LIMITED GUARANTY
Exhibit
10.2
THIS
GUARANTY (this “Guaranty”) is made
and entered into as of January [__], 2008 by Aurora Equity Partners III L.P.,
a
Delaware limited partnership (“AEP”), and
Aurora
Overseas Equity Partners III, L.P., a Delaware limited partnership (“AOEP”
and
collectively with AEP, the “Guarantors”).
RECITALS
A. NuCO2
Acquisition Corp., a Delaware corporation (“Parent”), NuCO2
Merger Co., a Florida corporation and wholly-owned subsidiary of Parent (“Merger Sub”), and
NuCO2 Inc., a Florida corporation (the “Company”), have
entered into that certain Agreement and Plan of Merger dated as of even date
herewith (as it may be amended from time to time, the “Merger
Agreement”). Capitalized terms used but not defined herein
shall have the meanings assigned to such terms in the Merger
Agreement.
B. It
is a condition precedent to the entering into of the Merger Agreement that
the
Guarantors execute a guaranty of all of Merger Sub’s and the Parent’s
obligations under the Merger Agreement.
NOW,
THEREFORE, in consideration of the above Recitals, which are incorporated
into
the Agreement below by reference as if fully set forth therein, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged by the Guarantors, each of the Guarantors agrees with the Company
as follows:
AGREEMENT
ARTICLE
I
REPRESENTATIONS
AND
WARRANTIES
Each
of
the Guarantors, severally and not jointly, makes the following representations
and warranties to and in favor of the Company with respect to itself (but
not
the other Guarantor), which shall be continuing representations and warranties
so long as any Guarantied Obligations (as defined below) shall remain unpaid
and
unsatisfied:
Section
1.1. Existence and
Rights. Such Guarantor is a limited partnership duly formed
and validly existing under the laws of the jurisdiction of its
formation. Such Guarantor has the requisite power and authority,
rights and franchises to own its property and to carry on its business as
now
carried on and is duly qualified and in good standing in each jurisdiction
in
which the property owned by it or the business conducted by it makes such
qualification necessary, and such Guarantor has the power and authority to
execute, deliver and perform this Guaranty.
Section
1.2. Guaranty Authorized
and
Binding. The execution, delivery and performance of this
Guaranty by such Guarantor have been duly authorized by all requisite
limited
partnership action and this Guaranty is a valid and legally binding obligation
of such Guarantor enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and to general principles
of
equity.
Section
1.3. No
Conflict. The execution and delivery of this Guaranty by such
Guarantor (a) are not, and the performance of this Guaranty by such Guarantor
will not be, in contravention of, or in conflict with, or result in the default,
require consent, or give rise to a right of termination or acceleration of
any
obligation under, any agreement, indenture or undertaking to which such
Guarantor is a party or by which it or any of its property is or may be bound
or
affected, (b) do not, and will not, require the consent or approval of any
Governmental Authority, (c) are not, and will not be, in contravention of,
or in
conflict with, any applicable Law binding on such Guarantor or any term or
provision of such Guarantor’s limited partnership agreement or other
organizational documents, and (d) do not, and will not, cause any security
interest, lien or other encumbrance to be created or imposed upon any of
such
Guarantor’s assets or property.
Section
1.4. Review
of Documents. Such Guarantor hereby acknowledges that it has
copies of and is fully familiar with the Merger Agreement.
Section
1.5. Financial
Capacity. Such Guarantor has the financial capacity to pay and
perform its obligations under this Guaranty in full, and all funds necessary
for
such Guarantor to fulfill its obligations under this Guaranty in full shall
be
available to such Guarantor for so long as this Guaranty shall remain in
effect
in accordance with Section 2.2.
ARTICLE
II
GUARANTY
Section
2.1. Guaranty.
(a) Subject
to the limitations set forth in Section 2.1(b), each Guarantor hereby absolutely
unconditionally and irrevocably guaranties to the Company the prompt payment
(on
demand and in lawful money of the United States) and performance of such
Guarantor’s Pro Rata Portion (as defined below) of the Guarantied Obligations
(as defined below). The term “Guarantied
Obligations” as used herein means all obligations of Merger Sub or Parent
under the Merger Agreement, subject to the terms and conditions set forth
therein (as such provisions may be amended or waived by Merger Sub, Parent
and
the Company from time to time). Notwithstanding any other provision
of this Guaranty, payment by any Guarantor hereunder will be due on the 15th
Business Day
after the date on which the Company notifies such Guarantor that Merger Sub
or
Parent has failed to pay the Guarantied Obligations when due in accordance
with
the terms of the Merger Agreement and that the Company is requesting payment
from such Guarantor.
(b) The
guaranties and obligations of the Guarantors shall be several and not joint,
which shall mean that a Guarantor shall be liable to the Company only to
the
extent of such Guarantor’s Pro Rata Portion of the Guarantied
Obligations. In addition, in no event shall the Guarantors be
obligated to make payments to the Company with respect to this Guaranty that
exceed
$35,000,000 in the aggregate (the “Maximum Amount”), it
being understood that this Guaranty may not be enforced against the Guarantors
without giving effect to the Maximum Amount. The Company hereby
agrees that in no event shall the Guarantors be required to pay to the Company
under, in respect of, or in connection with this Guaranty or the Merger
Agreement other than as expressly set forth herein. The term “Pro Rata Portion”
as
used herein means (i) with respect to AEP, 98.8864% and (ii) with respect
to
AOEP, 1.1136%.
(c) Notwithstanding
the foregoing, in the event that the Company, directly or indirectly, claims,
attempts, commences litigation or other proceedings in order to assert, asserts,
demands or otherwise seeks to claim that the provisions of Section 2.1 hereof
limiting the Guarantors’ liability to the Maximum Amount or that any other
provisions of this Guaranty are illegal, invalid or unenforceable in whole
or in
part, or attesting any theory of liability against the Guarantors or any
Affiliates of Guarantors with respect to the transactions contemplated by
the
Merger Agreement other than liability of the Guarantors under this Guaranty
(as
limited by the provisions of Section 2), then (i) the obligations of the
Guarantors under this Guaranty shall terminate ab initio
and shall thereupon be null
and void, (ii) if the Guarantors have previously made any payments under
this
Guaranty, they shall be entitled to recover such payments from the Company
and
(iii) none of the Guarantors and any Non-Recourse Parties (as defined below)
shall have any liability to the Company or any of its Affiliates with respect
to
the Merger Agreement, the Equity Commitment Letter (as defined below), the
transactions contemplated by the Merger Agreement or under this
Guaranty.
Section
2.2. Continuing
Guaranty. This is a continuing guaranty of the Guarantied
Obligations and shall remain in full force and effect until the earlier to
occur
of (a) the indefeasible payment and performance in full of the Guarantied
Obligations, (b) the termination of the Merger Agreement by Parent, Merger
Sub
or the Company, in either such case in accordance with its terms, and only
if
neither Merger Sub nor the Parent has any liability or financial obligation
to
the Company that survives such termination or (c) consummation of the
Closing. Upon termination of the Merger Agreement in accordance with
its terms, and only if neither Merger Sub nor Parent has any liability or
financial obligation to the Company that survives such termination, or upon
consummation of the Closing, this Guaranty shall automatically become void
and
neither Guarantor shall thereafter have any liability arising
hereunder. Each Guarantor understands and agrees that, subject to the
immediately preceding two sentences, this Guaranty shall be binding upon
the
Guarantor and its successors and assigns, shall be construed as an absolute,
irrevocable and continuing guaranty of payment and performance and shall
be
enforceable by the Company and its successors, transferees and assigns, subject
to the terms set forth herein. Each Guarantor authorizes Merger Sub,
Parent and the Company without notice or demand and without affecting such
Guarantor’s liability hereunder, from time to time to make any change to the
terms of the Merger Agreement or in any other term of all or any of the
Guarantied Obligations, or any other amendment or waiver of or any consent
to
departure from the Merger Agreement or any of the documents executed in
connection therewith.
Section
2.3. Nature
of Guaranty. In the event that any payment to the Company
hereunder is rescinded or must otherwise be returned for any reason whatsoever,
the Guarantors shall remain liable hereunder with respect to the Guarantied
Obligations as if such payment had not
been
made; provided that this Section 2.3 shall not apply to any such rescission
or
return by reason of the insolvency, bankruptcy or reorganization of Merger
Sub
or Parent, which shall be covered by Section 2.5 below. A separate
action or separate actions under this Guaranty may be brought and prosecuted
against either Guarantor whether or not any action is brought or prosecuted
against Merger Sub, Parent, the other Guarantor or any other person or whether
Merger Sub, Parent, the other Guarantor or any other person is joined in
any
such action or actions. Any circumstance which operates to toll any
statute of limitations applicable to Merger Sub or Parent shall also operate
to
toll the statute of limitations applicable to Guarantor. This
Guaranty is an unconditional guarantee of payment and not of
collection.
Section
2.4. Waivers. Each
Guarantor hereby waives the right to require the Company to proceed against
Merger Sub, Parent, the other Guarantor or any other person liable on the
Guarantied Obligations or to pursue any other remedy in the Company’s power
whatsoever, and each Guarantor waives the right to have the proceeds of property
of Merger Sub, Parent, the other Guarantor or any other person liable on
the
Guarantied Obligations first applied to the discharge of the Guarantied
Obligations. When making any demand on a Guarantor hereunder against
the Guarantied Obligations, the Company may, but shall be under no obligation
to, make a similar demand on Merger Sub, Parent or the other Guarantor, and
any
failure by the Company to make any such demand or to collect any payments
from
Merger Sub, Parent or the other Guarantor shall not relieve such Guarantor
of
its obligations or liabilities hereunder. The Company may, at its
election, exercise any right or remedy it may have against Merger Sub, Parent,
a
Guarantor or any other person without affecting or impairing in any way the
liability of the other Guarantor hereunder, except to the extent the Guarantied
Obligations have been indefeasibly paid, and each Guarantor waives any defense
arising out of the absence, impairment or loss of any right of reimbursement
or
subrogation or any other right or remedy of such Guarantor against Merger
Sub or
Parent, whether resulting from such election by the Company or
otherwise. Each Guarantor hereby waives, to the fullest extent
permitted by law, all rights and benefits under any applicable law purporting
to
reduce a guarantor’s obligations in proportion to the obligation of the
principal. Each Guarantor hereby waives any defense based upon or
arising by reason of: (a) any lack of authority of any officer, director or
any other person acting or purporting to act on behalf of Merger Sub or Parent,
or any defect in the formation of Merger Sub or Parent; (b) any act or
omission by Merger Sub or Parent which directly or indirectly results in
or aids
the discharge of Merger Sub or Parent or any Guarantied Obligations by operation
of law or otherwise; or (c) any modification of the Guarantied Obligations,
in any form whatsoever, including, without limitation, the renewal, extension,
acceleration or other change in time for payment or performance of the
Guarantied Obligations, any waiver or modification of conditions precedent
or
any other change in the terms of the Guarantied Obligations or any part
thereof. Each Guarantor hereby waives 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 of new or additional obligations. Each
Guarantor assumes the responsibility for being and keeping itself informed
of
the financial condition of Merger Sub and Parent and of all other circumstances
bearing upon the risk of nonpayment or nonperformance by Merger Sub or Parent
of
the Guarantied Obligations which diligent inquiry would reveal, represents
that
it has adequate means of obtaining such financial information from Merger
Sub
and Parent on a continuing basis, and agrees that the Company shall have
no duty
to advise any Guarantor of information known
to
it regarding such condition or any such circumstances. Each Guarantor
hereby waives notice of any action taken or omitted by the Company in reliance
hereon, any requirement that the Company be diligent and prompt in making
demands hereunder, notice of any waiver or amendment of any terms and conditions
of the Merger Agreement, notice of any default by Merger Sub or Parent or
the
assertion of any right of the Company hereunder, and any right to plead or
assert any election of remedies in any action to enforce this Guaranty in
respect of its obligations hereunder.
Section
2.6. Guarantor’s Understandings
With Respect To Waivers. Each Guarantor warrants and agrees
that each of the waivers set forth above is made with such Guarantor’s full
knowledge of its significance and consequences and made after the opportunity
to
consult with counsel of its own choosing, and that under the circumstances,
the
waivers are reasonable and not contrary to public policy or law. If
any of said waivers are determined to be contrary to any applicable law or
public policy, such waiver shall be effective only to the extent permitted
by
law.
Section
2.7. Covenants of the
Company. The Company hereby covenants and agrees that it shall
not institute, directly or indirectly and shall cause its Affiliates not
to
institute, directly or indirectly, any proceeding or bring any other claim
arising under, or in connection with, the Merger Agreement, the transactions
contemplated thereby or the equity commitment letter between the Company
and
Parent (the “Equity
Commitment Letter”), against the Guarantors or any Non-Recourse Party,
except for claims against the Guarantors under this Guaranty (subject to
the
limitations described herein, including the Maximum
Amount). Notwithstanding anything to the contrary contained in this
Guaranty, the Company hereby agrees that to the extent Parent and Merger
Sub are
indefeasibly relieved in full of their payment obligations under the Merger
Agreement (other than due to a rejection of the Merger Agreement in the context
of a bankruptcy or insolvency of Parent or Merger Sub), the Guarantors shall
be
similarly relieved of their obligations under this
Guaranty. Notwithstanding
anything
that may be
expressed or implied in this Guaranty or any document or instrument delivered
in
connection herewith, by its acceptance of the benefits of this Guaranty,
the
Company covenants, agrees and acknowledges that no Person other than the
Guarantors has any obligations hereunder and that, notwithstanding that the
Guarantors or their general partners may be a partnership or limited liability
companies, the Company has no right of recovery under this Guaranty, or any
claim based on the obligations hereunder against, and no personal liability
shall attach to, the former, current or future equity holders, controlling
persons, directors, officers, employees, agents, Affiliates, members, managers
or general or limited partners of any of the Guarantors, Parent or Merger
Sub or
any former, current or future stockholder, controlling person, director,
officer, employee, general or limited partner, member, manager, Affiliate
(other
than the Guarantors) or agent of any of the foregoing (collectively, but
not
including Parent, Merger Sub or the Guarantors, each a “Non-Recourse Party”),
through Parent, Merger Sub or otherwise, whether by or through attempted
piercing of the corporate veil, by or through a claim by or on behalf of
Parent
or Merger Sub against any Non-Recourse Party (including a claim to enforce
the
Equity Commitment Letter), by the enforcement of any assessment or by any
legal
or equitable proceeding, by virtue of any statute, regulation or applicable
Law,
or otherwise, and the Company further covenants, agrees and acknowledges
that
the only rights of recovery that the Company has in respect of the Merger
Agreement or the transactions contemplated thereby are its rights to recover
from Parent and Merger Sub under and to the extent expressly provided in
the
Merger Agreement and from the Guarantors (but not any Non-Recourse Party)
under
and to the extent expressly provided in this Guaranty and subject to the
Maximum
Amount and the other limitations described herein; provided, however, that
in
the event a Guarantor (i) consolidates with or merges with any other person
and
is not the continuing or surviving entity of such consolidation or merger
or
(ii) transfers or conveys all or a substantial portion or its properties
and
other assets to any person such that the sum of such Guarantor’s remaining net
assets plus uncalled capital is less than such Guarantor’s Pro Rata Portion of
the Maximum Amount, then, and in each such case, the Company may seek recourse,
whether by enforcement or any judgment or assessment or by any legal or
equitable proceeding or by virtue of any statue, regulation or other applicable
Law, against such continuing or surviving entity, but only to the extent
of the
liability of such Guarantor hereunder. The Company acknowledges and
agrees that Parent and Merger Sub have no assets other than certain contract
rights and that no additional funds are expected to be contributed to Parent
or
Merger Sub unless and until the Closing occurs. Recourse against the
Guarantors under and pursuant to the terms of this Guaranty shall be the
sole
and exclusive remedy of the Company and all of its Affiliates against the
Guarantors and the Non-Recourse Parties in respect of any liabilities or
obligations arising under, or in connection with, the Merger Agreement, the
Equity Commitment Letter or the transactions contemplated thereby, including
by
piercing of the corporate veil or by a claim by or on behalf of Parent or
Merger
Sub. Nothing set forth in this Guaranty shall confer or give or shall
be construed to confer or give to any Person other than the Company, its
successors, transferees or assigns (including any Person acting in a
representative capacity) any rights or remedies against any Person including
the
Guarantors, except as expressly set forth herein.
ARTICLE
III
MISCELLANEOUS
Section
3.1. Survival of
Warranties. All representations, warranties, covenants and
agreements of the Guarantors contained herein shall survive the execution
and
delivery of this Guaranty and shall be deemed made continuously, and shall
continue in full force and effect, until the termination of this
Guaranty.
Section
3.2. No
Waiver. No waiver, forbearance, failure or delay by the
Company in exercising, or in beginning to exercise, any right, power or remedy,
nor any simultaneous or later exercise thereof, shall constitute a waiver
of the
Company’s rights hereunder, and every right, power or remedy of the Company
shall continue in full force and effect until such right, power or remedy
is
specifically waived in writing. No single or partial exercise of any
right, power or remedy by the Company shall preclude any other or further
exercise thereof or the exercise of any other right, power or
remedy. All remedies hereunder are cumulative and are not exclusive
of any other remedies that may be available to the Company at law, in equity,
or
otherwise.
Section
3.3. Notices. All
notices, requests, demands, claims and other communications hereunder shall
be
in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given (i) if personally
delivered, when so delivered, (ii) if mailed, two Business Days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid and addressed to the intended recipient as set forth below,
(iii) if given by telex or telecopier, once such notice or other
communication is transmitted to the telex or telecopier number specified
below
and the appropriate answer back or telephonic confirmation is received, provided
that such notice or other communication is promptly thereafter mailed in
accordance with the provisions of clause (ii) above or (iv) if sent
through an overnight delivery service in circumstances to which such service
guarantees next day delivery, the day following being so sent:
If
to
either Guarantor, Merger Sub or Parent:
c/o
Aurora Management Partners LLC
00000
Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx
X. Xxxx, Esq.
Telecopier
No.: (000) 000-0000
with
a
copy to:
Xxxxx
X.
