EXHIBIT 10.54
EXECUTION COPY
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GUARANTY
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GUARANTY dated as of August 1, 1998, by Edison Mission Energy, a
California corporation ("Guarantor"), in favor of Pennsylvania
Electric Company, a Pennsylvania corporation, NGE Generation,
Inc., a New York corporation, and New York State Electric & Gas
Corporation, a New York corporation (collectively, "Sellers").
WHEREAS, Mission Energy Westside, Inc., a California
corporation and a direct wholly-owned subsidiary of Guarantor
("Buyer"), has entered into an Asset Purchase Agreement dated as of
August 1, 1998 (the "Agreement"), pursuant to which Buyer has agreed to
purchase and Sellers have agreed to sell Sellers' interests in
certain electric generating assets, as more particularly set forth
in the Agreement; and
WHEREAS, in order to induce the Sellers to enter into the
Agreement, the Guarantor has agreed to execute and deliver this
Guaranty; and
WHEREAS, the Guarantor will benefit from the transactions
contemplated by the Agreement.
NOW, THEREFORE, the Guarantor agrees as follows:
Section 1. Definitions. Capitalized terms used herein shall
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have the meanings assigned to them herein or, if not defined
herein, then such terms shall have the meanings assigned to them in the
Agreement.
Section 2. Guaranty. Guarantor hereby absolutely,
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unconditionally and irrevocably guarantees the full and prompt
performance and payment when due of all covenants, promises,
agreements, obligations, indemnifications, undertakings,
representations and warranties of Buyer in the Agreement (all of such
covenants, promises, agreements, undertakings, obligations,
indemnifications, representations and warranties, as they may be limited
by Section 10.4 of the Agreement, collectively, the "Guaranteed
Obligations") when the same become due, whether at maturity, by
declaration, demand, or otherwise, and agrees to reimburse
Sellers for all expenses, including reasonable attorneys'
fees, of enforcing their rights under this Guaranty. The liability of
Guarantor under this Guaranty is a guaranty of performance and payment
and not of collection.
Section 3. Guaranty Absolute. Guarantor guarantees that the Guaranteed
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Obligations will be paid or performed strictly in accordance with the terms of
the Agreement, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Sellers with respect thereto. The obligations of the Guarantor
under this Guaranty are independent of the Guaranteed Obligations,
and a separate action or actions may be brought and prosecuted against the
Guarantor to enforce this Guaranty, irrespective of whether any actions are
brought against Buyer. The liability of Guarantor under this Guaranty
shall to the fullest extent permitted by law be absolute, unconditional and
irrevocable, and unaffected by:
(a) the occurrence or continuance of any event of bankruptcy,
reorganization or insolvency with respect to Buyer;
(b) any amendment, supplement, reformation or other modification
of the Agreement;
(c) the exercise, non-exercise or delay in exercising, by Sellers or
any other Person, of any of their rights under this Guaranty or the
Agreement;
(d) any change in time, manner or place of payment of, or in any
other terms of, all or any of the Guaranteed Obligations or any
other amendment or waiver of, or any consent to departure from, the
Agreement or any other agreement, document or instrument relating thereto;
(e) any permitted assignment or other transfer of the Agreement in
whole or in part;
(f) any change in ownership or control of Sellers, Guarantor or
Buyer;
(g) any sale, transfer or other disposition by Guarantor of any direct
or indirect interest it may have in Buyer; or
(h) the absence of any notice to, or knowledge by, Guarantor
of the existence or occurrence of any of the matters or events set forth in
the foregoing clauses.
Section 4. Waivers.
