EXHIBIT 10.14
CONFORMED COPY
SUBSIDIARY GUARANTY
GUARANTY, dated as of December 26, 2001, made by AMTROL INTERNATIONAL
INVESTMENTS, INC., a Rhode Island corporation (the "GUARANTOR"), in favor of
CYPRESS MERCHANT BANKING PARTNERS, L.P. ("CMBP") and CYPRESS OFFSHORE PARTNERS,
L.P. ("COP"; together with CMBP, the "LENDERS") pursuant to the Loan Agreement
referred to below.
W I T N E S S E T H:
WHEREAS, AMTROL Holdings, Inc., a Delaware corporation ("HOLDINGS"),
AMTROL Inc., a Rhode Island corporation ("AMTROL"), and Water Soft Inc., a Rhode
Island corporation (together with AMTROL each a "BORROWER" and collectively the
"BORROWERS"), the Lenders party thereto from time to time are parties to a Loan
Agreement, dated as of December 26, 2001 (such Agreement, as amended, restated
or otherwise modified from time to time, being hereinafter referred to as the
"Loan Agreement");
WHEREAS, AMTROL, is party to a Credit Agreement dated as of November 13,
1996, as amended, among Holdings, AMTROL, various lending institutions and
Bankers Trust Company, as administrative agent, under which loans are currently
outstanding in the aggregate principal amount of $53,074,904.05 (the "EXISTING
SENIOR DEBT");
WHEREAS, in order to partially refinance the Existing Senior Debt, the
Borrowers are, on the date hereof, entering into a Loan and Security Agreement,
dated as of December 26, 2001, among Holdings, the Borrowers, the lenders party
thereto and Foothill Capital Corporation ("Foothill"), as arranger and
administrative agent (as amended, supplemented or modified from time to time,
the "FOOTHILL LOAN AGREEMENT"), which is to be guaranteed by Holdings and
certain subsidiaries of Holdings (the "SUBSIDIARY GUARANTORS") and secured by
first priority liens on substantially all of the assets of Holdings, the
Borrowers and the Subsidiary Guarantors (collectively, the "LOAN PARTIES"); and
WHEREAS, in order to provide additional funds to refinance Existing Senior
Debt, the Borrowers have requested, and each Lender has agreed, to make loans to
the Borrowers on a senior secured basis on the terms and conditions set forth
herein, to be guaranteed by Holdings and the Subsidiary Guarantors and to be
secured by second priority liens on substantially all the assets of the Loan
Parties;
WHEREAS, AMTROL directly owns all of the issued and outstanding shares of
Stock of the Guarantor; and
WHEREAS, pursuant to Section 5 of the Loan Agreement, the Guarantor is
required to execute and deliver to the Lenders a guaranty guaranteeing all the
Notes and all other obligations under the Loan Agreement;
NOW, THEREFORE, in consideration of the premises and the agreements herein
and in order to induce the Lenders to make and maintain Loans pursuant to the
Loan Agreement, the Guarantor agrees with the Lenders as follows:
Section 1. DEFINITIONS. Reference is hereby made to the Loan Agreement for
a statement of the terms thereof. All terms used in this Guaranty which are
defined therein and not otherwise defined herein shall have the same meanings
herein as set forth therein.
Section 2. GUARANTY. The Guarantor hereby (i) irrevocably, absolutely and
unconditionally guarantees the prompt payment by the Borrowers, as and when due
and payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), of all amounts now or hereafter owing in respect of the
Notes and any other amounts due and payable under the Loan Documents, whether
for principal, interest (including interest accruing on or after the filing of
any petition in bankruptcy or for reorganization relating to a Borrower whether
or not a claim for post-filing interest is allowed in such proceeding), fees,
commissions, expenses, indemnifications or otherwise (the "OBLIGATIONS"), and
(ii) agrees to pay any and all expenses (including reasonable counsel fees and
expenses) incurred by the Lenders in enforcing its rights under this Guaranty.
Section 3. GUARANTOR'S OBLIGATIONS UNCONDITIONAL.
