LOAN AGREEMENT

Exhibit 10.9

LOAN AGREEMENT
Dated as of July 1, 1996

Between

THE INDUSTRIAL DEVELOPMENT AUTHORITY OF
THE CITY OF JACKSON, MISSOURI

AND

AMERICAN RAILCAR INDUSTRIES, INC.

The interest of the Issuer in this Loan Agreement has been assigned to Fleet National Bank, as Trustee, under the Trust Indenture, dated as of July 1, 1996, securing $2,500,000 The Industrial Development Authority of the City of Jackson, Missouri, Industrial Development Revenue Bonds (American Railcar Industries, Inc./ACF Industries, Incorporated Railcar Component Manufacturing Project), Series 1996, as security for payment of the principal of and premium, if any, and interest on such Bonds.

TABLE OF CONTENTS

ARTICLE I
DEFINITIONS

ARTICLE II

REPRESENTATIONS, WARRANTIES AND COVENANTS

LOAN AGREEMENT

      THIS LOAN AGREEMENT dated as of July 1, 1996, is between THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF JACKSON, MISSOURI (hereinafter called “Issuer”), an industrial development corporation organized and existing under the laws of the State of Missouri (“State”), and AMERICAN RAILCAR INDUSTRIES, INC. (hereinafter called “Company”), a corporation organized and existing under the laws of the State of Missouri.

W I T N E S S E T H:

      WHEREAS, Issuer is authorized by the Industrial Development Corporations Act, Chapter 349 of the Revised Statutes of Missouri, 1986, as amended (the “Act”), to acquire lands, construct and equip industrial buildings, improvements, and facilities, and incur other costs and expenses and make other expenditures incidental to and for the securing and developing of industry; and

      WHEREAS, Issuer is authorized by the Act to issue industrial development revenue bonds payable from revenues derived from the industrial project so acquired and constructed and secured by a lien thereon and security interest therein; and

      WHEREAS, the necessary arrangements have been made with Company for the acquisition, construction, and equipping of an industrial project consisting of a manufacturing facility for railcar components or related industrial products with attached office or any other manufacturing or industrial use provided for in Section 2.2(c) hereof; and

      WHEREAS, Company desires that Issuer issue its Industrial Development Revenue Bonds (American Railcar Industries, Inc./ACF Industries, Incorporated Railcar Component Manufacturing Project), Series 1996 (the “Bonds”), and loan the proceeds of the Bonds to the Company to provide funds to acquire, construct, reimburse, and equip the Project, and Issuer has agreed to do the same;

      WHEREAS, pursuant to a Trust Indenture, dated as of the date hereof, between Issuer and Fleet National Bank, a national banking association duly organized, validly existing, and in good standing under the laws of the United States, having all requisite power and authority to act as trustee, and having its principal corporate trust office in Providence, Rhode Island, as Trustee, Issuer intends to assign to Trustee as security for the Bonds its interest in this Agreement (except for the reimbursement of certain expenses and payments for indemnification of Issuer);

      NOW, THEREFORE, in consideration of the respective representations and agreements hereinafter contained Issuer and Company agree as follows (provided, that in the performance of the agreements of Issuer herein contained and any obligation it may thereby incur for the payment of money shall not be a general debt on its part, but shall be payable solely out of the Loan Payments and other amounts derived from this Loan Agreement and the Guaranty, the insurance proceeds and condemnation awards as herein provided and the Mortgaged Property):

ARTICLE I

DEFINITIONS

     All words and phrases defined in the Indenture shall have the same meanings for purposes of this Loan Agreement. In addition, the following words and terms shall have the following meanings:

      “Additional Payments” means Additional Payments as defined in Section 4.2 of this Loan Agreement.

      “Agreed Rate” means eight and fifty-hundredths percent (8.50%) per annum.

      “Authorized Issuer Representative” means the person or persons, satisfactory to Company, at the time designated to act on behalf of Issuer by written certificate furnished to Company and Trustee containing the specimen signature(s) of such person(s) and signed on behalf of Issuer by its President, Vice President or Secretary. Such certificate may designate an alternate or alternates.

      “Collateral” means that portion of the Mortgaged Property constituting Mortgaged Personal Property. The term Collateral does not include any Leased Equipment.

      “Construction Period” means the period between July 18, 1996 and the Completion Date.

      “Impositions” means all impositions as defined in Section 7.3 of this Loan Agreement.

      “Loan Payments” means Loan Payments defined in Section 4.1(a) of this Loan Agreement.

      “Loan Term” means the duration of Company’s obligations under this Loan Agreement as specified in Section 6.1 of this Loan Agreement.

      “Official Action Date” means November 7, 1995.

