GUARANTY
This
GUARANTY
dated
as of May 18,
2007 (the “Guaranty”),
is executed by
Integrys
Energy
Group, Inc., a Wisconsin corporation (the
“Guarantor”)
to and for the
benefit of Bank of America, N.A., in its capacity as administrative agent for
the Banks (as defined below) (in such capacity, the “Administrative
Agent”).
WHEREAS,
Peoples Energy
Corporation, an Illinois corporation (the “Borrower”)
has obtained a
revolving line of credit in the original amount of $400,000,000 pursuant to
that
certain Credit Agreement dated as of June 13, 2006 by and among the Borrower,
the Administrative Agent and the other Banks party thereto (the “Banks”)
as amended by
that certain letter agreement effective as of March 6, 2007 by and between
the
Borrower and the Administrative Agent (the Credit Agreement as so amended is
referred to herein as, the “Credit
Agreement”);
WHEREAS,
contemporaneously
with the execution of this Guaranty, the Borrower and the Administrative Agent
are entering into a First Amendment and Consent to Credit Agreement to provide
for, among other things, the delivery of this Guaranty;
WHEREAS,
the Borrower is a
wholly owned subsidiary of the Guarantor and the extension of credit by the
Banks is desirable to the conduct and operation of the business of the Borrower
and will inure to the financial benefit of the Guarantor;
WHEREAS,
the
Administrative Agent has requested that Guarantor execute and deliver this
Guaranty and the Guarantor has agreed to execute and deliver this Guaranty;
and
NOW,
THEREFORE,
in consideration
of the foregoing and for other good and valuable consideration, the receipt
of
which is hereby acknowledged, the parties hereto agree as follows:
1. Definitions.
Capitalized terms
used but not defined herein shall have the meaning ascribed to them in the
Credit Agreement.
2. Guaranty.
Guarantor does
hereby fully and unconditionally guaranty for the benefit of the Banks and
the
Administrative Agent (a) the due and punctual payment of all “Obligations” (as
defined in the Credit Agreement) of Borrower, whether on the Termination Date
or
at any earlier or accelerated date or dates as provided in the Credit Documents
or at any time hereafter made or granted, and the due and punctual performance
in full of all other obligations of the Borrower under the Credit Documents
(collectively, the “Guaranteed
Obligations”)
and (b) in case
of any extension of time of payment or renewal of any of the Guaranteed
Obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether on the
Termination Date, by acceleration, or otherwise. In case of the failure of
Borrower to punctually make any such payment of the Obligations, Guarantor
hereby agrees to cause any such payment to be made promptly when and as the
same
shall become due and payable. This
Guaranty
constitutes a guaranty of payment and not of collection and shall not be
impaired by the failure to endorse evidence of this Guaranty on any Credit
Document.
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Guarantor
hereby
agrees that its obligations under this Guaranty shall be as if it were principal
debtor and not merely surety, and
shall
be
absolute and unconditional, irrespective of, and shall be unaffected by, any
invalidity, irregularity or unenforceability of any Note or any other Credit
Document, any failure to enforce the provisions of any Note or any other Credit
Document, or any waiver, modification or indulgence granted to Borrower with
respect thereto, by any Bank or the Administrative Agent, or any other
circumstance which may otherwise constitute a legal or equitable discharge
of a
surety or guarantor; provided,
however,
that,
notwithstanding the foregoing, no such waiver, modification, or indulgence
shall, without the consent of Guarantor, increase the aggregate principal amount
of the Revolving Credit Commitments (except any increase resulting from the
Borrower’s exercise of the “Increase Option” as set forth in Section 2.1(b) of
the Credit Agreement) or the interest rate thereon or increase any premium
payable thereon.
3. Representations
and Warranties.
