Item 1.01 Entry into a Material Definitive Agreement.
On December 28, 2021 (the "Execution Date"), FreightCar America Leasing 1, LLC,
a Delaware limited liability company (the "Borrower"), FreightCar America
Leasing, LLC, a Delaware limited liability company (the "Guarantor" and together
with the Borrower, the "Obligors"), FreightCar America, Inc., a Delaware
corporation ("FCA"), FreightCar America Railcar Management, LLC, a Delaware
limited liability company ("FCA Management"), and Manufacturers and Traders
Trust Company (a/k/a M&T Bank), a New York banking corporation (the "Lender"),
entered into a Forbearance and Settlement Agreement (the "Forbearance
Agreement") with respect to the Credit Agreement entered into by Borrower and
the Lender on April 16, 2019 (the "M&T Credit Agreement"), as guaranteed by the
Guarantor, and its related Credit Documents (as defined in the M&T Credit
Agreement), as well as certain intercompany services agreements related thereto.
Additional details of the M&T Credit Agreement and certain defaults related
thereto were previously disclosed by FCA in certain of its reports filed with
the Securities and Exchange Commission, including the Borrower's inability to
repay amounts outstanding under the M&T Credit Agreement upon its maturity date
of April 16, 2021.
Pursuant to the Forbearance Agreement, the Obligors will continue to perform and
comply with all of their performance obligations (as opposed to payment
obligations) under certain provisions of the M&T Credit Agreement (primarily
related to information obligations and the preservation of the collateral
pledged by the Borrower to the Lender pursuant to that certain Security
Agreement, dated as of April 16, 2019 (the "Security Agreement"), between the
Borrower and the Lender (the "Collateral")) and all the provisions of the
Security Agreement.During the period from Execution Date until the termination
of the Forbearance Agreement, the Lender may not take any action against the
Obligors or exercise or enforce any rights or remedies provided for in the
Credit Documents or otherwise available to it. The M&T Credit Agreement is not
being amended.
On December 1, 2023, or sooner if requested by the Lender (the "Turnover Date"),
the Borrower shall execute and deliver to the Lender documents required to
deliver and assign to the Lender all the leased railcars and related leases
serving as Collateral for the M&T Credit Agreement.
Upon the Turnover Date and the Obligors' performance of their respective
obligations under the Forbearance Agreement, including the delivery of certain
Collateral to the Lender upon the Turnover Date, all Obligations (as defined in
the M&T Credit Agreement) shall be deemed satisfied in full, the Lender shall no
longer have any further claims against the Obligors under the M&T Credit
Documents and the Credit Documents shall automatically terminate and be of no
further force or effect except for the provisions thereof that expressly survive
termination.
The Forbearance Agreement contains customary releases at execution for all FCA
affiliates (other than the Obligors) and agreements to deliver final releases
with respect to the Obligors upon their performance under the Forbearance
Agreement. FCA also agreed to turn over to the Lender on the Effective Date
certain rents in the amount of $715,000 that it had previously collected as
servicing agent for the Borrower, and to continue to provide such services
through the Turnover Date without a service fee, and after the Turnover Date
through the return of the railcars serving as Collateral, for a service fee.
The foregoing description of the Forbearance Agreement does not purport to be
complete and is qualified in its entirety by reference to the Forbearance
Agreement to be filed as an exhibit to the Company's annual report on Form 10-K
for the fiscal year ended December 31, 2021.
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