Exhibit 10-7

R. E. GINNA NUCLEAR POWER PLANT

ASSET PURCHASE AGREEMENT

BY

AND AMONG

ROCHESTER GAS AND ELECTRIC CORPORATION, AS SELLER

CONSTELLATION GENERATION GROUP, LLC, AS BUYER

AND

CONSTELLATION ENERGY GROUP, INC., AS BUYER'S PARENT

DATED AS OF NOVEMBER 24, 2003

TABLE OF CONTENTS

     

Page

ARTICLE 1 DEFINITIONS

  1

 

Section 1.1

Definitions.

  1

 

Section 1.2

Certain Interpretive Matters.

 20

ARTICLE 2 PURCHASE AND SALE

 20

 

Section 2.1

Purchased Assets.

 20

 

Section 2.2

Excluded Assets.

 23

 

Section 2.3

Assumed Liabilities and Obligations.

 24

 

Section 2.4

Excluded Liabilities.

 27

 

Section 2.5

Control of Litigation.

 29

ARTICLE 3 THE CLOSING

 30

 

Section 3.1

Closing.

 30

 

Section 3.2

Payment of Purchase Price.

 30

 

Section 3.3

Adjustment to Purchase Price.

 30

 

Section 3.4

Allocation of Purchase Price.

 33

 

Section 3.5

Prorations.

 34

 

Section 3.6

Deliveries by Seller.

 35

 

Section 3.7

Deliveries by Buyer.

 36

 

Section 3.8

Delivery of DOE Credit Support.

 37

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER

 38

 

Section 4.1

Organization.

 38

 

Section 4.2

Authority Relative to this Agreement.

 38

 

Section 4.3

Consents and Approvals; No Violation.

 38

 

Section 4.4

Reports.

 39

 

Section 4.5

Undisclosed Liabilities.

 39

 

Section 4.6

Absence of Certain Changes or Events.

 40

 

Section 4.7

Title and Related Matters.

 40

 

Section 4.8

Real Property Agreements.

 40

 

Section 4.9

Insurance.

 40

 

Section 4.10

Environmental Matters.

 41

 

Section 4.11

Labor Matters.

 42

 

Section 4.12

ERISA; Benefit Plans.

 43

 

Section 4.13

Real Property; Plant and Equipment.

 45

 

Section 4.14

Condemnation.

 45

 

Section 4.15

Certain Contracts and Arrangements.

 45

 

Section 4.16

Legal Proceedings, etc.

 46

 

Section 4.17

Permits.

 47

 

Section 4.18

NRC Licenses.

 47

 

Section 4.19

Regulation as a Utility.

 47

 

Section 4.20

Taxes.

 48

 

Section 4.21

Qualified Decommissioning Funds.

 48

 

Section 4.22

Nonqualified Decommissioning Fund.

 50

 

Section 4.23

WARN Act

 51

 

Section 4.24

Intellectual Property

 51

 

Section 4.25

Zoning Classification

 51

 

Section 4.26

Utilities

 51

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER AND BUYER'S PARENT

 52

 

Section 5.1

Organization; Qualification.

 52

 

Section 5.2

Authority Relative to this Agreement.

 52

 

Section 5.3

Consents and Approvals; No Violation.

 53

 

Section 5.4

Availability of Funds.

 53

 

Section 5.5

Legal Proceedings.

 53

 

Section 5.6

WARN Act.

 54

 

Section 5.7

Transfer of Decommissioning Funds.

 54

 

Section 5.8

Foreign Ownership or Control.

 54

 

Section 5.9

Seller's Representations and Warranties.

 54

 

Section 5.10

Permit Qualifications.

 54

ARTICLE 6 COVENANTS OF THE PARTIES

 55

 

Section 6.1

Conduct of Business Relating to the Purchased Assets.

 55

 

Section 6.2

Access to Information.

 59

 

Section 6.3

Expenses.

 61

 

Section 6.4

Further Assurances; Cooperation.

 61

 

Section 6.5

Public Statements.

 63

 

Section 6.6

Consents and Approvals.

 63

 

Section 6.7

Brokerage Fees and Commissions.

 66

 

Section 6.8

Tax Matters.

 67

 

Section 6.9

Advice of Changes.

 68

 

Section 6.10

Employees.

 69

 

Section 6.11

Risk of Loss.

 75

 

Section 6.12

Decommissioning Funds.

 76

 

Section 6.13

Spent Nuclear Fuel Fees.

 77

 

Section 6.14

Department of Energy Decontamination and Decommissioning Fees.

 78

 

Section 6.15

Cooperation Relating to Insurance and Price-Anderson Act.

 78

 

Section 6.16

Tax Clearance Certificates.

 79

 

Section 6.17

Release of Seller.

 79

 

Section 6.18

Private Letter Ruling.

 79

 

Section 6.19

NRC Commitments.

 80

 

Section 6.20

Decommissioning.

 80

 

Section 6.21

Uprate.

 81

 

Section 6.22

Right of First Refusal.

 82

ARTICLE 7 CONDITIONS

 82

 

Section 7.1

Conditions to Obligations of Buyer.

 82

 

Section 7.2

Conditions to Obligations of Seller.

 84

ARTICLE 8 INDEMNIFICATION

 86

 

Section 8.1

Indemnification.

 86

 

Section 8.2

Defense of Claims.

 88

ARTICLE 9 TERMINATION

 90

 

Section 9.1

Termination.

 90

 

Section 9.2

Procedure and Effect of No Default Termination.

 91

ARTICLE 10 MISCELLANEOUS PROVISIONS

 91

 

Section 10.1

Amendment and Modification.

 91

 

Section 10.2

Waiver of Compliance; Consents.

 92

 

Section 10.3

Survival of Representations, Warranties, Covenants and Obligations.

 92

 

Section 10.4

Notices.

 92

 

Section 10.5

Assignment.

 94

 

Section 10.6

Governing Law.

 94

 

Section 10.7

Counterparts.

 95

 

Section 10.8

Interpretation.

 95

 

Section 10.9

Schedules and Exhibits.

 95

 

Section 10.10

Entire Agreement.

 95

 

Section 10.11

Bulk Sales Laws

 96

 

Section 10.12

No Joint Venture

 96

 

Section 10.13

Change in Law

 96

 

Section 10.14

Buyer's Parent Support

 96

 

Section 10.15

Severability

 96

LIST OF EXHIBITS AND SCHEDULES

EXHIBITS

 

Exhibit A

Form of Assignment and Assumption Agreement

Exhibit B

Form of Bill of Sale

Exhibit C

Form of Reciprocal Easement Agreement

Exhibit D

Form of Interconnection Agreement

Exhibit E

Form of Bargain and Sale Deed for Seller

Exhibit F

Form of Power Purchase Agreement for Seller

Exhibit G

Form of Seller's Parent Guaranty

Exhibit H

Form of Opinion from Counsel for Seller and Seller's Parent

Exhibit I

Form of Opinion from Counsel for Buyer and Buyer's Parent

Exhibit J

Form of Emergency and Environmental Equipment Easements

   

SCHEDULES

 

1.1(173)

Transferable Permits

2.1(j)

Intellectual Property

2.1(n)

Radio Licenses

2.1(t)

Emergency Assets and Agreements

2.2(a)

Excluded Assets

2.2(l)

Excluded Contracts

3.3(a)(vi)

Low Level Waste and Disposal Criteria

3.3(a)(viii)

Purchase Price Adjustment

4.3(a)

Seller's Third Party Consents

4.3(b)

Seller's Required Regulatory Approvals

4.5

Liabilities

4.6

Absence of Certain Changes or Events

4.7

Exceptions to Title to Real Property

4.8

Real Property Agreements

4.9

Insurance Exceptions

4.10

Environmental Matters

4.11

Employment Matters

4.12(a)

ERISA; Benefit Plans

4.12(b)

Benefit Plan Exceptions

4.13(a)

Description of Real Property

4.13(b)

Description of Major Equipment Components and Personal Property

4.13(c)

FSAR Exceptions

4.14

Notices of Condemnation

4.15(a)(i)

List of Seller's Agreements (other than Fuel Contracts)

4.15(a)(ii)

List of Fuel Contracts

4.15(b)

Agreement Exceptions

4.15(c)

Agreement Defaults

4.16

List of Legal Proceedings

4.17(a)

List of Permit Violations

4.17(b)

List of Material Permits (other than Transferable Permits)

4.18(a)

List of NRC License Violations

4.18(b)

List of Material NRC Licenses

4.20

General Tax Matters

4.20(a)

Tax Matters: Notice of Deficiency or Assessment

4.20(b)

Tax Matters: Extensions of Applicable Statutory Periods of Limitations

4.21

Tax and Financial Matters Relating to Qualified Decommissioning Funds

4.25

Zoning Classification

5.3(a)

Buyer's Third Party Consents

5.3(b)

Buyer's Required Regulatory Approvals

5.5

List of Buyer's Legal Proceedings

6.1(a)

Capital Budget

6.10(a)

Transferred Employees

6.10(o)

Assumed Plans and Agreements

   

ASSET PURCHASE AGREEMENT

          ASSET PURCHASE AGREEMENT, dated as of November 24, 2003, (the
"Agreement") by and among Rochester Gas and Electric Corporation, a New York
corporation ("RG&E" or "Seller"), Constellation Generation Group, LLC, a limited
liability company formed under the laws of the state of Maryland ("Buyer"), and
Constellation Energy Group, Inc., a Maryland corporation as parent of the Buyer
("Buyer's Parent"). Seller, Buyer and Buyer's Parent are referred to
individually as a "Party," and collectively as the "Parties."

W I T N E S S E T H:

          WHEREAS, Seller owns R. E. Ginna Nuclear Power Plant ("Ginna"), NRC
Operating License No. DPR-18, located in Ontario, New York, and certain
facilities and other assets associated therewith and ancillary thereto;

          WHEREAS, Buyer desires to purchase and assume, and Seller desires to
sell and assign the Purchased Assets (as defined in Section 2.1 below) and
certain associated liabilities, upon the terms and conditions hereinafter set
forth in this Agreement; and

          WHEREAS, the Parties desire that Buyer's Parent support the
obligations of Buyer hereunder from the time of execution of this Agreement to
the Closing Date.

          NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements hereinafter set forth, and intending
to be legally bound hereby, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

          Section 1.1     Definitions.  As used in this Agreement, the following
terms have the meanings specified in this Section 1.1.

          (1)     "Actual Amount" has the meaning set forth in Section 6.10(h).

          (2)     "Affiliate" has the meaning set forth in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act.

          (3)     "Agreement" means this Asset Purchase Agreement together with
the Schedules and Exhibits hereto, as the same may be from time to time amended.

          (4)     "Allocation" has the meaning set forth in Section 3.4(b).

          (5)     "Ancillary Agreements" means the Bill of Sale, Assignment and
Assumption Agreement, the Deed, the Easement Agreement, the Interconnection
Agreement, the Emergency and Environmental Equipment Easements, the Seller
Parent Guaranty, and the Power Purchase Agreement, as the same may be amended
from time to time.

          (6)     "ANI" means American Nuclear Insurers, or any successor
thereto.

          (7)     "Assignment and Assumption Agreement" means the Assignment and
Assumption Agreement between Seller and Buyer substantially in the form of
Exhibit "A" hereto, by which Seller, subject to the terms and conditions hereof,
shall assign Seller's interest in and rights under the Seller's Agreements, the
Fuel Contracts, the Non-material Contracts, the Real Property Agreements, the
Transferable Permits, certain intangible assets and other Purchased Assets to
Buyer and whereby Buyer shall assume the Assumed Liabilities and Obligations.

          (8)     "Assumed Liabilities and Obligations" has the meaning set
forth in Section 2.3.

          (9)     "Atomic Energy Act" means the Atomic Energy Act of 1954, as
amended, 42 U.S.C. Section 2011 et seq.

          (10)    "Benefit Plans" has the meaning set forth in Section 4.12(a).

          (11)    "Bill of Sale" means the Bill of Sale, substantially in the
form of Exhibit "B" hereto, to be delivered at the Closing, with respect to
Seller's interests in the Tangible Personal Property included in the Purchased
Assets to be transferred to Buyer at the Closing.

          (12)    "Business Books and Records" has the meaning set forth in
Section 2.1(g).

          (13)    "Business Day" shall mean any day other than Saturday, Sunday
and any day on which banking institutions in the State of New York are
authorized by law or other governmental action to close.

          (14)    "Buyer" has the meaning set forth in the preamble.

          (15)    "Buyer Indemnitee" has the meaning set forth in Section
8.1(b).

          (16)    "Buyer Material Adverse Effect" has the meaning set forth in
Section 5.3(a).

          (17)    "Buyer's Parent" has the meaning set forth in the preamble.

          (18)    "Buyer's Parent Guaranty" shall mean a guaranty executed by
the Buyer's Parent sufficient to satisfy the regulations of the NRC, found at 10
C.F.R. Part 30, Appendix A, regarding guarantees of nuclear decommissioning
obligations.

          (19)    "Buyer's Required Regulatory Approvals" has the meaning set
forth in Section 5.3(b).

          (20)    "Byproduct Material" means any radioactive material (except
Special Nuclear Material) yielded in, or made radioactive by, exposure to the
radiation incident to the process of producing or utilizing Special Nuclear
Material.

          (21)    "Capital Budget" means the budget established for capital
projects for the Purchased Assets as set forth in Schedule 6.1(a), as such
budget may be amended by agreement of the Parties.

          (22)    "Capital Expenditures" has the meaning set forth in Section
3.3(a)(iv).

          (23)    "Closing" has the meaning set forth in Section 3.1.

          (24)    "Closing Adjustment" has the meaning set forth in Section
3.3(b).

          (25)    "Closing Date" has the meaning set forth in Section 3.1.

          (26)    "COBRA" means the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended, and the rules and regulations promulgated thereunder.

          (27)    "Code" means the Internal Revenue Code of 1986, as amended.

          (28)     "Commercially Reasonable Efforts" means efforts which are
designed to enable a Party, directly or indirectly, to expeditiously satisfy a
condition to, or otherwise assist in the consummation of, the transactions
contemplated by this Agreement and which do not require the performing Party to
expend any funds or assume Liabilities other than expenditures and Liability
assumptions which are customary and reasonable in nature and amount in the
context of the transactions contemplated by this Agreement.

          (29)    "Confidentiality Agreement" means the letter agreement, dated
July 8, 2003, between Seller and Buyer's Parent.

          (30)    "Cooling Tunnel Easement" means the Indenture between The
People of the State of New York and Seller dated September 12, 1974 and recorded
in the Wayne County Clerk's Office at Liber 677, Page 317.

          (31)    "Cooling Tunnel Easement Amendment" has the meaning set forth
in Section 6.1(a)(7).

          (32)    "Decommission" or "Decommissioning" means to completely retire
and remove the Facilities from service and to restore the Site, as well as any
planning and administrative activities incidental thereto, including but not
limited to (a) the dismantlement, decontamination and/or storage of the
Facilities, in whole or in part, and any reduction or removal of radioactivity
at the Site to a level that permits termination of the NRC License, (b) all
other activities necessary for the retirement, dismantlement, decontamination
and/or storage of the Facilities to comply with all applicable Nuclear Laws and
Environmental Laws, including the applicable requirements of the Atomic Energy
Act and the NRC's rules, regulations, orders and pronouncements thereunder, the
NRC License for the Facilities and any related decommissioning or license
termination plan, and (c) once the Site is no longer utilized either for power
generation of any kind or for any storage of Spent Nuclear Fuel or High Level
Waste, restoration of the Site to an appropriately graded and vegetated
condition, including, but not limited to, the replacement of locally-indigenous
trees, plants, shrubs, and grasses to conform substantially with the surrounding
environs, as appropriate for the intended use of the Site and the property
located thereon. Site restoration shall include, as appropriate, removal and
disposal of components and materials meeting NRC release criteria, demolition
and removal of decontaminated structures to an approximate depth of three feet
below grade, and backfilling of the Site with clean material, grading and
landscaping. The Parties understand and agree that SAFSTOR is a permissible
method of decommissioning, provided that decommissioning is completed in
accordance with the applicable NRC regulations.

          (33)    "Decommissioning Funds" means the Qualified Decommissioning
Funds and the Nonqualified Decommissioning Funds.

          (34)    "Decommissioning Target" means an amount in dollars equal to
(x) $179,900,000 times (y) 1.0002085 raised to the power of number "Z", where
"Z" represents the actual number of days that have elapsed since December 31,
2002 until the Closing Date.

          (35)    "Deed" has the meaning set forth in Section 3.6(d).

          (36)    "Department of Energy" or "DOE" means the United States
Department of Energy and any successor agency thereto.

          (37)    "Department of Energy Decommissioning and Decontamination
Fees" means all fees related to the Department of Energy's Special Assessment of
utilities for the Uranium Enrichment Decontamination and Decommissioning Funds
pursuant to Sections 1801, 1802 and 1803 of the Atomic Energy Act and the
Department of Energy's implementing regulations at 10 C.F.R. Part 766,
applicable to separative work units purchased from the Department of Energy in
order to decontaminate and decommission the Department of Energy's gaseous
diffusion enrichment facilities.

          (38)    "Department of Justice" means the United States Department of
Justice and any successor agency thereto.

          (39)    "Direct Claim" has the meaning set forth in Section 8.2(c).

          (40)    "DOE Credit Support" shall mean (a) the Seller's Parent
Guaranty, (b) an irrevocable and unconditional standby letter of credit by a
banking or other financial institution that is reasonably acceptable to Buyer,
for the benefit of the Buyer, having a drawing amount which is equal to the
One-Time DOE Pre-1983 Fee, and payable at the offices of a bank reasonably
acceptable to the Buyer, or (c) such other means of providing assurance of
payment of the One-Time DOE Pre-1983 Fee agreeable to Buyer, in Buyer's
reasonable discretion.

          (41)    "DOE Litigation" shall have the meaning set forth in Section
6.13(b).

          (42)    "Easement Agreement" means the Reciprocal Easement Agreement
between Seller and Buyer in substantially the form of Exhibit "C".

          (43)    "Easements" means, with respect to the Purchased Assets, the
easements, licenses and access rights to be granted by the appropriate party by
or pursuant to the Interconnection Agreement, the Deed, the Emergency and
Environmental Equipment Easements or the Easement Agreement, including, without
limitation, easements authorizing access, use, maintenance, construction,
repair, replacement and other activities by the parties thereto.

          (44)     "Emergency and Environmental Equipment Easements" means the
easements, leases or other occupancy agreements between Seller and Buyer, each
substantially in the form of Exhibit "J" or of Seller's standard form of pole
attachment agreement, with respect to each siren, environmental air sampler or
environmental or post-accident thermoluminescent dosimeter (a) constituting part
of the Purchased Assets, (b) located on property owned or co-owned by Seller
immediately after the Closing Date and (c) not located on land that is subject
to the Easement Agreement, which Emergency and Environmental Equipment Easements
shall be granted by Seller without any rent charge unless such charge is
required by Law.

          (45)    "Emission Reduction Credits" means credits, in units that are
established by an applicable Governmental Authority with jurisdiction over the
Purchased Assets, resulting from the reduction in the emissions or air
pollutants from an emitting source or facility, whether obtained prior to or
after the Closing Date, and other air emissions reduction credits whether or not
such credits are designated as "emission reduction credits."

          (46)     "Encumbrances" means any mortgages, pledges, liens, security
interests, conditional and installment sale agreements, activity and use
limitations, conservation easements, deed restrictions, easements, encumbrances
and charges of any kind.

          (47)    "Energy Reorganization Act" means the Energy Reorganization
Act of 1974, as amended.

          (48)    "Environment" means all soil, real property, air, water
(including surface waters, streams, ponds, drainage basins and wetlands),
groundwater, water body sediments, drinking water supply, stream sediments or
land, including land surface or subsurface strata, including all fish, plant,
wildlife, and other biota and any other environmental medium or natural
resource.

