BOND GUARANTY AGREEMENT
Exhibit
10.11A
THIS BOND GUARANTY AGREEMENT is made and entered into as of April 1, 1995 (the “Guaranty”),
by and among American Railcar Industries, Inc., a Missouri corporation (“company”), ACF industries,
Inc., a New Jersey corporation (the “Corporate Guarantor”) and Fleet National Bank, as trustee
(“Trustee”), a national banking association duly organized, validly existing, and in good standing
under the laws of the United States, with all requisite power and authority to act as trustee in
the State of Arkansas, together with any successor trustee at the time serving as such under the
Trust Indenture (hereinafter identified) between the City of Paragould, Arkansas (“Issuer”), and
Trustee.
WITNESSETH:
WHEREAS, Issuer is a duly organized and existing
municipality under the laws of the State of Arkansas and proposes to issue its industrial
development revenue bonds under the provisions of the Municipalities and Counties Industrial
Development Revenue Bond Law, Ark. Code Xxx. §§ 00-000-000 to -224 (1987) (the “Act”) , in the
principal amount of $9,500,000, designated Industrial Development Revenue Bonds (American Railcar
Industries, inc./acf lndustries, Incorporated Railcar Manufacturing Project), Series 1995
(the “Bonds”); and
WHEREAS, the Bonds will be issued under and secured by a Trust Indenture, dated as of April 1,
1995 (the “Indenture”), by and between Issuer and Trustee; and
WHEREAS, the proceeds to be derived from the sale of the Bonds
will be used by issuer to finance the costs of acquiring, constructing, and equipping an industrial
facility for use in the manufacture, production, processing, distribution, and sale of railroad
cars or related industrial products with attached office, which is being leased by Issuer to
company pursuant
to the provisions of a Lease Agreement, dated as of April 1, 1995
(the “Lease Agreement”);and
WHEREAS, Company desires that Issuer issue the Bonds and apply the proceeds as aforesaid, and
Company is willing to enter into this Guaranty in order to enhance the marketability of the Bonds
and thereby achieve interest cost and other savings to Company;
WHEREAS, corporate Guarantor is the majority shareholder of the company and will derive
substantial benefits from the facilities being leased pursuant to the Lease Agreement;
NOW, THEREFORE, in consideration of the premises and in order
to achieve the interest cost and other savings described above, and as an Inducement to the initial
purchasers of the Bonds and all who shall at any time become owners of the Bonds, Company
and Corporate Guarantor do hereby, subject to the terms hereof, jointly and severally covenant and
agree with Trustee as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
Section 1.1. Company does hereby represent and warrant that:
(a) Company is a corporation duly incorporated and in good
standing under the laws of the State of Missouri, has power to
enter into this Guaranty, and has duly authorized the execution and
delivery of this Guaranty by proper corporate action;
(b) neither this Guaranty, the execution and delivery hereof, nor the agreements herein
contained are prevented, limited by, or contravene or constitute a material default under any
agreement, instrument or indenture to which Company is a party or by which it is bound or any
provisions of Company’s Articles of Incorporation or any
requirements of law; and
(c) the assumption by Company of its obligations hereunder
will result in a direct financial benefit to company.
Section 1.2. Corporate Guarantor does hereby represent and warrant that:
(a) Corporate Guarantor is a corporation duly incorporated and
in good standing under the laws of the State of New Jersey, has power to enter into this Guaranty,
and has duly authorized the execution and delivery of this Guaranty by proper corporate action;
(b) neither this Guaranty, the execution and delivery hereof, nor the agreements herein
contained are prevented, limited by, or contravene or constitute a material default under any
agreement, instrument, or indenture to which corporate Guarantor is a party or by which it is bound
or any provisions of Corporate Guarantor’s Articles of Incorporation or any requirements of law;
and
(c) the assumption by Corporate Guarantor of its obligations hereunder will result in a direct
financial benefit to Corporate Guarantor.
ARTICLE II
GUARANTY
GUARANTY
Section 2.1. Company and Corporate Guarantor hereby jointly
and severally guarantee to Trustee for the benefit of the Owners from time to time of
the Bonds (a) the full and prompt payment of the principal of and premium, if any, on any Bond when
and as the same shall become due, whether at the stated maturity thereof, by deceleration, call for
redemption, or otherwise, and (b) the full and prompt payment of any interest on any Bond when and
as the same shall become due. The liability of Company and Corporate Guarantor hereunder and the
rights of the Trustee for the benefits of the
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owners hereunder shall be reinstated and revived with respect to any amount at any time paid
with
respect to the obligations of company or Corporate Guarantor that thereafter is required to be
returned or restored by Trustee or any Owner as a result of insolvency, bankruptcy, reorganization
or other similar proceedings affecting Borrower or Corporate Guarantor or any of the assets of
either of them, all as though such amount had not been paid. All payments by Company or Corporate
Guarantor shall be paid in lawful money of the United States of America. Each and every default in
payment of the principal of or premium, if any, or interest on any Bond shall give rise to a
separate cause of action hereunder, and separate suits may be brought hereunder as each cause of
action arises.