      “Permitted Encumbrances” means, as of any particular time, (i) the Indenture and the Loan Agreement, (ii) any easements, licenses, rights of way (including the dedication of public highways), and other rights or privileges in the nature of easements with respect to any property included in the Mortgaged Property, granted or conveyed prior to the date of the recording of the Deed of Trust or in accordance with and pursuant to Section 9.5 of this Loan Agreement, (iii) utility, access, and other easements and rights-of-way, restrictions, reservations, reversions, and exceptions that an Independent Engineer, reasonably acceptable to Trustee and Company, certifies will not interfere with or impair the operation’s being conducted in the Mortgaged Property (or, if no operations are being conducted therein, the operations for which the Mortgaged Property was designed or last modified), (iv) such minor defects, irregularities, encumbrances, easements, rights-of-way, and clouds on title as normally exist with respect to properties similar in character to the Mortgaged Property, and as do not, in the opinion of any counsel acceptable to Trustee, materially impair the property affected thereby for the purpose for which it was acquired or is held by Issuer, (v) any judgment lien against the Company affecting the Mortgaged Property so long as such judgment is being contested and execution thereon is stayed, (vi) any liens on the Mortgaged Property for taxes, payments-in-lieu of taxes, assessments, levies, fees, water and sewer rents, other governmental and similar charges, and any liens of mechanics, materialmen, laborers, suppliers or vendors for work or services performed or materials furnished in connection with the Mortgaged Property, which are not due and payable or which are not delinquent, or the amount or

validity of which, are being contested in accordance with the terms of this Loan Agreement, (vii) any lien on accounts receivable securing or deemed to secure any indebtedness incurred or deemed incurred by virtue of any recourse obligation or in connection with any sale or assignment of accounts receivable, (viii) any lien or encumbrance or reservation of title affecting personalty not constituting part of the Mortgaged Property, and (ix) all encumbrances set forth in the mortgagee’s loan policy of title insurance insuring the Issuer, the Trustee and the Co-Trustee under the Deed of Trust, and all other matters specified in Schedule 3 to the Deed of Trust.

“Permitted Investments” means:

     (a) Governmental Obligations;

     (b) obligations of any of the following federal agencies which represent full faith and credit of the United States of America: Fanners Home Administration, General Services Administration, United States Maritime Administration, Small Business Administration, Government National Mortgage Association, United States Department of Housing and Urban Development, and Federal Housing Administration;

     (c) U.S. dollar denominated deposit accounts fully insured to the holder by the Federal Deposit Insurance Corporation in commercial banks;

     (d) U. S. dollar denominated deposit accounts, federal funds, and banker’s acceptances with commercial banks (foreign or domestic) which have a rating on their short term certificates of deposit on the date of purchase of “A-l” or “A-1 + “ by S&P or “P-l” by Moody’s and maturing no more than 360 days after the date of purchase;

     (e) money market funds rated in the highest rating category of S&P or Moody’s which are monitored quarterly or money market funds which are invested exclusively in Government Obligations or cash;

     (f) pre-refunded municipal obligations, which obligations shall be limited to bonds or other obligations of any state of the United States or of any agency, instrumentality, or local governmental unit of any such state (i) which are not callable at the option of the obligor prior to maturity or as to which irrevocable notice has been given by the obligor to call on the date specified in the notice; (ii) which are fully secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or obligations described in paragraph (a) above, which fund may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate; (iii) which fund is sufficient, as verified by an independent accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates thereof or the redemption date or dates specified in the irrevocable instructions referred to in subclause (i) of this paragraph, as appropriated; and (iv) which are rated, based on the escrow, in the highest rating category of S&P or Moody’s, or any successors thereto; and

     (g) U.S. dollar denominated certificates of deposit in commercial banks properly secured at all times by collateral security described in (a) and (b) above.

     “Project” means the Land, the Buildings, and the Mortgaged Equipment, and any other structure now or hereafter located on the Land, and all real property, including easements, deemed necessary in connection therewith, as they may at any time exist, exclusive of any Land which may from time to time be released as permitted under Section 9.4 of this Loan Agreement and subject to easements, licenses, and other rights created in accordance with Section 9.5 of this Loan Agreement.

      “Qualified Project Costs” means costs and expenses of the Project which constitute land costs or costs for property of a character subject to the allowance for depreciation, excluding specifically working capital and inventory costs, provided, however, that (a) costs or expenses paid or incurred more than sixty days prior to the Official Action Date shall not be deemed to be Qualified Project Costs; (b) Issuance Costs shall not be deemed to be Qualified Project Costs; (c) interest during the Construction Period shall be allocated between Qualified Project Costs and other costs and expenses to be paid from the proceeds of the Bonds; (d) interest following the Construction Period shall not constitute a Qualified Project Cost; (e) letter of credit fees and municipal bond insurance premiums which represent a transfer of credit risk shall be allocated between Qualified Project Costs and other costs and expenses to be paid from the proceeds of the Bonds; and (f) letter of credit fees and municipal bond insurance premiums which do not represent a transfer of the credit risk shall not constitute Qualified Project Costs.

     " Yield ” means yield computed under Regulation § 148-4 of the Code for the Bonds and yield computed under Regulation § 1.148-5 for an investment.

ARTICLE II

REPRESENTATIONS, WARRANTIES AND COVENANTS

      Section 2.1. Representations, Warranties and Covenants by Issuer. Issuer makes the following representations, warranties and covenants as the basis for the undertakings on its part herein contained:

     (a) Under the provisions of the Act and the Constitution of the State, Issuer is authorized to enter into the transactions to be performed by it under this Loan Agreement and the Indenture and to carry out its obligations hereunder and thereunder. Issuer has been duly authorized to execute and deliver this Loan Agreement and the Indenture.