          (49)    "Environmental Claim" means any and all written claims
alleging potential Liability, administrative or judicial actions, suits, orders,
liens, notices alleging Liability, notices of violation, investigations which
have been disclosed in writing to Seller, complaints, requests for information
relating to the Release or threatened Release into the Environment of Hazardous
Substances, proceedings, or other written communication, whether criminal or
civil, pursuant to or relating to any applicable Environmental Law by any
Governmental Authority based upon, alleging, asserting, or claiming any actual
or potential (a) violation of, or Liability under any Environmental Law, (b)
violation of any Environmental Permit, or (c) Liability for investigatory costs,
cleanup costs, removal costs, remedial costs, response costs, natural resource
damages, property damage, personal injury, fines, or penalties arising out of,
based on, resulting from, or related to the presence, Release, or threatened
Release into the Environment of any Hazardous Substances at any location related
to the Purchased Assets, including, but not limited to, any off-Site location to
which Hazardous Substances, or materials containing Hazardous Substances, were
sent.

          (50)     "Environmental Clean-up Site" means any location which is
listed or formally proposed for listing on the National Priorities List, the
Comprehensive Environmental Response, Compensation and Liability Information
System, or on any similar state list of sites requiring investigation or
cleanup, or which is the subject of any action, suit, proceeding or
investigation which has been disclosed in writing to Seller for any alleged
violation of any Environmental Law, or at which there has been a Release, or, to
the Knowledge of Seller, a threatened or suspected Release, of a Hazardous
Substance.

          (51)     "Environmental Condition" means the presence or Release to
the Environment, whether at the Site or at an off-Site location, of Hazardous
Substances, including any migration of those Hazardous Substances through air,
soil or groundwater to or from the Site or any off-Site location regardless of
when such presence or Release occurred or is discovered.

          (52)    "Environmental Laws" means all Laws regarding pollution or
protection of the Environment, the conservation and management of land, natural
resources and wildlife or human health and safety or the Occupational Safety and
Health Act (only as it relates to Hazardous Substances), including, without
limitation, Laws regarding Releases or threatened Releases of Hazardous
Substances (including, without limitation, Releases to ambient air, surface
water, groundwater, land, surface and subsurface strata) or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, Release,
transport, disposal or handling of Hazardous Substances. "Environmental Laws"
include, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 9601 et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the Federal
Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act
(42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C.
Section 2601 et seq.), the Oil Pollution Act (33 U.S.C. Section 2701 et seq.),
the Emergency Planning and Community Right-to-Know Act (42 U.S.C. Section 11001
et seq.), the Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.)
only as it relates to Hazardous Substances, Articles 17, 19, 24, 27 (Titles 9,
11 and 13), 29, 37 and 40 of the New York Environmental Conservation Law and all
other Laws analogous to any of the above. Notwithstanding the foregoing,
Environmental Laws do not include Nuclear Laws.

          (53)    "Environmental Permit" means any federal, state or local
permits, licenses, approvals, consents, registrations or authorizations required
by any Governmental Authority under or in connection with any Environmental Law
including any and all orders, consent orders or binding agreements issued or
entered into by a Governmental Authority under any applicable Environmental Law.

          (54)     "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the applicable rules and regulations promulgated
thereunder.

          (55)    "ERISA Affiliate" has the meaning set forth in Section 2.4(k).

          (56)    "Estimated Adjustment" has the meaning set forth in Section
3.3(b).

          (57)    "Estimated Allocation" has the meaning set forth in Section
3.4(a).

          (58)    "Estimated Closing Statement" has the meaning set forth in
Section 3.3(b).

          (59)    "Excess Decommissioning Funds" means the estimated cost
savings to Buyer as a result of not completing any Decommissioning activities
necessary or appropriate to restore the Site to an appropriately graded and
vegetated condition as appropriate for the intended use of the Site and the
property located thereon. For purposes of this definition, the Excess
Decommissioning Funds will be calculated by Buyer in good faith and subject to
concurrence by the NYPSC.

          (60)     "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

          (61)    "Excluded Assets" has the meaning set forth in Section 2.2.

          (62)    "Excluded Liabilities" has the meaning set forth in Section
2.4.

          (63)    "Exempt Wholesale Generator" means an exempt wholesale
generator as defined in Section 32 of the Holding Company Act and the
regulations promulgated thereunder.

          (64)     "Facilities" means the plant, facilities, equipment, supplies
and improvements, including, but not limited to, the cooling water intake tunnel
and discharge canal, in which Seller has an ownership interest and which are
included in the Purchased Assets, constituting the nuclear power plant known as
the R.E. Ginna Nuclear Power Plant.

          (65)     "Federal Power Act" means the Federal Power Act, as amended.

          (66)    "Federal Trade Commission" means the United States Federal
Trade Commission or any successor agency thereto.

          (67)     "FERC" means the United States Federal Energy Regulatory
Commission or any successor agency thereto.

          (68)    "Final Safety Analysis Report" or "FSAR" means the report, as
updated, that is required to be maintained for Ginna in accordance with the
requirements of 10 C.F.R. Section 50.71(e).

          (69)    "Fuel Contracts" has the meaning set forth in Section 4.l5(a).

          (70)    "Ginna" has the meaning set forth in the recitals.

          (71)    "Ginna Employee" means an hourly-paid or salaried employee of
Seller or an Affiliate, who receives an Internal Revenue Service Form W-2 from
Seller or an Affiliate, employed as of the Closing Date who is employed at
Ginna, or whose work responsibilities involve principally the operation of any
of the Purchased Assets, which employees shall be set forth in Schedule 6.10(a)
(which shall be updated as of the Closing Date as provided for herein). "Ginna
Employee" does not mean or include any worker, working at or on the Facilities
or the Purchased Assets, who is compensated directly by an entity other than
Seller or an Affiliate and/or for whom Seller or an Affiliate issues an Internal
Revenue Service Form 1099.

          (72)    "Good Utility Practices" means any of the practices, methods
and activities generally accepted in the electric utility industry in the United
States of America as good practices applicable to nuclear generating facilities
of similar design, size and capacity and consistent with past practice at the
Facilities or any of the practices, methods or activities which, in the exercise
of reasonable judgment by a prudent nuclear operator in light of the facts known
at the time the decision was made (other than the fact that such operator is in
the process of selling the facility), could have been expected to accomplish the
desired result at a reasonable cost consistent with good business practices,
reliability, safety, expedition and applicable Laws including Nuclear Laws and
Laws relating to the protection of public health and safety. Good Utility
Practices are not intended to be limited to the optimal practices, methods or
acts to the exclusion of all others, but rather to be practices, methods or acts
generally accepted in the electric utility industry.

          (73)    "Governmental Authority" means any federal, state, local,
provincial, foreign, international or other governmental, regulatory or
administrative agency, taxing authority, commission, department, board, or other
governmental subdivision, court, tribunal, arbitrating body or other
governmental authority.

          (74)    "GUST" means: (a) the Uruguay Round Agreements Act, Pub. L.
103-465; (b) the Uniformed Services Employment and Reemployment Rights Act of
1994, Pub. L. 103-353; (c) the Small Business Job Protection Act of 1996, Pub.
L. 104-188; (d) the Taxpayer Relief Act of 1997, Pub. L. 105-34; (e) the
Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. 105-206;
and (f) the Community Renewal Tax Relief Act of 2000, Pub. L. 106-554.

          (75)    "Hazardous Substances" means (a) any petroleum, asbestos, and
urea formaldehyde foam insulation and transformers or other equipment that
contains polychlorinated biphenyls; (b) any chemicals, materials or substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "hazardous constituents," "restricted hazardous
materials," "extremely hazardous substances," "toxic substances,"
"contaminants," "pollutants," "toxic pollutants," "hazardous air pollutants" or
words of similar meaning and regulatory effect under any applicable
Environmental Law; and (c) any other chemical, material or substance, exposure
to which is prohibited, limited or regulated by any applicable Environmental
Law; excluding, however, any Nuclear Material.

          (76)    "High Level Waste" means (a) Spent Nuclear Fuel, (b) liquid
wastes resulting from the operation of the first cycle solvent extraction
system, or its equivalent, and the concentrated wastes from subsequent
extraction cycles, or their equivalent, in a facility for reprocessing
irradiated reactor fuel, (c) solids into which such liquid wastes have been
converted, and (d) any other material containing radionuclides in concentrations
or quantities that exceed NRC requirements for classification as Low Level
Waste.

          (77)    "High Level Waste Repository" means a facility which is
designed, constructed and operated by or on behalf of the Department of Energy
for the storage and disposal of Spent Nuclear Fuel and other High Level Waste in
accordance with the requirements set forth in the Nuclear Waste Policy Act.

          (78)    "Holding Company Act" means the Public Utility Holding Company
Act of 1935, as amended.

          (79)    "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.

          (80)     "Income Tax" means any federal, state, local or foreign Tax
(a) based upon, measured by or calculated with respect to net income, profits or
receipts (including, without limitation, capital gains Taxes and minimum Taxes),
or (b) based upon, measured by or calculated with respect to multiple bases
(including, without limitation, corporate franchise taxes) if one or more of the
bases on which such Tax may be based, measured by or calculated with respect to,
is described in clause (a), in each case together with any interest, penalties
or additions to such Tax.

          (81)    "Indemnifiable Loss" has the meaning set forth in Section
8.1(a).

          (82)    "Indemnifying Party" has the meaning set forth in Section
8.1(c).

          (83)    "Indemnitee" means either a Seller Indemnitee or a Buyer
Indemnitee.

          (84)    "Independent Accounting Firm" means such independent
accounting firm of national reputation as is mutually appointed by Seller and
Buyer.

          (85)    "Initial Transfer" has the meaning set forth in Section
6.10(h).

          (86)    "Intellectual Property" means all patents and patent rights,
trademarks and trademark rights, service marks and service mark rights,
inventions, trade names, copyrights and copyright rights owned or licensed by
Seller and necessary for the operation and maintenance of the Purchased Assets,
and all pending applications for registrations of patents, trademarks, service
marks and copyrights, as set forth in Schedule 2.1(j).

          (87)    "Interconnection Agreement" means the Interconnection
Agreement, in the form of Exhibit "D" hereto, under which Ginna will be provided
after the Closing Date with interconnection services consistent with FERC
regulations and precedent and NRC requirements relating to offsite power
availability and grid reliability and access to Seller's transmission facilities
for the transmission of power from Ginna.

          (88)    "Inventory of Major Spare Parts" means the spare reactor
coolant pump motor, spare low pressure turbine rotor, spare main transformer and
their respective replacements, if any.

          (89)    "Inventories" means Nuclear Fuel or alternative fuel
inventories, materials, spare parts (including Inventory of Major Spare Parts),
consumable supplies and chemical and gas inventories relating to the operation
of the Facilities located at, or in transit to, the Facilities and the interests
of the Seller in spare parts located off-Site which are subject to the PIMS
Agreement.

          (90)    "IRS" means the United States Internal Revenue Service or any
successor agency thereto.

          (91)     "Knowledge" means the actual knowledge of the corporate
officers of the specified Party charged with responsibility for the particular
function relating to the specific matter of the inquiry.

          (92)    "LAR" has the meaning set forth in Section 6.21(a).

          (93)    "Law or Laws" means all laws, rules, regulations, codes,
statutes, ordinances, decrees, treaties, and/or administrative orders of any
Governmental Authority.

          (94)    "Liability" or "Liabilities" means any liability or obligation
(whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
whether incurred or consequential and whether due or to become due). Without
limiting the generality of the foregoing, in the case of the NRC License,
"Liabilities" shall include the NRC Commitments.

          (95)    "License Renewal Application" means the application submitted
by Seller to the NRC, as amended and supplemented, seeking renewal of the NRC
License.

          (96)    "Loss" or "Losses" means any and all damages, fines, fees,
penalties, deficiencies, losses and expenses (including without limitation all
Remediation costs, fees of attorneys, accountants and other experts, or other
expenses of litigation or proceedings or of any claim, default or assessment).

          (97)    "Low Level Waste" means radioactive material that: (a) is
neither High Level Waste as defined herein, nor byproduct material (as defined
in Section 11e.(2) of the Atomic Energy Act (42 U.S.C. 2014(e)(2)); and (b) the
NRC, consistent with existing law and in accordance with clause (a), classifies
as low-level radioactive waste. For the purposes of the Purchase Price
adjustment in Section 3.3(a)(vi) only, the term "Low Level Waste" shall not
include the items which are set forth in Schedule 3.3(a)(vi) as being excluded
from the definition of "Low Level Waste" for purposes of that Purchase Price
adjustment.

          (98)    "Material Adverse Effect" means any change (or changes taken
together) in, or effect on, the Purchased Assets (including the operations or
condition (financial or otherwise) thereof) that is materially adverse to the
value of the Purchased Assets, taken as a whole, including but not limited to,
those that result in (i) shutdown of the Facilities, (ii) a material diminution
of the full licensed thermal power or the full rated electrical output of the
Facilities, or (iii) any loss, claim or occurrence related to the Purchased
Assets which could reasonably be expected to cause a loss and/or the expenditure
by the Buyer within one year following the Closing Date in excess of Two and
One-Half Million Dollars ($2,500,000) individually, or in excess of Twenty Five
Million Dollars ($25,000,000) in the aggregate, other than any change (or
changes taken together) generally affecting the international, national,
regional or local electric industry as a whole, or the nuclear power industry as
a whole, including changes in local wholesale or retail markets for electric
power or Nuclear Fuel, national, regional or local electric transmission systems
or operations thereof, any change in law generally applicable to similarly
situated Persons, any changes resulting from or associated with acts of war or
terrorism or changes imposed by a Governmental Authority associated with
additional security to address the events of September 11, 2001 and any change
or effect resulting from action or inaction by a Governmental Authority with
respect to an independent system operator or retail access in New York, but in
any such case not affecting the Purchased Assets or the Parties in any manner or
degree significantly different than the industry as a whole; and provided
further, that any loss, claim, occurrence, change or effect that is cured prior
to the Closing Date shall not be considered a Material Adverse Effect.

          (99)    "Mortgage Indenture" means the Indenture of Mortgage
originally granted by Rochester Railway and Light Company to Bankers Trust
Company (now Deutsche Bank Trust Company), as Trustee, dated as of September 1,
1918, as supplemented and amended.

          (100)    "NEIL" means Nuclear Electric Insurance Limited, or any
successor thereto.

          (101)    "Non-material Contracts" means those contracts, agreements,
personal property leases or other commitments incidental to the operation or
maintenance of the Purchased Assets that have been entered into by Seller in the
ordinary course of business prior to the Closing which either (i) are
terminable, without penalty or any other termination related Liability, upon
notice of 90 days or less by Seller or (ii) require the payment or delivery of
goods or services with a value of less than $50,000 per annum in the case of any
individual contract or commitment.

          (102)    "Nonqualified Decommissioning Funds" means the external trust
fund that does not meet the requirements of Code Section 468A and Treas. Reg.
Section 1.468A-5, maintained by Seller with respect to the Facilities prior to
the Closing pursuant to the Seller's Decommissioning Trust Agreement, and
established and maintained by the Trustee after the Closing pursuant to the
Post-Closing Decommissioning Trust Agreement to the extent assets are
transferred to such trust pursuant to Section 6.12.

          (103)    "NRC" means the United States Nuclear Regulatory Commission
and any successor agency thereto.

          (104)    "NRC Commitments" means all written regulatory commitments
identified as such by Seller to the NRC, including, without limitation, all
written regulatory commitments identified as such by Seller in connection with
its License Renewal Application.

          (105)    "NRC License" means Operating License No. DPR-18 and any
renewed license related thereto on the basis of which the Seller is authorized
to own, possess and operate the Facilities and Nuclear Material prior to the
Closing Date, and on the basis of which the Buyer is authorized to own, possess
and operate the Facilities and Nuclear Material after the Closing Date.

          (106)    "Nuclear Fuel" means all nuclear fuel assemblies in the
Facility reactor on the Closing Date and any irradiated fuel assemblies that
have been temporarily removed from the Facilities reactor as of the Closing Date
and are capable of reinsertion into the Facilities reactor without modification
or additional cost, and all unirradiated fuel assemblies awaiting insertion into
the Facilities reactor, as well as all nuclear fuel constituents (including
uranium in any form and separative work units) in any stage of the fuel cycle
that are in process of production, conversion, enrichment or fabrication for use
in the Facilities and which are owned by Seller, or in which Seller has any
right, title or interest, on the Closing Date.

          (107)    "Nuclear Insurance Policies" means all nuclear insurance
policies carried by or for the benefit of Seller with respect to the ownership,
operation or maintenance of the Facilities, including all nuclear liability,
property damage and business interruption policies in respect thereof. Without
limiting the generality of the foregoing, the term "Nuclear Insurance Policies"
includes all policies issued or administered by ANI or NEIL.

          (108)    "Nuclear Laws" means all Laws relating to the regulation of
nuclear power plants, Source Material, Byproduct Material and Special Nuclear
Materials; the regulation of Low Level Waste and High Level Waste; the
transportation and storage of Nuclear Materials; the regulation of Safeguards
Information; the regulation of Nuclear Fuel; the enrichment of uranium; the
disposal and storage of High Level Waste and Spent Nuclear Fuel; contracts for
and payments into the Nuclear Waste Fund; and as applicable, the antitrust laws
and the Federal Trade Commission Act to specified activities or proposed
activities of certain licensees of commercial nuclear reactors, but shall not
include Environmental Laws. "Nuclear Laws" include the Atomic Energy Act of
1954, as amended (42 U.S.C. Section 2011 et seq.), the Price-Anderson Act
(Section 170 of the Atomic Energy Act of 1954, as amended); the Energy
Reorganization Act of 1974 (42 U.S.C. Section 5801 et seq.); Convention on the
Physical Protection of Nuclear Material Implementation Act of 1982 (Public Law
97 -351; 96 Stat. 1663); the Foreign Assistance Act of 1961 (22 U.S.C. Section
2429 et seq.); the Nuclear Non-Proliferation Act of 1978 (22 U.S.C. Section
3201); the Low-Level Radioactive Waste Policy Act (42 U.S.C. Section 2021b et
seq.); the Nuclear Waste Policy Act (42 U.S.C. Section 10101 et seq. as
amended); the Low-Level Radioactive Waste Policy Amendments Act of 1985 (42
U.S.C. Section 2021d, 471); and the Energy Policy Act of 1992 (4 U.S.C. Section
13201 et seq.); and any state or local Laws analogous to the foregoing.

          (109)    "Nuclear Material or Materials" means Source Material,
Special Nuclear Material, Low Level Waste, High Level Waste, Byproduct Material
and Spent Nuclear Fuel.

          (110)    "Nuclear Waste Fund" means the fund established by the
Department of Energy under the Nuclear Waste Policy Act in which the Spent
Nuclear Fuel Fees to be used for the design, construction and operation of a
High Level Waste Repository and other activities related to the storage and
disposal of Spent Nuclear Fuel and/or High Level Waste are deposited.

          (111)    "Nuclear Waste Policy Act" means the Nuclear Waste Policy Act
of 1982, as amended.

          (112)    "NYDEC" means the New York State Department of Environmental
Conservation and any successor agency thereto.

          (113)    "NYPSC" means the Public Service Commission of the State of
New York and any successor agency thereto.

          (114)    "Observers" has the meaning set forth in Section 6.1(c).

          (115)    "One-Time DOE Pre-1983 Fee" means the one-time fee, including
any interest, late fees and/or penalties accruing thereon from time to time,
payable by Seller pursuant to Article VIII (B)(2)(b) of the Standard Spent Fuel
Disposal Contract.

          (116)    "Other Plant Personnel" has the meaning set forth in Section
4.11.

          (117)    "Party" (and the corresponding term "Parties") has the
meaning set forth in the preamble.

          (118)    "PBGC" means the Pension Benefit Guaranty Corporation
established by ERISA.

          (119)     "Permits" has the meaning set forth in Section 4.17(a).

