GUARANTY AS OF DECEMBER 7, 2004 BETWEEN FIRSTENERGY CORP. AND ATLAS RESOURCES, INC.
Exhibit 10.12
GUARANTY AS OF DECEMBER 7, 2004 BETWEEN
FIRSTENERGY CORP. AND ATLAS RESOURCES, INC.
FIRSTENERGY CORP. AND ATLAS RESOURCES, INC.
| [GRAPHIC OMITTED] | 00 Xxxxx Xxxx Xx. | |||
| Xxxxx, Xxxx 00000 | ||||
| 0-000-000-0000 |
Guaranty dated as of December 7, 2004 by and between FirstEnergy Corp., an Ohio corporation,
with its principal place of business at 00 Xxxxx Xxxx Xxxxxx, Xxxxx, XX 00000 (“Guarantor”) and
Atlas Resources Inc., a Pennsylvania corporation, with its principal place of business at 000
Xxxxxx Xx., Xxxxxxxxxx, XX 00000 (“Seller”). Seller, together with its affiliates Atlas Energy
Group, Inc., an Ohio Corporation, Resource Energy, Inc., a Delaware corporation, and Viking
Resources Corporation, an Ohio Corporation, entered into a Gas Purchase Agreement for the purchase
and sale of natural gas (“Sales Agreement”) to FirstEnergy Solutions Corp., (“Customer”), a
subsidiary of the Guarantor.
In consideration thereof, and as an inducement for the extension of credit by the Seller to the
Customer, the Guarantor hereby absolutely and unconditionally guarantees to the Seller, its
permitted successors and assigns pursuant to this letter (this “Guaranty”), the prompt payment
(within three (3) business days of demand by the Seller) of any and all amounts that are or may hereafter become
due and payable (taking into account all applicable grace periods) from the Customer to the Seller
by reason of the Sales Agreement (the “Obligations”), to fully perform the Sales Agreement, as well
as any indebtedness under the Sales Agreement (regardless of whether such indebtedness be in the
form of book accounts, promissory notes, trade acceptances, checks, drafts, or other evidence of
indebtedness, together with late fees, service charges or liquidated damages (but only if, and to
the extent, provided for in the Sales Agreement) and Interest at the rate specified therein). This
Guaranty shall be a guaranty of payment, and not of collection, and the Seller shall not be
required to take any proceedings or exhaust its remedies against the Customer prior to the exercise
of its rights and remedies against the Guarantor, as guarantor.
The Guarantor hereby agrees to reimburse the Seller for all sums paid to it by the Customer under
the Sales Agreement, which must subsequently be returned by the Seller to the Customer as a
preference or fraudulent transfer under the Federal Bankruptcy Code, any applicable state law and
for any other reason.
Notwithstanding anything else in this Guaranty to the contrary, the obligation and liability of
Guarantor hereunder shall not (i) be effective or enforceable with respect to any Obligation,
liability or claim relating in any way to consequential, indirect, punitive or exemplary damages of
any kind whatsoever, whether owing by Company or otherwise, and (ii) exceed Fifteen Million Dollars
($15,000,000) in the aggregate. This Guaranty is a continuing guaranty and shall remain in full
force and effect until at least March 31, 2007, and shall continue on a monthly basis thereafter,
unless terminated by either party with thirty (30) days written notice to the other party.
If the Guarantor shall be adjudicated bankrupt under the Federal Bankruptcy Laws, or if any
petition for any relief under any of such laws shall be filed by or against the Guarantor, or if
the Guarantor shall make an assignment for the benefit of creditors or shall apply for a receiver
for all or any part of its property, or if the Guarantor shall become insolvent or unable to pay
its debts as they mature, then and in any such event all of the Obligations shall forthwith become
and be immediately due and payable by the Guarantor.
Notice of demand by the Seller shall be sent by either certified mail, return receipt requested, or
hand delivery, to the respective addresses specified above, with notices to the Guarantor sent to
the attention of the Credit Manager and notices to the Seller sent to the attention of both Xxxx
Xxxxxxx and Xxxxx XxXxxx, and shall be deemed to be received on the day that such writing is
delivered to the intended recipient thereof.
