Exhibit 10.32

EXECUTION COPY

PURCHASE AND SALE AGREEMENT

by and between

SELECT ENERGY, INC.

and

AMERADA HESS CORPORATION

Dated as of May 1, 2006

   

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PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement (“Agreement”) dated as of May 1, 2006 (the
“Agreement Date”), is by and between Select Energy, Inc., a Connecticut
corporation (“Seller”), and Amerada Hess Corporation (or such other name as it
may be known by following the date hereof), a Delaware corporation (“Buyer,”
together with Seller, the “Parties,” and each separately being a “Party”).

RECITALS:

WHEREAS, Seller currently conducts the business of supplying retail electricity
and natural gas products and related services to commercial, industrial and
institutional customers in the New England, New York and Mid-Atlantic regions of
the United States through its own operations and the operations of Select Energy
New York, Inc. (“SENY”), a Delaware corporation and wholly-owned subsidiary of
Seller (the “Retail Business”);

WHEREAS, Seller desires to sell and Buyer desires to purchase the Retail
Business subject to the assumption of certain of the liabilities of Seller, all
upon the terms and subject to the conditions set forth in this Agreement; and

WHEREAS, Seller desires to engage Buyer to administer the Administered Contracts
(as defined below) and Buyer desires to accept such obligation, all upon the
terms and subject to the conditions set forth in this Agreement and in the
Administration Agreement (as defined below).  

NOW, THEREFORE, in consideration of the premises and mutual covenants set forth
herein, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:

ARTICLE I

DEFINITIONS

1.1

Definitions.

As used in this Agreement, the following terms shall have the meanings set forth
below.  All references to articles, sections, subsections, exhibits and
schedules herein shall be to those articles, sections, subsections, exhibits and
schedules of this Agreement, unless otherwise specified.

“Acquired Assets” has the meaning set forth in Section 2.1(a).

“Acquired Records” has the meaning set forth in Section 6.5.

“Administered Contract(s)” has the meaning set forth in Section 2.3(a).

“Administration Agreement” has the meaning set forth in Section 2.3(b).

   

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“AE/CC Commissions” means commissions paid to Seller’s regional account
executives and channel coordinators with respect to Contracts and pursuant to
the Commission Plan.  

“Affiliate” of a Person means a Person directly or indirectly controlled by,
controlling or under common control with the other Person.  For the purposes of
this definition, “control” means, when used with respect to any Person, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract, or otherwise, and the terms
“controlling” and “controlled” have correlative meanings.

“Agreement” has the meaning set forth in the introductory paragraph hereto,
together with the Schedules and Exhibits, as the same may be amended from time
to time.

  

“Agreement Date” has the meaning set forth in the introductory paragraph hereto.

“Allocations” has the meaning set forth in Section 6.3(m).

“Alternative Credit Support” has the meaning set forth in Section 2.2(d).

“Ancillary Documents” means the Bill of Sale, the Assignment and Assumption
Agreement, the Seller Guaranty and the certificates of Buyer and Seller to be
delivered at Closing.

“Applicable Law” means any statute, law, rule, or regulation, or judicial or
administrative interpretation thereof, any judgment, decision, order, consent
order, stipulated agreement, ordinance, writ, injunction, or decree of, any
Governmental Entity to which a specified Person or property is subject.

“Assignment and Assumption Agreement” mean an assignment and assumption
agreement in the form of Exhibit A.

“Assumed Liabilities” has the meaning set forth in Section 2.1(c).

“Attribute Law Requirements” has the meaning set forth in Section 6.20.

“Attribute Laws” means those Applicable Laws in effect from time to time
requiring (a) the disclosure of the fuel source, emissions and/or other
attributes of the generation used in providing electric service to retail
customers, (b) the inclusion of specified amounts of generation with particular
attributes in the generation used in providing electric service to retail
customers, and/or (c) that generation falling within specified emission limits
be used to serve retail customers.

“Back-to-Back Agreement” means the agreement provided for in Section 2.4, the
form of which, if entered into by the Parties as contemplated in this Agreement,
will be negotiated in good faith by the Parties as provided herein.

   

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“Backed Transactions” has the meaning set forth in Section 2.4(a).

“Bankrupt” means the condition of being subject to voluntary or involuntary
bankruptcy, insolvency, receivership, conservatorship or like proceedings
(including the takeover of a party by an applicable regulatory agency) pursuant
to Applicable Law.

“Base Annualized Volume” means the total volume for a twelve (12) month period,
generally calendar year 2005, or the most recent such period on the Schedule
Updates, or the best estimate therefor agreed by the Parties, for each of the
retail service Customers of Seller and SENY as of March 6, 2006.

 

“Billing and Marketing Representative Agreements” means contracts with Persons
representing either Seller or SENY or Counterparties in brokering agreements for
Power or Gas, and pursuant to which such Persons are paid a specified fee in
accordance with the terms of such contracts as a result of a completed
transaction.

   

“Bill of Sale” means a bill of sale in the form of Exhibit B.

  

“Broker Fees” means fees payable to brokers, marketing representatives,
aggregators and other similar Persons under the Contracts.

“Business Day” means any calendar day, excluding Saturdays and Sundays and any
other days on which banks in Hartford, Connecticut are permitted or required to
close.

“Buyer” has the meaning set forth in the introductory paragraph hereto.

“Buyer’s Closing Conditions” has the meaning set forth in Section 7.2.

“Buyer Indemnified Parties” has the meaning set forth in Section 9.2.

“Buy Out Amount” has the meaning set forth in Section 6.24.

“Buyer Regulatory Approvals” means those consents, approvals, orders or
authorizations of, or registrations, declarations or filings with, all
Governmental Entities required in connection with the execution, delivery or
performance hereof by Buyer set forth on Schedule 1.1(o).

“Cancels/Rebills” means any adjustment, true-up and/or other settlement issued
by any LDC, Pipeline Administrator, System Operator and/or Counterparty.

“Closing” has the meaning set forth in Section 5.1.

“Closing Conditions” means, collectively, the Seller’s Closing Conditions and
Buyer’s Closing Conditions, as defined in Sections 7.1 and 7.2, respectively.

“Closing Date” has the meaning set forth in Section 5.1.

   

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“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.

“Code” means the United States Internal Revenue Code of 1986, as amended.

“Commercially Reasonable Efforts” mean efforts which are reasonably within the
contemplation of the Parties at the Agreement Date and which do not require the
performing Party to expend any funds other than expenditures that are customary
and reasonable in nature and amount in transactions of the kind and nature
contemplated by this Agreement in order for the performing Party to satisfy its
obligations hereunder or otherwise assist in the consummation of the
transactions contemplated by this Agreement.

“Commission Plan” means collectively the Seller’s 2003, 2004 and 2005 Retail
Sales Commission Plan for Regional Account Executives and Channel Coordinators,
copies of which Buyer acknowledges it has received from Seller.

“Competitive Business” has the meaning set forth in Section 6.24.

“Confidentiality Agreement” means the confidentiality agreement by and among
Buyer, Seller and SENY dated November 22, 2005.

“Consent to Assignment and Release” means the assignment of a Contract to Buyer
and the release of Seller and its Affiliates from all Liabilities related
thereto, in a form or forms mutually acceptable to Seller and Buyer.

“Contracts” means the Select Contracts and SENY Contracts, collectively.

  

“Counterparty” means a party, other than Seller or its Affiliates, to a
Contract.

“Credit Rating” has the meaning set forth in Section 2.2(d).

“Customer” means the Counterparty to a Contract for the retail sale of Power or
Gas.

“Damages” means suits, actions, legal or administrative proceedings,
arbitrations, claims, payments, charges, judgments, assessments, Liabilities,
obligations, orders, damages, Taxes, penalties, losses, fees, fines, alternative
compliance payments or costs and expenses, paid or incurred by a Person seeking
recovery hereunder, including any legal, consulting or other expenses reasonably
incurred in connection therewith.

“Divestiture Period” has the meaning set forth in Section 6.24.

"Dollars" or "$" means United States Dollars.

“Downgrade Event” shall mean any event resulting in either Buyer or Seller
Guarantor having a Credit Rating of less than Baa3 from Moody’s and  BBB- from
S&P.

   

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“Elections” has the meaning set forth in Section 6.3(m).

“Encumbrances” means liens, pledges, licenses to third parties, leases, rights
of first refusal, options to acquire, mortgages, deeds of trust and security
interests.

 

“Enhanced Severance” means with respect to a Hired Employee an amount equal to
(a) two (2) weeks of salary (based on such Person's base salary immediately
preceding severance and paid bi-weekly) for each full year of service of such
Person with Seller and Buyer, measured as continuous service in the case of any
year in which such Person was employed by both Seller and Buyer, subject to a
minimum of twelve (12) weeks and a maximum of fifty-two (52) weeks of such
salary, less applicable federal, state, Social Security and Medicare Tax
withholdings, (b) payment of such employee’s payments for the employee and any
applicable dependents of the employee (other than co-pay and deductibles)
pursuant to COBRA for a period of six (6) months following termination, and (c)
the provision of outplacement services of duration and of a nature consistent
with Seller’s and its Affiliates’ practices with respect to the divestiture of
their respective competitive businesses.

 

“Exhibit” means an exhibit to this Agreement.

“Excluded Assets” has the meaning set forth in Section 2.1(b).

“Excluded Liabilities” has the meaning set forth in Section 2.1(d).

“FERC” means the Federal Energy Regulatory Commission, or its regulatory
successor, as applicable.

“Financial Transmission Rights” means financial transmission rights as defined
in the applicable Market Rules and Procedures.

“Gas” means natural gas procured under certain Sourcing Contracts or SENY
Contracts, or supplied to Customers under certain Retail Service Contracts or
SENY Contracts, and related natural gas pipeline capacity, products, services
and storage.

“Governmental Entity” means any court or tribunal in any jurisdiction (domestic
or foreign) or any federal, state, municipal or local government or other
governmental body, agency, authority (including any state attorney general’s
office or office of consumer protection), department, commission, board, bureau,
instrumentality, arbitrator or arbitral body (domestic or foreign).

“Hired Employee” has the meaning set forth in Section 6.13(a).

“Indemnified Person” has the meaning set forth in Section 9.5.

“Indemnifying Party” has the meaning set forth in Section 9.5.

   

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“Initial Employment Period” has the meaning set forth in Section 6.13(b).

“Initial MTM Adjustment” has the meaning set forth in Section 2.2(c)(i).

“Interim Period” means the period between the date of relevant initial Schedules
and the Closing Date.

“IRS” means the United States Internal Revenue Service, or its successor, as
applicable.

“LDCs” means the local distribution companies that distribute Power or Gas to
Customers.

“LDC Obligations” means those obligations to meet LDC Rules that Seller and/or
SENY is responsible for under, or in connection with, the Contracts or the
requirements of any Governmental Entity.

“LDC Pools” means pools established by LDCs with respect to the distribution of
Gas to retail customers.

“LDC Rules” means all criteria, rules, tariff provisions, standards, procedures,
manuals, business practices or other documentation, obligations or
understandings, as such may be amended, replaced, modified, or otherwise changed
from time to time, that are applied by any  LDC.

“Liability” or “Liabilities” means all indebtedness, obligations, duties and
other liabilities, whether absolute, accrued, contingent, fixed or otherwise,
whether known or unknown, whether asserted or unasserted, whether liquidated or
unliquidated, or whether due or to become due, including any charges, fees,
Taxes, assessments, adders, surcharges, or awards of Damages imposed or
authorized by any Governmental Entity, LDC, System Operator and/or  Pipeline
Administrator.

“Load Obligations” means electrical load that Seller is responsible for under
the Contracts and under the applicable Market Rules and Procedures, LDC Rules
and/or the requirements of any Governmental Entity with respect to electrical
load.

“Market Rules and Procedures” means all criteria, rules, tariff provisions,
standards, procedures, manuals, business practices or other documentation,
obligations or understandings, as such may be amended, replaced, modified, or
otherwise changed from time to time, that are applied by an electric power pool,
independent system operator, regional transmission organization or other similar
entity applicable to the Retail Business (including the Contracts) and
obligations associated therewith.

“Marks” has the meaning set forth in Section 6.11.

   

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“Master Agreements” means those agreements used in the natural gas and electric
power industries that provide generic terms and conditions under which specific
transactions can be documented and confirmed by the parties to such
transactions.  Such agreements include the North American Energy Standards
Board, Inc. and Gas Industry Standards Board, Inc. Base Contracts, the Edison
Electric Institute, Inc. Master Power Purchase and Sale Agreement, and the
International Swaps and Derivatives Association, Inc. Master Agreement.

“Material Adverse Effect” means (a) any material adverse change, event, effect
or occurrence arising or occurring after the Agreement Date, or for a change or
event, if arising before the Agreement Date, such change or event, not being
known to the Parties or reasonably susceptible to discovery, and with effects
occurring after the Agreement Date with respect to the Acquired Assets, Seller
or to Buyer, as the case may be, that prevents, or can reasonably be expected to
prevent the consummation of the transactions contemplated by this Agreement and
for which there is no monetary remedy set forth in this Agreement, or (b) the
cessation prior to the Closing of all or substantially all of the operations of
the Retail Business by Seller and SENY as a going concern; provided, however,
that Material Adverse Effect shall not include any change, event, effect or
occurrence (or changes, events, effects or occurrences taken together) that
results from economic factors affecting the economy as a whole or generally
affecting the international, national, regional or local wholesale or retail
electric or gas industry as a whole or which does not affect the Contracts or
the Parties in any manner or degree significantly different than the industry as
a whole, including: (i) changes in the Retail Business, including the failure to
consummate new sales (including renewals of existing Retail Service Contracts
and/or SENY Contracts) in a manner consistent with past performance and/or the
taking of any action and/or the exercise of any rights by any Counterparty that
could adversely affect the relationship with such Counterparty, including the
ability to continue doing business with such Counterparty; (ii) changes in
markets for electric power, natural gas or fuel, including changes in market
design and pricing (including the introduction of locational-based capacity
requirements), (iii) changes resulting from or associated with acts of war or
terrorism; (iv) changes (individually or taken together) in the North American,
national, regional or local electric transmission systems or operations thereof;
(v) weather generally or natural disasters and the effects thereof; or (vi)
Seller’s failure or delay in collecting from Counterparties any reimbursements
for billing determinant and other cost recoveries in respect of LDC and System
Operators charges levied on Seller related to regulatory changes; and provided,
further, that any change, event, effect or occurrence that is cured prior to the
Closing shall not be a Material Adverse Effect.

 

“Moody's” means Moody’s Investor Services, Inc.

“MTM Adjustment” has the meaning set forth in Section 2.2(c)(i).

“Name Use License” has the meaning set forth in Section 6.11.

“Non-Compete Term” has the meaning set forth in Section 6.24.

“NU” means Northeast Utilities, a Massachusetts business trust.

   

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“NU Guarantee” means any guarantee of payment or performance or other direct or
indirect assurance or undertaking, in each case provided by or on behalf of
Seller and/or SENY by NU under, or in connection with, any Contract, whether in
the form of a written guaranty, letter of credit, performance bond, deposit, as
a direct signatory party or otherwise, including those undertakings set forth on
Schedule 1.1(n).  

“Other Select Agreements” means those contracts and agreements of Seller as of
the date specified in, and that are listed on, Schedule 1.1(l).

“Owed” has the meaning set forth in Section 10.1.

“Partner Agreements” means those agreements as of the date specified in, and
that are listed on or attached to, Schedule 1.1(b).

  

“Party” and “Parties” has the meaning set forth in the introductory paragraph
hereto.

“Permits” means licenses, approvals, consents, franchises, authorizations,
clearances and other permits of, to, from or with, any Governmental Entity.

“Permitted Encumbrances” has the meaning set forth in Section 3.8.

“Person” means any individual, corporation, partnership, joint venture, trust,
limited liability company, unincorporated organization, Governmental Entity,
Pipeline Administrator, System Operator, LDC or other entity.

“Pipeline Administrator” means each administrator of natural gas pipelines for
the transportation of wholesale natural gas.

“Pipeline Obligations” means those obligations, including those imposed by
Pipeline Administrators and/or any Governmental Entity and those under LDC
Rules, associated with storage, transportation and delivery of Gas (including
nominating and balancing).

“Power” means all electric energy, capacity (including locational capacity or
any other capacity market design change approved by the FERC and implemented
subsequent to the Closing Date), related ancillary services (including operating
reserves and locational forward reserves) and any other electricity products
(including renewable and/or green energy attributes) and services required, or
determined to be required, to be supplied or purchased under the Administered
Contracts.  The term Power shall include all requirements electric service to
retail customers.

“Prime Rate” means the rate of interest as publicly announced from time to time
by Bank of America as its prime rate as stated on the date of the applicable
interest calculation.

“Program Agreements” means contracts between Seller and organizations with a
membership pursuant to which such organizations endorse Seller to members of
such organizations as a supplier of electric power, natural gas and/or related
products and services.

 

   

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“Proprietary Information” means, with respect to Seller, Seller’s valuation

methodologies, credit and/or risk management policies, legal analysis, work
product or advice, modeling, and other proprietary records and information
relating to Seller’s business activities.

“PUCs” has the meaning set forth in Section 6.18.

“Purchase Price” has the meaning set forth in Section 2.2.

“Receivables Proration Period” has the meaning set forth in Section 6.4(b).

“Reconciliation Period” has the meaning set forth in Section 6.4(d).

“Rejected Contracts” has the meaning set forth in Section 6.1(b).

“Renewable Energy Contracts” means those contracts of Seller related to the
procurement and/or performance of obligations under or with respect to the
Attribute Laws.

    

“Renewable Energy Credits” means those renewable energy credits, emission
credits and other attributes of generation used to demonstrate compliance with
Attribute Laws, including credits and certificates issued or accounted for in
any Tracking System.

  

“Representatives” has the meaning set forth in Section 10.13(a)(i).

“Required Disclosure” has the meaning set forth in Section 10.13(a)(ii).

“Restricted Persons” has the meaning set forth in Section 6.24.

“Retail Business” has the meaning set forth in the introductory paragraph
hereto.

“Retail Service Contracts” means contracts between Seller and Customers under
which Seller supplies Power and/or Gas at retail to the Customers.

    

“Retained Accounts Receivable” means (a) all accounts receivable of Seller
related to deliveries prior to the Closing Date, and (b) all accounts receivable
of SENY related to deliveries prior to the Closing Date, in each case including
any rights to reimbursement for any billing determinant and other cost
recoveries from Counterparties in respect of LDC and System Operators charges
related to deliveries prior to the Closing Date.

 

“Retained Syracuse Assets” has the meaning set forth in Section 6.19(e).

“S&P” means Standard & Poor’s Rating Group.

“Schedule” means a schedule to this Agreement, whether in hard copy or
electronic media.

   

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“Schedule Update” has the meaning set forth in Section 6.14(a).

“Securities Act” means the Securities Act of 1933, as amended.

“Select Contracts” means collectively the (a) Retail Service Contracts, (b) the
Sourcing Contracts (with respect to Seller only), (c) the Renewable Energy
Contracts, (d) the Sponsorship Contracts, (e) the Partner Agreements, (f) the
Transportation and Storage Agreements, (g) the Billing and Marketing
Representative Agreements (with respect to Seller only), (h) the Program
Agreements, and (i) the Other Select Agreements.

“Seller Intellectual Property” means the intellectual property of Seller
described on Schedule 1.1(m).

“Seller” has the meaning set forth in the introductory paragraph hereto.

“Seller’s Closing Conditions” has the meaning set forth in Section 7.1.

“Seller Group” has the meaning set forth in Section 6.3(i).

“Seller Guarantor” means NU.

“Seller Guaranty” means a guaranty in the form of Exhibit C.

“Seller Indemnified Parties” has the meaning set forth in Section 9.3.

“Seller’s Knowledge” means the actual knowledge of Seller’s Vice President,
Retail Sales and Marketing, its Managing Director, Power and Gas Operations and
all Directors in the Retail Business.

“Seller Regulatory Approvals” means those consents, approvals, orders or
authorizations of, or registrations, declarations or filings with, all
Governmental Entities required in connection with the execution, delivery or
performance hereof by Seller set forth on Schedule 1.1(p).

“SENY” has the meaning set forth in the introductory paragraph hereto.

“SENY Assurances” has the meaning set forth in Section 6.6.

“SENY Contracts” means all of the contracts of SENY.

 

“SENY Shares” means the 10,000 shares of Common Stock, par value $1.00 per
shares, issued by SENY.

“Smith Barney Trades” means those transactions with Citigroup Global Markets,
Inc. (dba Smith Barney) listed on Schedule 1.1(i).

“Sourcing Contracts” means, collectively, the following contracts of Seller and
SENY (as applicable): (a) transaction confirmations under which Seller procures
and otherwise transacts

   

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for Power and Gas at wholesale to serve Customers; (b) the Financial
Transmission Rights; and (c) the Smith Barney Trades.

    

“Sponsorship Contracts” means the Contracts pursuant to which Seller sponsors
certain activities and organizations for promotional purposes.

 

“Storage Gas Locations” means the locations listed on Schedule 6.23 with respect
to stored Gas owned by Seller and SENY, as the case may be.

“Supplemental MTM Adjustment” has the meaning set forth in Section 2.2(c)(i).

“System Operator” means the operator of a transmission system for electric power
and related products and services , and the administrator of regional market
settlement systems for electric power and related products and services as
provided for under applicable Market Rules and Procedures.

“Tax” or “Taxes” means all taxes, however denominated, including any interest,
penalties or other additions to tax that may become payable in respect thereof,
imposed by any Taxing Authority, which taxes shall include all income or profits
taxes (including federal income taxes, state income taxes and any liability for
the payment of any combined or consolidated tax), gross receipts taxes, sales
taxes, use taxes, real property gains or transfer taxes, ad valorem taxes,
property taxes, value-added taxes, franchise taxes, production taxes, severance
taxes, windfall profit taxes, withholding taxes, payroll taxes, employment
taxes, social security, excise taxes and other obligations of the same or
similar nature to any of the foregoing, whether disputed or not.

“Tax Audit” has the meaning set forth in Section 6.3(e).

“Taxing Authority” means any Governmental Entity exercising any authority to
impose, regulate, levy, assess or administer the imposition of any Tax.

“Tax Items” means all items of income, gain, loss, deduction and credit or other
items.

“Tax Returns” shall mean any report, return, information statement or return,
payee statement, notice, form, or other document or information required to be
provided to any Governmental Entity, with respect to Taxes, including any return
of an affiliated, combined or unitary group.

“Territory” means the District of Columbia, the states of Connecticut, Delaware,
Maine, Maryland, New Hampshire, New Jersey, New York, and Rhode Island,  and the
commonwealths of Massachusetts and Pennsylvania.

“Threshold” has the meaning set forth in Section 9.4(d).

“Tracking Systems” means the New England Power Pool Generation Information
System, the PJM Environmental Information Services Generation Attributes
Tracking System, any successor to either such system, and any other system that
generates and/or accounts for

   

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Renewable Energy Credits in any jurisdiction in which Seller or SENY has any
Attribute Law Requirements.