     (b) Issuer will perform all of its obligations as specified in this Loan Agreement.

     (c) Notwithstanding anything herein contained to the contrary, it is the intention of Issuer that any obligation it may hereby incur for the payment of money shall not be a general debt on its part but shall be payable solely from the Loan Payments and other amounts derived from this Loan Agreement, and the insurance and condemnation awards as herein provided and the Company’s estate and interest in the Mortgaged Property.

     (d) Issuer has been induced to enter into this undertaking by the promise of Company to locate industrial facilities within or near the corporate limits of Issuer.

     (e) In order to furnish necessary moneys for the payment of Costs of the Project and a portion of the expenses of authorizing and issuing the Bonds, Issuer has authorized the issuance of the Bonds.

     (f) The Bonds are to be issued under and secured by the Indenture, pursuant to which Issuer’s interest in this Loan Agreement and the payments and income derived by Issuer from the Note, the Deed of Trust and this Loan Agreement will be assigned to Trustee as collateral security for payment of the principal of and premium, if any, and interest on the Bonds, and the Bonds will be secured by a security interest in the Note, this Loan Agreement and the Deed of Trust, which constitutes a lien upon, and security interest in, the Mortgaged Property (provided that in the performance of the agreements of the Issuer herein contained, any obligation that Issuer may thereby incur for the payment of money shall be limited to the Issuer’s lien upon the Mortgaged Property and the proceeds thereof and shall not be a general debt on its part, but shall be payable solely out of the proceeds derived from this Agreement, the sale of the Bonds referred to in Section 2.1 herein, and the insurance proceeds and condemnation awards as herein provided) and provided further that the obligations of Company to pay principal and premium and interest on the Bonds are guaranteed by the Guarantor and the Company pursuant to the Guaranty.

     (g) Not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Bonds are delivered by Issuer pursuant to Article II of the Indenture, Issuer covenants to satisfy the information reporting requirement of Section 149(e) of the Code.

     (h) Issuer shall not take any action to condemn or cause any condemnation of the Project or any part thereof.

     (i) Issuer shall not take any action to interfere with the direct payment by the Company to the Trustee of any Loan Payments due to Issuer or otherwise under the Note, the Loan Agreement or the Deed of Trust, which pursuant to the Loan Agreement and Indenture are to paid by Company directly to Trustee and not to modify, alter or rescind Issuer’s instruction to Company to such effect.

      Section 2.2. Representations, Warranties and Covenants by Company. Company makes the following representations, warranties and covenants as the basis for the undertakings on its part herein contained:

     (a) Company is a corporation duly incorporated under the laws of the State of Missouri, is in good standing under the laws of the State of Missouri, and has power to enter into this Loan Agreement, the Hazardous Substance Certification and Indemnification, and the Guaranty, and to perform all obligations contained herein and therein, and by proper corporate action, has been duly authorized to execute and deliver this Loan Agreement, the Hazardous Substance Certification and Indemnification, and the Guaranty.

     (b) Company intends to acquire, construct, and equip an industrial enterprise within the corporate limits of Issuer consisting of the Project.

     (c) Company will operate the Mortgaged Property upon its completion as (i) a manufacturing facility for railcar components or related industrial products with attached office or (ii) any other manufacturing or industrial use provided that such use (a) is consistent with the Act and with a Manufacturing Facility (as such term is defined in Section 144 (a) (12) of the Code, and (b) does not violate any other requirements of the Code and applicable Regulations so that interest on the Bonds shall at any time cease to be excluded from gross income for federal income tax purposes, until the expiration or earlier termination of the Loan Term as provided herein, all to the extent that such operation is, in Company’s judgment, commercially desirable.

     (d) Neither the execution and delivery of this Loan Agreement, the Hazardous Substance Certification and Indemnification, and the Guaranty, the consummation of the transactions contemplated hereby and thereby, nor the fulfillment of or compliance with the terms and conditions hereof and thereof conflicts with or results in a material breach of the terms, conditions, or provisions of the Articles of Incorporation or bylaws of Company or any agreement or instrument to which Company is now a party or by which Company is bound, or constitutes a material default under any of the foregoing, or results in the creation or imposition of any lien, charge, or encumbrance whatsoever upon any of the property or assets of Company under the terms of any instrument or agreement except as provided herein.

     (e) There is no action, suit, proceeding, inquiry, or investigation, at law or in equity, before or by any court or public board or body, known to be pending or threatened against or affecting Company, nor to the best of the knowledge of Company is there any basis therefor, wherein an unfavorable decision, ruling, or finding would materially adversely affect the transactions contemplated by this Loan Agreement or which, in any way, would materially adversely affect the validity or enforceability of the Bonds, this Loan Agreement, the Hazardous Substance Certification and Indemnification, the Guaranty, or any other agreement or instrument, to which Company is a party, used or contemplated for use in the consummation of the transactions contemplated hereby.

