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HomeMy WebLinkAboutA9466 - DESERT COMMUNITY ENERGY-GUARANTYCONTRACT ABSTRACT Contract/Amendment Name of Contract: Company Name: Company Contact: Email: Summary of Services: Contract Price: Contract Term: Public Integrity/ Business Disclosure Forms: Contract Administration Lead Department: Contract Administrator/ Ext: Contract Approvals Council/City Manager Approval Date: Agreement Number: Amendment Number: Contract Compliance Exhibits: Insurance: Routed By: Bonds: Business License: Sole Source Co-Op CoOp Agmt #: Sole Source Documents: CoOp Name: CoOp Pricing: By: Submitted on: Contract Abstract Form Rev 8.16.23 Authorized Signers: Name, Email (Corporations require 2 signatures) Desert Community Energy - Guaranty Desert Community Energy David Freedman Dfreedman@cvag.org City of Palm Springs to provide $25 million guaranty for energy purchases by Desert Community Energy. Sustainability Lindsey-Paige McCloy 12/14/2023 A9466 N/A - - - Procurement - No 12/26/2023 Lindsey-Paige McCloy DocuSign Envelope ID: E53CF62D-F153-4620-B507-0682200A25C3 GUARANTY NO. A9466 This guaranty, as may be amended from time to time in accordance with its terms, (the “Guaranty”) is made effective as of December 29, 2023 (the (“Effective Date”) by the City of Palm Springs (the “Guarantor”) in favor of The Energy Authority, Inc. (the “Beneficiary”). WHEREAS, Desert Community Energy (“Company”) is a joint powers authority that serves energy to commercial and residential customers within the boundaries of Guarantor and Guarantor is a member of Company; and WHEREAS, the Beneficiary and Company are parties to that certain Resource Management Agreement dated as of January 22, 2018 (the “RMA”); and WHEREAS, Guarantor acknowledges that it will benefit directly or indirectly from the transactions made pursuant to the RMA (the “Client Transactions”); and WHEREAS, the Guarantor has agreed to enter into this Guaranty to provide assurance for the payment obligations of Company in connection with the Client Transactions. NOW, THEREFORE, for good and valuable consideration, the adequacy, receipt and sufficiency of which are hereby acknowledged, and as inducement to the Beneficiary entering into the Client Transactions, the Guarantor hereby agrees as follows: 1.Guaranty. The Guarantor hereby unconditionally guarantees the punctual payment when due (subject to written demand in accordance with Section 10 below) of Company’s payment obligations arising under any Client Transactions (the “Guaranteed Obligations”) up to a maximum aggregate liability of Guarantor under this Guaranty in the amount of twenty-five million dollars ($25,000,000.00) (“Liability Cap”). If Company fails to pay any Guaranteed Obligation when due, Guarantor shall, as an independent obligation, promptly upon receiving notice of such failure from the applicable Beneficiary or its agent, pay such Guaranteed Obligation to such Beneficiary in accordance with the terms and provisions of the Client Transactions and all applicable transaction documents. Notwithstanding anything contained herein to the contrary, any payment made by Guarantor to Beneficiary pursuant to this Guaranty shall reduce the monetary obligation of Guarantor under this Guaranty by the amount of the payment made by Guarantor. If all or a part of any payment made by Guarantor to Beneficiary hereunder is later determined to have been improper because such amount was not actually owed by Company to Beneficiary under the Client Transactions or such payment was otherwise unjustified or has been successfully disputed by Company in accordance with the terms of the RMA, Beneficiary shall repay such amount to Guarantor within ten (10) business days after the date of the determination of an improper or unjustified payment, together with any interest, reasonable attorneys’ fees, and/or costs of collection, if any, required by the Client Transactions to be paid by Beneficiary in the collection of such amount. DocuSign Envelope ID: E53CF62D-F153-4620-B507-0682200A25C3 2 2.Guaranty of Payment. The Guarantor’s obligations and liability under this Guaranty shall be limited to payment obligations only and the Guarantor shall have no obligation to perform under any Client Transactions, including, without limitation, to sell, deliver, supply or transport gas, electricity or any other commodity. In the event that Company has posted any cash collateral or irrevocable letter of credit with Beneficiary to secure the Client Transactions, Beneficiary will attempt to enforce its rights in such collateral prior to seeking payment from Guarantor. This Guaranty is one of payment and not of collection and shall apply regardless of whether recovery of all such Guaranteed Obligations may be discharged, or uncollectible in any bankruptcy, insolvency, reorganization, liquidation, receivership, or similar proceeding affecting Company or its assets. 