 million. The fair value of the contracts is included on the Consolidated Balance Sheets as Accounts payable and accrued liabilities when there is a loss, or as Accounts receivable, net when there is a gain. As the contracts mature at various dates through December 2019, any such gain or loss remaining will be recognized in manufacturing revenue or cost of revenue along with the related transactions. In the event that the underlying transaction does not occur or does not occur in the period designated at the inception of the hedge, the amount classified in accumulated other comprehensive loss would be reclassified to the results of operations in Interest and foreign exchange at the time of occurrence. At August 31, 2018 exchange rates, approximately $1.3 million would be reclassified to revenue or cost of revenue in the next year.

At August 31, 2018, an interest rate swap agreement maturing in March 2020 had a notional amount of $85.1 million. The fair value of the contract is included on the Consolidated Balance Sheets in Accounts payable and accrued liabilities when there is a loss, or in Accounts receivable, net when there is a gain. As interest expense on the underlying debt is recognized, amounts corresponding to the interest rate swap are reclassified from Accumulated other comprehensive loss and charged or credited to interest expense. At August 31, 2018 interest rates, approximately $0.1 million would be reclassified to interest expense in the next year.

72 The Greenbrier Companies 2018 Annual Report

Fair Values of Derivative Instruments

	Asset Derivatives					Liability Derivatives
		August 31,					August 31,
		2018		2017			2018		2017
(In thousands)	Balance sheet caption	Fair Value		Fair Value		Balance sheet caption	Fair Value		Fair Value
Derivatives designated as hedging instruments
Foreign forward exchange contracts	Accounts receivable, net	$	700	$	2,341	Accounts payable and accrued liabilities	$	1,211	$	1,761
Interest rate swap contracts	Intangibles and other assets, net		781		–	Accounts payable and accrued liabilities		1		1,125
		$	1,481	$	2,341		$	1,212	$	2,886
Derivatives not designated as hedging instruments
Foreign forward exchange contracts	Accounts receivable, net	$	76	$	1,473	Accounts payable and accrued liabilities	$	354	$	–

The Effect of Derivative Instruments on the Consolidated Statements of Income

Derivatives in cash flow hedging relationships	Financial statement caption of gain recognized in income on derivative	Gain recognized in income on derivatives Years ended August 31,
		2018			2017
Foreign forward exchange contract	Interest and foreign exchange	$	1,052		$	3,207
Interest rate swap contracts	Interest and foreign exchange		(1	)		23
		$	1,051		$	3,230

Derivatives in cash flow hedging relationships	Gain (loss) recognized in OCI on derivatives (effective portion) Years ended August 31,					Financial statement caption of gain (loss) reclassified from accumulated OCI into income	Gain (loss) reclassified from accumulated OCI into income (effective portion) Years ended August 31,						Financial statement caption of gain (loss) in income on derivative (ineffective portion and amount excluded from effectiveness testing)	Gain (loss) recognized on derivative (ineffective portion and amount excluded from effectiveness testing) Years ended August 31,
	2018			2017			2018			2017				2018		2017
Foreign forward exchange contracts	$	(658	)	$	1,746	Revenue	$	1,145		$	(3,980	)	Revenue	$	854	$	(2,843	)
Foreign forward exchange contracts		(1,093	)		385	Cost of revenue		(429	)		336		Cost of revenue		306		248
Interest rate swap contracts		1,632			1,042	Interest and foreign exchange		(298	)		(1,057	)	Interest and foreign exchange		–		–
	$	(119	)	$	3,173		$	418		$	(4,701	)		$	1,160	$	(2,595	)

Note 15 - Equity

Stock Incentive Plan

The 2014 Amended and Restated Stock Incentive Plan was amended and restated as the 2017 Amended and Restated Stock Incentive Plan on October 24, 2017 and approved by stockholders on January 5, 2018. The stockholders also approved an increase in the total number of shares reserved for issuance by 1,100,000 shares.

The Greenbrier Companies 2018 Annual Report 73

As a result, the maximum aggregate number of the Company’s common shares authorized for issuance is 5,425,000. The 2017 Amended and Restated Stock Incentive Plan provides for the grant of incentive stock options, non-statutory stock options, restricted shares, restricted stock units and stock appreciation rights.

On August 31, 2018 there were 1,050,675 shares available for grant compared to 233,271 and 476,770 shares available for grant as of the years ended August 31, 2017 and 2016, respectively. There are no stock options or stock appreciation rights outstanding as of August 31, 2018. The Company currently grants restricted shares and restricted stock units. Restricted share grants are considered outstanding shares of common stock at the time they are issued. The holders of unvested restricted shares are entitled to voting rights and participation in dividends. Shares associated with restricted stock unit awards are not considered legally outstanding shares of common stock until vested. Restricted stock unit awards, including performance-based awards, are entitled to participate in dividends and these awards are considered participating securities and are considered outstanding for earnings per share purposes when the effect is dilutive.

During the years ended August 31, 2018, 2017 and 2016, the Company awarded restricted share and restricted stock unit grants totaling 317,036, 269,705 and 447,895 shares, respectively, which include performance-based grants. As of August 31, 2018, there were a total of 467,710 shares associated with unvested performance-based grants. The actual number of shares that will vest associated with performance-based grants will vary depending on the Company’s performance. Approximately 467,710 additional shares may be granted if performance-based restricted stock unit awards vest at stretch levels of performance. These additional shares are associated with restricted stock unit awards granted during the years ended August 31, 2018, 2017 and 2016. The fair value of awards granted was $15.2 million, $11.3 million and $12.5 million for the years ended August 31, 2018, 2017 and 2016, respectively.

The value, at the date of grant, of stock awarded under restricted share grants and restricted stock unit grants is amortized as compensation expense over the lesser of the vesting period of one to three years or to the recipients eligible retirement date. Compensation expense recognized related to restricted share grants and restricted stock unit grants for the years ended August 31, 2018, 2017 and 2016 was $17.2 million, $20.2 million and $22.5 million, respectively, and was recorded in Selling and administrative and Cost of Revenue on the Consolidated Statements of Income. Unamortized compensation cost related to restricted stock grants was $15.5 million as of August 31, 2018.

Total unvested restricted share and restricted stock unit grants were 788,744 and 837,654 as of August 31, 2018 and 2017. The following table summarizes restricted share and restricted stock unit grant transactions for shares, both vested and unvested, under the 2017 Amended and Restated Stock Incentive Plan:

	Shares
Balance at August 31, 2015 (1)		3,419,861
Granted		447,895
Forfeited		(19,526	)
Balance at August 31, 2016 (1)		3,848,230
Granted		269,705
Forfeited		(26,206	)
Balance at August 31, 2017 (1)		4,091,729
Granted		317,036
Forfeited		(34,440	)
Balance at August 31, 2018 (1)		4,374,325

⁽¹⁾  Balance represents cumulative grants net of forfeitures.

Share Repurchase Program

The Board of Directors has authorized the Company to repurchase in aggregate up to $225 million of the Company’s common stock. The program may be modified, suspended or discontinued at any time without prior notice. Under the share repurchase program, shares of common stock may be purchased on the open market or

74 The Greenbrier Companies 2018 Annual Report

through privately negotiated transactions from time-to-time. The timing and amount of purchases will be based upon market conditions, securities law limitations and other factors. The share repurchase program does not obligate the Company to acquire any specific number of shares in any period.

There were no shares repurchased during the years ended August 31, 2018 and 2017. As of August 31, 2018 the Company had cumulatively repurchased 3,206,226 shares for approximately $137.0 million and had $88.0 million available under the share repurchase program. In October 2017, the expiration date of this share repurchase program was extended from January 1, 2018 to March 31, 2019.

Stock Issuance

The Company’s convertible senior notes due 2018 matured on April 1, 2018. The conversion of these notes resulted in the issuance of an additional 3.4 million shares of the Company’s common stock. See Note 13 – Notes Payable, net.

Note 16 - Earnings Per Share

The shares used in the computation of the Company’s basic and diluted earnings per common share are reconciled as follows:

	Years ended August 31,
(In thousands)	2018		2017		2016
Weighted average basic common shares outstanding (1)		30,857		29,225		29,156
Dilutive effect of 2018 Convertible notes (2)		1,821		3,295		3,214
Dilutive effect of 2024 Convertible notes (3)		–		–		n/a
Dilutive effect of 2026 Convertible notes (4)		n/a		n/a		–
Dilutive effect of restricted stock units (5)		157		42		98
Weighted average diluted common shares outstanding		32,835		32,562		32,468

(1) Restricted stock grants and restricted stock units that are considered participating securities, including some grants subject to certain performance criteria, are included in weighted average basic common shares outstanding when the Company is in a net earnings position. No restricted stock and restricted stock units were anti-dilutive for the years ended August 31, 2018, 2017 and 2016.

(2) The dilutive effect of the 2018 Convertible notes was included as they were considered dilutive under the “if converted” method as further discussed below. The 2018 Convertible notes matured on April 1, 2018.

(3) The 2024 Convertible notes were issued in February 2017. The dilutive effect of the 2024 Convertible notes was excluded for the year ended August 31, 2018 and 2017 as the average stock price was less than the applicable conversion price and therefore was considered anti-dilutive.

(4) The 2026 Convertible notes were retired in August 2016. The effect of the 2026 Convertible notes was excluded for the year ended August 31, 2016 as the average stock price was less than the applicable conversion price and therefore the notes were considered anti-dilutive.

(5) Restricted stock units that are not considered participating securities and restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved, are included in weighted average diluted common shares outstanding when the Company is in a net earnings position.

The Greenbrier Companies 2018 Annual Report 75

Diluted EPS is calculated using the more dilutive of two approaches. The first approach includes the dilutive effect, using the treasury stock method, associated with shares underlying the 2024 Convertible notes, 2026 Convertible notes, restricted stock units that are not considered participating securities and performance based restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved. The second approach supplements the first by including the “if converted” effect of the 2018 Convertible notes during the periods in which they were outstanding. Under the “if converted” method, debt issuance and interest costs, both net of tax, associated with the convertible notes are added back to net earnings and the share count is increased by the shares underlying the convertible notes. The 2024 Convertible notes and 2026 Convertible notes are included in the calculation of both approaches using the treasury stock method when the average stock price is greater than the applicable conversion price.

	Years ended August 31,
	2018		2017		2016
Net earnings attributable to Greenbrier	$	151,781	$	116,067	$	183,213
Add back:
Interest and debt issuance costs on the 2018 Convertible notes, net of tax		2,031		2,932		2,695
Earnings before interest and debt issuance costs on convertible notes	$	153,812	$	118,999	$	185,908
Weighted average diluted common shares outstanding		32,835		32,562		32,468
Diluted earnings per share (1)	$	4.68	$	3.65	$	5.73

(1) Diluted earnings per share was calculated as follows:

Earnings before interest and debt issuance costs on convertible notes

            Weighted average diluted common shares outstanding

Note 17 - Related Party Transactions

In June 2017, the Company purchased a 40% interest in the common equity of an entity that buys and sells railcar assets that are leased to third parties. The railcars sold to this lease financing warehouse are principally built by Greenbrier. The Company accounts for this lease financing warehouse investment under the equity method of accounting. As of August 31, 2018, the carrying amount of the investment was $6.1 million which is classified in Investment in unconsolidated affiliates in the Consolidated Balance Sheet. Upon sale of railcars to this entity from Greenbrier, 60% of the related revenue and margin is recognized and 40% is deferred until the railcars are ultimately sold by the entity. During the year ended August 31, 2018, the Company recognized $16 million in revenue associated with railcars sold into the lease financing warehouse and an additional $48 million associated with railcars sold out of the lease financing warehouse. The Company also provides administrative and remarketing services to this entity and earns management fees for these services which were immaterial for the year ended August 31, 2018.

The Company has a 60.0% ownership interest in Greenbrier-Maxion, a railcar manufacturer in Brazil, and a 24.5% ownership interest in Amsted-Maxion Cruzeiro, a manufacturer of various castings and components for railcars and other heavy industrial equipment in Brazil. The Company accounts for these investments under the equity method of accounting. As of August 31, 2018, the Company had a $7.2 million note receivable from Greenbrier-Maxion and a $10.0 million note receivable from Amsted-Maxion Cruzeiro. These note receivables are included on the Consolidated Balance Sheet in Accounts receivable, net.

In July 2014, the Company and Watco Companies LLC completed the formation of GBW, an unconsolidated 50/50 joint venture. The Company accounted for its interest in GBW under the equity method of accounting. On August 20, 2018 we entered into an agreement with our joint venture partner to discontinue the GBW railcar repair joint venture. The Company leased real and personal property to GBW with lease revenue totaling approximately $5 million for the years ended August 31, 2018, 2017 and 2016. The Company sold wheel sets and components to GBW which totaled $16.5 million, $18.3 million and $28.5 million for the years ended August 31, 2018, 2017 and 2016, respectively. GBW provided services to the Company which totaled $0.4 million, $1.0 million and $1.3 million for the years ended August 31, 2018, 2017 and 2016, respectively.

76 The Greenbrier Companies 2018 Annual Report

Mr. Furman is the owner of a private aircraft managed by a private independent management company. From time to time, the Company’s business requires charter use of privately-owned aircraft. In such instances, it is possible that charters may be placed on Mr. Furman’s aircraft. The Company placed charters on Mr. Furman’s aircraft aggregating $0.5 million, $0.5 million and $0.8 million for each of the years ended August 31, 2018, 2017 and 2016, respectively.

Note 18 - Income Taxes

Components of income tax expense were as follows:

	Years ended August 31,
(In thousands)	2018			2017			2016
Current
Federal	$	28,357		$	22,710		$	66,455
State		3,244			305			4,595
Foreign		38,628			35,893			50,299
		70,229			58,908			121,349
Deferred
Federal		(33,459	)		9,418			(6,199	)
State		(344	)		(1,467	)		(1,174	)
Foreign		(3,690	)		(2,732	)		(1,644	)
		(37,493	)		5,219			(9,017	)
Change in valuation allowance		157			(113	)		(10	)
Income tax expense	$	32,893		$	64,014		$	112,322

Income tax expense is computed at rates different from statutory rates. The U.S. federal corporate statutory rate was significantly reduced from 35% to 21% effective January 1, 2018 by the Tax Act enacted on December 22, 2017. As a result of the Company’s fiscal year, the Company’s statutory federal corporate rate is a blended rate of 25.7% in 2018, which will be reduced to 21% in 2019 and thereafter.

Deferred income taxes were remeasured as a result of the new statutory rate resulting in a tax benefit of $33.6 million. The Tax Act also required the Company to accrue a transition tax on foreign earnings not previously subject to U.S. taxation, which resulted in $6.9 million of tax expense in 2018.

The Company recognized the income tax effects of the Tax Act in accordance with Staff Accounting Bulletin No. 118 (SAB 118) which required the financial results to reflect effects for which the accounting is complete and those for which it is provisional. Provisional effects will be adjusted during the measurement period determined under SAB 118 based on ongoing analysis of data, tax positions and regulatory guidance. The effect of the transition tax is provisional, in particular the calculation of prior year foreign earnings and profits. The effect of the remeasurement of domestic deferred taxes is provisional primarily because temporary differences that have been estimated as of August 31, 2018 could change the remeasurement once they are finalized with the filing of our fiscal 2018 income tax return. Since many of the deferred tax balances include estimates of future events, the Company is unable to determine the final impact of the tax rate change at this time.

The Tax Act also imposed a global intangible low-taxed income (GILTI) tax, which does not apply to the Company until 2019. The Company has made an accounting policy election to treat the GILTI tax as a current period expense.

The Greenbrier Companies 2018 Annual Report 77

The reconciliation between effective and statutory tax rates on operations is as follows:

	Years ended August 31,
	2018			2017			2016
Federal statutory rate		25.7	%		35.0	%		35.0	%
State income taxes, net of federal benefit		0.8			0.1			0.7
Foreign operations, excluding transition tax		1.8			(3.4	)		0.1
Transition tax on foreign earnings		3.1			–			–
Remeasurement of domestic deferred taxes		(15.0	)		–			–
Change in valuation allowance		0.1			–			–
Noncontrolling interest in flow-through entity		(2.4	)		(6.0	)		(7.4	)
Permanent differences and other		0.6			1.4			–
Effective tax rate		14.7	%		27.1	%		28.4	%

Earnings before income tax and earnings from unconsolidated affiliates for the years ended August 31, 2018, 2017 and 2016 were $110.8 million, $123.2 million and $264.8 million, respectively, for our domestic U.S. operations and $112.8 million, $113.0 million and $130.3 million, respectively, for our foreign operations.

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities were as follows:

	As of August 31,
(In thousands)	2018		2017
Deferred tax assets:
Accrued payroll and related liabilities	$	18,461	$	28,761
Deferred revenue		10,642		7,547
Inventories and other		10,518		13,641
Maintenance and warranty accruals		7,201		10,988
Net operating losses		2,002		320
Investment and asset tax credits		1,439		1,840
		50,263		63,097
Deferred tax liabilities:
Fixed assets		70,942		110,429
Original issue discount		6,099		11,086
Intangibles		2,474		3,605
Other		1,831		(831	)
Investment in GBW Joint Venture		–		14,066
		81,346		138,355
Valuation allowance		657		533
Net deferred tax liability	$	31,740	$	75,791

As of August 31, 2018 the Company had $1.5 million of state credit carryforwards that will begin to expire in 2021 and $8.5 million of foreign NOL carryforwards that will begin to expire in 2020. The Company has placed valuation allowances against any deferred tax assets for which no benefit is anticipated, including those for loss and credit carryforwards not likely to be used before their expiration dates. The net increase in the total valuation allowance on deferred taxes for which no benefit is anticipated was approximately $0.1 million for the year ended August 31, 2018.

Prior to 2018 no provision had been made for U.S. income taxes on the Company’s cumulative undistributed earnings from foreign subsidiaries. In 2018, however, these earnings were subject to the one-time transition tax on the deemed repatriation of undistributed foreign earnings, a tax which the Company intends to pay over eight years as permitted by the Tax Act. Notwithstanding this deemed repatriation, any actual repatriation would be

78 The Greenbrier Companies 2018 Annual Report

accompanied by foreign withholding taxes. The Company does not intend to repatriate these foreign earnings and continues to assert that its foreign earnings are indefinitely reinvested.

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits:

	Years ended August 31,
(In thousands)	2018			2017			2016
Unrecognized Tax Benefit – Opening Balance	$	1,820		$	942		$	1,019
Gross increases – tax positions in prior period		237			1,368			–
Gross decreases – tax positions in prior period		(449	)		(53	)		–
Settlements		–			–			–
Lapse of statute of limitations		–			(437	)		(77	)
Unrecognized Tax Benefit – Ending Balance	$	1,608		$	1,820		$	942

The Company is subject to taxation in the U.S. and in various states and foreign jurisdictions. The Company is effectively no longer subject to U.S. Federal examination for fiscal years ending before 2015, to state and local examinations before 2014, or to foreign examinations before 2013.

Unrecognized tax benefits, excluding interest, at August 31, 2018 were $1.6 million, all of which would affect the effective tax rate if recognized. The unrecognized tax benefits at August 31, 2017 were $1.8 million. Accrued interest on unrecognized tax benefits was $0.2 million as of August 31, 2018 and was minimal as of August 31, 2017. The Company recorded annual interest benefits of approximately $0.2 million for changes in the reserves during each of the years ended August 31, 2018 and 2017. The Company has not accrued any penalties on the reserves. Interest and penalties related to income taxes are not classified as a component of income tax expense. Benefits from the realization of unrecognized tax benefits for deductible differences attributable to ordinary operations will be recognized as a reduction of income tax expense. The Company does not anticipate a significant decrease in the reserves for uncertain tax positions during the next year.

Note 19 - Segment Information

The Company operates in three reportable segments: Manufacturing; Wheels, Repair & Parts; and Leasing & Services. Prior to August 20, 2018, the Company operated in four reportable segments: Manufacturing; Wheels & Parts; Leasing & Services; and GBW Joint Venture. On August 20, 2018 the Company entered into an agreement with its joint venture partner to discontinue the GBW railcar repair joint venture, which resulted in 12 repair shops returned to the Company. Beginning on August 20, 2018, the GBW Joint Venture was no longer considered a reportable segment.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Performance is evaluated based on Earnings from operations. Corporate includes selling and administrative costs not directly related to goods and services and certain costs that are intertwined among segments due to our integrated business model. The Company does not allocate Interest and foreign exchange or Income tax expense for either external or internal reporting purposes. Intersegment sales and transfers are valued as if the sales or transfers were to third parties. Related revenue and margin are eliminated in consolidation and therefore are not included in consolidated results in the Company’s Consolidated Financial Statements.

The information in the following table is derived directly from the segments’ internal financial reports used for corporate management purposes. The results of operations for the GBW Joint Venture are not reflected in the tables below as the investment is accounted for under the equity method of accounting.

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For the year ended August 31, 2018:

	Revenue								Earnings (loss) from operations
	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	2,044,586	$	118,157		$	2,162,743		$	240,901		$	17,721		$	258,622
Wheels, Repair & Parts		347,023		41,494			388,517			16,731			2,748			19,479
Leasing & Services		127,855		11,847			139,702			88,481			10,296			98,777
Eliminations		–		(171,498	)		(171,498	)		–			(30,765	)		(30,765	)
Corporate		–		–			–			(93,128	)		–			(93,128	)
	$	2,519,464	$	–		$	2,519,464		$	252,985		$	–		$	252,985

For the year ended August 31, 2017:

	Revenue								Earnings (loss) from operations
	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	1,725,188	$	19,291		$	1,744,479		$	295,334		$	1,022		$	296,356
Wheels, Repair & Parts		312,679		30,861			343,540			14,984			2,303			17,287
Leasing & Services		131,297		11,812			143,109			31,904			11,099			43,003
Eliminations		–		(61,964	)		(61,964	)		–			(14,424	)		(14,424	)
Corporate		–		–			–			(81,790	)		–			(81,790	)
	$	2,169,164	$	–		$	2,169,164		$	260,432		$	–		$	260,432

For the year ended August 31, 2016:

	Revenue								Earnings (loss) from operations
	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	2,096,331	$	89,158		$	2,185,489		$	415,094		$	24,299		$	439,393
Wheels, Repair & Parts		322,395		32,436			354,831			19,948			2,602			22,550
Leasing & Services		260,798		13,101			273,899			51,723			13,101			64,824
Eliminations		–		(134,695	)		(134,695	)		–			(40,002	)		(40,002	)
Corporate		–		–			–			(78,213	)		–			(78,213	)
	$	2,679,524	$	–		$	2,679,524		$	408,552		$	–		$	408,552

	Years ended August 31,
(In thousands)	2018		2017		2016
Assets:
Manufacturing	$	1,020,757	$	914,450	$	701,296
Wheels, Repair & Parts		306,756		236,315		275,599
Leasing & Services		578,818		535,323		516,147
Unallocated		559,133		711,617		342,732
	$	2,465,464	$	2,397,705	$	1,835,774
Depreciation and amortization:
Manufacturing	$	44,225	$	33,807	$	27,137
Wheels, Repair & Parts		10,771		11,143		11,971
Leasing & Services		19,360		20,179		24,237
	$	74,356	$	65,129	$	63,345
Capital expenditures:
Manufacturing	$	59,707	$	54,973	$	51,294
Wheels, Repair & Parts		5,204		3,129		10,190
Leasing & Services		111,937		27,963		77,529
	$	176,848	$	86,065	$	139,013

80 The Greenbrier Companies 2018 Annual Report

The following table summarizes selected geographic information.

	Years ended August 31,
(In thousands)	2018		2017		2016
Revenue (1):
U.S.	$	1,840,877	$	1,674,517	$	2,297,501
Foreign		678,587		494,647		382,023
	$	2,519,464	$	2,169,164	$	2,679,524
Assets:
U.S.	$	1,677,144	$	1,307,239	$	955,674
Mexico		517,543		791,974		788,878
Europe		270,777		298,492		91,222
	$	2,465,464	$	2,397,705	$	1,835,774

⁽¹⁾  Revenue is presented on the basis of geographic location of customers.

Reconciliation of Earnings from operations to Earnings before income tax and earnings (loss) from unconsolidated affiliates:

	Years ended August 31,
(In thousands)	2018		2017		2016
Earnings from operations	$	252,985	$	260,432	$	408,552
Interest and foreign exchange		29,368		24,192		13,502
Earnings before income tax and earnings (loss) from unconsolidated affiliates	$	223,617	$	236,240	$	395,050

The Company has a 50% ownership interest in the GBW Joint Venture and accounts for its interest under the equity method of accounting. The Company’s 50% share of the results of operations are included in Earnings (loss) from unconsolidated affiliates in the Consolidated Statement of Income and its investment is included in Investments in unconsolidated affiliates in the Consolidated Balance Sheet. The GBW Joint Venture was Greenbrier’s fourth reportable segment until August 20, 2018. Information for 2018, 2017 and 2016 is included in the tables below which represent totals for GBW rather than Greenbrier’s 50% share, as this is how performance and resource allocation was previously evaluated.

	Years ended August 31,
(In thousands)	2018			2017			2016
GBW Joint Venture:
Revenue	$	238,033		$	253,436		$	373,490
Earnings (loss) from operations	$	(46,783	)	$	(32,454	)	$	8,558
Assets	$	8,531		$	206,009		$	247,610
Depreciation and amortization	$	8,932		$	9,023		$	7,676
Capital expenditures	$	8,514		$	8,030		$	16,110

Note 20 - Customer Concentration

Customer concentration is defined as a single customer that accounts for more than 10% of total revenues or accounts receivable. In 2018, revenue from two customers represented 20% and 11% of total revenue. In 2017, revenue from one customer represented 20% of total revenue. In 2016, revenue from two customers represented 17% and 14% of total revenue. No other customers accounted for more than 10% of total revenues for the years ended August 31, 2018, 2017, or 2016. One customer had a balance that individually equaled or exceeded 10% of accounts receivable and represented 19% of the consolidated accounts receivable balance at August 31, 2018. Three customers had balances that individually equaled or exceeded 10% of accounts receivable and represented 13%, 13% and 10% of the consolidated accounts receivable balance at August 31, 2017.

The Greenbrier Companies 2018 Annual Report 81

Note 21 - Lease Commitments

Lease expense for railcar equipment leased-in under non-cancelable leases was $7.5 million, $7.6 million and $6.6 million for the years ended August 31, 2018, 2017 and 2016. Aggregate minimum future amounts payable under these non-cancelable railcar equipment leases are as follows:

(In thousands)
Year ending August 31,
2019	$	6,287
2020		4,839
2021		1,821
2022		1,792
2023		1,792
Thereafter		1,810
	$	18,341

Operating leases for domestic railcar repair facilities, office space and certain manufacturing and office equipment expire at various dates through February 2030. Rental expense for facilities, office space and equipment was $8.7 million, $9.4 million and $9.3 million for the years ended August 31, 2018, 2017 and 2016. Aggregate minimum future amounts payable under these non-cancelable operating leases are as follows:

(In thousands)
Year ending August 31,
2019	$	6,048
2020		4,437
2021		3,286
2022		1,915
2023		1,862
Thereafter		196
	$	17,744

Note 22 - Commitments and Contingencies

Portland Harbor Superfund Site

The Company’s Portland, Oregon manufacturing facility is located adjacent to the Willamette River. In December 2000, the U.S. Environmental Protection Agency (EPA) classified portions of the Willamette River bed known as the Portland Harbor, including the portion fronting the Company’s manufacturing facility, as a federal “National Priority List” or “Superfund” site due to sediment contamination (the Portland Harbor Site). The Company and more than 140 other parties have received a “General Notice” of potential liability from the EPA relating to the Portland Harbor Site. The letter advised the Company that it may be liable for the costs of investigation and remediation (which liability may be joint and several with other potentially responsible parties) as well as for natural resource damages resulting from releases of hazardous substances to the site. Ten private and public entities, including the Company (the Lower Willamette Group or LWG), signed an Administrative Order on Consent (AOC) to perform a remedial investigation/feasibility study (RI/FS) of the Portland Harbor Site under EPA oversight, and several additional entities have not signed such consent, but nevertheless contributed money to the effort. The EPA-mandated RI/FS was produced by the LWG and cost over $110 million during a 17-year period. The Company bore a percentage of the total costs incurred by the LWG in connection with the investigation. The Company’s aggregate expenditure during the 17-year period was not material. Some or all of any such outlay may be recoverable from other responsible parties. The EPA issued its Record of Decision (ROD) for the Portland Harbor Site on January 6, 2017 and accordingly on October 26, 2017, the AOC was terminated.

Separate from the process described above, which focused on the type of remediation to be performed at the Portland Harbor Site and the schedule for such remediation, 83 parties, including the State of Oregon and the

82 The Greenbrier Companies 2018 Annual Report

federal government, entered into a non-judicial mediation process to try to allocate costs associated with remediation of the Portland Harbor site. Approximately 110 additional parties signed tolling agreements related to such allocations. On April 23, 2009, the Company and the other AOC signatories filed suit against 69 other parties due to a possible limitations period for some such claims; Arkema Inc. et al v. A & C Foundry Products, Inc. et al, U.S. District Court, District of Oregon, Case #3:09-cv-453-PK. All but 12 of these parties elected to sign tolling agreements and be dismissed without prejudice, and the case has been stayed by the court until January 16, 2020. The allocation process is continuing in parallel with the process to define the remediation steps.

The EPA’s January 6, 2017 ROD identifies a clean-up remedy that the EPA estimates will take 13 years of active remediation, followed by 30 years of monitoring with an estimated undiscounted cost of $1.7 billion. The EPA typically expects its cost estimates to be accurate within a range of -30% to +50%, but this ROD states that changes in costs are likely to occur as a result of new data it wants to collect over a 2-year period prior to final remedy design. The ROD identifies 13 Sediment Decision Units. One of the units, RM9W, includes the nearshore area of the river sediments offshore of the Company’s Portland, Oregon manufacturing facility as well as upstream and downstream of the facility. It also includes a portion of the Company’s riverbank. The ROD does not break down total remediation costs by Sediment Decision Unit. The EPA’s ROD concluded that more data was needed to better define clean-up scope and cost. On December 8, 2017, the EPA announced that Portland Harbor is one of 21 Superfund sites targeted for greater attention. On December 19, 2017, the EPA announced that it had entered a new AOC with a group of four potentially responsible parties to conduct additional sampling during 2018 and 2019 to provide more certainty about clean-up costs and aid the mediation process to allocate those costs. The parties to the mediation, including the Company, have agreed to help fund the additional sampling.

The ROD does not address responsibility for the costs of clean-up, nor does it allocate such costs among the potentially responsible parties. Responsibility for funding and implementing the EPA’s selected cleanup remedy will be determined at an unspecified later date. Based on the investigation to date, the Company believes that it did not contribute in any material way to contamination in the river sediments or the damage of natural resources in the Portland Harbor Site and that the damage in the area of the Portland Harbor Site adjacent to its property precedes its ownership of the Portland, Oregon manufacturing facility. Because these environmental investigations are still underway, including the collection of new pre-remedial design sampling data by EPA, sufficient information is currently not available to determine the Company’s liability, if any, for the cost of any required remediation or restoration of the Portland Harbor Site or to estimate a range of potential loss. Based on the results of the pending investigations and future assessments of natural resource damages, the Company may be required to incur costs associated with additional phases of investigation or remedial action, and may be liable for damages to natural resources. In addition, the Company may be required to perform periodic maintenance dredging in order to continue to launch vessels from its launch ways in Portland, Oregon, on the Willamette River, and the river’s classification as a Superfund site could result in some limitations on future dredging and launch activities. Any of these matters could adversely affect the Company’s business and Consolidated Financial Statements, or the value of its Portland property.

On January 30, 2017 the Confederated Tribes and Bands of Yakama Nation sued 33 parties including the Company as well as the United States and the State of Oregon for costs it incurred in assessing alleged natural resource damages to the Columbia River from contaminants deposited in Portland Harbor. Confederated Tribes and Bands of the Yakama Nation v. Air Liquide America Corp., et al., United States Court for the District of Oregon Case No. 3i17-CV-00164-SB. The Company, along with many of the other defendants, has moved to dismiss the case. That motion is pending. The complaint does not specify the amount of damages the Plaintiff will seek.

Oregon Department of Environmental Quality (DEQ) Regulation of Portland Manufacturing Operations

The Company has entered into a Voluntary Cleanup Agreement with the Oregon Department of Environmental Quality (DEQ) in which the Company agreed to conduct an investigation of whether, and to what extent, past or present operations at the Portland property may have released hazardous substances into the environment. The Company has also signed an Order on Consent with the DEQ to finalize the investigation of potential onsite

The Greenbrier Companies 2018 Annual Report 83

sources of contamination that may have a release pathway to the Willamette River. Interim precautionary measures are also required in the order and the Company is discussing with the DEQ potential remedial actions which may be required. The Company’s aggregate expenditure has not been material, however the Company could incur significant expenses for remediation. Some or all of any such outlay may be recoverable from other responsible parties.

Other Litigation, Commitments and Contingencies

In the quarter ended November 30, 2016, the Company received an adverse judgment of approximately $15 million, which was subsequently reduced to approximately $10 million, on one matter related to commercial litigation in a foreign jurisdiction. The Company has settled the litigation for less than the judgment.

From time to time, Greenbrier is involved as a defendant in litigation in the ordinary course of business, the outcomes of which cannot be predicted with certainty. While the ultimate outcome of such legal proceedings cannot be determined at this time, the Company believes that the resolution of pending litigation will not have a material adverse effect on the Company’s Consolidated Financial Statements.

As of August 31, 2018, the Company had outstanding letters of credit aggregating $72.2 million associated with performance guarantees, facility leases and workers compensation insurance.

As of August 31, 2018, the Company had a $10.0 million note receivable from Amsted-Maxion Cruzeiro, its unconsolidated Brazilian castings and components manufacturer and a $7.2 million note receivable balance from Greenbrier-Maxion, its unconsolidated Brazilian railcar manufacturer. These note receivables are included on the Consolidated Balance Sheet in Accounts receivable, net. In the future, the Company may make loans to or provide guarantees for Amsted-Maxion Cruzeiro or Greenbrier-Maxion.

Note 23 - Fair Value of Financial Instruments

The estimated fair values of financial instruments and the methods and assumptions used to estimate such fair values are as follows:

(In thousands)	Carrying Amount 1		Estimated Fair Value (Level 2)
Notes payable as of August 31, 2018	$	469,721	$	517,925
Notes payable as of August 31, 2017	$	597,604	$	644,708

¹ Carrying amount disclosed in this table excludes debt discount and debt issuance costs.

The carrying amount of cash and cash equivalents, accounts and notes receivable, revolving notes, accounts payable and accrued liabilities, foreign currency forward contracts and interest rate swaps is a reasonable estimate of fair value of these financial instruments. Estimated rates currently available to the Company for debt with similar terms and remaining maturities and current market data are used to estimate the fair value of notes payable.

Note 24 - Fair Value Measures

Certain assets and liabilities are reported at fair value on either a recurring or nonrecurring basis. Fair value, for this disclosure, is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, under a three-tier fair value hierarchy which prioritizes the inputs used in measuring a fair value as follows:

Level 1 -	observable inputs such as unadjusted quoted prices in active markets for identical instruments;
Level 2 -	inputs, other than the quoted market prices in active markets for similar instruments, which are observable, either directly or indirectly; and
Level 3 -	unobservable inputs for which there is little or no market data available, which require the reporting entity to develop its own assumptions.

84 The Greenbrier Companies 2018 Annual Report

Assets and liabilities measured at fair value on a recurring basis as of August 31, 2018 are:

(In thousands)	Total		Level 1		Level 2(1)		Level 3
Assets:
Derivative financial instruments	$	1,557	$	–	$	1,557	$	–
Nonqualified savings plan investments		26,299		26,299		–		–
Cash equivalents		126,430		126,430		–		–
	$	154,286	$	152,729	$	1,557	$	–
Liabilities:
Derivative financial instruments	$	1,566	$	–	$	1,566	$	–

(1) Level 2 assets include derivative financial instruments which are valued based on significant observable inputs. See Note 14 – Derivative Instruments for further discussion.

Assets and liabilities measured at fair value on a recurring basis as of August 31, 2017 are:

(In thousands)	Total		Level 1		Level 2(1)		Level 3
Assets:
Derivative financial instruments	$	3,814	$	–	$	3,814	$	–
Nonqualified savings plan investments		20,974		20,974		–		–
Cash equivalents		105,337		105,337		–		–
	$	130,125	$	126,311	$	3,814	$	–
Liabilities:
Derivative financial instruments	$	2,886	$	–	$	2,886	$	–

(1) Level 2 assets include derivative financial instruments which are valued based on significant observable inputs. See Note 14 – Derivative Instruments for further discussion.

Note 25 - Subsequent Events

As of August 31, 2018, a $550.0 million revolving line of credit, maturing October 2020, secured by substantially all the Company’s assets in the U.S. not otherwise pledged as security for term loans, was available to provide working capital and interim financing of equipment, principally for the U.S. and Mexican operations. Advances under this facility bear interest at LIBOR plus 1.75% or Prime plus 0.75% depending on the type of borrowing. Available borrowings under the credit facility are generally based on defined levels of inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated capitalization and fixed charges coverage ratios. In September 2018, this revolving line of credit was renewed on terms similar to the existing facility and increased to $600.0 million with a new maturity date of September 2023. In addition, advances under this renewed facility bear interest at LIBOR plus 1.50% or Prime plus 0.50% depending on the type of borrowing.

In September 2018, the Company refinanced approximately $170 million of existing senior term debt, due in March 2020, secured by a pool of leased railcars with new 5-year $225 million senior term debt also secured by a pool of leased railcars. The new debt bears a floating interest rate of LIBOR plus 1.50% or Prime plus 0.50%. The term loan is to be repaid in equal quarterly installments of $1.97 million with the remaining outstanding amounts, plus accrued interest, to be paid on the maturity date in September 2023. An interest rate swap agreement was entered into on 50% of the initial balance to swap the floating interest rate to a fixed rate of 2.99%. The Company intends to use hedge accounting to account for the interest rate swap agreement.

In October 2018, the Company announced that Greenbrier and the Saudi Railway Company (SAR) signed an agreement to form a joint venture that will generate a total investment of 1 billion Saudi Riyals (USD $270 million) in the Saudi Arabia’s railway system and supply of freight railcars for the Saudi rail industry. The joint venture is subject to the completion of final due diligence by the parties and required government or corporate approvals.

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Quarterly Results of Operations (Unaudited)

(In thousands, except per share amount)	First			Second			Third			Fourth			Total
2018
Revenue
Manufacturing	$	451,485		$	511,827		$	510,099		$	571,175		$	2,044,586
Wheels, Repair & Parts		78,011			88,710			94,515			85,787			347,023
Leasing & Services		30,039			28,799			36,773			32,244			127,855
		559,535			629,336			641,387			689,206			2,519,464
Cost of revenue
Manufacturing		380,850			429,165			427,875			489,517			1,727,407
Wheels, Repair & Parts		72,506			80,708			85,850			79,266			318,330
Leasing & Services		16,865			14,116			19,155			14,536			64,672
		470,221			523,989			532,880			583,319			2,110,409
Margin		89,314			105,347			108,507			105,887			409,055
Selling and administrative		47,043			50,294			51,793			51,309			200,439
Net gain on disposition of equipment		(19,171	)		(5,817	)		(14,825	)		(4,556	)		(44,369	)
Earnings from operations		61,442			60,870			71,539			59,134			252,985
Other costs
Interest and foreign exchange		7,020			7,029			6,533			8,786			29,368
Earnings before income tax and earnings (loss) from unconsolidated affiliates		54,422			53,841			65,006			50,348			223,617
Income tax expense		(18,135	)		11,301			(15,944	)		(10,115	)		(32,893	)
Earnings (loss) from unconsolidated affiliates		(2,910	)		147			(12,823	)		(3,075	)		(18,661	)
Net earnings		33,377			65,289			36,239			37,158			172,063
Net earnings attributable to noncontrolling interest		(7,124	)		(3,647	)		(3,288	)		(6,223	)		(20,282	)
Net earnings attributable to Greenbrier	$	26,253		$	61,642		$	32,951		$	30,935		$	151,781
Basic earnings per common share: (1)	$	0.90		$	2.10		$	1.03		$	0.95		$	4.92
Diluted earnings per common share: (1)	$	0.83		$	1.91		$	1.01		$	0.94		$	4.68

(1) Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the dilutive effect of the 2024 Convertible Notes using the treasury stock method when dilutive, restricted stock units that are not considered participating securities, restricted stock units that are subject to performance criteria for which actual levels of performance above target have been achieved and the dilutive effect of shares underlying the 2018 Convertible Notes, during the periods in which they were outstanding, using the “if converted” method in which debt issuance and interest costs, net of tax, were added back to net earnings. The 2018 Convertible notes matured on April 1, 2018.

86 The Greenbrier Companies 2018 Annual Report

Quarterly Results of Operations (Unaudited)

(In thousands, except per share amount)	First			Second			Third			Fourth			Total
2017
Revenue
Manufacturing	$	454,033		$	445,504		$	317,104		$	508,547		$	1,725,188
Wheels, Repair & Parts		69,635			82,714			85,231			75,099			312,679
Leasing & Services		28,646			38,064			36,826			27,761			131,297
		552,314			566,282			439,161			611,407			2,169,164
Cost of revenue
Manufacturing		356,555			346,653			245,228			425,531			1,373,967
Wheels, Repair & Parts		64,978			75,497			77,985			69,876			288,336
Leasing & Services		18,030			25,207			26,247			16,078			85,562
		439,563			447,357			349,460			511,485			1,747,865
Margin		112,751			118,925			89,701			99,922			421,299
Selling and administrative		41,213			39,495			42,810			47,089			170,607
Net gain on disposition of equipment		(1,122	)		(2,090	)		(1,581	)		(4,947	)		(9,740	)
Earnings from operations		72,660			81,520			48,472			57,780			260,432
Other costs
Interest and foreign exchange		1,724			5,673			7,894			8,901			24,192
Earnings before income tax and loss from unconsolidated affiliates		70,936			75,847			40,578			48,879			236,240
Income tax expense		(20,386	)		(24,858	)		(8,656	)		(10,114	)		(64,014	)
Loss from unconsolidated affiliates		(2,584	)		(1,988	)		(681	)		(6,511	)		(11,764	)
Net earnings		47,966			49,001			31,241			32,254			160,462
Net earnings attributable to noncontrolling interest		(23,004	)		(14,465	)		1,582			(8,508	)		(44,395	)
Net earnings attributable to Greenbrier	$	24,962		$	34,536		$	32,823		$	23,746		$	116,067
Basic earnings per common share: (1)	$	0.86		$	1.19		$	1.12		$	0.81		$	3.97
Diluted earnings per common share: (1)	$	0.79		$	1.09		$	1.03		$	0.75		$	3.65

(1) Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the dilutive effect of the 2024 Convertible Notes using the treasury stock method when dilutive, restricted stock units that are subject to performance criteria for which actual levels of performance above target have been achieved and the dilutive effect of shares underlying the 2018 Convertible Notes using the “if converted” method in which debt issuance and interest costs, net of tax, were added back to net earnings.

The Greenbrier Companies 2018 Annual Report 87

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the Exchange Act). Based on that evaluation, our Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls

There have been no changes in our internal control over financial reporting during the quarter ended August 31, 2018 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Management of The Greenbrier Companies, Inc. together with its consolidated subsidiaries (the Company), is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Principal Executive Officer and Principal Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.

As of the end of the Company’s 2018 fiscal year, management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the framework established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). On August 20, 2018 the Company entered into an agreement to discontinue the GBW railcar repair joint venture, which resulted in 12 repair shops returned to the Company. In addition, on August 8, 2018 Greenbrier-Astra Rail entered into an agreement to take an approximately 68% ownership stake in Rayvag, a railcar manufacturing company based in Adana, Turkey. Management excluded these 12 repair shops and Rayvag from our 2018 assessment of the effectiveness of our internal control over financial reporting as of August 31, 2018. The 12 repair shops and Rayvag accounted for approximately 1.2% of the Company’s total assets as of August 31, 2018 and from the date of the agreements to August 31, 2018 accounted for approximately 0.2% of the Company’s revenues for the year ended August 31, 2018. These 12 repair shops and Rayvag will be included in our assessment of internal controls over financial reporting in fiscal 2019. Based on this assessment, management has determined that the Company’s internal control over financial reporting as of August 31, 2018 is effective.

Our independent registered public accounting firm, KPMG LLP, independently assessed the effectiveness of the Company’s internal control over financial reporting excluding the 12 repair shops and Rayvag, as stated in their attestation report, which is included at the end of Part II, Item 9A of this Form 10-K.

88 The Greenbrier Companies 2018 Annual Report

Inherent Limitations on Effectiveness of Controls

The Company’s management, including the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

The Greenbrier Companies, Inc. and subsidiaries:

Opinion on Internal Control Over Financial Reporting

We have audited The Greenbrier Companies, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of August 31, 2018, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of August 31, 2018, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of August 31, 2018 and 2017, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three year period ended August 31, 2018, and the related notes (collectively, the consolidated financial statements), and our report dated October 26, 2018 expressed an unqualified opinion on those consolidated financial statements.

During fiscal 2018, the Company acquired 12 repair shops and an approximate 68% ownership interest in Rayvag, a railcar manufacturing company. Management excluded all 12 of the acquired repair shops and Rayvag’s internal control over financial reporting from its assessment of the effectiveness of the Company’s internal control over financial reporting as of August 31, 2018. The total assets of these 12 repair shops and Rayvag represented approximately 1.2% of consolidated total assets as of August 31, 2018 and approximately 0.2% of consolidated revenues for the year ended August 31, 2018. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of these 12 repair shops and Rayvag.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable

90 The Greenbrier Companies 2018 Annual Report

assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Portland, Oregon

October 26, 2018

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Item 9B. OTHER INFORMATION

None

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

There is hereby incorporated by reference the information under the captions “Election of Directors”, “Board Committees, Meetings and Charters”, “Our Code of Business Conduct and Ethics and FCPA Compliance” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s definitive Proxy Statement to be filed pursuant to Regulation 14A, which Proxy Statement is anticipated to be filed with the Securities and Exchange Commission within 120 days after the end of Registrant’s year ended August 31, 2018. Information on the executive officers of the Company is found under the caption “Executive Officers of the Registrant” in Part I of this 10-K.

Item 11. EXECUTIVE COMPENSATION

There is hereby incorporated by reference the information under the caption “Executive Compensation”, “Compensation Committee Report”, 2018 Director Compensation”, “Compensation Committee Interlocks and Insider Participation” and “Risk Oversight” in Registrant’s definitive Proxy Statement to be filed pursuant to Regulation 14A, which Proxy Statement is anticipated to be filed with the Securities and Exchange Commission within 120 days after the end of Registrant’s year ended August 31, 2018.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS

There is hereby incorporated by reference the information under the captions “Stock Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in Registrant’s definitive Proxy Statement to be filed pursuant to Regulation 14A, which Proxy Statement is anticipated to be filed with the Securities and Exchange Commission within 120 days after the end of Registrant’s year ended August 31, 2018.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

There is hereby incorporated by reference the information under the caption “Related Party Transactions” and “Director Independence” in Registrant’s definitive Proxy Statement to be filed pursuant to Regulation 14A, which Proxy Statement is anticipated to be filed with the Securities and Exchange Commission within 120 days after the end of Registrant’s year ended August 31, 2018.

Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

There is hereby incorporated by reference the information under the caption “Ratification of Appointment of Auditors” in Registrant’s definitive Proxy Statement to be filed pursuant to Regulation 14A, which Proxy Statement is anticipated to be filed with the Securities and Exchange Commission within 120 days after the end of the Registrant’s year ended August 31, 2018.

92 The Greenbrier Companies 2018 Annual Report

PART IV

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(1) Financial Statements

See Consolidated Financial Statements in Item 8

(a) (2)   Financial Statements Schedule*

* All other schedules have been omitted because they are inapplicable, not required or because the information is given in the Consolidated Financial Statements or notes thereto. This supplemental schedule should be read in conjunction with the Consolidated Financial Statements and notes thereto included in this report.

(a) (3)   The following exhibits are filed herewith and this list is intended to constitute the exhibit index:

3.1 Registrant’s Articles of Incorporation are incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 10-Q filed April 5, 2006.

3.2 Articles of Merger amending the Registrant’s Articles of Incorporation are incorporated herein by reference to Exhibit 3.2 to the Registrant’s Form 10-Q filed April 5, 2006.

3.3 Registrant’s Bylaws, as amended January 11, 2006, are incorporated herein by reference to Exhibit 3.3 to the Registrant’s Form 10-Q filed April 5, 2006.

3.4 Amendment to the Registrant’s Bylaws, dated October 31, 2006, is incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed November 6, 2006.

3.5 Amendment to the Registrant’s Bylaws, dated January 8, 2008, is incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed November 8, 2007.

3.6 Amendment to the Registrant’s Bylaws, dated April 8, 2008, is incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed April 11, 2008.

3.7 Amendment to the Registrant’s Bylaws, dated April 7, 2009, is incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed April 13, 2009.

3.8 Amendment to the Registrant’s Bylaws, dated June 8, 2009, is incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed June 10, 2009.

3.9 Amendment to the Registrant’s Bylaws, dated June 10, 2009, is incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed June 12, 2009.

3.10 Amendment to the Registrant’s Bylaws, dated October 30, 2012, is incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed November 5, 2012.

3.11 Amendment to the Registrant’s Bylaws, dated January 9, 2013, is incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed January 15, 2013.

3.12 Amendment to the Registrant’s Bylaws, dated October 29, 2013, is incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed October 31, 2013.

3.13 Amendment to the Registrant’s Bylaws, dated October 29, 2014, is incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed November 3, 2014.

3.14 Amendment to the Registrant’s Bylaws, dated March 31, 2015, is incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed April 6, 2015.

3.15 Amendment to the Registrant’s Bylaws, dated July 1, 2015, is incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed July 8, 2015.

3.16 Amendment to the Registrant’s Bylaws, dated October 21, 2015, is incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed October 22, 2015.

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3.17 Amendment to the Registrant’s Bylaws, dated October 30, 2015, is incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed November 2, 2015.

3.18 Amendment to the Registrant’s Bylaws, dated March 31, 2017, is incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed March 31, 2017.

3.19 Amendment to the Registrant’s Bylaws, dated June 23, 2017, is incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed June 29, 2017.

4.1 Specimen Common Stock Certificate of Registrant is incorporated herein by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-3 filed April 7, 2010 (SEC File Number 333-165924).

4.2 Indenture between the Registrant and Wells Fargo Bank, National Association, as Trustee, including the Form of Note attached as Exhibit A thereto, dated February 6, 2017, is incorporated herein by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed February 6, 2017.

10.1* Amended and Restated Employment Agreement between the Registrant and Mr. William A. Furman, dated August 28, 2012, is incorporated herein by reference to Exhibit 10.3 to the Registrant’s Form 10-Q filed January 9, 2013.

10.2* Form of Amended and Restated Employment Agreement between the Registrant and certain of its executive officers, as amended and restated on August 28, 2012, is incorporated herein by reference to Exhibit 10.8 to the Registrant’s Form 10-K filed November 1, 2012.

10.3* Amendment No. 1 to Form of Amended and Restated Employment Agreement between the Registrant and certain of its executive officers, as amended and restated on August 28, 2012, is incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed January 8, 2014.

10.4* Second Amendment to Form of Amended and Restated Employment Agreement between the Registrant and certain of its executive officers, as amended and restated on August 28, 2012, is incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed June 29, 2018.

10.5* Form of Agreement concerning Indemnification and Related Matters (Directors) between Registrant and its directors is incorporated herein by reference to Exhibit 10.2 to the Registrant’s Form 10-Q filed July 1, 2015.

10.6* Form of Agreement concerning Indemnification and Related Matters (Officers) between Registrant and its officers is incorporated herein by reference to Exhibit 10.2 to the Registrant’s Form 10-Q filed June 29, 2018.

10.7* Form of Change of Control Agreement is incorporated herein by reference to Exhibit 10.5 to the Registrant’s Form 10-Q filed April 4, 2013.

10.8* The Greenbrier Companies, Inc. Form of Amendment to Change of Control Agreement, approved on May 28, 2013, is incorporated herein by reference to Exhibit 10.2 of the Registrant’s Form 8-K filed June 3, 2013.

10.9* The Greenbrier Companies, Inc. 2014 Amended and Restated Stock Incentive Plan is incorporated herein by reference to Appendix A to the Registrant’s Proxy Statement on Schedule 14A filed November 19, 2014.

10.10* The Greenbrier Companies, Inc. 2017 Amended and Restated Stock Incentive Plan is incorporated herein by reference to Appendix A to the Registrant’s Proxy Statement on Schedule 14A filed November 14, 2017.

10.11* Form of Director Restricted Share Agreement related to the 2017 Amended and Restated Stock Incentive Plan is incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed April 6, 2018.

94 The Greenbrier Companies 2018 Annual Report

10.12* The Greenbrier Companies, Inc. Nonqualified Deferred Compensation Plan 2018 Amendment and Restatement of the Basic Plan Document is incorporated herein by reference to Exhibit 10.4 to the Registrant’s Form 10-Q filed June 29, 2018.

10.13* The Greenbrier Companies Nonqualified Deferred Compensation Plan 2018 Amendment and Restatement of the Adoption Agreement is incorporated herein by reference to Exhibit 10.5 to the Registrant’s Form 10-Q filed June 29, 2018.

10.14* Updated Rabbi Trust Agreements, dated October 1, 2012, related to The Greenbrier Companies, Inc. Nonqualified Deferred Compensation Plan, are incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed January 9, 2013.

10.15* Amendment No. 1 to Trust Agreement, dated June 15, 2018, related to The Greenbrier Companies, Inc. Nonqualified Deferred Compensation Plan, is incorporated by reference to Exhibit 10.6 to the Registrant’s Form 10-Q filed June 29, 2018.

10.16* The Greenbrier Companies Nonqualified Deferred Compensation Plan Adoption Agreement for Directors, dated July 1, 2012, is incorporated herein by reference to Exhibit 10.28 to the Registrant’s Form 10-K filed November 1, 2012.

10.17* Amendment No. 1 to the Greenbrier Companies Nonqualified Deferred Compensation Plan Adoption Agreement for Directors, dated December 15, 2015, is incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed April 5, 2016.

10.18* Updated Rabbi Trust Agreements, dated October 1, 2012, related to the Greenbrier Companies, Inc. Nonqualified Deferred Compensation Plan for Directors, are incorporated herein by reference to Exhibit 10.2 to the Registrant’s Form 10-Q filed January 9, 2013.

10.19* Amendment No. 1 to Trust Agreement, dated June 15, 2018, related to The Greenbrier Companies, Inc. Nonqualified Deferred Compensation Plan for Directors, is incorporated by reference to Exhibit 10.7 to the Registrant’s Form 10-Q filed June 29, 2018.

10.20* The Greenbrier Companies, Inc. Form of Restricted Stock Unit Award Agreement, approved on May 22, 2015, is incorporated herein by reference to Exhibit 10.1 of the Registrant’s Form 10-Q filed July 1, 2015.

10.21* The Greenbrier Companies, Inc. Form of Restricted Stock Unit Award Agreement, approved on March 27, 2017, is incorporated herein by reference to Exhibit 10.22 of the Registrant’s Form 10-K filed October 27, 2017.

10.22* The Greenbrier Companies, Inc. Form of Restricted Stock Unit Award Agreement, approved on April 2, 2018, is incorporated herein by reference to Exhibit 10.3 of the Registrant’s Form 10-Q filed June 29, 2018.

10.23* The Greenbrier Companies, Inc. 2014 Employee Stock Purchase Plan is incorporated herein by reference to Appendix B to the Registrant’s Definitive Proxy Statement on Schedule 14A filed on November 19, 2014.

10.24* Consulting Services Agreement between Greenbrier Leasing Company LLC and Charles J. Swindells dated January 7, 2016 is incorporated herein by reference to Exhibit 10.3 to the Registrant’s Form 10-Q filed April 5, 2016.

10.25 The Greenbrier Companies, Inc. Executive Stock Ownership Guidelines, adopted as of June 27, 2018.

10.26 Dissolution Agreement, dated August  20, 2018, by and among the Registrant, Greenbrier Rail Services Holdings, LLC, Watco Companies, L.L.C., Millennium Rail, L.L.C., Watco Mechanical Services, L.L.C., GBW Railcar Services Holdings, L.L.C., GBW Railcar Services, L.L.C., and GBW Railcar Services Canada, Inc.

10.27 Second Amended and Restated Limited Liability Company Agreement of GBW Railcar Services Holdings, L.L.C., dated August 20, 2018, by and among Greenbrier Rail Services Holdings, LLC, Watco Mechanical Services, L.L.C., and Millennium Rail, L.L.C.

The Greenbrier Companies 2018 Annual Report 95

10.28 Fourth Amended and Restated Credit Agreement, dated as of September  26, 2018, by and among The Greenbrier Companies, Inc., Bank of America, N.A., as Administrative Agent, Merrill Lynch, Pierce, Fenner  & Smith Incorporated, as Sole Lead Arranger and Sole Bookrunner, MUFG Union Bank, N.A., as Syndication Agent, Bank of the West, Branch Banking and Trust Company, Fifth Third Bank, and Wells Fargo Bank, National Association, as Co-Documentation Agents, and the lenders identified therein.

10.29 Fourth Amended and Restated Security Agreement, dated as of September  26, 2018, by and among The Greenbrier Companies, Inc., and the other parties identified as Debtors therein, in favor of Bank of America, N.A., as Administrative Agent.

10.30 Fourth Amended and Restated Pledge Agreement, dated as of September 26, 2018, by and among The Greenbrier Companies, Inc., and the other parties identified as Debtors therein, in favor of Bank of America, N.A., as Administrative Agent.

10.31 Amended and Restated Credit Agreement, dated as of September 26, 2018, by and among Greenbrier Leasing Company LLC, an Oregon limited liability company, Bank of America, N.A., as Administrative Agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Sole Lead Arranger and Sole Bookrunner, MUFG Union Bank, N.A., as Syndication Agent, and the lenders identified therein.

10.32 Amended and Restated Security Agreement, dated as of September  26, 2018, by and between Greenbrier Leasing Company LLC, an Oregon limited liability company, in favor of Bank of America, N.A., as Administrative Agent.

10.33 Purchase Agreement, dated January 31, 2017, among The Greenbrier Companies, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Goldman, Sachs & Co. is incorporated herein by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed February 6, 2017.

14.1 Code of Business Conduct and Ethics is incorporated herein by reference to Exhibit 14.1 to the Registrant’s Form 8-K filed January 12, 2016.

21.1 List of the subsidiaries of the Registrant.

23.1 Consent of KPMG LLP.

31.1 Certification pursuant to Rule 13(a) – 14(a).

31.2 Certification pursuant to Rule 13(a) – 14(a).

32.1 Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101 The following financial information from the Company’s Annual Report on Form 10-K for the year ended August 31, 2018, formatted in XBRL (eXtensible Business Reporting Language) and furnished electronically herewith: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income; (iii) Consolidated Statements of Comprehensive Income (iv) the Consolidated Statements of Equity (v) the Consolidated Statements of Cash Flows; (vi) the Notes to Condensed Consolidated Financial Statements.

* Management contract or compensatory plan or arrangement

Note: For all exhibits incorporated by reference, unless otherwise noted above, the SEC file number is 001-13146.

Item 16. FORM 10-K SUMMARY

None.

96 The Greenbrier Companies 2018 Annual Report

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

THE GREENBRIER COMPANIES, INC.

Dated: October 26, 2018	By:	/s/    William A. Furman
		William A. Furman
		President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Date
/s/    William A. Furman William A. Furman, President, Chief Executive Officer and Chairman of the Board	October 26, 2018
/s/    Duane C. McDougall Duane C. McDougall, Director	October 26, 2018
/s/    Graeme A. Jack Graeme A. Jack, Director	October 26, 2018
/s/    Charles J. Swindells Charles J. Swindells, Director	October 26, 2018
/s/    Donald A. Washburn Donald A. Washburn, Director	October 26, 2018
/s/    Kelly M. Williams Kelly M. Williams, Director	October 26, 2018
/s/    Thomas B. Fargo Thomas B. Fargo, Director	October 26, 2018
/s/    Wanda F. Felton Wanda F. Felton, Director	October 26, 2018
/s/    David L. Starling David L. Starling, Director	October 26, 2018
/s/    Lorie L. Tekorius Lorie L. Tekorius, Executive Vice President and Chief Operating Officer (Principal Financial Officer)	October 26, 2018
/s/    Adrian J. Downes Adrian J. Downes, Senior Vice President, Acting Chief Financial Officer and Chief Accounting Officer (Principal Accounting Officer)	October 26, 2018

The Greenbrier Companies 2018 Annual Report 97

CERTIFICATIONS

The Company filed the required 303A.12(a) New York Stock Exchange Certification of its Chief Financial Officer with the New York Stock Exchange with no qualifications following the 2018 Annual Meeting of Shareholders and the Company filed as an exhibit to its Annual Report on Form 10-K for the year ended August 31, 2017, as filed with the Securities and Exchange Commission, a Certification of the Chief Executive Officer and a Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

98 The Greenbrier Companies 2018 Annual Report

EX-10.25

Exhibit 10.25

THE GREENBRIER COMPANIES, INC.

Executive Stock Ownership Guidelines

The Board of Directors believes that it is important for executive officers of The Greenbrier Companies, Inc. (the “Company”) to have a financial stake in the Company such that the executive officers’ interests align with those of the Company’s shareholders. To meet this objective, the Board has established these stock ownership guidelines for employees of the Company who are designated as “executive officers” by the Board.

1. Ownership Requirements. Each executive officer is expected to acquire, and continue to hold during the term or his or her employment with the Company, ownership of Company stock having a value equal to the multiple of his or her annual base salary indicated in the table below, based upon title. An officer who holds more than one title indicated below will be expected to satisfy the highest applicable ownership requirement. Executive officers will have five years to satisfy these guidelines after the date of adoption of these guidelines or the date of being designated as an executive officer, whichever is later.

Position	Salary Multiple
Chief Executive Officer		5x
Executive Vice Presidents		2.5x
Senior Vice Presidents		2x
Presidents of Business Units		2x
Vice Presidents		1x

2. Included Holdings. Company stock holdings that count toward meeting the ownership requirements include:

(a) Shares owned outright or beneficially by the executive (or his or her immediate family members);

(b) Restricted shares, including shares granted but not vested;

(c) Shares issuable upon the settlement of restricted stock units;

(d) Shares held in the Company’s Employee Stock Purchase Plan (“ESPP”);

(e) Shares held in the Company’s Nonqualified Deferred Compensation Plan trust.

Unexercised stock options do not count toward meeting the ownership requirements.

3. Share Retention Requirements. Until the ownership requirements are achieved, each executive officers is expected to retain not less than 50% of the number of shares awarded to him or her under the Company’s Stock Incentive Plan, net of the number of shares the executive officer has applied to the payment of taxes on such awards and excluding any shares held subject to a 10b5-1 Sales Plan in existence as of the effective

1

date of these guidelines. Shares transferred by an executive pursuant to a domestic relations order do not violate the share retention requirements. In the event that an executive falls below the applicable guideline by reason of a transfer of shares made pursuant to a domestic relations order the Compensation Committee may, in its discretion, allow the executive additional time to come back into compliance with the guidelines.

4. Monitoring Compliance. The Compensation Committee will monitor compliance with these stock ownership guidelines. In order to reduce the impact of stock price fluctuation on executive officers’ ongoing obligation to achieve and maintain compliance with these guidelines, shares of Company stock purchased on the open market are valued at cost, restricted shares acquired under any Company stock incentive plan are valued at the fair market value (as defined under the stock incentive plan) on the date of grant, and shares acquired under stock options and under the ESPP are valued at the fair market value at the time of exercise of the option or purchase of the ESPP shares and these values remain constant.    The foregoing notwithstanding, shares held by an executive officer as of the effective date of these guidelines or upon becoming subject to these guidelines as an executive officer shall in each case be valued at the fair market value on such date, which value remains constant. Once an executive officer has met the applicable ownership guideline, the number of shares required to be held to meet the guideline remains fixed, and fluctuations in market value of the Company’s shares do not increase or decrease the number of shares required to be held.

If an executive officer’s guideline stock ownership requirement changes due to a change in position or an increase (or decrease) in the executive officer’s annual base salary, the number of shares required to be held will increase (or decrease) accordingly.

5. Modification of Guidelines. The Compensation Committee has authority to review and modify these guidelines from time-to-time as it deems appropriate.

These Executive Stock Ownership Guidelines were most recently reviewed and amended by the Compensation Committee of the Board of Directors of the Company on June 27, 2018.

2

EX-10.26

Exhibit 10.26

EXECUTION COPY

DISSOLUTION AGREEMENT

by and among

THE GREENBRIER COMPANIES, INC.

GREENBRIER RAIL SERVICES HOLDINGS, LLC

WATCO COMPANIES, L.L.C.

MILLENNIUM RAIL, L.L.C.

WATCO MECHANICAL SERVICES, L.L.C.

GBW RAILCAR SERVICES HOLDINGS, L.L.C.

GBW RAILCAR SERVICES, L.L.C.

GBW RAILCAR SERVICES CANADA, INC.

Dated as of August 20, 2018

TABLE OF CONTENTS

		Page
ARTICLE I. DEFINITIONS			1
Section 1.1	Specific Definitions		1
Section 1.2	Other Definitional Provisions		9
ARTICLE II. DISSOLUTION OF GBW AND GBW OPERATING SUB			9
Section 2.1	Dissolution of GBW and GBW Operating Sub		9
Section 2.2	Transfer of Assets		10
Section 2.3	Assumption of Liabilities		14
Section 2.4	Watco Payment		15
Section 2.5	Closing		15
Section 2.6	Closing Cash Adjustments		18
Section 2.7	Reserved		19
Section 2.8	Existing Leases		19
Section 2.9	Terminations		19
Section 2.10	Information Sharing		21
Section 2.11	Post-Closing Obligations of the Parties		21
ARTICLE III. ADDITIONAL AGREEMENTS			26
Section 3.1	Consents		26
Section 3.2	Employees and Employee Benefits		27
Section 3.3	Liens		31
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF WATCO PARTIES			31
Section 4.1	Organization		31
Section 4.2	Authorization		31
Section 4.3	Conflicts, Consents		31
Section 4.4	Litigation		32
Section 4.5	Enforceability		32
Section 4.6	Brokers and Finders		32
Section 4.7	Inspections, No Other Representations		32
Section 4.8	All GBW or Greenbrier Property		32
Section 4.9	Customer Issues and Contracts		33
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF GREENBRIER PARTIES			33
Section 5.1	Organization		33

i

Section 5.2	Authorization	33
Section 5.3	Conflicts, Consents	33
Section 5.4	Litigation	34
Section 5.5	Enforceability	34
Section 5.6	Brokers and Finders	34
Section 5.7	Inspections, No Other Representations	34
Section 5.8	All GBW or Watco Property	34
Section 5.9	Brandon Railroad Assets	34
Section 5.10	Customer Issues and Contracts	35
ARTICLE VI. COVENANTS		35
Section 6.1	Tax Matters	35
Section 6.2	Use of Names	36
Section 6.3	Confidential Information	36
Section 6.4	Commercially Reasonable Efforts	37
Section 6.5	Releases	38
Section 6.6	Transaction Expenses	39
Section 6.7	Cooperation	39
Section 6.8	Withdrawals	40
Section 6.9	Dispute Resolution	40
ARTICLE VII. GENERAL PROVISIONS		40
Section 7.1	Expenses	40
Section 7.2	Press Release	40
Section 7.3	Notices	40
Section 7.4	Assignment, Successors	42
Section 7.5	No Third Party Beneficiaries	42
Section 7.6	Amendment, Waivers, etc	42
Section 7.7	Entire Agreement	42
Section 7.8	Severability	43
Section 7.9	Headings and Recitals	43
Section 7.10	Counterparts	43
Section 7.11	Governing Law; Consent to Forum	43
Section 7.12	Enforcement of Agreement	43
Section 7.13	Waiver of Jury Trial	44

ii

Exhibits

Exhibit A:	Second Amended and Restated GBW LLC Agreement
Exhibit B:	Tax Matrix
Exhibit C:	Greenbrier Transfer Documents
Exhibit D:	Watco Transfer Documents
Exhibit E:	Deed for Owned Real Property—Omaha West Shop
Exhibit F:	Non-foreign Affidavits

iii

THIS DISSOLUTION AGREEMENT, dated as of August 20, 2018, is entered into by and among The Greenbrier Companies, Inc., an Oregon corporation (“Greenbrier”), Greenbrier Rail Services Holdings, LLC, an Oregon limited liability company (“GBH”) (Greenbrier and GBH each being referred to herein as a “Greenbrier Party” and collectively as the “Greenbrier Parties”), Watco Companies, L.L.C., a Delaware limited liability company (“Watco”), Millennium Rail, L.L.C. (f/k/a Millennium Rail, Inc.), a Delaware limited liability company (“Millennium”), Watco Mechanical Services, L.L.C., a Kansas limited liability company (“Watco Mechanical”) (Watco, Millennium and Watco Mechanical each being referred to herein as a “Watco Party” and collectively as the “Watco Parties”), GBW Railcar Services Holdings, L.L.C., a Delaware limited liability company (“GBW”), GBW Railcar Services, L.L.C., a Delaware limited liability company (“GBW Operating Sub”), and GBW Railcar Services Canada, Inc., a Canadian corporation (“GBW Canadian Sub”) (GBW, GBW Operating Sub, and GBW Canadian Sub each being referred to herein as a “GBW Party” and collectively as the “GBW Parties”), each of whom are referred to herein as a “Party” and collectively as the “Parties”.

RECITALS

A. GBH, together with Millenium and Watco Mechanical, formed GBW, and the membership interests in GBW are currently owned by them in the percentages set forth below:

GBH	50.00	%
Millennium	41.51	%
Watco Mechanical	8.49	%

B. GBW formed GBW Operating Sub as a wholly-owned subsidiary of GBW.

C. The Parties now desire to dissolve and wind up GBW and GBW Operating Sub, on the terms, subject to the conditions, and for the considerations set forth in this Agreement.

D. Notwithstanding the dissolution of GBW and GBW Operating Sub, it is the intention of the Watco Parties and Greenbrier Parties to maintain their relationship and to cooperate fully with respect to customer matters subject to applicable anti-trust laws.

NOW, THEREFORE, in consideration of the mutual promises, covenants, representations and warranties made herein and of the mutual benefits to be derived therefrom, the Parties, intending to be legally bound, agree as follows:

ARTICLE I.

DEFINITIONS

Section 1.1 Specific Definitions. As used in this Agreement and the Schedules hereto, the following terms have the following meanings:

1

“Affiliate” means with respect to any Person, a Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with such Person, and “control” (including the terms “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 and policies of a Person, whether through the ownership of voting securities, by contract or credit arrangement, as trustee or executor, or otherwise. The GBW Parties shall not be deemed to be Affiliates of the Greenbrier Parties or Watco Parties for purposes of this Agreement.

“Agreement” means this Dissolution Agreement, including the schedules and exhibits hereto.

“Business” means the building, acquiring, owning, leasing, subleasing or operating of any railcar repair, refurbishment or maintenance facility or business in the United States, Canada and Mexico. For the sake of clarity, the Business shall not include (a) the manufacturing, repairing, refurbishing and selling of railcar wheels and parts, (b) the repairing and leasing of locomotives, (c) the performing (or arranging to perform) of running repairs to railcars pursuant to the rules of the Association of American Railroads while such railcars are located on a rail line, and (d) the manufacturing, operating, leasing, managing or controlling of railcars.

“Business Day” means any day other than Saturday, Sunday or other day on which the nationally chartered banks are authorized or required to close.

“Business Employees” has the meaning set forth in Section 3.2(a)(i).

“CBA” means any collective bargaining agreement, side agreement or letter, memorandum of understanding, or other binding commitment with any labor or trade union, works council, or other labor organization representing Business Employees.

“Closing” has the meaning set forth in Section 2.5(a).

“Closing Date” has the meaning set forth in Section 2.5(a).

“Code” means the Internal Revenue Code of 1986, as amended.

“Confidential Information” means the terms of this Agreement, the terms of the Transaction Documents, the transactions contemplated by this Agreement and the Transaction Documents and all business, financial or other information relating directly to the conduct of the business and affairs of the GBW Parties, except (a) information that is or becomes publicly available other than by the act or omission of a Party or any Affiliate of any Party in violation of this Agreement, or (b) information that is independently developed by a Party or any Affiliate of any Party without using information in violation of this Agreement.

“Confidentiality Agreement” has the meaning set forth in Section 6.3(d).

“Consent” means any consent, approval, authorization, action, Permit, exception, waiver or other Order of, action by, filing, registration, designation or declaration with, or notification to any Governmental Authority or other Person.

“Contracts” means any agreement of any kind or nature whatsoever by which any person or entity is bound, including all contracts, agreements, understandings, notes, bonds, instruments, leases, subleases, mortgages, licenses, capital leases, commitments or binding arrangements, express or implied, oral or written, and all amendments thereto.

2

“Contribution Agreement” means that certain Contribution Agreement, dated as of July 18, 2014, by and between Watco, Greenbrier, and GBW.

“Credit Agreement” means that certain Credit Agreement, dated as of July 18, 2014 by and among GBW, GBW Operating Sub, GBH (as agent for the lenders thereunder) and the lenders from time to time parties thereto.

“Data” has the meaning set forth in Section 2.2(h).

“Delaware Act” means the Delaware Limited Liability Company Act, as amended from time to time.

“Environmental Liabilities” means Liabilities arising from violation of applicable Laws relating to protection of the environment.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Existing Leases” has the meaning set forth in Section 2.8.

“Final Transfer Date” has the meaning set forth in Section 3.2(a)(ii).

“GAAP” means generally accepted accounting principles in the United States of America consistently applied.

“GBH” has the meaning set forth in the preamble.

“GBH Assets” has the meaning set forth in Section 2.2(b).

“GBH Assigned Contracts” has the meaning set forth in Section 2.2(b)(i).

“GBH Manager” has the meaning set forth in Section 2.1(b).

“GBH Shops” means each Shop listed in Schedule A hereto.

“GBH Transferred Permits” has the meaning set forth in Section 2.2(b)(vi).

“GBW” has the meaning set forth in the preamble.

“GBW Canadian Sub” has the meaning set forth in the preamble.

“GBW LLC Agreement” means that certain Amended and Restated Limited Liability Company Agreement of GBW Railcar Services Holdings, L.L.C., dated as of July 18, 2014, by and between GBH, Watco Mechanical and Millennium, as amended from time to time.

“GBW Members” means GBH, Millennium and Watco Mechanical.

3

“GBW Operating Sub” has the meaning set forth in the preamble.

“GBW Operating Subject Marks” has the meaning set forth in Section 6.2.

“GBW Operating Sub LLC Agreement” means that certain Limited Liability Company Agreement of GBW Railcar Services, L.L.C., dated as of July 18, 2014, made by GBW.

“GBW Party” and “GBW Parties” have the meanings set forth in the preamble.

“GBW Retained Contract” has the meaning set forth in Section 2.2(d)(i).

“Governmental Authority” means any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States, any foreign country or any domestic or foreign state, country, city or other political subdivision.

“Greenbrier” has the meaning set forth in the preamble.

“Greenbrier Assumed Liabilities” means (a) the Trade Accounts Payable relating to the GBH Shops, and (b) the Liabilities of the GBW Parties under the GBH Assigned Contracts, arising at any time after the Closing relating to periods after the Closing; provided that in no event shall the Greenbrier Assumed Liabilities include, and the Greenbrier Parties shall not assume or be obligated pursuant to this Agreement or otherwise (except with respect to any express obligations under Section 2.11(g) or any other express obligation under this Agreement) for, any Liabilities arising out of or with respect to any of the following: (A) any breach of, default under (including a payment default), or failure to perform or comply with any of the terms of, any of the GBH Assigned Contracts occurring at or prior to the Closing, (B) any illegal, void or voidable GBH Assigned Contract or portion thereof, (C) any acts of negligence or other torts occurring at or prior to the Closing, (D) any violations of Law occurring at or prior to the Closing, or (E) any obligations for warranty and related obligations resulting from any work performed at or prior to the Closing.

“Greenbrier Loan” means the outstanding loan by the Greenbrier Member to the GBW Parties, made pursuant to the Credit Agreement, the Security Agreement and the Guaranty.

“Greenbrier Member” means GBH.

“Greenbrier Party” and “Greenbrier Parties” have the meanings set forth in the preamble.

“Greenbrier Pre-Contribution Liabilities” has the meaning set forth in Section 2.11(g)(i).

“Greenbrier Released Parties” has the meaning set forth in Section 6.5(b).

“Greenbrier Transfer Documents” has the meaning set forth in Section 2.5(b)(i).

“Guaranty” means that certain Guaranty, dated as of July 18, 2014, by GBW Operating Sub in favor of GBH (as agent of the lenders under the Credit Agreement).

“Hiring Party” has the meaning set forth in Section 3.2(a)(ii).

4

“Hollidaysburg Shop” means the Shop located at 585 Berwind Rd, Hollidaysburg, Pennsylvania 16648.

“Indemnified Taxes” means (a) any and all Taxes imposed on GBW, whether directly by a Governmental Authority or through a lease arrangement (including leases with Affiliates of any Party), for taxable periods ending on or before the Closing Date or for the portion of a Straddle Period ending on the Closing Date to the extent such Taxes have not been paid in full on or prior to the Closing Date, subject in any event to the provisions of the Tax Matrix (in the event of any conflict between the Tax Matrix and any other provision of this Agreement, the Tax Matrix shall in all cases govern and be controlling), and (b) reasonable out-of-pocket costs and expenses paid or incurred by the Parties to accounting firms, law firms or other third parties in connection with the preparation and filing of Tax Returns and in connection with any audit, assessment, investigation or Action by or against any Governmental Authority relating to such Taxes. Taxes for a Straddle Period shall be allocated to the portion of the period ending on the Closing Date, ratably based on the number of days in the period, provided, however, that exemptions, allowances or deductions that are calculated on an annual basis (including depreciation and amortization deductions) shall be apportioned on a per diem basis.

“Information Sharing Agreements” means (a) the Information Sharing and Cooperation Agreement dated July 18, 2014 between GBW and Watco and (b) the Information Sharing and Cooperation Agreement dated July 18, 2014 between GBW and Greenbrier.

“Initial Transfer Date” has the meaning set forth in Section 3.2(a)(ii).

“JV Shops” means the Shops listed in Schedule B hereto.

“Law” means any provision of any federal, state, local, foreign, international, municipal or administrative order, constitution, law, common law and the law of equity, ordinance, judicial decision, writ, injunction, license, permit, regulation, rule, code, plan, statute or treaty of, and the departmental or regulatory policies and guidelines of, a Governmental Authority.

“Leased Personal Property” has the meaning set forth in Section 2.8.

“Liabilities” means liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise.

“Lien” means any mortgage, pledge, deed of trust, hypothecation, claim, security interest, title defect, encumbrance, burden, charge or other similar restriction, lease, sublease, claim, title retention agreement, option, easement, covenant, encroachment or other adverse claim.

“Management Employees” has the meaning set forth in Section 3.2(a)(i).

“Master Personal Property Lease Agreements” means (a) the Master Personal Property Lease Agreement, dated as of July 18, 2014, by and between GBW Operating Sub and Gunderson Rail Services LLC and (b) the Master Personal Property Lease Agreement, dated as of July 18, 2014, by and among GBW Operating Sub, Millennium and Watco Mechanical.

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“Master Real Property Lease Agreements” means (a) the Master Real Property Lease Agreement, dated as of July 18, 2014, by and between GBW Operating Sub and Gunderson Railcar Services LLC and (b) the Master Real Property Lease Agreement, dated as of July 18, 2014, by and among GBW Operating Sub, Millennium and Watco Mechanical.

“Material Adverse Effect” means any event, circumstance, occurrence, state of fact, change in, or effect, that has a material adverse effect on the ability of an applicable Party to consummate such Party’s obligations regarding the Unwind Transactions.

“Mira Loma 2 Shop” means the Shop located at 4500 Etiwanda Ave., Mira Loma, California 91752.

“Omaha West Shop” means the Shop located at 13810 L Street, Omaha, Nebraska 68137.

“Operational Employees” has the meaning set forth in Section 3.2(a)(i).

“Order” means any judgment, injunction, order, writ, decree (including a consent decree), ruling or charge that is issued by a Governmental Authority.

“Organizational Documents” means (a) with respect to any corporation or limited liability company, its articles or certificate of incorporation or memorandum and articles of association and by-laws, (b) with respect to any other entity, its analogous governing documents, and (c) with respect to any trust, its trust agreement.

“Overland Park Sublease” means the Sublease (Overland Park, Kansas), dated May 15, 2015, by and between Watco and GBW Operating Sub.

“Permits” means any licenses, permits, orders, approvals, concessions, clearances, registrations, certificates (including certificates of occupancy), qualifications and other evidence of authority.

“Permitted Liens” means (a) Liens for Taxes and other governmental charges and assessments that are not yet due and payable or that are being contested in good faith by appropriate proceedings, (b) statutory Liens in favor of lessors arising in connection with any real property leased by the GBW Parties from third parties, in each case for obligations that are not delinquent, and (c) with respect to the real property owned by the GBW Parties relating to the Omaha West Shop, recorded easements, rights of way, covenants, restrictions, reservations, exceptions and encroachments on, over or affecting any portion of such real property, and/or imperfections of title disclosed in any title policy or commitment for such real property, in each case which do not materially impair or interfere with the occupancy, operation or use by the Watco Parties of such real property or the Omaha West Shop, or zoning, building and other similar codes and regulations, provided that such zoning, building and other similar codes and regulations are not violated by the present use and operation of such real property and the Omaha West Shop.

“Person” means any natural person, firm, partnership, association, corporation, company, trust, business trust, Governmental Authority or other entity.

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“Proceeding” means any action, suit or litigation.

“Second Amended and Restated GBW LLC Agreement” means the Second Amended and Restated Limited Liability Company Agreement of GBW, to be entered into by the GBW Members at Closing, in the form attached hereto as Exhibit A;

“Security Agreement” means that certain Security Agreement, dated as of July 18, 2014, by and among GBW, GBW Operating Sub and GBH (as agent of the lenders under the Credit Agreement) and any other entity that joins as a guarantor.

“Services Agreements” means the Services Agreements listed in Sections 2.9(a)(viii) and 2.9(a)(ix); provided, however, that notwithstanding anything to the contrary, in the event of any conflict between the terms and provisions of the Services Agreements and this Agreement, the terms and provisions of this Agreement shall in all cases govern and be controlling.

“Shared Contract” has the meaning set forth in Section 2.2(e).

“Shares” means the issued share capital of GBW Canadian Sub.

“Sharing Ratio” means a GBW Member’s Sharing Ratio (as defined in the GBW LLC Agreement) as of the date of this Agreement.

“Shops” means the network of railcar repair, refurbishment and maintenance facility shops operated by GBW Operating Sub and “Shop” means an individual railcar repair, refurbishment and maintenance facility shop included in such network.

“Specs” has the meaning set forth in Section 2.2(f).

“Straddle Period” means a taxable period that includes, but does not end on, the Closing Date.

“Tax” or “Taxes” means any federal, state, provincial, local or foreign income, alternative minimum, accumulated earnings, personal holding company, franchise, capital stock, profits, windfall profits, gross receipts, sales, use, value added, transfer, registration, stamp, premium, excise, customs duties, severance, real property, personal property, ad valorem, environmental (including taxes under Code Section 59A), occupancy, license, occupation, employment, payroll, social security (or similar), disability, unemployment, workers’ compensation, withholding, estimated or other similar tax, assessment or other governmental charge of any kind whatsoever including any interest, penalty, or addition thereto, whether disputed or not.

“Tax Matrix” means the tax matrix attached hereto as Exhibit B.

“Tax Return” means any return, report, declaration, form, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof that relates to GBW and its subsidiaries.

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“Trade Accounts Payable” means the amounts included in the “Accounts Payable” line item on the Closing Date balance sheet of GBW (prepared and reflected on a consolidated basis with GBW Operating Sub). The Parties will cooperate to determine the final amounts as promptly as possible.

“Transaction Documents” means the Watco Transfer Documents, the Greenbrier Transfer Documents, the Second Amended and Restated GBW LLC Agreement and each other agreement or instrument to be entered into in connection with the transactions contemplated by this Agreement.

“Transfer Date” has the meaning set forth in Section 3.2(a)(ii).

“Transferred Employees” has the meaning set forth in Section 3.2(a)(ii).

“Transferred Management Employees” has the meaning set forth in Section 3.2(a)(ii).

“Transferred Operational Employees” has the meaning set forth in Section 3.2(a)(ii).

“Union Business Employee” means any Business Employee whose employment is subject to a CBA.

“Unwind Transactions” means the dissolution and winding up of GBW and GBW Operating Sub pursuant to this Agreement and the other transactions contemplated by this Agreement.

“Watco” has the meaning set forth in the preamble.

“Watco Assets” has the meaning set forth in Section 2.2(a).

“Watco Assigned Contracts” has the meaning set forth in Section 2.2(a)(i).

“Watco Assumed Liabilities” means (a) the Trade Accounts Payable relating to the Watco Shops and JV Shops, and (b) the Liabilities of the GBW Parties under the Watco Assigned Contracts, arising at any time after the Closing relating to periods after the Closing; provided that in no event shall the Watco Assumed Liabilities include, and the Watco Parties shall not assume or be obligated pursuant to this Agreement or otherwise (except with respect to any express obligations under Section 2.11(g) or any other express obligation under this Agreement) for, any Liabilities arising out of or with respect to any of the following: (A) any breach of, default under (including a payment default), or failure to perform or comply with any of the terms of, any of the Watco Assigned Contracts occurring at or prior to the Closing, (B) any illegal, void or voidable Watco Assigned Contract or portion thereof, (C) any acts of negligence or other torts occurring at or prior to the Closing, (D) any violations of Law occurring at or prior to the Closing, or (E) any obligations for warranty and related obligations resulting from any work performed at or prior to the Closing.

“Watco Equalization Consideration” means the aggregate sum of US $5,000,000.

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“Watco Loans” means the outstanding loans by the Watco Members to the GBW Parties, made pursuant to the Credit Agreement, the Security Agreement and the Guaranty.

“Watco Manager” has the meaning set forth in Section 2.1(b).

“Watco Members” means Watco Mechanical and Millenium.

“Watco Party” and “Watco Parties” have the meanings set forth in the preamble.

“Watco Pre-Contribution Liabilities” has the meaning set forth in Section 2.11(g)(i).

“Watco Released Parties” has the meaning set forth in Section 6.5(a).

“Watco Shops” means the Shops listed in Schedule C hereto.

“Watco Transfer Documents” has the meaning set forth in Section 2.5(c)(i).

“Watco Transferred Permits” has the meaning set forth in Section 2.2(a)(vi).

Section 1.2 Other Definitional Provisions.

(a) The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement.

(b) Terms defined in the singular have the same meaning when used in the plural, and vice versa.

(c) References to “Sections,” “Exhibits” and “Schedules” refer to Sections of, and Exhibits and Schedules to, this Agreement, unless otherwise specified.

(d) The words “include”, “includes”, or “including” and words of similar import, when used in this Agreement, shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import.

(e) Any reference to a Law shall include any amendment thereof or any successor thereto and any rules and regulations promulgated thereunder, unless the context otherwise requires.

ARTICLE II.

DISSOLUTION OF GBW AND GBW OPERATING SUB

Section 2.1 Dissolution of GBW and GBW Operating Sub.

(a) GBH, Millenium, Watco Mechanical and GBW acknowledge and agree that GBW and GBW Operating Sub will, as of the Closing, be dissolved pursuant to Section 8.1(a)(1) of the Second Amended and Restated GBW LLC Agreement, and Section 5.1(a) of the GBW Operating Sub LLC Agreement, and GBH, Millenium, Watco Mechanical and GBW desire and agree to proceed with the winding up of GBW and GBW Operating Sub in accordance with this

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Agreement. From and after the Closing, the Parties will proceed with winding up (i) the affairs of GBW in accordance with the terms of this Agreement, the Second Amended and Restated GBW LLC Agreement and the Delaware Act, and (ii) the affairs of GBW Operating Sub in accordance with the terms of this Agreement, the GBW Operating Sub LLC Agreement and the Delaware Act. In the event of any conflict between the terms and provisions of the Second Amended and Restated GBW LLC Agreement or the GBW Operating Sub LLC Agreement and this Agreement, the terms and provisions of this Agreement shall in all cases govern and be controlling.

(b) GBH, Millenium, Watco Mechanical, GBW and GBW Operating Sub acknowledge and agree that no further actions are required by the Board of Managers of GBW or GBW Operating Sub or their respective officers with respect to the Unwind Transactions, and each person holding any position as Manager on the Board of Managers of GBW shall be deemed removed, simultaneously with the Closing, from such position by the GBW Member(s) appointing such Manager (subject to continuation of Rick Turner and Rick Webb as Managers as provided herein below and in the Second Amended and Restated GBW LLC Agreement), provided, however, that one representative designated from time to time by Watco Mechanical (the “Watco Manager”) by written notice to GBH and one representative designated from time to time by GBH (the “GBH Manager”) by written notice to Watco Mechanical shall hold the positions of the two Managers of GBW, solely for purposes of implementing this Agreement and winding up GBW and GBW Operating Sub and signing and filing any additional documents, instruments or tax returns as may be necessary or advisable for purposes of winding up GBW and GBW Operating Sub. The initial GBH Manager shall be Rick Turner and the initial Watco Manager shall be Rick Webb.

(c) At such time as may be agreed by the Watco Manager and the GBH Manager following completion of the winding up of GBW, GBW shall be terminated by filing a certificate of cancellation with the Delaware Secretary of State and making any other filings required by applicable Law. At such time as may be agreed by the Watco Manager and the GBH Manager following completion of the winding up of GBW Operating Sub, GBW Operating Sub shall be terminated by filing a certificate of cancellation with the Delaware Secretary of State and making any other filings required by applicable Law.

Section 2.2 Transfer of Assets. Subject to the terms and conditions hereof, at the Closing:

(a) Transfers to Millenium or Watco Mechanical. Upon the terms and subject to the conditions of this Agreement, as of the Closing, the Parties will cause GBW and GBW Operating Sub to assign, transfer and convey to Millenium or Watco Mechanical (respectively with respect to the applicable Watco Shop or JV Shop as indicated on Schedule B and Schedule C), all right, title and interest in and to the following assets relating to the Watco Shops and the JV Shops, free and clear of all Liens other than Permitted Liens (collectively, the “Watco Assets”):

(i) the Contracts to which GBW or GBW Operating Sub are parties relating specifically to any one or more of the Watco Shops or JV Shops, including those Contracts set forth on Schedule 2.2(a)(i) (the “Watco Assigned Contracts”);

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(ii) the owned real property (including improvements) relating to the Omaha West Shop;

(iii) the tangible personal property, including furniture, equipment and inventory (including work in process), and vehicles, located at the Watco Shops and JV Shops, and any and all rights, titles or interests of the GBW Parties in or to any leasehold improvements located at or relating to any of the Watco Shops or JV Shops;

(iv) the accounts receivable relating to the Watco Shops and JV Shops (including unbilled work in process at the Watco Shops and JV Shops as of Closing);

(v) all lists of present and, to the extent available, potential customers and all goodwill and going concern value associated with the Watco Shops and JV Shops;

(vi) all transferrable licenses, permits, registrations, authorizations, use agreements, orders or approvals of Governmental Authorities related to the Watco Shops and JV Shops (the “Watco Transferred Permits”), including, without limitation, the Watco Transferred Permits set forth on Schedule 2.2(a)(vi);

(vii) the furniture, fixtures, equipment and leasehold improvements located in the office space leased or sub-leased by the Watco Parties and their Affiliates to the GBW Parties;

(viii) any other physical assets of the GBW Parties located at or used in the Watco Shops or the JV Shops; and

(ix) originals or copies of all books, records, files and papers, whether in hard copy or electronic format, used in or related to the Watco Shops and the JV Shops, including sales and advertising materials, sales and purchase correspondence, and lists of present and former suppliers.

(b) Transfers to GBH. Upon the terms and subject to the conditions of this Agreement, as of the Closing, the Parties will cause GBW and GBW Operating Sub to assign, transfer and convey to GBH all right, title and interest in and to the following assets relating to the GBH Shops (except the GBH Shops owned by GBW Canadian Sub which will be transferred to GBH via transfer of the Shares as set forth below) and the Mira Loma 2 Shop as specifically set forth below, free and clear of all Liens other than Permitted Liens (collectively, the “GBH Assets”):

(i) the Contracts to which GBW or GBW Operating Sub are parties relating specifically to any one or more of the GBH Shops, including those Contracts set forth on Schedule 2.2(b)(i) (the “GBH Assigned Contracts”);

(ii) the tangible personal property, including furniture, equipment and inventory (including work in process), and vehicles, located at the GBH Shops and the Mira Loma 2 Shop (or the proceeds therefrom as applicable), and any and all rights, titles or interests of the GBW Parties in or to any leasehold improvements located at or relating to any of the GBH Shops or the Mira Loma 2 Shop;

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(iii) the accounts receivable relating to the GBH Shops (including unbilled work in process at the GBH Shops as of Closing);

(iv) all lists of present and, to the extent available, potential customers and all goodwill and going concern value associated with the GBH Shops;

(v) all transferrable licenses, permits, registrations, authorizations, use agreements, orders or approvals of Governmental Authorities related to the GBH Shops (the “GBH Transferred Permits”), including, without limitation, the GBH Transferred Permits set forth on Schedule 2.2(b)(v);

(vi) the Shares;

(vii) the furniture, fixtures, equipment and leasehold improvements located in the office space leased or sub-leased by the Greenbrier Parties and their Affiliates to the GBW Parties;

(viii) any other physical assets of the GBW Parties located at or used in the GBH Shops or the Mira Loma 2 Shop;

(ix) all intellectual property (other than trade names, but including all information technology development projects relating to the Entrust Billing System, Syspro System, Human Capital Management, Concur T&E System, Intelex Safety and QA System and Email System, and any other software applications or systems) used by the GBW Parties in their operations as of Closing (subject to the obligation of Greenbrier to provide services to the GBW Parties and to the Watco Parties pursuant to the Services Agreement referred to in Section 2.9(a)(viii)); and

(x) originals or copies of all books, records, files and papers, whether in hard copy or electronic format, used in or related to the GBH Shops, including sales and advertising materials, sales and purchase correspondence, and lists of present and former suppliers.

(c) Transfers of Management Related Assets. It is the intention of the Parties that except as expressly provided herein the personal computer equipment and cell phone used exclusively by each Management Employee in the performance of his or her duties and owned by the GBW Parties will be transferred to the GBW Member (or its Affiliate) that hires such Management Employee at the time such Management Employee is hired by such GBW Member (or its Affiliate).

(d) Retention or Transfers of Remaining Assets.

(i) The GBW Parties shall retain, and not transfer, each of the Contracts listed on Schedule 2.2(d)(i) (each a “GBW Retained Contract”), and the GBH Manager and the Watco Manager will use commercially reasonable efforts to seek from the counterparty to any such GBW Retained Contract (at such time as such GBW Retained Contract is not reasonably required for purposes of the winding up of GBW and GBW Operating Sub) a termination of that Contract on commercially reasonable terms (with the GBW Parties responsible for all costs, expenses, penalties and residual or other termination payments or other liabilities relating thereto, subject to obligations of the GBW Members under Section 2.11(g)), all as determined by the Watco Manager and the GBH Manager.

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(ii) To the extent not otherwise distributed, transferred or retained pursuant to this Section 2.2 or Section 2.6(b), the remaining assets of GBW and GBW Operating Sub shall be distributed or transferred from time to time as determined by the Watco Manager and the GBH Manager to the GBW Members pursuant to Section 8.2(b) of the Second Amended and Restated GBW LLC Agreement.

(e) Shared Contracts. To the extent that any Contract of the GBW Parties, other than any GBW Retained Contract, relates to both GBH Shops on the one hand and Watco Shops or JV Shops on the other hand (each a “Shared Contract”, including those listed on Schedule 2.2(e)), the GBH Manager and the Watco Manager will use commercially reasonable efforts to seek from the counterparty to any such Shared Contract a bifurcation and restatement of that Contract on commercially reasonable terms as determined by the Watco Manager and the GBH Manager that results, consistent with the purposes and intent of this Agreement, in two separate agreements, one solely between the counterparty and GBH and another solely between the counterparty and the Watco Members.

(f) Drawings and Specifications. The Parties agree that all drawings, specifications, and other technical materials (collectively, “Specs”) provided by, or relating to the products of, any Greenbrier Party or any Affiliate thereof, are and shall remain the sole and exclusive property of the Greenbrier Parties and their Affiliates, and all Specs provided by, or relating to the products of, any Watco Party or any Affiliate thereof are and shall remain the sole and exclusive property of the Watco Parties and their Affiliates. Each of the Watco Parties and the GBW Parties acknowledges and agrees that it has no ownership right or other interest in such Specs that are the property of the Greenbrier Parties and their Affiliates; provided, however, that the Greenbrier Parties hereby grant to each of the Watco Parties and the GBW Parties a limited, non-exclusive, fully paid-up, royalty-free license to use such Specs solely to the extent necessary to complete any work-in-process or retrofit projects existing or scheduled as of the Closing or to complete any warranty work relating to work performed or in process at the Shops at or prior to Closing, but in no event longer than ninety (90) days after Closing or until all scheduled retrofit projects are completed, whichever is later, after which time each of the Watco Parties and the GBW Parties will destroy all such Specs in their possession or control, subject to Section 2.2(g). Each of the Greenbrier Parties and the GBW Parties acknowledges and agrees that it has no ownership right or other interest in such Specs that are the property of the Watco Parties and their Affiliates; provided, however, that the Watco Parties hereby grant to each of the Greenbrier Parties and the GBW Parties a limited, non-exclusive, fully paid-up, royalty-free license to use such Specs solely to the extent necessary to complete any work-in-process or retrofit projects existing or scheduled as of the Closing or to complete any warranty work relating to work performed or in process at the Shops at or prior to Closing, but in no event longer than ninety (90) days after Closing or until all scheduled retrofit projects are completed, whichever is later, after which time each of the Greenbrier Parties and the GBW Parties will destroy all Specs in their possession or control, subject to Section 2.2(g). To the extent that after the periods specified in this Section 2.2(f), any Party requires access to any Spec of any other Party to complete any warranty work or for any other reasonable purpose relating to work performed, in process or scheduled at or prior to Closing at any of the Shops transferred to the requesting Party, such other Party shall provide access to such Spec to such requesting Party and grant such requesting Party a limited, non-exclusive, fully paid-up, royalty-free license to use such Spec for such reasonable purpose.

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(g) Document Retention. Notwithstanding any provision of this Agreement to the contrary, (i) any Party may retain and use a copy of any Specs, any Confidential Information, or copies of the books, records, files and papers of the GBW Parties, whether in hard copy or electronic format, (A) as may be required by law, or a regulatory agency or competent listing authority, (B) as may be consistent with industry best practices for document, information or records retention for legal and compliance purposes only, (C) in accordance with customer or other third party contractual requirements, or (D) to such extent as such Party reasonably determines is advisable to address or respond to any existing or future warranty claims, and (ii) a Party shall not be required to destroy any computer records or files. Subject to the foregoing provisions of this Section 2.2(g), any such retained copies, computer records or files shall otherwise remain subject to the terms of this Agreement and the Confidentiality Agreement.

(h) Transfer of Data. The Parties will cooperate in good faith to transfer to each other Party any data and records contained within the core application systems, including the Entrust Billing System, Perceptive System, BLIP System, SYSPRO Financial System, Intelex Safety QA System and Email System, as well as Human Capital Management records (i.e. ADP records) which were generated with respect to the GBW Parties prior to or during the implementation of this Agreement, and which may reasonably be required by a Party (the “Data”). Such transfer must be requested by a Party reasonably promptly following Closing to enable such transfer to be completed by December 1, 2018, and access to Data will be terminated on December 31, 2018, except as otherwise (i) provided in this Agreement (including in Section 2.11(b)), (ii) provided in the Services Agreements, (iii) reasonably required for a requesting Party’s accounting or tax purposes, (iv) reasonably required to address or respond to any existing or future warranty claims, or (v) determined by the GBH Manager and the Watco Manager. Data will be transferred pursuant to this Section 2.2(h) in such form and media as may be reasonably required for the requesting Party to migrate, translate and utilize such Data to and in standard core application systems. Access to Data pursuant to the foregoing provisions after December 31, 2018 shall be promptly provided by the Party with applicable Data to the Party requesting such Data, which requesting Party shall promptly pay any reasonable out-of-pocket expenses (including reasonable actual labor costs) incurred by the Party providing access to such Data; provided, however, that the Parties will use their commercially reasonable best efforts to transfer all Data prior to December 31, 2018 and provided further than no Party may request access to Data in a manner or frequency that is unreasonably burdensome on the Party providing access to such Data.

Section 2.3 Assumption of Liabilities. Subject to the terms and conditions hereof, at the Closing:

(a) Assumption by Millenium and Watco Mechanical. Millenium and Watco Mechanical will assume the Watco Assumed Liabilities to the extent outstanding as of or arising on or after the Closing. The Watco Assumed Liabilities will be allocated between Millenium and Watco Mechanical based upon the Shops transferred to each of them. Except for the Watco

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Assumed Liabilities and the Watco Loans, the Watco Parties shall not assume or otherwise become obligated to pay when due, perform or discharge, as applicable, any Liabilities of the GBW Parties except as expressly provided in this Agreement and the Transaction Documents. Without limiting the foregoing, the Watco Parties shall not assume or otherwise become obligated to pay when due, perform or discharge, as applicable, any Liabilities relating to flooding of the Hollidaysburg Shop prior to Closing (including, without limiting the foregoing, any accruals, costs, expenses, damages, remediation and reserves with respect to such flooding of the Hollidaysburg Shop, whether arising or incurred prior to or following Closing, but only to the extent not covered by applicable insurance proceeds, and subject also to obligations of the GBW Members under Section 2.11(g)).

(b) Assumption by GBH. GBH will assume the Greenbrier Assumed Liabilities to the extent outstanding as of or arising on or after the Closing. Except for the Greenbrier Assumed Liabilities and the Greenbrier Loan, the Greenbrier Parties shall not assume or otherwise become obligated to pay when due, perform or discharge, as applicable, any Liabilities of the GBW Parties except as expressly provided in this Agreement and the Transaction Documents.

(c) Assumption of Loans. The GBW Parties confirm that the current balance owed under each of the Watco Loans and the Greenbrier Loan are valid obligations of the GBW Parties immediately prior to the Closing, and are reflected on the balance sheet of the GBW Parties for the principal amount of such loans outstanding, and accrued interest and any other amounts due pursuant to the Credit Agreement. The Watco Loans and the obligations and Liabilities of GBW and GBW Operating Sub under the Credit Agreement solely with respect to the Watco Loans are assigned to and assumed by each of the Watco Members at Closing, proportionate to their relative Sharing Ratios, in connection with the distribution of the Watco Assets to Millennium and Watco Mechanical. The Greenbrier Loan and the obligations and Liabilities of GBW and GBW Operating Sub under the Credit Agreement solely with respect to the Greenbrier Loan are assigned to and assumed by the Greenbrier Member at Closing in connection with the distribution of the GBH Assets to GBH. The Parties confirm that such loans are not being discharged or forgiven in connection with such distributions, but rather are being assumed. In connection with the transfer of each Shop, the applicable loan collateral relating to that Shop will be transferred to the new owner of such Shop as provided in Section 2.2, subject to the assumption of the Greenbrier Loan and the Watco Loans as described in this Section 2.3(c). In the event that any of such loan collateral is not located at the appropriate Shop, the GBH Manager and the Watco Manager will determine a fair method of adjustment or facilitate return to the applicable Shop.

Section 2.4 Watco Payment. At the Closing, Watco shall pay to GBH the Watco Equalization Consideration.

Section 2.5 Closing.

(a) Closing Date. The closing of the Unwind Transactions (the “Closing”) will take place remotely (via electronic delivery and release of deliveries contemplated by this Section 2.5 with delivery of originals within 10 days following Closing with respect to recordable documents) at 12:01 a.m. on the first Business Day on which all of the Parties have signed this Agreement (the “Closing Date”).

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(b) GBW and GBW Operating Sub Deliveries To GBH at Closing. At the Closing, GBW and GBW Operating Sub shall deliver or cause to be delivered to GBH the following:

(i) bills of sale and assignments for the GBH Assets, in the forms set forth in Exhibit C attached hereto (the “Greenbrier Transfer Documents”), duly executed by GBW and GBW Operating Sub;

(ii) [Reserved];

(iii) the non-foreign affidavit in the applicable form included in Exhibit F attached hereto, as required pursuant to Section 1446(f)(2) of the Code, stating that each of GBW and GBW Operating Sub is not a “foreign person” as defined in such Code section;

(iv) all Consents listed on Schedule 2.5(b)(iv), which shall be in full force and effect;

(v) all originals or copies of the books, records, files and papers, whether in hard copy or electronic format, maintained by or in the possession of the GBW Parties and used in the conduct of the Business that relate specifically to the GBH Assets or the GBH Shops; and

(vi) the stock certificate(s) evidencing the Shares.

(c) GBW and GBW Operating Sub Deliveries To Watco Members at Closing. At the Closing, GBW and GBW Operating Sub shall deliver or cause to be delivered to the Watco Members the following:

(i) bills of sale and assignments for the Watco Assets, in the form set forth in Exhibit D attached hereto, and a special warranty deed for the Omaha West Shop, in the form set forth in Exhibit E attached hereto (collectively, the “Watco Transfer Documents”), all duly executed by GBW and GBW Operating Sub;

(ii) [Reserved];

(iii) the non-foreign affidavit in the applicable form included in Exhibit F attached hereto, as required pursuant to Section 1446(f)(2) of the Code, stating that each of GBW and GBW Operating Sub is not a “foreign person” as defined in such Code section;

(iv) all Consents listed on Schedule 2.5(c)(iv), which shall be in full force and effect; and

(v) all originals or copies of the books, records, files and papers, whether in hard copy or electronic format, maintained by or in the possession of the GBW Parties and used in the conduct of the Business that relate specifically to the Watco Assets or the Watco Shops or JV Shops.

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(d) GBH Deliveries at Closing. At the Closing, GBH shall execute and deliver or cause to be executed and delivered to the Watco Members the following:

(i) Greenbrier Transfer Documents, duly executed by the Greenbrier Parties that are signatories thereto;

(ii) Second Amended and Restated GBW LLC Agreement, duly executed by GBH;

(iii) [Reserved];

(iv) the non-foreign affidavit in the applicable form included in Exhibit F attached hereto, as required pursuant to Section 1446(f)(2) of the Code, stating that each of the Greenbrier Parties is not a “foreign person” as defined in such Code section;

(v) all Consents listed on Schedule 2.5(d)(v), which shall be in full force and effect;

(vi) the termination agreements referred to in Section 2.9(a);

(vii) all originals or copies of the books, records, files and papers, whether in hard copy or electronic format, maintained by or in the possession of the Greenbrier Parties that relate specifically to the Watco Assets or the Watco Shops or JV Shops, except to the extent of duplicate copies already possessed by the Watco Parties, which copies shall be destroyed by the Greenbrier Parties subject to the provisions of Section 2.2(g); and

(viii) copies of documentation of the Greenbrier Parties, in form and substance reasonably acceptable to the Watco Members, evidencing the appropriate approvals and authorizations of the Unwind Transactions by the Greenbrier Parties.

(e) Watco Deliveries at Closing. At the Closing, the Watco Members shall execute and deliver or cause to be executed and delivered to GBH the following:

(i) Watco Transfer Documents, duly executed by the Watco Parties that are signatories thereto;

(ii) Second Amended and Restated GBW LLC Agreement, duly executed by Millenium and Watco Mechanical;

(iii) [Reserved];

(iv) the non-foreign affidavit in the applicable form included in Exhibit F attached hereto, as required pursuant to Section 1446(f)(2) of the Code, stating that each of the Watco Parties is not a “foreign person” as defined in such Code section;

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(v) all Consents listed on Schedule 2.5(e)(v), which shall be in full force and effect;

(vi) all originals or copies of the books, records, files and papers, whether in hard copy or electronic format, maintained by or in the possession of the Watco Parties that relate specifically to the GBH Assets or the GBH Shops, except to the extent of duplicate copies already possessed by the Greenbrier Parties, which copies shall be destroyed by the Watco Parties subject to the provisions of Section 2.2(g);

(vii) copies of documentation of the Watco Parties, in form and substance reasonably acceptable to GBH, evidencing the appropriate approvals and authorizations of the Unwind Transactions by the Watco Parties; and

(viii) the Watco Equalization Consideration, by wire transfer of immediately available funds to such accounts as shall be specified by GBH in writing at least two Business Days prior to the Closing Date.

(f) Possession. At the Closing, GBW and GBW Operating Sub shall deliver possession of the GBH Assets to GBH, and shall deliver possession of the Watco Assets to Millenium and Watco Mechanical as specified in Schedule 2.2(a), as of the opening of business on the Closing Date.

Section 2.6 Closing Cash Adjustments.

(a) Contributions. Each GBW Member shall make a contribution in accordance with its Sharing Ratio to the capital of GBW, to the extent expressly provided for in this Agreement or as otherwise approved by both the GBH Manager and Watco Manager, to cover any approved expenses of GBW and GBW Operating Sub known on the Closing Date, including severance payable to Management Employees who are not Transferred Employees pursuant to Section 3.2, and any statutory reserve, and will be obligated to fund its share of any expenses or Liabilities of the GBW Parties as provided herein.

(b) Cash on Hand. All cash on hand of any GBW Party at Closing or paid to any GBW Party pursuant to this Agreement shall remain with such GBW Party to pay obligations of such GBW Party (and may be transferred among the GBW Parties as approved by both the GBH Manager and Watco Manager), with any remaining cash balance to be distributed or transferred to the Greenbrier Member and Watco Members (in accordance with their Sharing Ratios) on December 31, 2018, less any necessary reserve amount determined by both the GBH Manager and Watco Manager and used or distributed as determined by both the GBH Manager and Watco Manager.

(c) Refunds; Trailing Payments. For a period of time from and after December 31, 2018 as determined by GBH in its reasonable discretion, GBH shall monitor the bank accounts of GBW and GBW Operating Sub and distribute to the Greenbrier Member and Watco Members (in accordance with their Sharing Ratios) any rebates, refunds or other trailing payments made to such accounts, except that any rebates, refunds or other trailing payments which by their nature should reasonably be paid in full or in accordance with some other allocation to the Greenbrier Member and/or the Watco Members as reasonably determined by the GBH Manager and the Watco Manager.

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Section 2.7 Mira Loma 2. Union Pacific has provided notice to GBW of its election to terminate the agreement relating to the Mira Loma 2 Shop effective September 19, 2018. As a result, except as specifically set forth in Section 2.2(b), all aspects of the Mira Loma 2 Shop, including its operations, assets, liabilities, and employees, will remain with GBW and will not be transferred to either of the GBW Members. Each of GBH, on the one hand, and the Watco Members, on the other hand, shall bear fifty percent (50%) of any and all costs, liabilities or expenses associated with the termination and winding up of the business at the Mira Loma 2 Shop.

Section 2.8 Existing Leases. In that the Master Personal Property Lease Agreements and Master Real Property Lease Agreements (the “Existing Leases”) will terminate as of Closing, rental payments shall cease accruing in connection with all the Existing Leases upon Closing. In the event leased personal property (“Leased Personal Property”) has been transferred to a Shop that will not be in the control of the Party that owns the Leased Personal Property, then, as determined by the GBH Manager and the Watco Manager, either (a) the Party in possession of the Leased Personal Property will purchase such Leased Personal Property from the Party that owns such property at a mutually agreed price and upon mutually agreed terms as determined by the GBH Manager and the Watco Manager, or (b) the GBH Manager and the Watco Manager will cause GBW Operating Sub to transfer such Leased Personal Property to a Shop controlled by the Party that owns the Leased Personal Property on or before the Closing Date.

Section 2.9 Terminations.

(a) The following existing agreements will terminate effective as of the Closing (or on September 19, 2018 as to any such agreements that are necessary for the continuation of the Mira Loma 2 Shop in accordance with Section 2.7, or at such other time as specifically set forth below), without any further action by the Parties (except that Greenbrier will cause to be delivered to the Watco Members, as of Closing, written agreement to such terminations by (i) Gunderson Rail Services LLC with respect to items (ii) and (iii) of this Section 2.9(a), and (ii) James A. Cowan, with respect to items (x) and (xi) of this Section 2.9(a)):

(i) Contribution Agreement;

(ii) Master Personal Property Lease Agreements;

(iii) Master Real Property Lease Agreements;

(iv) Credit Agreement, such termination effective immediately following the Closing;

(v) Security Agreement;

(vi) Guaranty;

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(vii) Tucson Facility Services Agreement between Greenbrier and GBW, dated July 18, 2014;

(viii) Services Agreement between Greenbrier and GBW, dated July 18, 2014, such termination effective as of December 31, 2018 (except that Section 5 thereof and the sections thereof referenced in Section 8.5 thereof which shall survive such termination, and except that such Services Agreement shall be deemed amended, effective as of Closing, in the respects described in Schedule 2.9(a)(viii));

(ix) Services Agreement between Watco and GBW, dated July 18, 2014, such termination effective as of December 31, 2018 (except that Section 5 thereof and the sections thereof referenced in Section 8.5 thereof which shall survive such termination, and except that such Services Agreement shall be deemed amended, effective as of Closing, in the respects described in Schedule 2.9(a)(ix));

(x) Secondment Agreement among Greenbrier, GBW, James A. Cowan and Watco, dated July 18, 2014;

(xi) Amendment to Employment Agreement between Greenbrier and James A. Cowan, dated July 18, 2014;

(xii) Employment Transition and Management Agreement among Greenbrier, GBW and Watco, dated July 18, 2014;

(xiii) Side Letter Agreement between GBW and Watco Mechanical, dated July 18, 2014;

(xiv) Side Letter Agreement between GBW and Millennium, dated July 18, 2014;

(xv) Side Letter Agreement between GBW and GBH, dated July 18, 2014;

(xvi) Email Correspondence between Matt McKenzie of Watco and Mark Rittenbaum of Greenbrier dated July 18, 2014, regarding the accounting treatment of GBH’s ownership interest in GBW; and

(xvii) Overland Park Sublease.

(b) Termination of Agreements. Without limiting the releases set forth in this Agreement, the Parties will be released from any further obligation under or with respect to any Contracts that are terminated as part of the Unwind Transactions except to the extent provided in this Section 2.9 and except for rental, lease and other payments relating to the period prior to termination of such Contracts and the lenders under the Credit Agreement will execute and deliver all documents necessary to terminate of record any security interests arising under the Security Agreement.

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Section 2.10 Information Sharing.

(a) The Information Sharing Agreements will survive the dissolution of GBW and GBW Operating Sub and terminate without any further action by the Parties upon the later of the termination of GBW or the termination of GBW Operating Sub; provided that the Parties agree that no further audits of the financial statements of GBW or GBW Operating Sub shall be conducted except as otherwise provided in this Section 2.10(a). The GBW Members will consider whether applicable accounting standards require, or it is otherwise prudent, that an audit of the financial statements of any one or more of the GBW Parties be performed hereafter; provided, however, that in the event any GBW Member requires additional accounting services (including any audit) other than those services that are required by both the Watco Members and GBH Member for reporting purposes in connection with the Unwind Transactions or the dissolution of the GBW Parties, the GBW Member requiring such services shall pay such expenses; provided further, and notwithstanding anything in this Section 2.10(a) to the contrary, in the event the Closing is extended to a date on or after August 31, 2018, then an audit of the financial statements of the GBW Parties will be performed by Grant Thornton and GBW shall pay the expenses of such audit.

(b) From and after the termination of the Information Sharing Agreements, upon the request of the Watco Parties and Greenbrier Parties, at the requesting Party’s expense (which shall be limited to reasonable out-of-pocket expenses except as provided otherwise in the Services Agreements), the other Parties agree to reasonably cooperate in providing information regarding the GBW Parties to the extent that the requesting Party requires such information in order to comply with reporting, disclosure, filing, record retention or other requirements (including under applicable securities or tax Laws, rules or regulations) by a Governmental Authority having jurisdiction over such Party or national securities exchange on which its securities are traded, including in connection with any offering of securities by such Party, or to comply with reporting or disclosure requirements under any credit agreement, indenture or other contractual obligation for borrowed money.

Section 2.11 Post-Closing Obligations of the Parties.

(a) Further Assurances. Each Party shall, from time to time following the Closing, at any other Party’s request and without further consideration, perform such acts and execute and deliver to such requesting Party such other and further instruments, documents and other considerations as such requesting Party may reasonably request for the more effective consummation of the Unwind Transactions and the satisfaction by such requesting Party of its obligations under this Agreement, including without limitation the transfer of vehicle titles for any vehicles included in the GBH Assets or the Watco Assets, as applicable.

(b) Access to Records. Subject to applicable anti-trust laws, for a period of seven (7) years following the Closing Date (or until their termination in the case of GBW and GBW Operating Sub), each Party shall maintain and allow any other Party the right, at its reasonable out-of-pocket cost and expense, to inspect and copy from time to time upon such other Party’s reasonable request, such maintaining Party’s books and records relating to the GBW Parties and the Business for the three-year period immediately preceding the Closing Date, as shall be necessary for the inspecting Party’s or its Affiliates’ preparation of any federal, state or local tax

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returns relevant to the GBW Parties or for any other reasonable purpose. Notwithstanding the foregoing or anything else herein to the contrary, none of the Greenbrier Parties or the Watco Parties shall be required to maintain any records that have been transferred to the other in accordance with Section 2.2(h) or otherwise, and a Party may delete such records once transferred. A Party receiving a transfer of records under Section 2.2(h) or otherwise shall provide promptly, upon the transferring Party’s request, written confirmation of the receipt and adequacy of such records.

(c) Discharge of Liabilities.

(i) Subject to any applicable statute of limitations and any valid defenses or setoffs, from and after the Closing Date, Greenbrier shall, or shall cause its Affiliates to, timely pay, satisfy and/or discharge in accordance with past practice or otherwise deal with all of the Greenbrier Assumed Liabilities, in such a manner as to prevent claims against Watco Parties with respect to the Greenbrier Assumed Liabilities.

(ii) Subject to any applicable statute of limitations and any valid defenses or setoffs, from and after the Closing Date, Watco shall, or shall cause its Affiliates to, timely pay, satisfy and/or discharge in accordance with past practice or otherwise deal with all of the Watco Assumed Liabilities, in such a manner as to prevent claims against Greenbrier Parties with respect to the Watco Assumed Liabilities.

(d) Settlement of Property. In the event that any Party discovers that it possesses or receives any property (including, but not limited to, cash, personalty, contracts, and books and records or other documents) on or after Closing that is or should be the property of any other Party in accordance with the terms of this Agreement, such discovering or receiving Party shall provide all such property to the appropriate Party within five (5) days of such discovery or receipt or, if impractical to do so, will notify the appropriate Party within such five (5) day period and deliver such property promptly thereafter.

(e) Allocations. The Parties will allocate all expenses relating to the Business to the date of Closing (other than Taxes which are addressed in Article VI) consistent with the Greenbrier Assumed Liabilities and Watco Assumed Liabilities, based upon the respective periods of ownership of applicable assets for the calendar year, or other applicable fiscal period in which the Closing occurs.

(f) Warranty Claims. Warranty claims relating to any work performed by the GBW Parties at any of the Shops shall be addressed as determined by the joint agreement of the GBH Manager and the Watco Manager; provided, however, that in the event that the GBH Manager and the Watco Manager cannot so agree on how to address a warranty claim within thirty (30) days after such warranty claim has been acknowledged or brought to the attention of the GBH Manager and the Watco Manager in writing, warranty claims relating to any work performed at any of the Shops shall be addressed in accordance with the following:

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(i) GBH Shops. Each of GBH, on the one hand, and the Watco Members, on the other hand, shall bear fifty percent (50%) of the actual cost necessary to perform any warranty work (including actual cost of labor, parts and materials used in such warranty work and applicable rail freight costs) relating to work performed at GBH Shops by the GBW Parties, and GBH shall bear one hundred percent (100%) of any and all costs necessary to perform any warranty work (including actual cost of labor, parts and materials used in such warranty work and applicable rail freight costs) relating to work performed at GBH Shops prior to operation of such GBH Shops by the GBW Parties or after the Closing.

(ii) Watco Shops. Each of GBH, on the one hand, and the Watco Members, on the other hand, shall bear fifty percent (50%) of the actual cost necessary to perform any warranty work (including actual cost of labor, parts and materials used in such warranty work and applicable rail freight costs) relating to work performed at Watco Shops and the Omaha West Shop by the GBW Parties, and the Watco Members shall bear one hundred percent (100%) of any and all costs necessary to perform any warranty work (including actual cost of labor, parts and materials used in such warranty work and applicable rail freight costs) relating to work performed at Watco Shops or the Omaha West Shop prior to operation of such Watco Shops or the Omaha West Shop by the GBW Parties or after the Closing.

(iii) JV Shops. Each of GBH, on the one hand, and the Watco Members, on the other hand, shall bear fifty percent (50%) of the actual cost necessary to perform any warranty work (including actual cost of labor, parts and materials used in such warranty work and applicable rail freight costs) relating to work performed at JV Shops (other than the Omaha West Shop) by the GBW Parties, and the Watco Members shall bear one hundred percent (100%) of any and all costs necessary to perform any warranty work (including actual cost of labor, parts and materials used in such warranty work and applicable rail freight costs) relating to work performed at JV Shops (other than the Omaha West Shop) after the Closing.

