Schedule 14A.3

Deed of guarantee and indemnity

Schedule 14A.1, cl 3

DATED

BY

1. [Guarantor] (the "Guarantor")

IN FAVOUR OF

2. [Clearing manager] (the "Beneficiary")

1. Guarantee and indemnity

1.1 The Guarantor—

(a) unconditionally and irrevocably guarantees to the Beneficiary the due performance and observance by [Participant] (the "Debtor") of each obligation the Debtor may now or in the future have to the Beneficiary to pay amounts it owes to, and is invoiced by, the Beneficiary (whether as principal or agent) together with default interest, if any, in relation to such amounts (the "Obligations") under the Electricity Industry Participation Code 2010 (the "Code"); and

(b) indemnifies the Beneficiary against any loss incurred by the Beneficiary as a result of any failure by the Debtor to fulfil the Obligations. This indemnity shall apply to any of the Obligations (or any amount which, if recoverable, would have formed part of the Obligations) which is not or may not be enforceable, recoverable, or recovered for any reason; and

(c) shall pay the Obligations (and any other amounts owing under this Deed) on demand.

1.2 The total amount payable by the Guarantor under this Deed must not exceed the aggregate of $[insert amount] (the “Maximum Amount”) and any sums payable under clauses 1.3 and 9 of this Deed.

1.3 If any moneys payable by the Guarantor under this Deed are not paid on demand, the Guarantor must pay to the Beneficiary interest on such unpaid moneys (both before and after judgment) at the rate determined in accordance with clause 1.4 of this Deed from the date of demand to the date of their actual receipt by the Beneficiary calculated on a daily basis and capitalised as the Beneficiary will determine.

1.4 The interest rate will be 5% per annum plus the then prevailing settlement bid rate for 90 day bills displayed on Reuters Screen BKBM at 10:45am on the date of demand or, if for any reason that rate is not displayed, the rate determined by the Beneficiary to be the nearest practicable equivalent.

2. Preservation of rights

2.1 The obligations of the Guarantor and the rights, powers and remedies conferred on the Beneficiary under this Deed are in addition to, and not in substitution for, any other security or guarantee that the Beneficiary may at any time hold in respect of the Obligations and may be enforced without the Beneficiary first having recourse to any such security and without the Beneficiary first taking steps or proceedings against the Debtor.

2.2 The Guarantor's liability and the rights, powers, and remedies conferred on the Beneficiary under this Deed will not be affected, discharged, or diminished by (and the Guarantor waives notice of) any act, omission or matter which, but for this clause 2.2, would have affected, discharged or diminished the Guarantor's liability to the Beneficiary or the Beneficiary’s rights, powers and remedies with respect to the Guarantor or would have otherwise provided a defence to the Guarantor (in each case, in whole or in part), including—

(a) the insolvency, liquidation, or dissolution of the Debtor or any other person, the appointment of any receiver, manager, inspector, trustee, statutory manager, or other similar person in respect of the Debtor or any other person, or any change in the Debtor’s status, function, control, or ownership; and

(b) any of the Obligations, or the obligations of any person under any security or guarantee held in relation to any of the Obligations, being or becoming in whole or in part void, voidable, defective, illegal, invalid, or unenforceable in any respect or ranking after any other security; and

(c) any time, credit or other indulgence or other concession being granted or agreed to be granted by the Beneficiary to, or any composition or other arrangement made with or accepted from, the Debtor in respect of any of the Obligations or the obligations of any person under any security or guarantee held in relation to the same; and

(d) any variation of the terms of any of the Obligations or of any security or guarantee (including under this Deed) held in relation to the same; and

(e) any failure to realise or fully realise the value of, or any release, discharge, exchange, or substitution of, any security or guarantee held in relation to any of the Obligations; and

(f) any failure (whether intentional or not) to take, fully take or perfect any security now or in the future agreed to be taken by the Beneficiary in relation to any of the Obligations; and

(g) any other act, event or omission that, but for this clause 2.2, would or might operate or discharge, impair, or otherwise affect any of the obligations of the Guarantor under this Deed or any of the rights, powers, or remedies conferred upon the Beneficiary by the rules or by law.

2.3 If any payment to the Beneficiary under this Deed is avoided by law, the Guarantor’s obligation to make the payment will not be affected, discharged, or diminished, and the Guarantor must on demand indemnify the Beneficiary against all costs sustained or incurred by the Beneficiary as a result of it being required for any reason to refund all or part of any amount received or recovered by it in respect of such payment and must in any event pay to the Beneficiary on demand the amount so refunded by it. The Beneficiary and the Guarantor will, in any such case, be deemed to be restored to the position in which each would have been and will be entitled to exercise the rights they respectively would have had if that payment had not been made.

