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AMENDED AND RESTATED GUARANTY AGREEMENT
AGRICULTURAL SUPPLY, INC.
ASPEN CONSULTING COMPANIES, INC.
MITIGATION SERVICES, INC.
TURF PARTNERS, INC.
YUMA ACQUISITION SUB., INC.
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Dated as of June 30, 1999
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TABLE OF CONTENTS
1. Guaranty.............................................................................................2
1.1. Guaranty of Each of the Guarantors.............................................................2
1.2. Guarantors' Obligations Unconditional..........................................................3
1.3. Full Recourse Obligations......................................................................5
1.4. Waiver.........................................................................................5
1.5. Subrogation....................................................................................6
1.6. Effect of Bankruptcy Proceedings, etc..........................................................6
1.7. Endorsement on Notes...........................................................................7
1.8. Term of Guaranty...............................................................................7
2. Maximum Liability....................................................................................7
3. Subordination........................................................................................8
4. Representations and Warranties.......................................................................8
5. Notices..............................................................................................9
6. Amendments, etc......................................................................................9
7. Submission to Jurisdiction...........................................................................9
8. Survival............................................................................................10
9. Further Assurances..................................................................................10
10. Miscellaneous.......................................................................................10
AMENDED AND RESTATED GUARANTY AGREEMENT
AMENDED AND RESTATED GUARANTY AGREEMENT, dated as of June
30, 1999, made by AGRICULTURAL SUPPLY, INC., a Delaware corporation ("ASI"),
ASPEN CONSULTING COMPANIES, INC., a Colorado corporation ("ACC"), MITIGATION
SERVICES, INC., a Delaware corporation ("MSI"), TURF PARTNERS, INC. (formerly
known as Turf Acquisition Sub, Inc.), a Delaware corporation ("TPI"), and
YUMA ACQUISITION SUB., INC., a Delaware corporation ("YAS" and, together with
ASI, ACC, MSI and TPI, the "Guarantors").
W I T N E S S E T H :
WHEREAS, ECO SOIL SYSTEMS, INC., a Nebraska corporation
(the "Company"), entered into separate Note and Warrant Purchase Agreements,
dated as of August 25, 1998 (the "Original Note Agreements"), with the
purchasers referred to in each such agreement (collectively, the
"Purchasers"), providing, among other things, for issuance by the Company of
up to $15,000,000 aggregate principal amount of its 12.00% Senior
Subordinated Notes due 2003 (the "Original Notes") to the Purchasers;
WHEREAS, each of the Guarantors is a wholly-owned
subsidiary of the Company;
WHEREAS, in connection with the issuance of the Original
Notes on August 25, 1998, the Guarantors (together with certain other
wholly-owned subsidiaries of the Company that were subsequently merged into
or consolidated with the one or more of the Guarantor) delivered the Guaranty
Agreement, dated as of August 25, 1999 (the "Original Guaranty");
WHEREAS, the Original Note Agreements were amended by a
letter agreement dated, March 31, 1999, and are being further amended by
Amendment No. 2, dated as of June 30, 1999 (the Original Note Agreements, as
so amended and as they may be further amended or supplemented from time to
time, being referred to hereinafter as the "Note Agreements"); and the
Original Notes are being amended and restated as of June 30, 1999 (the
Original Notes as so amended being referred to hereinafter as the "Notes");
WHEREAS, in connection with the amendments referred to
above, the Purchasers have requested that the
Guarantors reaffirm the guaranties and agreements contained in the Original
Guaranty and amend and restate the Original Guaranty so as expressly to
guarantee the amounts due and payable by the Company and the other
obligations and covenants of the Company under the Notes and the Note
Agreements as amended as described above; and
WHEREAS, capitalized terms not otherwise defined herein
shall have the meanings specified therefor in the Note Agreements.
