EXHIBIT 10.3
Execution Copy
Amended and Restated Guaranty, dated as of February 25, 1999
(the "Guaranty"), by each of the Guarantors identified as
such on the signature pages hereof (individually a
"Guarantor" and collectively the "Guarantors"), for and in
favor of Wexford Capital Partners II, L.P., a Delaware
limited partnership, Wexford Overseas Partners I, L.P., a
Cayman Islands exempted limited partnership, Wexford Special
Situations 1996, L.P., a Delaware limited partnership,
Wexford Special Situations 1996 Institutional, L.P., a
Delaware limited partnership, Wexford Special Situations
1996 Limited, a Cayman Islands exempted company, and Wexford-
Euris Special Situations 1996, L.P., a Delaware limited
partnership (collectively, the "Lenders") and Wexford
Management LLC, a Connecticut limited liability company, as
Agent (the "Agent").
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Whereas, on January 13, 1999, pursuant to an Agreement and Plan of
Merger, dated November 9, 1998 (the "Merger Agreement"), among Wahlco
Environmental Systems, Inc. ("Wahlco"), Thermatrix Inc. ("Thermatrix") and TMX
Acquisition Sub I, Inc., a wholly owned subsidiary of Thermatrix ("Merger Sub"),
Merger Sub merged with and into Wahlco (the "Merger") and Wahlco became a wholly
owned subsidiary of Thermatrix at the effective time of the Merger;
Whereas, concurrently with the execution and delivery hereof,
Thermatrix and Wahlco (the "Borrowers") are entering into a Second Amended and
Restated Credit Agreement, dated as of the date hereof, with the Lenders and the
Agent (as the same may hereafter be modified, extended, replaced or otherwise
amended, the "Credit Agreement"), pursuant to which the Borrowers shall be
jointly and severally liable for the payment and performance of all of the
Obligations to the Lenders and the Agent set forth therein and in the other Loan
Documents (as such terms are defined in the Credit Agreement) (all of such
Obligations, the "Liabilities");
Whereas, each Guarantor is a direct and/or indirect subsidiary of the
Borrowers;
Whereas, it is a condition to the effectiveness of the Credit
Agreement that the Guarantors guaranty the payment and performance of the
Liabilities to the Lenders and the Agent; and
Whereas, each of the Guarantors will receive substantial direct and
indirect benefits from the Lenders and the Agent entering into the Credit
Agreement;
Now Therefore, the parties agree as follows:
Each Guarantor hereby unconditionally guarantees, jointly and
severally, to the Lenders and the Agent the full and punctual payment and
performance (whether at stated maturity, by acceleration or otherwise) of the
Liabilities. Upon failure by the Borrowers to pay any such amount when due, the
Guarantors shall pay the amount not paid on demand.
Each Guarantor agrees that this Guaranty is a guaranty of payment and
performance, and not of collection, and that this Guaranty shall in all respects
be a continuing, absolute and unconditional guaranty, and shall remain in full
force and effect, notwithstanding, without limitation, the dissolution or
insolvency of either Borrower or any Guarantor or that at any time or from time
to time all of the Liabilities may have been paid in full, or any and all
modifications, extensions or renewals of any of the Liabilities, any and all
interest on any of the foregoing, and any and all expenses paid or incurred by
the Agent in endeavoring to collect any of the foregoing and in enforcing this
Guaranty (including attorneys' and paralegals' fees and expenses); and all of
the agreements and obligations of the Guarantors under this Guaranty shall
remain fully in effect until all of the Liabilities (including any
modifications, extensions or renewals of any thereof) and all such interest and
expenses shall have been paid in full.
The Guarantors further agree that if at any time all or any part of
any payment theretofore applied by the Agent to any of the Liabilities is or
must be rescinded or returned by the Agent for any reason whatsoever (including,
without limitation, the insolvency, bankruptcy or reorganization of either
Borrower), the Liabilities shall, for the purposes such payment is of this
Guaranty, to the extent that is or must be rescinded or returned, be deemed to
have continued in existence, notwithstanding such application by the Agent, and
this Guaranty shall continue to be effective or be reinstated, as the case may
be, as to the Liabilities, all as though such application by the Agent had not
been made.