(a) The Guarantor hereby guarantees that the Obligations will be paid
strictly in accordance with the terms of the Loan Documents, regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Lenders. The Guarantor agrees
that its guarantee constitutes a guaranty of payment when due and not of
collection and waives any right to require that any resort be made by any Lender
to any Collateral. The obligations of the Guarantor under this Guaranty are
independent of the obligations under the Loan Agreement and the other Loan
Documents, and a separate action or actions may be brought and prosecuted
against the Guarantor to enforce this Guaranty, irrespective of whether any
action is brought against any Borrower or whether any Borrower is joined in any
such action. The liability of the Guarantor hereunder shall be absolute and
unconditional irrespective of: (i) any lack of validity or enforceability of any
Loan Document or any agreement or instrument relating thereto; (ii) any change
in the time, manner or place of payment of, or in any other term in respect of,
all or any of the Obligations, or any other amendment or waiver of or consent to
any departure from any provision of any Loan Document other than this Guaranty
(including the creation or existence of any Obligations in excess of the amount
permitted by any lending formulas contained in the Loan Documents or the amount
evidenced by the Loan Documents); (iii) any exchange or release of, or
non-perfection of any Lien on or security interest in, any Collateral, or any
release or amendment or waiver of or consent to any departure from any other
guaranty, for all or any of the Obligations; (iv) the existence of any claim,
set-off, defense or other right that the Guarantor may have against any Person,
including, without limitation, any Lender, or (v) any other circumstance which
might otherwise constitute a defense available to, or a discharge of, any
Borrower or any other guarantor in respect of the Obligations or the Guarantor
in respect hereof.
(b) This Guaranty (i) is a continuing guaranty and shall remain in full
force and effect until such date on which all of the Obligations and all other
expenses to be paid by the
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Guarantor pursuant hereto shall have been satisfied in full and the Loan
Agreement shall have been terminated, and (ii) shall continue to be effective or
shall be reinstated, as the case may be, if at any time any payment of any of
the Obligations is rescinded or must otherwise be returned by any Lender upon
the insolvency, bankruptcy or reorganization of any Borrower or otherwise, all
as though such payment had not been made.
Section 4. WAIVERS. The Guarantor hereby waives, to the extent permitted
by applicable law, (i) promptness and diligence; (ii) notice of acceptance and
notice of the incurrence of any Obligation by the Borrowers; (iii) notice of any
actions taken by any Lender or the Borrowers under any Loan Document or any
other agreement or instrument relating thereto; (iv) all other notices, demands
and protests, and all other formalities of every kind in connection with the
enforcement of the Obligations or of the obligations of the Guarantor hereunder,
the omission of or delay in which, but for the provisions of this Section 4,
might constitute grounds for relieving the Guarantor of its obligations
hereunder; (v) any right to compel or direct the Lenders to seek payment or
recovery of any amounts owed under this Guaranty from any one particular fund or
source; (vi) any requirement that any Lender protect, secure, perfect or insure
any security interest or Lien or any property subject thereto or exhaust any
right or take any action against any Borrower or any other Person or any
Collateral; and (vii) any other defense available to the Guarantor.
Section 5. SUBROGATION. The Guarantor hereby waives and irrevocably agrees
that it will not exercise any and all rights which it has or may have at any
time or from time to time (whether arising directly or indirectly by operation
of law or contract) to assert any claim against any Borrower on account of any
payments made under this Guaranty or otherwise, including, without limitation,
any and all existing and future rights of subrogation, reimbursement,
exoneration, contribution and/or indemnity. Notwithstanding anything to the
contrary in the preceding sentence, if any amount shall be paid to the Guarantor
on account of such subrogation rights at any time when all of the Obligations
and all such other expenses shall not have been paid in full, such amount shall
be held in trust for the benefit of the Lenders, shall be segregated from the
other funds of the Guarantor and shall forthwith be paid over to the Lenders to
be applied in whole or in part by the Lenders against the Obligations, whether
matured or unmatured, and all such other expenses in accordance with the terms
of the Loan Agreement.
Section 6. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents
and warrants as follows:
(a) The Guarantor (i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation as
set forth on the first page hereof; and (ii) has all requisite corporate power
and authority to execute, deliver and perform this Guaranty and each other Loan
Document to which the Guarantor is a party.
(b) The execution, delivery and performance by the Guarantor of this
Guaranty and each other Loan Document to which the Guarantor is a party (i) have
been duly authorized by all necessary corporate action, (ii) do not contravene
its applicable charter or by-laws or any applicable law, (iii) do not violate
any contractual restriction binding on or otherwise
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affecting the Guarantor, and (iv) do not result in or require the creation of
any Lien upon or with respect to any of its properties other than pursuant to
any such Loan Document.
(c) No authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority or other regulatory body is required in
connection with the due execution, delivery and performance by the Guarantor of
this Guaranty or any of the other Loan Documents to which the Guarantor is a
party.
(d) Each of this Guaranty and the other Loan Documents to which the
Guarantor is a party is a legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with its terms, except as
enforcement may be limited by the effects of bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally.
(e) There is no pending or, to the knowledge of the Guarantor, threatened
action, suit or proceeding against the Guarantor or to which any of the
properties of the Guarantor is subject, before any Governmental Authority or any
arbitrator (i) which challenges the validity or enforceability of this Guaranty
or any of the other Loan Documents to which the Guarantor is a party, or (ii) in
which there is a reasonable possibility of an adverse decision which would
materially adversely affect the business, operations or financial condition of
the Guarantor.
