SUBSIDIARY GUARANTEE
Exhibit 10(v)-7
THIS SUBSIDIARY GUARANTEE (this “Guarantee”) made and delivered as of November 28,
2007, by each of the Subsidiaries of EnergySouth, Inc., a Delaware corporation (“Parent
Borrower”), identified on the signature pages of this Guarantee (each a “Guarantor” and
collectively the “Guarantors”) in favor of (i) each of the lenders from time to time
parties to the Credit Agreement described below (each a “Lender” and collectively the
“Lenders”), (ii) Regions Bank, in its capacities as Administrative Agent, Issuing Bank, and
Swingline Lender under the terms of the Credit Agreement and the other Loan Documents referred to
in the Credit Agreement (in such capacities, the “Administrative Agent”, “Issuing
Bank” and “Swingline Lender”, respectively), and (iii) such of the Lenders and their
respective Affiliates that are other Secured Parties as provided in the Credit Agreement (the
Lenders, the Administrative Agent, the Issuing Bank, the Swingline Lender, and such other Secured
Parties collectively referred to herein as the “Guaranteed Parties”).
W I T N E S S E T H:
WHEREAS, Bay Gas Storage Company, Ltd., an Alabama limited partnership (“Subsidiary
Borrower” and, together with Parent Borrower, the “Borrowers”), Parent Borrower, the
Lenders, the Administrative Agent, the Issuing Bank, and the Swingline Lender are parties to a
certain Amended and Restated Credit Agreement dated as of November 28, 2007 (as the same may be
further amended, restated, and supplemented from time to time, the “Credit Agreement”;
capitalized terms used in this Guarantee that are defined in the Credit Agreement are used herein
with the respective meanings given to such capitalized terms in the Credit Agreement);
WHEREAS, the Credit Agreement provides for the issuance of the Bay Gas LC for the account of
Subsidiary Borrower and the making of Bay Gas Revolving Loans to the Subsidiary Borrower;
WHEREAS, it is a condition to the ESI Lenders’ obligation to make ESI Revolving Loans and
Swingline Loans to Parent Borrower, and to issue Letters of Credit for the account of Parent
Borrower, as provided in the Credit Agreement, that each Guarantor, as a Subsidiary,
unconditionally guarantee the payment of (i) all ESI Revolving Loans and Swingline Loans to Parent
Borrower, (ii) all obligations of Parent Borrower to reimburse the Issuing Bank in respect of LC
Disbursements made under the ESI LCs, and (iii) all other Obligations of Parent Borrower and all
Subsidiaries, including without limitation, all payments, obligations and liabilities in respect of
Hedging Obligations and Treasury Management Obligations owing to any Lenders or their respective
Affiliates, as provided in the Credit Agreement (the ESI Revolving Loans and Swingline Loans to
Parent Borrower, ESI LC reimbursement obligations of Parent Borrower, and such other Obligations of
Parent Borrower and the Subsidiaries being herein collectively referred to as the “Parent
Guaranteed Obligations”; the term “Parent Guaranteed Obligations” to include, without
limitation (x) all principal and interest due with respect to all ESI Revolving Loans and the
Swingline Loans to Parent Borrower outstanding under the terms
of the Credit Agreement, all interest and fees accruing on outstanding ESI LCs and unpaid ESI
LC reimbursement obligations, and all payments due from, and all interest and fees payable by, any
Subsidiaries in respect of Hedging Obligations and Treasury Management Obligations owing to any
Lenders or their respective Affiliates, including without limitation, all interest and fees
accruing or that would have accrued after the filing of a petition in bankruptcy or other
insolvency proceeding (whether or not such claim for interest is allowed or allowable in such
proceeding), (y) all commitment fees, Letter of Credit fees, and all other fees, expenses, and
amounts otherwise payable by Parent Borrower or any Subsidiaries for reimbursement or
indemnification under the terms of the Credit Agreement, any other Loan Document, and any other
document evidencing or governing such Hedging Obligations and Treasury Management Obligations, and
(z) all renewals, extensions, modifications, and refinancings (in whole or in part) of any of the
amounts referred to above);
WHEREAS, it is a condition to the Issuing Bank’s obligation to issue the Bay Gas LC for the
account of Subsidiary Borrower, and to the Bay Gas Lenders’ obligations to make Bay Gas Revolving
Loans to the Subsidiary Borrower, as provided in the Credit Agreement, that each Guarantor, as a
