Exhibit 10.3
GUARANTY
THIS
UNCONDITIONAL GUARANTY OF PAYMENT AND PERFORMANCE (“
Guaranty ”) is made as of the 23 day of
April, 2007 by Cleco Corporation, a Louisiana corporation (“
Guarantor ”), in favor of Calpine Acadia
Holdings, LLC, a Delaware limited liability company (“
Seller ”). All of the obligations of
Guarantor arising hereunder shall be binding on the undersigned,
and its successors and assigns, and the term “
Guarantor ” shall mean all of such parties
and each of them individually.
RECITALS
WHEREAS,
pursuant to that certain Purchase Agreement (the “
PA ”) dated as of April 23, 2007, by and
between Seller and Acadia Power Holdings, LLC, a Louisiana limited
liability company (“ Buyer ”), Buyer
has entered into an agreement to purchase the Ownership Interests
and Related Assets in a sale authorized by the Bankruptcy Court
pursuant to, inter alia , sections 105, 363, and 365 of
the Bankruptcy Code;
WHEREAS, Seller
is an indirect wholly owned subsidiary of Calpine Corporation, a
Delaware corporation (“ Calpine
”);
WHEREAS,
Calpine and Seller each filed a Chapter 11 Case on December 20,
2005;
WHEREAS,
Guarantor is an Affiliate of Buyer;
WHEREAS, all
capitalized terms not defined herein shall have the meanings set
forth in the PA; and
WHEREAS,
Guarantor shall derive benefits from the PA.
AGREEMENT
NOW, THEREFORE,
as a material inducement to Seller to enter into the PA with Buyer,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and confessed,
Guarantor does hereby irrevocably and unconditionally, warrant and
represent unto and covenant and agree with Seller as
follows:
Section
1.
Guaranty of
Payment . Guarantor hereby absolutely, unconditionally and
irrevocably guarantees to Seller and its successors, endorsees,
transferees and assigns the punctual and complete payment when due
(including interest accruing after the commencement of any
bankruptcy or insolvency proceeding by or against Buyer, whether or
not allowed in such proceeding) of the sums of money now or
hereafter due and owing by Buyer pursuant to the terms of the
PA.
The Guaranty of
Guarantor as set forth in this Section 1 is a continuing
guaranty of payment and not a guaranty of collection.
Section
2.
Guaranty of
Performance . Guarantor additionally absolutely,
unconditionally and irrevocably guarantees to Seller the timely
performance of all other obligations of Buyer under the PA. (The
obligations of Guarantor as set forth in Sections 1 and
2 are collectively referred to as the “
Guaranteed Obligations ”).
Section
3.
Primary Liability of
Guarantor . Guarantor shall be liable for the payment and
performance of the Guaranteed Obligations, as set forth in this
Guaranty, as a primary obligor. This Guaranty shall be effective as
a waiver of, and Guarantor hereby expressly waives, any and all
rights to which Guarantor may otherwise have been entitled under
any suretyship laws in effect from time to time in the State of New
York.
In the event of
default by Buyer in payment or performance of the Guaranteed
Obligations, or any part thereof, when such payment or performance
becomes due, Guarantor shall, on demand and without further notice
of nonpayment or nonperformance, or any other notice whatsoever,
pay the amount due thereon to Seller or perform or observe the
agreement, covenant, term or condition, as the case may be, and it
shall not be necessary for Seller, in order to enforce such payment
or performance by Guarantor, first to institute suit or pursue or
exhaust any rights or remedies against Buyer or others liable for
such payment or for such performance, or to join Buyer for the
payment or performance of the Guaranteed Obligations or any part
thereof in any action to enforce this Guaranty, or to resort to any
other means of obtaining payment or performance of the Guaranteed
Obligations.