          (120)     "Permitted Encumbrances" means: (i) the Easements; (ii)
those exceptions to title to the Purchased Assets listed in Schedule 4.7 with
respect to Real Property; (iii) with respect to any date before the Closing
Date, Encumbrances created by the Mortgage Indenture; (iv) statutory liens for
Taxes or other governmental charges or assessments not yet due or delinquent or
the validity of which are being contested in good faith by appropriate
proceedings provided that the aggregate amount being so contested does not
exceed $200,000; (v) mechanics', materialmen's, carriers', workers', repairers'
and other similar liens arising or incurred in the ordinary course of business
relating to obligations as to which there is no default on the part of Seller or
the validity of which are being contested in good faith, and which do not,
individually or in the aggregate, exceed $200,000; (vi) zoning, entitlement,
conservation restriction and other land use and environmental regulations
imposed by Governmental Authorities which do not materially, individually or in
the aggregate, detract from the value of the Purchased Assets as such assets are
currently used or interfere with the present use or operation of the Purchased
Assets and neither secure indebtedness, nor, individually or in the aggregate,
result in a Material Adverse Effect; (vii) the covenants and restrictions set
forth in this Agreement or in any of the Ancillary Agreements; and (viii) such
other liens, imperfections in or failures of title, easements, leases, licenses,
restrictions, activity and use limitations, conservation easements, encumbrances
and encroachments, as do not, individually or in the aggregate, materially
detract from the value of the Purchased Assets as such assets are currently used
or materially interfere with the present use or operation of the Purchased
Assets and neither secure indebtedness, nor, individually or in the aggregate,
result in a Material Adverse Effect.

          (121)    "Person" means any individual, partnership, limited liability
company, joint venture, corporation, trust, unincorporated organization,
association, or governmental entity or any political subdivision, department or
agency thereof.

          (122)    "PIMS Agreement" means the agreement between Seller and
Pooled Equipment Inventory Company, effective July 1, 2002, as amended, with
respect to pooled inventory management.

          (123)    "Plans" has the meaning set forth in Section 2.4(k).

          (124)     "Post-Closing Adjustment" has the meaning set forth in
Section 3.3(c).

          (125)    "Post-Closing Decommissioning Trust Agreement" means the
decommissioning trust agreement between Buyer and the Trustee pursuant to which
any assets of any of the Decommissioning Funds to be transferred by Seller at
Closing pursuant to Section 6.12 hereof will be held in trust.

          (126)    "Post-Closing Statement" has the meaning set forth in Section
3.3(c).

          (127)    "Power Purchase Agreement" means the Power Purchase Agreement
between Seller and Buyer, dated as of the date of this Agreement and in the form
of Exhibit "F" hereto.

          (128)    "Price-Anderson Act" means Section 170 of the Atomic Energy
Act and related provisions of Section 11 of the Atomic Energy Act.

          (129)    "Proposed Post-Closing Adjustment" has the meaning set forth
in Section 3.3(c).

          (130)    "Proprietary Information" means (i) with respect to
information provided by Seller to Buyer, has the meaning as set forth in the
Confidentiality Agreement, and (ii) with respect to information provided by
Buyer to Seller, shall mean information relating to the financing or operation
and maintenance, actual or proposed, of the Purchased Assets and any financial,
operational or other information concerning Buyer or its Affiliates or their
respective assets and properties furnished by Buyer or its Representatives to
Seller or its Representatives, whether furnished before or after the date
hereof, whether oral or written, and regardless of the manner in which it is
furnished; but does not include information which (a) is or becomes generally
available to the public other than as a result of a disclosure by Seller or its
Representatives, (b) was available to Seller or its Representatives on a
non-confidential basis prior to its disclosure by Buyer or its Representatives
or (c) becomes available on a non-confidential basis from a person other than
Buyer or its Representatives who is not otherwise bound by a confidentiality
agreement with Buyer or its Representatives, or is otherwise not under any
obligation to Buyer or its Representatives not to transmit the information to
Seller or its Representatives.

          (131)    "Purchased Assets" has the meaning set forth in Section 2.1.

          (132)    "Purchase Price" has the meaning set forth in Section 3.2.

          (133)    "Qualified Decommissioning Funds" means the external trust
funds that meet the requirements of Code Section 468A and Treas. Reg. Section
1.468A-5, maintained by Seller with respect to the Facilities prior to Closing
pursuant to Seller's Decommissioning Trust Agreement and maintained by Buyer
after the Closing pursuant to the Post-Closing Decommissioning Trust Agreement
to the extent assets are transferred to such fund by Seller pursuant to Section
6.12.

          (134)    "Real Property" has the meaning set forth in Section 2.1(a).

          (135)    "Real Property Agreements" has the meaning set forth in
Section 4.8.

          (136)    "Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing of a Hazardous Substance into the Environment or within any building,
structure, facility or fixture.

          (137)    "Remediation" means action of any kind required by any
applicable Law or order of a Governmental Authority to address a Release, the
threat of a Release or the presence of Hazardous Substances at the Site or an
off-Site location including, without limitation, any or all of the following
activities to the extent they relate to or arise from the presence of a
Hazardous Substance at the Site or an off-Site location: (a) monitoring,
investigation, assessment, treatment, cleanup, containment, removal, mitigation,
response or restoration work; (b) obtaining any permits, consents, approvals or
authorizations of any Governmental Authority necessary to conduct any such
activity; (c) preparing and implementing any plans or studies for any such
activity; (d) obtaining a written notice from a Governmental Authority with
jurisdiction over the Site or an off-Site location under Environmental Laws that
no material additional work is required by such Governmental Authority; (e) the
use, implementation, application, installation, operation or maintenance of
remedial action on the Site or an off-Site location, remedial technologies
applied to the surface or subsurface soils, excavation and off-Site treatment or
disposal of soils, systems for long term treatment of surface water or ground
water, engineering controls or institutional controls; and (f) any other
activities required under Environmental Laws to address the presence or Release
of Hazardous Substances at the Site or an off-Site location.

          (138)    "Replacement Benefit Plan" has the meaning set forth in
Section 6.10(e).

          (139)    "Replacement Defined Benefit Plan" has the meaning set forth
in Section 6.10(h).

          (140)     "Replacement Retiree Coverages" has the meaning set forth in
Section 6.10(m).

          (141)    "Replacement Welfare Plans" has the meaning set forth in
Section 6.10(d).

          (142)    "Representatives" of a Party means the Party and its
Affiliates and their directors, officers, employees, agents, partners, advisors
(including, without limitation, accountants, counsel, environmental consultants,
financial advisors and other authorized representatives) and parents and other
controlling Persons.

          (143)    "Requested Rulings" has the meaning set forth in Section
6.18.

          (144)    "RG&E" has the meaning set forth in the preamble.

          (145)    "RG&E Defined Benefit Plan" has the meaning set forth in
Section 6.10(h).

          (146)    "RG&E Retiree Coverages" has the meaning set forth in Section
6.10(m).

          (147)    "RG&E Savings Plan" has the meaning set forth in Section
6.10(g).

          (148)    "Safeguards Information" means information not otherwise
classified as national security information or restricted data under NRC's
regulations which specifically identifies an NRC licensee's detailed (1)
security measures for the physical protection of Special Nuclear Material, or
(2) security measures for the physical protection and location of certain plant
equipment vital to the safety of production or utilization facilities.

          (149)    "SEC" means the United States Securities and Exchange
Commission and any successor agency thereto.

          (150)    "Securities Act" means the Securities Act of 1933, as
amended.

          (151)    "Seller" has the meaning set forth in the preamble.

          (152)    "Seller Indemnitee" has the meaning set forth in Section
8.1(a).

          (153)    "Seller's Agreements" means those contracts, agreements,
licenses and leases relating to the ownership, operation and maintenance of the
Purchased Assets, as more particularly described on Schedule 4.15(a)(i), as such
schedule is supplemented and amended in accordance with the provisions of this
Agreement.

          (154)    "Seller's Decommissioning Trust Agreement" means the Master
Decommissioning Trust Agreement, made as of March 9, 1990, as amended, between
RG&E and Mellon Bank, N.A., regarding the Qualified Decommissioning Fund and the
Nonqualified Decommissioning Fund of Seller.

          (155)    "Seller's Parent" shall mean Energy East Corporation.

          (156)    "Seller's Parent Guaranty" means the Guaranty executed by
Seller's Parent, dated the Closing Date and in the form attached hereto as
Exhibit "G".

          (157)    "Seller's Required Regulatory Approvals" has the meaning set
forth in Section 4.3(b).

          (158)    "Site" means the parcels of land included in the Real
Property. Any reference to the Site shall include, by definition, the surface
and subsurface elements, including the soils and groundwater present at the Site
and any references to items "at the Site" shall include all items "at, in, on,
upon, over, across, under, and within" the Site.

          (159)    "Source Material" means: (1) uranium or thorium; or any
combination thereof, in any physical or chemical form, or (2) ores which contain
by weight one-twentieth of one percent (0.05%) or more of (i) uranium, (ii)
thorium, or (iii) any combination thereof. Source Material does not include
Special Nuclear Material.

          (160)    "Special Nuclear Material" means plutonium, uranium enriched
in the isotope-233 or in the isotope-235, and any other material that the NRC
determines to be "Special Nuclear Material," but does not include Source
Material. Special Nuclear Material also refers to any material artificially
enriched by any of the above-listed materials or isotopes, but does not include
Source Material.

          (161)    "Spent Nuclear Fuel" means fuel that has been permanently
withdrawn from a nuclear reactor following irradiation, and has not been
chemically separated into its constituent elements by reprocessing. Spent
Nuclear Fuel includes the Special Nuclear Material, Byproduct Material, Source
Material greater than Class C waste, and other radioactive materials associated
with Nuclear Fuel assemblies.

          (162)    "Spent Nuclear Fuel Fees" means those fees assessed on
electricity generated at Ginna and sold pursuant to the Standard Spent Fuel
Disposal Contract, as provided in Section 302 of the Nuclear Waste Policy Act
and 10 C.F.R. Part 961, as the same may be amended from time to time, including,
but not limited to, the One-Time DOE Pre-1983 Fee.

          (163)    "Standard Spent Fuel Disposal Contract" means the Contract
for Disposal of Spent Nuclear Fuel and/or High Level Radioactive Waste, No.
DE-CR01-83NE44419, dated June 30, 1983, entered into between RG&E and the United
States of America, represented by the Department of Energy, as amended.

          (164)    "Subsidiary" when used in reference to any Person means any
entity of which outstanding securities having ordinary voting power to elect a
majority of the Board of Directors or other Persons performing similar functions
of such entity, are owned directly or indirectly, by such Person.

          (165)    "Tangible Personal Property" has the meaning set forth in
Section 2.1(c).

          (166)    "Tax Basis" means the adjusted tax basis determined for
federal income tax purposes under Code Section 1011(a).

          (167)    "Tax" or "Taxes" means, all taxes, charges, fees, levies,
penalties or other assessments imposed by any federal, state or local or foreign
taxing authority, including but not limited to, income, excise, real or personal
property, sales, transfer, franchise, payroll, withholding, social security,
receipts, license, stamp, occupation, employment or other taxes, including any
interest, penalties or additions attributable thereto, and any payments to any
state, local or foreign taxing authorities in lieu of any such taxes, charges,
fees, levies or assessments.

          (168)    "Tax Return" means any return, report, information return,
declaration, claim for refund or other document (including any schedule or
related or supporting information) required to be supplied to any taxing
authority with respect to Taxes including amendments thereto.

          (169)    "Termination Date" has the meaning set forth in Section
9.1(b).

          (170)    "Third Party Claim" has the meaning set forth in Section
8.2(a).

          (171)    "Title Company" has the meaning set forth in Section 7.1(j).

          (172)    "Total Compensation" has the meaning set forth in Section
6.10(c).

          (173)    "Transferable Permits" means those Permits and Environmental
Permits identified in Schedule 1.1(173), which are transferable to Buyer without
application to, a filing with, notice to, consent or approval of any
Governmental Authority.

          (174)    "Transferred Employee Records" means all records related to
Transferred Employees, including but not limited to the following information:
(i) skill and development training, (ii) seniority histories, (iii) salary and
benefit information, (iv) Occupational, Safety and Health Administration
reports, (v) active medical restriction forms, (vi) fitness for duty, (vii)
disciplinary actions, (viii) job performance appraisals and/or evaluations, (ix)
employment applications, (x) bonuses, (xi) job history, (xii) access
authorization records, and (xiii) radiation exposure records.

          (175)    "Transferred Employees" has the meaning set forth in Section
6.10(b).

          (176)    "Transfer Taxes" means all state or local real property
transfer, sales, use, value added, stamp, recording, registration, conveyance
and other like Taxes and other fees, including without limitation any payments
made in lieu of such Taxes which become payable in connection with the
transactions contemplated by this Agreement.

          (177)    "Transition Committee" has the meaning set forth in Section
6.1(b).

          (178)    "Transmission Assets" has the meaning set forth in Section
2.2(a).

          (179)    "Trustee" means with respect to Seller prior to the Closing
the trustee of the Decommissioning Funds appointed by Seller pursuant to
Seller's Decommissioning Trust Agreement and after the Closing to the extent any
assets of the Decommissioning Funds are transferred by Seller pursuant to
Section 6.12 hereof, the trustees appointed pursuant to the Post-Closing
Decommissioning Trust Agreement.

          (180)    "Uprate" has the meaning set forth in Section 6.21(a).

          (181)    "Uprate Reports" has the meaning set forth in Section
6.21(a).

          (182)    "USEPA" means the United States Environmental Protection
Agency and any successor agency thereto.

          (183)    "WARN Act" means the Worker Adjustment and Retraining
Notification Act of 1988, as amended.

          (184)    "WARN Certificate" has the meaning set forth in Section
6.10(i).

          Section 1.2     Certain Interpretive Matters.  In this Agreement,
unless the context otherwise requires, the singular shall include the plural,
the masculine shall include the feminine and neuter, and vice versa. The term
"includes" or "including" shall mean "including without limitation." References
to a Section, Article, Exhibit or Schedule shall mean a Section, Article,
Exhibit or Schedule of this Agreement, and reference to a given agreement or
instrument shall be a reference to that agreement or instrument as modified,
amended, supplemented and restated through the date as of which such reference
is made.

ARTICLE 2

PURCHASE AND SALE

          Section 2.1     Purchased Assets.  Upon the terms and subject to the
satisfaction of the conditions contained in this Agreement, at the Closing,
Seller will sell, assign, convey, transfer and deliver to Buyer, and Buyer will
purchase, assume and acquire from Seller, free and clear of all Encumbrances
(except for Permitted Encumbrances), all of Seller's right, title and interest
in and to the following assets, wherever located (collectively, the "Purchased
Assets"): (i) all of the assets used in, held for use, constituting, or
necessary in the ordinary course of business to operate and maintain Ginna (but
excluding such assets that are not necessary for the operation of Ginna as a
generating station and are used predominantly elsewhere in the operation of
Seller's business), including, without limitation, those assets identified in
Schedule 2.1(j) and Schedules 4.13(a) and (b), and (ii) those assets described
below (but excluding the Excluded Assets):

          (a)     Except as otherwise constituting part of the Excluded Assets,
the land described on Schedule 4.13(a) (which land comprises the Site) together
with all buildings, facilities and other improvements thereon including the
Facilities (but excluding any personal property thereon) and all appurtenances
thereto, including, without limitation, all related rights of ingress and egress
(collectively, the "Real Property");

          (b)     All Nuclear Materials and Inventories owned by Seller, or in
which the Seller has any right, title or interest, on the Closing Date, wherever
located;

          (c)     All machinery, mobile or otherwise, equipment (including
computer hardware and software and transferable rights thereto and
communications equipment), vehicles, tools, spare parts, materials, works in
progress, fixtures, furniture and furnishings and other personal property
relating to or used in the ordinary course of business to operate and maintain
the Facilities, including, without limitation, the items of personal property
included in Schedule 4.13(b), other than property used primarily as part of the
Transmission Assets or otherwise constituting part of the Excluded Assets
(collectively, "Tangible Personal Property");

          (d)     Subject to the provisions of Sections 2.1(p) and 6.4(d), all
rights of Seller under the Fuel Contracts, Non-material Contracts and the
Seller's Agreements which have not been identified in Schedule 2.2(l) as
Excluded Assets;

          (e)     All Real Property Agreements;

          (f)     All Transferable Permits;

          (g)     To the extent permitted by Law, all books, operating records,
licensing records, quality assurance records, purchasing records, and equipment
repair, maintenance or service records of Seller relating to the design,
construction, licensing or operation of the Facilities, operating, safety and
maintenance manuals, inspection reports, environmental assessments, engineering
design plans, documents, blueprints and as built plans, specifications,
procedures and other similar items of Seller, wherever located, relating to the
Facilities and the other Purchased Assets, whether existing in hard copy or
magnetic or electronic form (subject to the right of Seller to retain copies of
same for its use) (collectively, the "Business Books and Records");

          (h)     All unexpired, transferable warranties and guarantees from
third parties with respect to any item of Real Property or Tangible Personal
Property constituting part of the Purchased Assets;

          (i)     The name "R. E. Ginna" or "Ginna" as used as a designation
attached to or associated with the Facilities and any related logos;

          (j)     The Intellectual Property described on Schedule 2.1(j);

          (k)     The substation equipment, if any, designated in the
Interconnection Agreement or the Easement Agreement as being transferred to
Buyer;

          (l)     The assets comprising that portion of the Decommissioning
Funds that is transferred to Buyer pursuant to Section 6.12 of this Agreement,
together with all related tax accounting and other records for such assets,
including all decommissioning studies, analyses and cost estimates;

          (m)     To the extent transferable, all Nuclear Insurance Policies
with ANI, including all rights to collect premium refunds made after the Closing
Date, including, but not limited to, those pursuant to the ANI nuclear industry
credit rating plan (other than refunds that relate to premiums paid for time
periods prior to the Closing Date);

          (n)     Subject to the receipt of approval from the Wireless Bureau of
the Federal Communications Commission, certain radio licenses set forth on
Schedule 2.1(n);

          (o)     Subject to Buyer's written commitment to satisfy its
indemnification obligations under Section 8.1(a), the right to proceeds from
insurance policies for coverage of Assumed Liabilities and Obligations;

          (p)     Subject to Buyer's written commitment to satisfy its
indemnification obligations under Section 8.1(a), the rights of Seller in and to
any causes of action, claims and defenses against third parties (including
indemnification and contribution) relating to any Assumed Liabilities and
Obligations, including, but not limited to, all rights of Seller in and to any
cause of action or claim pending or hereafter initiated with respect to damages
incurred prior to, on or after the Closing Date relating to the DOE Litigation;
provided that the prosecution of any cause of action or claim related to the DOE
Litigation shall be conducted as specified in Section 6.13 and any recovery of
damages, costs, attorneys' fees, interest and penalties, or any other expenses
awarded shall be shared between Seller and Buyer in accordance with Section
6.13;

          (q)     The Transferred Employee Records, subject to the right of
Seller to retain copies of such records for its reasonable and lawful use and
subject to the obligation of Buyer to preserve such records and make such
records available to Seller as reasonably necessary for Seller's reasonable and
lawful purposes following the Closing Date as provided in Section 6.2(c);

          (r)     Any rights of Seller with respect to prior assessments of
licensees of operating nuclear power plants to support disposal facility
development activities by the NYDEC, and the former Commission for Siting
Low-Level Radioactive Waste Disposal Facilities, which ceased operation in
August 1995;

          (s)     All assignable right, title and interest of the Seller to the
NRC License;

          (t)     All rights of the Seller in property, assets, leases and
agreements used or usable in providing emergency warning or associated with
emergency preparedness as set forth on Schedule 2.1(t);

          (u)     All Emission Reduction Credits or emission allowances that
relate to the operation of the Facilities prior to, on or after the Closing
Date; and

          (v)     The assets required to be transferred from the RG&E Defined
Benefit Plan to the Replacement Defined Benefit Plan or paid from Seller to
Buyer as set forth in Section 6.10(h).