Subsidiary, unconditionally guarantee the payment of (i) all LC Disbursements made in respect of
the Bay Gas LC, (ii) all Bay Gas Revolving Loans, and (iii) all other Obligations of Subsidiary
Borrower, including without limitation, all payments, obligations and liabilities in respect of
Hedging Obligations and Treasury Management Obligations owing by Subsidiary Borrower to any Lenders
or their respective Affiliates, as provided in the Loan Documents (the LC Disbursements made in
respect of the Bay Gas LC, the Bay Gas Revolving Loans, and such other Obligations of Subsidiary
Borrower being herein collectively referred to as the “Subsidiary Borrower Guaranteed
Obligations”; the term “Subsidiary Borrower Guaranteed Obligations” to include, without
limitation (x) all principal and interest due with respect to all LC Disbursements made in respect
of the Bay Gas LC, all Bay Gas Revolving Loans, and all payments due from, and all interest and
fees payable by, Subsidiary Borrower in respect of the Bay Gas LC and all Hedging Obligations and
Treasury Management Obligations owing to any Lenders or their respective Affiliates, including,
without limitation, all interest and fees accruing or that would have accrued after the filing of a
petition in bankruptcy or other insolvency proceeding (whether or not such claim for interest is
allowed or allowable in such proceeding), (y) all commitment fees and other fees, expenses and
amounts otherwise payable by Subsidiary Borrower for reimbursement or indemnification under the
terms of the Credit Agreement, the Bay Gas LC, any other Loan Document, and any other document
evidencing or governing such Hedging Obligations and Treasury Management Obligations, and (z) all
renewals, extensions, modifications, and refinancings (in whole or in part) of any of the amounts
referred to above); and
WHEREAS, the making of the ESI Revolving Loans and Swingline Loans to Parent Borrower, the
issuance of the ESI LCs for the account of Parent Borrower, the issuance of the Bay Gas LC for the
account of Subsidiary Borrower, and the making of the Bay Gas Revolving Loans to the Subsidiary
Borrower, will result in direct and substantial benefits to each Guarantor;
NOW, THEREFORE, in order to induce the Guaranteed Parties to make the Loans and otherwise to
extend and continue to extend credit to Borrowers hereafter, and in
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consideration of $10.00 and other good and valuable consideration received by each Guarantor,
each Guarantor hereby declares and agrees:
1. Each Guarantor hereby unconditionally and irrevocably guarantees to the Guaranteed Parties,
and any transferee of any of the Parent Guaranteed Obligations, jointly and severally, the full and
prompt payment when due of all Parent Guaranteed Obligations and all costs, charges and expenses
(including reasonable attorneys’ fees) incurred or sustained by the Guaranteed Parties in enforcing
the obligations of such Guarantor hereunder. Each Guarantor hereby unconditionally and irrevocably
guarantees to the Guaranteed Parties, and any transferee of any of the Subsidiary Borrower
Guaranteed Obligations, jointly and severally, the full and prompt payment when due of all
Subsidiary Borrower Guaranteed Obligations and all costs, charges and expenses (including
reasonable attorneys’ fees) incurred or sustained by the Guaranteed Parties in enforcing the
obligations of such Guarantor hereunder. If any portion of the Parent Guaranteed Obligations or
the Subsidiary Borrower Guaranteed Obligations is not paid when due, each Guarantor hereby agrees
to and will immediately pay same, without resort by the Guaranteed Parties to any other person or
party. The obligation of each Guarantor to the Guaranteed Parties hereunder is primary, absolute
and unconditional, except as may be specifically set forth herein. Any and all payments by each
Guarantor hereunder shall be made free and clear of, and without deduction for, any set-off,
counterclaim, recoupment, or withholding so that, in each case, each Guaranteed Party will receive,
after giving effect to any Taxes (other than taxes applicable to the Guaranteed Party of the types
described in the definition of “Excluded Taxes” as set forth in the Credit Agreement), the
full amount that it would otherwise be entitled to receive with respect to the Guaranteed
Obligations (but without duplication of amounts for Taxes already included in the Guaranteed
Obligations). Each Guarantor acknowledges and agrees that this is a guarantee of payment when due,
and not of collection.