 

“Transportation and Storage Agreements” means contracts for transportation and
storage capacity with respect to Gas.  

ARTICLE II

PURCHASE AND SALE OF THE RETAIL BUSINESS

2.1

Agreement to Purchase and Sell the Acquired Assets; Assumption of Certain
Liabilities.  Upon the terms and subject to the conditions of this Agreement,
Seller agrees to sell, assign, transfer, convey and deliver, or cause to be
sold, assigned, transferred, conveyed and delivered, to Buyer and Buyer agrees
to purchase and acquire all of the Acquired Assets  and to assume the Assumed
Liabilities on the Closing Date.

(a)

Acquired Assets.  The “Acquired Assets” consist of all of the rights, title and
interests of Seller and its Affiliates in and to the following assets as
existing on the Closing Date:

(i)

all Select Contracts to the extent contained in Schedules 1.1(a), 1.1(b),
1.1(c), 1.1(d), 1.1(e), 1.1(i), 1.1(j), 1.1(k) and 1.1(l);

(ii)

the SENY Shares;

(iii)

all claims of Seller against third parties relating to the Acquired Assets or
Assumed Liabilities, whether known or unknown, fixed or contingent, but only to
the extent relating to periods occurring on and after the Closing Date;

(iv)

the Seller Intellectual Property;

(v)

subject to and in accordance with Section 6.4, all rights of Seller relating to
deposits and other performance assurance provided by Customers to Seller in
connection with Retail Service Contracts (other than Administered Contracts)
relating to periods occurring on and after the Closing Date; and

(vi)

subject to Section 6.5(b), the Acquired Records.  

(b)

Excluded Assets.  Notwithstanding anything in this Agreement to the contrary,
Buyer shall not acquire and shall have no rights as a result of this Agreement,
the Bill of Sale or the Assignment and Assumption Agreement, to any assets,
rights, title, benefits, privileges or interests of Seller and its Affiliates
other than the Acquired Assets (collectively, the “Excluded Assets”), which are
not part of the purchase and sale contemplated hereunder. The Excluded Assets
are excluded from the Acquired Assets and shall remain the property of Seller
after the Closing. The Excluded Assets include the following:

   

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(i)

all trade credits and all accounts payable, instruments and general intangibles
attributable to the Select Contracts and existing or accrued with respect to any
period of time prior to the Closing Date;

(ii)

all claims of Seller against third parties (including collections actions),
whether known, unknown, fixed or contingent, (A) relating to the Acquired Assets
or Assumed Liabilities, but only to the extent relating to periods occurring
prior to the Closing Date, including the claims set forth on Schedule
2.1(b)(ii), and (B) relating to the other Excluded Assets and Excluded
Liabilities;

(iii)

any proceeds, income or revenues, and any security or other deposits made or
accrued under the Select Contracts or attributable to any of the other Excluded
Assets; excluding, however, those deposits and other performance assurance
provided by Customers under Retail Service Contracts and included in the
Acquired Assets;

(iv)

the Administered Contracts;

(v)

the Rejected Contracts;

(vi)

the Retained Accounts Receivable; and

(vii)

the Retained Syracuse Assets.

(c)

Assumed Liabilities.  On the Closing Date, Buyer shall assume, satisfy and shall
agree to pay, perform or discharge all Liabilities of Seller and its Affiliates
related to, and/or arising from, the Acquired Assets (the “Assumed
Liabilities”), including:

(i)

all Liabilities of Seller and its Affiliates under the Select Contracts that are
assigned to Buyer at the Closing, accruing on and after the Closing Date;

(ii)

all Liabilities of Seller and its Affiliates under the Select Contracts that are
Administered Contracts and are subsequently assigned to Buyer following the
Closing, accruing on and after the Closing Date (in each case as such Select
Contracts are assigned, except as otherwise provided in (vii), (viii) and (ix)
below);

(iii)

all Liabilities of Seller and its Affiliates with respect to the Acquired Assets
other than Select Contracts and the SENY Shares, accruing on and after the
Closing Date;

(iv)

all Liabilities of Seller with respect to the SENY Shares;

   

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(v)

any trade accounts payable relating to the Acquired Assets (including accounts
payable under Sourcing Contracts assigned to Buyer) relating to periods on and
after the Closing Date;

(vi)

all Liabilities of Seller and its Affiliates for Cancels/Rebills directly or
indirectly issued with respect to any of the Acquired Assets (including the
Partner Agreements and the SENY Contracts) to the extent not an Excluded
Liability;

(vii)

subject to, and in accordance with, Section 6.13(d), all Liabilities of Seller
and its Affiliates for AE/CC Commissions with respect to the Contracts for
deliveries occurring on or after the Closing Date;

  

(viii)

all Liabilities of Seller and its Affiliates for Broker Fees under the Contracts
to the extent not an Excluded Liability; and

(ix)

all Liabilities of Seller and its Affiliates for fees and/or other payments to
Counterparties to the Program Agreements to the extent not an Excluded
Liability.

 

(d)

Excluded Liabilities.  Buyer shall not assume, satisfy or perform the following
Liabilities of Seller (the “Excluded Liabilities”):

(i)

except (A) as may otherwise be provided in the Administration Agreement, and (B)
the other provisions of this Agreement with respect to Administered Contracts,
any Liabilities of Seller to the extent such Liabilities are in respect of, or
arise from, the obligations to be performed during the period prior to the
Closing Date;

(ii)

any trade accounts payable related to the Acquired Assets (including accounts
payable under Sourcing Contracts assigned to Buyer) and resulting from periods
prior to the Closing Date;

(iii)

subject to, and in accordance with, Section 6.13(d), all Liabilities of Seller
for that portion of AE/CC Commissions associated with respect to Retained
Accounts Receivable or due to obligations after the Closing with respect to
non-Hired Employees (as described in Section 6.13(d));

(iv)

all Liabilities of Seller for that portion of Broker Fees due and payable with
respect to Retained Accounts Receivable;  

(v)

all Liabilities of Seller for that portion of fees and/or other payments to
Counterparties to the Program Agreements with respect to (A) Retained Accounts
Receivable to the extent that such fees and/or other payments are determined on
such basis; or (B) periods before the Closing Date to the extent that such fees
and/or other payments are determined based on time;

   

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(vi)

all Liabilities of Seller or its Affiliates for Cancels/Rebills relative to
periods prior to the Closing Date which Cancels/Rebills become known (A) within
one year after the Closing Date with respect to (x) the New York Independent
System Operator and (y) New England LDC seasonal reconciliations with respect to
Gas, and (B) six (6) months after the Closing Date with respect to all other
Cancels/Rebills;

(vii)

all Liabilities of SENY identified in Section 3.9 of the Seller’s Disclosure
Schedule with respect to Taxes arising from or related to the period prior to
Closing;

(viii)

all Liabilities of SENY with respect to periods prior to the Closing Date
related to (A) the UCC-1 financing statement in the State of Delaware (Filing
No. 42483552, filed on August 26, 2004) naming HSBC Bank USA, National
Association as the secured party, and (B) the UCC-1 financing statement in the
State of Delaware (Filing No. 52071307, filed on July 6, 2005) naming Orange and
Rockland Utilities, Inc. as the secured party; and

 (vii)

any Liabilities of Seller to Buyer arising under or pursuant to this Agreement.

2.2

Purchase Price; Payment.  

(a)

Purchase Price.  The consideration for the Acquired Assets shall be (i) Forty
Four Million Dollars ($44,000,000.00) (the “Purchase Price”) payable by Seller
to Buyer, as may be subsequently adjusted pursuant to Section 2.2(c), and (ii)
Buyer’s assumption of the Assumed Liabilities.  In the event that the Closing
does not occur until  July 31, 2006, the Purchase Price shall be Forty One
Million Dollars ($41,000,000.00), as may be subsequently adjusted pursuant to
Section 2.2(c), and in any event the applicable Purchase Price shall be paid in
accordance with Section 2.2(b) below.

(b)

Payment of Purchase Price.  Subject to the satisfaction or waiver of all
conditions contained herein, Seller shall pay the Purchase Price to Buyer by
wire transfer of immediately available United States funds in accordance with
Buyer’s instructions as follows:  (i) an amount equal to thirty-three percent
(33%) of the Purchase Price (rounded up to the nearest dollar) at the Closing;
(ii) an amount equal to thirty-three percent (33%) of the Purchase Price
(rounded up to the nearest dollar) no later than December 31, 2006; and, (iii)
the remaining unpaid Purchase Price no later than December 31, 2007; provided
that, if (x) Buyer repudiates this Agreement or the Administration Agreement; or
(y) Buyer has fraudulently, willfully or through failure to comply with
Applicable Laws committed a breach of a material obligation under this Agreement
or under the Administration Agreement for which all cure periods, if any, have
expired, or (z) there is a preliminary adjudication in Seller’s favor with
respect to an indemnification obligation of Buyer under either this Agreement or
the Administration Agreement for which Seller has demanded payment but payment
has not been made by Buyer, or (xx) there is a

   

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Downgrade Event for which Buyer has not posted Alternative Credit Support to
Seller, then Seller shall be entitled to retain a portion of the unpaid Purchase
Price equal to Damages that Seller determines in good faith it may be entitled
to as a result thereof, as collateral for Buyer’s obligations pending final
resolution of any such matter, provided that any such withheld Purchase Price
shall be paid to Buyer within five (5) Business Days after a cure, if any, has
been effected.

(c)

Purchase Price Adjustment.  The Purchase Price shall be adjusted as follows:  

(i)   A calculation of the mark-to-market of the Retail Service Contracts, SENY
Contracts for the retail sale of Power and Gas, Sourcing Contracts, Partner
Agreements, Transportation and Storage Agreements, and Renewable Energy
Contracts (including any termination or modification to such Contracts, but
excluding Contracts that expire in accordance with their terms prior to the
Closing Date) consummated prior to the Closing Date, but not included in the
applicable Schedules as of the Agreement Date, for both Power and Gas will be
performed in accordance with the methodologies set forth on Schedule 2.2(c)(i) –
Natural Gas and Schedule 2.2(c)(i) – Electricity.  The results of the foregoing
calculations shall be aggregated, producing a total mark-to-market adjustment to
the Purchase Price ("MTM Adjustment").  If the MTM Adjustment is negative, then
the Purchase Price paid by Seller shall be increased by such negative amount.
 If the MTM Adjustment is positive, then the Purchase Price paid by Seller shall
be reduced by such positive amount. Seller will provide Schedule Updates of such
Contracts two (2) Business Days prior to Closing pursuant to Section 6.14.  From
those Schedule Updates, Buyer will calculate and provide to Seller an initial
MTM Adjustment (“Initial MTM Adjustment”) on the Business Day prior to Closing.
 All values to be updated on Schedule 2.2(c)(i) – Natural Gas and Schedule
2.2(c)(i) – Electricity will be as of the close of business on the Business Day
prior to the Closing.    The Initial MTM Adjustment will be paid or credited, as
applicable, to the installment of the Purchase Price due at the Closing pursuant
to Section 2.2(b)(i).  For any Retail Service Contracts, SENY Contracts for the
retail sale of Power and Gas, Sourcing Contracts, Partner Agreements,
Transportation and Storage Agreements, and Renewable Energy Contracts subject to
the MTM Adjustment and not included in the Initial MTM Adjustment, Seller will
provide Schedule Updates of all such Contracts not reflected on the prior update
prior to the seventh (7th) Business Day following Closing, pursuant to Section
6.14.  Buyer will calculate and provide to Seller a supplemental MTM Adjustment
(“Supplemental MTM Adjustment”) one (1) Business Day following receipt of the
Schedule Update.  In calculating the Supplemental MTM Adjustment, the applicable
market prices used by Buyer shall be determined as of the close of business on
the Business Day immediately preceding the calculation date.  The Purchase Price
shall be adjusted in accordance with the foregoing based on such Supplemental
MTM Adjustment and such payment or credit, as applicable, will be paid by Seller
or Buyer within ten (10) days following receipt by Seller of the Supplemental
MTM Adjustment.  During the Interim Period,

   

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Seller agrees to use Commercially Reasonable Efforts to hedge with sourcing
positions (A) open electric basis positions in the Retail Business existing as
of March 6, 2006; and (B) transactions entered into or modified after March 6,
2006.  The Parties shall negotiate in good faith to resolve any differences in
the calculations made by Buyer in accordance with this Section 2.2(c)(i).  In
the event that the Parties are unable to resolve such differences, the
undisputed portion of applicable adjustment shall be paid or credited, as
applicable, in accordance herewith and the disputed portion shall be submitted
to an independent calculation agent, as mutually selected by the Parties, who
shall resolve the disputed calculations within twenty (20) days of submission to
such calculation agent and in which case the adjustment as determined by such
calculation agent shall be final and binding upon the Parties.  The payment or
credit, as applicable, shall include interest computed at the Prime Rate from
the date that such payment or credit was due until the date of payment.

(ii)   To the extent that the Closing occurs on either June 30, 2006 or July 31,
2006, the Parties agree to determine, in good faith, the amount of an adjustment
to the Purchase Price, proportionate to an allocation of Twenty Million Dollars
($20,000,000) for Gas Customers and Thirty Five Million Dollars ($35,000,000)
for Power Customers, applicable to a change by more than five percent (5%) in
the Base Annualized Volume for Gas or Power, as applicable.  To effect the
foregoing, an increase of more than five percent (5%) shall result in a
reduction in the Purchase Price paid by Seller based on such adjustment to such
allocation, while a decrease of more than five percent (5%) shall result in an
increase in the Purchase Price paid by Seller based on such adjustment to such
allocation; provided that the Purchase Price adjustment calculation shall apply
only to that portion of the change in Base Annualized Volume (whether the change
is an increase or a decrease) in excess of five percent (5%).   

 

(iii)  Any adjustments to the Purchase Price to be made in accordance with the
provisions of Section 6.23(b) shall be netted as an adjustment in Seller’s favor
against Seller’s payment to Buyer made in accordance with Section 2.2(b)(i)
above.  Any adjustments to the Purchase Price to be made in accordance with the
provisions of Section 6.6 and Section 6.19(f) shall be aggregated and netted as
an adjustment in Seller’s favor against Seller’s payment to Buyer made in
accordance with Section 2.2(b)(ii) above.  Any adjustment to the Purchase Price
to be made in accordance with the provisions of  Section 6.3(d) shall be added
to Seller’s payment to Buyer on the next applicable payment date provided in
Section 2.2(b) following determination of such adjustment, and if the Purchase
Price has been paid in full, as an independent payment from Seller to Buyer
following such determination.

(d)

Additional Assurances. In the event that either Seller Guarantor or Buyer
experiences a  Downgrade Event, then the other Party shall have the right to
demand in writing that credit support be provided (“Alternative Credit Support”)
in one of the following forms, to be elected by the Party providing the
Alternative Credit Support: (A)

   

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an irrevocable letter of credit in a form attached hereto as Schedule 2.2(d)
that shall be renewed annually and remain effective as long as there are any
outstanding obligations between the Parties; or (B) cash, in each case in an
amount determined by the Party demanding Alternative Credit Support in a
commercially reasonable manner.  Such Alternative Credit Support hereunder shall
be furnished to the requesting Party within five (5) Business Days after demand.
 The provision of Alternative Credit Support hereunder constitutes a “margin
payment” under the United States Bankruptcy Code.  “Credit Rating” shall mean
the rating assigned to the Buyer or Seller Guarantor or their respective
Guarantor by Moody’s and S&P for the senior long term unsecured debt not
supported by third party credit enhancement (other than by repayment of its
debt).  Any demand issued by a Party for Alternative Credit Support as a result
of a Downgrade Event shall be deemed to have occurred prior to the effective
date of such Downgrade Event.  In the event that the Credit Rating of Buyer or
Seller Guarantor is restored to a level that does not constitute a Downgrade
Event, then the Alternative Credit Support shall be returned within five (5)
Business Days after the written request therefor (accompanied by reasonable
evidence of such Credit Ratings).

(e)

Seller Additional Assurances.  On the Agreement Date, simultaneously with the
execution and delivery of this Agreement, Seller shall deliver to Buyer the
Seller Guaranty executed by the Seller Guarantor.

2.3

Provisions Regarding Administered Contracts.  

(a)

If (i) any of the Contracts is not assignable or transferable at the Closing by
virtue of the provisions thereof, or under Applicable Law without the consent of
a third party (including a Governmental Entity); (ii) the attempted assignment
of any of the Contracts at the Closing would be ineffective or would adversely
affect the rights and obligations of Seller under such Contract; (iii) any of
the Contracts is not assignable or transferable at the Closing without novation,
and/or (iv) any of the Contracts is assignable or transferable at the Closing,
whether by virtue of the provisions thereof, under Applicable Law and/or in
connection with a third party consent and/or novation, but such assignment or
transfer would not result in the release of Seller and its Affiliates from all
obligations thereunder (each of the foregoing being an “Administered Contract”),
then this Agreement and the related instruments of transfer shall not constitute
an assignment or transfer thereof or of any claim, right or benefit arising
thereunder or resulting therefrom, unless or until any such release, consent
and/or novation is obtained; provided, however, that Seller reserves the right,
in its sole discretion (A) in connection with the Closing (or, after the
Closing, pursuant to the Administration Agreement), to designate as an Acquired
Asset any Contract that would otherwise qualify as an Administered Contract
pursuant to clause (iv) of the definition thereof, and Buyer shall accept such
assignment of such Contract, and (B) to terminate prior to Closing any
Sponsorship Contract that Seller determines in its sole discretion would
otherwise become an Administered Contract as of the Closing Date.  

(b)

At the Closing, the Parties shall enter into an Administration Agreement in the
form of Exhibit D with respect to the Administered Contracts.

   

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(c)

Each Administered Contract shall automatically and without further action of the
Parties be assigned to Buyer and shall become an Acquired Asset upon Seller’s
receipt of a fully executed Consent to Assignment and Release, or upon a
novation of the Administered Contract under which all of the obligations of
Seller and/or its Affiliates are terminated, and to the extent not already
constituting Assumed Liabilities, all of  the Liabilities of Seller and its
Affiliates related to, and/or arising from, such Administered Contract accruing
on and after the Closing Date shall constitute Assumed Liabilities; accordingly,
such Administered Contract shall be governed pursuant to the terms of this
Agreement as if it had been transferred to Buyer as of the Closing Date.

2.4

Back-to-Back Agreement.

(a)

The Parties agree that if (i) a Consent to Assignment and Release, and/or (ii)
any Seller Regulatory Approvals and/or Buyer Regulatory Approvals, as
applicable, in each case with respect to a Sourcing Contract is not obtained
before the Closing, the Parties shall, unless mutually agreed otherwise, enter
into a Back-to-Back Agreement at the Closing in accordance with this Section 2.4
with respect to each such Sourcing Contract (collectively, the "Backed
Transactions").  

(b)

The Parties agree that the general terms and conditions of any Back to Back
Agreement entered into under this Section 2.4 shall be governed by the
applicable Master Agreement for the transactions contemplated under the Sourcing
Contract.  If the Parties do not have such a Master Agreement in place as of the
Agreement Date, the Parties shall execute and deliver such Master Agreement
simultaneously with the execution and delivery of the Back-to-Back Agreement.
 It is the intent of the Parties that the confirmations detailing the commercial
terms of any such Back to Back Agreement that is entered into by the Parties as
contemplated herein shall: (i) fully transfer to Buyer all of Seller’s risks
under the relevant Sourcing Contracts to the extent of the related Backed
Transactions, including risks of changes in the market(s) for Power and Gas,
future changes in the requirements, rules and procedures of System Operators,
Pipeline Administrators, LDCs and Governmental Entities and changes to the
interpretation and application of such requirements, rules and procedures, and
defaults by or disagreements with the Counterparties concerning application and
interpretation of such Backed Transactions related to periods after the Closing
Date; provided, however, that Seller shall not transfer either the obligation or
the right to post or receive, as applicable, margin or collateral under such
Sourcing Contracts as such rights and obligations shall be retained by Seller
under such Sourcing Contracts until such time as they are assigned; (ii) provide
to Buyer the full beneficial interest of the revenues to or from Counterparties
for Power and Gas products and performance of the contract obligations under the
relevant Backed Transactions during the term of the Back-to-Back Agreement; and
(iii) provide for an agency relationship in which Buyer acts as agent on behalf
of Seller with respect to the Backed Transactions, with the same general agency
authorizations and limitations and such other adjustments to applicable
covenants, representations, warranties and remedies to reflect that agency
relationship consistent with those set forth in the Administration Agreement.
 The Parties agree that any Back-to-Back Agreement entered into pursuant to

   

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this Agreement shall reflect this intent.  The Back-to-Back Agreement shall also
provide that any ambiguity concerning any provision of the Back-to-Back
Agreement relating to such risks or benefits or their interpretation or
application under future circumstances, regardless of whether such future
circumstances were contemplated by Parties, shall be interpreted in a way that
is consistent with this intent.    Further, the Parties agree that
indemnification and limitations on liability will be addressed in the
Back-to-Back Agreement in a manner consistent with the provisions of this
Agreement.  To the extent that any Master Agreement between the Parties needs to
be amended to accomplish the intent of this Section 2.4, the Parties shall
cooperate to make such amendments.

(c)

In the event that Seller and Buyer enter into the Back-to-Back Agreement, (i)
Buyer shall, as Seller’s agent, use Commercially Reasonable Efforts to pursue
(and Seller shall cooperate and provide assistance as reasonably requested by
Buyer) obtaining the Consents to Assignment and Release, and if outstanding,
Buyer Regulatory Approvals for each of the applicable Sourcing Contracts subject
to a Back-to-Back Agreement; and (ii) Seller shall continue to pursue (and Buyer
shall cooperate and provide assistance as reasonably requested by Seller)
obtaining, if outstanding, the Seller Regulatory Approvals for each of the
applicable Sourcing Contracts subject to a Back-to-Back Agreement.

(d)

At the time that the receipt of a Consent to Assignment and Release from the
relevant Counterparty, and/or the receipt of Seller Regulatory Approval and/or
Buyer Regulatory Approval, as applicable, with respect to any Sourcing Contract
under the Back-to-Back Agreement, the Parties shall cooperate and, as promptly
as practicable after receipt of such Consent to Assignment and Release and any
such outstanding approvals, execute such documents or instruments necessary to
effect the assignment of the relevant Sourcing Contract(s) in a manner
consistent with Section 6.17.  In addition, with respect to those Sourcing
Contracts subject to the Back-to-Back Agreement, the Back-to-Back Agreement
shall specify that it terminates with respect to such Sourcing Contracts and
related Backed Transactions upon such assignment to Buyer.

(e)

If the Parties have entered into a Back-to-Back Agreement, this Section 2.4
shall survive the Closing until the full performance of all obligations under
the Back-to-Back Agreement and the later of (i) the full performance and
termination of all of Backed Transactions in accordance with their respective
terms and without liability to Seller and its Affiliates, or (ii) the assignment
of all of the Backed Transactions in accordance with Section 2.4(d).