This Guaranty shall remain in full force and effect and continue to be
effective even if any petition is filed by or against any Borrower or Guarantor
for liquidation or reorganization, or any Borrower or Guarantor becomes
insolvent or makes an assignment for the benefit of creditors or a receiver or
trustee is appointed for all or any significant part of any Borrower's or
Guarantor's assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Liabilities, or any
part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any Lender, whether as a "voidable
preference", "fraudulent conveyance", or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Liabilities shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned. To such end, the obligations of each of the
Guarantors hereunder shall be limited to an aggregate amount equal to the
largest amount that would not render such Grantor's obligations hereunder
subject to avoidance under Section 548 (or any other section) of the United
States Bankruptcy Code or any comparable provisions of any applicable state law.
The Agent may, from time to time, whether before or after any
discontinuance of this Guaranty, in its sole discretion and without notice to
the Guarantors, take any or all of the following actions: (a) retain or obtain
a security interest in any property to secure any of the Liabilities or any
obligation hereunder; (b) retain or obtain the primary or secondary obligation
of any obligor or obligors, in addition to the Guarantors, with respect to any
of the Liabilities; (c) extend or renew for one or more periods (whether or not
longer than the original period), modify, alter or exchange any of the
Liabilities or any document or instrument with respect thereto or extend or
waive the time for any of the Guarantors', the Borrowers' or other Person's
performance of, or compliance with, any term, covenant or agreement on its part
to be performed
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or observed under the Loan Documents, or waive such performance or compliance or
consent to a failure of, or departure from, such performance or compliance; (d)
release, waive or compromise any obligation of Thermatrix hereunder or any
obligation of any nature of any other obligor primarily or secondarily obligated
with respect to any of the Liabilities; (e) release its security interest in, or
surrender, release or permit any substitution or exchange for, all or any part
of any property now or hereafter securing any of the Liabilities or any
obligation hereunder, or extend or renew for one or more periods (whether or not
longer than the original period) or release, waive, compromise, alter or
exchange any obligations of any nature of any obligor with respect to any such
property; and (f) resort to the Guarantors for payment of any of the
Liabilities, whether or not the Agent shall have resorted to the Borrowers or to
any property of the Borrowers or any other Person securing any of the
Liabilities or any obligation hereunder or shall have proceeded against any
other obligor primarily or secondarily obligated with respect to any of the
Liabilities.
Any amounts received by the Agent from whatever source on account of
the Liabilities may be applied by the Agent toward the payment of such of the
Liabilities, and in such order of application, as the Agent may from time to
time elect; and, notwithstanding any payments made by or for the account of the
Guarantors pursuant to this Guaranty, the Guarantors shall not be subrogated to
any rights of the Agent until such time as the Agent shall have received payment
of the full amount of all of the Liabilities and of all of the obligations of
the Guarantors hereunder. The Guarantors further agree that nothing contained
herein or otherwise shall prevent the Agent from pursuing concurrently or
successively all rights and remedies available to it at law and/or in equity or
under any of the documents evidencing the Liabilities and the exercise of any of
its rights or remedies shall not constitute a discharge of the Guarantors'
obligations hereunder, it being the purpose and intent of the Guarantors that
their obligations hereunder shall be absolute, independent and unconditional
under any and all circumstances whatsoever.