NOW, THEREFORE, in consideration of the premises and the
covenants herein contained, the parties hereto agree as follows:
1. GUARANTY. 1.1. GUARANTY OF EACH OF THE GUARANTORS. The
Guarantors, jointly and severally, unconditionally and irrevocably guarantee to
each holder from time to time of any of the Notes:
(a) the due, prompt and complete payment by the Company of
the principal of and interest on, and any other amount due under, the
Notes, when and as the same shall become due and payable (whether at
stated maturity or by prepayment or by declaration or otherwise) in
accordance with the terms of the Notes and of the Note Agreements, and
(b) the due, prompt and faithful performance of, and
compliance with, all obligations, covenants, terms, conditions and
undertakings of the Company contained in the Notes and the Note
Agreements and in any other agreement or document executed by the
Company pursuant to the Note Agreements (the Note Agreements, the
Notes and such other agreements and documents being sometimes
collectively hereinafter referred to as the "Guaranteed Documents",
and the amounts payable by the Company under any of the Guaranteed
Documents and all other obligations of the Company thereunder being
sometimes collectively hereinafter referred to as the "Guaranteed
Obligations").
This guaranty is a guaranty of payment, performance and
compliance and not of collectibility and is in no way conditioned or
contingent upon any attempt to collect from or enforce performance or
compliance by the Company or upon any other event, contingency, circumstance
or condition whatsoever. If for any reason whatsoever the Company shall
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fail or be unable duly, punctually and fully to pay such amounts as and when
the same shall become due and payable or to perform or comply with any other
Guaranteed Obligation, whether or not such failure or inability shall
constitute an "Event of Default" under any Guaranteed Document, the
Guarantors, without demand, presentment, protest or notice of any kind, will
forthwith pay or cause to be paid such amounts to the holders of the Notes
entitled thereto under the terms of such Guaranteed Document, in lawful money
of the United States, at the place specified in the Note Agreements, or
perform or comply with such Guaranteed Obligations or cause such Guaranteed
Obligations to be performed or complied with, together with interest on any
amount due and owing from the Company at the rate applicable under the
Guaranteed Documents from the date the same becomes due and payable to the
date of payment. The Guarantors, promptly after demand, will reimburse to
each holder of the Notes all costs and expenses of collecting such amounts or
otherwise enforcing the Note Agreements, including, without limitation, the
reasonable fees and expenses of counsel.
1.2. GUARANTORS' OBLIGATIONS UNCONDITIONAL. The obligations
of the Guarantors under this Agreement are primary, absolute and
unconditional obligations of the Guarantors, are not subject to any
counterclaim, set-off, deduction, diminution, abatement, recoupment,
suspension, deferment, reduction or defense based upon any claim the
Guarantors or any other Person may have against the Company or any other
Person, and shall remain in full force and effect without regard to, and
shall not be released, discharged or in any way affected by, any circumstance
or condition whatsoever (whether or not any Guarantor or the Company shall
have any knowledge or notice thereof), including, without limitation, in each
case, to the extent permitted by law:
(a) any amendment of or change in, or waiver of, any of the
Guaranteed Documents;
(b) any furnishing, acceptance or release of, or any defect
in, any security for any of the Guaranteed Obligations;
(c) any failure, omission or delay on the part of the Company
to conform or comply with any term of any of the Guaranteed Documents
or any other instrument or agreement referred to in section 1.1 above,
including,
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without limitation, failure to give notice to any Guarantor of the
occurrence of a default or an "Event of Default" under any Guaranteed
Document;
(d) any waiver of the payment, performance or observance of
any of the obligations, conditions, covenants or agreements contained
in any Guaranteed Document, or any other waiver, consent, extension,
indulgence, compromise, settlement, release or other action or
inaction under or in respect of any of the Guaranteed Documents or any
other instrument or agreement referred to in section 1.1 above or any
obligation or liability of the Company, or any exercise or
non-exercise of any right, remedy, power or privilege under or in
respect of any such instrument or agreement or any such obligation or
liability;
(e) any failure, omission or delay on the part of the holder
of any of the Notes to enforce, assert or exercise any right, power or
remedy conferred on it in the Note Agreements, or any such failure,
omission or delay on the part of such holder in connection with any
Guaranteed Document, or any other action on the part of such holder;