Guarantor
represents and warrants to the Administrative Agent and the Banks as
follows:
(a) Guarantor
has the
requisite power, authority, capacity and legal right to execute, deliver and
perform this Guaranty and all other documents required to be executed and
delivered in connection herewith. This Guaranty and all other documents required
to be executed and delivered by Guarantor, when executed and delivered, will
constitute legal, valid and binding obligations of Guarantor, enforceable
against Guarantor in accordance with their terms subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws relating to or affecting creditor’s rights and general principles of
equity, regardless of whether considered in a proceeding in equity or at
law;
(b)
The
execution,
delivery and performance of this Guaranty by the Guarantor do not and will
not
(i) require the consent or approval of, any governmental body, agency or
authority, or (ii) result in a breach of or constitute a default under, or
result in the imposition of, any lien, charge or encumbrance upon any property
of the Guarantor pursuant to (A) any of the Guarantor’s organizational documents
or (B) any indenture or other agreement or instrument under which the Guarantor
is a party or by which it or any of its properties may be bound or affected,
other than, with respect to clause (ii)(B) above, those which are not reasonably
expected to result in a material adverse effect on the Guarantor or its
subsidiaries.
(c) As
of the date of
this Guaranty, there is not any litigation, arbitration, governmental or
administrative proceedings, actions, examinations, claims or demands pending
or,
to the Guarantor’s knowledge, threatened against the Guarantor that would
reasonably be expected to materially adversely affect performance by Guarantor
of its obligations under this Guaranty;
(d) Guarantor
has taken
all necessary corporate action to ensure that the execution, delivery and
performance of this Guaranty have been duly authorized; and
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(e) The
execution,
delivery and performance of this Guaranty by Guarantor and compliance with
the
provisions hereof by Guarantor will not violate any provision of Guarantor’s
Articles of Incorporation or By-laws.
4. Covenants
and
Agreements.
Guarantor hereby
acknowledges, covenants and agrees that:
(a) Guarantor
shall be
subrogated to all rights of any Banks and Administrative Agent against Borrower
in respect of any amounts paid to such Bank or Administrative Agent by Guarantor
pursuant to the provisions of this Guaranty; provided,
however,
that Guarantor
shall not be entitled to enforce, or to receive any payments arising out of
or
based upon, such right of subrogation until the Obligations have been paid
in
full.
(b) This
Guaranty shall
continue in full force and effect until payment of the Obligations in full
and
the termination of all Commitments thereunder.
(c)
The
Guarantor’s
liability under this Guaranty shall in no way be modified, affected, impaired,
reduced, released or discharged by: (i) any acceptance by the Administrative
Agent or any Bank of any new or renewal Note or Notes, or of any security or
collateral for, or other guarantors or obligors of, any of the Obligations;
(ii)
any compromise, settlement, surrender, release, discharge, renewal, refinancing,
extension, alteration, exchange, sale, pledge or election by the Administrative
Agent or any Bank with respect to the Obligations or any note by the Borrower,
or with respect to any collateral under Section 1111 or any action taken under
Section 364, or any other section of the United States Bankruptcy Code, now
existing or hereafter amended, or other disposition of, or substitution for,
or
indulgence with respect to, or failure, neglect or omission to realize upon,
or
to enforce or exercise any liens or rights of appropriation or other rights
of
the Administrative Agent or any Bank with respect to, the Obligations or any
security or collateral therefor or any claims against any person or persons
primarily or secondarily liable thereon; (iii) any failure, neglect or omission
to perfect, protect, secure or insure any of the foregoing security interests,
liens, or encumbrances of the properties or interests in properties subject
thereto; or (iv) any change in the Borrower’s name or the merger of the Borrower
into another corporation or other entity or omission of any kind or at any
time
upon the part of any Bank or the Administrative Agent.
(d) No
delay on the
part of the Administrative Agent or the Banks in the exercise of any right
or
remedy shall operate as a waiver thereof, and no single or partial exercise
by
the Administrative Agent of any right or remedy shall preclude other or further
exercise thereof, or the exercise of any other right or remedy. No modification,
termination, discharge or waiver of any of the provisions hereof shall be
binding upon the Administrative Agent, except as expressly set forth in a
writing duly signed and delivered on behalf of the Administrative
Agent.