Each of the Guarantors hereby expressly waives: (a) notice of the
acceptance by the Agent and the Lenders of this Guaranty; (b) notice of the
existence or creation or non-payment of all or any of the Liabilities; (c)
presentment, demand, notice of dishonor, protest, notice of protest and all
other notices whatsoever; (d) any defense, right of set-off or other claim which
such Guarantor may have against the Borrowers or may have against the Agent or
the Lenders; (e) all diligence in collection or protection of or realization
upon the Liabilities or any thereof, any obligation hereunder, or any security
for or guaranty of any of the foregoing; and (f) any failure by the Agent or any
Lender to inform the Guarantors of any facts the Agent or such Lender may now or
hereafter know about the Borrowers and the Liabilities, it being understood and
agreed that the Agent and the Lenders have no duty so to inform and that the
Guarantors are fully responsible for being and remaining informed by the
Borrowers of all circumstances bearing on the existence or creation, or the risk
of nonpayment or nonperformance of the Liabilities.
In addition to the foregoing, each of the Guarantors waives, and
agrees that it shall not at any time insist upon, plead or in any manner
whatever claim or take the benefit or advantage of, any appraisal, valuation,
stay, extension, marshaling of assets or redemption laws, or exemption, whether
now or at any time hereafter in force, which may delay, prevent or
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otherwise affect the performance by the Guarantors of their obligations under,
or the enforcement by the Agent or the Lenders of, this Guaranty and the benefit
of all provisions of law which are or might be in conflict with the terms of
this Guaranty. Each of the Guarantors represents, warrants and jointly and
severally agrees that, as of the date of this Guaranty, its obligations under
this Guaranty are not subject to any offsets or defenses against the Agent or
the Lenders or the Borrowers of any kind. Each of the Guarantors further jointly
and severally agrees that its obligations under this Guaranty shall not be
subject to any counterclaims, offsets or defenses against the Agent or the
Lenders or against the Borrowers of any kind which may arise in the future.
Notwithstanding the immediately preceding paragraph, but without
limiting or affecting any of the Agent's or the Lenders' rights or remedies of
any kind whatsoever, the Agent shall endeavor to notify the Guarantors of Events
of Default under the Credit Agreement which are or have become, in the Agent's
determination, the basis upon which to exercise the rights or remedies provided
therein. The requirement of notification set forth in this paragraph represents
a non-binding statement of principle only, and is not intended to impose any
affirmative duty upon the Agent, nor shall the requirement of notification be
construed to create or support any claim, right of action, counterclaim,
crossclaim or defense of any kind whatsoever, nor shall the requirement of
notification impair or in any way affect any of the Agent's rights, benefits or
remedies.
The Agent and each Lender may, from time to time, without notice to
the Guarantors, assign or transfer any or all of the Liabilities or any interest
therein and, notwithstanding any such assignment or transfer or any subsequent
assignment or transfer thereof, the Liabilities shall be and remain the
Liabilities for the purposes of this Guaranty, and each and every immediate and
successive assignee or transferee of any of the Liabilities or of any interest
therein shall, to the extent of the interest of such assignee or transferee in
the Liabilities, be entitled to the benefits of this Guaranty to the same extent
as if such assignee or transferee were the Agent or such Lender; provided,
however, that, unless the Agent shall otherwise consent in writing, the Agent
shall have an unimpaired right, prior and superior to that of any such assignee
or transferee, to enforce this Guaranty, for the benefit of the Agent and the
Lenders, as to those of the Liabilities which the Agent have not been assigned
or transferred.
No delay in the exercise of any right or remedy shall operate as a
waiver thereof, and no single or partial exercise by the Agent or any Lender of
any right or remedy shall preclude other or further exercise thereof or the
exercise of any other right or remedy; nor shall any modification or waiver of
any of the provisions of this Guaranty be binding upon the Agent or any Lender,
except as expressly set forth in a writing duly signed and delivered by the
Agent or such Lender. No action of the Agent or any Lender permitted hereunder
shall in any way affect or impair the rights of the Agent or such Lender and the
obligations of the Guarantors under this Guaranty.
