FORM OF] REDEMPTION AGREEMENT
Exhibit 10.24
[FORM OF]
REDEMPTION AGREEMENT
REDEMPTION AGREEMENT
This Redemption Agreement (this “Agreement”) is entered into as of , 2005, among
American Railcar Industries, Inc., a Missouri corporation (“ARI Missouri”), American Railcar
Industries, Inc., a Delaware corporation and wholly-owned subsidiary of ARI Missouri (“ARI
Delaware”; collectively with ARI Missouri, “ARI”) and Vegas Financial Corp., a Nevada corporation
(“Stockholder”).
W I T N E S S E T H
WHEREAS, 82,055 shares of New Preferred Stock, par value $.01 per share, of ARI Missouri are
issued and outstanding as of the date hereof (including shares of New Preferred Stock of ARI
Delaware into which such shares may be converted as described in further detail below, the
“Shares”);
WHEREAS, Stockholder currently holds of record and beneficially all of the Shares;
WHEREAS, ARI is contemplating a public offering of its shares of common stock of ARI (“Public
Offering”);
WHEREAS, in connection with the Public Offering, ARI Missouri plans to reincorporate in
Delaware (“Reincorporation”) pursuant to a merger with and into ARI Delaware, whereby ARI Delaware
shall be the surviving corporation, and each Share shall be converted into one share of New
Preferred Stock of ARI Delaware with substantially identical terms and conditions, including
dividend and liquidation rights and preferences;
WHEREAS, ARI desires to purchase from Stockholder, and Stockholder desires to sell to ARI, the
Shares upon the closing of the Public Offering upon the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this
Agreement, and intending to be legally bound by the terms and conditions of this Agreement, the
parties hereto hereby agree as follows:
ARTICLE 1. Redemption of Shares.
Section 1.1 Repurchase and Redemption; Redemption Price. Based upon the
representations and warranties of Stockholder set forth in Section 2 hereof, ARI agrees to
repurchase and redeem from the Stockholder and, based upon the representations and warranties of
ARI set forth in Section 3 hereof, Stockholder agrees to tender to ARI for repurchase and
redemption, at the Closing (as defined in Section 1.3 below), all of the Shares for an
aggregate price equal to the price to be paid for the Shares (“Redemption Price”)
pursuant to ARI’s
Articles or Certificate of Incorporation, as applicable (“Charter”), in
connection with the liquidation, dissolution or winding up of ARI as if such liquidation,
dissolution or winding up had taken place at the time of the Closing. For the avoidance of doubt,
it is set forth that such Redemption Price per Share shall equal: (i) $1,000 (“NP Base Amount” as
defined in the Charter), plus (ii) cumulative dividends accrued and unpaid on such Share as
of the date of this Agreement, equaling $___ per share plus (iii) cumulative dividends
which shall accrue on such Share from the date hereof until the Closing at a rate of $___ per day.
Section 1.2. Payment of Redemption Price. At the Closing, ARI shall pay the
Redemption Price to the stockholder by [federal funds wire transfer of immediately available
funds], against delivery of those documents and instruments listed and described in Section
1.4 hereof.
Section 1.3 Time and Place of Closing. The transfers and deliveries
contemplated hereby (the “Closing”) shall take place at the time and place of the closing of the
Public Offering. The date of the Closing is referred to herein as the “Closing Date.”
Section 1.4 Deliveries at Closing. At the Closing, the Stockholder shall
authorize, execute and deliver to ARI, against payment of the Redemption Price one or more stock
certificates representing the Shares, duly endorsed in blank, or accompanied by a duly executed
stock power.
ARTICLE 2. Representations and Warranties of Stockholder. In connection with the transactions
contemplated by this Agreement, Stockholder hereby represents and warrants to ARI as follows:
SECTION 2.1. Title. Stockholder is the sole record and beneficial owner of,
and has good legal title to the Shares, and has the full legal right, power and authority to assign
and transfer complete ownership in the Shares to ARI. The Shares are, and upon the effectiveness of
the assignment and transfer will be, free and clear of all liens, claims, restrictions,
encumbrances, charges, options or rights of third parties with respect thereto.
SECTION 2.2 Organization; Authority. (i) Stockholder is a corporation duly
formed and validly existing under the laws of the State of Nevada and has full power and authority
to own its property, including the Shares, and to enter into and perform the transactions
contemplated hereby.
SECTION 2.3. Non-Contravention. The execution and delivery by Stockholder of
this Agreement and the consummation of the transactions contemplated hereby will not (a) violate or
conflict with any provision of the organizational documents of Stockholder, each as amended to
date, (b) constitute a violation of, or be in conflict with, constitute or create a default under,
or result in the creation or imposition of any lien upon any property of Stockholder pursuant to
(i) any agreement or instrument to which
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Stockholder is a party or by which Stockholder or any of its properties are bound or subject,
or (ii) any statute, judgment, decree, order, regulation or rule of any court or governmental
authority to which Stockholder is subject.
SECTION 2.4. Approval; Binding Effect. Stockholder has obtained all corporate
and other approvals necessary for the execution and delivery of this Agreement and for the
consummation of the transactions contemplated hereby. This Agreement has been duly executed and
delivered by Stockholder and constitutes the legal, valid and binding obligation of Stockholder,
enforceable against Stockholder in accordance with its terms, except to the extent such
enforceability is subject to the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or other law affecting or relating to creditors’ rights generally and general principles
of equity.