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(e) Should
a claim (a
“Repayment
Claim”)
be made upon the
Administrative Agent or any Bank at any time for repayment of any amount
received by the Administrative Agent or such Bank in payment of the Obligations,
or any part thereof, whether received from the Borrower or the Guarantor
pursuant hereto by reason of: (a) any judgment, decree or order of any court
or
administrative body having jurisdiction over the Administrative Agent or such
Bank or any of their respective properties; or (b) any settlement or compromise
of any such Repayment Claim effected by the Administrative Agent or such Bank,
in its sole discretion, with the claimant (including the Borrower), the
Guarantor shall remain liable to the Administrative Agent or such Bank for
the
amount so repaid to the same extent as if such amount had never originally
been
received by the Administrative Agent or such Bank, notwithstanding any
termination hereof or the cancellation of any note or other instrument
evidencing the Obligations.
(f) Guarantor
shall aid
and assist the Borrower in satisfying all of the Borrower’s obligations set
forth in Sections 7.3 and 7.6 of the Credit Agreement and shall provide the
Borrower with information sufficient to allow the Borrower to make the
representations and warranties contained in Section 5.3 of the Credit Agreement
to the extent such representations and warranties relate to the
Guarantor.
5. Waivers.
Guarantor
hereby
waives:
(a) diligence,
presentment, demand of payment, filing of claims with a court in the event
of a
merger or bankruptcy of Borrower, any right to require a proceeding first
against Borrower, protest or notice with respect to any Note or the indebtedness
evidenced thereby, and all demands whatsoever, and covenants that this Guaranty
will not be discharged with respect to any Note except by payment in full of
the
Obligations.
(b)
any
and all
defenses, claims and discharges of the Borrower pertaining to the Obligations,
except the defense of discharge by payment in full of the Obligations and the
termination of the Commitments thereunder.
6. Restrictions
on
Liens.
After the date of
this Guaranty and so long as this Guaranty remains effective, Guarantor will
not
pledge, mortgage, hypothecate or grant a security interest in, or permit any
mortgage, pledge, security interest or other lien upon, any capital stock of
any
Guarantor Subsidiary now or hereafter directly or indirectly owned by Guarantor
to secure any Indebtedness, without making effective provisions whereby the
Obligations shall be (so long as such other Indebtedness shall be so secured)
equally and ratably secured with any and all such other Indebtedness and any
other indebtedness similarly entitled to be equally and ratably secured;
provided,
however,
that this
restriction shall not apply to nor prevent the creation or existence of (a)
any
mortgage, pledge, security interest, lien or encumbrance upon any such capital
stock (i) created at the time of the acquisition of such capital stock by
Guarantor or within one year after such time to secure all or a portion of
the
purchase price for such capital stock or (ii) existing thereon at the time
of
the acquisition thereof by Guarantor (whether or not the
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obligations
secured
thereby are assumed by Guarantor), or (b) any extension, renewal or refunding
of
any mortgage, pledge, security interest, lien or encumbrance described in clause
(a) above on capital stock of any Guarantor Subsidiary theretofore subject
thereto (or substantially the same capital stock) or any portion thereof.
In
case Guarantor
or any Guarantor Subsidiary shall propose to pledge, mortgage, hypothecate
or
grant a security interest in any capital stock of any Guarantor Subsidiary
owned
by Guarantor or such Guarantor Subsidiary to secure any Indebtedness, other
than
as permitted by clauses (a) and (b) in the preceding paragraph, Guarantor will
prior thereto give written notice thereof to the Administrative Agent, and
Guarantor will prior to or simultaneously with such pledge, mortgage,
hypothecation or grant of security interest, in form satisfactory to the
Administrative Agent, effectively cause the Obligations to be secured (for
so
long as other Indebtedness shall be secured) equally and ratably with such
Indebtedness and with any other indebtedness for money borrowed similarly
entitled to be equally and ratably secured.