(iv) Mira Loma 2 Shop. Each of GBH, on the one hand, and the Watco Members, on the other hand, shall bear fifty percent (50%) of the actual cost necessary to perform any warranty work (including actual cost of labor, parts and materials used in such warranty work and applicable rail freight costs) relating to work performed at the Mira Loma 2 Shop prior to September 19, 2018, provided, however, that GBH shall bear one hundred percent (100%) of any and all costs necessary to perform any warranty work (including actual cost of labor, parts and materials used in such warranty work and applicable rail freight costs) relating to work performed at the Mira Loma 2 Shop prior to operation of such Mira Loma 2 Shop by the GBW Parties.

(v) Location of Work. Work as provided for in this Section 2.11(f) with respect to warranty claims relating to any work originally performed at a Shop will be performed at such Shop, except to the extent otherwise agreed by the GBH Manager and the Watco Manager.

(vi) Resolution of Pending Claims. Notwithstanding any other provision of this Section 2.11(f), work remaining to be performed with respect to outstanding warranty claims that relate to any work originally performed at a Shop and that are known to the GBW Members as of Closing must be resolved by mutual agreement of the GBH Manager and the Watco Manager.

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(g) Liabilities; Capital Contributions.

(i) The Watco Members and the Greenbrier Member agree to make additional capital contributions to GBW when and as called by GBW to satisfy costs, expenses and Liabilities incurred by the GBW Parties (other than costs, expenses and Liabilities included in the Greenbrier Assumed Liabilities or Watco Assumed Liabilities). Such additional capital contributions shall be made in accordance with each GBW Member’s Sharing Ratio, except that (A) the Watco Members will contribute an amount equal to 100% of such costs, expenses and Liabilities that arise out of the ownership or operation of assets or businesses by members of the Watco Parties prior to their contribution to the GBW Parties (the “Watco Pre-Contribution Liabilities”) and (B) the Greenbrier Member will contribute an amount equal to 100% of such costs, expenses and Liabilities that arise out of the ownership or operation of assets or businesses by members of the Greenbrier Parties prior to their contribution to the GBW Parties (the “Greenbrier Pre-Contribution Liabilities”). All additional capital contributions shall be made within five (5) Business Days after GBW provides notice to GBW Members of the call for additional capital contributions.

(ii) If the Watco Members fail to make any required capital contribution under Section 2.11(g), the Greenbrier Member may choose, in its sole and absolute discretion, to cause GBW to take (and is authorized to act on behalf and in the name of GBW in that regard) such action (including the filing of a lawsuit) and to exercise any other rights and remedies available at law or in equity as deemed appropriate to obtain payment of the additional capital contribution by the Watco Members. If the Greenbrier Member fails to make any required capital contribution under Section 2.11(g), the Watco Members may choose, in their sole and absolute discretion, to cause GBW to take (and are authorized to act on behalf and in the name of GBW in that regard) such action (including the filing of a lawsuit) and to exercise any other rights and remedies available at law or in equity as deemed appropriate to obtain payment of the additional capital contribution by the Greenbrier Member.

(iii) If any claim is made directly by any third party against any GBW Member(s) for costs, expenses or Liabilities of any GBW Party, under the Delaware Act or otherwise, the GBW Members shall be responsible for the costs of defense and for such costs, expenses and Liabilities in accordance with their Sharing Ratios, except that (i) the Watco Members will be responsible for all costs of defense of any claim relating to Watco Pre-Contribution Liabilities or Watco Assumed Liabilities and all costs, expenses and Liabilities of the GBW Parties that are Watco Pre-Contribution Liabilities or Watco Assumed Liabilities and (ii) the Greenbrier Member shall be responsible for all costs of defense of any claim relating to Greenbrier Pre-Contribution Liabilities or Greenbrier Assumed Liabilities and such costs, expenses and Liabilities of the GBW Parties that are Greenbrier Pre-Contribution Liabilities or Greenbrier Assumed Liabilities. Upon receipt by any GBW Member of any notice from any third party asserting any claim relating to any GBW Party, the GBW Member receiving such notice shall forward a copy of such

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notice to the other GBW Members within three (3) Business Days after receipt of notice. The GBW Member(s) responsible for costs, expenses and Liabilities with respect to such claim shall be entitled to control the defense of such claim and the other GBW Members shall reasonably cooperate in the defense of such claim. The GBW Member(s) controlling the defense do not need to obtain the prior written consent of the other GBW Member(s) who are parties to such claim to settle any claim if the settlement thereof involves only the payment of money by the GBW Member(s) controlling the defense of the claim and does not include any admission of Liability by any GBW Member; but if the settlement involves anything other than the payment of money by such GBW Members (including injunctive or equitable relief), then the GBW Member(s) controlling the defense must obtain the prior written consent of the other GBW Member(s) who are parties to such claim before entering into any such settlement; provided, that no settlement may be made unless such settlement expressly and unconditionally releases the other GBW Member(s) who are parties from all Liabilities and obligations with respect to such claim, with prejudice.

(h) Maintenance of Insurance. Schedule 2.11(h) contains a list of all insurance policies maintained by the GBW Parties. The liability and property insurance (including automobile liability and property insurance) maintained by the GBW Parties as of the Closing will remain in place following the Closing until September 19, 2018. The employment practices insurance package maintained by the GBW Parties as of the Closing will remain in place following the Closing until employment of all Transition Employees with GBW or GBW Operating Sub has terminated, or until such earlier time as the Watco Manager and the GBH Manager may mutually agree. The workers’ compensation insurance maintained by the GBW Parties as of the Closing will remain in place following the Closing until the applicable period of liability for worker’s compensation claims has ended, or until such earlier time as the Watco Manager and the GBH Manager may mutually agree, at which time any claims thereunder will be cashed out. All other insurance policies maintained by the GBW Parties will be terminated effective as of September 20, 2018, or promptly thereafter. GBH and the Watco Members shall bear, in accordance with their Sharing Ratios, the premiums and other costs for the insurance maintained by the GBW Parties. With respect to occurrences, events or claims arising under such policies relating to periods prior to Closing (including, without limitation, occurrences, events and claims relating to flooding of the Hollidaysburg Shop prior to Closing and including, without limitation, any related accruals, costs, expenses, damages, remediation and reserves with respect to such flooding of the Hollidaysburg Shop, whether arising or incurred prior to or following Closing, but subject to obligations of the GBW Members under Section 2.11(g)) or relating to periods after Closing and not subject to the immediately following sentence, GBH and the Watco Members shall bear, in accordance with their Sharing Ratios, the actual insurance costs and expenses (including any deductibles or self-insured retentions) relating to such occurrences, events or claims. With respect to occurrences, events or claims arising under such policies maintained by the GBW Parties relating to periods on or after Closing and that relate to any of the Shops or to any of the employees of the GBW Parties working at the Shops or designated to be hired by one of the Parties on September 1, 2018, the owner of the applicable Shop or the applicable Hiring Party shall bear one hundred percent (100%) of actual insurance costs and expenses (including any deductibles or self-insured retentions but excluding premiums as addressed above) relating to any such occurrences, events or claims. Each Party may at its sole cost and expense obtain such available tail, runoff or extended period insurance coverage as such Party may determine, and the Watco Manager and the GBH Manager may otherwise mutually agree to cause any of the GBW Parties to obtain other available tail, runoff or extended period insurance coverage on such basis as the Watco Manager and the GBH Manager may mutually approve.

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(i) Parental Guarantees. Greenbrier and Watco have provided the following parental guarantees relating to GBW (collectively, the “Parental Guarantees”): (A) the guarantees by each of Greenbrier and Watco relating to the U.S. Bank credit cards, (B) Letter of Credit number 68109579 issued on behalf of Greenbrier to Travelers in support of GBW and Letter of Credit number 68123113 issued on behalf of Greenbrier to Hartford Fire Insurance in support of GBW, and (C) Letter of Credit number BMCH489009OS issued on behalf of Watco to Hartford Fire Insurance Company in support of GBW and Letter of Credit number BMCH459746OS issued on behalf of Watco to The Travelers Indemnity Company in support of GBW. The Parental Guarantees will remain in place following the Closing until the related policies are sold or the applicable period of liability for worker’s compensation claims has ended and for the period required by the applicable financial institution issuing such letters of credit, or until such earlier time as the Watco Manager and the GBH Manager may mutually agree. Subject to the foregoing, the Parental Guarantees may be increased, decreased, terminated, amended, or replaced, as required or permitted from time to time, but only as the Watco Manager and the GBH Manager may mutually approve.

ARTICLE III.

ADDITIONAL AGREEMENTS

Section 3.1 Consents. Each Party shall proceed expeditiously and use its commercially reasonable efforts to procure upon reasonable terms and conditions any consents which are necessary for consummation of the Unwind Transactions at the earliest possible reasonable date. Without limiting the conditions to Closing set forth in this Agreement, with respect to any Contracts for which any required consent or approval is not obtained prior to the Closing Date, the Parties shall each use their commercially reasonable efforts to obtain any such consent or approval after the Closing Date until such consent or approval has been obtained. In the event and to the extent that the Parties are unable to obtain any required consents to the assignment of any Contract in accordance with the provisions of this Agreement, to the extent not prohibited under the terms of such Contract or under applicable Law, the Party that is intended to be the assignor shall subcontract or sublease to the Party that is intended to be the assignee all of the intended assignor’s rights, duties and obligations under such Contract arising after and relating to the period after Closing or enter into an alternative arrangement with the intended assignee whereby the intended assignee will receive the economic benefits of the Contract intended to be assigned. In such event, (a) the intended assignor shall (i) provide or cause to be provided to the intended assignee the benefits of such Contract (or portion thereof) intended to be assigned, and (ii) enforce for the account of the intended assignee any rights of the intended assignor arising from such Contract (or portion thereof) intended to be assigned, and (b) the intended assignee shall perform the obligations of the intended assignor arising under any such Contract (or portion thereof) intended to be assigned to the extent that, by reason of the Unwind Transactions or otherwise, the intended assignee has control over the resources necessary to perform such obligations, provided that the intended assignee shall not be responsible for any liabilities arising out of or resulting from any breach of such Contract

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intended to be assigned prior to the Closing Date (except for a breach occasioned by such subcontracting or subleasing to the intended assignee). If and when any required consent to assignment of any Contract intended to be assigned is obtained, the intended assignor shall promptly assign all of its rights and obligations thereunder to the intended assignee(s) in accordance with the terms of this Agreement without the payment of further consideration. Nothing in this Section 3.1 shall limit the intended assignor’s obligations to obtain approvals and consents as otherwise provided in this Agreement.

Section 3.2 Employees and Employee Benefits.

(a) Joint Venture Employees.

(i) GBW has separately provided to the Watco Parties and the Greenbrier Parties: (A) Schedule 3.2(a)(i)(A), which contains a true and correct list of all full-time and part-time employees of the GBW Parties who provide services at the Shops, other than Management Employees (collectively, the “Operational Employees”), and (B) Schedule 3.2(a)(i)(B), which contains a true and correct list of all management-level employees of the GBW Parties (collectively, the “Management Employees”), with each such Operational Employee and Management Employee identified by such employee’s job title, principal work location, date of hire, employment status (i.e., active or on leave or disability; full-time or part-time). The Operational Employees and Management Employees are sometimes referred to collectively herein as the “Business Employees”.

(ii) The Watco Parties shall offer employment to (A) all Operational Employees who are actively employed by the GBW Parties at a Watco Shop or JV Shop immediately prior to the Initial Transfer Date and (B) all Management Employees actively employed by the GBW Parties immediately prior to the Final Transfer Date and designated in Schedule 3.2(a)(i)(B) as persons to be offered employment by the Watco Parties. The Greenbrier Parties shall offer employment to (C) all Operational Employees who are actively employed by the GBW Parties at a GBH Shop immediately prior to the Initial Transfer Date and (D) all Management Employees actively employed by the GBW Parties immediately prior to the Final Transfer Date and designated in Schedule 3.2(a)(i)(B) as persons to be offered employment by the Greenbrier Parties. Each offer to an Operational Employee actively employed by the GBW Parties immediately prior to the Initial Transfer Date (A) shall provide for (1) the commencement of employment to be effective September 1, 2018 (each such Operational Employee remaining as an employee of GBW or GBW Operating Sub until such date), and (2) base salary, hourly wage or pay rate, as applicable, upon such terms as may be offered by the Hiring Party, and (B) shall be subject only to satisfaction of standard pre-hiring drug and background check requirements of the Party making the offer. Each offer to a Management Employee actively employed by the GBW Parties immediately prior to the Final Transfer Date (A) shall provide for (1) the commencement of employment to be effective as of the applicable Final Transfer Date for such Management Employee (each such Management Employee remaining as an employee of GBW or GBW Operating Sub until such date), and (2) base salary, hourly wage or pay rate, as applicable, upon such terms as may be offered by the Hiring Party, and (B) shall be subject only to satisfaction of standard pre-hiring drug and background check requirements of the Party making the offer. The Watco

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Parties and Greenbrier Parties will provide to GBW or GBW Operating Sub a list of the Business Employees who have received an offer of employment from such Party and who have accepted employment (the Operational Employees who accept such employment, the “Transferred Operational Employees” and the Management Employees who accept such employment, the “Transferred Management Employees”, and collectively the “Transferred Employees”), and a list of each Business Employee who has rejected such Party’s offer of employment. The “Initial Transfer Date” for each Transferred Operational Employee shall be September 1, 2018, and the “Final Transfer Date” for each Transferred Management Employee shall be January 1, 2019, or such earlier date as is either set forth in Schedule 3.2(a)(i)(B) or jointly determined by the GBH Manager and the Watco Manager (the Initial Transfer Date and Final Transfer Date are collectively referred to herein as the “Transfer Date”) except with respect to any Business Employee to whom an employment offer is made and who is on approved leave (including short-term disability, long-term disability, and FMLA) as of or following Closing, in which case the Transfer Date shall be the date upon which such Business Employee is eligible to return to work with GBW or GBW Operating Sub, as applicable. The Watco Party or Greenbrier Party hiring any Transferred Employee pursuant to this Agreement is sometimes referred to herein as the “Hiring Party” with respect to such Transferred Employee.

(iii) Effective as of August 31, 2018, GBW or GBW Operating Sub will, or will cause the appropriate Affiliate of GBW or GBW Operating Sub to, terminate the employment of all Operational Employees actively employed on such date, and effective as of the date immediately prior to the Management Employee’s applicable Final Transfer Date, GBW or GBW Operating Sub will, or will cause the appropriate Affiliate of GBW or GBW Operating Sub to, terminate the employment of each Management Employee actively employed on such date, other than Management Employees designated in Schedule 3.2(a)(i)(B) as persons who will continue employment with GBW and GBW Operating Sub for a transition period until terminated no later than the Termination Date following Closing that is indicated under the column labeled “Transition or Termination Date” for each such Management Employee as designated in Schedule 3.2(a)(i)(B) or as otherwise agreed by the Watco Manager and the GBH Manager (the “Transition Employees”). With respect to Business Employees who are not designated as Transferred Employees or Transition Employees, GBW or GBW Operating Sub may, or may cause the appropriate Affiliate of GBW or GBW Operating Sub to, terminate their employment with GBW or GBW Operating Sub prior to December 31, 2018 as agreed by the GBH Manager and Watco Manager.

(iv) The GBW Parties shall be responsible for the payment of all compensation of Business Employees relating to the period prior to and through the date of termination of employment of such Business Employees. GBW and GBW Operating Sub shall be responsible for all severance, change of control and other costs related to termination of employment under the terms of the employee benefit plans for or agreements with any Operational Employee or Management Employee who is not offered employment by any Watco Party or Greenbrier Party in accordance with this Agreement, and such obligations are described or listed on Schedule 3.2(a)(iv) for each Management Employee who is not a Transferred Employee or shall otherwise be approved by both the GBH Manager and the Watco Manager. For the period from and after the Closing Date until the Transfer

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Date: (A) the Watco Parties will reimburse the GBW Parties for their costs related to the employment of each Operational Employee actively employed by the GBW Parties at a Watco Shop or JV Shop (excluding in each case all insurance premiums and all costs related to termination of employment) and (B) the Greenbrier Parties will reimburse the GBW Parties for their costs related to the employment of each Operational Employee actively employed by the GBW Parties at a GBH Shop (excluding in each case all insurance premiums and all costs related to termination of employment). The Watco Members and the Greenbrier Member shall reimburse the GBW Parties for all other employment-related costs of Business Employees, including the costs of the Transition Employees, in accordance with their Sharing Ratios.

(v) The Parties agree to cooperate to cause the GBW Parties to comply with the WARN Act (or any similar state or local Law) to the extent applicable in connection with the Unwind Transactions.

(b) Benefits.

(i) The Hiring Party shall initially provide each Transferred Employee with: (A) retirement and welfare benefits which are substantially comparable to the retirement and welfare benefits that Hiring Party makes available to its similarly-situated employees prior to the applicable Transfer Date; and (B) severance benefits, if any, which are substantially comparable to the severance benefits that Hiring Party makes available to its similarly-situated employees prior to the applicable Transfer Date. GBW or GBW Operating Sub has provided to Hiring Party each such Transferred Employee’s recognized credited service, current vacation balances and participation, vesting and, as applicable, benefit accrual periods of service amounts under the applicable benefit plans as of the day immediately prior to the applicable Transfer Date. Hiring Party shall ensure that all of its benefit plans in which such Transferred Employees participate after the applicable Transfer Date, without duplication of benefits, recognize, to the extent applicable, each such Transferred Employee’s years of service with the GBW Parties (together with any predecessors thereof that previously employed any such Transferred Employees and as to which a GBW Party recognizes such years of service) prior to the applicable Transfer Date for eligibility and vesting purposes, and Hiring Party shall recognize such years of service for benefit accrual purposes under Hiring Party’s vacation/paid time off plan or policy, service award program, sickness plan, short-term disability plan and long-term disability plan, in each such case to the extent Hiring Party and/or its Affiliates sponsor such a plan and Transferred Employees participate in such a plan.

(ii) With respect to each Transferred Employee who elects to participate in Hiring Party’s welfare benefit plans which may be made available to such Transferred Employee and such Transferred Employee’s dependents, Hiring Party shall waive any pre-existing condition exclusions to coverage and any waiting period or service requirements that did not exist or were otherwise satisfied under the comparable benefit plans, to the extent permitted by the Hiring Party’s applicable welfare benefit plans. For each Transferred Employee who enrolls in Hiring Party’s health plan, Hiring Party shall also apply towards any deductible requirements and out-of-pocket maximum limits under

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its health plans applicable to Hiring Party’s benefit year in which the applicable Transfer Date occurs, any amounts paid by such Transferred Employee toward such requirements and limits under the benefit plans that are health plans during the period from and after the beginning of such benefit year of Hiring Party until the Transfer Date.

(iii) The applicable Hiring Party will carry over at its cost the accrued vacation entitlement as of the applicable Transfer Date of each Transferred Employee hired by such Hiring Party. From and after the applicable Transfer Date, each Transferred Employees shall accrue vacation time under the applicable Hiring Party’s vacation policy, if any, that is applicable to such Transferred Employee.

(iv) Nothing herein shall be deemed to (A) give rise to any rights, claims, benefits or causes of action to a Transferred Employee or any beneficiary thereof, (B) obligate any Hiring Party to provide any compensation or benefits to any Transferred Employee for any period of time or (C) prevent, restrict, or limit any Hiring Party from terminating the employment of any Transferred Employee at any time or from modifying or terminating any of its benefit plans, programs or policies from time to time as it may deem appropriate.

(v) The GBW Parties shall remain responsible for all claims for health, accident, sickness, death and disability benefits that are deemed incurred prior to the applicable Transfer Date by Transferred Employees or their eligible dependents (subject to the Parties’ reimbursement obligations in Section 3.2(a)(iv) to the extent applicable thereto), and the applicable Hiring Party shall be responsible for all such claims by Transferred Employees or their eligible dependents that are incurred on or after the applicable Transfer Date (to the extent such claims are covered under the applicable plans of such Hiring Party in which such Transferred Employees participate). For purposes of this paragraph, (A) a claim for health benefits (including claims for medical, prescription drug and dental expenses) will be deemed to have been incurred on the date on which the actual medical service, treatment or material was rendered to or received by the Transferred Employee or eligible dependent claiming such benefit, (B) a claim for accident, injury or disability benefits (including health benefits related to such claim) based on an injury occurring prior to the applicable Transfer Date will be deemed to have been incurred prior to the applicable Transfer Date, and (C) in the case of any claim for benefits other than those designated in the preceding clauses (A) and (B) (such as a claim for life insurance or disability benefits), a claim will be deemed to have been incurred upon the occurrence of the event giving rise to such claim. Claims for workers’ compensation benefits under any insurance policy, Contract or applicable Law arising out of occurrences prior to the applicable Transfer Date shall be the responsibility of GBW or GBW Operating Sub (subject to the Parties’ reimbursement obligations in Section 3.2(a)(iv) to the extent applicable thereto). Claims for workers’ compensation benefits under any insurance policy, Contract or applicable Law for Transferred Employees arising out of occurrences after the applicable Transfer Date shall be the responsibility of the applicable Hiring Party.

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(c) Collective Bargaining Agreements. All provisions of this Section 3.2 shall be subject to the requirements of any applicable CBA with respect to any Union Business Employee. The Parties shall cooperate in providing notices, to applicable counterparties under any applicable CBA with respect to any Union Business Employee, with respect to the Unwind Transactions, and the GBH Manager and the Watco Manager will use commercially reasonable efforts to seek from the counterparties to any such CBA a separation and restatement of that CBA on commercially reasonable terms as determined by the Watco Manager or the GBH Manager (as applicable based on the Party that is the applicable Hiring Party with respect to Union Business Employees under such CBA) that results, consistent with the purposes and intent of this Agreement, in a separate CBA, solely between the counterparties to such CBA and the applicable Hiring Party.

Section 3.3 Liens. From and after the Closing: (A) if any GBH Asset is subject to a Lien arising from, or related to, the obligations or actions of a Watco Party, such Watco Party will promptly cause such Lien to be lifted and released from such GBH Asset(s), and (B) if any Watco Asset is subject to a Lien arising from, or related to, the obligations or actions of a Greenbrier Party, such Greenbrier Party will promptly cause such Lien to be lifted and released from such Watco Asset(s).

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF WATCO PARTIES

Except as otherwise indicated on the Schedules, each of the Watco Parties represents and warrants to the Greenbrier Parties as follows:

Section 4.1 Organization. Each Watco Party is duly organized, validly existing and in good standing under the Laws of the state of its formation.

Section 4.2 Authorization. Each Watco Party has full power and authority to execute and deliver this Agreement and the Transaction Documents and to consummate the Unwind Transactions and to perform its obligations hereunder and thereunder. The execution, delivery and performance of this Agreement and the Transaction Documents by each Watco Party and the consummation of the Unwind Transactions have been duly authorized by all requisite action on the part of such Watco Party.

Section 4.3 Conflicts, Consents.

(a) Conflicts. Except as set forth in Schedule 4.3(a), the execution, delivery and performance of this Agreement and the Transaction Documents by each Watco Party, and the consummation by each Watco Party of the Unwind Transactions, do not and will not (i) conflict with or constitute a violation of or default or event of default under (or any event that, with or without notice or lapse of time or both, would constitute a default or event of default under), or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a benefit under, or require notice to or the Consent of any Person under any provision of (A) their respective Organizational Documents or (B) any Contract, mortgage, indenture, loan agreement, bond, deed of trust, other agreement, commitment or obligation for the borrowing of money or the obtaining of credit, material lease or other material agreement or instrument to which any Watco Party is a party or by which any Watco Party may be bound, (ii) conflict with any Law or Order applicable or relating to any Watco Party, or (iii) result in the creation or imposition of any

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Lien on any of the assets of any Watco Party, other than, in the case of clauses (i)(B), (ii) and (iii), any conflicts, violations or defaults that would not reasonably be expected to have a Material Adverse Effect on the ability of any Watco Party to consummate its obligations in regard to the Unwind Transactions. From and after the Closing, none of the Greenbrier Assets will be subject to a Lien arising from or related to the obligations or actions of a Watco Party.

(b) Consents. Except as set forth in Schedule 4.3(a), no Consent of or with any Governmental Authority or third Person is required to be obtained or made by any Watco Party in connection with the execution, delivery and performance by any Watco Party of this Agreement and the Transaction Documents or the consummation by any Watco Party of the Unwind Transactions.

Section 4.4 Litigation. There is no Proceeding pending or, to the knowledge of any Watco Party, threatened against any Watco Party that would have a Material Adverse Effect on the ability of any Watco Party to consummate its obligations regarding the Unwind Transactions.

Section 4.5 Enforceability. This Agreement constitutes the legal, valid and binding obligation of each Watco Party, enforceable against each Watco Party in accordance with its terms, except to the extent enforceability may be limited by (i) bankruptcy, insolvency, and other similar Laws (including court decisions) now or hereafter in effect and affecting the rights and remedies of creditors generally or providing for the relief of debtors generally and (ii) general principles of equity (regardless of whether such remedies are sought in a Proceeding in equity, admiralty or at law).

Section 4.6 Brokers and Finders. No Watco Party has employed any broker or finder in connection with the Unwind Transactions so as to give rise to any claim against any Greenbrier Party or any GBW Party for any brokerage or finder’s commission, fee or similar compensation.

Section 4.7 Inspections, No Other Representations. Each Watco Party is an informed and sophisticated party, and has engaged advisors, experienced in the evaluation and consummation of the Unwind Transactions. Each Watco Party has undertaken such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed decision with respect to the execution, delivery and performance of this Agreement. Each Watco Party acknowledges that the Greenbrier Parties and the GBW Parties have given Watco Parties access to the key employees, documents and facilities of GBW. Each of the Watco Parties will undertake prior to Closing such further investigation and request such additional documents and information as it deems necessary. Without limiting the generality of the foregoing, each Watco Party acknowledges that the Greenbrier Parties have not made and do not make any representation or warranty except as exclusively set forth in this Agreement.

Section 4.8 All GBW or Greenbrier Property. Each Watco Party has undertaken commercially reasonable efforts to discover any and all property in its possession (including, but not limited to, cash, personalty, contracts, and books and records or other documents) that is or should be the property of the GBW Parties or the Greenbrier Parties in accordance with the terms of this Agreement, and to ensure that all such property is owned by or transferred to the appropriate Party.

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Section 4.9 Customer Issues and Contracts. All customer agreements relating in any way to the GBH Shops of which the Watco Parties are aware, whether in written or oral form, have been disclosed and made available to the Greenbrier Parties and, except as set forth in Schedule 4.9 or previously disclosed in writing to the Greenbrier Parties, there are no material customer issues, material liabilities, or material disputes relating to any such customer agreements of which the Watco Parties are aware.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES OF GREENBRIER PARTIES

Except as otherwise indicated on the Schedules, the Greenbrier Parties, jointly and severally, represent and warrant to the Watco Parties as follows:

Section 5.1 Organization. Each Greenbrier Party is duly organized, validly existing and in good standing under the Laws of the state of its formation.

Section 5.2 Authorization. Each Greenbrier Party has full power and authority to execute and deliver this Agreement and the Transaction Documents and to consummate the Unwind Transactions and to perform its obligations hereunder and thereunder. The execution, delivery and performance of this Agreement and the Transaction Documents by each Greenbrier Party and the consummation of the Unwind Transactions have been duly authorized by all requisite action on the part of such Greenbrier Party.

Section 5.3 Conflicts, Consents.

(a) Conflicts. Except as set forth in Schedule 5.3(a), the execution, delivery and performance of this Agreement and the Transaction Documents by each Greenbrier Party, and the consummation by each Greenbrier Party of the Unwind Transactions, do not and will not (i) conflict with or constitute a violation of or default or event of default under (or any event that, with or without notice or lapse of time or both, would constitute a default or event of default under), or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a benefit under, or require notice to or the Consent of any Person under any provision of (A) their respective Organizational Documents or (B) any mortgage, indenture, loan agreement, bond, deed of trust, other agreement, commitment or obligation for the borrowing of money or the obtaining of credit, material lease or other material agreement or instrument to which any Greenbrier Party is a party or by which any Greenbrier Party may be bound, (ii) conflict with any Law or Order applicable or relating to any Greenbrier Party, or (iii) result in the creation or imposition of any Lien on any of the assets of any Greenbrier Party, other than, in the case of clauses (i)(B), (ii) and (iii), any conflicts, violations or defaults that would not reasonably be expected to have a Material Adverse Effect on the ability of any Greenbrier Party to consummate its obligations in regard to the Unwind Transactions. From and after the Closing, none of the Watco Assets will be subject to a Lien arising from or related to the obligations, or actions of a Greenbrier Party.

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(b) Consents. Except as set forth in Schedule 5.3(a), no Consent of or with any Governmental Authority or third Person is required to be obtained or made by any Greenbrier Party in connection with the execution, delivery and performance by any Greenbrier Party of this Agreement and the Transaction Documents or consummation by any Greenbrier Party of the Unwind Transactions.

Section 5.4 Litigation. There is no Proceeding pending or, to the knowledge of any Greenbrier Party, threatened against either Greenbrier Party that would have a Material Adverse Effect on the ability of either Greenbrier Party to consummate its obligations regarding the Unwind Transactions.

Section 5.5 Enforceability. This Agreement constitutes the legal, valid and binding obligation of each Greenbrier Party, enforceable against each Greenbrier Party in accordance with its terms, except to the extent enforceability may be limited by (i) bankruptcy, insolvency, and other similar Laws (including court decisions) now or hereafter in effect and affecting the rights and remedies of creditors generally or providing for the relief of debtors generally and (ii) general principles of equity (regardless of whether such remedies are sought in a Proceeding in equity, admiralty or at law).

Section 5.6 Brokers and Finders. No Greenbrier Party has employed any broker or finder in connection with the Unwind Transactions that will give rise to any claim against any Watco Party or any GBW Party for any brokerage or finder’s commission, fee or similar compensation.

Section 5.7 Inspections, No Other Representations. Each Greenbrier Party is an informed and sophisticated party, and has engaged advisors, experienced in the evaluation and consummation of the Unwind Transactions. Each Greenbrier Party has undertaken such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed decision with respect to the execution, delivery and performance of this Agreement. Each Greenbrier Party acknowledges that the Watco Parties and the GBW Parties have given Greenbrier Parties access to the key employees, documents and facilities of GBW. Each of the Greenbrier Parties will undertake prior to Closing such further investigation and request such additional documents and information as it deems necessary. Without limiting the generality of the foregoing, each Greenbrier Party acknowledges that the Watco Parties have not made and do not make any representation or warranty except as exclusively set forth in this Agreement.

Section 5.8 All GBW or Watco Property. Each Greenbrier Party has undertaken commercially reasonable efforts to discover any and all property in its possession (including, but not limited to, cash, personalty, contracts, and books and records or other documents) that is or should be the property of the GBW Parties or the Watco Parties in accordance with the terms of this Agreement, and to ensure that all such property is owned by or transferred to the appropriate Party.

Section 5.9 Brandon Railroad. No assets, employees, operations or liabilities relating to the Brandon Railroad were ever contributed or transferred to or assumed by any of the GBW Parties.

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Section 5.10 Customer Issues and Contracts. All customer agreements relating in any way to the JV Shops or Watco Shops of which the Greenbrier Parties are aware, whether in written or oral form, have been disclosed and made available to the Watco Parties and, except as set forth in Schedule 5.10 or previously disclosed to the Watco Parties in writing, there are no material customer issues, material liabilities, or material disputes relating to any such customer agreements of which the Greenbrier Parties are aware.

ARTICLE VI.

COVENANTS

Section 6.1 Tax Matters.

(a) The Parties agree to treat the transfer of GBH Assets and Watco Assets in dissolution of GBW and GBW Operating Sub hereunder for U.S. federal income Tax purposes as (i) distributions subject to the Watco Assumed Liabilities or Greenbrier Assumed Liabilities, as the case may be, and, as described in Section 2.3, subject to assumption of the Greenbrier Loan and the Watco Loans (with such distributions treated as current or liquidating, as appropriate pursuant to Code Sections 731 through 737), proportionate to the positive capital accounts of each of the GBW Members prior to such distributions (after reflecting adjustments made immediately prior to such distributions of property pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(e)(1)), which as a result of the distributions proportionate to positive capital accounts is deemed to result in a proportionate share of all of the Watco Assets in an amount of $5,000,000 having been distributed to GBH, (ii) subject to the provisions of Code Section 751(b), and (iii) immediately after the distributions, payment of the Watco Equalization Consideration directly by the Watco Members proportionate to their respective Sharing Ratios to the Greenbrier Member for the purchase of the portion of the Watco Assets deemed distributed to GBH as described in clause (i). For purposes of clause (ii), the fair market value of fixed assets shall be treated as their respective net book values for GAAP purposes as of the Closing Date, and no inventory shall be treated as having appreciated substantially in value as described in Code Section 751(b)(3). The Parties agree to, and agree to cause their Affiliates to, prepare and timely file all relevant Tax Returns, including preparation of the required Treas. Reg. § 1.751-1(b)(5) Statement within 90 days after the Closing Date.

(b) The Parties agree that the fair market value of the assets of the GBW Parties exceeds the amount of their liabilities both immediately prior to and immediately after the distribution made on the Closing Date.

(c) The Parties agree that neither they nor their Affiliates will take any position inconsistent with the treatment described in Sections 6.1(a) and (b) in notices to or filings with taxing authorities, in audits or other Proceedings with respect to Taxes, or in other documents or notices relating to the Unwind Transactions unless required to do so by a “determination” as defined in Section 1313 of the Code or required to do so by a change in applicable Law or pursuant to the good faith resolution with a taxing authority. Watco agrees to promptly advise GBH, and GBH agrees to promptly advise Watco, regarding the existence, progress and resolution of any Tax audit, controversy or litigation related to such reporting position as it relates to Watco and any of its Affiliates, on the one hand, or GBH and any of its Affiliates, on the other hand, and to consider the other Party’s position on such matter.

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(d) Millennium, as the tax matters partner and tax representative, shall cause GBW to prepare, on a basis consistent with past practice except to the extent otherwise agreed or required pursuant to applicable Tax Laws, Form 1065 (Return of Partnership Income) of GBW for each fiscal year until liquidated and file such Tax returns in a timely manner as required by applicable Law with the appropriate Governmental Authority, and each of the Parties shall perform their respective duties as further described in the Tax Matrix. Millennium shall provide GBH with a copy for its review and comment at least thirty (30) days before the extended due date for such Form 1065 (Return of Partnership Income), and shall reasonably consider comments provided by GBH within 15 days thereafter before filing such Tax return.

(e) Greenbrier and GBH agree, jointly and severally, to indemnify the GBW Parties for fifty percent (50%) of all Indemnified Taxes, and Millenium and Watco Mechanical agree, jointly and severally, to indemnify the GBW Parties for fifty percent (50%) of all Indemnified Taxes, regardless of whether the Indemnified Taxes are paid after the Closing. GBW shall provide reasonably prompt notice to Greenbrier, GBH, Millenium and Watco Mechanical of (i) any claim by any Governmental Authority for the payment of Indemnified Taxes after the Closing Date, and (ii) any determination by GBW that it is required to pay Indemnified Taxes after the Closing Date. Unless earlier payment is required by applicable Law, (i) the Parties will discuss in good faith whether such Indemnified Taxes may be reasonably contested, and (ii) if the Parties are not in mutual agreement thereon, the dispute will be resolved by a reasonably acceptable public accounting firm within the earlier of (x) twenty days, or (y) the date on which payment is required after exhaustion of all extensions. United States federal, state, local, and Canadian tax refunds will be shared 50% by Greenbrier and 50% by Watco (or their Affiliates as Greenbrier or Watco may respectively determine).

(f) The Parties agree to take the actions, including the filing of Tax Returns, specified in the Tax Matrix in a timely manner.

Section 6.2 Use of Names. As soon as reasonably practicable but in no event later than six months following the Closing Date (except to the extent reasonably necessary to facilitate the winding up of GBW and GBW Operating Sub), each Party shall, and shall cause their respective Affiliates to (a) cease to use the name “GBW Railcar Services Holdings, LLC” and “GBW Railcar Services, L.L.C.” or any service marks, trademarks, trade names, identifying symbols, logos, emblems, signs or insignia related thereto or containing or comprising the foregoing, including any name or mark confusingly similar thereto (collectively, the “GBW Operating Subject Marks”) and (b) remove, strike over or otherwise obliterate all GBW Operating Subject Marks from all materials including, without limitation, any vehicles, business cards, schedules, stationery, packaging materials, displays, signs, promotional materials, manuals, forms, computer software and other materials.

Section 6.3 Confidential Information.

(a) For a period of two years after the Closing, each Watco Party and Greenbrier Party agrees to, and shall instruct their respective agents, representatives and Affiliates to, treat and hold as confidential, and not disclose, furnish, disseminate, publish, or make available, any Confidential Information possessed by or known to such Party, whether procured before or after the Closing Date. Each Watco Party and Greenbrier Party may disclose any such Confidential

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Information to their respective representatives and agents as may be reasonably necessary in order to enable them to carry out the provisions of this Agreement and the Transaction Documents; provided, that before any such disclosure, the applicable Party shall make those representatives and agents aware of their obligations of confidentiality under this Agreement and shall be responsible for any noncompliance by, those representatives or agents with such confidentiality obligations.

(b) Notwithstanding the foregoing, any Watco Party or Greenbrier Party shall be permitted to disclose any and all Confidential Information: (1) to prepare its annual and interim financial statements, (2) to comply with reporting, disclosure, filing or other requirements imposed on such Party (including under applicable securities and Tax Laws) by applicable Law or by a Governmental Authority having jurisdiction over such Party (including in connection with any offering of securities by such Party), (3) to comply with reporting or disclosure requirements of such Party under any credit agreement, indenture or other contractual obligation for borrowed money by any security, (4) for use in any other judicial, regulatory, administrative or other Proceeding or in order to satisfy audit, accounting, claims, regulatory, litigation or other similar legal or regulatory requirements, (5) relating to any Shops acquired by such Party or its Affiliates pursuant to this Agreement and (6) as provided in any Information Sharing Agreement to which such Party is a party.

(c) In the event that any Party or anyone to whom such Party disclosed any Confidential Information shall be legally compelled or required by any Governmental Authority to disclose any Confidential Information other than as permitted by this Agreement, such Party agrees, except as may be prohibited by Law, to promptly provide written notice to all other Parties to enable any Party, at their cost and expense, to seek a protective order, in camera process or other appropriate remedy to avoid public or third-party disclosure of such Confidential Information. In the event that such protective order or other remedy is not obtained, the applicable Party shall furnish only so much of such Confidential Information as it is legally compelled to disclose (upon advice of its legal counsel) and shall exercise its commercially reasonable efforts to obtain reliable assurance that confidential treatment will be accorded such Confidential Information. Such Confidential Information shall otherwise remain subject to the provision of this Section 6.3. Each Party shall cooperate with and assist the other Parties in seeking any protective order or other relief requested pursuant to this Section 6.3.

(d) That certain Mutual Confidentiality and Non-Disclosure Agreement effective as of December 5, 2017 by and between Greenbrier and Watco (the “Confidentiality Agreement”), shall continue in full force and effect in accordance with its terms. The obligations in the Confidentiality Agreement are in addition to and do not limit or amend the obligations in this Agreement or any other agreement or document entered into pursuant to this Agreement, provided that the Parties shall be permitted to make disclosures as provided in this Agreement.

Section 6.4 Commercially Reasonable Efforts. Upon the terms and subject to the conditions of this Agreement, each of the Parties hereto shall use its commercially reasonable efforts to take, or cause to be taken, all appropriate action, and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws or otherwise to consummate and make effective the Unwind Transactions, including, without limitation, using its commercially reasonable efforts to obtain all necessary actions or non-actions, waivers, Consents, clearances, approvals, and expirations or terminations of waiting periods, from Governmental Authorities and other Persons.

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Section 6.5 Releases.

(a) Release by Greenbrier Parties. Each of the Greenbrier Parties, for itself and its respective successors and assigns, does hereby, except as provided in Section 6.5(d), forever irrevocably and unequivocally release, discharge, waive, agree to indemnify and hold harmless, and covenant not to sue, the Watco Parties and the GBW Parties and their respective Affiliates, and their respective officers, directors, shareholders, members, managers, employees, agents, representatives, successors and assigns (collectively the “Watco Released Parties”), from, against and with respect to any and all causes of action, claims, demands, rights or remedies, whether at law or in equity and regardless of the grounds for liability, that the Greenbrier Parties may have against any of the Watco Released Parties with respect to any compensation, consideration, costs, expenses (including, without limitation, attorneys’ fees and legal expenses), damages (actual, consequential, incidental, indirect, punitive, special, or otherwise), liabilities (whether based on Contract, statute, common law, tortious conduct, strict liability, or otherwise), losses, or obligations, whether known or unknown, foreseen or unforeseen, asserted or unasserted, fixed or contingent, direct or indirect (including, without limitation, as a third party beneficiary), in any way arising from, related to, or in connection with each GBW Party or its formation, operation, dissolution, winding up, or other respect, in each case to the extent arising or based upon acts, omissions or circumstances of any Watco Released Parties occurring or existing prior to the Closing.

(b) Release by Watco Parties. Each of the Watco Parties, for itself and its respective successors and assigns, does hereby, except as provided in Section 6.5(d), forever irrevocably and unequivocally release, discharge, waive, agree to indemnify and hold harmless, and covenant not to sue, each of the Greenbrier Parties and GBW Parties and their respective Affiliates and their respective officers, directors, shareholders, members, managers, employees, agents, representatives, successors and assigns (collectively the “Greenbrier Released Parties”), from, against and with respect to any and all causes of action, claims, demands, rights or remedies, whether at law or in equity and regardless of the grounds for liability, that such Watco Party may have against any of the Greenbrier Released Parties with respect to any compensation, consideration, costs, expenses (including, without limitation, attorneys’ fees and legal expenses), damages (whether actual, consequential, incidental, indirect, punitive, special, or otherwise), liabilities (whether based on Contract, statute, common law, tortuous conduct, strict liability, or otherwise), losses, or obligations, whether known or unknown, foreseen or unforeseen, asserted or unasserted, fixed or contingent, direct or indirect (including, without limitation, as a third party beneficiary), in any way arising from, related to, or in connection with each GBW Party or its formation, operation, dissolution, winding up, or other respect, in each case to the extent arising or based upon acts omissions or circumstances of any Greenbrier Released Parties occurring or existing prior to the Closing.

(c) Release by GBW Parties. Each of the GBW Parties, for itself and its respective successors and assigns, does hereby, except as provided in Section 6.5(d), forever irrevocably and unequivocally release, discharge, waive, agree to indemnify and hold harmless, and covenant not to sue, the Greenbrier Released Parties and the Watco Released Parties from, against and

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with respect to any and all causes of action, claims, demands, rights or remedies, whether at law or in equity and regardless of the grounds for liability, that such GBW Party may have against any of the Greenbrier Released Parties or the Watco Released Parties with respect to any compensation, consideration, contributions, costs, expenses (including, without limitation, attorneys’ fees and legal expenses), damages (actual, consequential, incidental, indirect, punitive, special, or otherwise), liabilities (whether based on Contract, statute, common law, tortuous conduct, strict liability, or otherwise), losses, or obligations, whether known or unknown, foreseen or unforeseen, asserted or unasserted, fixed or contingent, direct or indirect (including, without limitation, as a third party beneficiary), in any way arising from, related to, or in connection with (i) each GBW Party or its formation, operation, dissolution, winding up, or other respect, or (ii) any and all other persons or entities, agreements, business, intellectual property, or other matters, whether related to any GBW Party or otherwise, to the extent arising or based upon acts, omissions or circumstances of any GBW Parties or their Affiliates (including any of the Greenbrier Released Parties or the Watco Released Parties), successors, or assigns, occurring or existing prior to the Closing; provided that for purposes of this Section 6.5(c), the Greenbrier Released Parties and the Watco Released Parties shall not include any employee of any GBW Party.

(d) Reservation of Claims and Rights. Notwithstanding anything set forth herein to the contrary, the Parties shall each retain the right to bring a claim or cause of action, and/or to seek appropriate remedies, from such persons or entities as would be liable in the absence of any release under this Section 6.5, for or with respect to any claims for any breach of any obligations, representations or warranties under this Agreement or under any Transaction Documents, or based on acts or omissions occurring from and after the Closing.

Section 6.6 Transaction Expenses. All transfer, documentary, sales, use, stamp, registration, value added and other such Taxes and fees (including any penalties and interest) incurred in connection with the Unwind Transactions (including any real property transfer Tax and any other similar Tax but excluding any income Tax or property Tax) shall be borne and paid when due by the applicable transferee. The applicable Greenbrier Parties and Watco Parties shall cooperate, each at its own expense, to timely file any Tax return or other document with respect to such Taxes or fees.

Section 6.7 Cooperation. Subject to all applicable anti-trust laws, the Greenbrier Parties and Watco Parties shall cooperate as may be reasonably necessary or desirable to effect completely the Unwind Transactions and the other transactions contemplated under this Agreement or the Transaction Documents, including obtaining any customer or other consents, the opening and closing of Tax accounts, the carryover of wage bases for payroll tax purposes, minimizing or eliminating transfer Taxes, and the transfer of business licenses and permits to the extent reasonably practical. Any approvals, adjustments, agreements, consents, or determinations by any Party hereunder, including any approval, adjustment, agreement, consent, or determination by the GBH Manager or Watco Manager, shall be in writing and shall not be unreasonably withheld, conditioned, or delayed.

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Section 6.8 Withdrawals. The transferee of each Shop shall be responsible for preparing and filing all withdrawals for Secretary of State purposes, Tax registration withdrawals and transfer Tax filings in the state or other jurisdiction where such Shop is located, within ninety (90) days after Closing as contemplated by the Tax Matrix, unless a longer period is reasonably necessary. To the extent there are Shops in a single jurisdiction transferred to GBH and any of the Watco Members, GBH and the Watco Members shall reasonably cooperate in preparing and making such filings with respect to such jurisdiction.

Section 6.9 Dispute Resolution. Any disputes between the Parties in regard to application, interpretation or enforcement of any provision hereof shall be addressed by discussions and negotiations between the GBH Manager on behalf of the Greenbrier Parties and the Watco Manager on behalf of the Watco Parties, and if such persons are unable to resolve the dispute within thirty (30) days after any discussions or negotiations commence with respect to such dispute, then the Parties may avail themselves of all other rights or remedies under this Agreement or otherwise available at law or in equity.

ARTICLE VII.

GENERAL PROVISIONS

Section 7.1 Expenses. Except as otherwise expressly provided herein, each Party will bear its own expenses incurred in connection with this Agreement and the Transaction Documents and the transactions contemplated hereby and thereby, including all fees of its legal counsel, financial advisers and accountants.

Section 7.2 Press Release. Promptly, but in no event later than four (4) days, after the Closing Date, Watco and Greenbrier may issue a mutually agreeable joint press release regarding the transactions contemplated by this Agreement. No Greenbrier Party or Watco Party or any of their respective Affiliates will issue any additional press release or make any public announcements regarding such matters without the prior written consent of the GBH Manager or Watco Manager, respectively. Notwithstanding the foregoing or anything to the contrary contained in this Agreement or in any Transaction Document, Watco or Greenbrier may at any time, and from time to time, make public disclosures regarding such matters as may be required pursuant to any applicable public company filing requirements, securities Laws (including in connection with any offering of securities by such Party) or requirements related to the Parties’ indentures, including filing any Form 8-K and any exhibits thereto, including requirements to file a copy of this Agreement (redacted to the extent reasonably permitted by applicable Law) or to disclose information regarding the provisions hereof or performance hereunder to applicable regulatory authorities.

Section 7.3 Notices. Any notice, request, consent or communication under this Agreement will be effective only if it is in writing and (a) personally delivered, (b) sent by certified mail, return receipt requested, postage prepaid, (c) sent by a nationally recognized overnight delivery service, with delivery confirmed, or (d) sent via facsimile transmission, with a copy sent on the same day by one of the methods set forth in clauses (a) or (c), addressed as follows:

If to any Watco Party:

Watco Companies, L.L.C.

315 W. 3rd Street

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Pittsburg, KS 66762

Attn: Rick Webb, Chief Executive Officer

Fax: (620) 231-0812

with a copy to:

Watco Companies, L.L.C.

315 W. 3rd Street

Pittsburg, KS 66762

Attn: Craig Richey, General Counsel

Fax: (620) 231-0812

If to any Greenbrier Party:

c/o The Greenbrier Companies, Inc.

One Centerpointe Drive, Suite 200

Lake Oswego, Oregon 97035

Attn: William Furman, President and Chief Executive Officer

Fax: (503) 684-7553

with a copy to:

The Greenbrier Companies, Inc.

One Centerpointe Drive, Suite 200

Lake Oswego, Oregon 97035

Attn: Martin R. Baker, Senior Vice President, Chief Compliance Officer and General Counsel

Fax: (503) 684-7553

If to any GBW Party:

GBW Railcar Services, L.L.C.

c/o Watco Companies, L.L.C.

315 W. 3^rd Street

Pittsburg, KS 66762

Attn: Rick Webb, Chief Executive Officer and

         Craig Richey, General Counsel

Fax: (620) 231-0812

and

c/o The Greenbrier Companies, Inc.

One Centerpointe Drive, Suite 200

Lake Oswego, Oregon 97035

Attn: William Furman, President and Chief Executive Officer and

         Martin R. Baker, Senior Vice President, Chief Compliance Officer and

         General Counsel

Fax: (503) 684-7553

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or such other Persons or addresses as are furnished in writing by any party to the other party, and will be deemed to have been given only upon its delivery in accordance with this Section 7.3.

Section 7.4 Assignment, Successors. This Agreement shall not be assignable by any Party hereto without the prior written consent of all of the other Parties; provided that any Watco Party or Greenbrier Party may assign its rights hereunder to any Affiliate of such Party provided that the assigning Party remains liable for its obligations hereunder. Any attempt to assign this Agreement without such consent shall be void and of no effect. This Agreement shall inure to the benefit of, and be binding on and enforceable against, the Parties hereto and the successors and permitted assigns of the respective Parties hereto.

Section 7.5 No Third Party Beneficiaries. Nothing in this Agreement, expressed or implied, is intended or shall be construed to confer any right, remedy or claim under or by reason of this Agreement upon any Person, including any claimant, creditor, or other third party, other than the Parties, the Greenbrier Released Parties, the Watco Released Parties, and successors and assigns permitted by Section 7.4.

Section 7.6 Amendment, Waivers, etc. No amendment, modification or discharge of this Agreement, and no waiver hereunder, shall be valid or binding unless set forth in writing and duly executed by the Party against whom enforcement of the amendment, modification, discharge or waiver is sought. Any such waiver shall constitute a waiver only with respect to the specific matter described in such writing and shall in no way impair the rights of the Party granting such waiver in any other respect or at any other time. Neither the waiver by any of the Parties hereto of a breach of or a default under any of the provisions of this Agreement or to exercise any right or privilege hereunder, shall be construed as a waiver of any other breach or default of a similar nature, or as a waiver of any of such provisions, rights or privileges hereunder. The rights and remedies herein provided are cumulative and none is exclusive of any other, or of any rights or remedies that any party may otherwise have at Law or in equity.

Section 7.7 Entire Agreement.

(a) This Agreement (including the Schedules and the exhibits referred to herein or attached hereto), the Second Amended and Restated GBW LLC Agreement and the Confidentiality Agreement constitute the entire agreement among the Parties and supersede all prior agreements and understandings, both written and oral, between the Parties with respect to the subject matter hereof.

(b) The Parties hereto have participated jointly in the negotiation and drafting of this Agreement and the Transaction Documents and, in the event an ambiguity or question of intent or interpretation arises, this Agreement and the Transaction Documents shall be construed as jointly drafted by the Parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement or the Transaction Documents. Further, prior drafts of this Agreement or any ancillary agreements hereto or the fact that any clauses have been added, deleted or otherwise modified from any prior drafts of this Agreement or any ancillary agreements hereto shall not be used as an aid of construction or otherwise constitute evidence of the intent of the Parties hereto; and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of such prior drafts.

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Section 7.8 Severability. If any provision, including any phrase, sentence, clause, section or subsection, of this Agreement is invalid, inoperative or unenforceable for any reason, such circumstances shall not have the effect of rendering such provisions in question invalid, inoperative or unenforceable in any other case or circumstance, or of rendering any other provision herein contained invalid, inoperative, or unenforceable to any extent whatsoever.

Section 7.9 Headings and Recitals. The headings contained in this Agreement are for purposes of convenience only and shall not affect the meaning or interpretation of this Agreement. The recitals set forth at the beginning of this Agreement are incorporated by reference in, and made a part of, this Agreement.

Section 7.10 Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall together constitute one and the same instrument. The signature of any party hereto to any counterpart hereof shall be deemed a signature to, and may be appended to, any other counterpart hereof. In the event that any signature to this Agreement or any ancillary agreement is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof. Once signed, this Agreement may be delivered by facsimile or “.pdf” format, and any reproduction of this Agreement made by reliable means (e.g., photocopy, facsimile or portable document format) is considered an original.

Section 7.11 Governing Law; Consent to Forum. This Agreement shall be governed, interpreted, construed and enforced exclusively by, and in accordance with, the Laws of the State of Delaware. Any suit, action or Proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement, whether in contract, tort or otherwise, must be brought in the federal courts of the United States of America located in the District of Delaware, or the courts of the State of Delaware, so long as one of such courts have subject-matter jurisdiction over the suit, action or Proceeding, and that any cause of action arising out of this Agreement will be deemed to have arisen from a transaction of business in the State of Delaware. Each of the Parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or Proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection that it may now or later have to the laying of the venue of any such suit, action or Proceeding in any such court or that any such suit, action or Proceeding that is brought in any such court has been brought in an inconvenient form. Service of process, summons, notice or other document by registered mail to the address set forth in Section 7.3 will be effective service of process for any suit, action or other Proceeding brought in any such court.

Section 7.12 Enforcement of Agreement. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached. It is accordingly agreed that, in addition to any other applicable remedies at Law or in equity, the Parties shall be entitled to an

43

injunction or injunctions, without proof of damages, to specifically enforce the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of the other Party under this Agreement. Each Party further agrees that no other Party or any other Person shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy available pursuant to this Section 7.12, and each Party irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument in connection with or as a condition to obtaining any remedy available pursuant to this Section 7.12.

Section 7.13 Waiver of Jury Trial. The Parties hereby knowingly, voluntarily, and intentionally waive any rights they may have to a trial by jury in respect of any litigation based hereon, or arising out of, under, or in connection with, this Agreement, or any course of conduct, course of dealing, or statements (whether verbal or written) of the Parties.

[Signature pages on following pages]

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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first above written.

THE GREENBRIER COMPANIES, INC.
By:	/s/ Martin R. Baker
Name:	Martin R. Baker
Title:	Senior Vice President, General Counsel and
	Chief Compliance Officer
GREENBRIER RAIL SERVICES HOLDINGS, LLC
By:	/s/ Martin R. Baker
Name:	Martin R. Baker
Title:	Senior Vice President
WATCO COMPANIES, L.L.C.
By:	/s/ Rick D. Baden
Name:	Rick D. Baden
Title:	President and Chief Financial Officer
MILLENNIUM RAIL, L.L.C.
By:	/s/ Rick D. Baden
Name:	Rick D. Baden
Title:	President and Chief Financial Officer
WATCO MECHANICAL SERVICES, L.L.C.
By:	/s/ Rick D. Baden
Name:	Rick D. Baden
Title:	President and Chief Financial Officer

[SIGNATURE PAGE TO DISSOLUTION AGREEMENT]

GBW RAILCAR SERVICES HOLDINGS, L.L.C.
By:	/s/ Cheryl Balkenhol
Name:	Cheryl Balkenhol
Title:	Chief Financial Officer
GBW RAILCAR SERVICES, L.L.C.
By:	/s/ Cheryl Balkenhol
Name:	Cheryl Balkenhol
Title:	Chief Financial Officer
GBW RAILCAR SERVICES CANADA, INC.
By:	/s/ Cheryl Balkenhol
Name:	Cheryl Balkenhol
Title:	Chief Financial Officer

[SIGNATURE PAGE TO DISSOLUTION AGREEMENT]

EX-10.27

Exhibit 10.27

EXECUTION COPY

SECOND

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

GBW RAILCAR SERVICES HOLDINGS, L.L.C.

(a Delaware limited liability company)

THESE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE

SECURITIES ACT OF 1933 OR

PURSUANT TO THE PROVISIONS OF ANY STATE SECURITIES ACT

CERTAIN RESTRICTIONS ON TRANSFERS OF INTERESTS

ARE SET FORTH HEREIN

TABLE OF CONTENTS

		Page
ARTICLE 1 Definitions			1
ARTICLE 2 Organization			2
Section 2.1	Formation		2
Section 2.2	Name, Principal Office		2
Section 2.3	Registered Office and Registered Agent		2
Section 2.4	Purpose, Powers and Business		2
Section 2.5	Outside Activities		2
Section 2.6	Services		3
Section 2.7	Term		3
ARTICLE 3 Company Capital			3
Section 3.1	Capital Contributions and Loans of the Members		3
Section 3.2	Additional Funding by the Members		3
Section 3.3	Company Capital		3
Section 3.4	Liability of Members		4
Section 3.5	Loans by Members or Affiliates		4
Section 3.6	Capital Accounts		4
Section 3.7	Sharing Ratios		5
Section 3.8	Remedies for Non-payment of Winding Up Payment Obligations		6
ARTICLE 4 Managers			6
Section 4.1	Number and Qualifications		6
Section 4.2	Actions With or Without a Meeting and Telephone Meetings		6
Section 4.3	Powers and Voting Rights of the Managers		6
Section 4.4	Restrictions on the Powers of Managers Acting Individually		7
Section 4.5	Transactions with Related Parties		7
Section 4.6	Indemnification of Managers		7
Section 4.7	Limitations on Liability of Members and Managers		8
Section 4.8	Officers		9
Section 4.9	Dispute Resolution		12
ARTICLE 5 Allocations and Distributions			12
Section 5.1	Distributions		12
Section 5.2	Profits, Losses and Distributive Shares of Tax Items		13
Section 5.3	Tax Withholding		16
Section 5.4	Compliance with Code		16
Section 5.5	Basis Adjustment		16
ARTICLE 6 Dispositions of Membership Interests			16
Section 6.1	Restrictions on Disposition		16
Section 6.2	Assignees		17
Section 6.3	Additional and Substituted Members		18

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ARTICLE 7 Books and Records; Accounting; Reporting; Tax Elections; Etc.		18
Section 7.1	Books and Records; Financial Statements	18
Section 7.2	Accounting Basis for Tax Reporting Purposes; Tax Matters Member	19
Section 7.3	Tax Reports	21
Section 7.4	Tax Elections	21
ARTICLE 8 Dissolution, Liquidation and Termination of the Company		22
Section 8.1	Dissolution, Winding Up, and Termination of the Company and GBW Operating Sub	22
Section 8.2	Use of Cash on Hand	22
Section 8.3	Distributions in Kind	23
Section 8.4	Date of Termination	23
Section 8.5	Waiver of Partition	23
Section 8.6	Certificate of Cancellation	23
ARTICLE 9 Representations and Warranties of the Members		23
Section 9.1	Access to Information	23
Section 9.2	No Registration	24
Section 9.3	No Tax Representations	24
ARTICLE 10 Meetings of Members		24
Section 10.1	Place of Meetings	24
ARTICLE 11 Miscellaneous Provisions		24
Section 11.1	Address for Notices	24
Section 11.2	Additional Documents and Acts	24
Section 11.3	Applicable Law; Forum; Waiver of Jury Trial	25
Section 11.4	Confidentiality	25
Section 11.5	Amendments	26
Section 11.6	Binding Effect	27
Section 11.7	No State-Law Partnership	27
Section 11.8	Entire Agreement	27
Section 11.9	Severability	27
Section 11.10	No Waiver	27
Section 11.11	Counterparts	28
Section 11.12	Approvals	28
Section 11.13	Creditors and Other Third Parties Not Benefited	28
Section 11.14	Successors and Assigns	28
Section 11.15	Exhibits and Schedules	28

Schedule 1	Names, Addresses, Capital Accounts and Sharing Ratios of the Members
Schedule 2	List of Managers
Exhibit A	Glossary; Certain Interpretive Matters

ii

SECOND

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

GBW RAILCAR SERVICES HOLDINGS, L.L.C.

This Second Amended and Restated Limited Liability Company Agreement of GBW Railcar Services Holdings, L.L.C. (the “Company”), dated August 20, 2018, is hereby duly adopted, approved, ratified, and confirmed as the limited liability company agreement of the Company by the Persons signing this Agreement as the Members of the Company.

WHEREAS, the Company was formed as a Delaware limited liability company pursuant to a Certificate of Formation filed with the Secretary of State of the State of Delaware on June 4, 2014 in accordance with the Act;

WHEREAS, the Company formed GBW Railcar Services, L.L.C., a Delaware limited liability company (“GBW Operating Sub”) as a wholly-owned subsidiary of the Company;

WHEREAS, the parties now desire to dissolve and wind up the Company and GBW Operating Sub, as contemplated and provided for in that certain Dissolution Agreement, dated August 20, 2018, as entered into by and between the parties hereto and certain of their Affiliates (the “Dissolution Agreement”), and, in connection with such dissolution and winding up as contemplated and provided for in the Dissolution Agreement, desire to enter into this Agreement for purposes of amending and restating in its entirety the Company’s existing Amended and Restated Limited Liability Company Agreement dated as of July 18, 2014 (the “Prior LLC Agreement”), effective immediately after the Closing under the Dissolution Agreement (the “Effective Time”); and

WHEREAS, the parties desire to set forth the applicable terms that will apply to the Company as a limited liability company during the continuation of its existence while winding up in accordance with the Act and the Dissolution Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual promises set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1

Definitions

All capitalized terms used in this Agreement have the meanings specified herein or in the Glossary attached as Exhibit A. In addition, the interpretive matters set forth in Exhibit A are incorporated herein, and any capitalized terms used in this Agreement but not otherwise defined herein have the meanings specified in the Dissolution Agreement.

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ARTICLE 2

Organization

Section 2.1 Formation.

The Company was formed upon the filing of the Certificate of Formation of the Company with the Delaware Secretary of State on June 4, 2014, pursuant to the Act.

Section 2.2 Name, Principal Office.

The name of the Company is GBW Railcar Services Holdings, L.L.C. The Company will maintain its principal office at the address determined by the Managers from time to time. The Managers may at any time change the location of the Company’s office and may establish additional offices if they deem it advisable. The Managers (or the applicable Officer, if authorized by the Managers) will promptly give any other Persons written notice of any change in location of the principal office of the Company, to the extent necessary.

Section 2.3 Registered Office and Registered Agent.

The Company’s registered office in the State of Delaware is located at 2711 Centerville Road, Suite 400, Wilmington, Delaware, 19808, New Castle County, and the name of its registered agent at such address for service of process will be Corporation Service Company, or such other registered office or registered agent as the Managers may determine from time to time.

Section 2.4 Purpose, Powers and Business.

(a) Purpose. The purposes and character of the business of the Company from and after the Effective Time are to wind up the Business, as conducted directly by the Company or indirectly by the GBW Operating Sub, and engage in any and all activities related or incidental thereto (collectively, “Winding Up Activities”).

(b) Powers. The Company will have all powers under the Act that are necessary or desirable to conduct the Winding Up Activities, as conducted directly by the Company or indirectly by the GBW Operating Sub, and any and all activities related or incidental thereto. The Company will carry out the foregoing activities pursuant to the arrangements set forth or provided for in this Agreement and the Dissolution Agreement.

Section 2.5 Outside Activities.

Notwithstanding any provision set forth in the Prior LLC Agreement, each Member agrees that all provisions, requirements and restrictions set forth in Section 2.5 of the Prior LLC Agreement are hereby terminated and shall have no further force or effect.

2

Section 2.6 Services.

The Members or their Affiliates may provide administrative, commercial, operational, project execution and other services to the Company or GBW Operating Sub from time to time in connection with the Winding Up Activities. Any such services will be provided pursuant to the Transition Services Agreement or the terms of any other services agreement as may be entered into by the service provider and the Company or GBW Operating Sub, as applicable, with the approval of both Managers.

Section 2.7 Term.

The term of existence of the Company is perpetual, subject to the dissolution and winding up of the Company as contemplated and provided for in the Dissolution Agreement and herein.

ARTICLE 3

Company Capital

Section 3.1 Capital Contributions and Loans of the Members.

In exchange for their respective Membership Interests, including each Member’s Sharing Ratio as set forth opposite its name on Schedule 1, each Member made certain Capital Contributions and loans to the Company pursuant to the Contribution Agreement and Prior LLC Agreement.

Section 3.2 Additional Funding by the Members.

(a) Additional Funding for Winding Up. In lieu of any additional funding obligations as contemplated or provided for in Article 3 of the Prior LLC Agreement, each Member agrees to make payments with respect to the following obligations as contemplated and provided for in the Dissolution Agreement (“Winding Up Payment Obligations”): (i) additional Capital Contributions required of such Member as set forth in Section 2.11(g)(i) of the Dissolution Agreement, and (ii) any other payment obligations of such Member as contemplated and provided for in the Dissolution Agreement. No payments by a Member with respect to any Winding Up Payment Obligations will be deemed a Capital Contribution except as expressly contemplated and provided for in Section 2.11(g)(i) of the Dissolution Agreement.

(b) Funding by Watco Members. The Watco Members shall be jointly and severally liable for payment of all Winding Up Payment Obligations required to be made by the Watco Members, however the Watco Members shall allocate between themselves all such Winding Up Payment Obligations in accordance with their respective Sharing Ratios.

Section 3.3 Company Capital.

(a) No Member will be paid interest on any Capital Contribution to the Company.

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(b) No Member has the right to withdraw all or any part of its Capital Contribution or, except as expressly provided for herein or in the Dissolution Agreement, to receive any return on any portion of its Capital Contribution.

(c) Under circumstances involving any Distribution, no Member has the right to receive property other than as expressly provided for in the Dissolution Agreement.

Section 3.4 Liability of Members.

(a) No Member will be liable for the debts, liabilities, contracts or any other obligations of the Company or any Company Subsidiary, except to the extent expressly provided for in the Act or pursuant to the terms of any guaranty provided by a Member. No Member is liable for the debts, liabilities, contracts or any other obligations of any other Member.

(b) No Member is required to contribute to the capital of, or loan, the Company or any Company Subsidiary any funds other than as expressly required in this Agreement or the Dissolution Agreement.

(c) No Member will be liable for the return of all or any portion of the Capital Contributions of any other Member.

Section 3.5 Loans by Members or Affiliates.

Except as otherwise expressly provided for in this Agreement or the Dissolution Agreement, the Company and its Subsidiaries may not borrow from, lend to, or provide guarantees on behalf of, any Member or its Affiliates in connection with the Winding Up Activities.

Section 3.6 Capital Accounts.

(a) A Capital Account has been established and maintained for each Member. The Capital Account balance of each Member as of the Effective Time is described on Schedule 1 hereto. Upon the occurrence of events described in the definition of Book Value, the Managers shall increase or decrease the Capital Accounts of the Members to reflect a revaluation of Company property on the Company’s books.

(b) A Member’s Capital Account will be increased by (i) the amount of cash and the initial Book Value of any property contributed by the Member to the Company as a Capital Contribution pursuant to this Agreement and the Dissolution Agreement, (ii) the Member’s allocable share of Profits, income and gain, and (iii) the amount of any liabilities of the Company that are expressly assumed by the Member after the Closing or that are secured by any Company property distributed to the Member.

(c) A Member’s Capital Account will be decreased by (i) the amount of cash and the Book Value of any Company property distributed to the Member pursuant to any provision of this Agreement and the Dissolution Agreement, (ii) the Member’s allocable share of Losses, deductions and other losses, and (iii) the amount of any liabilities of the Member that are expressly assumed by the Company after the Closing or that are secured by any property contributed by the Member to the Company.

4

(d) Subject to all other provisions of this Article 3 and the Dissolution Agreement, the Capital Account of each Member will be determined after giving effect to all transactions that have been effected prior to the time when such determination is made giving rise to the allocation of Profits and Losses, including all contributions and Distributions. Any Person who acquires a Membership Interest directly from a Member will have a Capital Account that includes all or part, as the case may be, of the Capital Account balance of the Membership Interest so acquired or transferred. Any Member that Disposes of a Membership Interest shall have its Capital Account decreased by the amount so transferred pursuant to such Disposition.

(e) If any Member or any of its Affiliates makes a loan to the Company, such loan will not be considered a contribution to the capital of the Company and will not increase the Capital Account of the lending Member. Repayment of such loans will not be deemed withdrawals from the capital of the Company.

(f) Any fees, salary or similar compensation payable to a Member (including under the Transition Services Agreement) will be deemed a payment to a Member other than in its capacity as a Member pursuant to Code Section 707(a) or a guaranteed payment pursuant to Code Section 707(c) for federal income tax purposes, and not a Distribution to such Member for such purposes. Such payments to a Member will not reduce the Capital Account of the Member, except to the extent of its distributive share of any Company Losses or other downward capital adjustment resulting from such payment.

(g) From time to time the Managers may make such modifications to the manner in which the Capital Accounts are computed to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2, provided that such modification is not likely to have a material adverse effect on the amounts allocable for federal income tax purposes or distributable (whether or not in liquidation) to any Member pursuant to this Agreement.

(h) The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2, and will be interpreted and applied in a manner consistent with such Treasury Regulations.

(i) No Member with a deficit balance in its Capital Account will have any obligation to the Company or any other Member to restore such deficit balance. In addition, a deficit Capital Account balance of a Member (or a deficit capital account of a venturer, member or partner in a Member) will not be deemed to be a Company asset or Company property.

Section 3.7 Sharing Ratios.

The Sharing Ratio of each Member as of the Effective Date and thereafter shall be as set forth in Schedule 1.

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Section 3.8 Remedies for Non-payment of Winding Up Payment Obligations.

If the Watco Members fail to pay any of their required Winding Up Payment Obligations, the Greenbrier Member may choose, in its sole and absolute discretion, to cause GBW to take (and is authorized to act on behalf and in the name of GBW in that regard) such action (including the filing of a lawsuit) and to exercise any other rights and remedies available at law or in equity as deemed appropriate to obtain payment of the applicable Winding Up Payment Obligations by the Watco Members. If the Greenbrier Member fails to pay any of its required Winding Up Payment Obligations, the Watco Members may choose, in their sole and absolute discretion, to cause GBW to take (and are authorized to act on behalf and in the name of GBW in that regard) such action (including the filing of a lawsuit) and to exercise any other rights and remedies available at law or in equity as deemed appropriate to obtain payment of the applicable Winding Up Payment Obligations by the Greenbrier Member.

ARTICLE 4

Managers

Section 4.1 Number and Qualifications.

Subject to the Dissolution Agreement and any approval rights contained in the Act, the powers of the Company in conducting Winding Up Activities will be exercised by or under the authority of, and the Winding Up Activities will be conducted under the direction of, the GBH Manager and the Watco Manager (sometimes referred to herein individually as a “Manager” and collectively as the “Managers”). Managers need not be Members or residents of the State of Delaware. As provided in the Dissolution Agreement, one representative designated from time to time by Watco Mechanical as the Watco Manager by written notice to GBH and one representative designated from time to time by GBH as the GBH Manager by written notice to Watco Mechanical shall hold the positions of the two Managers of the Company, with the initial GBH Manager being Rick Turner and the initial Watco Manager being Rick Webb as indicated in Schedule 2 hereto.

Section 4.2 Actions With or Without a Meeting and Telephone Meetings.

Notwithstanding any provision contained in this Agreement or the Dissolution Agreement, all actions of the Managers provided for herein or in the Dissolution Agreement will be taken either at a meeting of the Managers and evidenced by written summary thereof executed by all Managers or by written consent without a meeting. Any meeting of the Managers may be held by telephone conference by means of which all Managers participating in the meeting can hear or otherwise communicate with each other, and participation in such a meeting will constitute presence in person at such meeting.

Section 4.3 Powers and Voting Rights of the Managers.

(a) Power of the Managers. Except as provided in this Agreement or the Dissolution Agreement, to the fullest extent permitted by the Act, the Managers have full; exclusive and complete discretion to manage and control the winding up of the Company, will make all decisions affecting the Winding Up Activities, will have full authority to take any action contemplated hereby or in the Dissolution Agreement and will have full power to exercise any and all rights generally inferred or conferred by Law in connection therewith.

6

(b) Voting Rights of the Managers. The exercise of any Voting Rights by the Managers must be set forth in a written instrument signed by both the GBH Manager and the Watco Manager.

Section 4.4 Restrictions on the Powers of Managers Acting Individually.

Notwithstanding anything to the contrary contained in this Article 4 or the Dissolution Agreement, a Manager has no power or authority to act individually on behalf of the Company except for such power or authority as may be specifically conferred upon such Manager by action of the Managers.

Section 4.5 Transactions with Related Parties.

The Company may agree, contract, or arrange with any Manager, Member or Officer or any Affiliate of any Manager, Member or Officer, for any Company purpose, provided that the terms and provisions of any such agreement, contract or arrangement must be approved as provided in Section 4.3(b).

Section 4.6 Indemnification of Managers.

(a) Subject to Section 4.6(b), the Company will indemnify the Managers relating to any action or omission in such capacity to the fullest extent permitted under the Act from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including reasonable legal fees and expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which a Manager may be involved, or is threatened to be involved, as a party or otherwise so long as the Manager’s conduct was not finally adjudged by a court of competent jurisdiction to have been knowingly fraudulent or in bad faith. The termination of any proceeding by judgment, order or settlement, or the termination of any proceeding by conviction or upon a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that a Manager did not meet the requisite standard of conduct set forth in this Section 4.6(a). Any indemnification pursuant to this Section 4.6 will be made only out of the assets of the Company, including insurance proceeds, if any, and no Member shall be required to make any Additional Capital Contribution to the Company to fund such indemnification.

(b) The Company will reimburse a Manager on a monthly basis for reasonable expenses incurred by such Manager who is a party to a proceeding in advance of the final disposition of the proceeding upon receipt by the Company of (i) a written undertaking by such Manager to return monies so advanced if it is ultimately determined that indemnification is not required under this Section 4.6 and (ii) a written affirmation by such Manager of such Manager’s good faith belief that the standard of conduct necessary for indemnification by the Company as authorized in this Section 4.6 has been met; provided that such Manager will be required to reimburse the Company for all amounts that have been paid to such Manager by the Company if the Manager has been determined by a court of competent jurisdiction to not be entitled to indemnification under Section 4.6(a).

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(c) The indemnification provided by this Section 4.6 is in addition to any other rights to which the Managers may be entitled under any agreement, as a matter of Law, or otherwise.

(d) The Company may purchase and maintain such insurance on behalf of the Managers, as the Managers determine, against any liability that may be asserted against or expenses that may be incurred by a Manager in connection with the Company’s activities, regardless of whether the Company would have the power to indemnify the Manager against such liability under the provisions of this Agreement.

(e) In no event may any Manager subject the other Managers or any Members to personal liability by reason of the indemnification provisions set forth in this Agreement.

(f) No Manager will be denied indemnification in whole or in part under this Section 4.6 because the Manager or any Affiliate of the Manager had an interest in the transaction with respect to which the indemnification applies, if the transaction was approved by the Managers or the Members or was otherwise permitted by the terms of this Agreement.

(g) The provisions of this Section 4.6 are for the benefit of the Managers and their respective heirs and personal representatives, and will not be deemed to create any rights for the benefit of any other Persons.

(h) Any amendment, modification or repeal of this Section 4.6 or any provision in this Section 4.6 will be prospective only and will not in any way affect the rights of any Manager under this Section 4.6 as in effect immediately prior to such amendment, modification or repeal with respect to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when claims relating to such matters may arise or be asserted.

Section 4.7 Limitations on Liability of Members and Managers.

(a) In addition to the other limitations on liability set forth in this Agreement, no Person will be liable to the Company or its Members for any loss, damage, liability or expense suffered by the Company or its Members on account of any action taken or omitted to be taken by such Person as a Member or Manager of the Company or by such Person while serving at the request of the Company as a director, manager, officer, representative or in any other comparable position of any other enterprise, unless a court determines that such action or inaction constitutes willful misconduct, was knowingly fraudulent or in bad faith. With respect to each Manager and each Member, any and all other duties and responsibilities, including any fiduciary duties, are hereby eliminated and waived in their entirety to the extent permitted by applicable Laws, including the Act. A Member’s or Manager’s liability hereunder will be limited only for those actions taken or omitted to be taken by such Member or Manager in the exercise or discharge of such Member’s or Manager’s rights or obligations with respect to the management of the Winding Up Activities. The provisions of this Section 4.7 are not intended to limit the liability of any Member or Manager for any other obligations of such Member or Manager undertaken in this Agreement or any other agreement to which the Company is a party in such Member’s or

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Manager’s capacity as a Member or Manager, or otherwise. Notwithstanding the foregoing limitation, each Member will be liable to the Company and to the other Members for any and all losses, costs, and expenses incurred by the Company or the other Members as a result of any breach by the Member of any terms or provisions of this Agreement. Nothing in this Agreement is intended to limit or eliminate the implied contractual covenant of good faith and fair dealing as contemplated by Section 18-1101 of the Act.

(b) In furtherance of the foregoing limitations on liability of the Members and Managers, the following provisions apply:

(1) a Member or Manager has no liability hereunder for failing to act if such act required the consent of some or all of the Managers or Members and the required consent to such action was not granted; and

(2) each of the Managers and the Members may engage and rely upon attorneys, accountants and other advisors on behalf of the Company even though such Persons may also be retained from time to time by a Member or any of a Member’s officers, directors, shareholders, members or partners, and such Persons may be engaged with respect to any matter in which the interest of the Company and a Member or Manager may differ, or may be engaged by both the Company and a Member or Manager with respect to any other matter. Neither the Managers nor the Members are responsible for any misconduct or negligence on the part of any such attorney, accountant or other advisor so long as such Person was selected with reasonable care.

Section 4.8 Officers.

(a) Number. The principal Officers of the Company, if any, will consist of a Chief Executive Officer and a Chief Financial Officer, and may also include a President, a Chief Operating Officer, one or more Vice Presidents, a Secretary and such other Officers and assistant Officers and agents as may be deemed necessary and elected or appointed by the Managers, at such time and in such manner and for such terms as the Managers may prescribe. Any two or more offices may be held by the same individual.

(b) General Duties; Fiduciary Duties. All Officers and agents of the Company, as between themselves and the Company, will have such authority, perform such duties and manage the Winding Up Activities of the Company as may be provided in this Agreement or as may be determined by the Managers. Each Officer has the same fiduciary duties to the Company and its Members as the officers of a Delaware corporation.

(c) Appointment, Term of Office and Qualifications. All Officers will be appointed by the Managers. Each Officer will hold office until a successor is chosen and qualified or until the death, resignation, or removal of such Officer.

(d) Removal. Any Officer or agent of the Company may be removed (with or without cause) by the Managers.

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(e) Vacancies. Any vacancy in any office because of death, resignation, removal or any other cause may only be filled by the Managers.

(f) Resignation. Any Officer may resign at any time by giving written notice to the Managers. Such resignation will take effect at the time specified in the notice, and, unless otherwise specified in the notice, the acceptance of such resignation will not be necessary to make it effective. Such resignation will be without prejudice to the contract rights, if any, of the Company.

(g) Chief Executive Officer. The Chief Executive Officer, if any, will have general and active management of the Winding Up Activities, subject, however, to the control and direction of the Managers. The Chief Executive Officer will, in general, perform all duties incident to the office of Chief Executive Officer and such other duties as from time to time may be assigned by the Managers.

(h) Chief Financial Officer. The Chief Financial Officer, if any, is the principal financial officer of the Company, subject, however, to the control of the Managers; will have charge and custody of and be responsible for, all funds of the Company and will deposit all such funds in the name of the Company in such banks, trust companies or other depositories as are selected by the Managers; will receive and give receipts for moneys due and payable to the Company from any source; and, in general, will perform all the duties incident to the office of the Chief Financial Officer and such other duties as from time to time may be assigned by the Managers. The Chief Financial Officer will render to the Managers, whenever the same are required, an account of all transactions of the Company and of the financial condition of the Company.

(i) President. The President, if any, will report to the Chief Executive Officer and will assist the Chief Executive Officer in the general and active management of the Winding Up Activities. The President will, in general, perform all duties incident to the office of President and such other duties as from time to time may be assigned by the Chief Executive Officer. In the absence or disability of the Chief Executive Officer, the President will temporarily act as the Chief Executive Officer of the Company until the Managers determine otherwise.

(j) Chief Operating Officer. The Chief Operating Officer, if any, will report to the Chief Executive Officer or, if so directed by the Managers, to the President and will have general and active management of the Winding Up Activities to the extent directed by the Managers and will be responsible for carrying out the orders and directions of the Managers. The Chief Operating Officer will perform such other duties as from time to time may be assigned by the Managers.

(k) Vice Presidents. Each Vice President, if any, will have such powers and shall perform such duties as the Managers may from time to time prescribe or as the Managers may from time to time delegate to such Officer. At the request of the Managers, any Vice President may temporarily act in place of the President. In the case of the death, absence, or inability to act of the President, the Managers may designate any Vice President to perform the duties of the President. The Managers may appoint different types of Vice Presidents with different day-to-day management responsibilities over the Winding Up Activities, including the power to employ individuals to accomplish the Winding Up Activities.

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(l) Secretary. The Secretary, if any, will keep, or cause to be kept, in books provided for that purpose, minutes of the meetings of, or actions taken by, the Managers or the Members; will see that all notices are duly given in accordance with the provisions of this Agreement and as required by applicable Law; will be custodian of the records; and, in general, will perform all duties incident to the office of the Secretary and such other duties as may from time to time be assigned by the Managers.

(m) Indemnification.

(1) Subject to Section 4.8(m)(2), the Company will indemnify the Officers relating to any action or omission in such capacity from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including reasonable legal fees and expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative in which an Officer may be involved, or is threatened to be involved, as a party or otherwise so long as the Officer acted in good faith and in a manner the Officer reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the Officer’s conduct was unlawful. The termination of any proceeding by judgment, order or settlement, or the termination of any proceeding by conviction or upon a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that an Officer did not meet the requisite standard of conduct set forth in this Section 4.8(m). Any indemnification pursuant to this Section 4.8(m) will be made only out of the assets of the Company, including insurance proceeds, if any, and no Member shall be required to make any Additional Capital Contribution or loan to the Company to fund such indemnification.

(2) The Company will reimburse an Officer on a monthly basis for reasonable expenses incurred by such Officer who is a party to a proceeding in advance of the final disposition of the proceeding upon receipt by the Company of (i) a written undertaking by such Officer to return monies so advanced if it is ultimately determined that indemnification is not required under this Section 4.8(m) and (ii) a written affirmation by such Officer of such Officer’s good faith belief that the standard of conduct necessary for indemnification by the Company as authorized in this Section 4.8(m) has been met; provided that such Officer will be required to reimburse the Company for all amounts that have been paid to such Officer by the Company if the Officer has been finally adjudged by a court of competent jurisdiction to not be entitled to indemnification under Section 4.8(m)(1).

(3) The indemnification provided by this Section 4.8(m) is in addition to any other rights to which the Officers may be entitled under any agreement, as a matter of law, or otherwise.

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(4) The Company may purchase and maintain such insurance on behalf of an Officer, or an employee of the Company, as the Managers determine, against any liability that may be asserted against or expenses that may be incurred by an Officer or an employee in connection with the Company’s activities, regardless of whether the Company would have the power to indemnify the Officer or employee against such liability under the provisions of this Agreement.

(5) In no event may any Officer subject the Managers or Members to personal liability by reason of the indemnification provisions set forth in this Agreement.

(6) No Officer will be denied indemnification in whole or in part under this Section 4.8(m) because the Officer or any Affiliate of the Officer had an interest in the transaction with respect to which the indemnification applies, if the transaction was approved by the Managers or the Members or was otherwise permitted by the terms of this Agreement.

(7) The provisions of this Section 4.8(m) are for the benefit of the Officers and their respective heirs and personal representatives, and will not be deemed to create any rights for the benefit of any other Persons.

(8) Any amendment, modification or repeal of this Section 4.8(m) or any provision in this Section 4.8(m) will be prospective only and will not in any way affect the rights of any Officer under this Section 4.8(m) as in effect immediately prior to such amendment, modification or repeal with respect to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when claims relating to such matters may arise or be asserted.

Section 4.9 Dispute Resolution.

Any disputes between the Members in regard to application, interpretation or enforcement of any provision hereof shall be addressed by discussions and negotiations between the Greenbrier Manager on behalf of the Greenbrier Member and the Watco Manager on behalf of the Watco Members, and if such persons are unable to resolve the dispute within thirty (30) days after any discussions or negotiations commence with respect to such dispute, then the Members may avail themselves of all other rights or remedies under this Agreement or otherwise available at law or in equity.

ARTICLE 5

Allocations and Distributions

Section 5.1 Distributions.

Distributions of assets in connection with the dissolution of the Company and GBW Operating Sub and Winding Up Activities have and shall be made as contemplated and provided for in Section 8.2(b) of this Agreement.

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Section 5.2 Profits, Losses and Distributive Shares of Tax Items.

(a) Profits and Losses. Except as provided in Section 5.2(b), Profits and Losses for any period after the Effective Time will be allocated to the Members in proportion to their respective Sharing Ratios.

(b) Special Allocations. Except as otherwise provided in this Agreement, the following special allocations will be made in the following order and priority:

(1) Company Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulation Section 1.704-2(f), notwithstanding any other provision of this Section 5.2, if there is a net decrease in Company Minimum Gain during any taxable year or other period for which allocations are made, the Members will be specially allocated items of Company income and gain for that period (and, if necessary, subsequent periods). The amount allocated to each Member under this Section 5.2(b)(1) will be an amount equal to the total net decrease in the Member’s Minimum Gain Share at the end of the immediately preceding taxable year. The items to be allocated will be determined in accordance with Treasury Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 5.2(b)(1) is intended to comply with the “partnership minimum gain chargeback” requirements of the Treasury Regulations and the exceptions thereto and is to be interpreted consistently therewith.

(2) Member Nonrecourse Debt Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulation Section 1.704-2(i)(4), notwithstanding any other provision of this Section 5.2 (other than Section 5.2(b)(1) which will be applied first), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any taxable year or other period for which allocations are made, any Member with a share of such Member Nonrecourse Debt Minimum Gain attributable to any Member Nonrecourse Debt (determined under Treasury Regulations Section 1.704-(2)(i)(5)) as of the beginning of the year will be specially allocated items of Company income and gain for that period (and, if necessary, subsequent periods) in proportion to the portion of such Member’s share of the net decrease in the Member Nonrecourse Debt Minimum Gain with respect to such Member Nonrecourse Debt that is allocable to the Disposition of Company property subject to such Member Nonrecourse Debt. The items to be so allocated will be determined in accordance with Treasury Regulations Section 1.704-2(g). This Section 5.2(b)(2) is intended to comply with the “partner minimum gain chargeback” requirements of the Treasury Regulations and the exceptions thereto and is to be interpreted consistently therewith.

(3) Qualified Income Offset. A Member who unexpectedly receives any adjustment, allocation or distribution described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) will be specially allocated items of Company income and gain in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of the Member as quickly as possible, provided that an allocation pursuant to this Section 5.2(b)(3) will be made only if and to the extent that such Member would have such a deficit after all other allocations provided for in this Agreement have been tentatively made as if this Section 5.2(b)(3) were not in this Agreement. It is intended that this Section 5.2(b)(3) qualify and be construed as a “qualified income offset” within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(d).

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(4) Nonrecourse Deductions. Nonrecourse Deductions for any taxable year or other period for which allocations are made will be allocated among the Members in proportion to their respective Sharing Ratios in the Company.

(5) Member Nonrecourse Deductions. Notwithstanding anything to the contrary in this Agreement, any Member Nonrecourse Deductions for any taxable year or other period for which allocations are made will be allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which the Member Nonrecourse Deductions are attributable in accordance with Treasury Regulations Section 1.704-2(i).

(6) Code Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Company asset under Code Sections 734(b) or 743(b) is required to be taken into account in determining Capital Accounts under Treasury Regulations Section 1.704-1(b)(2)(iv)(m), the amount of the adjustment to the Capital Accounts will be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis), and the gain or loss will be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted under Treasury Regulations Section 1.704-1(b)(2)(iv)(m).

(7) Depreciation Recapture. If there is any recapture of Depreciation or investment tax credit, the allocation of gain or income attributable to such recapture will be shared by the Members in the same proportion as the deduction for such Depreciation or investment tax credit was shared, to the extent possible.

(8) Reallocation. To the extent Losses allocated to a Member would cause such Member to have an Adjusted Capital Account Deficit at the end of any Fiscal Year, the Losses will be reallocated to other Members to the extent such reallocation does not cause any such other Member to have, or increase, an Adjusted Capital Account Deficit. If any Member receives an allocation of Losses otherwise allocable to another Member in accordance with this Section 5.2(b)(8), the Member will be allocated Profits in subsequent Fiscal Years necessary to reverse the effect of such allocation of Losses. This allocation of Profits (if any) will be made before any allocations under Section 5.2(a) but after any other allocations under Section 5.2(b).

(9) Interest in Company. Notwithstanding any other provision of this Agreement, no allocation of Profit or Loss or item of Profit or Loss will be made to a Member if the allocation would not have “economic effect” under Treasury Regulations Section 1.704-1(b)(2)(ii) or otherwise would not be in accordance with the Member’s interest in the Company within the meaning of Treasury Regulations Section 1.704¬1(b)(3). The Managers may reallocate any item in accordance with this Section 5.2(c)(9).

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(c) Curative Allocations. The allocations set forth in Section 5.2(b)(1) through 5.2(c)(9) (the “Regulatory Allocations”) are intended to comply with certain requirements of Treasury Regulations Section 1.704-1(b) and 1.704-2. The Regulatory Allocations may not be consistent with the manner in which the Members intend to divide Company Distributions. Accordingly, the Managers are authorized to further allocate Profits, Losses, and other items among the Members so as to prevent the Regulatory Allocations from distorting the manner in which Company Distributions would be divided among the Members under Section 5.1 and Section 8.2 but for application of the Regulatory Allocations. In general, the reallocation will be accomplished by specially allocating other Profits, Losses and items of income, gain, loss and deduction, to the extent they exist, among the Members so that the net amount of the Regulatory Allocations and the special allocations to each Member is zero. The Managers will have discretion to accomplish this result in any reasonable manner that is consistent with Code Section 704 and the related Treasury Regulations.

(d) Tax Allocations; Code Section 704(c). Except as otherwise provided herein, for federal income tax purposes, each item of income, gain, loss and deduction which is recognized by the Company for federal income tax purposes shall be allocated among the Members in the same manner as its correlative item of Profit or Loss is allocated pursuant to Section 5.2(a). In accordance with Code Section 704(c) and the related Treasury Regulations, income, gain, loss and deduction with respect to any property contributed to the capital of the Company, solely for tax purposes, will be allocated among the Members so as to take account of any variation between the adjusted basis to the Company of the property for federal income tax purposes and the initial Book Value. If the Book Value of any Company asset is adjusted, subsequent allocations of income, gain, loss and deduction with respect to that asset will take into account any variation between the adjusted basis of the asset for federal income tax purposes and its Book Value in the same manner as under Code Section 704(c) and the related Treasury Regulations. Any other elections or decisions relating to Section 704(c) allocations under this Section 5.2(d) will be made in any manner that the Managers determine reasonably reflects the purpose and intention of this Agreement. Section 704(c) allocations under this Section 5.2(d) are solely for purposes of federal, state and local taxes and will not affect, or in any way be taken into account in computing, any Member’s Capital Account, or share of Profits, Losses or other items or Distributions under any provision of this Agreement. The Company hereby adopts the remedial allocation method provided in Treasury Regulations Section 1.704-3 for allocations of such variation, whether resulting from a contribution of assets with a variation or as a result of a revaluation of the Book Value.

(e) Other Allocation Rules. The following rules will apply to the calculation and allocation of Profits, Losses and other items:

(1) Solely for purposes of determining a Member’s proportionate share of “excess nonrecourse liabilities” of the Company within the meaning of Treasury Regulation Section 1.752-3(a)(3), each Member’s interest in Company Profits is equal to such Member’s Sharing Ratio; provided, however, that if proposed Treasury Regulations are finalized requiring use of liquidation value percentages, such percentages (if different from profits percentages) will be used for allocating “excess nonrecourse liabilities.”

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(2) For purposes of determining the Profits, Losses or any other item allocable to any period (including allocations among Members as a result of any Membership Interest that has been Disposed of during the Fiscal Year), Profits, Losses and other items will be determined using a “closing of the books” method to the extent permitted under Code Section 706 and the related Treasury Regulations, and if not so permitted then on a daily, monthly or other basis, as determined by the Managers using any permissible method under Code Section 706 and the related Treasury Regulations.

(f) Member Acknowledgment. The Members agree to be bound by the provisions of this Section 5.2 in reporting their shares of Company income and loss for income tax purposes.

Section 5.3 Tax Withholding.

Notwithstanding any other provision of this Agreement, the Managers may take any action that the Managers determine is necessary or appropriate to cause the Company to comply with any withholding requirements established under any federal, state or local tax Law, including withholding on any Distribution to any Member. For purposes of this Article 5, any amount withheld on any Distribution and paid over to the appropriate Governmental Authority will be treated as if such amount had in fact been distributed to the applicable Member.

Section 5.4 Compliance with Code.

The foregoing provisions of this Article 5 relating to the allocation of Profits, Losses and other items for federal income tax purposes are intended to comply with Treasury Regulations Sections 1.704 1(b) and 1.704-2, and are to be interpreted and applied in a manner consistent with such Treasury Regulations.

Section 5.5 Basis Adjustment.

Upon the Disposition of all or part of an interest in the Company or a Disposition of property to a Member, or any other transaction permitting an election pursuant to Section 754 of the Code, the Managers will cause the Company to elect, pursuant to Section 754 of the Code, to adjust the basis of the Company’s assets as provided in Sections 734 and 743 of the Code.

ARTICLE 6

Dispositions of Membership Interests

Section 6.1 Restrictions on Disposition.

(a) Except with the express prior written approval of the other Members, which approval may be withheld by each such Member in its sole and absolute discretion, or as expressly permitted in this Article 6, no Member may Dispose of all or any part of such Member’s Membership Interest or any beneficial right or interest therein, or contract to do or

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permit any of the foregoing, whether voluntarily or by operation of law, and any attempt to do so will be void. Each Member may, without any approval of the other Members (but only after ten (10) days’ prior written notice to the other Members), Dispose of all or any part of such Member’s Membership Interest to an Affiliate of such Member, provided that (i) with respect to the Greenbrier Member, such Affiliate is a directly or indirectly wholly-owned Subsidiary of The Greenbrier Companies, Inc. (“Greenbrier Parent”), and (ii) with respect to the Watco Members, such Affiliate is a directly or indirectly wholly-owned Subsidiary of Watco Companies (“Watco Parent”), with such transferee being admitted as a substitute Member with respect to the subject Membership Interest to the extent indicated in the documentation providing for such Disposition. Irrespective of any other provision contained herein, a Member may pledge its Membership Interest to a commercial bank, commercial bank group, or commercial bank syndication or any administrative agent thereof (collectively “Banks”) to the extent required under such Member’s credit agreement or similar arrangement. The Company will cooperate and execute such documents as may be reasonably requested by any Member or Bank to facilitate such pledge at such Member’s cost and expense. Any pledge by a Member of its Membership Interest must be on the condition that the Banks’ rights to foreclose or otherwise execute upon the Membership Interests and the Bank’s transferee being admitted as a substituted member will be subject to the provisions of this Article 6. No such Bank (or its transferee, except transferees pursuant to Section 6.3), pledgee or secured party will be permitted to vote, consent to or approve any matters under this Agreement, or appoint (or direct the vote, consent or approval of) any Manager.

(b) Notwithstanding anything to the contrary contained herein, but subject to Section 6.1(d), as to which this Section 6.1(b) is inapplicable, unless the other Members consent, no Member may Dispose of all or any portion of its Membership Interest if such Disposition would otherwise cause the Company to lose its status as a partnership for federal income tax purposes.

(c) Notwithstanding anything to the contrary contained herein, no Member may Dispose of all or any portion of its Membership Interest if such Disposition would violate any federal securities Laws or any applicable state securities Laws (including suitability standards).

(d) Notwithstanding anything to the contrary contained herein (other than Section 6.1(c), as to which this Section 6.1(d) is subservient, but including Sections 6.1(b), 6.2, and 6.3, as to which this Section 6.1(d) controls), either Watco Member may, upon ten (10) days’ prior written notice to the Greenbrier Member, transfer or otherwise Dispose of its Membership Interests to the other Watco Member at any time and from time to time. If there is more than one Greenbrier Member, either Greenbrier Member may, upon ten (10) days’ prior written notice to the Watco Members, transfer or otherwise Dispose of its Membership Interests to the other Greenbrier Member at any time and from time to time.

Section 6.2 Assignees.

(a) The Company will not recognize for any purpose any purported Disposition of all or any portion of a Membership Interest unless the provisions of this Article 6 have been satisfied, all costs of such Disposition have been paid by the assigning Member, such Disposition is exempt from registration under the Securities Act and any applicable state securities act, and

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there is delivered to the Managers, if requested by any of the Managers, an opinion of counsel reasonably satisfactory to the Managers with respect thereto, and there is filed with the Company a written and dated notification of such Disposition, in form reasonably satisfactory to the Managers, executed by both the seller, assignor or transferor and the purchaser, assignee or transferee and the notification (1) contains the acceptance by the purchaser, assignee or transferee of an agreement to be bound by all the terms and provisions of this Agreement and (2) represents that such Disposition was made in accordance with all applicable securities Laws (including suitability standards). Any Disposition of all or any portion of a Membership Interest will be recognized by the Company as effective as of the date of the Disposition.

(b) A Person who is the assignee of all or any portion of a Membership Interest, but does not become a substituted Member pursuant to Section 6.3, and desires to make a further assignment of such Membership Interest, will be subject to all the provisions of this Article 6 to the same extent and in the same manner as any Member desiring to make a Disposition of all or any portion of its Membership Interest.

(c) A Person who is the assignee of all or any portion of a Membership Interest, but does not become a substituted Member pursuant to Section 6.3, will not be entitled to vote on, consent to, call for or approve any matters under this Agreement in the capacity as a Member.

Section 6.3 Additional and Substituted Members.

(a) Except as otherwise expressly provided in this Article 6, no Member may substitute in its place a purchaser, assignee, transferee, donee, heir, legatee, distributee or other recipient of all or any portion of the Membership Interest of such Member. Subject to Section 6.3(b), any such purchaser, assignee, transferee, donee, heir, legatee, distributee or other recipient of all or any portion of a Membership Interest will be admitted to the Company as a substituted Member only with the consent of the other Members, which consent may be granted or withheld by the other Members in their sole and absolute discretion.

(b) Notwithstanding the provisions of Section 6.3(a), the other Members may not unreasonably withhold their consent to admit a substituted Member. The parties acknowledge that it will not be unreasonable for any Member may withhold its consent if the Member determines in good faith that the admission of such purchaser as a substituted Member could reasonably be expected to have a material adverse effect on the Winding Up Activities.

ARTICLE 7

Books and Records; Accounting; Reporting; Tax Elections; Etc.

Section 7.1 Books and Records; Financial Statements.

(a) The books and records of the Company and its Subsidiaries will be maintained by the Company at its principal office and will be available for examination at such office by any Member or its duly authorized representatives upon reasonable notice.

(b) Financial statements (consisting of an unaudited balance sheet and unaudited profit and loss statement), in the form prepared for the Managers, will also be delivered to the Members on a monthly basis, no later than ten (10) days after month end, and on a quarterly basis, no later than 20 days after quarter end.

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(c) As soon as practicable following the end of each Fiscal Year (and in any event not later than 45 days after the, end of each Fiscal Year), the Company will prepare and deliver to each Member:

(1) information necessary for the Members to comply with reporting, disclosure, filing, record retention and other requirements imposed under applicable securities and tax Laws; and

(2) other pertinent information reasonably requested by any Member regarding the Company and its Subsidiaries.

(d) Nothing in this Section 7.1 is intended to limit the obligations of the Company under the Information Sharing and Cooperation Agreement between the Company and Watco Companies or the Information Sharing and Cooperation Agreement between the Company and The Greenbrier Companies, Inc.

Section 7.2 Accounting Basis for Tax Reporting Purposes; Tax Matters Member.

(a) Subject to Section 7.4, the books and records of the Company and its Subsidiaries will be kept on such method of reporting for tax and financial reporting purposes as the Managers select.

(b) Millennium Rail, L.L.C. is hereby designated as the Company’s “TMM,” to serve with respect to the Company in the same capacity as a “tax matters partner” as defined in the Code (including serving in the capacity as the partnership representative as defined in Section 6223(a) of the Code, as revised by the Bipartisan Budget Act of 2015, H.R. 1314, or “BBA of 2015”), and in such capacity is hereby authorized and empowered to act for and represent the Company and each of the Members before the Internal Revenue Service in any audit or examination of any Company tax return and before any court selected by the Members for judicial review of any adjustment assessed by the Internal Revenue Service. Millennium Rail, L.L.C. hereby accepts such designation. All reasonable out-of-pocket expenses incurred by the TMM in this capacity will be considered expenses of the Company for which the TMM is entitled to full reimbursement. The TMM shall cause to be prepared and filed all federal, foreign, state and local income tax returns of the Company. The Members specifically acknowledge, without limiting the general applicability of this Section, that the TMM will not be liable, responsible or accountable in damages or otherwise to the Company or any Member with respect to any action taken by it in its capacity as a “Tax Matters Member.” All out-of-pocket expenses incurred by the TMM in the capacity of “Tax Matters Member” will be considered expenses of the Company for which the TMM is entitled to full reimbursement. If an audit results in an imputed underpayment by the Company as determined in Section 6225 of the Code (as revised by the BBA of 2015), the TMM will make the “push out” election under Section 6226(a) of the Code (as revised by the BBA of 2015) in the manner and within the timeframe required, and each Member or former Member agrees to take the appropriate adjustment into account as required by Section 6226(b) of the Code (as revised by the BBA of 2015) and will be liable for

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any related interest, penalty, addition to tax, or additional amount. Notwithstanding any other provision of this Agreement, the provisions of the previous sentence shall survive the termination of the Company or the transfer of any Member’s Membership Interest and will remain binding upon the Members for a period of time necessary to resolve any such matters.

(c) The TMM will not make or alter any tax election that it reasonably believes could adversely and disproportionately affect the other Members without obtaining written approval from the other Members. Prompt notice shall be given to each of the Members upon the receipt by the TMM of advice that the Internal Revenue Service or other taxing authority intends to examine any income tax return or records or books of the Company. The TMM shall act in such capacity reasonably at all times, shall keep the other Members informed as to its actions and the status of the Company’s income tax affairs (including any threatened, pending or ongoing income tax audits) and shall take such action as may be necessary to cause any Member so requesting to become a “notice partner” within the meaning of Section 6223 of the Code (prior to being revised by the BBA of 2015) and the Regulations thereunder. If an audit of any of the Company’s income tax returns shall occur, the TMM shall not settle or otherwise compromise assertions of the auditing agent in a manner that could reasonably be expected to have a material adverse effect on any Member, as compared to the position taken on the Company’s tax returns, without the prior written consent of each such affected Member.

(d) Each Member shall be considered to have retained such rights (and obligations, if any) as are provided for under the Code or any other applicable Law with respect to any examination, proposed adjustment or proceeding relating to Company tax items (including its rights under Section 6224(c) of the Code (prior to being revised by the BBA of 2015) and its right to notice of any proposed tax settlements in any court case involving the Company). The TMM shall notify the Members, within thirty (30) days after the TMM receives notice from the IRS or any other taxing authority, of any administrative proceeding with respect to an examination of, or proposed adjustment to, any Company tax items. The TMM shall provide the Members with notice of its intention to extend the statute of limitations or file a tax claim in any court at least ten (10) days before taking such action and shall not take such action without the prior written approval of the Members. If the other Members notify the TMM of their intention to represent themselves, or to obtain independent counsel and other advisors to represent them, in connection with any such examination, proceeding or proposed adjustment, the TMM agrees to supply such other Members and their counsel and other advisors, as the case may be, with copies of all written communications received by the TMM with respect thereto, together with such other information as they may reasonably request in connection therewith. The TMM further agrees, in that event, to cooperate with such other Members and their counsel and other advisors, as the case may be, in connection with their separate representation, to the extent reasonably practicable and at the sole cost and expense of such other Members. In addition to the foregoing, the TMM shall notify the Members prior to submitting a request for administrative adjustment on behalf of the Company.

(e) No Member, officer, agent or employee of the Company is authorized to, or may, file IRS Form 8832 (or such alternative or successor form) to elect to have the Company be classified as a corporation for federal income tax purposes. The Members agree to take such action as may be necessary or required (and permitted under the terms of this Agreement) to maintain the status of the Company as a partnership for federal income tax purposes.

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(f) The provisions of this Section 7.2 shall survive any termination of this Agreement.

Section 7.3 Tax Reports.

(a) Upon written request, the TMM will provide the other Members a reasonable opportunity to review and comment on all income tax returns prior to the filing of such income tax returns. As soon as is reasonably practicable after the end of each Fiscal Year, the TMM will cause the Company to send to each Member a federal Schedule K-1 within 105 days after the end of each Fiscal Year and similar required information for state, local and foreign income tax purposes for the Fiscal Year that ended, together with such other tax information as is reasonably necessary for the preparation by such Member of its federal, state, local and foreign income tax returns by such date. The Managers will also send to each Member any other reports or statements reasonably requested by such Member from time to time.

(b) The Company will provide to the Members any other financial or tax information regarding the Company and its Subsidiaries reasonably requested by a Member, including (1) book and tax basis information for the Company’s and its Subsidiaries’ assets sufficient to allow a Member to satisfy its own obligations and make its own computations, allocations and adjustments under Code Sections 704(b), 704(c) and 754 and (2) access to the financial and tax service providers (including the Company’s accountants) of the Company.

Section 7.4 Tax Elections.

The Company has or will make the following elections on the appropriate tax returns, to the extent applicable:

(a) to maintain the Company’s historical Fiscal Year for tax purposes;

(b) to adopt the accrual method of accounting;

(c) to elect to amortize the organizational expenses of the Company ratably over the period as permitted by Section 709(b) of the Code and to elect to amortize the start-up expenditures of the Company as permitted by Section 195(b) of the Code;

(d) to make an election pursuant to Section 754 of the Code (in the first year in which there is a transaction occurs that permits such election); and

(e) subject to Section 7.2, to make any other election the Managers deem appropriate.

The Company and its Members will take all necessary steps to cause the Company to be treated as a partnership for federal and applicable state income tax purposes. Neither the Company nor any Member will make an election for the Company to be excluded from the application of the provisions of Subchapter K of chapter 1 of subtitle A of the Code or any

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similar provisions of applicable state Law, and no provision of this Agreement will be construed to sanction or approve such an election. In addition, the Company will not make an election under the Code (and applicable Treasury Regulations) or any similar provisions of applicable state Law, or take any other action that could result in the Company being treated as a corporation for income tax purposes without the unanimous approval of the Members.

ARTICLE 8

Dissolution, Liquidation and Termination of the Company

Section 8.1 Dissolution, Winding Up, and Termination of the Company and GBW Operating Sub.

(a) The Company and GBW Operating Sub are dissolved as of the Closing, as contemplated and provided for in the Dissolution Agreement.

(b) The Winding Up Activities will be conducted, and the assets of the Company will be transferred and distributed, as contemplated and provided for in the Dissolution Agreement.

(c) The Company will not terminate until the Winding Up Activities have been completed, as mutually determined by the Managers, the assets of the Company have been transferred and distributed, and a certificate of cancellation has been filed with the Delaware Secretary of State, all as contemplated and provided for in this Agreement, the Dissolution Agreement and the Act.

Section 8.2 Use of Cash on Hand.

(a) Subject to the restrictions and limitations contained in this Agreement and the Dissolution Agreement, available cash on hand in bank accounts maintained by the Company or the GBW Operating Sub will, as directed by the Managers, be used to pay expenses and obligations of the Company and GBW Operating Sub in connection with the Winding Up Activities.

(b) In settling accounts in connection with the Winding Up Activities, the assets of the Company and GBW Operating Sub will be paid or distributed in the following order:

(1) first, to creditors of the Company (including Members, Managers and any Affiliate of any Member or Manager), in the order of priority as provided by applicable Laws; and

(2) then, any remainder will be distributed to the Members in the following order: (i) pro rata, in accordance with their respective Sharing Ratios to the extent of each Member’s positive Capital Account (and after the positive Capital Accounts of one or more Members is eliminated under this this clause (i) to the remaining Members in accordance with their relative Sharing Ratios until the positive Capital Accounts of each Member is eliminated), and (ii) thereafter in accordance with their respective Sharing Ratios.

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Notwithstanding the foregoing, no Distributions will be made pursuant to this Section 8.2(b) before giving effect to the allocations of Profits, Losses and other items, pursuant to Section 5.2.

It is the intention of the parties hereto that liquidating distributions of the Company be made in accordance with the positive Capital Accounts of the Members, to the extent possible. Items of income, gain, loss and deduction for the year of liquidation (including items of gross income) shall be allocated to cause the positive balances of the Capital Accounts of the Members to be equal to the amount which each Member is entitled to receive based upon their respective Sharing Ratios.

Section 8.3 Distributions in Kind.

With respect to Distributions in kind as made to the Members pursuant to the Dissolution Agreement or otherwise, the Capital Account balances of such Members will be adjusted to reflect the Members’ allocable share of gain or loss that would have resulted if the distributed property had been sold at its fair market value (as determined in accordance with the method for determining Book Value), pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(e)(1).

Section 8.4 Date of Termination.

The Company will be terminated when all the cash or property available for application and distribution under Section 8.2 has been applied and distributed in accordance therewith and a certificate of cancellation has been filed pursuant to Section 8.6.

Section 8.5 Waiver of Partition.

Each Member hereby irrevocably waives any right or power it may possess to compel a partition or sale of any asset of the Company or to compel a winding up of the Company other than as expressly set forth in this Agreement, subject to any Distribution in kind pursuant to Section 8.3.

Section 8.6 Certificate of Cancellation.

Upon the completion of the Winding Up Activities, the Managers will thereafter cause to be filed with the Delaware Secretary of State a certificate of cancellation, pursuant to the requirements of the Act, canceling the Certificate of Formation.

ARTICLE 9

Representations and Warranties of the Members

Section 9.1 Access to Information.

Each Member has been afforded full opportunity to request any and all relevant information and ask questions concerning the Winding Up Activities, has been provided all information and copies of documents it has requested and has received answers to such questions to its full satisfaction.

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Section 9.2 No Registration.

Each Member recognizes that the Membership Interests have not been registered under the Securities Act or applicable state securities Laws and were sold pursuant to the exemptions from registration offered by Section 4(2) of the Securities Act and the regulations promulgated thereunder and by applicable state Law provisions.

Section 9.3 No Tax Representations.

Each Member represents and warrants that it has consulted its own tax advisor with respect to the tax aspects of such Member’s acquisition and ownership of its Membership Interest, the dissolution of the Company and GBW Operating Sub, and the Winding Up Activities, as provided herein and in Dissolution Agreement. Each Member represents and warrants that it is not relying upon any representations that may have been made by the Company or any other Member as to any tax projections or tax consequences of the Member’s acquisition and ownership of its Membership Interest, the dissolution of the Company and GBW Operating Sub, and the Winding Up Activities, as provided herein and in Dissolution Agreement.

ARTICLE 10

Meetings of Members

Section 10.1 Place of Meetings.

No meetings of the Members will be required but may be held upon the mutual written determination of all of the Members.

ARTICLE 11

Miscellaneous Provisions

Section 11.1 Address for Notices.

All notices, demands, consents, approvals and reports provided for in this Agreement must be in writing and must be given to the parties at the addresses set forth herein or at such other addresses as the Member may hereafter specify in writing. Such notices may be delivered by hand, may be mailed, postage prepaid, by certified or registered mail, return receipt requested, by a deposit in a depository for the receipt of mail regularly maintained by the United States Postal Service, or may be sent by nationally recognized overnight delivery service (e.g., FedEx), freight prepaid. All notices that are hand delivered will be deemed given on the date of delivery. All notices that are mailed in the manner provided above will be deemed given five days after being mailed. All notices that are sent by nationally recognized overnight delivery service in the manner provided above will be deemed given on the first Business Day after the Business Day on which the sending Member delivered the notice to the overnight delivery service.

Section 11.2 Additional Documents and Acts.

In connection with this Agreement, as well as all transactions contemplated by this Agreement, the Members agree to execute such additional documents and papers, and to perform and do such additional acts as may be necessary and proper to effectuate and carry out all of the provisions of this Agreement.

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Section 11.3 Applicable Law; Forum; Waiver of Jury Trial.

(a) This Agreement and the application or interpretation hereof, are governed exclusively by the Laws of the State of Delaware, and specifically the Act.

(b) Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement, whether in contract, tort or otherwise, must be brought in the federal courts of the United States of America located in the District of Delaware, or the courts of the State of Delaware, so long as one of such courts have subject-matter jurisdiction over the suit, action or proceeding, and that any cause of action arising out of this Agreement will be deemed to have arisen from a transaction of business in the State of Delaware. Each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection that it may now or later have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding that is brought in any such court has been brought in an inconvenient form. Service of process, summons, notice or other document by registered mail to the address set forth in Schedule 1 will be effective service of process for any suit, action or other proceeding brought in any such court.

(c) The Members hereby knowingly, voluntarily, and intentionally waive any rights they may have to a trial by jury in respect of any litigation based hereon, or arising out of, under, or in connection with, this Agreement and the transactions contemplated thereby.

Section 11.4 Confidentiality.

The terms of this Agreement, the terms of the Transaction Documents and Dissolution Agreement, the identity of any Member, any principal of a Member or any Affiliate of any Member or the relative or absolute rights or interests of any of the Members, all business, financial or other information relating directly to the conduct of the business and affairs of the Company and its Subsidiaries or the Winding Up Activities, and the identity of any Person with whom the Company may be holding discussions with respect to any investment, acquisition or other transaction or in whom the Company may invest directly or indirectly (collectively, the “Information”) that has not been publicly disclosed with the consent of the Managers is confidential and proprietary information of the Company the disclosure of which would cause irreparable harm to the Company and the Members. Notwithstanding the foregoing, “Information” shall not include (a) information that is or becomes publicly available other than by the act or omission of a Member or any Affiliate of any Member in violation of this Agreement, or (b) information that is independently developed by a Member or any Affiliate of any Member without using Information in violation of this Agreement. Accordingly, each Member, Manager and Officer will not (and each Member will direct its shareholders, partners, members, directors, officers, managers, agents, employees, advisors (including any appraiser selected by or on behalf of it), and Affiliates not to) disclose to any Person any Information or confirm any statement made by third persons regarding Information unless the Managers consent

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thereto or until the Company has publicly disclosed the Information. The covenants contained in this Section 11.4 will survive the Disposition of the Membership Interest of any Member and the termination of the Company and, in the case of each Manager and Officer, such Person ceasing to be a Manager or Officer.

Notwithstanding any contrary provision in this Section 11.4, any Member may, without breach of the covenants set forth in this Section 11.4 and without notice to or consent of the Managers, disclose any Information in any filing required of such Member or such Member’s Affiliate with any securities commission or other regulatory agency, to any financial advisors, accountants, attorneys, employees, or similar representatives or as may be required by applicable Law or the securities listing requirements applicable to such Member or such Member’s Affiliates. For the avoidance of doubt, disclosure of Information by a Member or any of its Affiliates as contemplated by (i) the Contribution Agreement or Dissolution Agreement, (ii) the Information Sharing and Cooperation Agreement between the Company and Watco Companies or (iii) the Information Sharing and Cooperation Agreement between the Company and The Greenbrier Companies, Inc. shall not constitute a breach of this Section 11.4. Nothing in this Section 11.4 is intended to modify or supersede the terms of the Information Sharing and Cooperation Agreement between the Company and Watco Companies or the Information Sharing and Cooperation Agreement between the Company and The Greenbrier Companies, Inc.

Section 11.5 Amendments.

(a) Requirements. Except as otherwise expressly set forth in this Agreement, the Certificate of Formation and this Agreement may be amended, or compliance herewith waived, by action of both Managers; provided, however, that any amendment or modification (i) altering any Member’s share of allocations of Profits (or any item thereof) and Losses (or any item thereof) or Distributions (other than as a result of the issuance of additional Membership Interests or adjustments to Sharing Ratios as expressly permitted herein), (ii) altering any Member’s rights or the composition of the Managers or the Managers’ Voting Rights (other than as expressly provided herein), (iii) modifying in any manner a Member’s obligation to make Capital Contributions or loans or otherwise modifying Article 3 or Section 5.1, (iv) otherwise altering the limited liability of a Member, or (v) amending Section 2.5, Section 4.9, Section 8.2 or Section 11.4, requires the consent of each Member affected thereby.

(b) Amendments Without Consent. In addition to amendments pursuant to Section 11.5(a), amendments of this Agreement may be made from time to time by the Managers, without the consent of any of the Members, (i) to cure any ambiguity, or to correct or supplement any provision hereof that may be inconsistent with any other provision hereof, (ii) to delete or add any provision of this Agreement required to be so deleted or added by any state or provincial securities commissioner or similar official, which addition or deletion is deemed by such commission or official to be for the benefit or protection of the Members, (iii) to revise this Agreement as necessary to comply or conform with any revisions in applicable Laws governing the Company, (iv) to effect a change that the Managers in their sole discretion determine to be necessary or desirable to qualify or continue the qualification of the Company as a limited liability company or as an Entity in which the Members have limited liability under the Laws of any state or to ensure that the Company will not be taxed as an association taxable as a

26

corporation for federal income tax purposes, and (v) to reflect the admission of substituted Members in the Company; provided however, that no amendment may be adopted pursuant to clauses (i) through (v) above unless the adoption thereof, in the opinion of the Managers, is for the benefit of or not adverse to the interest of the Members and, in the opinion of counsel, does not affect the limited liability of the Members or the status of the Company as a partnership for federal income tax purposes. The Managers will promptly notify the Members of any amendment adopted pursuant to clauses (i) through (v) of this Section 11.5(b).

Section 11.6 Binding Effect.

Except as herein otherwise provided to the contrary, this Agreement is binding upon and will inure to the benefit of the Members, their distributees, heirs, legal representatives, executors, administrators, successors and assigns.

Section 11.7 No State-Law Partnership.

The Members intend that the Company not be a partnership (including a limited partnership) or joint venture, and that no Member be a partner or joint venturer of any other Member, for any purposes other than federal and state tax purposes, and this Agreement may not be construed to suggest otherwise.

Section 11.8 Entire Agreement.

This Agreement, along with the Transaction Documents (as defined in the Dissolution Agreement) and the Dissolution Agreement, contain all of the understandings and agreements of whatsoever kind and nature existing between the Members with respect to the subject matter hereof and thereof and supersede all prior agreements and undertakings with respect thereto, including the Limited Liability Company Agreement of the Company dated July 14, 2014, and the Amended and Restated Limited Liability Company Agreement of the Company dated July 18, 2014.

Section 11.9 Severability.

Every provision hereof is intended to be severable, and if any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity will not affect the validity of the remainder of this Agreement.

Section 11.10 No Waiver.

No waiver, express or implied, by any Member of any breach or default by any other Member in the performance by the other Member of its obligations hereunder will be deemed or construed to be a waiver of any other breach or default under this Agreement. Failure on the part of any Member to complain of any act or omission of any other Member, or to declare such other Member in default irrespective of how long such failure continues, will not constitute a waiver hereunder. No notice to or demand on a defaulting Member will entitle such defaulting Member to any other or further notice or demand in similar or other circumstances.

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Section 11.11 Counterparts.

This Agreement may be executed and delivered in multiple counterparts, including by email, facsimile, pdf, or other electronic means, each of which will be deemed to be an original, will be binding upon the Member who executed the same, and all of such counterparts will constitute the same agreement.

Section 11.12 Approvals.

Except where otherwise indicated, all approval, waiver, consent and other similar rights of the Managers and the Members pursuant to this Agreement may be exercised by the Managers and Members, and such approvals, waivers, consents and other similar rights may be granted or denied by such Managers and Members, in their sole and absolute discretion. Each Manager, in making any decisions or determinations or taking any actions in the capacity of a Manager, in regard to approvals, consents and other similar rights, or otherwise, may consider and favor the rights and interests of the Member that appointed or designated such Manager (including the rights ‘and interests of such Member’s Affiliates) rather than the rights and interests of all Members, or the Company and its Subsidiaries, as a whole, and, except to the extent specifically set forth in this Agreement, such decision, determination or action will not be a breach of any fiduciary duty to the Company, and the Manager will not be required to abstain from participating in regard to any decisions or determinations or taking any actions (or any approvals, consents and other similar rights relating thereto) that directly or indirectly affect or involve the rights or interests of such Member (or the rights or interests of such Member’s Affiliates).

Section 11.13 Creditors and Other Third Parties Not Benefited.

Nothing in this Agreement is intended to nor will it benefit any creditor of the Company or any other third party. Except as provided herein, no creditor of the Company or other third party will be entitled to require the Managers to solicit or accept any loan or Capital Contribution for the Company or to enforce any right that the Company or any Member may have against a Member, whether arising under this Agreement or otherwise.

Section 11.14 Successors and Assigns.

This Agreement is binding upon and will inure to the benefit of the Members, and their respective heirs, legal representatives, successors and assigns; provided, however, that nothing contained herein negates or diminishes the restrictions set forth in Article 6.

Section 11.15 Exhibits and Schedules.

Each exhibit and schedule to this Agreement is incorporated herein for all purposes.

