Exhibit 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
r 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
/s/ Dennis L. Yakobson /s/ James H. Possehl
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