Exhibit 10.3

 

EXECUTION COPY

 

GUARANTY

 

THIS GUARANTY (as the same may be amended, restated, supplemented or otherwise
modified from time to time, this “Guaranty”) is made as of December 17, 2004, by
each of Inergy Propane, LLC, L & L Transportation, LLC, Inergy Transportation,
LLC, Inergy Sales & Service, Inc., Inergy Finance Corp., Inergy Acquisition
Company, LLC, Stellar Propane Service, LLC and Inergy Gas, LLC (each an “Initial
Guarantor”, and together with any additional Domestic Subsidiaries which become
parties to this Guaranty by executing a Supplement hereto in the form attached
hereto as Annex I, the “Guarantors”), in favor of JPMorgan Chase Bank, N.A., as
Administrative Agent (the “Administrative Agent”) for the benefit of the Holders
of Secured Obligations under the Credit Agreements described below. Each
capitalized term used herein and not defined herein shall have the meaning
ascribed thereto in the Credit Agreements described below.

 

WITNESSETH:

 

WHEREAS, Inergy, L.P., a Delaware limited partnership (the “Borrower”), has
entered into (i) a 5-Year Credit Agreement dated as of the date hereof (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the “5-Year Credit Agreement”), by and among the Borrower, the
Administrative Agent, certain financial institutions from time to time party
thereto (collectively, the “5-Year Lenders”) and (ii) a 364-Day Credit Agreement
dated as of the date hereof (as the same may be amended, restated, supplemented
or otherwise modified from time to time, the “364-Day Credit Agreement” and,
together with the 5-Year Credit Agreement, the “Credit Agreements”) by and among
the Borrower, the Administrative Agent and certain financial institutions from
time to time party thereto (collectively, the “364-Day Lenders” and together
with the 5-Year Lenders, the “Lenders”) which Credit Agreements provide, subject
to the terms and conditions thereof, for extensions of credit and other
financial accommodations by the Lenders to the Borrower;

 

WHEREAS, it is a condition precedent to the extensions of credit by the Lenders
under each Credit Agreement that each of the Guarantors (constituting all of the
Domestic Subsidiaries of the Borrower required to execute this Guaranty pursuant
to Section 5.09 of each Credit Agreement) execute and deliver this Guaranty,
whereby each of the Guarantors, without limitation and with full recourse, shall
guarantee the payment when due of all Obligations, including, without
limitation, all principal, interest, letter of credit reimbursement obligations
and other amounts that shall be at any time payable by the Borrower under the
Credit Agreements or the other Credit Documents; and

 

WHEREAS, in consideration of the direct and indirect financial and other support
that the Borrower has provided, and such direct and indirect financial and other
support as the Borrower may in the future provide, to the Guarantors, and in
order to induce the Lenders and the Administrative Agent to enter into the
Credit Agreements, each of the Guarantors is willing to guarantee the
Obligations under the Credit Agreements and the other Credit Documents;

 

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NOW, THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

Section 1. Representations, Warranties and Covenants. In order to induce the
Administrative Agent and the Lenders to enter into the Credit Agreements and to
make the Loans and the other financial accommodations to the Borrower and to
issue the Letters of Credit described in the Credit Agreements, each of the
Guarantors represents and warrants to each Lender and the Administrative Agent
as of the date of this Agreement, giving effect to the consummation of the
transactions contemplated by the Credit Documents on the Closing Date, and
thereafter on each date as required by Section 4.02 of the Credit Agreements
that:

 

(a) It (i) is a corporation, partnership or limited liability company duly
incorporated or organized, as the case may be, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization,
(ii) is duly qualified to do business as a foreign entity and is in good
standing under the laws of each jurisdiction where the business by it makes such
qualification necessary, except where the failure to qualify could not
reasonably be expected to have a Material Adverse Effect, and (iii) has all
requisite corporate, partnership or limited liability company power and
authority, as the case may be, to own, operate and encumber its property and to
conduct its business in each jurisdiction in which its business is conducted.