[Signature page follows]

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Each of the undersigned, being the Members of the Company, have caused this Agreement to be duly executed and delivered as of the Effective Time.

GREENBRIER MEMBER:	GREENBRIER RAIL SERVICES HOLDINGS, LLC
	By:	/s/ Martin R. Baker
	Name:	Martin R. Baker
	Title:	Senior Vice President
WATCO MEMBERS:	WATCO MECHANICAL SERVICES, L.L.C.
	By:	/s/ Rick D. Baden
	Name:	Rick D. Baden
	Title:	President & Chief Financial Officer
	MILLENNIUM RAIL, L.L.C.
	By:	/s/ Rick D. Baden
	Name:	Rick D. Baden
	Title:	President & Chief Financial Officer

AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

SIGNATURE PAGE

EXHIBIT A

Glossary; Certain Interpretive Matters

1. “Act” means the Delaware Limited Liability Company Act.

2. “Adjusted Capital Account” means, with respect to any Member, such Member’s Capital Account as of the end of any relevant date after giving effect to the following adjustments:

(a) credit to such Capital Account any amounts which such Member is deemed to be obligated to restore pursuant to Treasury Regulations Sections 1.704-1(b)(2)(ii)(c), 1.704-2(g)(1) and 1.704-2(i)(5); and

(b) debit to such Capital Account the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

The foregoing definition of “Adjusted Capital Account” is intended to comply with the provisions of Treasury Regulations Sections 1.704-1(b)(2)(ii) and 1.704-2, and is to be interpreted consistently therewith.

3. “Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if any, in that Member’s Adjusted Capital Account.

4. “Affiliate” means any Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with the Person to whom reference is made.

5. “Agreement” means this Second Amended and Restated Limited Liability Company Agreement of the Company.

6. “Banks” has the meaning set forth in Section 6.1(a).

7. “BBA of 2015” has the meaning set forth in Section 7.2.

8. “Book Value” means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except that the amount of assets of the Company have been adjusted and shall be further adjusted upon each of the following: (a) the initial Book Value of any asset contributed by a Member to the Company will be the fair market value of such asset, as determined by agreement of the contributing Member and the Managers; (b) the Book Value of all Company assets will be adjusted in the event of a revaluation to equal their respective gross fair market values, as reasonably determined by the Managers, as of the following times: (1) the acquisition of any additional Membership Interest in the Company by a new or existing Member in consideration for more than a de minimis Capital Contribution; (2) the distribution by the Company to a Member of more than a de minimis amount of property (other than cash) as consideration for all or a part of such Member’s Membership Interest in the Company; (3) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g); and (4) in connection with the grant of an interest in the Company (other than a de

Exhibit A

minimis interest) as consideration for the provision of services to or for the benefit of the Company by an existing Member acting in a member capacity, or by a new Member acting in a member capacity in anticipation of being a Member; (c) the Book Value of any Company asset distributed to any Member will be the fair market value of such asset on the date of distribution, as determined by the Managers; (d) such Book Value will be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses; and (e) the Book Value of all Company assets will be adjusted to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m). For the avoidance of doubt, Book Value will not refer to computations described for GAAP purposes.

9. “Business” means the building, acquiring, owning, leasing, subleasing or operating, prior to the Effective Time, of railcar repair, refurbishment or maintenance facilities and businesses in the United States, Canada and Mexico. For the sake of clarity, the Business did not include (i) the manufacturing, repairing, refurbishing and selling of railcar wheels and parts, (ii) the repairing and leasing of locomotives, (iii) the performing (or arranging to perform) of running repairs to railcars pursuant to the rules of the Association of American Railroads while such railcars are located on a rail line, and (iv) the manufacturing, operating, leasing, managing or controlling of railcars.

10. “Business Day” means a day other than a Saturday, Sunday or any other day on which nationally chartered banks are authorized or required to close.

11. “Capital Account” means, with respect to any Member, the account maintained for the Member as set forth herein in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv) (and, for the avoidance of doubt, will not refer to computations described for GAAP purposes).

12. “Capital Contributions” means any amount(s) contributed or deemed to be contributed as equity to the capital of the Company by the Members as expressly contemplated and provided for in the Contribution Agreement, the Prior LLC Agreement, this Agreement, or the Dissolution Agreement.

13. “Certificate of Formation” means the Certificate of Formation of the Company filed with the Delaware Secretary of State.

14. “Code” means the Internal Revenue Code of 1986.

15. “Company” has the meaning set forth in the introductory clauses to this Agreement.

16. “Contribution Agreement” means the Contribution Agreement dated as of July 18, 2014 among The Greenbrier Companies, Inc., Watco Companies and the Company.

Exhibit A

17. “Control” (including the correlative terms “Controlling,” “Controlled by” and “under common Control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting equity interests, by contract or otherwise.

18. “Default Interest Rate” means a rate per annum equal to the lesser of (a) the Prime Rate plus 800 basis points, and (b) the maximum rate permitted by applicable Law, in each case accruing daily and compounding on a quarterly basis.

19. “Depreciation” means, for each Fiscal Year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such year or other period, except that if the Book Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period (as a result of property contributions or adjustments to such values as described in Book Value), Depreciation for such year or other period will be determined in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv), Treasury Regulation Section 1.704-3(d) and other applicable authority based upon the method for tax allocations described in Section 5.2(d). For the avoidance of doubt, Depreciation will not refer to computations described for GAAP purposes.

20. “Dispose,” “Disposed” or “Disposition” means, with respect to any asset (including Membership Interests or any portion thereof), a sale, assignment, transfer, conveyance, gift, pledge, Encumbrance, hypothecation, exchange, or other disposition of the asset, whether such disposition be voluntary, involuntary or by operation of Law.

21. “Dissolution Agreement” has the meaning set forth in the introductory clauses to this Agreement.

22. “Distributions” means any distributions by the Company to the Members of liquidation proceeds or other amounts, or distribution of property other than money based upon its fair market value.

23. “Effective Time” has the meaning set forth in the introductory clauses to this Agreement.

24. “Encumbrance” means any lien, order, security interest, hypothec, contract, easement, covenant, community property interest, equitable interest, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership.

25. “Entity” means a Person other than a natural person.

26. “Fiscal Year” means the fiscal year of the Company for tax return purposes as previously established by the Company.

27. “GAAP” means United States generally accepted accounting principles consistently applied.

28. “GBW Operating Sub” has the meaning set forth in the introductory clauses to this Agreement.

Exhibit A

29. “Governmental Authority” means any court, tribunal, arbitrator, authority, agency, executive body, legislative body, branch, department, commission, official or other instrumentality of the United States, Canada or Mexico or any state, province, county, city or other political subdivision or similar governing entity, and including any governmental, quasi-governmental or non-governmental body administering, regulating or having general oversight over the Business or Winding Up Activities.

30. “Greenbrier Member” means Greenbrier Rail Services Holdings, LLC, an Oregon limited liability company, and any permitted assignee or successor(s)-in-interest with respect to all or any part of the Membership Interest of the Greenbrier Member, provided that any Persons comprising the Greenbrier Member must act collectively in regard to the exercise of any rights of the Greenbrier Member under this Agreement.

31. “Information” has the meaning set forth in Section 11.4.

32. “Law” or “Laws” means all domestic or foreign federal, state, territorial, provincial or local laws (statutory, common or otherwise), statutes, constitutions, treaties, conventions, rules, codes, regulations, ordinances, administrative interpretations, Orders and other pronouncements having the effect of law enacted, adopted, promulgated or applied by any Governmental Authority.

33. “Losses” has the meaning set forth in the definition of “Profits”.

34. “Manager” means any Person that is appointed or designated to act as a Manager of the Company as provided in Section 4.1, and “Managers” means all such Persons collectively in their capacity as Managers of the Company.

35. “Member” means the Persons listed as members on Schedule 1 or any successor or successors to all or part of any such Member’s Membership Interest, or any Person admitted as an additional member to the Company, in each case in accordance with this Agreement and the Act, each in the capacity as a member of the Company. “Members” mean all such Persons collectively in their capacity as members of the Company.

36. “Member Nonrecourse Debt” means any nonrecourse debt (as defined in Treasury Regulations Section 1.704-2(b)(4)) of the Company for which any Member bears the economic risk of loss, in accordance with Treasury Regulations Sections 1.704-2(b)(4) and 1.752-2.

37. “Member Nonrecourse Debt Minimum Gain” means, for each Member, the amount of Minimum Gain for the Fiscal Year or other period attributable to such Member’s “partner nonrecourse debt,” determined in accordance with Treasury Regulations Section 1.704-2(i)(3).

38. “Member Nonrecourse Deductions” means any Losses or other losses or deductions of the Company that must be allocated to a Member who bears the economic risk of loss for the “partner nonrecourse liability” to which the Losses or other losses or other deductions relate, determined in accordance with Treasury Regulations Section 1.704-2(i)(2).

Exhibit A

39. “Membership Interest” means all of the rights and obligations of a Member in respect of such Member’s ownership interest in the Company, including a Member’s Capital Account, Sharing Ratio, Voting Rights, the right to receive allocations and Distributions to the extent provided under this Agreement, and any other rights and obligations of a Member under this Agreement.

40. “Minimum Gain” means, with respect to all nonrecourse liabilities of the Company, the minimum amount of gain that would be realized by the Company if the Company Disposed of the Company property subject to such liability in full satisfaction thereof computed in accordance with Treasury Regulations Section 1.704-2(d).

41. “Minimum Gain Share” means, for each Member, the Member’s share of Minimum Gain for the Fiscal Year (after taking into account any decrease in Minimum Gain for such year), such share to be determined under Treasury Regulations Section 1.704-2(g).

42. “Nonrecourse Deductions” means, for each Fiscal Year or other period, an amount of Company deductions that are characterized as “nonrecourse deductions” under Treasury Regulations Section 1.704-2(c).

43. “Officer” means any Chief Executive Officer, President, Vice President, Secretary, Chief Financial Officer and any other officer duly appointed or elected by the Managers in accordance with the terms of this Agreement.

44. “Order” means any award, decisions, injunction, judgment, order writ, decree, ruling or verdict entered, issued, made or rendered by any court, administrative agency or other Governmental Authority.

45. “Person” means an individual, a corporation, a sole proprietorship, a partnership (general or limited), a limited liability company, an association, a trust, a joint venture, or any other entity or organization, including a Governmental Authority.

46. “Prime Rate” means a rate equal to the prime rate as published in The Wall Street Journal “Money Rates” table, adjusted daily. If multiple prime rates are quoted in the table, then the highest prime rate will be the Prime Rate.

47. “Prior LLC Agreement” has the meaning set forth in the introductory clauses to this Agreement.

48. “Profits” and “Losses” means, for each Fiscal Year or other period, an amount equal to the Company’s taxable income or loss for such year or period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) will be included in taxable income or loss), with the following adjustments:

(a) any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition will be added to such taxable income or loss;

Exhibit A

(b) any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition, will be subtracted from such taxable income or loss;

(c) gain or loss resulting from any Disposition of Company property with respect to which gain or loss is recognized for federal income tax purposes will be computed by reference to the Book Value of the property Disposed of, notwithstanding that the adjusted tax basis of such property differs from such Book Value;

(d) in lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there will be taken into account depreciation for such Fiscal Year or other period, computed in accordance with the definition of “Depreciation” herein;

(e) if the Book Value of any Company asset is adjusted pursuant to paragraphs (b), (c) or (e) of Book Value, the amount of the adjustment will be treated as an item of gain or loss from the disposition of such asset and will be taken into account for purposes of computing Profit or Loss to the extent required to comply with Treasury Regulations Section 1.704-1(b)(2)(iv)(e), Treasury Regulations Section 1.704-1(b)(2)(iv)(f)(2), and Treasury Regulations Section 1.704-1(b)(2)(iv)(m); and

(f) to the extent not otherwise provided in this Agreement, any items that are specifically allocated pursuant to Section 5.2(b) will not be taken into account in computing Profits or Losses.

49. “Regulatory Allocations” has the meaning set forth in Section 5.2(c).

50. “Securities Act” means the Securities Act of 1933.

51. “Sharing Ratio” means the percentage assigned to such Member in accordance with Section 3.7.

52. “Subsidiary” means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a limited or general partner of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person, or a combination thereof, or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors, managers or other governing body of such Person. Any references to “Subsidiary” or “Subsidiaries” in this Agreement shall be the Subsidiaries of the Company unless otherwise specifically indicated.

Exhibit A

53. “Treasury Regulations” means the Income Tax Regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

54. “Voting Rights” means a Person’s right to vote on, approve, consent to, or call for any particular action, decision or matter under this Agreement in such Person’s capacity as a Member or Manager (as applicable).

55. “Watco Companies” means Watco Companies, L.L.C., a Delaware limited liability company.

56. “Watco Members” means Watco Mechanical Services, L.L.C., a Kansas limited liability company, and Millennium Rail, L.L.C., a Delaware limited liability company, and any permitted assignee(s) or successor(s)-in-interest with respect to all or any part of the Membership Interest of a Watco Member, provided that any Persons comprising the Watco Members must act collectively in regard to the exercise of any rights of the Watco Members under this Agreement.

57. “Winding Up Activities” has the meaning set forth in Section 2.4(a).

58. “Winding Up Payment Obligations” has the meaning set forth in Section 3.2(a).

Exhibit A

Interpretive Matters

In construing this Agreement, it is the intent of the parties that:

(a) the captions of the articles, sections or subsections, or to the Table of Contents in this Agreement are inserted for convenience in locating the provisions of this Agreement and not as an aid in its construction;

(b) examples are not to be construed to limit, expressly or by implication, the matter they illustrate;

(c) the word “includes” and its derivatives means “includes, but is not limited to,” and corresponding derivative expressions;

(d) a defined term has its defined meaning throughout this Agreement and each exhibit and schedule to this Agreement, regardless of whether it appears before or after the place where it is defined;

(e) the meanings of the defined terms are applicable to both the singular and plural forms thereof;

(f) all references to prices, values or monetary amounts refer to United States dollars;

(g) all references to articles, sections, paragraphs, clauses, exhibits or schedules refer to articles, sections, paragraphs and clauses of this Agreement, and to exhibits or schedules attached to this Agreement, unless expressly provided otherwise;

(h) each exhibit and schedule to this Agreement is a part of this Agreement and references to the term “Agreement” are deemed to include each such exhibit and schedule to this Agreement except to the extent that the context indicates otherwise, but if there is any conflict or inconsistency between the body of this Agreement and any exhibit or schedule, the provisions of the body of this Agreement will control;

(i) the words “this Agreement,” “herein,” “hereby,” “hereunder,” and words of similar import refer to this Agreement as a whole and not to any particular article, section or other subdivision, unless expressly so limited;

(j) the word “or” is disjunctive but not necessarily exclusive;

(k) all references to agreements or Laws are deemed to refer to such agreements or Laws as amended or revised or as in effect at the applicable time, including corresponding provisions of future agreements or Laws;

(l) as used in this Agreement, accounting terms not defined in this Agreement, and accounting terms partly defined to the extent not defined, will have the respective meanings given to them under GAAP;

(m) in the event of any conflict between this Agreement and the Dissolution Agreement, the Dissolution Agreement will in all cases govern and be controlling.

EX-10.28

Exhibit 10.28

Published CUSIP Number: 39365MAA6 (deal)

39365MAB4 (revolver)

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of September 26, 2018

among

THE GREENBRIER COMPANIES, INC.,

as the Borrower,

BANK OF AMERICA, N.A.,

as Administrative Agent,

and

The Other Lenders Party Hereto

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

as Sole Lead Arranger and Sole Bookrunner,

MUFG UNION BANK, N.A.,

as Syndication Agent,

and

BANK OF THE WEST,

BRANCH BANKING AND TRUST COMPANY,

FIFTH THIRD BANK

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Co-Documentation Agents

TABLE OF CONTENTS

	Section	Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS			1
1.01	Defined Terms		1
1.02	Other Interpretive Provisions		32
1.03	Accounting Terms		33
1.04	Exchange Rates; Currency Equivalents		34
1.05	Additional Alternative Currencies		34
1.06	Change of Currency		35
1.07	Times of Day		36
1.08	Letter of Credit Amounts		36
ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS			36
2.01	Committed Loans		36
2.02	Borrowings, Conversions and Continuations of Committed Loans		36
2.03	Letters of Credit		38
2.04	Swing Line Loans		47
2.05	Security		50
2.06	Prepayments		50
2.07	Termination or Reduction of Commitments		51
2.08	Repayment of Loans		51
2.09	Interest		51
2.10	Fees		52
2.11	Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate		53
2.12	Evidence of Debt		53
2.13	Payments Generally; Administrative Agent’s Clawback		54
2.14	Sharing of Payments by Lenders		56
2.15	Increase in Commitments		56
2.16	Cash Collateral		57
2.17	Defaulting Lenders		58
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY			61
3.01	Taxes		61
3.02	Illegality		65
3.03	Inability to Determine Rates		66
3.04	Increased Costs		67
3.05	Compensation for Losses		68
3.06	Mitigation Obligations; Replacement of Lenders		69
3.07	Successor LIBOR		70
3.08	Survival		70
ARTICLE IV CONDITIONS PRECEDENT TO CREDIT EXTENSIONS			71
4.01	Conditions of Initial Credit Extension		71
4.02	Conditions to all Credit Extensions		72
ARTICLE V REPRESENTATIONS AND WARRANTIES			73
5.01	Existence, Qualification and Power; Compliance with Laws		73
5.02	Authorization; No Contravention		73
5.03	Governmental Authorization; Other Consents		73

i

5.04	Binding Effect	74
5.05	Financial Statements; No Material Adverse Effect	74
5.06	Litigation	74
5.07	No Default	75
5.08	Ownership of Property; Liens	75
5.09	Environmental Compliance	75
5.10	Insurance	75
5.11	Taxes	75
5.12	ERISA Compliance	76
5.13	Subsidiaries; Equity Interests	76
5.14	Margin Regulations; Investment Company Act	76
5.15	Disclosure	77
5.16	Compliance with Laws	77
5.17	Intellectual Property; Licenses, Etc.	77
5.18	Sanctions; Anti-Corruption	78
5.19	No EEA Financial Institution	78
ARTICLE VI AFFIRMATIVE COVENANTS		78
6.01	Financial Statements	78
6.02	Certificates; Other Information	79
6.03	Notices	81
6.04	Payment of Tax Obligations	81
6.05	Preservation of Existence, Etc.	82
6.06	Maintenance of Properties	82
6.07	Maintenance of Insurance	82
6.08	Compliance with Laws	83
6.09	Books and Records	83
6.10	Inspection Rights	83
6.11	Use of Proceeds	84
6.12	[Reserved]	84
6.13	Additional Subsidiary Guarantors	84
6.14	Pledged Assets	84
6.15	Anti-Corruption Laws	85
ARTICLE VII NEGATIVE COVENANTS		85
7.01	Liens	85
7.02	Investments	88
7.03	Indebtedness	90
7.04	Fundamental Changes	92
7.05	Dispositions	93
7.06	Restricted Payments	94
7.07	Change in Nature of Business	95
7.08	Transactions with Affiliates	95
7.09	Burdensome Agreements	95
7.10	Use of Proceeds	97
7.11	Financial Covenants	97
7.12	Capital Expenditures	97
7.13	Sanctions; Anti-Corruption Laws	97
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES		98
8.01	Events of Default	98

ii

8.02	Remedies Upon Event of Default	100
8.03	Application of Funds	100
ARTICLE IX ADMINISTRATIVE AGENT		101
9.01	Appointment and Authority	101
9.02	Rights as a Lender	102
9.03	Exculpatory Provisions	102
9.04	Reliance by Administrative Agent	103
9.05	Delegation of Duties	104
9.06	Resignation of Administrative Agent	104
9.07	Non-Reliance on Administrative Agent and Other Lenders	105
9.08	No Other Duties, Etc	106
9.09	Administrative Agent May File Proofs of Claim; Credit Bidding	106
9.10	Collateral and Guaranty Matters	107
9.11	Treasury Management Agreements and Swap Contracts	108
9.12	ERISA Matters	108
ARTICLE X MISCELLANEOUS		110
10.01	Amendments, Etc.	110
10.02	Notices; Effectiveness; Electronic Communication	112
10.03	No Waiver; Cumulative Remedies; Enforcement	114
10.04	Expenses; Indemnity; Damage Waiver	115
10.05	Payments Set Aside	117
10.06	Successors and Assigns	117
10.07	Treatment of Certain Information; Confidentiality	121
10.08	Right of Setoff	122
10.09	Interest Rate Limitation	123
10.10	Counterparts; Integration; Effectiveness	123
10.11	Survival of Representations and Warranties	123
10.12	Severability	124
10.13	Replacement of Lenders	124
10.14	Governing Law; Jurisdiction; Etc.	125
10.15	Waiver of Jury Trial	126
10.16	USA PATRIOT Act Notice	126
10.17	Judgment Currency	126
10.18	Statutory Notice	127
10.19	No Advisory or Fiduciary Responsibility	127
10.20	Electronic Execution of Assignments and Certain Other Documents	128
10.21	Acknowledgement and Consent to Bail-In of EEA Financial Institutions	128
10.22	Amendment and Restatement of Existing Credit Agreement	128

iii

SCHEDULES

1.01	Existing Letters of Credit
2.01	Commitments and Applicable Percentages
5.03	Governmental Authorizations; Other Consents
5.10	Insurance
5.13	Subsidiaries and Other Equity Investments
5.17	IP Rights
7.01	Existing Liens
7.02	Existing Investments
7.03	Existing Indebtedness
7.09	Burdensome Agreements
10.02	Administrative Agent’s Office; Certain Addresses for Notices

EXHIBITS

Form of

A	Committed Loan Notice
B	Swing Line Loan Notice
C	Note
D	Compliance Certificate
E	Assignment and Assumption
F	Subsidiary Guaranty
G 1-4	U.S. Tax Compliance Certificate
H	Borrowing Base Certificate
I	Notice of Prepayment
J	Secured Party Designation Notice

iv

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

This FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”) is entered into as of September 26, 2018, among THE GREENBRIER COMPANIES, INC., an Oregon corporation (the “Borrower”), each Lender (defined herein) from time to time a party hereto and BANK OF AMERICA, N.A., as Administrative Agent.

INTRODUCTORY STATEMENT

The Borrower is a party to a certain Third Amended and Restated Credit Agreement dated as of October 29, 2015 with certain Lenders and Bank of America, N.A., as administrative agent for such Lenders (as amended, supplemented or otherwise modified from time to time until (but not including) the date of this Agreement, the “Existing Credit Agreement”), which credit agreement amended and restated a certain Second Amended and Restated Credit Agreement dated as of June 30, 2011, which credit agreement amended and restated a certain Amended and Restated Credit Agreement dated as of November 7, 2006, which credit agreement amended and restated a certain Credit Agreement dated as of June 29, 2005.

The parties to this Agreement desire to amend the Existing Credit Agreement as set forth herein and to restate the Existing Credit Agreement in its entirety to read as follows. This Agreement is not a novation of the Existing Credit Agreement.

The Borrower has requested that the Lenders provide each of them with revolving loans and letters of credit, and the Lenders are willing to do so on the terms and conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms.

As used in this Agreement, the following terms shall have the meanings set forth below:

“Account” has the meaning provided in Article 9 of the Uniform Commercial Code in effect in New York as of the Closing Date and shall also include any rights to payment evidenced by or constituting chattel paper (as defined in Article 9 of the Uniform Commercial Code in effect in New York as of the Closing Date).

“Administrative Agent” means Bank of America, acting as administrative agent under any of the Loan Documents, or any successor administrative agent.

“Administrative Agent’s Office” means, with respect to any currency, the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02 with respect to such currency, or such other address or account with respect to such currency as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Aggregate Commitments” means the Commitments of all the Lenders. The amount of the Aggregate Commitments in effect on the Closing Date is $600,000,000.

“Agreement” means this Fourth Amended and Restated Credit Agreement.

“Alternative Currency” means each of (a) the Euro, (b) the Canadian Dollar, (c) Sterling, (d) to the extent available to all Lenders, the Mexican Peso and (e) each other currency (other than Dollars) that is approved in accordance with Section 1.05.

“Alternative Currency Sublimit” means an amount equal to the lesser of $50,000,000 and the amount available under the Revolver Ceiling. The Alternative Currency Sublimit is part of, and not in addition to the Aggregate Commitments.

“Applicable Percentage” means with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Aggregate Commitments represented by such Lender’s Commitment at such time; provided that if the commitments of each Lender to make Committed Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02 or if the Aggregate Commitments have expired, then such Applicable Percentage shall be determined based on the Applicable Percentage of such Lender most recently in effect, giving effect to any subsequent assignments. The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption (or other document contemplated by this Agreement) pursuant to which such Lender becomes a party hereto, as applicable. The Applicable Percentages shall be subject to adjustment as provided in Section 2.17.

“Applicable Rate” means, from time to time, the following percentages per annum, based upon the Consolidated Capitalization Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(b):

Applicable Rate
Pricing Level	Consolidated Capitalization Ratio	Commitment Fee			Eurocurrency Rate Loans + Letters of Credit			Base Rate Loans
1	> 0.60:1.0		0.30	%		2.00	%		1.00	%
2	> 0.50:1.0 but £ 0.60:1.0		0.25	%		1.75	%		0.75	%
3	£ 0.50:1.0		0.20	%		1.50			0.50	%

Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Capitalization Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b); provided, however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then upon request of the Required Lenders, Pricing Level 1 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and Pricing Level 1 shall remain in effect until the first Business Day immediately following the date on which such Compliance Certificate has been delivered pursuant to Section 6.02(b). The Applicable Rate in effect from the Closing Date through delivery of the Compliance Certificate for the fiscal year ending on August 31, 2018 shall be determined based upon Pricing Level 3.

2

“Applicable Time” means, with respect to any borrowings and payments in any Alternative Currency, the local time in the place of settlement for such Alternative Currency as may be determined by the Administrative Agent or the L/C Issuer, as the case may be, to be necessary for timely settlement on the relevant date in accordance with normal banking procedures in the place of payment.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Arranger” means Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any other registered broker-dealer wholly-owned by Bank of America Corporation to which all or substantially all of Bank of America Corporation’s or any of its subsidiaries’ investment banking, commercial lending services or related businesses may be transferred following the date of this Agreement), in its capacity as sole lead arranger and sole bookrunner.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form (including electronic documentation generated by use of an electronic platform) approved by the Administrative Agent.

“Attributable Indebtedness” means, on any date, (a) in respect of any capital lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, in each case (a) and (b) if such lease were accounted for as a capital lease.

“Audited Financial Statements” means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal year ended August 31, 2017, and the related consolidated statements of income or operations, stockholders’ equity and cash flows for such fiscal year of the Borrower and its Subsidiaries, including the notes thereto.

“Availability Period” means the period from and including the Closing Date to the earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Commitments pursuant to Section 2.07, and (c) the date of termination of the Commitment of each Lender to make Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

“Bank of America” means Bank of America, N.A. and its successors.

3

“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (i) the Federal Funds Rate plus  ¹⁄₂ of 1%, (ii) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate” and (iii) the Eurocurrency Rate plus 1.0%; provided that if the Base Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement. The “prime rate” is a rate set by Bank of America based upon various factors including its costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such “prime rate” announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

“Base Rate Committed Loan” means a Committed Loan that is a Base Rate Loan.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate. All Base Rate Loans shall be denominated in Dollars.

“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

“Borrower” has the meaning specified in the introductory paragraph hereto.

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrowing” means a Committed Borrowing or a Swing Line Borrowing, as the context may require.

“Borrowing Base” means, as of any date of determination, with respect to the assets of the Loan Parties, the sum of (i) the lesser of (A) 85% of the Dollar amount of the net book value of the Perfected Lease Assets and (B) 85% of the Dollar amount of the orderly liquidation value of the Perfected Lease Assets (determined as of the most recent appraisal thereof), (ii) 60% of the Dollar amount of the net book value of Unperfected Lease Assets (not to exceed $15,000,000 in the aggregate), (iii) 80% of the Dollar amount of Eligible Accounts, (iv) 50% of the Dollar amount of Eligible Inventory, and (v) 50% of the Dollar amount of Eligible Property, Plant and Equipment. Without limiting the foregoing, Excluded Property shall not be included in the Borrowing Base.

“Borrowing Base Certificate” means a certificate in a form attached as Exhibit H or other form reasonably acceptable to the Administrative Agent, which calculates the Borrowing Base as of any date of determination.

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located, and (where applicable):

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(a) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in Dollars, any fundings, disbursements, settlements and payments in Dollars in respect of any such Eurocurrency Rate Loan, or any other dealings in Dollars to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means any such day on which dealings in deposits in Dollars are conducted by and between banks in the London interbank eurodollar market;

(b) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in Euro, any fundings, disbursements, settlements and payments in Euro in respect of any such Eurocurrency Rate Loan, or any other dealings in Euro to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means a TARGET Day;

(c) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in a currency other than Dollars or Euro, means any such day on which dealings in deposits in the relevant currency are conducted by and between banks in the London or other applicable offshore interbank market for such currency; and

(d) if such day relates to any fundings, disbursements, settlements and payments in a currency other than Dollars or Euro in respect of a Eurocurrency Rate Loan denominated in a currency other than Dollars or Euro, or any other dealings in any currency other than Dollars or Euro to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan (other than any interest rate settings), means any such day on which banks are open for foreign exchange business in the principal financial center of the country of such currency.

“Canadian Dollar” or “CDN$” means lawful currency of Canada.

“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Administrative Agent, the L/C Issuer or the Lenders, as collateral for L/C Obligations or obligations of Lenders to fund participations in respect of L/C Obligations, cash or deposit account balances or, if the Administrative Agent and L/C Issuer shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to (a) the Administrative Agent and (b) the L/C Issuer. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

“Change in Law” means the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any Law, (b) any change in any Law or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of Law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Change of Control” means an event or series of events by which:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all Equity Interests that such person or group has the right to

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acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 35% or more of the Equity Interests of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); or

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

“Closing Date” means September 26, 2018.

“Code” means the Internal Revenue Code of 1986.

“Collateral” means any and all assets and rights and interests in or to property of the Loan Parties, whether tangible or intangible, in which a Lien is granted or purported to be granted pursuant to the Loan Documents to secure any of the Obligations.

“Commitment” means, as to each Lender, its obligation to (a) make Committed Loans to the Borrower pursuant to Section 2.01, (b) purchase participations in L/C Obligations, and (c) purchase participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the Dollar amount set forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and Assumption or other documentation pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

“Committed Borrowing” means a borrowing consisting of simultaneous Committed Loans of the same Type, in the same currency and, in the case of Eurocurrency Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01.

“Committed Loan” has the meaning specified in Section 2.01. Subject to the definition of “Base Rate Loan”, Committed Loans may be denominated in Dollars or Alternative Currencies.

“Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a conversion of Committed Loans from one Type to the other, or (c) a continuation of Eurocurrency Rate Loans, pursuant to Section 2.02(a), which shall be substantially in the form of Exhibit A or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).

“Compliance Certificate” means a certificate substantially in the form of Exhibit D.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

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“Consolidated Adjusted Interest Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated EBITDA plus rent expense for the period of the four prior fiscal quarters ending on such date to (b) Consolidated Interest Charges (excluding (i) any non-cash impact associated with any equity or equity-linked securities, and (ii) any prepayment premiums or penalties associated with the voluntary prepayment or redemption of Indebtedness permitted under Section 7.03 paid in cash by the Borrower or any of its Subsidiaries) plus rent expense for such period. Solely for purposes of this definition, “rent expense” shall include operating lease expense. Notwithstanding the foregoing, the aggregate amount of prepayment premiums excluded from Consolidated Interest Charges pursuant to the parenthetical in clause (b) of the preceding sentence, together with the aggregate amount of consent fees added back to Consolidated Net Income for purposes of calculating Consolidated EBITDA pursuant to clause (a)(vi) of such definition, shall not exceed 3% of the outstanding principal amount of the applicable Indebtedness permitted under Section 7.03 so prepaid or redeemed. In addition, solely for purposes of this definition and in the sole discretion of the Borrower, Consolidated EBITDA and Consolidated Interest Charges shall include pro-forma adjustments to incorporate the financial results of any entity acquired during the subject period by the Borrower or its Subsidiaries.

“Consolidated Capitalization Ratio” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated Funded Indebtedness plus Stockholders’ Equity as of such date.

“Consolidated EBITDA” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income for such period plus (a) the following to the extent deducted (except in the case of clause (vii)) in calculating such Consolidated Net Income: (i) Consolidated Interest Charges for such period, (ii) income tax expense or benefit (net of income tax credits) as reported on the consolidated statement of operations of the Borrower and its Subsidiaries for such period, (iii) depreciation and amortization expense, (iv) other extraordinary, unusual or non-recurring charges, expenses or losses of the Borrower and its Subsidiaries reducing such Consolidated Net Income which do not represent a cash item in such period or any future period, (v) non-cash stock compensation expenses for such period which do not represent a cash item in such period or any future period, (vi) consent fees (excluding fees to waive existing defaults) paid to holders of Indebtedness permitted under Section 7.03, (vii) to the extent not already included in Consolidated EBITDA, (A) any costs (including fees and expenses) incurred to the extent indemnified or otherwise covered by a third party (to the extent received by the Loan Parties during such period), (B) any costs incurred with respect to liability or casualty events, to the extent covered by insurance and received during such period, and (C) proceeds of business interruption insurance received by the Borrower or any of its Subsidiaries, (viii) costs, fees, expenses, charges and any one-time payments made related to (A) the Loan Parties’ negotiation and entry into the Loan Documents, or (B) any Permitted Acquisition or any debt or equity offering (whether or not consummated) and (ix) all unrealized non-cash losses under interest rate Swap Contracts during such period and minus (b) to the extent included in calculating such Consolidated Net Income, (i) extraordinary, unusual or non-recurring income or gains of the Borrower and its Subsidiaries increasing such Consolidated Net Income which does not represent a cash item in such period or any future period and (ii) all unrealized non-cash gains under interest rate Swap Contracts during such period. Notwithstanding the foregoing, the aggregate amount of consent fees added back to Consolidated Net Income for purposes of calculating Consolidated EBITDA pursuant to clause (a)(vi) of the preceding sentence, together with the aggregate amount of prepayment premiums excluded from Consolidated Interest Charges pursuant to the parenthetical in clause (b) of the first sentence of the definition of Consolidated Adjusted Interest Coverage Ratio, shall not exceed 3% of the outstanding principal amount of the applicable Indebtedness permitted under Section 7.03 so repaid or the holders of which have been so compensated. For purposes of clarification, gains or losses on purchases or sales of equipment in the ordinary course of the Borrower’s and its Subsidiaries’ business shall not constitute non-recurring income or expenses for purposes of determining Consolidated EBITDA.

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“Consolidated Funded Indebtedness” means, as of any date of determination with respect to the Borrower and its Subsidiaries on a consolidated basis, without duplication, the sum of: (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments; (b) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business, advisory fees and any earn-out obligation until such earn-out obligation is required to become a liability on the balance sheet of such Person in accordance with GAAP); (c) Indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including Indebtedness arising under conditional sales or other title retention agreements), whether or not such Indebtedness shall have been assumed by such Person or is limited in recourse; provided, however, that if such Indebtedness is limited in recourse to the property encumbered thereby, such Indebtedness shall be deemed to be equal to the lesser of the (i) fair market value of such asset at such date of determination and (ii) the amount of such Indebtedness; (d) capital leases and Synthetic Lease Obligations; (e) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Disqualified Equity Interest in such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; (f) all Guarantees with respect to Indebtedness of the types specified in clauses (a) through (e) above of another Person; and (g) all Indebtedness of the types referred to in clauses (a) through (f) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which any Loan Party or any Subsidiary is a general partner or joint venturer, except to the extent that Indebtedness is expressly made non-recourse to such Person.

“Consolidated Interest Charges” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all interest, premium payments, debt discount, fees (other than fees that are capitalized and amortized over the life of a loan), prepayment fees, Swap Contract expenses or breakage fees, charges and related expenses of the Borrower and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, and (b) the portion of rent expense of the Borrower and its Subsidiaries with respect to such period under capital leases that is treated as interest in accordance with GAAP.

“Consolidated Net Income” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the net income of the Borrower and its Subsidiaries (excluding extraordinary items) for that period; provided, however, that, without duplication, Consolidated Net Income shall be calculated without giving effect to (a) the cumulative effect of a change in accounting principles, (b) any write-off of deferred financing costs incurred as a result of the refinancing of Indebtedness, (c) purchase accounting adjustments required or permitted by GAAP, (d) any non-cash net after-tax income or loss from operating results of discontinued operations as determined by GAAP, and any after-tax gains or losses from sales of discontinued operations, (e) any non-cash impairment, charges or asset write-downs or write-offs (other than write-downs or write-offs of current assets), and (f) the net income (or loss) for such period of any Person that is not a Subsidiary; provided that Consolidated Net Income of the Borrower and its Subsidiaries shall be increased by the amount of dividends, distributions and other payments based on equity ownership that are actually paid in cash to the Borrower or a Subsidiary in respect of such period, in each case pursuant to GAAP.

“Consolidated Tangible Assets” means, as of any date, the book value of total assets of the Borrower and its subsidiaries on a consolidated basis minus the book value of intangible assets (including, for the avoidance of doubt, goodwill), as determined in accordance with GAAP.

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“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.

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

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

“Default Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided, however, that with respect to a Eurocurrency Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each case to the fullest extent permitted by applicable Laws, and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus 2% per annum.

“Defaulting Lender” means, subject to Section 2.17(c), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s reasonable determination (in good faith) that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, the L/C Issuer, the Swing Line Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swing Line Loans) within two Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent, the L/C Issuer or the Swing Line Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s reasonable determination (in good faith) that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in a writing reasonably satisfactory to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity or (iii) become the subject of a Bail-In

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Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.17(c)) as of the date established therefor by the Administrative Agent in a written notice of such determination, which shall be delivered by the Administrative Agent to the Borrower, the L/C Issuer, the Swing Line Lender and each other Lender promptly following such determination.

“Designated Jurisdiction” means any country or territory to the extent that such country or territory itself is the subject of any Sanction.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith. For purposes of clarification, the use of cash, cash equivalents or money in the ordinary course of business or in a manner not otherwise expressly prohibited by the terms of this Agreement, in each case, shall not constitute a “Disposition” or to “Dispose” under this Agreement.

“Disqualified Equity Interest” means any Equity Interest of any Person that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder thereof) or upon the happening of any event (a) matures (excluding any maturity as the result of an optional redemption by the issuer thereof or upon a “change of control” (as defined therein) or an asset sale, so long as any rights of the holders thereof upon the occurrence of such “change in control” or asset sale are subject to the prior payment in full in cash of the Obligations (other than contingent indemnification obligations and all Letters of Credit that remain outstanding that have been Cash Collateralized or with respect to which other arrangements satisfactory to the L/C Issuer have been made) and the termination of all Commitments and the termination of this Agreement) or is mandatorily redeemable in cash pursuant to a sinking fund obligation or otherwise, (b) is redeemable in cash at the option of the holder thereof (unless at the sole option of the issuer thereof or upon a “change of control” (as defined therein) or an asset sale, so long as any rights of the holders thereof upon the occurrence of such “change in control” or asset sale are subject to the prior payment in full in cash of the Obligations (other than contingent indemnification obligations and all Letters of Credit that remain outstanding that have been Cash Collateralized or with respect to which other arrangements satisfactory to the L/C Issuer have been made) and the termination of all Commitments and the termination of this Agreement), or (c) requires or mandates the purchase, redemption, retirement, defeasance or other similar payment (other than dividends) for cash (other than in connection with or upon a “change of control” (as defined therein) or an asset sale, so long as any rights of the holders thereof upon the occurrence of such “change in control” or asset sale are subject to the prior payment in full in cash of the Obligations (other than contingent indemnification obligations and all Letters of Credit that remain outstanding that have been Cash Collateralized or with respect to which other arrangements satisfactory to the L/C Issuer have been made) and the termination of all Commitments and the termination of this Agreement), in each case, on or prior to the date that is 91 days after the Maturity Date.

“Dollar” and “$” mean lawful money of the United States.

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“Dollar Equivalent” means, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount denominated in any Alternative Currency, the equivalent amount thereof in Dollars as determined by the Administrative Agent or the L/C Issuer, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of Dollars with such Alternative Currency.

“Domestic Subsidiary” means any Subsidiary (other than an Excluded Subsidiary) that is organized under the laws of any political subdivision of the United States.

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a Subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“Eligible Account” means an Account owned by any Loan Party which satisfies all of the following requirements:

(a) the Account is a genuine obligation resulting from the sale or lease of goods by, the rendition of services by or hire of vessels of by such Loan Party to a Person (other than to a Subsidiary, Affiliate, SPE or Joint Venture) in the ordinary course of business;

(b) the Account is subject to a first priority perfected Lien to secure the Obligations;

(c) there are no conditions which must be satisfied before such Loan Party is entitled to receive payment of the Account;

(d) the account debtor has not asserted in writing any defense to payment and has not asserted in writing any counterclaim or offset against the Borrower or any Subsidiary;

(e) to the extent any credit balance exists in favor of the account debtor, such credit balance has been deducted from the Account balance;

(f) except with respect to car hire receivables, such Loan Party has sent an invoice or statement to the account debtor in the amount of the Account; and

(g) Accounts arising from (i) contracts subject to performance or surety bonds with respect to which contracts the account debtors have elected to have the bonding company assume or provide for the assumption of the applicable Loan Party’s performance obligations with respect thereto and (ii) any other contracts with respect to which such bonding company described in clause (i) has provided a surety or performance bond.

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For purposes of this Agreement, the amount of any Eligible Account shall be determined to be net of any portion thereof that is received by the Loan Parties for the benefit of third parties and net of any lease payments owed by the Loan Parties with respect to goods subleased by the Loan Parties to third parties.

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Sections 10.06(b)(iii) and (v) (subject to such consents, if any, as may be required under Section 10.06(b)(iii)).

“Eligible Inventory” means all Inventory of the Loan Parties, including raw materials, work-in-process, and finished goods, valued at the lower of cost (on a FIFO basis) or market value, in accordance with GAAP, which satisfies all of the following requirements:

(a) the Inventory is owned by a Loan Party and is subject to a first priority perfected Lien to secure the Obligations;

(b) the Inventory is held for sale in the business of a Loan Party, is of good and merchantable title, and is not obsolete, defective or unsalable;

(c) the Inventory is covered by insurance to any extent required by any Loan Document;

(d) the Inventory is not subject to any licensing agreement, trademark or other proprietary right to which the applicable Loan Party is not subject or has the benefit of, and which would prohibit or restrict its sale by the Lender to third parties; and

(e) the Inventory is stored in the United States or Canada.

“Eligible Property, Plant and Equipment” means the net book value of all owned equipment (as defined in Article 9 of the Uniform Commercial Code in effect in New York as of the Closing Date) and real property of the Loan Parties (i) which has been pledged or, in the case of real property, mortgaged to the Administrative Agent as security for the Obligations and against which the Administrative Agent has obtained a first priority, perfected, and, in the case of real property, title insured, security interest, (ii) which is located in the United States and (iii) in the case of real property, with respect to which the Administrative Agent has received, and is satisfied with the results of, an appraisal for such real property and a Phase I environmental assessment.

“Environmental Laws” means any and all United States federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the Release or threatened Release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any of its Subsidiaries directly or indirectly resulting from or based upon (a) violation by the Borrower or any Subsidiary of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal by the Borrower or any Subsidiary of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release by the Borrower or any Subsidiary of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

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“Equity Interests” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of, or interest in, (however designated) equity of such Person, including any preferred stock, but excluding any debt security that is convertible into, or exchangeable for Equity Interests.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

“Euro” and “EUR” mean the single currency of the Participating Member States.

“Eurocurrency Rate” means,

(a) for any Interest Period with respect to a Eurocurrency Rate Loan:    (i) in the case of Eurocurrency Rate Loan denominated in a LIBOR Quoted Currency, the rate per annum equal to the London Interbank Offered Rate (“LIBOR”) or a comparable or successor rate, which comparable or successor rate is approved by the Administrative Agent, as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) (in such case, the “LIBOR Rate”) at approximately 11:00 a.m., London time, determined two Business Days prior to the commencement of such Interest Period, for deposits in the relevant currency (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period; (ii) in the case of Eurocurrency Rate Loan denominated in Canadian Dollars, the rate per annum equal to the Canadian Dealer Offered Rate (“CDOR”), or a comparable or successor rate, which comparable or successor rate is approved by the Administrative Agent, as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) (in such case, the “CDOR Rate”) at approximately 10:00 a.m. (Toronto, Ontario time) determined on the Rate Determination Date with a term equivalent to such Interest Period; (iii) in the case of Eurocurrency Rate Loan denominated in Mexican Pesos, the rate per annum equal to the Interbanking Equilibrium Interest Rate (“TIIE”), or a comparable or successor rate, which comparable or successor rate is approved by the Administrative Agent, as published by Banco de Mexico in the Federation’s Official Gazette (or such other commercially available source

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providing such quotations as may be designated by the Administrative Agent from time to time) at approximately 2:00 p.m. (Mexico City, Mexico time) determined on the Rate Determination Date with a term equivalent to such Interest Period; and (iv) in the case of any other Eurocurrency Rate Loan denominated in a Non-LIBOR Quoted Currency (other than those specified above), the rate designated with respect to such Alternative Currency at the time such Alternative Currency is approved by the Administrative Agent and the Lenders pursuant to Section 1.05; and

(b) for any interest rate calculation with respect to a Base Rate Loan on any date, the rate per annum equal to LIBOR at approximately 11:00 a.m. London time, determined two Business Days prior to such date for Dollar deposits with a term of one month commencing that day;

provided that to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied in a manner consistent with market practice; provided, further that to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied as otherwise reasonably determined by the Administrative Agent. Notwithstanding the foregoing, if the Eurocurrency Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.

“Eurocurrency Rate Loan” means a Committed Loan that bears interest at a rate based on clause (a) of the definition of “Eurocurrency Rate.”    Eurocurrency Rate Loans may be denominated in Dollars or in an Alternative Currency. All Committed Loans denominated in an Alternative Currency must be Eurocurrency Rate Loans.

“Event of Default” has the meaning specified in Section 8.01.

“Excluded Accounts” means any deposit accounts, securities accounts or other similar accounts (a) into which there are deposited no funds other than those intended solely to cover wages for employees (and related contributions to be made on behalf of such employees to health and benefit plans) plus balances for outstanding checks for wages from prior periods; (b) constituting employee withholding accounts and containing only funds deducted from pay otherwise due to employees for services rendered to be applied toward the tax obligations of such employees; (c) accounts maintained solely in trust for the benefit of third parties and fiduciary purposes; (d) into which there are deposited no funds other than those that are deposited for employee benefits (e.g. health insurance, flexible spending, etc.); and (e) zero balance accounts.

“Excluded GBW Property” means any property of Borrower or a Subsidiary from time to time that is (a) rail car repair, refurbishment and maintenance related real and personal property (including (i) customer lists, goodwill and other intangible assets, (ii) rail car repair business inventory (including work-in-process), (iii) certain contracts, permits and agreements related thereto and (iv) certain property leased related thereto) or Equity Interests in Brandon Railroad LLC or other Subsidiaries, who at the time of transfer only have assets or operations relating to railcar repair, refurbishment and maintenance assets, and (b) leases or licenses relating to rail car repair, refurbishment and maintenance assets; provided, however, if the aggregate book value of “Excluded GBW Property” shall at any time exceed an amount equal to $20,000,000 in the aggregate, such property that would otherwise be “Excluded GBW Property” pursuant to this definition that exceeds such amount shall be deemed to not be Excluded GBW Property for purposes of this Agreement.

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“Excluded Property” means, collectively (a) any rights or interests under any contract, lease, license, permit or agreement, including, without limitation, interests in partnerships, joint ventures or other such non-wholly owned Subsidiaries, if under the terms of such contract, lease, license, permit or agreement, or applicable Law with respect thereto, the granting of a security interest therein in the manner contemplated by the Loan Documents is prohibited (except (i) where such prohibition has been waived or the consent of the other party to such contract, lease, permit, license or agreement has been obtained or (ii) to the extent that an otherwise applicable prohibition on such grant is rendered ineffective by the Uniform Commercial Code or other applicable Laws), (b) equipment and other assets subject to a capitalized lease or purchase money Liens permitted under Section 7.01(j) or 7.01(s) that prohibit the granting of any other Lien on such equipment or other assets; provided that such equipment or other assets shall become Collateral upon release of such capitalized lease or purchase money Lien, (c) any fixtures attached to real property that is subject to a Lien permitted under Section 7.01(j) or 7.01(s), (d) Lease-Related Assets that are subject to Liens securing Term Debt permitted under Section 7.03(d) and to the extent that the terms of such Term Debt prohibit the granting of any Lien on such assets to secure the Obligations; provided that such assets shall not constitute Excluded Property at any time when such Lien is not in effect, (e) any IP Rights for which a perfected Lien thereon is not effected by filing of a Uniform Commercial Code financing statement or by appropriate evidence of such Lien being filed in the United States Copyright Office or the United States Patent and Trademark Office, (f) unless otherwise pledged as Collateral by the Loan Parties in their discretion, any personal property (other than personal property described in clause (e) above) for which the attachment or perfection of a Lien thereon is not governed by the Uniform Commercial Code or evidenced by filings with the Surface Transportation Board, (g) any intent-to-use applications for trademarks to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such applications under applicable Law, (h) Equity Interests of any Foreign Subsidiary, to the extent that such Equity Interests are not required to be (and have not been) pledged pursuant to Section 6.14, (i) Equity Interests in any Joint Venture (including Greenbrier-GIMSA, LLC), SPE, or Managed Person to the extent and for so long as either (y) the Organization Documents of such Joint Venture, SPE, or Managed Person prohibit the granting of security interests therein in the manner contemplated by the Loan Documents or (z) the terms of any financing arrangements with respect to such Joint Venture, SPE, or Managed Person prohibit the granting of Equity Interests therein in the manner contemplated by the Loan Documents, (j) margin stock (within the meaning of Regulation U issued by the Federal Reserve Bank), (k) Excluded Accounts (other than Excluded Accounts described in clause (e) of the definition thereof), and (l) Excluded GBW Property that is leased to GBW Railcar Services Holdings, L.L.C., a Delaware limited liability company or its subsidiaries. Notwithstanding the foregoing, “Excluded Property” shall not include any property pledged in accordance with Section 6.14(c).

“Excluded Subsidiary” means (a) any Subsidiary that is a “controlled foreign corporation” within the meaning of Section 957 of the Code (a “CFC”), (b) any direct or indirect Subsidiary all or substantially all of the assets of which consist of, directly or indirectly, the Equity Interests in one or more CFCs and (c) any Subsidiary that is owned directly or indirectly by a CFC (other than a Subsidiary that is organized under the laws of any political subdivision of the United States and that is treated as a C-corporation for federal income tax purposes (a “Domestic C-Corp”) or that is owned directly or indirectly by a Domestic C-Corp the income of which is treated for federal income tax purposes as income of such Domestic C-Corp).

“Excluded Swap Obligation” means, with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Loan Party of, or the grant under a Loan Document by such Loan Party of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act (or the application or official interpretation thereof) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act (determined after giving effect to Section 28 of the Security Agreement and any and all guarantees of such Loan Party’s Swap Obligations by other Loan Parties) at the time the Guarantee of such Loan Party, or grant by such Loan Party of a

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security interest, becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a Master Agreement governing more than one Swap Contract, such exclusion shall apply to only the portion of such Swap Obligation that is attributable to Swap Contracts for which such Guarantee or security interest is or becomes illegal.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to any Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the Laws of, or having its principal office or, in the case of any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a Law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 10.13) or (ii) such Lender changes its Lending Office, except in each case to the extent that, pursuant to Section 3.01(a)(ii), 3.01(a)(iii) or 3.01(c), amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such Recipient’s failure to comply with Section 3.01(e) and (d) any U.S. federal withholding Taxes imposed pursuant to FATCA.

“Existing Credit Agreement” has the meaning specified in the Introductory Statement hereto.

“Existing Letters of Credit” means those Letters of Credit listed on Schedule 1.01.

“Facility Office” means, with respect to any Lender, the office through which such Lender will perform its obligations under this Agreement.

“FATCA” means Sections 1471 through 1474 of the Code, as of the Closing Date (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any applicable intergovernmental agreements.

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight United States federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent, and (c) if the Federal Funds Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.

“Fee Letter” means the letter agreement, dated as of the Closing Date, among the Borrower, the Administrative Agent and the Arranger.

“Flood Hazard Property” means any improved real property constituting Collateral subject to a mortgage or deed of trust in favor of the Administrative Agent that is in an area designated by the Federal Emergency Management Agency as having special flood or mudslide hazards.

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“Foreign Lender” means any Lender that is not a U.S. Person.

“Foreign Subsidiary” means any Subsidiary other than a Domestic Subsidiary.

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to the L/C Issuer, such Defaulting Lender’s Applicable Percentage of the outstanding L/C Obligations other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to the Swing Line Lender, such Defaulting Lender’s Applicable Percentage of Swing Line Loans other than Swing Line Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders in accordance with the terms hereof.

“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“Golden West Agreements” means the Re-marketing Agreement dated as of November 19, 1987 among Southern Pacific Transportation Company, St. Louis Southwestern Railway Company, Greenbrier Leasing Corporation and the Greenbrier Railcar, Inc., the Amendment to Re-marketing Agreement among Southern Pacific Transportation Company, St. Louis Southwestern Railway Company, Greenbrier Leasing Corporation and Greenbrier Railcar, Inc. dated as of November 15, 1988, the Amendment No. 2 to Re-marketing Agreement among Southern Pacific Transportation Company, St. Louis Southwestern Railway Company, Greenbrier Leasing Corporation and Greenbrier Railcar, Inc., and the Amendment No. 3 to Re-marketing Agreement dated November 19, 1987 among Southern Pacific Transportation Company, St. Louis Southwestern Railway Company, Greenbrier Leasing Corporation and Greenbrier Railcar, Inc. dated as of March 5, 1991, in each case as in effect on the Closing Date.

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Guarantee” means, as to any Person, any (a) any Contractual Obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to

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pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“Honor Date” has the meaning specified in Section 2.03(c).

“Immaterial Subsidiary” means, as of any date, any Subsidiary (a) whose total assets, as of that date, are less than $5,000,000 and (b) whose total revenues for the most recent twelve-month period do not exceed $5,000,000.

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank Guarantees, surety bonds and similar instruments;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business, advisory fees and any earn-out obligation until such earn-out obligation is required to become a liability on the balance sheet of such Person in accordance with GAAP);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse; provided, however, that if such indebtedness is limited in recourse to the property encumbered thereby, such indebtedness shall be deemed to be equal to the lesser of (i) the fair market value of such asset at such date of determination and (ii) the amount of such indebtedness;

(f) capital leases and Synthetic Lease Obligations;

(g) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Disqualified Equity Interest in such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and

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(h) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any capital lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.

“Indemnitee” has the meaning specified in Section 10.04(b).

“Information” has the meaning specified in Section 10.07.

“Intercreditor Agreement” means (a) that certain Amended and Restated Intercreditor Agreement, dated as of the date hereof, among the Administrative Agent and the administrative agent under that certain $225,000,000 Term Debt agreement among Greenbrier Leasing Company LLC, the lenders party thereto and Bank of America, as administrative agent, and (b) any other intercreditor agreement contemplated by Section 6.14(e).

“Interest Payment Date” means, (a) as to any Eurocurrency Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however, that if any Interest Period for a Eurocurrency Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the last Business Day of each March, June, September and December and the Maturity Date.

“Interest Period” means, as to each Eurocurrency Rate Loan, the period commencing on the date such Eurocurrency Rate Loan is disbursed or converted to or continued as a Eurocurrency Rate Loan and ending on the date that is seven (7) days, one, two, three or six months thereafter (or in the case of a Eurocurrency Rate Loan denominated in Mexican Pesos, twenty-eight or ninety-one days thereafter) in each case, subject to availability for the applicable interest rate, as selected by the Borrower in its Committed Loan Notice or such other period that is twelve months or less requested by the Borrower any and consented to by all the Lenders; provided that:

(i) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

(ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

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(iii) no Interest Period shall extend beyond the Maturity Date.

“Inventory” has the meaning provided in Article 9 of the Uniform Commercial Code in effect in New York as of the Closing Date.

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property of, or a line of business or division of, another Person. For purposes of covenant compliance, the amount of any Investment made by any Person shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment less all cash returns, cash dividends and cash distributions (or the fair market value of any non-cash returns, dividends and distributions) received by such Person from such Investment.

“IP Rights” has the meaning specified in Section 5.17.

“IRS” means the United States Internal Revenue Service.

“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).

“Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the L/C Issuer and the Borrower (or any Subsidiary) or in favor of the L/C Issuer and relating to any such Letter of Credit.

“Joint Venture” means a Person or other legal arrangement which meets the following criteria: (a) it is a single-purpose corporation, partnership, limited liability company, joint venture or other similar legal arrangement (whether created by contract or conducted through a separate legal entity) formed by the Borrower or any of its Subsidiaries with another Person in order to conduct a common venture or enterprise with such Person and (b) the Borrower and its Subsidiaries directly or indirectly own less than 75% of the Equity Interests.

“Judgment Currency” has the meaning specified in Section 10.17.

“Laws” means, collectively, all international, foreign, United States federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Percentage. All L/C Advances shall be denominated in Dollars.

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“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Committed Borrowing. All L/C Borrowings shall be denominated in Dollars.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

“L/C Issuer” means (a) Bank of America, (b) solely to the extent that Bank of America is unable or unwilling to issue such Letters of Credit hereunder, any other Lender with a Commitment that upon request of the Borrower agrees to issue one or more Letters of Credit hereunder, as issuer of such Letters of Credit, and/or (c) any successor issuer of Letters of Credit hereunder. The term “L/C Issuer” when used with respect to a Letter of Credit or the L/C Obligations relating to a Letter of Credit shall refer to the L/C Issuer that issued such Letter of Credit.

“L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts with respect to Letters of Credit, including L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.08. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

“Lease-Related Assets” means (1) locomotives, rail cars, rolling stock, marine barges and other surface transportation equipment (and any accessions and attachments thereto) that are leased, or are held for lease, by a Loan Party to third Persons, (2) the accounts, chattel paper, documents, instruments, general intangibles (but excluding intellectual property) and commercial tort claims arising from or relating to the lease, sale, exchange or other disposition of the foregoing locomotives, rail cars, rolling stock, marine barges and other surface transportation equipment or evidencing rights in any of the assets described in clauses (1), (2), (3) and/or (4) of this definition, (3) the books and records relating or pertaining to or evidencing the foregoing and (4) the proceeds and products of the foregoing assets described in clauses (1), (2) and/or (3) above.

“Lender” means each of the Persons identified as a “Lender” on the signature pages hereto and each other Person that becomes a “Lender” in accordance with this Agreement and their successors and assigns and, as the context requires, includes the Swing Line Lender.

“Lending Office” means, as to the Administrative Agent, the L/C Issuer or any Lender, the office or offices of such Person described as such in such Person’s Administrative Questionnaire, or such other office or offices as such Person may from time to time notify the Borrower and the Administrative Agent, which office may include any Affiliate of such Lender or any domestic or foreign branch of such Lender or such affiliate. Unless the context otherwise requires each references to a Lender shall include its applicable Lending Office.

“Letter of Credit” means a standby or sight draft commercial letter of credit issued under this Agreement providing for the payment of cash upon the honoring of a presentation thereunder. Letters of Credit may be issued in Dollars or in Alternative Currencies. Notwithstanding anything to the contrary contained herein, a letter of credit (other than the Existing Letters of Credit) issued by an L/C Issuer other than Bank of America shall not be a “Letter of Credit” for purposes of the Loan Documents until such time as the Administrative Agent has been notified in writing of the issuance thereof by the applicable L/C Issuer and has confirmed with such L/C Issuer that there exists adequate availability under the Revolver Ceiling to issue such letter of credit.

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“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.

“Letter of Credit Expiration Date” means the day that is seven days prior to the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

“Letter of Credit Fee” means any letter of credit fee payable by the Borrower to the Administrative Agent, for the account of the Lenders, pursuant to Section 2.03(h).

“Letter of Credit Sublimit” means an amount equal to the lesser of $100,000,000 or the amount available under the Revolver Ceiling. The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Commitments. As of the Closing Date, the Letter of Credit Sublimit of the L/C Issuer is set forth on Schedule 2.01.

“LIBOR” has the meaning specified in the definition of Eurocurrency Rate.

“LIBOR Rate” has the meaning specified in the definition of Eurocurrency Rate.

“LIBOR Successor Rate Conforming Changes” means, with respect to any proposed LIBOR Successor Rate, any conforming changes to the definition of Base Rate, Interest Period, timing and frequency of determining rates and making payments of interest and other administrative matters as may be appropriate, in the discretion of the Administrative Agent, to reflect the adoption of such LIBOR Successor Rate and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such LIBOR Successor Rate exists, in such other manner of administration as the Administrative Agent determines in consultation with the Borrower).

“LIBOR Quoted Currency” means Dollars, Euros, Sterling and any other Alternative Currency for which there is a published LIBOR rate with respect thereto, in each case as long as there is a published LIBOR rate with respect thereto.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

“Loan” means an extension of credit by a Lender to the Borrower under Article II in the form of a Committed Loan or a Swing Line Loan.

“Loan Documents” means (a) this Agreement, (b) each Note, (c) each Issuer Document, (d) the Fee Letter, (e) the Subsidiary Guaranty, (f) the Security Agreement, (g) the Pledge Agreement, (h) any Intercreditor Agreement and (i) each other security agreement, pledge, deed of trust, mortgage or other document purporting to create a Lien on the Collateral. Loan Documents shall not include Swap Contracts or Treasury Management Agreements.

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“Loan Parties” means, collectively, the Borrower and each Subsidiary Guarantor.

“Managed Person” means any entity for which a Loan Party provides management or other services but with respect to which neither the Borrower nor any Subsidiary has any ownership interest.

“Mandatory Cost” means any amount incurred periodically by any Lender during the term of this Agreement which constitutes fees, costs or charges imposed on lenders generally in the jurisdiction in which such Lender is domiciled, subject to regulation or has its Facility Office by any Governmental Authority.

“Master Agreement” has the meaning specified in the definition of “Swap Contract.”

“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties or financial condition or results of operations of the Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the ability of the Loan Parties taken as a whole to perform their material obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which they are a party.

“Material Contractual Obligation” means, with respect to any Person, (i) each Contractual Obligation to which such Person is a party involving aggregate consideration payable to or by such Person of an amount equal to or greater than the Threshold Amount (other than purchase orders in the ordinary course of the business of such Person), and (ii) all other contracts or agreements, the loss of which could reasonably be expected to result in a Material Adverse Effect.

“Maturity Date” means September 26, 2023.

“Mexican Peso” means the lawful currency of Mexico.

“Minimum Collateral Amount” means, at any time, (a) with respect to Cash Collateral consisting of cash or deposit account balances provided to reduce or eliminate Fronting Exposure during the existence of a Defaulting Lender, an amount equal to 105% of the Fronting Exposure of the L/C Issuer with respect to Letters of Credit issued and outstanding at such time, (b) with respect to Cash Collateral consisting of cash or deposit account balances provided in accordance with the provisions of Section 2.16(a)(i), (a)(ii) or (a)(iii), an amount equal to 105% of the Outstanding Amount of all L/C Obligations, and (c) otherwise, an amount determined by the Administrative Agent and the L/C Issuer in their sole discretion.

“Multiemployer Plan” means any employee benefit plan of the type subject to and described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

“Non-LIBOR Quoted Currency” means any currency other than a LIBOR Quoted Currency.

“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of all Lenders or all directly affected Lenders in accordance with the terms of Section 10.13 and (b) has been approved by the Required Lenders.

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

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“Note” means a promissory note made by the Borrower in favor of a Lender evidencing Loans made by such Lender to the Borrower, substantially in the form of Exhibit C.

“Notice of Loan Prepayment” means a notice of prepayment with respect to a Loan, which shall be substantially in the form of Exhibit I or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer.

“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including (i) interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding and (ii) all costs and expenses in connection with the enforcement or collection of the obligations that are reimbursable by any Loan Party under the terms of any Loan Document. The foregoing shall also include (a) all obligations under any Swap Contract between any Loan Party and any Lender or Affiliate of a Lender that is permitted to be incurred pursuant to Section 7.03(c) (other than any Swap Contract that is subject to a Lien permitted by Section 7.01(i)); provided, however, that the “Obligations” of a Loan Party shall exclude any Excluded Swap Obligations with respect to such Loan Party and (b) all obligations under any Treasury Management Agreement between any Loan Party and any Lender or Affiliate of a Lender.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.06).

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“Outstanding Amount” means (i) with respect to Committed Loans on any date, the Dollar Equivalent amount of the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of such Committed Loans occurring on such date; (ii) with respect to Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of such Swing Line Loans occurring on such date; and (iii) with respect to any L/C Obligations on any date, the Dollar Equivalent amount of the aggregate outstanding amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursement of Unreimbursed Amounts.

“Overnight Rate” means, for any day, (a) with respect to any amount denominated in Dollars, the greater of (i) the Federal Funds Rate and (ii) an overnight rate determined by the Administrative Agent, the L/C Issuer, or the Swing Line Lender, as the case may be, in accordance with banking industry rules on interbank compensation, and (b) with respect to any amount denominated in an Alternative Currency, the rate of interest per annum at which overnight deposits in the applicable Alternative Currency, in an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day by a branch or Affiliate of Bank of America in the applicable offshore interbank market for such currency to major banks in such interbank market.

“Participant” has the meaning specified in Section 10.06(d).

“Participant Register” has the meaning specified in Section 10.06(d).

“Participating Member State” means any member state of the European Union that has the Euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

“Perfected Lease Assets” means those certain lease-related assets, including, but not limited to, rail cars, marine barges and other surface transportation equipment, and related chattel paper, of the Borrower, or of Subsidiary Guarantors, which have been pledged to the Administrative Agent, for the benefit of the holders of the Obligations, as security for the Obligations, and against which the Administrative Agent, for the benefit of the holders of the Obligations, has obtained a first priority, perfected security interest.

“Permitted Acquisition” means an Investment consisting of the acquisition by the Borrower or a Subsidiary Guarantor, in a single transaction or in a series of related transactions, of either (a) all or any substantial portion of the property of, or a line of business or division of, another Person or (b) at least a majority of the Voting Stock of another Person, in each case whether or not involving a merger or consolidation with such other Person (any such transaction, an “Acquisition”), provided, that (i) the property acquired (or the property of the Person acquired) in such Acquisition is a business, or those assets of a business, of the type that would not result in a violation of Section 7.07, (ii) in the case of an Acquisition of the Equity Interests of another Person, the board of directors (or other comparable governing body) of such other Person shall have duly approved such Acquisition, (iii) the Borrower shall have delivered to the Administrative Agent a certificate demonstrating that, upon giving effect to such

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Acquisition, the Loan Parties would be in compliance with the financial covenants set forth in Section 7.11 on a Pro Forma Basis for the period most recently ended for which financial statements have been delivered pursuant to Section 6.01, (iv) the representations and warranties made by the Loan Parties in each Loan Document shall be true and correct in all material respects (or, if qualified by materiality or Material Adverse Effect, in all respects) at and as if made as of the date of such Acquisition (after giving effect thereto), except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (or, if qualified by materiality or Material Adverse Effect, in all respects) as of such earlier date, (v) if such transaction involves the purchase of an interest in a partnership between a Loan Party as a general partner and entities unaffiliated with the Borrower as the other partners, such transaction shall be effected by having such equity interest acquired by a corporate holding company directly or indirectly wholly-owned by such Loan Party newly formed for the sole purpose of effecting such transaction, and (vi) immediately after giving effect to such Acquisition, there shall be at least $25,000,000 of undrawn availability under the Aggregate Commitments and the Revolver Ceiling.

“Permitted Liens” means, at any time, Liens in respect of property of any Loan Party or any Subsidiary permitted to exist at such time pursuant to the terms of Section 7.01.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Borrower or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

“Platform” has the meaning specified in Section 6.02.

“Pledge Agreement” means that certain Fourth Amended and Restated Pledge Agreement, dated as of the Closing Date, among the Loan Parties party thereto and the Administrative Agent.

“Pro Forma Basis” means, for purposes of calculating the financial covenants set forth in Section 7.11 (including for purposes of determining the Applicable Rate) or as otherwise specified by this Agreement, that any adjustments in connection with a Permitted Acquisition or other Investment permitted by Section 7.02 that results in a Person becoming a Subsidiary shall be deemed to have occurred as of the first day of the most recent four fiscal quarter period preceding the date of such transaction for which the Borrower was required to deliver (and has delivered) financial statements pursuant to Section 6.01(a) or (b). In connection with the foregoing, (a) income statement items attributable to the Person or property acquired shall be included to the extent relating to any period applicable in such calculations to the extent (i) such items are not otherwise included in such income statement items for the Borrower and its Subsidiaries in accordance with GAAP or in accordance with any defined terms set forth in Section 1.01 and (ii) such items are supported by financial statements or other information reasonably satisfactory to the Administrative Agent and (b) any Indebtedness incurred or assumed by the Borrower or any Subsidiary (including the Person or property acquired) in connection with such transaction and any Indebtedness of the Person or property acquired which is not retired in connection with such transaction shall be deemed to have been incurred as of the first day of the applicable period.

“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

“Public Lender” has the meaning specified in Section 6.02.

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“Qualified ECP Guarantor” means, at any time, each Loan Party with total assets exceeding $10,000,000 or that qualifies at such time as an “eligible contract participant” under the Commodity Exchange Act and can cause another Person to qualify as an “eligible contract participant” at such time under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Qualified Equity Interests” means the Equity Interests that are not Disqualified Equity Interests.

“Railcar Sales in the Ordinary Course of Business” means the Disposition of locomotives, rail cars, rolling stock, marine barges and other surface transportation equipment (and any accessions and attachments thereto) in the ordinary of course of business or as may be consistent with past practice, in each case, as permitted by Section 7.05.

“Rate Determination Date” means two (2) Business Days prior to the commencement of such Interest Period (or such other day as is generally treated as the rate fixing day by market practice in such interbank market, as determined by the Administrative Agent; provided that to the extent such market practice is not administratively feasible for the Administrative Agent, then “Rate Determination Date” means such other day as otherwise reasonably determined by the Administrative Agent).

“Recipient” means the Administrative Agent, any Lender, or the L/C Issuer.

“Register” has the meaning specified in Section 10.06(c).

“Related Indemnified Party” means with respect to any Indemnitee (a) any Controlling Person or Controlled Affiliate of such Indemnitee, (b) the respective directors, officers or employees of such Indemnitee, (c) the respective agents and advisors or other representatives of such Indemnitee, in the case of this clause (c), acting on behalf of or at the instruction of such Indemnitee; provided, that each reference to a Controlled Affiliate or Controlling Person in this definition pertains to a Controlled Affiliate or Controlling Person involved in the negotiation, syndication, administration and enforcement of this Agreement.

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

“Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing or migration into, onto or through the environment.

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.

“Required Lenders” means, as at any date of determination, Lenders holding in the aggregate more than 50% of (a) the Dollar amount of the unfunded Commitments and the outstanding Committed Loans, L/C Obligations and participations therein or (b) if the Commitments have been terminated, the Dollar amount of the outstanding Committed Loans, L/C Obligations and participations therein. The unfunded Commitments of, and the outstanding Committed Loans, L/C Obligations and participations therein held or deemed held by, any Defaulting Lender shall be disregarded in determining Required Lenders at any time; provided that the amount of any participation in any Swing Line Loan and Unreimbursed Amounts that such Defaulting Lender has failed to fund that have not been reallocated to and funded by another Lender shall be deemed to be held by the Lender that is the Swing Line Lender or L/C Issuer, as the case may be, in making such determination.

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“Resignation Effective Date” has the meaning specified in Section 9.06.

“Responsible Officer” means the chief executive officer, president, vice president, chief financial officer, controller or assistant controller, secretary or assistant secretary, treasurer or assistant treasurer of a Loan Party and, solely for purposes of notices given pursuant to Article II, any other officer or employee of the applicable Loan Party so designated by any of the foregoing officers in a notice to the Administrative Agent or any other officer or employee of the applicable Loan Party designated in or pursuant to an agreement between the applicable Loan Party and the Administrative Agent. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party. To the extent requested by the Administrative Agent, each Responsible Officer will provide an incumbency certificate and appropriate authorization documentation, in form and substance reasonably satisfactory to the Administrative Agent.

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to the Borrower’s and any Subsidiary’s stockholders, partners or members (or the equivalent Person thereof) other than, in any case, (a) dividends or distributions payable to the Borrower or a Subsidiary Guarantor, (b) a dividend or distribution payable or other payment made solely in (i) shares in any other class of Equity Interests not constituting Disqualified Equity Interests, with terms that are not materially more favorable, taken as a whole and in the good faith determination of the Borrower, than the Equity Interests with respect to which such dividend, distribution or other payment was made or (ii) shares of any class of common Equity Interests.

“Revaluation Date” means (a) with respect to any Committed Loan, each of the following: (i) each date of a Borrowing of a Eurocurrency Rate Loan denominated in an Alternative Currency, and (ii) each date of a continuation of a Eurocurrency Rate Loan denominated in an Alternative Currency pursuant to Section 2.02, and (iii) such additional dates as the Administrative Agent shall determine or the Required Lenders shall require; and (b) with respect to any Letter of Credit, each of the following: (i) each date of issuance of a Letter of Credit denominated in an Alternative Currency, (ii) each date of an amendment of any such Letter of Credit having the effect of increasing the amount thereof (solely with respect to the increased amount), (iii) each date of any payment by the L/C Issuer under any Letter of Credit denominated in an Alternative Currency, (iv) in the case of the Existing Letters of Credit, the Closing Date and (v) such additional dates as the Administrative Agent or the L/C Issuer shall determine or the Required Lenders shall require.

“Revolver Ceiling” means the amount that is the lesser of (a) the Aggregate Commitments and (b) the amount available under the Borrowing Base.

“Same Day Funds” means (a) with respect to disbursements and payments in Dollars, immediately available funds, and (b) with respect to disbursements and payments in an Alternative Currency, same day or other funds as may be determined by the Administrative Agent or the L/C Issuer, as the case may be, to be customary in the place of disbursement or payment for the settlement of international banking transactions in the relevant Alternative Currency.

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“Sanction(s)” means any international economic sanction administered or enforced by the United States Government, including OFAC, the United Nations Security Council, the European Union, Her Majesty’s Treasury (“HMT”) or other relevant sanctions authority.

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

“Secured Party Designation Notice” shall mean a notice from any Lender or an Affiliate of a Lender substantially in the form of Exhibit J.

“Security Agreement” means that certain Fourth Amended and Restated Security Agreement, dated as of the Closing Date, among the Loan Parties party thereto and the Administrative Agent.

“SPE” means any Person that is a direct or indirect, special purpose subsidiary of the Borrower that engages in no activities other than those reasonably related to or in connection with the entering into of transactions described in Section 7.05, including lease securitization, structured finance or syndication transactions, and/or in acquiring, managing, marketing, remarketing, leasing and/or selling rail cars and which is designated by the board of directors of the Borrower as an SPE; provided (a) that neither the Borrower nor any Subsidiary (i) shall provide any Guarantee or other credit support to such Person, (ii) shall have any contract, agreement, arrangement or understanding with such Person other than on terms that are fair and reasonable and that are no less favorable to the Borrower or such Subsidiary than could be obtained from an unrelated Person (other than representations, warranties and covenants (including those relating to servicing) entered into in the ordinary course of business in connection with a transactions contemplated by Section 7.05(f), including lease securitization, structured finance or syndication transactions), and (iii) shall have any obligation to maintain or preserve such Person’s financial condition or to cause such Person to achieve certain levels of operating results and (b) no portion of the Indebtedness or any other obligations (contingent or otherwise) of such Person shall be recourse to the Borrower or its Subsidiaries (other than representations, warranties and covenants (including those relating to servicing) entered into in the ordinary course of business in connection with a transactions contemplated by Section 7.05(f), including lease securitization, structured finance or syndication transactions).

“Special Notice Currency” means at any time an Alternative Currency, other than the currency of a country that is a member of the Organization for Economic Cooperation and Development at such time located in North America or Europe.

“Spot Rate” for a currency means the rate determined by the Administrative Agent or the L/C Issuer, as applicable, to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days prior to the date as of which the foreign exchange computation is made; provided that the Administrative Agent or the L/C Issuer may obtain such spot rate from another financial institution designated by the Administrative Agent or the L/C Issuer if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency; and provided further that the L/C Issuer may use such spot rate quoted on the date as of which the foreign exchange computation is made in the case of any Letter of Credit denominated in an Alternative Currency.

“Sterling” and “£” means the lawful currency of the United Kingdom.

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“Stockholders’ Equity” means, as of any date of determination, consolidated stockholders’ equity of the Borrower and its Subsidiaries (as reported as “Total equity – Greenbrier” on the consolidated balance sheet of the Borrower, which shall not include equity attributable to non-controlling interests) as of that date determined in accordance with GAAP but excluding any non-cash impact of (i) goodwill impairment charges, (ii) increases (or decreases) from accumulated other comprehensive income (or loss) and (iii) the issuance of any equity or equity-linked securities.

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower. For purposes of the Loan Documents, the term “Subsidiary” shall not include any “SPE”, any “Managed Person” or any “Joint Venture”.

“Subsidiary Guarantors” means, collectively, Greenbrier-Concarril, LLC, Greenbrier Leasing Company LLC, Greenbrier Management Services, LLC, Greenbrier Railcar Leasing, Inc., Greenbrier Rail Services Holdings, LLC, Gunderson LLC, Gunderson Marine LLC, Gunderson Rail Services LLC, Gunderson Specialty Products, LLC, Meridian Rail Acquisition Corp., and Meridian Rail Holdings Corp. and each other Subsidiary that becomes a Subsidiary Guarantor after the Closing Date in accordance with Section 6.13.

“Subsidiary Guaranty” means the Fourth Amended and Restated Subsidiary Guaranty made by each of the Subsidiary Guarantors in favor of the Administrative Agent and the Lenders, substantially in the form of Exhibit F.

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

“Swap Obligation” means with respect to any Loan Party any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

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“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.04.

“Swing Line Lender” means Bank of America, or any successor Swing Line Lender hereunder.

“Swing Line Loan” has the meaning specified in Section 2.04(a).

“Swing Line Loan Notice” means a notice of a Swing Line Loan Borrowing pursuant to Section 2.04(b), which shall be substantially in the form of Exhibit B or such other form as approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.

“Swing Line Sublimit” means an amount equal to the lesser of $25,000,000 and the amount available under the Revolver Ceiling. The Swing Line Sublimit is part of, and not in addition to, the Aggregate Commitments. As of the Closing Date, the Swing Line Sublimit of the Swing Line Lender is set forth on Schedule 2.01.

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

“TARGET2” means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilizes a single shared platform and which was launched on November 19, 2007.

“TARGET Day” means any day on which TARGET2 (or, if such payment system ceases to be operative, such other payment system, if any, determined by the Administrative Agent to be a suitable replacement) is open for the settlement of payments in Euro.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Term Debt” has the meaning specified in Section 7.03(d).

“Threshold Amount” means $25,000,000.

“Total Outstandings” means the aggregate Outstanding Amount of all Committed Loans, Swing Line Loans and L/C Obligations.

“Treasury Management Agreement” means any agreement governing the provision of treasury or cash management services, including deposit accounts, funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services, credit cards, credit card processing services, debit cards, stored value cards, purchase cards (including so-called “procurement cards” or “P-cards”) and other cash management services.

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“Type” means, with respect to a Committed Loan, its character as a Base Rate Loan or a Eurocurrency Rate Loan.

“UCP” means, with respect to any Letter of Credit, the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce (“ICC”) Publication No. 600 (or such later version thereof as may be in effect at the time of issuance).

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

“United States” and “U.S.” mean the United States of America.

“Unperfected Lease Assets” means those certain lease-related assets, including, but not limited to, rail cars, marine barges and other surface transportation equipment, and related chattel paper, of the Borrower, or of Subsidiary Guarantors, which have been pledged to the Administrative Agent, for the benefit of the holders of the Obligations, as security for the Obligations, but for which the Administrative Agent, for the benefit of the holders of the Obligations, has not received a first priority, perfected security interest.

“Unreimbursed Amount” means, with respect to any drawing under a Letter of Credit that is not reimbursed by the Borrower in accordance with Section 2.03(c)(i), the amount of such unreimbursed drawing.

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

“U.S. Tax Compliance Certificate” has the meaning specified in Section 3.01(e)(ii)(B)(3).

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

1.02 Other Interpretive Provisions.

With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or

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otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “hereto,” “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

(b) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

(c) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

1.03 Accounting Terms.

(a) Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.

(b) Changes in GAAP. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

(c) Calculations; Consolidation of Variable Interest Entities. Notwithstanding the above, the parties hereto acknowledge and agree that all calculations of the financial covenants in Section 7.11 (including for purposes of determining the Applicable Rate) shall be made on a Pro Forma Basis. All references herein to consolidated financial statements of the Borrower and its Subsidiaries or to the determination of any amount for the Borrower and its Subsidiaries on a consolidated basis or any similar reference shall, in each case, be deemed to include each variable interest entity (other than any such entity that is an SPE) that the Borrower is required to

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consolidate pursuant to FASB Interpretation No. 46 – Consolidation of Variable Interest Entities: an interpretation of ARB No. 51 (January 2003) as if such variable interest entity were a Subsidiary as defined herein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, any change in GAAP requiring leases which were previously classified as operating leases to be treated as capitalized leases shall be ignored for the purpose of determining Indebtedness hereunder and such leases shall continue to be treated as operating leases for such purpose consistent with GAAP as in effect on the Closing Date.

1.04 Exchange Rates; Currency Equivalents.

(a) The Administrative Agent or the L/C Issuer, as applicable, shall determine the Spot Rates as of each Revaluation Date to be used for calculating Dollar Equivalent amounts of Credit Extensions and Outstanding Amounts denominated in Alternative Currencies. Such Spot Rates shall become effective as of such Revaluation Date and shall be the Spot Rates employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur. Except for purposes of financial statements delivered by Loan Parties hereunder or calculating financial covenants hereunder or except as otherwise provided herein, the applicable amount of any currency (other than Dollars) for purposes of the Loan Documents shall be such Dollar Equivalent amount as so determined by the Administrative Agent or the L/C Issuer, as applicable.

(b) Wherever in this Agreement in connection with a Committed Borrowing, conversion, continuation or prepayment of a Loan or the issuance, amendment or extension of a Letter of Credit, an amount, such as a required minimum or multiple amount, is expressed in Dollars but such Committed Borrowing, Loan or Letter of Credit is denominated in an Alternative Currency, such amount shall be the relevant Alternative Currency equivalent of such Dollar amount (rounded to the nearest unit of such Alternative Currency, with 0.5 of a unit being rounded upward), as determined by the Administrative Agent or the L/C Issuer, as the case may be.

1.05 Additional Alternative Currencies.

(a) The Borrower may from time to time request that Eurocurrency Rate Loans be made and/or Letters of Credit be issued in a currency other than those specifically listed in the definition of “Alternative Currency”; provided that such requested currency is a lawful currency (other than Dollars) that is readily available and freely transferable and convertible into Dollars. In the case of any such request with respect to the making of Eurocurrency Rate Loans, such request shall be subject to the approval of the Administrative Agent and the Lenders obligated to make Credit Extensions in such currency; and in the case of any such request with respect to the issuance of Letters of Credit, such request shall be subject to the approval of the Administrative Agent and the L/C Issuer.

(b) Any such request shall be made to the Administrative Agent not later than 8:00 a.m., 20 Business Days prior to the date of the desired Credit Extension (or such other time or date as may be agreed by the Administrative Agent and, in the case of any such request pertaining to Letters of Credit, the L/C Issuer, in its or their sole discretion). In the case of any such request pertaining to Eurocurrency Rate Loans, the Administrative Agent shall promptly notify each Lender thereof; and in the case of any such request pertaining to Letters of Credit, the Administrative Agent shall promptly notify the L/C Issuer thereof. Each Lender (in the case of any such request pertaining to Eurocurrency Rate Loans) or the L/C Issuer (in the case of a

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request pertaining to Letters of Credit) shall notify the Administrative Agent, not later than 11:00 a.m., ten Business Days after receipt of such request whether it consents, in its sole discretion, to the making of Eurocurrency Rate Loans or the issuance of Letters of Credit, as the case may be, in such requested currency.

(c) Any failure by a Lender or the L/C Issuer, as the case may be, to respond to such request within the time period specified in the preceding sentence shall be deemed to be a refusal by such Lender or the L/C Issuer, as the case may be, to permit Eurocurrency Rate Loans to be made or Letters of Credit to be issued in such requested currency. If the Administrative Agent and all the Lenders that would be obligated to make Credit Extensions denominated in such requested currency consent to making Eurocurrency Rate Loans in such requested currency and the Administrative Agent and such Lenders reasonably determine that a Eurocurrency Rate is available to be used for such requested currency, the Administrative Agent shall so notify the Borrower and (i) the Administrative Agent and such Lenders may amend the definition of Eurocurrency Rate for any Non-LIBOR Quoted Currency to the extent necessary to add the applicable Eurocurrency Rate for such currency and (ii) to the extent the definition of Eurocurrency Rate reflects the appropriate interest rate for such currency or has been amended to reflect the appropriate rate for such currency, such currency shall thereupon be deemed for all purposes to be an Alternative Currency hereunder for purposes of any Committed Borrowings of Eurocurrency Rate Loans. If the Administrative Agent and the L/C Issuer consent to the issuance of Letters of Credit in such requested currency, the Administrative Agent shall so notify the Borrower and (A) the Administrative Agent and the L/C Issuer may amend the definition of Eurocurrency Rate for any Non-LIBOR Quoted Currency to the extent necessary to add the applicable Eurocurrency Rate for such currency and (B) to the extent the definition of Eurocurrency Rate reflects the appropriate interest rate for such currency or has been amended to reflect the appropriate rate for such currency, such currency shall thereupon be deemed for all purposes to be an Alternative Currency hereunder for purposes of any Letter of Credit issuances. If the Administrative Agent shall fail to obtain consent to any request for an additional currency under this Section 1.05, the Administrative Agent shall promptly so notify the Borrower. Any specified currency of an Existing Letter of Credit that is neither Dollars nor one of the Alternative Currencies specifically listed in the definition of “Alternative Currency” shall be deemed an Alternative Currency with respect to such Existing Letter of Credit only.

1.06 Change of Currency.

(a) The obligation of the Borrower to make a payment denominated in the national currency unit of any member state of the European Union that adopts the Euro as its lawful currency after the Closing Date shall be redenominated into Euro at the time of such adoption. If, in relation to the currency of any such member state, the basis of accrual of interest expressed in this Agreement in respect of that currency shall be inconsistent with any convention or practice in the London interbank market for the basis of accrual of interest in respect of the Euro, such expressed basis shall be replaced by such convention or practice with effect from the date on which such member state adopts the Euro as its lawful currency; provided that if any Committed Borrowing in the currency of such member state is outstanding immediately prior to such date, such replacement shall take effect, with respect to such Committed Borrowing, at the end of the then current Interest Period.

(b) Each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify to be appropriate to reflect the adoption of the Euro by any member state of the European Union and any relevant market conventions or practices relating to the Euro.

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(c) Each provision of this Agreement also shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify to be appropriate to reflect a change in currency of any other country and any relevant market conventions or practices relating to the change in currency.

1.07 Times of Day.

Unless otherwise specified, all references herein to times of day shall be references to Pacific time (daylight or standard, as applicable).

1.08 Letter of Credit Amounts.

Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the Dollar Equivalent of the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the Dollar Equivalent of the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

2.01 Committed Loans.

Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans (each such loan, a “Committed Loan”) to the Borrower in Dollars or in one or more Alternative Currencies from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s Commitment; provided, however, that after giving effect to any Borrowing of Committed Loans, (i) the Total Outstandings shall not exceed the Revolver Ceiling, and (ii) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and (iii) the aggregate Outstanding Amount of all Committed Loans denominated in Alternative Currencies shall not exceed the Alternative Currency Sublimit. Within the limits of each Lender’s Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.01, prepay under Section 2.06, and reborrow under this Section 2.01. Each Borrowing of Committed Loans shall be made as provided in Section 2.02 below. Committed Loans may be Base Rate Loans or Eurocurrency Rate Loans, as further provided herein, provided, however, all Borrowings made on the Closing Date shall be made as Base Rate Loans.

2.02 Borrowings, Conversions and Continuations of Committed Loans.

(a) Each Committed Borrowing, each conversion of Committed Loans from one Type to the other, and each continuation of Eurocurrency Rate Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent which may be given by: (A) telephone or (B) a Committed Loan Notice; provided that any telephonic notice must be confirmed promptly by delivery to the Administrative Agent of a Committed Loan Notice. Each Committed Loan Notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three

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Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Committed Loans that are Eurocurrency Rate Loans denominated in Dollars or of any conversion of any such Eurocurrency Rate Loans denominated in Dollars to Base Rate Committed Loans, (ii) four Business Days (or five Business Days in the case of a Special Notice Currency) prior to the requested date of any Borrowing or continuation of Committed Loans that are Eurocurrency Rate Loans denominated in Alternative Currencies, and (iii) on the requested date of any Borrowing of Committed Loans that are Base Rate Committed Loans. Notwithstanding the foregoing, if the Borrower wishes to request Eurocurrency Rate Loans having an Interest Period other than seven (7) days, one, two, three or six months in duration as provided in the definition of “Interest Period,” the applicable notice must be received by the Administrative Agent not later than 11:00 a.m. (i) four Business Days prior to the requested date of such Borrowing, conversion or continuation of Committed Loans that are Eurocurrency Rate Loans denominated in Dollars, or (ii) five Business Days (or six Business days in the case of a Special Notice Currency) prior to the requested date of such Borrowing, conversion or continuation of Committed Loans that are Eurocurrency Rate Loans denominated in Alternative Currencies, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them. Not later than 11:00 a.m., on the applicable Business Day specified in the immediately preceding sentence for which a request for such a Borrowing, conversion or continuation must be received, the Administrative Agent shall notify the Borrower (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Lenders. Each Borrowing of, conversion to or continuation of Eurocurrency Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c), each Committed Borrowing of or conversion to Base Rate Committed Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Committed Loan Notice shall specify (i) whether the Borrower is requesting a Committed Borrowing, a conversion of Committed Loans from one Type to the other, or a continuation of Eurocurrency Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Committed Loans to be borrowed, converted or continued, (iv) the Type of Committed Loans to be borrowed or to which existing Committed Loans are to be converted, (v) if applicable, the duration of the Interest Period with respect thereto, and (vi) the currency of the Committed Loans to be borrowed. If the Borrower fails to specify a currency in a Committed Loan Notice requesting a Borrowing, then the Committed Loans so requested shall be made in Dollars. If the Borrower fails to specify a Type of Committed Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Committed Loans shall be made as, or converted to, Base Rate Loans; provided, however, that in the case of a failure to timely request a continuation of Committed Loans denominated in an Alternative Currency, such Loans shall be continued as Eurocurrency Rate Loans in their original currency with an Interest Period of one month. Any automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurocurrency Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurocurrency Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. No Committed Loan may be converted into or continued as a Committed Loan denominated in a different currency, but instead must be prepaid in the original currency of such Committed Loan and reborrowed in the other currency.

(b) Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount (and currency) of its Applicable Percentage of the applicable Committed Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any

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automatic conversion to Base Rate Loans or continuation of Committed Loans denominated in a currency other than Dollars, in each case as described in the preceding subsection. In the case of a Committed Borrowing, each Lender shall make the amount of its Committed Loan available to the Administrative Agent in Same Day Funds at the Administrative Agent’s Office for the applicable currency not later than 11:00 a.m., in the case of any Committed Loan denominated in Dollars (or 1:00 p.m. in the case of a Base Rate Committed Loan), and not later than the Applicable Time specified by the Administrative Agent in the case of any Committed Loan in an Alternative Currency, in each case on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Credit Extension, Section 4.01), the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower; provided, however, that if, on the date the Committed Loan Notice with respect to a Borrowing of Committed Loans denominated in Dollars is given by the Borrower, the Borrower has outstanding L/C Borrowings, then the proceeds of such Borrowing, first, shall be applied to the payment in full of any such L/C Borrowings, and, second, shall be made available to the Borrower as provided above.

(c) Except as otherwise provided herein, a Eurocurrency Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurocurrency Rate Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as Eurocurrency Rate Loans (whether in Dollars or any Alternative Currency) without the consent of the Required Lenders, and the Required Lenders may demand that any or all of the then outstanding Committed Loans that are Eurocurrency Rate Loans denominated in an Alternative Currency be prepaid, or redenominated into Dollars in the amount of the Dollar Equivalent thereof, on the last day of the then current Interest Period with respect thereto.

(d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurocurrency Rate Loans upon determination of such interest rate.

(e) After giving effect to all Committed Borrowings, all conversions of Committed Loans from one Type to the other, and all continuations of Committed Loans as the same Type, there shall not be more than eight Interest Periods in effect with respect to Committed Loans.

2.03 Letters of Credit.

(a) The Letter of Credit Commitment.

(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars or in one or more Alternative Currencies for the account of the Borrower or its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of the Borrower or its Subsidiaries and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Total

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Outstandings shall not exceed the Revolver Ceiling, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.

(ii) The L/C Issuer shall not issue any Letter of Credit, if:

(A) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless (x) all the Lenders have approved such expiry date or (y) the L/C Issuer has approved such Letter of Credit and such Letter of Credit is required to be Cash Collateralized pursuant to Section 2.16 from and after the Letter of Credit Expiration Date.

(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:

(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good faith deems material to it;

(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;

(C) except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is in an initial stated amount less than (1) $100,000, in the case of a commercial Letter of Credit, and (2) $250,000, in the case of a standby Letter of Credit;

(D) except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is to be denominated in a currency other than Dollars or an Alternative Currency;

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(E) the L/C Issuer does not as of the issuance date of such requested Letter of Credit issue Letters of Credit in the requested currency;

(F) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder; or

(G) any Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the L/C Issuer (in its sole discretion) with the Borrower or such Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.17(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.

(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.

(v) The L/C Issuer shall not be under any obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith. The L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application may be sent by facsimile, by United States mail, by overnight courier, by electronic transmission using the system provided by the L/C Issuer, by personal delivery or by any other means acceptable to the L/C Issuer. Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than 10:00 a.m. at least two Business Days (or such later date and time as the Administrative Agent and the L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount and currency thereof; (C) the expiry date thereof; (D) the name and address of the

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beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; and (H) such other matters as the L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the L/C Issuer may reasonably require. Additionally, the Borrower shall furnish to the L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C Issuer or the Administrative Agent may reasonably require.

(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower (or the applicable Subsidiary) or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Lender’s Applicable Percentage times the amount of such Letter of Credit.

(iii) If the Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not be required to make a specific request to the L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date (except that the expiry date may extend up to one year beyond the Letter of Credit Expiration Date provided that, as of the Letter of Credit Expiration Date, the subject Letter of Credit is Cash Collateralized pursuant to Section 2.16); provided, however, that the L/C Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Extension

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Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Lender or the Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, and in each such case directing the L/C Issuer not to permit such extension.

(iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment. On a monthly basis, the L/C Issuer shall deliver to the Administrative Agent a complete list of all outstanding Letters of Credit issued by the L/C Issuer as provided in Section 2.03(f).

(c) Drawings and Reimbursements; Funding of Participations.

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower and the Administrative Agent thereof. In the case of a Letter of Credit denominated in an Alternative Currency, the Borrower shall reimburse the L/C Issuer in such Alternative Currency, unless (A) the L/C Issuer (at its option) shall have specified in such notice that it will require reimbursement in Dollars or (B) in the absence of any such requirement for reimbursement in Dollars, the Borrower shall have notified the L/C Issuer promptly following receipt of the notice of drawing that it will reimburse the L/C Issuer in Dollars. In the case of any such reimbursement in Dollars of a drawing under a Letter of Credit denominated in an Alternative Currency, the L/C Issuer shall notify the Borrower of the Dollar Equivalent of the amount of the drawing promptly following the determination thereof. Not later than 12:00 p.m. on the date of any payment by the L/C Issuer under a Letter of Credit to be reimbursed in Dollars, or the Applicable Time on the date of any payment by the L/C Issuer under a Letter of Credit to be reimbursed in an Alternative Currency (each such date, an “Honor Date”), the Borrower shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing and in the applicable currency. If the Borrower fails to so reimburse the L/C Issuer by such time in the case of a Letter of Credit, the Administrative Agent shall promptly notify each Lender of the Honor Date, the Unreimbursed Amount (expressed in Dollars in the amount of the Dollar Equivalent thereof in the case of a Letter of Credit denominated in an Alternative Currency) and the amount of such Lender’s Applicable Percentage thereof. In such event, the Borrower shall be deemed to have requested a Committed Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Commitments and the conditions set forth in Section 4.02 (other than the delivery of a Committed Loan Notice). In no event may the Borrower extend the time for reimbursing any drawing under a commercial Letter of Credit by obtaining a banker’s acceptance from the L/C Issuer. Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

(ii) Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available (and the Administrative Agent may apply Cash Collateral provided for this purpose) for the account of the L/C Issuer, in Dollars, at the Administrative Agent’s Office in an amount equal to its Applicable Percentage of the Unreimbursed Amount not

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later than 10:00 a.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Lender that so makes funds available shall be deemed to have made a Base Rate Committed Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the L/C Issuer in Dollars.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Committed Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender’s payment to the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03.

(iv) Until each Lender funds its Committed Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Applicable Percentage of such amount shall be solely for the account of the L/C Issuer.

(v) Each Lender’s obligation to make Committed Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the L/C Issuer, the Borrower, any Subsidiary or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender’s obligation to make Committed Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.02 (other than delivery of a Committed Loan Notice). No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein.

(vi) If any Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), then, without limiting the other provisions of this Agreement, the L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the applicable Overnight Rate from time to time in effect. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Committed Loan included in the relevant Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be. A certificate of the L/C Issuer submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.

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(d) Repayment of Participations.

(i) At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c), if the Administrative Agent receives for the account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Applicable Percentage thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s L/C Advance was outstanding) and in the same funds as those received by the Administrative Agent.

(ii) If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the L/C Issuer in its discretion), each Lender shall pay to the Administrative Agent for the account of the L/C Issuer its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the applicable Overnight Rate from time to time in effect. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

(e) Obligations Absolute. The obligation of the Borrower to reimburse the L/C Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document;

(ii) the existence of any claim, counterclaim, setoff, defense or other right that the Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

(iv) waiver by the L/C Issuer of any requirement that exists for the L/C Issuer’s protection and not the protection of the Borrower or any waiver by the L/C Issuer which does not in fact materially prejudice the Borrower;

(v) honor of a demand for payment presented electronically even if such Letter of Credit requires that demand be in the form of a draft;

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(vi) any payment made by the L/C Issuer in respect of an otherwise complying item presented after the date specified as the expiration date of, or the date by which documents must be received under such Letter of Credit if presentation after such date is authorized by the UCC, the ISP or the UCP, as applicable;

(vii) any payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law;

(viii) any adverse change in the relevant exchange rates or in the availability of the relevant Alternative Currency to the Borrower or any Subsidiary or in the relevant currency markets generally; or

(ix) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or any Subsidiary;

provided, that nothing in this Section 2.03(e) shall be deemed a waiver of the third and fourth sentences in Section 2.03(f).

The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will promptly notify the L/C Issuer. The Borrower shall be conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid.

(f) Role of L/C Issuer. Each Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable or responsible for any of the matters described in clauses (i) through (ix) of Section 2.03(e); provided, however, that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrower to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the

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L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason. The L/C Issuer shall provide to the Administrative Agent a list of outstanding Letters of Credit (together with amounts) issued by it on a monthly basis (and upon the request of the Administrative Agent); the Administrative Agent shall provide a copy of such list to any Lender and the Borrower upon request. The L/C Issuer may send a Letter of Credit or conduct any communication to or from the beneficiary via the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) message or overnight courier, or any other commercially reasonable means of communicating with a beneficiary.

(g) Applicability of ISP and UCP. Unless otherwise expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of the ISP shall apply to each standby Letter of Credit, and (ii) the rules of the UCP shall apply to each commercial Letter of Credit. Notwithstanding the foregoing, the L/C Issuer shall not be responsible to the Borrower for, and the L/C Issuer’s rights and remedies against the Borrower shall not be impaired by, any action or inaction of the L/C Issuer required or permitted under any Law, order, or practice that is required or permitted to be applied to any Letter of Credit or this Agreement, including the Law or any order of a jurisdiction where the L/C Issuer or the beneficiary is located, the practice stated in the ISP or UCP, as applicable, or in the decisions, opinions, practice statements, or official commentary of the ICC Banking Commission, the Bankers Association for Finance and Trade—International Financial Services Association (BAFT-IFSA), or the Institute of International Banking Law & Practice, whether or not any Letter of Credit chooses such Law or practice.

(h) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance, subject to Section 2.17, with its Applicable Percentage, in Dollars, a Letter of Credit Fee (i) for each commercial Letter of Credit equal to 0.125% per annum times the Dollar Equivalent of the daily amount available to be drawn under such Letter of Credit, and (ii) for each standby Letter of Credit equal to the Applicable Rate times the Dollar Equivalent of the daily amount available to be drawn under such Letter of Credit. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.08. Letter of Credit Fees shall be (i) computed on a quarterly basis in arrears and (ii) due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. If there is any change in the Applicable Rate during any quarter, the daily amount available to be drawn under each standby Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. Notwithstanding anything to the contrary contained herein, upon the request of the Required Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the Default Rate.

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(i) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. Subject to the penultimate sentence of this subsection (i), the Borrower shall pay directly to the L/C Issuer for its own account, in Dollars, a fronting fee (i) with respect to each commercial Letter of Credit, at the rate specified in the Fee Letter, computed on the Dollar Equivalent of the amount of such Letter of Credit, and payable upon the issuance thereof, (ii) with respect to any amendment of a commercial Letter of Credit increasing the amount of such Letter of Credit, at a rate separately agreed between the Borrower and the L/C Issuer, computed on the Dollar Equivalent of the amount of such increase, and payable upon the effectiveness of such amendment, and (iii) with respect to each standby Letter of Credit, at the rate per annum specified in the Fee Letter, computed on the Dollar Equivalent of the daily amount available to be drawn under such Letter of Credit on a quarterly basis in arrears. Such fronting fee in respect of any Letter of Credit shall be due and payable on the tenth Business Day after the end of each March, June, September and December in respect of the most recently-ended quarterly period (or portion thereof, in the case of the first payment), commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.08. In addition, the Borrower shall pay directly to the L/C Issuer for its own account, in Dollars, the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as from time to time in effect; such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

(j) Conflict with Issuer Documents. In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.

(k) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Borrower shall be obligated to reimburse the L/C Issuer hereunder for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit for the account of its Subsidiaries inures to the benefit of the Borrower, and that the Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.

2.04 Swing Line Loans.

(a) The Swing Line. Subject to the terms and conditions set forth herein, the Swing Line Lender shall, in reliance upon the agreements of the other Lenders set forth in this Section 2.04, make loans to the Borrower in Dollars (each a “Swing Line Loan”) from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Applicable Percentage of the Outstanding Amount of Committed Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount of such Lender’s Commitment; provided, however, that (i) after giving effect to any Swing Line Loan, (A) the Total Outstandings shall not exceed the Revolver Ceiling, and (B) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, (ii) the Borrower shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan and (iii) the Swing Line Lender shall not be under any obligation to make any Swing Line Loan if it shall determine (which determination shall be conclusive and binding absent manifest error) that it has, or by such Credit Extension may have, Fronting Exposure. Within the foregoing limits, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.04, prepay under Section 2.06, and

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reborrow under this Section 2.04. Immediately upon the making of a Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Lender’s Applicable Percentage times the amount of such Swing Line Loan.

(b) Borrowing Procedures. Each Borrowing of Swing Line Loans shall be made upon the Borrower’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by: (A) telephone or (B) a Swing Line Loan Notice; provided that any telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a Swing Line Loan Notice. Each Swing Line Loan Notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum principal amount of $100,000 and integral multiples of $100,000 in excess thereof, and (ii) the requested borrowing date, which shall be a Business Day. Promptly after receipt by the Swing Line Lender of any Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the first proviso to the first sentence of Section 2.04(a), or (B) that one or more of the applicable conditions specified in Article IV is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 2:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Borrower at its office by crediting the account of the Borrower on the books of the Swing Line Lender in Same Day Funds.

(c) Refinancing of Swing Line Loans.

(i) The Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of the Borrower (which hereby irrevocably authorizes the Swing Line Lender to so request on its behalf), that each Lender make a Committed Loan that is a Base Rate Committed Loan in an amount equal to such Lender’s Applicable Percentage of the amount of Swing Line Loans then outstanding; such request shall be made in writing (which written request shall be deemed to be a Committed Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized Commitments and the conditions set forth in Section 4.02. The Swing Line Lender shall furnish the Borrower with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Administrative Agent. Each Lender shall make an amount equal to its Applicable Percentage of the amount specified in such Committed Loan Notice available to the Administrative Agent in Same Day Funds (and the Administrative Agent may apply Cash Collateral available with respect to the applicable Swing Line Loan) for the account of the Swing Line Lender at the Administrative Agent’s Office for Dollar-denominated payments not later than 10:00 a.m. on the day specified in such Committed Loan Notice, whereupon, subject to Section 2.04(c)(ii), each Lender that so makes funds available shall be deemed to have made a Base Rate Committed Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender.

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(ii) If for any reason any Swing Line Loan cannot be refinanced by such a Committed Borrowing in accordance with Section 2.04(c)(i), the request for Base Rate Committed Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Lenders fund its risk participation in the such Swing Line Loan and each such Lender’s payment to the Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such participation.

(iii) If any Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the applicable Overnight Rate from time to time in effect. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Committed Loan included in the relevant Borrowing or funded participation in the relevant Swing Line Loan, as the case may be. A certificate of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

(iv) Each Lender’s obligation to make Committed Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Swing Line Lender, the Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender’s obligation to make Committed Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in Section 4.02. No such funding of risk participations shall relieve or otherwise impair the obligation of the Borrower to repay Swing Line Loans, together with interest as provided herein.

(d) Repayment of Participations.

(i) At any time after any Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Lender its Applicable Percentage of such payment (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s risk participation was funded) in the same funds as those received by the Swing Line Lender.

(ii) If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Lender shall pay to the Swing Line Lender its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the applicable Overnight Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

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(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be responsible for invoicing the Borrower for interest on its Swing Line Loans. Until each Lender funds its Committed Loan or risk participation pursuant to this Section 2.04 to refinance such Lender’s Applicable Percentage of any Swing Line Loan, interest in respect of such Applicable Percentage shall be solely for the account of the Swing Line Lender.

(f) Payments Directly to Swing Line Lender. The Borrower shall make all payments of principal and interest in respect of its Swing Line Loans directly to the Swing Line Lender.

2.05 Security.

All Obligations of the Borrower under this Agreement and all other Loan Documents shall be secured by the Collateral in accordance with the Loan Documents.

2.06 Prepayments.

(a) The Borrower may, upon delivery of a Notice of Loan Prepayment from the Borrower to the Administrative Agent, at any time or from time to time voluntarily prepay Committed Loans in whole or in part without premium or penalty; provided that such notice must be received by the Administrative Agent not later than 10:00 a.m. (A) three Business Days prior to the requested date of prepayment of Committed Loans that are Eurocurrency Rate Loans denominated in Dollars, (B) four Business Days (or five Business Days in the case of a Special Notice Currency) prior to the requested date of prepayment of Committed Loans that are Eurocurrency Rate Loans denominated in Alternative Currencies, and (C) on the requested date of prepayment of Committed Loans that are Base Rate Committed Loans. Any prepayment of Eurocurrency Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Committed Loans to be prepaid and, if Eurocurrency Rate Loans are to be prepaid, the Interest Period(s) of such Loans. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s Applicable Percentage of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurocurrency Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05. Subject to Section 2.17, each such prepayment shall be applied to the Committed Loans of the Lenders in accordance with their respective Applicable Percentages.

(b) The Borrower may, upon notice to the Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Swing Line Lender and the Administrative Agent not later than 10:00 a.m. on the date of the prepayment, and (ii) any such prepayment shall be in a minimum principal amount of $100,000. Each such notice shall specify the date and amount of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.

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(c) If the Administrative Agent notifies the Borrower at any time that the Total Outstandings at such time exceed the Revolver Ceiling, then, within two Business Days after receipt of such notice, the Borrower shall prepay Committed Loans, prepay Swing Line Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount sufficient to reduce such Outstanding Amount as of such date of payment to an amount not to exceed the Revolver Ceiling; provided, however, the Borrower shall not be required to Cash Collateralize the L/C Obligations pursuant to this Section 2.06(c) unless, after the prepayment in full of all Committed Loans and Swing Line Loans, the Total Outstandings exceed the Revolver Ceiling.

(d) If the Administrative Agent notifies the Borrower at any time that the Outstanding Amount of all Committed Loans denominated in Alternative Currencies at such time exceeds the Alternative Currency Sublimit then in effect, then, within two Business Days after receipt of such notice, the Borrower shall prepay its Committed Loans in an aggregate amount sufficient to reduce such Outstanding Amount as of such date of payment to an amount not to exceed 100% of the Alternative Currency Sublimit then in effect.

2.07 Termination or Reduction of Commitments.

The Borrower may upon notice to the Administrative Agent, terminate and/or from time to time permanently reduce the Aggregate Commitments; provided that (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $1,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not terminate or reduce the Aggregate Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Outstandings would exceed the Aggregate Commitments, and (iv) if, after giving effect to any reduction of the Aggregate Commitments, the Letter of Credit Sublimit, the Swing Line Sublimit or the Alternative Currency Sublimit exceeds the amount of the Aggregate Commitments, such Letter of Credit Sublimit, Swing Line Sublimit or Alternative Currency Sublimit, as applicable, shall be automatically reduced by the amount of such excess. The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of Commitments. The amount of any such Commitment reduction shall not be applied to the Alternative Currency Sublimit or the Letter of Credit Sublimit unless otherwise specified by the Borrower. Any reduction of the Aggregate Commitments shall be applied to the Commitment of each affected Lender according to its Applicable Percentage. All fees accrued until the effective date of any termination of the Commitments shall be paid on the effective date of such termination.

2.08 Repayment of Loans.

(a) The Borrower shall repay to the Lenders on the Maturity Date the aggregate principal amount of Committed Loans outstanding on such date.

(b) The Borrower shall repay each Swing Line Loan on the earlier to occur of (i) the date ten Business Days after such Loan is made and (ii) the Maturity Date.

2.09 Interest.

(a) Subject to the provisions of subsection (b) below, (i) each Eurocurrency Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurocurrency Rate for such Interest Period plus the Applicable Rate; (ii) each Base Rate Committed Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the

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Applicable Rate; and (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate. To the extent that any calculation of interest or any fee required to be paid under this Agreement shall be based on (or result in) a calculation that is less than zero, such calculation shall be deemed zero for purposes of this Agreement.

(b) (i) If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(ii) If any amount (other than principal of any Loan) payable by the Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(iii) Upon the written request of the Required Lenders, while any Event of Default exists (other than as set forth in clauses (b)(i) and (b)(ii) above), the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(iv) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

(c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

2.10 Fees.

In addition to certain fees described in subsections (h) and (i) of Section 2.03:

(a) Commitment Fee. The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Applicable Percentage, a commitment fee in Dollars equal to the Applicable Rate times the actual daily amount by which the Aggregate Commitments exceed the sum of (i) the Outstanding Amount of Committed Loans and (ii) the Outstanding Amount of L/C Obligations, subject to adjustment as provided in Section 2.17. The commitment fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period. The commitment fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.

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(b) Other Fees.

(i) The Borrower shall pay to the Arranger and the Administrative Agent for their own respective accounts, the fees in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

(ii) The Borrower shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

2.11 Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate.

(a) All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to the Eurocurrency Rate) shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year), or, in the case of interest in respect of Committed Loans denominated in Alternative Currencies as to which market practice differs from the foregoing, in accordance with such market practice. Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

(b) If, as a result of any restatement of or other adjustment to the financial statements of the Borrower or for any other reason, the Borrower or the Lenders determine that (i) the Consolidated Capitalization Ratio as calculated by the Borrower as of any applicable date was inaccurate and (ii) a proper calculation of the Consolidated Capitalization Ratio would have resulted in higher pricing for such period, the Borrower shall promptly and retroactively be obligated to pay to the Administrative Agent for the account of the applicable Lenders or the L/C Issuer, as the case may be, promptly on demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, automatically and without further action by the Administrative Agent, any Lender or the L/C Issuer), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period. This paragraph shall not limit the rights of the Administrative Agent, any Lender or the L/C Issuer, as the case may be, under Section 2.03(c)(iii), 2.03(h) or 2.09(b) or under Article VIII.

2.12 Evidence of Debt.

(a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the

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Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender to the Borrower made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans to the Borrower in addition to such accounts or records. Each Lender may attach schedules to a Note and endorse thereon the date, Type (if applicable), amount, currency and maturity of its Loans and payments with respect thereto.

(b) In addition to the accounts and records referred to in subsection (a) above, each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

2.13 Payments Generally; Administrative Agent’s Clawback.

(a) General. All payments to be made by the Borrower shall be made free and clear of and without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, (i) all payments by the Borrower hereunder (except with respect to principal of and interest on Loans denominated in an Alternative Currency) shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in Same Day Funds not later than 1:00 p.m. on the date specified herein, and (ii) all payments by the Borrower hereunder with respect to principal and interest on Loans denominated in an Alternative Currency shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in such Alternative Currency and in Same Day Funds not later than the Applicable Time specified by the Administrative Agent on the dates specified herein. Without limiting the generality of the foregoing, the Administrative Agent may require that any payments due from the Borrower under this Agreement be made in the United States. If, for any reason, the Borrower is prohibited by any Law from making any required payment hereunder in an Alternative Currency, the Borrower shall make such payment in Dollars in the Dollar Equivalent of the Alternative Currency payment amount. The Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent (i) after 1:00 p.m., in the case of payments in Dollars, or (ii) after the Applicable Time specified by the Administrative Agent in the case of payments in an Alternative Currency, shall in each case be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Committed Borrowing of Eurocurrency Rate Loans (or, in the case of any Committed Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Committed Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Committed Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Committed

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Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Committed Borrowing available to the Administrative Agent, then the Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in Same Day Funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the Overnight Rate and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Committed Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Committed Loan included in such Committed Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

(ii) Payments by Borrower; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the L/C Issuer hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the L/C Issuer, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the L/C Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the L/C Issuer, in Same Day Funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the Overnight Rate.

A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make Committed Loans, to fund participations in Letters of Credit and Swing Line Loans and to make payments pursuant to Section 10.04(c) are several and not joint. The failure of any Lender to make any Committed Loan, to fund any such participation or to make any payment under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Committed Loan, to purchase its participation or to make its payment under Section 10.04(c).

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(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

2.14 Sharing of Payments by Lenders.

If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of the Committed Loans made by it, or the participations in L/C Obligations or in Swing Line Loans held by it resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Committed Loans or participations and accrued interest thereon greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Committed Loans and subparticipations in L/C Obligations and Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Committed Loans and other amounts owing them, provided that:

(i) if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(ii) the provisions of this Section shall not be construed to apply to (A) any payment made by or on behalf of the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (B) the application of Cash Collateral provided for in Section 2.16, or (C) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Committed Loans or subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this Section shall apply).

The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation.

2.15 Increase in Commitments.

(a) Request for Increase. Provided there exists no Default, upon notice to the Administrative Agent (which shall promptly notify the Lenders), the Borrower may from time to time, request an increase in the Aggregate Commitments by an amount (for all such requests) not exceeding $50,000,000; provided that (i) any such request for an increase shall be in a minimum amount of $10,000,000. At the time of sending such notice, the Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Lenders).

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(b) Lender Elections to Increase. Each Lender shall notify the Administrative Agent within such time period whether or not it agrees to increase its Commitment and, if so, whether by an amount equal to, greater than, or less than its Applicable Percentage of such requested increase. Any Lender not responding within such time period shall be deemed to have declined to increase its Commitment.

(c) Notification by Administrative Agent; Additional Lenders. The Administrative Agent shall notify the Borrower and each Lender of the Lenders’ responses to each request made hereunder. To achieve the full amount of a requested increase and subject to the approval of the Administrative Agent and the L/C Issuer (which approvals shall not be unreasonably withheld), the Borrower may also invite additional Persons that qualify as Eligible Assignees to become Lenders pursuant to a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent and its counsel.

(d) Effective Date and Allocations. If the Aggregate Commitments are increased in accordance with this Section, the Administrative Agent and the Borrower shall determine the effective date (the “Increase Effective Date”) and the final allocation of such increase. The Administrative Agent shall promptly notify the Borrower and the Lenders of the final allocation of such increase and the Increase Effective Date.

(e) Conditions to Effectiveness of Increase. As a condition precedent to such increase, the Borrower shall deliver to the Administrative Agent a certificate of each Loan Party dated as of the Increase Effective Date signed by a Responsible Officer of such Loan Party (i) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (ii) in the case of the Borrower, certifying that, before and after giving effect to such increase, (A) the representations and warranties contained in Article V and the other Loan Documents are true and correct in all material respects (or, if qualified by materiality or Material Adverse Effect, in all respects) on and as of the Increase Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (or, if qualified by materiality or Material Adverse Effect, in all respects) as of such earlier date, and except that for purposes of this Section 2.15, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01, and (B) no Default exists. The Borrower shall prepay any of its Committed Loans outstanding on the Increase Effective Date (and pay any additional amounts required pursuant to Section 3.05) to the extent necessary to keep the outstanding Committed Loans ratable with any revised Applicable Percentages arising from any nonratable increase in the Commitments under this Section.

(f) Conflicting Provisions. This Section shall supersede any provisions in Sections 2.14 or 10.01 to the contrary.

2.16 Cash Collateral.

(a) Certain Credit Support Events. If (i) the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, (ii) as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, (iii) the Borrower shall be required to provide Cash Collateral pursuant to Section 8.02(c) or (iv) there shall exist a Defaulting Lender, the Borrower shall immediately (in the case of clause (iii) above) or within one Business Day (in all other cases) following any request by the Administrative Agent or the L/C Issuer provide Cash Collateral in an amount not less than the applicable Minimum Collateral Amount (determined in the case of Cash Collateral provided pursuant to clause (iv) above, after giving effect to Section 2.17(a)(iv) and any Cash Collateral provided by the Defaulting Lender).

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(b) Grant of Security Interest. All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America. The Borrower, and to the extent provided by any Lender, such Lender, hereby grants to (and subjects to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the L/C Issuer and the Lenders (including the Swing Line Lender), and agrees to maintain, a first priority (other than, in the case of priority, Liens permitted by Section 7.01(l)) security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to Section 2.16(c). If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower or the relevant Defaulting Lender will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency.

(c) Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section 2.16 or Sections 2.03, 2.05, 2.17 or 8.02 in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Obligations, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may be provided for herein.

(d) Release. Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or other obligations under any of this Section 2.16 or Sections 2.03, 2.05 or 2.17 shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following compliance with Section 10.06(b)(vi))) or (ii) the Administrative Agent’s good faith determination that there exists excess Cash Collateral; provided, however, (x) that Cash Collateral furnished by or on behalf of a Loan Party shall not be released during the continuance of a Default or Event of Default (and following application as provided in this Section 2.16 may be otherwise applied in accordance with Section 8.03), and (y) the Person providing Cash Collateral and the L/C Issuer agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.

2.17 Defaulting Lenders.

(a) Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:

(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders” and Section 10.01.

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(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise, or received by the Administrative Agent from a Defaulting Lender pursuant to Section 10.08) shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the L/C Issuer or Swing Line Lender hereunder; third, to Cash Collateralize the L/C Issuer’s Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.16; fourth, as the Borrower may request (so long as no Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the L/C Issuer’s future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.16; sixth, to the payment of any amounts owing to the Lenders, the L/C Issuer or Swing Line Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the L/C Issuer or Swing Line Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Borrowings in respect of which such Defaulting Lender has not fully funded its appropriate share and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Obligations owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swing Line Loans are held by the Lenders pro rata in accordance with the Commitments hereunder without giving effect to Section 2.17(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.17(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(iii) Certain Fees. (A) No Defaulting Lender shall be entitled to receive any commitment fee payable under Section 2.10(a) for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender). (B) Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Applicable Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.16. With respect to any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to clause (B) above, the Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise

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payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations that has been reallocated to such Non-Defaulting Lender pursuant to clause (b) below, (y) pay to the L/C Issuer the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such L/C Issuer’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

(iv) Reallocation of Applicable Percentages to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in L/C Obligations and Swing Line Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that such reallocation does not cause any Non-Defaulting Lender’s portion of the Total Outstandings to exceed such Non-Defaulting Lender’s Commitment. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

(b) Cash Collateral, Repayment of Swing Line Loans. If the reallocation described in clause (a)(iv) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under applicable Law, (x) first, prepay Swing Line Loans in an amount equal to the Swing Line Lenders’ Fronting Exposure and (y) second, Cash Collateralize the L/C Issuers’ Fronting Exposure in accordance with the procedures set forth in Section 2.16.

(c) Defaulting Lender Cure. If the Borrower, the Administrative Agent, the Swing Line Lender and the L/C Issuer agree in writing that a Defaulting Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swing Line Loans to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.17(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

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ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes.

(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.

(i) Any and all payments by or on account of any obligation of the Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable Laws. If any applicable Laws (as determined in the good faith discretion of any Loan Party or the Administrative Agent) require the deduction or withholding of any Tax from any such payment by the Administrative Agent or the Borrower, then the Administrative Agent or the Borrower shall be entitled to make such deduction or withholding, upon the basis of the information and documentation to be delivered pursuant to subsection (e) below.