          Section 2.2     Excluded Assets.  Notwithstanding anything to the
contrary in this Agreement, nothing in this Agreement shall be construed as
conferring on Buyer, and Buyer is not acquiring, any right, title or interest in
or to the following specific assets which are associated with the Purchased
Assets, but which are hereby specifically excluded from the sale and the
definition of Purchased Assets herein (the "Excluded Assets"):

          (a)     Except as expressly identified in Schedule 4.13(b) or the
Interconnection Agreement or the Easement Agreement, the electrical transmission
or distribution facilities (as opposed to generation facilities) of Seller or
any of its Affiliates, as well as all permits, contracts and warranties, to the
extent they relate to such transmission and distribution assets (collectively,
the "Transmission Assets"), and those assets and facilities identified on
Schedule 2.2(a);

          (b)     Certificates of deposit, shares of stock, securities, bonds,
debentures, evidences of indebtedness, and interests in joint ventures,
partnerships, limited liability companies and other entities (including, without
limitation, Seller's member account balances with NEIL), except such assets
comprising the portion of the Decommissioning Funds which is required to be
transferred to the Buyer pursuant to Section 6.12 hereof and except such assets
required to be transferred from the RG&E Defined Benefit Plan to the Replacement
Defined Benefit Plan or paid from Seller to Buyer as set forth in Section
6.10(h);

          (c)     All rights to collect premium refunds and distributions made
after the Closing Date under Nuclear Insurance Policies to the extent that such
refunds and distributions relate to premiums paid prior to the Closing Date;

          (d)     All cash, cash equivalents, bank deposits, accounts and notes
receivable (trade or otherwise), and any income, sales, payroll or other tax
receivables, except to the extent such assets are included in the portion of the
Decommissioning Funds transferred to Buyer pursuant to Section 6.12 hereof and
except such assets required to be transferred from the RG&E Defined Benefit Plan
to the Replacement Defined Benefit Plan or paid from Seller to Buyer as set
forth in Section 6.10(h);

          (e)     The rights of Seller and its Affiliates to the names
"Rochester Gas and Electric Corporation" and "RG&E" or any related or similar
trade names, trademarks, service marks, corporate names or logos, or any part,
derivative or combination thereof;

          (f)     All tariffs, agreements and arrangements to which Seller is a
party for the purchase or sale of electric capacity and/or energy or for the
purchase or sale of transmission or ancillary services;

          (g)     Other than those contemplated by Section 2.1(p), the rights of
Seller in and to any causes of action, claims and defenses against third parties
(including indemnification and contribution) arising out of or relating to (A)
any Real Property or personal property, Permits, Taxes, Real Property
Agreements, Seller's Agreements, Fuel Contracts or the Non-material Contracts,
if any, including any claims for refunds (including refunds of previously paid
Department of Energy Decommissioning and Decontamination Fees), prepayments,
offsets, recoupment, insurance proceeds, condemnation awards, judgments and the
like, whether received as payment or credit against future liabilities, relating
specifically to the Purchased Assets (including, without limitation, the
Facilities and the Site) and relating to any period prior to the Closing Date,
(B) the Excluded Assets, or (C) the Excluded Liabilities;

          (h)     All personnel records of Seller and Affiliates, except the
Transferred Employee Records;

          (i)     Any and all of Seller's rights in any contract representing an
intercompany transaction between Seller and an Affiliate of Seller, whether or
not such transaction relates to the provision of goods and services, payment
arrangements, intercompany charges or balances, or the like;

          (j)     To the extent not otherwise provided for in this Section 2.2,
any refund or credit (i) related to income, real or personal property, excise,
sales or use Taxes paid by Seller with respect to periods (or portions thereof)
prior to the Closing Date in respect of the Purchased Assets, whether such
refund is received as a payment or as a credit against future income, real or
personal property, excise, sales or use Taxes payable, or (ii) arising under any
agreement which is part of the Purchased Assets and relating to a period prior
to the Closing Date;

          (k)     Any cause of action or claim for damages or other rights that
relate to the One-Time DOE Pre-1983 Fee; and

          (l)     All rights of Seller under those contracts, agreements,
purchase orders and personal property leases set forth in Schedule 2.2(l).

          Section 2.3     Assumed Liabilities and Obligations.  On the Closing
Date, Buyer shall deliver to Seller the Assignment and Assumption Agreement
pursuant to which Buyer shall assume and agree to discharge when due, all of the
following Liabilities of Seller (collectively, "Assumed Liabilities and
Obligations"):

          (a)     All Liabilities of Seller arising on or after the Closing Date
with respect to the ownership, operation or maintenance of the Purchased Assets,
and all Liabilities of Seller arising on or after the Closing Date under
Seller's Agreements, the Standard Spent Fuel Disposal Contract, Fuel Contracts,
the Real Property Agreements, the Non-material Contracts and the Transferable
Permits in accordance with the terms thereof, including, without limitation, (i)
the contracts, licenses, agreements and personal property leases entered into by
Seller with respect to the Purchased Assets or under Seller's Agreements or the
Fuel Contracts or the Non-material Contracts and disclosed on the relevant
schedule and (ii) the contracts, licenses, agreements and personal property
leases entered into by Seller with respect to the Purchased Assets after the
date hereof consistent with the terms of this Agreement, except in each case to
the extent such Liabilities, but for a breach or default by Seller or a related
waiver or extension, would have been paid, performed or otherwise discharged on
or prior to the Closing Date or to the extent the same arise out of any such
breach or default or out of any event which after the giving of notice or the
passage of time would constitute a default by Seller

          (b)     All Liabilities or obligations with respect to the Transferred
Employees relating to personal injury, discrimination, wrongful discharge,
unfair labor practice, or constructive termination of any individual, or similar
claim or cause of action attributable to any actions or inactions on or after
the Closing Date;

          (c)     All Liabilities (except for Excluded Liabilities) of Seller
under or related to Environmental Laws, whether past, current or future, or the
common law, with respect to the Site; provided however, that Buyer does not
assume any Liability for the off-Site disposal or Release of Hazardous
Substances or the arrangement for such activities prior to the Closing Date, as
provided in Section 2.4(f) hereof, except that for the purposes of Section 2.3
and 2.4 "off-Site" does not include any location adjoining the Site to which
Hazardous Substances Released at the Site have migrated;

          (d)     All Liabilities of Seller associated with or arising from the
Purchased Assets in respect of Taxes for which Buyer is liable pursuant to
Sections 3.5 or 6.8(a) hereof;

          (e)     All Liabilities with respect to Transferred Employees for
which Buyer is responsible pursuant to Section 6.10. Moreover, for employees of
the Seller who become Transferred Employees as of the Closing Date or who are
listed on Schedule 4.11 (as updated as of the Closing Date to include former
employees of the Seller whose work assignments principally involved the
operation of any of the Purchased Assets and whose employment has been
terminated by Seller between the date hereof and the Closing Date) to the extent
required by a court of competent jurisdiction, administrative agency or
arbitrator, Buyer shall implement any prospective changes (as opposed to
compensatory costs, damages or other Liabilities relating to any periods prior
to the Closing) in the terms of the employment of any such employee whose
position no longer exists at Seller, whose position exists at Buyer and who is
subsequently ordered to be reinstated following the resolution of any claims or
causes of action, irrespective of when such claim or cause of action is filed or
threatened;

          (f)     With respect to the Purchased Assets, any Tax that may be
imposed by any federal, state or local government on the ownership, sale,
operation or use of the Purchased Assets on or after the Closing Date or that
relates to or arises from the Purchased Assets with respect to taxable periods
(or portions thereof) beginning on or after the Closing Date (except for any
Income Taxes attributable to income actually received by Seller);

          (g)     All Liabilities of Seller to Decommission the Facilities and
the Site;

          (h)     All Liabilities of Seller associated with (i) the Nuclear Fuel
consumed, or to be consumed, at Ginna from and after the Closing Date and (ii)
the management, storage, removal, transportation and disposal on and after the
Closing Date of all Nuclear Materials of Ginna ; provided, however, that Buyer
does not assume any Liability for the off-Site disposal of Low Level Waste prior
to the Closing Date as required pursuant to Laws in effect as of the Closing
Date;

          (i)     All obligations arising on or after the Closing Date to pay to
ANI any additional premiums due to audit assessments for assessments performed
on or after the Closing Date;

          (j)     All Liabilities arising under or relating to Nuclear Laws or
relating to any claim in respect of Nuclear Fuel or Nuclear Materials arising
out of the ownership or operation of the Purchased Assets on or after the
Closing Date, including any and all Liabilities to third parties (including
employees) for personal injury, property damage or tort, or similar causes of
action arising out of the ownership or operation of the Purchased Assets on or
after the Closing Date, including Liabilities arising out of or resulting from a
"nuclear incident" or "precautionary evacuation" (as such terms are defined in
the Atomic Energy Act) at the Site, or any other licensed nuclear reactor site
in the United States, or in the course of the transportation of radioactive
materials to or from the Site or any other site on or after the Closing Date,
including, without limitation, Liability for any deferred premiums assessed in
connection with such a nuclear incident or precautionary evacuation under any
applicable NRC or industry retrospective rating plan or insurance policy,
including any mutual insurance pools established in compliance with the
requirements imposed under Section 170 of the Atomic Energy Act, 10 C.F.R. Part
140, and 10 C.F.R. Section 50.54(w);

          (k)     Any Liability for any Price-Anderson Act secondary financial
protection retrospective premium obligations for (i) nuclear worker Liability
attributable to employment on or after the Closing Date or (ii) any third-party
Liability arising out of any nuclear incident on or after the Closing Date;

          (l)     Except as otherwise expressly provided herein, Liabilities of
Buyer to the extent arising from the execution, delivery or performance of this
Agreement and the transactions contemplated hereby; and

          (m)     All other Liabilities expressly allocated to or assumed by
Buyer in this Agreement.

          Section 2.4     Excluded Liabilities.  Notwithstanding anything to the
contrary in this Agreement, nothing in this Agreement shall be construed to
impose on Buyer, and Buyer shall not assume or be obligated to pay, perform or
otherwise discharge, the following Liabilities (the "Excluded Liabilities"),
with all of such Excluded Liabilities remaining as obligations of Seller:

          (a)     Any Liabilities of Seller in respect of any Excluded Assets or
other assets of Seller which are not Purchased Assets;

          (b)     Any Liabilities in respect of Taxes attributable to the
ownership, operation or use of the Purchased Assets for taxable periods, or
portions thereof, ending before the Closing Date, except for Taxes for which
Buyer is liable pursuant to Sections 3.5 or 6.8(a) hereof;

          (c)     Any Liabilities of Seller arising under any of Seller's
Agreements, Fuel Contracts, Real Property Agreements, Transferable Permits or
any of the Non-material Contracts prior to the Closing Date;

          (d)     Any monetary fines or penalties (including investigatory or
similar costs) imposed by a Governmental Authority with respect to the Purchased
Assets resulting from (i) an investigation, proceeding, request for information
or inspection before or by a Governmental Authority that commenced prior to the
Closing Date, or (ii) criminal acts, willful misconduct or gross negligence of
Seller;

          (e)     Subject to Section 3.5, any payment obligations of Seller for
goods delivered or services rendered prior to the Closing Date, including, but
not limited to, rental or lease payments due and owing prior to the Closing Date
pursuant to the Real Property Agreements and any leases relating to Tangible
Personal Property;

          (f)     Any Liability under or related to Environmental Laws or the
common law (whether or not arising or made manifest before the Closing Date or
on or after the Closing Date), arising as a result of, in connection with or
allegedly caused by the disposal, storage, transportation, discharge, Release,
or recycling of Hazardous Substances off-Site, or the arrangement for such
activities, in connection with the ownership or operation of the Purchased
Assets prior to the Closing Date except that for the purpose of Sections 2.3 and
2.4, "off-Site" does not include any location adjoining the Site to which
Hazardous Substances disposed of or Released at the Site have migrated;

          (g)     Third party Liability for any claims arising as a result of or
in connection with loss of life or injury to persons or damages to property
prior to the Closing Date (whether or not such loss or injury was made manifest
on or after the Closing Date) caused (or allegedly caused) by the presence or
Release of Hazardous Substances at, on, in, under, adjacent to or migrating from
the Purchased Assets prior to the Closing Date; provided Seller will not have
any Liability to third parties for any claims arising as a result of or in
connection with loss of life or injury to persons or damages to property caused
(or allegedly caused) by the Release by Buyer of Hazardous Substances at, on,
in, or under, the Purchased Assets on or after the Closing Date;

          (h)     All Liabilities arising under or relating to Nuclear Laws or
relating to any claim in respect of Nuclear Fuel or Nuclear Materials arising
out of the ownership or operation of the Purchased Assets prior to the Closing
Date (except for Liabilities associated with the management, storage, removal,
transportation and disposal of Nuclear Fuel and Nuclear Material), including any
and all Liabilities to third parties (including employees) for personal injury,
property damage or tort, or similar causes of action arising out of the
ownership or operation of the Purchased Assets prior to the Closing Date,
including Liabilities arising out of or resulting from a "nuclear incident" or
"precautionary evacuation" (as such terms are defined in the Atomic Energy Act)
at the Site, or any other licensed nuclear reactor site in the United States, or
in the course of the transportation of radioactive materials to or from the Site
or any other site prior to the Closing Date, including, without limitation,
Liability for any deferred premiums assessed in connection with such a nuclear
incident or precautionary evacuation under any applicable NRC or industry
retrospective rating plan or insurance policy, including any mutual insurance
pools established in compliance with the requirements imposed under Section 170
of the Atomic Energy Act, 10 C.F.R. Part 140, and 10 C.F.R. Section 50.54(w);

          (i)     Any Liabilities relating to Seller's operations on, or usage
of, the Easements, including, without limitation, Liabilities arising as a
result of or in connection with (1) any violation or alleged violation of
Environmental Law and (2) loss of life, injury to persons or property or damage
to natural resources, but only to the extent caused by Seller;

          (j)     Subject to Section 6.10(h) and 6.10(o), any Liabilities
relating to any Benefit Plan, any employee benefit plan as defined in Section
3(3) of ERISA, or any other plan, program, arrangement or policy established or
maintained in whole or in part by Seller or by any trade or business (whether or
not incorporated) which is or ever has been under common control, or which is or
ever has been treated as a single employer, with Seller under Section 414(b),
(c), (m) or (o) of the Code ("ERISA Affiliate") or to which Seller or any ERISA
Affiliate contributes or contributed, including any multiemployer plan
contributed to by Seller or any ERISA Affiliate or to which Seller or any ERISA
Affiliate is or was obligated to contribute (the "Plans"), including, but not
limited to any such Liability (i) for the termination or discontinuance of, or
the Seller's or an ERISA Affiliate's withdrawal from, any such Plan,
(ii) relating to benefits payable under any Plans, (iii) relating to the PBGC
under Title IV of ERISA, (iv) relating to a multi-employer plan, (v) with
respect to noncompliance with the notice requirements of COBRA, (vi) with
respect to any noncompliance with ERISA or any other applicable Laws, and
(vii) with respect to any suit, proceeding or claim which is brought against
Buyer, any Plan or any fiduciary or former fiduciary of, any of the Plans;

          (k)     Any Liabilities relating to the failure to hire, the
employment or services or termination of employment or services of any
individual, including wages, compensation, benefits, affirmative action,
personal injury, discrimination, harassment, retaliation, constructive
termination, wrongful discharge, unfair labor practices, or constructive
termination by the Seller of any individual, or any similar or related claim or
cause of action attributable to any actions or inactions by Seller prior to the
Closing Date with respect to the Purchased Assets, the Transferred Employees,
independent contractors, applicants, and any other individuals who are
determined by a court or by a Governmental Authority to have been applicants or
employees of the Seller or any of its Affiliates (including, but not limited to,
any Liability related to the matter disclosed on Schedule 4.11), or that are
filed with or pending before any court, administrative agency or arbitrator
prior to the Closing Date, including, but not limited to, the claim set forth on
Schedule 4.11, provided Seller will not have any Liability for similar actions
or inactions by Buyer or any successor thereto on or after the Closing Date;

          (l)     All Spent Nuclear Fuel Fees and any other fees associated with
electricity generated at Ginna and sold on or prior to the Closing Date,
including, but not limited to, the obligation to the Department of Energy under
the Standard Spent Fuel Disposal Contract to make the deferred payment of the
One-Time DOE Pre-1983 Fee;

          (m)     All Liabilities for Department of Energy Decommissioning and
Decontamination Fees;

          (n)     Any Encumbrances on the Purchased Assets, except for Permitted
Encumbrances and except as consented to by Buyer in accordance with Section 6.1;

          (o)     Except as otherwise expressly provided herein, Liabilities of
Seller to the extent arising from the execution, delivery or performance of this
Agreement and the transactions contemplated hereby; and

          (p)     Any other Liabilities expressly allocated to or assumed by
Seller in this Agreement.

          Section 2.5     Control of Litigation.    (a)    The Parties agree and
acknowledge that, subject to the provisions of Article 8 and Section 6.13,
Seller shall pay for and be entitled exclusively to control, defend and settle
any litigation, administrative or regulatory proceeding, and any investigation
or other activities arising out of or related to any Excluded Liabilities and
Buyer agrees to reasonably cooperate, at Seller's expense, with Seller in
connection therewith.

          (b)      The Parties agree and acknowledge that, subject to the
provisions of Article 8 and Section 6.13, Buyer shall pay for and be entitled
exclusively to control, defend and settle any litigation, administrative or
regulatory proceeding, and any investigation or other activities arising out of
or related to any Assumed Liabilities and Obligations, and Seller agrees to
reasonably cooperate, at Buyer's expense, with Buyer in connection therewith.

ARTICLE 3

THE CLOSING

          Section 3.1     Closing.  Upon the terms and subject to the
satisfaction of the conditions contained in Article 7 of this Agreement, the
sale, assignment, conveyance, transfer and delivery of the Purchased Assets to
Buyer, the payment of the Purchase Price to Seller, and the consummation of the
other respective obligations of the Parties contemplated by this Agreement shall
take place at a closing (the "Closing"), to be held at the offices of LeBoeuf,
Lamb, Greene & MacRae, L.L.P., 125 West 55th Street, New York, New York 10019,
at 10:00 a.m. local time, or another mutually acceptable time and location, on
the date that is twenty (20) Business Days following the date on which the last
of the conditions precedent to Closing set forth in Article 7 of this Agreement
have been either satisfied or waived by the Party for whose benefit such
conditions precedent exist, but in any event not after the Termination Date,
unless the Parties mutually agree on another date; provided that, in setting the
Closing Date, the matters contemplated by Section 7.1 (g), (h), (i), (j), (l),
(m), (n), (p) and (q) and Section 7.2 (g), (h), (i), (j) and (k), shall be
assumed to have been satisfied; provided, however, that the actual satisfaction
of such provisions shall in all cases be considered to be a condition to
Closing. The date of Closing is hereinafter called the "Closing Date." The
Closing shall be effective for all purposes as of 12:01 a.m. on the Closing
Date.

          Section 3.2     Payment of Purchase Price.  Upon the terms and subject
to the satisfaction of the conditions contained in this Agreement, in
consideration of the aforesaid sale, assignment, conveyance, transfer and
delivery of the Purchased Assets, Buyer will pay or cause to be paid to Seller
at the Closing in consideration of the Purchased Assets the sum of Four Hundred
and Twenty-Two Million, Six Hundred Thousand Dollars ($422,600,000) ("Purchase
Price") plus or minus any adjustments to such Purchase Price pursuant to the
provisions of Section 3.3 below, by wire transfer of immediately available funds
denominated in U.S. dollars or by such other means as are agreed upon by Seller
and Buyer.

          Section 3.3     Adjustment to Purchase Price.

