Exhibit 10.2

 
FORM OF GUARANTY
 
 
dated as of
 
 
July 14, 2008
 
 
between
 
 
GREAT PLAINS ENERGY INCORPORATED,
 
 
and
 
 
UNION BANK OF CALIFORNIA, N.A.,
 
 
as Administrative Agent
 

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TABLE OF CONTENTS
 

 
ARTICLE I
 
DEFINITIONS
       
SECTION 1.01
Financing Agreement
1
SECTION 1.02
Other Defined Terms
1
       
ARTICLE II
 
GUARANTY
       
SECTION 2.01
Guaranty
2
SECTION 2.02
Guaranty of Payment
2
SECTION 2.03
No Limitations
2
SECTION 2.04
Reinstatement
2
SECTION 2.05
Agreement To Pay; Subrogation
3
SECTION 2.06
Information
3
     
ARTICLE III
 
INDEMNITY, SUBROGATION AND SUBORDINATION
     
SECTION 3.01
Indemnity and Subrogation
3
SECTION 3.02
Subordination
3
     
ARTICLE IV
 
MISCELLANEOUS
     
SECTION 4.01
Notices
3
SECTION 4.02
Waivers; Amendment
4
SECTION 4.03
Successors and Assigns
4
SECTION 4.04
Survival of Agreement
4
SECTION 4.05
Counterparts; Effectiveness; Several Agreement
4
SECTION 4.06
Severability
5
SECTION 4.07
Right of Set-Off
5
SECTION 4.08
Governing Law; Jurisdiction; Consent to Service of Process
5
SECTION 4.09
WAIVER OF JURY TRIAL
6
SECTION 4.10
Headings
6
SECTION 4.11
Termination or Release
6

 
 
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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:
 
 
ARTICLE I
 
DEFINITIONS
 
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.
 

 
 
 

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ARTICLE II
 
GUARANTY
 
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.
 

 
 
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           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 regarding such circumstances
or risks.
 
 
ARTICLE III
 
INDEMNITY, SUBROGATION AND SUBORDINATION
 
SECTION 3.01.    Indemnity and Subrogation.  In addition to all such rights of
indemnity and subrogation as the Guarantor may have under applicable law (but
subject to Section 3.02), the Borrower agrees that in the event a payment of an
obligation shall be made by the Guarantor under this Agreement, the Borrower
shall indemnify the Guarantor for the full amount of such payment and the
Guarantor shall be subrogated to the rights of the Person to whom such payment
shall have been made to the extent of such payment.
 
SECTION 3.02.    Subordination.  Notwithstanding any provision of this Agreement
to the contrary, all rights of the Guarantor under Section 3.01 and all other
rights of indemnity, contribution or subrogation under applicable law or
otherwise shall be fully subordinated to the indefeasible payment in full in
cash of the Obligations.  No failure on the part of the Borrower or the
Guarantor to make the payments required by Section 3.01 (or any other payments
required under applicable law or otherwise) shall in any respect limit the
obligations and liabilities of the Guarantor with respect to its obligations
hereunder, and the Guarantor shall remain liable for the full amount of the
obligations of the Guarantor hereunder.
 
 
ARTICLE IV
 
MISCELLANEOUS
 
SECTION 4.01.    Notices.  All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in the Credit Agreement.  All communications and notices hereunder to
the Guarantor shall be given to it in care of the Borrower as provided in the
Credit Agreement.
 

 
 
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           SECTION 4.02.     Waivers; Amendment.  (a)  No failure or delay by
the Administrative Agent or any Lender in exercising any right or power
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.  The rights and remedies of the Administrative Agent and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have.  No waiver
of any provision of this Agreement or consent to any departure by the Guarantor
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section 4.02, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which
given.  Without limiting the generality of the foregoing, the making of a Loan
shall not be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.  No notice or demand on any Guaranty Party in any case
shall entitle any Guaranty Party to any other or further notice or demand in
similar or other circumstances.
 
 
(b)         Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Administrative Agent and the Guaranty Party or Guaranty
Parties with respect to which such waiver, amendment or modification is to
apply, subject to any consent required in accordance with the Credit Agreement.
 
SECTION 4.03.    Successors and Assigns.  Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of the Guarantor or the Administrative Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.  The Guaranty Parties shall not have the
right to assign or transfer their respective rights or obligations hereunder or
any interest herein (and any such assignment or transfer shall be void) except
as expressly contemplated by this Agreement or the Credit Agreement.
 