2.5

Allocation.  Seller shall prepare an allocation of the Purchase Price among the
Acquired Assets in accordance with the fair market value of such Assets and
deliver such allocation to the Buyer as soon as practicable after the Closing
Date, but in any event no later than forty five (45) days following such date.
Buyer shall timely and properly prepare, execute, file and deliver all such
documents, forms and other information as Seller may reasonably request to
prepare such allocation.  Buyer and Seller shall (i) agree upon this allocation
and set it forth in a writing signed by all parties as soon as practicable after
the Closing Date, but in any event no later than sixty (60) days following such
date; (ii)  report (and cause their respective Affiliates to report) the United
States tax consequences of the transactions contemplated herein,

   

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and in particular, the information required under § 1060(b) of the Code, in a
manner consistent with such allocation; (iii) not take any position inconsistent
with the allocation set forth in the writing described above in preparing
financial statements, returns, reports to shareholders or government authorities
or otherwise; (iv) not take any tax position inconsistent with such allocation
in connection with any refund claim, audit or returns, investigation,
administrative proceeding, litigation, or other civil or judicial proceeding in
respect to returns; and (v) each furnish the other with copies of all the Form
8594 (Asset Acquisition Statement Under Section 1060) filed with the IRS with
regard to this transaction by such party or any Affiliate thereof, pursuant to
§1060 of the Code, as a result of the consummation of the transactions
contemplated hereby, within thirty (30) days of the filing of such forms with
the United States.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer as of the Agreement Date, except as
otherwise set forth on Schedule 3 (the “Seller’s Disclosure Schedule”), as
follows:

3.1

Existence and Compliance with Applicable Law.  Seller (a) is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation; (b) is duly qualified to do business in those
jurisdictions in which it is necessary for the conduct of the Retail Business,
except for failures to so qualify which in the aggregate are not material to the
Retail Business, and (c) has all requisite corporate power and authority and the
legal right to own and operate its properties and to conduct the Retail Business
as currently conducted.

3.2

Power and Authorization; Conflicts.  Subject to receipt of the Seller Regulatory
Approvals, the execution, delivery and performance by Seller of this Agreement
and, upon execution and delivery to Buyer and each of the Ancillary Documents to
which Seller is a party, and the consummation by Seller of the transactions
contemplated hereby and thereby (a) are within Seller’s corporate powers and
authority, (b) have been duly authorized by all necessary corporate action on
the part of Seller, and, (c) do not and will not, with the passing of time or
the giving of notice or both, (i) contravene any of Seller’s or SENY’s
organizational documents, (ii) result in a material violation of any Applicable
Law, (iii) to Seller’s Knowledge require any consent, license, approval or
authorization of, or other action by, or any notice or filing with, any
Governmental Entity other than as set forth in Section 3.2 of the Seller’s
Disclosure Schedule, or (iv) result in the material breach, default or
termination of any agreement to which  Seller or SENY is a party or by which
Seller or SENY or any of their respective property is bound, which breach,
default or termination will materially and adversely affect Seller’s ability to
consummate the transactions contemplated by this Agreement or the Ancillary
Documents.

3.3

Enforceability.  This Agreement has been, and upon execution and delivery to
Buyer and each of the Ancillary Documents to which Seller is a party will have
been, duly executed and delivered by Seller.  This Agreement is, and upon
execution and delivery to Buyer and each of the Ancillary Documents to which
Seller is a party evidencing any obligation of

   

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Seller will be, the legal, valid and binding obligation of Seller, enforceable
against it in accordance with its terms, except where enforceability may be
limited or otherwise affected by bankruptcy, insolvency or other similar laws
affecting creditors’ rights generally and except where enforceability is subject
to the application of equitable principles or remedies.

3.4

Contracts; Validity.  The Select Contracts are legal, valid and binding
agreements of Seller, enforceable against Seller, in accordance with their terms
and, to Seller’s Knowledge, each Select Contract is a legal, valid and binding
agreement of each other party thereto, enforceable against such party in
accordance with its terms, except in each case where enforceability may be
limited or otherwise affected by Applicable Law, bankruptcy, insolvency or other
similar laws affecting creditors’ rights generally and except where
enforceability is subject to the application of equitable principles or
remedies. Except as set forth in Section 3.4 of the Seller’s Disclosure
Schedule:

(a)  Schedule 1.1(e) accurately sets forth in all material respects for each
Retail Service Contract for the sale of Power, the Counterparty, start date
(with deliveries starting before or during June 2006 indicated as June 1, 2006),
end date, delivery location and price charged to Customers excluding applicable
transaction Taxes and pass-through and other reimburseable costs (provided that
the variable portion of pricing information for Retail Service Contracts listed
as “COMPLEX” is set forth in the coordinate Retail Service Contracts, true and
correct copies of which, including the pricing mechanisms thereof, are attached
to Schedule1.1(e)).  Any actual usage for any such Retail Service Contracts
included in Schedule 1.1(e) accurately represents the historical billed volumes
invoiced by Seller to such Counterparty (indicated by an “A” in such Schedule).
 To Seller’s Knowledge, there are no material outstanding adjustments to such
historical billed volumes set forth on Schedule 1.1(e) that have not been
reflected in such data. Any historical usage for any such Retail Service
Contracts included in Schedule 1.1(e) accurately represents data obtained from
the applicable LDC (indicated by an “H” in such Schedule).

(b)  Schedule 1.1(e) accurately sets forth in all material respects for each
Retail Service Contract for the sale of Gas, the Counterparty, start date (with
deliveries starting before or during June 2006 indicated as June 1, 2006), end
date and delivery location.  For each Retail Service Contract for Gas, Seller
represents that the sum of the monthly price components set forth in Schedule
1.1(e), when applied to the related estimated contracted-for volumes as
weighting factors, accurately sets forth, in all material respects, the monthly
price charged to the applicable Customer (excluding applicable transaction Taxes
and pass-through and other reimbursable costs); provided, however, that (A) the
foregoing representation excludes pricing under Retail Service Contracts set
forth in their entirety in Schedule1.1(e), in which case Schedule1.1(e) includes
true and correct copies of such Retail Service Contracts, including the pricing
mechanisms thereof; (B) as projections, such estimated contracted-for volumes
are subject to the provisions of Section 9.6(c) such that Seller makes no
representation and warranty to such estimated contracted-for volumes for any
purpose whatsoever, other than their use as weighting factors in Seller's
pricing calculations; and (C) pricing periods reflect production months.  Any
actual usage for any such Retail Service Contracts included in Schedule 1.1(e)
accurately represents the historical billed volumes invoiced by Seller to such
Counterparty, except that actual usage for billing purposes reported by LDCs has
been adjusted as follows: (i)

   

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business meter level data was adjusted for losses to the citygate, using loss
factors provided by the applicable LDC; and (ii) usage data has been converted
into decatherms using industry standard british thermal units methodology to the
extent that an LDC reported such usage in other units of measurement (including
ccf). To Seller’s Knowledge, there are no material outstanding adjustments to
such historical billed volumes set forth on Schedule 1.1(e) that have not been
reflected in such data.

(c)   Schedule 1.1(i) accurately sets forth in all material respects for each
Sourcing Contract of Seller (excluding any such agreements that are SENY
Contracts, which agreements are included on Schedule 1.1(f) instead), the
Counterparty, start date (with deliveries starting before or during June 2006
indicated as June 1, 2006), end date, delivery location, price, peak volume or
off-peak volume (as applicable), block (as applicable) and contracted-for
volumes.

(d)  Schedule 1.1(q) sets forth in all material respects a complete and accurate
list of AE/CC Commissions for each Retail Service Contract listed on Schedule
1.1(e) and SENY Contract for the sale of retail Power and Gas listed on Schedule
1.1(f), in each case to the extent that such Contracts are subject to the
Commission Plan.

(e)  Schedule 1.1(a) sets forth in all material respects a complete and accurate
list of Broker Fees payable under the Billing and Marketing Representative
Agreements with respect to each Retail Service Contract listed on Schedule
1.1(e) and SENY Contract for the sale of retail Power and Gas listed on Schedule
1.1(f), in each case to the extent that such Contracts are subject to Billing
and Marketing Representative Agreements.

(f)   True and correct copies of the Other Select Agreements, including any
material amendments thereto are included in Schedule 1.1(l).

(g)  Schedule 1.1(b) accurately sets forth in all material respects for the
Partner Agreements with each of Agway Energy Services, Inc. and Strategic Power
Management, Inc., the start date (with deliveries starting before or during June
2006 indicated as June 1, 2006), end date, delivery location, price and
contracted for Power and/or Gas sales volumes (to the extent indicated as fixed
on Schedule 1.1(b)).  True and correct copies of the Partner Agreement,
including any amendments thereto, with IDT Energy, Inc. is included in Schedule
1.1(b); provided, however, that any Schedule Updates with respect to any
transactions under the Partner Agreement with IDT Energy, Inc. shall also
include representations as to the start date (with deliveries starting before or
during June 2006 indicated as June 1, 2006), end date, delivery location, price
and contracted for Power and/or Gas sales volumes (to the extent indicated as
fixed on any such Schedule Update).  There was no effective Partner Agreement
with Robison Energy, LLC as of March 6, 2006 that will remain in effect after
May 31, 2006.

(h)  True and correct copies of the Program Agreements of Seller (excluding any
such agreements that are SENY Contracts, which agreements are included on
Schedule 1.1(f) instead), including any material amendments thereto are included
in Schedule 1.1(c).

(i)  True and correct copies of the Renewable Energy Contracts, including any
material amendments thereto are included in Schedule 1.1(d).

   

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(j)  True and correct copies of the Sponsorship Contracts, including any
material amendments thereto are included in Schedule 1.1(j).

(k)  True and correct copies of the Transportation and Storage Agreements,
including any material amendments thereto are included in Schedule 1.1(k).

The foregoing representations are made with respect to the Schedules referenced
therein as of the Agreement Date with respect to the dates indicated thereon (if
applicable).

3.5

Absence of Certain Events.  Except as set forth in Section 3.5 of the Seller’s
Disclosure Schedule, as of April 11, 2006, neither Seller, nor to Seller’s
Knowledge any Counterparty to a Select Contract, is in material default under
any such Select Contract.  For purposes of the foregoing, a default under any
Retail Service Contract shall not constitute a material default unless (a) the
Customer to such Retail Service Contract has (i) repudiated such Retail Service
Contract in violation of the terms thereof, or (ii) failed to pay amounts due
under such Retail Service Contract for more than sixty (60) consecutive days
after the contractual due date and the aggregate amount delinquent under such
Retail Service Contract exceeds Ten Thousand Dollars ($10,000), or (b) the
Seller has received written notice that such Customer has become Bankrupt.

3.6

Legal Proceedings.  Except as set forth in Section 3.6 of the Seller’s
Disclosure Schedule, as of the Agreement Date, and except for collection actions
in the ordinary course of business and matters of general applicability in and
to the markets in which the Contracts and the Retail Business are governed
and/or performed, there is no suit, action, claim, arbitration or proceeding
pending, or to Seller’s Knowledge threatened, against Seller or SENY before any
Governmental Entity directly concerning the Acquired Assets.  For purposes of
the foregoing, a potential dispute under any Retail Service Contract or SENY
Contract for the retail sale of Power or Gas shall not constitute a threatened
claim or proceeding unless the aggregate amount in potential dispute under such
Contract exceeds Ten Thousand Dollars ($10,000).

3.7

Certain Representations Regarding SENY and the SENY Shares.  

(a)

SENY (i) is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation; (ii) is duly
qualified to do business in the State of New York; and (iii) has all requisite
corporate power and authority and the legal right to own and operate its
properties and to conduct its business as currently conducted.

(b)

The SENY Contracts are legal, valid and binding agreements of SENY, enforceable
against SENY, in accordance with their terms and, to Seller’s Knowledge, each
SENY Contract is a legal, valid and binding agreement of each other party
thereto, enforceable against such party in accordance with its terms, except in
each case where enforceability may be limited or otherwise affected by
Applicable Law, bankruptcy, insolvency or other similar laws affecting
creditors’ rights generally and except where

   

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enforceability is subject to the application of equitable principles or
remedies. Except as set forth in Section 3.7(b) of the Seller’s Disclosure
Schedule:

(i)  Schedule 1.1(f) accurately sets forth, in all material respects, for each
SENY Contract for the retail sale of  Power, the Counterparty, start date (with
deliveries starting before or during June 2006 indicated as June 1, 2006), end
date, delivery location and price charged to Customers excluding applicable
transaction Taxes and pass-through and other reimburseable costs.  Any actual
usage for any such contracts included in Schedule 1.1(f) accurately represents
the historical billed volumes invoiced by SENY or its Affiliates to such
Counterparty (indicated by an “A” in such Schedule).  To Seller’s Knowledge,
there are no material outstanding adjustments to such historical billed volumes
set forth on Schedule 1.1(f) that have not been reflected in such data.  Any
historical usage for any such contracts included in Schedule 1.1(f) accurately
represents data obtained from the applicable LDC (indicated by an “H” in such
Schedule).  

(ii)  Schedule 1.1(f) accurately sets forth, in all material respects, for each
SENY Contract for the retail sale of  Gas, the Counterparty, start date (with
deliveries starting before or during June 2006 indicated as June 1, 2006), end
date and delivery location.  For each SENY Contract for the retail sale of Gas,
Seller represents that the sum of the monthly price components set forth in
Schedule 1.1(f), when applied to the related estimated contracted-for volumes as
weighting factors, accurately sets forth, in all material respects, the monthly
price charged to the applicable Customer (excluding applicable transaction Taxes
and pass-through and other reimbursable costs); provided, however, that (A) the
foregoing representation excludes pricing under such SENY Contracts set forth in
their entirety in Schedule1.1(f), in which case Schedule1.1(f) includes true and
correct copies of such SENY Contracts, including the pricing mechanisms thereof;
(B) as projections, such estimated contracted-for volumes are subject to the
provisions of Section 9.6(c) such that Seller makes no representation and
warranty to such estimated contracted-for volumes for any purpose whatsoever,
other than their use as weighting factors in SENY's pricing calculations; and
(C) pricing periods reflect production months.    Any actual usage for any such
SENY Contracts included in Schedule 1.1(e) accurately represents the historical
billed volumes invoiced by Seller to such Counterparty, except that (A) a zero
under usage in Schedule 1.1(f) means that no historical billing information is
available, and (B) actual usage for billing purposes reported by LDCs has been
adjusted as follows: (1) business meter level data was adjusted for losses to
the citygate, using loss factors provided by the applicable LDC; and (2) usage
data has been converted into decatherms using industry standard british thermal
units methodology to the extent that an LDC reported such usage in other units
of measurement (including ccf).  To Seller’s Knowledge, there are no material
outstanding adjustments to such historical billed volumes set forth on Schedule
1.1(f) that have not been reflected in such data.

(iii)  Schedule 1.1(f) accurately sets forth in all material respects for each
Sourcing Contract of SENY (excluding any such agreements that are Select
Contracts, which agreements are included on Schedule 1.1(i) instead), the
Counterparty, start date (with deliveries starting before or during June 2006
indicated as June 1, 2006), end date,

   

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delivery location, price, peak volume or off-peak volume (as applicable), block
(as applicable) and contracted-for volumes.

(iv)  True and correct copies of all other SENY Contracts (other than those
referenced in subsections (i),(ii) and (iii) above), including any material
amendments thereto are set forth on Schedule 1.1(f), except (i) SENY Contracts
with System Administrators, LDCs and certain Pipeline Administrators have been
listed on Schedule 1.1(f), and Seller only represents as to such Contracts that
to Seller’s Knowledge, as of the Agreement Date, such listing is complete in all
material respects (provided, that Seller shall submit a Schedule Update to Buyer
regarding such listing as of the Closing Date and without qualification as to
Seller’s Knowledge), and (ii) the SENY Contract with Strategic Power Management,
Inc. is excluded from the foregoing representation (and is instead included in
the representation set forth in Section 3.4(g)).

The foregoing representations are made with respect to Schedule 1.1(f) as of the
Agreement Date with respect to the dates indicated thereon (if applicable).

(c)

Section 3.7(c) of the Seller’s Disclosure Schedule contains a list of all
material Permits, which are held by or applicable to SENY in the operation of
its business in the State of New York.  

(d)

Except as set forth in Section 3.7(d) of the Seller’s Disclosure Schedule
hereto, as of April 11, 2006, neither SENY, nor to Seller’s Knowledge any
Counterparty to a SENY Contract, is in material default under any such SENY
Contract.  For purposes of the foregoing, a default under any SENY Contract for
the retail sale of Power or Gas shall not constitute a material default unless
(i) the Customer to such SENY Contract has (A) repudiated such SENY Contract in
violation of the terms thereof, or (B) the Customer to such SENY Contract has
failed to pay amounts due under such SENY Contract for more than sixty (60)
consecutive days after the contractual due date and the aggregate amount
delinquent under such SENY Contract as of the Agreement Date exceeds Ten
Thousand Dollars ($10,000), or (ii) the Seller or SENY has received written
notice that such Customer has become Bankrupt.  

(e)

The authorized capital stock of SENY consists of 10,000 shares of Common Stock,
par value $1.00 per share.  The SENY Shares are all of the shares of SENY issued
and outstanding.  SENY does not have outstanding any stock or securities
convertible into or exchangeable for any shares of its capital stock, nor does
it have outstanding any rights, options or warrants to subscribe for or purchase
its capital stock or any stock or securities convertible into or exchangeable
for its capital stock, nor has it reserved any shares of capital stock for
issuance upon exercise or conversion of any rights, options or warrants to
subscribe for or to purchase its capital stock or any stock or securities
convertible into or exchangeable for its capital stock.  All of the SENY Shares
are owned beneficially and of record by Seller, free and clear of all
Encumbrances, and the SENY shares are duly authorized, validly issued, fully
paid and nonassessable.

(f)

SENY has no employees and no employee benefit plans.

   

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(g)

All material SENY Liabilities of any type have been included in Section 3.7(g)
of the Disclosure Schedule.

3.8

Title to Assets.  Except as described with respect to the SENY Shares in Section
3.7(e), Seller owns the Acquired Assets free and clear of all Encumbrances,
except Encumbrances that may arise in the ordinary course of business or are
listed in Section 3.8 of the Seller’s Disclosure Schedule (“Permitted
Encumbrances”).  

3.9

Tax Returns and Audits.  Except as set forth in Section 3.9 of the Seller’s
Disclosure Schedule:

(a)

SENY has duly filed with the appropriate Taxing Authority all Tax Returns with
respect to Taxes of SENY that it has been or is required to file on or prior to
the Closing Date, other than such Tax Returns for which an extension has been
timely requested.  

(b)

SENY is not delinquent in the payment of any Taxes nor has it requested any
extension of time within which to file any Tax Return which return has not since
been or will not be timely filed.  

(c)

No deficiency for any Taxes has been asserted or assessed against SENY or which
has not been paid.  

(d)

No litigation regarding Taxes of SENY is currently pending, there are no
outstanding agreements or waivers extending the statutory period of limitations
applicable to any Tax Returns required to be filed by or with respect to SENY,
and none of the Tax Returns are currently being audited or examined by any
taxing authority.

3.10

Availability of Financing.  Seller will have as of the Closing sufficient funds
available to consummate the transactions contemplated under this Agreement and
to timely perform all of its obligations under this Agreement.  

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller as of the Agreement Date, except as
otherwise set forth on Schedule 4 (the “Buyer’s Disclosure Schedule”), as
follows:

4.1

Existence and Compliance with Applicable Law.  Buyer (a) is a corporation,
validly existing and in good standing under the laws of the jurisdiction of its
formation; (b) is duly qualified to do business in those jurisdictions in which
it is necessary for the conduct of its business and to fulfill its obligations
following the Closing hereunder, except for failures to so qualify which in the
aggregate are not material to Buyer or affect its obligations hereunder; and (c)
has all requisite power and authority and the legal right to own and operate its
properties and

   

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to conduct its business as currently conducted and as required to be conducted
in fulfillment of its obligations hereunder.

4.2

Power and Authorization; Conflicts.  Subject to receipt of the Buyer Regulatory
Approvals, the execution, delivery and performance by Buyer of this Agreement,
and, upon execution and delivery to Seller and each of the Ancillary Documents
to which Buyer is a party, and the consummation by it of the transactions
contemplated hereby and thereby (a) are within Buyer’s powers and authority, (b)
have been duly authorized by all necessary corporate action on the part of
Buyer, and (c) do not and will not, with the passing of time or the giving of
notice or both, (i) contravene Buyer’s organizational documents, (ii) result in
a material violation of any Applicable Law, (iii) to Buyer’s knowledge require
any consent, license, approval or authorization of, or other action by, or any
notice or filing with, any Governmental Entity or any other Person other than
such as have already been obtained, or (iv) result in the breach, default or
termination of any agreement to which Buyer is a party or by which Buyer or any
of its property is bound, which breach, default or termination will materially
and adversely affect Buyer’s ability to consummate the transactions contemplated
by this Agreement or the Ancillary Documents to which Buyer is a party.

4.3

Enforceability.  This Agreement has been, and upon execution and delivery to
Buyer and each of the Ancillary Documents to which Buyer is a party will have
been, duly executed and delivered on behalf of Buyer.  This Agreement is, and
upon execution and delivery to Seller and each of the Ancillary Documents to
which Buyer is a party evidencing any obligation of Buyer will be, the legal,
valid and binding obligation of Buyer, enforceable against it in accordance with
its terms, except where enforceability may be limited or otherwise affected by
bankruptcy, insolvency or other similar laws affecting creditors’ rights
generally and except where enforceability is subject to the application of
equitable principles or remedies.

4.4

Availability of Financing.  Buyer will have as of the Closing sufficient funds
available to consummate the transactions contemplated under this Agreement and
to timely perform all of its obligations under this Agreement.  

4.5

Experience of Buyer.  (a) Buyer has knowledge and experience in transactions of
the type engaged in by Seller in the conduct of its Retail Business, in the
retail electric power and natural gas industry generally, including the nature
of full and firm requirements transactions and the responsibilities related to
retail electric power and natural gas customers, and in the Retail Business of
Seller as it relates to performing and administering the Contracts and that
Buyer is therefore capable of evaluating the risks and merits of purchasing and
accepting the assignment of the Acquired Assets, and assuming the Assumed
Liabilities; and (b) Buyer has relied on its own independent investigation of,
and judgment with respect to the Acquired Assets and the Assumed Liabilities and
the advice of its own legal, tax, economic, and other advisors, and, except for
the express representations set forth in this Agreement or in any Ancillary
Document, Buyer has not relied on any information, comments, statements, or
representations furnished by Seller or any representative of, or consultants or
advisors engaged by, Seller or agent thereof in determining to enter into this
Agreement.  

4.6

Performance of Contracts; Master Agreements.

   

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(a)

Except as set forth in Section 4.6(a) of the Buyer’s Disclosure Schedule, Buyer
possesses all necessary Permits for Buyer to perform its obligations under the
Contracts and under the Administration Agreement, including (i) Permits to sell
natural gas and electric power at retail in each jurisdiction in the Territory,
and (ii) market based rate authority from FERC.  All of such Permits are in full
force and effect, and except as set forth in Section 4.6(a) of the Buyer’s
Disclosure Schedule, there is no action or proceeding pending, or to Buyer's
knowledge threatened, against Buyer or any of its Affiliates before any
Governmental Entity concerning any of such Permits.

