EX 10.17
GUARANTY
THIS GUARANTY ("Guaranty") is entered into as of December 31, 1999, by
RENTECH, INC., a Colorado corporation ("Rentech"), and REPUBLIC FINANCIAL
CORPORATION, a Colorado corporation ("Republic", and collectively with Rentech,
"Guarantors"), in favor of SAND CREEK CHEMICAL LIMITED PARTNERSHIP, a Colorado
limited partnership ("Sand Creek"), and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company (both in its individual capacity and as Owner
Trustee for General Electric Capital Corporation under a Trust Agreement dated
as of November 1, 1993, "State Street Bank", and collectively with Sand Creek,
"Sellers")
RECITALS
WHEREAS, Sand Creek Energy, LLC, a Colorado limited liability company
("Buyer") and Sellers are entering into an Asset Purchase Agreement, dated as of
December 31, 1999 (such agreement, as amended or modified, the "Asset Purchase
Agreement"); and
WHEREAS, Sellers are willing to enter into the Asset Purchase Agreement
only on the condition that Guarantors enter into this Guaranty; and
WHEREAS, each of the Guarantors has a substantial equity interest in Buyer
and will receive substantial benefits from Sellers entering into and performing
their obligations under the Asset Purchase Agreement.
NOW, THEREFORE, to induce Sellers to enter into the Asset Purchase
Agreement, and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Guarantors agree as follows:
1. Guaranty.
1.1 Guaranty.
(a) Guarantors jointly and severally hereby irrevocably,
absolutely and unconditionally guarantee the full and punctual performance and
payment when due of all the Obligations (as defined below);
(i) provided, however, that (A) no claim may be brought
under this Guaranty unless notice of such claims or a claim against Buyer with
respect to the Obligations is given by either Seller prior to the fifth
anniversary of the date hereof and (B) the aggregate liability of Guarantors
under the Guaranty shall not exceed four million dollars ($4,000,000);
(ii) provided further, that in the event that Public Service
Company of Colorado ("PSCo.") agrees in writing, in form and substance
reasonably satisfactory to Sand Creek, to unconditionally and irrevocably
release Sand Creek and Intermountain Chemical, Inc. ("ICI") from any and all
obligations and liabilities under or relating to that certain letter agreement,
dated September 12, 1995, among PSCo., ICI and Conoco, Inc. ("Conoco") (the
"Letter Agreement") and the construction and operation of the pipeline
referenced therein, then the deadline for bringing any claim as described in
clause 1.1(a)(i)(A) above shall be accelerated to the second anniversary of the
date hereof and the maximum aggregate liability of the Guarantors under the
Guaranty shall be limited to two million dollars ($2,000,000); and
(iii) provided further, that in the event that Conoco also
agrees in writing, in form and substance reasonably satisfactory to Sand Creek,
to unconditionally and irrevocably release Sand Creek and ICI from any and all
obligations and liabilities under or relating to the Letter Agreement and the
construction and operation of the pipeline referenced herein, then the maximum
liability of each of the Guarantors under this Guaranty shall be limited to one
million dollars ($1,000,000) and the guaranty of the Guarantors hereunder will
become several, but not joint.
(b) This Guaranty constitutes a guaranty of performance and
payment when due and not merely of collection. Guarantors specifically agree
that it shall not be necessary or required that Sellers exercise any right,
assert any claim or demand or enforce any remedy whatsoever against Buyer or any
other Person before or as a condition to the obligations of Guarantors
hereunder. For purposes of this Guaranty, "Person" means any individual, sole
proprietorship, partnership, joint venture trust, unincorporated organization,
association, corporation, limited liability company, institution, public benefit
corporation, entity or government (including without limitation, any
instrumentality, division, agency, body or department thereof);
(c) This Guaranty shall be construed as a continuing, absolute
and unconditional guarantee of payment and performance without regard to (i) the
validity, regularity or enforceability of any of the obligations, (ii) any
defense, setoff or counterclaim (other than a defense of payment or performance)
which may at any time be available to or be asserted by Buyer against Sellers,
(iii) until Sellers shall have been paid in full, any right by Guarantors to
subrogation or indemnification, or (iv) any other circumstance whatsoever (with
or without notice to or knowledge of Buyer or Guarantors) which constitutes, or
might be construed to constitute, an equitable or legal discharge of Buyer for
the Obligations (other than payment in full of all Obligations), or of
Guarantors under this Guaranty, in bankruptcy or in any other instance.
