COVANTA GUARANTY
Exhibit
10.2
As of August 19, 0000
Xxxxxxxxx Xxxxxxxxxx Power Partners, L.P.,
Ridgewood Rhode Island Generation, LLC,
Xxxxxxx 0708 LLC
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Ridgewood Rhode Island Generation, LLC,
Xxxxxxx 0708 LLC
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx
Ladies and Gentlemen:
For value received, Covanta Energy Corporation (the
“Guarantor”), a corporation duly organized
under the laws of Delaware, unconditionally and absolutely
guarantees to Ridgewood Providence Power Partners, L.P.
(“RPPP”), Ridgewood Rhode Island Generation,
LLC (“RRIG”), Xxxxxxx 0708 LLC
(“Xxxxxxx”) and Rhode Island LFG Genco, LLC
(“RILG” and together with RRIG, RPPP and
Xxxxxxx, the “Counterparties”), the prompt and
complete payment when due, whether by acceleration or otherwise,
of all payment obligations and liabilities (the
“Guaranteed Obligations”), whether now in
existence or hereafter arising, of Indeck Maine Energy, LLC, a
limited liability company duly organized under the laws of the
State of Illinois (together with its successors, the
“Company”), pursuant to that certain Backup
Certificate Agreement, dated on the date hereof, among the
Company, RPPP, RRIG, Xxxxxxx, RILG and Ridgewood Power
Management LLC, as agent for RPPP, RRIG and Xxxxxxx under the
Agreement (defined below) (the “Backup
Agreement”). Each capitalized term used but not defined
herein shall have the meaning given to it in the Backup
Agreement.
This Guaranty is one of payment and not of collection.
Notwithstanding anything to the contrary, the total liability of
Guarantor hereunder, regardless of any amendment or modification
to the Backup Agreement, shall not exceed at any time an amount
equal to 80% of the amount required to be funded at such time in
the Account (as defined in the Agreement as defined below) under
and pursuant to Section 5.2 of the Certificate Purchase and
Sale Agreement dated as of April 30, 2003 among the
Company, RPPP, RRIG, Ridgewood Power Management LLC as agent
(“RPMC”) and Constellation Energy Commodities
Group, Inc., f/k/a Constellation Power Source, Inc.
(“Constellation”), as amended by that certain
letter agreement dated January 25, 2006, by Amendment
No. 1 thereto dated as of October 31, 2006 and by the
Assignment, Assumption, Release and Amendment Agreement of
Certificate Purchase and Sale Agreement, among Constellation,
the Company, RPPP, RRIG, RPMC, Ridgewood Electric Power
Trust III, Ridgewood Electric Power Trust IV,
Ridgewood Electric Power Trust V, Ridgewood Power B
Fund/Providence Expansion and Xxxxxxx, dated as of July 31,
2008 (together the “Agreement”), but not the
amount required with respect to Section 3.6 of the
Agreement, but in any event not to exceed a maximum amount of
$7,300,000 (the “Liability Cap”). For the
avoidance of doubt, the Guaranteed Obligations may at any time
and from time to time exceed the liability of the Guarantor
hereunder without impairing this Guaranty. The Guarantor’s
obligations and liability under this Guaranty shall be limited
to payment obligations only, and the Guarantor shall have no
obligation to perform (other than payment of this Guaranty)
under the Backup Agreement, including no obligation to generate,
obtain or provide Certificates.
The Guarantor hereby waives notice of acceptance of this
Guaranty and notice of any obligation or liability to which it
may apply, and waives presentment, demand for payment, protest,
notice of dishonor or non-payment of any such obligation or
liability, suit or the taking of other action by the
Counterparties against, and any other notice to, the Company,
the Guarantor or others.
The Counterparties, at any time and from time to time without
notice to or consent of the Guarantor and without impairing or
releasing the obligations of the Guarantor hereunder, may, with
respect to the Guaranteed Obligations: (1) agree with the
Company to make any change in the terms of any obligation or
liability of the Company to the Counterparties, (2) take or
fail to take any action of any kind in respect of any security
for any obligation or liability of the Company to the
Counterparties, (3) exercise or refrain from exercising any
rights against the Company or others, or (4) compromise or
subordinate any obligation or liability of the Company to the
Counterparties including any security therefor. Any other
suretyship defenses are hereby waived by the Guarantor.
This Guaranty shall be subject to and only effective on and
after the closing of the transactions contemplated in the
Purchase and Sale Agreement, dated as of the date hereof,
between Ridgewood Maine, L.L.C. (“RM”), Indeck Energy
Services (“IES”) and Guarantor, pursuant to which RM
and IES shall sell, assign, transfer and convey to Guarantor
their respective membership interests in the Company. This
Guaranty shall continue in full force and effect until the later
of (A) the termination or expiration of the Backup
Agreement and (B) the satisfaction of all of the
Company’s obligation under the Backup Agreement and the
Guarantor’s obligations under this Guaranty.
This Guaranty shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any of the
Guaranteed Obligations are annulled, set aside, invalidated,
declared to be fraudulent or preferential, rescinded or must
otherwise be returned, refunded or repaid by the Counterparties
upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Company or any other guarantor, or upon or
as a result of the appointment of a receiver or conservator of,
or trustee for the Company or any other guarantor or any
substantial part of its property or otherwise, all as though
such payment or payments had not been made. To the extent that
any payment by the Guarantor hereunder is annulled, set aside,
invalidated, declared to be fraudulent or preferential,
rescinded or must otherwise be returned, refunded or repaid by
the Counterparties, the amount available under the Liability Cap
will be restored by an amount equal to such payment.
The Guarantor may not assign its rights nor delegate its
obligations under this Guaranty, in whole or in part, without
prior written consent of the Counterparties, and any purported
assignment or delegation absent such consent is void, except for
an assignment and delegation of all of the Guarantor’s
rights and obligations hereunder in whatever form the Guarantor
determines may be appropriate to a partnership, corporation,
trust or other organization in whatever form that succeeds to
all or substantially all of the Guarantor’s assets and
business and that assumes such obligations by contract,
operation of law or otherwise. Upon any such delegation and
assumption of obligations (including any obligations arising
prior to such delegation and assumption), the Guarantor shall be
relieved of and fully discharged from all obligations hereunder,
whether such obligations arose before or after such delegation
and assumption.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
GUARANTOR AGREES TO THE EXCLUSIVE JURISDICTION OF COURTS LOCATED
IN THE STATE OF NEW YORK, UNITED STATES OF AMERICA, OVER ANY
DISPUTES ARISING UNDER OR RELATING TO THIS GUARANTY.
Very truly yours,
COVANTA ENERGY CORPORATION
By: |
/s/ Xxxxxxx
X. Xxxxxxx
|
Name: Xxxxxxx X. Xxxxxxx
Title: | President and Chief Executive Officer |
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