(b)

Except as set forth in Section 4.6(b) of the Buyer’s Disclosure Schedule, Buyer
has entered into all agreements, tariffs and/or other documents and maintains
accounts as required by each LDC, LDC Pools, System Operator, and Pipeline
Administrator as necessary for Buyer to perform its obligations under the
Contracts and under the Administration Agreement, and Buyer is in full
compliance with all Market Rules and Procedures, LDC Rules and natural gas
pipeline tariffs applicable to the Contracts.  Except as set forth in Section
4.6(b) of the Buyer’s Disclosure Schedule, there is no action or proceeding
pending, or to Buyer's knowledge threatened, against Buyer or any of its
Affiliates alleging any noncompliance with any of such Market Rules and
Procedures, LDC Rules and/or tariffs.

(c)

Section 4.6(c) of the Buyer’s Disclosure Schedule sets forth all Master
Agreements between Buyer and any Counterparty to a Sourcing Contract.

(d)

Buyer has, or will have as of the Closing, a clearing broker able to process the
transfer of the Smith Barney Trades to Buyer.

4.7

Securities Laws.  Buyer is acquiring the SENY Shares solely for the purpose of
investment and not with a view to, or for sale in connection with, any
distribution thereof in violation of the Securities Act.  Buyer acknowledges
that the SENY Shares are not registered under the Securities Act or any state
securities laws, and that such SENY Shares may not be transferred or sold except
pursuant to the registration provisions of the Securities Act and any applicable
such state securities laws or an exemption therefrom.  Buyer is knowledgeable,
sophisticated and experienced in business and financial matters of the type
contemplated by this Agreement and is able to bear the economic risks associated
with its purchase of the SENY Shares.  Buyer is an “accredited investor” as
defined in Regulation D promulgated pursuant to the Securities Act.

4.8

Legal Proceedings.  Except as set forth in Section 4.8 of the Buyer’s Disclosure
Schedule, and except for matters of general applicability in and to the markets
in which Buyer and its Affiliates conduct business, there is no suit, action,
claim, arbitration or proceeding pending, or to Buyer's knowledge threatened,
against Buyer or any of its Affiliates before any Governmental Entity that could
be reasonably expected to adversely affect the ability of Buyer  to perform all
of their respective obligations under this Agreement and each of the Ancillary
Documents to which each is a party.

   

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ARTICLE V

CLOSING; SETTLEMENT

5.1

Closing.  Subject to Sections 5.2, 5.3, 7.1 and 7.2, the Closing of the
transactions contemplated by this Agreement (the “Closing”) will take place at
10:00 a.m. Eastern Prevailing Time, in the offices of Day, Berry & Howard, LLP
in Hartford, Connecticut, on May 31, 2006, or at such other time or place or in
such manner as may be agreed by the Parties and shall be effective at 10:00 a.m.
on June 1, 2006 with respect to all Contracts relating to Gas and 12:01 a.m. on
June 1, 2006 for all other transactions hereunder (collectively hereinafter
referred to herein as the “Closing Date”); provided that, in the event that the
Closing occurs on June 30, 2006, the Closing shall be effective as of 10:00 a.m.
on July 1, 2006 with respect to all Contracts relating to Gas and 12:01 a.m. on
July 1, 2006 for all other transactions hereunder; provided further that in the
event that the Closing occurs on July 31, 2006, the Closing shall be effective
as of 10:00 a.m. on August 1, 2006 with respect to all Contracts relating to Gas
and 12:01 a.m. on August 1, 2006 for all other transactions hereunder, and in
the case of a Closing on either June 30, 2006 or July 31, 2006, the definition
of Closing Date shall relate to such date.

5.2

Deliveries by Seller at Closing.  At the Closing, Seller will deliver the
following to Buyer, each in form and substance reasonably satisfactory to Buyer:

(a)

A certificate executed on behalf of Seller by a duly authorized officer thereof,
dated as of the Closing representing and certifying as to the matters set forth
in Section 7.1(c) and Section 7.2(a), (b), and (d);

(b)

A certificate executed by an authorized officer of Seller certifying (i) the
authority and true signature of the person or persons executing this Agreement,
the Administration Agreement and the Ancillary Documents on behalf of Seller,
and (ii) the authority of Seller (including resolutions adopted by Seller) to
enter into and perform this Agreement, the Administration Agreement and the
Ancillary Documents;

(c)

The Bill of Sale;

(d)

The Assignment and Assumption Agreement;

(e)

The SENY Shares, endorsed in blank for transfer to Buyer, without legends (other
than customary provisions regarding the absence of registration);

(f)

Resignations of the SENY directors and officers;

(g)

The Administration Agreement;

(h)

Schedule Updates contemplated in Section 6.14;

(i)

All of the Renewable Energy Credits in Seller’s account in each Tracking System,
subject to Buyer’s obligations under Section 6.20;

   

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(j)

The Back-to-Back Agreement, if applicable; and

(k)

The portion of the Purchase Price payable to Buyer at Closing.

5.3

Deliveries by Buyer at Closing.  At the Closing, Buyer will deliver the
following to Seller, each in form and substance reasonably satisfactory to
Seller:

(a)

A certificate executed by a duly authorized representative of Buyer, dated as of
the Closing representing and certifying as to the matters set forth in Sections
7.1(a), (b), and (d) and Section 7.2(c);

(b)

A certificate executed by an authorized officer of Buyer certifying (i) the
authority and true signature of the person or persons executing this Agreement,
the Administration Agreement and the Ancillary Documents on behalf of Buyer, and
(ii) the authority of Buyer to enter into and perform this Agreement, the
Administration Agreement and the Ancillary Documents;

(c)

he Bill of Sale;

(d)

The Assignment and Assumption Agreement;

(e)

To the extent obtained by the Closing in accordance with Section 6.6, written
evidence, satisfactory to Seller, of the replacement of the NU Guarantees with
respect to Select Contracts assigned to Buyer at the Closing and any SENY
Contracts;

(f)

The Administration Agreement;

(g)

The Back-to-Back Agreement, if applicable; and

(h)

A complete list of Hired Employees certified by an authorized representative of
Buyer.

ARTICLE VI

COVENANTS OF THE PARTIES

6.1

Seller’s Conduct of Retail Business Prior to Closing.

 

(a)

From the Agreement Date until the Closing Date (unless Buyer shall otherwise
consent in writing or unless otherwise expressly permitted hereunder) Seller
shall conduct the Retail Business in the ordinary course.  In doing so, Seller
and SENY shall have the right to renew or extend existing Contracts according to
their terms and to engage in new business, including entering into new Contracts
in accordance with current policies, procedures, practices and controls.  

   

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(b)

Buyer shall have the right, by written notice given to Seller within five (5)
Business Days after the Agreement Date, to reject any Contracts (“Rejected
Contracts”) of Customers identified in Section 3.5 or 3.7(d) of the Seller’s
Disclosure Schedule; provided that (i) Buyer shall not have the right to reject
any Contracts with Governmental Entities; and (ii) if a Customer pays amounts to
Seller as a result of and/or in connection with the actions taken by Seller to
terminate service pursuant to such Contract and such payment results in such
Customer no longer being in material default under such Contract for nonpayment
pursuant to the terms of Section 3.5 or 3.7(d) (as the case may be), then
Buyer’s right of rejection shall be automatically rescinded and such previously
Rejected Contract shall be an Acquired Asset or Administered Contract, as
applicable.  Buyer acknowledges that the rejection of one or more Contracts in
accordance with the foregoing shall not affect in any manner any other Contracts
with the affected Customer that are not Rejected Contracts.

(c)

Schedule 6.1(c) sets forth as of April 11, 2006, Customers (other than
Governmental Entities) that are not listed in Sections 3.5 or 3.7(d) of the
Seller’s Disclosure Schedule and have failed to pay amounts due for more than
thirty (30) consecutive days after the contractual due date and the aggregate
amount of such delinquency exceeds Ten Thousand Dollars ($10,000).  Within ten
(10) days after the Agreement Date, Buyer shall provide written notice to Seller
identifying any of the Customers whose Contract Buyer would exercise the right
to reject under this Section 6.1(c) if, as a result of such Customer’s continued
failure, Seller updated Section 3.5 or 3.7(d) of the Seller’s Disclosure
Schedule to include such Customer, in which case Seller shall have the right to
terminate or cause the termination of the relevant Contracts; provided that the
foregoing shall not create any right of Buyer to reject any such Contract that
Seller has not terminated if such Customer ultimately does not qualify for
inclusion by Seller in an update to Section 3.5 or 3.7(d) of the Seller’s
Disclosure Schedule.  

(d)

Buyer’s failure to provide the notices of rejection set forth in (b) and (c)
above shall result in the Buyer’s irrevocable waiver of its right to reject the
applicable Contract.

  

(e)

Seller shall have the right to terminate or cause the termination of any
Contracts prior to the Closing Date if the Counterparty (i) has become Bankrupt,
(ii) has failed to pay amounts due under such Contract for more than sixty (60)
days after the contractual due date, or (iii) is in default of a material
obligation under such Contract; provided that Seller shall notify Buyer of such
intent to terminate, and if Buyer objects to such termination within three (3)
days after receipt of Seller’s notice, the Parties shall negotiate in good faith
an arrangement to appropriately share the credit risk associated with such
Contract in lieu of termination.  In the event that Seller is unable to
terminate a Rejected Contract prior to the Closing Date, Buyer agrees to perform
such Rejected Contract as an Administered Contract under the Administration
Agreement until such Rejected Contract is terminated; provided that if such
Rejected Contract is terminated, then all payments received on account of such
Rejected Contract (including any deposits or other Performance Assurance) shall
be applied in priority to the accounts receivable associated with the period of
service furnished by Buyer; provided, further, that if any balance remains due
with respect to Buyer’s account receivable for more than thirty (30) days after
the contractual due date, Seller shall pay the amount of such shortfall to
Buyer, in which case Seller shall be entitled to such account receivable.

   

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(f)

Notwithstanding anything to the contrary herein, Buyer shall not have the right
to reject any Contract of Customers identified in an update to Section 3.5 or
3.7(d) of the Seller’s Disclosure Schedule, unless such update resulted from a
failure of Seller to initially disclose such Customer in Section 3.5 or 3.7(d)
of the Seller’s Disclosure Schedule or Schedule 6.1(c), or Buyer has indicated
its intent to reject such Contract in accordance with Section 6.1(c).  

(g)

Any changes in the composition of the Contracts between the Agreement Date and
the Closing Date shall be reflected in the Schedules to this Agreement delivered
at the Closing pursuant to Section 5.2(h), and such change shall not constitute
a breach of this Agreement.

6.2

Fees and Expenses.  Except as otherwise expressly provided in this Agreement,
all fees and expenses, including fees and expenses of counsel, incurred in
connection with this Agreement and the Administration Agreement, if applicable,
and the transactions contemplated by this Agreement and the Administration
Agreement, including fees and expenses incurred by the Parties in connection
with the Buyer Regulatory Approvals and Seller Regulatory Approvals, shall be
paid by the Party incurring such fee or expense.

6.3

Taxes.

(a)

All transfer, documentary, sales, use, value added, recording, registration,
filing and other such Taxes and fees (including any penalties and interest),
whether levied on Buyer, Seller or SENY, or their respective Affiliates,
incurred in connection with the consummation of the transactions contemplated by
this Agreement and the transfer of the Acquired Assets (other than Taxes on
income or gain recognized by Seller on such transfer) shall be paid by Buyer,
and Buyer shall, at its own expense, file all necessary tax returns, forms and
documentation with respect to all such taxes and fees.  Seller shall cooperate
with the filing of such Tax Returns.

(b)

All Taxes, including the rights to the refund of any such Taxes, arising under,
or relating to, the Acquired Assets for the period prior to the Closing Date
shall be the sole and exclusive responsibility and right of Seller.

(c)

All Taxes arising under or relating to the Acquired Assets for the period on or
after the Closing Date and the Administered Contracts subject to the
Administration Agreement on or after the Closing Date, shall be the sole and
exclusive responsibility of Buyer.  To the extent that Buyer cannot pay such
Taxes directly due to Applicable Law, Buyer shall provide Seller with a complete
and accurate Tax Return and the full amount due with respect such Taxes at least
thirty (30) days before the tax filing and due date, and Seller shall file such
Tax Return and pay such Taxes when due; provided that if Buyer fails to comply
with the foregoing, Seller reserves the right, without prejudice to Seller's
right and remedies against Buyer, to prepare and make such filing and pay such
Taxes in compliance with Applicable Law, and Buyer shall reimburse Seller for
the preparation costs incurred by Seller and any such Tax payments within ten
(10) Business Days after Seller's request for reimbursement, together with
interest at that rate applicable to delinquent payments of such Tax from the
date that Seller paid such Tax.

   

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(d)

Seller shall prepare and timely file or shall cause to be prepared and timely
filed and shall remit or cause to be remitted any Taxes due in respect of the
following Tax Returns with respect to the Acquired Assets (including ownership
of SENY): (i) all Tax Returns for any taxable period ending prior to the Closing
Date; and (ii) all other Tax Returns required to be filed (taking into account
extensions) prior to the Closing Date.  Buyer shall prepare and timely file or
shall cause to be prepared and timely filed all Tax Returns that are required to
be filed by or with respect to the Acquired Assets or SENY for taxable years or
periods beginning on and ending after the Closing Date.  Buyer shall remit or
cause to be remitted any Taxes due in respect of such Tax Returns.  If Buyer is
required to file any Tax Return for a taxable period beginning before and ending
after the Closing Date, Buyer shall cause such Tax Return to be filed and shall
be responsible for the payment of any Tax for such period.  However, Seller
shall pay to Buyer, as an adjustment to the Purchase Price, the amount by which
the Tax attributable to the period prior to the Closing Date exceeds the amount
of such Tax paid (including payments of estimated Tax) prior to the Closing
Date.  The Tax attributable to the period prior to the Closing Date shall be
determined using the Tax accounting methods and Tax elections used by Seller or
SENY before the Closing Date.  Buyer shall compute the amount of the Tax
attributable to the period prior to the Closing Date and shall notify Seller of
such amount in writing no later than forty-five (45) days prior to filing the
Tax Return.  Within twenty (20) days after the date of such notification, Seller
shall pay to Buyer or Buyer shall pay to Seller, as appropriate, the difference
between (i) the amount of Tax determined by Buyer as attributable to the portion
of the period prior to the Closing Date, and (ii) the amount of the Tax for the
taxable period paid (including payments of estimated Tax) prior to the Closing
Date by Seller, unless within fifteen (15) days after such date, Seller notifies
Buyer in writing that Seller disagrees with the computation of any such amount.
 In that case, the Parties shall proceed in good faith to determine the correct
amount, and Seller’s payment to Buyer, or Buyer’s payment to Seller, shall be
due the later of (i) the time specified in the immediately preceding sentence
and (ii) ten (10) days after Seller and Buyer agree to the amount payable.  If
Seller is permitted but not required under applicable state or local Tax laws to
treat the day prior to the Closing Date as the last day of a taxable period, the
parties shall treat such day as the last day of a taxable period.  The Parties
shall treat SENY as if it ceased to be part of the affiliated group of
corporations of which Seller is a member within the meaning of Section 1504 of
the IRC, and any comparable or similar provision of state, local or foreign laws
or regulations, as of the close of business on the day prior to the Closing
Date.

(e)

The Parties shall cooperate and share all required information on a timely basis
in order to timely file all Tax Returns, reports, returns, schedules and any
other documents required to be filed with respect to Taxes and all claims for
refunds of Taxes and for the preparation of any audit, and for the prosecution
or defense of any claim or proceeding relating to any proposed adjustment.  Each
Party shall retain or cause to be retained all Tax Returns, and books and
records pertinent to the Retail Business until the applicable period for
assessment under Applicable Law (giving effect to any and all extensions or
waivers) has expired, and to abide by or cause the abidance with all record
retention agreements entered into with any Governmental Entity.  After the
Closing, each

   

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Party will give the other reasonable notice prior to discarding or destroying
any such Tax Returns, and books and records relating to Tax matters, in which
case each Party will allow the other upon request to take possession of such Tax
Returns, and books and records at the requesting Party’s expense.  The Parties
shall cooperate with each other in the conduct of any audit or other proceedings
involving the Acquired Assets for any Tax purpose; provided that Seller shall
have the sole right to represent SENY’s interests in any audit or examination by
any Governmental Entity (“Tax Audit”) relating to taxable periods ending prior
to the Closing and to employ counsel of its choice at Seller's expense.  In the
case of a period that begins before and ends after Closing, Seller shall be
entitled to participate at Seller's expense in any Tax Audit relating in any
part to Taxes attributable to the portion of such period deemed to end on or
before the Closing Date, but Buyer shall control the Tax Audit.  None of Buyer,
any of its Affiliates or SENY may settle or otherwise dispose of any Tax Audit
for which Seller may have a liability under this Agreement, or which may result
in an increase in Seller’s liability under this Agreement, in each case without
the prior written consent of Seller.

(f)

Any payment by Buyer or Seller under this Section 6.3 will be deemed an
adjustment to the Purchase Price.

(g)

Notwithstanding any other provision of this Agreement, the covenants and
obligations set forth in this Section 6.3 shall survive until, and any claim for
indemnification with respect thereto must be made prior to, the expiration of
the applicable statute of limitations with respect to the underlying Tax claim
(including any valid extensions).

(h)

Buyer agrees to make the election described in Reg. Section
1.1502-21T(b)(3)(ii)(B) to relinquish, with respect to all consolidated net
operating losses attributable to the Company, the portion of the carryback
period for which SENY was a member of the consolidated group which included
Seller.

(i)

Seller shall cause the common parent of the affiliated group of corporations
filing a consolidated federal income Tax Return which includes SENY (the “Seller
Group”), to be included in the consolidated federal income Tax Returns (and the
state income Tax Returns of any state that permits consolidated, combined or
unitary income Tax Returns, for which an election has been made if any) of
Seller Group for all periods ending on or before or which include the Closing
Date, all Tax Items of SENY which are required to be included therein, shall
file timely all such Tax Returns with the appropriate taxing authorities and
shall pay timely all taxes due with respect to the periods covered by such Tax
Returns.

(j)

Any Tax Return to be prepared pursuant to the provision of this Section 6.3
shall be prepared in a manner consistent with practices followed in prior years
with respect to similar Tax Returns, except for changes required by changes in
Applicable Law.

(k)

Effective as of the Closing Date, any tax indemnity, sharing, allocation or
similar agreement or arrangement that may be in effect prior to the Closing Date
between

   

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or among the Seller Guarantor and SENY, shall be extinguished in full, and any
Liabilities or rights existing under any such agreement or arrangement shall
cease to exist and shall no longer be enforceable.

(l)

(i)  Seller and each member of Seller Group shall grant to Buyer (or its
designees) access at all reasonable times to all of the information, books and
records relating to SENY within the possession of Seller or any member of Seller
Group (including work papers and correspondence with taxing authorities), and
shall afford Buyer (or its designees) the right (at Buyer’s expense) to take
extracts therefrom and to make copies thereof, to the extent reasonably
necessary to permit Buyer (or its designees) to prepare Tax Returns, to conduct
negotiations with Tax authorities, and to implement the provisions of, or to
investigate or defend any claims between the Parties arising under, this Section
6.3. (ii) Buyer shall grant or cause SENY to grant to Seller (or its designees)
access at all reasonable times to all of the information, books and records
relating to SENY within the possession of Buyer or SENY (including work papers
and correspondence with taxing authorities), and shall afford Seller (or its
designees) the right (at Seller’s expense) to take extracts therefrom and to
make copies thereof, to the extent reasonably necessary to permit Seller (or its
designees) to prepare Tax Returns, to conduct negotiations with Tax authorities,
and to implement the provisions of, or to investigate or defend any claims
between the Parties arising under, this Section 6.3. (iii) Each of the parties
hereto will preserve and retain all schedules, work papers and other documents
relating to any Tax Returns of or with respect to SENY or to any claims, audits
or other proceedings affecting SENY until the expiration of the statute of
limitations (including extensions) applicable to the taxable period to which
such documents relate or until the final determination of any controversy with
respect to such taxable period, and until the final determination of any
payments that may be required with respect to such taxable period under this
Agreement.

(m)

If Buyer notifies Seller in writing no fewer than two (2) Business Days prior to
the Closing that Buyer is irrevocably electing to make an election under Section
338(g) and 338(h)(10) of the Code and any similar state law elections in all
applicable states (the "Elections"), the Seller shall cause the common parent of
the "selling group" of SENY (as defined in Treasury Reg. Section 1.338-2(c)(16))
to join Buyer in making timely Elections with respect to the sale and purchase
of the SENY Stock pursuant to this Agreement, and each Party shall provide to
the other all necessary information to permit such Elections to be made.  The
Seller and the Buyer shall, as promptly as practicable following the Closing
Date, take or cause to be taken all actions necessary and appropriate (including
filing such forms, returns, schedules, and other document as may be required) to
effect and preserve timely the Elections.  In connection with such Elections,
Seller and the Buyer shall act together in good faith to (i) determine and agree
upon the “aggregate deemed sale price” for the assets of SENY (within the
meaning of Treasury Regulation Section 1.338-4T) and the "adjusted grossed-up
basis" for the assets of SENY (within the meaning of Treasury Regulation Section
1.338-5) and (ii) agree upon appropriate allocations (the "Allocations") of the
“aggregate deemed sale price” and "adjusted grossed-up basis" among the assets
of SENY in accordance with Section 338(b)(5) of the Code and the Treasury
Regulations promulgated thereunder.  The Seller shall calculate gain or loss, if
any, resulting from the Elections in a manner consistent with the

   

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Allocations in any Tax return or otherwise and Buyer shall allocate the
"adjusted grossed-up basis" among the assets of SENY in a manner consistent with
the Allocations and shall not take any position inconsistent with the
Allocations in any Tax return or otherwise.  If the Parties are unable to agree
upon the calculations of either (i) “aggregate deemed sale price” for the assets
of SENY, (ii) the "adjusted grossed-up basis” for the assets of SENY or (iii)
the Allocations, then, independent tax counsel or a nationally recognized public
accounting firm, in each case mutually acceptable to Seller and Buyer, shall be
engaged to decide the dispute, the cost of such counsel or accounting firm to be
shared equally by Seller and Buyer.

6.4

Collection of Receivables; Account Billings Following Closing.

(a)

Seller shall be entitled to receive all amounts due and payable for products and
services provided or supplied and which will become payable under the Retail
Service Contracts and the SENY Contracts for the retail sale of Power or Gas for
or relating to the period prior to the Closing Date.  Buyer shall be entitled to
receive and collect all amounts due and payable under such Contracts for and
relating to the period on and after the Closing Date.  The Parties shall
coordinate and develop a methodology and protocol for effecting such allocation.

