|
Exhibit 2.3
GUARANTY
AGREEMENT
This Guaranty Agreement (this
“ Agreement ”), dated as of March 31, 2008,
is made by and among Constellation Energy Commodities Group, Inc.,
a Delaware corporation (“ Guarantor ”), and CEP
Mid-Continent LLC, a Delaware limited liability company (“
CEP MidCon ”).
WITNESSETH:
WHEREAS, Cola Resources LLC,
a Delaware limited liability company and an affiliate of Guarantor
(the “ Seller ”), has entered into that certain
Agreement for Purchase and Sale dated February 19, 2008 (as it
may be amended from time to time, the “ Purchase
Agreement ”) with CEP MidCon, pursuant to which Seller
will sell and CEP MidCon will acquire certain Properties identified
in the Purchase Agreement. All capitalized terms used herein which
are not otherwise defined herein shall have the meaning attributed
to them in the Purchase Agreement.
WHEREAS, Guarantor will
receive substantial and direct benefits from the extensions of
credit contemplated by the Purchase Agreement and has agreed to
enter into this Agreement to provide assurance for the performance
of certain of Seller’s obligations in connection with the
Purchase Agreement and to induce CEP MidCon to enter into the
Purchase Agreement.
WHEREAS, the execution and
delivery of this Agreement is a condition to CEP MidCon’s
obligation to close under the terms of the Purchase
Agreement.
NOW, THEREFORE, in
consideration of the premises and other good and valuable
consideration, the adequacy, receipt and sufficiency of which are
hereby acknowledged, Guarantor hereby agrees as follows:
ARTICLE I
GUARANTY
Section 1.1
Guaranty. Subject to Sections 1.2 and 1.3 hereof,
Guarantor hereby unconditionally, absolutely and irrevocably
guarantees the punctual payment when-due of Seller’s payment
obligations, if any, arising under Section 14.3 of the
Purchase Agreement (subject to the limitations in Section 14.5
of the Purchase Agreement) (the “Indemnity
Obligations”) and (ii) Annex I of the Purchase
Agreement (the “Title Defect Obligations” and
collectively with the Indemnity Obligations, the “Guaranteed
Obligations”); provided, however, that the maximum liability
of Guarantor hereunder, regardless of any amendment or modification
to the Purchase Agreement, is limited to (a) for all Indemnity
Obligations, the sum of $10,664,900.00 and (b) for all Title
Defect Claims, the sum of $ 9,178,873.00. The maximum liability of
Guarantor for Title Defect Obligations is calculated to approximate
the aggregate of that portion, if any, of the Allocated Value of
each Wellbore allocable to any Lease as to which Seller has not
received recorded assignments of its interest as of the Closing
Date, less the estimated
sum of proceeds due Seller
for periods prior to the Effective Time attributable to Wellbores
which are not on pay status as of the Closing Date. Accordingly,
the maximum liability of Guarantor for Title Defect Obligations
shall adjust proportionately over time as CEP MidCon receives and
records assignments of its interests or receives proceeds for
Wellbores previously not on pay status based on the original
calculations establishing Guarantor’s maximum liability.
Guarantor’s obligations and liability under this Agreement
shall be limited to payment obligations only and Guarantor shall
have no obligation to perform under the Purchase Agreement,
including, without limitation, to sell, deliver, supply or
transport gas, electricity or any other commodity.
Section 1.2 Certain
Defenses. CEP MidCon agrees that, notwithstanding anything
contained herein to the contrary, Guarantor shall not be obligated
to pay the Guaranteed Obligations hereunder to the extent that the
Seller is not required to pay the Guaranteed Obligations as a
result of any right of offset, counterclaim or other defense
available to the Seller with respect to the Guaranteed Obligations
(collectively, a “ Seller Defense ”). In
furtherance thereof, Guarantor shall be entitled to assert, as a
valid defense to payment of the Guaranteed Obligations, any Seller
Defense to the same extent that any such Seller Defense could be
asserted by Seller in any action brought to enforce the Guaranteed
Obligations against the Seller.
Section 1.3
Termination. This Agreement and all obligations hereunder
shall
|