(ii) If the Borrower or the Administrative Agent shall be required by the Code to withhold or deduct any Taxes, including both United States federal backup withholding and withholding taxes, from any payment, then (A) the Administrative Agent shall withhold or make such deductions as are determined by the Administrative Agent to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) the Administrative Agent shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with the Code, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the Borrower shall be increased as necessary so that after any such required withholding or the making of all such required deductions (including such deductions applicable to additional sums payable under this Section 3.01) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

(iii) If the Borrower or the Administrative Agent shall be required by any applicable Laws other than the Code to withhold or deduct any Taxes from any payment, then (A) the Borrower or the Administrative Agent, as required by such Laws, shall withhold or make such deductions as are determined by it to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) the Borrower or the Administrative Agent, to the extent required by such Laws, shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with such Laws, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the Borrower shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 3.01) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

(b) Payment of Other Taxes by the Borrower. Without limiting the provisions of subsection (a) above, the Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable Laws, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

(c) Tax Indemnifications. (i) The Borrower shall, and does hereby indemnify each Recipient, and shall make payment in respect thereof within ten days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 3.01) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such

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Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the L/C Issuer (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or the L/C Issuer, shall be conclusive absent manifest error. The Borrower shall, and does hereby indemnify the Administrative Agent, and shall make payment in respect thereof within ten days after demand therefor, for any amount which a Lender or the L/C Issuer for any reason fails to pay indefeasibly to the Administrative Agent as required pursuant to Section 3.01(c)(ii) below.

(ii) Each Lender and the L/C Issuer shall, and does hereby, severally indemnify, and shall make payment in respect thereof within 10 days after demand therefor, (x) the Administrative Agent against any Indemnified Taxes attributable to such Lender or the L/C Issuer (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (y) the Administrative Agent and the Borrower, as applicable, against any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.06(d) relating to the maintenance of a Participant Register and (z) the Administrative Agent and the Borrower, as applicable, against any Excluded Taxes attributable to such Lender or the L/C Issuer, in each case, that are payable or paid by the Administrative Agent or the Borrower in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender and the L/C Issuer hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or the L/C Issuer, as the case may be, under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this clause (ii).

(d) Evidence of Payments. Upon request by the Borrower or the Administrative Agent, as the case may be, after any payment of Taxes by the Borrower or by the Administrative Agent to a Governmental Authority as provided in this Section 3.01, the Borrower shall deliver to the Administrative Agent or the Administrative Agent shall deliver to the Borrower, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such payment or other evidence of such payment reasonably satisfactory to the Borrower or the Administrative Agent, as the case may be.

(e) Status of Lenders; Tax Documentation.

(i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding

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anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.01(e)(ii)(A), 3.01(e)(ii)(B) and 3.01(e)(ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii) Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person,

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding Tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN-E (or W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN-E (or W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2) executed copies of IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit G-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN-E (or W-8BEN, as applicable); or

(4) to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E (or W-8BEN, as applicable), a U.S. Tax Compliance Certificate substantially in the form of Exhibit G-2 or

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Exhibit G-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit G-4 on behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies (or originals, as required) of any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in United States federal withholding Tax duly completed together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by Law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the Closing Date.

(iii) Each Lender agrees that if any form or certification it previously delivered pursuant to this Section 3.01 expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so. Additionally, the Borrower shall promptly deliver to the Administrative Agent or any Lender, as the Administrative Agent or such Lender shall reasonably request, on or prior to the Closing Date, and in a timely fashion thereafter, such documents and forms required by any relevant taxing authorities under the Laws of any jurisdiction, duly executed and completed by the Borrower, as are required to be furnished by such Lender or the Administrative Agent under such Laws in connection with any payment by the Administrative Agent or any Lender of Taxes or Other Taxes, or otherwise in connection with the Loan Documents, with respect to such jurisdiction.

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(f) Treatment of Certain Refunds. Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender or the L/C Issuer, or have any obligation to pay to any Lender or the L/C Issuer, any refund of Taxes withheld or deducted from funds paid for the account of such Lender or the L/C Issuer, as the case may be. If any Recipient determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 3.01, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 3.01 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) incurred by such Recipient, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Recipient, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Recipient in the event the Recipient is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this subsection, in no event will the applicable Recipient be required to pay any amount to the Borrower pursuant to this subsection the payment of which would place the Recipient in a less favorable net after-Tax position than such Recipient would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This subsection shall not be construed to require any Recipient to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

(g) Survival. Each party’s obligations under this Section 3.01 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender or the L/C Issuer, the termination of the Commitments and the repayment, satisfaction or discharge of all other Obligations.

3.02 Illegality.

If any Lender reasonably determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to perform any of its obligations hereunder or to make, maintain or fund or charge interest with respect to any Credit Extension (whether denominated in Dollars or an Alternative Currency), or to determine or charge interest rates based upon the Eurocurrency Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars or any Alternative Currency in the applicable interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, (i) any obligation of such Lender to issue, make, maintain, fund or charge interest with respect to any such Credit Extension or continue Eurocurrency Rate Loans in the affected currency or currencies or to convert Base Rate Committed Loans to Eurocurrency Rate Loans, shall be suspended and (ii) if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the Eurocurrency Rate component of the Base Rate, the interest rate on which Base Rate Loans of such Lender, shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurocurrency Rate component of the Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (x) the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all such Eurocurrency Rate Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurocurrency Rate component of the Base Rate), either on the last day of the Interest Period therefor, if such Lender

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may lawfully continue to maintain such Eurocurrency Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurocurrency Rate Loans and (y) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Eurocurrency Rate, the Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the Eurocurrency Rate component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the Eurocurrency Rate. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.

3.03 Inability to Determine Rates.

(a) If in connection with any request for a Eurocurrency Rate Loan or a conversion to or continuation thereof, (i) the Administrative Agent determines that (A) deposits (whether in Dollars or an Alternative Currency) are not being offered to banks in the applicable offshore interbank market for such currency for the applicable amount and Interest Period of such Eurocurrency Rate Loan, (B) adequate and reasonable means do not exist for determining the Eurocurrency Rate for any requested Interest Period with respect to a proposed Eurocurrency Rate Loan (whether denominated in Dollars or an Alternative Currency) or in connection with an existing or proposed Base Rate Loan or (C) a fundamental change has occurred in the foreign exchange or interbank markets with respect to such Alternative Currency (including, without limitation, changes in national or international financial, political or economic conditions or currency exchange rates or exchange controls) (in each case with respect to clause (i), “Impacted Loans”), or (ii) the Administrative Agent or the Required Lenders determine in good faith that for any reason the Eurocurrency Rate for any requested Interest Period with respect to a proposed Eurocurrency Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Eurocurrency Rate Loan, the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, (x) the obligation of the Lenders to make or maintain Eurocurrency Rate Loans in the affected currency or currencies shall be suspended (to the extent of the affected Eurocurrency Rate Loans or Interest Periods), and (y) in the event of a determination described in the preceding sentence with respect to the Eurocurrency Rate component of the Base Rate, the utilization of the Eurocurrency Rate component in determining the Base Rate shall be suspended, in each case until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurocurrency Rate Loans in the affected currency or currencies or, failing that, will be deemed to have converted such request into a request for a Committed Borrowing of Base Rate Loans in the amount specified therein.

(b) Notwithstanding the foregoing, if the Administrative Agent has made the determination described in clause (a)(i) of this Section, the Administrative Agent, in consultation with the Borrower and the affected Lenders, may establish an alternative interest rate for the Impacted Loans, in which case, such alternative rate of interest shall apply with respect to the Impacted Loans until (1) the Administrative Agent revokes the notice delivered with respect to the Impacted Loans under clause (a)(i) of this Section, (2) the Administrative Agent or the Required Lenders notify the Borrower that such alternative interest rate does not adequately and fairly reflect the cost to such Lenders of funding the Impacted Loans, or (3) any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for such Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to such alternative rate of interest or to determine or charge interest rates based upon such rate or any Governmental Authority has imposed material restrictions on the authority of such Lender to do any of the foregoing and provides the Administrative Agent and the Borrower written notice thereof.

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3.04 Increased Costs.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement contemplated by Section 3.04(e) or the L/C Issuer);

(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

(iii) impose on any Lender or the L/C Issuer or the London interbank market any other condition, cost or expense affecting this Agreement or Eurocurrency Rate Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any Loan the interest on which is determined by reference to the Eurocurrency Rate (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or the L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the L/C Issuer, the Borrower will pay to such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender or the L/C Issuer determines that any Change in Law affecting such Lender or the L/C Issuer or any Lending Office of such Lender or such Lender’s or the L/C Issuer’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or the L/C Issuer’s capital or on the capital of such Lender’s or the L/C Issuer’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit or Swing Line Loans held by, such Lender, or the Letters of Credit issued by the L/C Issuer, to a level below that which such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the L/C Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s holding company with respect to capital adequacy or liquidity), then from time to time the Borrower will pay to such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company for any such reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender or the L/C Issuer setting forth the amount or amounts necessary to compensate such Lender or the L/C Issuer or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay to such Lender or the L/C Issuer, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.

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(d) Delay in Requests. Failure or delay on the part of any Lender or the L/C Issuer to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s or the L/C Issuer’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender or the L/C Issuer pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than six months prior to the date that such Lender or the L/C Issuer, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the L/C Issuer’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect thereof).

(e) Additional Reserve Requirements. The Borrower shall pay to each Lender, (i) as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each Eurocurrency Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), and (ii) as long as such Lender shall be required to comply with any other reserve ratio requirement or analogous requirement of any central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of the Eurocurrency Rate Loans, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such Commitment or Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive, absent manifest error), which shall be due and payable on each date on which interest is payable on such Loan, provided the Borrower shall have received at least 10 days’ prior notice (with a copy to the Administrative Agent) of such additional costs from such Lender. If a Lender fails to give notice 10 days prior to the relevant Interest Payment Date, such additional costs shall be due and payable 10 days from receipt of such notice.

(f) Mandatory Costs. If any Lender or the L/C Issuer incurs any Mandatory Costs attributable to the Obligations, then from time to time the Borrower will pay to such Lender or the L/C Issuer, as the case may be, such Mandatory Costs. Such amount shall be expressed as a percentage rate per annum and shall be payable on the full amount of the applicable Obligations.

3.05 Compensation for Losses.

Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

(a) any continuation, conversion, payment or prepayment of any Eurocurrency Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

(b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Eurocurrency Rate Loan on the date or in the amount notified by the Borrower;

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(c) any failure by the Borrower to make payment of any Loan or drawing under any Letter of Credit (or interest due thereon) denominated in an Alternative Currency on its scheduled due date or any payment thereof in a different currency; or

(d) any assignment of a Eurocurrency Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 10.13;

including any loss of anticipated profits, any foreign exchange losses and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan, from fees payable to terminate the deposits from which such funds were obtained or from the performance of any foreign exchange contract. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurocurrency Rate Loan made by it at the Eurocurrency Rate for such Loan by a matching deposit or other borrowing in the offshore interbank market for such currency for a comparable amount and for a comparable period, whether or not such Eurocurrency Rate Loan was in fact so funded.

3.06 Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. Each Lender may make any Credit Extension to the Borrower through any Lending Office, provided that the exercise of this option shall not affect the obligation of the Borrower to repay the Credit Extensions in accordance with the terms of this Agreement. If any Lender requests compensation under Section 3.04, or requires the Borrower to pay any Indemnified Taxes or additional amounts to any Lender, the L/C Issuer or any Governmental Authority for the account of any Lender or the L/C Issuer pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then at the request of the Borrower, such Lender or the L/C Issuer, as applicable, shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the reasonable judgment of such Lender or the L/C Issuer, as applicable, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender or the L/C Issuer, as the case may be, to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or the L/C Issuer, as the case may be. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender or the L/C Issuer in connection with any such designation or assignment.

(b) Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if the Borrower is required to pay any Indemnified Taxes or additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01 or if any Lender gives a notice pursuant to Section 3.02 (which has not been revoked) and, in each case, the Lender has declined or is unable to designate a different lending office in accordance with Section 3.06(a) which results in the elimination of the amounts payable pursuant to Section 3.01 and Section 3.04, the Borrower may replace such Lender in accordance with Section 10.13.

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3.07 Successor LIBOR.

Notwithstanding anything to the contrary in this Agreement or any other Loan Documents (including Section 10.01 hereof), if the Administrative Agent determines (which determination shall be conclusive absent manifest error), or the Borrower or Required Lenders notify the Administrative Agent (with, in the case of the Required Lenders, a copy to Borrower) that the Borrower or Required Lenders (as applicable) have determined, that:

(i) adequate and reasonable means do not exist for ascertaining LIBOR for any requested Interest Period because the LIBOR Screen Rate is not available or published on a current basis and such circumstances are unlikely to be temporary; or

(ii) the administrator of the LIBOR Screen Rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which LIBOR or the LIBOR Screen Rate shall no longer be made available, or used for determining the interest rate of loans (such specific date, the “Scheduled Unavailability Date”), or

(iii) syndicated loans currently being executed, or that include language similar to that contained in this Section, are being executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace LIBOR,

then, reasonably promptly after such determination by the Administrative Agent or receipt by the Administrative Agent of such notice, as applicable, the Administrative Agent and the Borrower may amend this Agreement to replace LIBOR with an alternate benchmark rate (including any mathematical or other adjustments to the benchmark (if any) incorporated therein), giving due consideration to any evolving or then existing convention for similar Dollar denominated syndicated credit facilities for such alternative benchmarks (any such proposed rate, a “LIBOR Successor Rate”), together with any proposed LIBOR Successor Rate Conforming Changes (as defined below) and any such amendment shall become effective at 5:00 p.m. (New York time) on the fifth Business Day after the Administrative Agent shall have posted such proposed amendment to all Lenders and the Borrower unless, prior to such time, Lenders comprising the Required Lenders have delivered to the Administrative Agent written notice that such Required Lenders do not accept such amendment.

If no LIBOR Successor Rate has been determined and the circumstances under clause (i) above exist or the Scheduled Unavailability Date has occurred (as applicable), the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, (x) the obligation of the Lenders to make or maintain Eurocurrency Rate Loans shall be suspended, (to the extent of the affected Eurocurrency Rate Loans or Interest Periods), and (y) the Eurocurrency Rate component shall no longer be utilized in determining the Base Rate. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurocurrency Rate Loans (to the extent of the affected Eurocurrency Rate Loans or Interest Periods) or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans (subject to the foregoing clause (y)) in the amount specified therein.

Notwithstanding anything else herein, any definition of LIBOR Successor Rate shall provide that in no event shall such LIBOR Successor Rate be less than zero for purposes of this Agreement.

3.08 Survival.

All of the obligations of the Borrower under this Article III shall survive termination of the Aggregate Commitments and repayment of all other Obligations hereunder and the resignation or replacement of the Administrative Agent.

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ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01 Conditions of Initial Credit Extension.

The obligation of the L/C Issuer and each Lender to make its initial Credit Extension hereunder is subject to satisfaction of the following conditions precedent:

(a) The Administrative Agent’s receipt of the following, each properly executed by a Responsible Officer of the signing Loan Party (where applicable), each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to the Administrative Agent and each of the Lenders:

(i) executed counterparts of this Agreement, the Security Agreement, the Pledge Agreement and the Subsidiary Guaranty;

(ii) Notes executed by the Borrower in favor of each Lender requesting Notes;

(iii) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party;

(iv) such documents and certifications as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and that each of the Loan Parties is validly existing, in good standing, as applicable in their respective jurisdictions of formation;

(v) such executed documents as the Administrative Agent may reasonably require to perfect the Lenders’ first priority security interest in the Collateral, subject to the Liens set forth in Schedule 7.01, including notices of grants of security interests in intellectual property to be filed with the United States Patent and Trademark Office or United States Copyright Office, filings with the United States Surface Transportation Board and stock transfer powers;

(vi) favorable opinions of Paul Hastings LLP and Tonkon Torp LLP, counsel to the Loan Parties, addressed to the Administrative Agent and each Lender;

(vii) a certificate of a Responsible Officer of the Borrower either (A) attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by the Loan Parties and the validity against the Loan Parties of the Loan Documents, and such consents, licenses and approvals shall be in full force and effect, or (B) stating that, except as otherwise provided in Section 5.03, no such consents, licenses or approvals are so required;

(viii) a certificate signed by a Responsible Officer of the Borrower certifying (A) that the conditions specified in Sections 4.02(a) and (b) have been satisfied and (B) that there has been no event or circumstance since the date of the Audited Financial Statements that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect; and

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(ix) evidence that all insurance required to be maintained pursuant to the Loan Documents has been obtained and is in effect.

(b) At least five days prior to the Closing Date, if the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, it shall deliver a Beneficial Ownership Certification in relation to the Borrower.

(c) Any fees required to be paid on or before the Closing Date shall have been paid.

(d) Unless waived by the Administrative Agent, the Borrower shall have paid all fees, charges and disbursements of counsel to the Administrative Agent to the extent invoiced prior to the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent).

Without limiting the generality of the provisions of the last paragraph of Section 9.03, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

4.02 Conditions to all Credit Extensions.

The obligation of each Lender and the L/C Issuer to honor any Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Committed Loans to the other Type, or a continuation of Eurocurrency Rate Loans) is subject to the following conditions precedent:

(a) The representations and warranties of (i) the Borrower contained in Article V and (ii) each Loan Party contained in each other Loan Document or in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects (or, if qualified by materiality or Material Adverse Effect, in all respects) on and as of the date of such Credit Extension, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (or, if qualified by materiality or Material Adverse Effect, in all respects) as of such earlier date, and except that for purposes of this Section 4.02, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01.

(b) No Default shall exist, or would result from such proposed Credit Extension or the application of the proceeds thereof.

(c) The Administrative Agent and, if applicable, the L/C Issuer or the Swing Line Lender shall have received a Request for Credit Extension in accordance with the requirements hereof.

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(d) In the case of a Credit Extension to be denominated in an Alternative Currency, there shall not have occurred any change in national or international financial, political or economic conditions or currency exchange rates or exchange controls which in the reasonable opinion of the Administrative Agent, the Required Lenders or the L/C Issuer (in the case of any Letter of Credit to be denominated in an Alternative Currency) would make it impracticable for such Credit Extension to be denominated in the relevant Alternative Currency.

Each Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Committed Loans to the other Type or a continuation of Eurocurrency Rate Loans) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

The Borrower, on behalf of itself and the Subsidiary Guarantors, represents and warrants to the Administrative Agent and the Lenders that:

5.01 Existence, Qualification and Power; Compliance with Laws.

Each Loan Party and each Subsidiary thereof (a) is duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, and (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

5.02 Authorization; No Contravention.

The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is party, have been duly authorized by all necessary corporate or other organizational action, and do not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any (x) with respect to the creation of any Lien (other than Permitted Liens), Contractual Obligation or (y) with respect to any conflict, breach or contravention or payment, Contractual Obligation, in each case, to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries, except to the extent as could not reasonably be expected to have a Material Adverse Effect, or (ii) any material order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any material Law.

5.03 Governmental Authorization; Other Consents.

No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document,

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except (a) as have been obtained or made and are in full force and effect, (b) for the authorizations, approvals, actions, notices and filings listed on Schedule 5.03, (c) filings and recordings with respect to the Collateral to be made, or otherwise delivered to the Administrative Agent for filing or recordation and (d) notices and filings required by law in connection with the exercise of remedies pursuant to the Loan Documents. The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is party do not require any approval of any Loan Party’s equity holders or any approval or consent of any Person under any Contractual Obligation of any Loan Party, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of Contractual Obligations, for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be expected to have a Material Adverse Effect.

5.04 Binding Effect.

This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, except as enforcement thereof may be limited by applicable Debtor Relief Laws and by general principles of equity.

5.05 Financial Statements; No Material Adverse Effect.

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all material indebtedness and other liabilities required to be shown under GAAP, direct or contingent, of the Borrower and its Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.

(b) The unaudited consolidated balance sheet of the Borrower and its Subsidiaries dated May 31, 2018, and the related consolidated statements of income or operations and cash flows for the fiscal quarter ended on that date (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject to the absence of footnotes and to normal year-end audit adjustments.

(c) Since the date of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had or is reasonably expected to have a Material Adverse Effect.

5.06 Litigation.

There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any of its Subsidiaries or against any of their properties that either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

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5.07 No Default.

Neither the Borrower nor any Subsidiary is in default under or with respect to any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

5.08 Ownership of Property; Liens.

Each of the Borrower and each Subsidiary has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The property of the Borrower and its Subsidiaries is subject to no Liens, other than Permitted Liens.

5.09 Environmental Compliance.

The Borrower and its Subsidiaries conduct in the ordinary course of business a review of the effect of existing Environmental Laws and claims alleging potential liability or responsibility for violation of any Environmental Law on their respective businesses, operations and properties, and as a result thereof the Borrower has reasonably concluded that such Environmental Laws and claims could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

5.10 Insurance.

(a) The properties of the Borrower and its Subsidiaries are insured with financially sound and reputable insurance companies that are not Affiliates (except as permitted below) of the Borrower, in such amounts, and with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower or the applicable Subsidiary operates; provided, however, that the Borrower may reduce the amount of insurance required to be maintained above to the extent that the Borrower maintains a self-insurance program providing insurance coverage in lieu thereof and in a manner consistent with past practices or otherwise in accordance with sound business practices by companies in similar businesses similarly situated and located. The property and general liability insurance coverage of the Loan Parties as in effect on the Closing Date is outlined as to carrier, policy number, expiration date and type on Schedule 5.10.

(b) The Borrower and its Subsidiaries maintain, if available, fully paid flood hazard insurance on all Flood Hazard Property, on such terms and in such amounts as required by The National Flood Insurance Reform Act of 1994 or as otherwise required by the Administrative Agent.

5.11 Taxes.

The Borrower and its Subsidiaries have filed all United States federal and state income Taxes and other material Tax returns and reports required to be filed, and have paid all United States federal and state income Taxes and other material Taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except (a) those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP and (b) those (other than United States federal income Taxes) where the failure to do so could not reasonably be expected to result in a Material Adverse Effect. There is no proposed Tax assessment against the Borrower or any Subsidiary that would, if made, have a Material Adverse Effect. Neither any Loan Party nor any Subsidiary thereof is party to any formal Tax sharing agreement.

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5.12 ERISA Compliance.

(a) Except as could not reasonably be expected to have a Material Adverse Effect, each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other United States federal or state Laws. Each Plan that is intended to qualify under Section 401(a) of the Code has received an opinion letter or a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the knowledge of the Borrower, nothing has occurred which would prevent, or cause the loss of, such qualification. The Borrower and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.

(b) There are no pending or, to the knowledge of the Borrower, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.

(c) Except as would not reasonably be expected to result in liability in excess of the Threshold Amount, (i) no ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Borrower nor any ERISA Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA.

5.13 Subsidiaries; Equity Interests.

As of the Closing Date, the Borrower has no Subsidiaries other than those specifically disclosed in Part (a) of Schedule 5.13, and, to the extent applicable, all of the outstanding Equity Interests in such Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by a Loan Party in the amounts specified on Part (a) of Schedule 5.13 free and clear of all Liens (other than Liens permitted by clauses (a), (c) and (h) of Section 7.01). As of the Closing Date, the Borrower has no equity investments in any other corporation or entity other than those specifically disclosed in Part(b) of Schedule 5.13. All of the outstanding Equity Interests in the Borrower have been validly issued and are fully paid and nonassessable.

5.14 Margin Regulations; Investment Company Act.

(a) The Borrower is not engaged nor will it engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock.

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(b) None of the Borrower, any Person Controlling the Borrower, or any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

5.15 Disclosure.

No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case, as modified or supplemented by other information so furnished), when taken as a whole, contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; it being understood that for purposes of this Section 5.15, such reports, financial statements, certificates and other information shall not include any financial projections, budgets, forecasts, pro forma data and other forward looking statements (“Projections”) or any information of a general economic or general industry nature. All Projections provided by the Borrower have been prepared in good faith based upon assumptions believed to be reasonable at the time provided (it being understood that such Projections are subject to significant uncertainties and contingencies, many of which are beyond the Borrower’s control, and that the Projections are not a guarantee of financial performance which may differ and such differences may be material). As of the Closing Date, the information included in the Beneficial Ownership Certification is true and correct in all respects.

5.16 Compliance with Laws.

Each of the Borrower and each Subsidiary is in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, is not expected to have a Material Adverse Effect.

5.17 Intellectual Property; Licenses, Etc.

The Borrower and its Subsidiaries own, or possess the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the operation of their respective businesses, without, to the knowledge of the Borrower, conflict (except for conflicts that either individually or in the aggregate could not reasonably be expected to result in a Material Adverse Effect) with the rights of any other Person. To the knowledge of the Borrower, no slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by the Borrower or any Subsidiary infringes upon any valid rights held by any other Person, except for conflicts that either individually or in the aggregate could not reasonably be expected to result in a Material Adverse Effect. No claim or litigation regarding any of the foregoing is pending or, to the knowledge of the Borrower, threatened, which, either individually or in the aggregate, is reasonably expected to have a Material Adverse Effect. Set forth on Schedule 5.17 is a list of all IP Rights registered or pending registration with the United States Copyright Office or the United States Patent and Trademark Office and owned by each Loan Party as of the Closing Date.

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5.18 Sanctions; Anti-Corruption.

None of the Loan Parties, nor any of their Subsidiaries, nor, to the knowledge of the Loan Parties and their Subsidiaries, any director, officer, employee, agent, affiliate or representative thereof, is an individual or entity that is, or is owned or controlled by any individual or entity that is (i) currently the subject or target of any Sanctions, (ii) included on OFAC’s List of Specially Designated Nationals, HMT’s Consolidated List of Financial Sanctions Targets and the Investment Ban List, or any similar list enforced by any other relevant sanctions authority or (iii) located, organized or resident in a Designated Jurisdiction. The Loan Parties and their Subsidiaries have conducted their businesses in compliance in all material respects with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption legislation in other jurisdictions and have instituted and maintained policies and procedures designed to promote compliance in all material respects with such laws.

5.19 No EEA Financial Institution.

No Loan Party is an EEA Financial Institution.

ARTICLE VI

AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation under the Loan Documents shall remain unpaid or unsatisfied (other than contingent amounts not yet due), or any Letter of Credit shall remain outstanding (other than Letters of Credit that have been Cash Collateralized), the Borrower shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02, and 6.03) cause each Subsidiary to:

6.01 Financial Statements.

Deliver to the Administrative Agent and each Lender:

(a) as soon as available, but in any event no later than 90 days after the end of each fiscal year of the Borrower (commencing with the fiscal year ended August 31, 2018), a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, stockholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP in all material respects, such consolidated statements to be audited and accompanied by a report and opinion of KPMG or any other independent certified public accountant of nationally recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit (except for qualifications resulting from the Obligations being classified as short term Indebtedness during the year prior to the applicable maturity date); and

(b) as soon as available, but in any event no later than 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower (commencing with the fiscal quarter ended November 30, 2018), a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations and cash flows for such fiscal quarter and for the portion of the Borrower’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail, such consolidated statements to be certified by a Responsible Officer of the Borrower as fairly presenting in all material respects the financial condition, results of operations, stockholders’ equity and cash flows of the Borrower and its Subsidiaries in accordance with GAAP in all material respects, subject only to normal year-end audit adjustments and the absence of footnotes; and

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(c) as soon as available, but in any event not later than 75 days after the beginning of each fiscal year of the Borrower, forecasts prepared by management of the Borrower of consolidated balance sheets and statements of income or operations and cash flows of the Borrower and its Subsidiaries on a quarterly basis for such fiscal year (including the fiscal year in which the Maturity Date occurs).

As to any information contained in materials furnished pursuant to Section 6.02(d), the Borrower shall not be separately required to furnish such information under clause (a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Borrower to furnish the information and materials described in clauses (a) and (b) above at the times specified therein.

6.02 Certificates; Other Information.

Deliver to the Administrative Agent (for further distribution to the Lenders), in form and detail reasonably satisfactory to the Administrative Agent and the Required Lenders:

(a) within 45 days after the end of each fiscal quarter, a Borrowing Base Certificate as of the last day of such fiscal quarter;

(b) concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b) (commencing with the fiscal quarter ending August 31, 2018) a duly completed Compliance Certificate signed by a Responsible Officer of the Borrower which shall include, solely with respect to the delivery of the financial statements referred to in Section 6.01(a), such supplements to Schedules 5.13(a) and 5.17, as are necessary such that, as supplemented, such Schedules would be accurate and complete as of the date of such Compliance Certificate delivered in connection therewith (which delivery may, unless the Administrative Agent, or a Lender requests executed originals, be by electronic communication including fax or email and shall be deemed to be an original authentic counterpart thereof for all purposes);

(c) promptly after any request by the Administrative Agent or any Lender (acting through the Administrative Agent), copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Borrower by independent accountants in connection with the accounts or books of the Borrower or any Subsidiary, or any audit of any of them;

(d) promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to all of the stockholders of the Borrower, and copies of all annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to be delivered to the Administrative Agent pursuant hereto;

(e) promptly after the furnishing thereof, copies of any material statement or material report furnished to any holder of debt securities of any Loan Party or any Subsidiary thereof pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Lenders pursuant to Section 6.01 or any other clause of this Section 6.02;

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(f) promptly, and in any event within ten Business Days after receipt thereof by any Loan Party or any Subsidiary thereof, copies of each material notice or other material correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation by such agency regarding financial or other operational results of any Loan Party or any Subsidiary thereof;

(g) promptly following any request therefor, information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable “know your customer” requirements under the PATRIOT Act, the Beneficial Ownership Regulation or other applicable anti-money laundering laws;

(h) promptly, such additional information regarding the business, financial or corporate affairs of the Borrower or any Subsidiary, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request;

(i) upon closing of any offering of Term Debt which affects the Borrowing Base, upon a pledge of assets permitted pursuant to Section 7.01, or at the Borrower’s sole discretion upon the acquisition of assets by the Borrower or any of its Subsidiaries outside of the ordinary course of business (but otherwise permitted hereunder), an updated Borrowing Base Certificate which incorporates the acquired or pledged assets to reflect such assets on a pro-forma basis; and

(j) within thirty (30) days after closing of any offering of Term Debt, a certificate signed by a Responsible Officer which confirms that (i) such offering did not cause an Event of Default, and (ii) the documentation associated with such offering, a copy of which shall be attached to the certificate, does not impose a limitation on the ability of the Borrower or its Subsidiaries to make Restricted Payments to the Borrower or its Subsidiaries.

Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(d) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed on Schedule 10.02; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (ii) the Borrower shall notify the Administrative Agent and each Lender (by facsimile or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request by a Lender for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arranger will make available to the Lenders and the L/C Issuer materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks, Syndtrak, ClearPar or a substantially similar electronic transmission system (the “Platform”) and (b) certain of the Lenders (each a “Public Lender”) may have personnel who do not wish to receive

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material non-public information with respect to the Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrower hereby agrees that so long as the Borrower is the issuer of any outstanding debt or equity securities that are registered or issued pursuant to a private offering or is actively contemplating issuing any such securities (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the Arranger, the L/C Issuer and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower or its securities for purposes of United States federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 10.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated as “Public Side Information;” and (z) the Administrative Agent and the Arranger and any Affiliate of the Administrative Agent or the Arranger shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform that is not designated as “Public Side Information.” Notwithstanding the foregoing, the Borrower shall not be under any obligation to mark any Borrower Materials “PUBLIC.”

6.03 Notices.

Promptly notify the Administrative Agent and each Lender:

(a) of the occurrence of any Default;

(b) of any matter that has resulted or is reasonably expected to result in a Material Adverse Effect;

(c) of the occurrence of any ERISA Event that has resulted or is reasonably expected to result in liability in excess of the Threshold Amount; and

(d) of any material change in accounting policies or financial reporting practices by the Borrower or any Subsidiary.

Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

6.04 Payment of Tax Obligations.

Pay and discharge as the same shall become due and payable, all its obligations and liabilities, including all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, (a) unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Borrower or such Subsidiary or (b) except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.

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6.05 Preservation of Existence, Etc.

Except for Immaterial Subsidiaries, (a) preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 7.04 or 7.05; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.

6.06 Maintenance of Properties.

(a) Maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted; (b) make all necessary repairs thereto and renewals and replacements thereof; and (c) use the standard of care typical in the industry in the operation and maintenance of its material facilities, in each of the foregoing clauses (a), (b) and (c) except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

6.07 Maintenance of Insurance.

(a) Maintain with financially sound and reputable insurance companies that are not Affiliates of the Borrower, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts (after giving effect to any self-insurance compatible with the following standards) as are customarily carried under similar circumstances by such other Persons. The Administrative Agent and Lenders acknowledge and agree that the insurance set forth on Schedule 5.10 as of the Closing Date satisfies the requirements of this Section 6.07(a) as of the Closing Date.

(b) Cause the Administrative Agent to be named as lender loss payee or mortgagee, as its interest may appear, and/or additional insured with respect to any such insurance providing liability coverage or coverage in respect of any Collateral. All certificates of property and general liability insurance are to be delivered to the Administrative Agent, with the loss payable (but only in respect of Collateral) and additional insured endorsements in favor of the Administrative Agent and shall provide for not less than 30 days (10 days in the case of non-payment) prior written notice to the Administrative Agent of the exercise of any right of cancellation.

(c) So long as one or more of the following conditions is true (i) no Event of Default has occurred and is continuing, (ii) the Outstanding Amount of Loans is not greater than $0, or (iii) the loss covered by such insurance involves a potential claim of less than $10,000,000, then, Borrower and its Subsidiaries shall have the sole right to file claims under any property and general liability insurance policies, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies. Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent shall have the sole right to file claims involving losses under any property and general liability insurance policies in respect of the Collateral, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.

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(d) Without limiting the foregoing, (i) maintain, if available, fully paid flood hazard insurance on all Flood Hazard Property, on such terms and in such amounts as required by The National Flood Insurance Reform Act of 1994 or as otherwise required by the Administrative Agent, (ii) furnish to the Administrative Agent evidence of the renewal (and payment of renewal premiums therefor) of all such policies prior to the expiration or lapse thereof, and (iii) furnish to the Administrative Agent prompt written notice of any redesignation of any such Flood Hazard Property into or out of a special flood hazard area.

6.08 Compliance with Laws.

Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

6.09 Books and Records.

(a) Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP in all material respects consistently applied shall be made of all financial transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Borrower or such Subsidiary, as the case may be.

6.10 Inspection Rights.

(a) Permit representatives and independent contractors of the Administrative Agent (who may be accompanied by the Lenders at the sole expense of such Lenders) to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its Responsible Officers, and independent public accountants, at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided, however, that excluding any such visits and inspections during the continuance of an Event of Default, none of the Administrative Agent or any of the Lenders may exercise rights under this Section 6.10(a) more often than two (2) times during any calendar year and only one (1) such visit by Administrative Agent (and no visits by any Lenders) shall be at the Borrower’s expense; provided, further, that when an Event of Default exists the Administrative Agent (or any of its respective representatives or independent contractors) (and any Lender may accompany Administrative Agent at its own expense) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice.

(b) Notwithstanding anything to the contrary contained herein, the Administrative Agent may conduct annual appraisals of the Loan Parties’ rail car fleet. Such appraisals shall be done at the expense of the Borrower (provided that Borrower shall only be responsible for the actual charges paid or incurred by Administrative Agent in connection with the performance of such appraisal) and shall be performed by an appraiser reasonably acceptable to the Administrative Agent.

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(c) At the discretion of the Administrative Agent or the Required Lenders, the Administrative Agent shall have the right to require or conduct an annual field audit of the Collateral. Such field audit shall be done at the expense of the Borrower (provided that Borrower shall only be responsible for the actual charges paid or incurred by Administrative Agent in connection with the performance of such appraisal) and shall be performed by an auditor reasonably acceptable to the Administrative Agent.

6.11 Use of Proceeds.

Use the proceeds of the Credit Extensions for working capital and other general corporate purposes not in contravention of any applicable Law or of any Loan Document.

6.12 [Reserved].

6.13 Additional Subsidiary Guarantors.

Notify the Administrative Agent at the time that (i) any Person becomes a Domestic Subsidiary (except for Immaterial Subsidiaries) or (ii) any Domestic Subsidiary ceases to be an Immaterial Subsidiary, and, in each case, promptly thereafter (and in any event within 30 days), cause such Person to (a) become a Subsidiary Guarantor by executing and delivering to the Administrative Agent a counterpart of the Subsidiary Guaranty or such other document as the Administrative Agent shall deem appropriate for such purpose, and (b) deliver to the Administrative Agent documents of the types referred to in clauses (iii) and (iv) of Section 4.01(a) and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in clause (a)), all in form, content and scope reasonably satisfactory to the Administrative Agent. Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Borrower shall cause any Domestic Subsidiary that Guarantees any Indebtedness in excess of $25,000,000 to become a Subsidiary Guarantor.

6.14 Pledged Assets.

(a) Equity Interests. Cause 100% of the issued and outstanding Equity Interests (other than Excluded Property) of each direct Domestic Subsidiary of each Loan Party, to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent, for the benefit of the holders of the Obligations, pursuant to the terms and conditions of the Loan Documents, together with opinions of counsel (except in respect of Equity Interests of Immaterial Subsidiaries) and any filings and deliveries reasonably necessary in connection therewith to perfect the security interests therein, all in form and substance reasonably satisfactory to the Administrative Agent.

(b) Other Property. (i) Cause all of the owned and leased personal property (other than Excluded Property and Equity Interests of Subsidiaries not pledged pursuant to subsection (a) above) of each Loan Party to be subject at all times to first priority, perfected Liens in favor of the Administrative Agent, for the benefit of the holders of the Obligations, to secure the Obligations pursuant to the terms and conditions of the Loan Documents, subject in any case to Liens permitted by Section 7.01 and (ii) deliver such other documentation as the Administrative Agent may reasonably request in connection with the foregoing, including, without limitation, appropriate UCC-1 financing statements, landlord’s waivers, certified resolutions and other organizational and authorizing documents of such Person, favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to above and the perfection of the Administrative Agent’s Liens thereunder) and other items as may be reasonably requested by the Administrative Agent, all in form, content and scope reasonably satisfactory to the Administrative Agent.

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(c) In addition, the Loan Parties may pledge additional assets as Collateral pursuant to additional Loan Documents in form and substance reasonably satisfactory to the Administrative Agent, together with such other documentation as the Administrative Agent may reasonably request in connection therewith. To the extent such additional Collateral satisfies the applicable eligibility requirements, such Collateral shall be included in the Borrowing Base.

(d) Notwithstanding the foregoing, the Loan Parties shall not be required to be in compliance with clauses (a) and (b) of this Section 6.14 with respect to newly formed or acquired Subsidiaries until the thirty day period set forth in Section 6.13 has expired.

(e) Not permit any railcars owned by any Loan Party that are not pledged as Collateral and are subject to the same lease as any railcars that are pledged as Collateral to be subject to any Lien permitted under Section 7.01(i) unless the secured parties in respect of such Lien (or their representative or agent) have executed and delivered an intercreditor agreement with the Administrative Agent (which shall be in form and substance substantially similar to the Intercreditor Agreement described in clause (a) of the definition thereof or otherwise reasonably satisfactory to the Administrative Agent).

(f) Notwithstanding anything to the contrary contained herein, no actions in any non-U.S. jurisdiction shall be required under the Loan Documents in order to create any security interests in assets located or titled outside of the U.S. or to perfect any security interests (it being understood that there shall be no security agreements or pledge agreements governed under the laws of any non-U.S. jurisdiction, so long as all applicable equity interests that are certificated are in the possession of the Administrative Agent to the extent constituting Collateral).

6.15 Anti-Corruption Laws.

Conduct its businesses in compliance in all material respects with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and other similar anti-corruption legislation in other jurisdictions and maintain policies and procedures designed to promote compliance in all material respects with such laws.

ARTICLE VII

NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation under the Loan Documents shall remain unpaid or unsatisfied (other than contingent amounts not yet due), or any Letter of Credit shall remain outstanding (other than Letters of Credit that have been Cash Collateralized), the Borrower shall not, nor shall it permit any Subsidiary to, directly or indirectly:

7.01 Liens.

Create, incur, assume or suffer to exist any Lien upon any of its property or assets, whether now owned or hereafter acquired, other than the following:

(a) Liens pursuant to any Loan Document;

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(b) Liens existing on the Closing Date and listed on Schedule 7.01 and any renewals or extensions thereof, provided that (i) the property covered thereby is not increased other than after-acquired property that is affixed or incorporated into such property and proceeds and products of such property, (ii) the principal amount secured or benefited thereby is not increased (except by an amount equal to accrued and unpaid interest on the obligations secured thereby, and a reasonable premium or other reasonable amount paid in connection with such refinancing or extension, fees and expenses reasonably incurred in connection therewith, and by an amount equal to any existing commitments unutilized thereunder), (iii) the direct or any contingent obligor with respect thereto is not changed, and (iv) any renewal or extension of the obligations secured or benefited thereby is permitted by Section 7.03(b);

(c) Liens for taxes, fees, assessments and other governmental charges and levies (i) which are not individually, or in the aggregate, in excess of $2,500,000, (ii) which are not overdue for a period of more than 30 days or (iii) which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

(d) landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business (i) which are not individually, or in the aggregate, in excess of $2,500,000, (ii) which are not overdue for a period of more than 30 days or (iii) which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person;

(e) pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA or applicable Environmental Law;

(f) (i) deposits to secure the performance of bids, trade contracts and leases (other than in connection with the borrowing of money), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business, and/or (ii) Liens on rail cars (the “transferred rail cars”) or other personal property (“transferred personal property”) that are transferred to the Borrower or any of its Subsidiaries by customers as consideration for the future delivery by the Borrower or any of its Subsidiaries to such customer of (1) existing rail car assets or other existing assets, (2) to-be-refurbished rail car assets or other to-be-refurbished assets or (3) to-be-constructed rail car assets or other to-be-constructed assets, so long as in either case (x) no Default exists or would result from the creation of such Liens, (y) such Liens (A) secure only the performance obligations of the Borrower and its Subsidiaries to deliver the assets described in items (1), (2) or (3) of this clause (f) to such customer, (B) extend to no property of the Borrower and its Subsidiaries other than the transferred rail cars or other transferred personal property, (C) are released upon completion of performance by the Borrower and its Subsidiaries and (z) the transferred rail cars or other transferred personal property shall not be included in the Borrowing Base while they are subject to such Liens;

(g) any zoning restrictions, easements, rights-of-way, encroachments, protrusions and other similar encumbrances and title defects affecting real property which, in the aggregate, do not in any case materially interfere with the ordinary conduct of the business of the applicable Person, or the use of the property for the intended purpose;

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(h) Liens securing judgments for the payment of money not constituting an Event of Default under Section 8.01(h);

(i) Liens on Lease-Related Assets securing Term Debt permitted under Section 7.03(d) (and, if applicable, any obligations in respect of Swap Contracts permitted under the terms of the documentation governing any such Term Debt to be secured by the applicable Lease-Related Assets securing such Term Debt); provided that (i) such Liens do not at any time encumber any other property and (ii) the applicable Lease-Related Assets pledged to secure such Term Debt are not included in the Borrowing Base calculation set forth in the most recently delivered Borrowing Base Certificate;

(j) Liens securing Indebtedness permitted under Section 7.03(e); provided that (i) such Liens do not at any time encumber any property other than the property financed by such Indebtedness or the proceeds thereof and (ii) the Indebtedness secured thereby does not exceed the cost of the property being acquired on the date of acquisition (other than by the amount of premiums paid thereon and the fees and expenses incurred in connection therewith); provided, further, that individual financings of equipment provided by one lender may be cross-collateralized to other individual financings of equipment provided by such lender;

(k) Liens on assets of Foreign Subsidiaries securing Indebtedness permitted under Section 7.03(f);

(l) Liens in favor of a banking or other financial institution arising as a matter of Law or under customary general terms and conditions encumbering deposits or other funds maintained with such banking or other financial institution (including the right of set off) and that are within the general parameters customary in the banking industry;

(m) any right of a licensor under any license agreement for the use of intellectual property or other intangible assets as to which the Borrower or such Subsidiary is the licensee;

(n) any leases, licenses, subleases or sublicenses granted to others (i) in the ordinary course of business not interfering in any material respect, alone or in the aggregate, with the conduct of the business of the Borrower and its Subsidiaries taken as a whole or (ii) permitted pursuant to Section 7.05;

(o) Liens in favor of owners or purchasers of goods (including materials and/or components used in connection with the manufacture thereof) being manufactured or serviced in the ordinary course of business; provided that (i) such Liens do not at any time encumber any property other than the goods being manufactured or serviced (and such owned or purchased materials and/or components used in connection with the manufacture or service thereof) for such

purchaser or owner, (ii) such purchaser or owner shall have paid for the materials being used to manufacture or service such goods through the making of progress payments or similar advances and (iii) such goods are excluded from the Borrowing Base;

(p) Liens in favor of Loan Parties granted by any of Gunderson-Concarril S.A. de C.V., Greenbrier-GIMSA, LLC or Gunderson-GIMSA S. de R.L. de C.V. to secure any Indebtedness owed to a Loan Party;

(q) Liens solely on any cash earnest money deposits made by the Borrower or any of its Subsidiaries in connection with a Permitted Acquisition or other Investments permitted under Section 7.02 or Dispositions permitted under Section 7.05;

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(r) deposits in the ordinary course to secure liability insurance carriers and Liens on premium refunds and insurance proceeds securing the financing of insurance premiums permitted hereunder;

(s) Liens securing Indebtedness permitted by Section 7.03(m) on property of a Person existing at the time such Person is merged into or consolidated with the Borrower or any of its Subsidiaries or otherwise becomes a Subsidiary of the Borrower; provided, that such Liens were not created in contemplation of such merger, consolidation or Investment and do not extend to any assets other than those of the Person merged into or consolidated with the Borrower or such Subsidiary or acquired by the Borrower or such Subsidiary;

(t) customary negative pledges on assets being sold or Disposed of, including customary restrictions on distributions by a Subsidiary of the Borrower to be sold, pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Equity Interests or assets of such Subsidiary; provided, that such Disposition is permitted by Section 7.05;

(u) Liens on cash and cash equivalents deposited with a third-party trustee that arise in connection with the defeasance, discharge or redemption of Indebtedness;

(v) Liens in favor of the Borrower or any of its Subsidiaries securing Indebtedness permitted under Section 7.03(i); provided that such Liens shall not be provided by Loan Parties in favor of Subsidiaries that are not Loan Parties;

(w) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(x) Liens on assets leased to the Borrower or any Subsidiary under operating leases (including Liens on any subleases of such assets by the Borrower or such Subsidiary to third parties), which Liens (i) are granted in favor of the lessor with respect to the lease granting the Borrower or such Subsidiary rights in such assets as the lessee and (ii) secure the Borrower’s or such Subsidiary’s obligations to the lessor under such lease;

(y) Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by Borrower or any of its Subsidiaries in the ordinary course of business permitted by this Agreement; and

(z) Liens not otherwise permitted under this Section 7.01, provided that the obligations secured thereby shall not exceed $15,000,000 in the aggregate at any time outstanding.

7.02 Investments.

Make or permit to exist any Investments, except:

(a) Investments held by the Borrower or such Subsidiary in the form of cash equivalents or other investments permitted under the Borrower’s cash investment policy as approved by the Borrower’s board of directors, managers or equivalent governing body;

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(b) advances to officers, directors and employees of the Borrower and Subsidiaries in an aggregate amount not to exceed $500,000 at any time outstanding, for travel, entertainment, relocation and analogous ordinary business purposes;

(c) Investments (i) by any Loan Party in another Loan Party, (ii) by any Domestic Subsidiary that is not a Loan Party in any other Domestic Subsidiary that is not a Loan Party, (iii) by any Foreign Subsidiary in the Borrower or in any of its Subsidiaries, and (iv) by a Loan Party or any Subsidiary in a Foreign Subsidiary, “SPE”, “Managed Person” or “Joint Venture”, so long as the aggregate amount of such Investments, solely with respect to this subclause (iv), does not exceed $20,000,000 during the term of this Agreement;

(d) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;

(e) other Investments not exceeding an amount equal to the sum of (i) the greater of (x) $100,000,000 and (y) 10% of Consolidated Tangible Assets of the Borrower and its Subsidiaries as of the last day of the immediately preceding fiscal year of the Borrower plus (ii) any excess amount of Restricted Payments available to be paid pursuant to Section 7.06(d) that have not been distributed and have not been previously invested pursuant to this Section 7.02(e) or Section 7.02(g);

(f) purchases of Inventory by a Loan Party on behalf of any of Gunderson-Concarril S.A. de C.V., Greenbrier-GIMSA, LLC, GBW Railcar Services, L.L.C. or Gunderson-GIMSA S. de R.L. de C.V.;

(g) Investments in Greenbrier-GIMSA, LLC or Gunderson-GIMSA S. de R.L. de C.V. made after the Closing Date in an aggregate outstanding amount not exceeding the sum of (i) $30,000,000 plus (ii) any excess amount of Restricted Payments available to be paid pursuant to Section 7.06(d) that have not been distributed and have not been previously invested pursuant to this Section 7.02(g) or Section 7.02(e);

(h) Permitted Acquisitions, including, for the avoidance of doubt, any Investment in any Subsidiary in an amount required to permit such Subsidiary to consummate a Permitted Acquisition, which amount is actually applied by such Subsidiary to consummate such Permitted Acquisition substantially concurrently with the making of such Investment;

(i) to the extent constituting Investments, the creation of Liens, the incurrence of any Guarantee, the making of fundamental changes, the consummation of Dispositions, and the making of Restricted Payments permitted under Sections 7.01, 7.03(h), 7.04, 7.05 and 7.06, respectively;

(j) Investments to the extent that payment for such Investments is made solely with Qualified Equity Interests or with the net proceeds of the issuance of Qualified Equity Interests; provided that any Investments made with the net proceeds of the issuance of Qualified Equity Interests shall be made substantially contemporaneously with the issuance of such Qualified Equity Interests;

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(k) Investments consisting of (i) discretionary contributions made during such time as no Event of Default exists in an aggregate amount not to exceed $5,000,000 per fiscal year to a “rabbi” trust for the benefit of employees within the meaning of Revenue Procedure 92-64 and (ii) required contributions to a “rabbi” trust for the benefit of employees within the meaning of Revenue Procedure 92-64;

(l) Swap Contracts permitted by Section 7.03(c);

(m) Investments held by a Person acquired in a Permitted Acquisition to the extent that such Investments were not made in contemplation of or in connection with such Permitted Acquisition and were in existence on the date of such Permitted Acquisition; and

(n) Investments existing or contemplated on the Closing Date and set forth on Schedule 7.02 (and any extensions, modifications or renewals thereof provided that the amount of the original Investment is not increased except as otherwise permitted by this Section 7.02).

7.03 Indebtedness.

Create, incur, assume or suffer to exist any Indebtedness, except:

(a) Indebtedness under the Loan Documents;

(b) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03 and any refinancings, refundings, renewals or extensions thereof; provided that the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing, by an amount equal to accrued and unpaid interest on such Indebtedness, and by an amount equal to any existing commitments unutilized thereunder;

(c) obligations (contingent or otherwise) of the Borrower or any Subsidiary existing or arising under any Swap Contract, provided that (i) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person, and not for purposes of speculation or taking a “market view;” and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party;

(d) private offerings of debt securities or long-term Indebtedness to institutional investors or financial institutions by the Loan Parties or other Domestic Subsidiaries which Indebtedness (i) is secured by Liens permitted by Section 7.01(i) and (ii) in the case of any such Indebtedness not in existence on the Closing Date, if in a principal amount in excess of $30,000,000, contains terms and conditions reasonably acceptable to the Administrative Agent (any such Indebtedness, “Term Debt”); provided; however, that the aggregate principal amount of all such Term Debt at any one time outstanding pursuant to this subsection (d) shall not exceed $300,000,000;

(e) capital leases (including sale-leaseback transactions) or purchase money obligations for fixed or capital assets, within the limitations set forth in Section 7.01(j), and in an aggregate amount not to exceed $25,000,000 at any one time outstanding, and any refinancings, refundings, renewals, or extensions thereof; provided that the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to accrued and unpaid interest on such Indebtedness and a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing;

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(f) Indebtedness of Foreign Subsidiaries incurred in the ordinary course of business;

(g) earn-out obligations incurred in respect of Permitted Acquisitions;

(h) Guarantees given by the Borrower or any Subsidiary Guarantor in respect of Indebtedness of (i) the Borrower or any other Subsidiary Guarantor or (ii) a Foreign Subsidiary, “SPE”, “Managed Person” or “Joint Venture”, in each case, that is otherwise permitted or not prohibited under this Section 7.03; provided, that, the value of the Guarantees made in reliance of subclause (ii) of this clause (h) shall not exceed $10,000,000 in the aggregate at any time;

(i) intercompany Indebtedness resulting from loans and advances permitted by Section 7.02;

(j) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees or obligations in respect of letters of credit related thereto provided by the Borrower or any of its Subsidiaries in the ordinary course of business;

(k) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five Business Days of its incurrence;

(l) Indebtedness incurred in favor of insurance companies (or their financing affiliates) in connection with the financing of insurance premiums; provided, that the total of all such Indebtedness shall not exceed the aggregate amount of such unpaid insurance premiums;

(m) Indebtedness of a Person of the type described in Section 7.03(e) existing at the time such Person is merged into or consolidated with the Borrower or any of its Subsidiaries or otherwise becomes a Subsidiary of the Borrower; which Indebtedness was not incurred in contemplation of such merger, consolidation or Investment and is non-recourse to the Borrower or any Subsidiary other than such Person, and any refinancings, refundings, renewals or extensions thereof, provided that (i) the property securing such Indebtedness is not increased, (ii) the principal amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to accrued and unpaid interest on such Indebtedness and a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder and (iii) the direct or any contingent obligor with respect to such Indebtedness is not changed;

(n) Indebtedness of the Borrower or any of its Subsidiaries to the extent the net proceeds thereof are promptly deposited to defease or satisfy and discharge any other Indebtedness of such obligor not prohibited by this Section 7.03; provided that: (i) the amount of such new Indebtedness does not exceed the outstanding amount of the Indebtedness to be defeased or satisfied and discharged except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such defeasance or satisfaction and discharge, (ii) the terms relating to principal amount, amortization, maturity, collateral (if any) and subordination (if any), and other material terms

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taken as a whole, of any such new Indebtedness are no less favorable in any material respect to the Borrower and its Subsidiaries or the Lenders than the terms of any agreement or instrument governing the Indebtedness being defeased or satisfied and discharged and the interest rate applicable to any such new Indebtedness does not exceed the then applicable market interest rate and (iii) upon such defeasance, discharge or satisfaction, such new Indebtedness must otherwise be permitted under another subsection of this Section 7.03 and shall thereafter not be permitted under this subsection (n);

(o) to the extent constituting Indebtedness, obligations in respect of credit cards, credit card processing services, debit cards, stored value cards, purchase cards (including so-called “procurement cards” or “P-cards”), or in connection with services provided under Treasury Management Agreements, in each case, incurred in the ordinary course of business; and

(p) other Indebtedness, on terms reasonably acceptable to the Administrative Agent, in an aggregate principal amount at any one time outstanding not to exceed $550,000,000; provided that if such Indebtedness is secured, the aggregate principal amount of such secured Indebtedness shall not exceed $10,000,000 at any time outstanding and the Liens securing such Indebtedness are permitted by Section 7.01(z).

7.04 Fundamental Changes.

Merge, dissolve, divide, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that, so long as no Event of Default exists or would result therefrom:

(a) any Subsidiary may merge with (i) the Borrower, provided that the Borrower shall be the continuing or surviving Person, (ii) any one or more other Subsidiaries, provided that when any Subsidiary Guarantor is merging with another Subsidiary, the Subsidiary Guarantor shall be the continuing or surviving Person or (iii) any Person in order to effect any Investment permitted pursuant to Section 7.02, provided that a Subsidiary shall be the continuing or surviving Person (and if a Subsidiary Guarantor is party to such transaction, a Subsidiary Guarantor shall be the surviving Person);

(b) the Borrower may merge or consolidate with another corporation or entity which merger or consolidation merely effects the form or domicile of the Borrower without changing the respective holdings of Equity Interests in the Borrower (or in the surviving entity) by stockholders and pursuant to which all obligations of the Borrower in respect of this Agreement are and remain obligations of the surviving entity; provided that the surviving entity shall be organized under the laws of a political subdivision of the United States;

(c) any Subsidiary may Dispose of all or substantially all of its assets (upon voluntary liquidation, dissolution or otherwise) to the Borrower or to another Subsidiary; provided that if the transferor in such a transaction is a Subsidiary Guarantor, then the transferee must either be the Borrower or a Subsidiary Guarantor; and

(d) any Subsidiary may divide; provided that if the dividor in such a transaction is a Subsidiary Guarantor, then the newly formed entities must be Subsidiary Guarantors.

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7.05 Dispositions.

Make any Disposition, except:

(a) Dispositions of obsolete, damaged, destroyed or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;

(b) Dispositions of inventory in the ordinary course of business or equipment on or held for lease in the ordinary course of business, including sales, leases or exchanges of such assets, and in connection with the Golden West Agreements, in each case in the ordinary course of business;

(c) Dispositions of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property;

(d) Dispositions of property by the Borrower or any Subsidiary to the Borrower or to a wholly-owned Subsidiary; provided that if the transferor of such property is a Loan Party, the transferee thereof must be a Loan Party;

(e) Dispositions permitted by Section 7.04;

(f) Dispositions of lease assets in lease securitization, structured finance or syndication transactions, provided that the Borrower remains in compliance with its limitations under the Borrowing Base and all other terms and conditions of this Agreement;

(g) Dispositions pursuant to any sale-leaseback transactions under Section 7.03(e);

(h) sales or other Dispositions of assets having a fair market value (as determined by the Borrower in its reasonable discretion) of less than $75,000,000 in the aggregate during the term of this Agreement;

(i) Dispositions of cash equivalents in the ordinary course of business;

(j) leases or subleases of property, including real property, in each case in the ordinary course of business not materially interfering with the conduct of the business of the Borrower and its Subsidiaries, taken as a whole;

(k) licenses for the use of IP Rights in the ordinary course of the Borrower’s or such Subsidiary’s business;

(l) Dispositions of accounts receivable in connection with the compromise, settlement or collection thereof in the ordinary course of business;

(m) any surrender or waiver of contractual rights or the settlement, release or surrender of contractual rights or other litigation claims in the ordinary course of business;

(n) to the extent constituting a Disposition, Liens, Investments, fundamental changes and Restricted Payments permitted by Sections 7.01, 7.02, 7.04 and 7.06, respectively;

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(o) casualty events or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceedings of, any property of the Borrower or any of its Subsidiaries; and

(p) the sales of any of the real properties located at 3701 N. 16th Street, Omaha, Nebraska, 4233 N. 31st Avenue, Omaha, Nebraska and 3390 East 36th Street, Tucson, Arizona 85713;

(q) Dispositions of non-core assets acquired in connection with any Permitted Acquisition or other Investment permitted under Section 7.02 or other assets if the Disposition thereof is required by law (including anti-trust law) or a Governmental Authority;

(r) the assignment, cancellation, abandonment or other Disposition of (i) intellectual property or (ii) real property leases or licenses, that is, in the good faith judgment of Borrower, no longer economically practicable to maintain or useful in the conduct of the business of Borrower and the Subsidiaries, taken as a whole;

(s) [reserved];

(t) Dispositions of Excluded GBW Property; and

(u) Dispositions of Investments in, and issuances of any Equity Interests in, joint ventures to the extent required by, or made pursuant to customary buy/sell arrangements between, the joint venture parties set forth in joint venture arrangements and similar binding arrangements.

provided, however, that (1) any Disposition pursuant to clauses (c), (f), (g) and (i) shall be for fair market value and (2) no Disposition of less than all of the Equity Interests of a Subsidiary Guarantor to Person that is not a Loan Party shall be permitted by this Section 7.02.

7.06 Restricted Payments.

Declare or make, directly or indirectly, any Restricted Payment:

(a) each Subsidiary may make Restricted Payments to the Borrower, the Subsidiary Guarantors and any other Person that owns an Equity Interest in such Subsidiary, ratably according to their respective holdings of the type of Equity Interest in respect of which such Restricted Payment is being made;

(b) the Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in the common stock or other common Equity Interests of such Person;

(c) the Borrower and each Subsidiary may purchase, redeem or otherwise acquire Equity Interests issued by it with the proceeds received from the substantially concurrent issue of new shares of its common stock or other common Equity Interests;

(d) so long as no Default shall have occurred and be continuing or would result therefrom, the Borrower may declare or pay Restricted Payments after the Closing Date in an aggregate amount not to exceed the sum of (i) $300,000,000 plus (ii) 50% of the cumulative Consolidated Net Income of the Borrower and its Subsidiaries since May 31, 2018 minus (iii) all amounts available to make Restricted Payments pursuant to this subsection (d) that have been invested pursuant to Sections 7.02(e) and 7.02(g); and

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(e) the Borrower may make payments of cash in lieu of fractional shares in connection with the exercise of or conversion of securities that are exercisable or convertible into Equity Interests; and

(f) to the extent constituting Restricted Payments, upon the vesting of Equity Interests pursuant to the terms of any agreement with employees, consultants or directors or pursuant to the terms of the Borrower’s equity compensation plans or agreements, the Borrower may (i) repurchase a portion of such Equity Interests (through any “net” settling of any Equity Interest or through a tax withholding feature of any Equity Interest) to the extent such repurchased Equity Interests represent the exercise price of options or warrants or the amount of withholding taxes due upon such exercise or vesting and (ii) make tax withholding payments on behalf of such employees, consultants or directors in connection therewith;

(g) to the extent constituting Restricted Payments, the Borrower and the Subsidiaries may enter into and consummate transactions expressly permitted by any provision of Section 7.02 or 7.04; and

(h) so long as no Default shall have occurred and be continuing or would result therefrom, the Borrower may declare or pay Restricted Payments approved by the board of directors of the Borrower (or applicable governing body) so long as such Restricted Payments do not exceed $.60 per share per fiscal year.

7.07 Change in Nature of Business.

Engage in any material line of business substantially different from those lines of business conducted by the Borrower and its Subsidiaries on the Closing Date, except for any reasonable extensions or expansions thereof or any business substantially related or incidental thereto.

7.08 Transactions with Affiliates.

Other than (a) transactions not prohibited by this Agreement (including the payment of Restricted Payments permitted by Section 7.06), (b) payment of reasonable directors fees, (c) any issuance of Qualified Equity Interests of the Borrower to Affiliates of the Borrower and (d) any employment, consulting, service or termination agreement or reasonable and customary indemnification arrangements, entered into by the Borrower or any of its Subsidiaries with directors, officers and employees of the Borrower or any of its Subsidiaries and the payment of compensation to directors, officers and employees of the Borrower or any of its Subsidiaries (including amounts paid pursuant to employee benefit plans, employee stock option or similar plans), enter into any transaction of any kind with any Affiliate of the Borrower, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Borrower or such Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate.

7.09 Burdensome Agreements.

Enter into any Contractual Obligation that limits the ability (a) of any Subsidiary Guarantor to make Restricted Payments to the Borrower or any Subsidiary Guarantor or to otherwise transfer property to the Borrower or any Subsidiary Guarantor, (b) of any Subsidiary Guarantor to Guarantee the Obligations or (c) of the Borrower or any Subsidiary Guarantor to create, incur, assume or suffer to exist Liens on property of such Person (other than Excluded Property) to secure the Obligations, except:

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(i) Contractual Obligations in existence as of the Closing Date and set forth in Schedule 7.09;

(ii) Contractual Obligations contained in this Agreement or any other Loan Document;

(iii) any negative pledge incurred or provided in favor of any holder of Indebtedness permitted under Section 7.03(d), 7.03(e) or 7.03(m) solely to the extent any such negative pledge relates to the property financed by or the subject of such Indebtedness or requires the grant of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation of such Person;

(iv) any instrument governing Indebtedness or Equity Interests of a Person and its Subsidiaries acquired by the Borrower or any of its Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired, provided that, in the case of Indebtedness, such Indebtedness was permitted by Section 7.03;

(v) customary provisions restricting subletting or assignment of any lease, contract, or license of the Borrower or any Subsidiary or customary provisions in agreements that restrict the assignment of such agreement or any rights thereunder;

(vi) any agreement for the sale or other Disposition of assets, including customary restrictions on distributions by a Subsidiary of the Borrower to be sold, pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Equity Interests or assets of such Subsidiary; provided, that such Disposition was permitted by Section 7.05;

(vii) any instrument or agreements governing Indebtedness permitted by Section 7.03(f), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Foreign Subsidiaries obligated in respect of such Indebtedness;

(viii) negative pledges in favor of holders of Indebtedness permitted by Section 7.03 that limit the right of the debtor to dispose of or encumber the assets financed with such Indebtedness;

(ix) restrictions on cash or other deposits imposed by customers under contracts entered into in the ordinary course of business;

(x) customary provisions in joint venture agreements and other similar agreements applicable to Joint Ventures permitted under Section 7.02 and applicable solely to such Joint Venture and are entered into in the ordinary course of business; and

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(xi) in the case of subclause (a), any agreement or instrument relating to any Indebtedness of a Subsidiary permitted to be incurred subsequent to the Closing Date pursuant to Section 7.03 if the encumbrances and restrictions are not materially more restrictive than those set forth in this Agreement and do not otherwise materially impair the ability of the Loan Parties to perform their obligations under this Agreement.

7.10 Use of Proceeds.

Use the proceeds of any Credit Extension to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.

7.11 Financial Covenants.

Beginning with the fiscal quarter ended August 31, 2018:

(a) Consolidated Adjusted Interest Coverage Ratio. Permit the Consolidated Adjusted Interest Coverage Ratio as of the end of any fiscal quarter of the Borrower to be less than 2.00 to 1.0.

(b) Consolidated Capitalization Ratio. Permit the Consolidated Capitalization Ratio as of the end of any fiscal quarter of the Borrower to be greater than 0.70 to 1.0.

For purposes of the financial ratio calculations in this Section 7.11, no earnings or losses of any Managed Person shall be included.

7.12 Capital Expenditures.

Make any expenditure in respect of the purchase or other acquisition of any fixed or capital asset (excluding (i) normal replacements and maintenance which are properly charged to current operations, (ii) expenditures made with the proceeds of any Disposition of fixed or capital assets within 180 days of the date of such Disposition permitted under Section 7.05, (iii) expenditures made as a lessee of real property to improve the leasehold estate, so long as and to the extent that such expenditure has actually been reimbursed in cash by the applicable lessor, and (iv) expenditures to the extent financed with the proceeds of Indebtedness (other than a borrowing of revolving debt or short-term debt)), except for capital expenditures in the ordinary course of business not exceeding $75,000,000 in the aggregate in any fiscal year for the Borrower and its Subsidiaries, and any such expenditures made for leasing assets.

7.13 Sanctions; Anti-Corruption Laws.

(a) Directly or indirectly, use any Credit Extension or the proceeds of any Credit Extension, or lend, contribute or otherwise make available such Credit Extension or the proceeds of any Credit Extension to any Person, to fund any activities of or business with any Person, or in any Designated Jurisdiction, that, at the time of such funding, is the subject of Sanctions, or in any other manner that will result in a violation by any Person (including any Person participating in the transaction, whether as Lender, Arranger, Administrative Agent, L/C Issuer, Swing Line Lender, or otherwise) of Sanctions.

(b) Directly or indirectly use the proceeds of any Credit Extension for any purpose which would breach the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 or other similar anti-corruption legislation in other jurisdictions.

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ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

8.01 Events of Default.

Any of the following shall constitute an Event of Default:

(a) Non-Payment. The Borrower or any other Loan Party fails to pay (i) when and as required to be paid herein, and in the currency required hereunder, any amount of principal of any Loan or any L/C Obligation, or (ii) within three days after the same becomes due, any interest on any Loan or on any L/C Obligation, or any fee due hereunder, or (iii) within ten days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or

(b) Specific Covenants. The Borrower fails to perform or observe any term, covenant or agreement contained in (i) Section 6.01, which failure continues for more than five (5) Business Days after the date specified for performance or compliance with such term or condition or (ii) any of Section 6.02, 6.03, 6.05(a), 6.10, 6.11, 6.13 or 6.14 or Article VII, other than pursuant to Sections 7.02 and 7.03, or any Subsidiary Guarantor fails to perform or observe any term, covenant or agreement contained in its Subsidiary Guaranty; or

(c) Other Defaults. Any Loan Party fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for 30 days after the earlier of (i) the date upon which a Responsible Officer of a Loan Party knew of such failure and (ii) the date upon which written notice thereof is given to the Borrower by the Administrative Agent; or

(d) Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Borrower or any other Loan Party

herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made; or

(e) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make any payment beyond the applicable grace period with respect thereto, if any (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relating to any Indebtedness or Guarantee having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap

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Contract) resulting from (A) any event of default under such Swap Contract as to which the Borrower or any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which the Borrower or any Subsidiary is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by the Borrower or such Subsidiary as a result thereof is greater than the Threshold Amount; or

(f) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries (other than an Immaterial Subsidiary) institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or

(g) Inability to Pay Debts; Attachment. (i) The Borrower or any Subsidiary (other than an Immaterial Subsidiary) becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 30 days after its issue or levy; or

(h) Judgments. There is entered against the Borrower or any Subsidiary (i) a final judgment or order for the payment of money in an aggregate amount exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 30 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or

(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or

(j) Invalidity of Loan Documents. Any material provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder, as in accordance with the terms of such Loan Document or satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party contests in any manner the validity or enforceability of any provision of any Loan Document; or any Loan Party denies that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any provision of any Loan Document; or

(k) Change of Control. There occurs any Change of Control.

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Solely for purposes of determining whether an Event of Default has occurred under Section 8.01(f) or 8.01(g), it is understood and agreed that all Immaterial Subsidiaries affected by the applicable event or circumstance shall be considered together, as a single consolidated Person, for purposes of determining whether an Event of Default under Section 8.01(f) or 8.01(g) has occurred.

8.02 Remedies Upon Event of Default.

If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

(i) declare the commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated; and

(ii) require that the Borrower Cash Collateralize the L/C Obligations (in an amount equal to the Minimum Collateral Amount with respect thereto); and

(iii) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower; and

(iv) exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents and applicable law or equity;

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States (or other applicable Debtor Relief Law), the obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrower to Cash Collateralize its L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.

8.03 Application of Funds.

After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02), any amounts received on account of the Obligations shall be (subject to the provisions of Section 2.17) applied in the following order:

First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders and the L/C Issuer (including fees, charges and disbursements of counsel to the respective Lenders and the L/C Issuer (including fees and time charges for attorneys who may be employees of any Lender or the L/C Issuer) and amounts payable under Article III), ratably among them in proportion to the respective amounts described in this clause Second payable to them;

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Third, to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans and L/C Borrowings and fees, premiums and scheduled periodic payments, and any interest accrued thereon, due under any Swap Contract between any Loan Party and any Lender, or any Affiliate of a Lender, to the extent such Swap Contract is permitted by Section 7.03(c), ratably among the Lenders (and, in the case of such Swap Contracts, Affiliates of Lenders) and the L/C Issuer in proportion to the respective amounts described in this clause Third held by them;

Fourth, (a) payment of that portion of the Obligations constituting unpaid principal of the Loans and L/C Borrowings, (b) payment of breakage, termination or other payments, and any interest accrued thereon, due under any Swap Contract between any Loan Party and any Lender, or any Affiliate of a Lender, to the extent such Swap Contract is permitted by Section 7.03(c), (c) payments of amounts due under any Treasury Management Agreement between any Loan Party and any Lender, or any Affiliate of a Lender and (d) Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit, ratably among the Lenders (and, in the case of such Swap Contracts and Treasury Management Agreements, Affiliates of Lenders) and the L/C Issuer in proportion to the respective amounts described in this clause Fourth held by them; and

Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Law.

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fourth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in

the order set forth above. Excluded Swap Obligations with respect to any Subsidiary Guarantor shall not be paid with amounts received from such Subsidiary Guarantor or such Subsidiary Guarantor’s assets, but appropriate adjustments shall be made with respect to payments from other Loan Parties to preserve the allocation to Obligations otherwise set forth above in this Section.

Notwithstanding the foregoing, Obligations arising under Treasury Management Agreements and Swap Contracts shall be excluded from the application described above if the Administrative Agent has not received a Secured Party Designation Notice, together with such supporting documentation as the Administrative Agent may request, from the applicable Lender or Affiliate of a Lender, as the case may be. Each Lender or Affiliate of a Lender not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of Article IX for itself and its Affiliates as if a “Lender” party hereto.

ARTICLE IX

ADMINISTRATIVE AGENT

9.01 Appointment and Authority.

Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents (including Intercreditor Agreements) and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article (other than Sections 9.06 and 9.10) are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuer, and the Borrower shall not have rights as a third party beneficiary of any of such

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provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

The Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders (in its capacities as a Lender, Swing Line Lender (if applicable), holder of Obligations in respect of Treasury Management Agreements and Swap Contracts) and the L/C Issuer hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and the L/C Issuer for purposes of acquiring, holding and enforcing any and all Liens on Collateral, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Loan Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent, shall be entitled to the benefits of all provisions of this Article IX and Article X (including Section 10.04(c), as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.

9.02 Rights as a Lender.

The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders or to provide notice to or consent of the Lenders with respect thereto.

9.03 Exculpatory Provisions.

The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent and its Related Parties:

(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

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(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty or responsibility to disclose, and shall not be liable for the failure to disclose, any information relating to any of the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

Neither the Administrative Agent nor any of its Related Parties shall be liable to any Lender for any action taken or not taken by the Administrative Agent under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby or thereby (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. Any such action taken or failure to act pursuant to the foregoing shall be binding on all Lenders. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given in writing to the Administrative Agent by the Borrower, a Lender or the L/C Issuer.

Neither the Administrative Agent nor any of its Related Parties shall have any duty or obligation to any Lender or participant or any other Person to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Loan Documents, (v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

9.04 Reliance by Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall be fully protected in relying and shall not incur any liability for relying upon, any notice, request, certificate, communication, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall be fully protected in relying and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or the L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or the L/C Issuer prior to the making of such Loan or the issuance, extension, renewal or increase of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

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9.05 Delegation of Duties.

The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

9.06 Resignation of Administrative Agent.

(a) The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuer and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, with the consent of the Borrower at all times other than during the existence of an Event of Default (which consent shall not be unreasonably withheld or delayed), to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to) on behalf of the Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting the qualifications set forth above, with the consent of the Borrower at all times other than during the existence of an Event of Default (which consent shall not be unreasonably withheld or delayed), provided that in no event shall any such successor Administrative Agent be a Defaulting Lender. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

(b) If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Required Lenders may, to the extent permitted by applicable Law, by notice in writing to the Borrower and such Person remove such Person as Administrative Agent and, with the consent of the Borrower at all times other than during the existence of an Event of Default (which consent shall not be unreasonably withheld or delayed), appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.

(c) With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (i) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (ii) except for any indemnity payments or other amounts then owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the L/C Issuer directly, until such time, if any, as the Required Lenders appoint a successor

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Administrative Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or removed) Administrative Agent (other than as provided in Section 3.08 and other than any rights to indemnity payments or other amounts owed to the retiring or removed Administrative Agent as of the Resignation Effective Date or the Removal Effective Date, as applicable), and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them (i) while the retiring or removed Administrative Agent was acting as Administrative Agent and (ii) after such resignation or removal for as long as any of them continues to act in any capacity hereunder or under the other Loan Documents, including (A) acting as collateral agent or otherwise holding any collateral security on behalf of any of the holders of the Obligations and (B) in respect of any actions taken in connection with transferring the agency to any successor Administrative Agent.

(d) Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation as L/C Issuer and Swing Line Lender. If Bank of America resigns as an L/C Issuer, it shall retain all the rights, powers, privileges and duties of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto, including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c). If Bank of America resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c). Upon the appointment by the Borrower of a successor L/C Issuer or Swing Line Lender hereunder (which successor shall in all cases be a Lender other than a Defaulting Lender), (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as applicable, (ii) the retiring L/C Issuer and Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents and (iii) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.

9.07 Non-Reliance on Administrative Agent and Other Lenders.

Each Lender and the L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and the L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

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9.08 No Other Duties, Etc.

Anything herein to the contrary notwithstanding, none of the documentation agents, co-agents, syndication agents, bookrunners or arrangers listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the L/C Issuer hereunder.

9.09 Administrative Agent May File Proofs of Claim; Credit Bidding.

In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations arising under the Loan Documents that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuer and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuer and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuer and the Administrative Agent under Sections 2.03(h) and (i), 2.10 and 10.04) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuer to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuer, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 10.04.

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

The holders of the Obligations hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Obligations (including accepting some or all of the Collateral in satisfaction of some or all of the Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code of the United States, including under Sections 363, 1123 or 1129 of the Bankruptcy Code of the United States, or any similar Laws in any other jurisdictions to which a Loan Party is subject, (b) at any other sale or foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with any applicable Law. In connection with any such credit bid and purchase, the Obligations owed to the holders thereof shall be entitled to be, and shall be, credit bid on a ratable basis

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(with Obligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that would vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) in the asset or assets so purchased (or in the Equity Interests or debt instruments of the acquisition vehicle or vehicles that are used to consummate such purchase). In connection with any such bid (i) the Administrative Agent shall be authorized (A) to form one or more acquisition vehicles to make a bid, and (B) to adopt documents providing for the governance of the acquisition vehicle or vehicles (provided that any actions by the Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or Equity Interests thereof shall be governed, directly or indirectly, by the vote of the Required Lenders, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Lenders contained in clauses (i) through (viii) of Section 10.01) and (ii) to the extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Obligations assigned to the acquisition vehicle exceeds the amount of debt credit bid by the acquisition vehicle or otherwise), such Obligations shall automatically be reassigned to the Lenders pro rata and the Equity Interests and/or debt instruments issued by any acquisition vehicle on account of the Obligations that had been assigned to the acquisition vehicle shall automatically be cancelled, without the need for any Lender or any acquisition vehicle to take any further action.

9.10 Collateral and Guaranty Matters.

Without limiting the provisions of Section 9.09, each of the Lenders and the L/C Issuer irrevocably authorizes the Administrative Agent, at its option and in its discretion,

(a) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon termination of the Aggregate Commitments and payment in full of all Obligations (other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit, (ii) that is transferred or to be transferred as part of or in connection with any Disposition permitted hereunder or under any other Loan Document, (iii) that is owned by a Person other than a Loan Party, including vessels under construction for third parties pursuant to a contract, that are held by a Loan Party as a bailee for such other Person, or (iv) subject to Section 10.01, if approved, authorized or ratified in writing by the Required Lenders;

(b) to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by clause (ii) of Section 7.01(f) or Section 7.01(i); and

(c) to release any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder.

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Subsidiary Guarantor from its obligations under the Guaranty pursuant to this Section 9.10.

Notwithstanding the foregoing, the Administrative Agent, the Lenders and L/C Issuer acknowledge and agree that (x) in the event that any Subsidiary ceases to be a direct or indirect Subsidiary of the Borrower as a result of a transaction permitted by this Agreement, then such Subsidiary shall automatically be fully and finally released from its obligations hereunder without any further action of the Administrative Agent, the Lenders, or the L/C Issuer, and (y) upon the transfer of any Collateral to

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a Person that is not a Loan Party pursuant to a Disposition permitted by this Agreement, the Security Interest (as defined in the Security Agreement) and Liens as to any such Collateral granted by the Loan Documents shall be deemed to be released automatically without any further action of the Administrative Agent, the Lenders, or the L/C Issuer upon the consummation of such Disposition (it being understood and agreed, for the avoidance of doubt, that (A) Railcar Sales in the Ordinary Course of Business are transactions expressly permitted under the Loan Documents and that the Administrative Agent’s Security Interest (as defined in the Security Agreement) and Liens in any railcars (but not the proceeds thereof) shall be automatically released without any further action of the Administrative Agent, the Lenders, or the L/C Issuer in connection with any such Railcar Sales in the Ordinary Course of Business, and (B) upon the sale of a lease of railcars and all railcars that are Collateral that are subject to such lease pursuant to a Disposition permitted by this Agreement, the Administrative Agent’s Security Interest and Liens in such railcars and such lease (but not the proceeds thereof) shall be automatically released without any further action of the Administrative Agent, the Lenders, or the L/C Issuer), and, in each instance, the Administrative Agent shall promptly upon written request from the Borrower, and at the expense of the Borrower, take all necessary action to document the full and final release of such Loan Party or Collateral, as applicable, under the Loan Documents.

The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent’s Lien thereon, or any certificate prepared by the Borrower in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.

9.11 Treasury Management Agreements and Swap Contracts.

No Lender or Affiliate of a Lender providing Treasury Management Agreements or Swap Contracts that obtains the benefit of Section 8.03, the Subsidiary Guaranty or any Collateral by virtue of the provisions hereof or any Loan Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) (or to notice of or to consent to any amendment, waiver or modification of the provisions hereof or of the Subsidiary Guaranty or any Loan Document) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Article IX to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Treasury Management Agreements and Swap Contracts except to the extent expressly provided herein and unless the Administrative Agent has received a Secured Party Designation Notice of such Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Lender or Affiliate of a Lender providing Treasury Management Agreements or Swap Contracts, as the case may be. The Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under any such Treasury Management Agreements or such Swap Contracts in the case of the termination of the Commitments and payment in full of all Obligations (other than contingent indemnification obligations) arising under the Loan Documents.

9.12 ERISA Matters.

(a) Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, and the Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that at least one of the following is and will be true:

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(i) such Lender is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more Benefit Plans with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments or this Agreement,

(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement,

(iii) (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, or

(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

(b) In addition, unless either (1) subclause (i) in the immediately preceding subsection (a) is true with respect to a Lender or (2) a Lender has provided another representation, warranty and covenant in accordance with subclause (iv) in the immediately preceding subsection (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and the Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that none of the Administrative Agent or the Arranger or any of their respective Affiliates is a fiduciary with respect to the assets of such Lender involved in such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related hereto or thereto).

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ARTICLE X

MISCELLANEOUS

10.01 Amendments, Etc.

(a) No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

(i) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02) without the written consent of such Lender;

(ii) postpone any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby;

(iii) reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or (subject to clause (D) of the second proviso to this Section 10.01(a)) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary (i) to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest or Letter of Credit Fees at the Default Rate or (ii) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or L/C Borrowing or to reduce any fee payable hereunder;

(iv) change Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly and adversely affected thereby;

(v) amend Section 1.05 or the definition of “Alternative Currency” without the written consent of each Lender that is obligated to make Credit Extensions in such Alternative Currency;

(vi) change the definition of “Required Lenders”, or change any provision of this Section 10.01(a) without the written consent of each Lender directly and adversely affected thereby;

(vii) except in connection with a transaction permitted under Section 7.04 or 7.05, release all or substantially all of the value of the Subsidiary Guaranty without the written consent of each Lender whose Obligations are Guaranteed thereby; or

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(viii) release all or substantially all of the Collateral in any transaction or series of related transactions without the written consent of each Lender whose Obligations are secured by such Collateral;

and, provided further, that (A) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights or duties of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (B) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement; (C) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; (D) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto; and (E) the Administrative Agent and the Borrower may amend this Agreement as contemplated by Section 3.07.

Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Defaulting Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.

(b) Notwithstanding any provision herein to the contrary the Administrative Agent and the Borrower may jointly amend, modify or supplement this Agreement or any other Loan Document to cure or correct administrative errors or omissions, any ambiguity, omission, defect or inconsistency or to effect administrative changes, and such amendment shall become effective without any further consent of any other party to such Loan Document so long as (i) such amendment, modification or supplement does not adversely affect the rights of any Lender or other holder of Obligations in any material respect and (ii) the Lenders shall have received at least five Business Days’ prior written notice thereof and the Administrative Agent shall not have received, within five Business Days of the date of such notice to the Lenders, a written notice from the Required Lenders stating that the Required Lenders object to such amendment.

(c) Notwithstanding anything to the contrary in this Agreement:

(i) pursuant to one or more offers (each, an “Extension Offer”) made from time to time by the Borrower to all Lenders, the Borrower is hereby permitted to consummate from time to time transactions with individual Lenders that accept the terms contained in such Extension Offers to extend the maturity date of each such Lender’s Loans and/or Commitments (each, an “Extension”), so long as no Default nor any Event of Default shall exist at the time the notice in respect of an Extension Offer is delivered to the applicable Lenders, and no Default nor any Event of Default shall exist immediately prior to or after giving effect to the effectiveness of any Extension;

(ii) no consent of any Lender or the Administrative Agent shall be required to effectuate any Extension, other than the consent of each Lender agreeing to such Extension;

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(iii) all obligations in respect of an Extension shall be (A) Obligations under this Agreement and the other Loan Documents that are secured by the Collateral and guaranteed on a pari passu basis with all other applicable Obligations under this Agreement and the other Loan Documents and (B) on terms no more favorable, taken as a whole, to the existing Loan and/or Commitments (other than with respect to (1) maturity, (2) pricing, (3) covenants or other provisions applicable only to periods after the Maturity Date and (4) if the existing Lenders also receive the benefit of such more restrictive terms); and

(iv) the Lenders hereby irrevocably authorize the Administrative Agent to enter into amendments to this Agreement and the other Loan Documents with the Borrower as may be necessary or appropriate in the reasonable opinion of the Administrative Agent and the Borrower to accomplish the Extensions set forth in this Section 10.01(b).

10.02 Notices; Effectiveness; Electronic Communication.

(a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

(i) if to the Borrower, the Administrative Agent, the L/C Issuer or the Swing Line Lender, to the address, facsimile number, electronic mail address or telephone number specified for such Person on Schedule 10.02; and

(ii) if to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified in its Administrative Questionnaire (including, as appropriate, notices delivered solely to the Person designated by a Lender on its Administrative Questionnaire then in effect for the delivery of notices that may contain material non-public information relating to the Borrower).

Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic communication (including e mail, FpML messaging, and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant to Article II if such Lender or the L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent, the Swing Line Lender, the L/C Issuer or the Borrower may each, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

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Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement) and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii), if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY (AS DEFINED BELOW) IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any Lender, the L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of Borrower Materials or notices through the Platform, any other electronic platform or electronic messaging service or through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to the Borrower, any Lender, the L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

(d) Change of Address, Etc. Each of the Borrower, the Administrative Agent, the L/C Issuer and the Swing Line Lender may change its address, facsimile or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, facsimile or telephone number for notices and other communications hereunder by notice to the Borrower, the Administrative Agent, the L/C Issuer and the Swing Line Lender. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, facsimile number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable Law, including United States federal and state securities Laws, to make reference to Borrower Materials that are not made available through the “Public Side Information” portion of the Platform and that may contain material non-public information with respect to the Borrower or its securities for purposes of United States federal or state securities Laws.

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(e) Reliance by Administrative Agent, L/C Issuer and Lenders. The Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any notices (including telephonic or electronic Committed Loan Notices, Letter of Credit Applications and Swing Line Loan Notices) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify the Administrative Agent, the L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice given by or on behalf of the Borrower. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

10.03 No Waiver; Cumulative Remedies; Enforcement.

No failure by any Lender or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under any other Loan Document (including the imposition of the Default Rate) preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.02 for the benefit of all the Lenders and the L/C Issuer; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) the L/C Issuer or the Swing Line Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as L/C Issuer or Swing Line Lender, as the case may be) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 10.08 (subject to the terms of Section 2.14), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.14, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

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10.04 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable and documented out-of-pocket fees, charges and disbursements of counsel for the Administrative Agent), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, enforcement and collection, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, any Lender or the L/C Issuer (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or the L/C Issuer), and shall pay all fees and time charges for attorneys who may be employees of the Administrative Agent, any Lender or the L/C Issuer, in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any collection, enforcement, workout, restructuring or negotiations in respect of such Loans or Letters of Credit; provided that pursuant to this clause (a), the Borrower shall not be required to reimburse such fees, charges and disbursements of more than one primary counsel to the Administrative Agent, the L/C Issuer and all the Lenders, taken as a whole, and if necessary, one special counsel and one local counsel in each relevant jurisdiction, to the Administrative Agent, the L/C Issuer and the Lenders, taken as a whole, unless the representation of one or more Lenders by such counsel would be inappropriate due to the existence of an actual or perceived conflict of interest, in which case, upon prior written notice to the Borrower, the Borrower shall also be required to reimburse the reasonable out-of-pocket fees, charges and disbursements of one additional counsel to such affected Lenders in each relevant jurisdiction.

(b) Indemnification by the Borrower. The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), the Arranger, each Lender and the L/C Issuer, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (limited, in the case of legal fees and expenses of counsel, to the fees, charges and disbursements of one primary counsel to the Indemnitees, taken as a whole, and if reasonably necessary, one special counsel and one local counsel in each relevant jurisdiction, to the Indemnitees, taken as a whole, unless the representation of one or more Indemnitees by such counsel would be inappropriate due to the existence of an actual or perceived conflict of interest, in which case, upon prior written notice to the Borrower, the Borrower shall also be required to reimburse the reasonable out-of-pocket fees, charges and disbursements of one additional counsel to such affected Indemnitees in each relevant jurisdiction), incurred by any Indemnitee or asserted against any Indemnitee by any Person (including any Loan Party) arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents (including in respect of any matters addressed in Section 3.01), (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged Release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding

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relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee (or any of its Related Indemnified Parties), (y) result from a claim brought by the Borrower or any other Loan Party against an Indemnitee for material breach of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower or such other Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction or (z) any dispute solely among the Indemnitees other than any claims against an Indemnitee in its capacity or in fulfilling its role as Administrative Agent or Arranger or any similar role under this Agreement or any other Loan Document and other than any claims arising out of any act or omission of the Borrower or any of its Affiliates. Without limiting the provisions of Section 3.01(c), this Section 10.04(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

(c) Reimbursement by Lenders. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the L/C Issuer or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the L/C Issuer or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or L/C Issuer or the Swing Line Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), the L/C Issuer or the Swing Line Lender in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.13(e).

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, none of the Borrower, any agent nor any Lender shall assert, and each hereby waives, and acknowledges that no other Person shall have, any claim against any other party hereto (or any Indemnitee or any Loan Party), on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof (other than in respect of any such damages incurred or paid by an Indemnitee to a third party and to which such Indemnitee is otherwise entitled to indemnification as provided above). No Indemnitee shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

(e) Payments. All amounts due under this Section shall be payable not later than ten Business Days after demand therefor together with customary invoice supporting reimbursement or payment.

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(f) Survival. The agreements in this Section and the indemnity provisions of Section 10.02(e) shall survive the resignation of the Administrative Agent and the L/C Issuer, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.

10.05 Payments Set Aside.

To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent, the L/C Issuer or any Lender, or the Administrative Agent, the L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, the L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the applicable Overnight Rate from time to time in effect, in the applicable currency of such recovery or payment. The obligations of the Lenders and the L/C Issuer under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

10.06 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement and the other Loan Documents shall be binding upon and inure to the benefit of the parties hereto and thereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder or thereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including all or a portion of its Commitment and the Loans (including for purposes of this subsection (b), participations in L/C Obligations and in Swing Line Loans) at the time owing to it); provided that any such assignment shall be subject to the following conditions:

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(i) Minimum Amounts.

(A) In the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the related Loans at the time owing to it or contemporaneous assignments to related Approved Funds (determined after giving effect to such assignments) that equal at least the amount specified in subsection (b)(i)(B) of this Section in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(B) in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed).

(ii) Proportional Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or Commitment assigned, except that this clause (ii) shall not apply to the Swing Line Lender’s rights and obligations in respect of Swing Line Loans;

(iii) Required Consents. No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund;

(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of any Commitment if such assignment is to a Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender; and

(C) the consent of the L/C Issuer (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit issued (or to be issued) by the L/C Issuer; and

(D) the consent of the Swing Line Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Swing Line Loans made (or to be made) by the Swing Line Lender.

(iv) Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

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(v) No Assignment to Certain Persons. No such assignment shall be made to (A) the Borrower or any of the Borrower’s Affiliates or Subsidiaries, (B) any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B), or (C) a natural Person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural Person).

(vi) Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, the L/C Issuer or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swing Line Loans in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment); provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.    Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.

(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower (and such agency being solely for Tax purposes), shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it (or the equivalent thereof in electronic form) and a register for the recordation of the names and

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addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural Person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural Person), a Defaulting Lender or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the Lenders and the L/C Issuer shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 10.04(c) without regard to the existence of any participation.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in Section 10.01(a) that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section (it being understood that the documentation required under Section 3.01(e) shall be delivered to the Lender who sells the participation) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 3.06 and 10.13 as if it were an assignee under paragraph (b) of this Section and (B) shall not be entitled to receive any greater payment under Sections 3.01 or 3.04, with respect to any participation, than the Lender from whom it acquired the applicable participation would have been entitled to receive unless the sale of such participation is made with the Borrower’s prior written consent. Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 3.06 with respect to any Participant. To the extent permitted by Law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided that such Participant agrees to be subject to Section 2.13 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any

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commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(e) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note(s), if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(f) Resignation after Assignment. Notwithstanding anything to the contrary contained herein, if at any time Bank of America assigns all of its Commitment and Loans pursuant to subsection (b) above, Bank of America may, (i) upon 30 days’ notice to the Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon 30 days’ notice to the Borrower, resign as Swing Line Lender. In the event of any such resignation as L/C Issuer or Swing Line Lender, the Borrower shall be entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided, however, that no failure by the Borrower to appoint any such successor shall affect the resignation of Bank of America as L/C Issuer or Swing Line Lender, as the case may be. If Bank of America resigns as the L/C Issuer, it shall retain all the rights, powers, privileges and duties of the L/C Issuer hereunder with respect to all Letters of Credit issued by it and outstanding as of the effective date of its resignation as the L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Committed Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If Bank of America resigns as the Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Committed Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c). Upon the appointment of a successor L/C Issuer and/or Swing Line Lender, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and (b) the successor L/C Issuer shall issue letters of credit in substitution for the applicable Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.

10.07 Treatment of Certain Information; Confidentiality.

Each of the Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates, its auditors and to its and its Affiliates’ Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan

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Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as, or at least as restrictive as, those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or any Eligible Assignee invited to become a Lender pursuant to Section 2.15 or (ii) any actual or prospective counterparty (or its Related Parties) to any swap or derivative transaction relating to the Borrower and its obligations, this Agreement or payments hereunder, (g) on a confidential basis to (i) any rating agency in connection with rating any Loan Party or its Subsidiaries or the credit facilities provided hereunder or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers or other market identifiers with respect to the credit facilities provided hereunder, (h) with the consent of the Borrower or (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, the L/C Issuer or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower. In addition, the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry, and service providers to the Administrative Agent and the Lenders in connection with the administration and management of this Agreement, the other Loan Documents, the Commitments, and the Credit Extensions.

For purposes of this Section, “Information” means all information received from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or the L/C Issuer on a nonconfidential basis prior to disclosure by the Borrower or any Subsidiary. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges that (a) the Information may include material non-public information concerning the Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including United States federal and state securities Laws.

10.08 Right of Setoff.

If an Event of Default shall have occurred and be continuing, each Lender, the L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, after obtaining the prior written consent of the Administrative Agent, to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the L/C Issuer or any such Affiliate to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement or any other Loan Document to such Lender, the L/C Issuer or their respective Affiliates, irrespective of whether or not such Lender, the L/C Issuer or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower may be contingent or unmatured or are owed to a branch or office or Affiliate of such Lender or the L/C Issuer different from the branch or office or Affiliate holding such deposit or obligated on such indebtedness; provided, that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.17 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative

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Agent and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, the L/C Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the L/C Issuer or their respective Affiliates may have. Each Lender and the L/C Issuer agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

10.09 Interest Rate Limitation.

Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

10.10 Counterparts; Integration; Effectiveness.

This Agreement and each of the other Loan Documents may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent or the L/C Issuer constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement or any other Loan Document, or any certificate delivered thereunder, by fax transmission or e-mail transmission (e.g., “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement or such other Loan Document or certificate. Without limiting the foregoing, to the extent a manually executed counterpart is not specifically required to be delivered under the terms of any Loan Document, upon the request of any party, such fax transmission or e-mail transmission shall be promptly followed by such manually executed counterpart.

10.11 Survival of Representations and Warranties.

All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

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10.12 Severability.

If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section 10.12, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent, the L/C Issuer or the Swing Line Lender, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.

10.13 Replacement of Lenders.

If (a) any Lender requests compensation under Section 3.04, (b) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, (c) any Lender gives a notice pursuant to Section 3.02 (which has not been revoked), (d) any Lender is a Non-Consenting Lender or (e) any Lender is a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06), all of its interests, rights (other than its existing rights to payments pursuant to Sections 3.01 and 3.04) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which Eligible Assignee may be another Lender, if a Lender accepts such assignment), provided that:

(i) the Administrative Agent shall have received the assignment fee specified in Section 10.06(b);

(ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the Eligible Assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

(iii) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter;

(iv) such assignment does not conflict with applicable Laws; and

(v) in the case of any such assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent;

provided that the failure by such Lender to execute and deliver an Assignment and Assumption shall not impair the validity of the removal of such Lender and the mandatory assignment of such Lender’s Commitments and outstanding Loans and participations in L/C Obligations and Swing Line Loans pursuant to this Section 10.13 shall nevertheless be effective without the execution by such Lender of an Assignment and Assumption.

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A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

10.14 Governing Law; Jurisdiction; Etc.

(a) GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT, AS TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (EXCEPT, AS TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) SUBMISSION TO JURISDICTION EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER, THE L/C ISSUER, OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK.

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(c) WAIVER OF VENUE. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

10.15 Waiver of Jury Trial.

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.16 USA PATRIOT Act Notice.

Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Loan Parties that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Loan Parties, which information includes the name and address of the Loan Parties and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Loan Parties in accordance with the Act. The Loan Parties shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Act.

10.17 Judgment Currency.

If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Loan Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given. The obligation of the Borrower in respect of any such sum due from it to the

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Administrative Agent or the Lenders hereunder or under the other Loan Documents shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by the Administrative Agent of any sum adjudged to be so due in the Judgment Currency, the Administrative Agent may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum originally due to the Administrative Agent from the Borrower in the Agreement Currency, the Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Administrative Agent or the Person to whom such obligation was owing against such loss. If the amount of the Agreement Currency so purchased is greater than the sum originally due to the Administrative Agent in such currency, the Administrative Agent agrees to return the amount of any excess to the Borrower (or to any other Person who may be entitled thereto under applicable law).

10.18 Statutory Notice.

UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY THE LENDERS CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER’S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY THE LENDERS TO BE ENFORCEABLE.

10.19 No Advisory or Fiduciary Responsibility.

In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), each of the Loan Parties acknowledges and agrees, and acknowledges the other Loan Parties’ understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent, the Arranger and the Lenders are arm’s-length commercial transactions between the Loan Parties and their respective Affiliates, on the one hand, and the Administrative Agent, the Arranger and the Lenders, on the other hand, (B) each of the Loan Parties has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) each of the Loan Parties is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative Agent, the Arranger and each Lender each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Loan Parties or any of their respective Affiliates, or any other Person and (B) neither the Administrative Agent, the Arranger nor any Lender has any obligation to the Loan Parties or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, the Arranger, the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Loan Parties and their respective Affiliates, and neither the Administrative Agent, the Arranger nor any lender has any obligation to disclose any of such interests to the Loan Parties and their respective Affiliates. To the fullest extent permitted by Law, each of the Loan Parties hereby waives and releases any claims that it may have against the Administrative Agent, the Arranger and each Lender with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

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10.20 Electronic Execution of Assignments and Certain Other Documents.

The words “execute,” “execution,” “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement, any other document executed in connection herewith and the transactions contemplated hereby shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that notwithstanding anything contained herein to the contrary neither the Administrative Agent, the L/C Issuer nor any Lender is under any obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent, the L/C Issuer or such Lender pursuant to procedures approved by it and provided further without limiting the foregoing, upon the request of any party, any electronic signature shall be promptly followed by such manually executed counterpart.

10.21 Acknowledgement and Consent to Bail-In of EEA Financial Institutions.

Solely to the extent any Lender or L/C Issuer that is an EEA Financial Institution is a party to this Agreement and notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender or L/C Issuer that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender or L/C Issuer that is an EEA Financial Institution; and

(b) the effects of any Bail-in Action on any such liability, including, if applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.

10.22 Amendment and Restatement of Existing Credit Agreement.

The parties to the Existing Credit Agreement each hereby agrees that, at such time as this Agreement shall have become effective pursuant to the terms of Article IV, (a) the Existing Credit Agreement automatically shall be deemed amended, superseded and restated in its entirety by this Agreement and (b) the Commitments under the Existing Credit Agreement and as defined therein automatically shall be replaced with the Commitments hereunder. This Agreement is not a novation of the Existing Credit Agreement. The promissory notes executed and delivered by the Borrower under the Existing Credit Agreement are hereby cancelled and shall be deemed replaced with the Notes issued hereunder. This amendment and restatement has been effected in accordance with the terms of the Existing Credit Agreement.

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

THE GREENBRIER COMPANIES, INC.
By:	/s/ Adrian J. Downes
Name: Adrian J. Downes
Title: Senior Vice President, Chief
Accounting Officer and Acting Chief
Financial Officer

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THE GREENBRIER COMPANIES, INC.

BANK OF AMERICA, N.A., as Administrative Agent
By	/s/ Anthea Del Bianco
Name: Anthea Del Bianco
Title: Vice President

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THE GREENBRIER COMPANIES, INC.

LENDERS:	BANK OF AMERICA, N.A., as a Lender
	By:	/s/ Michael Snook
	Name: Michael Snook
	Title: Senior Vice President

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THE GREENBRIER COMPANIES, INC.

MUFG UNION BANK, N.A., as a Lender
By:	/s/ Steve Sloan
Name: Steve Sloan
Title: Director

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THE GREENBRIER COMPANIES, INC.

BRANCH BANKING AND TRUST COMPANY, as a Lender
By	/s/ Scott Hennessee
Name: Scott Hennessee
Title: Senior Vice President

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THE GREENBRIER COMPANIES, INC.

WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender
By:	/s/ Dawn Mace Moore
Name: Dawn Mace Moore
Title: Senior Vice President

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THE GREENBRIER COMPANIES, INC.

BANK OF THE WEST, as a Lender
By:	/s/ John DeLaittre
Name: John DeLaittre
Title: Director

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THE GREENBRIER COMPANIES, INC.

FIFTH THIRD BANK, as a Lender
By	/s/ Peter Samboul
Name: Peter Samboul
Title: Director

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THE GREENBRIER COMPANIES, INC.

CITIZENS BANK, N.A., as a Lender
By	/s/ Darran Wee
Name: Darran Wee
Title: Senior Vice President

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THE GREENBRIER COMPANIES, INC.

CREDIT INDUSTRIEL ET COMMERCIAL, NEW YORK BRANCH, as a Lender
By	/s/ Adrienne Molloy
Name: Adrienne Molloy
Title: Managing Director
By	/s/ Andrew McKuin
Name: Andrew McKuin
Title: Managing Director

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THE GREENBRIER COMPANIES, INC.

GOLDMAN SACHS LENDING PARTNERS LLC, as a Lender
By:	/s/ Ryan Durkin
Name: Ryan Durkin
Title: Authorized Signatory

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THE GREENBRIER COMPANIES, INC.

UMPQUA BANK, as a Lender
By:	/s/ Jeffrey Seiler
Name: Jeffrey Seiler
Title: Vice President

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THE GREENBRIER COMPANIES, INC.

WASHINGTON FEDERAL, N.A., as a Lender
By:	/s/ Jim Kennedy
Name: Jim Kennedy
Title: Senior Relationship Manager

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THE GREENBRIER COMPANIES, INC.

HSBC BANK USA, NATIONAL ASSOCIATION, as a Lender
By:	/s/ Mike Mitchell
Name: Mike Mitchell
Title: Vice President

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THE GREENBRIER COMPANIES, INC.

COLUMBIA STATE BANK, as a Lender
By:	/s/ Joe Schuster
Name: Joe Schuster
Title: Vice President

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THE GREENBRIER COMPANIES, INC.

EX-10.29

Exhibit 10.29

FOURTH AMENDED AND RESTATED SECURITY AGREEMENT

This FOURTH AMENDED AND RESTATED SECURITY AGREEMENT (“Agreement”), entered into as of September 26, 2018, among THE GREENBRIER COMPANIES, INC., an Oregon corporation (the “Company” or the “Borrower”), the other parties identified as “Debtors” on the signature pages hereto and such other parties that may become Debtors hereunder after the date hereof (together with the Company, the “Debtors” and individually a “Debtor”) in favor of BANK OF AMERICA, N.A., as administrative agent for its benefit and for the benefit of the other holders of the Secured Obligations (as defined below) (in such capacity, and together with its successors and permitted assigns, the “Administrative Agent”).

RECITALS

A. Pursuant to that certain Third Amended and Restated Credit Agreement dated as of October 29, 2015 (as amended, modified, extended, renewed or replaced from time to time, the “Existing Credit Agreement”) among the Borrower, the lenders party thereto (the “Existing Lenders”) and the Administrative Agent, the Existing Lenders required, as a condition precedent to their entering into the Existing Credit Agreement and making extensions of credit to or for the account of the Borrower thereunder, the Borrower and certain subsidiaries of the Borrower to execute that certain third amended and restated security agreement dated as of October 29, 2015 (the “Existing Security Agreement”).

B. The Lenders have agreed to amend and restate the Existing Credit Agreement pursuant to the Fourth Amended and Restated Credit Agreement dated as of the date hereof (as amended, restated, modified, extended, increased, renewed or replaced from time to time, the “Credit Agreement”) among the Company, as borrower, the lenders party thereto (the “Lenders”) and the Administrative Agent.

C. It is a condition precedent to each Lender’s obligation to make its initial Credit Extension under the Credit Agreement that the Debtors agree to amend and restate the Existing Security Agreement in accordance with this Agreement.

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration receipt of which is hereby acknowledged, the Debtors and the Administrative Agent, on behalf of itself and each Lender, hereby agree as follows:

1. Definitions; Interpretation.

(a) Terms Defined in Credit Agreement. All capitalized terms used in this Agreement and not otherwise defined herein have the meanings specified in the Credit Agreement.

(b) Certain Defined Terms. As used in this Agreement, the following terms have the following meanings:

“Account Debtor” means any Person who is or who may become obligated to any Debtor under, with respect to or on account of an Account or other Right to Payment in all cases only to the extent constituting Collateral.

“Administrative Agent” has the meaning set forth in the introductory paragraph hereto.

“Collateral” shall have the meaning assigned to such term in Section 2(a).

“Common Collateral” has the meaning assigned to such term in the applicable Intercreditor Agreement.

“Copyright License” shall mean any written agreement, now or hereafter in effect, granting any right to any third party under any Copyright now or hereafter owned by any Debtor or which any Debtor otherwise has the right to license, or granting to any Debtor the right to use any Copyright now or hereafter owned by any third party, and all rights of any Debtor under any such agreement.

“Copyrights” means any and all rights in any works of authorship, including (i) copyrights and moral rights, (ii) copyright registrations and recordings thereof and all applications in connection therewith, (iii) income, license fees, royalties, damages, and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past, present, or future infringements thereof, (iv) the right to sue for past, present, and future infringements thereof, and (v) all of the Debtor’s rights corresponding thereto throughout the world.

“Credit Agreement” has the meaning set forth in the preamble hereto.

“Debtor” and “Debtors” have the meanings set forth in the introductory paragraph hereto.

“Intellectual Property” means any and all Patents, Copyrights, Trademarks, trade secrets, know-how, algorithms, software programs (including source code and object code), processes, product designs, industrial designs, blueprints, drawings, customer lists, URLs and domain names, specifications, catalogs, literature, and any other proprietary information of any kind, including all rights therein and all applications for registration or registrations thereof.

“Lender” has the meaning set forth in the preamble hereto, and all references to the “Lenders” or any “Lender” herein shall include the Swing Line Lender in its capacity as a Lender and as Swing Line Lender and the L/C Issuer in its capacity as a Lender and as L/C Issuer.

“License” means any Patent License, Trademark License, Copyright License or other license or sublicense agreement to which any Debtor is a party.

“Patent License” shall mean any written agreement, now or hereafter in effect, granting to any third party any right to make, use or sell any invention on which a Patent, now or hereafter owned by any Debtor or which any Debtor otherwise has the right to license, is in existence, or granting to any Debtor any right to make, use or sell any invention on which a Patent, now or hereafter owned by any third party, is in existence, and all rights of each Debtor under any such agreement.

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“Patents” means patents and patent applications, including (i) all continuations, divisionals, continuations-in-part, re-examinations, reissues, and renewals thereof and improvements thereon, (ii) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past, present, or future infringements thereof, (iii) the right to sue for past, present, and future infringements thereof, and (iv) all of the Debtor’s rights corresponding thereto throughout the world.

“Rights to Payment” means, solely to the extent constituting Collateral, all Accounts, and any and all rights and claims to the payment or receipt of money or other forms of consideration of any kind in, to and under all Chattel Paper, Documents, General Intangibles, Payment Intangibles, Instruments and Proceeds, in all cases, with respect to any assets described in this definition, solely to the extent constituting Collateral.

“Security Interest” shall have the meaning assigned to such term in Section 2(a).

“Secured Obligations” means, without duplication, all Obligations.

“Trademark License” shall mean any written agreement, now or hereafter in effect, granting to any third party any right to use any Trademark now or hereafter owned by any Debtor or which any Debtor otherwise has the right to license, or granting to any Debtor any right to use any Trademark now or hereafter owned by any third party.

“Trademarks” means any and all trademarks, trade names, registered trademarks, trademark applications, service marks, registered service marks and service mark applications, including (A) all renewals thereof, (B) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past or future infringements or dilutions thereof, (C) the right to sue for past, present and future infringements and dilutions thereof, (D) the goodwill of the Debtor’s business symbolized by the foregoing or connected therewith, and (E) all of the Debtor’s rights corresponding thereto throughout the world.

“UCC” means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided, however, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions.

(a) Terms Defined in UCC. Terms used in this Agreement that are defined in the UCC have the meanings given to them in the UCC, including the following which are capitalized herein: Account, As-Extracted Collateral, Chattel Paper, Commercial Tort Claim, Commodity Account, Commodity Contract, Commodities Intermediary, Consumer Goods, Deposit Account, Document, Electronic Chattel Paper, Entitlement Holder, Equipment, Farm Products, Financial Assets, Fixture, General Intangible, Instrument, Inventory, Investment Property, Letter-of-Credit Right, Manufactured Home, Payment Intangible, Proceeds, Products, Securities Account, Securities Intermediary, and Security.

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(b) Interpretation. The rules of construction and interpretation specified in Sections 1.02 and 1.07 of the Credit Agreement also apply to this Agreement and are incorporated herein by this reference.

2. Security Interest.

(a) Grant of Security Interest. As security for the payment or performance, as the case may be, in full of the Secured Obligations, each Debtor hereby grants, collaterally assigns and pledges to the Administrative Agent, for the benefit of the Administrative Agent and the other holders of Secured Obligations, a security interest (the “Security Interest”), in all right, title or interest in or to any and all of the following assets and properties now owned or at any time hereafter acquired by such Debtor or in which such Debtor now has or at any time in the future may acquire any right, title or interest (collectively, the “Collateral”):

(i) all Accounts;

(ii) all Chattel Paper;

(iii) all Deposit Accounts;

(iv) all Documents;

(v) all Equipment;

(vi) all Fixtures;

(vii) all General Intangibles;

(viii) all Instruments;

(ix) all Inventory;

(x) all Intellectual Property;

(xi) all Investment Property;

(xii) all Letter-of-Credit Rights;

(xiii) specified Commercial Tort Claims, if any;

(xiv) all books and records pertaining to the assets and properties described in this Section 2(a);

(xv) all other goods of such Debtor whether tangible or intangible wherever located; and

(xvi) to the extent not otherwise included, all Proceeds and Products of any and all of the foregoing;

provided, however, that the Collateral (and any reference to any portion of the Collateral) shall not include (i) the Excluded Property and (ii) the Equity Interests of any Subsidiary not expressly pledged to the Administrative Agent to secure the Secured Obligations pursuant to the Pledge Agreement.

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(b) Debtors Remain Liable. Anything herein to the contrary notwithstanding, (i) each Debtor shall remain liable under any contracts, agreements and other documents included in the Collateral, to the extent set forth therein, to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (ii) the exercise by the Administrative Agent of any of the rights hereunder shall not release any Debtor from any of its duties or obligations under such contracts, agreements and other documents included in the Collateral, and (iii) neither the Administrative Agent nor any other holder of Secured Obligations shall have any obligation or liability under any contracts, agreements and other documents included in the Collateral by reason of this Agreement, nor shall the Administrative Agent or any other holder of Secured Obligations be obligated to perform any of the obligations or duties of any Debtor thereunder or to take any action to collect or enforce any such contract, agreement or other document included in the Collateral hereunder.

(c) Continuing Security Interest. Each Debtor acknowledges and agrees that the Security Interest in the Collateral (i) constitutes continuing collateral security for all of the Secured Obligations which shall remain in effect until released or terminated in accordance with Section 24 and (ii) except as provided in Section 11, is not to be construed as an assignment of any Intellectual Property.

(d) Transactions in the Ordinary Course.

(i) So long as no Event of Default shall have occurred and be continuing and the Administrative Agent has not otherwise provided notice to the applicable Debtor revoking its rights to possession, the applicable Debtor may have possession of its Collateral (other than instruments delivered to the Administrative Agent pursuant to this Agreement) and may use the Collateral in any lawful manner not inconsistent with this Agreement, the Credit Agreement, or any policy of insurance covering the Collateral.

(ii) Without in any way limiting the generality of Section 24, the Administrative Agent acknowledges and agrees that any buyer of assets in the ordinary course of the applicable Debtors’ business (including, for the avoidance of doubt, Railcar Sales in the Ordinary Course of Business) takes free of Administrative Agent’s Security Interest. Without in any way limiting the generality of the preceding sentence, Administrative Agent agrees that, except as to security interests specifically granted by TTX Company, its successors or assigns (“TTX”) or any other buyer, to such Debtor and its assigns, all railcars purchased in the ordinary course of business by TTX or any other buyer pursuant to a manufacturing agreement or otherwise, (whether or not such instruments are recorded with the United States Surface Transportation Board) shall not, following the delivery of such cars, be subject to any security interest in favor of the Administrative Agent other than with respect to proceeds of such sale.

(iii) The Administrative Agent acknowledges and agrees that each Debtor may lease, rent or hire (collectively, “Leases”) Collateral to lessees (“Lessees”) in the usual and ordinary course of such Debtor’s business. Such Leases may provide that the Lessee, subject to the provisions of such Lease, shall be entitled to the quiet possession and use of the subject Collateral, notwithstanding the occurrence of and continuance of any Event of Default, so long as such Lessee shall not be in default under such applicable Lease. The Administrative Agent shall, at the Lessee’s request, execute and deliver an

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agreement which shall permit the Lessee to continue such Lease in effect and to quiet possession of the subject Collateral, notwithstanding the occurrence of and continuance of any Event of Default, so long as such Lessee shall not be in default under such applicable Lease. Such agreement shall be in form and substance approved by the Administrative Agent, which approval shall not be unreasonably withheld.

3. Financing Statements, Etc. Each Debtor hereby irrevocably authorizes the Administrative Agent at any time and from time to time to file in any relevant jurisdiction any initial financing statements (including fixture filings) and amendments thereto against collateral described as “all assets”, “all personal property” or describing specific items of collateral and that contain any other information required by Article 9 of the UCC of each applicable jurisdiction for the filing of any financing statement or amendment, including (i) whether such Debtor is an organization, the type of organization and any organizational identification number issued to such Debtor and (ii) in the case of a financing statement filed as a fixture filing or covering Collateral constituting As Extracted Collateral or timber to be cut, a sufficient description of the real property to which such Collateral relates. Each Debtor agrees to provide such information to the Administrative Agent promptly upon request. Each Debtor also ratifies its authorization for the Administrative Agent to file in any relevant jurisdiction any initial financing statements or amendments thereto covering the Collateral if filed prior to the date hereof. The Administrative Agent is further authorized to file with the United States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country) such other documents as may be necessary or advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted by each Debtor, without the signature of such Debtor, and naming such Debtor as debtor and the Administrative Agent as secured party.

4. Representations and Warranties. In addition to the representations and warranties of the Debtors set forth in the Credit Agreement, which are incorporated herein by this reference, each Debtor represents and warrants to the Administrative Agent that:

(a) Chief Executive Office; Legal Name; State of Organization. As of the Closing Date, such Debtor’s chief executive office is (and for the prior four months has been) located at the location set forth in Part (a) of Schedule 1 hereto, and such Debtor’s books and records are consolidated at such location. As of the Closing Date, such Debtor may also maintain local books and records at the operating locations identified on Schedule 2. As of the Closing Date, such Debtor’s exact corporate or organizational name, the jurisdiction of its incorporation or organization (each as they have been for the prior four months) and the identification number given by its jurisdiction of incorporation or organization is set forth in Part (b) of Schedule 1 hereto. As of the Closing Date, such Debtor has not in the past four months changed its name from that set forth in Part (c) of Schedule 1 hereto.

(b) Location of Tangible Collateral As of the Closing Date, and thereafter as of the date each Compliance Certificate is delivered pursuant to the requirements set forth in the Credit Agreement, other than with respect to Collateral that (i) is in transit between or to one more locations of any of the Debtors, (ii) is in transit between or to a Debtor and a customer or on lease to a customer, or being used by railroads on an hourly and/or mileage basis, in each case, in the ordinary course of business, (iii) is being transported to or from, or is in the possession of or under the control of, a bailee, warehouseman, repair station, mechanic, or similar Person, for purposes of repair, service or refurbishment in the ordinary course of business, (iv) is in a location where Collateral with a net book value of $2,500,000 or less is located, or (v) is in the possession of employees in the ordinary course of business, the location of all tangible (other than Collateral under in the possession of the Administrative Agent) Collateral owned by such Debtor is as shown in Schedule 2 hereto (as automatically updated from time to time by any Debtor upon written notice to the Administrative Agent, but in any event, no later than in the Compliance Certificate delivered in respect of such month of change and without the need for consent or further action by the Administrative Agent or the Lenders).

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(c) Ownership and Authority. Such Debtor has (a) valid leasehold interests in (in the case of leasehold interests in real or personal property), and (b) good and marketable title to (in the case of all other personal property), all of the Collateral and such Debtor has the right, power and authority to grant to the Administrative Agent the Security Interest in such Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement.

(d) Validity of Security Interest. The Security Interest constitutes (i) to the extent that a security interest in the Collateral can be created under the UCC, a legal and valid security interest which is enforceable (except as enforcement thereof may be limited by applicable Debtor Relief Laws and by general principles of equity) against the Collateral in which such Debtor now has rights and will create a security interest which is enforceable (except as enforcement thereof may be limited by applicable Debtor Relief Laws and by general principles of equity) against the Collateral in which such Debtor hereafter acquires rights at the time such Debtor acquires any such rights; and (ii) when properly perfected by filing or otherwise, the Security Interest shall constitute a valid perfected security interest in the Collateral, in which such Debtor now has rights, and will have a perfected security interest in the Collateral in which such Debtor hereafter acquires rights at the time such Debtor acquires any such rights, to the extent that a security interest may be perfected by filing or otherwise under the UCC or by filing an appropriate notice with the United States Patent and Trademark Office or the United States Copyright Office, in each case securing the payment and performance of the Secured Obligations. The Security Interest is and shall be prior to any other Lien on any of the Collateral, other than Permitted Liens.

(e) Absence of Other Liens. Such Debtor has not filed or consented to the filing of (i) any financing statement or analogous document under the UCC or any other applicable Laws covering any Collateral (other than Liens in favor of such Debtor in its capacity as a lessor or secured party), (ii) any assignment in which such Debtor assigns any Collateral or any security agreement or similar instrument covering any Collateral with the United States Patent and Trademark Office or the United States Copyright Office or (iii) any assignment in which such Debtor assigns any Collateral or any security agreement or similar instrument covering any Collateral with any Governmental Authority (other than Liens in favor of such Debtor in its capacity as a lessor or secured party), which, in each case, financing statement or analogous document, assignment, security agreement or similar instrument is still in effect, other than, in each case, with respect to a Permitted Lien or a Disposition permitted under Section 7.05.

(f) Reserved.

(g) Inventory. Except (i) as disclosed to the Administrative Agent, in any event, no later than in the Compliance Certificate delivered in respect of such quarter of change and without the need for consent or further action by the Administrative Agent or the Lenders, (ii) for Collateral that (A) is in transit between or to one or more locations of any of the Debtors, (B) is in transit between or to a Debtor and a customer or on lease to a customer, or being used by railroads on an hourly and/or mileage basis, in each case, in the ordinary course of business, (C) is being transported to or from, or is in the possession of or under the control of, a bailee, warehouseman, repair station, mechanic, or similar Person, for purposes of repair, service or refurbishment in the ordinary course of business, or (D) is in the possession of employees in the

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ordinary course of business, (iii) for Collateral located at locations identified on Schedule 2 (as automatically updated from time to time by any Debtor upon written notice to the Administrative Agent, but in any event, no later than in the Compliance Certificate delivered in respect of such quarter of change and without the need for consent or further action by the Administrative Agent or the Lenders), or (iv) for other Collateral located at any location where Collateral with a net book value of $2,500,000 or less is located, no Inventory of such Debtor is stored with any bailee, warehouseman or similar Person or on any premises leased to such Debtor.

(h) Intellectual Property.

(i) Except, in any case, to the extent it could not reasonably be expected to result in a Material Adverse Effect, all Intellectual Property of such Debtor that is registered with any Governmental Authority and material to the conduct of its business (“Registered Intellectual Property”) is valid, subsisting, unexpired, enforceable and has not been abandoned, and to such Debtor’s knowledge, Trademarks used by such Debtor that are material to the conduct of its business do not infringe any Trademark rights of any third party.

