GUARANTY
Exhibit
10.3
THIS
UNCONDITIONAL GUARANTY OF PAYMENT AND PERFORMANCE (“Guaranty”)
is
made as of the 23 day of April, 2007 by Cleco Corporation, a Louisiana
corporation (“Guarantor”),
in
favor of Calpine Acadia Holdings, LLC, a Delaware limited liability company
(“Seller”).
All
of the obligations of Guarantor arising hereunder shall be binding on the
undersigned, and its successors and assigns, and the term “Guarantor”
shall
mean all of such parties and each of them individually.
RECITALS
WHEREAS,
pursuant to that certain Purchase Agreement (the “PA”)
dated
as of April 23, 2007, by and between Seller and Acadia Power Holdings, LLC,
a
Louisiana limited liability company (“Buyer”),
Buyer
has entered into an agreement to purchase the Ownership Interests and Related
Assets in a sale authorized by the Bankruptcy Court pursuant to, inter
alia,
sections 105, 363, and 365 of the Bankruptcy Code;
WHEREAS,
Seller
is
an indirect wholly owned subsidiary of Calpine Corporation, a Delaware
corporation (“Calpine”);
WHEREAS,
Calpine and Seller each filed a Chapter 11 Case on December 20,
2005;
WHEREAS,
Guarantor is an Affiliate of Buyer;
WHEREAS,
all capitalized terms not defined herein shall have the meanings set forth
in
the PA; and
WHEREAS,
Guarantor shall derive benefits from the PA.
AGREEMENT
NOW,
THEREFORE, as a material inducement to Seller to enter into the PA
with
Buyer, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and confessed, Guarantor does
hereby irrevocably and unconditionally, warrant and represent unto and covenant
and agree with Seller as follows:
Section
1. Guaranty
of Payment.
Guarantor hereby absolutely, unconditionally and irrevocably guarantees to
Seller and its successors, endorsees, transferees and assigns the punctual
and
complete payment when due (including interest accruing after the commencement
of
any bankruptcy or insolvency proceeding by or against Buyer, whether or not
allowed in such proceeding) of the sums of money now or hereafter due and
owing
by Buyer pursuant to the terms of the PA.
The
Guaranty of Guarantor as set forth in this Section
1
is a
continuing guaranty of payment and not a guaranty of collection.
Section
2. Guaranty
of Performance.
Guarantor additionally absolutely, unconditionally and irrevocably guarantees
to
Seller the timely performance of all other obligations of Buyer under the
PA.
(The
obligations of Guarantor as set forth in Sections
1
and
2
are
collectively referred to as the “Guaranteed
Obligations”).
Section
3. Primary
Liability of Guarantor.
Guarantor shall be liable for the payment and performance of the Guaranteed
Obligations, as set forth in this Guaranty, as a primary obligor. This Guaranty
shall be effective as a waiver of, and Guarantor hereby expressly waives,
any
and all rights to which Guarantor may otherwise have been entitled under
any
suretyship laws in effect from time to time in the State of New York.
In
the
event of default by Buyer in payment or performance of the Guaranteed
Obligations, or any part thereof, when such payment or performance becomes
due,
Guarantor shall, on demand and without further notice of nonpayment or
nonperformance, or any other notice whatsoever, pay the amount due thereon
to
Seller or perform or observe the agreement, covenant, term or condition,
as the
case may be, and it shall not be necessary for Seller, in order to enforce
such
payment or performance by Guarantor, first to institute suit or pursue or
exhaust any rights or remedies against Buyer or others liable for such payment
or for such performance, or to join Buyer for the payment or performance
of the
Guaranteed Obligations or any part thereof in any action to enforce this
Guaranty, or to resort to any other means of obtaining payment or performance
of
the Guaranteed Obligations.
Suit
may
be brought or demand may be made against Buyer or against all parties who
have
signed this Guaranty or against any one or more of them, separately or together,
without impairing the rights of Seller against any party hereto. Any time
that
Seller is entitled to exercise its rights or remedies hereunder, it may in
its
discretion elect to demand payment, performance or payment in lieu of
performance, all to the extent of its right to so elect under the terms of
the
PA.