     (f) The Net Proceeds from the sale of the Bonds which shall have been advanced to the Company will be used only for the payment of Cost of the Project.

     (g) The Mortgaged Property complies, or will comply upon completion of construction, with all presently applicable building and zoning ordinances where failure to comply would have a materially adverse effect on Company’s ability to utilize the Mortgaged Property for the purposes intended.

     (h) Company agrees to cooperate with Issuer in the performance of Issuer’s obligations under the Indenture.

     (i) No changes shall be made in the Project and no actions will be taken by Company which shall in any way impair the exemption of interest on any of the Bonds from federal income taxation.

     (j) Company will comply with and fulfill all other requirements and conditions of the Code and regulations and rulings issued pursuant thereto in the acquisition, construction, equipping, and operation of the Project to the end that the interest on the Bonds shall at all times be free from federal income taxation.

     (k) The Project is substantially the same in all material respects to that described in the notice of public hearing published in the Cash-Book Journal on January 31, 1996.

         Section 2.3. Intention. It is intended by the parties hereto that this Loan Agreement and all actions taken hereunder be consistent with and pursuant to the ordinances of Issuer relating to the Bonds, and that the interest on the Bonds be excluded from the gross income of the recipients thereof for federal income tax purposes by reasons of the provisions of Section 144(a) of the Code or any substantially similar successor provision hereinafter enacted.

ARTICLE III

THE LOAN

      Section 3.1. Loan of Funds to the Company.

     (a) Concurrently with the execution and delivery of this Loan Agreement, Issuer shall loan to Company the amount of $2,500,000, and Company shall receive such loan from the Issuer, for the purposes and upon the terms and conditions provided in this Loan Agreement.

     (b) The loan shall be evidenced by the Note in the principal amount of $2,500,000, which shall be in substantially the form attached hereto as Exhibit A, shall be executed by the Company and made payable to the order of Issuer, and shall be endorsed and assigned by Issuer, without recourse, to the Trustee as collateral security for the obligations of the Issuer pursuant to the Indenture and the Bonds.

      Section 3.2. Use of Proceeds; Completion of the Project.

     (a) The Net Proceeds of the Bonds shall be deposited with the Trustee and shall be disbursed by the Trustee to or on behalf of the Company for completion of the Project, all in the manner as provided in the Indenture and in this Loan Agreement.

     (b) The Company agrees to cause the Project to be diligently and continuously pursued and to be completed with reasonable dispatch, and to provide (from its own funds if required) all moneys necessary to complete the Project substantially in accordance with the plans and specifications for the Project.

     (c) In the event the moneys on deposit in the Construction Fund (together with other funds available to the Company for the Project) are at any time insufficient to pay for the completion of the Project, the Company agrees to pay the amount of such deficiency forthwith to the Trustee for deposit in the Construction Fund.

      Section 3.3. Project Documents. The Company, at its own cost and expense, will deliver to the Trustee copies of the following documents (which shall be collectively referred to herein as the “Project Documents”) concurrently with the initial issuance and delivery of the Bonds or at such time as such documents become available and in any event by such time as work is commenced on the portion of the Project to which they relate:

     (a) Title Insurance. A standard ALTA mortgage loan policy or policies of title insurance, or a commitment therefor, showing the Issuer, the Trustee and the Co-Trustee as the insured parties, with respect to the Mortgaged Real Property of the Company that constitutes real property Mortgaged Real Property, together with an endorsement equivalent to ALTA 100, and subject to exceptions for pending disbursement endorsements in an aggregate amount not less than the principal amount of the Bonds, which policy or policies shall insure that the Company holds good and marketable fee simple title to the Mortgaged Real Property and the Issuer has a first lien pursuant to the Deed of Trust on the Mortgaged Real Property, subject only to Permitted Encumbrances and to the limitations upon such insurance provided by the terms of the pending disbursements endorsement.

     (b) Survey. A perimeter survey of the Company’s Mortgaged Property constituting real property, prepared by a surveyor licensed in the State of Missouri.

ARTICLE IV

PAYMENT AND SECURITY PROVISIONS

      Section 4.1. Loan Payments.

     (a)  Loan Payments on the Note. The Company will duly and punctually pay the principal of, premium, if any, and interest on the Note in accordance with the terms of the Note and this Loan Agreement. The Company covenants and agrees that it will make the following payments on the Note (“Loan Payments”) directly to the Trustee, for the account of the Issuer, for deposit in the Bond Fund, with the understanding that the Trustee will apply such payment to the payment of the principal of, premium, if any, of, and interest on the Bonds, on the following dates, and otherwise as set out below:

     On or before two Business Days prior to each Interest Payment Date, and on or before two Business Days prior to any date on which any or all of the Bonds shall be declared to be and shall become due and payable prior to their stated maturity pursuant to the provisions of the Indenture, by redemption or otherwise, Company shall pay directly to Trustee in immediately available funds or tendered Bonds an amount equal to the aggregate amount of principal, premium, if any, and interest becoming due and payable on the Bonds on such Interest Payment Date or such other date.