(ii) No holding, decision or judgment has been rendered by any Governmental Authority which would limit, cancel or question the validity of any Registered Intellectual Property of such Debtor, except to the extent it could not reasonably be expected to result in a Material Adverse Effect.

(iii) To the knowledge of the applicable Debtor, no action or proceeding is pending seeking to limit, cancel or question the validity of any Registered Intellectual Property of such Debtor, except to the extent it could not reasonably be expected to result in a Material Adverse Effect.

(iv) Except to the extent it could not reasonably be expected to result in a Material Adverse Effect, to such Debtor’s knowledge, all applications filed with any Governmental Authority pertaining to the Intellectual Property owned by such Debtor which such Debtor reasonably determines are necessary for or material to the conduct of its business have been duly and properly filed, and all registrations or letters pertaining to such Intellectual Property have been duly and properly issued.

(v) Such Debtor has not made any assignment or agreement in conflict with the Security Interest of the Administrative Agent in Collateral consisting of Intellectual Property owned or purported to be owned by such Debtor.

(i) Reserved.

(j) Reserved.

(k) Deposit Accounts. As of the Closing Date, the names and addresses of all financial institutions at which such Debtor maintains its Deposit Accounts (other than Excluded Accounts), and the account numbers and account names of such Deposit Accounts, are set forth in Schedule 3.

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(l) Consents. Except for (i) the filing or recording of UCC financing statements and amendments thereto, (ii) the filing of appropriate notices with the United States Patent and Trademark Office and the United States Copyright Office, (iii) the filing of appropriate notices with the United States Surface Transportation Board, (iv) obtaining control to perfect the Security Interest granted by such Debtor pursuant hereto, (v) as may be required in connection with disposition of Investment Property by laws affecting the offering and sale of securities generally, (vi) delivering Collateral to perfect the Security Interest granted by such Debtor pursuant hereto, (vii) except as may have been obtained and remain in full force and effect, (viii) the giving of notice in respect of consignment arrangements, or (ix) as may otherwise be set forth in this Section 4, no consent or authorization of, or filing with a Governmental Authority, and no consent of any stockholder or member of such Debtor, is required (A) for the grant by such Debtor of the Security Interest in the Collateral pursuant hereto or for the execution, delivery or performance of this Agreement by such Debtor or (B) for the perfection of the Security Interest in the Collateral.

5. Covenants. In addition to the covenants of each Debtor set forth in the Credit Agreement, which are incorporated herein by this reference, so long as any Lender shall have any Commitment under the Credit Agreement or any of the Secured Obligations (other than contingent indemnification obligations and all Letters of Credit that remain outstanding have been Cash Collateralized or with respect to which other arrangements satisfactory to the L/C Issuer have been made) shall remain unpaid or unsatisfied, each Debtor shall:

(a) Change of Name, Identity or Structure. Promptly notify the Administrative Agent in writing of within thirty days of any change in (i) its corporate or organization name, (ii) the location of its chief executive office, its principal place of business, any office in which it maintains books or records (excepting, however, any office that maintains immaterial books, records and data or books, records and data that are regularly backed-up to a chief executive office) relating to the Collateral, (iii) its identity, type of organization or jurisdiction of incorporation or organization or (iv) its Federal Taxpayer Identification Number or other identification number given by its jurisdiction of incorporation or organization.

(b) Location of Collateral. Subject to the following sentence, in the Compliance Certificate delivered in respect of such quarter of change, notify the Administrative Agent of a change in the location of any office or facility at which Collateral (other than real property and improvements and fixtures thereto) owned by it (including the establishment of any such new office or facility) with a book value in excess of $2,500,000 is located. Such notification shall not be required pursuant to this Section 5(b) (i) for Collateral that (A) is in transit between or to one or more locations of any of the Debtors, (B) is in transit between or to a Debtor and a customer or on lease to a customer, or being used by railroads on an hourly and/or mileage basis, in each case, in the ordinary course of business, (C) is being transported to or from, or is in the possession of or under the control of, a bailee, warehouseman, repair station, mechanic, or similar Person, in each case for purposes of repair, service or refurbishment in the ordinary course of business, or (D) is in the possession of employees in the ordinary course of business and (ii) for Collateral that is moved to a location identified on Schedule 2 (as automatically updated from time to time by any Debtor upon written notice to the Administrative Agent or in the Compliance Certificate delivered in respect of such quarter of change and without the need for consent by the Administrative Agent or the Lenders).

(c) Leased Premises. Upon the request of the Administrative Agent, use commercially reasonable efforts to obtain from each Person from whom such Debtor leases any office or facility at which Collateral (other than real property and improvements and fixtures thereto) with a book value in excess of $2,500,000 is at any time present such subordination, waiver, consent and estoppel agreements as the Administrative Agent may reasonably require, in form and substance reasonably satisfactory to the Administrative Agent.

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(d) Rights to Payment.

(i) Upon the request of the Administrative Agent, during the continuance of an Event of Default, promptly provide the Administrative Agent with: (A) master customer listings, including all names and addresses, together with copies or originals (as requested by the Administrative Agent) of documents, customer statements, repayment histories and present status reports relating to the Accounts; (B) accurate (in all material respects) records and summaries of Accounts, including customary agings specifying the name, face value and date of each invoice, and listings of Accounts that are disputed or have been cancelled; and (C) such other matters and information relating to the Accounts as the Administrative Agent shall from time to time reasonably request;

(ii) [Reserved];

(iii) [Reserved];

(iv) Other than Accounts the aggregate value of which does not at any one time exceed $5,000,000, if any Accounts arise from contracts with the United States or any department, agency or instrumentality thereof, promptly (but in any event within 30 Business Days) notify the Administrative Agent thereof (which notice may be given in the Borrowing Base Certificate) and, upon the request of the Administrative Agent, execute any documents and instruments and use commercially reasonable efforts to take any other steps reasonably requested by the Administrative Agent in order that all monies due and to become due there-under shall be collaterally assigned to the Administrative Agent and notice thereof given to the Federal authorities under the Federal Assignment of Claims Act;

(v) If at any time such Debtor shall take a security interest in any property of an Account Debtor or any other Person to secure payment and performance of an Account or other Right to Payment (other than consignment arrangements entered into in the ordinary course of business and agreements entered into in the ordinary course business on payment terms of no more than 90 days), upon the request of Administrative Agent with respect to property having a value in excess of $5,000,000, such Debtor shall promptly (but in any event within 30 Business Days) execute and deliver assignments of such security interest to the Administrative Agent, which assignment need not be filed of public record unless necessary to continue the perfected status of the security interest against creditors of and transferees from the Account Debtor or other Person granting the security interest;

(vi) Upon the request of the Administrative Agent, mark the Accounts and other Rights to Payment and all of such Debtor’s books and records pertaining thereto with such legends as the Administrative Agent shall reasonably specify to reference to the fact that the Accounts and other Rights to Payment have been collaterally assigned to the Administrative Agent for the benefit of the holders of Secured Obligations and that the Administrative Agent has a security interest therein;

(vii) Upon the request of the Administrative Agent upon the occurrence and during the continuance of an Event of Default, (A) notify all or any designated portion of the Account Debtors of the Security Interest and (B) notify the Account Debtors or any designated portion thereof that payment shall be made directly to the Administrative Agent or to such other Person or location as the Administrative Agent shall specify; and

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(viii) Upon the occurrence and during the continuance of any Event of Default, establish such lockbox or similar arrangements for the payment of the Accounts and other Rights to Payment as the Administrative Agent shall require.

(e) Collateral Held by Bailee, Etc. Upon the request of the Administrative Agent, if any Collateral is at any time in the possession or control of a warehouseman, bailee or any agent or processor of such Debtor (other than for Collateral that (A) is in transit between or to one or more locations of any of the Debtors, (B) is in transit between or to a Debtor and a customer or on lease to a customer, or being used by railroads on an hourly and/or mileage basis, in each case, in the ordinary course of business, (C) is being transported to or from, or is in the possession of or under the control of, a bailee, warehouseman, repair station, mechanic, or similar Person, in each case for purposes of repair in the ordinary course of business, (D) is in the possession of employees in the ordinary course of business, or (E) is located at any location where Collateral with a net book value of $2,500,000 or less of Collateral is located), (x) promptly (but in any event within 30 Business Days) notify the Administrative Agent of such possession (it being understood that disclosure on Schedule 2 hereto (as automatically updated from time to time by any Debtor upon written notice to the Administrative Agent or in the Compliance Certificate delivered in respect of such quarter of change and without the need for consent by the Administrative Agent or the Lenders) shall satisfy this notification requirement), (y) upon request by Administrative Agent, notify such Person of the Security Interest and (z) upon request by Administrative Agent, use commercially reasonable efforts to obtain a written acknowledgment from such Person that it is holding such Collateral subject to the Security Interest and the instructions of the Administrative Agent.

(f) Inventory. Upon the request of the Administrative Agent: (i) promptly provide the Administrative Agent with a report of all Collateral consisting of Inventory which is included in the Borrowing Base, in form and substance reasonably satisfactory to the Administrative Agent; (ii) take a physical listing of such Inventory Debtor (other than for Collateral that (A) is in transit between or to one or more locations of any of the Debtors, (B) is in transit between or to a Debtor and a customer or on lease to a customer, or being used by railroads on an hourly and/or mileage basis, in each case, in the ordinary course of business, (C) is being transported to or from, or is in the possession of or under the control of, a bailee, warehouseman, repair station, mechanic, or similar Person, in each case for purposes of repair, service or refurbishment in the ordinary course of business, (D) is in the possession of employees in the ordinary course of business, or (E) is located at any location where Collateral with a net book value of $5,000,000 or less) and promptly deliver a copy of such physical listing to the Administrative Agent; and (iii) if any item of Collateral consisting of Inventory with a value in excess of $2,500,000 is at any time evidenced by a document of title, promptly (but in any event within 10 days following acquisition of such document of title) deliver such document of title to the Administrative Agent.

(g) Equipment. Upon the request of the Administrative Agent, deliver to the Administrative Agent a report of each item of Equipment with a value in excess of $1,000,000 constituting Collateral included in the Borrowing Base, in form and substance reasonably satisfactory to the Administrative Agent.

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(h) Copyrights.

(i) Except to the extent it could not reasonably be expected to result in a Material Adverse Effect, employ the Copyright for each work which such Debtor determines in its reasonable business judgment is material to the conduct of such Debtor’s business and which is owned by it (“Material Copyright”) with such notice of copyright as may be required by law to secure copyright protection.

(ii) Except to the extent it could not reasonably be expected to result in a Material Adverse Effect, not do any act or knowingly omit to do any act whereby any Material Copyright may become invalidated and (A) not do any act, or knowingly omit to do any act, whereby any Material Copyright may become injected into the public domain if it could reasonably be expected to result in a Material Adverse Effect; (B) promptly notify the Administrative Agent if it knows that any Material Copyright could reasonably be expected to become injected into the public domain or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in any court or tribunal in the United States or any other country) which would result in a Material Adverse Effect; (C) take all commercially reasonable steps as it shall deem appropriate under the circumstances, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of each Material Copyright owned by such Debtor, including filing of applications for renewal where necessary, except to the extent it could not reasonably be expected to result in a Material Adverse Effect; and (D) except to the extent it could not reasonably be expected to result in a Material Adverse Effect, take such actions as it shall reasonably deem appropriate in its reasonable business judgment under the circumstances to protect any such Material Copyright, including, where appropriate, the bringing of suit for infringement, seeking injunctive relief and seeking to recover any and all damages for such infringement.

(iii) Not make any assignment or agreement in conflict with the Security Interest of the Administrative Agent in Collateral consisting of Copyrights of such Debtor.

(i) Patents and Trademarks.

(i) Continue to use each Trademark owned by it, which such Debtor determines in its reasonable business judgment is material for the conduct of its business (“Material Trademarks”), in order to maintain such Material Trademark in full force free from any claim of abandonment for non-use, except to the extent it could not reasonably be expected to result in a Material Adverse Effect.

(ii) Not do any act, or omit to do any act, which will result in any Patent owned by it, which such Debtor determines in its reasonable business judgment is material for the conduct of its business (“Material Patent”), becoming abandoned or dedicated to the public, except to the extent it could not reasonably be expected to result in a Material Adverse Effect.

(iii) Promptly notify the Administrative Agent if it knows, or has reason to know, of any adverse determination or development with respect to a Material Trademark or Material Patent (including, the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office or any court or tribunal in any country) which would result in a Material Adverse Effect.

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(iv) [Reserved.]

(v) Except to the extent it could not reasonably be expected to result in a Material Adverse Effect, take necessary steps, as determined in such Debtor’s reasonable business judgment, in any proceeding before the United States Patent and Trademark Office, to maintain and pursue each application, to obtain the relevant registration and to maintain each registration of the Material Patents and Material Trademarks, including filing of applications for renewal, affidavits of use and affidavits of incontestability, where appropriate.

(vi) Except to the extent it could not reasonably be expected to result in a Material Adverse Effect, take such actions as it shall reasonably deem appropriate in its reasonable business judgment under the circumstances to protect any such Material Trademark, including, where appropriate, the bringing of suit for infringement, seeking injunctive relief and seeking to recover any and all damages for such infringement.

(vii) Except for licenses granted to third parties in the ordinary course of business, not make any assignment or agreement in conflict with the Security Interest of the Administrative Agent in Collateral consisting of Patents or Trademarks owned by such Debtor.

(j) Notices, Reports and Information. (i) Promptly notify the Administrative Agent of any and all Commercial Tort Claims having a value, or involving an asserted claim, in the amount of $1,000,000 or more in the aggregate for all Commercial Tort Claims held or acquired by such Debtor; and (ii) upon the request of the Administrative Agent promptly provide to the Administrative Agent such statements, listings and schedules further identifying and describing the Collateral and such other reports and other information in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail.

(k) Updated Schedules. Concurrently with the delivery of each Compliance Certificate pursuant to the Credit Agreement, provide to the Administrative Agent updated Schedule 2 to this Agreement.

6. Other Actions. In order to further insure the attachment, perfection and priority of, and the ability of the Administrative Agent to enforce, the Administrative Agent’s security interest in the Collateral, each Debtor agrees, in each case at its own expense, to take the following actions with respect to the following Collateral:

(a) Instruments. Upon the request of the Administrative Agent, promptly (but in any event, on the date that is the later of (i) 30 Business Days from the date of execution or (ii) the date of required delivery of the Compliance Certificate in respect of such date execution) deliver any Instruments having an aggregate value or face amount of $1,000,000 or more (excluding checks received in the ordinary course of business) held by such Debtor appropriately endorsed or accompanied by such instruments of transfer or assignment duly executed in blank as the Administrative Agent reasonably may from time to time specify.

(b) Deposit Accounts. Promptly (and in any event within 60 Business Days following such request or such later date as agreed by the Administrative Agent in its sole discretion), upon the request of the Administrative Agent for purposes of obtaining and maintaining control of Collateral consisting of Deposit Accounts, for each Deposit Account that such Debtor at any time opens or maintains, either: (i) use commercially reasonable efforts to

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cause the depositary bank to agree to comply at any time with instructions from the Administrative Agent to such depositary bank directing the disposition of funds from time to time credited to such Deposit Account, without further consent of such Debtor, pursuant to an agreement in a form satisfactory to the Administrative Agent, or (ii) arrange for the Administrative Agent to become the customer of the depositary bank with respect to such Deposit Account, with such Debtor being permitted, only with the consent of the Administrative Agent, to exercise rights to withdraw funds from such Deposit Account; provided, however, that the provisions of this subsection (b) shall not apply to any Excluded Accounts; provided, further, however, notwithstanding anything to the contrary contained in this clause (b), the Administrative Agent acknowledges and agrees that the Loan Parties may (i) close any Deposit Accounts and (ii) withdraw all or any part of the funds in the Deposit Accounts and transfer the funds in any manner not in violation of the Loan Documents so long as no Event of Default has occurred and is continuing and the Administrative Agent has not exercised its enforcement rights with respect thereto.

(c) Investment Property. Except to the extent otherwise provided under the Pledge Agreement, upon the request of the Administrative Agent: if such Debtor or its nominee holds any Securities that are Collateral, whether certificated or uncertificated, or other Investment Property that is Collateral through a Securities Intermediary or Commodity Intermediary, at the option of the Administrative Agent, and pursuant to an agreement in form and substance satisfactory to it, promptly (but in any event within 60 Business Days following such request), either (A) use commercially reasonable efforts to cause such Securities Intermediary or (as the case may be) Commodity Intermediary to agree to comply with entitlement orders or other instructions from the Administrative Agent to such Securities Intermediary as to such Securities or other Investment Property, or, as the case may be, to apply any value distributed on account of any Commodity Contract as directed by the Administrative Agent to such Commodity Intermediary, in each case without further consent of such Debtor or such nominee, or (B) in the case of Financial Assets or other Investment Property held through a Securities Intermediary, arrange for the Administrative Agent to become the Entitlement Holder with respect to such Investment Property, with such Debtor being permitted, only with the consent of the Administrative Agent, to exercise rights to withdraw or otherwise deal with such Investment Property; provided, however, that the provisions of this subsection (c) shall not apply to (A) any Financial Assets or Securities Account which contains assets, in either case, with an aggregate value of less than $500,000, (B) any Securities Accounts which contain, in the aggregate for all such Securities Accounts, aggregate Financial Assets of less than $500,000, or (C) Financial Assets held in Securities Accounts that would otherwise constitute Excluded Accounts if in a Deposit Account; provided, further, however, that notwithstanding anything to the contrary contained in this clause (c), the Administrative Agent acknowledges and agrees that the Loan Parties may withdraw all or any part of the Investment Property, Financial Assets or other funds in the Securities Accounts and transfer such Investment Property, Financial Assets or other funds in any manner not in violation of the Loan Documents so long as no Event of Default has occurred and is continuing and the Administrative Agent has not exercised its enforcement rights with respect thereto.

(d) Electronic Chattel Paper and Transferable Records. Promptly (but in any event within 20 days) following the request of the Administrative Agent, take such action as the Administrative Agent may reasonably request as are reasonably necessary to vest in the Administrative Agent (i) control of any Electronic Chattel Paper of such Debtor under Section 9-105 the UCC; and (ii) control of any “transferable record” of such Debtor under and as defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act, or, as the case may be, Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction, as so in effect in the relevant jurisdiction, in each case, to the extent that the aggregate value or face amount of such Electronic Chattel Paper equals or exceeds $1,000,000.

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(e) Letter of Credit Rights. If any Debtor is or becomes the beneficiary of letters of credit having a face amount or value of $1,000,000 or more, promptly (but in any event within 60 Business Days) following the request of the Administrative Agent, for any such letter of credit issued in favor of such Debtor, at the option of the Administrative Agent and pursuant to an agreement in form and substance satisfactory to it, either (i) use commercially reasonable efforts to arrange for the issuer of such letter of credit to consent to an assignment to the Administrative Agent of the proceeds of any drawing under the letter of credit or (ii) use commercially reasonable efforts arrange for the Administrative Agent to become the transferee beneficiary of the letter of credit, with the Administrative Agent agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be paid to such Debtor unless an Event of Default has occurred and is continuing and the Administrative Agent has exercised its enforcement rights hereunder.

(f) Reserved.

7. Further Assurances. Each Debtor agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Administrative Agent may from time to time reasonably request to better assure, preserve, protect and perfect the Security Interest and the rights and remedies of the Administrative Agent hereunder, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest and the filing of any financing statements (including fixture filings) or other documents in connection herewith or therewith.

8. Collection of Rights to Payment. At the request of the Administrative Agent, upon the occurrence and during the continuation of any Event of Default, all remittances on account of Collateral received by each Debtor shall be held in trust for the Administrative Agent and, in accordance with the Administrative Agent’s instructions, remitted to the Administrative Agent or deposited to an account with the Administrative Agent in the form received (appropriately endorsed or accompanied by necessary instruments of transfer).

9. Rights of Administrative Agent.

(a) Power of Attorney. Each Debtor hereby appoints the Administrative Agent the attorney-in-fact of such Debtor, effective upon the occurrence and during the continuance of an Event of Default (and, in the case of the exercise proxy, voting and other consensual rights in respect of Investment Property, so long as one day’s written notice has not been given by the Administrative Agent to the Debtors, for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Administrative Agent may deem necessary or advisable to accomplish the purposes hereof. Without limiting the generality of the foregoing, the Administrative Agent shall have the right, upon the occurrence and during the continuance of an Event of Default and after notice has been provided to such Debtor, with full power of substitution either in the Administrative Agent’s name or in the name of such Debtor:

(i) take possession of and endorse any notes, acceptances, checks, drafts, money orders or other forms of payment or security and collect any Proceeds of any Collateral;

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(ii) sign and endorse any invoice or bill of lading relating to any of the Collateral, warehouse or storage receipts, drafts against customers or other obligors, assignments, notices of assignment, verifications and notices to customers or other obligors;

(iii) notify the Postal Service authorities to change the address for delivery of mail addressed to such Debtor to such address as the Administrative Agent may designate and, without limiting the generality of the foregoing, establish with any Person lockbox or similar arrangements for the payment of the Rights to Payment;

(iv) receive, open and dispose of all mail addressed to such Debtor;

(v) send requests for verification of Rights to Payment to any Account Debtor;

(vi) notify, or to require such Debtor to notify, Account Debtors to make all payments directly to the Administrative Agent;

(vii) assert, adjust, sue for, compromise or release any claims under any policies of insurance;

(viii) exercise dominion and control over, and refuse to permit further withdrawals from any Deposit Account, Securities Account or Commodities Account constituting part of the Collateral;

(ix) notify each Person maintaining lockbox or similar arrangements for the payment of the Rights to Payment to remit all amounts representing collections on the Rights to Payment directly to the Administrative Agent;

(x) ask, demand, collect, receive and give acquittances and receipts for any and all Rights to Payment, enforce payment or any other rights in respect of the Rights to Payment and other Collateral, grant consents, agree to any amendments, modifications or waivers of the agreements and documents governing the Rights to Payment and other Collateral, and otherwise file any claims, take any action or institute, defend, settle or adjust any actions, suits or proceedings with respect to the Collateral, as the Administrative Agent may deem necessary or desirable to maintain, preserve and protect the Collateral, to collect the Collateral or to enforce the rights of the Administrative Agent with respect to the Collateral;

(xi) execute any and all applications, documents, papers and instruments necessary for the Administrative Agent to use the Intellectual Property and grant or issue any exclusive or non-exclusive license or sublicense with respect to any Intellectual Property;

(xii) execute any and all endorsements, assignments or other documents and instruments necessary to sell, lease, assign, convey or otherwise transfer title in or dispose of the Collateral; and

(xiii) execute any and all such other documents and instruments, and do any and all acts and things for and on behalf of such Debtor, which the Administrative Agent may deem necessary or advisable to maintain, protect, realize upon and preserve the Collateral and the Administrative Agent’s security interest therein and to accomplish the purposes of this Agreement.

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The foregoing power of attorney is coupled with an interest and irrevocable so long as any Lender shall have any Commitment under the Credit Agreement or any of the Secured Obligations (other than contingent indemnification obligations and all Letters of Credit that remain outstanding have been Cash Collateralized or with respect to which other arrangements satisfactory to the L/C Issuer have been made) shall remain unpaid or unsatisfied. Each Debtor hereby ratifies, to the fullest extent permitted by applicable Laws, all that the Administrative Agent shall lawfully and in good faith do or cause to be done by virtue of and in compliance with this subsection (a). The failure of Administrative Agent to provide notice of an Event of Default shall not prevent the Administrative Agent from exercising the power of attorney granted above, or invalidate any actions taken thereunder.

(b) Performance of Debtor Obligations. The Administrative Agent may perform or pay any obligation which any Debtor has agreed to perform or pay under or in connection with this Agreement, and the Debtors shall reimburse the Administrative Agent in accordance with the Credit Agreement for any amounts paid by the Administrative Agent pursuant to this subsection (b).

(c) Administrative Agent’s Duties. Notwithstanding any provision contained in this Agreement, the Administrative Agent shall have no duty to exercise any of the rights, privileges or powers afforded to it and shall not be responsible to any Debtor or any other Person for any failure to do so or delay in doing so.

(d) Rights of Required Lenders. All rights of the Administrative Agent under this Agreement, if not exercised by the Administrative Agent, may be exercised by the Required Lenders.

10. [Reserved.]

11. Remedies.

(a) General Remedies. Upon the occurrence and during the continuation of an Event of Default, the Administrative Agent shall have, in addition to all other rights and remedies granted to it in this Agreement, the Credit Agreement or any other Loan Document, all rights and remedies of a secured party under the UCC and other applicable Laws. Without limiting the generality of the foregoing, upon the occurrence and during the continuance of an Event of Default, each Debtor agrees that the Administrative Agent may, subject to the rights of Lessees of Pledged Railcars to quiet possession as contemplated by Section 2(d) of this Agreement:

(i) require such Debtor to assemble all or any part of the Collateral and make it available to the Administrative Agent at any place and time designated by the Administrative Agent;

(ii) peaceably and without notice enter any premises of such Debtor, take possession of any the Collateral, remove or dispose of all or part of the Collateral on any premises or elsewhere, and otherwise collect, receive, appropriate and realize upon all or any part of the Collateral, and demand, give receipt for, settle, renew, extend, exchange, compromise, adjust, or sue for all or any part of the Collateral, as the Administrative Agent may determine;

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(iii) cause the Security Interest with respect to any of the Collateral consisting of Intellectual Property to become an assignment, transfer and conveyance of any of or all such Collateral by such Debtor to the Administrative Agent, or to license or sublicense, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any such Collateral throughout the world on such terms and conditions and in such manner as the Administrative Agent shall determine (other than in violation of any then-existing licensing arrangements to the extent that waivers cannot be obtained);

(iv) secure the appointment of a receiver of the Collateral or any part thereof to the extent and in the manner provided by applicable Laws;

(v) exercise dominion and control over, and refuse to permit further withdrawals (whether of money, securities, commodities, instruments, investment property or other property) from any Deposit Account, Securities Account or Commodities Account constituting part of the Collateral; and

(vi) sell, resell, lease, use, assign, transfer or otherwise dispose of any or all of the Collateral in its then condition or following any commercially reasonable preparation or processing (utilizing in connection therewith any of such Debtor’s assets, without charge or liability to the Administrative Agent therefor) at public or private sale or at any broker’s board or on any securities exchange, by one or more contracts, in one or more parcels, at the same or different times, for cash or credit, or for future delivery without assumption of any credit risk, all as the Administrative Agent deems advisable; provided, however, that such Debtor shall be credited with the net proceeds of sale only when such proceeds are finally collected by the Administrative Agent.

(b) Sale of Collateral. Each purchaser at any sale pursuant to this Agreement shall subject to the rights of Lessees of Pledged Railcars to quiet possession as contemplated by Section 2(d) of this Agreement, hold the property sold absolutely, free from any claim or right on the part of any Debtor, and each Debtor hereby waives against such purchaser, to the fullest extent permitted by applicable Laws, all rights of redemption, stay and appraisal which such Debtor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. Neither the Administrative Agent’s compliance with the UCC or any other applicable requirement of Law, in the conduct of any sale made pursuant to this Agreement, nor its disclaimer of any warranties relating to the Collateral, shall be considered to adversely affect the commercial reasonableness of such sale. The Administrative Agent shall give each Debtor 10 days’ written notice (which such Debtor agrees is reasonable notice within the meaning of Section 9-612 of the UCC) of the Administrative Agent’s intention to make any sale of Collateral. The Administrative Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Administrative Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. To the fullest extent permitted by applicable Laws, the Administrative Agent or any other holder of Secured Obligations may bid for or purchase the Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to the Administrative Agent or such holder of Secured Obligations from any Debtor as a credit against the purchase price and the Administrative Agent or such holder of Secured Obligations may, upon compliance with the

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terms of sale, hold, retain and dispose of such property without further accountability to such Debtor therefor. For purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Administrative Agent shall be free to carry out such sale pursuant to such agreement and no Debtor shall be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Administrative Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Secured Obligations paid in full. To the fullest extent permitted by applicable Laws, any sale pursuant to the provisions of this subsection (b) shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the UCC.

(c) License. To the extent permitted by applicable Law, for the purpose of enabling the Administrative Agent to exercise its rights and remedies under this Section or otherwise in connection with this Agreement, each Debtor hereby grants to the Administrative Agent a non-exclusive license (exercisable without payment of royalty or other compensation to such Debtor) to use, license or sub-license any of the Collateral now owned or hereafter acquired by such Debtor, and wherever the same may be located, and including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof. The use of such license by the Administrative Agent shall be exercised, at the option of the Administrative Agent, solely upon the occurrence and during the continuation of an Event of Default; provided that any license, sub-license or other transaction entered into by the Administrative Agent in accordance herewith shall be binding upon the Debtors notwithstanding any subsequent cure of such Event of Default.

(d) Proceeds Account. To the extent that any of the Secured Obligations may be contingent, unmatured or unliquidated (including with respect to undrawn amounts under any Letter of Credit or contingent amounts due under any Treasury Management Agreement or Swap Contract between any Loan Party and any Lender or Affiliate of a Lender) upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may, at its option, (i) retain the proceeds of any sale, collection, disposition or other realization upon the Collateral (or any portion thereof) in a special purpose non-interest-bearing restricted deposit account (the “Proceeds Account”) created and maintained by the Administrative Agent for such purpose (which shall constitute a Deposit Account included within the Collateral hereunder) until such time as the Administrative Agent may elect to apply such proceeds to the Secured Obligations, and each Debtor agrees that such retention of such proceeds by the Administrative Agent shall not be deemed strict foreclosure with respect thereto; (ii) in any reasonable manner elected by the Administrative Agent, estimate the liquidated amount of any such contingent, unmatured or unliquidated claims and apply the proceeds of the Collateral against such amount; or (iii) otherwise proceed in any manner permitted by applicable Laws. Each Debtor agrees that the Proceeds Account shall be a blocked account and that upon the irrevocable deposit of funds into the Proceeds Account, such Debtor shall not have any right of withdrawal with respect to such funds. Accordingly, each Debtor irrevocably waives until the termination of this Agreement and the Security Interest in accordance with Section 24 the right to make any withdrawal from the Proceeds Account and the right to instruct the Administrative Agent to honor drafts against the Proceeds Account.

(e) Retention of Collateral. In addition to the rights and remedies hereunder, the Administrative Agent may, in compliance with Sections 9-620 and 9-621 of the UCC or otherwise complying with the requirements of applicable Law of the relevant jurisdiction, subject to the rights of Lessees of Pledged Railcars to quiet possession as contemplated by Section 2(d) of this Agreement, accept or retain the Collateral or any part thereof in satisfaction of the Secured Obligations. Unless and until the Administrative Agent shall have provided such notices, however, the Administrative Agent shall not be deemed to have retained any Collateral in satisfaction of any Secured Obligations for any reason.

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(f) Duty of Care. Except for the exercise of reasonable care in the custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Administrative Agent shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. The Administrative Agent shall be deemed to have exercised reasonable care in the custody and preservation of Collateral in its possession if such Collateral is accorded treatment substantially equal to that which the Administrative Agent accords its own property. Neither the Administrative Agent nor any of its Affiliates, directors, officers, employees, counsel, agents and attorneys-in-fact shall be liable for failure to demand, collect or realize upon all or any part of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Debtor or otherwise.

(g) Application of Proceeds. Subject to subsection (d) above, the cash proceeds actually received from the sale or other disposition or collection of Collateral, and any other amounts received in respect of the Collateral the application of which is not otherwise provided for herein, shall be applied as provided in the Credit Agreement.

The Administrative Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. The Debtors shall remain liable, on a joint and several basis, to the Administrative Agent and the holders of Secured Obligations for any deficiency which exists after any sale or other disposition or collection of Collateral.

12. Certain Waivers. Each Debtor waives, to the fullest extent permitted by applicable Laws, (a) any right of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling of the Collateral or other collateral or security for the Secured Obligations; (b) any right to require the Administrative Agent (i) to proceed against any Person, (ii) to exhaust any other collateral or security for any of the Secured Obligations, (iii) to pursue any remedy in the Administrative Agent’s power, or (iv) to make or give any presentments, demands for performance, notices of nonperformance, protests, notices of protests or notices of dishonor in connection with any of the Collateral; and (c) all claims, damages, and demands against the Administrative Agent arising out of the repossession, retention, sale or application of the proceeds of any sale of the Collateral, other than arising from a breach of this Agreement.

13. Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 10.02 of the Credit Agreement.

14. No Waiver; Cumulative Remedies. No failure by the Administrative Agent or any holder of Secured Obligations to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. No waiver of any single breach or default under this Agreement shall be deemed a waiver of any other breach or default. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Administrative Agent and the holders of Secured Obligations. Any single or partial exercise of any right or remedy shall not preclude the further exercise thereof or the exercise of any other right or remedy.

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15. Costs and Expenses; Indemnification; Other Charges. The terms of Section 10.04 of the Credit Agreement with respect to costs and expenses and indemnification are incorporated herein by reference, mutatis mutandis, and the parties hereto agree to such terms.

16. Successor and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and, except that no Debtor may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent (and any attempted assignment or transfer by any Debtor without such consent shall be null and void).

17. Governing Law; Jurisdiction; Etc.

(a) GOVERNING LAW. THIS AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS HEREUNDER, OR THE REMEDIES HEREUNDER, IN RESPECT OF ANY COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN NEW YORK; PROVIDED THAT THE ADMINISTRATIVE AGENT AND THE HOLDERS OF SECURED OBLIGATIONS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

(b) SUBMISSION TO JURISDICTION. EACH DEBTOR AND THE ADMINISTRATIVE AGENT IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY DEBTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. EACH DEBTOR IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER, THE L/C ISSUER, OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK.

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(c) WAIVER OF VENUE. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

18. Amendments, Etc. No amendment or waiver of any provision of this Agreement, and no consent to any departure by any Debtor therefrom, shall be effective unless in writing signed by the Administrative Agent and the Debtors, subject to any consent required in accordance with Section 10.01 of the Credit Agreement, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit under the Credit Agreement shall not be construed as a waiver of any Default under the Credit Agreement.

19. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

20. Integration. This Agreement, together with the other Loan Documents, comprises the complete, final and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter.

21. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

22. Incorporation of Provisions of the Credit Agreement. To the extent the Credit Agreement contains provisions of general applicability to the Loan Documents, including any such provisions contained in Article X thereof, such provisions are incorporated herein by this reference.

23. No Inconsistent Requirements. Each Debtor acknowledges that this Agreement and the other Loan Documents may contain covenants and other terms and provisions variously stated regarding the same or similar matters, and agrees that all such covenants, terms and provisions are cumulative and all shall be performed and satisfied in accordance with their respective terms.

24. Termination. This Agreement and the Security Interest shall terminate when all of the Obligations (as defined in the Credit Agreement) shall have been paid in full (other than contingent indemnification obligations) in accordance with the terms of the Credit Agreement, the Aggregate Commitments have been terminated and all Letters of Credit that remain outstanding have been Cash Collateralized or with respect to which other arrangements satisfactory to the L/C Issuer have been made; provided, however, that the obligations of the Debtors under Section 15 shall survive such termination. In addition, (x) in the event that any Subsidiary ceases to be a Subsidiary of a Debtor (including another Debtor) as a result of a transaction permitted by the Credit Agreement, then such Subsidiary shall automatically be fully and finally released from its obligations hereunder without any further action of the Administrative Agent, the Lenders, or the L/C Issuer, and (y) the Security Interest and Liens granted

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herein shall be deemed to be released automatically without any further action of the Administrative Agent, the Lenders, or the L/C Issuer as to any Collateral upon the sale, transfer or other disposition of such Collateral to a Person that is not a Debtor pursuant to a Disposition permitted by the Credit Agreement or any other Loan Document (it being understood and agreed, for the avoidance of doubt, that (A) Railcar Sales in the Ordinary Course of Business are transactions expressly permitted under the Loan Documents and that the Administrative Agent’s Security Interest and Liens in any railcars (but not the Proceeds thereof) shall be automatically released without any further action of the Administrative Agent, the Lenders, or the L/C Issuer in connection with any such Railcar Sales in the Ordinary Course of Business, and (B) upon the sale of a lease of railcars and all railcars that are Collateral that are subject to such lease pursuant to a Disposition permitted by the Credit Agreement or any other Loan Document, the Administrative Agent’s Security Interest and Liens in such railcars and such lease (but not the Proceeds thereof) shall be automatically released without any further action of the Administrative Agent, the Lenders, or the L/C Issuer), and in each instance, the Administrative Agent shall promptly upon written request from the Borrower take all necessary action to document the full and final release of such Debtor or Collateral, as applicable, under this Agreement. The Administrative Agent agrees to release its Lien on any Collateral (i) upon the termination of the Commitments and payment and satisfaction in full by the Borrower of all of the Obligations or (ii) constituting property that is sold or disposed of in a transaction permitted by the Credit Agreement or any other Loan Document if a release is required or desirable in connection therewith and if the Borrower certifies to the Administrative Agent that such sale or disposition is so permitted.

25. Joinder. At any time after the date of this Agreement, one or more additional Persons may become party hereto by executing and delivering to Administrative Agent a joinder agreement, in form and substance reasonably satisfactory to Administrative Agent. Immediately upon such execution and delivery of such joinder agreement (and without any further action), each such additional Person will become a party to this Agreement as a “Debtor” and have all of the rights and obligations of a Debtor hereunder and this Agreement shall be deemed amended by such joinder agreement.

26. [Reserved.]

27. Effect of Amendment and Restatement. Upon the effectiveness hereof, this Agreement amends and restates in its entirety as of the Closing Date the Existing Security Agreement. The security interests granted by each Debtor to Administrative Agent in the Collateral under the Existing Security Agreement continue (as modified hereby) without interruption under this Agreement to secure the Secured Obligations.

28. Keepwell. Each Debtor that is a Qualified ECP Guarantor at the time any Guarantee of the Obligations by any Debtor that is not then an “eligible contract participant” under the Commodity Exchange Act (a “Specified Loan Party”) or the grant of a security interest under the Loan Documents by any such Specified Loan Party, in either case, becomes effective with respect to any Swap Obligation, hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide such funds or other support to each Specified Loan Party with respect to such Swap Obligation as may be needed by such Specified Loan Party from time to time to honor all of its obligations under the Loan Documents in respect of such Swap Obligation (but, in each case, only up to the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP Guarantor’s obligations and undertakings under such Guarantee voidable under applicable Debtor Relief Laws, and not for any greater amount). The obligations and undertakings of each Qualified ECP Guarantor under this Section 28 shall remain in full force and effect until the Obligations have been indefeasibly paid and performed in full. Each Debtor intends this Section 28 to constitute, and this Section shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each Specified Loan Party for all purposes of the Commodity Exchange Act.

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29. Intercreditor Agreements. This Agreement (and the Security Interest in the Common Collateral granted hereunder) is subject to any Intercreditor Agreement from time to time in effect. In the event of any conflict between the terms of this Agreement and the any Intercreditor Agreement with respect to any Common Collateral, the terms of such Intercreditor Agreement shall control. So long as any Person is acting as bailee and as agent for perfection on behalf of the Administrative Agent pursuant to the terms of any Intercreditor Agreement, any obligation of any Debtor in this Agreement that requires delivery of Common Collateral to, or the possession or control of Common Collateral with, the Administrative Agent shall be deemed complied with and satisfied if such delivery of Collateral is made to, or such possession or control of Common Collateral is with, such Person on same terms this Agreement would have otherwise required rendering of performance to the Administrative Agent.

30. Term Debt Priority. Notwithstanding anything in this Agreement or any other Loan Document to the contrary notwithstanding, any reference made to a first priority perfected Lien or security interest in any Loan Document (excluding any Intercreditor Agreement) shall be deemed to include any Collateral that is subject to security interests in favor of both the holders of the Obligations and the holders of the Term Debt and, pursuant to an Intercreditor Agreement, such creditors have agreed that their respective security interests in such common Collateral shall have equal priority.

[SIGNATURES SET FORTH ON THE FOLLOWING PAGE]

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IN WITNESS WHEREOF, the Debtors have executed this Agreement as of the day and year first above written.

THE GREENBRIER COMPANIES, INC.
By	/s/ Justin Roberts
Name: Justin Roberts
Title: Vice President, Corporate Finance and Treasurer
GREENBRIER-CONCARRIL, LLC
GREENBRIER LEASING COMPANY LLC
GREENBRIER RAIL SERVICES HOLDINGS, LLC
GREENBRIER RAILCAR LEASING, INC.
GUNDERSON LLC
GUNDERSON MARINE LLC
GUNDERSON RAIL SERVICES LLC
MERIDIAN RAIL ACQUISITION CORP.
MERIDIAN RAIL HOLDINGS CORP.
By:	/s/ Justin Roberts
Name: Justin Roberts
Title: Vice President
GREENBRIER MANAGEMENT SERVICES, LLC
By: GREENBRIER LEASING COMPANY LLC
Its: Sole Member
By:	/s/ Justin Roberts
Name: Justin Roberts
Title: Vice President
GUNDERSON SPECIALTY PRODUCTS, LLC
By: GUNDERSON LLC
Its: Sole Member
By:	/s/ Justin Roberts
Name: Justin Roberts
Title: Vice President

FOURTH AMENDED AND RESTATED SECURITY AGREEMENT

THE GREENBRIER COMPANIES, INC.

Agreed and Accepted:
BANK OF AMERICA, N.A., as Administrative Agent
By:	/s/ Anthea Del Bianco
Name: Anthea Del Bianco
Title: Vice President

FOURTH AMENDED AND RESTATED SECURITY AGREEMENT

THE GREENBRIER COMPANIES, INC.

EX-10.30

Exhibit 10.30

FOURTH AMENDED AND RESTATED PLEDGE AGREEMENT

This FOURTH AMENDED AND RESTATED PLEDGE AGREEMENT (“Agreement”), entered into as of September 26, 2018, among THE GREENBRIER COMPANIES, INC., an Oregon corporation (the “Company” or the “Borrower”), the other parties identified as “Debtors” on the signature pages hereto and such other parties that may become Debtors hereunder after the date hereof (together with the Company, the “Debtors” and individually a “Debtor”) in favor of BANK OF AMERICA, N.A., as administrative agent for its benefit and for the benefit of the other holders of the Secured Obligations (as defined below) (in such capacity, and together with its successors and permitted assigns, the “Administrative Agent”).

RECITALS

A. Pursuant to that certain Third Amended and Restated Credit Agreement dated as of October 29, 2015 (as amended, modified, extended, renewed or replaced from time to time, the “Existing Credit Agreement”) among the Borrower, the lenders party thereto (the “Existing Lenders”) and the Administrative Agent, the Existing Lenders required, as a condition precedent to their entering into the Existing Credit Agreement and making extensions of credit to or for the account of the Borrower thereunder, the Borrower and certain subsidiaries of the Borrower to execute that certain third amended and restated pledge agreement dated as of October 29, 2015 (the “Existing Pledge Agreement”).

B. The Lenders have agreed to amend and restate the Existing Credit Agreement pursuant to the Fourth Amended and Restated Credit Agreement dated as of the date hereof (as amended, restated, modified, extended, increased, renewed or replaced from time to time, the “Credit Agreement”) among the Company, as borrower, the lenders party thereto (the “Lenders”) and the Administrative Agent.

C. It is a condition precedent to each Lender’s obligation to make its initial Credit Extension under the Credit Agreement that the Debtors agree to amend and restate the Existing Pledge Agreement in accordance with this Agreement.

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration receipt of which is hereby acknowledged, the Debtors and the Administrative Agent, on behalf of itself and each Lender, hereby agree as follows:

1. Definitions; Interpretations.

(a) Terms Defined in Credit Agreement. All capitalized terms used in this Agreement and not otherwise defined herein have the meanings specified in the Credit Agreement.

(b) Certain Defined Terms. As used in this Agreement, the following terms have the following meanings:

“Pledge Agreement Supplement” has the meaning specified in Section 3(a).

“Pledged Collateral” has the meaning specified in Section 2.

“Pledged Shares” means, (i) with respect to each Debtor, 100% of the issued and outstanding Equity Interests (other than Excluded Property) of each direct Domestic Subsidiary of such Debtor and (ii) such Equity Interests of direct Foreign Subsidiaries that a Debtor may elect to pledge, including the Equity Interests of the Subsidiaries owned by such Debtor as set forth on Schedule 1 hereto, in each case together with the certificates (or other agreements or instruments), if any, representing such shares, and all options and other rights, contractual or otherwise, with respect thereto.

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“Pledged Subsidiaries” means, collectively, the Subsidiaries of the Debtors listed on Schedule 1 hereto and such other parties that may become Pledged Subsidiaries hereunder after the Closing Date pursuant to a Pledge Agreement Supplement.

“Secured Obligations” means, without duplication, all Obligations.

“UCC” means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided, however, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions.

(c) Terms Defined in UCC. Where applicable and except as otherwise defined herein, terms used in this Agreement that are defined in the UCC shall have the meanings assigned to them in the UCC.

(d) Interpretation. The rules of interpretation and other definitional provisions set forth in Sections 1.02 and 1.07 of the Credit Agreement shall be applicable to this Agreement and are incorporated herein by this reference.

2. Pledge.

As security for the payment, in full in cash when due, whether at stated maturity, by acceleration or otherwise, and performance of the Secured Obligations, each Debtor hereby pledges, collaterally assigns, transfers, hypothecates, sets over and grants to the Administrative Agent for its benefit and the benefit of the other holders of the Secured Obligations a security interest in all of such Debtor’s right, title and interest in, to and under the following, whether now existing or owned or hereafter acquired or arising (collectively, the “Pledged Collateral”):

(a) all Pledged Shares;

(b) all certificates, instruments or other writings representing or evidencing the Pledged Shares;

(c) all warrants, options and other rights entitling such Debtor to acquire any interest in any Pledged Shares; and

(d) all cash and non-cash proceeds of the foregoing;

provided, however, that the Pledged Collateral (and any reference to any portion of the Pledged Collateral) shall not include the Excluded Property.

3. Delivery Or Transfer Of Pledged Collateral.

(a) Subject to Section 6.15 of the Credit Agreement, each Debtor shall deliver to the Administrative Agent (i) promptly following the Closing Date (and in any event within 5 Business Days of the Closing Date or such long period as may be agreed to by the Administrative Agent in its sole

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discretion) or prior to the execution and delivery of this Agreement, all certificates or instruments representing or evidencing Pledged Shares existing as of the Closing Date and (ii) pursuant to Section 6.14(d) of the Credit Agreement, promptly (but in any event within thirty (30) days or such longer period as may be agreed to by the Administrative Agent in its sole discretion) following the receipt thereof by or on behalf of such Debtor, all certificates, instruments or other writings representing or evidencing any Pledged Shares that Debtor shall acquire, obtain, receive or become entitled to receive after the Closing Date, together with a duly executed instrument in substantially the form of Schedule 2 hereto (a “Pledge Agreement Supplement”) identifying such additional Pledged Shares; provided that the failure to deliver any such Pledge Agreement Supplement shall not affect the validity of such pledge of such Pledged Shares. Prior to delivery to the Administrative Agent, all such certificates and instruments constituting Pledged Collateral shall be held in trust by the Debtors for the benefit of the Administrative Agent and the holders of the Secured Obligations pursuant hereto. All such certificates shall be delivered in suitable form for transfer by delivery or shall be accompanied by duly executed instruments of transfer or assignment reasonably satisfactory to the Administrative Agent. Each Debtor hereby authorizes the Administrative Agent to attach each Pledge Agreement Supplement to this Agreement and agrees that all shares listed thereon shall for all purposes hereunder constitute Pledged Collateral.

(b) Except to the extent constituting Excluded Property, if any Debtor shall receive by virtue of its being or having been the owner of any Pledged Collateral, any (i) certificate, including any certificate representing a dividend or distribution in connection with any increase or reduction of capital, reclassification, merger, consolidation, sale of assets, combination of shares or membership or equity interests, stock splits, spin-off or split-off, promissory notes or other instrument; (ii) warrant, option or other right, whether as an addition to, substitution for, or an exchange for, any Pledged Collateral or otherwise; (iii) dividends payable in securities; or (iv) distributions of securities or other equity interests in connection with a partial or total liquidation, dissolution or reduction of capital, capital surplus or paid-in surplus, then to the extent consisting of Pledged Collateral, such Debtor shall promptly (but in any event within thirty (30) days or such longer period as may be agreed to by the Administrative Agent in its sole discretion) following the receipt thereof by or on behalf of such Debtor deliver all of the foregoing to the Administrative Agent to hold as Pledged Collateral and shall, if received by such Debtor, be received in trust for the benefit of the Administrative Agent and the holders of the Secured Obligations, be segregated from the other property or funds of such Debtor, and be promptly (but in any event within thirty (30) days or such longer period as may be agreed to by the Administrative Agent in its sole discretion) following the receipt thereof by or on behalf of such Debtor delivered to the Administrative Agent as Pledged Collateral in the same form as so received, together with duly executed instruments of transfer or assignment satisfactory to the Administrative Agent, as further collateral security for the Secured Obligations.

(c) Each Debtor hereby irrevocably authorizes the Administrative Agent at any time and from time to time to file in any relevant jurisdiction any initial financing statements and amendments thereto that contain the information required by Article 9 of the UCC of each applicable jurisdiction for the filing of any financing statement or amendment in order to perfect and protect the security interest of the Administrative Agent in the Pledged Collateral.

(d) During the continuation of an Event of Default, the Administrative Agent shall have the right, at any time in its discretion during such period, to transfer to or to register in its name or the name of any of its nominees any or all of the Pledged Shares, subject to the provisions of Section 7(a), including, without limitation, the notice requirements specified therein. In addition, the Administrative Agent shall have the right at any time to exchange certificates, instruments or other writings representing or evidencing Pledged Shares for certificates, instruments or other writings of smaller or larger denominations.

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(e) Each Debtor acknowledges and agrees that the security interest of the Administrative Agent in the Pledged Collateral constitutes continuing collateral security for all of the Secured Obligations which shall remain in effect until terminated in accordance with Section 22.

4. Representations and Warranties.

In addition to the representations and warranties of the Debtors set forth in the Credit Agreement, which are incorporated herein by this reference, each Debtor represents and warrants to the Administrative Agent and the holders of the Secured Obligations that:

(a) The applicable Debtor is the record legal and beneficial owner of the Pledged Collateral. No other Person, except the Administrative Agent pursuant to this Agreement, has any right, title, claim, or interest (by way of Lien, purchase option or otherwise), other than Permitted Liens of the type described in Sections 7.01(c) and 7.01(h) of the Credit Agreement, in or against or to the Pledged Collateral.

(b) The pledge of the Pledged Collateral pursuant to this Agreement creates in favor of the Administrative Agent, for its benefit and the benefit of the other holders of the Secured Obligations, a legally valid, binding and enforceable (except as enforcement thereof may be limited by applicable Debtor Relief Laws and by general principles of equity), first priority perfected, security interest in the Pledged Collateral, securing the payment of the Secured Obligations, subject only to Permitted Liens of the type described in Sections 7.01(c) and 7.01(h) of the Credit Agreement.

(c) All Pledged Shares have been duly authorized, validly issued and fully paid and are non-assessable (to the extent such concepts are applicable to such Pledged Shares).

(d) Except for (i) the filing or recording of UCC financing statements and amendments thereto, (ii) as may be required in connection with the disposition of Pledged Collateral by laws affecting the offering and sale of securities generally or (iii) those that may have been obtained and remain in full force and effect, no approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority is necessary or required in connection with the enforcement against such Debtor of this Agreement, the exercise by the Administrative Agent of the voting or other rights provided for in this Agreement, or the remedies in respect of the Pledged Collateral pursuant to this Agreement, except as may be required in connection with the disposition of the Pledged Shares by laws affecting the offering and sale of securities generally.

(e) Such Debtor has full power, authority and legal right to pledge the Pledged Collateral pursuant to this Agreement. There are and, to such Debtor’s knowledge, will be, no restrictions on the transferability of any Pledged Collateral transferred or delivered, or previously transferred or delivered, by the Debtor hereunder, to the Administrative Agent or with respect to the foreclosure, transfer or disposition thereof by any Administrative Agent, except (i) as may be required in connection with the disposition of the Pledged Shares by Debtor Relief Laws or laws affecting the offering and sale of securities generally and (ii) notices and filings required by law, the Loan Documents and the Administrative Agent and the Lenders generally in connection with the exercise of remedies pursuant to the Loan Documents.

(f) Such Debtor is in compliance with Sections 3(a) or 3(b), as applicable, with respect to the delivery of all certificates or instruments representing, evidencing or constituting Pledged Collateral. The Pledged Collateral is not and shall not be represented or evidenced by any certificates or instruments other than those delivered hereunder, or if not delivered, as permitted to not yet be delivered hereunder.

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(g) Except as previously disclosed to the Administrative Agent, none of the Pledged Shares (i) are dealt in or traded on a securities exchange or in a securities market, (ii) by their terms expressly provides that they are a Security governed by Article 8 of the UCC, (iii) are an investment company security, (iv) are held in a Securities Account or (v) constitutes a Security or a Financial Asset.

(h) None of the Pledged Shares constitutes “margin stock” (within the meaning of Regulation U issued by the Federal Reserve Bank).

The foregoing representations and warranties shall survive the execution and delivery of this Agreement and shall be deemed remade only as specified by the Credit Agreement.

5. Covenants.

In addition to the covenants of each Debtor set forth in the Credit Agreement, which are incorporated herein by this reference, so long as any Lender shall have any Commitment under the Credit Agreement or any of the Secured Obligations (other than contingent indemnification obligations and all Letters of Credit that remain outstanding that have been Cash Collateralized or with respect to which other arrangements satisfactory to the L/C Issuer have been made) shall remain unpaid or unsatisfied, each Debtor shall:

(a) To the extent permitted by applicable law, such Debtor, for itself and its successors and assigns, does hereby irrevocably waive and release all preemptive, first-refusal and other similar rights of such Debtor to purchase any or all of the Pledged Shares upon any sale thereof by the Administrative Agent hereunder, whether such right to purchase arises under any of such Debtor’s Organization Documents, by agreement, by operation of law or otherwise.

(b) Such Debtor warrants and covenants to defend the Administrative Agent’s security interest in and to the Pledged Collateral against the claims and demands of all other Persons (other than Persons holding Permitted Liens described in Sections 7.01(c) and 7.01(h) of the Credit Agreement), and to appear in and defend any action, suit or proceeding which may affect its title to, or the Administrative Agent’s security interest in, the Pledged Collateral.

(c) Except to the extent permitted by the Credit Agreement, such Debtor agrees that it will not (i) sell, assign, transfer, surrender or otherwise dispose of, or grant any option, warrant or other right or interest with respect to, any of the Pledged Collateral, (ii) create or permit to exist any Lien upon or with respect to any of the Pledged Collateral, except for the Lien created by this Agreement and Permitted Liens described in Sections 7.01(c) and 7.01(h) of the Credit Agreement, or (iii) enter into any shareholder agreement, voting agreement, voting trust, irrevocable proxies or any other similar agreement or instrument with respect to any Pledged Collateral.

(d) Such Debtor will deliver to the Administrative Agent, in its capacity as shareholder in respect of any Pledged Collateral, all reports and notices received by such Debtor that are deemed material in such Debtor’s reasonable discretion.

6. Further Assurances. Each Debtor agrees that at any time and from time to time, at its own cost and expense, it will promptly procure, execute and deliver all further instruments, documents and agreements, and take all further action, that the Administrative Agent may reasonably request, in order to establish, maintain, preserve, protect and perfect in the Pledged Collateral, any security interest granted or purported to be granted hereby and the priority of such security interest, or to enable the Administrative Agent to exercise and enforce its rights and remedies hereunder with respect to any

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Pledged Collateral. Each Debtor hereby authorizes Administrative Agent to file any financing statements consistent with the terms and conditions of this Agreement together with such additions and supplements thereto as Administrative Agent reasonably deems necessary and which must be executed or filed to perfect or continue perfected, maintain the priority of or provide notice of the Administrative Agent’s security interest in the Pledged Collateral and file any such financing statements by electronic means as authorized or required by applicable law or filing procedures. Without limiting the generality of the foregoing, each Debtor further agrees that it shall, concurrently with the execution of this Agreement and at any time and from time to time thereafter (a) procure, execute and deliver to the Administrative Agent all stock powers, endorsements, assignments and other instruments of transfer reasonably requested by Administrative Agent, (b) in accordance with the requirements of Section 3, deliver to the Administrative Agent the originals of all Pledged Shares and all certificates or instruments evidencing the Pledged Collateral, and (c) cause the Lien of the Administrative Agent to be recorded or registered in the books of any Clearing Corporation as may be reasonably requested by the Administrative Agent.

7. Voting Rights; Dividends.

(a) So long as no Event of Default shall then exist or result therefrom (and so long as written notice revoking the applicable Debtor’s rights described in this Section 7 has not been given by the Administrative Agent to the Debtors after and during the continuance of such Event of Default, which written notice shall be given one (1) day before such notice shall be in effect):

(i) Each Debtor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Pledged Shares or any part thereof for any purpose not inconsistent with the terms of this Agreement or the Credit Agreement.

(ii) Each Debtor shall be entitled to receive and retain any and all dividends or distributions paid in respect of its Pledged Shares, in compliance with the terms of the Credit Agreement, except dividends paid or payable other than in cash in respect of, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Shares, all of which shall be, and all of which shall be forthwith delivered to the Administrative Agent to hold as, Pledged Collateral and shall, if received by any Debtor, be received in trust for the benefit of the Administrative Agent, be segregated from the other property of such Debtor, and be forthwith delivered to the Administrative Agent as Pledged Collateral in the same form as so received (with any necessary endorsement and indemnity).

(iii) The Administrative Agent shall execute and deliver (or cause to be executed and delivered) to the applicable Debtor all such proxies and other instruments as such Debtor may request for the purpose of enabling such Debtor to exercise the voting and other rights which it is entitled to exercise pursuant to clause (i) above and to receive the dividends or distributions which it is authorized to receive and retain pursuant to clause (ii) above.

Notwithstanding anything to the contrary contained herein, the Debtor shall be entitled and permitted to retain any tax distributions at any time.

(b) Upon the occurrence and during the continuance of an Event of Default:

(i) All rights of each Debtor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 7(a)(i) above shall cease upon one (1) day’s written notice from the Administrative Agent, and all such rights shall thereupon become vested in the Administrative Agent, for its benefit and the ratable benefit of the holders of the Secured Obligations, who shall thereupon have the sole right to exercise such voting and other consensual rights.

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(ii) All rights of each Debtor to receive the dividends or distributions which it would otherwise be authorized to receive and retain pursuant to Section 7(a)(ii) above shall cease upon one (1) day’s written notice from the Administrative Agent, and all such rights shall thereupon become vested in the Administrative Agent, for its benefit and the ratable benefit of the holders of the Secured Obligations, who shall thereupon have the sole right to receive and hold as Pledged Collateral such dividends.

(iii) All dividends or distributions which are received by any Debtor contrary to the provisions of paragraph (ii) of this Section 7(b) shall be received in trust for the benefit of the Administrative Agent, for its benefit and the ratable benefit of the holders of the Secured Obligations, shall be segregated from other funds of such Debtor and shall be forthwith paid over to the Administrative Agent as Pledged Collateral in the same form as so received (with any necessary endorsement or indemnity).

(iv) In order to permit the Administrative Agent to exercise the voting and other rights which it may be entitled to exercise pursuant to Section 7(b)(i) above, and to receive all dividends and distributions which it may be entitled to receive under Section 7(b)(ii) above, each Debtor shall, if necessary, upon one (1) day’s written notice given by the Administrative Agent, from time to time execute and deliver to the Administrative Agent appropriate proxies, dividend payment orders and other instruments as the Administrative Agent may request.

Notwithstanding anything to the contrary contained herein, the Debtor shall be entitled and permitted to retain any tax distributions at any time.

Anything in the foregoing to the contrary notwithstanding, it is the intention of the parties hereto that record and beneficial ownership of the Pledged Collateral, including all voting, consensual, dividend, and distribution rights, shall remain in the applicable Debtor until (i) the occurrence and continuance of an Event of Default and (ii) Administrative Agent has given one (1) day’s prior written notice to the applicable Debtor of Administrative Agent’s election to exercise such rights with respect to the Pledged Collateral.

8. Authorization; Administrative Agent Appointed Attorney-in-Fact. Upon the occurrence and during the continuance of an Event of Default (and, in the case of any exercise of rights under Section 7, after written notice revoking the applicable Debtor’s rights described in Section 7(a) has been given by the Administrative Agent to the Debtors, which written notice shall be given at least one (1) day before such notice shall be in effect), the Administrative Agent shall have the right to, in the name of any Debtor, or in the name of the Administrative Agent, or otherwise, without notice to or assent by any Debtor, and each Debtor hereby constitutes and appoints the Administrative Agent (and any of the Administrative Agent’s officers, employees or agents designated by the Administrative Agent) as such Debtor’s true and lawful attorney-in-fact, with full power and authority to take any action and execute any and all endorsements, assignments, documents, instruments or UCC financing statements which the Administrative Agent may deem necessary or desirable to accomplish the purposes of this Agreement, including, without limitation, (a) to receive, endorse and collect all instruments made payable to such Debtor representing any dividend, interest payment or other distribution in respect of the Pledged Collateral or any part thereof and to give full discharge for the same, (b) to perfect or continue perfected, maintain the priority of or provide notice of the Administrative Agent’s security interest in the Pledged Collateral or (c) to maintain, protect, sell, assign, convey or otherwise transfer title in or dispose of the Pledged Collateral. The foregoing power of attorney is coupled with an interest and irrevocable so long

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as any Lender shall have any Commitment under the Credit Agreement or any of the Secured Obligations (other than contingent indemnification obligations and all Letters of Credit that remain outstanding have been Cash Collateralized or with respect to which other arrangements satisfactory to the L/C Issuer have been made) shall remain unpaid or unsatisfied. Each Debtor hereby ratifies, to the fullest extent permitted by applicable law, all that the Administrative Agent shall lawfully and in good faith do or cause to be done by virtue of and in compliance with this Section 8. Notwithstanding anything to the contrary contained herein, the Debtor shall be entitled and permitted to retain any tax distributions at any time.

9. Administrative Agent Performance of Debtor’s Obligations. The Administrative Agent may perform or pay any obligation which any Debtor has agreed to perform or pay under or in connection with this Agreement, and each Debtor shall, jointly and severally, reimburse the Administrative Agent in accordance with the Credit Agreement for any amounts paid by the Administrative Agent pursuant to Section 14. Except in cases where prompt action is required to minimize risk of loss, Administrative Agent will give each Debtor two (2) Business Days’ notice before performing or paying a Debtor obligation.

10. No Responsibility for Certain Actions. Notwithstanding any provision contained in this Agreement, and other than as set forth in Section 9-207 of the UCC, neither the Administrative Agent nor any holder of the Secured Obligations shall have responsibility for (a) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Pledged Collateral, whether or not the Administrative Agent or any holder of the Secured Obligations has or is deemed to have knowledge of such matters, or (b) taking any necessary steps to preserve any rights against any parties with respect to any Pledged Collateral. The Administrative Agent shall have no duty with respect to the custody, safekeeping and physical preservation of the Pledged Collateral in its possession other than as set forth in Section 9-207 of the UCC.

11. Remedies In General. Upon the occurrence and during the continuance of an Event of Default (and, in the case of any exercise of rights or remedies under Section 7, after written notice revoking the applicable Debtor’s rights described in Section 7(a) has been given by the Administrative Agent to the Debtors, which written notice shall be given at least one (1) day before such notice shall be in effect):

(a) The Administrative Agent may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for herein or otherwise available to it under the Credit Agreement or any other Loan Document, all the rights and remedies of a secured party under the UCC and other applicable laws, and the Administrative Agent may also, without notice except as specified below, sell the Pledged Shares or any part thereof in one or more parcels at public or private sale, at any exchange, broker’s board or at any of the Administrative Agent’s offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Administrative Agent may deem commercially reasonable. Each Debtor agrees that, to the extent notice of sale shall be required by law, at least ten (10) days’ notice to the Debtors of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Administrative Agent shall not be obligated to make any sale of Pledged Shares regardless of notice of sale having been given. The Administrative Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. To the extent permitted by applicable law, each Debtor hereby waives any claims against the Administrative Agent arising by reason of the fact that the price at which any Pledged Shares may have been sold at such a private sale was less than the price which might have been obtained at a public sale, even if the Administrative Agent accepts the first offer received and does not offer such Pledged Shares to more than one offeree.

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(b) Each Debtor recognizes that, by reason of the aforementioned requirements and certain prohibitions contained in the Securities Act of 1933 and applicable state securities laws, the Administrative Agent may, at its option, elect not to require the Debtors to register the offering or sale of all or any part of the Pledged Shares under the provisions of the Securities Act of 1933 and may therefore be compelled, with respect to any sale of all or any part of the Pledged Shares, to limit purchasers to those who will agree, among other things, to acquire such securities for their own account, for investment, and not with a view to the distribution or resale thereof. Each Debtor acknowledges and agrees that any such sale may result in prices and other terms less favorable to the seller than if such sale were a public sale without such restrictions and notwithstanding such circumstances, agrees that any such sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no obligation to delay the sale of any of the Pledged Shares for the period of time necessary to permit the Debtors to register such securities for public sale under the Securities Act of 1933, or under applicable state securities laws, even if the Debtors would agree to do so.

(c) If the Administrative Agent determines to exercise its right to sell any or all of the Pledged Shares, upon written request, each Debtor shall and shall cause, each of its Subsidiaries to, from time to time, furnish to the Administrative Agent all such information as the Administrative Agent may request in order to determine the number of shares and other instruments included in the Pledged Shares which may be sold by the Administrative Agent as exempt transactions under the Securities Act of 1933 and rules of the commission thereunder, as the same are from time to time in effect.

(d) In connection with any disposition of the Pledged Shares, if the Administrative Agent elects to obtain the advice of an investment banking firm, such firm shall be selected by the Debtors from among three nationally known investment banking firms which are member firms of the New York Stock Exchange, which three firms shall be proposed by the Administrative Agent to the Debtors. Such selection by the Debtors shall be made within five (5) Business Days after receipt by the Debtors of the names of the firms proposed by the Administrative Agent. In the absence of such selection by the Debtors within such period, the Administrative Agent may select any one of such firms. The Debtors agree that the sale or other disposition of all or any part of the Pledged Shares in reliance on the advice of the investment banking firm so selected shall be deemed to be commercially reasonable under the UCC and otherwise proper.

(e) The Debtors shall, jointly and severally, indemnify and hold harmless the Administrative Agent, the Lenders and any underwriter or financial advisor to the Administrative Agent or the Lenders (and the officers, directors, shareholders, employees, attorneys, and agents of each of them), from and against any and all loss, liability, claim, damage and expense (including, without limitation, attorney costs) under the Securities Act of 1933, any “Blue Sky” law or otherwise insofar as such loss, liability, claim, damage or expense arises out of or is based upon any untrue statement or alleged untrue statements of a material fact contained in a registration statement or prospectus or on any preliminary prospectus or any amendment or supplement thereto, or arises out of or is based upon any omission or alleged omission to state therein a material fact required to be stated or necessary to make the statements therein not misleading, such indemnification to remain operative regardless of any investigation made by or on behalf of the Administrative Agent, the Lenders or any underwriter or financial advisor or any other person or entity indemnified hereunder. This indemnification does not apply to losses, claims, damages, liabilities or expenses that are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information furnished in writing to the issuer of such Pledged Shares by the Administrative Agent or on the Administrative Agent’s behalf expressly for use therein.

(f) Any and all expenses which may be charged to or for the account of Administrative Agent or the Lenders hereunder, including brokers’ or underwriters’ commissions or discounts, financial advisory fees, accounting fees, attorney costs, costs of printing and other expenses of offering, sale, or transfer shall be reimbursed by or charged to the Debtors pursuant to the terms of Section 14.

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(g) Any cash held by the Administrative Agent as Pledged Collateral and all cash proceeds received by the Administrative Agent in respect of any sale of, collection from, or other realization upon all or any part of the Pledged Shares shall be applied by the Administrative Agent as specified in the Credit Agreement.

(i) Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 10.02 of the Credit Agreement.

(ii) Amendments, Etc. No amendment or waiver of any provision of this Agreement, and no consent to any departure by any Debtor therefrom, shall be effective unless in writing signed by the Administrative Agent and the Debtors, subject to any consent required in accordance with Section 10.01 of the Credit Agreement, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit under the Credit Agreement shall not be construed as a waiver of any Default under the Credit Agreement.

12. Cumulative Remedies. The rights, powers and remedies of the Administrative Agent under this Agreement are cumulative and shall be in addition to all rights, powers and remedies available to the Administrative Agent and the holders of the Secured Obligations pursuant to the Credit Agreement, the other Loan Documents and at law or in equity, all of which rights, powers and remedies shall be cumulative and may be exercised successively or concurrently without impairing the Administrative Agent’s rights hereunder.

13. Certain Waivers. Each Debtor waives, to the fullest extent permitted by law, any right to require the Administrative Agent or the holders of the Secured Obligations (i) to proceed against any Person, (ii) to exhaust any other collateral or security for any of the Secured Obligations, (iii) to pursue any remedy in the Administrative Agent’s or any of the holders’ of the Secured Obligations power, or (iv) to make or give any presentments, demands for performance, notices of nonperformance, protests, notices of protests or notices of dishonor in connection with any of the Pledged Collateral.

14. Costs and Expenses; Indemnification; Other Charges. The terms of Section 10.04 of the Credit Agreement with respect to costs and expenses and indemnification are incorporated herein by reference, mutatis mutandis, and the parties hereto agree to such terms.

15. Binding Effect; Transferability; No Third-Party Beneficiaries. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and assigns, except that, other than with respect to any assignment or transfer made pursuant to Section 7.04 of the Credit Agreement, no Debtor may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and the Required Lenders (and any attempted assignment or transfer by any Debtor without such consent shall be null and void). Each Debtor acknowledges that upon any assignment or other transfer by the Administrative Agent or any other holder of the Secured Obligations of any of the Secured Obligations, the Administrative Agent or such holder of the Secured Obligations may transfer its interest herein, or any part thereof, to the assignee or transferee, who shall thereupon become vested with all the rights, remedies, powers, security interests and liens herein granted to the Administrative Agent or such holder of the Secured Obligations, or the transferred part thereof, subject, however, to the restrictions contained

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in the Credit Agreement. No Persons other than the Debtors, the holder of the Secured Obligations, the Administrative Agent and the respective assignees of the holder of the Secured Obligations and the Administrative Agent are intended to be benefited hereby or shall have any rights hereunder, as third-party beneficiaries or otherwise.

16. Governing Law; Jurisdiction; Etc.

(a) GOVERNING LAW. THIS AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS HEREUNDER, OR THE REMEDIES HEREUNDER, IN RESPECT OF ANY PLEDGED COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN NEW YORK; PROVIDED THAT THE ADMINISTRATIVE AGENT AND THE HOLDERS OF SECURED OBLIGATIONS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

(b) SUBMISSION TO JURISDICTION. EACH DEBTOR AND THE ADMINISTRATIVE AGENT IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY DEBTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. THE DEBTOR IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK.

(c) WAIVER OF VENUE. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION 16. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

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17. Integration. This Agreement, together with the other Loan Documents, comprises the complete, final and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter.

18. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

19. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

20. Incorporation of Provisions of the Credit Agreement. To the extent the Credit Agreement contains provisions of general applicability to the Loan Documents, including any such provisions contained in Article X thereof, such provisions are incorporated herein by this reference.

21. No Inconsistent Requirements. Each Debtor acknowledges that this Agreement and the other Loan Documents may contain covenants and other terms and provisions variously stated regarding the same or similar matters, and agrees that all such covenants, terms and provisions are cumulative and all shall be performed and satisfied in accordance with their respective terms.

22. Continuing Security Interest; Termination. This Agreement shall create a continuing security interest in the Pledged Collateral and shall apply to all past, present and future Secured Obligations, including Secured Obligations that arise under transactions that continue any Secured Obligation, increase or decrease any Secured Obligation, or from time to time create new Secured Obligations after all or any prior Secured Obligations have been satisfied. This Agreement and the security interest shall terminate when all of the Obligations (as defined in the Credit Agreement) shall have been paid in full (other than contingent indemnification obligations) in accordance with the terms of the Credit Agreement, the Aggregate Commitments have been terminated and all Letters of Credit that remain outstanding have been Cash Collateralized or with respect to which other arrangements satisfactory to the L/C Issuer have been made; provided, however, that the obligations of the Debtors under Sections 11(f) and 14 shall survive such termination. In addition, (x) in the event that any Subsidiary ceases to be a Subsidiary of a Debtor (including another Debtor) as a result of a transaction permitted by the Credit Agreement, then such Subsidiary shall automatically be fully and finally released from its obligations hereunder without any further action of the Administrative Agent, the Lenders, or the L/C Issuer, and (y) the security interest and Liens granted herein shall be deemed to be released automatically without any further action of the Administrative Agent, the Lenders, or the L/C Issuer as to any Pledged Collateral upon the sale, transfer or other disposition of such Pledged Collateral to a Person that is not a Debtor pursuant to a Disposition permitted by the Credit Agreement or any other Loan Document, and in each instance, the Administrative Agent shall promptly upon written request from (and at the expense of) the Borrower take all necessary action to document the full and final release of such Debtor or Pledged Collateral, as applicable, under this Agreement.

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23. Joinder. At any time after the date of this Agreement, one or more additional Persons may become party hereto by executing and delivering to Administrative Agent a joinder agreement, in form and substance reasonably satisfactory to Administrative Agent. Immediately upon such execution and delivery of such joinder agreement (and without any further action), each such additional Person will become a party to this Agreement as a “Debtor” and have all of the rights and obligations of a Debtor hereunder and this Agreement shall be deemed amended by such joinder agreement.

24. Rights of Required Lenders. All rights of the Administrative Agent hereunder, if not exercised by the Administrative Agent, may be exercised by the Required Lenders.

25. Consent of Issuers of Pledged Shares. Each issuer of Pledged Shares party to this Agreement hereby acknowledges, consents and agrees to the grant of the security interests in such Pledged Shares by the applicable Debtors pursuant to this Agreement, together with all rights accompanying such security interest as provided by this Agreement and applicable law, notwithstanding any anti-assignment provisions in any operating agreement, limited partnership agreement or similar organizational or governance documents of such issuer.

26. Effect of Amendment and Restatement. Upon the effectiveness hereof, this Agreement amends and restates in its entirety as of the Closing Date the Existing Pledge Agreement. The security interests granted by each Debtor to Administrative Agent in the Pledged Collateral under the Existing Pledge Agreement continue (as modified hereby) without interruption under this Agreement to secure the Secured Obligations.

27. Keepwell. Each Debtor that is a Qualified ECP Guarantor at the time any Guarantee of the Obligations by any Debtor that is not then an “eligible contract participant” under the Commodity Exchange Act (a “Specified Loan Party”) or the grant of a security interest under the Loan Documents by any such Specified Loan Party, in either case, becomes effective with respect to any Swap Obligation, hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide such funds or other support to each Specified Loan Party with respect to such Swap Obligation as may be needed by such Specified Loan Party from time to time to honor all of its obligations under the Loan Documents in respect of such Swap Obligation (but, in each case, only up to the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP Guarantor’s obligations and undertakings under such Guarantee voidable under applicable Debtor Relief Laws, and not for any greater amount). The obligations and undertakings of each Qualified ECP Guarantor under this Section 27 shall remain in full force and effect until the Obligations have been indefeasibly paid and performed in full. Each Debtor intends this Section 27 to constitute, and this Section 27 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each Specified Loan Party for all purposes of the Commodity Exchange Act.

28. Intercreditor Agreements. This Agreement (and the security interest in the Common Collateral (as defined in the applicable Intercreditor Agreement) granted hereunder) is subject to any Intercreditor Agreement from time to time in effect. In the event of any conflict between the terms of this Agreement and the any Intercreditor Agreement with respect to any Common Collateral, the terms of such Intercreditor Agreement shall control. So long as any Person is acting as bailee and as agent for perfection on behalf of the Administrative Agent pursuant to the terms of any Intercreditor Agreement, any obligation of any Debtor in this Agreement that requires delivery of Common Collateral to, or the possession or control of Common Collateral with, the Administrative Agent shall be deemed complied with and satisfied if such delivery of Common Collateral is made to, or such possession or control of Common Collateral is with, such Person on same terms this Agreement would have otherwise required rendering of performance to the Administrative Agent.

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29. Term Debt Priority. Notwithstanding anything in this Agreement or any other Loan Document to the contrary notwithstanding, any reference made to a first priority perfected Lien or security interest in any Loan Document (excluding any Intercreditor Agreement) shall be deemed to include any Pledged Collateral that is subject to security interests in favor of both the holders of the Obligations and the holders of the Term Debt and, pursuant to an Intercreditor Agreement, such creditors have agreed that their respective security interests in such common Pledged Collateral shall have equal priority.

[SIGNATURES SET FORTH ON THE FOLLOWING PAGE]

14

IN WITNESS WHEREOF, the Debtors have executed this Agreement as of the day and year first above written.

THE GREENBRIER COMPANIES, INC.
By	/s/ Justin Roberts
Name: Justin Roberts
Title: Vice President, Corporate Finance and Treasurer
GREENBRIER-CONCARRIL, LLC
GREENBRIER LEASING COMPANY LLC
GREENBRIER RAIL SERVICES HOLDINGS, LLC
GREENBRIER RAILCAR LEASING, INC.
GUNDERSON LLC
GUNDERSON MARINE LLC
GUNDERSON RAIL SERVICES LLC
MERIDIAN RAIL ACQUISITION CORP.
MERIDIAN RAIL HOLDINGS CORP.
By:	/s/ Justin Roberts
Name: Justin Roberts
Title: Vice President
GREENBRIER MANAGEMENT SERVICES, LLC
By: GREENBRIER LEASING COMPANY LLC
Its: Sole Member
By:	/s/ Justin Roberts
Name: Justin Roberts
Title: Vice President
GUNDERSON SPECIALTY PRODUCTS, LLC
By: GUNDERSON LLC
Its: Sole Member
By:	/s/ Justin Roberts
Name: Justin Roberts
Title: Vice President

FOURTH AMENDED AND RESTATED PLEDGE AGREEMENT

THE GREENBRIER COMPANIES, INC.

Agreed and Accepted:
BANK OF AMERICA, N.A., as Administrative Agent
By:	/s/ Anthea Del Bianco
Name: Anthea Del Bianco
Title:	Vice President

FOURTH AMENDED AND RESTATED PLEDGE AGREEMENT

THE GREENBRIER COMPANIES, INC.

EX-10.31

Exhibit 10.31

CUSIP NO. 39366XAG8 (deal)

39366XAH6 (term loan)

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of September 26, 2018

among

GREENBRIER LEASING COMPANY LLC,

as the Borrower,

BANK OF AMERICA, N.A.,

as Administrative Agent,

and

The Other Lenders Party Hereto

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

as Sole Lead Arranger and Sole Bookrunner,

and

MUFG UNION BANK, N.A.,

as Syndication Agent

TABLE OF CONTENTS

Section		Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS			1
1.01	Defined Terms		1
1.02	Other Interpretive Provisions		22
1.03	Accounting Terms		23
1.04	Times of Day		24
ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS			24
2.01	Term Loan		24
2.02	Borrowings, Conversions and Continuations		24
2.03	[INTENTIONALLY OMITTED]		25
2.04	[INTENTIONALLY OMITTED]		25
2.05	Security		25
2.06	Prepayments		26
2.07	[INTENTIONALLY OMITTED]		27
2.08	Repayment of Loans		27
2.09	Interest		27
2.10	Fees		28
2.11	Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate		28
2.12	Evidence of Debt		28
2.13	Payments Generally; Administrative Agent’s Clawback		29
2.14	Sharing of Payments by Lenders		30
2.15	Increase to Term Loan		31
2.16	Defaulting Lenders		32
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY			33
3.01	Taxes		33
3.02	Illegality		37
3.03	Inability to Determine Rates		38
3.04	Increased Costs		38
3.05	Compensation for Losses		40
3.06	Mitigation Obligations; Replacement of Lenders		40
3.07	Successor LIBOR		41
3.08	Survival		42
ARTICLE IV CONDITIONS PRECEDENT			42
ARTICLE V REPRESENTATIONS AND WARRANTIES			44
5.01	Existence, Qualification and Power; Compliance with Laws		44
5.02	Authorization; No Contravention		44
5.03	Governmental Authorization; Other Consents		44
5.04	Binding Effect		45
5.05	Financial Statements; No Material Adverse Effect		45
5.06	Litigation		45
5.07	No Default		45
5.08	Ownership of Property; Liens		45
5.09	Environmental Compliance		46
5.10	Insurance		46
5.11	Taxes		46

5.12	ERISA Compliance	46
5.13	Subsidiaries; Equity Interests	47
5.14	Margin Regulations; Investment Company Act	47
5.15	Disclosure	47
5.16	Compliance with Laws	48
5.17	Intellectual Property; Licenses, Etc.	48
5.18	OFAC	48
5.19	No EEA Financial Institution	48
ARTICLE VI AFFIRMATIVE COVENANTS		48
6.01	Financial Statements	49
6.02	Certificates; Other Information	49
6.03	Notices	51
6.04	Payment of Tax Obligations	52
6.05	Preservation of Existence, Etc.	52
6.06	Maintenance of Properties	52
6.07	Maintenance of Insurance	52
6.08	Compliance with Laws	53
6.09	Books and Records	53
6.10	Inspection Rights	53
6.11	Use of Proceeds	54
6.12	Pledged Railcars	54
6.13	Pledged Assets	54
6.14	Anti-Corruption Laws	55
ARTICLE VII NEGATIVE COVENANTS		55
7.01	Liens	55
7.02	Investments	58
7.03	Indebtedness	59
7.04	Fundamental Changes	61
7.05	Dispositions	62
7.06	Change in Nature of Business	63
7.07	Transactions with Affiliates	63
7.08	Burdensome Agreements	64
7.09	Use of Proceeds	65
7.10	Financial Covenants	65
7.11	Sanctions; Anti-Corruption Laws	65
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES		66
8.01	Events of Default	66
8.02	Remedies Upon Event of Default	68
8.03	Application of Funds	68
ARTICLE IX ADMINISTRATIVE AGENT		69
9.01	Appointment and Authority	69
9.02	Rights as a Lender	70
9.03	Exculpatory Provisions	70
9.04	Reliance by Administrative Agent	71
9.05	Delegation of Duties	71
9.06	Resignation of Administrative Agent	71
9.07	Non-Reliance on Administrative Agent and Other Lenders	73

ii

9.08	No Other Duties, Etc.	73
9.09	Administrative Agent May File Proofs of Claim; Credit Bidding	73
9.10	Collateral	74
9.11	Secured Hedge Agreements	75
9.12	ERISA Matters	75
ARTICLE X MISCELLANEOUS		76
10.01	Amendments, Etc.	76
10.02	Notices; Effectiveness; Electronic Communication	78
10.03	No Waiver; Cumulative Remedies; Enforcement	79
10.04	Expenses; Indemnity; Damage Waiver	80
10.05	Payments Set Aside	82
10.06	Successors and Assigns	82
10.07	Treatment of Certain Information; Confidentiality	86
10.08	Right of Setoff	87
10.09	Interest Rate Limitation	87
10.10	Counterparts; Integration; Effectiveness	88
10.11	Survival of Representations and Warranties	88
10.12	Severability	88
10.13	Replacement of Lenders	88
10.14	Governing Law; Jurisdiction; Etc.	89
10.15	Waiver of Jury Trial	90
10.16	USA PATRIOT Act Notice	91
10.17	Statutory Notice	91
10.18	No Advisory or Fiduciary Responsibility	91
10.19	Electronic Execution of Assignments and Certain Other Documents	92
10.20	Acknowledgement and Consent to Bail-In of EEA Financial Institutions	92

iii

SCHEDULES

1.01	Pledged Railcars
2.01	Commitments and Applicable Percentages
5.03	Governmental Authorizations; Other Consents
5.10	Insurance
5.13	Subsidiaries and Other Equity Investments
7.01	Existing Liens
7.02	Existing Investments
7.03	Existing Indebtedness
7.08	Burdensome Agreements
10.02	Administrative Agent’s Office; Certain Addresses for Notices

EXHIBITS

	Form of
1.01	Form of Secured Party Designation Notice
2.02	Loan Notice
2.06	Notice of Prepayment
2.12	Note
3.01	U.S. Tax Compliance Certificates
6.02(a)	Borrowing Base Certificate
6.02(b)	Compliance Certificate
10.06	Assignment and Assumption

iv

AMENDED AND RESTATED CREDIT AGREEMENT

This AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”) is entered into as of September 26, 2018, among GREENBRIER LEASING COMPANY LLC, an Oregon limited liability company (the “Borrower”), each Lender (defined herein) from time to time a party hereto and BANK OF AMERICA, N.A., as Administrative Agent.

INTRODUCTORY STATEMENT

The Borrower is a party to a certain Credit Agreement dated as of March 20, 2014 with certain Lenders and Bank of America, N.A., as administrative agent for such Lenders (as amended, supplemented or otherwise modified from time to time until (but not including) the date of this Agreement, the “Existing Credit Agreement”).

The parties to this Agreement desire to amend and restate the Existing Credit Agreement.

The Lenders are willing to do so on the terms and conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms.

As used in this Agreement, the following terms shall have the meanings set forth below:

“Administrative Agent” means Bank of America, acting as administrative agent under any of the Loan Documents, or any successor administrative agent.

“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02 or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Agreement” means this Amended and Restated Credit Agreement.

“Applicable Percentage” means with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the outstanding principal amount of the Term Loan held by such Lender at such time. The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption (or other document contemplated by this Agreement) pursuant to which such Lender becomes a party hereto, as applicable.

“Applicable Rate” means, from time to time, the following percentages per annum, based upon the Consolidated Capitalization Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(b):

Applicable Rate
Pricing Level	Consolidated Capitalization Ratio	Eurocurrency Rate Loans	Base Rate Loans
1	Greater than 0.40 to 1.0	1.75%	0.75%
2	Greater than 0.20 to 1.0 and less than or equal to 0.40 to 1.0	1.50%	0.50%
3	Less than or equal to 0.20 to 1.0	1.25%	0.25%

Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Capitalization Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b); provided, however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then upon request of the Required Lenders, Pricing Level 1 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and Pricing Level 1 shall remain in effect until the first Business Day immediately following the date on which such Compliance Certificate has been delivered pursuant to Section 6.02(b). The Applicable Rate in effect from the Closing Date through delivery of the Compliance Certificate for the fiscal year ending on August 31, 2018 shall be determined based upon Pricing Level 2.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Arranger” means Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any other registered broker-dealer wholly-owned by Bank of America Corporation to which all or substantially all of Bank of America Corporation’s or any of its subsidiaries’ investment banking, commercial lending services or related businesses may be transferred following the date of this Agreement), in its capacity as sole lead arranger and sole bookrunner.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit 10.06 or any other form (including electronic documentation generated by use of an electronic platform) approved by the Administrative Agent.

“Attributable Indebtedness” means, on any date, (a) in respect of any capital lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, in each case (a) and (b) if such lease were accounted for as a capital lease.

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“Audited Financial Statements” means the audited consolidated balance sheet of the Parent and its Subsidiaries for the fiscal year ended August 31, 2017, and the related consolidated statements of income or operations, stockholders’ equity and cash flows for such fiscal year of the Parent and its Subsidiaries, including the notes thereto.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

“Bank of America” means Bank of America, N.A. and its successors.

“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (i) the Federal Funds Rate plus  ¹⁄₂ of 1%, (ii) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate” and (iii) the Eurocurrency Rate plus 1.0%; provided that if the Base Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement. The “prime rate” is a rate set by Bank of America based upon various factors including its costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such “prime rate” announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

“Borrower” has the meaning specified in the introductory paragraph hereto.

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type and, in the case of Eurocurrency Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01.

“Borrowing Base” means, as of any date of determination, an amount equal to the net book value of the Pledged Railcars on the books of the Borrower as of such date.

“Borrowing Base Certificate” means a certificate in a form attached as Exhibit 6.02(a) or other form reasonably acceptable to the Administrative Agent, which calculates the Borrowing Base as of any date of determination.

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“Borrowing Base Ratio” means, as of any date of determination, the ratio of (a) the outstanding principal amount of the Term Loan as of such date minus the amount of all Cash Collateral as of such date to (b) the Borrowing Base in effect for such date.

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and if such day relates to any Eurocurrency Rate Loan, means any such day on which dealings in deposits in Dollars are conducted by and between banks in the London interbank eurodollar market.

“Cash Collateral” means cash that has been deposited in a deposit account maintained at Bank of America and is subject to a first-priority perfected security interest in favor of the Administrative Agent.

“Change in Law” means the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any Law, (b) any change in any Law or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of Law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Change of Control” means an event or series of events by which:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all Equity Interests that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 35% or more of the Equity Interests of the Parent entitled to vote for members of the board of directors or equivalent governing body of the Parent on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right);

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

(c) the failure of the Parent to own and control (directly or indirectly) at least 75% of the outstanding Equity Interests of the Borrower.

4

“Closing Date” means September 26, 2018.

“Code” means the Internal Revenue Code of 1986.

“Collateral” means any and all assets and rights and interests in or to property of the Borrower, whether tangible or intangible, in which a Lien is granted or purported to be granted pursuant to the Loan Documents to secure any of the Obligations.

“Collateral Documents” means a collective reference to the Security Agreement and the other security documents as may be executed and delivered by the Borrower pursuant to the terms of Section 6.13.

“Commitment” means, as to each Lender, its obligation to make its portion of the Term Loan to the Borrower on the Closing Date pursuant to Section 2.01, in an aggregate principal amount set forth opposite such Lender’s name on Schedule 2.01.

“Compliance Certificate” means a certificate substantially in the form of Exhibit 6.02(b).

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Consolidated Adjusted Interest Coverage Ratio” means as of any date of determination, the ratio of (a) Consolidated EBITDA plus rent expense for the period of the four prior fiscal quarters ending on such date to (b) Consolidated Interest Charges (excluding (i) any non-cash impact associated with any equity or equity-linked securities and (ii) any prepayment premiums or penalties associated with the voluntary prepayment or redemption of Indebtedness permitted under Section 7.03 paid in cash by the Borrower or any of its Subsidiaries) plus rent expense for such period. Solely for purposes of this definition, “rent expense” shall include operating lease expense. Notwithstanding the foregoing, the aggregate amount of prepayment premiums excluded from Consolidated Interest Charges pursuant to the parenthetical in clause (b) of the preceding sentence, together with the aggregate amount of consent fees added back to Consolidated Net Income for purposes of calculating Consolidated EBITDA pursuant to clause (a)(vi) of such definition, shall not exceed 3% of the outstanding principal amount of the applicable Indebtedness permitted under Section 7.03 so prepaid or redeemed. In addition, solely for purposes of this definition and in the sole discretion of the Borrower, Consolidated EBITDA and Consolidated Interest Charges shall include pro-forma adjustments to incorporate the financial results of any entity acquired during the subject period by the Borrower or its Subsidiaries.

“Consolidated Capitalization Ratio” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated Funded Indebtedness plus Stockholders’ Equity as of such date.

“Consolidated EBITDA” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income for such period plus (a) the following to the extent deducted (except in the case of clause (vii)) in calculating such Consolidated Net Income: (i) Consolidated Interest Charges for such period, (ii) income tax expense or benefit (net of income tax credits) as reported on the consolidated statement of operations of the Borrower and its Subsidiaries for such period, (iii) depreciation and amortization expense, (iv) other extraordinary, unusual or non-recurring charges, expenses or losses of the Borrower and its Subsidiaries reducing such Consolidated Net Income which do not represent a cash item in such period or any future period, (v) non-cash stock compensation expenses for such period which do not represent a cash item in such period or any future period, (vi) consent fees (excluding fees to waive existing defaults) paid to holders of Indebtedness

5

permitted under Section 7.03, (vii) to the extent not already included in Consolidated EBITDA, (A) any costs (including fees and expenses) incurred to the extent indemnified or otherwise covered by a third party (to the extent received by the Borrower during such period), (B) any costs incurred with respect to liability or casualty events, to the extent covered by insurance and received during such period, and (C) proceeds of business interruption insurance received by the Borrower or any of its Subsidiaries, (viii) costs, fees, expenses, charges and any one-time payments made related to (A) the Borrower’s negotiation and entry into the Loan Documents or (B) any Permitted Acquisition or any debt or equity offering (whether or not consummated) and (ix) all unrealized non-cash losses under interest rate Swap Contracts during such period and minus (b) to the extent included in calculating such Consolidated Net Income, (i) extraordinary, unusual or non-recurring income or gains of the Borrower and its Subsidiaries increasing such Consolidated Net Income which does not represent a cash item in such period or any future period and (ii) all unrealized non-cash gains under interest rate Swap Contracts during such period. Notwithstanding the foregoing, the aggregate amount of consent fees added back to Consolidated Net Income for purposes of calculating Consolidated EBITDA pursuant to clause (a)(vi) of the preceding sentence, together with the aggregate amount of prepayment premiums excluded from Consolidated Interest Charges pursuant to the parenthetical in clause (b) of the first sentence of the definition of Consolidated Adjusted Interest Coverage Ratio, shall not exceed 3% of the outstanding principal amount of the applicable Indebtedness permitted under Section 7.03 so repaid or the holders of which have been so compensated. For purposes of clarification, gains or losses on purchases or sales of equipment in the ordinary course of the Borrower’s and its Subsidiaries’ business shall not constitute non-recurring income or expenses for purposes of determining Consolidated EBITDA.

“Consolidated Funded Indebtedness” means, as of any date of determination with respect to the Borrower and its Subsidiaries on a consolidated basis, without duplication, the sum of: (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments; (b) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business, advisory fees and any earn-out obligation until such earn-out obligation is required to become a liability on the balance sheet of such Person in accordance with GAAP); (c) Indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including Indebtedness arising under conditional sales or other title retention agreements), whether or not such Indebtedness shall have been assumed by such Person or is limited in recourse; provided, however, that if such Indebtedness is limited in recourse to the property encumbered thereby, such Indebtedness shall be deemed to be equal to the lesser of the (i) fair market value of such asset at such date of determination and (ii) the amount of such Indebtedness; (d) capital leases and Synthetic Lease Obligations; (e) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Disqualified Equity Interest in such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; (f) all Guarantees with respect to Indebtedness of the types specified in clauses (a) through (e) above of another Person; and (g) all Indebtedness of the types referred to in clauses (a) through (f) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which the Borrower or any Subsidiary is a general partner or joint venturer, except to the extent that Indebtedness is expressly made non-recourse to such Person. Notwithstanding the foregoing, for so long as neither the Borrower nor any of its Subsidiaries is designated as a “borrower” or an “issuer” under the Parent Credit Facility, all Indebtedness and other obligations (whether consisting of guarantees or otherwise) in respect of the Parent Credit Facility shall be excluded from the definition of Consolidated Funded Indebtedness.

6

“Consolidated Interest Charges” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all interest, premium payments, debt discount, fees (other than fees that are capitalized and amortized over the life of a loan), prepayment fees, Swap Contract expenses or breakage fees, charges and related expenses of the Borrower and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, and (b) the portion of rent expense of the Borrower and its Subsidiaries with respect to such period under capital leases that is treated as interest in accordance with GAAP.

“Consolidated Net Income” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the net income of the Borrower and its Subsidiaries (excluding extraordinary items) for that period; provided, however, that, without duplication, Consolidated Net Income shall be calculated without giving effect to (a) the cumulative effect of a change in accounting principles, (b) any write-off of deferred financing costs incurred as a result of the refinancing of Indebtedness, (c) purchase accounting adjustments required or permitted by GAAP, (d) any non-cash net after-tax income or loss from operating results of discontinued operations as determined by GAAP, and any after-tax gains or losses from sales of discontinued operations, (e) any non-cash impairment, charges or asset write-downs or write-offs (other than write-downs or write-offs of current assets), and (f) the net income (or loss) for such period of any Person that is not a Subsidiary; provided that Consolidated Net Income of the Borrower and its Subsidiaries shall be increased by the amount of dividends, distributions and other payments based on equity ownership that are actually paid in cash to the Borrower or a Subsidiary in respect of such period, in each case pursuant to GAAP.

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Credit Extension” means a Borrowing.

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

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

“Default Rate” means an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided, however, that with respect to a Eurocurrency Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum.

“Defaulting Lender” means, subject to Section 2.16(b), any Lender that (a) has failed to (i) fund all or any portion of the Term Loan within two Business Days of the date the Term Loan was required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s reasonable determination (in good faith) that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within two Business Days of the date when due, (b) has notified the Borrower or the Administrative Agent in

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writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s reasonable determination (in good faith) that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in a writing reasonably satisfactory to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.16(b)) as of the date established therefor by the Administrative Agent in a written notice of such determination, which shall be delivered by the Administrative Agent to the Borrower and each other Lender promptly following such determination.

“Designated Jurisdiction” means any country or territory to the extent that such country or territory itself is the subject of any Sanction.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith. For purposes of clarification, the use of cash, cash equivalents or money in the ordinary course of business or in a manner not otherwise expressly prohibited by the terms of this Agreement, in each case, shall not constitute a “Disposition” or to “Dispose” under this Agreement.

“Disqualified Equity Interest” means any Equity Interest of any Person that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder thereof) or upon the happening of any event (a) matures (excluding any maturity as the result of an optional redemption by the issuer thereof or upon a “change of control” (as defined therein) or an asset sale, so long as any rights of the holders thereof upon the occurrence of such “change in control” or asset sale are subject to the prior payment in full in cash of the Obligations (other than contingent indemnification obligations) and the termination of this Agreement) or is mandatorily redeemable in cash pursuant to a sinking fund obligation or otherwise, (b) is redeemable in cash at the option of the holder thereof (unless at the sole option of the issuer thereof or upon a “change of control” (as defined therein) or an asset sale, so long as any rights of the holders thereof upon the occurrence of such “change in control” or asset sale are subject to the prior payment in full in cash of the Obligations (other than contingent indemnification obligations) and the termination of this Agreement), or (c) requires or mandates the purchase, redemption, retirement, defeasance or other similar payment (other than dividends) for cash (other than in connection with or upon a “change of control” (as defined therein) or an asset sale, so long as any rights of the holders thereof upon the occurrence of such “change in control” or asset sale are subject to the prior payment in full in cash of the Obligations (other than contingent indemnification obligations) and the termination of this Agreement), in each case, on or prior to the date that is 91 days after the Maturity Date.

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“Dollar” and “$” mean lawful money of the United States.

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States.

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a Subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Sections 10.06(b)(iii) and (v) (subject to such consents, if any, as may be required under Section 10.06(b)(iii)).

“Environmental Laws” means any and all United States federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the Release or threatened Release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any of its Subsidiaries directly or indirectly resulting from or based upon (a) violation by the Borrower or any Subsidiary of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal by the Borrower or any Subsidiary of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release by the Borrower or any Subsidiary of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Equity Interests” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of, or interest in, (however designated) equity of such Person, including any preferred stock, but excluding any debt security that is convertible into, or exchangeable for Equity Interests.

“ERISA” means the Employee Retirement Income Security Act of 1974.

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“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

“Eurocurrency Rate” means:

(a) for any Interest Period with respect to a Eurocurrency Rate Loan, (i) the rate per annum equal to the London Interbank Offered Rate (“LIBOR”) or a comparable or successor rate, which comparable or successor rate is approved by the Administrative Agent, as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time)(in such case, the “LIBOR Rate”) at approximately 11:00 a.m., London time, determined two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period; and

(b) for any interest rate calculation with respect to a Base Rate Loan on any date, the rate per annum equal to LIBOR at approximately 11:00 a.m., London time, determined two Business Days prior to such date for Dollar deposits with a term of one month commencing that day; provided that to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied in a manner consistent with market practice; provided, further that to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied as otherwise reasonably determined by the Administrative Agent.

Notwithstanding the foregoing, if the Eurocurrency Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.

“Eurocurrency Rate Loan” means a Loan that bears interest at a rate based on clause (a) of the definition of “Eurocurrency Rate”.

“Event of Default” has the meaning specified in Section 8.01.

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“Excluded Taxes” means any of the following Taxes imposed on or with respect to any Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the Laws of, or having its principal office or, in the case of any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a Law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 10.13) or (ii) such Lender changes its Lending Office, except in each case to the extent that, pursuant to Section 3.01(a)(ii), 3.01(a)(iii) or 3.01(c), amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such Recipient’s failure to comply with Section 3.01(e) and (d) any U.S. federal withholding Taxes imposed pursuant to FATCA.

“Existing Credit Agreement” has the meaning specified in the Introductory Statement hereto.

“FATCA” means Sections 1471 through 1474 of the Code, as of the Closing Date (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any applicable intergovernmental agreements.

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight United States federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent, and (c) if the Federal Funds Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.

“Fee Letter” means the letter agreement, dated as of the Closing Date, among the Borrower, the Administrative Agent and the Arranger.

“Foreign Lender” means any Lender that is not a U.S. Person.

“Foreign Subsidiary” means any Subsidiary other than a Domestic Subsidiary.

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

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“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Guarantee” means, as to any Person, any (a) any Contractual Obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“Hedge Bank” means, with respect to any Swap Contract, any Person that (i) at the time it enters into such Swap Contract, is a Lender or the Administrative Agent or an Affiliate of a Lender or the Administrative Agent, (ii) in the case of any such Swap Contract in effect on or prior to the Closing Date, is, as of the Closing Date or within 30 days thereafter, a Lender or the Administrative Agent or an Affiliate of a Lender or the Administrative Agent and a party to a Swap Contract or (iii) within 30 days after the time it enters into such Swap Contract, becomes a Lender, the Administrative Agent or an Affiliate of a Lender or the Administrative Agent, in each case, in its capacity as a party to such Swap Contract; provided, in the case of a Secured Hedge Agreement with a Person who is no longer a Lender (or Affiliate of a Lender), such Person shall be considered a Hedge Bank only through the stated termination date (without extension or renewal) of such Secured Hedge Agreement.

“Immaterial Subsidiary” means, as of any date, any Subsidiary (a) whose total assets, as of that date, are less than $5,000,000 and (b) whose total revenues for the most recent twelve-month period do not exceed $5,000,000. Notwithstanding the foregoing, in no event shall any Subsidiary that Guarantees the Parent’s obligations under the Parent Credit Facility be an “Immaterial Subsidiary” for purposes of the Loan Documents.

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

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(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank Guarantees, surety bonds and similar instruments;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business, advisory fees and any earn-out obligation until such earn-out obligation is required to become a liability on the balance sheet of such Person in accordance with GAAP);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse; provided, however, that if such indebtedness is limited in recourse to the property encumbered thereby, such indebtedness shall be deemed to be equal to the lesser of (i) the fair market value of such asset at such date of determination and (ii) the amount of such indebtedness;

(f) capital leases and Synthetic Lease Obligations;

(g) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Disqualified Equity Interest in such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and

(h) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any capital lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.

“Indemnitee” has the meaning specified in Section 10.04(b).

“Information” has the meaning specified in Section 10.07.

“Intercreditor Agreement” means (a) that certain Amended and Restated Intercreditor Agreement, dated as of the date hereof, among the Administrative Agent and the administrative agent under the Parent Credit Facility and (b) any other intercreditor agreement contemplated by Section 6.12(d).

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“Interest Payment Date” means, (a) as to any Eurocurrency Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however, that if any Interest Period for a Eurocurrency Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan, the last Business Day of each March, June, September and December and the Maturity Date.

“Interest Period” means, as to each Eurocurrency Rate Loan, the period commencing on the date such Eurocurrency Rate Loan is disbursed or converted to or continued as a Eurocurrency Rate Loan and ending on the date that is seven (7) days, one, two, three or six months thereafter or such other period that is twelve months or less requested by the Borrower and consented to by all the Lenders (in each case, subject to availability), as selected by the Borrower in its Loan Notice; provided that:

(i) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

(ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(iii) no Interest Period shall extend beyond the Maturity Date.

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property of, or a line of business or division of, another Person. For purposes of covenant compliance, the amount of any Investment made by any Person shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment less all cash returns, cash dividends and cash distributions (or the fair market value of any non-cash returns, dividends and distributions) received by such Person from such Investment.

“IRS” means the United States Internal Revenue Service.

“Joint Venture” means a Person or other legal arrangement which meets the following criteria: (a) it is a single-purpose corporation, partnership, limited liability company, joint venture or other similar legal arrangement (whether created by contract or conducted through a separate legal entity) formed by the Borrower or any of its Subsidiaries with another Person in order to conduct a common venture or enterprise with such Person and (b) the Borrower and its Subsidiaries directly or indirectly own less than 75% of the Equity Interests.

“Laws” means, collectively, all international, foreign, United States federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

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“Lender” means each of the Persons identified as a “Lender” on the signature pages hereto and each other Person that becomes a “Lender” in accordance with this Agreement and their successors and assigns.

“Lending Office” means, as to the Administrative Agent or any Lender, the office or offices of such Person described as such in such Person’s Administrative Questionnaire, or such other office or offices as such Person may from time to time notify the Borrower and the Administrative Agent.

“LIBOR” has the meaning specified in the definition of Eurocurrency Rate.

“LIBOR Rate” has the meaning specified in the definition of Eurocurrency Rate.

“LIBOR Successor Rate Conforming Changes” means, with respect to any proposed LIBOR Successor Rate, any conforming changes to the definition of Base Rate, Interest Period, timing and frequency of determining rates and making payments of interest and other administrative matters as may be appropriate, in the discretion of the Administrative Agent, to reflect the adoption of such LIBOR Successor Rate and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such LIBOR Successor Rate exists, in such other manner of administration as the Administrative Agent determines in consultation with the Borrower).

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

“Loan” means an extension of credit by a Lender to the Borrower under Article II in the form of a Term Loan.

“Loan Documents” means (a) this Agreement, (b) each Note, (c) the Fee Letter, (d) any Intercreditor Agreement and (e) the Collateral Documents. Loan Documents shall not include Secured Hedge Agreements.

“Loan Notice” means a notice of (a) a Borrowing, (b) a conversion of Term Loans from one Type to the other, or (c) a continuation of Eurocurrency Rate Loans, pursuant to Section 2.02(a), which shall be substantially in the form of Exhibit 2.02 or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.

“Managed Person” means any entity for which the Borrower or a Subsidiary provides management or other services but with respect to which neither the Borrower nor any Subsidiary has any ownership interest.

“Master Agreement” has the meaning specified in the definition of “Swap Contract.”

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“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties or financial condition or results of operations of the Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the ability of the Borrower to perform its material obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against the Borrower of any Loan Document to which it is a party.

“Material Contractual Obligation” means, with respect to any Person, (i) each Contractual Obligation to which such Person is a party involving aggregate consideration payable to or by such Person of an amount equal to or greater than the Threshold Amount (other than purchase orders in the ordinary course of the business of such Person), and (ii) all other contracts or agreements, the loss of which could reasonably be expected to result in a Material Adverse Effect.

“Maturity Date” means September 26, 2023.

“Multiemployer Plan” means any employee benefit plan of the type subject to and described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of all Lenders or all directly affected Lenders in accordance with the terms of Section 10.13 and (b) has been approved by the Required Lenders.

“Note” means a promissory note made by the Borrower in favor of a Lender evidencing Loans made by such Lender to the Borrower, substantially in the form of Exhibit 2.12.

“Notice of Loan Prepayment” means a notice of prepayment with respect to a Loan, which shall be substantially in the form of Exhibit 2.06 or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer.

“Obligations” means (a) all advances to, and debts, liabilities, obligations, covenants and duties of, the Borrower arising under any Loan Document or otherwise with respect to any Loan and (b) all obligations of the Borrower owing to a Hedge Bank in respect of Secured Hedge Agreements, in each case identified in clauses (a) and (b), whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including (i) interest and fees that accrue after the commencement by or against the Borrower or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding and (ii) all costs and expenses in connection with the enforcement or collection of the obligations that are reimbursable by the Borrower under the terms of any Loan Document.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

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“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.06).

“Overnight Rate” means, for any day, the greater of (i) the Federal Funds Rate and (ii) an overnight rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

“Parent” means The Greenbrier Companies, Inc., an Oregon corporation.

“Parent Credit Facility” means that certain Fourth Amended and Restated Credit Agreement, dated as of September 26, 2018 among the Parent, the guarantors from time to time party thereto, the lenders from time to time party thereto and Bank of America, as administrative agent (including, without limitation, any guarantee agreements and security documents and other documentation entered into in connection therewith), as any such agreement or facility may be amended (including any amendment and restatement thereof), restated, supplemented, refinanced, replaced (in whole or in part), or otherwise modified in writing from time to time, including any agreement (including any subsequent agreement or agreements) exchanging, extending the maturity of, refinancing, renewing, replacing, substituting or otherwise restructuring, whether in the bank or debt capital markets or otherwise (or combination thereof) (including increasing the amount of available borrowings thereunder or adding or removing borrowers or guarantors thereunder) and whether in whole or in part, all or any portion of the Indebtedness under such agreement or facility or any successor or replacement agreement or facility (including, without limitation, any guarantee agreements and security documents and other documentation entered into in connection therewith).

“Participant” has the meaning specified in Section 10.06(d).

“Participant Register” has the meaning specified in Section 10.06(d).

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

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“Permitted Acquisition” means an Investment consisting of the acquisition by the Borrower or any Subsidiary of the Borrower, in a single transaction or in a series of related transactions, of either (a) all or any substantial portion of the property of, or a line of business or division of, another Person or (b) at least a majority of the Voting Stock of another Person, in each case whether or not involving a merger or consolidation with such other Person (any such transaction, an “Acquisition”), provided, that (i) the property acquired (or the property of the Person acquired) in such Acquisition is a business, or those assets of a business, of the type that would not result in a violation of Section 7.06, (ii) in the case of an Acquisition of the Equity Interests of another Person, the board of directors (or other comparable governing body) of such other Person shall have duly approved such Acquisition, (iii) the Borrower shall have delivered to the Administrative Agent a certificate demonstrating that, upon giving effect to such Acquisition, the Borrower would be in compliance with the financial covenants set forth in Section 7.10 on a Pro Forma Basis for the period most recently ended for which financial statements have been delivered pursuant to Section 6.01, (iv) the representations and warranties made by the Borrower in each Loan Document shall be true and correct in all material respects (or, if qualified by materiality or Material Adverse Effect, in all respects) at and as if made as of the date of such Acquisition (after giving effect thereto), except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (or, if qualified by materiality or Material Adverse Effect, in all respects) as of such earlier date, (v) if such transaction involves the purchase of an interest in a partnership between the Borrower as a general partner and entities unaffiliated with the Borrower as the other partners, such transaction shall be effected by having such equity interest acquired by a corporate holding company directly or indirectly wholly-owned by the Borrower newly formed for the sole purpose of effecting such transaction and (vi) the Borrower shall have delivered to the Administrative Agent a Borrowing Base Certificate demonstrating that, upon giving effect to such Acquisition, the Borrowing Base Ratio does not exceed 0.85 to 1.00.

“Permitted Liens” means, at any time, Liens in respect of property of the Borrower or any Subsidiary permitted to exist at such time pursuant to the terms of Section 7.01.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Borrower or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

“Platform” has the meaning specified in Section 6.02.

“Pledged Railcars” means those certain railcars owned by the Borrower and pledged to the Administrative Agent pursuant to the Collateral Documents. As of the Closing Date, the Pledged Railcars are identified by the “reporting mark” (including the “road number”) and the lease number on Schedule 1.01. Thereafter, Schedule 1.01 shall be deemed to be updated from time to time in connection with Dispositions of or casualty or condemnation events with respect to any such railcars and pledges of additional railcars pursuant to the Collateral Documents, whether as a result of addition, substitution or otherwise.

“Pro Forma Basis” means, for purposes of calculating the financial covenants set forth in Section 7.10 (including for purposes of determining the Applicable Rate) or as otherwise specified by this Agreement, that any adjustments in connection with a Permitted Acquisition or other Investment permitted by Section 7.02 that results in a Person becoming a Subsidiary shall be deemed to have occurred as of the first day of the most recent four fiscal quarter period preceding the date of such transaction for which the Borrower was required to deliver (and has delivered) financial statements

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pursuant to Section 6.01(a) or (b). In connection with the foregoing, (a) income statement items attributable to the Person or property acquired shall be included to the extent relating to any period applicable in such calculations to the extent (i) such items are not otherwise included in such income statement items for the Borrower and its Subsidiaries in accordance with GAAP or in accordance with any defined terms set forth in Section 1.01 and (ii) such items are supported by financial statements or other information reasonably satisfactory to the Administrative Agent and (b) any Indebtedness incurred or assumed by the Borrower or any Subsidiary (including the Person or property acquired) in connection with such transaction and any Indebtedness of the Person or property acquired which is not retired in connection with such transaction shall be deemed to have been incurred as of the first day of the applicable period.

“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

“Public Lender” has the meaning specified in Section 6.02.

“Qualified Equity Interests” means the Equity Interests that are not Disqualified Equity Interests.

“Recipient” means the Administrative Agent or any Lender.

“Register” has the meaning specified in Section 10.06(c).

“Related Indemnified Party” means with respect to any Indemnitee (a) any Controlling Person or Controlled Affiliate of such Indemnitee, (b) the respective directors, officers or employees of such Indemnitee, (c) the respective agents and advisors or other representatives of such Indemnitee, in the case of this clause (c), acting on behalf of or at the instruction of such Indemnitee; provided, that each reference to a Controlled Affiliate or Controlling Person in this definition pertains to a Controlled Affiliate or Controlling Person involved in the negotiation, syndication, administration and enforcement of this Agreement.

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

“Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing or migration into, onto or through the environment.

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

“Required Lenders” means, as at any date of determination, Lenders holding in the aggregate more than 50% of the outstanding Term Loans. The outstanding Term Loans of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.

“Resignation Effective Date” has the meaning specified in Section 9.06.

“Responsible Officer” means the chief executive officer, president, vice president, chief financial officer, controller or assistant controller, secretary or assistant secretary, treasurer or assistant treasurer of the Borrower and, solely for purposes of notices given pursuant to Article II, any other officer or employee of the Borrower so designated by any of the foregoing officers in a notice to the Administrative Agent or any other officer or employee of the Borrower designated in or pursuant to an agreement

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between the Borrower and the Administrative Agent. Any document delivered hereunder that is signed by a Responsible Officer of the Borrower shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of the Borrower and such Responsible Officer shall be conclusively presumed to have acted on behalf of the Borrower. To the extent requested by the Administrative Agent, each Responsible Officer will provide an incumbency certificate and appropriate authorization documentation, in form and substance reasonably satisfactory to the Administrative Agent.

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to the Borrower’s and any Subsidiary’s stockholders, partners or members (or the equivalent Person thereof).

“Sanction(s)” means any international economic sanction administered or enforced by the United States Government, including OFAC, the United Nations Security Council, the European Union, Her Majesty’s Treasury (“HMT”) or other relevant sanctions authority.

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

“Secured Hedge Agreement” means any Swap Contract that is entered into by and between the Borrower and any Hedge Bank with respect to such Swap Contract for purposes of providing protection against fluctuations in interest rates relating to the Term Loan. For the avoidance of doubt, a holder of Obligations in respect of Secured Hedge Agreements shall be subject to the last paragraph of Section 8.03 and Section 9.11.

“Secured Party Designation Notice” shall mean a notice from any Lender or an Affiliate of a Lender substantially in the form of Exhibit 1.01.

“Security Agreement” means that certain Amended and Restated Security Agreement, dated as of the Closing Date, between the Borrower and the Administrative Agent.

“SPE” means any Person that is a direct or indirect, special purpose subsidiary of the Borrower that engages in no activities other than those reasonably related to or in connection with the entering into of transactions described in Section 7.05, including lease securitization, structured finance or syndication transactions, and/or in acquiring, managing, marketing, remarketing, leasing and/or selling rail cars and which is designated by the governing body of the Borrower as an SPE; provided (a) that neither the Borrower nor any Subsidiary (i) shall provide any Guarantee or other credit support to such Person, (ii) shall have any contract, agreement, arrangement or understanding with such Person other than on terms that are fair and reasonable and that are no less favorable to the Borrower or such Subsidiary than could be obtained from an unrelated Person (other than representations, warranties and covenants (including those relating to servicing) entered into in the ordinary course of business in connection with a transactions contemplated by Section 7.05(f), including lease securitization, structured finance or syndication transactions) and (iii) shall have any obligation to maintain or preserve such Person’s financial condition or to cause such Person to achieve certain levels of operating results and (b) no portion of the Indebtedness or any other obligations (contingent or otherwise) of such Person shall be recourse to the Borrower or its Subsidiaries (other than representations, warranties and covenants (including those relating to servicing) entered into in the ordinary course of business in connection with a transactions contemplated by Section 7.05(f), including lease securitization, structured finance or syndication transactions).

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“Stockholders’ Equity” means, as of any date of determination, consolidated stockholders’ equity of the Borrower and its Subsidiaries as of that date determined in accordance with GAAP but excluding any non-cash impact of (i) goodwill impairment charges, (ii) increases (or decreases) from accumulated other comprehensive income (or loss) and (iii) the issuance of any equity or equity-linked securities.

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower. For purposes of the Loan Documents, the term “Subsidiary” shall not include any “SPE”, any “Managed Person” or any “Joint Venture”.

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

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

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“Term Loan” has the meaning specified in Section 2.01.

“Threshold Amount” means $15,000,000.

“Treasury Management Services” means treasury or cash management services related to deposit accounts, funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services, credit cards, credit card processing services, debit cards, stored value cards, purchase cards (including so-called “procurement cards” or “P-cards”) and other cash management services.

“Type” means, with respect to a Term Loan, its character as a Base Rate Loan or a Eurocurrency Rate Loan.

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

“United States” and “U.S.” mean the United States of America.

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

“U.S. Tax Compliance Certificate” has the meaning specified in Section 3.01(e)(ii)(B)(3).

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

1.02 Other Interpretive Provisions.

With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “hereto,” “herein,” “hereof,” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall

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include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

(b) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

(c) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

1.03 Accounting Terms.

(a) Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.

(b) Changes in GAAP. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

(c) Calculations; Consolidation of Variable Interest Entities. Notwithstanding the above, the parties hereto acknowledge and agree that all calculations of the financial covenants in Section 7.10 (including for purposes of determining the Applicable Rate) shall be made on a Pro Forma Basis. All references herein to consolidated financial statements of the Borrower and its Subsidiaries or to the determination of any amount for the Borrower and its Subsidiaries on a consolidated basis or any similar reference shall, in each case, be deemed to include each variable interest entity (other than any such entity that is an SPE) that the Borrower is required to consolidate pursuant to FASB Interpretation No. 46 – Consolidation of Variable Interest Entities: an interpretation of ARB No. 51 (January 2003) as if such variable interest entity were a Subsidiary as defined herein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, any change in GAAP requiring leases which were previously classified as operating leases to be treated as capitalized leases shall be ignored for the purpose of determining Indebtedness hereunder and such leases shall continue to be treated as operating leases for such purpose consistent with GAAP as in effect on the Closing Date.

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1.04 Times of Day.

Unless otherwise specified, all references herein to times of day shall be references to Pacific time (daylight or standard, as applicable).

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

2.01 Term Loan.

Subject to the terms and conditions set forth herein, each Lender severally agrees to make its portion (which shall equal such Lender’s Commitment) of a $225,000,000 term loan (the “Term Loan”) to the Borrower in Dollars on the Closing Date; provided that each Lender’s portion of the outstanding Term Loan under (and as defined in) the Existing Credit Agreement shall be deemed to have been advanced to the Borrower by such Lender on the Closing Date and shall be applied to reduce such Lender’s Commitment. Amounts repaid on the Term Loan may not be reborrowed. The Term Loan may consist of Base Rate Loans or Eurocurrency Rate Loans, as further provided herein, provided, however, the Borrowing made on the Closing Date shall be made as a Base Rate Loan unless the Borrower has delivered a funding indemnity letter in form and substance reasonably acceptable to the Administrative Agent at least three (3) Business Days prior to the Closing Date.

2.02 Borrowings, Conversions and Continuations.

(a) Each Borrowing, each conversion of Term Loans from one Type to the other, and each continuation of Eurocurrency Rate Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent which may be given by: (A) telephone or (B) a Loan Notice; provided that any telephonic notice must be confirmed promptly by delivery to the Administrative Agent of a Loan Notice. Each Loan Notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Term Loans that are Eurocurrency Rate Loans or of any conversion of any such Eurocurrency Rate Loans to Base Rate Loans, and (ii) on the Closing Date for the Borrowing of Term Loans that are Base Rate Loans. Notwithstanding the foregoing, if the Borrower wishes to request Eurocurrency Rate Loans having an Interest Period other than seven (7) days, one, two, three or six months in duration as provided in the definition of “Interest Period,” the applicable notice must be received by the Administrative Agent not later than 11:00 a.m. (i) four Business Days prior to the requested date of such Borrowing, conversion or continuation of Eurocurrency Rate Loans, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them. Not later than 11:00 a.m., on the applicable Business Day specified in the immediately preceding sentence for which a request for such a Borrowing, conversion or continuation must be received, the Administrative Agent shall notify the Borrower (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Lenders. Each Borrowing of, conversion to or continuation of Eurocurrency Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof. Each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Loan Notice shall specify (i) whether the Borrower is requesting a Borrowing, a conversion of Term Loans from one Type to the other, or a continuation of Eurocurrency Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Term Loans to be borrowed, converted or continued,

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(iv) the Type of Term Loans to be borrowed or to which existing Term Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of Term Loan in a Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Term Loans shall be made as, or converted to, Base Rate Loans. Any automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurocurrency Rate Loans. If the Borrower requests a conversion to, or continuation of Eurocurrency Rate Loans in any such Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.