SECTION 4.04.    Survival of Agreement.  All covenants, agreements,
representations and warranties made by the Guaranty Parties in the Loan
Documents and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the Lenders and shall survive the
execution and delivery of the Loan Documents and the making of any Loans,
regardless of any investigation made by any Lender or on its behalf and
notwithstanding that the Administrative Agent or any Lender may have had notice
or knowledge of any Default or incorrect representation or warranty at the time
any credit is extended under the Credit Agreement, and shall continue in full
force and effect as long as the principal of or any accrued interest on any Loan
or any fee or any other amount payable under any Loan Document is outstanding
and unpaid and so long as the Commitments have not expired or terminated.
 
SECTION 4.05.    Counterparts; Effectiveness; Several Agreement.  This Agreement
may be executed in counterparts, each of which shall constitute an original but
all of which when taken together shall constitute a single contract.  Delivery
of an executed signature
 
 
 
                                                                                                           
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page to this Agreement by facsimile transmission or other electronic
communication shall be as effective as delivery of a manually signed counterpart
of this Agreement.  This Agreement shall become effective as to the Guaranty
Parties when (i) a counterpart hereof executed on behalf of the Guaranty Parties
shall have been delivered to the Administrative Agent and a counterpart hereof
shall have been executed on behalf of the Administrative Agent and (ii) the
closing of the Merger shall have occurred.
 
SECTION 4.06.    Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.  The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
 
SECTION 4.07.   Right of Set-Off.  In addition to any rights and remedies of the
Lenders provided by Law, upon the occurrence and during the continuance of any
Event of Default, each Lender is authorized at any time and from time to time,
without prior notice to the Borrower or the Guarantor, any such notice being
waived by the Borrower and the Guarantor to the fullest extent permitted by
applicable Law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by, and other
Indebtedness at any time owing by, such Lender to or for the credit or the
account of the respective Guaranty Parties against any and all obligations owing
to such Lender hereunder, now or hereafter existing, irrespective of whether or
not such Lender shall have made demand under this Agreement and although such
obligations may be contingent or unmatured or denominated in a currency
different from that of the applicable deposit or Indebtedness.  Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such set off and application made by such Lender. The rights of each Lender
under this Section 4.07 are in addition to other rights and remedies (including
other rights of setoff) that the Administrative Agent and such Lender may have.
 
SECTION 4.08.   Governing Law; Jurisdiction; Consent to Service of
Process.(a)  This Agreement shall be governed by and construed in accordance
with the law of the State of New York.
 
 
(b)         Each of the Guaranty Parties hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York City and of the
United States District Court for the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court.  Each of the parties hereto 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 Agreement or any other Loan Document
shall affect

 
 
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any right that the Administrative Agent or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or any other Loan
Document against the Guarantor, or its properties in the courts of any
jurisdiction.
 
 
(c)         Each of the Guaranty Parties hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any court referred to in paragraph (b) of this Section
4.08.  Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
 
 
(d)         Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 4.01.  Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
 
SECTION 4.09.   WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 4.09.
 
SECTION 4.10.    Headings.  Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
 
SECTION 4.11.    Termination or Release. (a)  This Agreement and the guaranty
made herein shall terminate with respect to all Obligations when all the
outstanding Obligations have been indefeasibly paid in full and the Lenders have
no further commitment to lend or extend credit under the Credit Agreement.
 
 
(b)         In connection with any termination or release pursuant to paragraph
(a), the Administrative Agent shall execute and deliver to the Guarantor, at the
Guarantor’s expense, all documents that the Guarantor shall reasonably request
to evidence such termination or release.
 

 
 
6 
 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
 

     
GREAT PLAINS ENERGY INCORPORATED
   
By:
/s/ Terry Bassham
   
Name:
Terry Bassham
   
Title:
Executive Vice President-
     
Finance and Strategic
     
Development and Chief
     
Financial Officer

[Guaranty]

 
 

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IN WITNESS WHEREOF, for the purposes of Section 3.01 and 4.02 only, the Borrower
has executed this Agreement as of the date first written above.
 

 
.
 
AQUILA , INC.
                   
By:
/s/ Michael Cole
   
Name:
Michael Cole
   
Title:
Vice President, Finance &
     
Treasurer

[Guaranty]

 
 

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first above written.
 

     
UNION BANK OF CALIFORNIA, N.A., as Administrative Agent
           
By:
/s/ Susan K. Johnson
   
Name:
Susan K. Johnson
   
Title:
Vice President

[Guaranty]

 
 

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