If
Seller has the right to demand performance, such election shall not affect
Seller’s right to demand payment thereafter if the performance is not fulfilled
as is otherwise permitted by the PA
until
all of the Guaranteed Obligations have been paid and performed in
full.
Section
4. Certain
Agreements and Waivers by Guarantor.
Guarantor hereby agrees that Seller’s rights or remedies and all Guarantor’s
obligations under the terms of this Guaranty shall remain in full force and
effect and shall not be released, diminished, impaired or reduced by, or
deemed
to be satisfied by, nor shall Guarantor be exonerated, discharged or released
(by virtue of any law, rule, arrangement or relationship) by, any one or
more of
the following events, actions, facts, or circumstances, and the liability
of
Guarantor under this Guaranty shall be absolute and unconditional irrespective
of:
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(i)
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the
taking or accepting of any other security or guaranty for, or right
of
recourse with respect to, any or all of the Guaranteed
Obligations;
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(ii)
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whether
express or by operation of any statute, regulation or rule of law,
or
otherwise, any limitation, discharge, cessation or partial release
of the
liability of Guarantor hereunder, or any complete or partial release
of
Buyer or any other party liable, directly or indirectly, for the
payment
or performance of any or all of the
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Guaranteed
Obligations (other than an express release by Seller in favor of
Guarantor);
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(iii)
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the
bankruptcy, dissolution, liquidation, termination, receivership,
reorganization, merger, consolidation, change of form, structure
or
ownership, sale of all assets, or lack of corporate, partnership
or other
power of Buyer or any other party at any time liable for the payment
or
performance of any or all of the Guaranteed
Obligations;
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(iv)
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either
with or without notice to or consent of Guarantor, any renewal,
extension,
modification, supplement, subordination or rearrangement of the
terms of
any or all of the Guaranteed Obligations, including, without limitation,
material alterations of the terms of payment or performance or
any other
terms thereof, or any waiver, termination, or release of, or consent
to
departure from, the PA
or
any adjustment, indulgence, forbearance, or compromise that may
be granted
from time to time by Seller to Buyer and/or any other person (other
than
Guarantor) at any time liable for the payment or performance of
any or all
of the Guaranteed Obligations;
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(v)
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any
neglect, lack of diligence, delay, omission, failure, or refusal
of Seller
to take or prosecute (or in taking or prosecuting) any action for
the
collection or enforcement of any of the Guaranteed
Obligations;
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(vi)
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if
for any reason Seller is required to refund any payment by Buyer
or any
other party liable for the payment or performance of any or all
of the
Guaranteed Obligations or pay the amount thereof to someone else,
except
in the event the Deposits are returned to Buyer in accordance with
Sections
12.2(b),
12.4(b)
or
12.5(b)
of
the PA;
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(vii)
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the
existence of any claim, set-off, or other right that Guarantor
may at any
time have against Buyer, Seller, or any other person, whether or
not
arising in connection with this Guaranty, or the PA;
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(viii)
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the
unenforceability of all or any part of the Guaranteed Obligations
against
Buyer because the Guaranteed Obligations, or any part thereof,
is
ultra
xxxxx
or
because the officers or persons creating the Guaranteed Obligations
acted
in excess of their authority or because of a lack of validity of
or of
defect or deficiency in the PA,
it being agreed that Guarantor shall remain liable on the Guaranteed
Obligations, or any part thereof, for any reason (and regardless
of any
joinder of Buyer or any other party in any action to obtain payment
or
performance of any or all of the Guaranteed Obligations) described
in this
paragraph; or
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(ix)
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any
order, ruling or plan of reorganization emanating from proceedings
under
Title 11 of the United States Code with respect to Buyer or any
other
person, including any extension, reduction, composition, or other
alteration of the Guaranteed Obligations, whether or not consented
to by
Seller.