(f) any voluntary or involuntary bankruptcy, insolvency,
reorganization, arrangement, readjustment, assignment for the benefit
of creditors, composition, receivership, conservatorship,
custodianship, liquidation, marshalling of assets and liabilities or
similar proceedings with respect to the Company, any Guarantor or any
other Person or any of their respective properties or creditors, or
any action taken by any trustee or receiver or by any court in any
such proceeding;
(g) any limitation on the liability or obligations of the
Company or any other Person under any of the Guaranteed Documents, or
any discharge, termination, cancellation, frustration, irregularity,
invalidity or unenforceability, in whole or in part, of any of the
Guaranteed Documents or any other agreement or instrument referred to
in section 1.1 above or any term hereof;
(h) any merger or consolidation of the Company or any
Guarantor into or with any other corporation, or
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any sale, lease or transfer of any of the assets of the Company or any
Guarantor to any other Person;
(i) any change in the ownership of any shares of capital
stock of the Company, or any change in the corporate relationship
between the Company and any Guarantor, or any termination of such
relationship;
(j) any release or discharge, by operation of law, of any
Guarantor from the performance or observance of any of the Guaranteed
Obligations; or
(k) any other occurrence, circumstance, happening or event
whatsoever, whether similar or dissimilar to the foregoing, whether
foreseen or unforeseen, and any other circumstance which might
otherwise constitute a legal or equitable defense or discharge of the
liabilities of a guarantor or surety or which might otherwise limit
recourse against the Guarantors (other than a defense of payment or
performance).
1.3. FULL RECOURSE OBLIGATIONS. Except as provided herein,
the obligations of the Guarantors set forth herein constitute the full
recourse obligations of each of the Guarantors enforceable against it to the
full extent of all its assets and properties.
1.4. WAIVER. The Guarantors unconditionally waive, to the
extent permitted by applicable law, (A) notice of any of the matters referred
to in section 1.2, (B) notice to the Guarantors of the incurrence of any of
the Guaranteed Obligations, notice to the Guarantors or the Company of any
breach or default by the Company with respect to any of the Guaranteed
Obligations or any other notice that may be required, by statute, rule of law
or otherwise, to preserve any rights of any holder of any of the Notes
against the Guarantors, (c) presentment to or demand of payment from the
Company or the Guarantors with respect to any Note or protest for nonpayment
or dishonor, (D) any right to the enforcement, assertion, exercise or
exhaustion by any holder of any of the Notes of any right, power, privilege
or remedy conferred in the Note Agreements or any other Guaranteed Document
or otherwise, (E) any requirement of diligence on the part of any holder of
any of the Notes, (F) any requirement to mitigate the damages resulting from
any default under any Guaranteed Document, (G) any notice of any sale,
transfer or other disposition of any right or title to or interest in any
Note by any holder thereof or in any
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other Guaranteed Document, (H) any release of the Guarantors from its
obligations hereunder resulting from any loss by it of its rights of
subrogation hereunder and (I) any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge, release or defense of a
guarantor or surety or which might otherwise limit recourse against the
Guarantors.
1.5. SUBROGATION. Upon the payment in full of all principal
of and interest on the Notes and any other amounts payable by the Company
under the Guaranteed Documents, the Guarantors shall be subrogated to the
rights of the holders of the Notes in respect of any payment or other
obligation with respect to which an amount has been payable by the Guarantors
hereunder. The Guarantors shall not seek to exercise any rights of
subrogation, reimbursement or indemnity arising from payments made by the
Guarantors pursuant to the provisions of this Agreement until the full and
complete payment or performance and discharge of the Guaranteed Obligations.
1.6. EFFECT OF BANKRUPTCY PROCEEDINGS, ETC. (a) This
Guaranty shall continue to be effective or be automatically reinstated, as
the case may be, if at any time any payment made by any Person on account of
any of the sums due any holder of any of the Notes pursuant to the terms of
the Notes, the Note Agreements or any other Guaranteed Document is rescinded
or must otherwise be restored or returned by such holder upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company or any
other Person, or upon or as a result of the appointment of a custodian,
receiver, trustee or other officer with similar powers with respect to the
Company or other Person or any substantial part of its property, or
otherwise, all as though such payment had not been made.
