Exhibit 10.4
GUARANTY
GUARANTY, made effective as of September 23, 1998, by SIEMENS
CORPORATION, a corporation organized and existing under the laws of Delaware
("Guarantor"), in favor of AES IRONWOOD, INC., a Delaware corporation ("Owner")
or its AES Ironwood L.L.C. assignee.
WHEREAS, Owner wishes to have engineered, designed, procured,
constructed, equipped, commissioned and tested a combined-cycle electric
generating facility with a nominal electric generating capacity of 700 megawatts
(net) to be located in Lebanon, Pennsylvania (such facility and the construction
thereof, as more fully defined in the EPC Agreement referred to below, the
"Project");
WHEREAS, concurrently with the execution and delivery of this
Guaranty, Owner has entered into that certain Agreement for Engineering,
Procurement and Construction Services, of even date herewith, with Siemens
Westinghouse Power Corporation, a wholly-owned subsidiary of Guarantor
("Contractor") (as such Agreement may be amended, supplemented or modified from
time to time, the "EPC Agreement");
WHEREAS, Guarantor owns one hundred percent (100%) of the
capital stock of Contractor and does and will continue to obtain substantial
benefits as a result of the EPC Agreement;
WHEREAS, in order to induce Owner to enter into the EPC
Agreement, Contractor has agreed that it would cause Guarantor to execute and
deliver to Owner this Guaranty;
NOW, THEREFORE, in consideration of Owner's entering into the
EPC Agreement, the foregoing premises, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Guarantor, intending to be legally bound, hereby agrees as follows:
SECTION 1
Definitions
Unless otherwise defined herein, capitalized terms used in
this Guaranty shall have the respective meanings assigned thereto in the EPC
Agreement.
SECTION 2
Guaranty
Guarantor hereby irrevocably and unconditionally guarantees to
Owner, as a primary obligor and not as a surety, the punctual performance and
payment in full of all obligations of Contractor under the EPC Agreement in
accordance with the terms and conditions thereof (subject to any rights and
defenses of Contractor thereunder, other than any rights and defenses arising
out of the matters described in Section 4 hereof) and agrees that if for any
reason whatsoever Contractor shall fail duly, punctually and fully to perform or
pay any such obligation under the EPC Agreement, Guarantor shall, upon receipt
of written notice from Owner of such failure, immediately perform or pay each
and every such obligation, or cause each such obligation to be performed or
paid, without regard to any exercise or nonexercise by Owner of any right,
remedy, power or privilege under or in respect of the EPC Agreement against
Contractor or under or in respect of any other guaranty or security relating
thereto. In addition, Guarantor agrees to reimburse Owner on demand for any and
all reasonable expenses (including, without limitation, attorneys' fees and
disbursements) incurred by Owner in enforcing or attempting to enforce any
rights under this Guaranty.
SECTION 3
No Subrogation
Notwithstanding any payment or payments made by Guarantor
hereunder or any set-off or application of funds of Guarantor by Owner, until
all of the obligations of Contractor under the EPC Agreement are performed or
paid in full, Guarantor shall not (a) be entitled to be subrogated to any of the
rights of Owner against Contractor or any other guarantor or in any collateral
security or guaranty or right of offset held by Owner for the performance and
payment of the obligations of Contractor under the EPC Agreement, or (b) seek
any reimbursement or contribution from Contractor or any other guarantor in
respect of any payment, set-off or application of funds made by Guarantor
hereunder.
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SECTION 4
Guaranty Absolute
The liability of Guarantor under this Guaranty with respect to
the guaranteed obligations shall be absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of the EPC Agreement or
any other agreement, guaranty or instrument relating thereto;
(b) any amendment to, waiver of or consent to departure from, or
failure to exercise any right, remedy, power or privilege
under or in respect of the EPC Agreement or any other
guaranty; provided, however, that for the avoidance of doubt,
the Guarantor and Owner hereby agree that the obligations of
Contractor under the EPC Agreement guaranteed by Guarantor
hereunder shall be such obligations of Contractor as they may
have been amended or waived in accordance with the terms of
the EPC Agreement;
(c) any exchange, release or nonperfection of any collateral, or
any release or amendment or waiver of, or consent to departure
from, any other guaranty of or security for the performance of
all or any of the obligations of Contractor under the EPC
Agreement;
(d) the insolvency of Guarantor or Contractor or any other party
or guarantor or any proceeding, voluntary or involuntary,
involving the bankruptcy, insolvency, receivership,
reorganization, arrangement, dissolution or liquidation of
Guarantor or Contractor or any other guarantor or any defense
which Guarantor or Contractor or any other guarantor may have
by reason of the order, decree or decision of any court or
administrative body resulting from any such proceeding;
(e) any change in ownership of Contractor or any change, whether
direct or indirect, in Guarantor's relationship to Contractor
or in the relationship of Contractor to any other guarantor,
including, without limitation, any such change by reason of
any merger or any sale, transfer, issuance, or other
disposition
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of any stock of, or other equity interest in, Contractor,
Guarantor or any other entity; and
(f) any other circumstance of a similar or different nature which
might otherwise constitute a defense available to Guarantor as
a guarantor (provided, however, that this clause 4(f) shall
not prevent Guarantor from being able to assert as a defense
to its performance under this Guaranty, any defense which is
available to Contractor under the EPC Agreement, other than
any defenses arising out of the matters described in this
Section 4).