     Anything herein to the contrary notwithstanding, any amount (whether in cash or tendered Bonds) at any time held by Trustee in the Bond Fund shall reduce any Loan Payment required to be made by Company and the outstanding balance of the Note to the extent such amount is in excess of the amount required for payment of Bonds theretofore matured or called for redemption and past due interest in all cases where such Bonds have not been presented for payment; and further, if the amount held by Trustee in the Bond Fund should be sufficient to pay at the times required the principal of and premium, if any, and interest on the Bonds then remaining unpaid, Company shall not be obligated to make any further Loan Payments.

     By acceptance of the direction to make payments to the Trustee for the account of the Issuer, all Loan Payments will reduce the outstanding balance of the Note in accordance with Section 4.1(b). To the extent that cash or Bonds tendered by the Company to the Trustee in accordance with Section 4.1(b) are sufficient to cover the next succeeding Loan Payment(s), the Loan Payment(s) will be paid from those funds and there will be no obligation on the part of the Company to pay such Loan Payment(s).

     It is understood and agreed that all payments payable by Company under this Section 4.1 are assigned by Issuer to Trustee as collateral security for the benefit of the owners of the Bonds, Company assents to such assignment.

     (b)  Credits on Loan Payments. Notwithstanding any provision contained in this Loan Agreement or in the Indenture to the contrary, in addition to any credits on the Note resulting from the payment or prepayment of Loan Payments from other sources:

     (1) any moneys deposited by the Trustee or the Company in the Bond Fund as interest (including moneys received as accrued interest from the sale of Bonds and any initial

deposit made from the proceeds of the sale of any Bonds) shall be credited against the obligation of the Company to pay interest on the Note as the same become due;

     (2) any moneys deposited by the Trustee or the Company in the Bond Fund as principal shall be credited against the obligation of the Company to pay the principal of the Note as the same becomes due in the order of maturity thereof, except that prepayments for purposes of making an optional deposit into the Bond Fund for an optional redemption of Bonds shall be credited against the obligation of the Company to pay the principal of the Note, but shall be applied to the maturities of principal of the Note corresponding to the maturities of the Bonds to be redeemed from the proceeds of such optional prepayment;

     (3) the amount of any moneys transferred by the Trustee from any other fund held under the Indenture and deposited in the Bond Fund as interest or principal shall be credited as interest or principal, as the case may be, against the obligation of the Company to pay interest or principal, as the case may be, next becoming due as the same become due;

     (4) Company and the Guarantor shall have the right to surrender Bonds acquired by it to Trustee and all such Bonds so surrendered shall be forthwith cancelled and the principal amounts thereof upon the instructions by the Company to the Trustee shall be applied as (i) credits against mandatory sinking fund requirements pursuant to the Indenture corresponding to the maturities of the Bonds so surrendered, (ii) credits or prepayments upon the principal portion of the Loan Payments due and payable with respect to the respective maturity dates or redemption dates of such Bonds in accordance with the instructions of the Company and the terms of the Indenture, or (iii) full payment of the Note pursuant to the Loan Agreement; and any unpaid interest allocable thereto shall be applied as credits or prepayments of the interest portion of the Loan Payments next becoming due as the same becomes due; and

     (5) Subject to the provisions of the foregoing subparagraph (4), amounts, whether in cash held by the Trustee in the Bond Fund or in tendered Bonds, shall reduce the Loan Payments required to be made by the Company to the extent such amount is in excess of the amount required for payment of Bonds theretofore matured or called for redemption and past due interest.

      Section 4.2. Additional Payments. The Company agrees to make the following additional payments (“Additional Payments”):

     (a)  Issuer Fees. The Company shall pay to the Issuer upon demand, all reasonable expenses, including reasonable attorneys fees, incurred by the Issuer in relation to the Bonds and the transactions contemplated by this Loan Agreement and the Indenture.

     (b)  Trustee Fees and Professional Fees. The Company shall pay to the Trustee and any co-trustee, paying agent, bond registrar, counsel, accountants, engineers and other Persons when due, all reasonable fees, charges and expenses of such Persons for services rendered under the Indenture, the Loan Agreement, the Deed of Trust, the Guaranty or the Hazardous Substance Certification and Indemnification and expenses incurred in the performance of such services under the foregoing agreements for which such Persons are entitled to payment or reimbursement, including expenses of compliance with the Arbitrage Instructions.

     (c) Rebate Payments. The Company shall pay to the Trustee all rebate payments required under Section 148(f) of the Code, to the extent such amounts are not available to the Trustee in the Rebate Fund held under the Indenture.

     (d) Costs of Enforcement. In the event the Company should default under any of the provisions of this Loan Agreement and the Trustee should employ attorneys or incur other expenses for the collection of required payments or the enforcement of performance or observance of any obligation or agreement on the part of the Company contained in this Loan Agreement, the Company shall pay on demand therefor, without duplication, to the Trustee the reasonable fees of such attorneys and such other expenses so incurred by the Trustee. The Company also shall pay, without duplication, and shall indemnify the Issuer and the Trustee from and against, all costs, expenses and charges, including reasonable counsel fees, incurred for the collection of payments due or for the enforcement or performance or observance of any covenant or agreement of the Company under this Loan Agreement, the Note, the Deed of Trust, the Guaranty and the Hazardous Substance Certification and Indemnification.