Section 2.2 The obligations of company and Corporate Guarantor under this Guaranty
shall be joint, several, absolute and unconditional and shall remain in full force and effect until
the entire principal of and premium, if any, and interest on the Bonds shall have been paid or
provided for under the Indenture and such obligations shall not be affected, modified, or impaired
upon the
happening from time to time of any event, including, without limitation, any of the following,
whether or not with notice to, or the consent of, company or Corporate Guarantor:
(a) the compromise, settlement, release, or termination of any
or all of the obligations, covenants, or agreements of Issuer or
the Company under this Guaranty, the Indenture or the Lease
Agreement;
(b) the failure to give notice to company or Corporate
Guarantor of the occurrence of an event of default under the terms
and provisions of this Guaranty, the Lease Agreement, the Hazardous
Substance Certification and Indemnification, or the
indenture;
(c) the assignment or mortgaging or the purported
assignment or mortgaging of all or
any part of the interest of Issuer or Company in the Mortgaged Property or any failure of title
with respect to Issuer’s or company’s interest in the Mortgaged
property;
(d) the waiver by Trustee or Issuer of the payment, performance, or observance by
Issuer, company, or Trustee of any of the obligations, covenants, or agreements contained in the
Indenture, the Lease Agreement, the Hazardous Substance certification and indemnification, or
this Guaranty;
(e) the extension of the time for payment of any principal of or premium, if any, or interest on
any Bonds under this Guaranty or of the time for performance of any other obligations, covenants,
or agreements under or arising out of the Indenture, the Lease agreement, the Hazardous Substance
Certification and
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Indemnification, or this Guaranty or the extension or the renewal of any thereof;
(f) the modification or amendment (whether material or otherwise) of any obligation, covenant, or
agreement set forth in the Indenture, the Hazardous Substance Certification and Indemnification or
the Lease Agreement;
(g) the taking or the omission of any of the actions referred to in the Indenture, the Lease
Agreement, the Hazardous Substance Certification and Indemnification, and of any actions under
this Guaranty;
(h) any failure, omission, delay, or lack on the part of Issuer or Trustee to enforce, assert,
or exercise any right, power, or remedy conferred on Issuer or Trustee in this Guaranty, the Lease
Agreement, the Hazardous Substance Certification and Indemnification, or the Indenture, or any
other act or acts on the part of Issuer, Trustee other than the
failure of the Trustee to make a required payment under the Indenture, if the Company has made all
the then required payments under the Lease Agreement, or any of the owners from time to time of the
Bonds;
(i) the voluntary or involuntary liquidation, dissolution, sale, or other disposition of all or
substantially all the assets, marshalling of assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition with
creditors, or readjustment of, or other similar proceedings affecting Company or Corporate
Guarantor or Issuer or any of the assets of any of them, or any allegation or contest of the
validity of this Guaranty in any such proceeding; or
(j) to the extent permitted by law, the release or discharge of Company or Corporate Guarantor
from the performance or observance of any obligation, covenant, or agreement contained in this
Guaranty by operation of law.
Section 2.3. Other than the payment of any obligation (including payments under the Indenture) no
set-off, counterclaim, reduction, or diminution of such obligation, or any defense of any kind or
nature which Company or Corporate Guarantor has or may have against Issuer or Trustee shall be
available hereunder against
Trustee.
Section 2.4. In the event of a default under the Indenture or the Lease Agreement in the payment of
principal of or premium, if any, on any Bond when and as the same shall become due, whether at the
stated maturity thereof, by acceleration, call for redemption, or otherwise, or in the event of a
default in the payment of any interest on any Bond when and as the same shall become due, Trustee
may, and if requested so to do by the Owners of not less than a
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majority in aggregate principal amount of the Bonds then outstanding and upon indemnification
as hereinafter provided, shall be obligated to proceed hereunder, and Trustee, in its sole
discretion, shall have the right to proceed first and directly against Company or Corporate
Guarantor under this Guaranty without proceeding against any other person or exhausting any other
remedies which it may have and without resorting to any other security held by Issuer or Trustee.
Before
taking any action hereunder, Trustee may require that satisfactory indemnity be furnished
by the Owners requesting such action for the reimbursement of all expenses and to protect against
all liability, determined in a reasonable manner, except liability which is adjudicated to have
resulted from its gross negligence or willful default by reason of any action so taken.