(f) The Guarantor now has and will continue to have independent means of
obtaining information concerning the affairs, financial condition and business
of the Borrowers, and have no need of, or right to obtain from the Lenders, any
credit or other information concerning the affairs, financial condition or
business of the Borrowers that may come under the control of any Lender.
Section 7. RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, the Lenders may, and are hereby authorized
to, at any time and from time to time, without notice to the Guarantor (any such
notice being expressly waived by the Guarantor) and to the fullest extent
permitted by law, set-off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other Indebtedness at
any time owing by any Lender to or for the credit of the account of the
Guarantor against any and all obligations of the Guarantor now or hereafter
existing under this Guaranty, irrespective of whether or not Lenders shall have
made any demand under this Guaranty and although such obligations may be
contingent or unmatured. The Lenders agree to notify the Guarantor promptly
after any such set-off and application made by the Lenders, PROVIDED that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Lenders under this Section 7 are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Lenders may have.
Section 8. NOTICES, ETC. All notices, requests and demands to or upon the
Lenders or the Guarantor hereunder shall be effected in the manner provided for
in Section 12 of the Loan Agreement; PROVIDED that any such notice, request or
demand to or upon the guarantor shall be addressed to the Guarantor at its
notice address set forth on its signature page hereto.
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Section 9. CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES.
(a) Each of the Guarantor and, by its acceptance hereof, the Lenders
hereby irrevocably submit to the jurisdiction of any New York State or federal
court sitting in New York City in any action or proceeding arising out of or
relating to this Guaranty, and the Guarantor and, by its acceptance hereof, the
Lenders hereby irrevocably agree that all claims in respect of such action or
proceeding may be heard and determined in such New York State or federal court.
Each of the Guarantor and, by its acceptance hereof, the Lenders irrevocably
consent to the service of any and all process in any such action or proceeding
by the mailing of copies of such process to the Guarantor or the Lenders, as the
case may be, at its address specified in Section 8 hereof. The Guarantor agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
(b) Nothing in this Section 9 shall affect the right of the Lenders to
serve legal process in any other manner permitted by law or affect the right of
the Lenders to bring any action or proceeding against the Guarantor or its
property in the courts of any other jurisdictions.
(c) The Guarantor hereby expressly and irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of venue of any such litigation brought in any such court referred to in
paragraph (a) above and any claim that any such litigation has been brought in
an inconvenient forum. To the extent that the Guarantor has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process
(whether through service or notice, attachment prior to judgment, attachment in
aid of execution or otherwise) with respect to itself or its property, the
Guarantor hereby irrevocably waives such immunity in respect of its obligations
under this Guaranty and the other Loan Documents.
Section 10. WAIVER OF JURY TRIAL. EACH OF THE GUARANTOR AND, BY ACCEPTANCE
HEREOF, THE LENDERS WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS GUARANTY, THE LOAN
DOCUMENTS OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER
AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION
THEREWITH, OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS
GUARANTY, AND AGREES THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
Section 11. MISCELLANEOUS.
(a) The Guarantor will make each payment hereunder in lawful money of the
United States of America and in immediately available funds to the Lenders at
such address specified by the Lenders from time to time by notice to the
Guarantor.
(b) No amendment of any provision of this Guaranty shall be effective
unless it is in writing and signed by the Guarantor and the Lenders, and no
waiver of any provision of this Guaranty, and no consent to any departure by the
Guarantor therefrom, shall be effective
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unless it is in writing and signed by the Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
(c) No failure on the part of the Lenders to exercise, and no delay in
exercising, any right hereunder or under any other Loan Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any right
preclude any other or further exercise thereof or the exercise of any other
right. The rights and remedies of the Lenders provided herein and in the other
Loan Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law. The rights of the Lenders under any Loan
Document against any party thereto are not conditional or contingent on any
attempt by the Lenders to exercise any of its rights under any other Loan
Document against such party or against any other Person.
(d) Any provision of this Guaranty which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining portions
hereof or thereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
(e) This Guaranty shall (i) be binding on the Guarantor and its successors
and assigns, and (ii) inure, together with all rights and remedies of the
Lenders, to the benefit of the Lenders and their respective successors,
transferees and assigns. Without limiting the generality of clause (ii) of the
immediately preceding sentence, to the extent permitted by Section 13(a) of the
Loan Agreement, any Lender may assign or otherwise transfer its rights under any
other Loan Document, to any other Person, and such other Person shall thereupon
become vested with all of the benefits in respect thereof granted to the Lender
herein or otherwise. None of the rights or obligations of the Guarantor
hereunder may be assigned or otherwise transferred without the prior written
consent of the Lenders.
(f) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
by an officer thereunto duly authorized, as of the date first above written.
AMTROL INTERNATIONAL
INVESTMENTS, INC.,
a Rhode Island corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Title: President
Address:
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Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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