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The Guarantor hereby acknowledges that any modification of the Sales Agreement shall not affect the
liability of the Guarantor with respect hereto. Except as provided above with respect to the
requirement of notice from the Seller to the Guarantor of a payment demand, the Guarantor hereby
waives, to the extent permitted by law, the requirements of the giving of any notice, including,
but not limited to, (a) notice of the acceptance of this Guaranty by the Seller; (b) notice of the
entry into the Sales Agreements between the Customer and the Seller and of any modifications
thereto; (c) notice of any extension of time for the payment of any sums due and payable to the
Seller under the Sales Agreement; (d) with respect to any notes or evidence of indebtedness
received by the Seller from the Customer, notice of presentment, notice of adverse facts, protest
or notice of protest; and (e) notice of any defaults by or disputes with the Customer.
This Guaranty shall not be affected by the taking of any checks, notes or other obligations,
secured or unsecured, in any amount, purportedly in payment of the whole or any part of any
Obligations or by reason of any extension of time given to, or any indulgences shown to, the
Customer by the Seller, or by the making, execution and delivery of any oral or written agreement
or agreements affecting said Obligations. The Guarantor’s liability hereunder shall not be impaired
or discharged by reason of any reorganization, insolvency, bankruptcy or similar proceeding
(whether voluntary or involuntary) modifying the Seller’s rights and remedies against the Customer
with regard to any Obligation or liability of the Customer to the Seller under the Sales Agreement.
The Guarantor also waives diligence, presentment, protest to or upon Customer with respect to the
Obligations. This Guaranty shall be construed as a continuing, absolute and unconditional guarantee
of payment without regard to (a) the validity, regularity or enforceability of the Sales Agreement,
any of the Obligations or any other collateral security therefor or guarantee a right of offset
with respect thereto at any time or from time to time by Seller, (b) until Seller shall have been
paid in full, any right by Guarantor to subrogation of indemnification, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Seller or Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal discharge of the Customer
for the Obligations, or of Guarantor under this Guaranty, in bankruptcy or in any other instance.
When pursuing its rights and remedies hereunder against Guarantor, the Seller may, but shall be
under no obligation to, pursue such rights and remedies as it may have against Customer or any
other party or against any collateral security or guarantee for the Obligations or any right to
offset with respect thereto, and any failure by Seller to pursue such other rights or remedies or
to collect any payments from the Customer or any such other party or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any release of
Customer or any such other party or of any such collateral security, guarantee or right of offset,
shall not relieve Guarantor of any liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of Seller against
Guarantor.
Notwithstanding anything else in this Guaranty to the contrary, Guarantor shall be permitted and
entitled to raise all defenses to payment hereunder that are available to Company, other than those
defenses available to the Company solely as a result of bankruptcy, insolvency, reorganization and
other similar proceedings.
This Guaranty shall bind the Guarantor for any and all of the Customer’s purchases of natural gas
from the Seller, or the Seller’s production affiliates, Resource Energy, Inc., Viking Resources
Corporation, and Atlas Energy Group, Inc.
This Guaranty shall remain in full force and effect and be binding in accordance with and to the
extent of its terms upon Guarantor and its successors and assigns thereof, and shall inure to the
benefits of the Seller, and its respective successors, transferees, affiliates and assigns, until
all Obligations and the obligations of Guarantor under this Guaranty shall been satisfied by
payment in full.
The Guarantor represents and warrants, as the date hereof, that this Guaranty has been duly
authorized, executed and delivered by the Guarantor.
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This Guaranty shall not be assigned or modified without the written consent of each of the
Guarantor and the Seller and shall not be affected by any change in the relationship between
Guarantor and the Customer. This Guaranty shall not be relied upon, or enforced, by any person
other than the Guarantor, the Customer, and the Seller.
This Guaranty shall be governed by and construed in accordance with the laws of the State of Ohio,
without regard to the conflict of law rules thereof. The Guarantor and the Seller, by accepting
this Guaranty, submit to the non- exclusive jurisdiction of the Courts of the State of Ohio and the
United States District Court of Northern District of Ohio.
This Guaranty revokes any prior guaranty issued by the Guarantor to the Seller for the obligations
of the customer.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed by its duly authorized
officer as of the date first above written.
| FIRSTENERGY CORP. |
||||
| /s/ Xxxxxx X. Xxxxx | ||||
| Xxxxxx X. Xxxxx | ||||
| Treasurer | ||||
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