Exhibit 10.65
BOWLINE GUARANTY
This Guaranty (this "Guaranty"), dated as of November 24, 1998,
is given by Southern Energy, Inc., a Delaware corporation (the
"Guarantor"), in favor of Orange and Rockland Utilities, Inc., a New York
corporation ("O&R") and Consolidated Edison Company of New York, Inc., a
New York corporation ("Con Edison").
RECITALS
WHEREAS, Southern Energy Bowline, L.L.C., a Delaware limited
liability company and a direct or indirect wholly-owned subsidiary of the
Guarantor (the "Buyer"), has entered into the Bowline Point Generating
Station Sales Agreement (the "Asset Sales Agreement"), dated as of the date
hereof with O&R and Con Edison, pursuant to which the Buyer has agreed to
purchase and O&R and Con Edison have agreed to sell certain electric
generating assets, as more particularly set forth therein; and
WHEREAS, the Buyer has entered into the Bowline Adjacent Property
Sales Agreement (the "Property Sales Agreement"), dated as of the date
hereof with O&R, pursuant to which the Buyer has agreed to purchase and O&R
has agreed to sell certain property, as more particularly set forth
therein; and
WHEREAS, Guarantor has agreed to guarantee the payment and
performance obligations of the Buyer under the Asset Sales Agreement and
the Property Sales Agreement.
NOW, THEREFORE, the Guarantor agrees as follows:
Section 1. Definitions. (a) Capitalized terms used herein
shall have the meanings assigned to them herein or, if not defined herein,
then such terms shall have the meanings assigned to them in the Asset Sales
Agreement.
Section 2. Guaranty. (a) Guarantor hereby absolutely and
irrevocably guarantees to O&R and Con Edison and their successors and
permitted assigns, as primary obligor and not merely as a surety, that the
Buyer shall: (i) be bound by and perform, (A) the provisions of Sections
3.1 (Purchase Price), 3.2 (Purchase Price Adjustment), Section 3.4
(Proration) and Section 4.2 (Payment of Purchase Price) of the Asset Sales
Agreement; (ii) pay (A) the amounts required to be paid by the Buyer
pursuant to Article IX (Indemnification) of the Asset Sales Agreement and
the Indemnification provisions of each of the Ancillary Agreements, where
applicable and (B) all other amounts required to be paid by the Buyer under
the Ancillary Agreements and any other agreement or instrument relating
thereto not described in (ii)(A) above; and (iii) promptly perform, observe
and comply with all other obligations, covenants, and undertakings and
representations and warranties of the Buyer contained in the Asset Sales
Agreement, the Ancillary Agreement and any other agreement or instrument
relating thereto (all of such obligations collectively, the "Guaranteed
Obligations"). Guarantor agrees that such Guaranteed Obligations shall
forthwith become due and payable by Guarantor or be required to be
performed by the Guarantor for the purposes of this Guaranty upon the
occurrence of any event or condition giving rise to the obligation of the
Buyer so to pay or be performed under the Asset Sales Agreement, Ancillary
Agreements or any other agreement or instrument relating thereto.
(b) Guarantor hereby absolutely and irrevocably guarantees
to O&R and its successors and permitted assigns, as primary obligor and not
merely as a surety, that the Buyer shall: (i) be bound by and perform, (A)
the provisions of Sections 3.1 (Purchase Price), Section 3.2 (Proration)
and Section 4.2 (Payment of Purchase Price) of the Property Sales
Agreement; (ii) pay (A) the amounts required to be paid by the Buyer
pursuant to Article IX (Indemnification) of the Property Sales Agreement
and (iii) promptly perform, observe and comply with all other obligations,
covenants, and undertakings and representations and warranties of the Buyer
contained in the Property Sales Agreement or any other agreement or
instrument relating thereto (the "Guaranteed Property Obligations").
Guarantor agrees that such Guaranteed Property Obligations shall forthwith
become due and payable by Guarantor or be required to be performed by the
Guarantor for the purposes of this Guaranty upon the occurrence of any
event or condition giving rise to the obligation of the Buyer so to pay or
be performed under the Property Sales Agreement or any other agreement or
instrument relating thereto.
(c) In the event that the Buyer shall fail to perform such
Guaranteed Obligations or Guaranteed Property Obligations at the times and
in the manner provided in the Asset Sales Agreement, the Property Sales
Agreement, the Ancillary Agreements and any other agreement or instrument
relating thereto, the Guarantor, within thirty (30) days of receipt of
written notice from O&R and/or Con Edison, as applicable, of the Buyer's
failure to perform, shall duly perform or cause to be performed the same.