2. This Guarantee is continuing in nature and shall be effective with respect to the full
amount outstanding under all Parent Guaranteed Obligations and all Subsidiary Borrower Guaranteed
Obligations, now existing or hereafter made or extended, and notwithstanding (i) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation or like proceeding
relating to any Guarantor or Borrower, or any action taken with respect to this Guarantee by any
trustee or receiver, or by any court, in any such proceeding, (ii) any lack of validity or
enforceability of the Credit Agreement, the Bay Gas LC or the other Loan Documents, or (iii) any
other circumstance that might otherwise constitute a defense available to, or a discharge of, any
Guarantor. Each Guarantor acknowledges and agrees that the number and amounts of outstanding
Parent Guaranteed Obligations and the Subsidiary Borrower Guaranteed Obligations may fluctuate from
time to time hereafter, and that Borrowers may make payments to the Guaranteed Parties from time to
time hereafter. Each Guarantor expressly agrees that this Guarantee shall continue in full force
and effect notwithstanding such fluctuations and payments, and whether or not any Parent Guaranteed
Obligations or Subsidiary Borrower Guaranteed Obligations are outstanding at any particular time,
until such time as all Parent Guaranteed Obligations and Subsidiary Borrower Guaranteed Obligations
have been paid in full and any commitment of the Guaranteed Parties under the Credit Agreement has
been terminated.
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3. Each Guarantor hereby waives notice of the Guaranteed Parties’ acceptance of this Guarantee
and the creation, extension or renewal of any ESI Revolving Loans, Swingline Loans, ESI LCs, or
other Parent Guaranteed Obligations, or the Bay Gas LC or any Bay Gas Revolving Loans or other
Subsidiary Borrower Guaranteed Obligations. Each Guarantor hereby consents and agrees that, at any
time or times, without notice to or further approval from such Guarantor, and without in any way
affecting the obligations of such Guarantor hereunder, the Guaranteed Parties may, with or without
consideration (i) release, compromise with, or agree not to xxx, in whole or in part, Borrowers or
any other obligor, guarantor, endorser or surety on any Parent Guaranteed Obligations or any
Subsidiary Borrower Guaranteed Obligations, (ii) renew, extend, accelerate, or increase or decrease
the principal amount of any Parent Guaranteed Obligations or any Subsidiary Borrower Guaranteed
Obligations, either in whole or in part, (iii) amend, waive, or otherwise modify any of the terms
of any Parent Guaranteed Obligations or any Subsidiary Borrower Guaranteed Obligations or of any
Security Documents or other undertakings of Borrowers or any other obligor, endorser, guarantor or
surety in connection with any Parent Guaranteed Obligations or any Subsidiary Borrower Guaranteed
Obligations, and (iv) apply any payment received from Borrowers or from any other obligor,
guarantor, endorser or surety on any Parent Guaranteed Obligations or any Subsidiary Borrower
Guaranteed Obligations to any of the liabilities of Borrowers or of such other obligor, guarantor,
endorser, or surety which the Guaranteed Parties may choose.
