PSA PERFORMANCE SUPPORT AGREEMENT
This PSA PERFORMANCE SUPPORT AGREEMENT ("Agreement") is dated as of
August 5, 1997 and is made by and between NEW ENGLAND POWER COMPANY, a
Massachusetts corporation ("NEP"), and USGEN ACQUISITION CORPORATION, a
Delaware corporation ("Asset Purchaser"). This Agreement sets forth the terms
and conditions under which Asset Purchaser will make available certain
electric energy and capacity to NEP in order to assist NEP in performing its
obligations under a certain Power Sales Agreement between NEP and
__________________ dated _____________ (the "Commitment"), and NEP will
transfer to Asset Purchaser the economic benefits of the Commitment and Asset
Purchaser will undertake certain responsibilities for administering the
Commitment. This Agreement is being entered into in connection with the
transactions contemplated by the Asset Purchase Agreement, dated as of August
5, 1997, by and among NEP, The Narragansett Electric Company and Asset
Purchaser (the "APA"), under which NEP is selling its electric generation
business to Asset Purchaser.
1. This Agreement shall become effective on the Effective Date (as defined
in Section 11) and shall remain in effect until NEP has made payment to
Asset Purchaser of amounts owed pursuant to Section 3, below.
2. Commencing as of the Effective Date, Asset Purchaser agrees to provide
to NEP each month all electric capacity and energy necessary for NEP to
perform its obligations under the Commitment. All electric energy shall
be delivered to NEP at the point at which ____________ (the "Power
Buyer") takes delivery from NEP under the terms of the Commitment.
Asset Purchaser shall be responsible for making all arrangements
necessary, if any, for the transmission of such energy to such delivery
points.
3. Commencing as of the Effective Date, and in consideration of Asset
Purchaser's undertakings hereunder, NEP agrees to pay to Asset Purchaser
all amounts payable by Power Buyer under the Commitment. For purposes
of the first and last monthly payments due from NEP to Asset Purchaser
under this Agreement, energy payments shall be based on meter readings
taken on the first and last day, respectively, for which NEP has a
payment obligation under this Agreement and capacity payments shall be
based on the ratio of the number of days in the month for which NEP has
a payment obligation under this Agreement to the total number of days in
the month. At the request of Asset Purchaser, NEP shall direct Power
Buyer to make all payments due under the Commitment into such bank
account of Asset Purchaser as Asset Purchaser shall notify NEP of in
such request.
4. Effective as of the Effective Date, NEP hereby appoints Asset Purchaser
as its agent for purposes of administering the Commitment. Asset
Purchaser is authorized to take all actions that NEP may lawfully take
under the Commitment without further approval by NEP, including, without
limitation, initiating legal or other actions to enforce the obligations
of Power Buyer thereunder and calculating and rendering bills to the
Power Buyer on NEP's behalf; except that NEP's prior written consent
shall be required for (i) actions that materially affect the price
charged for or the quantity of power to be sold by NEP under the
Commitment and (ii) Commitment option exercises, term extensions and/or
amendments. NEP shall not unreasonably withhold such consent. NEP
agrees not to agree to any amendment of, or to waive any rights under,
the Commitment without Asset Purchaser's consent. Asset Purchaser and
NEP shall cooperate in maintaining such cost indices as is necessary for
NEP (or Asset Purchaser on NEP's behalf) to calculate the amount due
from Power Buyer under the Commitment.
5. Each party shall be entitled to indemnification under this Agreement to
the extent and in the manner set forth in Article X of the APA which is
hereby incorporated herein by reference.