Section 2.5. Company or Corporate Guarantor hereby expressly waive notice from Trustee or the
owners from time to time of any of the Bonds, if any, of their acceptance and reliance on this
Guaranty. Company or corporate Guarantor agrees to pay all costs, expenses, and fees, including all
reasonable attorneys’ fees, which may be incurred by Trustee in enforcing or attempting to enforce
this Guaranty following any default on the part of Company or Corporate Guarantor, whether the same
shall be enforced by suit or otherwise.
Section 2.6. This Guaranty is entered into by the parties hereto for the benefit of Trustee,
the Owners from time to time of the Bonds, and any successor trustee or trustees under the
Indenture, all of whom shall be entitled to enforce performance and observance of this Guaranty.
ARTICLE III
COVENANTS
COVENANTS
Section 3.1. Corporate Guarantor shall not enter into any transaction of merger or consolidation or
change the form of organization of its business unless the corporate Guarantor is the surviving
entity or the surviving entity expressly assumes the
obligations of the Corporate Guarantor under this Guaranty and no Event of Default is then in
existence or would result therefrom
under this Guaranty.
Section 3.2. Corporate Guarantor will deliver to Trustee and
the Original Purchaser:
(a) Promptly upon their becoming available, and in any event not later than 120 days after the
end of each fiscal year, the audited financial statements of Corporate Guarantor, accompanied by an
unqualified opinion from KPMG Peat Marwick or another
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independent accounting firm, reasonably satisfactory to Trustee and the original Purchaser.
(b) Not later than 90 days after the end of each of the first 3 quarterly periods in each fiscal
year, unaudited financial statements of Corporate Guarantor for such quarter.
(c) As soon as practicable but in any event within ten (10) days upon becoming aware of the
existence of any condition or event that constitutes , or with the passage of time or the giving of
notice, or both, would constitute, a default or an event of default under this Guaranty,
the Hazardous Substance Certification and Indemnification, or the Lease Agreement, a written notice
specifying the nature and period of existence thereof and what action Company and Corporate
Guarantor are taking or propose to take with respect thereto.
(d) Immediately upon becoming aware that the Owner of any Bond has given notice or taken any other
action with respect to a claimed default or event of default, a written notice specifying the
notice given or action taken by such Bondowner and the nature of the claimed default or event of
default and what action Company and Corporate Guarantor are taking or propose to take with respect
thereto.
(e) With reasonable promptness, such other data or other information as from time to time may be
reasonably requested by Trustee concerning the Mortgaged Property.
Company and corporate
Guarantor will permit any of Trustee’s representatives, at Trustee’s
expense, to visit and inspect the Mortgaged Property, to examine all of the Company’s and Corporate
Guarantor’s books of account, records, reports, and other papers relating to the Mortgaged Property, and to make copies and extracts therefrom, and to discuss their
respective affairs, finances, and accounts relating to the Mortgaged Property with their respective
officers, employees, and independent public accountants (and by this provision Company authorizes
its accountants to discuss the same) all at such reasonable times and as often as may be
reasonably requested; provided, however, that Trustee shall hold such information in confidence and
shall not use such information for any purpose other than to determine whether the covenants,
terms, and provisions of this Guaranty have been complied with by Company and Corporate Guarantor
and to protect their interests under this Guaranty or where disclosure may be required by law.
Nothing herein shall be deemed to constitute a waiver of any
accountant— client privilege during
the pendency of litigation between Trustee, Company and Corporate Guarantor.
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ARTICLE IV
EVENTS OF DEFAULT
EVENTS OF DEFAULT
Section 4.1. An “event of default” shall exist if any of the
following occurs and is continuing:
(a) Section 2.1 Defaults. Either Company or Corporate Guarantor fails to perform or
observe any covenant contained in section 2.1 of this Guaranty.
(b) Other Defaults. Either Company or Corporate Guarantor fails to comply with any other provision
of this Guaranty, and such failure continues for more than 30 days after written notice of such
failure shall be given to the person identified in Section 5.2 as the representative of Company and
Corporate Guarantor together with a request to remedy the same.
(c) Bankruptcy.
(i) Company, Corporate Guarantor (or any other Person obligated, as guarantor
or otherwise, to make payments on the Bonds or under the Lease Agreement or this Guaranty) shall
(A) apply for or consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator, or the like of Company, Corporate Guarantor (or such other Person)
or of all or any substantial part of its property, (B) commence a voluntary case under the United
States Bankruptcy Code (as now or hereafter in effect), or (C) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts; or
(ii) A
proceeding or case shall be commenced, which case or proceeding shall not be dismissed
within 90 days, without the application or consent of Company, Corporate Guarantor (or any other
Person obligated, as guarantor or otherwise, to make payments on the Bonds or under the Lease
Agreement), in any court of competent jurisdiction, seeking
(A) the liquidation, reorganization,
dissolution, winding-up, or composition or adjustment of debts, of Company, Corporate Guarantor,
(B) the appointment of a trustee, receiver, custodian, liquidator, or the like of Company,
Corporate Guarantor (or any such other Person) or of all or any substantial part of its respective
property, or (C) similar relief in respect of Company or Corporate Guarantor (or any such other
Person) under any law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts.