4. Each Guarantor hereby consents and agrees that the Guaranteed Parties may at any time or
times, either with or without consideration, surrender, release or receive any property or other
collateral of any kind or nature whatsoever held by it or for its account securing any Parent
Guaranteed Obligations or any Subsidiary Borrower Guaranteed Obligations, or substitute any
collateral so held by the Guaranteed Parties for other collateral of like or different kind,
without notice to or further consent from such Guarantor, and such surrender, receipt, release or
substitution shall not in any way affect the obligations of such Guarantor hereunder. The
Guaranteed Parties shall have full authority to adjust, compromise, and receive less than the
amount due upon any such collateral, and may enter into any accord and satisfaction agreement with
respect to the same as the Guaranteed Parties may deem advisable without affecting the obligations
of such Guarantor hereunder. The Guaranteed Parties shall be under no duty to undertake to collect
upon such collateral or any part thereof, and no Guarantor’s obligations hereunder shall be
affected by the Guaranteed Parties’ alleged negligence or mistake in judgment in handling,
disposing of, obtaining, or failing to collect upon or perfect a security interest in, any such
collateral.
5. Each Guarantor hereby waives presentment, demand, protest, and notice of dishonor of any of
the liabilities guaranteed hereby. The Guaranteed Parties shall have no duty or obligation (i) to
proceed or exhaust any remedy against either Borrower, any other Guarantor or obligor, guarantor,
endorser, or surety on any Parent Guaranteed Obligations or any Subsidiary Borrower Guaranteed
Obligations, or any other security held by the Guaranteed Parties for any Parent Guaranteed
Obligations or any Subsidiary Borrower Guaranteed Obligations, or (ii) to give any notice
whatsoever to either Borrower or any other Guarantor, obligor, guarantor, endorser, or surety on
any Parent Guaranteed Obligations or any Subsidiary Borrower Guaranteed Obligations, in any case
before bringing suit, exercising rights to any such security or instituting proceedings of any kind
against any other Guarantor, either Borrower, or
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any of them, and each Guarantor hereby waives any requirement for such actions by the
Guaranteed Parties. Upon default by either Borrower and the Guaranteed Parties’ demand to any
Guarantor hereunder, such Guarantor shall be held and bound to the Guaranteed Parties directly as
principal debtor in respect of the payment of the amounts hereby guaranteed, such liability of such
Guarantor being joint and several with Borrowers, each other Guarantor, and all other obligors,
guarantors, endorsers and sureties on any Parent Guaranteed Obligations or any Subsidiary Borrower
Guaranteed Obligations.
6. Each Guarantor hereby waives to the fullest extent possible as against Borrowers and their
assets, any and all rights, whether at law, in equity, by agreement or otherwise, to subrogation,
indemnity, reimbursement, contribution, payment or any other claim, cause of action, right or
remedy that would otherwise arise out of any payment by such Guarantor hereunder, notwithstanding
the manner or nature of such payment including but not limited to (a) direct payment by such
Guarantor, (b) set-off by the Administrative Agent, the Issuing Bank or any Lender against any
liability or deposit owed by such entity to such Guarantor, (c) recovery by the Administrative
Agent, the Issuing Bank or any Lender against such Guarantor or any property of such Guarantor, as
the result of any judgment, judgment lien, or legal process, (d) the application of the proceeds of
any disposition of all or any part of the collateral to the repayment or all or any part of the
Parent Guaranteed Obligations or Subsidiary Borrower Guaranteed Obligations, or (e) the conveyance
of all or any part of any collateral to the Administrative Agent, the Issuing Bank or the Lenders
in satisfaction of all or any part of the Parent Guaranteed Obligations or Subsidiary Borrower
Guaranteed Obligations, until the indefeasible payment in full of the Parent Guaranteed Obligations
or Subsidiary Borrower Guaranteed Obligations. The waivers set forth above are intended by each
Guarantor and the Administrative Agent, the Issuing Bank and the Lenders to be for the benefit of
Borrowers and such waivers shall be enforceable by Borrowers as an absolute defense to any action
by such Guarantor against Borrowers or their assets which action arises out of any payment by any
Guarantor hereunder.