1.2 Obligations Independent. The obligations hereunder are independent
of the Obligations of Buyer, and a separate action or actions may be brought and
prosecuted against Guarantors whether action is brought against Buyer or whether
Buyer is joined in any such action or actions.
1.3 Authorization of Renewals, Etc. Guarantors authorizes Sellers,
without notice or demand and without affecting their liability hereunder, from
time to time:
(a) to renew, compromise, extend, accelerate or otherwise change
the time for payment, or otherwise change the terms of the Obligations;
(b) to receive and hold security for the payment of this Guaranty
or any of the Obligations and exchange, enforce, waive, release, fail to
perfect, sell, or otherwise dispose of any such security;
(c) to apply such security and direct the order or manner of sale
thereof as Sellers in their discretion may determine; and
(d) to release or substitute any one of more of any endorsers or
guarantors of the Obligations.
1.4 Waiver of Certain Rights. Guarantors waive any right to require
Sellers:
(a) to proceed against Buyer or any other Person;
(b) to proceed against or exhaust any security for the
Obligations or any other indebtedness of Buyer to Sellers; or
(c) to pursue any other remedy in Sellers' power whatsoever.
1.5 Waiver of Certain Defenses. Guarantors waive any defense arising
by reason of any disability or other defense of Buyer, or the cessation from any
cause whatsoever of the liability of Buyer other than final payment in full of
all Obligations, whether consensual or arising by operation of law or any
bankruptcy, conservatorship, receivership, insolvency or debtor relief
proceeding, or from any other cause, or any claim that Guarantors' obligations
exceed or are more burdensome than those of Buyer either individually or in the
aggregate.
1.6 Waiver of Presentments, Etc. Guarantors waive all presentments,
demands for performance, notices of nonperformance, protests, notices of
protest, notices of dishonor and notices of acceptance of this Guaranty and of
the existence, creation, or incurring or new or additional Obligations or any
other indebtedness of Buyer to Sellers.
1.7 Information Relating to Buyer. Guarantors acknowledges that it has
the ability, and hereby assumes the obligation and responsibility, to keep
informed of the financial condition and business operations of Buyer and its
affiliates and of other matters of circumstances affecting the ability of any of
them to pay or perform their respective obligations to Sellers or the risk of
nonpayment and nonperformance. Guarantors hereby waive any obligation on the
part of Sellers to inform Guarantors of the financial condition, or any changes
in financial condition, of Buyer or any affiliates thereof or of any other
matter or circumstance which might affect the ability of Buyer to pay and
perform under the Asset Purchase Agreement, or the risk of nonpayment or
nonperformance.
1.8 Reinstatement of Guaranty. If any payment or transfer of any
interest in property by Buyer to Sellers in fulfillment of any Obligations is
rescinded or must at any time (including after the return of cancellation of
this Guaranty) be returned, in whole or in part, by Sellers to Buyer or any
other Person, upon the insolvency, bankruptcy or reorganization of Buyer or
otherwise, this Guaranty shall be reinstated with respect to any such payment or
transfer, regardless of any such prior return or cancellation.
1.9 Powers. It is not necessary for Sellers to inquire into the powers
of Buyer or of the officers, directors, partners or agents acting or purporting
to act on their behalf, and any Obligations made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
2. Representations, Warranties and Agreements of Guarantors. Each of the
Guarantors represents and warrants to, and agrees with, Sellers that:
2.1 Corporate Existence and Power. It (a) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation; (b) has the power and authority and all
governmental licenses, authorizations, consents and approvals to own its assets,
carry on its business and to execute, deliver, and perform its obligations under
this Guaranty; and (c) is in compliance in all material respects with all
requirements of law the failure to comply with which would have a material
adverse effect on its ability to fulfill its obligations under this Guaranty.
2.2 Corporate Authorization: No Contravention. The execution, delivery
and performance by its of this Guaranty has been duly authorized by all
necessary corporate action, and do not and will not (a) contravene the terms of
its organizational documents; (b) conflict with or result in any breach or
contravention of, or the creation of any lien under, any document evidencing any
contractual obligation to which it is a party or any order, injunction, writ or
decree of any governmental authority to which it is or its property is subject;
or (c) violate any requirements of any governmental authority.