3.Guaranty Unconditional. The liability of Guarantor under this Guaranty shall be unconditional irrespective of: (a)Any modification, extension or waiver of any of the terms of any Client Transactions; (b)Any change in the time, manner, terms or place of payment of or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from any term or condition of the Client Transactions or any other agreement or instrument executed in connection therewith; (c)Any release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Guaranteed Obligations; (d)Except as to applicable statutes of limitation, the failure, omission, delay, waiver or refusal by the Beneficiary to exercise, in whole or in part, any right or remedy held by the Beneficiary with respect to any Client Transactions; or (e)Any change in the existence, structure or ownership of the Guarantor or Company, or any bankruptcy, insolvency, reorganization, liquidation, receivership, or similar proceeding affecting Company or its assets. The obligations of the Guarantor hereunder are several and not joint with Company or any other entity, and are primary obligations for which the Guarantor is the principal obligor. 4.No Conditions Precedent. There are no conditions precedent to the enforcement of this Guaranty, except as expressly contained herein. It shall not be necessary for the Beneficiary, in order to enforce payment by the Guarantor under this Guaranty, to exhaust its remedies against Company, any collateral pledged by Company except as set forth in Section 2, any other guarantor, or any other entity liable for the payment or performance of the Guaranteed Obligations. DocuSign Envelope ID: E53CF62D-F153-4620-B507-0682200A25C3 3 5.Waiver. Guarantor hereby waives: (a)notice of acceptance of this Guaranty, notice of the creation or existence of any of the Guaranteed Obligations and notice of any action by the Beneficiary in reliance hereon or in connection herewith; (b)notice of the entry into any Client Transactions between Company and the Beneficiary and notice of any amendments, supplements or modifications thereto; (c)except as expressly set forth herein, presentment, demand for payment, notice of dishonor or nonpayment, protest and notice of protest or any other notice of any other kind with respect to the Guaranteed Obligations; and (d)any requirement that suit be brought against, or any other action by the Beneficiary be taken against, or any notice of default or other notice be given to, or any demand be made on, Company or any other entity, or that any other action be taken or not taken as a condition to the Guarantor’s liability for the Guaranteed Obligations under this Guaranty or as a condition to the enforcement of this Guaranty against the Guarantor. 6.Bankruptcy and Other Actions. Guarantor shall reimburse Beneficiary for all sums paid to Beneficiary by Company with respect to such Guaranteed Obligations which Beneficiary is subsequently required by a final ruling of a court of competent jurisdiction to return to Company or a representative of Company’s creditors as a result of Company’s bankruptcy, insolvency, reorganization, liquidation, receivership, or similar proceeding. Without limiting Guarantor’s own defenses and rights hereunder, Guarantor reserves to itself all rights, setoffs, counterclaims and other defenses to which Company is or may be entitled to arising from or out of the Client Transactions, except as limited herein and except for defenses arising out of the bankruptcy, insolvency, reorganization, liquidation, receivership, or similar proceeding affecting Company or its assets. 7.Reinstatement. This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any Guaranteed Obligation is rescinded or must otherwise be returned by a Beneficiary upon the insolvency, bankruptcy or reorganization of Company or otherwise, all as though the payment had not been made. 8.Subrogation. The Guarantor shall be subrogated to all rights of the Beneficiary against Company in respect of any amounts paid by the Guarantor pursuant to the Guaranty, provided that the Guarantor waives any rights it may acquire by way of subrogation under this Guaranty, by any payment made hereunder or otherwise (including, without limitation, any statutory rights of subrogation under Section 509 of the Bankruptcy Code, 11 U.S.C. §509, or otherwise), reimbursement, exoneration, contribution, indemnification, or any right to participate in any claim or remedy of the Beneficiary against Company or any collateral which the Beneficiary now has or acquires, until all of the Guaranteed Obligations shall have been irrevocably paid to the Beneficiary in full. If (a) the Guarantor shall perform and shall make payment to the Beneficiary of all or any part of the Guaranteed Obligations and (b) all the Guaranteed Obligations shall have been paid in full, the Beneficiary shall, at the Guarantor’s request, execute and deliver to the Guarantor DocuSign Envelope ID: E53CF62D-F153-4620-B507-0682200A25C3 4 appropriate documents necessary to evidence the transfer by subrogation to the Guarantor of any interest in the Guaranteed Obligations resulting from such payment by the Guarantor. 9.Notices. All demands, notices and other communications provided for hereunder shall, unless otherwise specifically provided herein, (a) be in writing addressed to the party receiving the notice at the address set forth below or at such other address as may be designated by written notice, from time to time, to the other party, and (b) be effective upon delivery, when sent by commercial overnight courier, or personally delivered. Notices shall be sent to the following addresses: If to Beneficiary: The Energy Authority, Inc. Attn: Legal Department 1301 Riverplace Blvd., Suite 2700 Jacksonville, FL 32207 Phone: (904) 356-3900 Fax: (904) 665-0314 If to Guarantor: City of Palm Springs Attention: City Manager / City Clerk 3200 E. Tahquitz Canyon Way Palm Springs, California 92262 10.Demand and Payment. Beneficiary is not entitled to make demand upon Guarantor until a default occurs in payment of any Guaranteed Obligations by Company to Beneficiary. Any demand by the Beneficiary for payment hereunder shall be in writing, reference this Guaranty, reference the Guaranteed Obligations, be signed by a duly authorized representative of the Beneficiary and be delivered to the Guarantor pursuant to Section 9 contained herein. There are no other requirements of notice, presentment or demand. The Guarantor shall pay, or cause to be paid, such Guaranteed Obligations within ten (10) business day of receipt of such demand. 