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GUARANTEE

Guarantee Agreement

GUARANTEE | Document Parties: ESI TRACTEBEL FUNDING COR | FPL GROUP CAPITAL INC | Public Service Electric and Gas Company You are currently viewing:
This Guarantee Agreement involves

ESI TRACTEBEL FUNDING COR | FPL GROUP CAPITAL INC | Public Service Electric and Gas Company

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Title: GUARANTEE
Governing Law: New York     Date: 3/24/2004

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Exhibit 10.57



GUARANTEE



THIS GUARANTEE
(this " Guarantee "), dated as of December 23, 2003, is made by FPL GROUP CAPITAL INC, a Florida corporation (the " Guarantor "), in favor of Public Service Electric and Gas Company, a New Jersey corporation (the " Guaranteed Party "). Each of the Guarantor and the Guaranteed Party are sometimes referred to herein individually as a " Party " and collectively as the " Parties ".


W I T N E S S E T H :


WHEREAS , the Guaranteed Party has entered into an Amendment to Gas Purchase and Sales Agreement dated as of August 20, 2003 (the " Agreement "), with North Jersey Energy Associates, A Limited Partnership (the " Obligor "), an affiliate of the Guarantor, providing for, among other things, the supply of NJEA's total fuel requirements for the NJEA facility.


WHEREAS , in consideration for, and as inducement to, the Guaranteed Party's performance of the obligations set forth in the Agreement, Guarantor has agreed to provide this Guarantee to the Guaranteed Party.


NOW THEREFORE , in consideration of the foregoing, Guarantor hereby covenants and agrees as follows:


1. GUARANTEE . Subject to the terms herein, Guarantor hereby irrevocably and unconditionally guarantees to the Guaranteed Party, its successors and permitted assigns hereunder, the prompt payment when due of the obligations of Obligor (the " Obligations ") to the Guaranteed Party under the Agreement. This Guaranty shall constitute a guarantee of payment and not of collection. If Obligor fails to pay any Obligation in full when and as due in accordance with the terms of the Agreement, the Guarantor will pay in accordance with the terms hereof such Obligation directly for the Guaranteed Party's benefit promptly upon the Guaranteed Party's demand therefor in accordance with the provisions hereof. The Guaranteed Party may proceed against the Guarantor without any collection or other enforcement action against Obligor. This Guarantee extends to and includes all amendments or modifications of the Agreement which are agreed to in writing by Obligor and the Guaranteed Party. The liability of Guarantor under this Guaranty shall be subject to the following limitations:


(a) The maximum amount for which the Guarantor shall be liable hereunder and the maximum recovery from the Guarantor which may be collected pursuant to the provisions of this Guarantee, shall in no event exceed in the aggregate (whether in principal, interests, costs, expenses, attorney's fees or other sums due), Five Million Dollars ($5,000,000.00), less the aggregate amount theretofore paid by or on behalf of the Guarantor pursuant to the provisions of this Guarantee (as of the date of any determination thereof, the " Maximum Liability ").


(b) Guarantor's liability hereunder shall be and is specifically limited to payments expressly required to be made under the Agreement (even if such payments are deemed to be damages) as well as costs of collection and enforcement of this Guarantee (including attorney's fees) to the extent reasonably and actually incurred by the Guaranteed Party (all of which such liability in the aggregate will be subject to the limitation set forth in Section 1(a) above) but in no event shall Guarantor be subject hereunder to consequential, exemplary, equitable, loss of profits, punitive or tort damages, or, except to the extent specifically provided in the Agreement, any other damages.


2. TERM . This Guarantee shall become effective upon the Effective Date (as defined in the Agreement) and shall remain in full force and effect until the expiration or termination of Obligor's obligations under the Agreement in accordance with their terms and payment by Obligor of all amounts payable by Obligor thereunder, whether due before, on or after the date of such termination.


3. NATURE OF GUARANTEE . The Guarantor's obligations hereunder with respect to any Obligation shall not be affected by the existence, validity, enforceability, perfection, or extent of any collateral for such Obligations. The Guaranteed Party shall not be obligated to file any claim relating to the obligations owing to it if Obligor becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Guaranteed Party to exercise rights with respect to, or realize the benefit of, any such collateral shall not affect the Guarantor's obligations hereunder. If any payment to the Guaranteed Party with respect to any Obligation is rescinded or must otherwise be returned for any reason whatsoever, the Guarantor shall remain liable hereunder with respect to such Obligation as if such payment had not been made.


Notwithstanding any provision of this Guarantee to the contrary, the Guarantor shall be entitled to assert all rights and defenses that the Obligor may be entitled to under the Agreement, including, but not limited to, any setoff or counterclaims to which the Obligor is or may be entitled. Notwithstanding the preceding sentence, the liability of the Guarantor under this Guarantee shall not be affected because of the bankruptcy, insolvency, dissolution or liquidation of the Obligor or the lack of power or authority of the Obligor to enter into the Agreement and to perform its obligations thereunder.


4. DEMANDS AND NOTICE .


(a) The Guaranteed Party shall have the right to enforce this Guarantee against the Guarantor upon the occurrence of any failure by Obligor to pay any Obligations as and when due. The right of the Guaranteed Party to enforce this Guarantee shall be in addition to any other right to enforce the Agreement by actions taken against Obligor, any other guarantor or party, or by resort to any security held by the Guaranteed Party. In order to make a claim under this Guarantee, the Guaranteed Party must notify the Guarantor in writing of its demand that payment be made by the Guarantor (a " Payment Demand "), and the Guarantor shall, subject to the terms of this Guarantee, pay to the Guaranteed Party in the manner required by the Agreement the amount set forth in the Payment Demand notice within three (3) Business Days after the date of receipt of such Payment Demand notice by the Guarantor. The notice provisions set forth in this Section 4(a) shall not release or diminish the accrual of late payment interest owed under the Agreement as a result of nonpayment by Obligor thereunder.


(b) A Payment Demand shall identify the amount and the basis of the demand in reasonable detail, and shall specify that Obligor has failed to pay the Obligation that is the subject of the Payment Demand in full when and as due in accordance with the terms of the Agreement. Subject to the terms hereof, a Payment Demand conforming to the foregoing requirements shall be sufficient notice to the Guarantor to pay under this Gu


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