This Guaranty shall continue to be effective, or be
reinstated, as the case may be, if at any time any payment, or any part thereof,
to Owner by Contractor under the EPC Agreement or by Guarantor hereunder or by
any other guarantor under any other guaranty of the EPC Agreement is rescinded
or must otherwise be returned by Owner to Guarantor or Contractor or any of
their representatives or any other guarantor for any reason, including, without
limitation, upon the insolvency, bankruptcy, reorganization, dissolution or
liquidation of Guarantor or Contractor or any other guarantor, all as though
such payment had not been made.
SECTION 5
Waiver
Guarantor hereby waives notice from Owner of its acceptance
and reliance on this Guaranty and notice of any liability to which it may apply,
and waives presentment, demand of payment, protest, notice of dishonor or
nonpayment of any such liability, and the taking of any other action by Owner
against, and (except for the notice specified in Section 2 hereof) any other
notice to, any party liable thereon, including Guarantor, and any requirement
that Owner exhaust any right or take any action against or with respect to
Contractor or any other person or entity or any property.
SECTION 6
Consent to Jurisdiction; Waiver of Immunities
(a) Guarantor hereby irrevocably submits to the jurisdiction
of any State or Federal court sitting in the Borough of Manhattan, City of New
York, in any action
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or proceeding arising out of or relating to this Guaranty, and Guarantor hereby
irrevocably agrees that, subject to the terms of Section 6(d) hereof and without
limiting Owner's rights under Section 6(b) hereof, all claims in respect of such
action or proceeding shall be heard and determined in such State or Federal
court. Guarantor hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding. Guarantor hereby irrevocably consents to the service
of any and all process in any such action or proceeding by the mailing of copies
of such process to Guarantor at its address specified in Section 11 hereof.
Guarantor agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner permitted by law.
(b) Nothing in this Section shall affect the right of Owner to
serve legal process in any other manner permitted by law or affect the right of
Owner to bring any action or proceeding against Guarantor or its property in the
courts of any other jurisdiction.
(c) To the extent that Guarantor has or hereafter may acquire
any immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property,
Guarantor hereby irrevocably waives such immunity in respect of its obligations
under this Guaranty.
(d) Notwithstanding the foregoing, any dispute arising under
the EPC Agreement and any claims under any of the EPC Agreement and/or this
Guaranty relating to any such dispute, whether arising contemporaneously with or
subsequent to such dispute, shall be resolved by Owner, Contractor and Guarantor
in a single, combined arbitration proceeding in accordance with the provisions
of Article 21 of the EPC Agreement. In any such arbitration proceeding,
Contractor and Guarantor shall together select one arbitrator, Owner shall
select one arbitrator, and the two selected arbitrators shall select the third
arbitrator, in accordance with Section 21.1 of the EPC Agreement. Subject to the
Guarantor's ability to assert as a defense to its performance under this
Guaranty Contractor's rights under Section 15.2.1 of the EPC Agreement,
notwithstanding the existence of a dispute between Owner and Guarantor and
regardless of whether such dispute is the subject of dispute resolution pursuant
to this Section 6(d), Guarantor shall not be
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entitled to suspend or otherwise delay the performance of this Guaranty.