2.4 After a demand has been made by the Beneficiary under this Deed, and so long as the Guarantor is under any actual or contingent liability under this Deed, the Guarantor must not—

(a) exercise in respect of any amount paid by the Guarantor under this Deed any right of subrogation or any other right or remedy that the Guarantor may have in respect of such amount paid; or

(b) except with the Beneficiary’s consent in writing, claim or receive payment of any other moneys for the time being due to the Guarantor by the Debtor or exercise any other right or remedy that the Guarantor may have in respect of the same; or

(c) unless so required by the Beneficiary, prove in the liquidation of the Debtor in competition with the Beneficiary for any moneys owing to the Guarantor by the Debtor on any account.

Any moneys obtained by the Guarantor from the Debtor with such consent or as so required or in breach of this clause must, in each case, be held by the Guarantor upon trust to pay such moneys to the Beneficiary in or towards discharge of the Guarantor’s obligations under this Deed.

2.5 Any moneys received by the Beneficiary that may be applied in or towards discharge of any of the obligations of the Guarantor under this Deed must be regarded as a payment in gross so that, in the event of the liquidation of the Guarantor, the Beneficiary may prove in the liquidation for the whole of such moneys.

3. Representations and warranties

The Guarantor represents that—

(a) it is duly incorporated and validly existing under the laws of the jurisdiction in which it was incorporated, capable of suing and being sued and has the power to enter into and perform this Deed, and has taken all necessary corporate action to authorise it to enter into, execute, deliver, and perform its obligations under this Deed; and

(b) its entry into, execution, delivery, and performance of this Deed will not contravene any law or regulation to which the Guarantor is subject or any provision of its constitutional documents and all things (including the obtaining of consents) requisite for such entry, execution, delivery, and performance have been taken, fulfilled, and done, and are in full force and effect; and

(c) no obligation of the Guarantor under this Deed is secured by, and the execution, delivery and performance of this Deed will not result in the existence of, or oblige it to create, any mortgage, charge, pledge, lien or other encumbrance over any of its present or future revenues or assets; and

(d) the execution, delivery of and performance of the Guarantor’s obligations under this Deed will not cause the Guarantor to be in breach of or in default under any agreement binding on the Guarantor or any of its assets and no material litigation or administrative proceeding before any court or governmental authority is pending or (so far as the Guarantor knows) threatened against the Guarantor or any of its assets which, if decided against the Guarantor, would have a material adverse effect on the ability of the Guarantor to meet any or all of the obligations in this Deed.

4. Payments

All payments to be made by the Guarantor to the Beneficiary under this Deed must be made without set-off or counterclaim and without any deduction or withholding. If the Guarantor is obliged by law to make any deduction or withholding from any such payment, the amount due from the Guarantor in respect of such payment will be increased to the extent necessary to ensure that, after the making of such deduction or withholding, the Beneficiary receives a net amount equal to the amount the Beneficiary would have received had no such deduction or withholding been required to be made.

5. Continuing security

This Deed will be a continuing security to the Beneficiary in respect of each Obligation and must not be (or be construed so as to be) discharged by any intermediate discharge or payment of or on account of the Obligations or any settlement of accounts between the Beneficiary and the Debtor or anyone else.

6. Cancellation

[Despite anything else in this Deed, the Guarantor may at any time pay to the Beneficiary the Maximum Amount less any amount or amounts the Guarantor may previously have paid under this Deed or such lesser sum as the Beneficiary may require. Upon payment of that sum, this Guarantee shall be cancelled and the Guarantor shall have no further liability.]

[Note: Guarantor to elect either this clause or the following clause as a method of cancellation.]

[The Guarantor may cancel this Deed by giving 90 days’ notice in writing to the Beneficiary. Following cancellation of this Guarantee, the Guarantor remains liable for any Obligations incurred before the effective date of cancellation but shall not be liable for any Obligations incurred after that date.]

7. Assignment

This Deed may be assigned by the Beneficiary without the Guarantor’s consent. It will bind the successors and assigns of the Guarantor.

8. Notices

8.1 Any demand made on the Guarantor by the Beneficiary under this Deed must be in writing and delivered to the registered office of the Guarantor or to any other address in New Zealand from time to time notified by the Guarantor to the Beneficiary in writing.

8.2 The Guarantor must immediately notify the Beneficiary of any change in the above address.

9. Costs and expenses

The Guarantor indemnifies the Beneficiary for all costs and expenses (including legal fees and any taxes or duties) incurred by the Beneficiary in the enforcement and protection of its rights under this Deed.

10. Governing law

This Deed is governed by New Zealand law, and the Guarantor irrevocably submits to the non-exclusive jurisdiction of the courts of New Zealand.

[insert execution block for Guarantor]

Schedule 14A.3: replaced, on 1 November 2018, by clause 111 of the Electricity Industry Participation Code Amendment (Code Review Programme) 2018.