ANNEX A
FORM OF GUARANTY
This Guaranty (this "Guaranty"), dated as of March l4 1997, is
given by ABB Power T&D Company Inc., a Delaware corporation ("ABB"), and Xxxxx
Systems Corporation ("Xxxxx Systems"), a Delaware corporation (ABB and Xxxxx
hereinafter, collectively the "Guarantors." and each a "Guarantor"), in favor of
the Independent System Operator Restructuring Trust, established pursuant to the
Independent System Operator Trust Agreement (enabled by the Funding Decision,
CPUC Decision 96-10-04, October 25, 1996) (the "ISO Trust") and the Independent
System Operator ("ISO") to be established pursuant to said Funding Decision (the
ISO Trust and ISO hereinafter, the "ISO Parties").
RECITALS
WHEREAS, ABB and Xxxxx Systems have formed the ISO Alliance, LLC a
Delaware limited liability company ("Supplier"): and
WHEREAS, Supplier and the ISO Trust are entering into an agreement
(the "SA/SI/BS Contract") for the Scheduling Applications, Scheduling
Infrastructure and Balance of Business Systems to be used by the ISO; and
WHEREAS, as an inducement to the ISO Trust to enter into the
SA/SI/BS Contract with the Supplier, the Guarantors have agreed to guarantee the
obligations of the Supplier under the SA/SI/BS Contract as provided herein; and
WHEREAS, the Guarantors will benefit from the transactions
contemplated by the SA/SI/BS Contract pursuant to the terms thereof.
NOW, THEREFORE, the parties agree as follows:
Section 1. Definitions. Unless the context otherwise requires,
capitalized terms used herein and not otherwise defined have the meanings
assigned to them in me SA/SI/BS Contract.
Section 2. Guaranty. Each of the Guarantors, to the extent of the
limits of liability set forth in Section 3 hereof, hereby irrevocably guarantees
to the ISO Parties the full and prompt performance and payment when due of all
obligations of Supplier under the SA/SI/BS Contract (including, without
limitation, obligations to pay any damages or indemnification payments required
to be paid by Supplier under the SA/SI/BS Contract)(all.of such obligations
collectively, the "Guaranteed Obligations"). This Guaranty is for the benefit
of the ISO Parties and their shareholders, directors, officers, employees,
agents and representatives of the ISO Parties to the extent they are
beneficiaries and potential beneficiaries of the Guaranteed Obligations
pursuant to the SA/SI/BS Contract.
Section 3. Limits of Liability. The obligation of the Guarantors
hereunder is joint, but not several. Each Guarantor's liability shall be limited
to the following respective percentage of any joint liability of the Guarantors:
(a) The liability of ABB shall be limited to seventy percent
(70%) of the amount of any joint liability; and
(b) The liability of Xxxxx Systems shall be limited to thirty
percent (30%) of the amount of any joint liability.
Such limits shall apply to the entirety of the joint liability without regard to
any determination of responsibility as between ABB and Xxxxx Systems under their
respective obligations as Major Subcontractors under the SA/SI/BS Contract. The
Guarantors' aggregate liability under this Guaranty shall in no event exceed the
limit of liability under SA/SI/BS Contract as specified in Section 25.3 thereof.
Section 4. Scope of Guaranty. The liability of the Guarantors
under this Guaranty is coextensive with the Supplier's rights and obligations
under the SA/SI/BS Contract, the Guarantors shall be entitled to all defenses,
claims, setoffs and other rights to ,which the Supplier is entitled under the
SA/SI/BS Contract. Except to the extent inconsistent with the foregoing
sentence, this Guaranty is absolute, irrevocable, and continuing and shall be
unaffected by:
(a) any termination of the SA/SI/BS Contract;
*
(b) the existence of any claim, setoff, defense,
counterclaim or other right which the Guarantors (but not the Supplier under the
SA/SI/BS Contract) may have against any of the ISO Parties or any other natural
person. Governmental Authority or any other entity whether acting in an
individual fiduciary or other capacity (each, a "Person"):
(c) the occurrence or continuance of any event of
bankruptcy, reorganization or insolvency with respect to Supplier or any other
Person, or the dissolution, liquidation or winding up of Supplier or any other
Person;
(d) any amendment or other modification of the SA/SI/BS
Contract made pursuant to its terms;
(e) the exercise, non-exercise or delay in exercising, by
any of the ISO Parties, of any of their rights and remedies under this Guaranty;
2
(f) any assignment or other transfer of this Guaranty by
any of the ISO Parties or any assignment or other transfer of the SA/SI/BS
Contract in whole or in part;
(g) any sale, transfer or other disposition by the
Guarantors of any direct or indirect interest that ABB or Xxxxx Systems may have
in the Supplier;
(h) the absence of any notice to, or knowledge by.