6. NEP and Asset Purchaser agree to work cooperatively and use all
reasonable efforts to amend the Commitment and assign such amended
Commitment to Asset Purchaser so that NEP will be released of all
further liabilities and obligations under the Commitment and Asset
Purchaser will be directly under contract with the Power Buyer. Any
such amendment and assignment shall include all modifications necessary
to reflect the substitution of Asset Purchaser for NEP as the selling
party under the Commitment (including modification of Commitment price
indices, where appropriate) and to properly describe delivery point and
transmission system references made in the Commitment. It is intended
by the parties and a condition to the obligation of Asset Purchaser to
agree to any such Commitment amendment and assignment that such
Commitment amendment and assignment preserve the economic benefit and
other rights of the Commitment to the Asset Purchaser without increasing
the Asset Purchaser's obligations under the Commitment. NEP and Asset
Purchaser agree to execute all agreements and documents reasonably
requested by the other in connection with such Commitment amendment and
assignment. Where a complete assignment is not immediately feasible, the
parties shall work cooperatively to achieve such partial assignment of
rights and obligations as is consistent with the Commitment.
7. This Agreement and all rights, obligations, and performance of the
parties hereunder, are subject to all applicable Federal and state laws,
including, without limitation, the approval of the Federal Energy
Regulatory Commission, and to all duly promulgated orders and other duly
authorized actions of any governmental authority having jurisdiction.
8. This Agreement, the APA and any other agreement entered into by the
parties pursuant to the APA constitute the entire agreement between the
parties and supersedes all previous offers, negotiations, discussions,
communications and correspondence. This Agreement may be amended only
by a written agreement signed by the parties. The interpretation and
performance of this Agreement shall be according to and controlled by
the laws of The Commonwealth of Massachusetts.
9. This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any
party hereto, including by operation of law without the prior written
consent of the other party, nor is this Agreement intended to confer
upon any other person except the parties hereto any rights or remedies
hereunder. Notwithstanding the foregoing, (i) the Asset Purchaser may
assign all of its rights and obligations hereunder to any wholly owned
Subsidiary (direct or indirect) of PG&E Corporation and upon NEP's
receipt of notice from Asset Purchaser of any such assignment, the Asset
Purchaser will be released from all liabilities and obligations
hereunder, accrued and unaccrued, such assignee will be deemed to have
assumed, ratified, agreed to be bound by and perform all such
liabilities and obligations, and all references herein to Asset
Purchaser shall thereafter be deemed references to such assignee, in
each case without the necessity for further act or evidence by the
parties hereto or such assignee; provided, however, that no such
assignment and assumption shall release the Asset Purchaser from its
liabilities and obligations hereunder unless the assignee shall have
acquired all or substantially all of the Asset Purchaser's assets;
provided, further however, that no such assignment and assumption shall
relieve or in any way discharge PG&E Corporation from the performance of
its duties and obligations under the Guaranty dated as of the date of
this Agreement executed by PG&E Corporation; and (ii) the Asset
Purchaser or its permitted assignee may assign, transfer, pledge or
otherwise dispose of its rights and interests hereunder to a trustee or
lending institution(s) for the purposes of financing or refinancing the
Purchased Assets (as defined in the APA), including upon or pursuant to
the exercise of remedies under a financing or refinancing, or by way of
assignments, transfers, conveyances or dispositions in lieu thereof;
provided, however, that no such assignment or disposition shall relieve
or in any way discharge the Asset Purchaser or such assignee from the
performance of its duties and obligations under this Agreement. NEP
agrees to execute and deliver such documents as may be reasonably
necessary to accomplish any such assignment, transfer, conveyance,
pledge or disposition of rights hereunder so long as NEP's rights under
this Agreement are not thereby altered, amended, diminished or otherwise
impaired.
10. Subject to the provisions of Section 3 hereof, all payments required
under this Agreement shall be paid in cash by federal or other wire
transfer of immediately available funds to an account designated by the
party to receive the payment.
11. This Agreement shall be of no force and effect until the Effective Date.
If the APA shall have been terminated before the occurrence of the
Closing Date (as defined in the APA), this Agreement shall, without any
action of the parties hereto, terminate as of the time of the
termination of the APA. As used in this Agreement, "Effective Date"
shall mean the Closing Date (as defined in the APA).
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement on their behalf as of the date first
above written.
NEW ENGLAND POWER COMPANY
By:
Name:
Title:
USGEN ACQUISITION CORPORATION
By:
Name:
Title: