FORM OF GUARANTY
dated as of
July 14, 2008
GREAT PLAINS ENERGY INCORPORATED,
UNION BANK OF CALIFORNIA, N.A.,
as Administrative Agent
TABLE OF CONTENTS
GUARANTY dated as of July 14, 2008, between GREAT PLAINS ENERGY INCORPORATED (the “ Guarantor ”) and UNION BANK OF CALIFORNIA, N.A., as Administrative Agent.
Reference is made to the Credit Agreement dated as of August 31, 2005 (as amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Aquila, Inc. (the “ Borrower ”), the lenders from time to time party thereto (collectively, the “ Lenders ” and individually, a “ Lender ”), and Union Bank of California, N.A., as Administrative Agent (together with its successors in such capacity, the “ Administrative Agent ”), as Issuing Bank and as Sole Lead Arranger. The Lenders have extended credit to the Borrower subject to the terms and conditions set forth in the Credit Agreement. Pursuant to an Agreement and Plan of Merger dated as of February 6, 2007, by and among the Guarantor, Borrower, Black Hills Corporation and Gregory Acquisition Corp. (the “ Merger Agreement ”), the Borrower has agreed to be acquired by the Guarantor. The transaction will be consummated by merging Gregory Acquisition Corp. with and into the Borrower (the “ Merger ”), with the Borrower continuing as the surviving corporation. Upon completion of the Merger, the Borrower will become a wholly-owned subsidiary of the Guarantor, and the Guarantor will derive substantial benefits from the extension of credit to the Borrower pursuant to the Credit Agreement and is willing to execute and deliver this Agreement. Accordingly, the parties hereto agree as follows:
SECTION 1.01. Credit Agreement . Capitalized terms used in this Agreement and not otherwise defined herein have the meanings specified in the Credit Agreement.
SECTION 1.02. Other Defined Terms . As used in this Agreement, the following terms have the meanings specified below:
“ Agreement ” means this Guaranty.
“ Credit Agreement ” has the meaning assigned to such term in the preliminary statement of this Agreement.
“ Guarantor ” has the meaning assigned to such term in the preliminary statement of this Agreement.
“ Guaranty Parties ” means, collectively, the Borrower and the Guarantor.
“ Obligations ” shall mean all obligations of the Borrower under the Credit Agreement.
“ Person ” shall mean any natural person, corporation, business trust, joint venture, association, company, limited liability company, partnership, governmental authority or other entity.
SECTION 2.01. Guaranty . The Guarantor unconditionally guarantees, as a primary obligor and not merely as a surety, the due and punctual payment and performance of the Obligations. The Guarantor further agrees that the Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Obligation. The Guarantor waives presentment to, demand of payment from and protest to the Borrower of any of the Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment.
SECTION 2.02. Guaranty of Payment . The Guarantor further agrees that its guarantee hereunder constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Administrative Agent or any Lender to any security held for the payment of the Obligations, or to any balance of any deposit account or credit on the books of the Administrative Agent or any Lender in favor of the Borrower or any other Person.
SECTION 2.03. No Limitations . (a) Except for termination of the Guarantor’s obligations hereunder as expressly provided in Section 4.11 , the obligations of the Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations, or otherwise. Without limiting the generality of the foregoing, the obligations of the Guarantor hereunder shall not be discharged or impaired or otherwise affected by (i) the failure of the Administrative Agent or any Lender to assert any claim or demand or to enforce any right or remedy under the provisions of any Loan Document or otherwise; (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, any Loan Document or any other agreement, including with respect to any other Guarantor under this Agreement; (iii) the release of any security held by the Administrative Agent or any Lender for the Obligations; (iv) any default, failure or delay, willful or otherwise, in the performance of the Obligations; or (v) any other act or omission that may or might in any manner or to any extent vary the risk of the Guarantor or otherwise operate as a discharge of the Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Obligations).
(b) To the fullest extent permitted by applicable law, the Guarantor waives any defense based on or arising out of any defense of the Borrower or the unenforceability of the Obligations, or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower, other than the payment in full in cash of all the Obligations.
SECTION 2.04. Reinstatement . The Guarantor agrees that its guarantee hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation, is rescinded or must otherwise be restored by the Administrative Agent or any Lender upon the bankruptcy or reorganization of the Borrower or otherwise.
SECTION 2.05. Agreement To Pay; Subrogation . In furtherance of the foregoing and not in limitation of any other right that the Administrative Agent or any Lender has at law or in equity against the Guarantor by virtue hereof, upon the failure of the Borrower to pay any Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, the Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Administrative Agent for distribution to the Lenders in cash the amount of such unpaid Obligation. Upon payment by the Guarantor of any sums to the Administrative Agent as provided above, all rights of the Guarantor against the Borrower arising as a result thereof by way of right of subrogation, contribution, indemnity or otherwise shall in all respects be subject to Article III.
SECTION 2.06. Information . The Guarantor assumes all responsibility for being and keeping itself informed of the Borrower’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Obligations, and the nature, scope and extent of the risks that the Guarantor assumes and incurs hereunder, and agrees that none of the Administrative Agent or the other Lenders will have any duty to advise the Guarantor of information known to it or any of them