Northeast Utilities
Performance Guaranty of Select Energy, Inc.
All Requirements Power Supply Agreement with Boston Edison Company
This Performance Guaranty, dated November 30, 1998, of NORTHEAST
UTILITIES, a Massachusetts business trust ("Guarantor"), is for the benefit
of and delivered to Boston Edison Company, a Massachusetts corporation
("BECo").
Guarantor does hereby irrevocably guarantee, subject to the receipt of all
necessary regulatory approvals, the performance by its subsidiary SELECT
ENERGY, INC., a Connecticut corporation ("Select"), of all of its
obligations, including all payment obligations ("Guaranteed Obligations")
under the All Requirements Power Supply Agreement dated as of September 30,
1998 by and between Select, CL&P and BECo and the All Requirements Power
Supply Agreement dated as of October 5, 1998, as amended as of November 30,
1998, by and between Select, CL&P and BECo (collectively, the "Supply
Agreement"), at the times and in the manner provided therein. In addition,
Guarantor hereby agrees to pay any and all costs and expenses (including fees
and disbursements of counsel) incurred by BECo in enforcing any rights under
this Guaranty.
It is understood and agreed that Guarantor is not itself a public
utility or an energy marketer or broker and that its fulfillment of this
Performance Guaranty may take the form of arranging alternate capacity and
energy supply resources on terms that are comparable to those agreed to by
Select under the Supply Agreement, but at no greater cost or significantly
different terms to BECo than if Select had fully performed the Guaranteed
Obligations.
It is understood and agreed that BECo shall draw on any letter of credit
available to it furnished by Select to secure Select's obligations under the
Supply Agreement or withdraw amounts available to BECo in any escrow account
furnished by Select to secure Select's obligations under the Supply Agreement
prior to enforcing any rights under this Performance Guaranty.
Guarantor has obtained the approval of the Securities and Exchange Commission
under the Public Utility Holding Company Act of 1935 to enter into and
perform this Performance Guaranty.
This Performance Guaranty may only be assigned, amended or modified by a
writing signed by the parties hereto and is subject to, and its terms are
governed by and must be interpreted under the laws of the Commonwealth of
Massachusetts. No person, corporation or other entity may rely upon this
Performance Guaranty other than BECO.
No Trustee or shareholder of Guarantor shall be held to any liability
whatever for any obligation under this Performance Guaranty, and such
Performance Guaranty shall not be enforceable against any such Trustee in
their or his or her individual capacities or capacity. This Performance
Guaranty shall be enforceable against the Trustees of Guarantor only as such,
and every person, firm, association, trust or corporation having any claim or
demand arising under this Performance Guaranty and relating to Guarantor, its
shareholders or Trustee shall look solely to the trust estate of Guarantor
for the payment or satisfaction thereof.
Guarantor's obligation pursuant to this Performance Guaranty is an
unconditional guaranty of payment and performance and not of collectibility.
This Performance Guaranty shall remain in full force and effect until each
and all of the Guaranteed Obligations shall have been fully paid and
performed in accordance with the terms and provisions of the Supply
Agreement. Guarantor acknowledges that XXXx has entered into the Supply
Agreement in reliance on this Performance Guaranty being a continuing and
irrevocable agreement and Guarantor agrees that the Guaranteed Obligations
hereunder may not be revoked in whole or in part. BECo shall have no
obligation to assert any claim or demand or to enforce any remedy under the
Supply Agreement or to proceed first against Select or any other person or
entity, or resorting to any security or making of any effort to obtain
payment or performance by Select or any other person or entity. No delay or
omission by BECo to exercise any right under this Performance Guaranty shall
impair any right, nor shall it be construed to be a waiver thereof. No
waiver of any single breach or default under this Performance Guaranty shall
be deemed a waiver of any other breach or default.
The liability of Guarantor under this Performance Guaranty shall be absolute,
unconditional and irrevocable, irrespective of: (a) any change in time,
manner or place of payment of, or in any other term of, all or any of the
Guaranteed Obligations or any other amendment to, modification of, waiver of,
or any consent to departure from, the Supply Agreement, (b) any change in
ownership of Guarantor or Select; (c) any bankruptcy, insolvency, or
reorganization of, or other similar proceedings involving Guarantor or
Select; or (d) any other circumstances which might otherwise constitute a
legal or equitable discharge of a surety or guarantor. Guarantor represents
that it has discussed with its counsel the various defenses that may be
available to a guarantor or surety under law, and, to the fullest extent
permitted by law, Guarantor waives each and every defense (other than
payment) which may be available to it in respect of its obligations under
this Performance Guaranty and covenants that this Performance Guaranty will
not be discharged except by complete payment and performance of the
Guaranteed Obligations as provided above.
If a claim is made upon BECo at any time for repayment or recovery of any
amounts received by BECo from any source on account of any of the Guaranteed
Obligations and BECo pursuant to a court order and applicable law repays or
returns any amounts so received, then the Guarantor shall remain liable for
the amounts so repaid (such amounts being deemed part of the Guaranteed
Obligations) to the same extent as if such amounts had never been received by
BECo, notwithstanding any termination hereof or the cancellation of any
instrument or agreement evidencing any of the Guaranteed Obligations.
Guarantor, hereby irrevocably, unconditionally and expressly waives, to the
fullest extent permitted by applicable law, promptness, diligence, notice of
acceptance and other notice with respect to any of the Guaranteed Obligations
and this Performance Guaranty and any requirement that BECo protect, secure
or perfect any security interest or exhaust any right or first proceed
against Select or any other person or entity.
This Performance Guaranty shall be binding upon Guarantor and its successors
and permitted assigns and inure to the benefit of and be enforceable by BECo
and its successors and permitted assigns.
IN WITNESS WHEREOF, this Performance Guaranty has been executed by a duly
authorized officer of Guarantor as of the date first written above.
NORTHEAST UTILITIES, Guarantor
By:/S/Xxxxx X. Xxxxx
Title: Assistant Treasurer - Finance
Accepted:
Boston Edison Company
By:/S/Xxxxxxx X. Xxxxx
Title: Senior Vice President