     (e)  Taxes and Assessments. The Company also covenants and agrees, at its expense, to pay all Impositions imposed on the Mortgaged Property; provided, however, that the Company shall have the right to protest any such Impositions, as the case may be, at the Company’s expense, to protest and contest any such Impositions assessed or levied upon the Mortgaged Property and that the Company shall have the right to withhold payment of any such Impositions pending disposition of any such protest or contest unless such withholding, protest, or contest would materially adversely affect the rights or interests of the Issuer or the Trustee.

     (f)  Other Amounts Payable. The Company shall pay to the person or persons entitled thereto, any other amounts which the Company has agreed to pay under this Loan Agreement.

        In the event Company should fail to make any of the payments required in this Section, the item or installment so in default shall continue as an obligation of Company until the amount in default shall have been fully paid, and Company agrees to pay the same with interest thereon or with respect to payments to Trustee or Issuer with interest thereon, to the extent permitted by law, from the date thereof at the Agreed Rate.

        Payments made on account of the indebtedness evidenced by the Note and secured by the Deed of Trust, or as otherwise required to be paid pursuant to the provisions of the Indenture or this Loan Agreement, whether made to the Trustee or otherwise, by the Company or by the Guarantor, shall constitute Loan Payments and/or Additional Payments, as the case may be, under Section 4.1 and 4.2 of this Loan Agreement.

         Section 4.3. Prepayment of the Note.

         (a) Optional Prepayment. The Company shall have and is granted the option to prepay from time to time the amounts payable under this Loan Agreement in sums sufficient to redeem or to pay or cause to be paid all or part of the Bonds in accordance with the provisions of the Indenture. Upon the deposit by the Company of moneys and/or Bonds (which are cancelled and no longer Outstanding under the Indenture) in the Bond Fund in an amount sufficient to redeem Bonds subject to redemption taking into account any available funds in the Bond Fund, the Issuer, at the request of the Company, shall forthwith take all steps (other than the payment of the money required for such redemption) necessary under the applicable redemption provisions of the Indenture to effect redemption of all or part of the then

Outstanding Bonds, as may be specified by the Company, on the date established for such redemption. The Company may prepay all or any portion of its indebtedness on the Note by providing for the payment of all or any portion of the Bonds in accordance with Article IX of the Indenture. Such prepayments are credited against Loan Payments at the time such prepayment is deposited into the Bond Fund.

      (b) Mandatory Prepayment. Whenever any Bonds shall have been called for redemption under any provision of the Indenture, the Company shall prepay the Note in such amounts required and at such times to redeem such Bonds, including the principal, redemption premium, if any, and accrued interest thereon to the redemption date and such prepayment may include tender of Bonds by the Company or Guarantor for cancellation in total or partial payment. The Company further agrees that in the event the payment of principal of and interest on the Bonds is accelerated upon the occurrence of an event of default under the Indenture, all Loan Payments payable for the remainder of the term of this Loan Agreement shall be accelerated and prepayment shall be made on the Note in such amounts. Any such prepayments shall be deposited in the Bond Fund, and applied by the Trustee in accordance with the provisions of the Indenture. Any such prepayment shall be credited against Loan Payments to become due on the Note at the time such prepayment is deposited into the Bond Fund.

      Section 4.4. Mortgage, Pledge and Assignment Under the Deed of Trust.

     (a) In order to secure the payment of the Note and the performance of the duties and obligations of the Company under the Note, Deed of Trust, and this Loan Agreement, the Company pursuant to the Deed of Trust has pledged and assigned unto the Issuer and its successors and assigns forever, and granted a security interest to the Issuer in and to the Mortgaged Property.

     (b) The Company shall, at its own expense, take all necessary action to maintain and preserve the security interest in Mortgaged Property granted by (and as defined in) the Deed of Trust so long as the Note is outstanding and obligations of the Company to the Issuer and the Trustee under the Loan Agreement are outstanding. In addition, the Company shall, immediately after the execution and delivery of this Loan Agreement and thereafter from time to time, cause the Deed of Trust and any financing statements in respect thereof to be filed, registered and recorded in such manner and in such places as may be required by law in order to fully perfect and protect such security interest and from time to time will perform or cause to be performed any other act as provided by law and will execute or cause to be executed any and all continuation statements and further instruments that may be requested by the Trustee for such perfection and protection. Except to the extent it is exempt therefrom, the Company shall pay or cause to be paid all filing, registration and recording fees and all expenses incident to the preparation, execution and acknowledgment of such instruments of perfection, and all federal or state fees and other similar fees, duties, imposts, assessments and charges arising out of or in connection with the execution and delivery of the Deed of Trust and such instruments of perfection. In the event that the Company fails to execute any of such instruments within ten (10) days after demand to do so, the Company does hereby make, constitute and irrevocably appoint the Trustee as its attorney-in-fact and in its name, place and stead so to do, .