(b)

After the Closing Date, Seller shall bill and collect receivables under the
Retail Service Contracts and the SENY Contracts for the retail sale of Power or
Gas for products and services provided or supplied during the billing cycle in
effect for each Customer as of the Closing Date  (the “Receivables Proration
Period”).  To effect the entitlements set forth in Section 6.4(a), receivables
with respect to the Receivables Proration Period shall be prorated between
Seller and Buyer using the average billing charge per day over the billing cycle
such that Seller shall have the benefit of that portion of any such receivable
related to products and services provided or supplied prior to the Closing Date,
and Buyer shall have the benefit of that portion of any such receivable related
to products and services provided or supplied on and after the Closing Date.
 After such invoicing with respect to the Receivables Proration Period, Buyer
shall be responsible for any and all billings and collections with respect to
the Acquired Assets. Where permitted by the applicable LDC, Buyer will have the
option, at its own expense, to cause such LDC to perform a meter read as of the
Closing Date, in which case such actual usage data will be used for allocation
for the Receivables Proration Period in lieu of the proration otherwise provided
hereunder.

(c)

In order to effect Section 6.4(a) above, Buyer shall permit and cause each
payment received from a Customer to be applied in the following order: first,
against the invoice, if any, indicated with the payment; second, if the amount
of the payment equals the amount reflected on any outstanding invoice, against
such invoice; third, if a payment cannot be allocated by following the first two
steps, then Buyer and Seller shall cooperate to contact the Customer to
determine the Customer’s payment intent; fourth, for receipts during the sixty
(60) days after the Closing Date, if the Customer’s payment intent cannot be
determined, then Seller shall be entitled to such payment (to the extent of any
Retained Accounts Receivables with respect to such Customer only, with any
remaining amount to

   

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be retained by Buyer); fifth, for receipts more than sixty (60) days after the
Closing Date and up to one hundred and twenty (120) days after the Closing Date,
if the Customer’s payment intent cannot be determined, then such payment shall
be divided equally between Buyer and Seller, provided that if such payment would
satisfy entirely the Retained Accounts Receivable or the accounts receivable due
Buyer with respect to such Customer, any balance remaining shall be paid to the
other Party to the extent of its remaining receivables, and any remaining amount
thereafter (if any) will be at Buyer’s election either applied to Customer’s
account with Buyer or returned to the Customer; and sixth, for receipts more
than one hundred and twenty (120) days after the Closing Date, if the Customer’s
payment intent cannot be determined, then Buyer shall be entitled to such
payment to the extent of any outstanding receivables of Buyer with respect to
such Customer only, with any remaining amount to be paid to Seller, provided
that if such payment would satisfy entirely the Retained Accounts Receivable or
the accounts receivable due Buyer with respect to such Customer, any balance
remaining shall be paid to the other Party to the extent of its remaining
receivables, and any remaining amount thereafter (if any) will be at Buyer’s
election either applied to Customer’s account with Buyer or returned to the
Customer.  Seller shall retain all prepayments, deposits, letters of credit and
other performance assurance supplied by each Customer of Seller or SENY and any
Counterparty to a Partner Agreement, for a period of sixty (60) days after the
Closing, and thereafter such prepayments, deposits, letters of credit and other
performance assurance shall be held by Buyer and become Buyer’s responsibility;
provided that, neither Seller nor Buyer may draw upon more than fifty percent
(50%) of any such prepayments, deposits, letters of credit or other performance
assurance (as constituted as of the Closing Date) unless the underlying Contract
has been terminated and the accounts receivable due the other Party have been
paid in full.

(d)

Buyer and Seller shall cooperate regarding any Cancels/Rebills received by
either of them with respect to the Contracts following the Closing.  The Parties
shall prepare a joint reconciliation that net settles any Cancels/Rebills, in
the aggregate in excess of Fifty Thousand Dollars ($50,000), over the term of
the Reconciliation Period paid or received by a Party not responsible for such
Cancels/Rebills hereunder at intervals of thirty (30), sixty (60), one hundred
eighty (180) days and one year in each case, following the Closing Date (such
periods collectively, the “Reconciliation Period”).

(e)

Seller reserves the right to employ any commercially reasonable means in its
sole discretion in the collection of delinquent Retained Accounts Receivable by
it.  In the event that a particular Customer is delinquent in payments to both
Seller and Buyer, Seller and Buyer agree to coordinate their collection efforts.

(f)

In connection with the implementation of this Section 6.4, the Parties shall
develop a methodology and protocol for effecting the allocation hereunder of
responsibility for AE/CC Commission, Broker Fees and fees and/or other payments
under Program Agreements, and each Party shall promptly furnish after request
from the other Party reasonable documentation supporting such allocation.
 Without limiting the generality of the foregoing, Seller shall have the right,
with respect to that portion of Customer payments on invoices issued for the
Receivables Proration Period that otherwise

   

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would be due to Buyer pursuant to Section 6.4(b), to (i) retain therefrom
amounts necessary to reimburse AE/CC Commissions and fees and/or other payments
under Program Agreements paid by Seller, but attributable to the period
allocated to Buyer pursuant to Section 6.4(b) and subject to Section 6.13(d);
and (ii) deduct therefrom for payments to the appropriate Counterparties that
portion of Broker Fees and fees and/or other payments under Program Agreements
relating to that portion of the Receivables Proration Period allocated to Buyer
pursuant to Section 6.4(b).  

(g)

If the Hired Employees include a material portion (whether by number, seniority,
function, experience or otherwise) of Seller's billing and collection unit,
Seller, by written notice given to Buyer after the Closing, may request that
Buyer provide, at no cost to Seller, all or any portion of the billing and
collection services contemplated to be performed by Seller under this Section
6.4.  In any such event, the Parties shall reasonably coordinate the provision
of such services by Buyer.

(h)

Administered Contracts subject to the Administration Agreement shall be treated
in a manner consistent herewith.

(i)

Seller reserves the right to use copies of the Seller Intellectual Property in
connection with billing and collection of Retained Accounts Receivable by
Seller.

(j)

This Section 6.4 shall survive the Closing for the period necessary to give full
effect to its terms.

6.5

Access to Information.  

(a)

After the Agreement Date and until the Closing, at Buyer’s request and upon
reasonable prior notice to Seller, Buyer shall have reasonable access (at
Buyer’s sole cost and expense) during Seller’s normal business hours to, and
Seller shall cause its officers and employees to furnish to Buyer, the files of
Seller relating to the Retail Business, not constituting Proprietary Information
of Seller or its Affiliates.  Buyer acknowledges that following the Agreement
Date, Seller may have limited resources to assist Buyer in identifying and
obtaining such additional information.  Seller reserves the right to establish
procedures for such access (including prohibitions on copying) in a manner
reasonably necessary to comply with confidentiality provisions or other
limitations on disclosure that are binding on Seller and/or its Affiliates.

 

(b)

On and after the Closing Date, Buyer shall have access to copies of (i) all
Contracts (including amendments thereto) in Seller’s possession (including SENY
Contracts); and (ii) credit files, customer files, other non-proprietary or
confidential corporate records related to the Acquired Assets, and personnel
records with respect to Hired Employees subject to obtaining any consents and
releases with respect thereto or as otherwise required under Applicable Law
(“Acquired Records”); provided, that Seller is permitted to retain SENY
documents that are not related to the Retail Business, and such documents are
not Acquired Records.  Within thirty (30) days after the Closing Date, Seller
shall deliver to Buyer all original copies of Contracts in its possession, as

   

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well as the Contracts or Acquired Records.  Buyer agrees that Seller may retain
copies of any Acquired Records it reasonably needs to fulfill its obligations
under this Agreement or the Administration Agreement, or related to its
obligations under Applicable Law or the winding-down of its business.

(c)

For a period equal to the later of (i) two (2) years following the Closing Date,
and (ii) the expiration or termination of the Administration Agreement, Buyer
grants to Seller reasonable access to the books and records of SENY to the
extent that such access may be reasonably required by Seller, including access
required in order for Seller to meet its obligations regarding access to
information under Section 5.2(c) of that certain Stock Purchase Agreement, dated
as of September 28, 2001, between Seller and Niagara Mohawk Holdings, Inc.

6.6

Consents; Performance Guarantees.  

(a)

Prior to Closing, Seller shall notify in writing the Counterparties of the sale
of the Retail Business.  In connection with and/or shortly after such written
notice, Seller shall use Commercially Reasonable Efforts to obtain any required
consents to the assignment and/or novations of the Contracts as determined by
Seller, in such form (including a Consent to Assignment and Release) and by such
means as mutually agreed by Buyer and Seller.  Buyer shall use Commercially
Reasonable Efforts to assist Seller and its Affiliates in obtaining any and/or
all of such consents or novations; provided that after the Agreement Date but
before the Closing Date, Buyer shall not directly or indirectly contact and/or
solicit, including through press releases, advertising, direct mail and/or other
communications, any Counterparties without Seller's prior written consent.

 

(b)

Without limiting the generality of subsection (a) above, and subject to
subsection (c) below, within five (5) Business Days after the request of Seller
or following the Closing with respect to Contracts where consents or novations
have been obtained, the Buyer shall (a) replace all surety bonds issued to
Counterparties as set forth in Schedule 1.1(n) to be effective as of the Closing
Date, or (b) use Commercially Reasonable Efforts to provide reasonable credit
assurance, performance assurance and/or other undertakings in connection with
each Contract, such that neither Seller nor any of its Affiliates, including NU,
have any obligations with respect to any such guarantees or undertakings after
the Closing Date with respect to performance under such Contracts after the
Closing Date.  

(c)

Prior to Closing, Buyer shall use Commercially Reasonable Efforts to substitute
or replace, or provide for the substitution or replacement effective as of the
Closing, of those performance guaranties and letters of credit by or on behalf
of SENY, including those listed on Schedule 1.1(n) (“SENY Assurances”), in a
reasonable form such that neither Seller nor any of its Affiliates, including
NU, have any obligations with respect to any such SENY Assurances after the
Closing Date with respect to supply or delivery on and after the Closing Date.
With respect to any SENY Assurances that Buyer cannot substitute or replace
prior to the Closing, Buyer agrees to indemnify Seller and its Affiliates for
any Damages that Seller or its Affiliates suffer related to such

   

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SENY Assurances with respect to supply or delivery on and after the Closing Date
until Buyer is able to provide such substitution or replacement.  All security
deposits of cash with third parties by or on behalf of SENY, including those
listed on Schedule 1.1(n) shall be left in place with such third parties, and
the Purchase Price shall be adjusted in Seller’s favor dollar for dollar with
respect to such deposits as provided in Section 2.2(c).   Seller agrees to
indemnify Buyer pursuant to Article IX for any Damages that Buyer suffers
related to application by a Person withdrawing such security deposits for supply
or delivery obligations of Seller prior to the Closing Date in an amount that
varies from such Purchase Price adjustment.

(d)

This Section 6.6 shall survive the Closing for the period necessary to give full
effect to its terms.

6.7

Maintenance of Contracts Pending the Closing Date.  In addition to the
provisions set forth in Section 6.1, between the Agreement Date and the Closing
Date, Seller will not, and will cause SENY not to, grant, create or suffer to
exist any Encumbrance on any of the Contracts, except for Permitted
Encumbrances, unless otherwise consented to in writing by Buyer which consent
shall not be unreasonably withheld, conditioned or delayed.  The Parties
acknowledge and agree that Seller or its Affiliates may, for Contracts that have
been assigned to Buyer, provide notice of termination (effective as of the
Closing Date) of NU Guarantees under any Contracts or arrangements with other
Persons; provided that the notice of termination does not constitute a breach of
the underlying Contract.

6.8

Notice of Certain Events.  Each Party shall promptly notify the other Party of
(a) any change or occurrence, or failure to occur, of any event that,
individually or in the aggregate, has had or could reasonably be expected to
have a Material Adverse Effect with respect to a Party or otherwise results in
any representation or warranty of such Party hereunder being inaccurate in any
material respect; (b) any failure of such Party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder in any material respect; (c) any written notice or other written
communication from any Person alleging that the consent of such Person is or may
be required in connection with the transactions contemplated hereby; (d) any
written notice of default from a Counterparty with respect to any material
Contract; (e) any written notice or other written communication from any
Governmental Entity in connection with the transactions contemplated hereby (to
the extent legally permitted); and (f) receipt of written notice of any action,
suit, claim, investigation or proceeding directly involving any of the Acquired
Assets that would reasonably be expected to materially and adversely affect or
impair the consummation of the transactions contemplated hereby.  Each Party
hereby acknowledges that the other Party does not and shall not waive any right
it may have hereunder as a result of such notifications.

6.9

Cooperation.  The Parties shall cooperate in good faith and use Commercially
Reasonable Efforts to obtain, and not to oppose directly or indirectly, the
Buyer Regulatory Approvals or the Seller Regulatory Approvals.  The Parties will
cooperate, support, assist in preparing or prepare and join in any filings,
applications and other documents reasonably requested by the other Party in
connection with this Agreement.  Seller and Buyer will each use Commercially
Reasonable Efforts to prepare and file (or otherwise effect) as promptly as

   

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practicable after the Agreement Date all applications, notices, petitions and
filings with respect to the Seller Regulatory Approvals and Buyer Regulatory
Approvals.

6.10

Further Assurances.  Each Party shall execute and deliver such additional
instruments of sale, transfer, conveyance, assignment and confirmation and take
such additional action as is necessary to (a) transfer, convey and assign to
Buyer, and for Buyer to assume and accept, in each case in accordance with the
terms hereof, the Administered Contracts (as they become transferable), the
Acquired Assets and Assumed Liabilities and/or to cause Seller and its
Affiliates to be released from the Assumed Liabilities and NU from the NU
Guarantees, and (b) provide for the performance of the obligations of each Party
under the Administration Agreement.  This Section 6.10 shall survive for a
period of one (1) year after the Closing Date; provided that the foregoing
undertakings with respect to the Administration Agreement shall survive until
the full performance of all obligations thereunder.

6.11

Use of Seller’s Name and other Proprietary Information.

(a)

Effective on the Closing Date, Seller hereby grants to Buyer a non-exclusive,
non-transferable, royalty-free right and limited license to use the name and
logo set forth on Schedule 6.11 hereto that are used by Seller in connection
with the Retail Business (collectively, the “Marks”) subject to the provisions
hereof (the “Name Use License”) in connection with Buyer’s purchase of the
Acquired Assets pursuant to this Agreement and Buyer’s performance of the
Administered Contracts pursuant to the Administration Agreement or pursuant to
any Backed Transaction, in each case subject to Seller’s right to cancel such
Name Use License as provided in Section 6.11(c).

(b)

Subject to Section 6.11(c) below, the Name Use License shall remain in effect,
and Buyer shall only use the Marks (i) for purposes of marketing of retail
products and services in the electric energy and natural gas industries pursuant
to the transactions contemplated under this Agreement, for a period of six (6)
months following the Closing Date, and (ii) for purposes of performing services
under the Administration Agreement or pursuant to any Backed Transaction, until
such agreement or Backed Transaction is terminated or expired. Buyer
acknowledges that Seller will continue to use the  Marks.  Accordingly, Seller
retains the right to use the Marks in any manner and to grant non-exclusive
licenses to any third parties to use the Marks other than for the sale of retail
Power or Gas.  Seller further reserves the right and discretion to restrict, by
written notice given to Buyer, the Name Use License in any instance in which
Seller determines that the dual use of any of the Marks adversely affects
Seller's business.  Without limiting the generality of the foregoing, the Name
Use License does not extend to use of the Marks for purposes of conducting
business other than on the retail level, and Buyer shall not use any of the
Marks in connection with registrations, filings, agreements and/or any other
transactions with any Person (including, without limitation, any System
Operator) other than Buyer’s supply of electric energy and/or natural gas to
such Person for end use consumption, except to the extent that Seller otherwise
approves any such use in writing in advance.

   

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(c)

In connection with the Name Use License provided in Section 6.11(a), Buyer shall
use the Marks consistent with Seller’s past practice and any other guidelines or
communications provided to Buyer, and that Seller may terminate the Name Use
License at any time in its sole discretion if used otherwise.  In addition,
except as otherwise provided in this Agreement or the Administration Agreement
with respect to the Administered Contracts, Buyer and its Affiliates shall not
hold themselves out as agents or representatives of Seller or its Affiliates,
and Seller may terminate the Name Use License at any time in its sole discretion
if Buyer or its Affiliates violate any of the foregoing prohibitions.  

(d)

Buyer acknowledges that Seller makes no representations or warranties, express
or implied, with respect to the Marks, and, without limiting the generality of
the foregoing, specifically disclaims any implied warranties of merchantability,
title, noninfringement or fitness for a particular purpose.

(e)

This Section 6.11 shall survive the Closing for the period necessary to give
full effect to its terms.

6.12

Cooperation Regarding the Transfer of Certain Responsibilities and Obligations.
 The Parties shall cooperate in good faith to facilitate the transfer from
Seller to Buyer as of the Closing Date of all responsibilities for meeting the
requirements of and complying with the rules and procedures of applicable System
Operators, Pipeline Administrators and LDCs related to the Contracts (including
the enrollment of Customers), whether such Contracts are transferred on the
Closing Date or will be performed as Administered Contracts pursuant to the
Administration Agreement.  In addition, to the extent that Seller or SENY has
LDC Obligations, Load Obligations or Pipeline Obligations in connection with any
of the Contracts, the Parties shall cooperate and take all steps reasonably
necessary to transfer such LDC Obligations, Load Obligations or Pipeline
Obligations to Buyer in accordance with all applicable requirements, rules and
procedures, as of the Closing Date.  If any of such obligations cannot be
transferred effective on the Closing Date and/or the Parties mutually determine
to defer any of such transfers to minimize disruptions, including for the
avoidance of Customer enrollments other than at the end of the applicable
billing cycle, Buyer and Seller shall fully indemnify and reimburse each other,
within three (3) Business Days after request therefor, with respect to all
Liabilities of Seller and its Affiliates or Buyer incurred as a result of,
and/or in connection with, each such transfer not occurring as of the Closing
Date. If this Agreement is terminated in accordance with Article VIII, Buyer
shall promptly take any and all steps necessary to effect the immediate transfer
of the LDC Obligations, Load Obligations or Pipeline Obligations back to Seller
or SENY, as the case may be; provided that if the immediate transfer of the Load
Obligation or Pipeline Obligation back to Seller or SENY is delayed, Buyer shall
execute such documents or forms and act at the instruction of Seller to place
Seller in the same position Seller or SENY would have been in if the LDC
Obligations, Load Obligations or Pipeline Obligations had been immediately
transferred back to Seller or SENY.  This Section 6.12 shall survive the Closing
for the period necessary to give full effect to its terms.

6.13

Workforce Covenants.

   

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(a)

Within two (2) Business Days after the Agreement Date, Seller shall provide to
Buyer a listing of Seller’s account executives engaged in the Retail Business,
and within five (5) Business Days Seller shall provide to Buyer a listing of all
other employees engaged in the operation or administration of the Retail
Business.  Such list shall include base salary information, the years of
Seller-credited service for each such current employee, and the maximum amount
of severance such employee would be entitled to under Seller’s existing
severance policy, all as of May 31, 2006.  Buyer will be permitted, following
execution hereof, to interview any of the listed individuals and to offer
employment, on comparable terms as such employee had with Seller, to any such
employee on and after Closing, but is not required as a condition hereof to
offer employment to any such individual.  Notwithstanding any hiring decision,
Buyer will have no liability to either such employee or Seller in connection
with any of Seller’s benefit plans (including pension obligations of Seller and
its Affiliates), policies or procedures, term or condition of employment, and
nothing herein is intended to create any right, privilege or claim in any such
employee or Seller, and Buyer expressly disclaims that such employees are
intended beneficiaries hereof.  Subject to the qualification above, and the
provision that the one (1) year requirement for entry into Buyer’s pension plan
cannot be waived and that such employees would not be given credit for prior
service for purposes of determining benefit payments amounts under Buyer’s
pension plan, Buyer covenants with Seller that any such employee accepting
employment with Buyer will be provided with the benefits offered under Buyer’s
benefits, policies and procedures to similarly situated Buyer’s employees,
including credit for service for purposes of vesting benefits under Buyer’s
pension plan, as if the scheduled years of Seller’s service were deemed to be
service as an employee of Buyer.  Buyer shall notify Seller promptly of each
individual decision regarding employment of Persons then working for Seller, and
shall have made all such decisions regarding such employment and notified Seller
thereof not later than fifteen (15) days prior to the Closing and shall provide
Seller a final list of the names of such all such individuals at that time.
 Buyer and Seller shall cooperate with respect to communications to employees
and regarding Buyer’s hiring decisions. Subject to the confirmation in writing
prior to the Closing Date by each such individual of his or her intention to be
so employed (each such a “Hired Employee”), each Hired Employee shall be
retained by Buyer on an at-will basis effective as of the Closing Date.  Buyer
acknowledges that certain employees may remain employed by Seller and/or its
Affiliates and that employees may choose not to accept an offer of employment
with Buyer, and the Parties agree that neither event shall constitute a breach
hereunder by Seller or otherwise excuse the full performance by Buyer of its
obligations in accordance with the terms hereof.

(b)

With respect to each Hired Employee:

(i)

Buyer shall employ such Hired Employee for a period of not less than ninety (90)
days following the Closing (the “Initial Employment Period”) (provided that
Buyer retains the right to terminate any such Hired Employee for cause); and

   

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(ii)

Any Hired Employee terminated after the first (1st) anniversary of the Closing
Date shall be entitled to receive such severance benefits as may be applicable
under severance plans maintained or adopted by Buyer.

(c)

In the event that Buyer terminates any Hired Employee during the Initial
Employment Period for any reason other than for cause, Buyer shall pay any such
terminated Hired Employee an amount equal to such terminated Hired Employee’s
base salary for the remainder of the Initial Employment Period, plus Enhanced
Severance; provided that such terminated Hired Employee executes and delivers to
Buyer a general release and covenant not to sue in favor of Buyer, Seller and
their respective Affiliates in a form reasonably acceptable to Seller.  In the
event that Buyer terminates any Hired Employee after the Initial Employment
Period but prior to the first (1st) anniversary of the Closing Date for any
reason other than cause, Buyer shall pay any such terminated Hired Employee
Enhanced Severance, subject to receipt of the release reference in the
immediately preceding sentence.

(d)

After the Closing, Buyer shall continue to pay all AE/CC Commissions that are
Assumed Liabilities to any Hired Employees who earned such AE/CC Commissions
while employed by Seller in accordance with the Commission Plan and Seller’s
past practices.  With respect to AE/CC Commissions that are Assumed Liabilities,
but are payable to persons who are not Hired Employees because they were not
offered comparable employment by Buyer, Buyer shall reimburse Seller for an
amount equal to fifty percent (50%) of the aggregate payment by Seller to such
persons  with respect to such AE/CC Commissions; provided, that Buyer’s
reimbursement obligation hereunder extends only to such commissions that Seller
pays prior to or on December 31, 2007; provided further, that in the event
Seller has not paid any such commissions due to proceedings before any
Governmental Entity, mediator, arbitrator or similar dispute resolution forum,
initiated with respect to such person prior to December 31, 2007, Buyer shall be
obligated to reimburse Seller as described above for any AE/CC Commissions paid
by Seller with respect to the conclusion or settlement of any such proceeding.
 With respect to Persons who are offered comparable employment with Buyer, but
do not accept the offer, Seller shall not pay any severance or AE/CC Commissions
following the failure to accept such offer.  For purposes of clarity, the
transactions contemplated by this Agreement shall not constitute a “realignment,
reorganization or downsizing” under the Commission Plan.