(d) Subject to the foregoing provisions, this Guaranty
shall be an absolute, unconditional, present and continuing guaranty of
payment and performance (not merely of collection or collectability) which
shall remain in full force and effect until the first to occur of (i) the
date that each and all of the Guaranteed Obligations and Guaranteed
Property Obligations shall have been fully and satisfactorily discharged in
accordance with the terms and provisions of the Asset Sales Agreement, the
Property Sales Agreement, the Ancillary Agreements and any other agreement
or instrument relating thereto or (ii) such date (the "Attainment Date") on
or after the second anniversary of the Closing Date (as defined in the
Asset Sales Agreement) that the Buyer shall have attained for at least four
(4) consecutive fiscal quarters (A) "net worth", as determined in
accordance with U.S. generally accepted accounting principles and reflected
in a balance sheet certified by an independent certified public accounting
firm of national reputation, at least equal to an amount equal to one-third
of the sum of the Purchase Price (as described in Section 3.1 of the Asset
Sales Agreement) and the Purchase Price (as described in Section 3.1 of the
Property Sales Agreement).
Section 3. Guaranty Absolute. The liability of Guarantor under
this Guaranty shall be unaffected by:
(a) any lack of validity of the Asset Sales Agreement or
the Property Sales Agreement which is caused by an act or failure to act of
Buyer or the Guarantor;
(b) the occurrence or continuance of any event of
bankruptcy, reorganization or insolvency with respect to Buyer or any other
Person (for purposes hereof, "Person" shall include any natural person,
corporation, partnership, firm, association, governmental authority or any
other entity whether acting in an individual, fiduciary or other capacity),
or the dissolution, liquidation or winding up of Buyer or any other Person;
(c) any amendment, supplement, reformation or other
modification of the Asset Sales Agreement or the Property Sales Agreement;
(d) the exercise, non-exercise or delay in exercising, by
O&R or Con Edison, as applicable, or any other Person of any of their
rights and remedies under this Guaranty, the Asset Sales Agreement or the
Property Sales Agreement;
(e) any permitted assignment or other transfer of this
Guaranty by O&R or Con Edison, as applicable, or any permitted assignment
or other transfer of the Asset Sales Agreement or the Property Sales
Agreement in whole or in part;
(f) any change in control of the 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. Waiver. In addition to waiving any defenses to which
clauses (a) through (h) of Section 3 may refer:
(a) Guarantor waives, and agrees that it shall not at any
time insist upon, plead or in any manner whatever 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 obligations under, or the enforcement by
O&R or Con Edison, as applicable, of, this Guaranty.
(b) Guarantor waives all notices, diligence, presentment
and demand (whether for nonpayment or protest or of acceptance, maturity,
extension of time, change in nature or form of the Guaranteed Obligations
or the Guaranteed Property Obligations, acceptance of security, release of
security, composition or agreement arrive at as to the amount of, or the
terms of, the Guaranteed Obligations or the Guaranteed Property
Obligations, notice of adverse change in Buyer's financial condition, or
any other fact which might materially increase the risk to Guarantor
hereunder) with respect to the Guaranteed Obligations or the Guaranteed
Property Obligations which are not specifically provided for in the Asset
Sales Agreement or the Property Sales Agreement, and any other demands
whatsoever which are not specifically provided for in the Asset Sales
Agreement or the Property Sales Agreement, and waives the benefit of all
provisions of law which are in conflict with the terms of this Guaranty.
(c) Until payment and satisfaction in full of all
Guaranteed Obligations and the Guaranteed Property Obligations, Guarantor
irrevocably waives any right it may have to bring a case or proceeding
against Buyer by reason of their 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.
Section 5. Representations and Warranties. Guarantor represents
and warrants as follows:
(a) Due Organization. Guarantor is a corporation duly
organized and validly existing under the laws of Delaware.
(b) Power and Authority. Guarantor has full corporate
power, authority and legal right to enter into this Guaranty and to perform
its obligations hereunder.
(c) Due Authorization. This Guaranty has been duly
authorized, executed and delivered by Guarantor.
(d) Enforceability. This Guaranty constitutes the legal,
valid and binding obligation of Guarantor enforceable against Guarantor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, moratorium or other similar laws
affecting creditors' rights generally.
(e) No Conflicts. The execution and delivery by Guarantor
of this Guaranty and the performance by Guarantor of its obligations
hereunder will not (i) violate the provisions of Guarantor's certificate of
incorporation or bylaws; (ii) violate the provisions of any law applicable
to Guarantor or the transactions contemplated hereby; or (iii) result in a
breach of or constitute a default under any agreement to which Guarantor is
a party or by which it or its assets or property are bound which breach or
default would have a material adverse effect on Guarantor's ability to
perform its obligations hereunder.