      Section 4.5. Assignment of Authority’s Rights. Under the Indenture, the Issuer will, as security for the Bonds, pledge, assign, transfer and grant a security interest in certain of its rights, title and interest under this Loan Agreement, the Deed of Trust, and the Note to the Trustee. The Company agrees that this Loan Agreement, the Deed of Trust, and the Note, and all of the rights, interests, powers, privileges and benefits accruing to or vested in the Issuer may be protected and enforced in conformity with the Indenture and (except for Issuer fees and expenses and the Issuer’s right to indemnification in certain circumstances and as otherwise expressly set forth herein) may be thereby assigned by the Issuer

to the Trustee as security for the Bonds and may be exercised, protected and enforced for or on behalf of the Bondowners in conformity with this Loan Agreement and the Indenture. The Trustee is hereby given the right to enforce, as collateral assignee of the Issuer, the performance of the obligations of the Company, and the Company hereby consents to the same and agrees that the Trustee may enforce such rights as provided in this Loan Agreement, in the Deed of Trust, and in the Indenture.

      Section 4.6. Place of Loan Payments. Issuer hereby directs Company and Company hereby agrees to pay to Trustee at Trustee’s principal corporate trust office all Loan Payments payable by Company pursuant to subsections 4.1. All Additional Payments required to be made pursuant to Section 4.2 shall be paid to the respective party at their principal office.

      Section 4.7. Obligation of Company Hereunder Unconditional. The obligations of Company to make the payments required in Section 4.1 hereof and to perform and observe the other agreements on its part contained herein shall be absolute and unconditional, and the payments required in Section 4.1 shall be payable on the dates and at the times specified without notice or demand, and without abatement or set-off, and regardless of any contingencies whatsoever, and notwithstanding any circumstances or occurrences that may now exist or that may hereafter arise or take place, including, but without limiting the generality of the foregoing:

     (a) The unavailability of the Mortgaged Property or any part thereof for use by Company at any time by reason of the failure to complete the overall industrial project by any particular time or at all or by reason of any other contingency, occurrence, or circumstance whatsoever;

     (b) Damage to or destruction of the Mortgaged Property or any part thereof;

     (c) Legal curtailment of Company’s use of the Mortgaged Property or any part thereof;

     (d) Change in Issuer’s legal organization or status;

     (e) The taking of title to or the temporary use of the whole or any part of the Mortgaged Property by condemnation;

     (f) Any termination of this Loan Agreement for any reason whatsoever;

     (g) Failure of consideration or commercial frustration of purposes not arising out of or related to acts of the Issuer;

     (h) Any change in the tax or other laws of the United States of America or of the State; and

     (i) Any default of Issuer under this Loan Agreement or any other default or failure of Issuer whatsoever.

     Nothing contained in this Section shall be construed to release Issuer from the performance of any of the provisions of this Loan Agreement on its part to be performed.

     Company covenants that it will not enter into any contract, indenture, or agreement of any nature whatsoever which shall in any way limit, restrict, or prevent Company from performing any of its obligations under this Loan Agreement.

      Section 4.8. Cancellation of Note and Release of Mortgaged Property. Issuer shall cancel the Note, deliver a deed of release in respect of the Deed of Trust, cancel the Loan Agreement and execute and deliver UCC-3 termination statements covering all financing statements filed to evidence the security interest created in the Mortgaged Property or any part thereof, upon the payment or deposit by the Company or the Guarantor of money in the Bond Fund or tendered Bonds in an amount sufficient, when added to the available funds then on hand in the Bond Fund, to redeem the Bonds and to pay all sums at the date of such payment or deposit due to the Issuer, Trustee or any Co-Trustee pursuant to the Loan Agreement, the Note, the Deed of Trust, and the Indenture.

ARTICLE V

ACQUISITION, CONSTRUCTION, AND EQUIPPING OF

      Section 5.1. Agreement to Acquire, Construct, and Equip the Project. All payments necessary to acquire, construct, and equip the Project shall be made out of the Construction Fund or other funds provided by the Company whether or not pursuant to Section 5.5 hereof, and Company shall be reimbursed out of the Construction Fund, for all expenditures made by it in connection with the Project in accordance with the provisions of this Loan Agreement and the Indenture, in respect of expenditures paid not more than 60 days prior to Official Action Date. Title to all machinery, equipment and personal property of every nature paid for out of the Construction Fund or other funds provided by the Company pursuant to Section 5.5 of this Agreement (either by direct payment or by virtue of reimbursement to Company) shall be vested in, or be transferred to, Company. The Collateral does not include any Leased Equipment. The obligations of Issuer hereunder are subject to the provisions of this Loan Agreement limiting the obligations of Issuer to the extent of moneys in the Construction Fund.

     Company shall obtain all necessary approvals from any and all governmental agencies requisite to the constructing and equipping of the Project, and the Project shall be constructed and equipped in compliance with all federal, State, and local laws, ordinances, and regulations applicable thereto.