This Guaranty shall be continuing and shall not be discharged,
impaired or affected by (a) the power or authority or lack thereof of the
Borrowers to incur the Liabilities; (b) the lack of the genuineness, validity,
regularity, enforceability of, or any future amendment of, or change in, this
Guaranty, any other Loan Document, or any other agreement, document or
instrument to which the Borrowers and/or the Guarantors is or are or may become
a party; (c)
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any claims or defenses whatsoever that the Borrowers or anyone else may or might
have to the payment or performance of the Liabilities; (d) the existence or non-
existence of the Borrowers or any subsidiary or affiliate as a legal entity; (e)
the transfer by the Borrowers or any subsidiary or affiliate of all or any part
of the collateral described in the documents securing the Liabilities; (f) any
right of offset, counterclaim or defense (other than payment in full and
performance in full of all of the Liabilities in accordance with the terms of
the documents evidencing and securing the Liabilities) that any Guarantor may or
might have to its undertakings, liabilities and obligations hereunder; (g) the
absence of any action to enforce this Guaranty or any other Loan Document or the
waiver or consent by the Agent or the Lenders with respect to any of the
provisions hereof or thereof; (h) the existence, value or condition of, or
failure to perfect its Lien against, any security for the Liabilities, or any
action, or the absence of any action, by the Agent or the Lenders in respect
thereof (including, without limitation, the release of any such security); or
(i) any other action or circumstances which might otherwise constitute a legal
or equitable discharge or defense of a surety or guarantor, each and every such
defense being hereby waived by the Guarantors to the fullest extent permitted by
law.
Each Guarantor further expressly waives all rights it may have now or
in the future under any statute, or at common law, or at law or in equity, or
otherwise, to compel the Agent or any Lender to proceed in respect of the
Liabilities against the Borrowers or any other party or against any security for
the payment and performance of the Liabilities before proceeding against, or as
a condition to proceeding against, any Guarantor. Each Guarantor agrees that any
notice or directive given at any time to the Agent or the Lenders that is
inconsistent with the waiver in the immediately preceding sentence shall be null
and void and may be ignored by the Agent and the Lenders, and, in addition, may
not be pleaded or introduced as evidence in any litigation relating to this
Guaranty for the reason that such pleading or introduction would be at variance
with the written terms of this Guaranty. It is agreed between each Guarantor and
the Agent and the Lenders that all of the waivers set forth in this Guaranty are
of the essence of the transactions contemplated by the Loan Documents and that,
but for this Guaranty and such waivers, the Agent and the Lenders would decline
to enter into the Loan Documents.
This Guaranty shall be binding upon the Guarantors and upon their
successors and permitted assigns and shall inure to the benefit of the Agent and
the Lenders and their successors and assigns. All references herein to the
Borrowers shall be deemed to include their respective successors and assigns,
whether immediate or remote. If more than one party shall execute this Guaranty,
the term "undersigned" as used herein shall mean all parties executing this
Guaranty and each of them, and all such parties shall be jointly and severally
obligated hereunder. In addition and notwithstanding anything to the contrary
contained in this Guaranty, the obligations of the Guarantors with respect to
the Liabilities shall be joint and several with any other party that shall now
or hereafter execute a guaranty of any of the Liabilities pursuant to a guaranty
separate from this Guaranty. Notwithstanding the foregoing, no Guarantor may
assign or delegate any of its rights, obligations or liabilities hereunder.
All notices required or permitted to be given hereunder shall be in
writing and shall be either personally delivered or sent by United States
certified or registered mail, return receipt requested, addressed, if to a
Guarantor, to such Guarantor c/o Thermatrix at the address
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for notices to Thermatrix set forth in the Credit Agreement, or at such other
address as such Guarantor hereafter notifies the Agent and the Lenders as herein
provided and, if to the Agent or the Lenders, at their address for notices under
the Credit Agreement or at such other address as the Agent or such Lender
hereafter notifies the Guarantor as herein provided. Notices shall be deemed
received on the earlier of (i) the date noted on the return receipt as delivered
if mail delivery of the notice is successful; (ii) the last date of attempted
delivery, as noted by the United States Postal Service on the envelope
containing the notice, if mail delivery is unsuccessful; or (iii) the date of
actual delivery if personally delivered.