(e)

This Section 6.13 shall survive the Closing for the period necessary to give
full effect to its terms.

6.14

Supplements to Schedules.

(a)

From time to time prior to the Closing Date, in addition to the changes
contemplated under Section 6.1, Seller shall supplement or amend and deliver
updates to the Schedules to this Agreement (each a “Schedule Update”) which are
necessary to complete or correct any information in the Schedules or in any
continuing representation or warranty of Seller which has been rendered
inaccurate since the Agreement Date.

   

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(b)

If Buyer shall notify Seller in writing of any potential indemnification claim
under Section 9.4 with respect to a Schedule Update Seller shall have the right,
within ten (10) Business Days after receipt of such written notice from Buyer,
to cure, if possible, any claimed deficiency or breach identified in Seller’s
Schedule Update; provided that any such effort to cure shall not prejudice
either Buyer’s right to pursue or Seller’s right to dispute any such claim for
indemnification.

(c)

Schedule Updates related to Select Contracts or SENY Contracts will be delivered
by Seller at the Closing to reflect any changes (as reflected in Seller’s and
SENY’s records as of the Closing Date) to such Schedules originally attached to
this Agreement on the Agreement Date.  Buyer acknowledges that due to the
continued operation of the Retail Business throughout the period between the
Agreement Date and the Closing Date that Schedule Updates related to such
Schedules may not include all of the Contracts as of the Closing due to the
difficulties of reporting such changes in real time.  Consequently, Seller
shall, as soon as practicable following the Closing, update the appropriate
Schedules for any such Contracts not listed in such Schedule Updates.
 Representations and warranties of Seller regarding the Schedules shall be
effective as of the date such Schedules are updated pursuant to the terms
herein.

6.15

Bulk Transfer Laws.  Buyer acknowledges that Seller will not comply with the
provisions of any bulk transfer laws of any jurisdiction in connection with the
transactions contemplated by this Agreement.  Buyer hereby waives compliance by
Seller with the provisions of the bulk sales or transfer laws of all applicable
jurisdictions.

6.16

Transition Services.  For the periods set forth on Schedule 6.16, Seller will
use Commercially Reasonable Efforts to provide those transition services
designated by Buyer on Schedule 6.16 at prices to be mutually agreed upon by
Buyer and Seller prior to the Closing Date; provided that, in the event that
Buyer and Seller are unable to reach such agreement on pricing for any
transitional services in whole or in part prior to the Closing Date, acting
reasonably and in good faith, Seller shall thereafter provide such services and
Buyer shall reimburse Seller for Seller’s actual fully-loaded costs (including
salary, benefits and retention costs) with no profit margin of providing such
services, with any dispute regarding such reimbursement being resolved pursuant
to Section 10.17.  Seller shall furnish any such services in a manner consistent
with past practices; provided (a) to the extent any Hired Employees previously
performed such services for Seller and/or its Affiliates, Seller, by written
notice given to Buyer after the Closing, may decline to provide all or any
portion of the affected services; and (b) Seller reserves the right to vary from
such past practices as a result of resource limitations, including the departure
of personnel who previously performed such services for Seller.  Notwithstanding
anything to the contrary set forth herein and/or under Applicable Law, Seller
and its Affiliates shall have no Liability to Buyer and/or its Affiliates for
any services performed pursuant to this Section 6.16, and Buyer hereby releases
and discharges Seller and its Affiliates from such Liability, it being
understood that Buyer's sole recourse and remedy for dissatisfaction with the
performance of services shall be termination of the services arrangement unless
such liability arises from recklessness or willful misconduct.  This Section
6.16 shall survive after the

   

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termination of the service period until Buyer has paid Seller in full for such
services in accordance with Schedule 6.16.

6.17

Buyer Master Agreements.  The Parties contemplated that in connection with the
 assignment of each Sourcing Contract, simultaneously with the Closing, the
Counterparty to such Sourcing Contract will release Seller and its Affiliates,
in a form acceptable to Seller, from all Liabilities under such Sourcing
Contract, and such Sourcing Contract shall constitute a transaction under, and
otherwise governed by, the Master Agreement(s) between Buyer and such
Counterparty.  The Parties do not contemplate that Seller will transfer its
Master Agreements with Counterparties to Buyer.  To effect the foregoing, prior
to the Closing Date, (a) with respect to Master Agreement(s) between Buyer and
the Counterparty to each Sourcing Contract in existence as of the Agreement
Date, Buyer shall negotiate in good faith with each such Counterparty to allow
for such assignment to occur without incident; and (b) to the extent that Buyer
does not have any or an appropriate Master Agreement in effect with any
Counterparty to a Sourcing Contract that allows Buyer to transact with that
Counterparty for Power and/or Gas (as the case may be), Buyer shall use
Commercially Reasonable Efforts to enter into with each such Counterparty all
agreements or confirmations necessary to transact with that Counterparty for
Power and/or Gas.

6.18

Customer Notification.  As soon as practicable following the Agreement Date
and/or the Closing Date, and only to the extent required by Applicable Law,
Seller and Buyer will cause to be sent to the active Customers under Retail
Sales Contracts a notice of the transfer of such Customers from Seller to Buyer,
which notice will comply with all applicable requirements of the public utility
commissions having jurisdiction (“PUCs”), all other relevant Governmental
Entities and LDCs related to the transfer of Power and/or Gas customers.  Such
notices shall contain such information concerning Seller and Buyer as is
required by Applicable Law and/or LDC Rules.  After the Closing Date, Buyer also
shall cause SENY to send any and all notices to Customers under SENY Contracts,
PUCs and all other relevant Governmental Entities and LDCs, in each case as
required under Applicable Law and/or LDC Rules in connection with the
consummation of the transactions contemplated by this Agreement.  Seller, in its
discretion, may combine the notices required under this Section 6.18 with the
notice contemplated under Section 6.6.  This Section 6.18 shall survive the
Closing for the period necessary to give full effect to its terms.

6.19

Seller’s Retention of Certain SENY Assets; Other SENY Actions.

(a)

Buyer acknowledges and agrees that prior to the Closing, SENY intends to assign,
in a manner reasonably determined by Seller, its account receivables, routine
collection matters and bankruptcy claims (including those collection matters and
bankruptcy claims owned by or applicable to SENY included on Schedule
2.1(b)(ii)) in existence immediately prior to the Closing Date to an Affiliate,
and that any such accounts receivable, routine collection matters and bankruptcy
claims will not be held by SENY when the SENY Shares are sold to Seller.  Buyer
agrees that to the extent Seller is unable to effectuate such assignments prior
to the Closing, Buyer will use Commercially Reasonable Efforts, at Seller’s
expense, to effect such assignments after the Closing, to be effective, where
permitted by Applicable Law, as of the Closing Date.  In the event

   

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that any such matters or claims are not assigned to Seller prior to Closing,
Seller will indemnify Buyer pursuant to Article IX for all Damages suffered by
Buyer associated with any such matters between the Closing Date and the eventual
assignment of such matters.

(b)

Buyer also acknowledges and agrees that prior to the Closing, Seller and SENY
shall remove all cash from SENY bank accounts, and that Seller shall retain any
such cash or cash equivalents where ever held, as well as any cash of SENY in
money pools of Seller Affiliates; provided that, to the extent necessary Seller
shall leave sufficient cash in SENY checking accounts to cover any outstanding
checks of SENY written prior to Closing, and Buyer shall cause such checks to be
honored following the Closing to the extent that Seller left funds in SENY’s
account available therefor.

(c)

Prior to Closing, SENY shall terminate all existing agreements and money pool
arrangements with Seller and its Affiliates which impose obligations on SENY
after the Closing, except that this provision will not act to terminate SENY’s
obligations to perform such actions as are necessary to effect transactions as
are permitted to be performed after Closing pursuant to the terms of this
Agreement.  Seller’s Affiliates shall not, and shall not be obligated to,
provide insurance of any kind for SENY after the Closing Date.

(d)

Prior to Closing SENY shall transfer to Seller or another Affiliate all deposits
or prepayments of Customers and other Counterparties held by SENY in a manner
reasonably determined by Seller for disposition in the manner set forth in
Section 6.4.

(e)

Prior to the Closing, SENY shall assign and/or transfer to Seller and/or its
Affiliates in a manner reasonably determined by Seller, (i) its office leases in
Albany and Syracuse, New York, and (ii) all furniture, equipment, systems or
similar tangible assets of SENY that are in SENY’s Albany and Syracuse, New York
offices or in off-site storage (collectively, the “Retained Syracuse Assets”).
 Buyer agrees that to the extent Seller is unable to effectuate such assignments
and/or transfers prior to the Closing, Buyer will cause SENY to effect such
assignments and/or transfers (at Seller’s expense) after the Closing, to be
effective, where permitted by Applicable Law, as of the Closing Date.  Seller
will indemnify Buyer pursuant to Article IX for all Damages suffered by Buyer
associated with the Retained Syracuse Assets between the Closing Date and the
eventual assignment and/or transfer of such assets.

(f)

Buyer shall reimburse Seller dollar-for-dollar for the value of any prepayments
for goods or services made by SENY prior to the Closing that inure to the
benefit of Buyer on and after the Closing.  Within thirty (30) days after
Closing, Seller shall provide Buyer a list of any such prepayments along with
reasonable supporting documentation, and the aggregate value of such prepayments
shall be settled as a dollar-for-dollar adjustment to the Purchase Price in
favor of Seller as provided in Section 2.3(c).  

   

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6.20

Renewable Portfolio Standards Reporting Obligations.  Following the Closing,
Buyer shall assume responsibility, at its own expense, for taking all action
(other than executing any filing or registration with, or application or request
for consent or approval of, any Governmental Entity) and providing all
information necessary for Seller to comply with all Attribute Laws applicable to
it for the states and time periods set forth on Schedule 6.20 which time periods
extend beyond the Closing (the “Attribute Law Requirements”).  Without limiting
the generality of the foregoing, Buyer shall be responsible at its own expense
for (a) purchasing Renewable Energy Credits on behalf of Seller, (b) depositing
those Renewable Energy Credits in Seller’s accounts in the Tracking Systems used
to demonstrate compliance with the Attribute Law Requirements, (c) preparing for
execution by Seller the filings and registrations with Governmental Entities
necessary for Seller to demonstrate compliance with the Attribute Law
Requirements, and (d) upon execution of such filings and registrations by
Seller, filing such filings and registrations with the appropriate Governmental
Entities prior to the deadline therefor.  All filings and registrations prepared
by Buyer pursuant to this Section 6.20 shall be provided to Seller at least
thirty (30) days prior to the deadline date when such filing or registration
must be filed with a Governmental Entity.  In order to effect the purposes of
this Section 6.20, Seller appoints Buyer as its agent solely for the purpose of
effecting transactions in the Tracking Systems at Buyer’s expense, and Seller
will execute such forms and other documents as may be necessary to evidence or
effect that appointment.  Seller will use Commercially Reasonable Efforts to
cooperate with Buyer in performing its obligations under this Section 6.20.
 This Section 6.20 shall survive the Closing for the period necessary to give
full effect to its terms.

6.21

Cure of Material Adverse Effect.  Each Party shall exercise Commercially
Reasonable Efforts to cure any known Material Adverse Effect existing with
respect to such Party prior to the Closing.

6.22

Buyer Maintenance of Permits and Agreements.

(a)

Buyer shall secure and maintain all Permits set forth on Schedule 4.6(a), at
Buyer's sole cost and expense (including costs of preparation, any filing fees
and/or charges, and any bonds or other performance assurance relating to such
Permits), in a manner that assures procurement on or before the Closing Date.
 Buyer shall furnish to Seller copies of each application for such Permit
simultaneously with the submission thereof to the applicable Governmental
Entity, and within three (3) Business Days after Buyer's issuance or receipt, as
the case may be, Buyer shall provide copies to Seller of any written
communication submitted to, and/or received from, such Governmental Entity
and/or otherwise relating to each such Permit.  Without limiting the generality
of the foregoing, Buyer shall immediately notify Seller of any adverse action
and/or other development with respect to such permitting process.  Buyer shall
furnish to Seller copies of each such Permit within three (3) Business Days
after Buyer’s receipt of same.

(b)

Buyer, at Buyer's sole cost and expense (including costs of any bonds or other
performance assurance relating thereto), shall enter into all agreements,
tariffs and/or other documents set forth on Schedule 4.6(b) with the applicable
LDC, System Operator, and Pipeline Administrator, in a manner that assures
completion on or before

   

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the Closing Date.  Within three (3) Business Days after Buyer's issuance or
receipt, as the case may be, Buyer shall provide copies to Seller of any written
communication submitted to, and/or received from, an LDC, System Operator, and
Pipeline with respect to such efforts.  Without limiting the generality of the
foregoing, Buyer shall immediately notify Seller of any adverse action and/or
other development with respect to such process.  Buyer shall notify Seller in
writing of each successful completion of the process.

6.23

Sale of Storage Gas.

  

(a)

Simultaneously with the Closing, Buyer and Seller shall enter into transactions
providing for the sale to Buyer of stored Gas owned by Seller at the applicable
Storage Gas Location(s).  The transactions will be documented on applicable Gas
Industry Standards Board forms, at the prevailing applicable market price in
effect on the Closing Date.  The sale shall be priced in accordance with the
applicable indices for such purpose as set forth on Schedule 6.23 for the actual
quantity of gas in storage at 10:00 a.m. on the Closing Date.

(b)

Simultaneously and in connection with the Closing and in connection with the
sale of the SENY Shares to Buyer, Buyer shall also acquire the stored Gas owned
by SENY at the applicable Storage Gas Location(s).  Buyer shall pay Seller for
the stored Gas owned by SENY at the prevailing applicable market price in effect
on the Closing Date.  The sale shall be priced in accordance with the applicable
indices for such purpose as set forth on Schedule 6.23 for the actual quantity
of gas in storage at 10:00 a.m. on the Closing Date.  Buyer’s payment for such
stored Gas will be treated as a dollar for dollar adjustment to the Purchase
Price in Seller’s favor as provided in Section 2.2(c).

6.24

Agreement Not to Compete. For good and valuable consideration, Seller agrees
that, except as otherwise provided in this Section 6.24, for a period commencing
on the Closing Date and ending on the date which is sixty (60) months after the
Closing Date (the “Non-Compete Term"), neither Seller nor its Affiliates (Seller
and such Affiliates, herein, the "Restricted Persons") shall, without the prior
written consent of Buyer, directly or indirectly (whether as principal, agent,
independent contractor, partner or otherwise or by any other means) own, manage,
operate, control, participate in, perform services for or otherwise carry on, in
any material respect, any business or division or line of any business for the
purpose of engaging in the deregulated retail commodity sale of natural gas or
electricity to commercial, industrial or institutional customers in the
Territory (a "Competitive Business"); provided, however, that:

(a)

any Restricted Person which is a regulated electric or gas utility may engage in
any such activity if the following conditions have been satisfied (to the extent
not waived by Buyer):

(i)

such activity is limited to the service territory of such Restricted Person;

(ii)

such Restricted Person shall not actively market or solicit the deregulated or
competitive retail commodity sale of natural gas or electricity

   

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to commercial, industrial or institutional customers in connection with such
activities; and

(iii)

such activity has been authorized by a Governmental Entity (including through
legislative action and/or PUC decisions and/or orders) under a regulatory
structure that permits such Restricted Person the opportunity to recover the
economic effect thereof.

The Parties intend that the foregoing exception will allow Seller's regulated
electric or gas utility Affiliates to engage in their regulated utility
businesses, including the installation and operation of, and the sale of output
from, applications at customer premises (including distributed resources),
demand side management, and limited economic development “special” contracts
within their respective service territories, but shall not be construed to allow
such Affiliates to broadly engage in the deregulated or competitive retail
commodity sale of natural gas or electricity to commercial, industrial or
institutional customers.  If Buyer asserts in writing that any of Seller's
regulated electric or gas utility Affiliates have engaged in the foregoing
activities, but have not satisfied the foregoing conditions, then within thirty
(30) days after Seller's receipt of such assertion, Seller shall have the right,
but not the obligation, to pay to Buyer the Buy Out Amount (as calculated
below), in which case (A) Seller's obligations under this Section 6.24 with
respect to Seller's regulated electric or gas utility Affiliates shall be
limited only to a prohibition that such regulated electric or gas utility
Affiliates may not create a competitive subsidiary, division or other entity to
engage in a Competitive Business, or contracting for or engaging any sales
channels for such sales; and (B) such Buy Out will be deemed a simultaneous Buy
Out pursuant to (b)(i)(A) below, effective as of the date of any subsequent
merger or acquisition.  If Seller does not elect to make such payment of the Buy
Out Amount pursuant to the foregoing, then Buyer shall have the right to pursue,
and Seller shall have the right to dispute, any claim by Buyer for
indemnification resulting from such assertion);

(b)

such prohibition shall not prevent any Restricted Person from merging with or
acquiring or being acquired by a company whose business includes such a
Competitive Business; provided that:

(i)

within thirty (30) days after the consummation of such business combination,
Seller either shall (A) unless previously paid pursuant to Section 6.24(a)
above, pay to Buyer the Buy Out Amount (as calculated below), in which case any
and all of Seller's obligations under this Section 6.24 shall be extinguished
without Liability or recourse whatsoever; or (B) advise Buyer in writing that
the surviving entity intends to divest or cease to conduct such Competitive
Business restricted under, and in accordance with, this Section 6.24(b);

(ii)

if Seller has notified Buyer under clause (i)(B) above that the surviving entity
intends to divest or cease to conduct such Competitive Business, then on or
before the expiration of the Divestiture Period, the surviving entity either
shall divest such Competitive Business, or cease to conduct such Competitive
Business (other than as necessary to perform, compromise or

   

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otherwise liquidate obligations outstanding and/or incurred before such
cessation).  The "Divestiture Period" shall mean the period commencing on the
date that Seller notifies Buyer under clause (i)(B) above and ends one hundred
and eighty (180) days thereafter; provided that Seller shall have the right to
request, and the Parties shall negotiate in good faith, an extension of such
initial period based on the divestiture plan for such Competitive Business
(including the marketing plan developed by any independent adviser retained by
the surviving entity for such purpose); provided further that if one or more
agreements for such divestiture have been executed during the Divestiture
Period, but the parties thereto have not yet satisfied the conditions to closing
thereunder, and/or if Buyer (and/or any of its Affiliates) is negotiating to
acquire such Competitive Business, the Divestiture Period shall be extended to
allow for the consummation of such transaction(s);

(iii)

during the Divestiture Period, the surviving entity shall not use the “Select”
and/or "Northeast Utilities" name, mark or brand in soliciting the deregulated
or competitive retail commodity sale of natural gas or electricity to
commercial, industrial or institutional retail customers in connection with such
Competitive Business; and

(iv)

such Competitive Business shall be conducted in the ordinary course during the
Divestiture Period which shall not include the expansion of such Competitive
Business into new states and/or the contribution of capital (financial or
intellectual) to such Competitive Business (other than as reasonably necessary
to preserve the value thereof in the divestiture process and/or to fulfill
Liabilities in connection with the cessation process, as the case may be); and

(c)

the foregoing shall not prohibit Seller’s conduct of those portions of the
Retail Business constituting the Excluded Assets (including those Administered
Contracts for their stated term subject to the Administration Agreement) and
Seller's satisfaction of the Excluded Liabilities, and shall not apply to that
portion of Seller’s business as of the Agreement Date not related to the Retail
Business.

The "Buy Out Amount" shall mean a lump sum payment equal to Three Hundred Thirty
Three Thousand Three Hundred Thirty Three Dollars ($333,333.00) multiplied by
the number of full or partial months remaining in the Non-Compete Term.  For
example, if such election occurs with twenty (20) months remaining in the
Non-Compete Term, the Buy Out Amount would be Six Million Six Hundred Sixty Six
Thousand Six Hundred Sixty Dollars ($6,666,660.00) (20 x $333,333.00 =
$6,666,660.00).  Notwithstanding anything to the contrary in this Section 6.24,
Seller shall have no obligation to pay the Buy Out Amount on more than one
occasion.

ARTICLE VII

CONDITIONS TO THE PARTIES’ OBLIGATIONS TO CLOSE

   

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7.1

Seller’s Closing Conditions.  The obligation of Seller to consummate the
transactions contemplated by this Agreement is subject to the satisfaction, or
waiver by Seller, of the following conditions (collectively, the “Seller’s
Closing Conditions”):

(a)

Representations and Warranties True.  Each of the representations and warranties
of Buyer contained in this Agreement shall be true and correct in all material
respects (except with respect to representations and warranties that contain
materiality qualifiers, which representations and warranties shall be true and
correct in all respects as so qualified) on and as of the Closing Date as if
made on and as of such date, except to the extent that any such representation
or warranty is made as of a specified date, in which case such representation or
warranty shall have been true and correct as aforesaid as of such specified
date;

(b)

Covenants and Agreements Performed.  Buyer shall have performed and complied
with in all material respects all covenants and agreements required by this
Agreement to be performed or complied with by it on or prior to the Closing Date
and all deliveries contemplated by Section 5.3 shall have been made;

(c)

Legal Proceedings.  No preliminary or permanent injunction or other order,
decree, or ruling shall have been issued by a Governmental Entity and no
proceeding for the purpose of obtaining a preliminary injunction shall have been
commenced since the Agreement Date, and no statute, rule, regulation, or
executive order shall have been promulgated or enacted by a Governmental Entity
since the Agreement Date, in each case, which remains in effect on the Closing
Date which restrains, enjoins, prohibits, or otherwise makes illegal the
consummation of the transactions contemplated by this Agreement, the
Administration Agreement or in the Ancillary Documents;

(d)

No Material Adverse Effect.  Between the Agreement Date and the Closing Date
there shall not have occurred or arisen any Material Adverse Effect in relation
to Buyer that Buyer has not cured that results in a right to terminate this
Agreement;

(e)

Bankruptcy.  Buyer shall not be Bankrupt;

(f)

Regulatory Approvals.  All Seller Regulatory Approvals shall have been obtained;

(g)

Permits.  Buyer shall have procured all of the Permits set forth in Section
4.6(a) of the Buyer’s Disclosure Schedule, all of such Permits are in full force
and effect, and there is no action or proceeding pending or threatened against
Buyer or any of its Affiliates before any Governmental Entity directly
concerning any of such Permits; and

(h)

Other Buyer Agreements.  Buyer shall have entered into all agreements, tariffs
and/or other documents and shall have obtained any accounts as required by each
LDC, LDC Pool, System Operator, and Pipeline Administrator as set forth in
Section 4.6(b) of the Buyer’s Disclosure Schedule and otherwise satisfied any
and all conditions

   

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of each of such Persons necessary for Buyer to perform its obligations under the
Contracts and under the Administration Agreement, and there is no action or
proceeding pending or threatened against Buyer or any of its Affiliates Buyer
alleging any noncompliance with any Market Rules and Procedure, LDC Rules and
natural gas pipeline tariffs applicable to the Contracts.