 

(b) It has the requisite corporate, limited liability company or partnership, as
applicable, power and authority and legal right to execute and deliver this
Guaranty and to perform its obligations hereunder. The execution and delivery by
it of this Guaranty and the performance by each of its obligations hereunder
have been duly authorized by proper proceedings, and this Guaranty constitutes a
legal, valid and binding obligation of each Guarantor, enforceable against such
Guarantor, in accordance with its terms, except as enforceability may be limited
by (i) bankruptcy, insolvency, fraudulent conveyances, reorganization or similar
laws relating to or affecting the enforcement of creditors’ rights generally,
(ii) general equitable principles (whether considered in a proceeding in equity
or at law), and (iii) requirements of reasonableness, good faith and fair
dealing.

 

(c) Neither the execution and delivery by it of this Guaranty, nor the
consummation by it of the transactions herein contemplated, nor compliance by it
with the terms and provisions hereof, will (i) conflict with the charter or
other organizational documents of such Guarantor, (ii) conflict with, result in
a breach of or constitute (with or without notice or lapse of time or both) a
default under any law, rule, regulation, order, writ, judgment, injunction,
decree or award (including, without limitation, any environmental property
transfer laws or regulations) applicable to such Guarantor or any provisions of
any indenture, instrument or agreement to which such Guarantor is party or is
subject or which it or its property is bound or affected, or require termination
of any such indenture, instrument or agreement, except where such conflict,
breach or default could not reasonably be expected to have a Material Adverse
Effect, (iii) result in or require the creation or imposition of any Lien
whatsoever upon any of the property or assets of such Guarantor, other than
Liens permitted or created by the Credit Documents, or (iv) require any approval
of such Guarantor’s board of directors or shareholders or unitholders except
such as

 

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have been obtained. Except as set forth in Section 3.03 of the Credit Agreements
the execution, delivery and performance by the Guarantors of each of the Credit
Documents to which such Guarantor is a party do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by any governmental authority, including under any environmental
property transfer laws or regulations, except filings, consents or notices which
have been made.

 

(d) It has no Debt other than Debt permitted under Section 6.01 of the Credit
Agreements.

 

In addition to the foregoing, each of the Guarantors covenants that, so long as
any Lender has any Commitment outstanding under any Credit Agreement or any
amount payable under any Credit Agreement or any other Obligations shall remain
unpaid, it will, and, if necessary, will enable the Borrower to, fully comply
with those covenants and agreements of the Borrower applicable to such Guarantor
set forth in such Credit Agreement.

 

Section 2. The Guaranty. Each of the Guarantors hereby unconditionally
guarantees, jointly and severally with the other Guarantors, the full and
punctual payment and performance when due (whether at stated maturity, upon
acceleration or otherwise) of the Obligations, including, without limitation,
(i) the principal of and interest on each Revolving Loan made to the Borrower
pursuant to any Credit Agreement, (ii) any reimbursement obligations in respect
of LC Disbursements of the Borrower or the performance by it of such
reimbursement obligations, (iii) all other amounts payable by the Borrower under
any Credit Agreement and the other Credit Documents, including, without
limitation, all obligations under Hedging Agreements, and (iv) the punctual and
faithful performance, keeping, observance, and fulfillment by the Borrower of
all of the agreements, conditions, covenants, and obligations of the Borrower
contained in the Credit Documents (all of the foregoing being referred to
collectively as the “Guaranteed Obligations”). Upon (x) the failure by the
Borrower, or any of its Affiliates, as applicable, to pay punctually any such
amount or perform such obligation, and (y) such failure continuing beyond any
applicable grace or notice and cure period, each of the Guarantors agrees that
it shall forthwith on demand pay such amount or perform such obligation at the
place and in the manner specified in the relevant Credit Agreement or the
relevant Credit Document, as the case may be. Each of the Guarantors hereby
agrees that this Guaranty is an absolute, irrevocable and unconditional guaranty
of payment and is not a guaranty of collection.

 

Section 3. Guaranty Unconditional. The obligations of each of the Guarantors
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:

 

(i) any extension, renewal, settlement, indulgence, compromise, waiver or
release of or with respect to the Guaranteed Obligations or any part thereof or
any agreement relating thereto, or with respect to any obligation of any other
guarantor of any of the Guaranteed Obligations, whether (in any such case) by
operation of law or otherwise, or any failure or omission to enforce any right,
power or remedy with respect to the Guaranteed Obligations or any part thereof
or any agreement relating thereto, or

 

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with respect to any obligation of any other guarantor of any of the Guaranteed
Obligations;

 