Guarantors of the existence or occurrence of any of the matters or events set
forth in the foregoing clauses; or
(i) any other similar circumstance, condition or event that
might constitute or give rise to a defense to performance by Guarantors of its
obligations under this Guaranty.
Section 5. Waiver. Each of the Guarantors:
(a) waives, and agrees it shall not at any time insist
upon, plead, claim or take the benefit or advantage of, any appraisal,
valuation, stay, extension, marshaling of assets or redemption laws, or
exemption, whether now or at any time hereafter in force, which may delay,
prevent or otherwise affect the performance by each of the Guarantors of its
obligations under, or the enforcement by the ISO Parties of, this Guaranty;
(b) waives, and agrees that it shall not at any time claim
or take the benefit or advantage of Section 365(e)(2) of the Xxxxx 00, Xxxxxx
Xxxxxx Code or any other state or federal insolvency, reorganization, moratorium
or similar law for the relief of debtors;
(c) waives all notices, diligence, presentment and demand
(whether for non-payment or protest or of acceptance, maturity, extension of
time, change in nature or form of the Guaranteed Obligations, acceptance of
security, release of security, composition or agreement arrived at as to the
amount of, or the terms of, the Guaranteed Obligations, notice of adverse change
in the Supplier's financial condition or any other fact which might materially
increase the risk to the Guarantors hereunder) with respect to any of the
Guaranteed Obligations and all other demands whatsoever and waives the
benefit of all provisions of law which are or might be in conflict with the
terms of this Guaranty;
(d) agrees that its obligations under this Guaranty shall be
unaffected by the existence of any claim, setoff, defense, counterclaim or other
right which the Guarantors (but not the Supplier under the SA/SI/BS
Contract) may have against any of the ISO Parties or any other natural person,
Governmental Authority or any other entity whether acting in an individual
fiduciary or other capacity (each, a "Person"):
(e) irrevocably waives until the Guaranteed Obligations have
been satisfied (i) any rights which it may have acquired against the Supplier by
way of subrogation under this Guaranty or otherwise, (ii) any rights to seek any
reimbursement from Supplier in
respect of payments made by the Guarantors hereunder, and (iii) any claim,
counterclaim, or setoff which it may have against Supplier and the right to
exercise any rights or remedies or commence any proceedings with respect
thereto;
(f) irrevocably waives any right to require any of the ISO
Parties to proceed against Supplier or any other guarantor at any time, to
proceed against or exhaust any security held by any of the ISO Parties at any
time, and, except to the extent that Supplier has or would have had any such a
right under the SA/SI/BS Contract, the right to require any of the ISO Parties
to mitigate damages or to pursue any other remedy whatsoever at any time; and
(g) irrevocably waives any defense based upon an election of
remedies by any of the ISO Parties, including any election to proceed by
judicial or nonjudicial foreclosure of any security, whether real property or
personal property security, or by deed in lieu thereof, and whether or not every
aspect of any foreclosure sale is commercially reasonable, or any election of
remedies, including but not limited to remedies relating to real property or
personal property security, that destroys or otherwise impairs the rights of
Guarantors against Supplier for reimbursement.
Section 6. Affirmative Covenants. Each of the Guarantors covenants
and agrees that until this Guaranty has been terminated pursuant to Section 7,
each of the Guarantors will cause to be maintained and preserved the corporate
existence of the Supplier and will maintain beneficial ownership (free and clear
of all liens, claims and encumbrances) of the Supplier.