7.2

Buyer’s Closing Conditions.  The obligation of Buyer to consummate the
transactions contemplated by this Agreement is subject to the satisfaction, or
waiver by Buyer, of the following conditions (collectively, the “Buyer’s Closing
Conditions”):

(a)

Representations and Warranties True.  Each of the representations and warranties
of Seller contained in this Agreement shall be true and correct in all material
respects (except with respect to representations and warranties that contain
materiality qualifiers, which representations and warranties shall be true and
correct in all respects as so qualified) on and as of the Closing Date as if
made on and as of such date, except to the extent that any such representation
or warranty is made as of a specified date, in which case such representation or
warranty shall have been true and correct as aforesaid as of such specified date
(in each case as may be modified pursuant to Section 6.14);

(b)

Covenants and Agreements Performed.  Seller shall have performed and complied
with in all material respects all covenants and agreements required by this
Agreement to be performed or complied with by it on or prior to the Closing Date
and all deliveries contemplated by Section 5.2 shall have been made;

(c)

Legal Proceedings.  No preliminary or permanent injunction or other order,
decree, or ruling shall have been issued by a Governmental Entity and no
proceeding for the purpose of obtaining a preliminary injunction shall have been
commenced since the Agreement Date, and no statute, rule, regulation, or
executive order shall have been promulgated or enacted by a Governmental Entity
since the Agreement Date, in each case, which remains in effect on the Closing
Date which restrains, enjoins, prohibits, or otherwise makes illegal the
consummation of the transactions contemplated by this Agreement, the
Administration Agreement or in the Ancillary Documents;

(d)

No Material Adverse Effect.  Between the Agreement Date and the Closing Date
there shall not have occurred or arisen any Material Adverse Effect in relation
to Seller that Seller has not cured that results in a right to terminate this
Agreement;

(e)

Bankruptcy.  Neither Seller nor the Seller’s Guarantor shall be Bankrupt; and

(f)

Regulatory Approvals.  All Buyer Regulatory Approvals shall have been obtained.

7.3

Waiver of Closing Conditions.  Seller may, in its sole discretion, waive any of
the Seller’s Closing Conditions, and Buyer may, in its sole discretion, waive
any of the Buyer’s

   

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Closing Conditions); provided that: (a) Seller shall waive Seller’s Closing
Conditions under Sections 7.1(a), 7.1(b), 7.1(g) and 7.1(h) if the failure to
satisfy any of such conditions does not preclude Buyer from performing its
obligations under the Administration Agreement (including through the use of
transitional services under Section 6.16) and such failure is not a result of
fraud, willful misconduct or failure to comply with Applicable Laws; provided,
further, that such waiver shall not affect Seller’s rights under the
Administration Agreement and/or indemnification pursuant to Article IX; and (b)
Buyer shall waive Buyer’s Closing Conditions under Sections 7.2(a) and 7.2(b)
unless failure to satisfy such conditions is due to fraud, willful misconduct or
failure to comply with Applicable Laws; provided that such waiver shall not
prejudice Buyer’s right to claim indemnification pursuant to Article IX.

ARTICLE VIII

TERMINATION

8.1

Termination.  This Agreement may be terminated at any time prior to the Closing
Date, solely as follows:

(a)

by mutual written consent of Seller and Buyer;

(b)

by Seller or by Buyer, if any representation or warranty contained in this
Agreement is determined not true in some material respect as of the Agreement
Date or not true in some material respect on the Closing Date (after giving
effect to any applicable Schedule Updates and the cure provisions under Section
6.14), and such other Party fails to cure such misrepresentation within thirty
(30) days after receipt of written notice thereof; provided if such
misrepresentation is capable of cure and such other Party shall be pursuing such
cure with due diligence, but such cure cannot be effected within such thirty
(30) days, then such cure period shall be extended until the Closing Date;
provided further that if the then scheduled Closing Date would occur during the
foregoing initial cure period, or the foregoing extended cure period would
expire in less than fifteen (15) days due to the then scheduled Closing Date,
the scheduled Closing Date shall be extended to provide for an aggregate cure
period of forty-five (45) days;

(c)

by Seller or by Buyer, if the other Party has failed to comply in any material
respect with any of its covenants or agreements contained in this Agreement, and
such other Party fails to cure such noncompliance within thirty (30) days after
receipt of written notice thereof; provided if such noncompliance is capable of
cure and such other Party shall be pursuing such cure with due diligence, but
such cure cannot be effected within such thirty (30) days, then such cure period
shall be extended until the Closing Date; provided further that if the then
scheduled Closing Date would occur during the foregoing initial cure period, or
the foregoing extended cure period would expire in less than fifteen (15) days
due to the then scheduled Closing Date, the Closing Date shall be extended to
provide for an aggregate cure period of forty-five (45) days; provided that,
notwithstanding anything to the contrary in the foregoing, elsewhere in this
Agreement, or under Applicable Law, neither Seller nor Buyer shall be entitled
to any cure period with respect to such Party's failure to provide assurances in
strict accordance with Section

   

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2.2(d), and the other Party may immediately exercise any and all of its right
and remedies, including under Section 8.3, upon such failure;

(d)

by Seller or Buyer, if a Governmental Entity has issued a final non-appealable
order, decree or ruling or taken any other action (which order, decree or ruling
the Parties have used all their Commercially Reasonable Efforts to lift), which
permanently restrains, enjoins or otherwise prohibits the transactions
contemplated by this Agreement; or

(e)

by either Party on August 1, 2006, if Closing has not occurred, provided that
(i) such date shall be extended to give full effect to any applicable cure
period (but in no event past July 31, 2006), and (ii) if the  Closing has not
occurred due to a breach of the representations, warranties or obligations of
the Party seeking termination, which breach has not been timely cured, then such
Party may not terminate this Agreement pursuant to this Section 8.1(e).  

Notwithstanding anything to the contrary in this Section 8.1, (A) the Buyer’s
sole and exclusive remedy for any breach of Sections 3.2(c)(iv), 3.4, 3.5, 3.7,
3.9, 6.1, 6.3, 6.4, 6.7, 6.12 and 6.14 shall be indemnification pursuant to
Article IX, and Buyer hereby waives any right to terminate this Agreement as a
result of any such breach, other than a breach due to fraud, willful misconduct
or failure to comply with Applicable Laws, and (B) if Buyer has breached
Sections 4.6 and 6.22 and such breach does not preclude Buyer from performing
its obligations under the Administration Agreement (including through the use of
transitional services under Section 6.16), then the Seller will not exercise its
right to terminate this Agreement as a result of any such breach, other than a
breach due to fraud, willful misconduct or failure to comply with Applicable
Laws; provided, however, the foregoing shall not affect Seller’s rights under
the Administration Agreement.

8.2

Effect of Termination.

(a)

If this Agreement is terminated prior to the Closing pursuant to Section 8.1,
then this Agreement will immediately become null and void, and there will be no
Liability or obligation on the part of Seller or Buyer (or any of their
respective officers, directors, employees, agents or other representatives or
Affiliates), except that the provisions with respect to fees and expenses in
Section 6.2, cooperation regarding the transfer of certain responsibilities and
obligations in Section 6.12, termination damages in Section 8.3, notices in
Section 10.2, consent to venue and governing law in Section 10.4,
confidentiality in Section 10.13, dispute resolution in Section 10.17, and this
Section 8.2 will continue to apply following any such termination.

(b)

If this Agreement is terminated pursuant to Section 8.1, all filings,
applications and other submissions made pursuant to this Agreement shall be
withdrawn from the Person to which they were made.  In addition to the rights of
the Parties set forth in Section 8.3, the Parties shall retain the right to
pursue any other remedies, whether legal or equitable, following any such
termination.

   

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8.3

Termination Damages.

(a)

In the event that (i) Buyer repudiates this Agreement, or (ii) Seller terminates
this Agreement pursuant to Sections 8.1(b) and/or 8.1(c) and Buyer failed to use
its best efforts to cure the breach giving rise to such termination, then in
either case Buyer shall pay to Seller by wire transfer of immediately available
United States funds in accordance with Seller's instructions Twenty Million
Dollars ($20,000,000.00).  In all other instances in which Seller terminates
this Agreement pursuant to Sections 8.1(b) and/or 8.1(c), then Buyer shall pay
to Seller by wire transfer of immediately available United States funds in
accordance with Seller's instructions Three Million Dollars ($3,000,000.00).
 Any  payment hereunder shall be made within three (3) Business Days after such
repudiation or the effective date of such termination.  Buyer specifically
acknowledges that Seller's termination of this Agreement due to a default by
Buyer or Buyer’s repudiation of this Agreement will result in irreparable injury
to Seller to the Retail Business, particularly its value and viability as a
going concern, the full nature and extent of which cannot be reasonably
ascertained at this time, but which are acknowledged by both Parties to be
substantial; accordingly, Buyer shall pay the applicable foregoing sum under
this Section 8.3(a) to Seller as liquidated damages as a mutually agreed and
reasonable estimate of such injury to the Retail Business and not as a penalty.

(b)

In the event that Buyer terminates this Agreement pursuant to Sections 8.1(b)
and/or 8.1(c), then Seller shall pay to Buyer by wire transfer of immediately
available United States funds in accordance with Buyer's instructions Three
Million Dollars ($3,000,000.00) which payment shall be made within three (3)
Business Days after the effective date of such termination.  Seller specifically
acknowledges that Buyer's termination of this Agreement due to a default by
Seller will result in damages suffered by Buyer, the full nature and extent of
which cannot be reasonably ascertained at this time, but which are acknowledged
by both Parties to be substantial; accordingly, Seller shall pay the foregoing
sum under this Section 8.3(b) to Buyer as liquidated damages as a mutually
agreed and reasonable estimate of such damages of Buyer and not as a penalty.

ARTICLE IX

SURVIVAL AND INDEMNIFICATION

9.1

Survival of Representations, Warranties and Covenants.

(a)

The respective representations and warranties of the Parties contained in this
Agreement or in any certificate delivered at Closing pursuant to this Agreement
shall terminate one (1) year after the Closing Date, except that the
representations and warranties set forth (i) in Sections 3.1, 3.2 (other than
Section 3.2(c)(iv)), 3.3, 3.7(e), (f) and (g), 3.8, 4.1, 4.2 (other than Section
4.2(c)(iv)) and 4.3 shall terminate three (3) years after the Closing Date, and
(ii) in Section 3.9 shall survive for the applicable statutory periods and any
extensions thereof.

   

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(b)

The covenants and agreements contained in this Agreement to be performed or
complied with after the Closing shall survive in accordance with their
respective terms.

(c)

Any claim for indemnification with respect to any of such matters which is not
asserted by notice given as herein provided within such specified period of
survival may not be pursued.

9.2

Indemnification by Seller.  On and after the Closing, Seller shall be
responsible for, shall pay on a current basis, and shall indemnify, save, hold
harmless, discharge and release Buyer, all of its Affiliates, its and their
successors and permitted assignees, and all of its and their respective
stockholders, trustees, directors, officers, employees, agents and
representatives (collectively, “Buyer Indemnified Parties”) from and against any
and all Damages incurred arising from, based upon, related to or associated with
(a) the Excluded Assets or Excluded Liabilities; (b) the breach of, or failure
to perform or satisfy, any of the representations, warranties and covenants of
Seller set forth in this Agreement including the Ancillary Documents to which
Seller is a party; and (c) any fraud or willful misconduct of Seller in
connection with this Agreement, including the Ancillary Documents to which
Seller is a party.  Notwithstanding anything to the contrary in the foregoing,
the right of any Buyer Indemnified Party to assert or otherwise claim
indemnification under this Section 9.2 shall irrevocably expire and terminate
(i) with respect to indemnity obligations arising out of, and/or relating to,
the performance of the Retail Sales Contracts  before the Closing Date, for each
such Retail Sales Contract, on the first day of the sixth (6th) month after the
expiration or termination of such Retail Sales Contract (without giving effect
to any renewal and/or other extension thereof occurring after the Closing Date);
(ii) with respect to indemnity obligations related to Section 2.2, until the
entire Purchase Price is paid; and (iii) for all other indemnity obligations of
whatever nature, the later of the survival period provided for in Section 9.1(a)
above, or the first day of the sixth (6th) month after the Closing Date;
provided that the foregoing termination of Seller's indemnity obligations shall
not affect any claims asserted by any Buyer Indemnified Party before the
applicable date of expiration or termination.

9.3

Indemnification by Buyer.  After the Closing, Buyer shall assume, be responsible
for, shall pay on a current basis, and shall indemnify, save, hold harmless,
discharge and release Seller, all of its Affiliates, its and their successors
and permitted assigns, and all of their respective stockholders, trustees,
directors, officers, employees, agents and representatives (collectively,
“Seller Indemnified Parties”) from and against any and all Damages incurred
arising from, based upon, related to or associated with (a) the Acquired Assets
(for Damages accruing at or after the Closing Date) and the Assumed Liabilities;
(b) the breach of, or failure to perform or satisfy any of the representations,
warranties and covenants of Buyer set forth in this Agreement including the
Ancillary Documents to which Buyer is a party, (c) Buyer’s use of the Marks; and
(d) any fraud or willful misconduct of Buyer in connection with this Agreement,
including the Ancillary Documents to which Buyer is a party.  Notwithstanding
anything to the contrary in the foregoing, the right of any Seller Indemnified
Party to assert or otherwise claim indemnification under this Section 9.3 shall
irrevocably expire and terminate for each respective Contract on the first day
of the sixth (6th) month after such Contract is fully performed or properly
terminated in accordance with its terms; provided that the foregoing termination
of

   

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Buyer's indemnity obligations shall not affect any claims asserted by any Seller
Indemnified Party before such date.

9.4

Limitations on Liability and Available Remedies.  Except with respect to the
Administration Agreement entered into pursuant to this Agreement, which shall be
subject to the indemnification, remedy and liability provisions set forth
therein:

(a)

After the Closing, notice of any assertion by any Buyer Indemnified Party that
Seller is liable to any Buyer Indemnified Party in connection with the
transactions contemplated hereby pursuant to Section 9.2 must be made by Buyer
in writing and must be given to Seller, on or prior to the time of expiration
set forth in Section 9.2 above.  No claim for indemnification made after the
applicable expiration time will be valid.

(b)

After the Closing, notice of any assertion by any Seller Indemnified Party that
Buyer is liable to any Seller Indemnified Party pursuant to Section 9.3 in
connection with the transactions contemplated hereby must be given to Buyer on
or prior to the time of expiration set forth in Section 9.3 above.  No claim for
indemnification made after the applicable expiration time will be valid.

(c)

Any notice provided under this Section 9.4 shall state the facts known to the
asserting Party that give rise to such notice in sufficient detail to allow the
other Party to evaluate the assertion.

(d)

None of the Seller Indemnified Parties or Buyer Indemnified Parties shall make
any claim against an indemnifying party under this Article IX unless and until
the aggregate amount of such claims against the indemnifying party exceeds Two
Hundred and Fifty Thousand Dollars ($250,000) (the “Threshold”), whereupon a
Seller Indemnified Party or Buyer Indemnified Party, as the case may be, may
make claims under this Article IX for any and all claimed amounts.
 Notwithstanding the foregoing, (i) Damages resulting from any of the following
shall be excluded from the Threshold: (A) any claims related to the Excluded
Liabilities under Section 2.1(d)(vii), and (B) any claims related to a breach of
Section 3.7(g) other than with respect to SENY Contracts, and (ii) net Damages
resulting from data errors (other than intentional errors) on any Schedules or
Schedule Updates, including any inaccurate, incomplete and/or corrected data
that affects the calculation of any MTM Adjustment, whether discovered before or
after the Closing, shall not be the subject of a claim for indemnification by
any Seller Indemnified Parties or Buyer Indemnified Parties unless and until the
amount of any such claim for such Damages exceeds Five Million Dollars
($5,000,000) whereupon a Seller Indemnified Party or Buyer Indemnified Party, as
the case may be, may make claims under this Article IX for any and all claimed
amounts arising from such Damages.

(e)

The amount of any Damages for which any of the Buyer Indemnified Parties or
Seller Indemnified Parties is entitled to indemnification under this Agreement
shall be reduced by any corresponding insurance proceeds received.
 Indemnification payments payable pursuant to this Article IX shall not take
into account, and shall not be

   

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increased to reflect, the Tax consequences to the indemnified party of the
receipt of (or the right to receive) the indemnification payments.

(f)

Except as specifically provided in Section 8.3 with respect to termination
damages and Section 9.5 with respect to third party claims, none of the Buyer
Indemnified Parties nor the Seller Indemnified Parties shall be entitled to
recover from Seller or Buyer, respectively, for any Damages arising under this
Agreement or in connection with or with respect to the transactions contemplated
in this Agreement, any amount in excess of the actual compensatory damages,
court costs and reasonable attorneys fees, suffered by such Party.  Except as
specifically provided in Section 8.3 with respect to termination damages and
Section 9.5 with respect to third party claims, Buyer on behalf of each of the
Buyer Indemnified Parties and Seller on behalf of each of the Seller Indemnified
Parties waives any right to recover incidental, indirect, special, exemplary,
punitive or consequential damages, including lost revenues or profits, even if
such damages are foreseeable or the damaged Party has advised the other Party of
the possibility of such damages and regardless of whether any such damages are
deemed to result from the failure or inadequacy of any exclusive or other
remedy.

(g)

If the Closing occurs, except for remedies that are otherwise expressly provided
for in this Agreement, the sole and exclusive remedy of each of the Buyer
Indemnified Parties and the Seller Indemnified Parties as against Seller and
Buyer, respectively, with respect to the purchase and sale of the Acquired
Assets and the assumption of the Assumed Liabilities, shall be pursuant to the
indemnification provisions of this Article IX.  Any and all (i) claims relating
to the representations, warranties, covenants and agreements contained in this
Agreement, (ii) other claims pursuant to or in connection with this Agreement,
or (iii) other claims relating to the Acquired Assets and the purchase and sale
thereof and the assumption of the Assumed Liabilities, in each case, of any
Buyer Indemnified Parties against Seller and any Seller Indemnified Parties
against Buyer, respectively, shall be subject to the provisions set forth in
this Article IX.  Except for claims made pursuant to the indemnification
provisions of this Article IX, Buyer, on behalf of each of the Buyer Indemnified
Parties, and Seller, on behalf of each of the Seller Indemnified Parties, shall
be deemed to have waived, to the fullest extent permitted under Applicable Law,
any right of contribution and any and all rights, claims and causes of action it
may have against Seller or any of its Affiliates or Buyer or any of its
Affiliates, respectively, arising under or based on any Applicable Law or
otherwise, in each case relating to the transactions contemplated by this
Agreement.  The Parties acknowledge and agree that this Article IX is intended
to limit the Liabilities and remedies of the Parties (and the Buyer Indemnified
Parties and the Seller Indemnified Parties) with respect to the transactions
contemplated by this Agreement to and against each other, and that nothing in
this Article IX is intended to waive or limit rights or obligations of any Party
(or the Buyer Indemnified Parties and the Seller Indemnified Parties) as against
third parties or rights of assertion with respect thereto.

(h)

No Person entitled to indemnification hereunder or otherwise to damages in
connection with or with respect to the transactions contemplated in this
Agreement shall settle, compromise or take any other action with respect to any
claim, demand, assertion of

   

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Liability or legal proceeding that could materially prejudice or otherwise
materially adversely affect the ability of the Party providing such
indemnification or potentially liable for such damages to defend or otherwise
settle or compromise with respect to such claim, demand, assertion of Liability
or legal proceeding without the prior written consent of the Party providing
such indemnification, which consent shall not be unreasonably withheld.

(i)

Except as specifically otherwise provided for in Sections 8.3 and 10.13, each
Party acknowledges that the payment of money, as limited by the terms of this
Agreement, shall be adequate compensation for breach of any representation,
warranty, covenant or agreement contained in this Agreement or for any other
claim by any Seller Indemnified Parties against Buyer or by any Buyer
Indemnified Parties against Seller arising in connection with or with respect to
the transactions contemplated in this Agreement.  As the payment of money shall
be adequate compensation as set forth above, except as otherwise specified
herein, Buyer and Seller waive any right to rescind this Agreement or any of the
transactions contemplated hereby.

(j)

Each Person entitled to indemnification hereunder or otherwise to Damages in
connection with the transactions contemplated in this Agreement shall use
Commercially Reasonable Efforts to mitigate all Damages after becoming aware of
any event or circumstance that could reasonably be expected to give rise to any
Damages that are indemnifiable or recoverable hereunder or in connection
herewith.

(k)

The indemnification, release and assumption provisions provided for in this
Agreement shall be applicable whether or not the Damages in question arose
solely or in part from the active, passive or concurrent negligence, strict
liability or other fault (other than fraud or willful misconduct) of any
indemnified party.

(l)

Neither Party shall have recourse whatsoever against any of the trustees,
directors, officers,  employees or representatives of the other Party (including
for such purposes, the trustees, directors, officers,  employees or
representatives of any Affiliate of a Party).  Without limiting the generality
of the foregoing, Buyer, on behalf of itself, its Affiliates and the Buyer
Indemnified Parties, and Seller, on behalf of itself, its Affiliates and the
Seller Indemnified Parties, each hereby fully and irrevocably waives any right,
claim or entitlement whatsoever against such trustees, directors, officers,
 employees or representatives relating to any and all Damages suffered or
incurred by any of them arising from, based upon, related to, or associated with
this Agreement.

9.5

Third Party Claims Procedures.  Promptly after receipt by either Party of any
third party claim or notice of the commencement of any third party action or
administrative or legal proceeding or investigation against such Party or any of
its Affiliates, its and their successors and permitted assigns, or any of their
respective stockholders, trustees, directors, officers, employees, agents and
representatives (collectively, the “Indemnified Person”) to which the indemnity
provided for in this Article IX may apply, such Party shall notify the other
Party (the “Indemnifying Party”) of such fact.  The Indemnifying Party shall
have the right to assume the defense thereof with counsel designated by such
Indemnifying Party and reasonably satisfactory

   

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to the Indemnified Person; provided, however, that if the defendants in any such
action include both the Indemnified Person and the Indemnifying Party and the
Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it and/or other Indemnified Persons which are different
from or additional to those available to the Indemnifying Party, the Indemnified
Person or Persons shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such Indemnified Person or Persons and in such event the Indemnifying
Party shall pay the reasonable cost of such separate counsel; provided, further
if the claim is one that cannot by its nature be defended solely by the
Indemnifying Party, the Indemnified Person shall make available all information
and assistance reasonably available and necessary for the defense of the third
party action as the Indemnifying Party may reasonably request at the expense of
the Indemnifying Party.  The Indemnified Person shall be entitled, at its
expense, to participate in any action, suit or proceeding, the defense of which
has been assumed by the Indemnifying Party.  Notwithstanding the foregoing, the
Indemnifying Party shall not be entitled to assume and control the defense of
any such action, suit or proceedings if and to the extent that, in the opinion
of the Indemnified Person and its counsel, such action, suit or proceeding
involves the potential imposition of criminal liability on the Indemnified
Person or a conflict of interest between the Indemnified Person and the
Indemnifying Party, and in such event the Indemnifying Party shall pay the
reasonable expenses of the Indemnified Person in such defense.  The Indemnifying
Party will not have the right to settle any such action, suit or proceeding
without the consent of the Indemnified Person; provided, however, that any such
settlement involving non-monetary obligations of the Indemnified Person, or
otherwise having a direct effect upon its continuing operations shall be subject
to the written consent of the Indemnified Person, which consent shall not be
unreasonably withheld, conditioned or delayed.  