(ii) any modification or amendment of or supplement to any Credit Agreement, any
Hedging Agreement or any other Credit Document, including, without limitation,
any such amendment which may increase the amount of, or the interest rates
applicable to, any of the Guaranteed Obligations guaranteed hereby;

 

(iii) any release, surrender, compromise, settlement, waiver, subordination or
modification, with or without consideration, of any collateral securing the
Guaranteed Obligations or any part thereof, any other guaranties with respect to
the Guaranteed Obligations or any part thereof, or any other obligation of any
person or entity with respect to the Guaranteed Obligations or any part thereof,
or any nonperfection or invalidity of any direct or indirect security for the
Guaranteed Obligations;

 

(iv) any change in the corporate, partnership or other existence, structure or
ownership of the Borrower or any other guarantor of any of the Guaranteed
Obligations, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the Borrower or any other guarantor of the Guaranteed
Obligations, or any of their respective assets or any resulting release or
discharge of any obligation of the Borrower or any other guarantor of any of the
Guaranteed Obligations;

 

(v) the existence of any claim, setoff or other rights which the Guarantors may
have at any time against the Borrower, any other guarantor of any of the
Guaranteed Obligations, the Administrative Agent, any Holder of Secured
Obligations or any other Person, whether in connection herewith or in connection
with any unrelated transactions, provided that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim;

 

(vi) the enforceability or validity of the Guaranteed Obligations or any part
thereof or the genuineness, enforceability or validity of any agreement relating
thereto or with respect to any collateral securing the Guaranteed Obligations or
any part thereof, or any other invalidity or unenforceability relating to or
against the Borrower or any other guarantor of any of the Guaranteed
Obligations, for any reason related to any Credit Agreement, any Hedging
Agreement or any other Credit Document, or any provision of applicable law or
regulation purporting to prohibit the payment by the Borrower or any other
guarantor of the Guaranteed Obligations, of any of the Guaranteed Obligations;

 

(vii) the failure of the Administrative Agent to take any steps to perfect and
maintain any security interest in, or to preserve any rights to, any security or
collateral for the Guaranteed Obligations, if any;

 

(viii) the election by, or on behalf of, any one or more of the Holders of
Secured Obligations, in any proceeding instituted under Chapter 11 of Title 11
of the United States Code (11 U.S.C. 101 et seq.) (the “Bankruptcy Code”), of
the application of Section 1111(b)(2) of the Bankruptcy Code;

 

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(ix) any borrowing or grant of a security interest by the Borrower, as
debtor-in-possession, under Section 364 of the Bankruptcy Code;

 

(x) the disallowance, under Section 502 of the Bankruptcy Code, of all or any
portion of the claims of the Holders of Secured Obligations or the
Administrative Agent for repayment of all or any part of the Guaranteed
Obligations;

 

(xi) the failure of any other guarantor to sign or become party to this Guaranty
or any amendment, change, or reaffirmation hereof; or

 

(xii) any other act or omission to act or delay of any kind by the Borrower, any
other guarantor of the Guaranteed Obligations, the Administrative Agent, any
Holder of Secured Obligations or any other Person or any other circumstance
whatsoever which might, but for the provisions of this Section 3, constitute a
legal or equitable discharge of any Guarantor’s obligations hereunder.

 

Section 4. Discharge Only Upon Payment In Full; Reinstatement In Certain
Circumstances. Each of the Guarantors’ obligations hereunder shall remain in
full force and effect until all Guaranteed Obligations (other than contingent
indemnity obligations and Obligations in respect of Hedging Agreements) shall
have been paid in full in cash and the Commitments and all Letters of Credit
issued under each Credit Agreement shall have terminated or expired or, in the
case of all Letters of Credit, are fully collateralized on terms reasonably
acceptable to the Administrative Agent. If at any time any payment of the
principal of or interest on any Revolving Loan or reimbursement obligation in
respect of LC Disbursements or any other amount payable by the Borrower or any
other party under any Credit Agreement, any Hedging Agreement or any other
Credit Document is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of the Borrower or otherwise, each of
the Guarantors’ obligations hereunder with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.

 

Section 5. General Waivers; Additional Waivers.

 

(A) General Waivers. Each of the Guarantors irrevocably waives acceptance
hereof, presentment, demand or action on delinquency, protest and, to the
fullest extent permitted by law, any notice not provided for herein or under the
other Credit Documents, as well as any requirement that at any time any action
be taken by any Person against the Borrower, any other guarantor of the
Guaranteed Obligations, or any other Person.

 

(B) Additional Waivers. Notwithstanding anything herein to the contrary, each of
the Guarantors hereby absolutely, unconditionally, knowingly, and expressly
waives:

 

(i) any right it may have to revoke this Guaranty as to future indebtedness or
notice of acceptance hereof;

 

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(ii) (1) notice of acceptance hereof; (2) notice of any loans or other financial
accommodations made or extended under the Credit Documents or the creation or
existence of any Guaranteed Obligations; (3) notice of the amount of the
Guaranteed Obligations, subject, however, to each Guarantor’s right to make
inquiry of Administrative Agent and Holders of Secured Obligations to ascertain
the amount of the Guaranteed Obligations at any reasonable time; (4) notice of
any adverse change in the financial condition of the Borrower or of any other
fact that might increase such Guarantor’s risk hereunder; (5) notice of
presentment for payment, demand, protest, and notice thereof as to any
instruments among the Credit Documents; (6) notice of any Default or Event of
Default; and (7) all other notices (except if such notice is specifically
required to be given to such Guarantor hereunder or under the Credit Documents)
and demands to which each Guarantor might otherwise be entitled;

 

(iii) its right, if any, to require the Administrative Agent and the other
Holders of Secured Obligations to institute suit against, or to exhaust any
rights and remedies which the Administrative Agent and the other Holders of
Secured Obligations have or may have against, the other Guarantors or any third
party, or against any Collateral provided by the other Guarantors or any third
party; and each Guarantor further waives any defense arising by reason of any
disability or other defense (other than the defense that the Guaranteed
Obligations shall have been fully and finally performed and indefeasibly paid)
of the other Guarantors or by reason of the cessation from any cause whatsoever
of the liability of the other Guarantors in respect thereof;

 

(iv) (a) any rights to assert against the Administrative Agent and the other
Holders of Secured Obligations any defense (legal or equitable), set-off,
counterclaim, or claim which such Guarantor may now or at any time hereafter
have against the other Guarantors or any other party liable to the
Administrative Agent and the other Holders of Secured Obligations; (b) any
defense, set-off, counterclaim, or claim, of any kind or nature, arising
directly or indirectly from the present or future lack of perfection,
sufficiency, validity, or enforceability of the Guaranteed Obligations or any
security therefor; and (c) any defense such Guarantor has to performance
hereunder, and any right such Guarantor has to be exonerated, arising by reason
of: the impairment or suspension of the Administrative Agent’s and the other
Holders of Secured Obligations’ rights or remedies against the other Guarantors;
the alteration by the Administrative Agent and the other Holders of Secured
Obligations of the Guaranteed Obligations; any discharge of the other
Guarantors’ obligations to the Administrative Agent and the other Holders of
Secured Obligations by operation of law as a result of the Administrative
Agent’s and the other Holders of Secured Obligations’ intervention or omission;
or the acceptance by the Administrative Agent and the other Holders of Secured
Obligations of anything in partial satisfaction of the Guaranteed Obligations;
and

 

(v) any defense arising by reason of or deriving from (a) any claim or defense
based upon an election of remedies by the Administrative Agent and the other
Holders of Secured Obligations; or (b) any election by the Administrative Agent
and the other Holders of Secured Obligations under Section 1111(b) of Title 11
of the United States

 

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Code entitled “Bankruptcy”, as now and hereafter in effect (or any successor
statute), to limit the amount of, or any collateral securing, its claim against
the Guarantors:

 