          (a)      Subject to Section 3.3(b) and 3.3(c), at the Closing, the
Purchase Price shall be adjusted, without duplication, to account for the items
set forth in this Section 3.3(a):

               (i)     The Purchase Price shall be adjusted to account for the
items prorated as of the Closing Date pursuant to Section 3.5.

               (ii)     The Purchase Price shall be (A) increased if and to the
extent that the net book value of that portion of Nuclear Fuel which consists of
all nuclear fuel assemblies in the Facilities reactor on the Closing Date and
any irradiated fuel assemblies that have been temporarily removed from the
Facilities reactor as of the Closing Date and are capable of reinsertion without
modification or additional cost is greater than $21,600,000, and (B) decreased
if and to the extent the net book value of that portion of Nuclear Fuel which
consists of all nuclear fuel assemblies in the Facilities reactor on the Closing
Date and any irradiated fuel assemblies that have been temporarily removed from
the Facilities reactor as of the Closing Date and are capable of reinsertion
without modification or additional cost, is less than $21,600,000 (all
calculations are to be consistent with Seller's past practices).

               (iii)     The Purchase Price shall be (A) increased if and to the
extent that the gross book value of the Inventory of Major Spare Parts and the
Seller's interest in the Inventory subject to the PIMS Agreement on the Closing
Date is greater than $14,000,000, and (B) decreased if and to the extent the
gross book value of the Inventory of Major Spare Parts and the Seller's interest
in the Inventory subject to the PIMS Agreement on the Closing Date is less than
$14,000,000 (all calculations are to be consistent with Seller's past
practices).

               (iv)     The Purchase Price shall be increased by the amount
expended by Seller between the date hereof and the Closing Date for capital
additions to or replacements of property, plant and equipment included in the
Purchased Assets and other expenditures or repairs on property, plant and
equipment included in the Purchased Assets that are capitalized by Seller in
accordance with its normal accounting policies, provided, that, such
expenditures either (1) are described in the Capital Budget, or (2) are
necessary to comply with changes in applicable Laws effected after the date of
this Agreement, or (3) have been specifically requested or approved by Buyer in
writing, or (4) are made in accordance with Good Utility Practices and exceed
$3,000,000 in the aggregate (the "Capital Expenditures"). Nothing in this
paragraph should be construed to limit Seller's rights and obligations to make
all capital expenditures necessary to comply with the NRC License, the NRC
Commitments and other Permits.

               (v)     The Purchase Price shall be adjusted as set forth in
Sections 6.10(h) and (k) and Section 6.21(c).

               (vi)     If the cost to dispose of the Low Level Waste at the
Facilities as of the Closing Date is greater than $250,000, based on the
disposal criteria set forth in Schedule 3.3(a)(vi), the Purchase Price shall be
adjusted downward by every dollar that the cost of such Low Level Waste disposal
is greater than $250,000. Conversely, if the cost to dispose of the Low Level
Waste at the Facilities as of the Closing Date is less than $250,000, the
Purchase Price shall be adjusted upward by every dollar that the cost of such
Low Level Waste disposal is less than $250,000.

               (vii)     The Purchase Price shall be increased for every dollar
paid by Seller to a third party for uranium conversion, enrichment or
fabrication in connection with Ginna Reload Cycle 32 and/or fuel and fuel design
costs required for the Uprate referred to in Section 6.20, including but not
limited to, payments made by Seller to third parties with respect to all
unirradiated fuel assemblies awaiting insertion into the Facility reactor, as
well as all nuclear fuel constituents in any stage of the fuel cycle that are in
process of production, conversion, enrichment or fabrication for use in the
Facility.

               (viii)     The Purchase Price shall be adjusted as provided in
Schedule 3.3(a)(viii) in the event that the Closing occurs on a date before or
after June 30, 2004; provided, however that no such adjustment shall be made, in
the event that the Closing occurs after June 30, 2004 as a result of either (i)
the failure of Buyer to satisfy its performance obligations under this Agreement
or (ii) the failure to receive regulatory approval from the NRC for the transfer
of the NRC License to Buyer by June 30, 2004 where there remain unresolved
issues in the application related to NRC approval of Buyer's foreign ownership,
control or domination, if applicable.

          (b)      No less than ten (10) Business Days prior to the Closing
Date, Seller shall prepare in good faith and deliver to Buyer an estimated
closing statement (the "Estimated Closing Statement") that shall set forth
Seller's best estimate of all estimated adjustments to the Purchase Price
required by Section 3.3(a) (the "Estimated Adjustment"). Within ten (l0) days
after the delivery of the Estimated Closing Statement by Seller to Buyer, Buyer
may object in good faith to the Estimated Adjustment in writing. If Buyer
objects to the Estimated Adjustment, the Parties shall attempt to resolve their
differences by negotiation. If the Parties are unable to do so prior to the
Closing Date (or if Buyer does not object to the Estimated Adjustment), the
Purchase Price shall be adjusted (the "Closing Adjustment") for the Closing by
the amount of the Estimated Adjustment not in dispute. The disputed portion
shall be resolved in accordance with the provisions of Section 3.3(c) and paid
as part of any Post-Closing Adjustment to the extent required by Section 3.3(c).

          (c)     Within sixty (60) days after the Closing Date, Seller shall
prepare and deliver to Buyer a final closing statement (the "Post-Closing
Statement") that shall set forth all adjustments to the Purchase Price required
by Section 3.3(a) (the "Proposed Post-Closing Adjustment") and all work papers
detailing such adjustments. The Post-Closing Statement shall be prepared using
the same accounting principles, policies and methods as Seller has historically
used in connection with the calculation of the items reflected on such
Post-Closing Statement. Within thirty (30) days after the delivery of the
Post-Closing Statement by Seller to Buyer, Buyer may object to the Proposed
Post-Closing Adjustment in writing. Seller agrees to cooperate with Buyer to
provide Buyer with the information used to prepare the Post-Closing Statement
and information relating thereto. If Buyer objects to the Proposed Post-Closing
Adjustment, the Parties shall attempt to resolve such dispute by negotiation. If
the Parties are unable to resolve such dispute within thirty (30) days after any
objection by Buyer, the Parties shall appoint the Independent Accounting Firm,
which shall, at Seller's and Buyer's joint expense, review the Proposed
Post-Closing Adjustment and determine the appropriate adjustment to the Purchase
Price, if any, within thirty (30) days after such appointment. The Parties agree
to cooperate with the Independent Accounting Firm and provide it with such
information as it reasonably requests to enable it to make such determination.
The finding of such Independent Accounting Firm shall be binding on the Parties
hereto. Upon determination of the appropriate adjustment (the "Post-Closing
Adjustment") by agreement of the Parties or by binding determination of the
Independent Accounting Firm, the Party owing the difference shall deliver such
amount to the other Party no later than two (2) Business Days after such
determination, in immediately available funds or in any other manner as
reasonably requested by the payee.

          Section 3.4     Allocation of Purchase Price.

          (a)      At least twenty (20) Business Days prior to the Closing Date,
Buyer shall determine, with the assistance of an independent engineer or
appraiser, and provide to Seller an estimated allocation among the Purchased
Assets of the sum of the Purchase Price and the Assumed Liabilities and
Obligations that is consistent with the allocation methodology provided by
Section 1060 and 338 of the Code and the regulations promulgated thereunder (the
"Estimated Allocation"). The Estimated Allocation shall be subject to the
approval of the Seller, which approval shall not be unreasonably withheld. The
Estimated Allocation will be used for transfer tax, bulk sale filings and for
all other Closing document purposes.

          (b)      Within ninety (90) days after the Closing Date, the Buyer
shall determine, with the assistance of an independent engineer or appraiser,
and provide to Seller the allocation among the Purchased Assets of the sum of
the Purchase Price (including any adjustments thereto) and the Assumed
Liabilities and Obligations (together with any other relevant items) that is
consistent with the allocation methodology provided by Section 1060 and 338 of
the Code and the regulations promulgated thereunder (the "Allocation"). The
Allocation shall be subject to the approval of the Seller, which approval shall
not be unreasonably withheld.

          (c)      Except to the extent required to comply with audit
determinations of any tax authority with jurisdiction over a Party, Buyer and
Seller shall report the transactions contemplated by this Agreement for all
required federal income Tax and all other Tax purposes in a manner consistent
with the Allocation. Buyer and Seller shall not take any position in any Tax
Return, Tax proceeding or audit that is inconsistent with the Allocation without
the consent of the other Party. To the extent such filings are required, Buyer
and Seller agree to file Internal Revenue Service Form 8594 (Asset Acquisition
Statement Under Section 1060), and all federal, state, local and foreign Tax
Returns, in accordance with the Allocation. Subsequent to the preparation of the
Allocation as provided in Sections 3.4(a) and (b), Buyer and Seller agree to
provide the other with any information required to complete Form 8594 within ten
(10) days of the request for such information. Buyer and Seller shall notify and
provide the other with reasonable assistance in the event of an examination,
audit or other proceeding regarding the allocation of the Purchase Price
pursuant to this Section 3.4. Buyer and Seller shall treat the transaction
contemplated by this Agreement as the acquisition by Buyer of a trade or
business for United States federal income Tax purposes and agree that no portion
of the consideration shall be treated in whole or in part as the payment for
services or future services.

          Section 3.5     Prorations.

          (a)      Buyer and Seller agree that all of the items normally
prorated, including those listed below (but not including Income Taxes),
relating to the business and operation of the Purchased Assets shall be prorated
as of the Closing Date, with Seller liable to the extent such items relate to
any time period prior to the Closing Date, and Buyer liable to the extent such
items relate to periods commencing with the Closing Date (measured in the same
units used to compute the item in question, otherwise measured by calendar
days):

               (i)     Personal property, real estate, occupancy and water
Taxes, assessments and other charges, if any, on or with respect to the business
and operation of the Purchased Assets;

               (ii)     Any prepaid expenses (including security deposits)
relating to the Purchased Assets;

               (iii)     Rent, Taxes and all other items (including prepaid
services or goods not included in Inventory) payable by or to Seller under any
of Seller's Agreements or the Non-material Contracts;

               (iv)     Any permit, license, registration, compliance assurance
fees or other fees with respect to any Transferable Permit;

               (v)     Sewer rents and charges for water, telephone, electricity
and other utilities; and

               (vi)     Rent and Taxes and other items payable by Seller under
the Real Property Agreements assigned to Buyer.

          (b)      In connection with the prorations referred to in (a) above,
in the event that actual figures are not available at the Closing Date, the
proration shall be based upon the actual Taxes or other amounts accrued through
the Closing Date or paid for the most recent year (or other appropriate period)
for which actual Taxes or other amounts paid are available. Such prorated Taxes
or other amounts shall be re-prorated and paid to the appropriate Party within
sixty (60) days of the date that the previously unavailable actual figures
become available. Prorations measured by calendar days shall be based on the
number of days in a year or other appropriate period (i) before the Closing Date
and (ii) including and after the Closing Date. Seller and Buyer agree to furnish
each other with such documents and other records as may be reasonably requested
in order to confirm all adjustment and proration calculations made pursuant to
this Section 3.5.

          Section 3.6     Deliveries by Seller.  At the Closing (or, in the case
of those items contemplated by paragraph (j) below, at the Facilities on or
before the Closing Date), Seller will deliver, or cause to be delivered, the
following to Buyer:

          (a)     The Bill of Sale, duly executed by Seller;

          (b)     Copies of any and all governmental and other third party
consents, waivers or approvals obtained by Seller with respect to the transfer
of the Purchased Assets, or the consummation of the transactions contemplated by
this Agreement;

          (c)     The opinions of counsel and officer's certificates of Seller
contemplated by Sections 7.1(g) and (h);

          (d)     Bargain and sale deed with covenant provided for by Section 13
of the Lien Law of the State of New York, conveying the Real Property to Buyer,
in substantially the form of Exhibit "E" hereto, duly executed and acknowledged
by Seller in recordable form (the "Deed"), and any owner's affidavits or similar
documents reasonably required by the title company;

          (e)     All Ancillary Agreements duly executed by Seller (and with
respect to any Ancillary Agreement consisting of a pole attachment agreement, if
necessary, by any co-owner of the pole), as applicable;

          (f)     Copies, certified by the Secretary or Assistant Secretary of
Seller, of corporate resolutions authorizing the execution and delivery of this
Agreement and all of the agreements and instruments to be executed and delivered
by Seller in connection herewith, and the consummation of the transactions
contemplated hereby;

          (g)     A certificate of the Secretary or Assistant Secretary of
Seller identifying the name and title and bearing the signatures of the officers
of Seller authorized to execute and deliver this Agreement and the other
agreements and instruments contemplated hereby;

          (h)     Certificate of good standing with respect to Seller, issued by
the Secretary of the State of New York;

          (i)     To the extent available, Tax clearance certificates or Tax
status certificates dated no more than thirty (30) days prior to the Closing for
each jurisdiction identified on Schedule 4.20;

          (j)     To the extent available, originals of the Seller's Agreements,
Fuel Contracts, Non-material Contracts, Real Property Agreements, Transferred
Employee Records and Transferable Permits and, if not available, true and
correct copies thereof, in all cases together with notices to and, if required
by the terms thereof, consents by other Persons which are parties to the
Seller's Agreements, Fuel Contracts, Non-material Contracts, Real Property
Agreements and Transferable Permits;

          (k)     The assets of the Decommissioning Funds to be transferred
pursuant to Section 6.12 shall be delivered to the Trustee of the Post-Closing
Decommissioning Trust Agreement;

          (l)     All such other instruments of assignment, transfer or
conveyance as shall, in the reasonable opinion of Buyer and its counsel, be
necessary or desirable to transfer to Buyer the Purchased Assets, in accordance
with this Agreement and where necessary or desirable in recordable form;

          (m)     The WARN Certificate;

          (n)     An ALTA-ACSM survey certified by the surveyor to Buyer and the
Title Company, which survey shall have been updated to a date within thirty (30)
days before the Closing and shall mention and show (if of a kind that can
reasonably be expected to be shown) all title exceptions included in the then
most recent title commitment provided to Seller by Buyer;

          (o)     The written consent of the Office of General Services of the
State of New York to the assignment by Seller to Buyer of the Cooling Tunnel
Easement which consent shall be in recordable form, and shall not materially
alter the terms of said Cooling Tunnel Easement to Buyer's detriment;

          (p)     A letter executed by Geomatrix reasonably satisfactory in form
and substance to Buyer allowing Buyer to rely on the Phase I and Phase II report
as to the Site, the Phase I report as to the Station 13A Parcel (as defined in
the Easement Agreement), and the other environmental assessments (and all
amendments thereto) issued by Geomatrix on or after January 1, 2003 with respect
to the Site; and

          (q)     Such other agreements, consents, documents, instruments and
writings as are required to be delivered by Seller at or prior to the Closing
Date pursuant to this Agreement or the Ancillary Agreements or otherwise
reasonably required in connection herewith.

          Section 3.7     Deliveries by Buyer.  At the Closing, Buyer will
deliver, or cause to be delivered, the following to Seller:

          (a)     The Purchase Price, payable pursuant to Section 3.2, as
adjusted pursuant to Section 3.3(a);

          (b)     The opinions of counsel and certificates contemplated by
Section 7.2(h) and (j);

          (c)     Ancillary Agreements, duly executed by Buyer;

          (d)     Copies, certified by the Secretary or Assistant Secretary of
Buyer, of resolutions authorizing the execution and delivery of this Agreement,
and all of the agreements and instruments to be executed and delivered by Buyer
in connection herewith, and the consummation of the transactions contemplated
hereby;

          (e)     A certificate of the Secretary or Assistant Secretary of Buyer
identifying the name and title and bearing the signatures of the officers of
Buyer authorized to execute and deliver this Agreement, and the other agreements
contemplated hereby;

          (f)     A certificate of good standing with respect to Buyer, issued
by the Secretary of the State of Maryland;

          (g)     A certificate of authority of Buyer (or its assignee of this
Agreement) to do business in New York, issued by the Secretary of State of New
York;

          (h)     All such other instruments of assumption as shall, in the
reasonable opinion of Seller and its counsel, be necessary for Buyer to assume
the Assumed Liabilities and Obligations in accordance with this Agreement;

          (i)     Copies of any and all governmental and other third party
consents, waivers or approvals obtained by Buyer with respect to the transfer of
the Purchased Assets, or the consummation of the transactions contemplated by
this Agreement;

          (j)     A copy of the Post-Closing Decommissioning Trust Agreement;
and

          (k)     Such other agreements, documents, instruments and writings as
are required to be delivered by Buyer at or prior to the Closing Date pursuant
to this Agreement, or otherwise reasonably required in connection herewith.

          Section 3.8     Delivery of DOE Credit Support. At the Closing, Seller
will deliver or cause to be delivered, to Buyer, the DOE Credit Support (in any
permitted form, as determined by Seller).

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF SELLER

          Seller hereby represents and warrants to Buyer as follows:

          Section 4.1     Organization.  Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York
and has all requisite corporate power and authority to own, lease, and operate
its properties and to carry on its business as is now being conducted. Copies of
the Certificate of Incorporation and By-laws of Seller, each as amended to date,
have heretofore been made available to Buyer.

          Section 4.2     Authority Relative to this Agreement.  Seller has full
corporate power and authority to execute and deliver this Agreement and the
Ancillary Agreements and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary corporate action
required on the part of Seller and no other corporate proceedings on the part of
Seller are necessary to authorize this Agreement and the Ancillary Agreements or
to consummate the transactions contemplated hereby and thereby. This Agreement
has been duly and validly executed and delivered by Seller and at Closing, the
Ancillary Agreements will be duly and validly executed and delivered by Seller,
and assuming that this Agreement and the applicable Ancillary Agreements
constitute a valid and binding agreement of Buyer and subject to the receipt of
Seller's Required Regulatory Approvals, this Agreement and the Ancillary
Agreements constitute the legal, valid and binding agreement of Seller,
enforceable against Seller in accordance with their respective terms.

          Section 4.3     Consents and Approvals; No Violation.

          (a)     Subject to the receipt of the third-party consents set forth
in Schedule 4.3(a) and the Seller's Required Regulatory Approvals, neither the
execution and delivery of this Agreement or the Ancillary Agreements by Seller
nor the consummation of the transactions contemplated hereby or thereby will (i)
conflict with or result in the breach or violation of any provision of the
Certificate or Articles of Incorporation or Bylaws of Seller; (ii) result in a
default (or give rise to any right of termination, cancellation or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to which Seller
is a party or by which Seller, or any of the Purchased Assets, may be bound,
except for such defaults (or rights of termination, cancellation or
acceleration) as to which requisite waivers or consents have been obtained or
which would not, individually or in the aggregate, create a Material Adverse
Effect; or (iii) constitute violations of any order, writ, injunction, decree,
statute, rule or regulation applicable to Seller, or any of its assets, which
violation, individually or in the aggregate, would create a Material Adverse
Effect.

          (b)     Except as set forth in Schedule 4.3(b) (the filings and
approvals referred to in Schedule 4.3(b) are collectively referred to as the
"Seller's Required Regulatory Approvals"), no declaration, filing or
registration with, or notice to, or authorization, consent or approval of any
Governmental Authority is necessary for the execution and delivery of this
Agreement or the Ancillary Agreements or the consummation by Seller of the
transactions contemplated hereby or thereby, other than (i) such declarations,
filings, registrations, notices, authorizations, consents or approvals which, if
not obtained or made, will not, individually or in the aggregate, create a
Material Adverse Effect, or (ii) such declarations, filings, registrations,
notices, authorizations, consents or approvals which become applicable to Seller
as a result of the specific regulatory status of Buyer (or any of its
Affiliates) or the result of any other facts that specifically relate to the
business or activities in which Buyer (or any of its Affiliates) is or proposes
to be engaged. Seller has no Knowledge of any facts or circumstances that make
it reasonably likely that Seller's Required Regulatory Approvals will not be
obtained.