7. As an independent covenant, each Guarantor hereby expressly covenants and agrees for the
benefit of the Guaranteed Parties that all obligations and liabilities of either Borrower and any
other Subsidiaries of such Borrowers to any Guarantor of whatsoever description, including without
limitation, all intercompany receivables of such Guarantor from such Borrower and any such other
Subsidiaries of such Borrower (collectively, the “Junior Claims”) shall be subordinate and
junior in right of payment to all obligations of such Borrower and any such other Subsidiaries of
such Borrower to the Guaranteed Parties under the terms of the Credit Agreement and the other Loan
Documents (collectively, the “Senior Claims”). If an Event of Default shall occur, then,
unless and until such Event of Default shall have been cured, waived, or shall have otherwise
ceased to exist, no direct or indirect payment (in cash, property, securities, by set-off or
otherwise) shall be made by either Borrower or any such other Subsidiaries to any Guarantor on
account of or in any manner in respect of any Junior Claim except such payments and distributions
the proceeds of which shall be applied to the payment of Senior Claims.
In the event of a Proceeding (as hereinafter defined), all Senior Claims shall first be paid
in full before any direct or indirect payment or distribution (in cash, property,
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securities, by set-off or otherwise) shall be made to any Guarantor on account of or in any
manner in respect of any Junior Claim except such payments and distributions the proceeds of which
shall be applied to the payment of Senior Claims. For purposes of the immediately preceding
sentence, “Proceeding” means either Borrower or any Guarantor shall commence a voluntary
case concerning itself under the United States Bankruptcy Code or any other applicable bankruptcy
laws; or any involuntary case is commenced against either Borrower or any Guarantor; or a custodian
(as defined in the Bankruptcy Code or any other applicable bankruptcy laws) is appointed for, or
takes charge of, all or any substantial part of the property of either Borrower or any Guarantor,
or either Borrower or any Guarantor commences any other proceedings under any reorganization,
arrangement, adjustment of debt, relief of debtor, dissolution, insolvency or liquidation or
similar law of any jurisdiction, whether commenced against either Borrower or any Guarantor, or
either Borrower or any Guarantor is adjudicated insolvent or bankrupt; or any order of relief or
other order approving any such case or proceeding is entered; or either Borrower or any Guarantor
suffers any appointment of any custodian or the like for it or any substantial part of its
property; or either Borrower or any Guarantor makes a general assignment for the benefit of
creditors; or either Borrower or any Guarantor shall fail to pay, or shall state that it is unable
to pay, or shall be unable to pay, its debts generally as they become due; or either Borrower or
any Guarantor shall call a meeting of its creditors with a view to arranging a composition or
adjustment of its debts; or either Borrower or any Guarantor shall by any act or failure to act
indicate its consent to, approval of or acquiescence in any of the foregoing; or any organizational
action shall be taken by either Borrower or any Guarantor for the purpose of effecting any of the
foregoing.
In the event any direct or indirect payment or distribution is made to a Guarantor in
contravention of this Section 7, such payment or distribution shall be deemed received in
trust for the benefit of the Guaranteed Parties and shall be immediately paid over to the
Administrative Agent for application against the Parent Guaranteed Obligations or Subsidiary
Borrower Guaranteed Obligations, as the case may be, in accordance with the terms of the Credit
Agreement.
Each Guarantor agrees to execute such additional documents as the Administrative Agent may
reasonably request to evidence the subordination provided for in this Section 7.
8. (a) Upon the occurrence of an Event of Default specified in Section 8.1(g) or
(h) of the Credit Agreement with respect to either Borrower, all Parent Guaranteed
Obligations and Subsidiary Borrower Guaranteed Obligations shall automatically become immediately
due and payable by the Guarantors, without notice or other action on the part of the Guaranteed
Parties, and regardless of whether payment of the Parent Guaranteed Obligations or Subsidiary
Borrower Guaranteed Obligations by Borrowers has then been accelerated. In addition, if any event
of the types described in Section 8.1(g) or (h) of the Credit Agreement should
occur with respect to any Guarantor, and the Parent Guaranteed Obligations or Subsidiary Borrower
Guaranteed Obligations of the Borrowers have or thereafter become due and payable, then the Parent
Guaranteed Obligations and Subsidiary Borrower Guaranteed Obligations shall automatically become
immediately due and payable by such Guarantor, without further notice or other action on the part
of the Guaranteed Parties.