Section 6. Subordination of Subrogation. Until the Guaranteed Obligations have
been paid in full in cash and finally performed (other than contingent indemnity
obligations and Obligations in respect of the Hedging Agreements) the Guarantors
(i) shall have no right of subrogation with respect to such Guaranteed
Obligations and (ii) waive any right to enforce any remedy which the Issuing
Bank, Holders of Secured Obligations or the Administrative Agent now have or may
hereafter have against the Borrower, any endorser or any guarantor of all or any
part of the Obligations or any other Person, and until such time the Guarantors
waive any benefit of, and any right to participate in, any security or
collateral given to the Holders of Secured Obligations and the Administrative
Agent to secure the payment or performance of all or any part of the Guaranteed
Obligations or any other liability of the Borrower to the Holders of Secured
Obligations. Should any Guarantor have the right, notwithstanding the foregoing,
to exercise its subrogation rights, each Guarantor hereby expressly and
irrevocably (A) subordinates any and all rights at law or in equity to
subrogation, reimbursement, exoneration, contribution, indemnification or set
off that the Guarantor may have to the payment in full in cash of the Guaranteed
Obligations until the Guaranteed Obligations are paid in full in cash (other
than contingent indemnity obligations and Obligations in respect of Hedging
Agreements) and (B) waives any and all defenses available to a surety, guarantor
or accommodation co-obligor until the Guaranteed Obligations are paid in full in
cash (other than contingent indemnity obligations other than Obligations in
respect of Hedging Agreements). Each Guarantor acknowledges and agrees that this
subordination is intended to benefit the Administrative Agent and the Holders of
Secured Obligations and shall not limit or otherwise affect such Guarantor’s
liability hereunder or the enforceability of this Guaranty, and that the
Administrative Agent, the Holders of Secured Obligations and their respective
successors and assigns are intended third party beneficiaries of the waivers and
agreements set forth in this Section 6.

 

Section 7. Contribution with Respect to Guaranteed Obligations.

 

(a) To the extent that any Guarantor shall make a payment under this Guaranty (a
“Guarantor Payment”) which, taking into account all other Guarantor Payments
then previously or concurrently made by any other Guarantor, exceeds the amount
which otherwise would have been paid by or attributable to such Guarantor if
each Guarantor had paid the aggregate Guaranteed Obligations satisfied by such
Guarantor Payment in the same proportion as such Guarantor’s “Allocable Amount”
(as defined below) (as determined immediately prior to such Guarantor Payment)
bore to the aggregate Allocable Amounts of each of the Guarantors as determined
immediately prior to the making of such Guarantor Payment, then, following
payment in full in cash of the Guarantor Payment and the Guaranteed Obligations
(other than contingent indemnity obligations and Obligations in respect of
Hedging Agreements), and all Commitments and Letters of Credit have terminated
or expired or, in the case of all Letters of Credit, are fully collateralized on
terms reasonably acceptable to the Administrative Agent, such Guarantor shall be
entitled to receive contribution and indemnification payments from, and be
reimbursed by, each other Guarantor for the amount of such excess, pro rata
based upon their respective Allocable Amounts in effect immediately prior to
such Guarantor Payment.

 

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(b) As of any date of determination, the “Allocable Amount” of any Guarantor
shall be equal to the maximum amount of the claim which could then be recovered
from such Guarantor under this Guaranty without rendering such claim voidable or
avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law.

 

(c) This Section 7 is intended only to define the relative rights of the
Guarantors, and nothing set forth in this Section 7 is intended to or shall
impair the obligations of the Guarantors, jointly and severally, to pay any
amounts as and when the same shall become due and payable in accordance with the
terms of this Guaranty.

 

(d) The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Guarantor or Guarantors
to which such contribution and indemnification is owing.

 

(e) The rights of the indemnified Guarantors against other Guarantors under this
Section 7 shall be exercisable upon the full and indefeasible payment of the
Guaranteed Obligations (other than contingent indemnity obligations and
Obligations in respect of Hedging Agreements) in full in cash and the
termination or expiry (or in the case of all Letters of Credit full
collateralization), on terms reasonably acceptable to the Administrative Agent,
of the Commitments and all Letters of Credit issued under the Credit Agreements.

 

Section 8. Stay of Acceleration. If acceleration of the time for payment of any
amount payable by the Borrower under any Credit Agreement, any counterparty to
any Hedging Agreement or any other Credit Document is stayed upon the
insolvency, bankruptcy or reorganization of the Borrower or any of their
Affiliates, all such amounts otherwise subject to acceleration under the terms
of any Credit Agreement, any Hedging Agreement or any other Credit Document
shall nonetheless be payable by each of the Guarantors hereunder forthwith on
demand by the Administrative Agent.

 

Section 9. Notices. All notices, requests and other communications to any party
hereunder shall be given in the manner prescribed in Section 9.01 of the Credit
Agreement with respect to the Administrative Agent at its notice address therein
and, with respect to any Guarantor, in the care of the Borrower at the address
of the Borrower set forth in the Credit Agreement, or such other address or
telecopy number as such party may hereafter specify for such purpose by notice
to the Administrative Agent in accordance with the provisions of such Section
9.01.