For
purposes of
this Section 6, “Guarantor
Subsidiary”
means
(i) any corporation of which more than 50% of the outstanding securities
having ordinary voting power shall at the time be owned or controlled, directly
or indirectly, by Guarantor or by one or more other Guarantor Subsidiaries
or by
Guarantor and one or more other Guarantor Subsidiaries, or (ii) any
partnership, association, joint venture or similar business organization of
which more than 50% of the ownership interests having ordinary voting power
shall at the time be so owned or controlled.
7. Guarantor
May
Consolidate.
Nothing contained
in this Guaranty or any of the Credit Documents shall prevent any consolidation
or merger of Guarantor with or into any other Person or Persons (whether or
not
affiliated with Guarantor), or successive consolidations or mergers in which
Guarantor or its successor or successors shall be a party or parties, or shall
prevent any conveyance or transfer of the properties and assets of Guarantor
as
an entirety or substantially as an entirety to any other Person (whether or
not
affiliated with Guarantor) lawfully entitled to acquire the same; provided,
however,
and Guarantor
hereby covenants and agrees, that upon any such consolidation, merger,
conveyance or transfer, (a) the obligations of Guarantor as set forth in this
Guaranty shall be expressly assumed by an assumption agreement, in form
reasonably satisfactory to the Administrative Agent, executed and delivered
to
the Administrative Agent by the Person (if other than Guarantor) formed by
such
consolidation, or into which Guarantor shall have been merged, or by the Person
which shall have acquired such properties and assets and (b) Guarantor shall
deliver to the Administrative Agent an officers’ certificate and an opinion of
counsel, each stating that such consolidation, merger, conveyance or transfer
and, if an assumption agreement is required in connection with such transaction,
such assumption agreement, comply with this Section 7 and that all conditions
precedent herein provided for relating to such transaction have been fulfilled.
Upon
any
consolidation of Guarantor with, or merger of Guarantor into, any other Person
or any conveyance or transfer of the properties and assets of Guarantor as
an
entirety or substantially as an entirety in accordance with this Section 7,
the
successor Person formed by such consolidation or into which Guarantor is merged
or to which such conveyance or transfer is made shall succeed to, and be
substituted for, and shall have all obligations and may exercise every right
and
power of, Guarantor under this Guaranty and the other Credit Documents with
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the
same effect as
if such successor Person had been named as Guarantor herein, and thereafter,
in
the case of a conveyance or transfer, the predecessor Person shall be relieved
of all obligations and covenants under this Guaranty and the other Credit
Documents.
8. Governing
Law.
This Guaranty
shall be construed in accordance with and governed by the internal laws of
the
State of Illinois. Any legal action or proceeding with respect to this Guaranty
shall be brought in the courts of the State of Illinois or of the United States
for the Northern District of Illinois.
9. Successors
and
Assigns.
Guarantor agrees
that this Guaranty shall inure to the benefit of and may be enforced by the
Administrative Agent, and any holder of the Notes and their respective
successors and assigns, and shall be binding upon and enforceable against
Guarantor and its respective successors and assigns. All references herein
to
the Borrower and to the Guarantor, respectively, shall be deemed to include
any
successors or assigns, whether immediate or remote, to such
corporation.
[signature
page
follows]
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IN
WITNESS
WHEREOF,
this Guaranty has
been executed as of the date first above written.
GUARANTOR:
By:
/s/
Xxxxxxx
X. Xxxxxxx
Name: Xxxxxxx
X.
Xxxxxxx
Title:
Vice
President and
Treasurer
Accepted
and Agreed:
BANK
OF AMERICA,
N.A.,
as
Administrative
Agent
By:
/s/
Xxxx X.
Xxxxxxx
Name: Xxxx
X. Xxxxxxx
Title:
Vice President
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