ENFOLIO MASTER FIRM PURCHASE/SALE AGREEMENT
GUARANTY AGREEMENT
SAMPLE FOR DISCUSSION PURPOSES ONLY
This Guaranty Agreement (this "Guaranty"), dated as of ________, is made and
entered into between ________________, a ___________ corporation ("Guarantor
"), and ______________________, a _____________ ___________ ("Contract
Party").
WHEREAS, (i) Contract Party and ____________________, a wholly owned
subsidiary of Guarantor ("Obligor"), are contemplating entering into an
ENFOLIO Master Firm Purchase/Sale Agreement of even date here-with and herein
incorporated for all purposes (said Agreement, as the same may be from time
to time extended, amended and supplemented, particularly including, without
limitation, all Transactions thereunder, the "Gas Contract"), (ii) Guarantor
will directly or indirectly benefit from the Gas Contract and (iii) as a
condition precedent to the consummation of the Gas Contract, Contract Party
has required that Guarantor unconditionally guarantee to Contract Party all
payment obligations of Obligor under the Gas Contract.
NOW THEREFORE, to induce Contract Party to enter into the Gas Contract,
Guarantor agrees as follows:
1. PAYMENT GUARANTY. Guarantor absolutely, irrevocably and unconditionally
guarantees to Contract Party all payment obligations of Obligor set forth in
the Gas Contract and interest thereon accrued as provided in the Gas Contract
(the "Obligations"); provided, the applicable rate of interest shall never
exceed the maximum lawful rate permitted by law. This guaranty of payment is
a continuing guaranty effective during the term of the Gas Contract and until
complete performance by Obligor of its obligations under the Gas Contract and
payment in full of all Obligations; provided, in all instances this Guaranty
shall continue for a period of six months after the termination of the Gas
Contract for the purpose of guaranteeing indemnity Obligations which survive
the termination of the Gas Contract as set forth in Section 8.4 of the Gas
Contract (the "Indemnity Period"). With respect to any Claims threatened or
filed as of the close of the Indemnity Period, the Obligations resulting from
any such Claims shall be guaranteed hereunder. No notice of the Obligations
or any Transaction need be given in any form to Guarantor at any time and
Guarantor WAIVES any such notice and the right to consent to the Obligations
or any Transaction. Guarantor WAIVES any right to require as a condition to
its obligations hereunder that (i) collateral be applied to the Obligations,
(ii) presentment or demand be made upon Obligor or (iii) action be brought
against Obligor or any other person or entity except Guarantor, should
Contract Party seek to enforce the obligations of Guarantor. Specifically,
without limitation, Guarantor WAIVES any right to require, substantively or
procedurally, that (i) a judgment previously be rendered against Obligor or
any other person or entity except Guarantor, (ii) Obligor or any other person
or entity be joined in any action against Guarantor or (iii) an action
separate from one against Guarantor be brought against Obligor or any other
person or entity. The obligations of Guarantor are several from those of
Obligor or any other person or entity, including, without limitation, any
other surety for Obligor, and are primary payment obligations concerning
which Guarantor is the principal obligor. To the extent Obligor shall fail
to timely make payment of any Obligations, Guarantor shall satisfy its
obligations hereunder regardless of whether Contract Party or any other
person or entity shall have taken any steps to enforce its rights against
Obligor or any other person or entity except Guarantor. The obligations of
Guarantor hereunder shall in no way be affected or impaired by reason, and
Guarantor WAIVES its right to prior notice, of the happening from time to
time of any of the following: (i) extensions (whether or not material) of
the time for payment of all or any portion of the Obligations, (ii) the
modification or amendment in any manner (whether or not material) of the Gas
Contract or the Obligations, (iii) except for applicable statutes of
limitations, any failure, delay or lack of diligence on the part of Contract
Party, or any other person or entity to enforce, assert or exercise any
right, privilege, power or remedy conferred on Contract Party or any other
person or entity in the Gas Contract or at law, or any action on the part of
Contract Party or such other person or entity granting indulgence or
extension of any kind, (iv) the settlement or compromise of any Obligations,
(v) the status, composition, structure or name of Obligor change, including,
without limitation, by reason of merger, dissolution, consolidation or
reorganization, (vi) except for releases or waivers resulting from the rights
or defenses of Obligor that Guarantor has reserved in Section 3, the release
or waiver, by operation of law or otherwise, of the performance or observance
by Obligor of any express or implied covenant, term or condition in the Gas
Contract, (vii) the release or waiver, by operation of law or otherwise, of
the performance or observance by any co-guarantor, surety, endorser or other
obligor of any express or implied covenant, term or condition to be performed
or observed by it under the Gas Contract or related document and (viii) the
failure to acquire, perfect or maintain perfection of any lien on, or
security interest in, any collateral provided by Obligor to Contract Party or
the release of any such collateral or the release, modification or waiver of,
or failure to enforce, any pledge, security device, guaranty, surety or other
indemnity agreement in respect of such collateral. Notwithstanding the
foregoing, the liability of Guarantor hereunder shall be limited to direct,
actual damages and, unless expressly provided in the Gas Contract, Guarantor
shall not be liable for consequential, incidental, punitive, exemplary or
indirect damages, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, in
tort, contract or otherwise, or any penalties or charges assessed by any
person or entity for the unauthorized receipt of gas. Upon 30 Days written
notice and with the prior written consent of Contract Party, which consent
shall not be unreasonably withheld, this Guaranty may be replaced by (i) a
guaranty in identical form made by a guarantor of equal or better
creditworthiness, including credit ratings by nationally recognized credit
rating agencies, taking into consideration all relevant information
concerning corporate structure, all relevant financial information, both
current and projected, and all effects on the enforceability of the
replacement guaranty, or (ii) a letter of credit in favor of Contract Party
in the amount of the Maximum Limit (below defined), issued by a bank and in a
form, each of which shall be reasonably satisfactory to Contract Party,
taking into consideration all effects on the enforceability of the
replacement letter of credit; provided, this Guaranty shall continue to apply
to all Transactions in effect at the time this Guaranty is replaced until all
such Transactions are completed and the replacement guaranty or letter of
credit shall apply to only those Transactions formed after its execution and
delivery.