 

Section 10. No Waivers. No failure or delay by the Administrative Agent or any
Holders of Secured Obligations in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies provided in this
Guaranty, any Credit Agreement, any Hedging Agreement and the other Credit
Documents shall be cumulative and not exclusive of any rights or remedies
provided by law.

 

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Section 11. Successors and Assigns. This Guaranty is for the benefit of the
Administrative Agent and the Holders of Secured Obligations and their respective
successors and permitted assigns, provided, that no Guarantor shall have any
right to assign its rights or obligations hereunder without the consent of the
Administrative Agent, and any such assignment in violation of this Section 11
shall be null and void; and in the event of an assignment of any amounts payable
under any Credit Agreement, any Hedging Agreement or the other Credit Documents
in accordance with the respective terms thereof, the rights hereunder, to the
extent applicable to the indebtedness so assigned, may be transferred with such
indebtedness. This Guaranty shall be binding upon each of the Guarantors and
their respective successors and assigns.

 

Section 12. Changes in Writing. Other than in connection with the addition of
additional Subsidiaries, which become parties hereto by executing a Supplement
hereto in the form attached as Annex I, neither this Guaranty nor any provision
hereof may be changed, waived, discharged or terminated orally, but only in
writing signed by each of the Guarantors and the Administrative Agent with the
consent of the Lenders having Revolving Credit Exposures and unused Commitments
representing more than 50% of the sum of the total Revolving Credit Exposures
and unused Commitments under both Credit Agreements at such time (or more, if
required pursuant to the terms of any Credit Agreement).

 

Section 13. CHOICE OF LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT GIVING EFFECT TO FEDERAL
LAWS APPLICABLE TO NATIONAL BANKS.

 

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Section 14. CONSENT TO JURISDICTION; JURY TRIAL.

 

(A) CONSENT TO JURISDICTION. EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT
SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY CREDIT DOCUMENTS AND EACH GUARANTOR HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY HOLDER OF SECURED OBLIGATIONS
TO BRING PROCEEDINGS AGAINST ANY GUARANTOR IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY GUARANTOR AGAINST THE
ADMINISTRATIVE AGENT OR ANY HOLDER OF SECURED OBLIGATIONS OR ANY AFFILIATE OF
THE ADMINISTRATIVE AGENT OR ANY HOLDER OF SECURED OBLIGATIONS INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS GUARANTY OR ANY OTHER CREDIT DOCUMENT SHALL BE BROUGHT ONLY
IN A COURT SITTING IN NEW YORK, NEW YORK.

 

(B) WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY WAIVES TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,
OR CONNECTED WITH THIS GUARANTY OR ANY OTHER CREDIT DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.

 

Section 15. No Strict Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Guaranty. In the event an ambiguity or
question of intent or interpretation arises, this Guaranty shall be construed as
if drafted jointly by the parties hereto and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Guaranty.

 

Section 16. Expenses of Enforcement, Etc. Subject to the terms of the Credit
Agreements, if an Event of Default has occurred and is continuing under the
5-Year Credit Agreement, the 5-Year Lenders shall have the right at any time,
and, if an Event of Default has occurred and is continuing under the 364-Day
Credit Agreement, the 364-Day Lenders shall have the right at any time to direct
the Administrative Agent to commence enforcement proceedings with respect to the
Guaranteed Obligations. The Guarantors agree to reimburse the Administrative
Agent and the Holders of Secured Obligations for any costs and out-of-pocket
expenses (including reasonable attorneys’ fees and time charges of attorneys for
the Administrative Agent and the Holders of Secured Obligations, which attorneys
may be employees of the Administrative Agent or the Holders of Secured
Obligations) paid or incurred by the Administrative Agent or any Holders of
Secured Obligation in connection with the collection and enforcement of amounts
due under the Credit Documents, including without

 

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limitation this Guaranty. The Administrative Agent agrees to distribute payments
received from any of the Guarantors hereunder to the Holders of Secured
Obligations on a pro rata basis for application in accordance with the terms of
the respective Credit Agreements.