     All requests, approvals, and agreements required on the part of Company shall be in writing, signed by the Authorized Company Representative, as appropriate, granting such approval or entering into such agreement. Issuer and Company shall, concurrently with the delivery of this Loan Agreement, notify Trustee of the Authorized Company Representative. It is agreed that the Company may have more than one Authorized Company Representative and may change the Authorized Company Representative or Representatives from time to time, with each such change to be in writing forwarded to the Trustee. The Authorized Company Representative so designated shall be authorized to enter into and execute any contracts or agreements or to grant any approvals or to take any action for and on behalf of the party hereto represented by him, and the other party to this Loan Agreement shall be entitled to rely upon the duly designated Authorized Representative as having full authority to bind the party hereto represented by him.

      Section 5.2. Disbursements from the Construction Fund. Issuer has, in the Indenture, authorized and directed Trustee to make disbursements from the Construction Fund to pay the Cost of the Project or to reimburse Company for any Cost of the Project paid by Company.

        Trustee shall make disbursements upon receipt of a requisition signed by an Authorized Company Representative:

     (a) stating with respect to each disbursement to be made: (i) the requisition number, (ii) the name and address of the person, firm, or corporation to whom payment is due, (iii) the amount to be disbursed, (iv) that each obligation mentioned therein has been properly incurred, is a proper charge against the Construction Fund, and has not been the basis of any previous disbursement, (v) with respect to any requisition for payment for work, material, or supplies, that such obligation was incurred for work, materials or supplies in connection with the acquisition, construction, and equipping of the Project, (vi) that at least 95% of the amount requested for disbursement will be used for the payment of Qualified Project Costs, (vii) that all property to be acquired with the proceeds of the disbursement will be owned by Company, (viii) that no portion of the amount requested for disbursement will be used in the manner prohibited in Sections 9.10 or 9.12 of this Loan Agreement, and (ix) that no portion of the amount requested for disbursement will be used for the acquisition of existing property except upon compliance with Section 9.16 of this Loan Agreement;

     (b) specifying in reasonable detail the nature and purpose of the obligation, including (i) that such obligation has been properly incurred, is a proper charge against the Construction Fund, is a proper cost of the Project as defined in the Act and has not been the basis of any previous withdrawal, (ii) that the Authorized Company Representative has no written notice of any mechanics’, materialmen’s, or other liens or rights to liens or other obligations (other than those being contested in good faith or covered by title insurance) which should be satisfied or discharged before payment of such obligation is made, (iii) that such payment does not include any amount which is then entitled to be retained under any holdbacks or retainages provided for in any agreement, (iv) that there exists no event of default;

     (c) with respect to the first disbursement to be made for Costs of the Project, Company shall provide Trustee with a certificate of the Authorized Company Representative that the Project, as designed, complies with all presently applicable building and zoning ordinances applicable to the Project; and

     (d) accompanied by a pending disbursement endorsement in the amount of the disbursement issued by First American Title Insurance Company or any successor or replacement to First American Title Insurance Company approved by the Trustee.

        In making any payment from the Construction Fund, Trustee may rely conclusively on requisitions and certificates delivered to it pursuant to this Section, and Trustee and Issuer shall be relieved of all liability with respect to the accuracy of such requisitions and certificates and the making of such payments in accordance with such requisitions and certificates and all liability to see to the proper application thereof by Company.

         Section 5.3. Furnishing Documents to Trustee. Company agrees to cause such requisitions to be directed to Trustee as may be necessary to effect payments out of the Construction Fund in accordance with Section 5.2 hereof. Trustee shall retain a record of all such requisitions.

         Section 5.4. Establishment of Completion Date. The Completion Date shall be evidenced to Issuer and Trustee by (a) a certificate signed by an Authorized Company Representative stating that, except for amounts retained by Trustee at Company’s direction for any Cost of the Project not then due and payable, (i) acquisition and construction of the Project has been substantially completed and all costs

of labor, services, materials, and supplies used in such acquisition and construction have been paid, except for punch list items, for which adequate reserves shall have been established (ii) all equipment for the Project has been installed to Company’s satisfaction, such equipment so installed is suitable and sufficient for the operation of the Project, and substantially all costs and expenses incurred in the acquisition and installation of such equipment have been paid, except to the extent any such equipment is Leased Equipment, and (iii) all other facilities necessary in connection with the Project have been acquired, constructed, and equipped and all costs and expenses incurred in connection therewith have been paid and (b) a certificate signed by an Authorized Company Representative stating that the Project has been substantially completed in accordance with all plans and specifications for the Project and to the best knowledge of the Authorized Company Representative, after inquiry of the Project’s architect, the Project complies with all applicable federal, State, and local laws, regulations, and other governmental requirements (including, without limitation, the federal Americans with Disabilities Act). Notwithstanding the foregoing, the certificate required by clause (a) above shall state that it is given without prejudice to any rights against third parties which exist at the date of such certificate or which may subsequently come into being. Forthwith upon substantial completion of the acquisition, construction, and equipping of the Project, Company agrees to cause such certificates to be furnished to Issuer and Trustee.

     Any moneys in the Construction Fund remaining after the Completion Date and payment, or provision for payment, of the costs of financing the Project described above, at the direction of the Authorized Company Representative, promptly, and in all events on or before July 1, 1998, shall be:

     (i) used to acquire, construct, equip and install such additional real or personal property in connection with the Project, in accordance with the applicable provisions of the Code (i