(b) If an event permitting the acceleration of the maturity
of the principal amount of the Notes shall at any time have occurred and be
continuing, and such acceleration shall at such time be prevented by reason
of the pendency against the Company or any other Person of any case or
proceeding contemplated by section 1.6(a) then, for the purpose of defining
the obligation of the Guarantors under this Guaranty, the maturity of the
principal amount of the Notes shall be deemed to have been accelerated with
the same effect as if an acceleration had occurred in accordance with the
terms of the Note Agreement, and the Guarantors shall forthwith pay such
principal amount, all accrued and unpaid
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interest thereon and any other amounts guaranteed hereunder without further
notice or demand.
1.7. ENDORSEMENT ON NOTES. The Guarantors will execute the
guaranty appended to each Note upon the issuance of such Note. If any Note
shall be issued in exchange for or in replacement of any other Note pursuant
to the Note Agreements, the Guarantors will execute on the Note so issued its
guaranty substantially identical to that set forth on the Note so exchanged.
The absence of any such guaranty on any Note shall not, however, affect the
obligations of the Guarantors hereunder.
1.8. TERM OF GUARANTY. This Guaranty and all guarantees,
covenants and agreements of the Guarantors contained herein shall continue in
full force and effect and shall not be discharged until such time as all of
the amounts due under the Notes shall be paid in full.
2. MAXIMUM LIABILITY. The liability of each of the
Guarantors under this Agreement shall not exceed the greater of (A) the net
benefit realized by such Guarantor or any Subsidiary of such Guarantor from
the proceeds of the issuance of the Notes and (B) the greater of (I) 95% of
the Adjusted Net Assets of such Guarantor on the date of this Agreement and
(II) 95% of the Adjusted Net Assets of such Guarantor on the date of any
payment hereunder. For purposes of this Agreement, the term "Adjusted Net
Assets" means, with respect to each of the Guarantors at any date of
determination, the lesser of (X) the amount by which the fair value of the
property and assets of such Guarantor exceeds the total amount of liabilities
(including, without limitation, contingent liabilities but excluding
liabilities under the Guaranteed Documents) of such Guarantor at such date
and (Y) the amount by which the present fair salable value of the property
and assets of such Guarantor at such date exceeds the amount that will be
required to pay the probable liability of such Guarantor on its debts
(excluding the Guaranteed Obligations), as they become absolute and matured.
3. SUBORDINATION. The obligations of the Guarantor
hereunder with respect to the Note Agreements and the Notes (the
"Subordinated Debt") shall be subordinate and junior in right of payment to
all Superior Debt (as defined in section 13.2 of the Note Agreements) to the
extent and in the manner provided in section 13 of each of the Note
Agreements. For purposes of this section 3, all references
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to the Company in section 13 of the Note Agreement shall be read to include
references to the Company and any Guarantor.
4. REPRESENTATIONS AND WARRANTIES. The Guarantors hereby
jointly and severally represent and warrant as follows:
(a) ORGANIZATION, STANDING, ETC. Each Guarantor is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, and each has
all requisite corporate power and authority to own and operate its
properties, to carry on its business as now conducted and as proposed
to be conducted and to enter into and to carry out the terms of this
Agreement. This Agreement has been duly authorized by all necessary
corporate action on the part of each Guarantor and has been duly
executed and delivered by each Guarantor.
(b) QUALIFICATION. Each Guarantor is duly qualified and in
good standing as a foreign corporation duly authorized to do business
in each jurisdiction (other than the jurisdiction of its
incorporation) in which the nature of its activities or the character
of the properties it owns or leases makes such qualification necessary
and in which the failure so to qualify would have a materially adverse
effect on such Guarantor.
(c) COMPLIANCE WITH OTHER INSTRUMENTS, ETC. The execution,
delivery and performance of this Agreement by each Guarantor will not
result in any violation of or be in conflict with or constitute a
default under any term of its Certificate of Incorporation or By-laws
or other governing instrument, any agreement or instrument to which
such Guarantor is a party or by which it or any of its properties or
assets is bound, or any term of any applicable law, ordinance, rule or
regulation of any governmental authority or any term of any applicable
order, judgment or decree of any court, arbitrator or governmental
authority.