9.6

Waiver of Representations.

(a)

THE EXPRESS REPRESENTATIONS OF SELLER CONTAINED IN THIS AGREEMENT, THE
ADMINISTRATION AGREEMENT AND THE ANCILLARY DOCUMENTS TO WHICH SELLER IS A PARTY
ARE EXCLUSIVE AND ARE IN LIEU OF, ANY OTHER REPRESENTATION OR WARRANTY WITH
RESPECT TO THE ACQUIRED ASSETS OR THE ASSUMED LIABILITIES OR THE STATUS OF
EITHER OF THEM.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLER MAKES
NO REPRESENTATION, WARRANTY OR UNDERTAKING WHATSOEVER WITH RESPECT TO (i) THE
INFORMATION MEMORANDUM ISSUED BY SELLER'S FINANCIAL ADVISOR IN CONNECTION WITH
THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT; AND (ii) INFORMATION
DISCLOSED TO BUYER IN CONNECTION WITH THE EFFORTS OF SELLER AND ITS ADVISORS TO
SELL THE RETAIL BUSINESS, INCLUDING THE CONTENTS OF THE ELECTRONIC DATA ROOM
MAINTAINED AS PART OF THE SALE PROCESS, OR AS DISTRIBUTED TO BUYER AS PART OF
BUYER’S DUE DILIGENCE.

(b)

EXCEPT TO THE EXTENT OF THE EXPRESS REPRESENTATIONS AND WARRANTIES OF SELLER
CONTAINED IN THIS AGREEMENT, THE ADMINISTRATION AGREEMENT AND THE ANCILLARY
DOCUMENTS TO

   

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WHICH SELLER IS A PARTY, SELLER EXPRESSLY DISCLAIMS AND NEGATES, AND BUYER
HEREBY WAIVES, ANY LIABILITY OR RESPONSIBILITY OF SELLER AND ITS AFFILIATES FOR,
(i) ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED OR STATUTORY
(INCLUDING ANY WARRANTIES UNDER THE UNIFORM COMMERCIAL CODE), AND (ii) ANY
STATEMENT OR INFORMATION ORALLY OR IN WRITING MADE OR COMMUNICATED TO BUYER,
INCLUDING ANY OPINION, INFORMATION, ADVICE, FINANCIAL PROJECTIONS OR FORECASTS
RELATING TO THE RETAIL BUSINESS OR THE CONTRACTS, INCLUDING PROJECTIONS
REGARDING THE RETAIL LOAD SERVED BY  SELLER OR SENY UNDER THE RETAIL SERVICE
CONTRACTS AND SENY CONTRACTS, IN EACH CASE THAT MAY HAVE BEEN PROVIDED TO BUYER
BY ANY OFFICER, DIRECTOR, EMPLOYEE, AGENT, CONSULTANT OR REPRESENTATIVE OF
SELLER, SENY, OR ANY OTHER AGENT, CONSULTANT OR REPRESENTATIVE, AND (iii) ANY
OTHER INFORMATION WHETHER PUBLICLY AVAILABLE OR DEVELOPED PRIVATELY AND OBTAINED
BY BUYER, IN EACH CASE, IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED IN THIS
AGREEMENT, THE ADMINISTRATION AGREEMENT OR THE ANCILLARY DOCUMENTS.  EXCEPT TO
THE EXTENT OF THE EXPRESS REPRESENTATIONS AND WARRANTIES OF BUYER CONTAINED IN
THIS AGREEMENT, THE ADMINISTRATION AGREEMENT AND THE ANCILLARY DOCUMENTS TO
WHICH BUYER IS A PARTY, BUYER EXPRESSLY DISCLAIMS AND NEGATES, AND SELLER HEREBY
WAIVES, ANY LIABILITY OR RESPONSIBILITY OF BUYER AND ITS AFFILIATES FOR, (A) ALL
OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AND (B) ANY
STATEMENT OR INFORMATION ORALLY OR IN WRITING MADE OR COMMUNICATED TO SELLER,
INCLUDING ANY OPINION, INFORMATION OR ADVICE THAT MAY HAVE BEEN PROVIDED TO
SELLER BY ANY OFFICER, DIRECTOR, EMPLOYEE, AGENT, CONSULTANT OR REPRESENTATIVE
OF BUYER, OR ANY OTHER AGENT, CONSULTANT OR REPRESENTATIVE, IN EACH CASE, IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT OR THE
ADMINISTRATION AGREEMENT.

(c)

WITH RESPECT TO ANY FINANCIAL PROJECTION OR FORECAST DELIVERED BY OR ON BEHALF
OF SELLER OR SENY TO BUYER, OR OTHER PUBLIC OR PRIVATE INFORMATION OBTAINED BY
BUYER, BUYER ACKNOWLEDGES AND AGREES BY ITS EXECUTION OF THIS AGREEMENT THAT (A)
THERE ARE UNCERTAINTIES INHERENT IN ATTEMPTING TO MAKE SUCH PROJECTIONS AND
FORECASTS, AND BUYER IS FAMILIAR WITH SUCH UNCERTAINTIES; (B) BUYER IS TAKING
FULL RESPONSIBILITY FOR MAKING ITS OWN EVALUATION OF ALL SUCH PROJECTIONS AND
FORECASTS SO FURNISHED TO IT OR OTHER PUBLIC OR PRIVATE INFORMATION OBTAINED BY
BUYER; AND (C) BUYER SHALL HAVE NO CLAIM AGAINST ANY OF SELLER, SENY AND/OR ANY
OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, TRUSTEES, STOCKHOLDERS,
AFFILIATES OR REPRESENTATIVES WITH RESPECT TO

   

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SUCH PROJECTIONS OR FORECASTS OR SUCH OTHER PUBLIC OR PRIVATE INFORMATION.

(d)

EXCEPT TO THE EXTENT OF THE EXPRESS REPRESENTATIONS AND WARRANTIES OF SELLER
CONTAINED IN THIS AGREEMENT, THE ADMINISTRATION AGREEMENT AND THE ANCILLARY
DOCUMENTS TO WHICH SELLER IS A PARTY, SELLER EXPRESSLY DISCLAIMS AND NEGATES,
AND BUYER HEREBY WAIVES, ANY LIABILITY OR RESPONSIBILITY FOR, ANY WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, AS TO THE QUALITY, MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, CONFORMITY TO SAMPLES, OR CONDITION OF ANY ACQUIRED
ASSET OR ANY PART THEREOF.

(e)

 EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, BUYER ACKNOWLEDGES THAT THE
CONTRACTS DO NOT INCLUDE SUFFICIENT SOURCING AGREEMENTS TO PROVIDE FOR THE
PROVISION OF GAS OR POWER UNDER ALL OF THE RETAIL SERVICE CONTRACTS AND SENY
CONTRACTS FOR THE PROVISION OF RETAIL GAS AND POWER, AND THAT SUCH SHORTAGE IS
REFLECTED IN THE PURCHASE PRICE.  BUYER FURTHER ACKNOWLEDGES THAT IT HAS ASSUMED
ANY RISKS ASSOCIATED WITH CHANGES IN THE MARKET FOR GAS AND POWER THAT MAY OCCUR
BETWEEN THE AGREEMENT DATE AND THE CLOSING DATE.

ARTICLE X

MISCELLANEOUS

10.1

Setoff Rights and Limitations.  Except as provided in the next sentence, neither
Party shall have the right to setoff, net, off-set, or otherwise combine
accounts or obligations

   

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Owed to the other Party under any other agreement(s), instrument(s) or
undertaking(s), against any amounts Owed by such Party to the other Party under
this Agreement or the Administration Agreement.  Each Party shall have the right
to setoff, net, off-set or otherwise combine amounts Owed after the Closing Date
to the other Party under this Agreement or the Administration Agreement against
any amounts Owed by such other Party under this Agreement and in the
Administration Agreement.  For purposes of this Section 10.1, “Owed” shall mean
any amounts owed or otherwise accrued and payable (regardless of whether such
amounts have been or could be invoiced), except for amounts disputed in good
faith, as of the applicable date of determination and regardless of whether
arising prior to or after the Agreement Date.  Each Party represents and
acknowledges that the prohibition set forth in this Section 10.1 is an integral
part of this Agreement and the Administration Agreement and that without such
prohibition the Parties would not be willing to enter into this Agreement or the
Administration Agreement.

10.2

Notice.  All notices, requests, statements or payments shall be made as
specified below.  All notices are required to be in writing and shall be
delivered by letter, facsimile or other documentary form.  Notice by facsimile
or hand delivery shall be deemed to have been received by the close of the
Business Day on which it was transmitted or hand delivered (unless transmitted
or hand delivered after close of the Business Day in which case it shall be
deemed received at the close of the next Business Day).  Notice by overnight
mail or courier shall be deemed to have been received two (2) Business Days
after it was sent.  Notice by registered or certified mail, postage prepaid,
return receipt requested shall be deemed to have been received five (5) Business
Days after it was sent.  A Party may change its addresses by providing notice of
same in accordance herewith.  Notices shall be sent as follows:

 

If to Seller, to:

    

Select Energy, Inc.

 

107 Selden Street

 

Berlin, CT 06037-1616

    

Phone:

(860) 665-2702

 

Fax:

(860) 665-2017

 

Attn:

President

    

With a copy to:

    

Northeast Utilities Service Company

 

107 Selden Street

 

Berlin, CT 06037-1616

    

Phone:  (860) 665-3181

 

Fax:  

 (860) 665-5504

 

Attn:  General Counsel

  

   

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If to Buyer, addressed to:

    

Amerada Hess Corporation

 

One Hess Plaza

 

Woodbridge, NJ  07095

    

Phone:   (732) 750-6650

 

Fax:

  (732) 750-6670

 

Attn:   

  Senior Vice President, Energy Marketing

    

With a copy to:

    

Amerada Hess Corporation

 

One Hess Plaza

 

Woodbridge, NJ  07095

    

Phone:   (732) 750-7123

 

Fax:

  (732) 750-6944

 

Attn:      Associate General Counsel, Marketing and Refining

10.3

No Third Party Beneficiaries.  Nothing in this Agreement or any Schedules will
provide any benefit to any third party or entitle any third party to any claim,
cause of action, remedy or right of any kind, it being the intent of the Parties
that this Agreement will not be construed as a third-party beneficiary contract.
 As used in this Section 10.3, the term “third party” does not include
Affiliates of the Parties.

10.4

Governing Law.  This Agreement and the rights and duties of the Parties
hereunder will be governed by and construed, enforced and performed in
accordance with the law of the State of New York, without giving effect to
principles of conflicts of laws.

10.5

Entire Agreement.  This Agreement, the Administration Agreement and the
Ancillary Documents and documents incorporated by reference herein, including
the Exhibits and Schedules and the Confidentiality Agreement, contain the entire
agreement between the Parties with respect to the subject matter hereof and
there are no agreements, understandings, representations, or warranties between
the Parties other than those set forth or referred to herein or therein;
provided that Buyer's undertakings under the Confidentiality Agreement relating
to the Acquired Assets shall terminate on the Closing Date.

10.6

Waiver.  No waiver by any Party of any covenant, condition or of default by the
other Party in the performance of any of the provisions of this Agreement will
be construed as a waiver of any other covenant, condition or default hereunder
whether of a like kind or different nature.

   

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10.7

Amendments and Extensions.  No amendment, modification or change to this
Agreement will be enforceable unless reduced to writing and executed by duly
authorized representatives of both Parties or, in the case of a waiver or
consent, by the Party waiving compliance or giving consent.  The Parties
expressly agree that any dates, deadlines and time periods recited herein are
subject to extension by mutual written agreement of the Parties.

10.8

Severability.  If any provision hereof is declared or rendered unlawful by any
Governmental Entity with jurisdiction over the Parties, or deemed unlawful due
to a statutory change, the Parties will negotiate an equitable adjustment to the
provisions of this Agreement with a view to effecting, to the extent possible,
the original purpose and intent of this Agreement, and the validity and
enforceability of the remaining provisions of this Agreement shall not be
affected thereby.

10.9

Counterparts; Facsimile Signatures.  This Agreement may be executed in several
counterparts, including through facsimile signatures, each of which is an
original and all of which constitute one and the same agreement.

10.10

Joint Negotiation and Drafting.  This Agreement shall be considered for all
purposes as prepared through the joint efforts of the Parties and shall not be
construed against one Party or the other as a result of the preparation,
submission or other event of negotiation, drafting or execution hereof.  The
captions for the Articles and Sections contained in this Agreement have been
inserted for convenience only and form no part of this Agreement and shall not
be deemed to affect the meaning or construction of any of the covenants,
agreements, conditions or terms of this Agreement.

10.11

Assignment and Binding Effect.  Neither Party may assign this Agreement or its
rights hereunder without the prior written consent of the other Party, which
consent shall not be unreasonably withheld, conditioned or delayed; provided
that Seller may assign this Agreement to an Affiliate so long as the Seller
Guaranty continues for the benefit of Buyer and is not extinguished.
 Assignments or transfers not in compliance with this Section 10.11 shall be
void ab initio.  This Agreement shall inure to the benefit of and be binding
upon the Parties and their respective successors and permitted assigns.

10.12

Interpretation.  In this Agreement, words importing the singular include the
plural and vice versa.  Except where otherwise expressly provided or unless the
context otherwise necessarily requires: (a) reference to Applicable Law shall
mean such Applicable Law in effect as amended or modified as of the date on
which the reference is made, or performance and/or compliance is required; (b)
reference to a given agreement or instrument is a reference to that agreement or
instrument as originally executed, and as modified, amended, supplemented and
restated through the date as of which reference is made to that agreement or
instrument or performance is required under that agreement or instrument; (c)
"includes", "including" or any other variant thereof means "including, without
limitation,"; (d) the phrase "and/or" shall be deemed to mean the words both
preceding and following such phrase, or either of them; (e) reference to a
Person includes its heirs, executors, administrators, successors and permitted
assigns; (f) unless otherwise indicated, whenever this Agreement refers to a
number of days, such number shall refer to calendar days; and (g) any pronoun
includes the corresponding

   

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masculine, feminine or neuter forms.  The words "will" and "shall" are used
interchangeably throughout this Agreement; the use of either connotes a
mandatory requirement; and the use of one or the other will not mean a different
degree of right or obligation for either Party.

10.13

Confidentiality.

(a)

Unless otherwise agreed by the Parties, the specific terms of this Agreement
(including the Purchase Price), the Administration Agreement (including the
Administration Fee) and the Ancillary Documents shall not be disclosed to any
Person not employed or retained by such Party, except that such information may
be disclosed to:

(i)

any of the receiving Party’s or such Party’s Affiliates’, directors, trustees,
officers, employees and agents and advisors (collectively, its
“Representatives”) who require access to such information in connection with
this Agreement or the transactions contemplated hereby or for the conduct of the
receiving Party’s ordinary course of business.  Each of the Parties agree that
any of its Representatives to whom such information is disclosed will be
informed of the confidential or proprietary nature thereof and of the receiving
Party’s obligations under this Agreement and that each Party shall be
responsible for any use or disclosure of such information by any of its
Representatives; and

(ii)

as may be required or appropriate in response to any summons, subpoena, request
from a Governmental Entity, or otherwise in connection with any litigation or
arbitration, or to comply with any Applicable Law, including a regulatory
request or requirement, or accounting disclosure rule or standard (hereafter, a
“Required Disclosure”).  A Party seeking to disclose information as a Required
Disclosure shall, to the extent practical or permissible, notify the other Party
prior to making such disclosure in order to permit the other Party an
opportunity to seek an appropriate protective order or grant a waiver of
compliance with the provisions of this Agreement; provided that Buyer
acknowledges that Seller and its Affiliates shall disclose the transactions
contemplated under this Agreement in compliance with Applicable Laws pertaining
to securities issued by the Seller Guarantor, and Buyer hereby irrevocably
consents to such disclosure only to the extent that such disclosure is required
by Applicable Law.  Notwithstanding the foregoing, either Party will be
permitted to disclose such information or any portion thereof without notice to
the other Party upon the request of any Governmental Entity having or claiming
to have authority to regulate or oversee any aspect of such Party’s business or
that of its Affiliates, provided that the Party disclosing such information uses
reasonable efforts to advise such Governmental Entity of the confidential nature
of such information and request confidential treatment (if available) for such
information.

(b)

Nothing in this Section 10.13 shall restrict (i) either Party from pursuing and
obtaining all regulatory approvals required to consummate the transactions
contemplated under this Agreement; provided that that the Party disclosing
information uses reasonable efforts to advise the applicable Governmental Entity
of the confidential

   

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nature of such information and request confidential treatment (if available) for
such information Buyer; (ii) the issuance of notices to Customers as
contemplated by Section 6.19; and (iii) the ability of either Party to perform
its respective obligations under the Administration Agreement; provided that if
such performance requires the disclosure of all or a portion of any documents,
including the Administration Agreement, the Party seeking to disclose such
documentation shall redact the same to the fullest extent possible.

(c)

The Parties acknowledge that the disclosing Party would not have an adequate
remedy under Applicable Law and would be irreparably harmed if the recipient
breached this Section 10.13; accordingly, without prejudice to the rights and
remedies otherwise available, the disclosing Party shall be entitled to
equitable relief by way of injunction to prevent breaches of this Section 10.13
by the receiving Party or any other recipients of such confidential information.

(d)

Notwithstanding the foregoing, each Party (and each Representative of such Party
for so long as they remain a Representative) may disclose to any and all
Persons, without limitation of any kind, the Tax treatment and Tax structure of
the transaction contemplated by this Agreement and all materials of any kind
(including opinions or other analyses) that are provided to such Party relating
to such Tax treatment or Tax structure.  Nothing in this Agreement or any other
agreement between the Parties, express or implied, shall be construed as
limiting in any way the ability of either Party to consult with any Tax advisor
(including a Tax advisor independent from all other entities involved in the
transaction contemplated by this Agreement) regarding the Tax treatment or Tax
structure of the transaction contemplated by this Agreement.

10.14

Waiver of Jury Trial.  Each Party hereby irrevocably waives, to the fullest
extent permitted by law, any and all right to a trial by jury in any action,
suit or other legal proceeding based on, arising out of or relating to this
Agreement or the transactions contemplated herein.  

10.15

Incorporation of Exhibits and Schedules.  The Exhibits and Schedules identified
in this Agreement are incorporated herein by reference and made a part hereof.

10.16

Good Faith Covenant.  The Parties agree that their actions and dealings with
each other shall be subject to an express covenant of good faith and fair
dealing.

10.17

Dispute Resolution.

(a)

Negotiation between Executives.  The Parties shall attempt in good faith to
resolve any dispute arising out of or relating to this Agreement, promptly by
negotiation between executives who have authority to settle the controversy and
who are at a higher level of management than the person(s) with direct
responsibility for administration of this Agreement.  Any Party may give the
other Party written notice of any dispute not resolved in the normal course of
business.  Such notice shall include: (i) a statement of that Party’s position
and a summary of arguments supporting that position; and (ii) the name and title
of the executive who will be representing that Party and of any other person who
will accompany the executive.  Within fifteen (15) days after delivery of the
notice, the

   

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receiving Party shall respond with: (A) a statement of that Party’s position and
a summary of arguments supporting that position; and (B) the name and title of
the executive who will represent that Party and of any other person who will
accompany the executive.  Within thirty (30) days after delivery of the initial
notice, the executives of both Parties shall meet at a mutually acceptable time
and place, and thereafter as often as they reasonably deem necessary, to attempt
to resolve the dispute.  All reasonable requests for information made by one
Party to the other will be honored.  All negotiations pursuant to this clause
are confidential and shall be treated as compromise and settlement negotiations
for purposes of applicable rules of evidence.

(b)

Mediation.  If the dispute has not been resolved by negotiation within
forty-five (45) days of the disputing Party’s notice, or if the Parties failed
to meet within thirty (30) days following delivery of such notice, the Parties
shall endeavor to settle the dispute by mediation under the then current CPR
Mediation Procedure; provided, however, that if one Party fails to participate
as provided herein, the other Party can initiate mediation prior to the
expiration of the forty-five (45) days.  Unless otherwise agreed, the Parties
will select a mediator from the CPR Panels of Distinguished Neutrals.  The place
of mediation shall be in a neutral location agreed to by the Parties.

(c)

Arbitration.  If the dispute has not been resolved by mediation within ninety
(90) days of the initiation of such procedure, such dispute shall be finally
resolved by arbitration in accordance with the then current CPR Rules for
Non-Administered Arbitration by a sole arbitrator, for disputes involving
amounts in the aggregate under Three Million Dollars ($3,000,000), or three (3)
arbitrators, for disputes involving amounts in the aggregate equal to or greater
than Three Million Dollars ($3,000,000), of whom each Party shall designate one
in accordance with the “screened” appointment procedure provided in Rule 5.4,
with the third arbitrator selected pursuant to CPR Rules 5 and 6; provided,
however, that if either Party will not participate in a non-binding procedure,
the other may initiate arbitration before expiration of the above period.  The
arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16,
and judgment upon the award rendered by the arbitrator(s) may be entered by any
court having jurisdiction thereof.  The place of arbitration shall be Hartford,
Connecticut.

(d)

Powers of Arbitrators.  The arbitrator(s) are not empowered to award damages in
excess of compensatory damages (including liquidated damages specified in
Section 8.3) and each Party expressly waives and foregoes any right to punitive,
exemplary or similar damages unless a statute requires that compensatory damages
be increased in a specified manner.  All costs of the arbitration shall be paid
equally by the Parties, unless the award shall specify a different division of
the costs.  Each Party shall be responsible for its own expenses, including
attorneys’ fees.

(e)

Compelled Arbitration.  The Parties shall proceed in good faith to conclude the
arbitration proceeding as quickly as reasonably possible.  If a Party refuses to
participate in an arbitration proceeding as required by this Agreement, the
other Party may petition any Governmental Entity having proper jurisdiction for
an order directing the refusing

   

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Party to participate in the arbitration proceeding.  All costs and expenses
incurred by the petitioning Party in enforcing such participation will be paid
by the refusing Party.

 [Signature Page Follows]

   

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IN WITNESS WHEREOF, the Parties have signed this Agreement as of the Agreement
Date.

 

SELLER:

    

SELECT ENERGY, INC.

    

By:  /s/ William J. Quinlan

Name: William J. Quinlan

Title: Chief Operating Officer

    

BUYER:

    

AMERADA HESS CORPORATION

    

By:  /s/ John A. Gartman

Name: John A. Gartman

Title: Senior Vice-President - Energy Marketing