(b) Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage of the applicable Term Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans or continuation of Term Loans, as described in the preceding subsection. In the case of a Borrowing, each Lender shall make the amount of its Term Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 11:00 a.m. on the Business Day specified in the applicable Loan Notice. Upon satisfaction of the applicable conditions set forth in Article IV, the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower.

(c) Except as otherwise provided herein, a Eurocurrency Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurocurrency Rate Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as Eurocurrency Rate Loans without the consent of the Required Lenders.

(d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurocurrency Rate Loans upon determination of such interest rate.

(e) After giving effect to all Borrowings, all conversions of Term Loans from one Type to the other, and all continuations of Term Loans as the same Type, there shall not be more than five Interest Periods in effect with respect to Term Loans.

2.03 [INTENTIONALLY OMITTED]

2.04 [INTENTIONALLY OMITTED]

2.05 Security.

All Obligations of the Borrower under this Agreement and all other Loan Documents shall be secured by the Collateral in accordance with the Loan Documents.

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2.06 Prepayments.

(a) Voluntary Prepayments. The Borrower may, upon delivery of a Notice of Loan Prepayment from the Borrower to the Administrative Agent, at any time or from time to time voluntarily prepay the Loans in whole or in part without premium or penalty; provided that such notice must be received by the Administrative Agent not later than 10:00 a.m. (i) three Business Days prior to the requested date of prepayment of Eurocurrency Rate Loans and (ii) on the requested date of prepayment of Base Rate Loans. Any prepayment shall be in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid and, if Eurocurrency Rate Loans are to be prepaid, the Interest Period(s) of such Loans. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s Applicable Percentage of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurocurrency Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05. Subject to Section 2.16, each such prepayment shall be applied to the Loans of the Lenders in accordance with their respective Applicable Percentages. Any prepayment shall be applied ratably to the remaining principal amortization payments of the Term Loan, including, without limitation, the final principal repayment installment on the Maturity Date.

(b) Mandatory Prepayments. (i) Within ten Business Days following any Disposition of or casualty or condemnation event with respect to any Pledged Railcars that causes the Unremedied Railcar Value to equal or exceed $4,500,000, the Borrower shall prepay the Loans as provided in clause (iii) below, pledge additional railcars pursuant to the Collateral Documents and/or provide Cash Collateral to the extent necessary to cause the Unremedied Railcar Value to be less than $4,500,000. For purposes hereof, “Unremedied Railcar Value” means, as of any date of determination, an amount equal to the sum of (A) the aggregate book value on the books of the Borrower of all Pledged Railcars that have been subject to a Disposition or a casualty or condemnation event (in each case valued at the time of such Disposition or casualty or condemnation event) minus (B) the aggregate amount of all prepayments of the Loans made pursuant to this Section 2.06(b)(i) minus (C) the aggregate book value on the books of the Borrower of all additional railcars pledged pursuant to this Section 2.06(b)(i) minus (D) all Cash Collateral pledged pursuant to this Section 2.06(b)(i) and subject to the Lien of the Administrative Agent on such date.

(ii) If at any time the Borrowing Base Ratio, as reflected on the most recently delivered Borrowing Base Certificate exceeds 0.85 to 1.00, the Borrower shall within five Business Days following such determination, prepay the Loans as provided in clause (iii) below, pledge additional railcars pursuant to the Collateral Documents and/or provide Cash Collateral to the extent necessary to cause the Borrowing Base Ratio (as calculated after giving effect to any such prepayment of Loans, pledge of additional railcars and/or provision of Cash Collateral) to be less than or equal to the Borrowing Base Ratio as reflected on the most recently delivered Borrowing Base Certificate which evidenced a Borrowing Base Ratio that did not exceed 0.85 to 1.00.

(iii) All amounts prepaid pursuant to this Section 2.06(b) shall be applied ratably to the remaining principal amortization payments including, without limitation, the final principal repayment installment on the Maturity Date. Within the parameters of the foregoing application, prepayments shall be applied first to Base Rate Loans and then to Eurocurrency Rate Loans in direct order of Interest Period maturities. All prepayments under this Section 2.06(b) shall be subject to Section 3.05, but otherwise without premium or penalty, and shall be accompanied by interest on the principal amount prepaid through the date of prepayment.

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2.07 [INTENTIONALLY OMITTED]

2.08 Repayment of Loans.

The Borrower shall repay the outstanding principal amount of the Term Loan in equal installments of $1,968,750 on the last Business Day of each March, June, September and December (commencing September 28, 2018) with the remaining outstanding balance to be payable on the Maturity Date (as such installments may hereafter be adjusted as a result of prepayments made pursuant to Section 2.06), unless accelerated sooner pursuant to Section 8.02.

2.09 Interest.

(a) Subject to the provisions of subsection (b) below, (i) each Eurocurrency Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurocurrency Rate for such Interest Period plus the Applicable Rate; and (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate. To the extent that any calculation of interest or any fee required to be paid under this Agreement shall be based on (or result in) a calculation that is less than zero, such calculation shall be deemed zero for purposes of this Agreement.

(b) (i) If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(ii) If any amount (other than principal of any Loan) payable by the Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(iii) Upon the written request of the Required Lenders, while any Event of Default exists (other than as set forth in clauses (b)(i) and (b)(ii) above), the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(iv) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

(c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

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2.10 Fees.

(a) The Borrower shall pay to the Arranger and the Administrative Agent for their own respective accounts, the fees in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

(b) The Borrower shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

2.11 Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate.

(a) All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to the Eurocurrency Rate) shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12, bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

(b) If, as a result of any restatement of or other adjustment to the financial statements of the Borrower or for any other reason, the Borrower or the Lenders determine that (i) the Consolidated Capitalization Ratio as calculated by the Borrower as of any applicable date was inaccurate and (ii) a proper calculation of the Consolidated Capitalization Ratio would have resulted in higher pricing for such period, the Borrower shall promptly and retroactively be obligated to pay to the Administrative Agent for the account of the applicable Lenders, promptly on demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, automatically and without further action by the Administrative Agent or any Lender), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period. This paragraph shall not limit the rights of the Administrative Agent or any Lender under Section 2.09(b) or under Article VIII.

2.12 Evidence of Debt.

The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender to the Borrower made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans to the Borrower in addition to such accounts or records. Each Lender may attach schedules to a Note and endorse thereon the date, Type (if applicable), amount, currency and maturity of its Loans and payments with respect thereto.

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2.13 Payments Generally; Administrative Agent’s Clawback.

(a) General. All payments to be made by the Borrower shall be made free and clear of and without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, (i) all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 1:00 p.m. on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 1:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of Eurocurrency Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the Overnight Rate and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

(ii) Payments by Borrower; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the Overnight Rate.

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A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make Loans and to make payments pursuant to Section 10.04(c) are several and not joint. The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 10.04(c).

(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

2.14 Sharing of Payments by Lenders.

If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of the Loans made by resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Loans and accrued interest thereon greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, provided that:

(i) if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(ii) the provisions of this Section shall not be construed to apply to (x) any payment made by or on behalf of the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender) or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this Section shall apply).

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The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

2.15 Increase to Term Loan.

(a) Request for Increase. Provided there exists no Default, upon notice to the Administrative Agent (which shall promptly notify the Lenders), the Borrower may from time to time, request an increase to the Term Loan by an amount (for all such requests) not exceeding $25,000,000; provided that (i) any such request for an increase shall be in a minimum amount of $5,000,000. At the time of sending such notice, the Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Lenders).

(b) Lender Elections to Increase. Each Lender shall notify the Administrative Agent within such time period whether or not it agrees to increase its portion of the Term Loan and, if so, whether by an amount equal to, greater than, or less than its Applicable Percentage of such requested increase. Any Lender not responding within such time period shall be deemed to have declined to increase its portion of the Term Loan.

(c) Notification by Administrative Agent; Additional Lenders. The Administrative Agent shall notify the Borrower and each Lender of the Lenders’ responses to each request made hereunder. To achieve the full amount of a requested increase and subject to the approval of the Administrative Agent (which approvals shall not be unreasonably withheld), the Borrower may also invite additional Persons that qualify as Eligible Assignees to become Lenders pursuant to a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent and its counsel.

(d) Effective Date and Allocations. If the Term Loan is increased in accordance with this Section, the Administrative Agent and the Borrower shall determine the date of funding of such increase (the “Increase Effective Date”) and the final allocation of such increase. The Administrative Agent shall promptly notify the Borrower and the Lenders of the final allocation of such increase and the Increase Effective Date.

(e) Conditions to Effectiveness of Increase. As a condition precedent to the Borrowing of such increase, the Borrower shall deliver to the Administrative Agent a certificate dated as of the Increase Effective Date signed by a Responsible Officer of the Borrower (i) certifying and attaching the resolutions adopted by the Borrower approving or consenting to such increase, and (ii) certifying that, before and after giving effect to such increase, (A) the representations and warranties contained in Article V and the other Loan Documents are true and correct in all material respects (or, if qualified by materiality or Material Adverse Effect, in all respects) on and as of the Increase Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (or, if qualified by materiality or Material Adverse Effect, in all respects) as of such earlier date, and except that for purposes of this Section 2.15, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01, and (B) no Default exists.

(f) Conflicting Provisions. This Section shall supersede any provisions in Sections 2.14 or 10.01 to the contrary.

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(g) Beginning with the date of the next principal amortization payment, occurring after the date of such increase, the amount of each principal amortization payment on the Term Loan, shall be increased by the minimum amount that, when allocated ratably (based on outstandings) among all of the Lenders, immediately after giving effect to such increase, would provide (assuming all other things to be equal) for each of the Lenders holding the Term Loan immediately prior to giving effect to such increase, to receive in connection with such principal amortization payment an amount at least equal to the amount that such Lender would have received had such increase in the Term Loan (and the corresponding adjustment to such principal amortization payment pursuant to this Section 2.15(g)) not taken place.

2.16 Defaulting Lenders.

(a) Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:

(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders” and Section 10.01.

(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise or received by the Administrative Agent from a Defaulting Lender pursuant to Section 10.08) shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, as the Borrower may request (so long as no Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released in order to satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement; fourth, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and fifth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender pursuant to this Section 2.16(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(b) Defaulting Lender Cure. If the Borrower and the Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

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ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes.

(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.

(i) Any and all payments by or on account of any obligation of the Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable Laws. If any applicable Laws (as determined in the good faith discretion of the Borrower or the Administrative Agent) require the deduction or withholding of any Tax from any such payment by the Administrative Agent or the Borrower, then the Administrative Agent or the Borrower shall be entitled to make such deduction or withholding, upon the basis of the information and documentation to be delivered pursuant to subsection (e) below.

(ii) If the Borrower or the Administrative Agent shall be required by the Code to withhold or deduct any Taxes, including both United States federal backup withholding and withholding taxes, from any payment, then (A) the Administrative Agent shall withhold or make such deductions as are determined by the Administrative Agent to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) the Administrative Agent shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with the Code, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the Borrower shall be increased as necessary so that after any such required withholding or the making of all such required deductions (including such deductions applicable to additional sums payable under this Section 3.01) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

(iii) If the Borrower or the Administrative Agent shall be required by any applicable Laws other than the Code to withhold or deduct any Taxes from any payment, then (A) the Borrower or the Administrative Agent, as required by such Laws, shall withhold or make such deductions as are determined by it to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) the Borrower or the Administrative Agent, to the extent required by such Laws, shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with such Laws, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the Borrower shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 3.01) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

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(b) Payment of Other Taxes by the Borrower. Without limiting the provisions of subsection (a) above, the Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable Laws, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

(c) Tax Indemnifications. (i) The Borrower shall, and does hereby indemnify each Recipient, and shall make payment in respect thereof within ten days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 3.01) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error. The Borrower shall, and does hereby indemnify the Administrative Agent, and shall make payment in respect thereof within ten days after demand therefor, for any amount which a Lender for any reason fails to pay indefeasibly to the Administrative Agent as required pursuant to Section 3.01(c)(ii) below.

(ii) Each Lender shall, and does hereby, severally indemnify, and shall make payment in respect thereof within 10 days after demand therefor, (x) the Administrative Agent against any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (y) the Administrative Agent and the Borrower, as applicable, against any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.06(d) relating to the maintenance of a Participant Register and (z) the Administrative Agent and the Borrower, as applicable, against any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent or the Borrower in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this clause (ii).

(d) Evidence of Payments. Upon request by the Borrower or the Administrative Agent, as the case may be, after any payment of Taxes by the Borrower or by the Administrative Agent to a Governmental Authority as provided in this Section 3.01, the Borrower shall deliver to the Administrative Agent or the Administrative Agent shall deliver to the Borrower, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such payment or other evidence of such payment reasonably satisfactory to the Borrower or the Administrative Agent, as the case may be.

(e) Status of Lenders; Tax Documentation.

(i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed

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documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.01(e)(ii)(A), 3.01(e)(ii)(B) and 3.01(e)(ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii) Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person,

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding Tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN-E (or W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN-E (or W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2) executed copies of IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit 3.01-A to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN-E (or W-8BEN, as applicable); or

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(4) to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E (or W-8BEN, as applicable), a U.S. Tax Compliance Certificate substantially in the form of Exhibit 3.01-B or Exhibit 3.01-C, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit 3.01-D on behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies (or originals, as required) of any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in United States federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by Law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the Closing Date.

(iii) Each Lender agrees that if any form or certification it previously delivered pursuant to this Section 3.01 expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

(f) Treatment of Certain Refunds. Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender, or have any obligation to pay to any Lender, any refund of Taxes withheld or deducted from funds paid for the account of such Lender, as the case may be. If any Recipient determines,

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in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 3.01, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 3.01 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) incurred by such Recipient, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Recipient, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Recipient in the event the Recipient is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this subsection, in no event will the applicable Recipient be required to pay any amount to the Borrower pursuant to this subsection the payment of which would place the Recipient in a less favorable net after-Tax position than such Recipient would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This subsection shall not be construed to require any Recipient to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

(g) Survival. Each party’s obligations under this Section 3.01 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all other Obligations.

3.02 Illegality.

If any Lender reasonably determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its Lending Office to perform any of its obligations hereunder or to make, maintain or fund or charge interest with respect to any Loan, or to determine or charge interest rates based upon the Eurocurrency Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, (i) any obligation of such Lender to make, maintain, fund or charge interest with respect to any such Loan or continue Eurocurrency Rate Loans or to convert Base Rate Loans to Eurocurrency Rate Loans, shall be suspended and (ii) if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the Eurocurrency Rate component of the Base Rate, the interest rate on which Base Rate Loans of such Lender, shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurocurrency Rate component of the Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (x) the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all such Eurocurrency Rate Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurocurrency Rate component of the Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurocurrency Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurocurrency Rate Loans and (y) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Eurocurrency Rate, the Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the Eurocurrency Rate component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based on the Eurocurrency Rate. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.

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3.03 Inability to Determine Rates.

(a) If in connection with any request for a Eurocurrency Rate Loan or a conversion to or continuation thereof, (i) the Administrative Agent determines that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurocurrency Rate Loan or, (b) adequate and reasonable means do not exist for determining the Eurocurrency Rate for any requested Interest Period with respect to a proposed Eurocurrency Rate Loan or in connection with an existing or proposed Base Rate Loan (in each case with respect to clause (i), “Impacted Loans”), or (ii) the Administrative Agent or the Required Lenders determine in good faith that for any reason the Eurocurrency Rate for any requested Interest Period with respect to a proposed Eurocurrency Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Eurocurrency Rate Loan, the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, (x) the obligation of the Lenders to make or maintain Eurocurrency Rate Loans shall be suspended (to the extent of the affected Eurocurrency Rate Loans or Interest Periods), and (y) in the event of a determination described in the preceding sentence with respect to the Eurocurrency Rate component of the Base Rate, the utilization of the Eurocurrency Rate component in determining the Base Rate shall be suspended, in each case until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurocurrency Rate Loans (to the extent of the affected Eurocurrency Rate Loans or Interest Periods) or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.

(b) Notwithstanding the foregoing, if the Administrative Agent has made the determination described in clause (a)(i) of this Section and the Borrower shall so request, the Administrative Agent, the affected Lenders and the Borrower shall negotiate in good faith to amend the definition of “Eurocurrency Rate” and other applicable provisions to preserve the original intent thereof in light of such change; provided that, until so amended, such Impacted Loans will be handled as otherwise provided pursuant to the terms of this Section.

3.04 Increased Costs.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement contemplated by Section 3.04(e));

(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

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(iii) impose on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement or Eurocurrency Rate Loans made by such Lender;

and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any Loan the interest on which is determined by reference to the Eurocurrency Rate (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender, or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender determines that any Change in Law affecting such Lender or any Lending Office of such Lender or such Lender’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay to such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than six months prior to the date that such Lender, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect thereof).

(e) Additional Reserve Requirements. The Borrower shall pay to each Lender, as long as such Lender shall be required to comply with any reserve ratio requirement or analogous requirement of any other central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of the Eurocurrency Rate Loans, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such Commitment or Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive, absent manifest error), which in each case shall be due and payable on each date on which interest is payable on such Loan, provided the Borrower shall have received at least 10 days’ prior notice (with a copy to the Administrative Agent) of such additional costs from such Lender. If a Lender fails to give notice 10 days prior to the relevant Interest Payment Date, such additional costs shall be due and payable 10 days from receipt of such notice.

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3.05 Compensation for Losses.

Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

(a) any continuation, conversion, payment or prepayment of any Eurocurrency Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

(b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Eurocurrency Rate Loan on the date or in the amount notified by the Borrower;

(c) any assignment of a Eurocurrency Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 10.13;

including any loss of anticipated profits, and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan, from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurocurrency Rate Loan made by it at the Eurocurrency Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurocurrency Rate Loan was in fact so funded.

Notwithstanding the foregoing, each Lender hereby waives any claims it has pursuant to this Section 3.05 solely to the extent arising on the Closing Date as a result of any reallocation of the outstanding Term Loan on the Closing Date to reflect the Applicable Percentages set forth on Schedule 2.01 as of the Closing Date.

3.06 Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender requests compensation under Section 3.04, or requires the Borrower to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then at the request of the Borrower, such Lender shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the reasonable judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

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(b) Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if the Borrower is required to pay any Indemnified Taxes or additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01 or if any Lender gives a notice pursuant to Section 3.02 (which has not been revoked) and, in each case, the Lender has declined or is unable to designate a different lending office in accordance with Section 3.06(a) which results in the elimination of the amounts payable pursuant to Section 3.01 and Section 3.04, the Borrower may replace such Lender in accordance with Section 10.13.

3.07 Successor LIBOR.

Notwithstanding anything to the contrary in this Agreement or any other Loan Documents (including Section 10.01 hereof), if the Administrative Agent determines (which determination shall be conclusive absent manifest error), or the Borrower or Required Lenders notify the Administrative Agent (with, in the case of the Required Lenders, a copy to Borrower) that the Borrower or Required Lenders (as applicable) have determined, that:

(i) adequate and reasonable means do not exist for ascertaining LIBOR for any requested Interest Period because the LIBOR Screen Rate is not available or published on a current basis and such circumstances are unlikely to be temporary; or

(ii) the administrator of the LIBOR Screen Rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which LIBOR or the LIBOR Screen Rate shall no longer be made available, or used for determining the interest rate of loans (such specific date, the “Scheduled Unavailability Date”), or

(iii) syndicated loans currently being executed, or that include language similar to that contained in this Section, are being executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace LIBOR,

then, reasonably promptly after such determination by the Administrative Agent or receipt by the Administrative Agent of such notice, as applicable, the Administrative Agent and the Borrower may amend this Agreement to replace LIBOR with an alternate benchmark rate (including any mathematical or other adjustments to the benchmark (if any) incorporated therein), giving due consideration to any evolving or then existing convention for similar Dollar denominated syndicated credit facilities for such alternative benchmarks (any such proposed rate, a “LIBOR Successor Rate”), together with any proposed LIBOR Successor Rate Conforming Changes (as defined below) and any such amendment shall become effective at 5:00 p.m. (New York time) on the fifth Business Day after the Administrative Agent shall have posted such proposed amendment to all Lenders and the Borrower unless, prior to such time, Lenders comprising the Required Lenders have delivered to the Administrative Agent written notice that such Required Lenders do not accept such amendment.

If no LIBOR Successor Rate has been determined and the circumstances under clause (i) above exist or the Scheduled Unavailability Date has occurred (as applicable), the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, (x) the obligation of the Lenders to make or maintain Eurocurrency Rate Loans shall be suspended, (to the extent of the affected Eurocurrency Rate Loans or Interest Periods), and (y) the Eurocurrency Rate component shall no longer be utilized in determining the Base Rate. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurocurrency Rate Loans (to the extent of the affected Eurocurrency Rate Loans or Interest Periods) or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans (subject to the foregoing clause (y)) in the amount specified therein.

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Notwithstanding anything else herein, any definition of LIBOR Successor Rate shall provide that in no event shall such LIBOR Successor Rate be less than zero for purposes of this Agreement.

3.08 Survival.

All of the obligations of the Borrower under this Article III shall survive termination of the Commitments and repayment of all other Obligations hereunder and the resignation or replacement of the Administrative Agent.

ARTICLE IV

CONDITIONS PRECEDENT

The obligation of each Lender to make its portion of the Term Loan hereunder is subject to satisfaction of the following conditions precedent:

(a) The Administrative Agent’s receipt of the following, each properly executed by a Responsible Officer of the Borrower (where applicable), each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to the Administrative Agent and each of the Lenders:

(i) executed counterparts of this Agreement, the Intercreditor Agreement and the Security Agreement;

(ii) Notes executed by the Borrower in favor of each Lender requesting Notes;

(iii) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of the Borrower as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which the Borrower is a party;

(iv) such documents and certifications as the Administrative Agent may reasonably require to evidence that the Borrower is duly organized or formed, and that the Borrower is validly existing, in good standing, as applicable in their respective jurisdictions of formation;

(v) such executed documents as the Administrative Agent may reasonably require to perfect (to the extent then required pursuant to the terms of the Collateral Documents) the Lenders’ first priority (except as otherwise provided in any Intercreditor Agreement) security interest in the Collateral, including filings with the United States Surface Transportation Board;

(vi) evidence that the Administrative Agent, on behalf of the Lenders, shall have a perfected (to the extent then required pursuant to the terms of the Collateral Documents) security interest in the Collateral;

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(vii) favorable opinions of Paul Hastings LLP and Tonkon Torp LLP, counsel to the Borrower, addressed to the Administrative Agent and each Lender;

(viii) a certificate of a Responsible Officer of the Borrower either (A) attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by the Borrower and the validity against the Borrower of the Loan Documents, and such consents, licenses and approvals shall be in full force and effect, or (B) stating that, except as otherwise provided in Section 5.03, no such consents, licenses or approvals are so required;

(ix) a certificate signed by a Responsible Officer of the Borrower certifying (A) that no Default exists, (B) that the representations and warranties of the Borrower contained in Article V or any other Loan Document, or which are contained in any document furnished by the Borrower at any time under or in connection herewith or therewith, are true and correct in all material respects and (C) that there has been no event or circumstance since the date of the Audited Financial Statements that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect;

(x) a Borrowing Base Certificate as of the Closing Date, which shall demonstrate that the Borrowing Base equals or exceeds $ 264,705,882; and

(xi) evidence that all insurance required to be maintained pursuant to the Loan Documents has been obtained and is in effect.

(b) At least five days prior to the Closing Date, if the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, it shall deliver a Beneficial Ownership Certification in relation to the Borrower.

(c) Any fees required to be paid on or before the Closing Date shall have been paid.

(d) Unless waived by the Administrative Agent, the Borrower shall have paid all fees, charges and disbursements of counsel to the Administrative Agent to the extent invoiced prior to the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent), in each case, to the extent invoiced at least 1 day prior to the Closing Date.

Without limiting the generality of the provisions of the last paragraph of Section 9.03, for purposes of determining compliance with the conditions specified in this Article IV, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

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ARTICLE V

REPRESENTATIONS AND WARRANTIES

The Borrower, represents and warrants to the Administrative Agent and the Lenders that:

5.01 Existence, Qualification and Power; Compliance with Laws.

The Borrower and each Subsidiary thereof (a) is duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party and (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except with respect to clause (a) (as to any Subsidiary only), clause (b)(i) and/or clause (c), in each case, only to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

5.02 Authorization; No Contravention.

The execution, delivery and performance by the Borrower of each Loan Document to which the Borrower is party, have been duly authorized by all necessary corporate or other organizational action, and do not (a) contravene the terms of any of the Borrower’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any (x) with respect to the creation of any Lien (other than Permitted Liens), Contractual Obligation or (y) with respect to any conflict, breach or contravention or payment, Contractual Obligation, in each case, to which the Borrower is a party or affecting the Borrower or the properties of the Borrower or any of its Subsidiaries, except to the extent as could not reasonably be expected to have a Material Adverse Effect, or (ii) any material order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any material Law.

5.03 Governmental Authorization; Other Consents.

No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority is necessary or required in connection with the execution, delivery or performance by, or enforcement against, the Borrower of this Agreement or any other Loan Document except (a) as have been obtained or made and are in full force and effect, (b) for the authorizations, approvals, actions, notices and filings listed on Schedule 5.03, (c) filings and recordings with respect to the Collateral to be made, or otherwise delivered to the Administrative Agent for filing or recordation and (d) notices and filings required by law in connection with the exercise of remedies pursuant to the Loan Documents. The execution, delivery and performance by the Borrower of each Loan Document to which the Borrower is a party do not require any approval of the Borrower’s equity holders or any approval or consent of any Person under any Contractual Obligation of the Borrower, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of Contractual Obligations, for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be expected to have a Material Adverse Effect.

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5.04 Binding Effect.

This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by the Borrower. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except as enforcement thereof may be limited by applicable Debtor Relief Laws and by general principles of equity.

5.05 Financial Statements; No Material Adverse Effect.

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present in all material respects the financial condition of the Parent and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all material indebtedness and other liabilities required to be shown under GAAP, direct or contingent, of the Parent and its Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.

(b) The unaudited consolidated balance sheet of the Borrower and its Subsidiaries dated May 31, 2018, and the related consolidated statements of income or operations, and cash flows for the fiscal quarter ended on that date (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject to the absence of footnotes and to normal year-end audit adjustments.

(c) Since the date of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had or is reasonably expected to have a Material Adverse Effect.

5.06 Litigation.

There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any of its Subsidiaries or against any of their properties that either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

5.07 No Default.

Neither the Borrower nor any Subsidiary is in default under or with respect to any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

5.08 Ownership of Property; Liens.

Each of the Borrower and each Subsidiary has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Borrower has good and marketable title to all Pledged Railcars, subject to (a) Permitted Liens that do not secure Indebtedness (other than the Obligations) and (b) leases entered into in the ordinary course of the Borrower’s business. The property of the Borrower and its Subsidiaries is subject to no Liens, other than Permitted Liens.

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5.09 Environmental Compliance.

The Borrower and its Subsidiaries conduct in the ordinary course of business a review of the effect of existing Environmental Laws and claims alleging potential liability or responsibility for violation of any Environmental Law on their respective businesses, operations and properties, and as a result thereof the Borrower has reasonably concluded that such Environmental Laws and claims could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

5.10 Insurance.

The properties of the Borrower and its Subsidiaries are insured with financially sound and reputable insurance companies that are not Affiliates (except as permitted below) of the Borrower, in such amounts, and with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower or the applicable Subsidiary operates; provided, however, that the Borrower may reduce the amount of insurance required to be maintained above to the extent that the Borrower maintains a self-insurance program providing insurance coverage in lieu thereof and in a manner consistent with past practices or otherwise in accordance with sound business practices by companies in similar businesses similarly situated and located. The property and general liability insurance coverage of the Borrower as in effect on the Closing Date is outlined as to carrier, policy number, expiration date and type on Schedule 5.10.

5.11 Taxes.

The Borrower and its Subsidiaries have filed all United States federal and state income Taxes and other material Tax returns and reports required to be filed, and have paid all United States federal and state income Taxes and other material Taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except (a) those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP and (b) those (other than United States federal income Taxes) where the failure to do so could not reasonably be expected to result in liability in a Material Adverse Effect. There is no proposed Tax assessment against the Borrower or any Subsidiary that would, if made, have a Material Adverse Effect. Neither the Borrower nor any Subsidiary thereof is party to any formal Tax sharing agreement.

5.12 ERISA Compliance.

(a) Except as could not reasonably be expected to have a Material Adverse Effect, each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other United States federal or state Laws. Each Plan that is intended to qualify under Section 401(a) of the Code has received an opinion letter or a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the knowledge of the Borrower, nothing has occurred which would prevent, or cause the loss of, such qualification. The Borrower and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.

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(b) There are no pending or, to the knowledge of the Borrower, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.

(c) Except as would not reasonably be expected to result in liability in excess of the Threshold Amount, (i) no ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Borrower nor any ERISA Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA.

5.13 Subsidiaries; Equity Interests.

As of the Closing Date, the Borrower has no Subsidiaries other than those specifically disclosed in Part (a) of Schedule 5.13. As of the Closing Date, the Borrower has no equity investments in any other corporation or entity other than those specifically disclosed in Part (b) of Schedule 5.13.

5.14 Margin Regulations; Investment Company Act.

(a) The Borrower is not engaged nor will it engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock.

(b) None of the Borrower, any Person Controlling the Borrower, or any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

5.15 Disclosure.

No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of the Borrower to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case, as modified or supplemented by other information so furnished), when taken as a whole, contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; it being understood that for purposes of this Section 5.15, such reports, financial statements, certificates and other information shall not include any financial projections, budgets, forecasts, pro forma data and other forward looking statements (“Projections”) or any information of a general economic or general industry nature. All Projections provided by the Borrower have been prepared in good faith based upon assumptions believed to be reasonable at the time provided (it being understood that such Projections are subject to significant uncertainties and contingencies, many of which are beyond the Borrower’s control, and that the Projections are not a guarantee of financial performance which may differ and such differences may be material). As of the Closing Date, the information included in the Beneficial Ownership Certification is true and correct in all respects.

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5.16 Compliance with Laws.

Each of the Borrower and each Subsidiary is in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, is not expected to have a Material Adverse Effect.

5.17 Intellectual Property; Licenses, Etc.

The Borrower and its Subsidiaries own, or possess the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights that are reasonably necessary for the operation of their respective businesses, without, to the knowledge of the Borrower, conflict (except for conflicts that either individually or in the aggregate could not reasonably be expected to result in a Material Adverse Effect) with the rights of any other Person. To the knowledge of the Borrower, no slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by the Borrower or any Subsidiary infringes upon any valid rights held by any other Person, except for conflicts that either individually or in the aggregate could not reasonably be expected to result in a Material Adverse Effect. No claim or litigation regarding any of the foregoing is pending or, to the knowledge of the Borrower, threatened, which, either individually or in the aggregate, is reasonably expected to have a Material Adverse Effect.

5.18 OFAC.

Neither the Borrower, nor any of its Subsidiaries, nor, to the knowledge of the Borrower and its Subsidiaries, any director, officer, employee, agent, affiliate or representative thereof, is an individual or entity that is, or is owned or controlled by any individual or entity that is (i) currently the subject or target of any Sanctions, (ii) included on OFAC’s List of Specially Designated Nationals, HMT’s Consolidated List of Financial Sanctions Targets and the Investment Ban List, or any similar list enforced by any other relevant sanctions authority or (iii) located, organized or resident in a Designated Jurisdiction. The Borrower and its Subsidiaries have conducted their businesses in compliance in all material respects with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption legislation in other jurisdictions and have instituted and maintained policies and procedures designed to promote compliance in all material respects with such laws.

5.19 No EEA Financial Institution.

The Borrower is not an EEA Financial Institution.

ARTICLE VI

AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, or any Loan or other Obligation hereunder shall remain unpaid or unsatisfied (other than contingent amounts not yet due), the Borrower shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02, and 6.03) cause each Subsidiary to:

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6.01 Financial Statements.

Deliver to the Administrative Agent and each Lender:

(a) as soon as available, but in any event no later than 90 days after the end of each fiscal year of the Parent (commencing with the fiscal year ended August 31, 2018), a consolidated balance sheet of the Parent and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, stockholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP in all material respects, such consolidated statements to be audited and accompanied by a report and opinion of KPMG or any other independent certified public accountant of nationally recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit (except for qualifications resulting from the Obligations being classified as short term Indebtedness during the year prior to the applicable maturity date); and

(b) as soon as available, but in any event no later than 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower (commencing with the fiscal quarter ended November 30, 2018) and within 90 days of the end of the Borrower’s fourth fiscal quarter, a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations and cash flows for such fiscal quarter and for the portion of the Borrower’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail, such consolidated statements to be certified by a Responsible Officer of the Borrower as fairly presenting in all material respects the financial condition, results of operations and cash flows of the Borrower and its Subsidiaries in accordance with GAAP in all material respects, subject only to normal year-end audit adjustments and the absence of footnotes; and

(c) as soon as available, but in any event not later than 75 days after the beginning of each fiscal year of the Borrower, forecasts prepared by management of the Borrower of consolidated balance sheets and statements of income or operations and cash flows of the Borrower and its Subsidiaries on a quarterly basis for such fiscal year (including the fiscal year in which the Maturity Date occurs).

As to any information contained in materials furnished pursuant to Section 6.02(d), the Borrower shall not be separately required to furnish such information under clause (a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Borrower to furnish the information and materials described in clauses (a) and (b) above at the times specified therein.

6.02 Certificates; Other Information.

Deliver to the Administrative Agent (for further distribution to the Lenders), in form and detail reasonably satisfactory to the Administrative Agent and the Required Lenders:

(a) (i) within 45 days after the end of each fiscal quarter (including the fourth fiscal quarter) a Borrowing Base Certificate as of the last day of such fiscal quarter and (ii) within 5 Business Days following any individual or series of related Dispositions (other than leases) of, or casualty or condemnation events with respect to, any Pledged Railcars having an aggregate book value on the books of the Borrower in excess of $1,000,000, an updated Borrowing Base Certificate after giving effect to such event;

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(b) concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b) (commencing with the fiscal quarter ending August 31, 2018), a duly completed Compliance Certificate signed by a Responsible Officer of the Borrower (which delivery may, unless the Administrative Agent or a Lender requests an executed original, be by electronic communication including fax or email and shall be deemed to be an original authentic counterpart thereof for all purposes);

(c) promptly after any request by the Administrative Agent or any Lender (acting through the Administrative Agent), copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or other comparable governing body) (or the audit committee of the board of directors (or other comparable governing body)) of the Borrower by independent accountants in connection with the accounts or books of the Borrower or any Subsidiary, or any audit of any of them;

(d) promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to all of the stockholders of the Borrower, and copies of all annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file, if any, with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to be delivered to the Administrative Agent pursuant hereto;

(e) promptly after the furnishing thereof, copies of any material statement or material report furnished to any holder of debt securities of the Borrower or any Subsidiary thereof pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Lenders pursuant to Section 6.01 or any other clause of this Section 6.02;

(f) promptly, and in any event within ten Business Days after receipt thereof by the Borrower or any Subsidiary thereof, copies of each material notice or other material correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation by such agency regarding financial or other operational results of the Borrower or any Subsidiary thereof;

(g) promptly following any request therefor, information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable “know your customer” requirements under the PATRIOT Act, the Beneficial Ownership Regulation or other applicable anti-money laundering laws; and

(h) promptly, such additional information regarding the business, financial or corporate affairs of the Borrower or any Subsidiary, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request.

Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(d) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed on Schedule 10.02; or (ii) on which such documents are posted on the

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Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (ii) the Borrower shall notify the Administrative Agent and each Lender (by facsimile or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request by a Lender for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arranger will make available to the Lenders materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks, Syndtrak, ClearPar or a substantially similar electronic transmission system (the “Platform”) and (b) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to the Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrower hereby agrees that so long as the Borrower is the issuer of any outstanding debt or equity securities that are registered or issued pursuant to a private offering or is actively contemplating issuing any such securities (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the Arranger and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower or its securities for purposes of United States federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 10.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated as “Public Side Information;” and (z) the Administrative Agent and the Arranger and any Affiliate of the Administrative Agent or the Arranger shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform that is not designated as “Public Side Information.” Notwithstanding the foregoing, the Borrower shall not be under any obligation to mark any Borrower Materials “PUBLIC.”

6.03 Notices. Promptly notify the Administrative Agent and each Lender:

(a) of the occurrence of any Default;

(b) of any matter that has resulted or is reasonably expected to result in a Material Adverse Effect;

(c) of the occurrence of any ERISA Event that has resulted or is reasonably expected to result in liability in excess of the Threshold Amount; and

(d) of any material change in accounting policies or financial reporting practices by the Borrower or any Subsidiary.

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Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

6.04 Payment of Tax Obligations.

Pay and discharge as the same shall become due and payable, all its obligations and liabilities, including all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, (a) unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Borrower or such Subsidiary or (b) except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.

6.05 Preservation of Existence, Etc.

Except for Immaterial Subsidiaries, (a) preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 7.04 or 7.05; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.

6.06 Maintenance of Properties.

(a) Maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted; (b) make all necessary repairs thereto and renewals and replacements thereof; and (c) use the standard of care typical in the industry in the operation and maintenance of its material facilities, in each of the foregoing clauses (a), (b) and (c) except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

6.07 Maintenance of Insurance.

(a) Maintain with financially sound and reputable insurance companies that are not Affiliates of the Borrower, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts (after giving effect to any self-insurance compatible with the following standards) as are customarily carried under similar circumstances by such other Persons. The Administrative Agent and Lenders acknowledge and agree that the insurance set forth on Schedule 5.10 as of the Closing Date satisfies the requirements of this Section 6.07(a) as of the Closing Date.

(b) Cause the Administrative Agent to be named as lender loss payee or mortgagee, as its interest may appear, and/or additional insured with respect to any such insurance providing liability coverage or coverage in respect of any Collateral. All certificates of property and general liability insurance are to be delivered to the Administrative Agent, with the loss payable (but only in respect of Collateral) and additional insured endorsements in favor of the Administrative Agent and shall provide for not less than 30 days (10 days in the case of non-payment) prior written notice to the Administrative Agent of the exercise of any right of cancellation.

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(c) So long as one or more of the following conditions is true (i) no Event of Default has occurred and is continuing or (ii) (A) the loss covered by such insurance involves a potential claim of less than $2,500,000 and (B) no Event of Default under Section 8.01(a)(i), 8.01(a)(ii), 8.01(f) or 8.01(g) has occurred and is continuing, the Borrower and its Subsidiaries shall have the sole right to file claims under any property and general liability insurance policies, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies. Otherwise, the Administrative Agent shall have the sole right to file claims involving losses under any property and general liability insurance policies in respect of the Collateral, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.

6.08 Compliance with Laws.

Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

6.09 Books and Records.

(a) Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP in all material respects consistently applied shall be made of all financial transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Borrower or such Subsidiary, as the case may be.

6.10 Inspection Rights.

(a) Permit representatives and independent contractors of the Administrative Agent (who may be accompanied by the Lenders at the sole expense of such Lenders) to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its Responsible Officers, and independent public accountants, at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided, however, that excluding any such visits and inspections during the continuance of an Event of Default, none of the Administrative Agent or any of the Lenders may exercise rights under this Section 6.10(a) more often than two (2) times during any calendar year and only one (1) such visit by Administrative Agent (and no visits by any Lenders) shall be at the Borrower’s expense; provided, further, that when an Event of Default exists the Administrative Agent (or any of its respective representatives or independent contractors) (and any Lender may accompany Administrative Agent at its own expense) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice.

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(b) Notwithstanding anything to the contrary contained herein, the Administrative Agent may conduct annual appraisals of the Borrower’s rail car Collateral. Such appraisals shall be done at the expense of the Borrower (provided that Borrower shall only be responsible for the actual charges paid or incurred by Administrative Agent in connection with the performance of such appraisal) and shall be performed by an appraiser reasonably acceptable to the Administrative Agent.

6.11 Use of Proceeds.

Use the proceeds of the Credit Extensions for general corporate purposes (including to finance leased railcars and to repay existing Indebtedness of the Borrower) not in contravention of any applicable Law or of any Loan Document.

6.12 Pledged Railcars.

(a) Cause its lease agreements, taken as a whole, to restrict the use of the Pledged Railcars in Mexico in such a manner that the aggregate net book value of all Pledged Railcars subject to leases that allow the lessees thereof predominate use of their leased Pledged Railcars in Mexico does not exceed an amount equal to 5% of the sum of (i) the Borrowing Base plus (ii) the Cash Collateral. The Borrower shall be entitled to cure any breach of this Section 6.12(a) by pledging additional railcars and/or providing additional Cash Collateral, in each case, within five Business Days following the Borrower becoming aware of such breach.

(b) Concurrently with the delivery of the Compliance Certificates required pursuant to Section 6.02(b), deliver to the Administrative Agent a report identifying changes to the “reporting marks” (including the “road numbers”) of any Pledged Railcars since the Closing Date (or, if later, the most recent such report delivered to the Administrative Agent).

(c) Not permit its leases with respect to the Pledged Railcars to prohibit the grant of a security interest or other collateral pledge in such leases to the Administrative Agent as Collateral to secure the Obligations.

(d) Not permit non-Pledged Railcars owned by the Borrower that are subject to the same lease as any Pledged Railcars to be pledged to secure any obligations other than the Obligations unless the holders of such other obligations (or their representative or agent) have executed and delivered an intercreditor agreement with the Administrative Agent (which shall be in form and substance substantially similar to the Intercreditor Agreement executed and delivered on the Closing Date or otherwise reasonably satisfactory to the Administrative Agent).

6.13 Pledged Assets.

Cause the Collateral to be subject at all times to first priority (except as otherwise provided in any Intercreditor Agreement), perfected Liens in favor of the Administrative Agent to secure the Obligations to the extent required by and in accordance with the terms and conditions of the Collateral Documents, subject in any case to Liens permitted by Section 7.01 and (ii) deliver such other documentation as the Administrative Agent may reasonably request in connection with the foregoing, including, without limitation, appropriate UCC-1 financing statements, filings with the Surface Transportation Board of the United States, certified resolutions and other organizational and authorizing documents of such Person, favorable opinions of counsel (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to above and the perfection of the Administrative Agent’s Liens thereunder) and other items as may be reasonably requested by the Administrative Agent,

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all in form, content and scope reasonably satisfactory to the Administrative Agent. The Borrower shall also pledge additional owned railcars as required by Section 2.06. Anything in any Loan Document to the contrary notwithstanding, any reference made to a first priority perfected Lien or security interest in any Loan Document (excluding any Intercreditor Agreement) shall be deemed to include any Collateral that is subject to security interests in favor of both the holders of the Obligations and the holders of Indebtedness under any Parent Credit Facility or Indebtedness incurred pursuant to Section 7.03(p), as applicable, and, pursuant to an Intercreditor Agreement, such creditors have agreed that their respective security interests in such common Collateral shall have equal priority.

6.14 Anti-Corruption Laws.

Conduct its businesses in compliance in all material respects with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and other similar anti-corruption legislation in other jurisdictions and maintain policies and procedures designed to promote compliance in all material respects with such laws.

ARTICLE VII

NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied (other than contingent amounts not yet due), the Borrower shall not, nor shall it permit any Subsidiary to, directly or indirectly:

7.01 Liens.

Create, incur, assume or suffer to exist any Lien upon any of its property or assets, whether now owned or hereafter acquired, other than the following:

(a) Liens pursuant to any Loan Document;

(b) Liens existing on the Closing Date and listed on Schedule 7.01 and any renewals or extensions thereof, provided that (i) the property covered thereby is not increased other than after-acquired property that is affixed or incorporated into such property and proceeds and products of such property, (ii) the principal amount secured or benefited thereby is not increased (except by an amount equal to accrued and unpaid interest on the obligations secured thereby, and a reasonable premium or other reasonable amount paid in connection with such refinancing or extension, fees and expenses reasonably incurred in connection therewith, and by an amount equal to any existing commitments unutilized thereunder), (iii) the direct or any contingent obligor with respect thereto is not changed, and (iv) any renewal or extension of the obligations secured or benefited thereby is permitted by Section 7.03(b);

(c) Liens for taxes, fees, assessments and other governmental charges and levies (i) which are not individually, or in the aggregate, in excess of $1,000,000, (ii) which are not overdue for a period of more than 30 days or (iii) which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

(d) landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business (i) which are not individually, or in the aggregate, in excess of $1,000,000, (ii) which are not overdue for a period of more than 30 days or (iii) which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person;

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(e) pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA or applicable Environmental Law;

(f) (i) deposits to secure the performance of bids, trade contracts and leases (other than in connection with the borrowing of money), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business, and/or (ii) Liens on rail cars (the “transferred rail cars”) or other personal property (“transferred personal property”) that are transferred to the Borrower or any of its Subsidiaries by customers as consideration for the future delivery by the Borrower or any of its Subsidiaries to such customer of (1) existing rail car assets or other existing assets, (2) to-be-refurbished rail car assets or other to-be-refurbished assets or (3) to-be-constructed rail car assets or other to-be-constructed assets, so long as in either case (x) no Default exists or would result from the creation of such Liens, (y) such Liens (A) secure only the performance obligations of the Borrower and its Subsidiaries to deliver the assets described in items (1), (2) or (3) of this clause (f) to such customer, (B) extend to no property of the Borrower and its Subsidiaries other than the transferred rail cars or other transferred personal property, (C) are released upon completion of performance by the Borrower and its Subsidiaries and (z) the transferred rail cars or other transferred personal property shall not be included in the Borrowing Base while they are subject to such Liens;

(g) any zoning restrictions, easements, rights-of-way, encroachments, protrusions and other similar encumbrances and title defects affecting real property which, in the aggregate, do not in any case materially interfere with the ordinary conduct of the business of the applicable Person, or the use of the property for the intended purpose;

(h) Liens securing judgments for the payment of money not constituting an Event of Default under Section 8.01(h);

(i) Liens (other than Liens on the Pledged Railcars or, unless such shared Collateral is contemplated by and subject to an Intercreditor Agreement, any other Collateral) securing (i) Indebtedness permitted by Section 7.03(p) and (ii) any Swap Contracts relating thereto;

(j) Liens securing Indebtedness permitted under Section 7.03(e); provided that (i) such Liens do not at any time encumber any property other than the property financed by such Indebtedness or the proceeds thereof and (ii) the Indebtedness secured thereby does not exceed the cost of the property being acquired on the date of acquisition (other than by the amount of premiums paid thereon and the fees and expenses incurred in connection therewith); provided, further, that individual financings of equipment provided by one lender may be cross-collateralized to other individual financings of equipment provided by such lender.

(k) Liens on assets of Foreign Subsidiaries securing Indebtedness permitted under Section 7.03(f);

(l) Liens in favor of a banking or other financial institution arising as a matter of Law or under customary general terms and conditions encumbering deposits or other funds maintained with such banking or other financial institution (including the right of set off) and that are within the general parameters customary in the banking industry;

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(m) any right of a licensor under any license agreement for the use of intellectual property or other intangible assets as to which the Borrower or such Subsidiary is the licensee;

(n) any leases, licenses, subleases or sublicenses granted to others (i) in the ordinary course of business not interfering in any material respect, alone or in the aggregate, with the conduct of the business of the Borrower and its Subsidiaries taken as a whole or (ii) permitted pursuant to Section 7.05;

(o) Liens in favor of owners or purchasers of goods (including materials and/or components used in connection with the manufacture thereof) being manufactured or serviced in the ordinary course of business; provided that (i) such Liens do not at any time encumber any property other than the goods being manufactured or serviced (and such owned or purchased materials and/or components used in connection with the manufacture or service thereof) for such purchaser or owner, (ii) such purchaser or owner shall have paid for the materials being used to manufacture or service such goods through the making of progress payments or similar advances and (iii) such goods are excluded from the Borrowing Base;

(p) Liens solely on any cash earnest money deposits made by the Borrower or any of its Subsidiaries in connection with a Permitted Acquisition or other Investments permitted under Section 7.02 or Dispositions permitted under Section 7.05;

(q) deposits in the ordinary course to secure liability insurance carriers and Liens on premium refunds and insurance proceeds securing the financing of insurance premiums permitted hereunder;

(r) Liens securing Indebtedness permitted by Section 7.03(m) on property of a Person existing at the time such Person is merged into or consolidated with the Borrower or any of its Subsidiaries or otherwise becomes a Subsidiary of the Borrower; provided, that such Liens were not created in contemplation of such merger, consolidation or Investment and do not extend to any assets other than those of the Person merged into or consolidated with the Borrower or such Subsidiary or acquired by the Borrower or such Subsidiary;

(s) customary negative pledges on assets being sold or Disposed of, including customary restrictions on distributions by a Subsidiary of the Borrower to be sold, pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Equity Interests or assets of such Subsidiary; provided, that such Disposition is permitted by Section 7.05;

(t) Liens on cash and cash equivalents deposited with a third-party trustee that arise in connection with the defeasance, discharge or redemption of Indebtedness;

(u) Liens in favor of the Borrower or any of its Subsidiaries securing Indebtedness permitted under Section 7.03(i), other than any such Liens on assets of Borrower;

(v) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

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(w) Liens on assets leased to the Borrower or any Subsidiary under operating leases (including Liens on any subleases of such assets by the Borrower or such Subsidiary to third parties), which Liens (i) are granted in favor of the lessor with respect to the lease granting the Borrower or such Subsidiary rights in such assets as the lessee and (ii) secure the Borrower’s or such Subsidiary’s obligations to the lessor under such lease;

(x) Liens (other than Liens on the Pledged Railcars or, unless such shared Collateral is contemplated by and subject to an Intercreditor Agreement, any other Collateral) that secure any liability, obligation or Indebtedness in connection with any Parent Credit Facility or any Guarantee thereof;

(y) Liens (other than Liens on the Pledged Railcars or, unless such shared Collateral is contemplated by and subject to an Intercreditor Agreement, any other Collateral) securing (i) Indebtedness permitted pursuant to Section 7.03(o) and/or (ii) obligations, liabilities or Indebtedness in respect of Swap Contracts and/or Treasury Management Services of Parent or any of its Subsidiaries that are party to the Parent Credit Facility; and

(z) Liens not otherwise permitted under this Section 7.01, provided that the obligations secured thereby shall not exceed $5,000,000 in the aggregate at any time outstanding.

The foregoing to the contrary notwithstanding, the Borrower shall not be permitted to grant a Lien on the Pledged Railcars or any other Collateral to secure any Indebtedness, liabilities or other obligations under or in respect of or secured by the Parent Credit Facility, except, in the case of Collateral (other than Pledged Railcars), to the extent such shared Collateral is contemplated by and is the subject of an Intercreditor Agreement with the holders of such Indebtedness, liabilities or other obligations.

7.02 Investments.

Make or permit to exist any Investments, except:

(a) Investments held by the Borrower or such Subsidiary in the form of cash equivalents or other investments permitted under the Borrower’s cash investment policy as approved by the Borrower’s board of directors, members, managers or equivalent governing body;

(b) advances to officers, directors and employees of the Borrower and Subsidiaries in an aggregate amount not to exceed $500,000 at any time outstanding, for travel, entertainment, relocation and analogous ordinary business purposes;

(c) Investments (i) in the Parent and its Domestic Subsidiaries, (ii) in any Foreign Subsidiary of the Parent in an aggregate amount, when combined with the aggregate amount of Dispositions made pursuant to Section 7.05(d)(ii) during such fiscal year, not to exceed $10,000,000 in any fiscal year, and (iii) by any Foreign Subsidiary of the Parent or in any of its Subsidiaries;

(d) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;

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(e) other Investments not exceeding $15,000,000 in the aggregate in any fiscal year of the Borrower;

(f) Investments in any Person for the purpose of acquiring, managing, marketing, remarketing, leasing and/or selling rail cars in an aggregate amount for all Investments made pursuant to this clause (f) not to exceed $30,000,000 at any time outstanding;

(g) Investments resulting from entering into Treasury Management Services (or Guarantees thereof for Treasury Management Services of the Parent and any of its Subsidiaries that are party to the Parent Credit Facility);

(h) Permitted Acquisitions, including, for the avoidance of doubt, any Investment in any Subsidiary in an amount required to permit such Subsidiary to consummate a Permitted Acquisition, which amount is actually applied by such Subsidiary to consummate such Permitted Acquisition substantially concurrently with the making of such Investment;

(i) to the extent constituting Investments, (i) the creation of Liens, the incurrence of any Guarantee, the making of fundamental changes and the consummation of Dispositions permitted under Sections 7.01, 7.03, 7.04 and 7.05, respectively and (ii) the making of Restricted Payments;

(j) Swap Contracts permitted by Section 7.03(c);

(k) Investments held by a Person acquired in a Permitted Acquisition to the extent that such Investments were not made in contemplation of or in connection with such Permitted Acquisition and were in existence on the date of such Permitted Acquisition; and

(l) Investments existing or contemplated on the Closing Date and set forth on Schedule 7.02 (and any extensions, modifications or renewals thereof provided that the amount of the original Investment is not increased except as otherwise permitted by this Section 7.02).

7.03 Indebtedness.

Create, incur, assume or suffer to exist any Indebtedness, except:

(a) Indebtedness under the Loan Documents;

(b) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03 and any refinancings, refundings, renewals or extensions thereof; provided that the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing, by an amount equal to accrued and unpaid interest on such Indebtedness, and by an amount equal to any existing commitments unutilized thereunder;

(c) obligations (contingent or otherwise) of the Borrower or any Subsidiary existing or arising under any Swap Contract (or under any Guarantee of any Swap Contract of the Parent or any Subsidiary of the Parent party to the Parent Credit Facility), provided that (i) such obligations are (or were) entered into by such Person (or Parent or such Subsidiary of the Parent, as applicable) in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably

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anticipated by such Person (or Parent or such Subsidiary of the Parent, as applicable), or changes in the value of securities issued by such Person, and not for purposes of speculation or taking a “market view;” and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party;

(d) Guarantees in respect of any Parent Credit Facility;

(e) capital leases (including sale-leaseback transactions) or purchase money obligations for fixed or capital assets, within the limitations set forth in Section 7.01(j), and in an aggregate amount not to exceed $25,000,000 at any one time outstanding, and any refinancings, refundings, renewals or extensions thereof; provided that the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to accrued and unpaid interest on such Indebtedness and a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing;

(f) Indebtedness of Foreign Subsidiaries incurred in the ordinary course of business;

(g) earn-out obligations incurred in respect of Permitted Acquisitions;

(h) Guarantees given by the Borrower or any Subsidiary in respect of (i) any Indebtedness of the Parent or any of its Subsidiaries and/or (ii) other Indebtedness that is otherwise permitted under this Section 7.03;

(i) intercompany Indebtedness resulting from loans and advances permitted by Section 7.02;

(j) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees or obligations in respect of letters of credit related thereto provided by the Borrower or any of its Subsidiaries in the ordinary course of business;

(k) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five Business Days of its incurrence;

(l) Indebtedness incurred in favor of insurance companies (or their financing affiliates) in connection with the financing of insurance premiums; provided, that the total of all such Indebtedness shall not exceed the aggregate amount of such unpaid insurance premiums;

(m) Indebtedness of a Person of the type described in Section 7.03(e) existing at the time such Person is merged into or consolidated with the Borrower or any of its Subsidiaries or otherwise becomes a Subsidiary of the Borrower; which Indebtedness was not incurred in contemplation of such merger, consolidation or Investment and is non-recourse to the Borrower or any Subsidiary other than such Person, and any refinancings, refundings, renewals or extensions thereof, provided that (i) the property securing such Indebtedness is not increased, (ii) the principal amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to accrued and unpaid interest on such Indebtedness and a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder and (iii) the direct or any contingent obligor with respect to such Indebtedness is not changed;

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(n) Indebtedness of the Borrower or any of its Subsidiaries to the extent the net proceeds thereof are promptly deposited to defease or satisfy and discharge any other Indebtedness of such obligor not prohibited by this Section 7.03; provided that: (i) the amount of such new Indebtedness does not exceed the outstanding amount of the Indebtedness to be defeased or satisfied and discharged except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such defeasance or satisfaction and discharge, (ii) the terms relating to principal amount, amortization, maturity, collateral (if any) and subordination (if any), and other material terms taken as a whole, of any such new Indebtedness are no less favorable in any material respect to the Borrower and its Subsidiaries or the Lenders than the terms of any agreement or instrument governing the Indebtedness being defeased or satisfied and discharged and the interest rate applicable to any such new Indebtedness does not exceed the then applicable market interest rate and (iii) upon such defeasance, discharge or satisfaction, such new Indebtedness must otherwise be permitted under another subsection of this Section 7.03 and shall thereafter not be permitted under this subsection (n);

(o) to the extent constituting Indebtedness, obligations in respect of Treasury Management Services provided to Borrower or any of its Subsidiaries incurred in the ordinary course of business (and Guarantees thereof for Treasury Management Services of the Parent and any Subsidiary of the Parent party to the Parent Credit Facility);

(p) term loan Indebtedness, debt securities, or other long term Indebtedness in an aggregate principal amount at any one time outstanding not to exceed (together with the outstanding unpaid principal amount of the Loans) $250,000,000; and

(q) other Indebtedness, on terms reasonably acceptable to the Administrative Agent, in an aggregate principal amount not to exceed $25,000,000 at any one time outstanding; provided that if such Indebtedness is secured, the aggregate amount of such Indebtedness incurred in reliance on this clause (q) that is secured shall not exceed $5,000,000 at any one time outstanding.

7.04 Fundamental Changes.

Merge, dissolve, divide, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that, so long as no Event of Default exists or would result therefrom:

(a) (i) any Subsidiary may merge with (y) the Borrower, provided that the Borrower shall be the continuing or surviving Person, or (z) any one or more other Subsidiaries or (ii) the Borrower or any Subsidiary may merge with any Person in order to effect any Investment permitted pursuant to Section 7.02, provided that (1) if the Borrower is a party to such transaction, the Borrower shall be the continuing or surviving Person and (2) if a Subsidiary is a party to such transaction, a Subsidiary shall be the continuing or surviving Person; and

(b) the Borrower may merge or consolidate with another corporation or entity which merger or consolidation merely effects the form or domicile of the Borrower without changing the respective holdings of Equity Interests in the Borrower (or in the surviving entity) by equity holders and pursuant to which all obligations of the Borrower in respect of this Agreement are and remain obligations of the surviving; provided that the surviving entity shall be organized under the laws of a political subdivision of the United States;

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(c) any Subsidiary may Dispose of all or substantially all of its assets (upon voluntary liquidation, dissolution or otherwise) to the Borrower or to another Subsidiary; and

(d) any Subsidiary may divide; provided that if the dividor in such transaction is a Subsidiary Guarantor, then the newly formed entities must be Subsidiary Guarantors.

7.05 Dispositions.

Make any Disposition, except:

(a) Dispositions of obsolete, damaged, destroyed or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;

(b) Dispositions of inventory in the ordinary course of business or equipment on or held for lease in the ordinary course of business, including sales, leases or exchanges of such assets;

(c) Dispositions of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property;

(d) Dispositions of property to (i) the Parent or any wholly-owned Domestic Subsidiary of the Parent and (ii) to any Foreign Subsidiary of the Parent in an aggregate amount, when combined with the aggregate amount of Investments made pursuant to Section 7.02(c)(ii) during such fiscal year, not to exceed $10,000,000 in any fiscal year;

(e) Dispositions permitted by Section 7.04;

(f) Dispositions of lease assets in lease securitization, structured finance or syndication transactions, provided that the Borrower remains in compliance with its limitations under the Borrowing Base and all other terms and conditions of this Agreement;

(g) Dispositions pursuant to any sale-leaseback transactions under Section 7.03(e);

(h) sales or other Dispositions of assets having a fair market value (as determined by the Borrower in its reasonable discretion) of less than $10,000,000 in the aggregate during the term of this Agreement;

(i) Dispositions of cash equivalents in the ordinary course of business;

(j) leases or subleases of property, including real property, in each case in the ordinary course of business not materially interfering with the conduct of the business of the Borrower and its Subsidiaries, taken as a whole;

(k) licenses for the use of intellectual property of the Borrower or a Subsidiary in the ordinary course of the Borrower’s or such Subsidiary’s business;

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(l) Dispositions of accounts receivable in connection with the compromise, settlement or collection thereof in the ordinary course of business;

(m) any surrender or waiver of contractual rights or the settlement, release or surrender of contractual rights or other litigation claims in the ordinary course of business;

(n) to the extent constituting a Disposition, (i) Restricted Payments and (ii) Liens, Investments and fundamental changes permitted by Sections 7.01, 7.02 and 7.04, respectively;

(o) casualty events or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceedings of, any property of the Borrower or any of its Subsidiaries;

(p) Dispositions of Investments in, and issuances of any Equity Interests in, joint ventures to the extent required by or made pursuant to customary buy/sell arrangements between the joint venture parties set forth in joint venture arrangements and similar binding arrangements; and

(q) the assignment, cancellation, abandonment or other Disposition of (i) intellectual property or (ii) real property leases or licenses, that is, in the good faith judgment of Borrower, no longer economically practicable to maintain or useful in the conduct of the business of Borrower and the Subsidiaries, taken as a whole;

provided, however, that (i) any Disposition pursuant to clauses (c), (f) or (g) shall be for fair market value and (ii) if a Disposition involves Pledged Railcars (other than a lease thereof), the Borrower shall, if required by Section 6.02(a), deliver an updated Borrowing Base Certificate and shall comply with Section 2.06.

7.06 Change in Nature of Business.

Engage in any material line of business substantially different from those lines of business conducted by the Borrower and its Subsidiaries on the Closing Date, except for any reasonable extensions or expansions thereof or any business substantially related or incidental thereto.

7.07 Transactions with Affiliates.

Other than (a) transactions not prohibited by this Agreement, (b) payment of reasonable directors fees, (c) any issuance of Qualified Equity Interests of the Borrower to Affiliates of the Borrower and (d) any employment, consulting, service or termination agreement or reasonable and customary indemnification arrangements, entered into by the Borrower or any of its Subsidiaries with directors, officers and employees of the Borrower or any of its Subsidiaries and the payment of compensation to directors, officers and employees of the Borrower or any of its Subsidiaries (including amounts paid pursuant to employee benefit plans, employee stock option or similar plans), enter into any transaction of any kind with any Affiliate of the Borrower, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Borrower or such Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate.

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7.08 Burdensome Agreements.

Enter into any Contractual Obligation that (a) limits the ability of any Subsidiary to make Restricted Payments to the Borrower or any Subsidiary or to otherwise transfer property to the Borrower, (b) limits the ability of the Borrower to create, incur, assume or suffer to exist Liens on the Collateral to secure the Obligations or (c) requires the grant of a Lien to secure an obligation of such Person if a Lien on the Collateral is granted to secure the Obligations, except:

(i) Contractual Obligations in existence as of the Closing Date and set forth in Schedule 7.08;

(ii) any Parent Credit Facility so long as the encumbrances and restrictions are not materially more restrictive than those set forth in the Parent Credit Facility (as in effect on the Closing Date);

(iii) this Agreement or any other Loan Document;

(iv) in the case of subclause (a), any instrument governing Indebtedness or Equity Interests of a Person and its Subsidiaries acquired by the Borrower or any of its Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired, provided that, in the case of Indebtedness, such Indebtedness was permitted by Section 7.03;

(v) customary provisions restricting subletting or assignment of any lease, contract, or license of the Borrower or any Subsidiary or customary provisions in agreements that restrict the assignment of such agreement or any rights thereunder;

(vi) any agreement for the sale or other Disposition of assets, including customary restrictions on distributions by a Subsidiary of the Borrower to be sold, pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Equity Interests or assets of such Subsidiary; provided, that such Disposition was permitted by Section 7.05;

(vii) in the case of subclause (a), any instrument or agreements governing Indebtedness permitted by Section 7.03(f), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Foreign Subsidiaries obligated in respect of such Indebtedness;

(viii) restrictions on cash or other deposits imposed by customers under contracts entered into in the ordinary course of business;

(ix) customary provisions in joint venture agreements and other similar agreements applicable to Joint Ventures permitted under Section 7.02 and applicable solely to such Joint Venture and are entered into in the ordinary course of business;

(x) any agreement or instrument relating to any Indebtedness permitted to be incurred subsequent to the Closing Date pursuant to Section 7.03 if the encumbrances and restrictions are not materially more restrictive than those set forth in the Parent Credit Facility (as in effect on the Closing Date) or any Loan Document and do not otherwise materially impair the ability of the Borrower to perform its obligations under this Agreement;

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(xi) any negative pledge incurred or provided in favor of any holder of Indebtedness permitted under Section 7.03(e), 7.03(m) or 7.03(p) solely to the extent any such negative pledge relates to the property financed by or the subject of such Indebtedness and such negative pledge does not apply to Pledged Railcars; and

(xii) negative pledges in favor of holders of Indebtedness permitted by Section 7.03 that limit the right of the debtor to dispose of or encumber the assets financed with such Indebtedness.

7.09 Use of Proceeds.

Use the proceeds of any Credit Extension to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.

7.10 Financial Covenants.

Beginning with the fiscal quarter ended August 31, 2018:

(a) Consolidated Adjusted Interest Coverage Ratio. Permit the Consolidated Adjusted Interest Coverage Ratio as of the end of any fiscal quarter of the Borrower to be less than 2.00 to 1.00.

(b) Consolidated Capitalization Ratio. Permit the Consolidated Capitalization Ratio as of the end of any fiscal quarter of the Borrower to be greater than 0.60 to 1.00.

For purposes of the financial ratio calculations in this Section 7.10, no earnings or losses of any Managed Person shall be included.

7.11 Sanctions; Anti-Corruption Laws.

Directly or indirectly, use any Loan or the proceeds of any Loan, or lend, contribute or otherwise make available such Loan or the proceeds of any Loan to any Person, to fund any activities of or business with any Person, or in any Designated Jurisdiction, that, at the time of such funding, is the subject of Sanctions, or in any other manner that will result in a violation by any Person (including any Person participating in the transaction, whether as Lender, Arranger, Administrative Agent, or otherwise) of Sanctions. Directly or indirectly use any Credit Extension or the proceeds of any Credit Extension for any purpose which would breach the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 or other similar anti-corruption legislation in other jurisdictions.

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ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

8.01 Events of Default.

Any of the following shall constitute an Event of Default:

(a) Non-Payment. The Borrower fails to pay (i) when and as required to be paid herein, and in the currency required hereunder, any amount of principal of any Loan, or (ii) within three days after the same becomes due, any interest on any Loan, or any fee due hereunder, or (iii) within ten days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or

(b) Specific Covenants. The Borrower fails to perform or observe any term, covenant or agreement contained in (i) Section 6.01, which failure continues for more than five (5) Business Days after the date specified for performance or compliance with such term or condition or (ii) any of Section 6.02, 6.03, 6.05(a), 6.10, 6.11, 6.12 or 6.13 or Article VII, other than pursuant to Sections 7.02 and 7.03; or

(c) Other Defaults. The Borrower fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for 30 days after the earlier of (i) the date upon which a Responsible Officer of the Borrower knew of such failure and (ii) the date upon which written notice thereof is given to the Borrower by the Administrative Agent; or

(d) Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Borrower herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made; or

(e) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make any payment beyond the applicable grace period with respect thereto, if any (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relating to any Indebtedness or Guarantee having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral in respect thereof to be demanded; (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which the

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Borrower or any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which the Borrower or any Subsidiary is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by the Borrower or such Subsidiary as a result thereof is greater than the Threshold Amount; or (iii) the occurrence and continuation of an “Event of Default”, or equivalent term (as defined in the Parent Credit Facility); or

(f) Insolvency Proceedings, Etc. The Borrower or any of its Subsidiaries (other than an Immaterial Subsidiary) institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or

(g) Inability to Pay Debts; Attachment. (i) The Borrower or any Subsidiary (other than an Immaterial Subsidiary) becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 30 days after its issue or levy; or

(h) Judgments. There is entered against the Borrower or any Subsidiary (i) a final judgment or order for the payment of money in an aggregate amount exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 30 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or

(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or

(j) Invalidity of Loan Documents. Any material provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder, as in accordance with the terms of such Loan Document or satisfaction in full of all the Obligations, ceases to be in full force and effect; or the Borrower or any other Person contests in any manner the validity or enforceability of any provision of any Loan Document; or the Borrower denies that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any provision of any Loan Document; or

(k) Change of Control. There occurs any Change of Control.

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Solely for purposes of determining whether an Event of Default has occurred under Section 8.01(f) or 8.01(g), it is understood and agreed that all Immaterial Subsidiaries affected by the applicable event or circumstance shall be considered together, as a single consolidated Person, for purposes of determining whether an Event of Default under Section 8.01(f) or 8.01(g) has occurred.

8.02 Remedies Upon Event of Default.

If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans to be terminated, whereupon such commitments and obligation shall be terminated; and

(b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower; and

(c) exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents and applicable law or equity;

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States (or other applicable Debtor Relief Law), the obligation of each Lender to make Loans shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable without further act of the Administrative Agent or any Lender.

8.03 Application of Funds.

After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable as set forth in the proviso to Section 8.02), any amounts received on account of the Obligations shall be (subject to the provisions of Section 2.16) applied in the following order:

First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders (including fees, charges and disbursements of counsel to the respective Lenders (including fees and time charges for attorneys who may be employees of any Lender) and amounts payable under Article III), ratably among them in proportion to the respective amounts described in this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans and fees, premiums and scheduled periodic payments, and any interest accrued thereon, due under any Secured Hedge Agreement between the Borrower and any Hedge Bank, ratably among the Lenders (and, in the case of such Secured Hedge Agreements, Hedge Banks) in proportion to the respective amounts described in this clause Third held by them;

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Fourth, (a) payment of that portion of the Obligations constituting unpaid principal of the Loans, (b) payment of breakage, termination or other payments, and any interest accrued thereon, due under any Secured Hedge Agreement between the Borrower and any Hedge Bank, ratably among the Lenders (and, in the case of such Secured Hedge Agreements, Hedge Banks) in proportion to the respective amounts described in this clause Fourth held by them; and

Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Law.

Notwithstanding the foregoing, Obligations arising under Secured Hedge Agreements shall be excluded from the application described above if the Administrative Agent has not received a Secured Party Designation Notice, together with such supporting documentation as the Administrative Agent may request, from the applicable Hedge Bank. Each Hedge Bank not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of Article IX for itself and its Affiliates as if a “Lender” party hereto.

ARTICLE IX

ADMINISTRATIVE AGENT

9.01 Appointment and Authority.

Each of the Lenders hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents (including Intercreditor Agreements) and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article (other than Sections 9.06 and 9.10) are solely for the benefit of the Administrative Agent and the Lenders, and the Borrower shall not have rights as a third party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

The Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders (in its capacities as a Lender and a potential Hedge Bank) hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender for purposes of acquiring, holding and enforcing any and all Liens on Collateral, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent, shall be entitled to the benefits of all provisions of this Article IX and Article X (including Section 10.04(c), as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.

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9.02 Rights as a Lender.

The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders or to provide notice to or consent of the Lenders with respect thereto.

9.03 Exculpatory Provisions.

The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent and its Related Parties:

(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty or responsibility to disclose, and shall not be liable for the failure to disclose, any information relating to any of the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

Neither the Administrative Agent nor any of its Related Parties shall be liable to any Lender for any action taken or not taken by the Administrative Agent under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby or thereby (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. Any such action taken or failure to act pursuant to the foregoing shall be binding on all Lenders. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given in writing to the Administrative Agent by the Borrower or a Lender.

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Neither the Administrative Agent nor any of its Related Parties shall have any duty or obligation to any Lender or participant or any other Person to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or the creation, perfection or priority of any Lien purported to be created by the Loan Documents, (v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

9.04 Reliance by Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall be fully protected in relying and shall not incur any liability for relying upon, any notice, request, certificate, communication, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall be fully protected in relying, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

9.05 Delegation of Duties.

The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

9.06 Resignation of Administrative Agent.

(a) The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, with the consent of the Borrower at all times other than during the existence of an Event of Default (which consent shall not be unreasonably withheld or delayed), to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the

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Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to) on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above, with the consent of the Borrower at all times other than during the existence of an Event of Default (which consent shall not be unreasonably withheld or delayed), provided that in no event shall any such successor Administrative Agent be a Defaulting Lender. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

(b) If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Required Lenders may, to the extent permitted by applicable Law, by notice in writing to the Borrower and such Person remove such Person as Administrative Agent and, with the consent of the Borrower at all times other than during the existence of an Event of Default (which consent shall not be unreasonably withheld or delayed), appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.

(c) With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (i) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (ii) except for any indemnity payments or other amounts then owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or removed) Administrative Agent (other than as provided in Section 3.08 and other than any rights to indemnity payments or other amounts owed to the retiring or removed Administrative Agent as of the Resignation Effective Date or the Removal Effective Date, as applicable), and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them (i) while the retiring or removed Administrative Agent was acting as Administrative Agent and (ii) after such resignation or removal for as long as any of them continues to act in any capacity hereunder or under the other Loan Documents, including (A) acting as collateral agent or otherwise holding any collateral security on behalf of any of the holders of the Obligations and (B) in respect of any actions taken in connection with transferring the agency to any successor Administrative Agent.

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9.07 Non-Reliance on Administrative Agent and Other Lenders.

Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

9.08 No Other Duties, Etc.

Anything herein to the contrary notwithstanding, none of the documentation agents, co-agents, syndication agents, bookrunners or arrangers listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent or a Lender hereunder.

9.09 Administrative Agent May File Proofs of Claim; Credit Bidding.

In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to the Borrower, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations arising under the Loan Documents that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 2.09, 2.10 and 10.04) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 10.04.

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

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The holders of the Obligations hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Obligations (including accepting some or all of the Collateral in satisfaction of some or all of the Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code of the United States, including under Sections 363, 1123 or 1129 of the Bankruptcy Code of the United States, or any similar Laws in any other jurisdictions to which the Borrower is subject, (b) at any other sale or foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with any applicable Law. In connection with any such credit bid and purchase, the Obligations owed to the holders thereof shall be entitled to be, and shall be, credit bid on a ratable basis (with Obligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that would vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) in the asset or assets so purchased (or in the Equity Interests or debt instruments of the acquisition vehicle or vehicles that are used to consummate such purchase). In connection with any such bid (i) the Administrative Agent shall be authorized (A) to form one or more acquisition vehicles to make a bid, and (B) to adopt documents providing for the governance of the acquisition vehicle or vehicles (provided that any actions by the Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or Equity Interests thereof shall be governed, directly or indirectly, by the vote of the Required Lenders, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Lenders contained in clauses (a) through (f) of Section 10.01) and (ii) to the extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Obligations assigned to the acquisition vehicle exceeds the amount of debt credit bid by the acquisition vehicle or otherwise), such Obligations shall automatically be reassigned to the Lenders pro rata and the Equity Interests and/or debt instruments issued by any acquisition vehicle on account of the Obligations that had been assigned to the acquisition vehicle shall automatically be cancelled, without the need for any Lender or any acquisition vehicle to take any further action.

9.10 Collateral.

Without limiting the provisions of Section 9.09, each of the Lenders (including in its capacities as a potential Hedge Bank) irrevocably authorizes the Administrative Agent, at its option and in its discretion,

(a) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon termination of the Commitments and payment in full of all Obligations (other than contingent indemnification obligations) arising under the Loan Documents, (ii) that is transferred or to be transferred as part of or in connection with any Disposition permitted hereunder or under any other Loan Document, (iii) with respect to any Cash Collateral, so long as the Borrower is in compliance with the Borrowing Base Ratio, (iv) that is owned by a Person other than the Borrower or (v) subject to Section 10.01, if approved, authorized or ratified in writing by the Required Lenders; and

(b) to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by clause (ii) of Section 7.01(f) or Section 7.01(j).

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Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property.

The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent’s Lien thereon, or any certificate prepared by the Borrower in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.

9.11 Secured Hedge Agreements.

No Hedge Bank that obtains the benefit of Section 8.03 or any Collateral by virtue of the provisions hereof or any Collateral Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) (or to notice of or to consent to any amendment, waiver or modification of the provisions hereof or any Collateral Document) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Article IX to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Secured Hedge Agreements except to the extent expressly provided herein and unless the Administrative Agent has received a Secured Party Designation Notice of such Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Hedge Bank. The Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Secured Hedge Agreements in the case of the termination of the Commitments and payment in full of all Obligations (other than contingent indemnification obligations) arising under the Loan Documents.

9.12 ERISA Matters.

(a) Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, and the Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower, that at least one of the following is and will be true:

(i) such Lender is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more Benefit Plans with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments or this Agreement,

(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement,

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(iii) (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement, or

(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

(b) In addition, unless either (1) subclause (i) in the immediately preceding subsection (a) is true with respect to a Lender or (2) a Lender has provided another representation, warranty and covenant in accordance with subclause (iv) in the immediately preceding subsection (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and the Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower, that none of the Administrative Agent or the Arranger or any of their respective Affiliates is a fiduciary with respect to the assets of such Lender involved in such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related hereto or thereto).

ARTICLE X

MISCELLANEOUS

10.01 Amendments, Etc.

(a) No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrower, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

(i) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02) without the written consent of such Lender;

(ii) postpone any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby;

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(iii) reduce the principal of, or the rate of interest specified herein on, any Loan, or (subject to clause (y) of the second proviso to this Section 10.01(a)) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary (A) to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest at the Default Rate or (B) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or to reduce any fee payable hereunder;

(iv) change Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly and adversely affected thereby;

(v) change the definition of “Required Lenders” or change any provision of this Section 10.01(a) without the written consent of each Lender directly and adversely affected thereby; or

(vi) release all or substantially all of the Collateral in any transaction or series of related transactions without the written consent of each Lender whose Obligations are secured by such Collateral;

and, provided further, that (x) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; (y) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto; and (z) the Administrative Agent and the Borrower may amend this Agreement as contemplated by Section 3.07.

Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Defaulting Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.

(b) Notwithstanding any provision herein to the contrary the Administrative Agent and the Borrower may jointly amend, modify or supplement this Agreement or any other Loan Document to cure or correct administrative errors or omissions, any ambiguity, omission, defect or inconsistency or to effect administrative changes, and such amendment shall become effective without any further consent of any other party to such Loan Document so long as (i) such amendment, modification or supplement does not adversely affect the rights of any Lender or other holder of Obligations in any material respect and (ii) the Lenders shall have received at least five Business Days’ prior written notice thereof and the Administrative Agent shall not have received, within five Business Days of the date of such notice to the Lenders, a written notice from the Required Lenders stating that the Required Lenders object to such amendment.

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10.02 Notices; Effectiveness; Electronic Communication.

(a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

(i) if to the Borrower, or the Administrative Agent, to the address, facsimile number, electronic mail address or telephone number specified for such Person on Schedule 10.02; and

(ii) if to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified in its Administrative Questionnaire (including, as appropriate, notices delivered solely to the Person designated by a Lender on its Administrative Questionnaire then in effect for the delivery of notices that may contain material non-public information relating to the Borrower).

Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e mail, FpML messaging, and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may each, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii), if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-

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INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY (AS DEFINED BELOW) IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any Lender, or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of Borrower Materials or notices through the Platform, any other electronic platform or electronic messaging service or through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to the Borrower, any Lender or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

(d) Change of Address, Etc. Each of the Borrower and the Administrative Agent may change its address, facsimile or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, facsimile or telephone number for notices and other communications hereunder by notice to the Borrower and the Administrative Agent. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, facsimile number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable Law, including United States federal and state securities Laws, to make reference to Borrower Materials that are not made available through the “Public Side Information” portion of the Platform and that may contain material non-public information with respect to the Borrower or its securities for purposes of United States federal or state securities Laws.

(e) Reliance by Administrative Agent and Lenders. The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic or electronic Loan Notices) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify the Administrative Agent, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice given by or on behalf of the Borrower. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

10.03 No Waiver; Cumulative Remedies; Enforcement.

No failure by any Lender or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under any other Loan Document (including the imposition of the Default Rate)

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preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document are cumulative and not exclusive of any rights, remedies, powers and privileges provided by Law.

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Borrower shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.02 for the benefit of all the Lenders; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) any Lender from exercising setoff rights in accordance with Section 10.08 (subject to the terms of Section 2.14), or (c) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to the Borrower under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in clauses (b) and (c) of the preceding proviso and subject to Section 2.14, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

10.04 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable and documented out-of-pocket fees, charges and disbursements of counsel for the Administrative Agent), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, enforcement and collection, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), and (ii) all out-of-pocket expenses incurred by the Administrative Agent or any Lender (including the fees, charges and disbursements of any counsel for the Administrative Agent), and shall pay all fees and time charges for attorneys who may be employees of the Administrative Agent or any Lender, in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any collection, enforcement, workout, restructuring or negotiations in respect of such Loans; provided that pursuant to this clause (a), the Borrower shall not be required to reimburse such fees, charges and disbursements of more than one primary counsel to the Administrative Agent and all the Lenders, taken as a whole, and if necessary, one special counsel and one local counsel in each relevant jurisdiction, to the Administrative Agent and the Lenders, taken as a whole, unless the representation of one or more Lenders by such counsel would be inappropriate due to the existence of an actual or perceived conflict of interest, in which case, upon prior written notice to the Borrower, the Borrower shall also be required to reimburse the reasonable out-of-pocket fees, charges and disbursements of one additional counsel to such affected Lenders in each relevant jurisdiction.

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(b) Indemnification by the Borrower. The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), the Arranger, and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (limited, in the case of legal fees and expenses of counsel, to the fees, charges and disbursements of one primary counsel to the Indemnitees, taken as a whole, and if reasonably necessary, one special counsel and one local counsel in each relevant jurisdiction, to the Indemnitees, taken as a whole, unless the representation of one or more Indemnitees by such counsel would be inappropriate due to the existence of an actual or perceived conflict of interest, in which case, upon prior written notice to the Borrower, the Borrower shall also be required to reimburse the reasonable out-of-pocket fees, charges and disbursements of one additional counsel to such affected Indemnitees in each relevant jurisdiction), incurred by any Indemnitee or asserted against any Indemnitee by any Person (including the Borrower) arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents (including in respect of any matters addressed in Section 3.01), (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged Release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee (or any of its Related Indemnified Parties), (y) result from a claim brought by the Borrower against an Indemnitee for material breach of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction or (z) any dispute solely among the Indemnitees other than any claims against an Indemnitee in its capacity or in fulfilling its role as Administrative Agent or Arranger or any similar role under this Agreement or any other Loan Document and other than any claims arising out of any act or omission of the Borrower or any of its Affiliates. Without limiting the provisions of Section 3.01(c), this Section 10.04(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

(c) Reimbursement by Lenders. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof) or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent) or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.13(d).

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(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, none of the Borrower, any agent nor any Lender shall assert, and each hereby waives, and acknowledges that no other Person shall have, any claim against any other party hereto (or any Indemnitee or the Borrower), on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof (other than in respect of any such damages incurred or paid by an Indemnitee to a third party and to which such Indemnitee is otherwise entitled to indemnification as provided above). No Indemnitee shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

(e) Payments. All amounts due under this Section shall be payable not later than ten Business Days after demand therefor together with customary invoice supporting reimbursement or payment.

(f) Survival. The agreements in this Section and the indemnity provisions of Section 10.02(e) shall survive the resignation of the Administrative Agent, the replacement of any Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all the other Obligations.

10.05 Payments Set Aside.

To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the applicable Overnight Rate from time to time in effect, in the applicable currency of such recovery or payment. The obligations of the Lenders under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

10.06 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement and the other Loan Documents shall be binding upon and inure to the benefit of the parties hereto and thereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder or thereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any

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Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

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

(i) Minimum Amounts.

(A) In the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the related Loans at the time owing to it or contemporaneous assignments to related Approved Funds (determined after giving effect to such assignments) that equal at least the amount specified in subsection (b)(i)(B) of this Section in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(B) in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed).

(ii) Proportional Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or Commitment assigned;

(iii) Required Consents. No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof; and

(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of any Commitment if such assignment is to a Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender.

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(iv) Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(v) No Assignment to Certain Persons. No such assignment shall be made to (A) the Borrower or any of the Borrower’s Affiliates or Subsidiaries, (B) any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B), or (C) a natural Person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural Person).

(vi) Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment); provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.

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(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower (and such agency being solely for Tax purposes), shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it (or the equivalent thereof in electronic form) and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans owing to each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural Person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural Person), a Defaulting Lender or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 10.04(c) without regard to the existence of any participation.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in Section 10.01(a) that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section (it being understood that the documentation required under Section 3.01(e) shall be delivered to the Lender who sells the participation) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 3.06 and 10.13 as if it were an assignee under paragraph (b) of this Section and (B) shall not be entitled to receive any greater payment under Sections 3.01 or 3.04, with respect to any participation, than the Lender from whom it acquired the applicable participation would have been entitled to receive unless the sale of such participation is made with the Borrower’s prior written consent. Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 3.06 with respect to any Participant. To the extent permitted by Law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided that such Participant agrees to be subject to Section 2.14 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register

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(including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(e) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note(s), if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

10.07 Treatment of Certain Information; Confidentiality.

Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates, its auditors and to its and its Affiliates’ Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as, or at least as restrictive as, those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or any Eligible Assignee invited to become a Lender pursuant to Section 2.15 or (ii) any actual or prospective counterparty (or its Related Parties) to any swap or derivative transaction relating to the Borrower and its obligations, this Agreement or payments hereunder, (g) on a confidential basis to (i) any rating agency in connection with rating the Borrower or its Subsidiaries or the credit facilities provided hereunder or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers or other market identifiers with respect to the credit facilities provided hereunder, (h) with the consent of the Borrower or (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower. In addition, the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry, and service providers to the Administrative Agent and the Lenders in connection with the administration and management of this Agreement, the other Loan Documents, the Commitments and the Loans.

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For purposes of this Section, “Information” means all information received from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender on a nonconfidential basis prior to disclosure by the Borrower or any Subsidiary. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

Each of the Administrative Agent and the Lenders acknowledges that (a) the Information may include material non-public information concerning the Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including United States federal and state securities Laws.

10.08 Right of Setoff.

If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, after obtaining the prior written consent of the Administrative Agent, to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender or any such Affiliate to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement or any other Loan Document to such Lender or its respective Affiliates, irrespective of whether or not such Lender or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower may be contingent or unmatured or are owed to a branch or office or Affiliate of such Lender different from the branch or office or Affiliate holding such deposit or obligated on such indebtedness; provided, that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.16 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender and its Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender or its Affiliates may have. Each Lender agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

10.09 Interest Rate Limitation.

Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

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10.10 Counterparts; Integration; Effectiveness.

This Agreement and each of the other Loan Documents may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Article IV, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement or any other Loan Document, or any certificate delivered thereunder, by fax transmission or e-mail transmission (e.g., “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement or such other Loan Document or certificate. Without limiting the foregoing, to the extent a manually executed counterpart is not specifically required to be delivered under the terms of any Loan Document, upon the request of any party, such fax transmission or e-mail transmission shall be promptly followed by such manually executed counterpart.

10.11 Survival of Representations and Warranties.

All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied.

10.12 Severability.

If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section 10.12, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent, then such provisions shall be deemed to be in effect only to the extent not so limited.

10.13 Replacement of Lenders.

If (a) any Lender requests compensation under Section 3.04, (b) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, (c) any Lender gives a notice pursuant to Section 3.02 (which has not been revoked), (d) any Lender is a Non-Consenting Lender or (e) any Lender is a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent,

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require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06), all of its interests, rights (other than its existing rights to payments pursuant to Sections 3.01 and 3.04) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which Eligible Assignee may be another Lender, if a Lender accepts such assignment), provided that:

(a) the Administrative Agent shall have received the assignment fee specified in Section 10.06(b);

(b) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the Eligible Assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

(c) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter;

(d) such assignment does not conflict with applicable Laws; and

(e) in the case of any such assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent;

provided that the failure by such Lender to execute and deliver an Assignment and Assumption shall not impair the validity of the removal of such Lender and the mandatory assignment of such Lender’s Commitments and outstanding Loans pursuant to this Section 10.13 shall nevertheless be effective without the execution by such Lender of an Assignment and Assumption.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

10.14 Governing Law; Jurisdiction; Etc.

(a) GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT, AS TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (EXCEPT, AS TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) SUBMISSION TO JURISDICTION. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN

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ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK.

(c) WAIVER OF VENUE. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

10.15 Waiver of Jury Trial.

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION,

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SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.16 USA PATRIOT Act Notice.

Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the Act. The Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Act.

10.17 Statutory Notice.

UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY THE LENDERS CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER’S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY THE LENDERS TO BE ENFORCEABLE.

10.18 No Advisory or Fiduciary Responsibility.

In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent, the Arranger and the Lenders are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Administrative Agent, the Arranger and the Lenders, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative Agent, the Arranger and each Lender each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of their respective Affiliates, or any other Person and (B) neither the Administrative Agent, the Arranger nor any Lender has any obligation to the Borrower or any of its respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, the Arranger, the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and their respective Affiliates, and neither the Administrative Agent, the Arranger, nor any Lender has any obligation to disclose any of such interests to the Borrower and its Affiliates. To the fullest extent permitted by Law, the Borrower hereby waives and releases any claims that it may have against the Administrative Agent, the Arranger and each Lender with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

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10.19 Electronic Execution of Assignments and Certain Other Documents.

The words “execute,” “execution,” “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement, any other document executed in connection herewith and the transactions contemplated hereby shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that notwithstanding anything contained herein to the contrary neither the Administrative Agent nor any Lender is under any obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent or such Lender pursuant to procedures approved by it and provided further without limiting the foregoing, upon the request of any party, any electronic signature shall be promptly followed by such manually executed counterpart.

10.20 Acknowledgement and Consent to Bail-In of EEA Financial Institutions.

Solely to the extent any Lender that is an EEA Financial Institution is a party to this Agreement and notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender that is an EEA Financial Institution; and

(b) the effects of any Bail-in Action on any such liability, including, if applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.

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

GREENBRIER LEASING COMPANY LLC
By	/s/ Justin Roberts
Name:	Justin Roberts
Title:	Vice President

BANK OF AMERICA, N.A., as Administrative Agent
By	/s/ Anthea Del Bianco
Name:	Anthea Del Bianco
Title:	Vice President

AMENDED AND RESTATED CREDIT AGREEMENT

GREENBRIER LEASING COMPANY LLC

BANK OF AMERICA, N.A., as a Lender
By	/s/ Michael Snook
Name:	Michael Snook
Title:	Senior Vice President

AMENDED AND RESTATED CREDIT AGREEMENT

GREENBRIER LEASING COMPANY LLC

MUFG UNION BANK, N.A., as a Lender
By	/s/ Steve Sloan
Name:	Steve Sloan
Title:	Director

AMENDED AND RESTATED CREDIT AGREEMENT

GREENBRIER LEASING COMPANY LLC

BRANCH BANKING AND TRUST COMPANY, as a Lender
By	/s/ Scott Hennessee
Name:	Scott Hennessee
Title:	Senior Vice President

AMENDED AND RESTATED CREDIT AGREEMENT

GREENBRIER LEASING COMPANY LLC

BANK OF THE WEST, as a Lender
By	/s/ John DeLaittre
Name:	John DeLaittre
Title:	Director

AMENDED AND RESTATED CREDIT AGREEMENT

GREENBRIER LEASING COMPANY LLC

DVB BANK SE, as a Lender
By	/s/ Matthias Lieschied
Name:	Matthias Lieschied
Title:	Senior Vice President
By	/s/ Jann Gertjegerdes
Name:	Jann Gertjegerdes
Title:	Senior Vice President

AMENDED AND RESTATED CREDIT AGREEMENT

GREENBRIER LEASING COMPANY LLC

FIFTH THIRD BANK, as a Lender
By	/s/ Peter Samboul
Name:	Peter Samboul
Title:	Director

AMENDED AND RESTATED CREDIT AGREEMENT

GREENBRIER LEASING COMPANY LLC

COMERICA BANK, as a Lender
By	/s/ Liz V Hulley
Name:	Liz V Hulley
Title:	Vice President

AMENDED AND RESTATED CREDIT AGREEMENT

GREENBRIER LEASING COMPANY LLC

CREDIT INDUSTRIEL ET COMMERCIAL, NEW YORK BRANCH, as a Lender
By	/s/ Adrienne Molloy
Name:	Adrienne Molloy
Title:	Managing Director
By	/s/ Andrew McKuin
Name:	Andrew McKuin
Title:	Managing Director

AMENDED AND RESTATED CREDIT AGREEMENT

GREENBRIER LEASING COMPANY LLC

UMPQUA BANK, as a Lender
By	/s/ Jeffrey Seiler
Name:	Jeffrey Seiler
Title:	Vice President

AMENDED AND RESTATED CREDIT AGREEMENT

GREENBRIER LEASING COMPANY LLC

COLUMBIA STATE BANK, as a Lender
By	/s/ Joe Schuster
Name:	Joe Schuster
Title:	Vice President

AMENDED AND RESTATED CREDIT AGREEMENT

GREENBRIER LEASING COMPANY LLC

EX-10.32

Exhibit 10.32

AMENDED AND RESTATED SECURITY AGREEMENT

This AMENDED AND RESTATED SECURITY AGREEMENT (“Agreement”), entered into as of September 26, 2018, among GREENBRIER LEASING COMPANY LLC, an Oregon limited liability company (the “Debtor”), in favor of BANK OF AMERICA, N.A., as Administrative Agent for its benefit and the benefit of the other holders of the Secured Obligations (as defined below) (in such capacity, and together with its successors and permitted assigns, the “Administrative Agent”).

RECITALS

WHEREAS, pursuant to that certain Amended and Restated Credit Agreement dated as of the date hereof (as amended, restated, refinanced or otherwise modified from time to time, the “Credit Agreement”) among the Debtor, the Lenders identified therein and the Administrative Agent, it is a condition precedent to each Lender’s obligation to make its initial Credit Extension under the Credit Agreement that the Debtor enter into this Agreement and grant to the Administrative Agent, for itself and for the ratable benefit of the holders of the Secured Obligations the security interests hereinafter provided to secure the obligations of the Debtor described below.

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration receipt of which is hereby acknowledged, the parties hereby agree as follows:

1. Definitions; Interpretation.

(a) Terms Defined in Credit Agreement. All capitalized terms used in this Agreement and not otherwise defined herein have the meanings specified in the Credit Agreement.

(b) Certain Defined Terms. As used in this Agreement, the following terms have the following meanings:

“Account Debtor” means any Person who is or who may become obligated to the Debtor under, with respect to or on account of an Account or other Right to Payment in all cases only to the extent constituting Collateral.

“Administrative Agent” has the meaning set forth in the introductory paragraph hereto.

“CFC” means a “controlled foreign corporation” within the meaning of Section 957 of the Code.

“Collateral” has the meaning assigned to such term in Section 2(a).

“Common Collateral” has the meaning assigned to such term in the applicable Intercreditor Agreement.

“Copyrights” means any and all rights in any works of authorship, including (i) copyrights and moral rights, (ii) copyright registrations and recordings thereof and all applications in connection therewith, (iii) income, license fees, royalties, damages, and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past, present, or future infringements thereof, (iv) the right to sue for past, present, and future infringements thereof, and (v) all of the Debtor’s rights corresponding thereto throughout the world.

“Credit Agreement” has the meaning set forth in the preamble hereto.

“Debtor” has the meaning set forth in the introductory paragraph hereto.

“Intellectual Property” means any and all Patents, Copyrights, Trademarks, trade secrets, know-how, algorithms, software programs (including source code and object code), processes, product designs, industrial designs, blueprints, drawings, customer lists, URLs and domain names, specifications, catalogs, literature, and any other proprietary information of any kind, including all rights therein and all applications for registration or registrations thereof.

“Lease” means any agreement (as such agreement may be amended or otherwise modified from time to time, and including as supplemented by the terms of applicable schedules or similar contractual mechanisms) pursuant to which the Debtor leases Pledged Railcar(s) to a Lessee.

“Lessee” any Person who leases Pledged Railcars from the Debtor.

“Patents” means patents and patent applications, including (i) all continuations, divisionals, continuations-in-part, re-examinations, reissues, and renewals thereof and improvements thereon, (ii) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past, present, or future infringements thereof, (iii) the right to sue for past, present, and future infringements thereof, and (iv) all of the Debtor’s rights corresponding thereto throughout the world.

“Permitted Liens” means each of the Liens expressly permitted pursuant to Section 7.01 of the Credit Agreement.

“Pledged Railcars” means those certain railcars owned by the Debtor and identified by the “reporting mark” (including the “road number”) and the lease number on Schedule 2 (as such Schedule 2 may hereafter be amended (or deemed amended) from time to time pursuant to Section 2(f) hereof).

“Rights to Payment” means, solely to the extent constituting Collateral, all Accounts, and any and all rights and claims to the payment or receipt of money or other forms of consideration of any kind in, to and under all Chattel Paper, Documents, General Intangibles, Payment Intangibles, Instruments and Proceeds in all cases, with respect to any assets described in this definition, solely to the extent constituting Collateral.

“Security Interest” shall have the meaning assigned to such term in Section 2(a).

“Secured Obligations” means, without duplication, all Obligations.

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“Trademarks” means any and all trademarks, trade names, registered trademarks, trademark applications, service marks, registered service marks and service mark applications, including (A) all renewals thereof, (B) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past or future infringements or dilutions thereof, (C) the right to sue for past, present and future infringements and dilutions thereof, (D) the goodwill of the Debtor’s business symbolized by the foregoing or connected therewith, and (E) all of the Debtor’s rights corresponding thereto throughout the world.

“UCC” means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided, however, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions.

(c) Terms Defined in UCC. Terms used in this Agreement that are defined in the UCC have the meanings given to them in the UCC, including the following which are capitalized herein: Account, Chattel Paper, Commercial Tort Claim, Document, Electronic Chattel Paper, Equipment, General Intangible, Instrument, Inventory, Investment Property, Payment Intangible, Proceeds and Products.

(d) Interpretation. The rules of construction and interpretation specified in Section 1.02 of the Credit Agreement also apply to this Agreement and are incorporated herein by this reference.

2. Security Interest.

(a) Grant of Security Interest. As security for the payment or performance, as the case may be, in full of the Secured Obligations, the Debtor hereby grants, assigns and pledges to the Administrative Agent, for the ratable benefit of the Administrative Agent and the other holders of Secured Obligations, a security interest (the “Security Interest”), in all right, title or interest in or to any and all of the following assets and properties now owned or at any time hereafter acquired by the Debtor or in which the Debtor now has or at any time in the future may acquire any right, title or interest (collectively, the “Collateral”):

(i) all Pledged Railcars;

(ii) all Accounts to the extent arising from and pertaining to the sale, lease, license, exchange, or other disposition of the Pledged Railcars;

(iii) all Chattel Paper to the extent arising from and pertaining to the sale, lease, license, exchange, or other disposition of the Pledged Railcars;

(iv) all Documents to the extent that they evidence rights in any of the Pledged Railcars or any other Collateral;

(v) all Instruments to the extent arising from and pertaining to the sale, lease, license, exchange or other disposition of the Pledged Railcars or to the extent evidencing rights in any of the Pledged Railcars or any other Collateral;

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(vi) (A) all Leases of the Pledged Railcars and (B) all General Intangibles (other than the Leases) to the extent arising from and pertaining to the sale, lease, license, exchange, or other disposition of the Pledged Railcars or to the extent that such General Intangible evidences rights in any of the Pledged Railcars or any other Collateral;

(vii) all Commercial Tort Claims, if any, to the extent arising from or relating to any of the Pledged Railcars or any other Collateral;

(viii) all books and records to the extent pertaining to the assets and properties described in this Section 2(a); and

(ix) to the extent not otherwise included, all Proceeds and Accessions of any and all of the foregoing.

Notwithstanding anything to the contrary contained herein, the Collateral shall not include (a) Intellectual Property, except to the extent constituting Collateral pursuant to Section 2(a)(ix) above, (b) Equity Interests, except to the extent constituting Collateral as identifiable Proceeds of other Collateral pursuant to Section 2(a)(ix) above, except that Collateral shall not include voting Equity Interests of any CFC or Foreign Subsidiary to the extent that such Equity Interests represent more than 65% of the outstanding voting Equity Interests of such CFC or Foreign Subsidiary, (c) if a Lease is a “master lease” that contains more than one lease schedule of leased railcars, the rights under any schedule(s) to such “master lease” that do not expressly pertain to any Pledged Railcars or (d) any rights or interest in or under any contract, lease, permit, license, or license agreement (or in any assets subject thereto) (in each case excluding the Leases and the Pledged Railcars), if under the terms of such contract, lease, license, permit or agreement, or applicable Law with respect thereto, the granting of a security interest therein in the manner contemplated by the Loan Documents is prohibited, or in any assets to the extent that a grant of a security interest therein would violate applicable Law or require a consent not obtained from a Governmental Authority (except in each case described in this clause (d) (i) where such prohibition has been waived or the consent of the other party to such contract, lease, permit, license or agreement or Governmental Authority has been obtained or (ii) to the extent that an otherwise applicable prohibition on such grant is rendered ineffective by the Uniform Commercial Code or other applicable Laws).

Further, despite having a lien and security interest in all Leases of the Pledged Railcars, the Administrative Agent agrees, in enforcing rights and remedies pursuant to this Agreement, to take action with respect to such Leases only with respect to the Pledged Railcars subject to any such Lease, to the extent feasible.

(b) Debtor Remains Liable. Anything herein to the contrary notwithstanding, (i) the Debtor shall remain liable under any contracts, agreements and other documents included in the Collateral, to the extent set forth therein, to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (ii) the exercise by the Administrative Agent of any of the rights hereunder shall not release the Debtor from any of its duties or obligations under such contracts, agreements and other documents included in the Collateral, and (iii) neither the Administrative Agent nor any other holder of Secured Obligations shall have any obligation or liability under any contracts, agreements and other documents included in the Collateral by reason of this Agreement, nor shall the Administrative Agent or any other holder of Secured Obligations be obligated to perform any of the obligations or duties of the Debtor thereunder or to take any action to collect or enforce any such contract, agreement or other document included in the Collateral hereunder.

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(c) Continuing Security Interest. The Debtor acknowledges and agrees that the Security Interest in the Collateral constitutes continuing collateral security for all of the Secured Obligations which shall remain in effect until released or terminated in accordance with Section 24.

(d) Transactions in the Ordinary Course. The Administrative Agent acknowledges and agrees that any buyer of Equipment in the ordinary course of the Debtor’s business takes free of the Administrative Agent’s Security Interest and that the Debtor may lease, rent or hire Pledged Railcars to Lessees in the usual and ordinary course of the Debtor’s business. Without in any way limiting the generality of the preceding sentence, the Administrative Agent agrees that, except as to security interests specifically granted by TTX Company, its successors or assigns (“TTX”) or any other buyer, to the Debtor and its assigns, all railcars sold by the Debtor in the ordinary course of the Debtor’s business and purchased in the ordinary course of business by TTX or any other buyer pursuant to a manufacturing agreement or otherwise, (whether or not such instruments are recorded with the United States Surface Transportation Board) shall not, following the delivery of such cars, be subject to any security interest in favor of the Administrative Agent other than with respect to Proceeds of such sale.

Leases may provide that the Lessee, subject to the provisions of such Lease, shall be entitled to the quiet possession and use of the Pledged Railcars covered thereby, notwithstanding the occurrence of any Event of Default, so long as such Lessee shall not be in default under the applicable Lease. The Administrative Agent shall, at the Lessee’s request, execute and deliver an agreement which shall permit the Lessee to continue such Lease in effect and to quiet possession of the subject Pledged Railcars, notwithstanding the occurrence of any Event of Default, so long as such Lessee shall not be in default under the applicable Lease. Such agreement shall be in form and substance approved by the Administrative Agent, which approval shall not be unreasonably withheld.

(e) Collateral Assignment of Leases. In furtherance of the foregoing, the Debtor hereby grants to the Administrative Agent, for the ratable benefit of the Administrative Agent and the other holders of Secured Obligations, a security interest in all of the Debtor’s interest the Leases, including without limitation, (i) all rights of the Debtor to receive rents and other sums due and to become due under or pursuant to such Leases to the extent pertaining to Pledged Railcars, (ii) all rights of the Debtor to receive proceeds of any insurance, indemnity, warranty or guaranty with respect to such Leases to the extent pertaining to Pledged Railcars, (iii) claims of the Debtor for damages arising out of or for breach of or default under such Leases, and (iv) the rights of the Debtor to terminate such Leases, to perform thereunder and to compel performance and otherwise exercise all rights and remedies thereunder. Upon the occurrence and during the continuance of an Event of Default (but not prior to such time), the Administrative Agent shall be entitled to exercise any and all rights of the Debtor under the Leases (including the rights described in this Section 2(e)). Except as provided in the second paragraph of Section 2(d) hereof, the Administrative Agent shall not be obligated to perform any duty, covenant or condition required to be performed by Debtor pursuant to any Lease.

(f) Pledged Railcars; Schedule 2. From time to time in accordance with the Credit Agreement, the Debtor may dispose of or exchange Pledged Railcars (whether voluntarily or involuntarily through casualty or condemnation events) and/or pledge additional railcars to secure the Secured Obligations. Schedule 2 may be updated by the Debtor and the Administrative Agent

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from time to time (and without requirement of approval of any Lender) to reflect such additions or removal of Pledged Railcars, and in any event shall be deemed to be automatically updated to reflect such changes to the list Pledged Railcars as are recorded by the Administrative Agent under the terms of the Loan Documents with the United States Surface Transportation Board to the extent such recordations are executed or otherwise authorized by the Debtor.

3. Financing Statements, Etc. The Debtor hereby irrevocably authorizes the Administrative Agent at any time and from time to time to file in any relevant jurisdiction any initial financing statements and amendments thereto against the Collateral describing specific items of Collateral and that contain any other information required by Article 9 of the UCC of each applicable jurisdiction for the filing of any financing statement or amendment, including whether the Debtor is an organization, Debtor’s chief executive office and chief place of business, the type of organization and any organizational identification number issued to the Debtor. The Debtor agrees to provide such information to the Administrative Agent promptly upon request. The Debtor also ratifies its authorization for the Administrative Agent to file in any relevant jurisdiction any initial financing statements or amendments thereto covering the Collateral if filed prior to the date hereof.

4. Representations and Warranties. In addition to the representations and warranties of the Debtor set forth in the Credit Agreement, which are incorporated herein by this reference, the Debtor represents and warrants to the Administrative Agent that:

(a) Chief Executive Office; Legal Name; State of Organization. As of the Closing Date, the Debtor’s chief executive office is (and for the prior four months has been) located at the location set forth in Part (a) of Schedule 4(a) hereto, and the Debtor’s books and records are consolidated at such location. The Debtor may also maintain local books and records at the operating locations identified on Schedule 4(b) hereto. As of the Closing Date, the Debtor’s exact organizational name, the jurisdiction of its organization (each as they have been for the prior four months), its Federal Taxpayer Identification Number and the identification number given by its jurisdiction of organization is set forth in Part (b) of Schedule 4(a) hereto. The Debtor has not in the five years prior to the Closing Date changed its name, state of formation, been party to a merger, consolidation or other change in structure or used any trade name not disclosed in Part (c) of Schedule 4(a) hereto.

(b) Location of Tangible Collateral. As of the Closing Date, other than with respect to Collateral that is (i) in transit between one or more locations of Debtor, (ii) is in transit between the Debtor and a customer or on lease to a customer, or being used by railroads on an hourly and/or mileage basis, in each case, in the ordinary course of business, (iii) is being transported to or from, or is in the possession of or under the control of, a bailee, warehouseman, repair station, mechanic, or similar Person, for purposes of repair in the ordinary course of business, or (iv) is at any third party location where Collateral with a net book value of $1,000,000 or less is located, the location of all tangible (other than Collateral in the possession of the Administrative Agent) Collateral owned by the Debtor is as shown in Schedule 4(b) hereto (as updated from time to time by the Debtor upon written notice to the Administrative Agent and without the need for consent by the Administrative Agent or the Lenders).

(c) Validity of Security Interest. The Security Interest constitutes (i) a legal and valid security interest which is enforceable (except as enforcement thereof may be limited by applicable Debtor Relief Laws and by general principles of equity) against the Collateral in which the Debtor now has rights and will create a security interest which is enforceable (except as enforcement thereof may be limited by applicable Debtor Relief Laws and general principles of equity) against the Collateral in which the Debtor hereafter acquires rights at the time the Debtor

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acquires any such rights; and (ii) when properly perfected by the filing of a UCC financing statement in the jurisdiction of organization of Debtor or by filings with the United States Surface Transportation Board or otherwise, the Security Interest shall constitute a valid perfected security interest in the Collateral, in which the Debtor now has rights, and the Administrative Agent will have a perfected security interest in the Collateral in which the Debtor hereafter acquires rights, at the time the Debtor acquires any such rights, in each case under this clause (ii), to the extent that a security interest may be perfected by filing of a UCC financing statement in the jurisdiction of organization of Debtor or by filings with the United States Surface Transportation Board or otherwise, in each case securing the payment and performance of the Secured Obligations. Notwithstanding anything to the contrary contained herein or in any other Loan Document, the parties hereto acknowledge and agree that no representation is made herein or in any other Loan Document with respect to the creation or perfection of the Security Interest with respect to the Laws of Mexico.

(d) Absence of Other Liens. Except with respect to any Permitted Lien, the Debtor has not filed or consented to the filing of (i) any financing statement or analogous document under the UCC or any other applicable Laws covering any Collateral (other than Liens in favor of the Debtor in its capacity as a lessor or secured party) or (ii) any assignment in which the Debtor assigns any Collateral or the Debtor grants an interest pursuant to any security agreement or similar instrument covering any Collateral with any Governmental Authority (other than Liens in favor of the Debtor in its capacity as a lessor or secured party), which financing statement or analogous document, assignment, security agreement or similar instrument is still in effect.

(e) Pledged Railcars; Leases. As of the Closing Date, the “reporting mark” (including the “road number”) for each Pledged Railcar and the lease number for each of the Leases of the Pledged Railcars are identified on Schedule 2.

5. Covenants. In addition to the covenants of the Debtor set forth in the Credit Agreement, which are incorporated herein by this reference, so long as any Lender shall have any Commitment under the Credit Agreement, or any of the Secured Obligations shall remain unpaid or unsatisfied, the Debtor shall:

(a) Change of Name, Identity or Structure. Promptly notify the Administrative Agent in writing of any change (i) in its corporate or organization name, (ii) in the location of its chief executive office, its principal place of business, any office in which it maintains any material books or records relating to the Collateral, (iii) in its identity, type of organization, or jurisdiction of incorporation or organization or (iv) in its Federal Taxpayer Identification Number or other identification number given by its jurisdiction of incorporation or organization, and not to effect or permit any change referred to in clauses (i) through (iv) unless the Debtor has first provided the Administrative Agent with at least 10 days prior written notice of such change.

(b) Location of Collateral. Promptly notify the Administrative Agent in writing of any change in the location of any office or facility at which Collateral owned by it with a book value in excess of $1,000,000 is located. Such notification shall not be required pursuant to this Section 5(b) for Collateral that (A) is in transit between one or more locations of the Debtor, (B) is in transit between the Debtor and a customer, or on lease to a customer, or being used by railroads on an hourly and/or mileage basis, in each case, in the ordinary course of business, (C) is being transported to or from, or is in the possession of or under the control of, a bailee, warehouseman, repair station, mechanic, or similar Person, in each case for purposes of repair in the ordinary course of business or (D) is moved to a location identified on Schedule 4(b) hereto (as updated from time to time by the Debtor upon written notice to the Administrative Agent and without the need for consent by the Administrative Agent or the Lenders).

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(c) Leased Premises. Upon the request of the Administrative Agent, use commercially reasonable efforts to obtain from each Person from whom the Debtor leases any office or facility at which Collateral with a book value in excess of $1,000,000 is at any time present such subordination, waiver, consent and estoppel agreements as the Administrative Agent may reasonably require, in form and substance reasonably satisfactory to the Administrative Agent.

(d) Rights to Payment.

(i) Upon the request of the Administrative Agent, promptly provide the Administrative Agent with: (A) master customer listings relating to Pledged Railcars, including all names and addresses, together with copies or originals (as requested by the Administrative Agent) of documents, customer statements, repayment histories and present status reports relating to the Accounts constituting Collateral; (B) accurate records and summaries of Accounts constituting Collateral, including detailed agings specifying the name, face value and date of each invoice, and listings of Accounts constituting Collateral that are disputed or have been cancelled; and (C) such other matters and information relating to the Accounts constituting Collateral as the Administrative Agent shall from time to time reasonably request;

(ii) Other than Accounts the aggregate value of which does not at any one time exceed $5,000,000, if any Accounts that are Collateral arise from contracts with the United States or any department, agency or instrumentality thereof, promptly (but in any event within 30 Business Days) notify the Administrative Agent thereof and, upon the request of the Administrative Agent, execute any documents and instruments and take any other steps reasonably requested by the Administrative Agent in order that all monies due and to become due there-under shall be assigned to the Administrative Agent and notice thereof given to the Federal authorities under the Federal Assignment of Claims Act;

(iii) If at any time the Debtor shall take a security interest in any property of an Account Debtor or any other Person to secure payment and performance of an Account that is Collateral or other Right to Payment, upon the request of Administrative Agent with respect to property having a value in excess of $2,000,000 the Debtor shall promptly (but in any event within 30 Business Days) execute and deliver assignments of such security interest to the Administrative Agent, which assignment need not be filed of public record unless necessary to continue the perfected status of the security interest against creditors of and transferees from the Account Debtor or other Person granting the security interest;

(iv) Upon the request of the Administrative Agent, mark the Accounts that are Collateral and other Rights to Payment and all of the Debtor’s books and records pertaining thereto with such legends as the Administrative Agent shall reasonably specify to reference to the fact that the Accounts that are Collateral and other Rights to Payment have been collaterally assigned to the Administrative Agent for the benefit of the holders of Secured Obligations and that the Administrative Agent has a security interest therein;

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(v) Upon the request of the Administrative Agent upon the occurrence and during the continuance of an Event of Default, (A) notify all or any designated portion of the Account Debtors with respect to Accounts that are Collateral of the Security Interest and (B) notify the Account Debtors with respect to Accounts that are Collateral or any designated portion thereof with respect to Accounts that are Collateral that payment shall be made directly to the Administrative Agent or to such other Person or location as the Administrative Agent shall specify; and

(vi) Upon the occurrence, and during the continuance, of any Event of Default, establish such lockbox or similar arrangements for the payment of the Accounts with respect to Accounts that are Collateral and other Rights to Payment with respect to Accounts that are Collateral as the Administrative Agent shall require.

(e) Collateral Held by Bailee, Etc. Upon the request of the Administrative Agent, if any Collateral is at any time in the possession or control of a warehouseman, bailee or any agent or processor of the Debtor (other than (i) Collateral in possession of such Persons for purposes of repair in the ordinary course of business, (ii) Collateral that (A) is in transit between one or more locations of the Debtor, or (B) is in transit between a Debtor and a customer or on lease to a customer, or being used by railroads on an hourly and/or mileage basis, in each case, in the ordinary course of business or (iii) other Collateral located at any location where Collateral with a net book value of $1,000,000 or less is located), (x) promptly (but in any event within 30 Business Days) notify the Administrative Agent of such possession (it being understood that disclosure on Schedule 4(b) hereto shall satisfy this notification requirement), (y) upon request by the Administrative Agent, notify such Person of the Security Interest and (z) upon request by the Administrative Agent, use commercially reasonable efforts to obtain a written acknowledgment from such Person that it is holding such Collateral subject to the Security Interest and the instructions of the Administrative Agent.

(f) Notices, Reports and Information. (i) upon the reasonable request of the Administrative Agent promptly provide to the Administrative Agent such statements, listings and schedules further identifying and describing the Collateral and such other reports and other information in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail and (ii) upon the reasonable request of the Administrative Agent make such demands and requests for information and reports as the Debtor is entitled to make in respect of the Collateral.

6. Other Actions. In order to further insure the attachment, perfection and priority of, and the ability of the Administrative Agent to enforce, the Administrative Agent’s security interest in the Collateral, the Debtor agrees, in each case at its own expense, to take the following actions with respect to the following Collateral:

(a) Instruments. Upon the request of the Administrative Agent, promptly (but in any event within 10 Business Days) deliver any Instruments that are Collateral having an aggregate value or face amount of $250,000 or more held by the Debtor appropriately endorsed or accompanied by such instruments of transfer or assignment duly executed in blank as the Administrative Agent may reasonably from time to time specify.

(b) Electronic Chattel Paper and Transferable Records. Promptly (but in any event within 20 days) following the request of the Administrative Agent, take such action as the Administrative Agent may reasonably request as are reasonably necessary to vest in the Administrative Agent (i) control of any Electronic Chattel Paper that is Collateral of the Debtor

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under Section 9A-105 the UCC; and (ii) control of any “transferable record” of the Debtor under and as defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act, or, as the case may be, Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction, as so in effect in the relevant jurisdiction, in each case, to the extent that the aggregate value or face amount of such Electronic Chattel Paper that is Collateral equals or exceeds $250,000.

(c) Commercial Tort Claims. If the Debtor obtains Commercial Tort Claims that are Collateral having a value, or involving an asserted claim, in the amount of $250,000 or more, promptly (but in any event within 15 days) following the request of the Administrative Agent, provide the Administrative Agent with a summary description of each Commercial Tort Claim that is Collateral held by the Debtor and, if requested by Administrative Agent, promptly (and in any event within 10 days) execute and deliver such statements, documents and notices and do and cause to be done all such things as may be reasonably required by the Administrative Agent, the UCC or any other applicable requirement of Law, to grant to the Administrative Agent a security interest in such Commercial Tort Claim that is Collateral and in the Proceeds thereof.

7. Further Assurances. The Debtor agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Administrative Agent may from time to time reasonably request to better assure, preserve, protect and perfect the Security Interest and the rights and remedies of the Administrative Agent hereunder, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest and the filing of any financing statements or other documents in connection herewith or therewith. If any amount in excess of $250,000 payable under or in connection with any of the Collateral shall be or become evidenced by any Document, Instrument or Chattel Paper, such Document, Instrument or Chattel Paper shall, upon the request of the Administrative Agent, be promptly (but in any event within 30 days after such request) delivered to the Administrative Agent, appropriately endorsed or accompanied by such instruments of transfer or assignment duly executed in blank as the Administrative Agent reasonably may from time to time specify. Notwithstanding anything to the contrary contained herein or in any other Loan Document, the parties hereto acknowledge and agree that the Debtor shall not be required to take any action under the Laws of Mexico with respect to the creation or perfection of the Security Interest.

8. Collection of Rights to Payment. At the request of the Administrative Agent, upon the occurrence and during the continuation of any Event of Default, all remittances on account of Collateral received by the Debtor shall be held in trust for the Administrative Agent and, in accordance with the Administrative Agent’s instructions, remitted to the Administrative Agent or deposited to an account with the Administrative Agent in the form received (appropriately endorsed or accompanied by necessary instruments of transfer).

9. Rights of Administrative Agent.

(a) Power of Attorney. The Debtor hereby appoints the Administrative Agent the attorney-in-fact of the Debtor, effective upon the occurrence and during the continuance of an Event of Default, for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Administrative Agent may deem necessary or advisable to accomplish the purposes hereof. Without limiting the generality of the foregoing, the Administrative Agent shall have the right, upon the occurrence and during the continuance of an Event of Default and after notice has been provided to the Debtor, with full power of substitution either in the Administrative Agent’s name or in the name of the Debtor:

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(i) take possession of and endorse any notes, acceptances, checks, drafts, money orders or other forms of payment or security constituting Collateral and collect any Proceeds of any Collateral;

(ii) sign and endorse any invoice or bill of lading relating to any of the Collateral, warehouse or storage receipts, drafts against customers or other obligors, assignments, notices of assignment, verifications and notices to customers or other obligors in each case relating to any of the Collateral;

(iii) notify the Postal Services authorities to change the address for delivery of mail addressed to such Debtor to such address as the Administrative Agent may designate and, without limiting the generality of the foregoing, establish with any Person lockbox or similar arrangements for the payment of the Rights to Payment;

(iv) receive, open and dispose of all mail addressed to the Debtor to the extent relating to the Collateral;

(v) send requests for verification of Rights to Payment to any Account Debtors;

(vi) notify, or to require the Debtor to notify, Account Debtors to make all payments in respect of Collateral directly to the Administrative Agent;

(vii) except as otherwise provided in the Credit Agreement, assert, adjust, sue for, compromise or release any claims under any policies of insurance relating to Collateral;

(viii) notify each Person maintaining lockbox or similar arrangements for the payment of the Rights to Payment to remit all amounts representing collections on the Rights to Payment directly to the Administrative Agent;

(ix) ask, demand, collect, receive and give acquittances and receipts for any and all Rights to Payment, enforce payment or any other rights in respect of the Rights to Payment and other Collateral, grant consents, agree to any amendments, modifications or waivers of the agreements and documents governing the Rights to Payment and other Collateral, and otherwise file any claims, take any action or institute, defend, settle or adjust any actions, suits or proceedings with respect to the Collateral, as the Administrative Agent may deem necessary or desirable to maintain, preserve and protect the Collateral, to collect the Collateral or to enforce the rights of the Administrative Agent with respect to the Collateral;

(x) execute any and all endorsements, assignments or other documents and instruments necessary to sell, lease, assign, convey or otherwise transfer title in or dispose of the Collateral; and

(xi) execute any and all such other documents and instruments, and do any and all acts and things for and on behalf of the Debtor, which the Administrative Agent may deem necessary or advisable to maintain, protect, realize upon and preserve the Collateral and the Administrative Agent’s security interest therein and to accomplish the purposes of this Agreement.