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(b) Upon the insolvency or bankruptcy of either Borrower, the Guaranteed Parties’ rights
hereunder shall not be affected or impaired by their omission to prove all or any portion of their
claim, and any Guaranteed Party may in its discretion value or refrain from valuing any security
held by it without in any way releasing, reducing or otherwise affecting any Guarantor’s
obligations hereunder. Each Guarantor agrees that this Guarantee shall continue to be effective or
be reinstated, as the case may be, if at any time any payment of the liabilities hereby guaranteed
is rescinded or must otherwise be returned or restored by the Guaranteed Parties upon the
insolvency or bankruptcy of either Borrower or any other Guarantor, obligor, guarantor, endorser or
surety on any Parent Guaranteed Obligations or Subsidiary Borrower Guaranteed Obligations, all as
though such payment had not been made.
9. This Guarantee is in addition to, and is not intended to supersede or be a substitute for,
any other guarantee, suretyship agreement, or instrument which the Guaranteed Parties may hold in
connection with any Parent Guaranteed Obligations or Subsidiary Borrower Guaranteed Obligations and
each Guarantor’s obligations hereunder shall be deemed to be joint and several with the obligations
of each other Guarantor.
10. This Guarantee contains the entire agreement between the parties relating to the subject
matter hereof, and no provision hereof may be waived or modified except by a writing executed by
each Guarantor and the Guaranteed Parties. There is no understanding that any person other than
the Guarantors shall execute this or any similar Guarantee. No Guarantor’s execution of this
Guarantee was based upon any facts or materials provided by the Guaranteed Parties, nor was any
Guarantor induced to execute this Guarantee by any representation, statement or information made or
furnished by the Guaranteed Parties. Each Guarantor further acknowledges and agrees that such
Guarantor assumes sole responsibility for independently obtaining any information or reports deemed
necessary by such Guarantor in reaching its decision to execute this Guarantee.
11. The failure or forbearance of the Guaranteed Parties on any occasion to exercise any
rights or remedies hereunder or otherwise granted to them by law or another agreement shall not
affect the obligations of any Guarantor hereunder and shall not constitute a waiver of such right
or remedy or preclude the later or further exercise thereof. Time is of the essence of this
Guarantee and each Guarantor’s obligations hereunder.
12. Any notice or demand which the Guaranteed Parties may be required to give to any Guarantor
may be sent or made, at any Guaranteed Party’s option, to or on such Guarantor in the same manner
and with the same effect as provided with respect to notices pursuant to Section 10.1 of
the Credit Agreement, when delivered, mailed or sent by telecopy to the address or telecopier
number indicated for Parent Borrower set forth in Section 10.1 of the Credit Agreement, to
the attention of such Guarantor.
13. This Guarantee shall bind and inure to the benefit of the respective successors and
assigns of each Guarantor and the Guaranteed Parties.
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14. If any provision of this Guarantee or the application thereof to any person or
circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Guarantee and
the application of such provision to persons or circumstances, other than those as to which it is
held invalid or unenforceable, shall not be affected thereby. Each provision of this Guarantee
shall be valid and enforceable to the full extent permitted by law.
15. In addition to and not in limitation of all rights of set-off that the Guaranteed Parties
may have under applicable law, the Guaranteed Parties shall, upon the occurrence of any Event of
Default and whether or not the Guaranteed Parties have made any demand or the Parent Guaranteed
Obligations or Subsidiary Borrower Guaranteed Obligations are matured, have the right to
appropriate and apply to the payment of the Parent Guaranteed Obligations or Subsidiary Borrower
Guaranteed Obligations all deposits (general or special, time or demand, provisional or final) of
any Guarantor then or thereafter held by, and other indebtedness or property then or thereafter
owing to any Guarantor by, any of the Guaranteed Parties whether or not related to this Guarantee
or any transaction hereunder.