(d) GOVERNMENTAL CONSENTS, ETC. No consent, approval or
authorization of, or declaration or filing with, any governmental
authority on the part of any Guarantor is required for the valid
execution and delivery of this Agreement and the due performance of
the obligations of the Guarantors under this Agreement.
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5. NOTICES. All notices under the terms and provisions
hereof shall be in writing, and shall be delivered by messenger or overnight
courier or sent by fax or mailed by first-class mail, postage prepaid,
addressed, (A) if to any Purchaser, at the address set forth in Schedule A of
the relevant Note Agreement, or at such other address as a Purchaser shall
from time to time designate in writing to the Company, (B) if to any
Guarantor, to 00000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000,
000-000-0000 (fax), Attention: Chief Financial Officer, or at such other
address as such Guarantor shall from time to time designate in writing to the
Purchasers. Any notice so addressed shall be deemed to be given when so
delivered or sent or, if mailed, on the third business day after being so
mailed.
6. AMENDMENTS, ETC. No amendment, alteration, modification
or waiver of any term or provision of this Guaranty Agreement, nor consent to
any departure by any Guarantor therefrom, shall in any event be effective
unless the same shall be in writing and signed by the holders of all of the
Notes at the time outstanding, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which given.
7. SUBMISSION TO JURISDICTION. Each Guarantor, for itself
and its successors and assigns, hereby irrevocably (A) agrees that any legal
or equitable action, suit or proceeding against such Guarantor arising out of
or relating to this Agreement or any transaction contemplated hereby or the
subject matter of any of the foregoing may be instituted in any state or
federal court in the State of New York, (B) waives any objection which it may
now or hereafter have to the venue of any action, suit or proceeding, and (C)
irrevocably submits itself to the nonexclusive jurisdiction of any state or
federal court of competent jurisdiction in the State of New York for purposes
of any such action, suit or proceeding. Each Guarantor waives personal
service of process and consents that service of process upon it may be made
by certified or registered mail, return receipt requested, at its address
specified in section 5, and service so made shall be deemed completed on the
third business day after mailing. Nothing contained in this section 7 shall
be deemed to affect the rights of the Purchasers or any subsequent holder of
a Note to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against any Guarantor in any
jurisdiction.
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8. SURVIVAL. All warranties, representations and covenants
made by the Guarantors herein or in any certificate or other instrument
delivered by it or on its behalf hereunder shall be considered to have been
relied upon by the Purchasers and shall survive the execution and delivery of
this Agreement, regardless of any investigation made by the Purchasers or on
their behalf. All statements in any such certificate or other instrument
shall constitute warranties and representations by the Guarantors hereunder.
9. FURTHER ASSURANCES. Each Guarantor hereby agrees to
execute and deliver all such instruments and take all such action as any
holder of the Notes may from time to time reasonably request in order to
effectuate fully the purposes of this Agreement and to establish and perfect
the rights and remedies intended to be created in favor of the holders of the
Notes hereunder or under any of the Guaranteed Documents.
10. MISCELLANEOUS. Any provision of this Agreement 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, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
To the extent permitted by applicable law, each Guarantor hereby waives any
provision of law that renders any provision hereof prohibited or
unenforceable in any respect. The section and paragraph headings in this
Agreement and the table of contents are for convenience of reference only and
shall not modify, define, expand or limit any of the terms or provisions
hereof, and all references herein to numbered sections, unless otherwise
indicated, are to sections in this Agreement. THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
IN WITNESS WHEREOF, each of the Guarantors has caused this
Guaranty Agreement to be duly executed as of the day and year first above
written.
AGRICULTURAL SUPPLY, INC.
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By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Secretary
ASPEN CONSULTING COMPANIES,
INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Secretary
MITIGATION SERVICES, INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Secretary
TURF PARTNERS, INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Secretary
YUMA ACQUISITION SUB.,
INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Secretary
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