          Section 4.4     Reports.  Since January 1, 2002, Seller has filed or
caused to be filed with the SEC, the applicable state or local utility
commissions or regulatory bodies, the NRC, the DOE and the FERC, as the case may
be, all material forms, statements, reports and documents (including all
exhibits, amendments and supplements thereto) required to be filed by them with
respect to the Purchased Assets or the ownership or operation thereof under each
of the Securities Act, the Exchange Act, the applicable state public utility
laws, the Federal Power Act, the Holding Company Act, the Atomic Energy Act, the
Energy Reorganization Act, and the Price-Anderson Act and the respective rules
and regulations thereunder, except for such filings the failure of which to make
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. All such filings complied in all material respects with
all applicable requirements of the appropriate act and the rules and regulations
thereunder in effect on the date each such report was filed, and there are no
material misstatements or omissions relating to the Purchased Assets in any such
report; provided, however, Seller shall not be deemed to be making any
representation or warranty to Buyer hereunder concerning the financial
statements of Seller or any Affiliate of Seller contained in any such reports.

          Section 4.5     Undisclosed Liabilities.  Except as set forth in
Schedule 4.5, the Purchased Assets are not subject to any material Liability
that has not been accrued or reserved against in Seller's financial statements
as of the end of the most recent fiscal quarter for which such statements are
available or disclosed in the notes thereto in accordance with generally
accepted accounting principles consistently applied.

          Section 4.6     Absence of Certain Changes or Events.  Since January
1, 2003, except as set forth in Schedule 4.6 or Schedule 4.15(a)(i), there has
not been: (a) any Material Adverse Effect; (b) any damage, destruction or
casualty loss, whether or not covered by insurance, which, individually or in
the aggregate, created a Material Adverse Effect; or (c) any agreement,
commitment or transaction entered into by Seller that is material to the
ownership or operation of the Purchased Assets, taken as a whole, and remains in
full force and effect on the date hereof.

          Section 4.7     Title and Related Matters.  Except as set forth in
Schedule 4.7, Seller holds title, insurable at regular rates by a nationally
recognized title insurance company, to the Real Property to be conveyed by it
hereunder free and clear of all Encumbrances, other than the Permitted
Encumbrances; provided, however, that Seller makes no representation or warranty
with respect to title to groundwater. To the Knowledge of Seller, there are no
public or private special assessments threatened against the Purchased Assets.
The Real Property, the Cooling Tunnel Easement, and the real property interests
to be transferred to Buyer by the Easements constitute all of the real property
interests necessary to operate the Facilities as currently operated. Seller has
good and valid title to the Purchased Assets not constituting Real Property free
and clear of all Encumbrances, except Permitted Encumbrances.

          Section 4.8     Real Property Agreements.  Schedule 4.8 lists, as of
the date of this Agreement, all real property leases, easements, licenses and
other rights in real property including all material amendments thereto
(exclusive of non-current term extensions) (collectively, the "Real Property
Agreements") to which Seller is a party (directly or as a successor or assignee)
and which affect all or any part of any Real Property and (i) provide for annual
payments of more than $50,000 or (ii) are material to the ownership or operation
of the Purchased Assets. Except as set forth in Schedule 4.8, all such Real
Property Agreements are valid, binding and enforceable in accordance with their
terms, and are in full force and effect; there are no existing material defaults
by Seller or any other party thereunder; and no event has occurred which
(whether with or without notice, lapse of time or both) would constitute a
material default by Seller or any other party thereunder. Except as otherwise
set forth in Schedule 4.8, all such Real Property Agreements shall be
transferred and assigned by Seller to Buyer on the Closing Date.

          Section 4.9     Insurance.  Except as set forth in Schedule 4.9, all
material policies of property damage, fire, liability, nuclear property damage,
worker's compensation and other forms of insurance owned or held by Seller or
its Affiliates and insuring the Purchased Assets are in full force and effect,
all premiums with respect thereto covering all periods up to and including the
date as of which this representation is being made have been paid (other than
retroactive premiums which may be payable with respect to the Price Anderson
secondary protection plan or NEIL policies), and no written notice of
cancellation, non-renewal or termination has been received with respect to any
such policy which was not replaced on substantially similar terms prior to the
date of such cancellation. Except as described in Schedule 4.9, as of the date
of this Agreement, to the Knowledge of Seller, Seller has not been refused any
insurance with respect to the Purchased Assets nor has its coverage been limited
by any insurance carrier to which it has applied for any such insurance or with
which it has carried insurance on or after September 11, 2001, and all required
notices have been sent to insurers to preserve all material claims under the
aforementioned insurance policies.

          Section 4.10     Environmental Matters.  With respect to the Purchased
Assets and the ownership or operation thereof by Seller, except as disclosed in
Schedule 4.10:

          (a)     Seller has obtained and holds all material Environmental
Permits used in or necessary for the ownership and operation of the Facilities
and the Purchased Assets as conducted prior to the Closing Date;

          (b)     Seller is in compliance in all material respects with all
terms, conditions and provisions of, and has not received within the past five
(5) years any written notice from any Governmental Authority that it is not or
has not been in compliance with (i) all applicable Environmental Laws and (ii)
all material Environmental Permits except, in each case, with respect to
violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect;

          (c)     There are no Environmental Claims pending against Seller or,
to the Knowledge of Seller, threatened, with respect to the Purchased Assets and
Seller does not have Knowledge of any facts or circumstances which are
reasonably likely to form the basis for any material Environmental Claim against
Seller with respect to the Purchased Assets;

          (d)     No Releases of Hazardous Substances have occurred at, from,
on, or under the Site, and no Hazardous Substances are present on or migrating
from the Site, that are reasonably likely to give rise to a material
Environmental Claim against Seller or require any Remediation, except for such
Releases that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect

          (e)     Neither the Site nor any portion thereof is a current or, to
the Knowledge of Seller, proposed Environmental Clean-up Site and Seller has
not, to its Knowledge, transported or arranged for treatment, storage, handling,
disposal or transportation of any Hazardous Substances from the Site to any
location which is an Environmental Clean-up Site;

          (f)     There are no Encumbrances arising under or pursuant to any
Environmental Law with respect to the Purchased Assets and, to the Knowledge of
Seller, there are no facts, circumstances, or conditions that are reasonably
likely to restrict, encumber, or result in the imposition of special conditions
under any Environmental Law with respect to the ownership, occupancy,
development, use, or transferability of the Purchased Assets, except those
facts, circumstances or conditions relating to the status of the Purchased
Assets as a nuclear facility;

          (g)     There are no (i) underground storage tanks, active or
abandoned, or (ii) polychlorinated-biphenyl-containing equipment;

          (h)     There have been no environmental audits or assessments with
respect to the Purchased Assets conducted in the last five (5) years by, on
behalf of, or which are in the possession of Seller or its Affiliates which have
not been made available to Buyer prior to execution of this Agreement; and

          (i)     There have been no claims by Seller against comprehensive
general liability or excess insurance carriers for any Loss resulting from,
relating to or arising from Environmental Claims with respect to the Purchased
Assets.

          The representations and warranties made by Seller in this Section 4.10
are the exclusive representations and warranties made to Buyer relating to
environmental matters.

          Section 4.11     Labor Matters  As of the date hereof, there is no
current collective bargaining agreement which relates to the Ginna Employees.
Each Ginna Employee and each other individual that provides services at the
Facilities or otherwise in support of the Purchased Assets ("Other Plant
Personnel") is performing, and is qualified, licensed, certified or trained, in
accordance with applicable government requirements or standards to perform the
duties and responsibilities of their current job assignment, and each has the
appropriate nuclear power plant access authorizations, where required. For all
purposes, including but not limited to the payment of Taxes and coverage under
any Benefit Plan, any individual who performs services with respect to the
Facilities or the Purchased Assets has been and is currently properly classified
by Seller under applicable Laws as either a Ginna Employee or an independent
contractor, as the case may be. Except as described in Schedule 4.11: (i) except
for such matters as will not, individually or in the aggregate, create a
Material Adverse Effect, Seller is in compliance in all material respects with
all applicable Laws respecting employment and employment practices, terms and
conditions of employment (including, without limitation, Benefit Plans) and
wages (including, without limitation, Laws pertaining to non-discrimination in
compensation) and hours relating to the Ginna Employees have been complied with
in all material respects; (ii) as of the date hereof, no notice, written or to
the Knowledge of Seller, otherwise, has been received from any Governmental
Authority of any unfair labor practice charge or complaint against Seller or any
Affiliate thereof pending or, to Seller's Knowledge, threatened, before the
National Labor Relations Board or any other Governmental Authority or entity
with respect to Ginna Employees; (iii) as of the date hereof, there are no
written complaints of discrimination or retaliation pending, or to Seller's
Knowledge, threatened, with the U.S. Equal Employment Opportunity Commission or
state or local counterpart, the U.S. Department of Labor (including the Office
of Federal Contract Compliance Programs), the NRC or any other Governmental
Authority or entity related to services performed by Ginna Employees or, to the
Knowledge of Seller, Other Plant Personnel; (iv) as of the date hereof, there is
no noticed or, to the Knowledge of Seller, threatened or pending audit by the
Office of Federal Contract Compliance Programs of the affirmative action plans
which would pertain to the Facilities or the Purchased Assets and the Ginna
Employees; (v) as of the date hereof, neither Seller nor any Affiliate thereof
has any Knowledge of any claim of representation by a third party, organizing
drive by a third party seeking to represent all or any portion of the Ginna
Employees, or representation petition concerning the workforce at the Purchased
Assets; and (vi) as of the date hereof, Seller has not received any written
notice or, to Knowledge of the Seller, non-written notice, that any complaint
has been filed with or is pending before the United States Department of Labor
with regard to wages or compensation offered, paid or otherwise due and owing to
any Ginna Employee.

          Section 4.12     ERISA; Benefit Plans.

          (a)     Schedule 4.12(a) lists each employee benefit plan, including
each employee benefit plan as defined in Section 3(3) of ERISA, and each other
plan, contract, agreement, arrangement or policy, whether written or oral,
qualified or non-qualified, providing for (i) compensation, severance benefits,
bonuses, profit-sharing or other forms of incentive compensation; (ii) vacation,
holiday, sickness or other time-off; (iii) health, medical, dental, disability,
life, accidental death and dismemberment, employee assistance, educational
assistance, relocation or fringe benefits or perquisites, including
post-employment benefits; and (iv) deferred compensation, defined benefit or
defined contribution, retirement or pension benefits, or equity grants that
covers any Ginna Employee, or that is maintained, administered or with respect
to which contributions are made by Seller or an ERISA Affiliate in respect of
Ginna Employees ("Benefit Plans"). True, correct, and complete copies of all
such Benefit Plans, including all amendments thereto and other information
regarding benefit changes that have been previously communicated, have been made
available to Buyer, and the Benefit Plans are being administered in accordance
with such documents. To Seller's Knowledge, there have been no communications to
Ginna Employees concerning any increase to the cap on the employer's shares of
the cost for RG&E Retiree Coverages. Contractors and Other Plant Personnel for
whom the Seller or any ERISA Affiliate does not furnish a Form W-2 for such
services do not participate in or otherwise benefit from any of the Benefit
Plans.

          (b)     Except as set forth in Schedule 4.12(b), Seller and the ERISA
Affiliates have fulfilled their respective obligations under the minimum funding
requirements of Section 302 of ERISA and Section 412 of the Code with respect to
each Benefit Plan that is an "employee pension benefit plan" as defined in
Section 3(2) of ERISA and to which Section 302 of ERISA applies. To Seller's
Knowledge, except as set forth in Schedule 4.12(b), neither Seller nor any ERISA
Affiliate has incurred any Liability under Sections 4062(b), 4063 or 4064 of
ERISA to the PBGC in connection with any Benefit Plan that is subject to Title
IV of ERISA, nor any withdrawal Liability to any multi-employer pension plan
under Section 4201 et. seq. of ERISA or to any multi-employer welfare benefit
plan. Each Benefit Plan which is intended to be qualified within the meaning of
Code Section 401(a) is so qualified and has received a favorable determination
letter as to its qualification under all applicable Laws including GUST (and if
no favorable determination letter has yet been issued, such Benefit Plan was
timely submitted), has timely adopted the requisite amendments under the
Economic Growth and Tax Relief Reconciliation Act of 2001; and nothing has
occurred, whether by action or failure to act, that could reasonably be expected
to cause the loss of IRS qualification; and the most recent IRS determination
letters have been furnished by Seller to Buyer. To Knowledge of Seller, there is
no reportable event (as described in Section 4043 of ERISA) with respect to any
Benefit Plan that is required to be reported to the PBGC and no prohibited
transaction (as described in Section 406 of ERISA and Section 4975 of the Code)
has occurred with respect to any Benefit Plan, except as set forth in Schedule
4.12(b). With respect to each Benefit Plan from which Buyer will receive assets
in a transaction under Section 414(l) of the Code, receive assets in a
trustee-to-trustee transfer or participant rollover under Section 401(a)(31) of
the Code: (i) such Benefit Plan has been maintained in material compliance with
all applicable Laws, including ERISA, the Code, and the Securities Act and the
Exchange Act; (ii) such Benefit Plan may be amended, terminated, or otherwise
modified by the sponsoring employer to the greatest extent permitted by
applicable Laws (including, without limitation, elimination of future accruals
under any such Benefit Plan), and, to Knowledge of Seller, no employee
communication or provision in any document governing such Benefit Plan has
failed to reserve effectively the right of the sponsoring employer (including,
after its assumption of such Benefit Plan, Buyer) to terminate, or make any
amendment or modification to such Benefit Plan; (iii) Seller has not made any
commitment to establish any new Benefit Plan, to modify any Benefit Plan (except
as required under applicable Laws), nor has any intention to do so been
communicated to any Ginna Employees; (iv) no actions, suits or claims (other
than routine claims for benefits in the ordinary course) are pending or, to the
Knowledge of the Seller, threatened; (v) no facts or circumstances exist that
could give rise to any actions, suits or claims; (vi) no administrative
investigation, audit or other administrative proceeding by the Department of
Labor, the PBGC, the IRS or other Governmental Authority are pending, in
progress or, to the Knowledge of the Seller, threatened; (vii) as of the date
hereof, Seller does not have an application pending to the IRS under the
Employee Plans Compliance Resolution System; and (viii) if Seller has previously
made such application and a compliance statement has been issued, Seller has
signed such statement and made the applicable correction or will make the
applicable correction within the requisite time period.

          (c)     Neither Seller nor any ERISA Affiliate or parent or successor
corporation, within the meaning of Section 4069(b) of ERISA, has engaged in any
transaction that may be disregarded under Section 4069 or Section 4212(c) of
ERISA. No Benefit Plan or ERISA Affiliate Plan is a multi-employer plan.

          Section 4.13     Real Property; Plant and Equipment.

          (a)     Schedule 4.13(a) contains a substantially complete and
accurate legal description of the part of the Real Property included in the
Purchased Assets that consists of the land that comprises the Site. All
Encumbrances on the Real Property (other than Permitted Encumbrances) shall be
released on or before the Closing Date. Complete and correct copies of any
current surveys in Seller's possession and any policies of title insurance
currently in force and in the possession of Seller with respect to the Real
Property have heretofore been delivered by Seller to Buyer.

          (b)     Schedule 4.13(b) contains a description of the major equipment
components and personal property included in the Purchased Assets.

          (c)     Except as set forth in Schedule 4.13(c), the Purchased Assets
conform in all material respects to the technical specifications included in the
NRC License in accordance with the requirements of 10 C.F.R. 50.36 and the FSAR
and are being operated in all material respects in conformance with all material
applicable requirements under the Atomic Energy Act, the Energy Reorganization
Act, and the rules, regulations, orders and licenses issued thereunder. The
Purchased Assets constitute all of the real property and tangible assets
necessary to operate the Facilities in substantially the same manner as they
have been operated to date.

          (d)     The Business Books and Records are true, complete and correct
in all material respects and have been maintained in accordance with good
business practices. The business and operating budget projections provided to
the Buyer were prepared in good faith based on assumptions Seller believed to be
reasonable as of the date thereof and in light of the circumstances in which
they were prepared.

          Section 4.14     Condemnation.  Except as set forth in Schedule 4.14,
neither the whole nor any part of the Real Property, or any other real property
or rights leased, licensed, used or occupied by Seller in connection with the
ownership or operation of the Purchased Assets is subject to any pending suit
for condemnation or other taking by any Governmental Authority, and no such
condemnation or other taking has been threatened.

          Section 4.15     Certain Contracts and Arrangements.

          (a)     Except for Seller's interests in and rights under (i) those
purchase orders, contracts, agreements, licenses and leases relating to the
ownership, operation and maintenance of the Purchased Assets, which are listed
in Schedule 4.15(a)(i) or the other schedules to this Agreement or that are made
available to Buyer pursuant to the last sentence of Section 4.12(a), (ii) those
contracts, agreements, commitments and understandings of Seller relating to the
procurement or fabrication of Nuclear Fuel, a complete list of which is included
on Schedule 4.15(a)(ii) ("Fuel Contracts"), (iii) contracts, agreements,
personal property leases, commitments, understandings or instruments in which
all obligations of Seller will be fully performed or terminated prior to the
Closing Date, (iv) Non-material Contracts, and (v) the Ancillary Agreements,
Seller is not a party to any written contract, agreement, personal property
lease, commitment, understanding or instrument which is material to the
ownership or operation of the Purchased Assets or provides for the sale of
capacity, energy or ancillary services from any of the Purchased Assets (whether
or not entered into in the ordinary course of business).

          (b)     Except as disclosed in Schedule 4.15(b), each of the
agreements listed on Schedules 4.15(a)(i) and 4.15(a)(ii): (i) constitutes the
legal, valid and binding obligation of Seller enforceable in accordance with its
terms, (ii) is in full force and effect, and (iii) may be transferred or
assigned to Buyer at the Closing without consent or approval of the other
parties thereto, and will continue in full force and effect thereafter in
accordance with its terms, in each case without breaching the terms thereof or
resulting in the forfeiture or impairment of any material rights thereunder. The
Agreements listed in Schedules 4.15(a)(i) and 4.15(a)(ii) constitute the
agreements that are necessary collectively to permit Seller to own, use,
maintain and operate the Purchased Assets and the Facilities in accordance with
Good Utility Practice and applicable Laws.

          (c)     Except as set forth in Schedule 4.l5(c), there is not, under
any of the agreements listed on Schedule 4.15(a)(i) and (a)(ii), any breach,
violation, default or event which, with notice or lapse of time or both, would
constitute a default on the part of Seller, or to the Knowledge of Seller, on
the part of any of the parties thereto, except such events of default and other
events as to which requisite waivers or consents have been obtained or which
would not, individually or in the aggregate, create a Material Adverse Effect.

          Section 4.16     Legal Proceedings, etc.  Except as set forth in
Schedule 4.16 or in any filing made by Seller or any of its Affiliates prior to
the date hereof pursuant to the Securities Act, the Exchange Act or the Atomic
Energy Act, there are no claims, actions, proceedings or investigations pending
or to the Knowledge of Seller, threatened against or relating to Seller before
any court, arbitrator, mediator or Governmental Authority which, individually or
in the aggregate, would reasonably be expected to (i) result in a Material
Adverse Effect, (ii) prohibit or restrain the performance of this Agreement or
any of the Ancillary Agreements or the consummation of the transactions
contemplated hereby or thereby, or (iii) result in a material claim against
Buyer for damages as a result of Seller entering into this Agreement or any of
the Ancillary Agreements, or of the consummation of the transactions
contemplated hereby or thereby. Except as set forth in Schedule 4.16 or in any
filing made by Seller or any of its Affiliates prior to the date hereof pursuant
to the Securities Act, the Exchange Act or the Atomic Energy Act, Seller is not
subject to any outstanding judgment, rule, order, writ, injunction or decree of
any court, arbitrator or Governmental Authority which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.

          Section 4.17     Permits.

