BOND GUARANTY AGREEMENT
Exhibit 10.9.A
THIS BOND GUARANTY AGREEMENT is made and entered into as of July 1, 1996 (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 Missouri, together with any successor trustee at the time serving as such under the
Trust Indenture (hereinafter identified) between The Industrial Development Authority of the City
of Jackson, Missouri (“Issuer”), and Trustee.
WITNESSETH:
WHEREAS,
Issuer is a duly organized and existing industrial development corporation
under the laws of the State of Missouri and proposes to issue its industrial development revenue
bonds under the provisions of the Industrial Development Corporation Act, Chapter 349 of the
Revised Statutes of Missouri, 1986, as amended (the “Act”), in the principal amount of $2,500,000,
designated Industrial Development Revenue Bonds (American Railcar Industries, Inc./ACF Industries,
Incorporated Railcar Component Manufacturing Project), Series 1996 (the “Bonds”); and
WHEREAS, the Bonds will be issued under and secured by a Trust Indenture, dated as of July 1,
1996 (the “Indenture”), by and between Issuer and Trustee; and
WHEREAS, the proceeds to be derived from the sale of the Bonds will be loaned by Issuer to
Company pursuant to a Loan Agreement dated as of July 1, 1996 (the “Loan Agreement”) to finance
the costs of acquiring, constructing, and equipping an industrial facility for use in the
manufacture, production, processing, distribution, and sale of railcar components or related
industrial products with attached office; 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; and
WHEREAS, Corporate Guarantor is the majority shareholder of the Company and will derive
substantial benefits from the facilities being financed pursuant to the Loan 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 duty 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 acceleration, 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 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 thought 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 my 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 arise upon
the issue, sale and delivery of the Bonds by Issuer and the deposit of the net proceeds of such
sale with the Trustee so as to make me loan to the Company pursuant to the Loan Agreement. The
obligations of the Company and the Guarantor 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:
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(a)
the compromise, settlement, release, or termination of any or all of
the obligations,
covenants, or agreements of the Company under this Guaranty, the
Indenture or the Loan 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 Loan
Agreement, the Deed of Trust,
or the Indenture;
(c)
the assignment or mortgaging or the purported assignment or mortgaging of all or any part
of the interest of Company in the Mortgaged Property or any failure
of title with respect to
Company’s interest in the Mortgaged Property;
(d)
the waiver by Trustee or Issuer of the payment, performance, or observance by Company or
Trustee of any of the obligations, covenants, or agreements contained
in the Indenture, the Loan
Agreement, the Deed of Trust, or this Guaranty, other than the
failure of the Trustee to make a
required payment under the Indenture;
(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
Loan Agreement, the Deed of
Trust, or this Guaranty or the extension or the renewal of any
thereof (other than the extension of
the time for payment by the Trustee of a required payment under the
Indenture, if the Company
and/or Corporate Guarantor has made the payment due under the Note, the Loan Agreement, or the Deed
of Trust from which such payment by me Trustee shall derive or provision thereof shall have been
made (as in the case of sums deposited into the Bond Fund) whether in cash or cash equivalents or
by tendering Bonds (as, when and to the extent permitted under the Indenture));
(f) the modification or amendment (whether material or otherwise) of any obligation,
covenant, or agreement set forth in the Indenture, the Deed of Trust,
or the Loan Agreement;
(g)
the taking or the omission of any of the actions referred to in the Indenture, the
Loan Agreement, the Deed of Trust, 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 Trustee in this Guaranty, the Loan Agreement,
the Deed of Trust, or the Indenture, or any other act or acts on the part of Trustee (other than
the failure of the Trustee to make a required payment under the Indenture, if the Company and/or
the Corporate Guarantor has made the payment due under the Note, the Loan Agreement, or the Deed
of Trust from which such payment by the Trustee shall derive or provision therefor shall have been
made (as in the case of sums deposited into the Bond Fund), whether made in cash or cash
equivalents or by tendering Bonds (as, when and to the extent permitted under the Indenture)) 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 any of the assets of any
of them, or any allegation or contest of the validity of this Guaranty in any such
proceeding; or
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(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, if any, watch
Company or Corporate Guarantor has or may have against Issuer or Trustee shall be available
hereunder to the Company or the Guarantor against Trustee.
Section 2.4. In the event of a default under the Indenture or the Loan 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 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 reasonable
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 fee 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.
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 and of each fiscal year, the audited financial statements of
Corporate Guarantor,
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accompanied by an unqualified opinion from KPMG Peat Marwick or another independent
accounting firm reasonably satisfactory to Trustee.
(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 an event of default under this
Guaranty or the Loan 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 event of default, a written notice specifying the
notice given or action taken by such Bond owner and the nature of the claimed event of default
and what action Company and Corporate Guarantor are taking or propose to take with respect
thereto.
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.
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 to Section 2.1 of this Guaranty and such failure continues
for two (2) days after written notice of me Company’s failure to make any Loan Payment is
given to the person identified in Section 5.2 as me representative of the Company and the
Corporate Guarantor, together with a request to remedy the same.
(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,
or if such failure to comply cannot be cured within such 30-day period, then if either Company
or Corporate Guarantor fails to commence to cure such failure to comply within such 30-day
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period and thereafter fails to prosecute to completion with diligence and continuity the
performance required to cure such failure to comply.
(c) Bankruptcy.
(i) Company, Corporate Guarantor (or any other Person obligated, as guarantor
or otherwise, to make payments on the Bonds or under the Loan 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 Loan 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 Loan Agreement, the Deed of Trust, 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.
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 Missouri 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:
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If to Company:
American Railcar Industries, Inc.
c/o ACF Industries, Incorporated
000 Xxxxx Xxxxxx Xxxxxx
Xx. Xxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx, Assistant Treasurer
c/o ACF Industries, Incorporated
000 Xxxxx Xxxxxx Xxxxxx
Xx. Xxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx, Assistant Treasurer
If to Corporate Guarantor:
ACF Industries, Incorporated
000 Xxxxx Xxxxxx Xxxxxx
Xx. Xxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx, Treasurer
000 Xxxxx Xxxxxx Xxxxxx
Xx. Xxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx, Treasurer
If to the Trustee:
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 there of 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 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
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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 understanding, both written and oral, among the parties with respect to the subject
matter hereof and 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 to this Guaranty shall not affect the validity or unenforceability of the
remaining portions of this Guaranty or any part hereof.
Section 6.6. All words and phrases defined in the Indenture and not otherwise defined herein
shall have the same meanings for purposes of his Guaranty.
Section 6.7. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF MISSOURI.
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: | Assistant Treasurer | |||||
Attest:
By:
|
/s/ Xxxxx X. Xxxxxxx | |||
Its:
|
Assistant Secretary | |||
| ACF INDUSTRIES, INCORPORATED | ||||||
| By: | /s/ Xxxxx Xxxxxx | |||||
| Its: | Treasurer | |||||
Attest:
By:
|
/s/ Xxxxx X. Xxxxxxx | |||
Its:
|
Assistant Secretary | |||
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Approved
and Accepted this
18th day of July, 1996:
FLEET NATIONAL BANK, as Trustee
By:
|
[ILLEGIBLE] | |||
Its:
|
Vice President | |||
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