2.3 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
governmental authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, it of this
Guaranty.
2.4 Binding Effect. This Guaranty constitutes the legal, valid and
binding obligations of such Guarantor, enforceable against it in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.
3. Miscellaneous.
3.1 Assignment. This Guaranty shall be binding upon Guarantors and
their respective successors and assigns, and shall insure to the benefit of
Sellers and their respective successors and assigns, except that neither of the
Guarantors may assign or transfer any of its obligations under this Guaranty
without the prior written consent of both Sellers.
3.2 Notices. Each notice, report, demand, waiver, consent and other
communication required or permitted to be given hereunder shall be in writing
and shall be sent (and deemed given upon receipt) (a) by registered or certified
first-class mail, postage prepaid and return receipt requested, (b) by Federal
Express or comparable overnight courier, or (c) by fax, addressed as follows:
If to Sand Creek: Sand Creek Chemical Limited Partnership
c/o Baxter Associates, Inc.
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to: GE Capital Services
Structured Finance Group
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▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Manager of Compliance
and a copy to: Pillsbury Madison & Sutro LLP
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▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
If to State State Street Bank and Trust Company
Street Bank: ▇▇▇▇▇▇▇ Square
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ 2320
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Administration
If to Rentech: Rentech, Inc.
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
If to Republic: Republic Financial Corporation
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▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President, Legal
with a copy to: ▇▇▇▇▇, Johnson, Robinson, ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
3.3 Partial Exercise; Amendment. No delay on the part of Sellers in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude other or further exercise thereof or the exercise of any
other right, power or privilege or be construed to be a waiver of any breach
under the Asset Purchase Agreement. No waiver by Sellers of any such breach
shall be effective unless in writing and signed by an authorized officer of
Sellers, and no such waiver shall be deemed to be a waiver of a subsequent
breach under the Asset Purchase Agreement or be deemed to be a continuing
waiver. No course of dealing between Buyer or Guarantors, respectively, and
Sellers or their agents or employees shall be effective to change, modify or
discharge any provision of this Guaranty or to constitute a waiver of any breach
hereunder.
3.4 Remedies Cumulative. All rights and remedies provided in this
Guaranty and any instrument or agreement referred to herein are cumulative and
are not exclusive of any rights or remedies otherwise provided by law. Any
single or partial exercise of any right or remedy shall not preclude the further
exercise thereof or the exercise of any other right or remedy.
3.5 Costs and Expenses. Guarantors agree to pay on demand all costs
and expenses of Sellers, including attorney costs, in connection with the
enforcement of, and preservation of any rights, remedies or interests under,
this Guaranty.
3.6 Severability. Whenever possible, each provision of this Guaranty
shall be interpreted in such manner as to be effective and valid under all
applicable laws and regulations. If, however, any provision of this Guaranty
shall be prohibited by or invalid under any such law or regulation in any
jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform
to the minimum requirements of such law or regulation, or, if for any reason it
is not deemed so modified, it shall be ineffective and invalid only to the
extent of such prohibition or invalidity without affecting the remaining
provisions of this Guaranty, or the validity or effectiveness of such provision
in any other jurisdiction.
3.7 Governing Law. This Guaranty shall be governed by the laws of the
State of New York without giving effect to choice of law provisions included
herein.
3.8 Integration. This Guaranty (a) integrates all the terms and
conditions mentioned herein or incidental hereto, (b) supersedes all oral
negotiations and prior writings with respect to the subject matter hereof, and
(c) is intended by the parities as the final expression of the agreement with
respect to the terms and conditions set forth in this Guaranty and as the
complete and exclusive statement of the terms agreed to by the parties.
3.9 Counterparts. This Guaranty may be executed in a number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.
IN WITNESS WHEREOF, each of Guarantors has caused this Guaranty to be
signed in its name by its duly authorized representative as of the date first
above mentioned.
RENTECH, INC. REPUBLIC FINANCIAL CORPORATION
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President President
ACCEPTED BY:
SAND CREEK CHEMICAL LIMITED
PARTNERSHIP
By: ▇▇▇▇▇▇▇ HOLDING COMPANY,
as General Partner
By: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
STATE STREET BANK AND TRUST
COMPANY
By: K. Farimor
AVP