SECTION 2.5. Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder’s or other fee or commission in connection with the transactions contemplated
by this Agreement based upon any arrangement made by or on behalf of Stockholder.
SECTION 2.6. Governmental Consents. No consent, approval or authorization of,
or registration, qualification or filing with, any governmental agency or authority is required for
the execution and delivery by Stockholder of this Agreement or the consummation of the transactions
contemplated hereby.
ARTICLE 3. Representations and Warranties of ARI. In connection with the transactions
contemplated by this Agreement, each of ARI Missouri and ARI Delaware jointly and severally
represent and warrant as follows:
SECTION 3.1 Organization; Authority. Each of ARI Missouri and ARI Delaware is
duly organized and existing in good standing in its jurisdiction of incorporation. Each of ARI
Missouri and ARI Delaware has the corporate power to own its properties and to carry on its
business as now conducted and to enter into and perform the transactions contemplated hereby.
SECTION 3.2 Non-Contravention. The execution, delivery and performance by
ARI of this Agreement and the consummation of the transactions contemplated hereby, (i) are within
ARI’s corporate power and authority, (ii) have been duly authorized by all necessary corporate
proceedings, (iii) do not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which ARI is a party or by which ARI is
bound or to which any of the properties or assets of ARI is subject and has been, nor will such
actions result in any violation of the provisions of the organizational documents of ARI or any
statue or any order, rule, regulation or writ of any court or governmental agency or body having
proper jurisdiction over ARI or any of its properties or assets (except for such statutes, orders,
rules, regulations or writs the violation of which
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would not have a material adverse effect on the business, properties, financial positions or
results of operations of ARI and except to the extent consent to or waiver of such conflict,
violation or breach has been obtained from the third party prior to Closing), and (iv) will not
result in the creation or imposition of any lien upon any property of ARI pursuant to the terms of
any agreement or instrument to which ARI is bound or to which any of the properties or assets of
ARI is subject.
SECTION 3.3 Enforceability. The execution and delivery by ARI of this
Agreement will result in legally binding obligations of ARI, enforceable against it in accordance
with the terms and provisions hereof, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization and other similar laws affecting creditors’ rights generally, and by
general principles of equity (regardless of whether considered in a proceeding in equity or at
law).
SECTION 3.4 Governmental Consents. No consent, approval or authorization of,
or registration, qualification or filing with, any governmental agency or authority is required for
the execution and delivery by ARI of this Agreement or the consummation of the transactions
contemplated hereby.
ARTICLE 4. Indemnity.
SECTION 4.1. ARI shall defend, indemnify, save and hold harmless Stockholder from and
against all liabilities, losses, claims, demands, suits, costs, expenses and damages of every kind
and character, including, without limitation, attorneys’ fees, court costs, and costs of
investigation, which arise from or in connection with in any way a breach by ARI of its
representations and warranties contained in this Agreement or other breach of this Agreement by
ARI.
SECTION 4.2. Stockholder shall defend, indemnify, save and hold harmless ARI from and
against all liabilities, losses, claims, demands, suits, costs, expenses and damages of every kind
and character, including, without limitation, attorneys’ fees, court costs, and costs of
investigation, which arise from or in connection with in any way a breach by Stockholder of its
respective representations and warranties contained in this Agreement or other breach of this
Agreement by Stockholder.
ARTICLE 5. Miscellaneous.
SECTION 5.1. Assignment; Successors and Assigns. The provisions of this
Agreement shall be binding upon, and inure to the benefit of, the respective successors, assigns,
heirs, executors and administrators of the parties hereto.
SECTION 5.2. Survival of Representations and Warranties. All indemnities,
covenants, representations and warranties contained herein shall survive the execution and delivery
of this Agreement and the closing of the transactions contemplated hereby.
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SECTION 5.3. Expenses. Each party to this Agreement shall bear its own costs
and expenses, including, but not limited to, attorneys’ fees and expenses, in connection with the
closing of the transactions contemplated hereby.
SECTION 5.4. Entire Agreement. This Agreement, together with the instruments
and other documents contemplated to be executed and delivered in connection herewith, contains the
entire agreement and understanding of the parties hereto, and supersedes any prior agreements or
understandings between or among them, with respect to the subject matter hereof.
SECTION 5.5. Amendments and Waivers. This Agreement may not be amended or
waived (either generally or in a particular instance and either retroactively or prospectively)
except by a written instrument signed by the party against whom enforcement of such amendment,
modification or waiver is sought. No waivers of or exceptions to any term, condition or provision
of this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such term, condition or provision.
SECTION 5.6. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
SECTION 5.7. Captions. The captions of the sections, subsections and
paragraphs of this Agreement have been added for convenience only and shall not be deemed to be a
part of this Agreement.
SECTION 5.8. Governing Law. This Agreement shall be governed by and
interpreted and construed in accordance with the laws of the State of New York without regard to
the conflict of law principles thereof.
SECTION 5.9. Further Assurances. The parties hereto hereby agree to take such
further action and execute and deliver such further documents and instruments as may be necessary
or appropriate to effect the transactions, assignments, transfers and conveyances contemplated in
this Agreement.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement effective as
of the date and time first above written.
AMERICAN RAILCAR INDUSTRIES, INC.
(a Missouri corporation)
(a Missouri corporation)
By: |
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| Title: | ||||
| AMERICAN RAILCAR INDUSTRIES, INC. | ||||
| (a Delaware corporation) | ||||
By: |
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| Title: | ||||
| VEGAS FINANCIAL CORP. | ||||
By: |
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| Title: | ||||
