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.
1250 West Northwest Highway, Suite 503
Palatine, Illinois 60067
Attn: Reginald R. Baxter
with a copy to: GE Capital Services
Structured Finance Group
120 Long Ridge Road
Stamford, CT 06927
Attn: Manager of Compliance
and a copy to: Pillsbury Madison & Sutro LLP
50 Fremont Street
San Francisco, CA 94105
Attn: D. Stanley Rowland, Esq.
If to State State Street Bank and Trust Company
Street Bank: Goodwin Square
225 Asylum Street, Floor 2320
Hartford, CT 06103
Attn: Corporate Trust Administration
If to Rentech: Rentech, Inc.
1331 17th Street, Suite 720
Denver, Colorado 80202
Attn: Ronald C. Butz, Esq.
If to Republic: Republic Financial Corporation
3300 S. Parker Road, Suite 500
Aurora, CO 80014
Attn: Julie Babcock, Vice President, Legal
with a copy to: Otten, Johnson, Robinson, Neff & Ragonetti, P.C.
950 Seventeenth Street, Suite 1600
Denver, CO 80202
Attn: John R. Marcil, 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: Dennis L. Yakobson By: James H. Possehl
President President
ACCEPTED BY:
SAND CREEK CHEMICAL LIMITED
PARTNERSHIP
By: HUBBARD HOLDING COMPANY,
as General Partner
By: Reginald R. Baxter
President
STATE STREET BANK AND TRUST
COMPANY
By: K. Farimor
AVP