SECTION 7
Representations and Warranties
Guarantor hereby represents and warrants as follows:
(a) Guarantor (i) is a duly organized and validly existing
corporation in good standing under the laws of Delaware and (ii) has the
corporate power and authority to own its property and assets and to transact the
business in which it is engaged;
(b) Guarantor has the corporate power, authority and legal
right to execute, deliver and carry out the terms and provisions of this
Guaranty and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Guaranty;
(c) This Guaranty has been duly executed and delivered by
Guarantor and constitutes the legal, valid and binding obligation of Guarantor
enforceable against it in accordance with its terms, except to the extent that
its enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the rights of creditors generally or
by general principles of equity;
(d) Neither the execution, delivery or performance by
Guarantor of this Guaranty nor the consummation of the transactions herein
contemplated, nor compliance with the terms and provisions hereof, (i) will
contravene any applicable provision of any law, statute, rule, regulation,
order, writ, injunction or decree of any court or governmental instrumentality
or authority, or requires the authorization or approval of or any filing with
any such instrumentality or authority, (ii) will conflict or be inconsistent
with, or result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any lien upon or
assignment of any of the property or assets of Guarantor pursuant to the terms
of any agreement or other instrument to which Guarantor is a party or by which
it or any of its property or assets is bound or to which it is subject, or (iii)
will violate any provision of the charter, by-laws or like organizational
documents of Guarantor; and
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(e) As of the date on which this Guaranty is executed by
Guarantor, there are no actions, suits or proceedings pending or, to the best of
the knowledge of Guarantor, threatened against or affecting Guarantor before any
court or before any governmental or administrative body or agency which, if
adversely determined, would be reasonably likely to materially and adversely
affect its ability to fully perform its obligations hereunder.
SECTION 8
Covenants
Guarantor hereby covenants and agrees that, until performance
and payment in full of all obligations of Contractor under the EPC Agreement:
(a) Guarantor shall furnish to Owner: (i) as soon as possible
and in any event within five days after an executive officer of Guarantor
obtains knowledge thereof, notice of the occurrence of any Event of Default (as
defined in Section 9 hereof) or event which, with the giving of notice or lapse
of time, or both, would constitute an Event of Default, and setting forth the
details thereof and the action which Guarantor has taken and proposes to take
with respect thereto; and (ii) such other information necessary to demonstrate
the ability of Guarantor to perform its obligations under this Guaranty as Owner
may from time to time reasonably request;
(b) Guarantor shall comply, and shall cause each of its
subsidiaries to comply, with all applicable laws to the extent that
noncompliance therewith would be reasonably likely to have a material adverse
effect on the financial condition of Guarantor or on its ability to fully
perform its obligations under this Guaranty;
(c) Guarantor shall preserve and maintain, and shall cause
each of its subsidiaries to preserve and maintain, its corporate or legal
existence, rights and franchises to the extent that noncompliance therewith
would be reasonably likely to have a material adverse effect on the financial
condition of Guarantor or on its ability to fully perform its obligations under
this Guaranty; and
(d) Guarantor shall, in the event that at any time Owner shall
have reasonable grounds for believing that, were Contractor to default under the
EPC Agreement at that time, Guarantor would be unable to fully perform its
obligations hereunder, then within 15 days of Owner's
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written request therefor, Guarantor shall provide either (i) financial or other
information reasonably demonstrating its ability to so fully perform or (ii)
other assurances of its ability to so fully perform that are reasonably
satisfactory to Owner.
SECTION 9
Events of Default
(a) If any of the following events shall occur and be
continuing it shall constitute an "Event of Default" hereunder:
(i) Guarantor shall fail to observe or perform any
covenant or agreement contained in Section 2 hereof; provided, that if
and to the extent Contractor is entitled by the terms of the EPC
Agreement to a grace or cure period with respect to the failure of
performance thereunder that Guarantor's failure under Section 2 hereof
relates to, Guarantor shall have the same period of time as is
available to Contractor under the EPC Agreement to remedy such failure
of performance before such failure constitutes an Event of Default
hereunder, but in no event shall any such grace or cure period for
Guarantor hereunder extend past the grace or cure period available to
Contractor under the EPC Agreement;
(ii) Guarantor shall fail to observe or perform any
other covenant or agreement contained in this Guaranty (including
without limitation the covenants and agreements contained in Section 8
hereof), and such failure is not remedied within (1) 30 days after
Guarantor receives actual knowledge thereof, or (2) such longer period
as may be necessary for Guarantor to cure such failure, not to exceed
120 days, provided that Guarantor diligently pursues the cure of such
failure and such cure is effected in such a manner and within such time
that such failure to comply could not reasonably be expected to have a
material adverse effect on Owner or the Project;
(iii) Guarantor shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect, or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of
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it or any substantial part of its property, or shall consent to any
such relief or the appointment of or taking of possession by any such
official in an involuntary case or other proceeding commenced against
it, or shall generally not pay its debts as they become due, or shall
make a general assignment for the benefit of creditors, or shall take
any corporate action to authorize any of the foregoing;
(iv) An involuntary case or other proceeding shall
be commenced against Guarantor seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed or
unstayed for a period of 60 days; or
(v) Any representation or warranty made by
Guarantor hereunder shall prove to have been false or misleading in any
material respect when made or deemed made and Guarantor fails to remedy
such false or misleading representation or warranty within 30 days
after Contractor receives a notice from Owner with respect thereto.
