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
.
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
(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 ter
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