          (a)     Seller has all permits, licenses, registrations, certificates,
franchises and other governmental authorizations, consents and approvals, other
than with respect to permits under Environmental Laws referred to in Section
4.10 hereof or licenses issued by the NRC referred to in Section 4.18 hereof
(collectively, "Permits"), used in, or necessary for the ownership and operation
of, the Purchased Assets as presently conducted or as required by Law, except
for such Permits the failure of which to have would not reasonably be expected
to have a Material Adverse Effect. Except as set forth in Schedule 4.17(a),
Seller has not received any written notification which remains unresolved that
it is in violation of any of such Permits, or any Law applicable to the
Purchased Assets, except for notifications of violations which would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Seller is in compliance with all Permits and Laws of any
Governmental Authority applicable to the Purchased Assets, except for violations
which, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect.

          (b)     Schedule 4.17(b) sets forth all material Permits and
Environmental Permits other than Transferable Permits (which are set forth on
Schedule 1.1(173)) applicable to the Purchased Assets.

          Section 4.18     NRC Licenses.

          (a)     Seller has all licenses, permits, and other consents and
approvals applicable to Seller that are issued by the NRC and are necessary to
the ownership and operation of the Purchased Assets as presently operated,
pursuant to the requirements of all Nuclear Laws and all such licenses are in
full force and effect. Except as set forth in Schedule 4.18(a), Seller has not
received any written notification which remains unresolved that it is in
violation of any of such license, or any order, rule, regulation, or decision of
the NRC with respect to the Purchased Assets, except for notifications of
violations which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Seller is in compliance with all
Nuclear Laws and all orders, rules, regulations, or decisions of NRC applicable
to it with respect to the Purchased Assets, except for violations which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.

          (b)     Schedule 4.18(b) sets forth all material permits, licenses,
and other consents and approvals issued by the NRC applicable to the Purchased
Assets.

          Section 4.19     Regulation as a Utility.  Seller is an electric
utility company within the meaning of the Holding Company Act, a public utility
within the meaning of the Federal Power Act and an electric utility within the
meaning of the NRC regulations implementing the Atomic Energy Act. Except with
respect to local tax and zoning laws, Seller is not, as a result of its
ownership or operation of the Purchased Assets, subject to regulation as a
public utility or public service company (or similar designation) by any state
of the United States other than New York, any foreign country or any
municipality or any political subdivision of the foregoing.

          Section 4.20     Taxes.  With respect to the Purchased Assets, (i) all
material Tax Returns of the Seller required to be filed for taxable periods
ended prior to the Closing Date regarding the ownership or operation of the
Purchased Assets have been filed, and (ii) all material Taxes shown to be due on
such Tax Returns have been paid, except where such Taxes are being contested in
good faith through appropriate proceedings. Except as provided in Schedule
4.20(a), no notice of deficiency or assessment has been received from any taxing
authority with respect to liabilities for Taxes of the Seller in respect of the
Purchased Assets which has not been fully paid or finally settled. There are no
Encumbrances for Taxes upon the Purchased Assets, except for Encumbrances for
Taxes not yet due and payable and Encumbrances for Taxes that are being
contested in good faith. There is no unpaid material Tax on Seller's ownership,
operation, or use of the Purchased Assets for which the Buyer could become
liable. Schedule 4.20 sets forth the Tax jurisdictions in which Seller owns
assets or conducts business that require a notification to a taxing authority of
the transactions contemplated by this Agreement, if the failure to make such
notification, or obtain Tax clearances in connection therewith, would either
require Buyer to withhold any portion of the Purchase Price or would subject
Buyer to any Liability for any Taxes of Seller. Except as provided in Schedule
4.20(b), there are no outstanding agreements or waivers extending the applicable
statutory periods of limitations for Taxes associated with the Purchased Assets
for any period.

          Section 4.21     Qualified Decommissioning Funds.

          (a)     With respect to all periods prior to the Closing Date: (i)
Seller's Qualified Decommissioning Fund is a trust, validly existing under the
laws of the State of New York with all requisite authority to conduct its
affairs as it now does; (ii) Seller's Qualified Decommissioning Fund satisfies
the requirements necessary for such fund to be treated as a "Nuclear
Decommissioning Reserve Fund" within the meaning of Code Section 468A(a) and as
a "Nuclear Decommissioning Fund" and a "Qualified Nuclear Decommissioning Fund"
within the meaning of Treas. Reg. Section l.468A-l(b)(3); (iii) such Fund is in
compliance in all material respects with all applicable rules and regulations of
the NRC, the NYPSC and the IRS, and Seller's Qualified Decommissioning Fund has
not engaged in any acts of "self-dealing" as defined in Treas. Reg. Section
1.468A-5(b)(2); (iv) no "excess contribution," as defined in Treas. Reg. Section
1.468A-5(c)(2)(ii), has been made to Seller's Qualified Decommissioning Fund
which has not been withdrawn within the period provided under Treas. Reg.
Section 1.468A-5(c)(2)(i); and (v) Seller has made timely and valid elections to
make annual contributions to the Qualified Decommissioning Fund since 1990 and
Seller has heretofore delivered copies of such elections to Buyer.

          (b)     Seller has heretofore delivered to Buyer a copy of Seller's
Decommissioning Trust Agreement as in effect on the date of this Agreement.
Seller agrees not to amend Seller's Decommissioning Trust Agreement between the
date of this Agreement and the Closing Date without Buyer's prior written
consent, which shall not be unreasonably withheld, except for any amendment
which may be required to be made to the Seller's Decommissioning Trust Agreement
by the NRC final rule on decommissioning trust agreements published in the
Federal Register on December 24, 2002 or to permit the transfers referred to in
Section 6.12 or to permit return to Seller of Decommissioning Funds in excess of
the Decommissioning Target.

          (c)     Subject only to Seller's Required Regulatory Approvals, Seller
and the Trustee have, or as of Closing will have, all requisite authority to
cause the assets of the Qualified Decommissioning Fund to be transferred to the
Trustee of the Post-Closing Decommissioning Trust Agreement.

          (d)     With respect to all periods prior to the Closing Date, (i)
Seller and/or the Trustee of Seller's Qualified Decommissioning Fund has/have
filed or caused to be filed with the NRC, the IRS and any state or local
authority all material forms, statements, reports, documents (including all
exhibits, amendments and supplements thereto) required to be filed by such
entities; and (ii) there are no interim rate orders that may be retroactively
adjusted or retroactive adjustments to interim rate orders that may affect
amounts that Buyer may contribute to the Qualified Decommissioning Fund or may
require distributions to be made from the Qualified Decommissioning Fund. Seller
has delivered to Buyer a copy of the schedule of ruling amounts most recently
issued by the IRS for the Qualified Decommissioning Fund and a complete copy of
the request that was filed with the IRS to obtain such schedule of ruling
amounts and a copy of any pending request for revised ruling amounts, in each
case together with all exhibits, amendments and supplements thereto. Any amounts
contributed to the Qualified Decommissioning Fund while such request is pending
before the IRS and which turn out to exceed the applicable amounts provided in
the schedule of ruling amounts issued by the IRS will be withdrawn from the
Qualified Decommissioning Fund within the period provided under Treas. Reg.
Section 1.468A-5(c)(2)(i).

          (e)     Seller has made available to Buyer a statement of assets and
liabilities verified by the Trustee for the Seller's Qualified Decommissioning
Funds as of December 31, 2002, as of September 30, 2003 and will make such a
statement as of the second Business Day before Closing available prior to
Closing, and they present fairly as of such dates the financial position of each
of the Qualified Decommissioning Funds. Seller has made available to Buyer
information from which Buyer can determine the Tax Basis of all assets in the
Seller's Qualified Decommissioning Fund as of the second Business Day before
Closing.

          (f)     Seller has made available to Buyer all material contracts and
agreements to which the Trustee of Seller's Qualified Decommissioning Fund, in
its capacity as such, is a party.

          (g)     With respect to all taxable periods prior to the Closing Date,
Seller's Qualified Decommissioning Fund has filed all material Tax Returns
required to be filed, including but not limited to returns for estimated Income
Taxes, such Tax Returns are true, correct and complete in all material respects,
and all Taxes shown to be due on such Tax Returns have been paid in full. Except
as shown in Schedule 4.21, no notice of deficiency or assessment has been
received from any taxing authority with respect to any Liability for Taxes of
Seller's Qualified Decommissioning Fund which have not been fully paid or
finally settled, and any such deficiency shown in such Schedule 4.21 is being
contested in good faith through appropriate proceedings. Except as set forth in
Schedule 4.21, there are no outstanding agreements or waivers extending the
applicable statutory periods of limitations for any Taxes associated with the
Qualified Decommissioning Funds for any period.

          Section 4.22     Nonqualified Decommissioning Fund.

          (a)     With respect to all periods prior to the Closing Date, the
Seller's Nonqualified Decommissioning Fund is a trust validly existing under the
laws of the State of New York with all requisite authority to conduct its
affairs as it now does. Seller's Nonqualified Decommissioning Fund is in full
compliance in all material respects with all applicable rules and regulations of
the NRC and the NYPSC. The Seller's Nonqualified Decommissioning Fund is
classified as a grantor trust owned by Seller under Section 671 to 677 of the
Code.

          (b)     Subject only to the Seller's Required Regulatory Approvals,
Seller has or as of the Closing will have all requisite authority to cause all
or a portion of the assets of the Seller's Nonqualified Decommissioning Fund to
be transferred to the Trustee of the Post-Closing Decommissioning Trust
Agreement pursuant to Section 6.12 hereof.

          (c)     With respect to all periods prior to the Closing Date, Seller
and the Trustee of the Seller's Nonqualified Decommissioning Fund have filed or
caused to be filed with the NRC and any state or local authority all material
forms, statements, reports, documents (including all exhibits, amendments and
supplements thereto) required to be filed by either of them.

          (d)     Seller has made available to Buyer a statement of assets and
liabilities verified by the Trustee of the Seller's Nonqualified Decommissioning
Fund as of December 31, 2002, as of September 30, 2003 and will make available
such a statement as of the second Business Day before Closing available prior to
Closing, and they represent fairly as of such dates the financial position of
the Nonqualified Decommissioning Funds. Seller has made available to Buyer all
contracts and agreements to which the Trustee of the Nonqualified
Decommissioning Fund, in its capacity as such, is a party.

          Section 4.23     WARN Act.  Seller has not engaged in a "plant
closing" or "mass layoff," as such terms are defined in the WARN Act, prior to
the Closing Date.

          Section 4.24     Intellectual Property.  Seller has not received
written notice of any claims or demands of any other Person pertaining to any of
the Intellectual Property and no proceedings have been instituted, or are
pending or, to Seller's Knowledge, threatened, which challenge the rights of
Seller in respect thereof. To the Knowledge of Seller, none of the Intellectual
Property infringes any intellectual property of any other Person and Seller is
not making unauthorized use of any confidential information or trade secrets of
any Person, including without limitation, any former employer of any past or
present employee of Seller in connection with the operation of Ginna.

          Section 4.25     Zoning Classification.  The Real Property is zoned as
set forth in Schedule 4.25 and is currently zoned in zoning categories which
permit the operation of the Facilities as currently operated, as a matter of
right. Seller has not requested, applied for, or given its consent to, and
Seller has no Knowledge of, any pending zoning variance or change with respect
to the zoning of the Real Property. To Seller's Knowledge, there exist no
outstanding covenants or agreements in connection with the zoning of the Real
Property or any portion thereof which would bind or require Buyer to perform any
actions or pay any monies in connection therewith.

          Section 4.26     Utilities.  The sewer and water systems and all other
utilities that currently service the Real Property are sufficient for the
operation of the Facilities as currently operated. To Seller's Knowledge, Seller
has no reason to believe that such systems and utilities will not be sufficient
to continue to operate the Facilities, and, to Seller's Knowledge, such services
shall exist on the Closing Date. Seller has no Knowledge of and has not received
any notice of the curtailment of any utility service supplied to the Real
Property. To Seller's Knowledge, all water and all gas, electrical, steam,
telecommunication, sanitary and storm sewer and drainage lines, systems and hook
ups and all other utilities and public and quasi-public improvements located
upon, under, at or adjacent to the Real Property required by any applicable Laws
or otherwise necessary for the operation of the Facilities as currently operated
are installed and connected under valid permits.

EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE 4, THE
PURCHASED ASSETS ARE BEING SOLD AND TRANSFERRED "AS IS, WHERE IS," AND SELLER IS
NOT MAKING ANY OTHER REPRESENTATIONS OR WARRANTIES, WRITTEN OR ORAL, STATUTORY,
EXPRESS OR IMPLIED, CONCERNING THE PURCHASED ASSETS, INCLUDING, IN PARTICULAR,
ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ALL OF
WHICH ARE HEREBY EXPRESSLY EXCLUDED AND DISCLAIMED.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF BUYER AND BUYER'S PARENT

          Each of Buyer and Buyer's Parent represents and warrants with respect
to itself to Seller as follows:

          Section 5.1     Organization; Qualification.  Buyer is a limited
liability company duly formed, validly existing and in good standing under the
laws of the State of Maryland. Buyer's Parent is a corporation duly formed,
validly existing and in good standing under the laws of the State of Maryland.
Each of Buyer and Buyer's Parent has all requisite corporate power and authority
to own, lease and operate its properties and to carry on its business as is now
being conducted. Buyer has heretofore delivered to Seller complete and correct
copies of its articles of organization as currently in effect. Buyer is, or on
the Closing Date will be, qualified to conduct business in the State of New
York.

          Section 5.2     Authority Relative to this Agreement.  Each of Buyer's
Parent and Buyer has full corporate power and authority to execute and deliver
this Agreement and the Ancillary Agreements to which it is a party and to
consummate the transactions contemplated hereby or thereby. The execution and
delivery of this Agreement and the Ancillary Agreement and the consummation of
the transactions contemplated hereby or thereby, have been duly and validly
authorized by all necessary corporate action required on the part of each of
Buyer's Parent and Buyer and no other corporate proceedings on the part of
Buyer's Parent or Buyer are necessary to authorize this Agreement and the
Ancillary Agreements or to consummate the transactions contemplated hereby or
thereby. This Agreement has been duly and validly executed and delivered by each
of Buyer's Parent and Buyer, and assuming that this Agreement constitutes a
valid and binding agreement of Seller and subject to the receipt of Buyer's
Required Regulatory Approvals, constitutes a valid and binding agreement of each
of Buyer's Parent and Buyer, enforceable against each of Buyer's Parent and
Buyer in accordance with its terms.

          Section 5.3     Consents and Approvals; No Violation.

          (a)     Subject to the receipt of the third-party consents set forth
in Schedule 5.3(a) and the Buyer's Required Regulatory Approvals, neither the
execution and delivery of this Agreement and the Ancillary Agreements by Buyer
or Buyer's Parent nor the consummation of the transactions contemplated hereby
or thereby will (i) conflict with or result in any breach of any provision of
the articles of organization or operating agreement of Buyer and Buyer's Parent,
(ii) require any consent, approval, authorization or permit of, or filing with
or notification to, any Governmental Authority, (iii) result in a default (or
give rise to any right of termination, cancellation or acceleration) under any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
agreement, lease or other instrument or obligation to which Buyer or Buyer's
Parent is a party or by which any of its assets may be bound, except for such
defaults (or rights of termination, cancellation or acceleration) as to which
requisite waivers or consents have been obtained or which would not,
individually or in the aggregate, have a material adverse effect on the ability
of Buyer or Buyer's Parent to perform its obligations hereunder ("Buyer Material
Adverse Effect"), or (iv) violate any Laws applicable to Buyer, which
violations, individually or in the aggregate, would create a Buyer Material
Adverse Effect. Buyer has no Knowledge of any facts or circumstances that make
it reasonably likely that Buyer's Required Regulatory Approvals will not be
obtained.

          (b)     Except as set forth in Schedule 5.3(b) (the filings and
approvals referred to in such Schedule are collectively referred to as the
"Buyer's Required Regulatory Approvals"), no declaration, filing or registration
with, or notice to, or authorization, consent or approval of any Governmental
Authority is necessary for the consummation by Buyer of the transactions
contemplated hereby.

          Section 5.4     Availability of Funds.  Buyer and/or Buyer's Parent
have sufficient funds available to it through corporate funds, credit facilities
and access to capital markets to provide sufficient funds to pay the Purchase
Price on the Closing Date and to enable Buyer timely to perform all of its
obligations under this Agreement.

          Section 5.5     Legal Proceedings.  Except as set forth in Schedule
5.5, to the Knowledge of Buyer and Buyer's Parent, there are no claims, actions,
proceedings or investigations pending or threatened against Buyer or Buyer's
Parent before any court, arbitrator, mediator or Governmental Authority which,
individually or in the aggregate, could reasonably be expected to (i) result in
a Buyer Material Adverse Effect, (ii) prohibit or restrain the performance of
this Agreement or any of the Ancillary Agreements or the consummation of the
transactions contemplated hereby or thereby, or (iii) result in a material claim
against Seller for damages as a result of Buyer or Buyer's Parent entering into
this Agreement or any of the Ancillary Agreements, or of the consummation of the
transactions contemplated hereby or thereby. Except as set forth in Schedule
5.5, neither Buyer's Parent nor Buyer is subject to any outstanding judgments,
rules, orders, writs, injunctions or decrees of any court, arbitrator or
Governmental Authority which, individually or in the aggregate, could reasonably
be expected to have a Buyer Material Adverse Effect.

          Section 5.6     WARN Act.  Buyer does not intend with respect to the
Purchased Assets to engage in a "plant closing" or "mass layoff," as such terms
are defined in the WARN Act within sixty (60) days after the Closing Date.

          Section 5.7     Transfer of Decommissioning Funds.  With respect to
Seller's transfer of the assets of the Qualified Decommissioning Fund to the
Trustee under the Post-Closing Decommissioning Trust Agreement, except for the
fact that Ginna in the hands of Buyer may not be treated as a "nuclear power
plant" within the meaning of Treasury Regulations Section 1.468A-1(b)(4), Buyer
will otherwise acquire and own a "qualifying interest" in Ginna within the
meaning of Treasury Regulations Section 1.468A-l and will, as the transferee,
satisfy each of the requirements set forth in Treasury Regulations Section
1.468A-6(b)(2). The Post-Closing Decommissioning Trust Agreement satisfies the
requirements of Section 468A of the Code and the regulations promulgated
thereunder.

          Section 5.8     Foreign Ownership or Control.  Buyer or, if
applicable, Buyer's Parent, will conform to the restrictions on foreign
ownership, control or domination contained in Sections 103d and 104d of the
Atomic Energy Act of 1954, as amended, 42 U.S.C. Section 2133(d) and 2134(d), as
applicable, and the NRC's regulations in 10 C.F.R. Section 50.38. Neither
Buyer's Parent nor Buyer is currently owned, controlled or dominated by a
foreign entity and neither will become owned, controlled, or dominated by a
foreign entity before the Closing Date of this transaction.

          Section 5.9     Seller's Representations and Warranties.  As of the
date hereof, neither Buyer nor Buyer's Parent has any Knowledge of any breaches
of any of Seller's representations or warranties.

          Section 5.10     Permit Qualifications.  To the Knowledge of Buyer,
Buyer (or its successor or assigns) will be as the owner of Ginna qualified to
hold any Permits and Environmental Permits necessary to operate the Purchased
Assets.

ARTICLE 6

COVENANTS OF THE PARTIES

          Section 6.1     Conduct of Business Relating to the Purchased Assets.