2. MAXIMUM LIMIT. The amount covered by this Guaranty for all Obligations
in respect of the aggregate of all Transactions under the Gas Contract that
ever shall be required to be paid by Guarantor shall not exceed
$_____________ (the "Maximum Limit"); provided, this Guaranty shall cover and
Guarantor shall pay, in addition to the Maximum Limit, all reasonable
expenses, including, without limitation, attorneys' fees, court costs and
similar costs, of Contract Party in the event of judgment, settlement or
other enforcement against Guarantor. The Maximum Limit shall not be affected
by the number or type of outstanding Transactions or the holding or
application of any collateral by Contract Party.
3. DEFENSES. Other than as expressly waived in this Guaranty, Guarantor
retains its own defenses and rights hereunder. Guarantor WAIVES all rights,
setoffs, counterclaims and other defenses of Obligor relating to the
Obligations, including, without limitation, all rights, setoffs,
counterclaims and other defenses arising out of the bankruptcy, insolvency,
dissolution or liquidation of Obligor.
4. DEFAULT. If Obligor fails or refuses to pay timely any Obligations,
Contract Party may at its option exercise any or all of its rights, powers
and remedies afforded hereunder and under all documents, if any, securing
this Guaranty and may declare the unpaid amounts of all Obligations then
owing under the Gas Contract to be immediately due and payable, and thereupon
such amounts shall be immediately due and payable without presentation and
demand for payment, protest, notice of protest or dishonor, notice of
default, notice of intent to accelerate or notice of acceleration to
Guarantor or any other person or entity, all of which Guarantor hereby
WAIVES.
5. REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants that:
(i) it is a corporation duly organized and validly existing under the laws of
the State of its incorporation and has the power and authority to execute,
deliver and carry out the terms and provisions of this Guaranty, (ii) no
authorization, approval, consent or order of, or registration or filing with,
any court or other governmental body having jurisdiction over Guarantor is
required on the part of Guarantor for the execution and delivery of this
Guaranty and (iii) assuming due authorization, execution and delivery hereof
by Contract Party, this Guaranty constitutes a legal, valid and binding
agree-ment of Guarantor enforceable in accordance with its terms, except as
the enforceability thereof may be limited by the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and by general principles of equity.
6. FINANCIAL INFORMATION. At the written request of Contract Party,
Guarantor shall provide Contract Party with the financial information
described in Appendix "1" of the Gas Contract under Financial Information in
accordance therewith.
7. NOTICE. All notices and communications made pursuant to this Guaranty
shall be in writing and delivered personally or mailed by certified mail,
postage prepaid and return receipt requested, or sent by facsimile, as
follows:
To Guarantor:
________________
________________
________________
Facsimile: _______
To Contract Party:
________________
________________
________________
Facsimile: _______
Notice given by personal delivery or mail shall be effective upon actual
receipt. Notice given by facsimile shall be effective upon actual receipt if
received during recipient's normal business hours or at the beginning of
recipient's next business day after receipt if not received during
recipient's normal business hours. Any party may change its address to which
notice is to be given hereunder by providing notice of same in accordance
with this Section 7.
8. LAW, WAIVERS, MISCELLANEOUS. THIS GUARANTY SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. Guarantor WAIVES
all right to require marshaling of assets and liabilities, sale in inverse
order of alienation, notice of disposition of collateral and notice of
acceptance of this Guaranty. The Transaction Procedures set forth in the Gas
Contract are acknowledged and agreed to by Guarantor and Guarantor agrees not
to contest the validity or enforceability of any Transaction entered into in
accordance with the Transaction Procedures under applicable law relating to
whether certain agreements are to be in writing or signed by the Party to be
thereby bound. No term or provision of this Guaranty shall be amended,
modified, altered, waived, supple-mented or terminated except in a writing
signed by the parties hereto. All capitalized terms used in this Guaranty
and not herein defined shall have the meanings attributed to them in the Gas
Contract. This Guaranty shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and assigns of Guarantor and
Contract Party. This Guaranty embodies the entire agreement and
under-standing between Guarantor and Contract Party and supersedes all prior
agreements and understandings relating to the subject matter hereof. The
headings in this Guaranty are for purposes of reference only, and shall not
affect the meaning hereof. This Guaranty may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall con-stitute one document.
The parties hereto have caused this Guaranty to be executed as of the day
and year first above written.
[GUARANTOR] [CONTRACT PARTY]
____________________________ _____________________________
By _________________________ By __________________________
Title _______________________ Title ________________________
Debra Perlingiere
Enron North America Corp.
Legal Department
1400 Smith Street, EB 3885
Houston, Texas 77002
dperlin@enron.comPhone 713-853-7658
Fax 713-646-3490