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The foregoing power of attorney is coupled with an interest and irrevocable so long as any Lender shall have any Commitment under the Credit Agreement or any of the Secured Obligations shall remain unpaid or unsatisfied. The Debtor hereby ratifies, to the fullest extent permitted by applicable Laws, all that the Administrative Agent shall lawfully and in good faith do or cause to be done by virtue of and in compliance with this subsection (a). The failure of Administrative Agent to provide notice of an Event of Default shall not prevent the Administrative Agent from exercising the power of attorney granted above, or invalidate any actions taken thereunder.

(b) Performance of Debtor Obligations. If Debtor fails to perform any agreement contained herein, the Administrative Agent may perform or pay any obligation which the Debtor has agreed to perform or pay under or in connection with this Agreement, and the Debtor shall reimburse the Administrative Agent on demand for any reasonable amounts paid by the Administrative Agent pursuant to this subsection (b).

(c) Administrative Agent’s Duties. Notwithstanding any provision contained in this Agreement, the Administrative Agent shall have no duty to exercise any of the rights, privileges or powers afforded to it and shall not be responsible to the Debtor or any other Person for any failure to do so or delay in doing so.

10. Events of Default. The occurrence of an event which under the Credit Agreement would constitute an Event of Default shall be an event of default hereunder (an “Event of Default”).

11. Remedies.

(a) General Remedies. Upon the occurrence and during the continuation of an Event of Default, the Administrative Agent shall have, in addition to all other rights and remedies granted to it in this Agreement, the Credit Agreement or any other Loan Document, all rights and remedies of a secured party under the UCC and other applicable Laws. Without limiting the generality of the foregoing, upon the occurrence and during the continuance of an Event of Default, the Debtor agrees that the Administrative Agent may, subject to the rights of Lessees of Pledged Railcars to quiet possession as contemplated by Section 2(d) of this Agreement:

(i) require the Debtor to assemble all or any part of the Collateral and make it available to the Administrative Agent at any place and time designated by the Administrative Agent;

(ii) peaceably and without notice enter any premises of the Debtor, take possession of any the Collateral, remove or dispose of all or part of the Collateral on any premises or elsewhere, and otherwise collect, receive, appropriate and realize upon all or any part of the Collateral, and demand, give receipt for, settle, renew, extend, exchange, compromise, adjust, or sue for all or any part of the Collateral, as the Administrative Agent may determine;

(iii) secure the appointment of a receiver of the Collateral or any part thereof to the extent and in the manner provided by applicable Laws; and

(iv) sell, resell, lease, use, assign, transfer or otherwise dispose of any or all of the Collateral in its then condition or following any commercially reasonable preparation or processing (utilizing in connection therewith any of the Debtor’s assets, without charge or liability to the Administrative Agent therefor) at public or private sale

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or at any broker’s board or on any securities exchange, by one or more contracts, in one or more parcels, at the same or different times, for cash or credit, or for future delivery without assumption of any credit risk, all as the Administrative Agent deems advisable; provided, however, that the Debtor shall be credited with the net proceeds of sale only when such proceeds are finally collected by the Administrative Agent.

(b) Sale of Collateral. Each purchaser at any sale pursuant to this Agreement shall, subject only to the rights of Lessees of Pledged Railcars to quiet possession as contemplated by Section 2(d) of this Agreement, hold the property sold absolutely, free from any claim or right on the part of the Debtor, and the Debtor hereby waives against such purchaser, to the fullest extent permitted by applicable Laws, all rights of redemption, stay and appraisal which the Debtor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. Neither the Administrative Agent’s compliance with the UCC or any other applicable requirement of Law, in the conduct of any sale made pursuant to this Agreement, nor its disclaimer of any warranties relating to the Collateral, shall be considered to adversely affect the commercial reasonableness of such sale. The Administrative Agent shall give the Debtor 10 days’ written notice (which the Debtor agrees is reasonable notice within the meaning of Section 9-612 of the UCC) of the Administrative Agent’s intention to make any sale of Collateral. The Administrative Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Administrative Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. To the fullest extent permitted by applicable Laws, the Administrative Agent or any other holder of Secured Obligations may bid for or purchase the Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to the Administrative Agent or such holder of Secured Obligations from the Debtor as a credit against the purchase price and the Administrative Agent or such holder of Secured Obligations may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to the Debtor therefor. To the fullest extent permitted by applicable Laws, any sale pursuant to the provisions of this subsection (b) shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the UCC.

(c) License. For the purpose of enabling the Administrative Agent to exercise its rights and remedies under this Section or otherwise in connection with this Agreement, the Debtor hereby grants to the Administrative Agent a non-exclusive license (exercisable without payment of royalty or other compensation to the Debtor) to use, license or sub-license any of the Collateral now owned or hereafter acquired by the Debtor, and wherever the same may be located, and including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof. The use of such license by the Administrative Agent shall be exercised, at the option of the Administrative Agent, solely upon the occurrence and during the continuation of an Event of Default; provided that any license, sub-license or other transaction entered into by the Administrative Agent in accordance herewith shall be binding upon the Debtor notwithstanding any subsequent cure of such Event of Default.

(d) Proceeds Account. To the extent that any of the Secured Obligations may be contingent, unmatured or unliquidated, upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may, at its option, (i) retain the proceeds of any sale, collection, disposition or other realization upon the Collateral (or any portion thereof) in a special

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purpose non-interest-bearing restricted deposit account (the “Proceeds Account”) created and maintained by the Administrative Agent for such purpose until such time as the Administrative Agent may elect to apply such proceeds to the Secured Obligations, and the Debtor agrees that such retention of such proceeds by the Administrative Agent shall not be deemed strict foreclosure with respect thereto; (ii) in any reasonable manner elected by the Administrative Agent, estimate the liquidated amount of any such contingent, unmatured or unliquidated claims and apply the proceeds of the Collateral against such amount; or (iii) otherwise proceed in any manner permitted by applicable Laws. The Debtor agrees that the Proceeds Account shall be a blocked account and that upon the irrevocable deposit of funds into the Proceeds Account, the Debtor shall not have any right of withdrawal with respect to such funds. Accordingly, the Debtor irrevocably waives until the termination of this Agreement and the Security Interest in accordance with Section 24 the right to make any withdrawal from the Proceeds Account and the right to instruct the Administrative Agent to honor drafts against the Proceeds Account.

(e) Retention of Collateral. In addition to the rights and remedies hereunder, the Administrative Agent may, in compliance with Sections 9-620 and 9-621 of the UCC or otherwise complying with the requirements of applicable Law of the relevant jurisdiction, and subject to the rights of Lessees of Pledged Railcars to quiet possession as contemplated by Section 2(d) of this Agreement, accept or retain the Collateral or any part thereof in satisfaction of the Secured Obligations. Unless and until the Administrative Agent shall have provided such notices, however, the Administrative Agent shall not be deemed to have retained any Collateral in satisfaction of any Secured Obligations for any reason.

(f) Duty of Care. Except for the exercise of reasonable care in the custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Administrative Agent shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. The Administrative Agent shall be deemed to have exercised reasonable care in the custody and preservation of Collateral in its possession if such Collateral is accorded treatment substantially equal to that which the Administrative Agent accords its own property. Neither the Administrative Agent nor any of its Related Parties shall be liable for failure to demand, collect or realize upon all or any part of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of the Debtor or otherwise.

(g) Application of Proceeds. Subject to subsection (d) above, the cash proceeds actually received from the sale or other disposition or collection of Collateral, and any other amounts received in respect of the Collateral the application of which is not otherwise provided for herein, shall be applied as provided in the Credit Agreement.

The Administrative Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. The Debtor shall remain liable to the Administrative Agent and the holders of Secured Obligations for any deficiency which exists after any sale or other disposition or collection of Collateral.

12. Certain Waivers. The Debtor waives, to the fullest extent permitted by applicable Laws, (a) any right of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling of the Collateral or other collateral or security for the Secured Obligations; (b) any right to require the Administrative Agent (i) to proceed against any Person, (ii) to exhaust any other collateral or security for any of the Secured Obligations, (iii) to pursue any remedy in the Administrative Agent’s power, or (iv) to make or give any presentments, demands for performance,

14

notices of nonperformance, protests, notices of protests or notices of dishonor in connection with any of the Collateral; and (c) all claims, damages, and demands against the Administrative Agent arising out of the repossession, retention, sale or application of the proceeds of any sale of the Collateral, other than arising from a breach of this Agreement.

13. Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 10.02 of the Credit Agreement.

14. No Waiver; Cumulative Remedies. No failure by the Administrative Agent or any holder of Secured Obligations to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. No waiver of any single breach or default under this Agreement shall be deemed a waiver of any other breach or default. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Administrative Agent and the holders of Secured Obligations. Any single or partial exercise of any right or remedy shall not preclude the further exercise thereof or the exercise of any other right or remedy.

15. Costs and Expenses; Indemnification; Other Charges. The terms of Section 10.04 of the Credit Agreement with respect to costs and expenses and indemnification are incorporated herein by reference, mutatis mutandis, and the parties hereto agree to such terms.

16. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and, except that the Debtor may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent (and any attempted assignment or transfer by the Debtor without such consent shall be null and void).

17. Governing Law; Jurisdiction, Etc.

(a) GOVERNING LAW. THIS AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS HEREUNDER, OR THE REMEDIES HEREUNDER, IN RESPECT OF ANY COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN NEW YORK; PROVIDED THAT THE ADMINISTRATIVE AGENT AND THE HOLDERS OF SECURED OBLIGATIONS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

(b) SUBMISSION TO JURISDICTION. EACH OF THE DEBTOR AND THE ADMINISTRATIVE AGENT IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR

15

PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE DEBTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. THE DEBTOR IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK.

(c) WAIVER OF VENUE. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

18. Amendments, Etc. No amendment or waiver of any provision of this Agreement, and no consent to any departure by the Debtor therefrom, shall be effective unless in writing signed by the Administrative Agent and the Debtor, subject to any consent required in accordance with Section 10.01 of the Credit Agreement, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. Without limiting the generality of the foregoing, the making of a Loan under the Credit Agreement shall not be construed as a waiver of any Default under the Credit Agreement.

19. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

20. Integration. This Agreement, together with the other Loan Documents, comprises the complete, final and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter.

21. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

16

22. Incorporation of Provisions of the Credit Agreement. To the extent the Credit Agreement contains provisions of general applicability to the Loan Documents, including any such provisions contained in Article X thereof, such provisions are incorporated herein by this reference.

23. No Inconsistent Requirements. The Debtor acknowledges that this Agreement and the other Loan Documents may contain covenants and other terms and provisions variously stated regarding the same or similar matters, and agrees that all such covenants, terms and provisions are cumulative and all shall be performed and satisfied in accordance with their respective terms.

24. Termination. This Agreement and the Security Interest shall terminate when all of the Obligations (as defined in the Credit Agreement) shall have been paid in full (other than (i) contingent indemnification obligations and (ii) obligations in connection with Secured Hedge Agreements as to which arrangements satisfactory to the applicable counterparty to such Secured Hedge Agreement shall have been made) in accordance with the terms of the Credit Agreement and the Commitments have been terminated; provided, however, that the obligations of the Debtor under Section 15 shall survive such termination. In addition, the Security Interest herein shall be deemed to be released automatically as to any Collateral upon the sale, transfer or other disposition of all of such Debtor’s ownership in such Collateral pursuant to a Disposition permitted by the Credit Agreement or any other Loan Document (it being understood and agreed, for the avoidance of doubt, that (A) sales of Pledged Railcars in the ordinary course of business are transactions expressly permitted under the Loan Documents and that the Administrative Agent’s Security Interest and Liens in any such Pledged Railcars (but not the Proceeds thereof) shall be automatically released in connection with any such sale of any such Pledged Railcars in the ordinary course of business, (B) upon the sale of all Pledged Railcars subject to a Lease pursuant to a Disposition permitted by the Credit Agreement or any other Loan Document, the Administrative Agent’s Security Interest and Liens in such Lease shall be automatically released and (C) upon the sale of a Lease and all Pledged Railcars subject to such Lease pursuant to a Disposition permitted by the Credit Agreement or any other Loan Document, the Administrative Agent’s Security Interest and Liens in such Pledged Railcars and such Lease (but not the Proceeds thereof) shall be automatically released) or any other Loan Document, and in each instance, the Administrative Agent shall promptly upon written request from the Debtor take all necessary action to document the full and final release of such Debtor or Collateral, as applicable, under this Agreement. The automatic release described in the immediately preceding sentence shall not apply in connection with Dispositions by the Borrower to the Parent and the Parent’s other Subsidiaries during the continuance of an Event of Default that has resulted in an acceleration of the Obligations which has not been rescinded. The Administrative Agent agrees to release its Lien on any Collateral (i) upon the termination of the Commitments and payment and satisfaction in full by the Borrower of all of the Obligations or (ii) constituting property that is sold or disposed of in a transaction permitted by the Credit Agreement or any other Loan Document if a release is required or desirable in connection therewith and if the Borrower certifies to the Administrative Agent that such sale or disposition is so permitted.

25. Required Lenders. All rights of the Administrative Agent hereunder, if not exercised by the Administrative Agent, may be exercised by the Required Lenders.

17

26. Intercreditor Agreements. This Agreement (and the Security Interest in the Common Collateral granted hereunder) is subject to any Intercreditor Agreement from time to time in effect. In the event of any conflict between the terms of this Agreement and the any Intercreditor Agreement with respect to any Common Collateral, the terms of such Intercreditor Agreement shall control. So long as any Person is acting as bailee and as agent for perfection on behalf of the Administrative Agent pursuant to the terms of any Intercreditor Agreement, any obligation of the Debtor in this Agreement that requires delivery of Common Collateral to, or the possession or control of Common Collateral with, the Administrative Agent shall be deemed complied with and satisfied if such delivery of Collateral is made to, or such possession or control of Common Collateral is with, such Person on same terms this Agreement would have otherwise required rendering of performance to the Administrative Agent.

[SIGNATURES SET FORTH ON THE FOLLOWING PAGES]

18

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

GREENBRIER LEASING COMPANY LLC, an Oregon limited liability company, as Debtor
By:	/s/ Justin Roberts
Name: Justin Roberts
Title: Vice President

AMENDED AND RESTATED SECURITY AGREEMENT

GREENBRIER LEASING COMPANY LLC

BANK OF AMERICA, N.A., as Administrative Agent
By	/s/ Anthea Del Bianco
Name: Anthea Del Bianco
Title: Vice President

AMENDED AND RESTATED SECURITY AGREEMENT

GREENBRIER LEASING COMPANY LLC

EX-21.1

Exhibit 21.1

THE GREENBRIER COMPANIES, INC.

LIST OF SUBSIDIARIES

As of August 31, 2018

Name	State of Incorporation	Names Under Which Does Business (if other than registered name)
Apromat S.A.	Romania
Astra Rail Industries S.A.	Netherlands
Astra Rail Project s.r.o.	Slovak Republic
Autostack Company LLC	OR
GBSummit, LLC	DE
GBW Railcar Services Canada Inc.	Canada
GGSynergy, S.A. de C.V.	Mexico
Greenbrier-Astra Rail B.V.	Netherlands
Greenbrier – GIMSA, LLC	OR
Greenbrier do Brasil Participações Ltda.	Brazil
Greenbrier Europe B.V.	Netherlands
Greenbrier Europe Holdings, B.V.	Netherlands
Greenbrier Germany GmbH	Germany
Greenbrier Industries, S.A. de C.V.	Mexico
Greenbrier International Holdings II, LLC	OR
Greenbrier Leasing Company LLC	OR	Greenbrier Intermodal
Greenbrier Leasing Limited	Nova Scotia, Canada
Greenbrier Leasing Limited Partner, LLC	DE
Greenbrier Leasing, L.P.	DE
Greenbrier Management Services, LLC	DE	CIT Rail Services
Greenbrier Maxion – Equipamentos e Serviços Ferroviários S.A.	Brazil
Greenbrier MUL Holdings I LLC	OR
Greenbrier Omaha LLC	OR
Greenbrier Rail Holdings I, LLC	OR
Greenbrier Rail Holdings II, LLC	OR
Greenbrier Rail Holdings III, LLC	OR
Greenbrier Rail Services Holdings, LLC	OR
Greenbrier Rail Services-Tierra Blanca S.A. de C.V.	Mexico
Greenbrier Railcar Leasing, Inc.	WA
Greenbrier Railcar LLC	OR
Greenbrier S.A. de C.V.	Mexico
Greenbrier Tank Components, LLC	OR
Greenbrier Union Holdings I LLC	OR
Greenbrier-Concarril, LLC	DE
Gunderson – GIMSA S.A. de C.V.	Mexico
Gunderson LLC	OR
Gunderson Marine LLC	OR
Gunderson Rail Services LLC	OR	American Hydraulics GMO Parts Greenbrier Rail Services YSD Industries Greenbrier Castings
Gunderson Specialty Products, LLC	DE
Gunderson-Concarril S.A. de C.V.	Mexico
I.C.P.V. S.A.	Romania
Meridian Rail Acquisition Corp.	OR	Greenbrier Rail Services
Meridian Rail Holdings Corp.	OR
Meridian Rail Mexico City Corp.	OR
Mexico MeridianRail Services, S.A. de C.V.	Mexico
Rayvag Vagon Sanayi ve Ticaret A.S.	Turkey
WagonySwidnica sp. z o.o.	Poland
YSD Doors, S.A. de C.V	Mexico
Zaklad Transportu Kolejowego SIARKOPOL sp. z o.o.	Poland

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

To the Board of Directors

The Greenbrier Companies, Inc. and subsidiaries:

We consent to the incorporation by reference in the registration statements (Nos. 333-127922, 333-172933, 333-157593, 333-187887, 333-195058 and 333-223315) on Form S-8 and registration statement (No. 333-207771) on Form S-3 of The Greenbrier Companies, Inc. and subsidiaries of our report dated October 26, 2018, with respect to the consolidated balance sheets of The Greenbrier Companies, Inc. and subsidiaries as of August 31, 2018 and 2017, and the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three year period ended August 31, 2018, and the related notes and the effectiveness of internal control over financial reporting as of August 31, 2018, which report appears in the August 31, 2018 annual report on Form 10-K of The Greenbrier Companies, Inc. and subsidiaries.

Our report dated October 26, 2018, on the effectiveness of internal control over financial reporting as of August 31, 2018, contains an explanatory paragraph that states that management’s assessment of the effectiveness of internal control over financial reporting and our audit of internal control over financial reporting of The Greenbrier Companies, Inc. and subsidiaries’ excludes an evaluation of internal control over financial reporting of the 12 repair shops and an approximate 68% ownership interest in Rayvag acquired in fiscal 2018.

/s/ KPMG LLP

Portland, Oregon

October 26, 2018

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, William A. Furman, certify that:

1 I have reviewed this annual report on Form 10-K of the Greenbrier Companies for the annual period ended August 31, 2018;

2 Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statement for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 26, 2018

/s/    William A. Furman

William A. Furman

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS (cont’d)

I, Lorie L. Tekorius, certify that:

1. I have reviewed this annual report on Form 10-K of the Greenbrier Companies for the annual period ended August 31, 2018;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statement for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 26, 2018

/s/    Lorie L. Tekorius

Lorie L. Tekorius

Executive Vice President and

Chief Operating Officer (Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of The Greenbrier Companies, Inc. (the Company) on Form 10-K for the annual period ended August 31, 2018 as filed with the Securities and Exchange Commission on the date therein specified (the Report), I, William A. Furman, President and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 26, 2018

/s/    William A. Furman

William A. Furman

President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of The Greenbrier Companies, Inc. (the Company) on Form 10-K for the annual period ended August 31, 2018 as filed with the Securities and Exchange Commission on the date therein specified (the Report), I, Lorie L. Tekorius, Executive Vice President and Chief Operating Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 26, 2018

/s/    Lorie L. Tekorius

Lorie L. Tekorius

Executive Vice President and

Chief Operating Officer (Principal Financial Officer)

XML

Document and Entity Information - USD ($)	12 Months Ended
	Aug. 31, 2018	Oct. 19, 2018	Feb. 28, 2018
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Aug. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Trading Symbol	GBX
Entity Registrant Name	GREENBRIER COMPANIES INC
Entity Central Index Key	0000923120
Current Fiscal Year End Date	--08-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Shell Company	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		32,190,763
Entity Public Float			$ 1,465,342,435

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Aug. 31, 2018	Aug. 31, 2017
Assets
Cash and cash equivalents	$ 530,655	$ 611,466
Restricted cash	8,819	8,892
Accounts receivable, net	348,406	279,964
Inventories	432,314	400,127
Leased railcars for syndication	130,926	91,272
Equipment on operating leases, net	322,855	315,941
Property, plant and equipment, net	457,196	428,021
Investment in unconsolidated affiliates	61,414	108,255
Intangibles and other assets, net	94,668	85,177
Goodwill	78,211	68,590
Total assets	2,465,464	2,397,705
Liabilities and Equity
Revolving notes	27,725	4,324
Accounts payable and accrued liabilities	449,857	415,061
Deferred income taxes	31,740	75,791
Deferred revenue	105,954	129,260
Notes payable, net	436,205	558,228
Commitments and contingencies (Notes 21 & 22)
Contingently redeemable noncontrolling interest	29,768	36,148
Greenbrier
Preferred stock - without par value; 25,000 shares authorized; none outstanding
Common stock - without par value; 50,000 shares authorized; 32,191 and 28,503 outstanding at August 31, 2018 and 2017	0	0
Additional paid-in capital	442,569	315,306
Retained earnings	830,898	709,103
Accumulated other comprehensive loss	(23,366)	(6,279)
Total equity - Greenbrier	1,250,101	1,018,130
Noncontrolling interest	134,114	160,763
Total equity	1,384,215	1,178,893
Liabilities and Equity	$ 2,465,464	$ 2,397,705

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Aug. 31, 2018	Aug. 31, 2017
Preferred stock, without par value
Preferred stock, shares authorized	25,000,000	25,000,000
Preferred stock, outstanding
Common stock, without par value
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares outstanding	32,191,000	28,503,000

XML

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands		12 Months Ended
		Aug. 31, 2018		Aug. 31, 2017		Aug. 31, 2016
Revenue
Revenue	[1]	$ 2,519,464		$ 2,169,164		$ 2,679,524
Cost of revenue
Cost of revenue		2,110,409		1,747,865		2,128,087
Margin		409,055		421,299		551,437
Selling and administrative		200,439		170,607		158,681
Net gain on disposition of equipment		(44,369)		(9,740)		(15,796)
Earnings from operations		252,985		260,432		408,552
Other costs
Interest and foreign exchange		29,368		24,192		13,502
Earnings before income tax and earnings (loss) from unconsolidated affiliates		223,617		236,240		395,050
Income tax expense		(32,893)		(64,014)		(112,322)
Earnings before earnings (loss) from unconsolidated affiliates		190,724		172,226		282,728
Earnings (loss) from unconsolidated affiliates		(18,661)		(11,764)		2,096
Net earnings		172,063		160,462		284,824
Net earnings attributable to noncontrolling interest		(20,282)		(44,395)		(101,611)
Net earnings attributable to Greenbrier		$ 151,781		$ 116,067		$ 183,213
Basic earnings per common share		$ 4.92	[2]	$ 3.97	[3]	$ 6.28
Diluted earnings per common share	[4]	$ 4.68	[2]	$ 3.65	[3]	$ 5.73
Weighted average common shares:
Basic	[5]	30,857		29,225		29,156
Diluted		32,835		32,562		32,468
Dividends declared per common share		$ 0.96		$ 0.86		$ 0.81
Manufacturing
Revenue
Revenue		$ 2,044,586		$ 1,725,188		$ 2,096,331
Cost of revenue
Cost of revenue		1,727,407		1,373,967		1,630,554
Earnings from operations		240,901		295,334		415,094
Wheels, Repair & Parts
Revenue
Revenue		347,023		312,679		322,395
Cost of revenue
Cost of revenue		318,330		288,336		293,751
Earnings from operations		16,731		14,984		19,948
Leasing & Services
Revenue
Revenue		127,855		131,297		260,798
Cost of revenue
Cost of revenue		64,672		85,562		203,782
Earnings from operations		$ 88,481		$ 31,904		$ 51,723

[1] Revenue is presented on the basis of geographic location of customers.

[2] Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the dilutive effect of the 2024 Convertible Notes using the treasury stock method when dilutive, restricted stock units that are not considered participating securities, restricted stock units that are subject to performance criteria for which actual levels of performance above target have been achieved and the dilutive effect of shares underlying the 2018 Convertible Notes, during the periods in which they were outstanding, using the "if converted" method in which debt issuance and interest costs, net of tax, were added back to net earnings. The 2018 Convertible notes matured on April 1, 2018.

[3] Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the dilutive effect of the 2024 Convertible Notes using the treasury stock method when dilutive, restricted stock units that are subject to performance criteria for which actual levels of performance above target have been achieved and the dilutive effect of shares underlying the 2018 Convertible Notes using the "if converted" method in which debt issuance and interest costs, net of tax, were added back to net earnings.

[4] Diluted earnings per share was calculated as follows: Earnings before interest and debt issuance costs on convertible notes Weighted average diluted common shares outstanding

[5] Restricted stock grants and restricted stock units that are considered participating securities, including some grants subject to certain performance criteria, are included in weighted average basic common shares outstanding when the Company is in a net earnings position. No restricted stock and restricted stock units were anti-dilutive for the years ended August 31, 2018, 2017 and 2016.

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands		12 Months Ended
		Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Net earnings		$ 172,063	$ 160,462	$ 284,824
Other comprehensive income
Translation adjustment		(16,159)	15,488	(2,204)
Reclassification of derivative financial instruments recognized in net earnings	[1]	(415)	3,729	2,544
Unrealized gain (loss) on derivative financial instruments	[2]	(197)	1,944	(5,842)
Other (net of tax effect)		(335)	(665)	(84)
Other comprehensive income		(17,106)	20,496	(5,586)
Comprehensive income		154,957	180,958	279,238
Comprehensive income attributable to noncontrolling interest		(20,263)	(44,417)	(101,573)
Comprehensive income attributable to Greenbrier		$ 134,694	$ 136,541	$ 177,665

[1] Net of tax of effect of $3 thousand, $1.0 million and $1.2 million for the years ended August 31, 2018, 2017 and 2016, respectively.

[2] Net of tax of effect of $0.1 million, $0.8 million and $2.1 million for the years ended August 31, 2018, 2017 and 2016, respectively.

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Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Reclassification of derivative financial instruments recognized in net earnings (loss), tax	$ 3	$ 1,000	$ 1,200
Unrealized loss on derivative financial instruments, tax	$ 100	$ 800	$ 2,100

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Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands	Total	Contingently Redeemable Noncontrolling Interest	Common Stock Shares	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Total Attributable to Greenbrier	Attributable to Noncontrolling Interest	Equity Excluding Contingently Redeemable Noncontrolling Interest [Member]	2024 Convertible Senior Notes Additional Paid-in Capital	2024 Convertible Senior Notes Total Attributable to Greenbrier	2024 Convertible Senior Notes Equity Excluding Contingently Redeemable Noncontrolling Interest [Member]	2024 Convertible Senior Notes Issuance Costs Additional Paid-in Capital	2024 Convertible Senior Notes Issuance Costs Total Attributable to Greenbrier	2024 Convertible Senior Notes Issuance Costs Equity Excluding Contingently Redeemable Noncontrolling Interest [Member]
Beginning balance (in shares) at Aug. 31, 2015			28,907
Beginning balance at Aug. 31, 2015				$ 295,444	$ 458,599	$ (21,205)	$ 732,838	$ 130,651	$ 863,489
Net earnings	$ 284,824
Net earnings					183,213		183,213	101,611	284,824
Other comprehensive income, net	(5,586)					(5,548)	(5,548)	(38)	(5,586)
Noncontrolling interest adjustments								526	526
Noncontrolling interest acquired								(1,195)	(1,195)
Joint venture partner distribution declared								(94,439)	(94,439)
Investment by joint venture partner								5,400	5,400
Restricted stock awards (net of cancellations) (in shares)			353
Restricted stock awards (net of cancellations)				6,055			6,055		6,055
Unamortized restricted stock				(11,555)			(11,555)		(11,555)
Restricted stock amortization				22,502			22,502		22,502
Excess tax benefit from restricted stock awards				2,813			2,813		2,813
Dividends					(23,634)		(23,634)		(23,634)
Repurchase of stock (in shares)			(1,055)
Repurchase of stock				(32,373)			(32,373)		(32,373)
Ending Balance (in shares) at Aug. 31, 2016			28,205
Ending Balance at Aug. 31, 2016				282,886	618,178	(26,753)	874,311	142,516	1,016,827
Net earnings	160,462				116,067		116,067	46,535	162,602
Beginning balance at Aug. 31, 2016		$ (2,140)
Contingently redeemable noncontrolling interest		38,288
Other comprehensive income, net	$ 20,496					20,474	20,474	22	20,496
Noncontrolling interest adjustments								(677)	(677)
Joint venture partner distribution declared								(28,027)	(28,027)
Acquisition of minority interest								394	394
Restricted stock awards (net of cancellations) (in shares)			298
Restricted stock awards (net of cancellations)				5,520			5,520		5,520
Unamortized restricted stock				(10,734)			(10,734)		(10,734)
Restricted stock amortization				19,826			19,826		19,826
Tax deficiency from restricted stock awards				(2,339)			(2,339)		(2,339)
Dividends					(25,142)		(25,142)		(25,142)
2024 Convertible Senior Notes - equity component, net of tax										$ 20,818	$ 20,818	$ 20,818	$ (671)	$ (671)	$ (671)
Ending Balance (in shares) at Aug. 31, 2017	28,503		28,503
Ending Balance at Aug. 31, 2017	$ 1,178,893	36,148		315,306	709,103	(6,279)	1,018,130	160,763	1,178,893
Net earnings	172,063				151,781		151,781	26,662	178,443
Beginning balance at Aug. 31, 2017		(6,380)
Other comprehensive income, net	$ (17,106)					(17,087)	(17,087)	(19)	(17,106)
Noncontrolling interest adjustments								2,864	2,864
Noncontrolling interest acquired								(7)	(7)
Joint venture partner distribution declared								(62,649)	(62,649)
Investment by joint venture partner								6,500	6,500
Restricted stock awards (net of cancellations) (in shares)			336
Restricted stock awards (net of cancellations)				7,334			7,334		7,334
Unamortized restricted stock				(15,058)			(15,058)		(15,058)
Restricted stock amortization				16,100			16,100		16,100
Dividends					(29,986)		(29,986)		(29,986)
Conversion of 2018 Convertible Senior Notes (in shares)			3,352
Conversion of 2018 Convertible Senior Notes				118,887			118,887		118,887
Ending Balance (in shares) at Aug. 31, 2018	32,191		32,191
Ending Balance at Aug. 31, 2018	$ 1,384,215	$ 29,768		$ 442,569	$ 830,898	$ (23,366)	$ 1,250,101	$ 134,114	$ 1,384,215

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Cash flows from operating activities:
Net earnings	$ 172,063	$ 160,462	$ 284,824
Adjustments to reconcile net earnings to net cash provided by operating activities:
Deferred income taxes	(40,496)	4,377	(8,935)
Depreciation and amortization	74,356	65,129	63,345
Net gain on disposition of equipment	(44,369)	(9,740)	(15,796)
Stock based compensation expense	29,314	26,427	24,037
Accretion of debt discount	4,171	2,340
Noncontrolling interest adjustments	2,864	(677)	526
Other	1,688	(845)	560
Decrease (increase) in assets:
Accounts receivable, net	(83,551)	(25,272)	(32,051)
Inventories	(26,592)	(2,787)	53,711
Leased railcars for syndication	(54,023)	41,015	19,154
Other	34,115	17,558	(16,989)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities	54,032	(25,422)	(85,928)
Deferred revenue	(20,231)	33,039	50,712
Net cash provided by operating activities	103,341	285,604	337,170
Cash flows from investing activities
Acquisitions, net of cash acquired	(34,874)	(27,127)
Proceeds from sales of assets	153,224	24,149	103,715
Capital expenditures	(176,848)	(86,065)	(139,013)
Decrease (increase) in restricted cash	73	15,387	(15,410)
Investment in and advances to unconsolidated affiliates	(26,455)	(40,632)	(12,855)
Cash distribution from joint ventures	4,661	550	7,855
Net cash used in investing activities	(80,219)	(113,738)	(55,708)
Cash flows from financing activities
Net changes in revolving notes with maturities of 90 days or less	23,401	4,324	(49,000)
Repayments of revolving notes with maturities longer than 90 days			(1,888)
Proceeds from issuance of notes payable	13,771	276,093
Repayments of notes payable	(22,269)	(8,297)	(22,299)
Debt issuance costs		(9,082)	(4,161)
Repurchase of stock			(33,498)
Dividends	(29,914)	(24,890)	(23,303)
Cash distribution to joint venture partner	(73,033)	(28,511)	(95,092)
Investment by joint venture partner	6,500		5,400
Tax payments for net share settlement of restricted stock	(7,723)	(5,215)	(5,500)
Excess tax benefit from restricted stock awards			2,813
Other			(887)
Net cash provided by (used in) financing activities	(89,267)	204,422	(227,415)
Effect of exchange rate changes	(14,666)	12,499	(4,298)
Increase (decrease) in cash and cash equivalents	(80,811)	388,787	49,749
Cash and cash equivalents
Beginning of period	611,466	222,679	172,930
End of period	530,655	611,466	222,679
Cash paid during the period for:
Interest	18,878	13,962	12,277
Income taxes, net	66,423	45,280	125,455
Non-cash activity
Conversion of 2018 Senior Convertible Notes	118,887
Transfer from Leased railcars for syndication and Inventories to Equipment on operating leases, net	20,945	8,668	73,165
Capital expenditures accrued in Accounts payable and accrued liabilities	13,534	16,145	8,408
Change in Accounts payable and accrued liabilities associated with cash distributions to joint venture partner	14	484	652
Change in Accounts payable and accrued liabilities associated with dividends declared	$ (72)	(252)	(331)
Change in Accounts payable and accrued liabilities associated with repurchase of stock			1,125
Transfer of Property, plant and equipment, net to (from) Intangibles and other assets, net		$ (63)	$ 588

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Nature of Operations

12 Months Ended

Aug. 31, 2018

Nature of Operations

Note 1 - Nature of Operations

The Company operates in three reportable segments: Manufacturing; Wheels, Repair & Parts; and Leasing & Services. Prior to August 20, 2018, the Company operated in four reportable segments: Manufacturing; Wheels & Parts; Leasing & Services; and GBW Joint Venture. On August 20, 2018 the Company entered into an agreement with its joint venture partner to discontinue the GBW railcar repair joint venture which resulted in 12 repair shops returned to the Company. Beginning on August 20, 2018, GBW Joint Venture was no longer considered a reportable segment.

The segments are operationally integrated. The Manufacturing segment, which currently operates from facilities in the U.S., Mexico, Poland, Romania and Turkey, produces double-stack intermodal railcars, tank cars, conventional railcars, automotive railcar products and marine vessels. The Wheels, Repair & Parts segment performs wheel and axle servicing; railcar repair, refurbishment and maintenance; as well as production of a variety of parts for the railroad industry in North America. The Leasing & Services segment owns approximately 8,100 railcars (6,300 railcars held as equipment on operating leases, 1,600 held as leased railcars for syndication and 200 held as finished goods inventory) and provides management services for approximately 357,000 railcars for railroads, shippers, carriers, institutional investors and other leasing and transportation companies in North America as of August 31, 2018. Through unconsolidated affiliates the Company produces rail and industrial castings, tank heads and other components and has an ownership stake in a railcar manufacturer in Brazil and a lease financing warehouse.

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Summary of Significant Accounting Policies

12 Months Ended

Aug. 31, 2018

Summary of Significant Accounting Policies

Note 2 - Summary of Significant Accounting Policies

Principles of consolidation - The financial statements include the accounts of the Company and its subsidiaries in which it has a controlling interest. All intercompany transactions and balances are eliminated upon consolidation.

Unclassified balance sheet - The balance sheets of the Company are presented in an unclassified format as a result of significant leasing activities for which the current or non-current distinction is not relevant. In addition, the activities of the Manufacturing; Wheels, Repair & Parts; and Leasing & Services segments are so intertwined that in the opinion of management, any attempt to separate the respective balance sheet categories would not be meaningful and may lead to the development of misleading conclusions by the reader.

Foreign currency translation - Certain operations outside the U.S., primarily in Europe, prepare financial statements in currencies other than the U.S. Dollar. Revenues and expenses are translated at monthly average exchange rates during the year, while assets and liabilities are translated at year-end exchange rates. Translation adjustments are accumulated as a separate component of equity in other comprehensive income (loss). The net foreign currency translation adjustment balances were $21.5 million, $5.4 million and $20.8 million as of August 31, 2018, 2017 and 2016, respectively.

Cash and cash equivalents - Cash may temporarily be invested primarily in money market funds. All highly-liquid investments with a maturity of three months or less at the date of acquisition are considered cash equivalents.

Restricted cash - Restricted cash primarily relates to amounts associated with funds temporarily held in connection with a performance guarantee as part of a 2016 transaction, amounts held to support a target minimum rate of return on certain agreements and a pass through account for activity related to management services provided for certain third party customers.

Accounts receivable - Accounts receivable includes receivables from related parties (see Note 17 – Related Party Transactions) and is stated net of allowance for doubtful accounts of $2.7 million and $1.8 million as of August 31, 2018 and 2017, respectively.

	As of August 31,
(In thousands)	2018			2017			2016
Allowance for doubtful accounts
Balance at beginning of period	$	1,768		$	2,215		$	2,449
Additions, net of reversals		938			370			70
Usage		(54	)		(891	)		(277	)
Currency translation effect		49			74			(27	)
Balance at end of period	$	2,701		$	1,768		$	2,215

Inventories - Inventories are valued at the lower of cost or market using the first-in first-out method. Work-in-process includes material, labor and overhead. Finished goods includes completed wheels, parts and railcars not on lease or in transit.

Leased railcars for syndication -Leased railcars for syndication consist of newly-built railcars manufactured at one of the Company’s facilities or railcars purchased from third parties, which have been placed on lease to a customer and which the Company intends to sell to an investor with the lease attached. These railcars are generally anticipated to be sold within six months of delivery of the last railcar in a group or six months from when the Company acquires the railcar from a third party and are typically not depreciated during that period as the Company does not believe any economic value of a railcar is lost in the first six months. In the event the railcars are not sold in the first six months, the railcars are either held in Leased railcars for syndication and are depreciated or are transferred to Equipment on operating leases and are depreciated. As of August 31, 2018, Leased railcars for syndication was $130.9 million compared to $91.3 million as of August 31, 2017.

Equipment on operating leases, net - Equipment on operating leases is stated net of accumulated depreciation. Depreciation to estimated salvage value is provided on the straight-line method over the estimated useful lives of up to thirty-five years. Management periodically reviews salvage value estimates based on current scrap prices and what the Company expects to receive upon disposal.

Investment in unconsolidated affiliates - Investment in unconsolidated affiliates includes the Company’s interests which are accounted for under the equity method of accounting. See Note 7 - Investments in Unconsolidated Affiliates for additional information.

Property, plant and equipment - Property, plant and equipment is stated at cost, net of accumulated depreciation. Depreciation is provided on the straight-line method over estimated useful lives which are as follows:

	Depreciable Life
Buildings and improvements		10 – 25 years
Machinery and equipment		3 – 15 years
Other		3 – 7 years

Goodwill - Goodwill is recorded when the purchase price of an acquisition exceeds the fair market value of the net assets acquired. Goodwill is not amortized and is tested for impairment at least annually and more frequently if material changes in events or circumstances arise. The provisions of ASC 350, Intangibles – Goodwill and Other, require the Company to perform an annual impairment test on goodwill. The Company compares the fair value of each reporting unit with its carrying value. An impairment loss is recorded to the extent that the reporting unit’s carrying amount exceeds the reporting unit’s fair value. An impairment loss cannot exceed the total amount of goodwill allocated to the reporting unit.

Intangible and other assets, net - Intangible assets are recorded when a portion of the purchase price of an acquisition is allocated to assets such as customer contracts and relationships and trade names. Intangible assets with finite lives are amortized using the straight line method over their estimated useful lives and primarily include long-term customer agreements which are amortized over 5 to 20 years. Other assets include revolving note fees and debt acquisition costs which are capitalized and amortized as interest expense over the life of the related borrowings.

Impairment of long-lived assets - When changes in circumstances indicate the carrying amount of certain long-lived assets may not be recoverable, the assets are evaluated for impairment. If the forecasted undiscounted future cash flows are less than the carrying amount of the assets, an impairment charge to reduce the carrying value of the assets to estimated realizable value is recognized in the current period. No impairment was recorded in the years ended August 31, 2018, 2017 and 2016.

Maintenance obligations - The Company is responsible for maintenance on a portion of the managed and owned lease fleet under the terms of maintenance obligations defined in the underlying lease or management agreement. The estimated liability is based on maintenance histories for each type and age of railcar. The liability, included in Accounts payable and accrued liabilities, is reviewed periodically and updated based on maintenance trends and known future repair or refurbishment requirements.

Warranty accruals - Warranty costs are estimated and charged to operations to cover a defined warranty period. The estimated warranty cost is based on history of warranty claims for each particular product type. For new product types without a warranty history, preliminary estimates are based on historical information for similar product types. The warranty accruals, included in Accounts payable and accrued liabilities, are reviewed periodically and updated based on warranty trends.

Income taxes - The liability method is used to account for income taxes. Deferred income taxes are provided for the temporary effects of differences between assets and liabilities recognized for financial statement and income tax reporting purposes. Valuation allowances reduce deferred tax assets to an amount that will more likely than not be realized. We recognize liabilities for uncertain tax positions based on whether evidence indicates that it is more likely than not that the position will be sustained on audit. It is inherently difficult and subjective to estimate such amounts, as this requires us to estimate the probability of various possible outcomes. The Company reevaluates these uncertain tax positions on a quarterly basis. Changes in assumptions may result in the recognition of a tax benefit or an additional charge to the tax provision.

Deferred revenue - Cash payments received prior to meeting revenue recognition criteria are recorded in Deferred revenue. Amounts are reclassified out of Deferred revenue once the revenue recognition criteria have been met. Deferred revenue primarily consists of customer prepayments and the unrecognized portion of the $40 million upfront fee from MUL. The Company also has a 40% interest in the common equity of an entity that buys and sells railcar assets that are leased to third parties. Deferred revenue includes 40% of the revenue and margin of railcars sold to this entity until the railcars are ultimately sold to a third party. The Deferred revenue balance was $106.0 million and $129.3 million as of August 31, 2018 and 2017, respectively.

Noncontrolling interest and Contingently redeemable noncontrolling interest - The Company has a joint venture with Grupo Industrial Monclova, S.A. (GIMSA) that manufactures new railroad freight cars for the North American marketplace at GIMSA’s existing manufacturing facility located in Frontera, Mexico. Each party owns a 50% interest in the joint venture. The financial results of this operation are consolidated for financial reporting purposes as the Company maintains a controlling interest as evidenced by the right to appoint the majority of the Board of Directors, control over accounting, financing, marketing and engineering and approval and design of products. The noncontrolling interest related to the partner’s 50% interest in the joint venture is included in Noncontrolling interest in the equity section of the Company’s Consolidated Balance Sheet.

Greenbrier-Astra Rail was formed in 2017 between the Company’s existing European operations headquartered in Swidnica, Poland and Astra Rail, based in Arad, Romania. Greenbrier-Astra Rail is controlled by the Company with an approximate 75% interest. The Company consolidates Greenbrier-Astra Rail for financial reporting purposes and includes the noncontrolling interest in the mezzanine section of the Consolidated Balance Sheet in Contingently redeemable noncontrolling interest (see Note 3 – Acquisitions).

In August 2018, Greenbrier-Astra Rail entered into an agreement to take an approximately 68% ownership stake in Rayvag, a railcar manufacturing company based in Adana, Turkey. Rayvag is controlled by the Company. The Company consolidates Rayvag for financial reporting purposes. The noncontrolling interest related to the partner’s interest is included in Noncontrolling interest in the equity section of the Company’s Consolidated Balance Sheet.

The Company has a joint venture with Summit Railroad Products, Inc. to provide axle services. Each party owns a 50% interest in the joint venture. The financial results of this operation are consolidated for financial reporting purposes as the Company has the power to direct the activities which most significantly impact the economic performance of the entity. The noncontrolling interest related to the partner’s 50% interest in the joint venture is included in Noncontrolling interest in the equity section of the Company’s Consolidated Balance Sheet.

Net earnings attributable to noncontrolling interest on the Company’s Consolidated Statement of Income represents the Company’s partners’ share of results from operations.

Accumulated other comprehensive loss - Accumulated other comprehensive loss, net of tax as appropriate, consisted of the following:

(In thousands)	Unrealized Gain (Loss) on Derivative Financial Instruments			Foreign Currency Translation Adjustment			Other			Accumulated Other Comprehensive Loss
Balance, August 31, 2017	$	181		$	(5,366	)	$	(1,094	)	$	(6,279	)
Other comprehensive loss before reclassifications		(197	)		(16,140	)		(335	)		(16,672	)
Amounts reclassified from accumulated other comprehensive loss		(415	)		–			–			(415	)
Balance, August 31, 2018	$	(431	)	$	(21,506	)	$	(1,429	)	$	(23,366	)

The amounts reclassified out of Accumulated other comprehensive loss into the Consolidated Statements of Income, with the financial statement caption, were as follows:

	Year Ended August 31,						Financial Statement Caption
(In thousands)	2018			2017
(Gain) loss on derivative financial instruments:
Foreign exchange contracts	$	(716	)	$	3,644		Revenue and Cost of revenue
Interest rate swap contracts		298			1,057		Interest and foreign exchange
		(418	)		4,701		Total before tax
		3			(972	)	Tax benefit
	$	(415	)	$	3,729		Net of tax

Revenue recognition - Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured.

Railcars are generally manufactured, repaired or refurbished under firm orders from third parties. Revenue is recognized when new, used, refurbished or repaired railcars are completed, accepted by an unaffiliated customer and contractual contingencies removed. Marine revenue is either recognized on the percentage of completion method during the construction period or on the completed contract method based on the terms of the contract. Under the percentage of completion method, revenue is recognized based on the progress toward contract completion measured by actual costs incurred to date in relation to the estimate of total expected costs. Under the completed contract method, revenue is not recognized until the project has been fully completed. Cash payments received prior to meeting revenue recognition criteria are accounted for in Deferred revenue. Operating lease revenue is recognized as earned under the lease terms. Certain leases are operated under car hire arrangements whereby revenue is earned based on utilization, car hire rates and terms specified in the lease agreement.

The Company sells railcars with attached leases to financial investors. Revenue and cost of revenue associated with railcars that the Company has manufactured are recognized in Manufacturing once sold. Revenue and cost of revenue associated with railcars which were obtained from a third party with the intent to resell them and subsequently sold are recognized in Leasing & Services. In addition the Company will often perform management or maintenance services at market rates for these railcars. The Company evaluates the terms of any remarketing agreements and any contractual provisions that represent retained risk and the level of retained risk based on those provisions. The Company applies a 10% threshold to determine whether the level of retained risk exceeds 10% of the individual fair value of the rail cars delivered. If retained risk exceeded 10%, the transaction would not be recognized as a sale until such time as the retained risk declined to 10% or less. For any contracts with multiple elements (i.e. railcars, maintenance, management services, etc.) the Company allocates revenue among the deliverables primarily based upon objective and reliable evidence of the fair value of each element in the arrangement. If objective and reliable evidence of fair value of any element is not available, the Company will use its estimated selling price for purposes of allocating the total arrangement consideration among the elements.

Interest and foreign exchange - Interest and foreign exchange includes foreign exchange transaction gains and losses, amortization of loan fee expense, accretion of debt discounts and external interest expense.

(In thousands)	Years ended August 31,
	2018			2017		2016
Interest and foreign exchange:
Interest and other expense	$	30,946		$	23,519	$	17,268
Foreign exchange (gain) loss		(1,578	)		673		(3,766	)
	$	29,368		$	24,192	$	13,502

Research and development - Research and development costs are expensed as incurred. Research and development costs incurred for new product development during the years ended August 31, 2018, 2017 and 2016 were $6.0 million, $4.2 million and $2.7 million, respectively, included in Selling and administrative expenses.

Forward exchange contracts - Foreign operations give rise to risks from changes in foreign currency exchange rates. Forward exchange contracts with established financial institutions are used to hedge a portion of such risk. Realized and unrealized gains and losses on effective hedges are deferred in other comprehensive income (loss) and recognized in earnings concurrent with the hedged transaction or when the occurrence of the hedged transaction is no longer considered probable. Ineffectiveness is measured and any gain or loss is recognized in foreign exchange gain or loss. Even though forward exchange contracts are entered into to mitigate the impact of currency fluctuations, certain exposure remains, which may affect operating results. In addition, there is risk for counterparty non-performance.

Interest rate instruments - Interest rate swap agreements are used to reduce the impact of changes in interest rates on certain debt. The net cash amounts paid or received under the agreements are recognized as an adjustment to interest expense.

Net earnings per share - Basic earnings per common share (EPS) excludes the potential dilution that would occur if additional shares were issued upon conversion of bonds. Restricted share grants are treated as outstanding when issued and restricted stock units are not treated as outstanding when issued. Restricted share grants and restricted stock units that are considered participating securities, including some grants subject to certain performance criteria, are included in weighted average basic common shares outstanding when calculating EPS when the Company is in a net earnings position.

Diluted EPS is calculated using the more dilutive of two approaches. The first approach includes the dilutive effect, using the treasury stock method, associated with shares underlying the 2024 Convertible notes, restricted stock units that are not considered participating securities and performance based restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved. The second approach supplements the first by including the “if converted” effect of the 2018 Convertible notes during the periods in which they were outstanding. Under the “if converted” method, debt issuance and interest costs, both net of tax, associated with the convertible notes are added back to net earnings and the share count is increased by the shares underlying the convertible notes. The 2024 Convertible notes are included in the calculation of both approaches using the treasury stock method when the average stock price is greater than the applicable conversion price.

Stock-based compensation - The value of stock based compensation awards is amortized as compensation expense from the date of grant through the earlier of the vesting period or the recipient’s eligible retirement date. Awards are expensed upon grant when the recipient’s eligible retirement date precedes the grant date. Stock based compensation expense consists of restricted stock units, restricted stock and phantom stock units awards. Stock based compensation expense for the years ended August 31, 2018, 2017 and 2016 was $29.3 million, $26.4 million and $24.0 million, respectively and was recorded in Selling and administrative on the Consolidated Statements of Income.

Restricted stock units and restricted stock are accounted for as equity based awards (see Note 15 – Equity). Phantom stock units are accounted for as liability based awards.

The Company began granting phantom stock units during the year ended August 31, 2016. Every phantom stock unit entitles the participant to receive a cash payment equal to the value of a single share of the Company’s common stock upon vesting. The holders of unvested phantom stock units are entitled to participate in dividend equivalents.

There were no phantom stock units awarded during the year ended August 31, 2018. During the years ended August 31, 2017 and 2016, the Company awarded 151,634 and 268,161 phantom stock units, respectively, which include performance-based grants. As of August 31, 2018, there were a total of 200,686 phantom stock units associated with unvested performance-based grants. The actual number of phantom stock units that will vest associated with performance-based phantom stock units will vary depending on the Company’s performance. Approximately 200,686 additional phantom stock units may be granted if performance-based phantom stock units vest at stretch levels of performance. These additional units are associated with phantom stock unit awards granted during the years ended August 31, 2016 and 2017. The grant date fair value of phantom stock awards was $6.7 million and $7.9 million for the years ended August 31, 2017 and 2016, respectively.

Our phantom stock unit grants are considered liability based awards and therefore are re-measured at the end of each reporting period. Compensation expense is recognized through the earlier of the vesting period or the recipient’s eligible retirement date. Time-based awards to employees are expensed upon grant when the recipient’s eligible retirement date precedes the grant date or during the vesting period if the grantee becomes retirement eligible before the vesting period is complete. Compensation expense related to phantom stock unit grants is recorded in Selling and administrative expense and Cost of revenue on the Company’s Consolidated Statements of Income. Compensation expense recognized related to phantom stock units for the years ended August 31, 2018, August 31, 2017 and 2016 was $12.1 million, $6.2 million and $1.5 million, respectively. Unamortized compensation cost related to phantom stock unit grants was $5.9 million, $10.9 million and $7.5 million as of August 31, 2018, 2017 and 2016, respectively.

Management estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires judgment on the part of management to arrive at estimates and assumptions on matters that are inherently uncertain. These estimates may affect the amount of assets, liabilities, revenue and expenses reported in the financial statements and accompanying notes and disclosure of contingent assets and liabilities within the financial statements. Estimates and assumptions are periodically evaluated and may be adjusted in future periods. Actual results could differ from those estimates.

Initial Adoption of Accounting Policies - In the first quarter of 2018, the Company adopted Accounting Standards Update 2016-09, Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). This changes how companies account for certain aspects of share-based payments to employees. Excess tax benefits or deficiencies related to vested awards which were previously recognized in stockholders’ equity are now recognized in the income statement when awards vest. For the year ended August 31, 2018, the impact of adopting this new guidance was immaterial. Prior to adopting the updated standard, excess tax benefits were reported as financing activities and are now reported as operating activities in the statement of cash flows. In addition, cash paid by an employer when directly withholding shares for tax withholding purposes were reported as operating activities and are now classified as financing activities.

Prospective Accounting Changes - In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (ASU 2014-09), providing a common revenue recognition model under U.S. GAAP. Under ASU 2014-09, an entity recognizes revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or services. It also requires additional disclosures to sufficiently describe the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB issued a one year deferral and the new standard is effective for fiscal years and interim periods within those years beginning after December 15, 2017. The Company plans to adopt this new standard beginning September 1, 2018 using the modified retrospective method. The Company has substantially completed our evaluation of the requirements of the new standard and is implementing slight modifications to our affected processes and controls in the first quarter of fiscal 2019. The majority of our revenue recognition timing will remain unchanged, while we expect certain minor changes related to maintenance and repair services. Costs incurred while fulfilling maintenance contracts will now be recognized as incurred while the related revenue will continue to be recognized over time. Additionally, our repair service revenue, while previously recognized upon completion of a repair order, will now be recognized as costs are incurred. As a result of these changes, the Company expects to record an increase to retained earnings of approximately $5.4 million and a reclassification from accrued maintenance to contract liabilities of $2.4 million as of September 1, 2018.

In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (ASU 2016-02). The new guidance supersedes existing guidance on accounting for leases in Topic 840 and is intended to increase the transparency and comparability of accounting for lease transactions. ASU 2016-02 requires most leases to be recognized on the balance sheet. Lessees will need to recognize a right-of-use asset and a lease liability for virtually all leases. The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Lessor accounting remains similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. The ASU will require both quantitative and qualitative disclosures regarding key information about leasing arrangements. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will include a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The Company plans to adopt this guidance beginning September 1, 2019. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.

In December 2016, the FASB issued Accounting Standards Update 2016-18, Restricted Cash (ASU 2016-18). This update requires additional disclosure and that the Statement of Cash Flow explain the change during the period in the total cash, cash equivalents and amounts generally described as restricted cash. Therefore, amounts generally described as restricted cash should be included with cash & cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Statement of Cash Flows. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 with early adoption permitted. The Company plans to adopt this guidance beginning September 1, 2018.

In August 2017, the FASB issued Accounting Standards Update 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12). This update improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements and make certain targeted improvements to simplify the application of the hedge accounting guidance. The guidance expands the ability to hedge non-financial and financial risk components, reduces complexity in fair value hedges of interest rate risk, eliminates the requirement to separately measure and report hedge ineffectiveness, as well as eases certain hedge effectiveness assessment requirements. The new guidance is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company plans to adopt this guidance beginning September 1, 2019. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.

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Acquisitions

12 Months Ended

Aug. 31, 2018

Acquisitions

Note 3 - Acquisitions

GBW

On August 20, 2018, the Company entered into a dissolution agreement with Watco Companies, LLC, its previous joint venture partner, to discontinue their GBW Railcar Services railcar repair joint venture. Pursuant to the dissolution agreement, previously operated Greenbrier repair shops and associated employees were returned to the Company. Additionally, the dissolution agreement provides that certain agreements entered into in connection with the original creation of GBW in 2014 will be terminated as of the transaction date, including the leases of real and personal property, service agreements, and certain employment-related agreements. GBW is expected to exist as a formal legal entity at least through December 31, 2018 to complete its cessation of activities in an orderly manner.

Beginning on August 20, 2018, the repair shops and their activity are being reported in the Company’s consolidated financial statements as part of the Wheels, Repair & Parts segment.

As the assets received and liabilities assumed from GBW meet the definition of a business, the Company has accounted for this transaction as a business combination. The total net assets acquired were approximately $56.8 million. Additionally, the Company removed the book value of its remaining equity method investment in, and note receivable due from, the joint venture. The accumulated deficit reflected in GBW’s balance sheet as of August 31, 2018 will be funded by its parents. The Company has included this assumed liability within the purchase price allocation in the table below. The impact of the acquisition was not material to the Company’s results of operations, therefore pro forma financial information has not been included. See Note 17 – Related Party Transactions for additional information.

The preliminary allocation of the purchase price based on the fair value of the net assets acquired was as follows as of August 31, 2018:

(in thousands)
Cash and cash equivalents	$	5,000
Accounts receivable, net		12,230
Inventories		18,106
Property, plant and equipment, net		16,748
Intangibles and other assets, net		9,200
Goodwill		7,863
Total assets acquired		69,147
Accounts payable and accrued liabilities		12,394
Total liabilities assumed		12,394
Net assets acquired	$	56,753

As of August 31, 2018, certain liabilities in the table above are estimates and the Company will adjust the purchase price allocation as they are settled.

Greenbrier Astra Rail

On June 1, 2017, Greenbrier and Astra Holding GmbH (Astra) contributed its European operations to a newly formed company, Greenbrier-Astra Rail (GAR), a Europe-based freight railcar manufacturing, engineering and repair business. As consideration for an approximate 75% controlling interest, Greenbrier agreed to pay Astra €30 million at closing, an additional €30 million which was paid on June 1, 2018 and issue an approximate 25% noncontrolling interest in the new company. The total net assets acquired of $115.8 million includes $38.3 million representing the fair value of the noncontrolling interest at the acquisition date.

Astra also received a put option to sell its entire noncontrolling interest to Greenbrier at an exercise price equal to the higher of fair value or a defined EBITDA multiple as measured on the exercise date. The option is exercisable 30 days prior to and up until June 1, 2022. Due to Astra’s redemption right under the put option, the noncontrolling interest has been classified as a Contingently redeemable noncontrolling interest in the mezzanine section of the Consolidated Balance Sheets. The carrying value of the noncontrolling interest cannot be less than the maximum redemption amount, which is the amount Greenbrier will settle the put option for if exercised. Adjustments to reconcile the carrying value to the maximum redemption amount are recorded to retained earnings. There were no such adjustments during the year ended August 31, 2018.

For the year ended August 31, 2018, the European operations contributed by Astra generated revenues of $136.8 million and a loss from operations of $11.5 million, which are reported in the Company’s consolidated financial statements as part of the Manufacturing segment. The impact of the acquisition was not material to the Company’s consolidated results of operations for the twelve-month period ended August 31, 2017, therefore pro forma financial information has not been included.

The purchase price of the net assets acquired from Astra was allocated as follows:

(in thousands)
Cash and cash equivalents	$	6,562
Accounts receivable, net		10,984
Inventories		30,454
Property, plant and equipment, net		75,296
Intangibles and other assets, net		17,300
Goodwill		25,746
Total assets acquired		166,342
Accounts payable and accrued liabilities		17,879
Deferred income taxes		7,292
Deferred revenue		964
Notes payable, net		24,382
Total liabilities assumed		50,517
Net assets acquired	$	115,825

On August 2, 2018, GAR entered in to an agreement with Rayvag Vagon Sanavi ve Ticaret A.S. (Rayvag) to take an approximately 68% ownership stake in Rayvag. Rayvag is a railcar manufacturer and provider of railcar repair and parts services based in Adana, Turkey. The amount paid to acquire the 68% ownership stake in Rayvag and the impact of the acquisition were not material to the Company’s consolidated balance sheet and results of operations, therefore pro forma financial information has not been included.

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Inventories

12 Months Ended

Aug. 31, 2018

Inventories

Note 4 - Inventories

	As of August 31,
(In thousands)	2018			2017
Manufacturing supplies and raw materials	$	278,726		$	222,080
Work-in-process		105,021			86,794
Finished goods		54,181			95,389
Excess and obsolete adjustment		(5,614	)		(4,136	)
	$	432,314		$	400,127

	As of August 31,
(In thousands)	2018			2017			2016
Excess and obsolete adjustment
Balance at beginning of period	$	4,136		$	3,257		$	2,679
Charge to cost of revenue		4,023			2,781			2,422
Disposition of inventory		(2,455	)		(2,003	)		(1,792	)
Currency translation effect		(90	)		101			(52	)
Balance at end of period	$	5,614		$	4,136		$	3,257

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Equipment on Operating Leases, net

12 Months Ended

Aug. 31, 2018

Equipment on Operating Leases, net

Note 5 - Equipment on Operating Leases, net

Equipment on operating leases is reported net of accumulated depreciation of $64.9 million and $91.1 million as of August 31, 2018 and 2017, respectively. Depreciation expense was $11.2 million, $12.1 million and $16.6 million as of August 31, 2018, 2017 and 2016, respectively. In addition, certain railcar equipment leased-in by the Company on operating leases (see Note 21 – Lease Commitments) is subleased to customers under non-cancelable operating leases. Aggregate minimum future amounts receivable under all non-cancelable operating leases and subleases are as follows:

(In thousands)
Year ending August 31,
2019	$	26,246
2020		19,898
2021		13,311
2022		11,311
2023		8,562
Thereafter		14,733
	$	94,061

Certain equipment is also operated under daily, monthly or car hire utilization arrangements. Associated revenue amounted to $12.8 million, $13.0 million and $14.7 million for the years ended August 31, 2018, 2017 and 2016, respectively.

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Property, Plant and Equipment, net

12 Months Ended

Aug. 31, 2018

Property, Plant and Equipment, net

Note 6 - Property, Plant and Equipment, net

	As of August 31,
(In thousands)	2018			2017
Land and improvements	$	84,432		$	84,594
Machinery and equipment		414,865			378,311
Buildings and improvements		202,973			186,960
Construction in progress		48,406			39,417
Other		68,452			60,747
		819,128			750,029
Accumulated depreciation		(361,932	)		(322,008	)
	$	457,196		$	428,021

Depreciation expense was $54.5 million, $45.5 million and $39.2 million for the years ended August 31, 2018, 2017 and 2016, respectively.

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Investments In Unconsolidated Affiliates

12 Months Ended

Aug. 31, 2018

Investments In Unconsolidated Affiliates

Note 7 - Investments In Unconsolidated Affiliates

GBW

The Company has a 50% ownership interest in GBW which performed railcar repair, refurbishment and maintenance until August 20, 2018, on which date the Company entered in to a dissolution agreement (See Note 3 – Acquisitions). The Company accounts for its interest in GBW under the equity method of accounting.

The assets and liabilities shown below as of August 31, 2018 primarily represent one remaining repair shop and other corporate related obligations while the summarized income statement for the year ended August 31, 2018 is for GBW’s full year of activity.

Summarized financial data for GBW is as follows:

	As of August 31,
(In thousands)	2018		2017
Current assets	$	8,531	$	81,860
Total assets	$	8,531	$	206,009
Current liabilities	$	23,283	$	33,033
Total liabilities	$	23,283	$	111,384

	Years ended August 31,
(In thousands)	2018			2017			2016
Revenue	$	238,033		$	253,436		$	373,490
Margin	$	(6,047	)	$	(4,058	)	$	33,929
Net income (loss) (1)	$	(51,679	)	$	(36,947	)	$	4,006

⁽¹⁾  In 2018 and 2017, GBW recorded a pre-tax goodwill impairment loss of $26.4 million and $11.2 million, respectively, which reduced the goodwill balance to $15.1 million at the time of the dissolution.

Greenbrier-Maxion

In May 2017, the Company completed a $20 million investment in Greenbrier-Maxion, a railcar manufacturer in Brazil resulting in an increase in the Company’s ownership interest from 19.5% to 60%. Greenbrier-Maxion also assembles bogies and offers a range of aftermarket services including railcar overhaul and refurbishment. The Company does not consolidate Greenbrier-Maxion for financial reporting purposes and accounts for its interest under the equity method of accounting as the entity’s governance provisions require that all significant decisions of Greenbrier-Maxion are subject to shared consent of its shareholders.

Summarized financial data for Greenbrier-Maxion is as follows:

	As of August 31,
(In thousands)	2018		2017
Current assets	$	41,619	$	48,012
Total assets	$	61,034	$	71,455
Current liabilities	$	38,027	$	38,055
Total liabilities	$	41,539	$	42,197

	Years ended August 31,
(In thousands)	2018			2017		2016
Revenue	$	187,664		$	228,510	$	168,465
Margin	$	10,086		$	24,372	$	14,245
Net income (loss)	$	(3,006	)	$	1,378	$	(4,051	)

Amsted-Maxion Cruzeiro

In May 2017, the Company increased its ownership interest in Amsted-Maxion Cruzeiro, a manufacturer of castings and components for railcars and other heavy equipment, from 19.5% to 24.5% for $3.25 million. Proceeds from the Company’s increased ownership, along with loans from each of the partners, were used to retire third-party debt at Amsted-Maxion Cruzeiro. The Company retains an option to increase its ownership to 29.5% subject to certain conditions. Amsted-Maxion Cruzeiro has a 40% ownership position in Greenbrier-Maxion. The Company accounts for its interest in Amsted-Maxion Cruzeiro under the equity method of accounting.

Summarized financial data for Amsted-Maxion Cruzeiro is as follows:

	As of August 31,
(In thousands)	2018		2017
Current assets	$	21,463	$	23,777
Total assets	$	111,589	$	142,583
Current liabilities	$	27,981	$	28,084
Total liabilities	$	83,407	$	94,846

	Years ended August 31,
(In thousands)	2018			2017			2016
Revenue	$	96,490		$	90,114		$	87,833
Margin	$	8,001		$	5,983		$	8,256
Net income (loss)	$	(9,590	)	$	(20,114	)	$	(12,640	)

Other Unconsolidated Affiliates

The Company has eight other unconsolidated affiliates which are accounted for under the equity method of accounting. For the year ended August 31, 2018, the Company recognized earnings of $1.8 million from these other unconsolidated affiliates.

Summarized financial information, shown as 100% of these other unconsolidated affiliates in aggregate are as follows:

	As of August 31,
(In thousands)	2018		2017
Current assets	$	32,168	$	16,996
Total assets	$	239,535	$	283,895
Current liabilities	$	3,647	$	3,003
Total liabilities	$	52,852	$	90,064

	Years ended August 31,
(In thousands)	2018		2017		2016
Revenue	$	25,549	$	39,161	$	75,851
Margin	$	11,360	$	8,015	$	11,087
Net income (loss)	$	6,988	$	5,202	$	6,051

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Goodwill

12 Months Ended

Aug. 31, 2018

Goodwill

Note 8 - Goodwill

Changes in the carrying value of goodwill are as follows:

(In thousands)	Manufacturing		Wheels, Repair & Parts		Leasing & Services		Total
Balance August 31, 2017	$	25,325	$	43,265	$	–	$	68,590
Additions (1)		839		7,863		–		8,702
Translation		919		–		–		919
Balance August 31, 2018	$	27,083	$	51,128	$	–	$	78,211

⁽¹⁾ Additions to goodwill relate to the GBW repair shop transaction and Manufacturing includes final adjustments to the Astra purchase price allocation. See Note 3 – Acquisitions.

(In thousands)	Goodwill
Gross goodwill balance before accumulated goodwill impairment losses and other reductions	$	230,736
Accumulated goodwill impairment losses		(128,209	)
Accumulated other reductions		(24,316	)
Balance August 31, 2018	$	78,211

The Company performs a goodwill impairment test annually during the third quarter. Goodwill is also tested more frequently if changes in circumstances or the occurrence of events indicates that a potential impairment exists. The provisions of ASC 350, Intangibles – Goodwill and Other, require the performance of an impairment test on goodwill. The Company compares the fair value of each reporting unit with its carrying value. The Company determines the fair value of the reporting unit based on a weighting of income and market approaches. Under the income approach, the Company calculates the fair value of a reporting unit based on the present value of estimated future cash flows. Under the market approach, the Company estimates the fair value based on observed market multiples for comparable businesses. An impairment loss is recorded to the extent that the reporting unit’s carrying amount exceeds the reporting unit’s fair value. An impairment loss cannot exceed the total amount of goodwill allocated to the reporting unit. Goodwill was tested during the third quarter of 2018 and the Company concluded that goodwill was not impaired.

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Intangibles and Other Assets, net

12 Months Ended

Aug. 31, 2018

Intangibles and Other Assets, net

Note 9 - Intangibles and Other Assets, net

Intangible assets that are determined to have finite lives are amortized over their useful lives. Intangible assets with indefinite useful lives are not amortized and are periodically evaluated for impairment.

The following table summarizes the Company’s identifiable intangible and other assets balance:

	As of August 31,
(In thousands)	2018			2017
Intangible assets subject to amortization:
Customer relationships	$	72,521		$	64,521
Accumulated amortization		(43,576	)		(40,153	)
Other intangibles		16,300			20,207
Accumulated amortization		(6,400	)		(4,866	)
		38,845			39,709
Intangible assets not subject to amortization		5,115			912
Prepaid and other assets		18,935			16,914
Nonqualified savings plan investments		26,299			20,974
Debt issuance costs, net		1,824			2,623
Assets held for sale		3,650			4,045
	$	94,668		$	85,177

Amortization expense for the years ended August 31, 2018, 2017 and 2016 was $5.3 million, $4.8 million and $6.3 million, respectively. Amortization expense for the years ending August 31, 2019, 2020, 2021, 2022 and 2023 is expected to be $5.2 million, $5.2 million, $4.8 million, $3.4 million and $3.2 million, respectively.

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Revolving Notes

12 Months Ended

Aug. 31, 2018

Revolving Notes

Note 10 - Revolving Notes

Senior secured credit facilities, consisting of three components, aggregated to $635.3 million as of August 31, 2018.

As of August 31, 2018, a $550.0 million revolving line of credit, maturing October 2020, secured by substantially all the Company’s assets in the U.S. not otherwise pledged as security for term loans, was available to provide working capital and interim financing of equipment, principally for the U.S. and Mexican operations. Advances under this facility bear interest at LIBOR plus 1.75% or Prime plus 0.75% depending on the type of borrowing. Available borrowings under the credit facility are generally based on defined levels of inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated capitalization and fixed charges coverage ratios. After August 31, 2018 this revolving line of credit agreement was amended (see Note 25 – Subsequent Events).

As of August 31, 2018, lines of credit totaling $35.3 million secured by certain of the Company’s European assets, with variable rates that range from Warsaw Interbank Offered Rate (WIBOR) plus 1.2% to WIBOR plus 1.3% and Euro Interbank Offered Rate (EURIBOR) plus 1.1%, were available for working capital needs of the European manufacturing operation. European credit facilities are continually being renewed. Currently, these European credit facilities have maturities that range from December 2018 through June 2019.

As of August 31, 2018, the Company’s Mexican railcar manufacturing joint venture had two lines of credit totaling $50.0 million. The first line of credit provides up to $30.0 million and is fully guaranteed by the Company and its joint venture partner. Advances under this facility bear interest at LIBOR plus 2.0%. The Mexican railcar manufacturing joint venture will be able to draw against this facility through January 2019. The second line of credit provides up to $20.0 million, of which the Company and its joint venture partner have each guaranteed 50%. Advances under this facility bear interest at LIBOR plus 2.0%. The Mexican railcar manufacturing joint venture will be able to draw amounts available under this facility through July 2019.

As of August 31, 2018, outstanding commitments under the senior secured credit facilities consisted of $72.2 million in letters of credit under the North American credit facility and $27.7 million outstanding under the European credit facilities.

As of August 31, 2017, outstanding commitments under the senior secured credit facilities consisted of $77.6 million in letters of credit under the North American credit facility and $4.3 million outstanding under the European credit facilities.

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Accounts Payable and Accrued Liabilities

12 Months Ended

Aug. 31, 2018

Accounts Payable and Accrued Liabilities

Note 11 - Accounts Payable and Accrued Liabilities

	As of August 31,
(In thousands)	2018		2017
Trade payables	$	226,405	$	180,592
Other accrued liabilities		73,273		107,002
Accrued payroll and related liabilities		105,111		84,749
Accrued warranty		27,395		20,737
Accrued maintenance		9,090		17,667
Income taxes payable		4,771		–
Other		3,812		4,314
	$	449,857	$	415,061

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Maintenance and Warranty Accruals

12 Months Ended

Aug. 31, 2018

Maintenance and Warranty Accruals

Note 12 - Maintenance and Warranty Accruals

	As of August 31,
(In thousands)	2018			2017			2016
Accrued maintenance
Balance at beginning of period	$	17,667		$	18,646		$	18,642
Charged to cost of revenue		(389	)		10,609			12,926
Payments		(8,188	)		(11,588	)		(12,922	)
Balance at end of period	$	9,090		$	17,667		$	18,646
Accrued warranty
Balance at beginning of period	$	20,737		$	12,159		$	11,512
Charged to cost of revenue		12,323			6,872			6,069
Acquisition		–			3,526			–
Payments		(5,217	)		(2,649	)		(5,299	)
Currency translation effect		(448	)		829			(123	)
Balance at end of period	$	27,395		$	20,737		$	12,159

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Notes Payable, net

12 Months Ended

Aug. 31, 2018

Notes Payable, net

Note 13 - Notes Payable, net

	As of August 31,
(In thousands)	2018			2017
Convertible senior notes, due 2018	$	–		$	119,063
Convertible senior notes, due 2024		275,000			275,000
Term loans		179,923			184,001
Other notes payable		14,798			19,540
	$	469,721		$	597,604
Debt discount and issuance costs		(33,516	)		(39,376	)
	$	436,205		$	558,228

The Company’s 3.5% convertible senior notes due 2018 with a conversion price of $35.47 matured on April 1, 2018 with a balance of $119.1 million prior to conversion. The conversion of these notes resulted in the issuance of an additional 3.4 million shares of the Company’s common stock.

Convertible senior notes, due 2024, bear interest at a fixed rate of 2.875%, paid semi-annually in arrears on February 1^st and August 1^st. The convertible notes mature on February 1, 2024, unless earlier repurchased by the Company or converted in accordance with their terms. Upon the satisfaction of certain conditions, holders may convert at their option prior to the business day immediately preceding the stated maturity date. The convertible notes are senior unsecured obligations and rank equally with other senior unsecured debt. The convertible notes are convertible into shares of the Company’s common stock, at an initial conversion rate of 16.6234 shares per $1,000 principal amount of the notes (which is equal to an initial conversion price of $60.16 per share). The initial conversion rate and conversion price are subject to adjustment upon the occurrence of certain events, such as distributions, dividends or stock splits. There were $33.1 million of initial debt discount and $8.0 million of original debt issuance costs included in Notes Payable, net on the Company’s Consolidated Balance Sheet. The debt discount represents the difference between the debt principal and the value of a similar debt instrument that does not have a conversion feature at issuance. The debt discount is being amortized using the effective interest rate method through February 2024 and the amortization expense is included in Interest and Foreign exchange on the Company’s Consolidated Statement of Income. In accordance with ASC 470-20, the Company separately accounts for the liability component (debt principal net of debt discount) and equity component. The liability component is recognized as the fair value of a similar instrument that does not have a conversion feature at issuance. To determine the fair value of the liability component, the Company assumed an interest rate of approximately 5% which resulted in a fair value of $241.9 million. The equity component, which is the conversion feature at issuance, is recognized as the difference between the proceeds from the issuance of the notes ($275 million) and the fair value of the liability component ($241.9 million). As of August 31, 2018 and 2017, the equity component was $33.1 million which was recorded on the Company’s Consolidated Balance Sheet in Additional paid-in capital, net of tax of $12.3 million.

Term loans are primarily composed of:

• $200 million of senior term debt, with a maturity date of March 2020, which is secured by a pool of leased railcars. The debt bears a floating interest rate of LIBOR plus 1.75% with principal of $1.75 million paid quarterly in arrears and a balloon payment of $159.8 million due at maturity. An interest rate swap agreement was entered into on 50% of the initial balance to swap the floating interest rate of LIBOR plus 1.75% to a fixed rate of 3.74%. The principal balance as of August 31, 2018 was $170.3 million. After August 31, 2018 this senior term debt agreement was amended (see Note 25 – Subsequent Events).

• Other term loans with an aggregate balance of $9.7 million as of August 31, 2018 and maturity dates ranging from April 2020 to September 2022.

• Other notes payable includes $14.8 million of unsecured debt with a maturity date of June 2019.

The notes payable, along with the revolving and operating lines of credit, contain certain covenants with respect to the Company and various subsidiaries, the most restrictive of which, among other things, limit the ability to: incur additional indebtedness or guarantees; pay dividends or repurchase stock; enter into capital leases; create liens; sell assets; engage in transactions with affiliates, including joint ventures and non U.S. subsidiaries, including but not limited to loans, advances, equity investments and guarantees; enter into mergers, consolidations or sales of substantially all the Company’s assets; and enter into new lines of business. The covenants also require certain maximum ratios of debt to total capitalization and minimum levels of fixed charges (interest and rent) coverage.

As of August 31, 2018 principal payments on the notes payable are expected as follows:

(In thousands)
Year ending August 31,
2019	$	26,775
2020		167,086
2021		413
2022		413
2023		34
Thereafter (1)		275,000
	$	469,721

(1) The repayment of the $275.0 million of Convertible senior notes due 2024 is assumed to occur at the scheduled maturity in 2024 instead of assuming an earlier conversion by the holders.

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Derivative Instruments

12 Months Ended

Aug. 31, 2018

Derivative Instruments

Note 14 - Derivative Instruments

Foreign operations give rise to market risks from changes in foreign currency exchange rates. Foreign currency forward exchange contracts with established financial institutions are utilized to hedge a portion of that risk. Interest rate swap agreements are used to reduce the impact of changes in interest rates on certain debt. The Company’s foreign currency forward exchange contracts and interest rate swap agreements are designated as cash flow hedges, and therefore the effective portion of unrealized gains and losses is recorded in accumulated other comprehensive income or loss.

At August 31, 2018 exchange rates, forward exchange contracts for the purchase of Polish Zlotys and the sale of Euros; the purchase of Mexican Pesos and the sale of U.S. Dollars; and for the purchase of U.S. Dollars and the sale of Saudi Riyals and Euros aggregated to $145.4 million. The fair value of the contracts is included on the Consolidated Balance Sheets as Accounts payable and accrued liabilities when there is a loss, or as Accounts receivable, net when there is a gain. As the contracts mature at various dates through December 2019, any such gain or loss remaining will be recognized in manufacturing revenue or cost of revenue along with the related transactions. In the event that the underlying transaction does not occur or does not occur in the period designated at the inception of the hedge, the amount classified in accumulated other comprehensive loss would be reclassified to the results of operations in Interest and foreign exchange at the time of occurrence. At August 31, 2018 exchange rates, approximately $1.3 million would be reclassified to revenue or cost of revenue in the next year.

At August 31, 2018, an interest rate swap agreement maturing in March 2020 had a notional amount of $85.1 million. The fair value of the contract is included on the Consolidated Balance Sheets in Accounts payable and accrued liabilities when there is a loss, or in Accounts receivable, net when there is a gain. As interest expense on the underlying debt is recognized, amounts corresponding to the interest rate swap are reclassified from Accumulated other comprehensive loss and charged or credited to interest expense. At August 31, 2018 interest rates, approximately $0.1 million would be reclassified to interest expense in the next year.

Fair Values of Derivative Instruments

	Asset Derivatives					Liability Derivatives
		August 31,					August 31,
		2018		2017			2018		2017
(In thousands)	Balance sheet caption	Fair Value		Fair Value		Balance sheet caption	Fair Value		Fair Value
Derivatives designated as hedging instruments
Foreign forward exchange contracts	Accounts receivable, net	$	700	$	2,341	Accounts payable and accrued liabilities	$	1,211	$	1,761
Interest rate swap contracts	Intangibles and other assets, net		781		–	Accounts payable and accrued liabilities		1		1,125
		$	1,481	$	2,341		$	1,212	$	2,886
Derivatives not designated as hedging instruments
Foreign forward exchange contracts	Accounts receivable, net	$	76	$	1,473	Accounts payable and accrued liabilities	$	354	$	–

The Effect of Derivative Instruments on the Consolidated Statements of Income

Derivatives in cash flow hedging relationships	Financial statement caption of gain recognized in income on derivative	Gain recognized in income on derivatives Years ended August 31,
		2018			2017
Foreign forward exchange contract	Interest and foreign exchange	$	1,052		$	3,207
Interest rate swap contracts	Interest and foreign exchange		(1	)		23
		$	1,051		$	3,230

Derivatives in cash flow hedging relationships	Gain (loss) recognized in OCI on derivatives (effective portion) Years ended August 31,					Financial statement caption of gain (loss) reclassified from accumulated OCI into income	Gain (loss) reclassified from accumulated OCI into income (effective portion) Years ended August 31,						Financial statement caption of gain (loss) in income on derivative (ineffective portion and amount excluded from effectiveness testing)	Gain (loss) recognized on derivative (ineffective portion and amount excluded from effectiveness testing) Years ended August 31,
	2018			2017			2018			2017				2018		2017
Foreign forward exchange contracts	$	(658	)	$	1,746	Revenue	$	1,145		$	(3,980	)	Revenue	$	854	$	(2,843	)
Foreign forward exchange contracts		(1,093	)		385	Cost of revenue		(429	)		336		Cost of revenue		306		248
Interest rate swap contracts		1,632			1,042	Interest and foreign exchange		(298	)		(1,057	)	Interest and foreign exchange		–		–
	$	(119	)	$	3,173		$	418		$	(4,701	)		$	1,160	$	(2,595	)

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Equity

12 Months Ended

Aug. 31, 2018

Equity

Note 15 - Equity

Stock Incentive Plan

The 2014 Amended and Restated Stock Incentive Plan was amended and restated as the 2017 Amended and Restated Stock Incentive Plan on October 24, 2017 and approved by stockholders on January 5, 2018. The stockholders also approved an increase in the total number of shares reserved for issuance by 1,100,000 shares. As a result, the maximum aggregate number of the Company’s common shares authorized for issuance is 5,425,000. The 2017 Amended and Restated Stock Incentive Plan provides for the grant of incentive stock options, non-statutory stock options, restricted shares, restricted stock units and stock appreciation rights.

On August 31, 2018 there were 1,050,675 shares available for grant compared to 233,271 and 476,770 shares available for grant as of the years ended August 31, 2017 and 2016, respectively. There are no stock options or stock appreciation rights outstanding as of August 31, 2018. The Company currently grants restricted shares and restricted stock units. Restricted share grants are considered outstanding shares of common stock at the time they are issued. The holders of unvested restricted shares are entitled to voting rights and participation in dividends. Shares associated with restricted stock unit awards are not considered legally outstanding shares of common stock until vested. Restricted stock unit awards, including performance-based awards, are entitled to participate in dividends and these awards are considered participating securities and are considered outstanding for earnings per share purposes when the effect is dilutive.

During the years ended August 31, 2018, 2017 and 2016, the Company awarded restricted share and restricted stock unit grants totaling 317,036, 269,705 and 447,895 shares, respectively, which include performance-based grants. As of August 31, 2018, there were a total of 467,710 shares associated with unvested performance-based grants. The actual number of shares that will vest associated with performance-based grants will vary depending on the Company’s performance. Approximately 467,710 additional shares may be granted if performance-based restricted stock unit awards vest at stretch levels of performance. These additional shares are associated with restricted stock unit awards granted during the years ended August 31, 2018, 2017 and 2016. The fair value of awards granted was $15.2 million, $11.3 million and $12.5 million for the years ended August 31, 2018, 2017 and 2016, respectively.

The value, at the date of grant, of stock awarded under restricted share grants and restricted stock unit grants is amortized as compensation expense over the lesser of the vesting period of one to three years or to the recipients eligible retirement date. Compensation expense recognized related to restricted share grants and restricted stock unit grants for the years ended August 31, 2018, 2017 and 2016 was $17.2 million, $20.2 million and $22.5 million, respectively, and was recorded in Selling and administrative and Cost of Revenue on the Consolidated Statements of Income. Unamortized compensation cost related to restricted stock grants was $15.5 million as of August 31, 2018.

Total unvested restricted share and restricted stock unit grants were 788,744 and 837,654 as of August 31, 2018 and 2017. The following table summarizes restricted share and restricted stock unit grant transactions for shares, both vested and unvested, under the 2017 Amended and Restated Stock Incentive Plan:

	Shares
Balance at August 31, 2015 (1)		3,419,861
Granted		447,895
Forfeited		(19,526	)
Balance at August 31, 2016 (1)		3,848,230
Granted		269,705
Forfeited		(26,206	)
Balance at August 31, 2017 (1)		4,091,729
Granted		317,036
Forfeited		(34,440	)
Balance at August 31, 2018 (1)		4,374,325

⁽¹⁾  Balance represents cumulative grants net of forfeitures.

Share Repurchase Program

The Board of Directors has authorized the Company to repurchase in aggregate up to $225 million of the Company’s common stock. The program may be modified, suspended or discontinued at any time without prior notice. Under the share repurchase program, shares of common stock may be purchased on the open market or through privately negotiated transactions from time-to-time. The timing and amount of purchases will be based upon market conditions, securities law limitations and other factors. The share repurchase program does not obligate the Company to acquire any specific number of shares in any period.

There were no shares repurchased during the years ended August 31, 2018 and 2017. As of August 31, 2018 the Company had cumulatively repurchased 3,206,226 shares for approximately $137.0 million and had $88.0 million available under the share repurchase program. In October 2017, the expiration date of this share repurchase program was extended from January 1, 2018 to March 31, 2019.

Stock Issuance

The Company’s convertible senior notes due 2018 matured on April 1, 2018. The conversion of these notes resulted in the issuance of an additional 3.4 million shares of the Company’s common stock. See Note 13 – Notes Payable, net.

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Earnings Per Share

12 Months Ended

Aug. 31, 2018

Earnings Per Share

Note 16 - Earnings Per Share

The shares used in the computation of the Company’s basic and diluted earnings per common share are reconciled as follows:

	Years ended August 31,
(In thousands)	2018		2017		2016
Weighted average basic common shares outstanding (1)		30,857		29,225		29,156
Dilutive effect of 2018 Convertible notes (2)		1,821		3,295		3,214
Dilutive effect of 2024 Convertible notes (3)		–		–		n/a
Dilutive effect of 2026 Convertible notes (4)		n/a		n/a		–
Dilutive effect of restricted stock units (5)		157		42		98
Weighted average diluted common shares outstanding		32,835		32,562		32,468

(1) Restricted stock grants and restricted stock units that are considered participating securities, including some grants subject to certain performance criteria, are included in weighted average basic common shares outstanding when the Company is in a net earnings position. No restricted stock and restricted stock units were anti-dilutive for the years ended August 31, 2018, 2017 and 2016.

(2) The dilutive effect of the 2018 Convertible notes was included as they were considered dilutive under the “if converted” method as further discussed below. The 2018 Convertible notes matured on April 1, 2018.

(3) The 2024 Convertible notes were issued in February 2017. The dilutive effect of the 2024 Convertible notes was excluded for the year ended August 31, 2018 and 2017 as the average stock price was less than the applicable conversion price and therefore was considered anti-dilutive.

(4) The 2026 Convertible notes were retired in August 2016. The effect of the 2026 Convertible notes was excluded for the year ended August 31, 2016 as the average stock price was less than the applicable conversion price and therefore the notes were considered anti-dilutive.

(5) Restricted stock units that are not considered participating securities and restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved, are included in weighted average diluted common shares outstanding when the Company is in a net earnings position.

Diluted EPS is calculated using the more dilutive of two approaches. The first approach includes the dilutive effect, using the treasury stock method, associated with shares underlying the 2024 Convertible notes, 2026 Convertible notes, restricted stock units that are not considered participating securities and performance based restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved. The second approach supplements the first by including the “if converted” effect of the 2018 Convertible notes during the periods in which they were outstanding. Under the “if converted” method, debt issuance and interest costs, both net of tax, associated with the convertible notes are added back to net earnings and the share count is increased by the shares underlying the convertible notes. The 2024 Convertible notes and 2026 Convertible notes are included in the calculation of both approaches using the treasury stock method when the average stock price is greater than the applicable conversion price.

	Years ended August 31,
	2018		2017		2016
Net earnings attributable to Greenbrier	$	151,781	$	116,067	$	183,213
Add back:
Interest and debt issuance costs on the 2018 Convertible notes, net of tax		2,031		2,932		2,695
Earnings before interest and debt issuance costs on convertible notes	$	153,812	$	118,999	$	185,908
Weighted average diluted common shares outstanding		32,835		32,562		32,468
Diluted earnings per share (1)	$	4.68	$	3.65	$	5.73

(1) Diluted earnings per share was calculated as follows:

Earnings before interest and debt issuance costs on convertible notes

            Weighted average diluted common shares outstanding

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Related Party Transactions

12 Months Ended

Aug. 31, 2018

Related Party Transactions

Note 17 - Related Party Transactions

In June 2017, the Company purchased a 40% interest in the common equity of an entity that buys and sells railcar assets that are leased to third parties. The railcars sold to this lease financing warehouse are principally built by Greenbrier. The Company accounts for this lease financing warehouse investment under the equity method of accounting. As of August 31, 2018, the carrying amount of the investment was $6.1 million which is classified in Investment in unconsolidated affiliates in the Consolidated Balance Sheet. Upon sale of railcars to this entity from Greenbrier, 60% of the related revenue and margin is recognized and 40% is deferred until the railcars are ultimately sold by the entity. During the year ended August 31, 2018, the Company recognized $16 million in revenue associated with railcars sold into the lease financing warehouse and an additional $48 million associated with railcars sold out of the lease financing warehouse. The Company also provides administrative and remarketing services to this entity and earns management fees for these services which were immaterial for the year ended August 31, 2018.

The Company has a 60.0% ownership interest in Greenbrier-Maxion, a railcar manufacturer in Brazil, and a 24.5% ownership interest in Amsted-Maxion Cruzeiro, a manufacturer of various castings and components for railcars and other heavy industrial equipment in Brazil. The Company accounts for these investments under the equity method of accounting. As of August 31, 2018, the Company had a $7.2 million note receivable from Greenbrier-Maxion and a $10.0 million note receivable from Amsted-Maxion Cruzeiro. These note receivables are included on the Consolidated Balance Sheet in Accounts receivable, net.

In July 2014, the Company and Watco Companies LLC completed the formation of GBW, an unconsolidated 50/50 joint venture. The Company accounted for its interest in GBW under the equity method of accounting. On August 20, 2018 we entered into an agreement with our joint venture partner to discontinue the GBW railcar repair joint venture. The Company leased real and personal property to GBW with lease revenue totaling approximately $5 million for the years ended August 31, 2018, 2017 and 2016. The Company sold wheel sets and components to GBW which totaled $16.5 million, $18.3 million and $28.5 million for the years ended August 31, 2018, 2017 and 2016, respectively. GBW provided services to the Company which totaled $0.4 million, $1.0 million and $1.3 million for the years ended August 31, 2018, 2017 and 2016, respectively.

Mr. Furman is the owner of a private aircraft managed by a private independent management company. From time to time, the Company’s business requires charter use of privately-owned aircraft. In such instances, it is possible that charters may be placed on Mr. Furman’s aircraft. The Company placed charters on Mr. Furman’s aircraft aggregating $0.5 million, $0.5 million and $0.8 million for each of the years ended August 31, 2018, 2017 and 2016, respectively.

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Income Taxes

12 Months Ended

Aug. 31, 2018

Income Taxes

Note 18 - Income Taxes

Components of income tax expense were as follows:

	Years ended August 31,
(In thousands)	2018			2017			2016
Current
Federal	$	28,357		$	22,710		$	66,455
State		3,244			305			4,595
Foreign		38,628			35,893			50,299
		70,229			58,908			121,349
Deferred
Federal		(33,459	)		9,418			(6,199	)
State		(344	)		(1,467	)		(1,174	)
Foreign		(3,690	)		(2,732	)		(1,644	)
		(37,493	)		5,219			(9,017	)
Change in valuation allowance		157			(113	)		(10	)
Income tax expense	$	32,893		$	64,014		$	112,322

Income tax expense is computed at rates different from statutory rates. The U.S. federal corporate statutory rate was significantly reduced from 35% to 21% effective January 1, 2018 by the Tax Act enacted on December 22, 2017. As a result of the Company’s fiscal year, the Company’s statutory federal corporate rate is a blended rate of 25.7% in 2018, which will be reduced to 21% in 2019 and thereafter.

Deferred income taxes were remeasured as a result of the new statutory rate resulting in a tax benefit of $33.6 million. The Tax Act also required the Company to accrue a transition tax on foreign earnings not previously subject to U.S. taxation, which resulted in $6.9 million of tax expense in 2018.

The Company recognized the income tax effects of the Tax Act in accordance with Staff Accounting Bulletin No. 118 (SAB 118) which required the financial results to reflect effects for which the accounting is complete and those for which it is provisional. Provisional effects will be adjusted during the measurement period determined under SAB 118 based on ongoing analysis of data, tax positions and regulatory guidance. The effect of the transition tax is provisional, in particular the calculation of prior year foreign earnings and profits. The effect of the remeasurement of domestic deferred taxes is provisional primarily because temporary differences that have been estimated as of August 31, 2018 could change the remeasurement once they are finalized with the filing of our fiscal 2018 income tax return. Since many of the deferred tax balances include estimates of future events, the Company is unable to determine the final impact of the tax rate change at this time.

The Tax Act also imposed a global intangible low-taxed income (GILTI) tax, which does not apply to the Company until 2019. The Company has made an accounting policy election to treat the GILTI tax as a current period expense.

The reconciliation between effective and statutory tax rates on operations is as follows:

	Years ended August 31,
	2018			2017			2016
Federal statutory rate		25.7	%		35.0	%		35.0	%
State income taxes, net of federal benefit		0.8			0.1			0.7
Foreign operations, excluding transition tax		1.8			(3.4	)		0.1
Transition tax on foreign earnings		3.1			–			–
Remeasurement of domestic deferred taxes		(15.0	)		–			–
Change in valuation allowance		0.1			–			–
Noncontrolling interest in flow-through entity		(2.4	)		(6.0	)		(7.4	)
Permanent differences and other		0.6			1.4			–
Effective tax rate		14.7	%		27.1	%		28.4	%

Earnings before income tax and earnings from unconsolidated affiliates for the years ended August 31, 2018, 2017 and 2016 were $110.8 million, $123.2 million and $264.8 million, respectively, for our domestic U.S. operations and $112.8 million, $113.0 million and $130.3 million, respectively, for our foreign operations.

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities were as follows:

	As of August 31,
(In thousands)	2018		2017
Deferred tax assets:
Accrued payroll and related liabilities	$	18,461	$	28,761
Deferred revenue		10,642		7,547
Inventories and other		10,518		13,641
Maintenance and warranty accruals		7,201		10,988
Net operating losses		2,002		320
Investment and asset tax credits		1,439		1,840
		50,263		63,097
Deferred tax liabilities:
Fixed assets		70,942		110,429
Original issue discount		6,099		11,086
Intangibles		2,474		3,605
Other		1,831		(831	)
Investment in GBW Joint Venture		–		14,066
		81,346		138,355
Valuation allowance		657		533
Net deferred tax liability	$	31,740	$	75,791

As of August 31, 2018 the Company had $1.5 million of state credit carryforwards that will begin to expire in 2021 and $8.5 million of foreign NOL carryforwards that will begin to expire in 2020. The Company has placed valuation allowances against any deferred tax assets for which no benefit is anticipated, including those for loss and credit carryforwards not likely to be used before their expiration dates. The net increase in the total valuation allowance on deferred taxes for which no benefit is anticipated was approximately $0.1 million for the year ended August 31, 2018.

Prior to 2018 no provision had been made for U.S. income taxes on the Company’s cumulative undistributed earnings from foreign subsidiaries. In 2018, however, these earnings were subject to the one-time transition tax on the deemed repatriation of undistributed foreign earnings, a tax which the Company intends to pay over eight years as permitted by the Tax Act. Notwithstanding this deemed repatriation, any actual repatriation would be accompanied by foreign withholding taxes. The Company does not intend to repatriate these foreign earnings and continues to assert that its foreign earnings are indefinitely reinvested.

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits:

	Years ended August 31,
(In thousands)	2018			2017			2016
Unrecognized Tax Benefit – Opening Balance	$	1,820		$	942		$	1,019
Gross increases – tax positions in prior period		237			1,368			–
Gross decreases – tax positions in prior period		(449	)		(53	)		–
Settlements		–			–			–
Lapse of statute of limitations		–			(437	)		(77	)
Unrecognized Tax Benefit – Ending Balance	$	1,608		$	1,820		$	942

The Company is subject to taxation in the U.S. and in various states and foreign jurisdictions. The Company is effectively no longer subject to U.S. Federal examination for fiscal years ending before 2015, to state and local examinations before 2014, or to foreign examinations before 2013.

Unrecognized tax benefits, excluding interest, at August 31, 2018 were $1.6 million, all of which would affect the effective tax rate if recognized. The unrecognized tax benefits at August 31, 2017 were $1.8 million. Accrued interest on unrecognized tax benefits was $0.2 million as of August 31, 2018 and was minimal as of August 31, 2017. The Company recorded annual interest benefits of approximately $0.2 million for changes in the reserves during each of the years ended August 31, 2018 and 2017. The Company has not accrued any penalties on the reserves. Interest and penalties related to income taxes are not classified as a component of income tax expense. Benefits from the realization of unrecognized tax benefits for deductible differences attributable to ordinary operations will be recognized as a reduction of income tax expense. The Company does not anticipate a significant decrease in the reserves for uncertain tax positions during the next year.

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Segment Information

12 Months Ended

Aug. 31, 2018

Segment Information

Note 19 - Segment Information

The Company operates in three reportable segments: Manufacturing; Wheels, Repair & Parts; and Leasing & Services. Prior to August 20, 2018, the Company operated in four reportable segments: Manufacturing; Wheels & Parts; Leasing & Services; and GBW Joint Venture. On August 20, 2018 the Company entered into an agreement with its joint venture partner to discontinue the GBW railcar repair joint venture, which resulted in 12 repair shops returned to the Company. Beginning on August 20, 2018, the GBW Joint Venture was no longer considered a reportable segment.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Performance is evaluated based on Earnings from operations. Corporate includes selling and administrative costs not directly related to goods and services and certain costs that are intertwined among segments due to our integrated business model. The Company does not allocate Interest and foreign exchange or Income tax expense for either external or internal reporting purposes. Intersegment sales and transfers are valued as if the sales or transfers were to third parties. Related revenue and margin are eliminated in consolidation and therefore are not included in consolidated results in the Company’s Consolidated Financial Statements.

The information in the following table is derived directly from the segments’ internal financial reports used for corporate management purposes. The results of operations for the GBW Joint Venture are not reflected in the tables below as the investment is accounted for under the equity method of accounting.

For the year ended August 31, 2018:

	Revenue								Earnings (loss) from operations
	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	2,044,586	$	118,157		$	2,162,743		$	240,901		$	17,721		$	258,622
Wheels, Repair & Parts		347,023		41,494			388,517			16,731			2,748			19,479
Leasing & Services		127,855		11,847			139,702			88,481			10,296			98,777
Eliminations		–		(171,498	)		(171,498	)		–			(30,765	)		(30,765	)
Corporate		–		–			–			(93,128	)		–			(93,128	)
	$	2,519,464	$	–		$	2,519,464		$	252,985		$	–		$	252,985

For the year ended August 31, 2017:

	Revenue								Earnings (loss) from operations
	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	1,725,188	$	19,291		$	1,744,479		$	295,334		$	1,022		$	296,356
Wheels, Repair & Parts		312,679		30,861			343,540			14,984			2,303			17,287
Leasing & Services		131,297		11,812			143,109			31,904			11,099			43,003
Eliminations		–		(61,964	)		(61,964	)		–			(14,424	)		(14,424	)
Corporate		–		–			–			(81,790	)		–			(81,790	)
	$	2,169,164	$	–		$	2,169,164		$	260,432		$	–		$	260,432

For the year ended August 31, 2016:

	Revenue								Earnings (loss) from operations
	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	2,096,331	$	89,158		$	2,185,489		$	415,094		$	24,299		$	439,393
Wheels, Repair & Parts		322,395		32,436			354,831			19,948			2,602			22,550
Leasing & Services		260,798		13,101			273,899			51,723			13,101			64,824
Eliminations		–		(134,695	)		(134,695	)		–			(40,002	)		(40,002	)
Corporate		–		–			–			(78,213	)		–			(78,213	)
	$	2,679,524	$	–		$	2,679,524		$	408,552		$	–		$	408,552

	Years ended August 31,
(In thousands)	2018		2017		2016
Assets:
Manufacturing	$	1,020,757	$	914,450	$	701,296
Wheels, Repair & Parts		306,756		236,315		275,599
Leasing & Services		578,818		535,323		516,147
Unallocated		559,133		711,617		342,732
	$	2,465,464	$	2,397,705	$	1,835,774
Depreciation and amortization:
Manufacturing	$	44,225	$	33,807	$	27,137
Wheels, Repair & Parts		10,771		11,143		11,971
Leasing & Services		19,360		20,179		24,237
	$	74,356	$	65,129	$	63,345
Capital expenditures:
Manufacturing	$	59,707	$	54,973	$	51,294
Wheels, Repair & Parts		5,204		3,129		10,190
Leasing & Services		111,937		27,963		77,529
	$	176,848	$	86,065	$	139,013

The following table summarizes selected geographic information.

	Years ended August 31,
(In thousands)	2018		2017		2016
Revenue (1):
U.S.	$	1,840,877	$	1,674,517	$	2,297,501
Foreign		678,587		494,647		382,023
	$	2,519,464	$	2,169,164	$	2,679,524
Assets:
U.S.	$	1,677,144	$	1,307,239	$	955,674
Mexico		517,543		791,974		788,878
Europe		270,777		298,492		91,222
	$	2,465,464	$	2,397,705	$	1,835,774

⁽¹⁾  Revenue is presented on the basis of geographic location of customers.

Reconciliation of Earnings from operations to Earnings before income tax and earnings (loss) from unconsolidated affiliates:

	Years ended August 31,
(In thousands)	2018		2017		2016
Earnings from operations	$	252,985	$	260,432	$	408,552
Interest and foreign exchange		29,368		24,192		13,502
Earnings before income tax and earnings (loss) from unconsolidated affiliates	$	223,617	$	236,240	$	395,050

The Company has a 50% ownership interest in the GBW Joint Venture and accounts for its interest under the equity method of accounting. The Company’s 50% share of the results of operations are included in Earnings (loss) from unconsolidated affiliates in the Consolidated Statement of Income and its investment is included in Investments in unconsolidated affiliates in the Consolidated Balance Sheet. The GBW Joint Venture was Greenbrier’s fourth reportable segment until August 20, 2018. Information for 2018, 2017 and 2016 is included in the tables below which represent totals for GBW rather than Greenbrier’s 50% share, as this is how performance and resource allocation was previously evaluated.

	Years ended August 31,
(In thousands)	2018			2017			2016
GBW Joint Venture:
Revenue	$	238,033		$	253,436		$	373,490
Earnings (loss) from operations	$	(46,783	)	$	(32,454	)	$	8,558
Assets	$	8,531		$	206,009		$	247,610
Depreciation and amortization	$	8,932		$	9,023		$	7,676
Capital expenditures	$	8,514		$	8,030		$	16,110

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Customer Concentration

12 Months Ended

Aug. 31, 2018

Customer Concentration

Note 20 - Customer Concentration

Customer concentration is defined as a single customer that accounts for more than 10% of total revenues or accounts receivable. In 2018, revenue from two customers represented 20% and 11% of total revenue. In 2017, revenue from one customer represented 20% of total revenue. In 2016, revenue from two customers represented 17% and 14% of total revenue. No other customers accounted for more than 10% of total revenues for the years ended August 31, 2018, 2017, or 2016. One customer had a balance that individually equaled or exceeded 10% of accounts receivable and represented 19% of the consolidated accounts receivable balance at August 31, 2018. Three customers had balances that individually equaled or exceeded 10% of accounts receivable and represented 13%, 13% and 10% of the consolidated accounts receivable balance at August 31, 2017.

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Lease Commitments

12 Months Ended

Aug. 31, 2018

Lease Commitments

Note 21 - Lease Commitments

Lease expense for railcar equipment leased-in under non-cancelable leases was $7.5 million, $7.6 million and $6.6 million for the years ended August 31, 2018, 2017 and 2016. Aggregate minimum future amounts payable under these non-cancelable railcar equipment leases are as follows:

(In thousands)
Year ending August 31,
2019	$	6,287
2020		4,839
2021		1,821
2022		1,792
2023		1,792
Thereafter		1,810
	$	18,341

Operating leases for domestic railcar repair facilities, office space and certain manufacturing and office equipment expire at various dates through February 2030. Rental expense for facilities, office space and equipment was $8.7 million, $9.4 million and $9.3 million for the years ended August 31, 2018, 2017 and 2016. Aggregate minimum future amounts payable under these non-cancelable operating leases are as follows:

(In thousands)
Year ending August 31,
2019	$	6,048
2020		4,437
2021		3,286
2022		1,915
2023		1,862
Thereafter		196
	$	17,744

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Commitments and Contingencies

12 Months Ended

Aug. 31, 2018

Commitments and Contingencies

Note 22 - Commitments and Contingencies

Portland Harbor Superfund Site

The Company’s Portland, Oregon manufacturing facility is located adjacent to the Willamette River. In December 2000, the U.S. Environmental Protection Agency (EPA) classified portions of the Willamette River bed known as the Portland Harbor, including the portion fronting the Company’s manufacturing facility, as a federal “National Priority List” or “Superfund” site due to sediment contamination (the Portland Harbor Site). The Company and more than 140 other parties have received a “General Notice” of potential liability from the EPA relating to the Portland Harbor Site. The letter advised the Company that it may be liable for the costs of investigation and remediation (which liability may be joint and several with other potentially responsible parties) as well as for natural resource damages resulting from releases of hazardous substances to the site. Ten private and public entities, including the Company (the Lower Willamette Group or LWG), signed an Administrative Order on Consent (AOC) to perform a remedial investigation/feasibility study (RI/FS) of the Portland Harbor Site under EPA oversight, and several additional entities have not signed such consent, but nevertheless contributed money to the effort. The EPA-mandated RI/FS was produced by the LWG and cost over $110 million during a 17-year period. The Company bore a percentage of the total costs incurred by the LWG in connection with the investigation. The Company’s aggregate expenditure during the 17-year period was not material. Some or all of any such outlay may be recoverable from other responsible parties. The EPA issued its Record of Decision (ROD) for the Portland Harbor Site on January 6, 2017 and accordingly on October 26, 2017, the AOC was terminated.

Separate from the process described above, which focused on the type of remediation to be performed at the Portland Harbor Site and the schedule for such remediation, 83 parties, including the State of Oregon and the federal government, entered into a non-judicial mediation process to try to allocate costs associated with remediation of the Portland Harbor site. Approximately 110 additional parties signed tolling agreements related to such allocations. On April 23, 2009, the Company and the other AOC signatories filed suit against 69 other parties due to a possible limitations period for some such claims; Arkema Inc. et al v. A & C Foundry Products, Inc. et al, U.S. District Court, District of Oregon, Case #3:09-cv-453-PK. All but 12 of these parties elected to sign tolling agreements and be dismissed without prejudice, and the case has been stayed by the court until January 16, 2020. The allocation process is continuing in parallel with the process to define the remediation steps.

The EPA’s January 6, 2017 ROD identifies a clean-up remedy that the EPA estimates will take 13 years of active remediation, followed by 30 years of monitoring with an estimated undiscounted cost of $1.7 billion. The EPA typically expects its cost estimates to be accurate within a range of -30% to +50%, but this ROD states that changes in costs are likely to occur as a result of new data it wants to collect over a 2-year period prior to final remedy design. The ROD identifies 13 Sediment Decision Units. One of the units, RM9W, includes the nearshore area of the river sediments offshore of the Company’s Portland, Oregon manufacturing facility as well as upstream and downstream of the facility. It also includes a portion of the Company’s riverbank. The ROD does not break down total remediation costs by Sediment Decision Unit. The EPA’s ROD concluded that more data was needed to better define clean-up scope and cost. On December 8, 2017, the EPA announced that Portland Harbor is one of 21 Superfund sites targeted for greater attention. On December 19, 2017, the EPA announced that it had entered a new AOC with a group of four potentially responsible parties to conduct additional sampling during 2018 and 2019 to provide more certainty about clean-up costs and aid the mediation process to allocate those costs. The parties to the mediation, including the Company, have agreed to help fund the additional sampling.

The ROD does not address responsibility for the costs of clean-up, nor does it allocate such costs among the potentially responsible parties. Responsibility for funding and implementing the EPA’s selected cleanup remedy will be determined at an unspecified later date. Based on the investigation to date, the Company believes that it did not contribute in any material way to contamination in the river sediments or the damage of natural resources in the Portland Harbor Site and that the damage in the area of the Portland Harbor Site adjacent to its property precedes its ownership of the Portland, Oregon manufacturing facility. Because these environmental investigations are still underway, including the collection of new pre-remedial design sampling data by EPA, sufficient information is currently not available to determine the Company’s liability, if any, for the cost of any required remediation or restoration of the Portland Harbor Site or to estimate a range of potential loss. Based on the results of the pending investigations and future assessments of natural resource damages, the Company may be required to incur costs associated with additional phases of investigation or remedial action, and may be liable for damages to natural resources. In addition, the Company may be required to perform periodic maintenance dredging in order to continue to launch vessels from its launch ways in Portland, Oregon, on the Willamette River, and the river’s classification as a Superfund site could result in some limitations on future dredging and launch activities. Any of these matters could adversely affect the Company’s business and Consolidated Financial Statements, or the value of its Portland property.

On January 30, 2017 the Confederated Tribes and Bands of Yakama Nation sued 33 parties including the Company as well as the United States and the State of Oregon for costs it incurred in assessing alleged natural resource damages to the Columbia River from contaminants deposited in Portland Harbor. Confederated Tribes and Bands of the Yakama Nation v. Air Liquide America Corp., et al., United States Court for the District of Oregon Case No. 3i17-CV-00164-SB. The Company, along with many of the other defendants, has moved to dismiss the case. That motion is pending. The complaint does not specify the amount of damages the Plaintiff will seek.

Oregon Department of Environmental Quality (DEQ) Regulation of Portland Manufacturing Operations

The Company has entered into a Voluntary Cleanup Agreement with the Oregon Department of Environmental Quality (DEQ) in which the Company agreed to conduct an investigation of whether, and to what extent, past or present operations at the Portland property may have released hazardous substances into the environment. The Company has also signed an Order on Consent with the DEQ to finalize the investigation of potential onsite sources of contamination that may have a release pathway to the Willamette River. Interim precautionary measures are also required in the order and the Company is discussing with the DEQ potential remedial actions which may be required. The Company’s aggregate expenditure has not been material, however the Company could incur significant expenses for remediation. Some or all of any such outlay may be recoverable from other responsible parties.

Other Litigation, Commitments and Contingencies

In the quarter ended November 30, 2016, the Company received an adverse judgment of approximately $15 million, which was subsequently reduced to approximately $10 million, on one matter related to commercial litigation in a foreign jurisdiction. The Company has settled the litigation for less than the judgment.

From time to time, Greenbrier is involved as a defendant in litigation in the ordinary course of business, the outcomes of which cannot be predicted with certainty. While the ultimate outcome of such legal proceedings cannot be determined at this time, the Company believes that the resolution of pending litigation will not have a material adverse effect on the Company’s Consolidated Financial Statements.

As of August 31, 2018, the Company had outstanding letters of credit aggregating $72.2 million associated with performance guarantees, facility leases and workers compensation insurance.

As of August 31, 2018, the Company had a $10.0 million note receivable from Amsted-Maxion Cruzeiro, its unconsolidated Brazilian castings and components manufacturer and a $7.2 million note receivable balance from Greenbrier-Maxion, its unconsolidated Brazilian railcar manufacturer. These note receivables are included on the Consolidated Balance Sheet in Accounts receivable, net. In the future, the Company may make loans to or provide guarantees for Amsted-Maxion Cruzeiro or Greenbrier-Maxion.

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Fair Value of Financial Instruments

12 Months Ended

Aug. 31, 2018

Fair Value of Financial Instruments

Note 23 - Fair Value of Financial Instruments

The estimated fair values of financial instruments and the methods and assumptions used to estimate such fair values are as follows:

(In thousands)	Carrying Amount 1		Estimated Fair Value (Level 2)
Notes payable as of August 31, 2018	$	469,721	$	517,925
Notes payable as of August 31, 2017	$	597,604	$	644,708

¹ Carrying amount disclosed in this table excludes debt discount and debt issuance costs.

The carrying amount of cash and cash equivalents, accounts and notes receivable, revolving notes, accounts payable and accrued liabilities, foreign currency forward contracts and interest rate swaps is a reasonable estimate of fair value of these financial instruments. Estimated rates currently available to the Company for debt with similar terms and remaining maturities and current market data are used to estimate the fair value of notes payable.

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Fair Value Measures

12 Months Ended

Aug. 31, 2018

Fair Value Measures

Note 24 - Fair Value Measures

Certain assets and liabilities are reported at fair value on either a recurring or nonrecurring basis. Fair value, for this disclosure, is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, under a three-tier fair value hierarchy which prioritizes the inputs used in measuring a fair value as follows:

Level 1 -	observable inputs such as unadjusted quoted prices in active markets for identical instruments;
Level 2 -	inputs, other than the quoted market prices in active markets for similar instruments, which are observable, either directly or indirectly; and
Level 3 -	unobservable inputs for which there is little or no market data available, which require the reporting entity to develop its own assumptions.

Assets and liabilities measured at fair value on a recurring basis as of August 31, 2018 are:

(In thousands)	Total		Level 1		Level 2(1)		Level 3
Assets:
Derivative financial instruments	$	1,557	$	–	$	1,557	$	–
Nonqualified savings plan investments		26,299		26,299		–		–
Cash equivalents		126,430		126,430		–		–
	$	154,286	$	152,729	$	1,557	$	–
Liabilities:
Derivative financial instruments	$	1,566	$	–	$	1,566	$	–

(1) Level 2 assets include derivative financial instruments which are valued based on significant observable inputs. See Note 14 – Derivative Instruments for further discussion.

Assets and liabilities measured at fair value on a recurring basis as of August 31, 2017 are:

(In thousands)	Total		Level 1		Level 2(1)		Level 3
Assets:
Derivative financial instruments	$	3,814	$	–	$	3,814	$	–
Nonqualified savings plan investments		20,974		20,974		–		–
Cash equivalents		105,337		105,337		–		–
	$	130,125	$	126,311	$	3,814	$	–
Liabilities:
Derivative financial instruments	$	2,886	$	–	$	2,886	$	–

(1) Level 2 assets include derivative financial instruments which are valued based on significant observable inputs. See Note 14 – Derivative Instruments for further discussion.

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Subsequent Events

12 Months Ended

Aug. 31, 2018

Subsequent Events

Note 25 - Subsequent Events

As of August 31, 2018, a $550.0 million revolving line of credit, maturing October 2020, secured by substantially all the Company’s assets in the U.S. not otherwise pledged as security for term loans, was available to provide working capital and interim financing of equipment, principally for the U.S. and Mexican operations. Advances under this facility bear interest at LIBOR plus 1.75% or Prime plus 0.75% depending on the type of borrowing. Available borrowings under the credit facility are generally based on defined levels of inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated capitalization and fixed charges coverage ratios. In September 2018, this revolving line of credit was renewed on terms similar to the existing facility and increased to $600.0 million with a new maturity date of September 2023. In addition, advances under this renewed facility bear interest at LIBOR plus 1.50% or Prime plus 0.50% depending on the type of borrowing.

In September 2018, the Company refinanced approximately $170 million of existing senior term debt, due in March 2020, secured by a pool of leased railcars with new 5-year $225 million senior term debt also secured by a pool of leased railcars. The new debt bears a floating interest rate of LIBOR plus 1.50% or Prime plus 0.50%. The term loan is to be repaid in equal quarterly installments of $1.97 million with the remaining outstanding amounts, plus accrued interest, to be paid on the maturity date in September 2023. An interest rate swap agreement was entered into on 50% of the initial balance to swap the floating interest rate to a fixed rate of 2.99%. The Company intends to use hedge accounting to account for the interest rate swap agreement.

In October 2018, the Company announced that Greenbrier and the Saudi Railway Company (SAR) signed an agreement to form a joint venture that will generate a total investment of 1 billion Saudi Riyals (USD $270 million) in the Saudi Arabia’s railway system and supply of freight railcars for the Saudi rail industry. The joint venture is subject to the completion of final due diligence by the parties and required government or corporate approvals.

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Quarterly Results of Operations (Unaudited)

12 Months Ended

Aug. 31, 2018

Quarterly Results of Operations (Unaudited)

Quarterly Results of Operations (Unaudited)

(In thousands, except per share amount)	First			Second			Third			Fourth			Total
2018
Revenue
Manufacturing	$	451,485		$	511,827		$	510,099		$	571,175		$	2,044,586
Wheels, Repair & Parts		78,011			88,710			94,515			85,787			347,023
Leasing & Services		30,039			28,799			36,773			32,244			127,855
		559,535			629,336			641,387			689,206			2,519,464
Cost of revenue
Manufacturing		380,850			429,165			427,875			489,517			1,727,407
Wheels, Repair & Parts		72,506			80,708			85,850			79,266			318,330
Leasing & Services		16,865			14,116			19,155			14,536			64,672
		470,221			523,989			532,880			583,319			2,110,409
Margin		89,314			105,347			108,507			105,887			409,055
Selling and administrative		47,043			50,294			51,793			51,309			200,439
Net gain on disposition of equipment		(19,171	)		(5,817	)		(14,825	)		(4,556	)		(44,369	)
Earnings from operations		61,442			60,870			71,539			59,134			252,985
Other costs
Interest and foreign exchange		7,020			7,029			6,533			8,786			29,368
Earnings before income tax and earnings (loss) from unconsolidated affiliates		54,422			53,841			65,006			50,348			223,617
Income tax expense		(18,135	)		11,301			(15,944	)		(10,115	)		(32,893	)
Earnings (loss) from unconsolidated affiliates		(2,910	)		147			(12,823	)		(3,075	)		(18,661	)
Net earnings		33,377			65,289			36,239			37,158			172,063
Net earnings attributable to noncontrolling interest		(7,124	)		(3,647	)		(3,288	)		(6,223	)		(20,282	)
Net earnings attributable to Greenbrier	$	26,253		$	61,642		$	32,951		$	30,935		$	151,781
Basic earnings per common share: (1)	$	0.90		$	2.10		$	1.03		$	0.95		$	4.92
Diluted earnings per common share: (1)	$	0.83		$	1.91		$	1.01		$	0.94		$	4.68

(1) Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the dilutive effect of the 2024 Convertible Notes using the treasury stock method when dilutive, restricted stock units that are not considered participating securities, restricted stock units that are subject to performance criteria for which actual levels of performance above target have been achieved and the dilutive effect of shares underlying the 2018 Convertible Notes, during the periods in which they were outstanding, using the “if converted” method in which debt issuance and interest costs, net of tax, were added back to net earnings. The 2018 Convertible notes matured on April 1, 2018.

Quarterly Results of Operations (Unaudited)

(In thousands, except per share amount)	First			Second			Third			Fourth			Total
2017
Revenue
Manufacturing	$	454,033		$	445,504		$	317,104		$	508,547		$	1,725,188
Wheels, Repair & Parts		69,635			82,714			85,231			75,099			312,679
Leasing & Services		28,646			38,064			36,826			27,761			131,297
		552,314			566,282			439,161			611,407			2,169,164
Cost of revenue
Manufacturing		356,555			346,653			245,228			425,531			1,373,967
Wheels, Repair & Parts		64,978			75,497			77,985			69,876			288,336
Leasing & Services		18,030			25,207			26,247			16,078			85,562
		439,563			447,357			349,460			511,485			1,747,865
Margin		112,751			118,925			89,701			99,922			421,299
Selling and administrative		41,213			39,495			42,810			47,089			170,607
Net gain on disposition of equipment		(1,122	)		(2,090	)		(1,581	)		(4,947	)		(9,740	)
Earnings from operations		72,660			81,520			48,472			57,780			260,432
Other costs
Interest and foreign exchange		1,724			5,673			7,894			8,901			24,192
Earnings before income tax and loss from unconsolidated affiliates		70,936			75,847			40,578			48,879			236,240
Income tax expense		(20,386	)		(24,858	)		(8,656	)		(10,114	)		(64,014	)
Loss from unconsolidated affiliates		(2,584	)		(1,988	)		(681	)		(6,511	)		(11,764	)
Net earnings		47,966			49,001			31,241			32,254			160,462
Net earnings attributable to noncontrolling interest		(23,004	)		(14,465	)		1,582			(8,508	)		(44,395	)
Net earnings attributable to Greenbrier	$	24,962		$	34,536		$	32,823		$	23,746		$	116,067
Basic earnings per common share: (1)	$	0.86		$	1.19		$	1.12		$	0.81		$	3.97
Diluted earnings per common share: (1)	$	0.79		$	1.09		$	1.03		$	0.75		$	3.65

(1) Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the dilutive effect of the 2024 Convertible Notes using the treasury stock method when dilutive, restricted stock units that are subject to performance criteria for which actual levels of performance above target have been achieved and the dilutive effect of shares underlying the 2018 Convertible Notes using the “if converted” method in which debt issuance and interest costs, net of tax, were added back to net earnings.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Aug. 31, 2018

Principles of consolidation

Principles of consolidation - The financial statements include the accounts of the Company and its subsidiaries in which it has a controlling interest. All intercompany transactions and balances are eliminated upon consolidation.