(b) Upon the occurrence of an Event of Default, Guarantor
shall be in material breach of this Guaranty and Owner may exercise any and all
remedies it may have hereunder or at law or in equity. Notwithstanding anything
stated to the contrary in this Guaranty, except as otherwise provided in this
sentence, Guarantor shall not be liable under this Guaranty, whether based in
contract, in tort (including negligence and strict liability), under warranty or
otherwise, for any indirect, incidental, special or consequential loss or damage
of any type, including but not limited to loss of use or loss of profit or
revenue, and Owner hereby releases Guarantor from any such liability; provided,
however, that this sentence shall not limit Guarantor's obligations to pay to
Owner the Provisional Acceptance Late Completion Payments and Performance
Guarantee Payments under Articles 7 and 8 of the EPC Agreement (as such terms
are defined therein) in accordance with the terms and provisions of the EPC
Agreement and this Guaranty.
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SECTION 10
Amendments
No amendment or waiver of any provision of this Guaranty nor
consent to any departure by Guarantor therefrom shall in any event be effective
unless the same shall be in writing and signed by Owner, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 11
Addresses for Notices
All notices and other communications provided for hereunder
shall be in writing and, (i) if to Guarantor, mailed or communicated by
facsimile or delivered to it, addressed to Siemens Corporation, 000 Xxxx Xxxxxx
Xxxxx, Xxxxxx, Xxx Xxxxxx 00000-0000, Attention: Vice President, Corporate
Finance, Facsimile # (000) 000-0000, (ii) if to Owner, mailed or delivered to
it, addressed to it at its address specified in the EPC Agreement, or (iii) as
to each party at such other address as shall be designated by such party in a
written notice to the other party. All such notices and other communications
shall, when mailed or communicated by facsimile transmission, respectively, be
effective when deposited in the mails addressed as aforesaid or when such
facsimile transmission is confirmed.
SECTION 12
No Waiver; Remedies
No failure on the part of Owner to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise thereof or the exercise of any other right operate as
a waiver thereof. The remedies herein provided are cumulative and are not
exclusive of any remedies provided at law or in equity.
SECTION 13
Continuing Guaranty; Assignments
(a) This Guaranty shall be construed as a continuing, absolute
and unconditional guaranty of
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payment and performance, and not of collection only, and the obligations of
Guarantor hereunder shall not be conditioned or contingent upon the pursuit by
Owner at any time of any right or remedy against Contractor or against any other
person or entity which may be or become liable in respect of all or any part of
the obligations of Contractor under the EPC Agreement or against any collateral
security or guaranty therefor. This Guaranty shall: (i) remain in full force and
effect until satisfaction in full of all obligations of Contractor under the EPC
Agreement; (ii) be binding upon Guarantor and its successors and assigns; and
(iii) inure to the benefit of and be enforceable by Owner and its successors and
permitted assigns.
(b) Guarantor shall have no right, power or authority to
delegate all or any of its obligations hereunder. Guarantor hereby expressly
agrees that Owner may assign all or any of its rights hereunder without
Guarantor's approval to any person or entity to which it has assigned its rights
under the EPC Agreement (including, without limitation, the Financing Parties
referred to in the EPC Agreement) and that any such assignee of Owner may
further assign such rights assigned to it. Notwithstanding anything to the
contrary contained in the foregoing, no such assignment to any Person which
directly competes with Siemens AG or any of its affiliates in the field of
design, engineering, manufacturing, procurement and construction of power
generation, transmission or distribution facilities shall be permitted without
the prior written consent of Guarantor. In the event of any such assignment,
references herein to "Owner" shall be deemed to include references to the
relevant assignee. If in connection with such an assignment by Owner any
Financing Party requests Guarantor to consent in writing to such permitted
assignment even though such consent is not required hereunder, Guarantor shall
do so promptly, with such acknowledgment and consent agreement to contain such
terms and conditions as are mutually and reasonably agreed upon by Guarantor,
Owner and the Financing Parties. In addition, at Owner's request, Guarantor
shall provide to the Financing Parties a certificate from Guarantor and/or an
opinion of counsel addressed to the Financing Parties, in form and substance
reasonably satisfactory to Owner and the Financing Parties, concerning such
matters as the Financing Parties reasonably request, including that (w)
Guarantor is duly organized, validly existing and in good standing under the
laws of the state or commonwealth of its formation or incorporation, as the case
may be, (x) the execution,
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delivery and performance of this Guaranty and the related acknowledgment and
consent agreement are within the power and authority of Guarantor, and this
Guaranty and such acknowledgment and consent agreement are not in conflict with
Guarantor's organizational documents or any agreement to which Guarantor is a
party or by which it is bound or affected, (y) there is no law, rule or
regulation, nor is there any judgment, decree or order of any court or
governmental entity binding on Guarantor which would be contravened by the
execution, delivery, performance or enforcement of this Guaranty and such
acknowledgment and consent agreement, and (z) each of this Guaranty and such
acknowledgment and consent agreement is a legal, valid and binding obligation
enforceable against Guarantor in accordance with its terms, subject to usual and
customary qualifications.