Xxxxx, Esq.
Xxxxxx,
Xxxx & Xxxxxxxx LLP
000
Xxxxx
Xxxxx Xxxxxx
Xxx
Xxxxxxx, XX 00000
Telecopier
No.: (000) 000-0000
If
to the
Company:
Xxxx
X.
Xxxxxxxx, Esq.
NuCO2
Inc.
0000
XX
Xxxxxx Xxxxx
Xxxxxx,
Xxxxxxx 00000
Telecopier
No.: (000) 000-0000
with
a
copy to:
Xxxxxx
Xxxxxxx, Esq.
Xxxxxx
Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
Park
Avenue Tower
00
Xxxx
00xx Xxxxxx
Xxx
Xxxx,
XX 00000
Telecopier
No.: (000) 000-0000
Any
party
may give any notice, request, demand, claim or other communication hereunder
using any other means (including ordinary mail or electronic mail), but no
such
notice, request, demand, claim or other communication shall be deemed to
have
been duly given unless and until it actually is received by the individual
for
whom it is intended. Any party may change the address to which
notices, requests, demands, claims and other communications hereunder are
to be
delivered by giving the other parties notice in the manner herein set
forth.
Section
3.4. Severability. 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
provisions hereof or thereof or affecting the validity or enforceability
of such
provision in any other jurisdiction.
Section
3.5. Governing Law;
Jurisdiction. This Guaranty shall be governed by and construed
in accordance with the substantive laws of the State of New York and the
United
States of America without regard to any law which would result in the selection
or application of the law of any other jurisdiction.
Section
3.6. Binding Effect;
Assignment. This Guaranty shall be binding upon and inure to
the benefit of the Company and the Guarantors and their respective successors
and assigns, provided that neither Guarantor shall have the right to assign
its
rights and obligations hereunder without the prior written consent of the
Company (and any attempted assignment in contravention of the terms hereof
shall
be void).
Section
3.7. Headings. Article
and Section headings in this Guaranty are included herein for the convenience
of
reference only and shall not constitute a part of this Guaranty for any other
purpose.
Section
3.8. Entire
Agreement. This Guaranty constitutes the entire agreement and
understanding between the parties pertaining to the subject matter hereof
and
supersedes all prior or contemporaneous drafts, agreements, representations
and
understandings of the parties. Each
party acknowledges that it has expressly bargained for a prohibition of any
implied or oral amendments or modifications of any kind, nature or
character. Each party agrees and acknowledges that this Guaranty is
fully integrated and not in need of parol evidence in order to reflect the
intentions of the parties, and that the parties intend the literal words
of this
agreement to govern the transactions described herein, and for all prior
negotiations, drafts and other extraneous communications to have no significance
or evidentiary effect whatsoever.
Section
3.9. Counterparts. This
Guaranty may be executed in counterparts, each of which shall be deemed to
be an
original, but all of which taken together shall constitute but one and the
same
instrument.
IN
WITNESS WHEREOF, this Guaranty has been entered into by the undersigned as
of
the date and year first above written.
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GUARANTORS:
|
|
|
AURORA
EQUITY PARTNERS III,
L.P.
|
|
|
By:
|
AURORA
CAPITAL PARTNERS III,
L.P., its general partner
|
|
By:
|
AURORA
ADVISORS III LLC,
its general partner
|
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By:
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/s/ Xxxxxxx X. Xxxx |
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Name: Xxxxxxx
X. Xxxx
|
|
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Title: Vice
President, Secretary and General Counsel
|
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AURORA
OVERSEAS EQUITY PARTNERS
III, L.P.
|
|
|
By:
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AURORA
OVERSEAS CAPITAL
PARTNERS III, L.P., its general partner
|
|
By:
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AURORA
OVERSEAS ADVISORS III
LDC, its general partner
|
|
By:
|
/s/ Xxxxxxx X. Xxxx |
|
Name: Xxxxxxx
X. Xxxx
|
|
|
Title: Vice
President, Secretary and General
Counsel
|
|
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ACCEPTED
BY:
|
|
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NUCO2
INC.
|
|
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By:
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/s/ Xxxxxxx X. XxXxxxxxxx |
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Name:
Xxxxxxx X. XxXxxxxxxx
|
|
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Title:
Chairman and Chief Executive
Officer
|
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SIGNATURE
PAGE TO LIMITED
GUARANTY
