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PARENT GUARANTY
THIS
GUARANTY (this "Guaranty") is made as of January 18, 2007 by
ITC Holdings Corp., a Michigan corporation ("Guarantor"), in favor
of Interstate Power and Light Company, an Iowa corporation (the
"Guaranteed Party").
RECITALS
WHEREAS,
concurrently herewith the Guaranteed Party and ITC Midwest LLC, a
Michigan limited liability company and a wholly-owned subsidiary of
Guarantor ("Buyer"), are entering into that certain Asset Sale
Agreement, dated as of January 18, 2007 (as amended from time
to time, the "Agreement"), pursuant to which the Buyer has agreed,
subject to the terms and conditions therein, to purchase certain
assets and assume certain liabilities of the Guaranteed Party;
WHEREAS,
to induce the Guaranteed Party to enter into the Agreement and
consummate the transactions contemplated thereby, Guarantor has
agreed to execute and deliver this Guaranty; and
WHEREAS,
the execution and performance by the Guaranteed Party of the
Agreement and the transactions contemplated thereby will benefit
Guarantor. Without this Guaranty, the Guaranteed Party would not
execute and deliver the Agreement or consummate the transactions
contemplated thereby. Therefore, in consideration of the execution
and delivery by the Guaranteed Party of the Agreement and
consummation of the transactions contemplated thereby, Guarantor
has agreed to execute and deliver this Guaranty.
NOW,
THEREFORE, in consideration of the premises, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Guarantor agrees as follows:
1. Capitalized Terms
. Any capitalized terms used herein and not defined herein shall
have the respective meanings assigned thereto in the Agreement.
2. Guaranty . The
Guarantor hereby absolutely, unconditionally and irrevocably (i)
guarantees to the Guaranteed Party the full and prompt payment as
and when due of the payment obligations of Buyer under the
Agreement, to the extent and only to the extent Buyer would be
liable to the Guaranteed Party for such payment under the
Agreement, and subject to each and every limitation and defense on
Buyer’s payment obligations under the Agreement, including
pursuant to Sections 11.3 and 11.4 of the Agreement and
(ii) agrees to cause Buyer to fully and promptly perform as
and when due all of the performance obligations of Buyer under the
Agreement to the extent and only to the extent the Guaranteed Party
has the right to obtain specific enforcement by Buyer of such
obligations pursuant to Section 11.4 of the Agreement, and
subject to each and every limitation and defense on Buyer’s
obligations under the Agreement, including pursuant to Section 11.4
of the Agreement (such obligations of Buyer in clauses (i) and
(ii) are referred to herein as the "Guaranteed Obligations").
Nothing in this Guaranty shall be deemed to waive or limit
Guarantor’s ability to assert any claims, defenses,
limitations or other rights that Buyer may have under the
Agreement.
3. Nature of Guaranty
. This Guaranty is a guaranty of payment and performance and not of
collection, whether or not recovery may be, or hereafter may
become, barred by any statute of limitations or otherwise. If any
payment made by Buyer or any other Person and applied to the
Guaranteed Obligations is at any time annulled, set aside,
rescinded, invalidated, declared to be fraudulent or preferential
or otherwise required to be repaid or refunded for any reason,
including bankruptcy, insolvency, or reorganization, then, to the
extent of such payment or repayment, the liability of Guarantor
will continue to be in full force and effect (or be reinstated, if
applicable) as fully as if such payment had never been made.
Subject to terms and conditions hereof, Guarantor covenants that
this Guaranty will not be fulfilled or discharged, except to the
extent of payment and performance of the Guaranteed Obligations,
whether by the Buyer or by Guarantor under this Guaranty. Without
limiting the generality of the foregoing, Guarantor’s
guaranty of the Guaranteed Obligations hereunder will not be
released or discharged by any of the following:
(a) any
change in the Agreement or the obligations thereunder, or any
insolvency, bankruptcy or similar proceeding affecting Buyer or its
assets or any defense that may arise in such insolvency, bankruptcy
or similar proceeding;
(b) the
existence of any claim or set-off that Buyer or Guarantor has or
may in the future have against the Guaranteed Party, whether in
connection with this Guaranty, the Agreement or any unrelated
transaction, provided that nothing in this Guaranty will be deemed
a waiver by Guarantor or Buyer of any claim of Buyer against the
Guaranteed Party or prevent the assertion of any claim of Buyer
against the Guaranteed Party by separate suit or constitute any
waiver by Guarantor or Buyer of any claims, defenses or other
rights that the Buyer has against the Guaranteed Party under the
Agreement or any limitations on obligations of the Buyer under the
Agreement;
(c) any
laws now or hereinafter in effect in any jurisdiction affecting any
of the terms of the Agreement or the rights of Buyer with respect
thereto, provided that nothing in this Guaranty will constitute any
waiver by Guarantor or Buyer of any claims, defenses or other
rights that the Buyer has against the Guaranteed Party under the
Agreement or any limitations on obligations of the Buyer under the
Agreement;
(d) any
change in the corporate existence, structure or ownership of
Guarantor or Buyer or any assignment by Buyer of its rights or
obligations under the Agreement;
(e) the
existence of any default, breach, or dissolution of Buyer in
connection with the Agreement, provided that nothing in this
Guaranty will constitute any waiver by Guarantor or Buyer of any
claims, defenses or other rights that the Buyer has against the
Guaranteed Party under the Agreement or any limitations on
obligations of the Buyer under the Agreement; and
(f) any
other act, omission to act, delay of any kind by any party hereto
or any other Person that might, but for the provisions of this
Section 3, constitute a legal or equitable discharge of the
obligations of Guarantor hereunder.
2
This
Guaranty will in all respects be a continuing, absolute, and
unconditional guaranty irrespective of the existence, validity,
enforceability, perfection, or extent of any collateral
therefor.
4. Independent
Obligations . Guarantor agrees that its guaranty of the
Guaranteed Obligations hereunder is independent of the obligations
of Buyer under the Agreement and if any default occurs hereunder, a
separate action or actions may be brought and prosecuted against
Guarantor whether or not Buyer is joined therein.
(a) Guarantor
agrees that the Guaranteed Party may enforce this Guaranty, at any
time and from time to time, without the necessity of proceeding
against Buyer. Guarantor hereby waives any right it might otherwise
have to require the Guaranteed Party to proceed against Buyer, to
exercise any right or remedy under the Agreement, or to pursue any
other remedy or to enforce any other right, in each case without
waiving any limitations on or defenses to those remedies under the
Agreement.
(b) Guarantor
will continue to be subject to this Guaranty notwithstanding:
(i) any modification, agreement or stipulation between the
Guaranteed Party and Buyer, or their respective successors and
assigns, with respect to the Agreement, or the Guaranteed
Obligations; or (ii) any waiver of or failure to enforce any
of the terms, covenants or conditions contained in the Agreement or
any modification thereof.
(c) The
Guaranteed Obl
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