SECTION 14
Waiver of Jury Trial
Guarantor hereby irrevocably and unconditionally waiveS any
and all right to trial by jury in any action, suit or counterclaim arising in
connection with this Guaranty.
SECTION 15
Governing Law
This Guaranty shall be governed by, and construed in
accordance with, the laws of the State of New York, the United States of
America, without regard to the conflict of laws rules thereof.
SECTION 16
Severability
If any provision hereof is invalid or unenforceable in any
jurisdiction, the other provisions hereof shall remain in full force and effect
in such jurisdiction and the remaining provisions hereof shall be liberally
construed in order to carry out the provisions hereof. The invalidity or
unenforceability of any provision of this Guaranty in any jurisdiction shall not
affect the validity or enforceability of any such provision in any other
jurisdiction.
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SECTION 17
Survival of Provisions
All provisions of this Guaranty which are expressly or by
implication to come into or continue in force and effect after the expiration or
termination of this Guaranty shall remain in effect and be enforceable following
such expiration or termination.
SECTION 18
Confidential Information
(a) Guarantor and Owner agree to hold in confidence for a
period commencing with the date hereof and ending five years from the date of
Project Completion any information supplied to it hereunder by the other.
Guarantor and Owner hereby further agree to require third parties to enter into
appropriate non-disclosure agreements relative to such confidential information
as may be communicated to them by Guarantor or Owner; provided, however, that in
the event Guarantor or Owner disclose any confidential information to a third
party pursuant to such non-disclosure agreement, Guarantor or Owner, as the case
may be, shall remain liable hereunder for any further disclosure by such
third-party which is in breach of such non-disclosure agreement or would be in
breach of this Section 18 if such further disclosure were made by Guarantor or
Owner, as applicable. The provisions of this Section 18(a) shall not apply to
information within any one of the following categories: (i) information which
was in the public domain prior to receipt thereof from the other party or which
subsequently becomes part of the public domain by publication or otherwise,
except by the receiving party's wrongful act; (ii) information which the
receiving party can show was in its possession prior to its receipt thereof from
the other party; (iii) information received by a party from a third party
without a confidentiality obligation with respect thereto known to Owner; (iv)
information which the receiving party developed independently; or (v)
information which a party is required by law to disclose; provided, however,
that prior to making any such disclosure under clause (v) of this Section 18(a),
such disclosing party shall: (1) provide the other party with timely advance
written notice of the confidential information requested by such government
authority and such disclosing party's intent
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to so disclose; (2) minimize the amount of confidential information to be
provided consistent with the interests of the non-disclosing party and the
requirements of the government authority involved; and (3) at the request and
expense of the non-disclosing party make every reasonable effort (which shall
include participation by the non-disclosing party in discussions with the
government authority involved) to secure confidential treatment and minimization
of the confidential information to be provided. Neither Guarantor nor Owner
shall publish the terms and conditions of this Guaranty, unless the other party
provides its express prior written consent thereto; provided, however, that
Owner shall be permitted to disclose, subject to the provisions of this Section
18(a), such terms and provisions to the Financing Parties or any applicable
rating agency and otherwise to the extent required to obtain financing for the
Facility. Notwithstanding any other provision of this Section 18(a), Owner shall
be permitted to summarize the material terms and conditions of this Guaranty for
purposes of including such summary in any offering document associated with the
issuance of debt by Owner for the purpose of obtaining financing for the
Facility.
(b) Guarantor shall not issue any press or publicity release
or any advertisement, or publish or otherwise disclose any photograph or other
information, concerning this Guaranty, the EPC Agreement or the Project without
the express prior written consent of Owner.
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
SIEMENS CORPORATION
By: /s/ Xxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President, General Counsel
and Secretary
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President, Corporate
Relations
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ACCEPTED AND AGREED
AES IRONWOOD, INC.
By:/s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
Appendix A
Actions, Suits and Proceedings
[None.]