Section 7. Term of Guaranty. This Guaranty is a continuing guaranty
and shall remain in full force and effect until the earlier of (i) the date on
which all Guaranteed Obligations have been performed or paid in fall or (ii) the
date, not earlier than the date of Acceptance of the System pursuant to the
SA/SI/BS Contract, on which the Guarantors provide for the allocation between
them and the assumption by one or both of them of direct liability for each of
the Guaranteed Obligations of Supplier which may then be outstanding, at which
time this Guaranty shall terminate; provided that Guarantors have obtained the
prior written consent of Purchaser to such termination, such consent not to be
unreasonably withheld. Each and every default in the payment or performance of
the Guaranteed Obligations shall give rise to a separate cause of action
hereunder and separate causes of action may be brought hereunder as each such
cause of action arises.
Section 8. Independent and Separate Obligations. The obligations
of the Guarantors hereunder are independent of the obligations of each other and
those of Supplier with respect to the Guaranteed Obligations and, in the event
of any default hereunder, a separate action or actions may be brought and
prosecuted against each of the Guarantors whether or not the Supplier is joined
therein or a separate action or actions are brought against Supplier or the
other Guarantor, provided that, in any action brought against one or both of the
Guarantors in which Supplier is not joined as a party: (i) all defenses of
Supplier
4
(except those defenses that may be available by reason of bankruptcy,
reorganization, or insolvency proceedings of or against Supplier) shall be
available to the Guarantors to the same extent that such defenses could have
been asserted by Supplier under the SA/SI/BS Contract in such an action, and
(ii) Guarantors shall not be liable in any manner that is inconsistent with a
prior adjudication against the Supplier under the SA/SI/BS Contract.
Section 9. Bankruptcy No Discharge: Repayments: Reinstatement.
(a) Bankruptcy Proceedings. The Guarantors shall not
commence or join with any other party in commencing any bankruptcy,
reorganization, or insolvency proceedings of or against Supplier. The Guarantors
understand and acknowledge that by virtue of this Guaranty, the Guarantors have
specifically assumed any and all risks of a bankruptcy or reorganization case or
similar proceeding with respect to (he Supplier. As an example and not in any
way a limitation, a subsequent modification of the Guaranteed Obligations or any
rejection or disaffirmance thereof by any trustee, receiver or liquidating
agency of Supplier or of any of their respective properties, or any settlement
or compromise of any claim made in any such case, in any reorganization case
concerning Supplier shall not affect the obligation of the Guarantors to pay and
perform the Guaranteed Obligations in accordance with their original terms.
(b) Repayment and Reinstatement. If any claim is made upon
any of the ISO Parties or any Person claiming through an ISO Party for repayment
or disgorgement of any amount or amounts received by an ISO Party in payment of
the Guaranteed Obligations and the ISO Party or such Person, as the case
may be, repays or disgorges all or any part of said amount, then,
notwithstanding any revocation or termination of this Guaranty, Guarantors shall
be and remain liable to the ISO Parties or such Person, as the case may be, for
the amount so repaid, to the same extent as if such amount had never originally
been received by the ISO Party or such Person, as the case may be.
Section 10. Payment. Each of the Guarantors agrees that whenever
such Guarantor shall make any payment to any of the ISO Parties hereunder on
account of the liability hereunder, such Guarantor will deliver such payment to
the ISO Parties in immediately available funds at the address notified to
such Guarantor in writing, and notify the ISO Parties in writing that such
payment is made under this Guaranty for such purpose.
Section 11. Full Recourse. The obligations of each of the
Guarantors set forth herein constitute the full recourse obligations of each of
the Guarantors, jointly but not severally enforceable against each Guarantor to
the extent of the limits of liability set forth in Section 3 hereof,
notwithstanding any provision in any other agreement limiting the liability of
such Guarantor, or any agreement by any holder of any evidence of the Guaranteed
Obligations to look for payment with respect thereto solely to certain property
securing such Guaranteed Obligations.
Section 12. Subrogation. Notwithstanding any payments made or
obligation performed by the Guarantors or any setoff or application of funds of
the Guarantors by reason of this Guaranty, the Guarantors shall not be entitled
to be subrogated to any rights of the ISO Parties against the Supplier or with
respect to any security, guaranty or right of setoff pertaining to the
Guaranteed Obligations until all Guaranteed Obligations shall have been fully
paid. Any claim of the Guarantors against Supplier arising from payments made by
the Guarantors pursuant to the provisions of this Guaranty shall be in all
respects subordinate to the full and complete payment or performance and
discharge of the Guaranteed Obligations, and no payment hereunder by the
Guarantors shall give rise to any claim by the Guarantors against the ISO
Parties. Prior to termination of this Guaranty pursuant to Section 7, the
Guarantors will not assign or otherwise transfer any such claim against Supplier
to any other Person.