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(a) Guarantor hereby irrevocably, unconditionally and expressly
waives, and agrees that it shall not at any time insist upon, plead or in any
manner whatsoever claim or take the benefit or advantage of, any appraisal,
valuation, stay, extension, marshalling of assets or redemption laws, or
exemption, whether now or at any time hereafter in force, which may delay,
prevent or otherwise affect the performance by Guarantor of its
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obligations under, or the enforcement by Sellers of, this Guaranty;
(b) Guarantor hereby irrevocably, unconditionally and expressly
waives all notices, diligence, presentment and demand of every kind and any
requirement that Sellers protect, secure or perfect any security interest or
exhaust any right or first proceed against the Buyer or any other person or
entity;
(c) Until payment and satisfaction in full of all Guaranteed
Obligations, to the extent permitted by applicable law, Guarantor
irrevocably, unconditionally and expressly waives any right it may have to bring
a case or proceeding against Buyer by reason of its performance under this
Guaranty or with respect to any other obligation of Buyer to Guarantor, under
any state or federal bankruptcy, insolvency, reorganization, moratorium or
similar laws for the relief of debtors. Guarantor irrevocably waives, to the
fullest extent permitted by law and for the benefit of, and as a separate
undertaking with the Seller, any defense to the performance of this Guaranty
that may be available to Guarantor as a consequence of this Guaranty's being
rejected or otherwise not assumed by Buyer or any trustee or similar
official for Buyer or for any substantial part of the property of Buyer, or as a
consequence of this Guaranty's being otherwise terminated or modified, in
any bankruptcy or insolvency proceeding, whether such rejection, non-
assumption, termination or modification shall have been by reason of
this Guaranty's being held to be an executory contract or by reason of any
other circumstance. If, notwithstanding the foregoing, this Guaranty shall be
rejected or otherwise not assumed, or terminated or modified, Guarantor
agrees, to the fullest extent permitted by law, for the benefit of, and as a
separate undertaking with the Sellers, that Guarantor will be unconditionally
liable to pay to Sellers an amount equal to each payment that would otherwise be
payable by Guarantor under or in connection with this Guaranty if this Guaranty
were not so rejected or otherwise not assumed or terminated or modified. In
addition, if in any such proceeding any amount previously paid to Sellers is
returned to the court or Buyer, Guarantor's liability hereunder shall be
reinstated to such amount.
Section 5. Subrogation. Guarantor will not exercise any rights which
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it may acquire by way of subrogation under this Guaranty, by any payment
made hereunder or otherwise, until all the Guaranteed Obligations and all other
amounts payable under this Guaranty shall have been paid and performed in full.
If any amount shall be paid to Guarantor on account of such subrogation rights
at any time prior to the payment and performance in full of the Guaranteed
Obligations and all other amounts payable under this Guaranty, such amount shall
be held in trust for the benefit of the Sellers and shall forthwith be paid to
the Sellers to be credited and applied upon the Guaranteed Obligations,
whether matured or unmatured, in accordance with the terms of the
Agreement.
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Section 6. Representations and Warranties. Guarantor hereby
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represents and warrants as follows:
(a) Due Organization. Guarantor is a corporation duly incorporated
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and validly existing under the laws of the State of California.
(b) Power and Authority. Guarantor has full corporate power,
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authority and legal right to execute and deliver this Guaranty and to
perform its obligations hereunder.
(c) Due Authorization. This Guaranty has been duly authorized,
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executed and delivered by Guarantor.
(d) Enforceability. This Guaranty constitutes the legal, valid and
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binding obligation of Guarantor enforceable against Guarantor in accordance
with its terms.
(e) No Conflicts. The execution and delivery by Guarantor of this
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Guaranty and the performance by Guarantor of its obligations hereunder
will not (i) conflict with or result in any breach of any provisions of
Guarantor's certificate of incorporation or bylaws; (ii) conflict with
or result in any reach of any provision of any law applicable to Guarantor or
the transactions contemplated hereby; (iii) result in a breach of or constitute
a default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, agreement or other instrument or obligation
to which Guarantor is a party or by which it or its assets or property are bound
or (iv) require any consent, approval, permit or authorization of, or filing
with or notification to, any governmental or regulatory authority.
(f) No Proceedings. No action, suit or proceeding at law or in equity
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or by or before any governmental authority or arbitral tribunal is now
pending or, to the knowledge of Guarantor, threatened against Guarantor
that reasonably could be expected to have a material adverse effect on
Guarantor's ability to perform its obligations under this Guaranty.