 

Section 17. Setoff. At any time after all or any part of the Guaranteed
Obligations have become due and payable (by acceleration or otherwise), each
Holder of Secured Obligations and the Administrative Agent may, without notice
to any Guarantor and regardless of the acceptance of any security or collateral
for the payment hereof, appropriate and apply toward the payment of all or any
part of the Guaranteed Obligations (i) any indebtedness due or to become due
from such Holder of Secured Obligations or the Administrative Agent to any
Guarantor, and (ii) any moneys, credits or other property belonging to any
Guarantor, at any time held by or coming into the possession of such Holder of
Secured Obligations or the Administrative Agent or any of their respective
affiliates.

 

Section 18. Financial Information. Each Guarantor hereby assumes responsibility
for keeping itself informed of the financial condition of the Borrower and any
and all endorsers and/or other Guarantors of all or any part of the Guaranteed
Obligations, and of all other circumstances bearing upon the risk of nonpayment
of the Guaranteed Obligations, or any part thereof, that diligent inquiry would
reveal, and each Guarantor hereby agrees that none of the Holders of Secured
Obligations or the Administrative Agent shall have any duty to advise such
Guarantor of information known to any of them regarding such condition or any
such circumstances. In the event any Holder of Secured Obligations or the
Administrative Agent, in its sole discretion, undertakes at any time or from
time to time to provide any such information to a Guarantor, such Holder of
Secured Obligations or the Administrative Agent shall be under no obligation (i)
to undertake any investigation not a part of its regular business routine, (ii)
to disclose any information which such Holder of Secured Obligations or the
Administrative Agent, pursuant to accepted or reasonable commercial finance or
banking practices, wishes to maintain confidential or (iii) to make any other or
future disclosures of such information or any other information to such
Guarantor.

 

Section 19. Severability. Wherever possible, each provision of this Guaranty
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.

 

Section 20. Merger. This Guaranty represents the final agreement of each of the
Guarantors with respect to the matters contained herein and may not be
contradicted by evidence of prior or contemporaneous agreements, or subsequent
oral agreements, between the Guarantor and any Holder of Secured Obligations or
the Administrative Agent.

 

Section 21. Headings. Section headings in this Guaranty are for convenience of
reference only and shall not govern the interpretation of any provision of this
Guaranty.

 

[SIGNATURE PAGES TO FOLLOW]

 

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IN WITNESS WHEREOF, each Initial Guarantor has caused this Guaranty to be duly
executed by its authorized officer as of the day and year first above written.

 

INERGY PROPANE, LLC, as a Guarantor

     

L & L TRANSPORTATION, LLC, as a

Guarantor

By:  

/s/ R. Brooks Sherman, Jr.

           

Name:

 

R. Brooks Sherman, Jr.

      By:  

/s/ R. Brooks Sherman, Jr.

Title:

 

Senior Vice President and CFO

     

Name:

 

R. Brooks Sherman, Jr.

           

Title:

 

Senior Vice President and CFO

INERGY TRANSPORTATION, LLC, as a

Guarantor

     

INERGY SALES & SERVICE, INC., as a

Guarantor

By:  

/s/ R. Brooks Sherman, Jr.

      By:  

/s/ R. Brooks Sherman, Jr.

Name:

 

R. Brooks Sherman, Jr.

     

Name:

 

R. Brooks Sherman, Jr.

Title:

 

Senior Vice President and CFO

     

Title:

 

Senior Vice President and CFO

INERGY FINANCE CORP., as a Guarantor

     

INERGY ACQUISITION COMPANY, LLC,

as a Guarantor

By:  

/s/ R. Brooks Sherman, Jr.

           

Name:

 

R. Brooks Sherman, Jr.

      By:  

/s/ R. Brooks Sherman, Jr.

Title:

 

Senior Vice President and CFO

     

Name:

 

R. Brooks Sherman, Jr.

           

Title:

 

Senior Vice President and CFO

STELLAR PROPANE SERVICE, LLC, as a

Guarantor

     

INERGY GAS, LLC, as a Guarantor

            By:  

/s/ R. Brooks Sherman, Jr.

By:

 

/s/ R. Brooks Sherman, Jr.

      Name:  

R. Brooks Sherman, Jr.

Name:

 

R. Brooks Sherman, Jr.

     

Title:

 

Senior Vice President and CFO

Title:

 

Senior Vice President and CFO

           

Acknowledged and Agreed to:

       

JPMORGAN CHASE BANK, N.A., as Administrative Agent

By:  

/s/ Jane Bek Kiel

           

Name:

 

Jane Bek Kiel

           

Title:

 

Director

           

 

Signature Page to Guaranty