Section 13. Expenses. In any claim brought under Section 18(b) the
successful Part(ies) shall be entitled to be reimbursed by the unsuccessful
Part(ies) for all costs and expenses, including reasonable attorneys fees and
expenses, incurred by the successful Part(ies) in such action.
Section 14. Amendments: Waivers, etc. Neither this instrument nor
any term hereof may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by any of the ISO Parties and the
Guarantors. No delay or failure by any of the ISO Parties to exercise any remedy
against Supplier or the Guarantors will be construed as a waiver of that right
or remedy. No failure on the part of any of the ISO Parties to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by any
applicable governmental rule.
Section 15. Severability. In the event that the provisions of this
Guaranty are claimed or held to be inconsistent with any other instrument
evidencing or securing the Guaranteed Obligations, the terms of the Guaranty
shall remain fully valid and effective. If any one or more of the provisions of
this Guaranty should be determined to be illegal or unenforceable, all other
provisions shall remain effective.
Section 16. Assignment. The Guarantors shall not assign any of the
Guarantors' rights or obligations under this Guaranty. The ISO Trust or the ISO
may, at any time and from time to time, assign, conditionally or otherwise, in
whole or in part, their rights hereunder, whereupon such assignee shall succeed
to such rights and all of the terms of this instrument shall be binding upon and
inure to the benefit of such successors and assigns.
Section 17. Address for Notices. All notices and other
communications provided for hereunder shall be given in accordance with the
notice requirements of the
6
SA/SI/BS Contract and if to the Guarantors, at the address specified below the
space for its execution of this Guaranty.
Section 18. Jurisdiction.
(a) Except for any claims against Guarantors for the
collection of an arbitration award or judgment against Supplier constituting a
Guaranteed Obligation hereun- der or pertaining to the validity, enforceability,
or breach of this Guaranty, all claims hereun- der shall be asserted and
adjudicated in accordance with the provisions of Section 26 and any other
applicable provisions of the SA/SI/BS Contract pertaining to me resolution of
disputes, including but not limited to the provisions thereof requiring the
resolution of disputes through arbitration.
(b) For claims against Guarantors for the collection of an
arbitration award or judgment against Supplier constituting a Guaranteed
Obligation hereunder or pertaining to the validity, enforceability, or breach of
this Guaranty, the Guarantors irrevocably submit, to the extent permitted by
law, to the jurisdiction of any State or federal court sitting in the State of
California, and the Guarantors irrevocably agree mat all claims in respect of
such action or proceeding may be heard and determined in such a court. The
Guarantors and the ISO Parties irrevocably waive the defense of an inconvenient
forum to the maintenance of such action or proceeding. To the extent permitted
by law, the Guarantors irrevocably consent to the service of any and all process
in any such action or proceedings by the mailing of copies of such process to
the Guarantors at the address specified below. The Guarantors agree 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. Guarantors, at the option of the ISO parties, may be joined in
any proceeding against Supplier. Nothing in this section shall affect the right
of the ISO Parties to serve legal process in any other manner permitted by law
or affect the right of ISO Parties to bring any action or proceeding against
Guarantors in the courts of any other jurisdiction where jurisdiction over the
Guarantors would otherwise be available.
(c) To the extent that the Guarantors have or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process
otherwise consented to in paragraph (b) above (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, to the extent permitted by
law, each Guarantor hereby irrevocably waives such immunity in respect of its
obligations under this Guaranty.
Section 19. Governing Law. This Guaranty shall be governed by, and
construed in accordance with, the laws of the state of California (regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law thereof) as to all matters.
7
Section 20. Waiver of Jury Trial. EACH OF THE GUARANTORS AND THE
ISO PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR
ANY MATTER ARISING HEREUN- DER.
IN WITNESS WHEREOF, Each of the Guarantors has executed and
delivered this Guaranty effective as of the date first above written.
ABB POWER T&D COMPANY INC.
By: /s/
Address: Name:
Title:
XXXXX SYSTEMS CORPORATION
By: /s/
Address: Name:
Title:
