GUARANTY
THIS GUARANTY, effective as of June 24,
2008 and given by Southwestern Energy Company
(“Guarantor”) to induce Texas Gas Transmission, LLC
(“Texas Gas”) to commence or to continue to provide
service(s) pursuant to the terms and conditions of Texas
Gas’s FERC Gas Tariff for Southwestern Energy Services
Company (“Shipper”) and/or to enter into service
agreement(s) in connection therewith.
RECITAL
A.
WHEREAS, Texas Gas owns and operates
certain facilities to provide natural gas services pursuant to
Texas Gas’s FERC Gas Tariff;
B.
WHEREAS, Guarantor desires to induce
Texas Gas to expand its interstate pipeline system by constructing
and operating two new lateral lines and related facilities
(collectively referred to as the “Expansion Project”)
in order to provide service(s) for Shipper pursuant to the terms
and conditions of Texas Gas’s FERC Gas Tariff and/or one or
more service agreements entered into pursuant to that certain
“Precedent Agreement for the Fayetteville/Greenville
Expansion Project” between Texas Gas and Shipper (the
“Agreement(s)”); and
C.
WHEREAS, Texas Gas is willing to expand
its system and commence such service(s) only if the Guarantor
guarantees, to the extent specified herein, payment and performance
of Shipper’s covenants, agreements, obligations, and
liabilities under the Agreement(s) and any other agreement or
instrument related thereto or entered into the connection
therewith.
NOW THEREFORE, in consideration of the
premises Guarantor agrees as follows:
AGREEMENT
1.
Guaranty . The Guarantor hereby irrevocably and
unconditionally guarantees the payment of obligations (including
any obligations to repay gas in kind that may subsequently be
converted from an in-kind obligation to a cash payment obligation)
and liabilities of Shipper to Texas Gas pursuant to the
Agreement(s), (collectively, the “Guaranteed
Obligations”), subject to the terms and conditions set forth
herein. Guarantor agrees, subject to the Guaranty Cap
(defined below), upon any failure by the Shipper to pay any of the
Guaranteed Obligations, that it will pay any amounts then due and
payable that Shipper has failed to pay Texas Gas within ten
(10) days following written demand
by Texas Gas. The Guarantor agrees
that Texas Gas may resort to the Guarantor for payment of any of
the Guaranteed Obligations, whether or not Texas Gas shall have
resorted to any collateral security, or shall have proceeded
against any other obligor principally or secondarily obligated with
respect to any of the Guaranteed Obligations. This Guaranty
shall constitute a guaranty of payment, and not of collection.
As of any date upon which a payment is required to made,
Guarantor’s total payment obligation hereunder shall not
exceed an amount (the “Guaranty Cap”) equal to the
lesser of (i) 25% of Shipper’s negotiated demand charges for
the full term of the Agreement(s), less any payments with respect
to the Guaranteed Obligations made by Guarantor pursuant to this
Agreement, or (ii) 25% of Shipper’s
1
negotiated demand charges for the
remaining initial terms of the Agreement(s) as of the first day of
the month of services under the Agreement(s) for which payment is
claimed, which amount shall reflect any reductions in
Shipper’s obligations under the Agreement(s). To the
extent that payments hereunder discharge, in full, any Guaranteed
Obligations as to which Shipper is in arrears or default, Shipper
shall be deemed to have paid such Guaranteed Obligations in full
and to have cured any default.
2.
Guaranty Unconditional and
Absolute . The
obligations of the Guarantor hereunder shall be unconditional and
absolute and, without limiting the generality of the foregoing,
shall not be released, discharged or otherwise affected
by:
(A)
any extension, renewal, settlement,
compromise, waiver, discharge or release in respect of any
Guaranteed Obligations of Shipper;
(B)
the existence, or extent of, any release,
exchange, surrender, non-perfection or invalidity of any direct or
indirect security for any of the Guaranteed Obligations;
(C)
any modification, amendment, waiver,
extension of or supplement to any of the Agreement(s) or the
Guaranteed Obligations agreed to from time to time by Shipper and
Texas Gas, except insofar as it modifies the Guaranty
Cap;
(D)
any change in the corporate existence
(including its constitution, laws, rules,