16. (a) It is the intent of each Guarantor and the Guaranteed Parties that each Guarantor’s
maximum obligations hereunder shall be:
(i) in a case or proceeding commenced by or against such Guarantor under the Bankruptcy
Code, on or within one year from the date on which any of the Parent Guaranteed Obligations
or Subsidiary Borrower Guaranteed Obligations are incurred, the maximum amount which would
not otherwise cause the Parent Guaranteed Obligations or Subsidiary Borrower Guaranteed
Obligations (or any other obligations of such Guarantor to the Guaranteed Parties) to be
avoidable or unenforceable against such Guarantor under Section 548 of the Bankruptcy Code;
or
(ii) in a case or proceeding commenced by or against such Guarantor under the
Bankruptcy Code subsequent to one year from the date on which any of the Parent Guaranteed
Obligations or Subsidiary Borrower Guaranteed Obligations are incurred, the maximum amount
which would not otherwise cause the Parent Guaranteed Obligations or Subsidiary Borrower
Guaranteed Obligations (or any other obligations of the Guarantor to the Guaranteed Parties)
to be avoidable or unenforceable against such Guarantor under any state fraudulent transfer
or fraudulent conveyance act or statute applied in any such case or proceeding by virtue of
Section 544 of the Bankruptcy Code; or
(iii) in a case or proceeding commenced by or against such Guarantor under any law,
statute or regulation other than the Bankruptcy Code (including, without limitation, any
other bankruptcy, reorganization, arrangement, moratorium, readjustment of debt,
dissolution, liquidation or similar debtor relief laws), the maximum amount which would not
otherwise cause the Parent Guaranteed Obligations or Subsidiary Borrower Guaranteed
Obligations (or any other obligations of such Guarantor to the Guaranteed Parties) to be
avoidable or unenforceable against such Guarantor under such law, statute or regulation
including, without limitation, any state fraudulent transfer or fraudulent conveyance act or
statute applied in any such case or proceeding.
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(The substantive laws under which the possible avoidance or unenforceability of any Guarantor’s
obligations under this Guarantee shall be determined in any such case or proceeding shall
hereinafter be referred to as the “Avoidance Provisions”).
(b) To the end set forth in Section 16(a), but only to the extent that any Guarantor’s
obligations under this Guarantee would otherwise be subject to avoidance under the Avoidance
Provisions if such Guarantor is not deemed to have received valuable consideration, fair value or
reasonably equivalent value for its guarantee of the Parent Guaranteed Obligations or Subsidiary
Borrower Guaranteed Obligations, or if its guarantee of the Parent Guaranteed Obligations or
Subsidiary Borrower Guaranteed Obligations would render the Guarantor insolvent, or leave the
Guarantor with an unreasonably small capital to conduct its business, or cause the Guarantor to
have incurred debts (or to have intended to have incurred debts) beyond its ability to pay such
debts as they mature, in each case as of the time any obligations under this Guarantee are deemed
to have been incurred under the Avoidance Provisions and after giving effect to contribution as
among Guarantors, the maximum Parent Guaranteed Obligations or Subsidiary Borrower Guaranteed
Obligations for which such Guarantor shall be liable hereunder shall be reduced to the maximum
amount which, after giving effect to such reduction, would not cause its guarantee of the Parent
Guaranteed Obligations or Subsidiary Borrower Guaranteed Obligations (or any other obligations of
such Guarantor to the Guaranteed Parties) to be subject to avoidance under the Avoidance
Provisions. This Section 16(b) is intended solely to preserve the rights of the Guaranteed
Parties hereunder to the maximum extent that would not cause the guarantee of the Parent Guaranteed
Obligations or Subsidiary Borrower Guaranteed Obligations by any Guarantor to be subject to
avoidance under the Avoidance Provisions, and neither any Guarantor nor any other Person shall have
any right or claim under this Section 16 as against the Guaranteed Parties that would not
otherwise be available to such Person under the Avoidance Provisions.