11.No Waiver; Remedies. Except as to applicable statutes of limitation, no failure on the part of Beneficiary 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 law. 12.Term; Termination. Unless otherwise extended in writing by the Guarantor, this Guaranty shall continue in full force and effect from the Effective Date until payment-in-full of the Guaranteed Obligations with respect to such Client Transactions have been fully satisfied. Notwithstanding the foregoing, no such expiration or termination of this Guaranty shall (a) affect Guarantor’s obligations hereunder with respect to any Client Transactions entered DocuSign Envelope ID: E53CF62D-F153-4620-B507-0682200A25C3 5 into prior to such expiration or termination; or (b) prevent reinstatement of this Guaranty with respect to any such Guaranteed Obligations in accordance with Section 7 contained herein. 13.Assignment; Successors and Assigns. The Guarantor and the Beneficiary shall not assign its rights hereunder without the prior written consent of the other party, and any assignment without such prior written consent shall be null and void and of no force or effect. This Guaranty shall be binding upon and inure to the benefit of each party hereto and its respective successors and permitted assigns. 14.Amendments and Waivers. Subject to Section 12 of this Guaranty, no provision of this Guaranty shall be waived, amended, terminated or supplemented except by a written instrument executed by Guarantor and Beneficiary. 15.Captions. The captions in this Guaranty have been inserted for convenience only and shall be given no substantive meaning or significance whatsoever in construing the terms and provisions of this Guaranty. 16.Representation and Warranties. The Guarantor represents and warrants to Beneficiary that, as to Guarantor, the following statements are true, correct and complete on and as of the date hereof: (a)Organization and Qualification; Authority; Consents. Guarantor is a municipal corporation duly organized, validly existing under and operating pursuant to the laws of the State of California and the City Charter of the City of Palm Springs. Guarantor has full right and authority to enter into this Guaranty and to perform each and all of the matters and things herein provided for; and this Guaranty does not, nor does the performance or observance by Guarantor of any of the matters or things herein or therein provided for, contravene any provision of law or any organizational document of Guarantor or any covenant, indenture or agreement of or affecting Guarantor. The execution, delivery, performance and observance by Guarantor of this Guaranty and any other instruments and documents executed by Guarantor in connection with this Guaranty do not and, at the time of delivery hereof, will not require any consent or approval of any other Person, other than such consents and approvals that have been given or obtained. (b)Legal Effect. This Guaranty constitutes a legal, valid and binding agreement of Guarantor, enforceable in accordance with its terms, subject to laws relating to bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally and the application of equitable remedies if equitable remedies are sought. (c)Litigation. There is no litigation or governmental proceeding pending, nor to the knowledge of Guarantor threatened in writing, against Guarantor which if adversely determined would result in any material adverse change in the financial condition of Guarantor. DocuSign Envelope ID: E53CF62D-F153-4620-B507-0682200A25C3 6 (d)Other Agreements. Guarantor is not in default under the terms of any covenant, indenture or agreement of or affecting Guarantor, which default if uncured would have a material adverse effect on the financial condition of Guarantor. 17.GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. However, 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. 18.Counterparts. This Guaranty and any amendments, waivers, consents or supplements may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. 19.Entire Agreement. This Guaranty constitutes the entire understanding between Guarantor and Beneficiary with respect to the Guaranteed Obligations and supersedes and replaces in its entirety any and all guaranties previously issued by Guarantor to Beneficiary with respect to the Guaranteed Obligations, or any part of them. [remainder of page intentionally left blank] DocuSign Envelope ID: E53CF62D-F153-4620-B507-0682200A25C3 7 IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed and delivered by its duly authorized representative effective as of the Effective Date. City of Palm Springs By: ______________________________________ Name: Scott C. Stiles Title: City Manager APPROVED AS TO FORM: By: ___________________________ City Attorney ATTEST: By: ________________________ City Clerk APPROVED BY CITY COUNCIL: Date: 12/14/2023 Item No. 1GG DocuSign Envelope ID: E53CF62D-F153-4620-B507-0682200A25C3 12/27/2023