(d) Warranties. Any material warranty or representation made by or on behalf of Company or
Corporate Guarantor in the Lease Agreement, this Guaranty, or any writing furnished in connection
with or pursuant thereto, as applicable, shall be false or misleading in any material respect as of
the date made.
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ARTICLE V
NOTICE AND SERVICE OF PROCESS,
PLEADINGS AND OTHER PAPERS
NOTICE AND SERVICE OF PROCESS,
PLEADINGS AND OTHER PAPERS
Section 5.1. Company covenants that it is qualified to do business and subject to service of
process in the State of Arkansas and that it will remain so qualified so long as any of the Bonds
are outstanding and Company and Corporate Guarantor each covenant that each is qualified to do
business in each jurisdiction where failure to so qualify would have a material adverse affect on
its business or property.
Section 5.2. Any notice, process, pleadings, or other papers served upon the agents or
officers of Company or Corporate Guarantor shall be sent by registered or certified mail as
follows:
If to Company:
American Railcar Industries, Inc.
c/o ACF Industries, Incorporated
0000 Xxxxx Xxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx, Treasurer
c/o ACF Industries, Incorporated
0000 Xxxxx Xxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx, Treasurer
If to Corporate Guarantor:
ACF Industries, Incorporated
0000 Xxxxx Xxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx, Treasurer
0000 Xxxxx Xxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx, Treasurer
with & copy to the Trustee as:
Fleet National Bank
000 Xxxxxxxxxxx xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Corporate Trust Department
000 Xxxxxxxxxxx xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Corporate Trust Department
or to such other address as may be furnished by any party hereto or by Trustee in writing.
ARTICLE VI
MISCELLANEOUS
MISCELLANEOUS
Section 6.1. The obligations of Company and Corporate Guarantor hereunder shall arise
jointly, severally and absolutely when the Bonds shall have been issued, sold, and delivered by
Issuer and the proceeds thereof paid to Trustee for the account of Issuer under the Indenture.
Section 6.2. No remedy herein conferred upon or reserved to Trustee is intended to be exclusive of any other available remedy
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or remedies, but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Guaranty or now or hereafter existing at law or in equity. No
delay or omission to exercise any right or power accruing upon any default, omission, or failure of
performance hereunder shall impair any such right or power or shall be construed to be a waiver
thereof, but any such right and power may be exercised from time to time as often as may be deemed
expedient. In order to entitle Trustee to exercise any remedy reserved to it in this Guaranty, it
shall not be necessary to give any notice, other than such notice as may be herein expressly
required. In the event any provision contained in this Guaranty should be breached by Company or
Corporate Guarantor and thereafter duly waived by Trustee, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach hereunder. No waiver,
amendment, release, or modification of this Guaranty shall be established by conduct, custom, or
course of dealing, but solely by an instrument in writing duly executed by Trustee.
Section 6.3. Trustee shall not consent to any amendment or modification of this Guaranty
except in accordance with the provisions of Article XIII of the Indenture. Nothing contained herein
or in the Indenture shall permit, or be construed as permitting, any amendment, change, or
modification of this Guaranty which would change the amount of any sums payable by Company or
Corporate Guarantor hereunder or the time for payment of such amounts or change the unconditional
nature of the Guaranty herein contained.
Section 6.4. This Guaranty constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, among the parties with respect to the subject
matter hereof arid may be executed in several counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the same instrument.
Section 6.5. The invalidity or unenforceability of any one or
more phrases, sentences, clauses, or Sections in this Guaranty
shall not affect the validity or enforceability of the remaining
portions of this Guaranty or any part hereof.
Section 6.6 All words and phrases defined in the Indenture
shall have the same meanings for purposes of this Guaranty.
Section 6.7. This Guaranty shall be governed by and construed
in accordance with the laws of the state of Arkansas.
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IN WITNESS WHEREOF, Company and Corporate. Guarantor have caused this Guaranty to be
executed in their respective names and behalfs and attested by the duly authorized officers, all as
of the date first above written.
| AMERICAN RAILCAR INDUSTRIES, INC. |
||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Its: | Asst Treasurer | |||
Attest:
By:
Its:
| ACF INDUSTRIES, INCORPORATED |
||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Its: | Treasurer | |||
Attest:
By:
Its:
Approved and Accepted:
Fleet
National Bank, as Trustee
By:
[ILLEGIBLE]
Its: Vice President