(c) None of the provisions of this Section 16 are intended in any manner to alter the
obligations of any holder of any subordinated Indebtedness or the rights of the holders of “senior
indebtedness” as provided by the terms of subordinated Indebtedness. Accordingly, it is the intent
of each of the Guarantors that, in the event that any payment or distribution is made with respect
to any subordinated Indebtedness prior to the payment in full of the Parent Guaranteed Obligations
or Subsidiary Borrower Guaranteed Obligations by virtue of the provisions of this Section
16, in any case or proceeding of the kinds described in clauses (i)-(iii) of Section
16(a), the holders of the subordinated Indebtedness shall be obligated to pay or deliver such
payment or distribution to or for the benefit of the Guaranteed Parties. Furthermore, in respect
of the Avoidance Provisions, it is the intent of each Guarantor that the subrogation rights of the
holders of subordinated Indebtedness with respect to the obligations of the Guarantor under this
Guarantee, be subject in all respects to the provisions of Section 16(b).
17. (a) THIS GUARANTEE AND THE RIGHTS AND OBLIGATIONS OF EACH GUARANTOR HEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAW PRINCIPLES THEREOF) OF THE STATE OF GEORGIA.
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(b) Each Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the non-exclusive jurisdiction of the United States District Court of the Northern
District of Georgia, and of any state court of the State of Georgia located in Xxxxxx County and
any appellate court from any thereof, in any action or proceeding arising out of or relating to
this Guarantee or any other Loan Document or the transactions contemplated hereby or thereby, or
for recognition or enforcement of any judgment, and each Guarantor hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or proceeding may be heard and
determined in such Georgia state court or, to the extent permitted by applicable law, such Federal
court. Each 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. Nothing in this Guarantee or any other Loan Document shall affect any right
that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any
action or proceeding relating to this Guarantee or any other Loan Document against such Guarantor
or its properties in the courts of any jurisdiction.
(c) Each Guarantor irrevocably and unconditionally waives any objection which it may now or
hereafter have to the laying of venue of any such suit, action or proceeding described in
Section 17(b) and brought in any court referred to in Section 17(b). Each Guarantor
irrevocably waives, to the fullest extent permitted by applicable law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such court.
(d) Each Guarantor irrevocably consents to the service of process in the manner provided for
notices in Section 10.1 of the Credit Agreement and Section 12 of this Guarantee.
Nothing in this Guarantee or in any other Loan Document will affect the right of any party hereto
to serve process in any other manner permitted by law.
(e) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL
RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION
WITH THIS GUARANTEE OR ANY OTHER LOAN DOCUMENT OR ANY MATTER ARISING IN CONNECTION HEREUNDER OR
THEREUNDER.
18. Upon execution and delivery by any Subsidiary of either Borrower, or by any Designated
Affiliate as provided in the Credit Agreement, of an instrument in the form of Annex I,
such Person shall become a Guarantor hereunder with the same force and effect as if originally
named a Guarantor herein (each an “Additional Guarantor”). The execution and delivery of any such
instrument shall not require the consent of any Guarantor hereunder. The rights and obligations of
each Guarantor hereunder shall remain in full force and effect notwithstanding the addition of any
Additional Guarantor as a party to this Guarantee.
19. This Guarantee may be executed in any number of counterparts, each of which when so
executed and delivered shall be an original, but all of which shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, each Guarantor has caused this Guarantee to be executed by its duly
authorized officer as of the date first above written.
| GUARANTORS: ENERGYSOUTH MIDSTREAM, INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Executive Vice President and Chief Financial Officer |
|||
| ENERGYSOUTH SERVICES, INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Executive Vice President and Chief Financial Officer |
|||
| MGS MARKETING SERVICES, INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Executive Vice President and Chief Financial Officer |
|||
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THE PROVISIONS OF SECTION 7 ABOVE HEREBY ACKNOWLEDGED AND AGREED TO:
| ENERGYSOUTH, INC. as Parent Borrower |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Executive Vice President and Chief Financial Officer |
|||
| BAY GAS STORAGE COMPANY, LTD. as Subsidiary Borrower |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Executive Vice President and Chief Financial Officer |
|||
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