(g) No Claims. Guarantor's obligations under this Guaranty are not
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subject to any offsets or claims of any kind against Buyer, Sellers or any
other Person.
Section 7. Continuing Guarantee. Subject to Section 14 hereof, this
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Guaranty is a continuing guaranty and shall remain in full force and effect
until all Guaranteed Obligations have been performed or paid in full.
Section 8. Amendments; Waivers; Etc. Neither this instrument nor
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any terms hereof may be changed, waived, discharged or terminated orally,
but only by an instrument in
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writing signed by each Seller and Guarantor. No delay or failure by Sellers to
exercise any remedy against Buyer or Guarantor will be construed as a waiver of
that right or remedy. No failure on the part of Sellers to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided
by any applicable law.
Section 9. Severability. In the event that the provisions of this
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Guaranty are claimed or held to be inconsistent with any other instrument
evidencing or securing the Guaranteed Obligations, the terms of this
Guaranty shall remain fully valid and effective. If any one or more of the
provisions of this Guaranty should be determined to be illegal or
unenforceable, all other provisions shall remain effective.
Section 10. Assignment.
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(a) Assignability. Guarantor shall not have the right to assign any of
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Guarantor's rights or obligations or delegate any of its duties under this
Guaranty without the prior written consent of Sellers. Guarantor shall
remain liable under the Guaranty, notwithstanding assumption of this
Guaranty by a successor or assign, unless and until released in writing from
its obligations hereunder by Sellers. Each Seller may, at any time and from
time to time, assign, in whole or in part, the rights of such Seller hereunder
to any Affiliate of such Seller, or to any Person to whom Seller has the
right to assign its rights or obligations under and, pursuant to the terms of
the Agreement, whereupon such assignee shall succeed to all rights of such
Seller hereunder.
(b) Successors and Assigns. Subject to Section 10(a) hereof, all
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of the terms of this Guaranty shall be binding upon and inure to the benefit
of the parties hereof and their respective permitted successors and
assigns.
Section 11. Address for All Notices. All notices and other communications
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provided for hereunder shall be given and effective in accordance with
the notice requirements of the Agreement and if to Guarantor, at the
following address:
Edison Mission Energy
00000 Xxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Section 12. Jurisdiction. This Guaranty shall be governed by and
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construed in accordance with the law of the State of New
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York, without regard to its principles of conflict of laws. Guarantor
irrevocably agrees that any legal action or proceeding arising under, or
relating to, this Guaranty shall be brought in any state or federal court
located in the State of New York, New York City, Borough of Manhattan.
The Guarantor irrevocably waives any objection that it may now have or in the
future have to such jurisdiction as the proper forum and venue for any action
or proceeding arising under, or relating to, this Guaranty.
Section 13. Entire Agreement. This writing is the complete and
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exclusive statement of the terms of this Guaranty and supersedes all
prior oral or written representations, understandings, and agreements
between Sellers and Guarantor with respect to the subject matter hereof.
Sellers and Guarantor agree that there are no conditions to the full
effectiveness of this Guaranty.
Section 14. Termination. This Guaranty shall terminate and be of no
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further force or effect on the later to occur of the following: (1) the
occurrence under the Agreement of the Closing and (2) the date on which Buyer's
Debt Ratings by each of Moody's and S&P shall be rated at least
investment grade. As used herein, "Debt Ratings" means the ratings
assigned by S&P and Xxxxx'x to Buyer's senior unsecured non-credit enhanced
long term debt, "S&P" means Standard & Poor's Rating Group, a division of
McGraw Hill, or any successor thereto, and "Moody's" means Xxxxx'x
Investors Service, Inc., or any successor thereto.
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IN WITNESS WHEREOF, Guarantor has duly caused this Guaranty to be executed
and delivered as of the date first written above.
EDISON MISSION ENERGY
By: /s/ Xxxxx X. Xxxx , Xx.
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Name:
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Title:
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