Unclassified balance sheet

Unclassified balance sheet - The balance sheets of the Company are presented in an unclassified format as a result of significant leasing activities for which the current or non-current distinction is not relevant. In addition, the activities of the Manufacturing; Wheels, Repair & Parts; and Leasing & Services segments are so intertwined that in the opinion of management, any attempt to separate the respective balance sheet categories would not be meaningful and may lead to the development of misleading conclusions by the reader.

Foreign currency translation

Foreign currency translation - Certain operations outside the U.S., primarily in Europe, prepare financial statements in currencies other than the U.S. Dollar. Revenues and expenses are translated at monthly average exchange rates during the year, while assets and liabilities are translated at year-end exchange rates. Translation adjustments are accumulated as a separate component of equity in other comprehensive income (loss). The net foreign currency translation adjustment balances were $21.5 million, $5.4 million and $20.8 million as of August 31, 2018, 2017 and 2016, respectively.

Cash and cash equivalents

Cash and cash equivalents - Cash may temporarily be invested primarily in money market funds. All highly-liquid investments with a maturity of three months or less at the date of acquisition are considered cash equivalents.

Restricted cash

Restricted cash - Restricted cash primarily relates to amounts associated with funds temporarily held in connection with a performance guarantee as part of a 2016 transaction, amounts held to support a target minimum rate of return on certain agreements and a pass through account for activity related to management services provided for certain third party customers.

Accounts receivable

Accounts receivable - Accounts receivable includes receivables from related parties (see Note 17 – Related Party Transactions) and is stated net of allowance for doubtful accounts of $2.7 million and $1.8 million as of August 31, 2018 and 2017, respectively.

	As of August 31,
(In thousands)	2018			2017			2016
Allowance for doubtful accounts
Balance at beginning of period	$	1,768		$	2,215		$	2,449
Additions, net of reversals		938			370			70
Usage		(54	)		(891	)		(277	)
Currency translation effect		49			74			(27	)
Balance at end of period	$	2,701		$	1,768		$	2,215

Inventories

Inventories - Inventories are valued at the lower of cost or market using the first-in first-out method. Work-in-process includes material, labor and overhead. Finished goods includes completed wheels, parts and railcars not on lease or in transit.

Leased railcars for syndication

Leased railcars for syndication -Leased railcars for syndication consist of newly-built railcars manufactured at one of the Company’s facilities or railcars purchased from third parties, which have been placed on lease to a customer and which the Company intends to sell to an investor with the lease attached. These railcars are generally anticipated to be sold within six months of delivery of the last railcar in a group or six months from when the Company acquires the railcar from a third party and are typically not depreciated during that period as the Company does not believe any economic value of a railcar is lost in the first six months. In the event the railcars are not sold in the first six months, the railcars are either held in Leased railcars for syndication and are depreciated or are transferred to Equipment on operating leases and are depreciated. As of August 31, 2018, Leased railcars for syndication was $130.9 million compared to $91.3 million as of August 31, 2017.

Equipment on operating leases, net

Equipment on operating leases, net - Equipment on operating leases is stated net of accumulated depreciation. Depreciation to estimated salvage value is provided on the straight-line method over the estimated useful lives of up to thirty-five years. Management periodically reviews salvage value estimates based on current scrap prices and what the Company expects to receive upon disposal.

Investment in unconsolidated affiliates

Investment in unconsolidated affiliates - Investment in unconsolidated affiliates includes the Company’s interests which are accounted for under the equity method of accounting. See Note 7 - Investments in Unconsolidated Affiliates for additional information.

Property, plant and equipment

Property, plant and equipment - Property, plant and equipment is stated at cost, net of accumulated depreciation. Depreciation is provided on the straight-line method over estimated useful lives which are as follows:

	Depreciable Life
Buildings and improvements		10 – 25 years
Machinery and equipment		3 – 15 years
Other		3 – 7 years

Goodwill

Goodwill - Goodwill is recorded when the purchase price of an acquisition exceeds the fair market value of the net assets acquired. Goodwill is not amortized and is tested for impairment at least annually and more frequently if material changes in events or circumstances arise. The provisions of ASC 350, Intangibles – Goodwill and Other, require the Company to perform an annual impairment test on goodwill. The Company compares the fair value of each reporting unit with its carrying value. An impairment loss is recorded to the extent that the reporting unit’s carrying amount exceeds the reporting unit’s fair value. An impairment loss cannot exceed the total amount of goodwill allocated to the reporting unit.

Intangible and other assets, net

Intangible and other assets, net - Intangible assets are recorded when a portion of the purchase price of an acquisition is allocated to assets such as customer contracts and relationships and trade names. Intangible assets with finite lives are amortized using the straight line method over their estimated useful lives and primarily include long-term customer agreements which are amortized over 5 to 20 years. Other assets include revolving note fees and debt acquisition costs which are capitalized and amortized as interest expense over the life of the related borrowings.

Impairment of long-lived assets

Impairment of long-lived assets - When changes in circumstances indicate the carrying amount of certain long-lived assets may not be recoverable, the assets are evaluated for impairment. If the forecasted undiscounted future cash flows are less than the carrying amount of the assets, an impairment charge to reduce the carrying value of the assets to estimated realizable value is recognized in the current period. No impairment was recorded in the years ended August 31, 2018, 2017 and 2016.

Maintenance obligations

Maintenance obligations - The Company is responsible for maintenance on a portion of the managed and owned lease fleet under the terms of maintenance obligations defined in the underlying lease or management agreement. The estimated liability is based on maintenance histories for each type and age of railcar. The liability, included in Accounts payable and accrued liabilities, is reviewed periodically and updated based on maintenance trends and known future repair or refurbishment requirements.

Warranty accruals

Warranty accruals - Warranty costs are estimated and charged to operations to cover a defined warranty period. The estimated warranty cost is based on history of warranty claims for each particular product type. For new product types without a warranty history, preliminary estimates are based on historical information for similar product types. The warranty accruals, included in Accounts payable and accrued liabilities, are reviewed periodically and updated based on warranty trends.

Income taxes

Income taxes - The liability method is used to account for income taxes. Deferred income taxes are provided for the temporary effects of differences between assets and liabilities recognized for financial statement and income tax reporting purposes. Valuation allowances reduce deferred tax assets to an amount that will more likely than not be realized. We recognize liabilities for uncertain tax positions based on whether evidence indicates that it is more likely than not that the position will be sustained on audit. It is inherently difficult and subjective to estimate such amounts, as this requires us to estimate the probability of various possible outcomes. The Company reevaluates these uncertain tax positions on a quarterly basis. Changes in assumptions may result in the recognition of a tax benefit or an additional charge to the tax provision.

Deferred revenue

Deferred revenue - Cash payments received prior to meeting revenue recognition criteria are recorded in Deferred revenue. Amounts are reclassified out of Deferred revenue once the revenue recognition criteria have been met. Deferred revenue primarily consists of customer prepayments and the unrecognized portion of the $40 million upfront fee from MUL. The Company also has a 40% interest in the common equity of an entity that buys and sells railcar assets that are leased to third parties. Deferred revenue includes 40% of the revenue and margin of railcars sold to this entity until the railcars are ultimately sold to a third party. The Deferred revenue balance was $106.0 million and $129.3 million as of August 31, 2018 and 2017, respectively.

Noncontrolling interest and Contingently redeemable noncontrolling interest

Noncontrolling interest and Contingently redeemable noncontrolling interest - The Company has a joint venture with Grupo Industrial Monclova, S.A. (GIMSA) that manufactures new railroad freight cars for the North American marketplace at GIMSA’s existing manufacturing facility located in Frontera, Mexico. Each party owns a 50% interest in the joint venture. The financial results of this operation are consolidated for financial reporting purposes as the Company maintains a controlling interest as evidenced by the right to appoint the majority of the Board of Directors, control over accounting, financing, marketing and engineering and approval and design of products. The noncontrolling interest related to the partner’s 50% interest in the joint venture is included in Noncontrolling interest in the equity section of the Company’s Consolidated Balance Sheet.

Greenbrier-Astra Rail was formed in 2017 between the Company’s existing European operations headquartered in Swidnica, Poland and Astra Rail, based in Arad, Romania. Greenbrier-Astra Rail is controlled by the Company with an approximate 75% interest. The Company consolidates Greenbrier-Astra Rail for financial reporting purposes and includes the noncontrolling interest in the mezzanine section of the Consolidated Balance Sheet in Contingently redeemable noncontrolling interest (see Note 3 – Acquisitions).

In August 2018, Greenbrier-Astra Rail entered into an agreement to take an approximately 68% ownership stake in Rayvag, a railcar manufacturing company based in Adana, Turkey. Rayvag is controlled by the Company. The Company consolidates Rayvag for financial reporting purposes. The noncontrolling interest related to the partner’s interest is included in Noncontrolling interest in the equity section of the Company’s Consolidated Balance Sheet.

The Company has a joint venture with Summit Railroad Products, Inc. to provide axle services. Each party owns a 50% interest in the joint venture. The financial results of this operation are consolidated for financial reporting purposes as the Company has the power to direct the activities which most significantly impact the economic performance of the entity. The noncontrolling interest related to the partner’s 50% interest in the joint venture is included in Noncontrolling interest in the equity section of the Company’s Consolidated Balance Sheet.

Net earnings attributable to noncontrolling interest on the Company’s Consolidated Statement of Income represents the Company’s partners’ share of results from operations.

Accumulated other comprehensive loss

Accumulated other comprehensive loss - Accumulated other comprehensive loss, net of tax as appropriate, consisted of the following:

(In thousands)	Unrealized Gain (Loss) on Derivative Financial Instruments			Foreign Currency Translation Adjustment			Other			Accumulated Other Comprehensive Loss
Balance, August 31, 2017	$	181		$	(5,366	)	$	(1,094	)	$	(6,279	)
Other comprehensive loss before reclassifications		(197	)		(16,140	)		(335	)		(16,672	)
Amounts reclassified from accumulated other comprehensive loss		(415	)		–			–			(415	)
Balance, August 31, 2018	$	(431	)	$	(21,506	)	$	(1,429	)	$	(23,366	)

The amounts reclassified out of Accumulated other comprehensive loss into the Consolidated Statements of Income, with the financial statement caption, were as follows:

	Year Ended August 31,						Financial Statement Caption
(In thousands)	2018			2017
(Gain) loss on derivative financial instruments:
Foreign exchange contracts	$	(716	)	$	3,644		Revenue and Cost of revenue
Interest rate swap contracts		298			1,057		Interest and foreign exchange
		(418	)		4,701		Total before tax
		3			(972	)	Tax benefit
	$	(415	)	$	3,729		Net of tax

Revenue recognition

Revenue recognition - Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured.

Railcars are generally manufactured, repaired or refurbished under firm orders from third parties. Revenue is recognized when new, used, refurbished or repaired railcars are completed, accepted by an unaffiliated customer and contractual contingencies removed. Marine revenue is either recognized on the percentage of completion method during the construction period or on the completed contract method based on the terms of the contract. Under the percentage of completion method, revenue is recognized based on the progress toward contract completion measured by actual costs incurred to date in relation to the estimate of total expected costs. Under the completed contract method, revenue is not recognized until the project has been fully completed. Cash payments received prior to meeting revenue recognition criteria are accounted for in Deferred revenue. Operating lease revenue is recognized as earned under the lease terms. Certain leases are operated under car hire arrangements whereby revenue is earned based on utilization, car hire rates and terms specified in the lease agreement.

The Company sells railcars with attached leases to financial investors. Revenue and cost of revenue associated with railcars that the Company has manufactured are recognized in Manufacturing once sold. Revenue and cost of revenue associated with railcars which were obtained from a third party with the intent to resell them and subsequently sold are recognized in Leasing & Services. In addition the Company will often perform management or maintenance services at market rates for these railcars. The Company evaluates the terms of any remarketing agreements and any contractual provisions that represent retained risk and the level of retained risk based on those provisions. The Company applies a 10% threshold to determine whether the level of retained risk exceeds 10% of the individual fair value of the rail cars delivered. If retained risk exceeded 10%, the transaction would not be recognized as a sale until such time as the retained risk declined to 10% or less. For any contracts with multiple elements (i.e. railcars, maintenance, management services, etc.) the Company allocates revenue among the deliverables primarily based upon objective and reliable evidence of the fair value of each element in the arrangement. If objective and reliable evidence of fair value of any element is not available, the Company will use its estimated selling price for purposes of allocating the total arrangement consideration among the elements.

Interest and foreign exchange

Interest and foreign exchange - Interest and foreign exchange includes foreign exchange transaction gains and losses, amortization of loan fee expense, accretion of debt discounts and external interest expense.

(In thousands)	Years ended August 31,
	2018			2017		2016
Interest and foreign exchange:
Interest and other expense	$	30,946		$	23,519	$	17,268
Foreign exchange (gain) loss		(1,578	)		673		(3,766	)
	$	29,368		$	24,192	$	13,502

Research and development

Research and development - Research and development costs are expensed as incurred. Research and development costs incurred for new product development during the years ended August 31, 2018, 2017 and 2016 were $6.0 million, $4.2 million and $2.7 million, respectively, included in Selling and administrative expenses.

Net earnings per share

Net earnings per share - Basic earnings per common share (EPS) excludes the potential dilution that would occur if additional shares were issued upon conversion of bonds. Restricted share grants are treated as outstanding when issued and restricted stock units are not treated as outstanding when issued. Restricted share grants and restricted stock units that are considered participating securities, including some grants subject to certain performance criteria, are included in weighted average basic common shares outstanding when calculating EPS when the Company is in a net earnings position.

Diluted EPS is calculated using the more dilutive of two approaches. The first approach includes the dilutive effect, using the treasury stock method, associated with shares underlying the 2024 Convertible notes, restricted stock units that are not considered participating securities and performance based restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved. The second approach supplements the first by including the “if converted” effect of the 2018 Convertible notes during the periods in which they were outstanding. Under the “if converted” method, debt issuance and interest costs, both net of tax, associated with the convertible notes are added back to net earnings and the share count is increased by the shares underlying the convertible notes. The 2024 Convertible notes are included in the calculation of both approaches using the treasury stock method when the average stock price is greater than the applicable conversion price.

Stock-based compensation

Stock-based compensation - The value of stock based compensation awards is amortized as compensation expense from the date of grant through the earlier of the vesting period or the recipient’s eligible retirement date. Awards are expensed upon grant when the recipient’s eligible retirement date precedes the grant date. Stock based compensation expense consists of restricted stock units, restricted stock and phantom stock units awards. Stock based compensation expense for the years ended August 31, 2018, 2017 and 2016 was $29.3 million, $26.4 million and $24.0 million, respectively and was recorded in Selling and administrative on the Consolidated Statements of Income.

Restricted stock units and restricted stock are accounted for as equity based awards (see Note 15 – Equity). Phantom stock units are accounted for as liability based awards.

The Company began granting phantom stock units during the year ended August 31, 2016. Every phantom stock unit entitles the participant to receive a cash payment equal to the value of a single share of the Company’s common stock upon vesting. The holders of unvested phantom stock units are entitled to participate in dividend equivalents.

There were no phantom stock units awarded during the year ended August 31, 2018. During the years ended August 31, 2017 and 2016, the Company awarded 151,634 and 268,161 phantom stock units, respectively, which include performance-based grants. As of August 31, 2018, there were a total of 200,686 phantom stock units associated with unvested performance-based grants. The actual number of phantom stock units that will vest associated with performance-based phantom stock units will vary depending on the Company’s performance. Approximately 200,686 additional phantom stock units may be granted if performance-based phantom stock units vest at stretch levels of performance. These additional units are associated with phantom stock unit awards granted during the years ended August 31, 2016 and 2017. The grant date fair value of phantom stock awards was $6.7 million and $7.9 million for the years ended August 31, 2017 and 2016, respectively.

Our phantom stock unit grants are considered liability based awards and therefore are re-measured at the end of each reporting period. Compensation expense is recognized through the earlier of the vesting period or the recipient’s eligible retirement date. Time-based awards to employees are expensed upon grant when the recipient’s eligible retirement date precedes the grant date or during the vesting period if the grantee becomes retirement eligible before the vesting period is complete. Compensation expense related to phantom stock unit grants is recorded in Selling and administrative expense and Cost of revenue on the Company’s Consolidated Statements of Income. Compensation expense recognized related to phantom stock units for the years ended August 31, 2018, August 31, 2017 and 2016 was $12.1 million, $6.2 million and $1.5 million, respectively. Unamortized compensation cost related to phantom stock unit grants was $5.9 million, $10.9 million and $7.5 million as of August 31, 2018, 2017 and 2016, respectively.

Management estimates

Management estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires judgment on the part of management to arrive at estimates and assumptions on matters that are inherently uncertain. These estimates may affect the amount of assets, liabilities, revenue and expenses reported in the financial statements and accompanying notes and disclosure of contingent assets and liabilities within the financial statements. Estimates and assumptions are periodically evaluated and may be adjusted in future periods. Actual results could differ from those estimates.

Initial Adoption of Accounting Policies

Initial Adoption of Accounting Policies - In the first quarter of 2018, the Company adopted Accounting Standards Update 2016-09, Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). This changes how companies account for certain aspects of share-based payments to employees. Excess tax benefits or deficiencies related to vested awards which were previously recognized in stockholders’ equity are now recognized in the income statement when awards vest. For the year ended August 31, 2018, the impact of adopting this new guidance was immaterial. Prior to adopting the updated standard, excess tax benefits were reported as financing activities and are now reported as operating activities in the statement of cash flows. In addition, cash paid by an employer when directly withholding shares for tax withholding purposes were reported as operating activities and are now classified as financing activities.

Prospective accounting changes

Prospective Accounting Changes - In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (ASU 2014-09), providing a common revenue recognition model under U.S. GAAP. Under ASU 2014-09, an entity recognizes revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or services. It also requires additional disclosures to sufficiently describe the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB issued a one year deferral and the new standard is effective for fiscal years and interim periods within those years beginning after December 15, 2017. The Company plans to adopt this new standard beginning September 1, 2018 using the modified retrospective method. The Company has substantially completed our evaluation of the requirements of the new standard and is implementing slight modifications to our affected processes and controls in the first quarter of fiscal 2019. The majority of our revenue recognition timing will remain unchanged, while we expect certain minor changes related to maintenance and repair services. Costs incurred while fulfilling maintenance contracts will now be recognized as incurred while the related revenue will continue to be recognized over time. Additionally, our repair service revenue, while previously recognized upon completion of a repair order, will now be recognized as costs are incurred. As a result of these changes, the Company expects to record an increase to retained earnings of approximately $5.4 million and a reclassification from accrued maintenance to contract liabilities of $2.4 million as of September 1, 2018.

In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (ASU 2016-02). The new guidance supersedes existing guidance on accounting for leases in Topic 840 and is intended to increase the transparency and comparability of accounting for lease transactions. ASU 2016-02 requires most leases to be recognized on the balance sheet. Lessees will need to recognize a right-of-use asset and a lease liability for virtually all leases. The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Lessor accounting remains similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. The ASU will require both quantitative and qualitative disclosures regarding key information about leasing arrangements. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will include a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The Company plans to adopt this guidance beginning September 1, 2019. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.

In December 2016, the FASB issued Accounting Standards Update 2016-18, Restricted Cash (ASU 2016-18). This update requires additional disclosure and that the Statement of Cash Flow explain the change during the period in the total cash, cash equivalents and amounts generally described as restricted cash. Therefore, amounts generally described as restricted cash should be included with cash & cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Statement of Cash Flows. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 with early adoption permitted. The Company plans to adopt this guidance beginning September 1, 2018.

In August 2017, the FASB issued Accounting Standards Update 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12). This update improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements and make certain targeted improvements to simplify the application of the hedge accounting guidance. The guidance expands the ability to hedge non-financial and financial risk components, reduces complexity in fair value hedges of interest rate risk, eliminates the requirement to separately measure and report hedge ineffectiveness, as well as eases certain hedge effectiveness assessment requirements. The new guidance is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company plans to adopt this guidance beginning September 1, 2019. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.

Foreign Exchange Contracts

Derivatives

Forward exchange contracts - Foreign operations give rise to risks from changes in foreign currency exchange rates. Forward exchange contracts with established financial institutions are used to hedge a portion of such risk. Realized and unrealized gains and losses on effective hedges are deferred in other comprehensive income (loss) and recognized in earnings concurrent with the hedged transaction or when the occurrence of the hedged transaction is no longer considered probable. Ineffectiveness is measured and any gain or loss is recognized in foreign exchange gain or loss. Even though forward exchange contracts are entered into to mitigate the impact of currency fluctuations, certain exposure remains, which may affect operating results. In addition, there is risk for counterparty non-performance.

Interest rate swap contracts

Derivatives

Interest rate instruments - Interest rate swap agreements are used to reduce the impact of changes in interest rates on certain debt. The net cash amounts paid or received under the agreements are recognized as an adjustment to interest expense.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Aug. 31, 2018

Allowance for Doubtful Accounts

Accounts receivable - Accounts receivable includes receivables from related parties (see Note 17 – Related Party Transactions) and is stated net of allowance for doubtful accounts of $2.7 million and $1.8 million as of August 31, 2018 and 2017, respectively.

	As of August 31,
(In thousands)	2018			2017			2016
Allowance for doubtful accounts
Balance at beginning of period	$	1,768		$	2,215		$	2,449
Additions, net of reversals		938			370			70
Usage		(54	)		(891	)		(277	)
Currency translation effect		49			74			(27	)
Balance at end of period	$	2,701		$	1,768		$	2,215

Estimated Useful Lives

Depreciation is provided on the straight-line method over estimated useful lives which are as follows:

	Depreciable Life
Buildings and improvements		10 – 25 years
Machinery and equipment		3 – 15 years
Other		3 – 7 years

Components of Accumulated Other Comprehensive Loss, Net of Tax

Accumulated other comprehensive loss - Accumulated other comprehensive loss, net of tax as appropriate, consisted of the following:

(In thousands)	Unrealized Gain (Loss) on Derivative Financial Instruments			Foreign Currency Translation Adjustment			Other			Accumulated Other Comprehensive Loss
Balance, August 31, 2017	$	181		$	(5,366	)	$	(1,094	)	$	(6,279	)
Other comprehensive loss before reclassifications		(197	)		(16,140	)		(335	)		(16,672	)
Amounts reclassified from accumulated other comprehensive loss		(415	)		–			–			(415	)
Balance, August 31, 2018	$	(431	)	$	(21,506	)	$	(1,429	)	$	(23,366	)

Amounts Reclassified out of Accumulated Other Comprehensive Loss

The amounts reclassified out of Accumulated other comprehensive loss into the Consolidated Statements of Income, with the financial statement caption, were as follows:

	Year Ended August 31,						Financial Statement Caption
(In thousands)	2018			2017
(Gain) loss on derivative financial instruments:
Foreign exchange contracts	$	(716	)	$	3,644		Revenue and Cost of revenue
Interest rate swap contracts		298			1,057		Interest and foreign exchange
		(418	)		4,701		Total before tax
		3			(972	)	Tax benefit
	$	(415	)	$	3,729		Net of tax

Interest and Foreign Exchange

Interest and foreign exchange - Interest and foreign exchange includes foreign exchange transaction gains and losses, amortization of loan fee expense, accretion of debt discounts and external interest expense.

(In thousands)	Years ended August 31,
	2018			2017		2016
Interest and foreign exchange:
Interest and other expense	$	30,946		$	23,519	$	17,268
Foreign exchange (gain) loss		(1,578	)		673		(3,766	)
	$	29,368		$	24,192	$	13,502

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Acquisitions (Tables)

12 Months Ended

Aug. 31, 2018

GBW Railcar Services LLC

Preliminary Allocation of Purchase Price Based on Fair Value of Net Assets Acquired

The preliminary allocation of the purchase price based on the fair value of the net assets acquired was as follows as of August 31, 2018:

(in thousands)
Cash and cash equivalents	$	5,000
Accounts receivable, net		12,230
Inventories		18,106
Property, plant and equipment, net		16,748
Intangibles and other assets, net		9,200
Goodwill		7,863
Total assets acquired		69,147
Accounts payable and accrued liabilities		12,394
Total liabilities assumed		12,394
Net assets acquired	$	56,753

Greenbrier-Astra Rail

Preliminary Allocation of Purchase Price Based on Fair Value of Net Assets Acquired

The purchase price of the net assets acquired from Astra was allocated as follows:

(in thousands)
Cash and cash equivalents	$	6,562
Accounts receivable, net		10,984
Inventories		30,454
Property, plant and equipment, net		75,296
Intangibles and other assets, net		17,300
Goodwill		25,746
Total assets acquired		166,342
Accounts payable and accrued liabilities		17,879
Deferred income taxes		7,292
Deferred revenue		964
Notes payable, net		24,382
Total liabilities assumed		50,517
Net assets acquired	$	115,825

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Inventories (Tables)

12 Months Ended

Aug. 31, 2018

Components of Inventories

	As of August 31,
(In thousands)	2018			2017
Manufacturing supplies and raw materials	$	278,726		$	222,080
Work-in-process		105,021			86,794
Finished goods		54,181			95,389
Excess and obsolete adjustment		(5,614	)		(4,136	)
	$	432,314		$	400,127

Inventory Valuation

	As of August 31,
(In thousands)	2018			2017			2016
Excess and obsolete adjustment
Balance at beginning of period	$	4,136		$	3,257		$	2,679
Charge to cost of revenue		4,023			2,781			2,422
Disposition of inventory		(2,455	)		(2,003	)		(1,792	)
Currency translation effect		(90	)		101			(52	)
Balance at end of period	$	5,614		$	4,136		$	3,257

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Equipment on Operating Leases, net (Tables)

12 Months Ended

Aug. 31, 2018

Aggregate Minimum Future Amounts Receivable Under All Non-Cancelable Operating Leases and Subleases

Aggregate minimum future amounts receivable under all non-cancelable operating leases and subleases are as follows:

(In thousands)
Year ending August 31,
2019	$	26,246
2020		19,898
2021		13,311
2022		11,311
2023		8,562
Thereafter		14,733
	$	94,061

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Property, Plant and Equipment, net (Tables)

12 Months Ended

Aug. 31, 2018

Property, Plant and Equipment, Net

	As of August 31,
(In thousands)	2018			2017
Land and improvements	$	84,432		$	84,594
Machinery and equipment		414,865			378,311
Buildings and improvements		202,973			186,960
Construction in progress		48,406			39,417
Other		68,452			60,747
		819,128			750,029
Accumulated depreciation		(361,932	)		(322,008	)
	$	457,196		$	428,021

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Investments In Unconsolidated Affiliates (Tables)

12 Months Ended

Aug. 31, 2018

GBW Railcar Services LLC

Schedule of Summarized Financial Data

Summarized financial data for GBW is as follows:

	As of August 31,
(In thousands)	2018		2017
Current assets	$	8,531	$	81,860
Total assets	$	8,531	$	206,009
Current liabilities	$	23,283	$	33,033
Total liabilities	$	23,283	$	111,384

	Years ended August 31,
(In thousands)	2018			2017			2016
Revenue	$	238,033		$	253,436		$	373,490
Margin	$	(6,047	)	$	(4,058	)	$	33,929
Net income (loss) (1)	$	(51,679	)	$	(36,947	)	$	4,006

⁽¹⁾  In 2018 and 2017, GBW recorded a pre-tax goodwill impairment loss of $26.4 million and $11.2 million, respectively, which reduced the goodwill balance to $15.1 million at the time of the dissolution.

Greenbrier-Maxion

Schedule of Summarized Financial Data

Summarized financial data for Greenbrier-Maxion is as follows:

	As of August 31,
(In thousands)	2018		2017
Current assets	$	41,619	$	48,012
Total assets	$	61,034	$	71,455
Current liabilities	$	38,027	$	38,055
Total liabilities	$	41,539	$	42,197

	Years ended August 31,
(In thousands)	2018			2017		2016
Revenue	$	187,664		$	228,510	$	168,465
Margin	$	10,086		$	24,372	$	14,245
Net income (loss)	$	(3,006	)	$	1,378	$	(4,051	)

Amsted-Maxion Cruzeiro

Schedule of Summarized Financial Data

Summarized financial data for Amsted-Maxion Cruzeiro is as follows:

	As of August 31,
(In thousands)	2018		2017
Current assets	$	21,463	$	23,777
Total assets	$	111,589	$	142,583
Current liabilities	$	27,981	$	28,084
Total liabilities	$	83,407	$	94,846

	Years ended August 31,
(In thousands)	2018			2017			2016
Revenue	$	96,490		$	90,114		$	87,833
Margin	$	8,001		$	5,983		$	8,256
Net income (loss)	$	(9,590	)	$	(20,114	)	$	(12,640	)

Other Unconsolidated Affiliates

Schedule of Summarized Financial Data

Summarized financial information, shown as 100% of these other unconsolidated affiliates in aggregate are as follows:

	As of August 31,
(In thousands)	2018		2017
Current assets	$	32,168	$	16,996
Total assets	$	239,535	$	283,895
Current liabilities	$	3,647	$	3,003
Total liabilities	$	52,852	$	90,064

	Years ended August 31,
(In thousands)	2018		2017		2016
Revenue	$	25,549	$	39,161	$	75,851
Margin	$	11,360	$	8,015	$	11,087
Net income (loss)	$	6,988	$	5,202	$	6,051

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Goodwill (Tables)

12 Months Ended

Aug. 31, 2018

Schedule of Changes in Carrying Value of Goodwill

Changes in the carrying value of goodwill are as follows:

(In thousands)	Manufacturing		Wheels, Repair & Parts		Leasing & Services		Total
Balance August 31, 2017	$	25,325	$	43,265	$	–	$	68,590
Additions (1)		839		7,863		–		8,702
Translation		919		–		–		919
Balance August 31, 2018	$	27,083	$	51,128	$	–	$	78,211

⁽¹⁾ Additions to goodwill relate to the GBW repair shop transaction and Manufacturing includes final adjustments to the Astra purchase price allocation. See Note 3 – Acquisitions.

(In thousands)	Goodwill
Gross goodwill balance before accumulated goodwill impairment losses and other reductions	$	230,736
Accumulated goodwill impairment losses		(128,209	)
Accumulated other reductions		(24,316	)
Balance August 31, 2018	$	78,211

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Intangibles and Other Assets, net (Tables)

12 Months Ended

Aug. 31, 2018

Identifiable Intangible and Other Assets

The following table summarizes the Company’s identifiable intangible and other assets balance:

	As of August 31,
(In thousands)	2018			2017
Intangible assets subject to amortization:
Customer relationships	$	72,521		$	64,521
Accumulated amortization		(43,576	)		(40,153	)
Other intangibles		16,300			20,207
Accumulated amortization		(6,400	)		(4,866	)
		38,845			39,709
Intangible assets not subject to amortization		5,115			912
Prepaid and other assets		18,935			16,914
Nonqualified savings plan investments		26,299			20,974
Debt issuance costs, net		1,824			2,623
Assets held for sale		3,650			4,045
	$	94,668		$	85,177

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Accounts Payable and Accrued Liabilities (Tables)

12 Months Ended

Aug. 31, 2018

Accounts Payable and Accrued Liabilities

	As of August 31,
(In thousands)	2018		2017
Trade payables	$	226,405	$	180,592
Other accrued liabilities		73,273		107,002
Accrued payroll and related liabilities		105,111		84,749
Accrued warranty		27,395		20,737
Accrued maintenance		9,090		17,667
Income taxes payable		4,771		–
Other		3,812		4,314
	$	449,857	$	415,061

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Maintenance and Warranty Accruals (Tables)

12 Months Ended

Aug. 31, 2018

Maintenance and Warranty Accruals

	As of August 31,
(In thousands)	2018			2017			2016
Accrued maintenance
Balance at beginning of period	$	17,667		$	18,646		$	18,642
Charged to cost of revenue		(389	)		10,609			12,926
Payments		(8,188	)		(11,588	)		(12,922	)
Balance at end of period	$	9,090		$	17,667		$	18,646
Accrued warranty
Balance at beginning of period	$	20,737		$	12,159		$	11,512
Charged to cost of revenue		12,323			6,872			6,069
Acquisition		–			3,526			–
Payments		(5,217	)		(2,649	)		(5,299	)
Currency translation effect		(448	)		829			(123	)
Balance at end of period	$	27,395		$	20,737		$	12,159

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Notes Payable, net (Tables)

12 Months Ended

Aug. 31, 2018

Notes Payable, Net

	As of August 31,
(In thousands)	2018			2017
Convertible senior notes, due 2018	$	–		$	119,063
Convertible senior notes, due 2024		275,000			275,000
Term loans		179,923			184,001
Other notes payable		14,798			19,540
	$	469,721		$	597,604
Debt discount and issuance costs		(33,516	)		(39,376	)
	$	436,205		$	558,228

Principal Payments on the Notes Payable

As of August 31, 2018 principal payments on the notes payable are expected as follows:

(In thousands)
Year ending August 31,
2019	$	26,775
2020		167,086
2021		413
2022		413
2023		34
Thereafter (1)		275,000
	$	469,721

(1) The repayment of the $275.0 million of Convertible senior notes due 2024 is assumed to occur at the scheduled maturity in 2024 instead of assuming an earlier conversion by the holders.

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Derivative Instruments (Tables)

12 Months Ended

Aug. 31, 2018

Fair Values of Derivative Instruments

Fair Values of Derivative Instruments

	Asset Derivatives					Liability Derivatives
		August 31,					August 31,
		2018		2017			2018		2017
(In thousands)	Balance sheet caption	Fair Value		Fair Value		Balance sheet caption	Fair Value		Fair Value
Derivatives designated as hedging instruments
Foreign forward exchange contracts	Accounts receivable, net	$	700	$	2,341	Accounts payable and accrued liabilities	$	1,211	$	1,761
Interest rate swap contracts	Intangibles and other assets, net		781		–	Accounts payable and accrued liabilities		1		1,125
		$	1,481	$	2,341		$	1,212	$	2,886
Derivatives not designated as hedging instruments
Foreign forward exchange contracts	Accounts receivable, net	$	76	$	1,473	Accounts payable and accrued liabilities	$	354	$	–

Effect of Derivative Instruments on Consolidated Statements of Income

The Effect of Derivative Instruments on the Consolidated Statements of Income

Derivatives in cash flow hedging relationships	Financial statement caption of gain recognized in income on derivative	Gain recognized in income on derivatives Years ended August 31,
		2018			2017
Foreign forward exchange contract	Interest and foreign exchange	$	1,052		$	3,207
Interest rate swap contracts	Interest and foreign exchange		(1	)		23
		$	1,051		$	3,230

Derivatives in cash flow hedging relationships	Gain (loss) recognized in OCI on derivatives (effective portion) Years ended August 31,					Financial statement caption of gain (loss) reclassified from accumulated OCI into income	Gain (loss) reclassified from accumulated OCI into income (effective portion) Years ended August 31,						Financial statement caption of gain (loss) in income on derivative (ineffective portion and amount excluded from effectiveness testing)	Gain (loss) recognized on derivative (ineffective portion and amount excluded from effectiveness testing) Years ended August 31,
	2018			2017			2018			2017				2018		2017
Foreign forward exchange contracts	$	(658	)	$	1,746	Revenue	$	1,145		$	(3,980	)	Revenue	$	854	$	(2,843	)
Foreign forward exchange contracts		(1,093	)		385	Cost of revenue		(429	)		336		Cost of revenue		306		248
Interest rate swap contracts		1,632			1,042	Interest and foreign exchange		(298	)		(1,057	)	Interest and foreign exchange		–		–
	$	(119	)	$	3,173		$	418		$	(4,701	)		$	1,160	$	(2,595	)

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Equity (Tables)

12 Months Ended

Aug. 31, 2018

Summary of Restricted Stock Share and Restricted Stock Unit Grant Transactions for Shares, both Vested and Unvested

The following table summarizes restricted share and restricted stock unit grant transactions for shares, both vested and unvested, under the 2017 Amended and Restated Stock Incentive Plan:

	Shares
Balance at August 31, 2015 (1)		3,419,861
Granted		447,895
Forfeited		(19,526	)
Balance at August 31, 2016 (1)		3,848,230
Granted		269,705
Forfeited		(26,206	)
Balance at August 31, 2017 (1)		4,091,729
Granted		317,036
Forfeited		(34,440	)
Balance at August 31, 2018 (1)		4,374,325

⁽¹⁾  Balance represents cumulative grants net of forfeitures.

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Earnings Per Share (Tables)

12 Months Ended

Aug. 31, 2018

Reconciliation of Shares Used in Computation of Basic and Diluted Earnings Per Common Share

The shares used in the computation of the Company’s basic and diluted earnings per common share are reconciled as follows:

	Years ended August 31,
(In thousands)	2018		2017		2016
Weighted average basic common shares outstanding (1)		30,857		29,225		29,156
Dilutive effect of 2018 Convertible notes (2)		1,821		3,295		3,214
Dilutive effect of 2024 Convertible notes (3)		–		–		n/a
Dilutive effect of 2026 Convertible notes (4)		n/a		n/a		–
Dilutive effect of restricted stock units (5)		157		42		98
Weighted average diluted common shares outstanding		32,835		32,562		32,468

(1) Restricted stock grants and restricted stock units that are considered participating securities, including some grants subject to certain performance criteria, are included in weighted average basic common shares outstanding when the Company is in a net earnings position. No restricted stock and restricted stock units were anti-dilutive for the years ended August 31, 2018, 2017 and 2016.

(2) The dilutive effect of the 2018 Convertible notes was included as they were considered dilutive under the “if converted” method as further discussed below. The 2018 Convertible notes matured on April 1, 2018.

(3) The 2024 Convertible notes were issued in February 2017. The dilutive effect of the 2024 Convertible notes was excluded for the year ended August 31, 2018 and 2017 as the average stock price was less than the applicable conversion price and therefore was considered anti-dilutive.

(4) The 2026 Convertible notes were retired in August 2016. The effect of the 2026 Convertible notes was excluded for the year ended August 31, 2016 as the average stock price was less than the applicable conversion price and therefore the notes were considered anti-dilutive.

(5) Restricted stock units that are not considered participating securities and restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved, are included in weighted average diluted common shares outstanding when the Company is in a net earnings position.

Approach to Calculate Diluted Earning per Share

	Years ended August 31,
	2018		2017		2016
Net earnings attributable to Greenbrier	$	151,781	$	116,067	$	183,213
Add back:
Interest and debt issuance costs on the 2018 Convertible notes, net of tax		2,031		2,932		2,695
Earnings before interest and debt issuance costs on convertible notes	$	153,812	$	118,999	$	185,908
Weighted average diluted common shares outstanding		32,835		32,562		32,468
Diluted earnings per share (1)	$	4.68	$	3.65	$	5.73

(1) Diluted earnings per share was calculated as follows:

Earnings before interest and debt issuance costs on convertible notes

            Weighted average diluted common shares outstanding

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Income Taxes (Tables)

12 Months Ended

Aug. 31, 2018

Components of Income Tax Expense of Continuing Operations

Components of income tax expense were as follows:

	Years ended August 31,
(In thousands)	2018			2017			2016
Current
Federal	$	28,357		$	22,710		$	66,455
State		3,244			305			4,595
Foreign		38,628			35,893			50,299
		70,229			58,908			121,349
Deferred
Federal		(33,459	)		9,418			(6,199	)
State		(344	)		(1,467	)		(1,174	)
Foreign		(3,690	)		(2,732	)		(1,644	)
		(37,493	)		5,219			(9,017	)
Change in valuation allowance		157			(113	)		(10	)
Income tax expense	$	32,893		$	64,014		$	112,322

Reconciliation Between Effective and Statutory Tax Rates on Operations

The reconciliation between effective and statutory tax rates on operations is as follows:

	Years ended August 31,
	2018			2017			2016
Federal statutory rate		25.7	%		35.0	%		35.0	%
State income taxes, net of federal benefit		0.8			0.1			0.7
Foreign operations, excluding transition tax		1.8			(3.4	)		0.1
Transition tax on foreign earnings		3.1			–			–
Remeasurement of domestic deferred taxes		(15.0	)		–			–
Change in valuation allowance		0.1			–			–
Noncontrolling interest in flow-through entity		(2.4	)		(6.0	)		(7.4	)
Permanent differences and other		0.6			1.4			–
Effective tax rate		14.7	%		27.1	%		28.4	%

Tax Effects of Temporary Differences that give rise to Significant Portions of Deferred Tax Assets and Deferred Tax Liabilities

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities were as follows:

	As of August 31,
(In thousands)	2018		2017
Deferred tax assets:
Accrued payroll and related liabilities	$	18,461	$	28,761
Deferred revenue		10,642		7,547
Inventories and other		10,518		13,641
Maintenance and warranty accruals		7,201		10,988
Net operating losses		2,002		320
Investment and asset tax credits		1,439		1,840
		50,263		63,097
Deferred tax liabilities:
Fixed assets		70,942		110,429
Original issue discount		6,099		11,086
Intangibles		2,474		3,605
Other		1,831		(831	)
Investment in GBW Joint Venture		–		14,066
		81,346		138,355
Valuation allowance		657		533
Net deferred tax liability	$	31,740	$	75,791

Unrecognized Tax Benefits

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits:

	Years ended August 31,
(In thousands)	2018			2017			2016
Unrecognized Tax Benefit – Opening Balance	$	1,820		$	942		$	1,019
Gross increases – tax positions in prior period		237			1,368			–
Gross decreases – tax positions in prior period		(449	)		(53	)		–
Settlements		–			–			–
Lapse of statute of limitations		–			(437	)		(77	)
Unrecognized Tax Benefit – Ending Balance	$	1,608		$	1,820		$	942

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Segment Information (Tables)

12 Months Ended

Aug. 31, 2018

Results of Operations

For the year ended August 31, 2018:

	Revenue								Earnings (loss) from operations
	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	2,044,586	$	118,157		$	2,162,743		$	240,901		$	17,721		$	258,622
Wheels, Repair & Parts		347,023		41,494			388,517			16,731			2,748			19,479
Leasing & Services		127,855		11,847			139,702			88,481			10,296			98,777
Eliminations		–		(171,498	)		(171,498	)		–			(30,765	)		(30,765	)
Corporate		–		–			–			(93,128	)		–			(93,128	)
	$	2,519,464	$	–		$	2,519,464		$	252,985		$	–		$	252,985

For the year ended August 31, 2017:

	Revenue								Earnings (loss) from operations
	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	1,725,188	$	19,291		$	1,744,479		$	295,334		$	1,022		$	296,356
Wheels, Repair & Parts		312,679		30,861			343,540			14,984			2,303			17,287
Leasing & Services		131,297		11,812			143,109			31,904			11,099			43,003
Eliminations		–		(61,964	)		(61,964	)		–			(14,424	)		(14,424	)
Corporate		–		–			–			(81,790	)		–			(81,790	)
	$	2,169,164	$	–		$	2,169,164		$	260,432		$	–		$	260,432

For the year ended August 31, 2016:

	Revenue								Earnings (loss) from operations
	External		Intersegment			Total			External			Intersegment			Total
Manufacturing	$	2,096,331	$	89,158		$	2,185,489		$	415,094		$	24,299		$	439,393
Wheels, Repair & Parts		322,395		32,436			354,831			19,948			2,602			22,550
Leasing & Services		260,798		13,101			273,899			51,723			13,101			64,824
Eliminations		–		(134,695	)		(134,695	)		–			(40,002	)		(40,002	)
Corporate		–		–			–			(78,213	)		–			(78,213	)
	$	2,679,524	$	–		$	2,679,524		$	408,552		$	–		$	408,552

	Years ended August 31,
(In thousands)	2018		2017		2016
Assets:
Manufacturing	$	1,020,757	$	914,450	$	701,296
Wheels, Repair & Parts		306,756		236,315		275,599
Leasing & Services		578,818		535,323		516,147
Unallocated		559,133		711,617		342,732
	$	2,465,464	$	2,397,705	$	1,835,774
Depreciation and amortization:
Manufacturing	$	44,225	$	33,807	$	27,137
Wheels, Repair & Parts		10,771		11,143		11,971
Leasing & Services		19,360		20,179		24,237
	$	74,356	$	65,129	$	63,345
Capital expenditures:
Manufacturing	$	59,707	$	54,973	$	51,294
Wheels, Repair & Parts		5,204		3,129		10,190
Leasing & Services		111,937		27,963		77,529
	$	176,848	$	86,065	$	139,013

Summary of Selected Geographic Information

The following table summarizes selected geographic information.

	Years ended August 31,
(In thousands)	2018		2017		2016
Revenue (1):
U.S.	$	1,840,877	$	1,674,517	$	2,297,501
Foreign		678,587		494,647		382,023
	$	2,519,464	$	2,169,164	$	2,679,524
Assets:
U.S.	$	1,677,144	$	1,307,239	$	955,674
Mexico		517,543		791,974		788,878
Europe		270,777		298,492		91,222
	$	2,465,464	$	2,397,705	$	1,835,774

⁽¹⁾  Revenue is presented on the basis of geographic location of customers.

Reconciliation of Earnings from Operations to Earnings Before Income Tax and Earnings (Loss) from Unconsolidated Affiliates

Reconciliation of Earnings from operations to Earnings before income tax and earnings (loss) from unconsolidated affiliates:

	Years ended August 31,
(In thousands)	2018		2017		2016
Earnings from operations	$	252,985	$	260,432	$	408,552
Interest and foreign exchange		29,368		24,192		13,502
Earnings before income tax and earnings (loss) from unconsolidated affiliates	$	223,617	$	236,240	$	395,050

GBW Railcar Services LLC

Results of Operations

Information for 2018, 2017 and 2016 is included in the tables below which represent totals for GBW rather than Greenbrier’s 50% share, as this is how performance and resource allocation is evaluated.

	Years ended August 31,
(In thousands)	2018			2017			2016
GBW Joint Venture:
Revenue	$	238,033		$	253,436		$	373,490
Earnings (loss) from operations	$	(46,783	)	$	(32,454	)	$	8,558
Assets	$	8,531		$	206,009		$	247,610
Depreciation and amortization	$	8,932		$	9,023		$	7,676
Capital expenditures	$	8,514		$	8,030		$	16,110

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Lease Commitments (Tables)

12 Months Ended

Aug. 31, 2018

Railcar Equipment

Aggregate Minimum Future Amounts Payable Under Non-Cancelable Operating Leases

Aggregate minimum future amounts payable under these non-cancelable railcar equipment leases are as follows:

(In thousands)
Year ending August 31,
2019	$	6,287
2020		4,839
2021		1,821
2022		1,792
2023		1,792
Thereafter		1,810
	$	18,341

Domestic railcar repair facilities, office space and certain manufacturing and office equipment

Aggregate Minimum Future Amounts Payable Under Non-Cancelable Operating Leases

Aggregate minimum future amounts payable under these non-cancelable operating leases are as follows:

(In thousands)
Year ending August 31,
2019	$	6,048
2020		4,437
2021		3,286
2022		1,915
2023		1,862
Thereafter		196
	$	17,744

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Fair Value of Financial Instruments (Tables)

12 Months Ended

Aug. 31, 2018

Estimated Fair Values of Financial Instruments and Methods and Assumptions Used

The estimated fair values of financial instruments and the methods and assumptions used to estimate such fair values are as follows:

(In thousands)	Carrying Amount 1		Estimated Fair Value (Level 2)
Notes payable as of August 31, 2018	$	469,721	$	517,925
Notes payable as of August 31, 2017	$	597,604	$	644,708

¹ Carrying amount disclosed in this table excludes debt discount and debt issuance costs.

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Fair Value Measures (Tables)

12 Months Ended

Aug. 31, 2018

Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis as of August 31, 2018 are:

(In thousands)	Total		Level 1		Level 2(1)		Level 3
Assets:
Derivative financial instruments	$	1,557	$	–	$	1,557	$	–
Nonqualified savings plan investments		26,299		26,299		–		–
Cash equivalents		126,430		126,430		–		–
	$	154,286	$	152,729	$	1,557	$	–
Liabilities:
Derivative financial instruments	$	1,566	$	–	$	1,566	$	–

(1) Level 2 assets include derivative financial instruments which are valued based on significant observable inputs. See Note 14 – Derivative Instruments for further discussion.

Assets and liabilities measured at fair value on a recurring basis as of August 31, 2017 are:

(In thousands)	Total		Level 1		Level 2(1)		Level 3
Assets:
Derivative financial instruments	$	3,814	$	–	$	3,814	$	–
Nonqualified savings plan investments		20,974		20,974		–		–
Cash equivalents		105,337		105,337		–		–
	$	130,125	$	126,311	$	3,814	$	–
Liabilities:
Derivative financial instruments	$	2,886	$	–	$	2,886	$	–

(1) Level 2 assets include derivative financial instruments which are valued based on significant observable inputs. See Note 14 – Derivative Instruments for further discussion.

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Quarterly Results of Operations (Unaudited) (Tables)

12 Months Ended

Aug. 31, 2018

Quarterly Financial Data

(In thousands, except per share amount)	First			Second			Third			Fourth			Total
2018
Revenue
Manufacturing	$	451,485		$	511,827		$	510,099		$	571,175		$	2,044,586
Wheels, Repair & Parts		78,011			88,710			94,515			85,787			347,023
Leasing & Services		30,039			28,799			36,773			32,244			127,855
		559,535			629,336			641,387			689,206			2,519,464
Cost of revenue
Manufacturing		380,850			429,165			427,875			489,517			1,727,407
Wheels, Repair & Parts		72,506			80,708			85,850			79,266			318,330
Leasing & Services		16,865			14,116			19,155			14,536			64,672
		470,221			523,989			532,880			583,319			2,110,409
Margin		89,314			105,347			108,507			105,887			409,055
Selling and administrative		47,043			50,294			51,793			51,309			200,439
Net gain on disposition of equipment		(19,171	)		(5,817	)		(14,825	)		(4,556	)		(44,369	)
Earnings from operations		61,442			60,870			71,539			59,134			252,985
Other costs
Interest and foreign exchange		7,020			7,029			6,533			8,786			29,368
Earnings before income tax and earnings (loss) from unconsolidated affiliates		54,422			53,841			65,006			50,348			223,617
Income tax expense		(18,135	)		11,301			(15,944	)		(10,115	)		(32,893	)
Earnings (loss) from unconsolidated affiliates		(2,910	)		147			(12,823	)		(3,075	)		(18,661	)
Net earnings		33,377			65,289			36,239			37,158			172,063
Net earnings attributable to noncontrolling interest		(7,124	)		(3,647	)		(3,288	)		(6,223	)		(20,282	)
Net earnings attributable to Greenbrier	$	26,253		$	61,642		$	32,951		$	30,935		$	151,781
Basic earnings per common share: (1)	$	0.90		$	2.10		$	1.03		$	0.95		$	4.92
Diluted earnings per common share: (1)	$	0.83		$	1.91		$	1.01		$	0.94		$	4.68

(1) Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the dilutive effect of the 2024 Convertible Notes using the treasury stock method when dilutive, restricted stock units that are not considered participating securities, restricted stock units that are subject to performance criteria for which actual levels of performance above target have been achieved and the dilutive effect of shares underlying the 2018 Convertible Notes, during the periods in which they were outstanding, using the “if converted” method in which debt issuance and interest costs, net of tax, were added back to net earnings. The 2018 Convertible notes matured on April 1, 2018.

Quarterly Results of Operations (Unaudited)

(In thousands, except per share amount)	First			Second			Third			Fourth			Total
2017
Revenue
Manufacturing	$	454,033		$	445,504		$	317,104		$	508,547		$	1,725,188
Wheels, Repair & Parts		69,635			82,714			85,231			75,099			312,679
Leasing & Services		28,646			38,064			36,826			27,761			131,297
		552,314			566,282			439,161			611,407			2,169,164
Cost of revenue
Manufacturing		356,555			346,653			245,228			425,531			1,373,967
Wheels, Repair & Parts		64,978			75,497			77,985			69,876			288,336
Leasing & Services		18,030			25,207			26,247			16,078			85,562
		439,563			447,357			349,460			511,485			1,747,865
Margin		112,751			118,925			89,701			99,922			421,299
Selling and administrative		41,213			39,495			42,810			47,089			170,607
Net gain on disposition of equipment		(1,122	)		(2,090	)		(1,581	)		(4,947	)		(9,740	)
Earnings from operations		72,660			81,520			48,472			57,780			260,432
Other costs
Interest and foreign exchange		1,724			5,673			7,894			8,901			24,192
Earnings before income tax and loss from unconsolidated affiliates		70,936			75,847			40,578			48,879			236,240
Income tax expense		(20,386	)		(24,858	)		(8,656	)		(10,114	)		(64,014	)
Loss from unconsolidated affiliates		(2,584	)		(1,988	)		(681	)		(6,511	)		(11,764	)
Net earnings		47,966			49,001			31,241			32,254			160,462
Net earnings attributable to noncontrolling interest		(23,004	)		(14,465	)		1,582			(8,508	)		(44,395	)
Net earnings attributable to Greenbrier	$	24,962		$	34,536		$	32,823		$	23,746		$	116,067
Basic earnings per common share: (1)	$	0.86		$	1.19		$	1.12		$	0.81		$	3.97
Diluted earnings per common share: (1)	$	0.79		$	1.09		$	1.03		$	0.75		$	3.65

(1) Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the dilutive effect of the 2024 Convertible Notes using the treasury stock method when dilutive, restricted stock units that are subject to performance criteria for which actual levels of performance above target have been achieved and the dilutive effect of shares underlying the 2018 Convertible Notes using the “if converted” method in which debt issuance and interest costs, net of tax, were added back to net earnings.

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Nature of Operations - Additional Information (Detail)	Aug. 20, 2018 Facility Segment	Aug. 19, 2018 Segment	Aug. 31, 2018 Vehicle
Organization and Nature of Operations [Line Items]
Number of reportable segments | Segment	3	4
Number of railcars repair shops returned to business | Facility	12
Leasing & Services
Organization and Nature of Operations [Line Items]
Number of railcars owned			8,100
Number of railcars that get services			357,000
Leasing & Services | Equipment on operating leases, net
Organization and Nature of Operations [Line Items]
Number of railcars owned			6,300
Leasing & Services | Leased railcars for syndication
Organization and Nature of Operations [Line Items]
Number of railcars owned			1,600
Leasing & Services | Inventory Finished Goods
Organization and Nature of Operations [Line Items]
Number of railcars owned			200

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Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands		12 Months Ended
	Sep. 01, 2018	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016	Aug. 02, 2018	Jun. 30, 2017	Jun. 01, 2017	Oct. 31, 2016	Aug. 31, 2015
Summary Of Significant Accounting Policies [Line Items]
Net foreign currency translation adjustment		$ 21,500	$ 5,400	$ 20,800
Allowance for doubtful accounts		2,701	1,768	2,215					$ 2,449
Leased railcars for syndication		$ 130,926	91,272
Property, Plant and Equipment useful life		35 years
Goodwill impairment		$ 0	0	0
Percentage of revenue and gross margin		40.00%
Deferred revenue		$ 105,954	129,260
Retained risk threshold percentage		10.00%
Research and development		$ 6,000	4,200	2,700
Stock based compensation expense		$ 29,314	$ 26,427	$ 24,037
Performance based share based compensation		317,036	269,705	447,895
Share based compensation, non vested shares		467,710
Unamortized share based compensation		$ 15,500
Greenbrier-Astra Rail
Summary Of Significant Accounting Policies [Line Items]
Interest in joint venture							25.00%
Ownership percentage by parent			75.00%				75.00%
GIMSA
Summary Of Significant Accounting Policies [Line Items]
Interest in joint venture								50.00%
Rayvag
Summary Of Significant Accounting Policies [Line Items]
Interest in joint venture		68.00%			68.00%
Summit Railroad Products, Inc
Summary Of Significant Accounting Policies [Line Items]
Interest in joint venture		50.00%
Accounting Standards Update 2014-09 | Subsequent Event
Summary Of Significant Accounting Policies [Line Items]
Increase to retained earnings	$ 5,400
Reclassification from accrued maintenance to contract liabilities	$ 2,400
Phantom Stock Units (PSUs)
Summary Of Significant Accounting Policies [Line Items]
Performance based share based compensation		0	151,634	268,161
Share based compensation, non vested shares		200,686
Additional shares available for grant if performance-based phantom stock units vest at stretch level of performance		200,686
Share based compensation, fair value of phantom stock			$ 6,700	$ 7,900
Stock compensation expenses		$ 12,100	6,200	1,500
Unamortized share based compensation		$ 5,900	$ 10,900	$ 7,500
Greenbrier
Summary Of Significant Accounting Policies [Line Items]
Percentage of ownership in entity		40.00%				40.00%
Upfront Fee [Member]
Summary Of Significant Accounting Policies [Line Items]
Unrecognized deferred revenue		$ 40,000
Customer Relationships | Minimum
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives		5 years
Customer Relationships | Maximum
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives		20 years

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Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Allowance for doubtful accounts
Balance at beginning of period	$ 1,768	$ 2,215	$ 2,449
Additions, net of reversals	938	370	70
Usage	(54)	(891)	(277)
Currency translation effect	49	74	(27)
Balance at end of period	$ 2,701	$ 1,768	$ 2,215

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Summary of Significant Accounting Policies - Estimated Useful Lives (Detail)	12 Months Ended
	Aug. 31, 2018
Property Plant and Equipment Estimated Useful Lives [Line Items]
Property, Plant and Equipment useful life	35 years
Building and improvements | Minimum
Property Plant and Equipment Estimated Useful Lives [Line Items]
Property, Plant and Equipment useful life	10 years
Building and improvements | Maximum
Property Plant and Equipment Estimated Useful Lives [Line Items]
Property, Plant and Equipment useful life	25 years
Machinery and Equipment | Minimum
Property Plant and Equipment Estimated Useful Lives [Line Items]
Property, Plant and Equipment useful life	3 years
Machinery and Equipment | Maximum
Property Plant and Equipment Estimated Useful Lives [Line Items]
Property, Plant and Equipment useful life	15 years
Other | Minimum
Property Plant and Equipment Estimated Useful Lives [Line Items]
Property, Plant and Equipment useful life	3 years
Other | Maximum
Property Plant and Equipment Estimated Useful Lives [Line Items]
Property, Plant and Equipment useful life	7 years

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Summary of Significant Accounting Policies - Components of Accumulated Other Comprehensive Loss, Net of Tax (Detail) $ in Thousands	12 Months Ended
	Aug. 31, 2018 USD ($)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ 1,018,130
Other comprehensive loss before reclassifications	(16,672)
Amounts reclassified from accumulated other comprehensive loss	(415)
Ending balance	1,250,101
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(6,279)
Ending balance	(23,366)
Unrealized (Gain) Loss on Derivative Financial Instruments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	181
Other comprehensive loss before reclassifications	(197)
Amounts reclassified from accumulated other comprehensive loss	(415)
Ending balance	(431)
Foreign Currency Translation Adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(5,366)
Other comprehensive loss before reclassifications	(16,140)
Ending balance	(21,506)
Other
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(1,094)
Other comprehensive loss before reclassifications	(335)
Ending balance	$ (1,429)

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Summary of Significant Accounting Policies - Amounts Reclassified out of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Aug. 31, 2018	May 31, 2018	Feb. 28, 2018	Nov. 30, 2017	Aug. 31, 2017	May 31, 2017	Feb. 28, 2017	Nov. 30, 2016	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Interest and foreign exchange	$ 8,786	$ 6,533	$ 7,029	$ 7,020	$ 8,901	$ 7,894	$ 5,673	$ 1,724	$ 29,368	$ 24,192	$ 13,502
Total before tax	(50,348)	(65,006)	(53,841)	(54,422)	(48,879)	(40,578)	(75,847)	(70,936)	(223,617)	(236,240)	(395,050)
Tax benefit	$ 10,115	$ 15,944	$ (11,301)	$ 18,135	$ 10,114	$ 8,656	$ 24,858	$ 20,386	32,893	64,014	$ 112,322
Unrealized (Gain) Loss on Derivative Financial Instruments | Reclassification out of Accumulated Other Comprehensive loss
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Total before tax									(418)	4,701
Tax benefit									3	(972)
Net of tax									(415)	3,729
Unrealized (Gain) Loss on Derivative Financial Instruments | Reclassification out of Accumulated Other Comprehensive loss | Foreign Exchange Contracts
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Revenue and Cost of revenue									(716)	3,644
Unrealized (Gain) Loss on Derivative Financial Instruments | Reclassification out of Accumulated Other Comprehensive loss | Interest rate swap contracts
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Interest and foreign exchange									$ 298	$ 1,057

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Summary of Significant Accounting Policies - Interest and Foreign Exchange (Detail) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Aug. 31, 2018	May 31, 2018	Feb. 28, 2018	Nov. 30, 2017	Aug. 31, 2017	May 31, 2017	Feb. 28, 2017	Nov. 30, 2016	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Interest Expense [Line Items]
Interest and other expense									$ 30,946	$ 23,519	$ 17,268
Foreign exchange (gain) loss									(1,578)	673	(3,766)
Interest and foreign exchange	$ 8,786	$ 6,533	$ 7,029	$ 7,020	$ 8,901	$ 7,894	$ 5,673	$ 1,724	$ 29,368	$ 24,192	$ 13,502

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Acquisitions - Additional Information (Detail) € in Millions			3 Months Ended								12 Months Ended
	Jun. 01, 2018 EUR (€)	Jun. 01, 2017 EUR (€)	Aug. 31, 2018 USD ($)	May 31, 2018 USD ($)	Feb. 28, 2018 USD ($)	Nov. 30, 2017 USD ($)	Aug. 31, 2017 USD ($)	May 31, 2017 USD ($)	Feb. 28, 2017 USD ($)	Nov. 30, 2016 USD ($)	Aug. 31, 2018 USD ($)		Aug. 31, 2017 USD ($)		Aug. 31, 2016 USD ($)		Aug. 20, 2018 USD ($)	Aug. 02, 2018	Jun. 01, 2017 USD ($)
Business Acquisition [Line Items]
Net assets acquired																	$ 56,800,000
Revenue			$ 689,206,000	$ 641,387,000	$ 629,336,000	$ 559,535,000	$ 611,407,000	$ 439,161,000	$ 566,282,000	$ 552,314,000	$ 2,519,464,000	[1]	$ 2,169,164,000	[1]	$ 2,679,524,000	[1]
Earnings (loss) from operations			$ 59,134,000	$ 71,539,000	$ 60,870,000	$ 61,442,000	$ 57,780,000	$ 48,472,000	$ 81,520,000	$ 72,660,000	$ 252,985,000		$ 260,432,000		$ 408,552,000
Rayvag
Business Acquisition [Line Items]
Ownership interest in entity			68.00%								68.00%							68.00%
Greenbrier-Astra Rail
Business Acquisition [Line Items]
Net assets acquired																			$ 115,825,000
Ownership percentage by parent							75.00%						75.00%						75.00%
Amount of consideration paid | €	€ 30	€ 30
Ownership interest in entity																			25.00%
Noncontrolling interest, fair value of acquisition																			$ 38,300,000
Adjustments to reconcile carrying value of redemption amount to recorded retained earnings											$ 0
Revenue											136,800,000
Earnings (loss) from operations											$ 11,500,000

[1] Revenue is presented on the basis of geographic location of customers.

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Acquisitions - Preliminary Allocation of Purchase Price Based on Fair Value of Net Assets Acquired (Detail) - USD ($) $ in Thousands	Aug. 31, 2018	Aug. 20, 2018	Aug. 31, 2017
Business Acquisition [Line Items]
Goodwill	$ 78,211		$ 68,590
Net assets acquired		$ 56,800
GBW Railcar Services LLC
Business Acquisition [Line Items]
Cash and cash equivalents	5,000
Accounts receivable, net	12,230
Inventories	18,106
Property, plant and equipment, net	16,748
Intangibles and other assets, net	9,200
Goodwill	7,863	$ 15,100
Total assets acquired	69,147
Accounts payable and accrued liabilities	12,394
Total liabilities assumed	12,394
Net assets acquired	$ 56,753

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Acquisitions - Purchase Price of Net Assets Acquired (Detail) - USD ($) $ in Thousands	Aug. 31, 2018	Aug. 20, 2018	Aug. 31, 2017	Jun. 01, 2017
Business Acquisition [Line Items]
Goodwill	$ 78,211		$ 68,590
Net assets acquired		$ 56,800
Greenbrier-Astra Rail
Business Acquisition [Line Items]
Cash and cash equivalents				$ 6,562
Accounts receivable, net				10,984
Inventories				30,454
Property, plant and equipment, net				75,296
Intangibles and other assets, net				17,300
Goodwill				25,746
Total assets acquired				166,342
Accounts payable and accrued liabilities				17,879
Deferred income taxes				7,292
Deferred revenue				964
Notes payable, net				24,382
Total liabilities assumed				50,517
Net assets acquired				$ 115,825

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Inventories - Components of Inventories (Detail) - USD ($) $ in Thousands	Aug. 31, 2018	Aug. 31, 2017
Inventory [Line Items]
Manufacturing supplies and raw materials	$ 278,726	$ 222,080
Work-in-process	105,021	86,794
Finished goods	54,181	95,389
Excess and obsolete adjustment	(5,614)	(4,136)
Inventories	$ 432,314	$ 400,127

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Inventories - Inventory Valuation (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of period	$ 4,136
Balance at end of period	5,614	$ 4,136
Inventory Valuation Reserve
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of period	4,136	3,257	$ 2,679
Charge to cost of revenue	4,023	2,781	2,422
Disposition of inventory	(2,455)	(2,003)	(1,792)
Currency translation effect	(90)	101	(52)
Balance at end of period	$ 5,614	$ 4,136	$ 3,257

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Equipment on Operating Leases, Net - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Property, Plant and Equipment [Line Items]
Accumulated depreciation	$ 361,932	$ 322,008
Depreciation expense	54,500	45,500	$ 39,200
Revenue associated with equipment hiring arrangements	12,800	13,000	14,700
Property Subject to Operating Lease
Property, Plant and Equipment [Line Items]
Accumulated depreciation	64,900	91,100
Depreciation expense	$ 11,200	$ 12,100	$ 16,600

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Equipment on Operating Leases, Net - Aggregate Minimum Future Amounts Receivable Under All Non-Cancelable Operating Leases and Subleases (Detail) $ in Thousands	Aug. 31, 2018 USD ($)
Future Minimum Payments Receivable [Line Items]
2019	$ 26,246
2020	19,898
2021	13,311
2022	11,311
2023	8,562
Thereafter	14,733
Operating Leases, Future Minimum Payments Receivable, Total	$ 94,061

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Property, Plant and Equipment, Net - Property, Plant and Equipment, Net (Detail) - USD ($) $ in Thousands	Aug. 31, 2018	Aug. 31, 2017
Property, Plant and Equipment [Line Items]
Property plant and equipment	$ 819,128	$ 750,029
Accumulated depreciation	(361,932)	(322,008)
Property, plant and equipment, net	457,196	428,021
Land and improvements
Property, Plant and Equipment [Line Items]
Property plant and equipment	84,432	84,594
Machinery and Equipment
Property, Plant and Equipment [Line Items]
Property plant and equipment	414,865	378,311
Building and improvements
Property, Plant and Equipment [Line Items]
Property plant and equipment	202,973	186,960
Construction in Progress
Property, Plant and Equipment [Line Items]
Property plant and equipment	48,406	39,417
Other
Property, Plant and Equipment [Line Items]
Property plant and equipment	$ 68,452	$ 60,747

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Property, Plant and Equipment, Net - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 54.5	$ 45.5	$ 39.2

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Investments in Unconsolidated Affiliates - Additional Information (Detail) $ in Thousands	3 Months Ended								12 Months Ended
	Aug. 31, 2018 USD ($)	May 31, 2018 USD ($)	Feb. 28, 2018 USD ($)	Nov. 30, 2017 USD ($)	Aug. 31, 2017 USD ($)	May 31, 2017 USD ($)	Feb. 28, 2017 USD ($)	Nov. 30, 2016 USD ($)	Aug. 31, 2018 USD ($)	Aug. 31, 2017 USD ($)	Aug. 31, 2016 USD ($)	Aug. 20, 2018	Apr. 30, 2017	Aug. 31, 2015
Investment [Line Items]
Payment for investment									$ 26,455	$ 40,632	$ 12,855
Earnings (loss) from other unconsolidated affiliates	$ (3,075)	$ (12,823)	$ 147	$ (2,910)	$ (6,511)	$ (681)	$ (1,988)	$ (2,584)	$ (18,661)	$ (11,764)	$ 2,096
Number of other unconsolidated affiliates									8
Amsted-Maxion Cruzeiro
Investment [Line Items]
Ownership stake in a railcar manufacturer	40.00%								40.00%
Greenbrier-Maxion
Investment [Line Items]
Equity method investment, percentage of ownership interest	60.00%					60.00%			60.00%				19.50%
Payment for investment									$ 20,000
Amsted-Maxion Cruzeiro
Investment [Line Items]
Equity method investment, percentage of ownership interest	24.50%					24.50%			24.50%				19.50%
Payment for investment									$ 3,250
Other Unconsolidated Affiliates
Investment [Line Items]
Earnings (loss) from other unconsolidated affiliates									$ 1,800
GBW Railcar Services LLC
Investment [Line Items]
Equity method investment, percentage of ownership interest	50.00%								50.00%			50.00%		50.00%

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Investments in Unconsolidated Affiliates - Schedule of Summarized Financial Data (Detail) - USD ($) $ in Thousands		3 Months Ended								12 Months Ended
		Aug. 31, 2018	May 31, 2018	Feb. 28, 2018	Nov. 30, 2017	Aug. 31, 2017	May 31, 2017	Feb. 28, 2017	Nov. 30, 2016	Aug. 31, 2018		Aug. 31, 2017		Aug. 31, 2016
Schedule of Equity Method Investments [Line Items]
Total assets		$ 2,465,464				$ 2,397,705				$ 2,465,464		$ 2,397,705		$ 1,835,774
Revenue		689,206	$ 641,387	$ 629,336	$ 559,535	611,407	$ 439,161	$ 566,282	$ 552,314	2,519,464	[1]	2,169,164	[1]	2,679,524	[1]
Margin		105,887	108,507	105,347	89,314	99,922	89,701	118,925	112,751	409,055		421,299		551,437
Net income (loss)		30,935	$ 32,951	$ 61,642	$ 26,253	23,746	$ 32,823	$ 34,536	$ 24,962	151,781		116,067		183,213
GBW Railcar Services LLC
Schedule of Equity Method Investments [Line Items]
Current assets		8,531				81,860				8,531		81,860
Total assets		8,531				206,009				8,531		206,009		247,610
Current liabilities		23,283				33,033				23,283		33,033
Total liabilities		23,283				111,384				23,283		111,384
Revenue										238,033		253,436		373,490
Margin										(6,047)		(4,058)		33,929
Net income (loss)	[2]									(51,679)		(36,947)		4,006
Greenbrier-Maxion
Schedule of Equity Method Investments [Line Items]
Current assets		41,619				48,012				41,619		48,012
Total assets		61,034				71,455				61,034		71,455
Current liabilities		38,027				38,055				38,027		38,055
Total liabilities		41,539				42,197				41,539		42,197
Revenue										187,664		228,510		168,465
Margin										10,086		24,372		14,245
Net income (loss)										(3,006)		1,378		(4,051)
Amsted-Maxion Cruzeiro
Schedule of Equity Method Investments [Line Items]
Current assets		21,463				23,777				21,463		23,777
Total assets		111,589				142,583				111,589		142,583
Current liabilities		27,981				28,084				27,981		28,084
Total liabilities		83,407				94,846				83,407		94,846
Revenue										96,490		90,114		87,833
Margin										8,001		5,983		8,256
Net income (loss)										(9,590)		(20,114)		(12,640)
Other Unconsolidated Affiliates
Schedule of Equity Method Investments [Line Items]
Current assets		32,168				16,996				32,168		16,996
Total assets		239,535				283,895				239,535		283,895
Current liabilities		3,647				3,003				3,647		3,003
Total liabilities		$ 52,852				$ 90,064				52,852		90,064
Revenue										25,549		39,161		75,851
Margin										11,360		8,015		11,087
Net income (loss)										$ 6,988		$ 5,202		$ 6,051

[1] Revenue is presented on the basis of geographic location of customers.

[2] In 2018 and 2017, GBW recorded a pre-tax goodwill impairment loss of $26.4 million and $11.2 million, respectively, which reduced the goodwill balance to $15.1 million at the time of the dissolution.

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Investments in Unconsolidated Affiliates - Schedule of Summarized Financial Data (Parenthetical) (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016	Aug. 20, 2018
Schedule of Equity Method Investments [Line Items]
Pre-tax goodwill impairment loss	$ 0	$ 0	$ 0
Goodwill	78,211	68,590
GBW Railcar Services LLC
Schedule of Equity Method Investments [Line Items]
Pre-tax goodwill impairment loss	26,400	$ 11,200
Goodwill	$ 7,863			$ 15,100

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Goodwill - Schedule of Changes in Carrying Value of Goodwill (Detail) $ in Thousands	12 Months Ended
	Aug. 31, 2018 USD ($)
Goodwill [Line Items]
Beginning balance	$ 68,590
Addition	8,702	[1]
Translation	919
Ending balance	78,211
Gross goodwill balance before accumulated goodwill impairment losses and other reductions	230,736
Accumulated goodwill impairment losses	(128,209)
Accumulated other reductions	(24,316)
Manufacturing
Goodwill [Line Items]
Beginning balance	25,325
Addition	839	[1]
Translation	919
Ending balance	27,083
Wheels, Repair & Parts
Goodwill [Line Items]
Beginning balance	43,265
Addition	7,863	[1]
Ending balance	$ 51,128

[1] Additions to goodwill relate to the GBW repair shop transaction and Manufacturing includes final adjustments to the Astra purchase price allocation. See Note 3 - Acquisitions.

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Intangibles and Other Assets, Net - Identifiable Intangible and Other Assets (Detail) - USD ($) $ in Thousands	Aug. 31, 2018	Aug. 31, 2017
Intangibles and Other Assets by Major Class [Line Items]
Finite-Lived Intangible Assets, Net, Total	$ 38,845	$ 39,709
Intangible assets not subject to amortization	5,115	912
Prepaid and other assets	18,935	16,914
Nonqualified savings plan investments	26,299	20,974
Debt issuance costs, net	1,824	2,623
Assets held for sale	3,650	4,045
Total Intangible and other assets, net	94,668	85,177
Customer Relationships
Intangibles and Other Assets by Major Class [Line Items]
Finite lived intangible assets gross	72,521	64,521
Accumulated amortization	(43,576)	(40,153)
Other Intangible Assets
Intangibles and Other Assets by Major Class [Line Items]
Finite lived intangible assets gross	16,300	20,207
Accumulated amortization	$ (6,400)	$ (4,866)

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Intangibles and Other Assets, Net - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Schedule of Intangible Assets Disclosure [Line Items]
Amortization expense	$ 5.3	$ 4.8	$ 6.3
Future amortization expense, 2019	5.2
Future amortization expense, 2020	5.2
Future amortization expense, 2021	4.8
Future amortization expense, 2022	3.4
Future amortization expense, 2023	$ 3.2

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Revolving Notes - Additional Information (Detail)	1 Months Ended	12 Months Ended
	Mar. 31, 2014	Aug. 31, 2018 USD ($) Facility CreditFacility	Aug. 31, 2017 USD ($)
LIBOR
Line of Credit Facility [Line Items]
Debt instrument, percentage points added to the reference rate	1.75%
Senior Secured Credit Facilities, Consisting of 3 Components
Line of Credit Facility [Line Items]
Number of senior secured credit facilities | CreditFacility		3
Line of credit facility maximum capacity		$ 635,300,000
Letter of credit facility outstanding amount		72,200,000	$ 77,600,000
Revolving Line of Credit, 1st Component of Senior Secured Credit Facilities
Line of Credit Facility [Line Items]
Line of credit facility maximum capacity		$ 550,000,000
Line of credit maturity date		2020-10
Revolving Line of Credit, 1st Component of Senior Secured Credit Facilities | LIBOR
Line of Credit Facility [Line Items]
Debt instrument, percentage points added to the reference rate		1.75%
Revolving Line of Credit, 1st Component of Senior Secured Credit Facilities | Prime Rate
Line of Credit Facility [Line Items]
Debt instrument, percentage points added to the reference rate		0.75%
European Line of Credit, 2nd Component of Senior Secured Credit Facilities
Line of Credit Facility [Line Items]
Line of credit facility maximum capacity		$ 35,300,000
Letter of credit facility outstanding amount		$ 27,700,000	$ 4,300,000
European Line of Credit, 2nd Component of Senior Secured Credit Facilities | Minimum
Line of Credit Facility [Line Items]
Line of credit maturity date		2018-10
European Line of Credit, 2nd Component of Senior Secured Credit Facilities | Maximum
Line of Credit Facility [Line Items]
Line of credit maturity date		2019-06
European Line of Credit, 2nd Component of Senior Secured Credit Facilities | WIBOR | Minimum
Line of Credit Facility [Line Items]
Debt instrument, percentage points added to the reference rate		1.20%
European Line of Credit, 2nd Component of Senior Secured Credit Facilities | WIBOR | Maximum
Line of Credit Facility [Line Items]
Debt instrument, percentage points added to the reference rate		1.30%
European Line of Credit, 2nd Component of Senior Secured Credit Facilities | EURIBOR
Line of Credit Facility [Line Items]
Debt instrument, percentage points added to the reference rate		1.10%
Mexican Railcar Manufacturing Joint Venture Line of Credit, 3rd Component of Senior Secured Credit Facilities
Line of Credit Facility [Line Items]
Line of credit facility maximum capacity		$ 50,000,000
Number of lines of credits | Facility		2
Mexican Railcar Manufacturing Joint Venture Line of Credit 1, 3rd Component of Senior Secured Credit Facilities
Line of Credit Facility [Line Items]
Line of credit facility maximum capacity		$ 30,000,000
Line of credit facility borrowings outstanding due period		2019-01
Mexican Railcar Manufacturing Joint Venture Line of Credit 1, 3rd Component of Senior Secured Credit Facilities | LIBOR
Line of Credit Facility [Line Items]
Debt instrument, percentage points added to the reference rate		2.00%
Mexican Railcar Manufacturing Joint Venture Line of Credit 2, 3rd Component of Senior Secured Credit Facilities
Line of Credit Facility [Line Items]
Line of credit facility maximum capacity		$ 20,000,000
Line of credit facility borrowings outstanding due period		2019-07
Joint venture partner each guaranteed percentage		50.00%
Mexican Railcar Manufacturing Joint Venture Line of Credit 2, 3rd Component of Senior Secured Credit Facilities | LIBOR
Line of Credit Facility [Line Items]
Debt instrument, percentage points added to the reference rate		2.00%

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Accounts Payable and Accrued Liabilities - Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Thousands	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2015
Accounts Payable and Accrued Liabilities [Line Items]
Trade payables	$ 226,405	$ 180,592
Other accrued liabilities	73,273	107,002
Accrued payroll and related liabilities	105,111	84,749
Accrued warranty	27,395	20,737	$ 12,159	$ 11,512
Accrued maintenance	9,090	17,667	$ 18,646	$ 18,642
Income taxes payable	4,771
Other	3,812	4,314
Accounts payable and accrued liabilities	$ 449,857	$ 415,061

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Maintenance and Warranty Accruals - Warranty Accruals Activity (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Accrued maintenance
Balance at beginning of period	$ 17,667	$ 18,646	$ 18,642
Charged to cost of revenue	(389)	10,609	12,926
Payments	(8,188)	(11,588)	(12,922)
Balance at end of period	9,090	17,667	18,646
Accrued warranty
Balance at beginning of period	20,737	12,159	11,512
Charged to cost of revenue	12,323	6,872	6,069
Acquisition		3,526
Payments	(5,217)	(2,649)	(5,299)
Currency translation effect	(448)	829	(123)
Balance at end of period	$ 27,395	$ 20,737	$ 12,159

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Notes Payable, Net - Notes Payable, Net (Detail) - USD ($) $ in Thousands	Aug. 31, 2018	Apr. 01, 2018	Aug. 31, 2017
Debt Instrument [Line Items]
Term loans	$ 179,923		$ 184,001
Other notes payable	14,798		19,540
Notes payable, gross	469,721		597,604
Debt discount and issuance costs	(33,516)		(39,376)
Notes payable, net	436,205		558,228
2018 Senior Notes
Debt Instrument [Line Items]
Convertible senior notes		$ 119,100	119,063
2024 Convertible Senior Notes
Debt Instrument [Line Items]
Convertible senior notes	$ 275,000		$ 275,000

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Notes Payable, Net - Additional Information (Detail) $ / shares in Units, $ in Thousands, shares in Millions		1 Months Ended	12 Months Ended
	Apr. 01, 2018 USD ($) shares	Mar. 31, 2014 USD ($)	Aug. 31, 2018 USD ($) $ / shares	Aug. 31, 2017 USD ($)
Debt Instrument [Line Items]
Debt issuance costs			$ 1,824	$ 2,623
Periodic Principal Payment		$ 1,750
Balloon payment		$ 159,800
Swap agreement interest rate		50.00%
Fixed interest rate		3.74%
Debt instrument amount outstanding			469,721	597,604
LIBOR
Debt Instrument [Line Items]
Debt instrument, percentage points added to the reference rate		1.75%
Term Loan
Debt Instrument [Line Items]
Debt instrument amount outstanding			170,300
Senior term debt			200,000
Other Term Loan Due February 2018 to April 2020
Debt Instrument [Line Items]
Senior term debt			9,700
Other Notes Payable
Debt Instrument [Line Items]
Unsecured debt			$ 14,800
Senior Unsecured Notes
Debt Instrument [Line Items]
Debt instrument, maturity date			Jun. 30, 2019
2018 Senior Notes
Debt Instrument [Line Items]
Debt instrument, interest rate			3.50%
Convertible senior notes	$ 119,100			119,063
Debt instrument, maturity date			Apr. 01, 2018
Convertible notes conversion rate, per share | $ / shares			$ 35.47
Conversion of 2018 Convertible Senior Notes, shares | shares	3.4
2024 Convertible Senior Notes
Debt Instrument [Line Items]
Debt instrument, interest rate			2.875%
Convertible senior notes			$ 275,000	275,000
Debt instrument, maturity date			Feb. 01, 2024
Convertible notes conversion rate, per share | $ / shares			$ 60.16
Description of long term debt			Convertible senior notes, due 2024, bear interest at a fixed rate of 2.875%, paid semi-annually in arrears on February 1st and August 1st.
Convertible notes initial conversion rate, shares per $1,000 principal amount			16.6234
Initial debt discount			$ 33,100
Debt issuance costs			$ 8,000
Frequency of payments			Semi-annually
2024 Convertible Senior Notes | ASC 470-20
Debt Instrument [Line Items]
Convertible notes, fair value			$ 241,900
Proceeds from the issuance of the notes			275,000
Convertible notes, equity component			33,100	33,100
2024 Convertible Senior Notes | ASC 470-20 | Additional Paid-in Capital
Debt Instrument [Line Items]
Convertible senior notes - equity component, net of tax			$ 12,300	$ 12,300
2024 Convertible Senior Notes | Measurement Input, Risk Free Interest Rate [Member] | ASC 470-20
Debt Instrument [Line Items]
Fair value assumed, interest rate			0.05

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Notes Payable, Net - Principal Payments on Notes Payable (Detail) - USD ($) $ in Thousands		Aug. 31, 2018	Aug. 31, 2017
Debt Instrument [Line Items]
2019		$ 26,775
2020		167,086
2021		413
2022		413
2023		34
Thereafter	[1]	275,000
Notes payable, gross		$ 469,721	$ 597,604

[1] The repayment of the $275.0 million of Convertible senior notes due 2024 is assumed to occur at the scheduled maturity in 2024 instead of assuming an earlier conversion by the holders.

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Notes Payable, Net - Principal Payments on Notes Payable (Parenthetical) (Detail) - 2024 Convertible Senior Notes - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2018	Aug. 31, 2017
Debt Instrument [Line Items]
Convertible senior notes	$ 275,000	$ 275,000
Debt instrument, redemption, description	The repayment of the $275.0 million of Convertible senior notes due 2024 is assumed to occur at the scheduled maturity in 2024 instead of assuming an earlier conversion by the holders.

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Derivative Instruments - Additional Information (Detail)	12 Months Ended
	Aug. 31, 2018 USD ($)
Foreign Exchange Contracts
Derivative [Line Items]
Aggregate derivative notional amount	$ 145,400,000
Amount reclassified to revenue or cost of revenue in the next year	1,300,000
Interest rate swap contracts
Derivative [Line Items]
Aggregate derivative notional amount	$ 85,100,000
Maturity date	2020-03
Unrealized pre-tax gain (loss) that would be reclassified to interest expense in the next year	$ 100,000

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Derivative Instruments - Fair Values of Derivative Instruments (Detail) - USD ($) $ in Thousands	Aug. 31, 2018	Aug. 31, 2017
Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Asset Derivatives	$ 1,481	$ 2,341
Designated as Hedging Instrument | Accounts Payable and Accrued Liabilities
Derivatives, Fair Value [Line Items]
Liability Derivatives	1,212	2,886
Designated as Hedging Instrument | Foreign Exchange Contracts | Accounts Receivable
Derivatives, Fair Value [Line Items]
Asset Derivatives	700	2,341
Designated as Hedging Instrument | Foreign Exchange Contracts | Accounts Payable and Accrued Liabilities
Derivatives, Fair Value [Line Items]
Liability Derivatives	1,211	1,761
Designated as Hedging Instrument | Interest rate swap contracts | Accounts Payable and Accrued Liabilities
Derivatives, Fair Value [Line Items]
Liability Derivatives	1	1,125
Designated as Hedging Instrument | Interest rate swap contracts | Intangibles and Other Assets, Net
Derivatives, Fair Value [Line Items]
Asset Derivatives	781
Not Designated as Hedging Instrument | Foreign Exchange Contracts | Accounts Receivable
Derivatives, Fair Value [Line Items]
Asset Derivatives	76	$ 1,473
Not Designated as Hedging Instrument | Foreign Exchange Contracts | Accounts Payable and Accrued Liabilities
Derivatives, Fair Value [Line Items]
Liability Derivatives	$ 354

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Derivative Instruments - Effect of Derivative Instruments on Consolidated Statements of Income (Detail) - Cash Flow Hedging - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2018	Aug. 31, 2017
Derivative Instruments, Gain (Loss) [Line Items]
Gain recognized in income on derivatives	$ 1,051	$ 3,230
Gain (loss) recognized in OCI on derivatives (effective portion)	(119)	3,173
Gain (loss) reclassified accumulated OCI income (effective portion)	418	(4,701)
Gain (loss) recognized on derivative (ineffective portion and amount excluded from effectiveness testing)	1,160	(2,595)
Foreign Exchange Forward
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in OCI on derivatives (effective portion)	(658)	1,746
Foreign Exchange Forward | Interest and Foreign Exchange
Derivative Instruments, Gain (Loss) [Line Items]
Gain recognized in income on derivatives	1,052	3,207
Foreign Exchange Forward | Sales
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) reclassified accumulated OCI income (effective portion)	1,145	(3,980)
Gain (loss) recognized on derivative (ineffective portion and amount excluded from effectiveness testing)	854	(2,843)
Foreign Exchange Forward | Cost Of Revenue
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in OCI on derivatives (effective portion)	(1,093)	385
Gain (loss) reclassified accumulated OCI income (effective portion)	(429)	336
Gain (loss) recognized on derivative (ineffective portion and amount excluded from effectiveness testing)	306	248
Interest rate swap contracts
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in OCI on derivatives (effective portion)	1,632	1,042
Interest rate swap contracts | Interest and Foreign Exchange
Derivative Instruments, Gain (Loss) [Line Items]
Gain recognized in income on derivatives	(1)	23
Gain (loss) reclassified accumulated OCI income (effective portion)	$ (298)	$ (1,057)

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Equity - Additional Information (Detail) - USD ($)				12 Months Ended			60 Months Ended
	Apr. 01, 2018	Oct. 27, 2017	Sep. 30, 2017	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2018	Jan. 05, 2018
Stockholders Equity Note [Line Items]
Shares available for grant				1,050,675	233,271	476,770	1,050,675
Performance based share based compensation				317,036	269,705	447,895
Share based compensation, non vested shares				467,710			467,710
Additional shares available for grant				467,710
Unamortized compensation cost of restricted stock grants				$ 15,500,000			$ 15,500,000
2018 Senior Notes
Stockholders Equity Note [Line Items]
Conversion of 2018 Convertible Senior Notes, shares	3,400,000
Debt instrument, maturity date				Apr. 01, 2018
2017 Amended and Restated Stock Incentive Plan
Stockholders Equity Note [Line Items]
Number of shares reserved for future issuance								1,100,000
Maximum aggregate number of common shares authorized for issuance								5,425,000
Selling, Administrative and Cost of Revenue
Stockholders Equity Note [Line Items]
Restricted stock compensation expense				$ 17,200,000	$ 20,200,000	$ 22,500,000
Share Repurchase Program - 2014
Stockholders Equity Note [Line Items]
Repurchase of common stock, shares				0	0		3,206,226
Stock repurchase program total cost of repurchased shares							$ 137,000,000
Remaining authorized repurchase amount				$ 88,000,000			88,000,000
Repurchase program expiration date		Mar. 31, 2019	Jan. 01, 2018	Jan. 01, 2018
Maximum | Share Repurchase Program - 2013
Stockholders Equity Note [Line Items]
Amount authorized for repurchase				$ 225,000,000			$ 225,000,000
Unvested Restricted Stock Grants
Stockholders Equity Note [Line Items]
Share based compensation, non vested shares				788,744	837,654		788,744
Fair value of awards granted				$ 15,200,000	$ 11,300,000	$ 12,500,000
Restricted Stock | Minimum
Stockholders Equity Note [Line Items]
Vesting period of compensation expense				1 year
Restricted Stock | Maximum
Stockholders Equity Note [Line Items]
Vesting period of compensation expense				3 years

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Equity - Summary of Restricted Stock Share and Restricted Stock Unit Grant Transactions for Shares, both Vested and Unvested (Detail) - shares		12 Months Ended
		Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Reconciliation of Restricted Stock Activity [Line Items]
Beginning Balance	[1]	4,091,729	3,848,230	3,419,861
Granted		317,036	269,705	447,895
Forfeited		(34,440)	(26,206)	(19,526)
Ending Balance	[1]	4,374,325	4,091,729	3,848,230

[1] Balance represents cumulative grants net of forfeitures.

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Earnings Per Share - Reconciliation of Shares Used in Computation of Basic and Diluted Earnings Per Common Share (Detail) - shares shares in Thousands		12 Months Ended
		Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Earnings Per Share Disclosure [Line Items]
Weighted average basic common shares outstanding	[1]	30,857	29,225	29,156
Dilutive effect of restricted stock units	[2]	157	42	98
Weighted average diluted common shares outstanding		32,835	32,562	32,468
2018 Senior Notes
Earnings Per Share Disclosure [Line Items]
Dilutive effect of convertible notes	[3]	1,821	3,295	3,214

[1] Restricted stock grants and restricted stock units that are considered participating securities, including some grants subject to certain performance criteria, are included in weighted average basic common shares outstanding when the Company is in a net earnings position. No restricted stock and restricted stock units were anti-dilutive for the years ended August 31, 2018, 2017 and 2016.

[2] Restricted stock units that are not considered participating securities and restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved, are included in weighted average diluted common shares outstanding when the Company is in a net earnings position.

[3] The dilutive effect of the 2018 Convertible notes was included as they were considered dilutive under the "if converted" method as further discussed below. The 2018 Convertible notes matured on April 1, 2018.

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Earnings Per Share - Reconciliation of Shares Used in Computation of Basic and Diluted Earnings Per Common Share (Parenthetical) (Detail) - shares	12 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
2018 Senior Notes
Earnings Per Share Disclosure [Line Items]
Debt instrument, maturity date	Apr. 01, 2018
Restricted Stock
Earnings Per Share Disclosure [Line Items]
Anti-dilutive shares excluded from calculation	0	0	0

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Earnings Per Share - Approach to Calculate Diluted Earning Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended																12 Months Ended
	Aug. 31, 2018		May 31, 2018		Feb. 28, 2018		Nov. 30, 2017		Aug. 31, 2017		May 31, 2017		Feb. 28, 2017		Nov. 30, 2016		Aug. 31, 2018		Aug. 31, 2017		Aug. 31, 2016
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Net earnings attributable to Greenbrier	$ 30,935		$ 32,951		$ 61,642		$ 26,253		$ 23,746		$ 32,823		$ 34,536		$ 24,962		$ 151,781		$ 116,067		$ 183,213
Earnings before interest and debt issuance costs on convertible notes																	$ 153,812		$ 118,999		$ 185,908
Weighted average diluted common shares outstanding																	32,835		32,562		32,468
Diluted earnings per share	$ 0.94	[1]	$ 1.01	[1]	$ 1.91	[1]	$ 0.83	[1]	$ 0.75	[2]	$ 1.03	[2]	$ 1.09	[2]	$ 0.79	[2]	$ 4.68	[1],[3]	$ 3.65	[2],[3]	$ 5.73	[3]
2018 Senior Notes
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Interest and debt issuance costs on the 2018 Convertible notes, net of tax																	$ 2,031		$ 2,932		$ 2,695

[1] Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the dilutive effect of the 2024 Convertible Notes using the treasury stock method when dilutive, restricted stock units that are not considered participating securities, restricted stock units that are subject to performance criteria for which actual levels of performance above target have been achieved and the dilutive effect of shares underlying the 2018 Convertible Notes, during the periods in which they were outstanding, using the "if converted" method in which debt issuance and interest costs, net of tax, were added back to net earnings. The 2018 Convertible notes matured on April 1, 2018.

[2] Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the dilutive effect of the 2024 Convertible Notes using the treasury stock method when dilutive, restricted stock units that are subject to performance criteria for which actual levels of performance above target have been achieved and the dilutive effect of shares underlying the 2018 Convertible Notes using the "if converted" method in which debt issuance and interest costs, net of tax, were added back to net earnings.

[3] Diluted earnings per share was calculated as follows: Earnings before interest and debt issuance costs on convertible notes Weighted average diluted common shares outstanding

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Related Party Transactions - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016	Aug. 20, 2018	Jun. 30, 2017	May 31, 2017	Apr. 30, 2017	Aug. 31, 2015
Related Party Transaction [Line Items]
Carrying amount of investment in unconsolidated affiliates	$ 6.1
Percentage of recognized revenue and margin from sale	60.00%
Percentage of deferred revenue and margin from sale	40.00%
Revenue recognize from railcars sold	$ 48.0
Related party expenses	0.5	$ 0.5	$ 0.8
Leasing Warehouse
Related Party Transaction [Line Items]
Revenue recognize from railcars sold	$ 16.0
Greenbrier
Related Party Transaction [Line Items]
Equity method investment, percentage of ownership interest	40.00%				40.00%
GBW Railcar Services LLC
Related Party Transaction [Line Items]
Equity method investment, percentage of ownership interest	50.00%			50.00%				50.00%
Related party transaction other revenue	$ 5.0	5.0	5.0
Sale of wheel sets and components	16.5	18.3	28.5
Related party expenses	$ 0.4	$ 1.0	$ 1.3
GBW Railcar Services LLC | Watco Companies LLC
Related Party Transaction [Line Items]
Equity method investment, percentage of ownership interest								50.00%
Amsted-Maxion Cruzeiro
Related Party Transaction [Line Items]
Equity method investment, percentage of ownership interest	24.50%					24.50%	19.50%
Note receivable	$ 10.0
Greenbrier-Maxion
Related Party Transaction [Line Items]
Equity method investment, percentage of ownership interest	60.00%					60.00%	19.50%
Note receivable	$ 7.2

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Income Taxes - Components of Income Tax Expense of Continuing Operations (Detail) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Aug. 31, 2018	May 31, 2018	Feb. 28, 2018	Nov. 30, 2017	Aug. 31, 2017	May 31, 2017	Feb. 28, 2017	Nov. 30, 2016	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Current
Federal									$ 28,357	$ 22,710	$ 66,455
State									3,244	305	4,595
Foreign									38,628	35,893	50,299
Current Income Tax Expense (Benefit), Total									70,229	58,908	121,349
Deferred
Federal									(33,459)	9,418	(6,199)
State									(344)	(1,467)	(1,174)
Foreign									(3,690)	(2,732)	(1,644)
Total Deferred Income Tax Expense (Benefit)									(37,493)	5,219	(9,017)
Change in valuation allowance									157	(113)	(10)
Income tax expense	$ 10,115	$ 15,944	$ (11,301)	$ 18,135	$ 10,114	$ 8,656	$ 24,858	$ 20,386	$ 32,893	$ 64,014	$ 112,322

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Income Taxes - Additional information (Detail) - USD ($) $ in Millions	4 Months Ended	8 Months Ended	12 Months Ended
	Dec. 31, 2017	Aug. 31, 2018	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Operating Loss Carryforwards [Line Items]
Statutory federal corporate tax rate	35.00%	21.00%		25.70%	35.00%	35.00%
Tax benefit due to remeasurement of deferred tax assets and liabilities				$ 33.6
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Transition Tax for Accumulated Foreign Earnings, Provisional Income Tax Expense				6.9
Income tax and earnings from unconsolidated affiliates,Domestic u.s. operations				110.8	$ 123.2	$ 264.8
Income tax and earnings from unconsolidated affiliates,Foreign operations				112.8	113.0	$ 130.3
Net increase (Decrease) in the valuation allowance				0.1
Unrecognized tax benefits, excluding interest		$ 1.6		1.6	1.8
Accrued interest related to uncertain tax provisions		0.2		0.2
Interest benefit relating to reserves for uncertain tax provisions				$ 0.2	$ 0.2
Maximum
Operating Loss Carryforwards [Line Items]
Transition tax payable period				8 years
Scenario Forecast
Operating Loss Carryforwards [Line Items]
Statutory federal corporate tax rate			21.00%
State
Operating Loss Carryforwards [Line Items]
Credit carryforwards		1.5		$ 1.5
Credit carryforwards expiration Year				2021
Foreign
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards		$ 8.5		$ 8.5
Operating loss carryforwards expiration dates				2020

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Income Taxes - Reconciliation Between Effective and Statutory Tax Rates on Continuing Operations (Detail)	4 Months Ended	8 Months Ended	12 Months Ended
	Dec. 31, 2017	Aug. 31, 2018	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Income Tax [Line Items]
Federal statutory rate	35.00%	21.00%	25.70%	35.00%	35.00%
State income taxes, net of federal benefit			0.80%	0.10%	0.70%
Foreign operations, excluding transition tax			1.80%	(3.40%)	0.10%
Transition tax on foreign earnings			3.10%
Remeasurement of domestic deferred taxes			(15.00%)
Change in valuation allowance			0.10%
Noncontrolling interest in flow-through entity			(2.40%)	(6.00%)	(7.40%)
Permanent differences and other			0.60%	1.40%
Effective tax rate			14.70%	27.10%	28.40%

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Income Taxes - Tax Effects of Temporary Differences that give rise to Significant Portions of Deferred Tax Assets and Deferred Tax Liabilities (Detail) - USD ($) $ in Thousands	Aug. 31, 2018	Aug. 31, 2017
Deferred tax assets:
Accrued payroll and related liabilities	$ 18,461	$ 28,761
Deferred revenue	10,642	7,547
Inventories and other	10,518	13,641
Maintenance and warranty accruals	7,201	10,988
Net operating losses	2,002	320
Investment and asset tax credits	1,439	1,840
Deferred Tax Assets, Gross, Total	50,263	63,097
Deferred tax liabilities:
Fixed assets	70,942	110,429
Original issue discount	6,099	11,086
Intangibles	2,474	3,605
Other	1,831	(831)
Investment in GBW Joint Venture		14,066
Deferred Tax Liabilities, Gross, Total	81,346	138,355
Valuation allowance	657	533
Net deferred tax liability	$ 31,740	$ 75,791

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Income Taxes - Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Income Taxes [Line Items]
Unrecognized Tax Benefit - Opening Balance	$ 1,820	$ 942	$ 1,019
Gross increases - tax positions in prior period	237	1,368
Gross decreases - tax positions in prior period	(449)	(53)
Settlements	0	0	0
Lapse of statute of limitations		(437)	(77)
Unrecognized Tax Benefit - Ending Balance	$ 1,608	$ 1,820	$ 942

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Segment Information - Additional Information (Detail)	Aug. 20, 2018 Facility Segment	Aug. 19, 2018 Segment	Aug. 31, 2018	Aug. 31, 2015
Segment Reporting Information [Line Items]
Number of reportable segments | Segment	3	4
Number of railcars repair shops returned to business | Facility	12
GBW Railcar Services LLC
Segment Reporting Information [Line Items]
Equity method investment, percentage of ownership interest	50.00%		50.00%	50.00%

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Segment Information - Segments Internal Financial Reports (Detail) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Aug. 31, 2018	May 31, 2018	Feb. 28, 2018	Nov. 30, 2017	Aug. 31, 2017	May 31, 2017	Feb. 28, 2017	Nov. 30, 2016	Aug. 31, 2018		Aug. 31, 2017		Aug. 31, 2016
Segment Reporting Information [Line Items]
Revenues	$ 689,206	$ 641,387	$ 629,336	$ 559,535	$ 611,407	$ 439,161	$ 566,282	$ 552,314	$ 2,519,464	[1]	$ 2,169,164	[1]	$ 2,679,524	[1]
Earnings (loss) from operations	59,134	71,539	60,870	61,442	57,780	48,472	81,520	72,660	252,985		260,432		408,552
Assets	2,465,464				2,397,705				2,465,464		2,397,705		1,835,774
Depreciation and amortization									74,356		65,129		63,345
Capital expenditures									176,848		86,065		139,013
Manufacturing
Segment Reporting Information [Line Items]
Revenues	571,175	510,099	511,827	451,485	508,547	317,104	445,504	454,033	2,044,586		1,725,188		2,096,331
Earnings (loss) from operations									240,901		295,334		415,094
Wheels, Repair & Parts
Segment Reporting Information [Line Items]
Revenues	85,787	94,515	88,710	78,011	75,099	85,231	82,714	69,635	347,023		312,679		322,395
Earnings (loss) from operations									16,731		14,984		19,948
Leasing & Services
Segment Reporting Information [Line Items]
Revenues	32,244	$ 36,773	$ 28,799	$ 30,039	27,761	$ 36,826	$ 38,064	$ 28,646	127,855		131,297		260,798
Earnings (loss) from operations									88,481		31,904		51,723
Operating Segments | Manufacturing
Segment Reporting Information [Line Items]
Revenues									2,162,743		1,744,479		2,185,489
Earnings (loss) from operations									258,622		296,356		439,393
Assets	1,020,757				914,450				1,020,757		914,450		701,296
Depreciation and amortization									44,225		33,807		27,137
Capital expenditures									59,707		54,973		51,294
Operating Segments | Wheels, Repair & Parts
Segment Reporting Information [Line Items]
Revenues									388,517		343,540		354,831
Earnings (loss) from operations									19,479		17,287		22,550
Assets	306,756				236,315				306,756		236,315		275,599
Depreciation and amortization									10,771		11,143		11,971
Capital expenditures									5,204		3,129		10,190
Operating Segments | Leasing & Services
Segment Reporting Information [Line Items]
Revenues									139,702		143,109		273,899
Earnings (loss) from operations									98,777		43,003		64,824
Assets	578,818				535,323				578,818		535,323		516,147
Depreciation and amortization									19,360		20,179		24,237
Capital expenditures									111,937		27,963		77,529
Operating Segments | Unallocated Amount to Segment
Segment Reporting Information [Line Items]
Assets	$ 559,133				$ 711,617				559,133		711,617		342,732
Intersegment Eliminations
Segment Reporting Information [Line Items]
Revenues									(171,498)		(61,964)		(134,695)
Earnings (loss) from operations									(30,765)		(14,424)		(40,002)
Intersegment Eliminations | Manufacturing
Segment Reporting Information [Line Items]
Revenues									(118,157)		(19,291)		(89,158)
Earnings (loss) from operations									(17,721)		(1,022)		(24,299)
Intersegment Eliminations | Wheels, Repair & Parts
Segment Reporting Information [Line Items]
Revenues									(41,494)		(30,861)		(32,436)
Earnings (loss) from operations									(2,748)		(2,303)		(2,602)
Intersegment Eliminations | Leasing & Services
Segment Reporting Information [Line Items]
Revenues									(11,847)		(11,812)		(13,101)
Earnings (loss) from operations									(10,296)		(11,099)		(13,101)
Corporate, Non-Segment
Segment Reporting Information [Line Items]
Earnings (loss) from operations									$ (93,128)		$ (81,790)		$ (78,213)

[1] Revenue is presented on the basis of geographic location of customers.

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Segment Information - Summary of Geographic Information (Detail) - USD ($) $ in Thousands		3 Months Ended								12 Months Ended
		Aug. 31, 2018	May 31, 2018	Feb. 28, 2018	Nov. 30, 2017	Aug. 31, 2017	May 31, 2017	Feb. 28, 2017	Nov. 30, 2016	Aug. 31, 2018		Aug. 31, 2017		Aug. 31, 2016
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue		$ 689,206	$ 641,387	$ 629,336	$ 559,535	$ 611,407	$ 439,161	$ 566,282	$ 552,314	$ 2,519,464	[1]	$ 2,169,164	[1]	$ 2,679,524	[1]
Assets		2,465,464				2,397,705				2,465,464		2,397,705		1,835,774
UNITED STATES
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue	[1]									1,840,877		1,674,517		2,297,501
Assets		1,677,144				1,307,239				1,677,144		1,307,239		955,674
Foreign
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue	[1]									678,587		494,647		382,023
Mexico
Segment Reporting, Revenue Reconciling Item [Line Items]
Assets		517,543				791,974				517,543		791,974		788,878
Europe
Segment Reporting, Revenue Reconciling Item [Line Items]
Assets		$ 270,777				$ 298,492				$ 270,777		$ 298,492		$ 91,222

[1] Revenue is presented on the basis of geographic location of customers.

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Segment Information - Reconciliation of Earnings from Operations to Earnings Before Income Tax and Earnings (Loss) from Unconsolidated Affiliates (Detail) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Aug. 31, 2018	May 31, 2018	Feb. 28, 2018	Nov. 30, 2017	Aug. 31, 2017	May 31, 2017	Feb. 28, 2017	Nov. 30, 2016	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Segment Reporting, Other Significant Reconciling Item [Line Items]
Earnings from operations	$ 59,134	$ 71,539	$ 60,870	$ 61,442	$ 57,780	$ 48,472	$ 81,520	$ 72,660	$ 252,985	$ 260,432	$ 408,552
Interest and foreign exchange	8,786	6,533	7,029	7,020	8,901	7,894	5,673	1,724	29,368	24,192	13,502
Earnings before income tax and earnings (loss) from unconsolidated affiliates	$ 50,348	$ 65,006	$ 53,841	$ 54,422	$ 48,879	$ 40,578	$ 75,847	$ 70,936	$ 223,617	$ 236,240	$ 395,050

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Segment Information - Results of Operations for GBW Joint Venture (Detail) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Aug. 31, 2018	May 31, 2018	Feb. 28, 2018	Nov. 30, 2017	Aug. 31, 2017	May 31, 2017	Feb. 28, 2017	Nov. 30, 2016	Aug. 31, 2018		Aug. 31, 2017		Aug. 31, 2016
Segment Reporting Information [Line Items]
Revenue	$ 689,206	$ 641,387	$ 629,336	$ 559,535	$ 611,407	$ 439,161	$ 566,282	$ 552,314	$ 2,519,464	[1]	$ 2,169,164	[1]	$ 2,679,524	[1]
Earnings (loss) from operations	59,134	$ 71,539	$ 60,870	$ 61,442	57,780	$ 48,472	$ 81,520	$ 72,660	252,985		260,432		408,552
Assets	2,465,464				2,397,705				2,465,464		2,397,705		1,835,774
Capital expenditures									176,848		86,065		139,013
GBW Railcar Services LLC
Segment Reporting Information [Line Items]
Revenue									238,033		253,436		373,490
Earnings (loss) from operations									(46,783)		(32,454)		8,558
Assets	$ 8,531				$ 206,009				8,531		206,009		247,610
Depreciation and amortization									8,932		9,023		7,676
Capital expenditures									$ 8,514		$ 8,030		$ 16,110

[1] Revenue is presented on the basis of geographic location of customers.

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Customer Concentration - Additional Information (Detail)	12 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Customer Concentration Risk | Sales Revenue, Net | Customer One Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage	20.00%	20.00%	17.00%
Customer Concentration Risk | Sales Revenue, Net | Customer Two Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage	11.00%		14.00%
Credit Concentration Risk | Accounts Receivable | Customer One Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage	19.00%	13.00%
Credit Concentration Risk | Accounts Receivable | Customer Two Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage		13.00%
Credit Concentration Risk | Accounts Receivable | Customer Three Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage		10.00%

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Lease Commitments - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2016
Railcar Equipment
Lessee, Lease, Description [Line Items]
Lease expense	$ 7.5	$ 7.6	$ 6.6
Domestic railcar repair facilities, office space and certain manufacturing and office equipment
Lessee, Lease, Description [Line Items]
Lease expense	$ 8.7	$ 9.4	$ 9.3

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Lease Commitments - Aggregate Minimum Future Amounts Payable Under Non-Cancelable Railcar Equipment Leases (Detail) - Railcar Equipment $ in Thousands	Aug. 31, 2018 USD ($)
Operating Leased Assets [Line Items]
2019	$ 6,287
2020	4,839
2021	1,821
2022	1,792
2023	1,792
Thereafter	1,810
Operating Leases, Future Minimum Payments Due	$ 18,341

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Lease Commitments - Aggregate Minimum Future Amounts Payable Under Non-Cancelable Operating Leases (Detail) - Domestic railcar repair facilities, office space and certain manufacturing and office equipment $ in Thousands	Aug. 31, 2018 USD ($)
Operating Leased Assets [Line Items]
2019	$ 6,048
2020	4,437
2021	3,286
2022	1,915
2023	1,862
Thereafter	196
Operating Leases, Future Minimum Payments Due, Total	$ 17,744

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Commitments and Contingencies - Additional Information (Detail)		12 Months Ended	204 Months Ended
	Jan. 06, 2017 USD ($) Segment	Aug. 31, 2018 USD ($)	Dec. 31, 2016 USD ($)	Nov. 30, 2016 USD ($)
Commitments and Contingencies Disclosure [Line Items]
Remedial investigation and feasibility study			$ 110,000,000
Performance Guarantee
Commitments and Contingencies Disclosure [Line Items]
Letter of credit facility outstanding amount		$ 72,200,000
Portland Harbor Site
Commitments and Contingencies Disclosure [Line Items]
Number of sediment decision units | Segment	13
Estimated undiscounted cost	$ 1,700,000,000
Period for remedial action	13 years
Period for monitoring	30 years
New data collection period to reflect actual cost prior to final remedy design	2 years
Portland Harbor Site | Minimum
Commitments and Contingencies Disclosure [Line Items]
Accuracy of cost estimate	(30.00%)
Portland Harbor Site | Maximum
Commitments and Contingencies Disclosure [Line Items]
Accuracy of cost estimate	50.00%
Amsted-Maxion Cruzeiro
Commitments and Contingencies Disclosure [Line Items]
Note receivable		10,000,000
Greenbrier-Maxion
Commitments and Contingencies Disclosure [Line Items]
Note receivable		7,200,000
Commercial Litigation in a Foreign Jurisdictions
Commitments and Contingencies Disclosure [Line Items]
Adverse judgment				$ 15,000,000
Adverse judgment settlement amount		$ 10,000,000

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Fair Value of Financial Instruments - Fair Value of Financial Instruments (Detail) - USD ($) $ in Thousands		Aug. 31, 2018	Aug. 31, 2017
Carrying (Reported) Amount, Fair Value Disclosure
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	[1]	$ 469,721	$ 597,604
Estimate of Fair Value, Fair Value Disclosure | Fair Value, Inputs, Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable		$ 517,925	$ 644,708

[1] Carrying amount disclosed in this table excludes debt discount and debt issuance costs.

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Fair Value Measures - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Aug. 31, 2018	Aug. 31, 2017
Assets:
Nonqualified savings plan investments	$ 26,299	$ 20,974
Fair Value, Measurements, Recurring
Assets:
Derivative financial instruments	1,557	3,814
Nonqualified savings plan investments	26,299	20,974
Cash equivalents	126,430	105,337
Assets, Fair Value Disclosure, Total	154,286	130,125
Liabilities:
Derivative financial instruments	1,566	2,886
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring
Assets:
Nonqualified savings plan investments	26,299	20,974
Cash equivalents	126,430	105,337
Assets, Fair Value Disclosure, Total	152,729	126,311
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring
Assets:
Derivative financial instruments	1,557	3,814
Assets, Fair Value Disclosure, Total	1,557	3,814
Liabilities:
Derivative financial instruments	$ 1,566	$ 2,886

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Subsequent Events - Additional Information (Detail) ر.س in Billions			1 Months Ended		12 Months Ended
	Oct. 26, 2018 USD ($)	Oct. 26, 2018 SAR (ر.س)	Sep. 30, 2018 USD ($)	Mar. 31, 2014	Aug. 31, 2018 USD ($)
Subsequent Events [Line Items]
Swap agreement interest rate				50.00%
Fixed interest rate				3.74%
Term Loan
Subsequent Events [Line Items]
Senior term debt					$ 200,000,000
Subsequent Event
Subsequent Events [Line Items]
Periodic payment			$ 1,970,000
Swap agreement interest rate			50.00%
Fixed interest rate			2.99%
Subsequent Event | Saudi Railway Company
Subsequent Events [Line Items]
Investment in joint venture	$ 270,000,000	ر.س 1
Subsequent Event | Term Loan
Subsequent Events [Line Items]
Senior term debt			$ 170,000,000
Subsequent Event | New Five Year Term Loan
Subsequent Events [Line Items]
Senior term debt			$ 225,000,000
LIBOR
Subsequent Events [Line Items]
Debt instrument, percentage points added to the reference rate				1.75%
LIBOR | Subsequent Event
Subsequent Events [Line Items]
Debt instrument, percentage points added to the reference rate			1.50%
Prime Rate | Subsequent Event
Subsequent Events [Line Items]
Debt instrument, percentage points added to the reference rate			0.50%
Revolving Line of Credit, 1st Component of Senior Secured Credit Facilities
Subsequent Events [Line Items]
Line of credit facility maximum capacity					$ 550,000,000
Line of credit maturity date					2020-10
Revolving Line of Credit, 1st Component of Senior Secured Credit Facilities | Subsequent Event
Subsequent Events [Line Items]
Line of credit facility maximum capacity			$ 600,000,000
Line of credit maturity date			2023-09
Revolving Line of Credit, 1st Component of Senior Secured Credit Facilities | LIBOR
Subsequent Events [Line Items]
Debt instrument, percentage points added to the reference rate					1.75%
Revolving Line of Credit, 1st Component of Senior Secured Credit Facilities | LIBOR | Subsequent Event
Subsequent Events [Line Items]
Debt instrument, percentage points added to the reference rate			1.50%
Revolving Line of Credit, 1st Component of Senior Secured Credit Facilities | Prime Rate
Subsequent Events [Line Items]
Debt instrument, percentage points added to the reference rate					0.75%
Revolving Line of Credit, 1st Component of Senior Secured Credit Facilities | Prime Rate | Subsequent Event
Subsequent Events [Line Items]
Debt instrument, percentage points added to the reference rate			0.50%

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Quarterly Results of Operations (Unaudited) - Quarterly Results of Operations (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended																12 Months Ended
	Aug. 31, 2018		May 31, 2018		Feb. 28, 2018		Nov. 30, 2017		Aug. 31, 2017		May 31, 2017		Feb. 28, 2017		Nov. 30, 2016		Aug. 31, 2018		Aug. 31, 2017		Aug. 31, 2016
Revenue
Revenue	$ 689,206		$ 641,387		$ 629,336		$ 559,535		$ 611,407		$ 439,161		$ 566,282		$ 552,314		$ 2,519,464	[1]	$ 2,169,164	[1]	$ 2,679,524	[1]
Cost of revenue
Cost of revenue	583,319		532,880		523,989		470,221		511,485		349,460		447,357		439,563		2,110,409		1,747,865		2,128,087
Margin	105,887		108,507		105,347		89,314		99,922		89,701		118,925		112,751		409,055		421,299		551,437
Selling and administrative	51,309		51,793		50,294		47,043		47,089		42,810		39,495		41,213		200,439		170,607		158,681
Net gain on disposition of equipment	(4,556)		(14,825)		(5,817)		(19,171)		(4,947)		(1,581)		(2,090)		(1,122)		(44,369)		(9,740)		(15,796)
Earnings from operations	59,134		71,539		60,870		61,442		57,780		48,472		81,520		72,660		252,985		260,432		408,552
Selling and administrative	51,309		51,793		50,294		47,043		47,089		42,810		39,495		41,213		200,439		170,607		158,681
Net gain on disposition of equipment	(4,556)		(14,825)		(5,817)		(19,171)		(4,947)		(1,581)		(2,090)		(1,122)		(44,369)		(9,740)		(15,796)
Earnings from operations	59,134		71,539		60,870		61,442		57,780		48,472		81,520		72,660		252,985		260,432		408,552
Other costs
Interest and foreign exchange	8,786		6,533		7,029		7,020		8,901		7,894		5,673		1,724		29,368		24,192		13,502
Earnings before income tax and earnings (loss) from unconsolidated affiliates	50,348		65,006		53,841		54,422		48,879		40,578		75,847		70,936		223,617		236,240		395,050
Income tax expense	(10,115)		(15,944)		11,301		(18,135)		(10,114)		(8,656)		(24,858)		(20,386)		(32,893)		(64,014)		(112,322)
Earnings (loss) from unconsolidated affiliates	(3,075)		(12,823)		147		(2,910)		(6,511)		(681)		(1,988)		(2,584)		(18,661)		(11,764)		2,096
Net earnings	37,158		36,239		65,289		33,377		32,254		31,241		49,001		47,966		172,063		160,462		284,824
Net earnings attributable to noncontrolling interest	(6,223)		(3,288)		(3,647)		(7,124)		(8,508)		1,582		(14,465)		(23,004)		(20,282)		(44,395)		(101,611)
Net earnings attributable to Greenbrier	$ 30,935		$ 32,951		$ 61,642		$ 26,253		$ 23,746		$ 32,823		$ 34,536		$ 24,962		$ 151,781		$ 116,067		$ 183,213
Basic earnings per common share	$ 0.95	[2]	$ 1.03	[2]	$ 2.10	[2]	$ 0.90	[2]	$ 0.81	[3]	$ 1.12	[3]	$ 1.19	[3]	$ 0.86	[3]	$ 4.92	[2]	$ 3.97	[3]	$ 6.28
Diluted earnings per common share	0.94	[2]	1.01	[2]	1.91	[2]	0.83	[2]	0.75	[3]	1.03	[3]	1.09	[3]	0.79	[3]	4.68	[2],[4]	3.65	[3],[4]	5.73	[4]
Basic earnings per common share	0.95	[2]	1.03	[2]	2.10	[2]	0.90	[2]	0.81	[3]	1.12	[3]	1.19	[3]	0.86	[3]	4.92	[2]	3.97	[3]	6.28
Diluted earnings per common share	$ 0.94	[2]	$ 1.01	[2]	$ 1.91	[2]	$ 0.83	[2]	$ 0.75	[3]	$ 1.03	[3]	$ 1.09	[3]	$ 0.79	[3]	$ 4.68	[2],[4]	$ 3.65	[3],[4]	$ 5.73	[4]
Manufacturing
Revenue
Revenue	$ 571,175		$ 510,099		$ 511,827		$ 451,485		$ 508,547		$ 317,104		$ 445,504		$ 454,033		$ 2,044,586		$ 1,725,188		$ 2,096,331
Cost of revenue
Cost of revenue	489,517		427,875		429,165		380,850		425,531		245,228		346,653		356,555		1,727,407		1,373,967		1,630,554
Earnings from operations																	240,901		295,334		415,094
Earnings from operations																	240,901		295,334		415,094
Wheels, Repair & Parts
Revenue
Revenue	85,787		94,515		88,710		78,011		75,099		85,231		82,714		69,635		347,023		312,679		322,395
Cost of revenue
Cost of revenue	79,266		85,850		80,708		72,506		69,876		77,985		75,497		64,978		318,330		288,336		293,751
Earnings from operations																	16,731		14,984		19,948
Earnings from operations																	16,731		14,984		19,948
Leasing & Services
Revenue
Revenue	32,244		36,773		28,799		30,039		27,761		36,826		38,064		28,646		127,855		131,297		260,798
Cost of revenue
Cost of revenue	$ 14,536		$ 19,155		$ 14,116		$ 16,865		$ 16,078		$ 26,247		$ 25,207		$ 18,030		64,672		85,562		203,782
Earnings from operations																	88,481		31,904		51,723
Earnings from operations																	$ 88,481		$ 31,904		$ 51,723

[1] Revenue is presented on the basis of geographic location of customers.

[2] Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the dilutive effect of the 2024 Convertible Notes using the treasury stock method when dilutive, restricted stock units that are not considered participating securities, restricted stock units that are subject to performance criteria for which actual levels of performance above target have been achieved and the dilutive effect of shares underlying the 2018 Convertible Notes, during the periods in which they were outstanding, using the "if converted" method in which debt issuance and interest costs, net of tax, were added back to net earnings. The 2018 Convertible notes matured on April 1, 2018.

[3] Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the dilutive effect of the 2024 Convertible Notes using the treasury stock method when dilutive, restricted stock units that are subject to performance criteria for which actual levels of performance above target have been achieved and the dilutive effect of shares underlying the 2018 Convertible Notes using the "if converted" method in which debt issuance and interest costs, net of tax, were added back to net earnings.

[4] Diluted earnings per share was calculated as follows: Earnings before interest and debt issuance costs on convertible notes Weighted average diluted common shares outstanding