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In
the event any payment by Buyer
or any other person to Seller is held to constitute a preference,
fraudulent transfer or other voidable payment under any bankruptcy, insolvency
or similar law, or if for any other reason Seller is required to refund
such
payment or pay the amount thereof to any other party, such payment by Buyer
or
any other party to Seller shall not constitute a release of Guarantor from
any
liability hereunder, and this Guaranty shall continue to be effective or
shall
be reinstated (notwithstanding any prior release, surrender or discharge
by
Seller of this Guaranty or of Guarantor), as the case may be, with respect
to,
and this Guaranty shall apply to, any and all amounts so refunded by Seller
or
paid by Seller to another person (which amounts shall constitute part of
the
Guaranteed Obligations), and any interest paid by Seller and any attorneys’
fees, costs and expenses paid or incurred by Seller in connection with
any such
event. It is the intent of Guarantor and Seller that the obligations and
liabilities of Guarantor hereunder are absolute and unconditional under
any and
all circumstances and that until the Guaranteed Obligations are fully and
finally paid and performed, and not subject to refund or disgorgement,
the
obligations and liabilities of Guarantor hereunder shall not be discharged
or
released, in whole or in part, by any act or occurrence that might, but
for the
provisions of this Guaranty, be deemed a legal or equitable discharge or
release
of Guarantor.
In
addition to the other matters set forth in this Section
4,
Guarantor hereby waives any claim of subrogation with respect to any payment
made by Guarantor to Seller arising out of the Guaranteed Obligations until
all
Guaranteed Obligations have been indefeasibly paid in full.
Section
5. Seller
Assigns.
This
Guaranty is for the benefit of Seller and Seller’s successors and assigns in the
event of a permitted assignment of, and under the terms of, the PA,
or any
part thereof, and the rights and benefits hereunder, to the extent applicable
to
the PA
so
assigned, may be transferred with such Guaranteed Obligations. Seller shall
provide notice of any transfer or assignment of the PA,
or any
part thereof, to Guarantor, provided that failure to give such notice will
not
affect the Guaranteed Obligations hereunder unless such failure to provide
notice precludes Guarantor from performing its obligations under this
Guaranty.
Section
6. Binding
Effect.
This
Guaranty is binding not only on Guarantor, but also on Guarantor’s successors
and assigns.
Section
7. Governing
Law; Forum.
This
Guaranty, and its validity, enforcement, and interpretation, shall for all
purposes be governed by and construed in accordance with the laws of the
State
of New York without
regard to the conflicts of laws provisions of the State of New York that
would
result in the application of the laws of another jurisdiction,
except
as superseded by the Bankruptcy Code and applicable United States federal
law,
and is intended to be performed in accordance with, and only to the extent
permitted by, such laws. All obligations of Guarantor hereunder are payable
and
performable at the place or places where the Guaranteed Obligations are payable
and performable. Guarantor hereby irrevocably submits generally and
unconditionally for Guarantor and in respect of Guarantor’s property to the
jurisdiction of the United States Bankruptcy Court for the Southern District
of
New York over any suit, action or proceeding arising out of or relating to
this
Guaranty or the Guaranteed Obligations. Guarantor hereby irrevocably waives,
to
the fullest extent permitted by law, any objection that Guarantor may now
or
hereafter have to the laying of venue in any such court and any claim that
any
such court is an inconvenient forum. Guarantor
4
hereby
agrees and consents that, in addition to any methods of service of process
provided for under applicable law, all service of process in any such suit,
action or proceeding in the United States Bankruptcy Court for the Southern
District of New York may be made by certified or registered mail, return
receipt
requested, directed to Guarantor at its address stated in Section
11
of this
Guaranty, or at a subsequent address of which Seller received actual notice
from
Guarantor in accordance with the notice provisions hereof, and service so
made
shall be complete five (5) days after the same shall have been so mailed.
Nothing herein shall affect the right of Seller to serve process in any manner
permitted by law or limit the right of Seller to bring proceedings against
Guarantor in any other court or jurisdiction.
Section
8. Attorneys’
Fees and Costs of Collection.