(f) No Proceedings. There is no action, suit or proceeding
at law or in equity or by or before any governmental authority or arbitral
tribunal now pending or, to the best knowledge of Guarantor, threatened
against Guarantor which 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 subject to any offsets or claims of any kind against Buyer, O&R or
Con Edison, as applicable, or any other Person.
Section 6. Repayment and Reinstatement. If any claim is ever
made upon O&R or Con Edison, as applicable, or any Person claiming through
O&R or Con Edison, as applicable, for repayment or disgorgement of any
amount or amounts received by O&R or Con Edison, as applicable, from the
Buyer in payment of the Guaranteed Obligations or the Guaranteed Property
Obligations and O&R or Con Edison, as applicable, or such Person, as the
case may be, repays or disgorges all or any part of said amount, then,
notwithstanding any revocation or termination of this Guaranty, Guarantor
shall be and remain liable to O&R or Con Edison, as applicable, or such
Person, as the case may be, under the terms of this Guaranty for the amount
so repaid, to the same extent as if such amount had never originally been
received by O&R or Con Edison, as applicable, or such Person, as the case
may be.
Section 7. Amendments; Waivers; Etc. Neither this instrument
nor any term hereof may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by O&R or Con Edison,
as applicable, and Guarantor, as the case may be. No delay or failure by
O&R or Con Edison, as applicable, 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 O&R or Con Edison, as applicable, 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 8. Severability. In the event that the provisions of
this Guaranty are claimed or held to be inconsistent with any other
instrument evidencing or securing O&R or 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 9. Assignment.
(a) Assignability. Guarantor shall not have the right to
assign any of Guarantor's rights or obligations under this Guaranty. O&R
or Con Edison, as applicable, may, at any time and from time to time,
assign, in whole or in part, their respective rights hereunder to any
Person to whom O&R or Con Edison, as applicable, has the right to assign
their rights or obligations under and, pursuant to the terms of the Asset
Sales Agreement or the Property Sales Agreement, whereupon such assignee
shall succeed to all rights of O&R or Con Edison, as applicable, hereunder,
as the case may be.
(b) Successors and Assigns. Subject to Section 9(a)
hereof, all of the terms of this instrument shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
Section 10. Addresses for Notices. All notices and other
communications provided for hereunder shall be given in accordance with the
notice requirements of the Asset Sales Agreement and if to Guarantor, at
the address specified below the space for its execution of this Guaranty.
Section 11. Jurisdiction.
(a) To the extent permitted by applicable law, Guarantor
hereby irrevocably submits to the jurisdiction of any state or federal
court sitting in New York City in any action or proceeding arising out of
or relating to this Guaranty, and Guarantor hereby irrevocably agrees that
all claims in respect of such action or proceeding may be heard and
determined in such a court. Guarantor, O&R and Con Edison hereby
irrevocably waive, to the fullest extent they may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or
proceeding. To the extent permitted by applicable law, Guarantor
irrevocably consents to the service of any and all process in any such
action or proceedings by the mailing of copies of such process to Guarantor
at its address specified below the space for its execution of this
Guaranty. 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 provided by law.
(b) To the extent that Guarantor has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal
process otherwise consented to in paragraph (a) of this section (whether
through service or notice, attachment prior to judgment, attachment in aid
of execution, execution or otherwise) with respect to itself or its
property, to the extent permitted by law, Guarantor hereby irrevocably
waives such immunity in respect of its obligations under this Guaranty.
Section 12. Governing Law. This Guaranty shall be governed by,
and construed in accordance with, the laws of the state of New York except
the choice of law rules.
Section 13. Entire Agreement. This Guaranty contains the
complete agreement of Guarantor with respect to the matters contained
herein and supersedes all other negotiations or agreements, whether written
or oral, with respect to the subject matter hereof.
IN WITNESS WHEREOF, Guarantor has signed this Guaranty under seal
effective as of the date first above written.
SOUTHERN ENERGY, INC.
By: /s/ Xxxxx Xxxxxxxx
__________________________
Name: Xxxxx Xxxxxxxx
Title: Vice President - Project
Development
Address: 000 Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
ACCEPTED AND AGREED:
ORANGE AND ROCKLAND UTILITIES, INC.
By: /s/ D. Xxxxx Xxxxxxx
__________________________________
Name: D. Xxxxx Xxxxxxx
Title: Vice Chairman and Chief
Executive Officer
Address: One Xxxx Xxxx Xxxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
By: /s/ J. Xxxxxxx Xxxxx
_________________________________
Name: J. Xxxxxxx Xxxxx
Title: President and Chief Operating Officer
Address: 0 Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
