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.
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 Ann.
§§ 14-164-201 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
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.
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,
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