Guarantor shall pay on demand all reasonable attorneys’ fees actually incurred
and all other costs and expenses actually incurred by Seller in the enforcement
of or preservation of Seller’s rights under this Guaranty. Guarantor agrees to
pay interest on any expenses or other sums due to Seller under this Section
8
that are
not paid when due, at a rate per annum equal to the prime rate as stated
in the
Wall Street Journal plus two percent (2%). Guarantor’s obligations and
liabilities under this Section
8
shall
survive any payment or discharge in full of the Guaranteed
Obligations.
Section
9. Payments.
All
sums payable under this Guaranty shall be paid in immediately available funds
in
lawful money of the United States of America that at the time of payment
is
legal tender for the payment of public and private debts.
Section
10. Notices.
All
notices, requests, waivers, approvals, consents and demands to or upon the
respective parties hereto, and all responses thereto, shall be in writing
and
shall be deemed to have been properly given or served when personally delivered
or deposited in the mail, certified mail, return receipt requested, postage
prepaid, or delivered to a nationally recognized overnight courier service
(e.g., Federal Express) which maintains evidence of receipt, with all delivery
charges paid or provided for, addressed to the addresses set forth below.
All
notices, requests and demands, and all responses thereto, shall be effective
(i)
upon receipt if personally delivered (ii) one (1) business day after deposit
if
sent by overnight courier or (iii) three (3) business days after deposit
in the
mail, if mailed as referenced above. Rejection or other refusal to accept
or the
inability to deliver because of changed address of which no notice was given
shall be deemed to be receipt of the notice, demand or request sent. To the
extent reasonably possible, the parties shall provide written notice at least
thirty (30) days prior to any change of their respective addresses. Neither
party may have more than three (3) addresses. For the purpose of this Guaranty
the following addresses apply until notice of different address is
given:
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If
to Seller:
c/o
Calpine Corporation
00
Xxxx Xxx Xxxxxxxx Xxxxxx
Xxx
Xxxx, Xxxxxxxxxx 00000
Attention:
General Counsel
Facsimile:
(000) 000-0000
Copy
to:
Xxxxxxxx
& Xxxxx LLP
000
Xxxxxxxxx Xxxxxx, XX Xxxxx 0000
Xxxxxxxxxx,
XX 00000
Attention:
Xxxxxxxx X. Xxxxx
Facsimile:
(000) 000-0000
Xxxxxxxx
& Xxxxx LLP
Citicorp
Center
000
Xxxx 00xx Xxxxxx
Xxx
Xxxx, XX 00000-0000
Attention:
Xxxxxxx X. Xxxxx
Facsimile:
(000) 000-0000
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If
to
Guarantor:
Cleco
Corporation
0000
Xxxxxxx Xxxxx Xxxx
Xxxxxxxxx,
XX 00000-0000
Attention:
Chief Financial Officer
Facsimile:
(000) 000-0000
With
a
copy to:
Cleco
Corporation
0000
Xxxxxxx Xxxxx Xxxx
Xxxxxxxxx,
XX 00000-0000
Attention:
General Counsel
Facsimile:
(000) 000-0000
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Section
11. Term
of Guaranty.
This
Guaranty shall continue in effect until all the Guaranteed Obligations are
fully
and finally paid, performed, and discharged, provided that Seller shall be
entitled to continue to hold this Guaranty in its possession for a period
of one
year from the date the Guaranteed Obligations are paid and performed in full
and
for so long thereafter as may be necessary to enforce any obligation of
Guarantor hereunder and/or to exercise any right or remedy of Seller hereunder,
provided that
this
Guaranty will terminate on the earlier of three (3) business days after the
Deposits are required to be returned to Buyer in accordance with Sections
12.2(b),
12.4(b)
or
12.5(b)
of the
PA or five (5) years after the date hereof, after which date no claim may
be
made against the Guarantor hereunder.