Each Guarantor agrees, upon the written request of the Agent, to
execute and deliver to the Agent and the Lenders, from time to time, any
additional instruments or documents reasonably considered necessary by the Agent
to cause this Guaranty to be, become or remain valid and effective in accordance
with its terms.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.
EACH GUARANTOR AND THE AGENT AND THE LENDERS CONSENTS FOR THEMSELVES
AND IN RESPECT OF THEIR PROPERTIES, GENERALLY, UNCONDITIONALLY AND IRREVOCABLY,
TO THE NONEXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS IN THE STATE OF
NEW YORK WITH RESPECT TO ANY PROCEEDING RELATING TO ANY MATTER, CLAIM OR DISPUTE
ARISING UNDER THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH
GUARANTOR FURTHER CONSENTS, GENERALLY, UNCONDITIONALLY AND IRREVOCABLY, TO THE
NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE STATE IN
RESPECT OF ANY PROCEEDING RELATING TO ANY MATTER, CLAIM OR DISPUTE ARISING WITH
RESPECT TO SUCH COLLATERAL. EACH GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS, GENERALLY, UNCONDITIONALLY AND IRREVOCABLY, AT ITS ADDRESS
FOR NOTICES PURSUANT HERETO, IN CONNECTION WITH ANY OF THE AFORESAID PROCEEDINGS
IN ACCORDANCE WITH THE RULES APPLICABLE TO SUCH PROCEEDINGS. EACH GUARANTOR
HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY HAVE NOW OR IN THE FUTURE
TO THE LAYING OF VENUE IN RESPECT OF ANY OF THE AFORESAID PROCEEDINGS BROUGHT IN
THE COURTS REFERRED TO ABOVE AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT TO
SERVE PROCESS IN ANY MANNER PERMITTED BY LAW OR TO COMMENCE PROCEEDINGS OR
OTHERWISE PROCEED AGAINST EACH GUARANTOR IN ANY JURISDICTION.
EACH GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER
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OR IN CONNECTION WITH, THIS AGREEMENT OR THE GUARANTY, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT
OR EITHER GUARANTOR IN CONNECTION HEREWITH. EACH GUARANTOR ACKNOWLEDGES AND
AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
(AND EACH OTHER PROVISION OF EACH LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT ENTERING INTO THIS
AGREEMENT.
This Guaranty, together with the other Loan Documents, constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior agreements relating to a guaranty of the loans and
advances and other obligations under the Loan Documents and/or the Liabilities
and may not be amended or supplemented except by a writing signed by the Agent,
the Lenders and each Guarantor to be charged thereby.
In the event that any one or more of the provisions contained in this
Guaranty shall be determined to be invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of any such
provision or provisions in every other respect and the remaining provisions of
this Guaranty shall not be in any way impaired.
This Guaranty may be executed in any number of counterparts, all of
which shall individually and collectively constitute one agreement.
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In witness whereof, each of the undersigned has caused this Guaranty
to be duly executed by its authorized officer as of the day and year first above
written.
Guarantors
Bachmann Companies, Inc.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President & Chief
Financial Officer
Wahlco Engineered Products Group, LTD. (2625927)
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
Wahlco, Inc.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President and Chief
Financial Officer
XXX Property, LTD. (2690271)
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
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Wahlco Engineered Products, Inc.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President &
Chief Financial Officer
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director and Secretary
Wahlco Engineered Products, Ltd. (526365)
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
Pentney Engineering, LTD. (2625925)
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
Teddington Bellows (Holdings), LTD. (830610)
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
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Teddington Bellows (213069)
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
Treste Plant Hire, LTD. (2631345)
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
Thermatrix, LTD. (2847272)
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Director
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
Accepted and agreed as of
the date first written above:
Wexford Management LLC, as Agent
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name: Xxxxxx Xxxxx
Title: Senior Vice President
and General Counsel
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