Suit may be
brought or demand may be made against Buyer or against all parties
who have signed this Guaranty or against any one or more of them,
separately or together, without impairing the rights of Seller
against any party hereto. Any time that Seller is entitled to
exercise its rights or remedies hereunder, it may in its discretion
elect to demand payment, performance or payment in lieu of
performance, all to the extent of its right to so elect under the
terms of the PA. If Seller has the right to demand performance,
such election shall not affect Seller’s right to demand
payment thereafter if the performance is not fulfilled as is
otherwise permitted by the PA until all of the Guaranteed
Obligations have been paid and performed in full.
Section
4.
Certain Agreements and
Waivers by Guarantor . Guarantor hereby agrees that Seller’s
rights or remedies and all Guarantor’s obligations under the
terms of this Guaranty shall remain in full force and effect and
shall not be released, diminished, impaired or reduced by, or
deemed to be satisfied by, nor shall Guarantor be exonerated,
discharged or released (by virtue of any law, rule, arrangement or
relationship) by, any one or more of the following events, actions,
facts, or circumstances, and the liability of Guarantor under this
Guaranty shall be absolute and unconditional irrespective
of:
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the taking or
accepting of any other security or guaranty for, or right of
recourse with respect to, any or all of the Guaranteed
Obligations;
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whether express
or by operation of any statute, regulation or rule of law, or
otherwise, any limitation, discharge, cessation or partial release
of the liability of Guarantor hereunder, or any complete or partial
release of Buyer or any other party liable, directly or indirectly,
for the payment or performance of any or all of the
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Guaranteed
Obligations (other than an express release by Seller in favor of
Guarantor);
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the bankruptcy,
dissolution, liquidation, termination, receivership,
reorganization, merger, consolidation, change of form, structure or
ownership, sale of all assets, or lack of corporate, partnership or
other power of Buyer or any other party at any time liable for the
payment or performance of any or all of the Guaranteed
Obligations;
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either with or
without notice to or consent of Guarantor, any renewal, extension,
modification, supplement, subordination or rearrangement of the
terms of any or all of the Guaranteed Obligations, including,
without limitation, material alterations of the terms of payment or
performance or any other terms thereof, or any waiver, termination,
or release of, or consent to departure from, the PA or any
adjustment, indulgence, forbearance, or compromise that may be
granted from time to time by Seller to Buyer and/or any other
person (other than Guarantor) at any time liable for the payment or
performance of any or all of the Guaranteed Obligations;
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any neglect,
lack of diligence, delay, omission, failure, or refusal of Seller
to take or prosecute (or in taking or prosecuting) any action for
the collection or enforcement of any of the Guaranteed
Obligations;
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if for any
reason Seller is required to refund any payment by Buyer or any
other party liable for the payment or performance of any or all of
the Guaranteed Obligations or pay the amount thereof to someone
else, except in the event the Deposits are returned to Buyer in
accordance with Sections 12.2(b) , 12.4(b) or
12.5(b) of the PA;
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the existence
of any claim, set-off, or other right that Guarantor may at any
time have against Buyer, Seller, or any other person, whether or
not arising in connection with this Guaranty, or the PA;
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the
unenforceability of all or any part of the Guaranteed Obligations
against Buyer because the Guaranteed Obligations, or any part
thereof, is ultra vires or because the officers or persons
creating the Guaranteed Obligations acted in excess of their
authority or because of a lack of validity of or of defect or
deficiency in the PA, it being agreed that Guarantor shall remain
liable on the Guaranteed Obligations, or any part thereof, for any
reason (and regardless of any joinder of Buyer or any other party
in any action to obtain payment or performance of any or all of the
Guaranteed Obligations) described in this paragraph; or
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any order,
ruling or plan of reorganization emanating from proceedings under
Title 11 of the United States Code with respect to Buyer or any
other person, including any extension, reduction, composition, or
other alteration of the Guaranteed Obligations, whether or not
consented to by Seller.
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In the event any payment
by Buyer or any other person to Seller is held to constitute
a preference, fraudulent transfer or other voidable payment
under any bankruptcy, insolvency or similar law, or if for any
other reason Seller
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