Section
12. Interpretation.
If this
Guaranty is signed by more than one Person as “Guarantor”,
then
the term “Guarantor”
as
used
in this Guaranty shall refer to all such Persons jointly and severally, and
all
promises, agreements, covenants, waivers, consents, representations, warranties
and other provisions in this Guaranty are made by and shall be binding upon
each
and every such undersigned Person, jointly and severally. The term “Seller”
shall
be deemed to include Seller’s successors and assigns. Whenever the context of
any provisions hereof shall require it, words in the singular shall include
the
plural, words in the plural shall include the singular, and pronouns of any
gender shall include the other genders. Captions and headings in this Guaranty
are for convenience only and shall not affect the construction of this Guaranty.
All references in this Guaranty to Sections, Subsections, paragraphs and
subparagraphs refer to the respective subdivisions of this Guaranty, unless
such
reference specifically identifies another document. The terms “herein,”
“hereof,” “hereto,” “hereunder” and similar terms refer to this Guaranty and not
to any particular Section or subsection of this Guaranty. The terms “include”
and “including” shall be interpreted as if followed by the words “without
limitation.” All references in this Guaranty to sums denominated in dollars or
with the symbol “$” refer to the lawful currency of the United States of
America, unless such reference specifically identifies another currency.
For
purposes of this Guaranty, the term “Person”
shall
mean any
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or Government.
Section
13. Time
of Essence.
Time
shall be of the essence in this Guaranty with respect to all of Guarantor’s
obligations hereunder.
Section
14. Execution.
This
Guaranty may be executed in multiple counterparts, each of which, for all
purposes, shall be deemed an original, and all of which together shall
constitute one and the same agreement.
Section
15. Entire
Agreement.
This
Guaranty embodies the entire agreement between Seller and Guarantor with
respect
to the Guaranty by Guarantor of the Guaranteed Obligations. This Guaranty
supersedes all prior agreements and understandings, if any, with respect
to
guaranty by Guarantor of the Guaranteed Obligations. No condition or conditions
precedent to the effectiveness of this Guaranty exist. This Guaranty shall
be
effective upon execution by Guarantor and delivery to Seller. This Guaranty
may
not be modified, amended or superseded except in a writing signed by Seller
and
Guarantor referencing this Guaranty by its date and specifically identifying
the
portions hereof that are to be modified, amended or superseded.
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Section
16. Severability.
If
any
term, covenant or condition of this Guaranty, or the application
of such term, covenant or condition, to any party or circumstance shall be
found
by a court of competent jurisdiction to be, to any extent, invalid or
unenforceable, the remainder of this Guaranty and the application of such
term,
covenant, or condition to parties or circumstances other than those to which
it
is held invalid or unenforceable shall not be affected thereby, and each
term,
covenant or condition shall be valid and enforced to the fullest extent
permitted by law. Upon determination that any such term is invalid, illegal
or
unenforceable, the parties hereto shall amend this Guaranty so as to effect
the
original intent of the parties as closely as possible in an acceptable manner.
Section
17. Acknowledgement.
Guarantor
acknowledges that it has been advised by its counsel with respect to the
PA and
the transactions evidenced hereunder.
Section
18. Guarantor
Assigns.
Guarantor may not assign this Guaranty without the prior written consent
of
Seller, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the prior sentence, Guarantor may assign this Guaranty
in
connection with the sale (directly or indirectly) of all of Guarantor’s
ownership
interests in Buyer, provided in each instance that such assignee is at least
as
financially creditworthy as Guarantor, in which case Guarantor shall be released
from its obligations under this Guaranty to the extent such obligations are
assumed by the assignee.
Section
19. Scope.
Subject
only to Section
4,
this
Guaranty creates for Guarantor only the same rights and imposes on Guarantor
only the same obligations and duties that it would have if it was the applicable
party to the PA.
THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN
WITNESS WHEREOF,
Guarantor has duly executed this Guaranty the day and year first above set
forth.
| CLECO CORPORATION | |
| By: /s/ Xxxxxxxx X. Xxxxx | |
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Name:
Xxxxxxxx
X.
Xxxxx
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Title:
Sr.
Vice President, CFO &
Treasurer
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