          (a)     Except as described in Schedule 6.1(a) or to the extent Buyer
otherwise consents in writing, during the period from the date hereof to the
Closing Date, Seller (1) shall operate and maintain the Purchased Assets in the
ordinary course consistent with Good Utility Practices; it being understood that
any actions deemed reasonably necessary in the operation of the Purchased Assets
in accordance with Good Utility Practices shall be deemed to be in the ordinary
course unless such actions materially impair the value, rated capacity, ability
to complete the Uprate or operation of the Purchased Assets or the liabilities
and obligations of Buyer after the Closing Date, and that the Capital Budget is
consistent with this standard; (2) shall use Commercially Reasonable Efforts to
preserve intact the Purchased Assets and preserve the goodwill and relationships
with customers, suppliers and others having business dealings with them with
respect thereto; (3) shall maintain in full force and effect the insurance
coverages described in Section 4.9; (4) shall comply in all material respects
with all applicable Laws relating to the Purchased Assets, including without
limitation, all Nuclear Laws and Environmental Laws; (5) shall maintain the
Business Books and Records in the usual, regular and ordinary manner; (6) shall
use its Commercially Reasonable Efforts to complete in accordance with Good
Utility Practices, and in conformity with all applicable Laws, the Capital
Expenditures set forth in Schedule 6.1(a) which are targeted for completion
prior to the Closing Date; provided, however, in the case of (A) the submission
of a purchase order for a new fuel design for the new fuel assemblies for the
Uprate, such item shall be completed by Seller prior to January 30, 2004 and (B)
active vehicle barriers and containment sump design upgrade, Seller shall have
taken all reasonable steps necessary to permit timely completion of such items
such that Buyer is not materially prejudiced thereby; (7) shall, and Seller
shall continue after the Closing Date to, use its Commercially Reasonable
Efforts to obtain an amendment of the Cooling Tunnel Easement extending the term
thereof through December 31, 2029 (the "Cooling Tunnel Easement Amendment"),
from the Office of General Services of the State of New York, which amendment
shall be in recordable form; and (8) shall use Commercially Reasonable Efforts
to train the applicable number of Transferred Employees required by Law to fill
the emergency response positions currently filled by RG&E Employees who are not
Transferred Employees; provided, however, in the event the actions required by
subsection (8) are not completed prior to the Closing Date, then Seller must
provide the existing trained RG&E Employees (at Seller's sole cost and expense)
to fill the emergency response positions for a maximum of 60 days after the
Closing Date. Notwithstanding the foregoing, except as contemplated in this
Agreement or as described in Schedule 6.1(a), or as required under applicable
Law or by any Governmental Authority or by any NRC Commitments, prior to the
Closing Date, without the written consent of Buyer, which consent shall not be
unreasonably withheld, Seller will not with respect to the Purchased Assets:

               (i)     make any material change in the levels of Inventories
customarily maintained by Seller with respect to the Purchased Assets, except
for such changes as are consistent with Good Utility Practices;

               (ii)     except for Permitted Encumbrances, sell, lease (as
lessor), pledge, mortgage, encumber, restrict, transfer or otherwise dispose of,
or grant any right, or suffer to be imposed any Encumbrance with respect to, any
of the Purchased Assets, other than assets used, consumed or replaced in the
ordinary course of business consistent with Good Utility Practices;

               (iii)     materially amend, extend or voluntarily terminate prior
to the expiration date thereof any of Seller's Agreements or the Real Property
Agreements listed in Schedule 4.8 (or any other agreement to the extent any such
extension or amendment thereof would require the agreement to be disclosed on
Schedule 4.8 or 4.15(a)(i)) or any material Permit or Environmental Permit or
waive any default by, or release, settle or compromise any claim against, any
other party thereto, other than (a) in the ordinary course of business, to the
extent consistent with Good Utility Practices, (b) with cause, to the extent
consistent with Good Utility Practices, or (c) as may be required in connection
with Seller's obligations to Buyer under this Agreement;

               (iv)     enter into any new commitment for the purchase of
Nuclear Fuel unless (A) the aggregate payments under all such new commitments
would not be expected to exceed $500,000 or (B) the commitment is terminable
either (x) automatically on the Closing Date or (y) at the option of Buyer at
any time after the Closing Date without any penalty or cancellation charge;

               (v)     enter into any power sales agreement having a term that
extends beyond June 30, 2004 or such other date that the Parties mutually agree
to be the date on which the Closing is expected to occur;

               (vi)     amend in any material respect or cancel any property,
liability or casualty insurance policies related thereto, or fail to maintain by
self insurance or with financially responsible insurance companies insurance in
such amounts and against such risks and losses as are customary for such assets
and businesses;

               (vii)     enter into any individual requirements contract for
goods or any commitment or contract for non-employment related services, in
either case not addressed in clauses (i) through (vi) above, that will be
delivered or provided after June 30, 2004 or such other date as the Parties
mutually agree to be the date on which the Closing is expected to occur that
exceeds $100,000 per annum, unless such commitment or contract is terminable by
Seller (or after the Closing Date by Buyer) upon not more than 60 days notice
without penalty or cancellation charge;

               (viii)     hire any new Ginna Employees (other than to replace
any existing Ginna Employees who have resigned or been terminated and employees
hired to perform the duties of Ginna Employees who are on disability leave),
materially increase the aggregate wages and benefits payable to Ginna Employees
or establish, adopt, enter into or amend the Benefit Plans to the extent
applicable to Ginna Employees;

               (ix)     except as reasonably necessary to complete the
integration process for its pending SAP conversion, change, in any material
respect, its accounting methods or practices, credit practices or collection
policies or any pricing, investment, financial reporting, inventory, allowance
or Tax practice or policy to the extent such change would be binding on Buyer;

               (x)     enter into, amend, make waivers under or otherwise modify
any real or personal property Tax agreement, treaty or settlement, or make any
new or change any current, election with respect to Taxes affecting the
Purchased Assets to the extent such change would be binding on Buyer;

               (xi)     fail to take commercially reasonable best efforts to
pursue currently pending regulatory approvals relating to the Facilities;

               (xii)     knowingly engage in any practice, take any action, fail
to take any action, or enter into any transaction through the Closing Date that
will result or may reasonably be anticipated to result in any misrepresentation
or breach of any warranty of Seller hereunder as of the Closing Date;

               (xiii)     settle any claim or litigation that results in any
obligation imposed on the Facilities or the Purchased Assets that could
reasonably be likely to continue past the Closing Date; and

               (xiv)     agree to enter into any of the transactions set forth
in the foregoing paragraphs (i) through (xiii).

          (b)     The Parties shall establish, as soon as practicable after the
execution of this Agreement, a committee (the "Transition Committee") comprised
of at least four (4) persons, including two (2) persons designated by Seller and
two (2) persons designated by Buyer. The Transition Committee shall remain in
existence until the Closing Date and shall oversee and manage the transition
process through the Closing Date. The Transition Committee will be kept fully
apprised by Seller of all the Facilities' management and operating developments,
including with respect to any pre-closing outage, any repairs to the Facilities
and the Capital Expenditures. The Transition Committee shall have reasonable
access to the management of Seller. The Transition Committee shall report to the
senior management of Seller and Buyer. The Transition Committee shall have no
authority to bind or make agreements on behalf of Seller or Buyer or to issue
instructions to or direct or exercise authority over Seller or Buyer or any of
their respective officers, employees, advisors or agents or to waive or modify
any provision hereof.

          (c)     Between the date of this Agreement and the Closing Date, in
the interest of cooperation between Seller and Buyer and to plan for and
facilitate an orderly transition of ownership and operation of the Purchased
Assets from Seller to Buyer and to permit informed action by Buyer regarding its
rights pursuant to Section 6.1(a), the Parties agree that at the sole
responsibility and expense of Buyer, and subject to compliance with all
applicable NRC rules and regulations, Seller will permit designated Buyer
Representatives ("Observers") of Buyer to observe all operations of Seller that
relate to the Purchased Assets, and such observation will be permitted on a
cooperative basis in the presence of personnel of Seller but not restricted to
the normal business hours of Seller; provided, however, that such Observers and
their actions shall not interfere with the operation of Ginna. Seller shall use
Commercially Reasonable Efforts to provide to the Observers, at no cost to
Buyer, interim furnished office space, utilities and HVAC at the Facilities
reasonably necessary to allow Buyer to conduct its transition efforts through
the Closing Date; provided that Buyer shall be responsible for all other costs
relating thereto, including, without limitation telecommunications expenses and
the cost of workers' compensation and employer's liability coverage, which will
be maintained by Buyer for its employees.

          (d)     Buyer's representatives on the Transition Committee and/or the
Observers may recommend or suggest to Seller that actions be taken or not be
taken by Seller to improve or enhance the operation and maintenance of the
Purchased Assets from the date hereof through the Closing Date; provided,
however, that Seller will not be under any obligation to follow any such
recommendations or suggestions and Seller shall be entitled, subject to this
Agreement, to conduct its business in accordance with its own judgment and
discretion. Buyer's Observers shall have no authority to bind or make agreements
on behalf of Seller; to conduct discussions with or make representations to
third parties on behalf of Seller; or to issue instructions to or direct or
exercise authority over Seller or any of Seller's officers, employees, advisors
or agents.

          (e)     Between the date hereof and the Closing Date, Seller agrees to
meet with representatives of Buyer from time to time and allow Buyer to provide
input as to the scheduling, scope, capital expenditures and other activities to
be included in the 2005 refueling outage and Seller shall in good faith consider
the foregoing and to the extent such requests are in accordance with all
applicable Laws, Seller's NRC License and Good Utility Practices and Seller is
in agreement with Buyer, Seller shall implement such requests such that the 2005
refueling outage planning would include the Buyer requested activities, it being
understood that any such activities by Seller taken at the request of Buyer
shall not constitute or result in a breach of this Agreement.

          (f)     Seller agrees that, except as required by its obligations as a
public utility under sections 65 and 66 of the New York Public Service Law,
Seller shall not take or cause to be taken any action to reduce the unforced
capacity credit assigned by the New York Independent System Operator to the
Facilities under regulations or policies in effect on the date hereof; provided,
however, that the foregoing shall in no way restrict or prohibit Seller (a) from
taking or causing to be taken any action in accordance with Good Utility
Practice, (b) from taking or causing to be taken any action that generally
affects Seller's generating facilities, or (c) from abstaining from any vote of
the New York Independent System Operator or any committee or subcommittee
thereof.

          Section 6.2     Access to Information.

          (a)     In addition to the rights granted by Sections 6.1(b) and (d),
between the date of this Agreement and the Closing Date, Seller will, during
ordinary business hours and upon reasonable notice and subject to compliance
with all applicable NRC rules and regulations (i) give Buyer and Buyer's
Representatives reasonable access to all management personnel engaged in the
operation of the Purchased Assets and all books, documents, records, plants,
offices and other facilities and properties constituting the Purchased Assets;
(ii) permit Buyer to make such reasonable inspections thereof as Buyer may
reasonably request, other than Phase II environmental site assessments (which
have been conducted prior to the date hereof); (iii) furnish Buyer with such
financial and operating data and other information with respect to the Purchased
Assets as Buyer may from time to time reasonably request; (iv) furnish Buyer a
copy of each material report, schedule or other document filed or received by it
since the date hereof with respect to the Purchased Assets with the SEC, NRC,
FERC, NYPSC or any other Governmental Authority having jurisdiction over the
Purchased Assets; provided, however, that (A) any such investigation shall be
conducted in such a manner as not to interfere unreasonably with the operation
of the Purchased Assets, (B) Seller shall not be required to take any action
which would constitute a waiver of the attorney-client privilege, and (C) Seller
need not supply Buyer with any information that Seller is legally prohibited
from supplying. Seller will provide Buyer or Buyer's Representatives with access
to the Transferred Employee Records that it has, but Seller shall not be
required to provide access to other employee records or medical information
unless required by law or specifically authorized by the affected employee.
Notwithstanding anything in this Section 6.2 to the contrary, Seller will only
furnish or provide such access to Transferred Employee Records and personnel and
medical records as is permitted by law or required by legal process or subpoena
(other than data concerning salaries and benefits, dates of birth, dates of hire
and other information used to calculate pension benefits which shall be
provided).

          (b)     Buyer and Seller acknowledge that all information furnished to
or obtained by Buyer or Buyer's Representatives pursuant to this Section 6.2
shall be subject to the provisions of the Confidentiality Agreement and shall be
treated as "Proprietary Information" (as defined in Section 1.1(130)).

          (c)     Following the Closing Date and subject to all applicable NRC
rules and regulations, each Party and its respective Representatives shall have
reasonable access to all of the Business Books and Records, including all
Transferred Employee Records or other personnel and medical records required to
be made available by Law, legal process or subpoena, in the possession of the
other Party or Parties to the extent that such access may reasonably be required
by such Party in connection with the Assumed Liabilities and Obligations or the
Excluded Liabilities, or other matters relating to or affected by the operation
of the Purchased Assets. Such access shall be afforded by the Party or Parties
in possession of such books and records upon receipt of reasonable advance
notice and during normal business hours. The Party or Parties exercising this
right of access shall be solely responsible for any costs or expenses incurred
by it or them pursuant to this Section 6.2(c). If the Party or Parties in
possession of such books and records shall desire to dispose of any such books
and records, such Party or Parties shall, prior to such disposition, give the
other Party or Parties a reasonable opportunity at such other Party's or
Parties' expense, to segregate and remove such books and records as such other
Party or Parties may select. Notwithstanding the foregoing, the right of access
to medical records and other confidential employee records shall be subject to
all applicable legal requirements.

          (d)     Seller agrees (i) not to release any Person (other than Buyer)
from any confidentiality agreement now existing with respect to the Purchased
Assets, or waive or amend any provision thereof, (ii) to promptly after the
Closing Date assign any rights arising under any such confidentiality agreement
(to the extent assignable) to Buyer, and (iii) to request the destruction or
return of all confidential information provided to any other Person who
participated in the Ginna sale process and who executed a Confidentiality
Agreement in connection therewith.

          (e)     Notwithstanding the terms of the Confidentiality Agreement and
Section 6.2(b) above, the Parties agree that prior to the Closing Buyer may
reveal or disclose Proprietary Information to any other Persons in connection
with Buyer's financing and risk management of the Purchased Assets, and, to the
extent that Seller consents, which consent shall not be unreasonably withheld,
to existing and potential customers and suppliers, and to such Persons with whom
Buyer expects it may have business dealings regarding the Purchased Assets from
and after the Closing Date; provided, however, that all such Persons agree in
writing to maintain the confidentiality of the Proprietary Information on
substantially the same terms and conditions of the Confidentiality Agreement.

          (f)     Except as may be permitted in the Confidentiality Agreement or
during the course of Buyer's due diligence investigation of the Purchased Assets
prior to the date hereof, Buyer agrees that, prior to the Closing Date, it will
not contact any vendors, suppliers, employees, or other contracting parties of
Seller or Seller's Affiliates with respect to any aspect of the Purchased Assets
or the transactions contemplated hereby, without the prior written consent of
Seller, which consent shall not be unreasonably withheld.

          (g)     Upon Buyer's or Seller's (as the case may be) prior written
approval (which approval shall not be unreasonably withheld or delayed), Seller
or Buyer (as the case may be) may provide Proprietary Information of the other
Party to the SEC, NRC, FERC, NYPSC or any other Governmental Authority having
jurisdiction over the Purchased Assets or any stock exchange, as may be
necessary to obtain Seller's Required Regulatory Approvals or Buyer's Required
Regulatory Approvals, respectively, or to comply generally with any applicable
Laws. The disclosing Party shall seek confidential treatment for the Proprietary
Information provided to any such Governmental Authority and the disclosing Party
shall notify the other Party as far in advance as practical of its intention to
release to any Governmental Authority any such Proprietary Information.

          (h)     The Parties agree that the Confidentiality Agreement shall
remain in place until the Closing Date. Thereafter, the Parties agree that any
restrictions contained in the Confidentiality Agreement with respect to Buyer's
disclosure of Proprietary Information shall terminate, other than with respect
to the Proprietary Information of Seller that does not relate to the Purchased
Assets. The Parties further agree that after the Closing Date, Seller shall keep
confidential all Proprietary Information provided by Buyer or which Seller
possesses with respect to the Purchased Assets, to the extent permitted by Law,
and to the same extent and under the same conditions applicable to Buyer's
obligations with respect to Seller's Proprietary Information as contained in the
Confidentiality Agreement between the Parties, but without limitation as to
duration.

          Section 6.3     Expenses.  (a) Except to the extent specifically
provided herein, whether or not the transactions contemplated hereby are
consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby, including the cost of legal, technical
and financial consultants and the cost of filing for and prosecuting
applications for Buyer's and Seller's Required Regulatory Approvals, shall be
borne by the Party incurring such costs and expenses.

          (b)     Buyer shall be responsible for all reasonable third party
vendor costs and expenses incurred and relating to work performed with respect
to the Purchased Assets at the request of the Buyer after the date hereof.

          Section 6.4     Further Assurances; Cooperation.

          (a)     Subject to the terms and conditions of this Agreement, each of
the Parties hereto will use Commercially Reasonable Efforts to take, or cause to
be taken, all action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable Laws to consummate and make effective the
sale, transfer conveyance and assignment of the Purchased Assets and the
assignment of the Assumed Liabilities and Obligations or the exclusion of the
Excluded Liabilities pursuant to this Agreement, including without limitation
using Commercially Reasonable Efforts to ensure satisfaction of the conditions
precedent to each Party's obligations hereunder, including, without limitation,
all regulatory approvals. Notwithstanding anything in the previous sentence to
the contrary, Seller and Buyer shall use Commercially Reasonable Efforts to
obtain all Permits and Environmental Permits necessary for Buyer to acquire and
operate the Purchased Assets. Neither Buyer nor Seller will, without the prior
written consent of the other, advocate, take or fail to take any action which
would reasonably be expected to prevent or materially impede, interfere with or
delay the transactions contemplated by this Agreement or which could reasonably
be expected to cause, or to contribute to causing, the other to receive less
favorable regulatory treatment than that sought by the other. Buyer further
agrees that prior to the Closing Date, neither it nor its Affiliates will enter
into any other contract to acquire, nor acquire, electric generation facilities
or uncommitted generation capacity if the proposed acquisition of such
additional electric generation facilities or uncommitted generation capacity
which would increase the market power attributable to Buyer in a manner
materially adverse to approval of the transactions contemplated hereby or would
otherwise prevent or materially interfere with the transactions contemplated by
this Agreement.

          (b)     From time to time after the Closing Date, without further
consideration, Seller will execute and deliver such documents to Buyer as Buyer
may reasonably request, at Buyer's expense, in order to more effectively
consummate the sale and purchase, including the transfer, conveyance and
assignment, of the Purchased Assets or to more effectively vest in Buyer such
title to the Purchased Assets (or such rights to use, with respect to Purchased
Assets not owned by Seller), as is provided for in Section 4.7, subject to the
Permitted Encumbrances. Seller shall cooperate with Buyer, at Buyer's expense,
in Buyer's efforts to cure or remove any Permitted Encumbrances that Buyer
reasonably deems objectionable. From time to time after the Closing Date,
without further consideration, Buyer will, at its own expense, execute and
deliver such documents to Seller as Seller may reasonably request in order to
evidence Buyer's assumption of the Assumed Liabilities and Obligations.

          (c)     The Parties shall cooperate with each other to facilitate the
transition of the information systems, computer applications and processing of
data at the Facilities.

          (d)     To the extent that Seller's rights under any Seller's
Agreement may not be assigned without the consent of another Person which
consent has not been obtained, this Agreement shall not constitute an agreement
to assign the same if an attempted assignment would constitute a breach thereof
or be unlawful, and Seller, at its expense, shall use Commercially Reasonable
Efforts to obtain any such required consent(s) as promptly as possible. Seller
and Buyer agree that if any consent to an assignment of any Seller's Agreement
shall not be obtained or if any attempted assignment would be ineffective or
would impair Buyer's rights and obligations under the applicable Seller's
Agreement so that Buyer would not in effect acquire the benefit of all such
rights and obligations, Seller, to the maximum extent permitted by law and such
Seller's Agreement, shall after the Closing appoint Buyer to be Seller's
Representative and agent with respect to such Seller's Agreement, and Seller
shall, to the maximum extent permitted by Law and such Seller's Agreement, enter
into such reasonable arrangements with Buyer as are necessary to provide Buyer
with the benefits and obligations of such Seller's Agreement (the cost of
administering which shall be at Seller's expense). Seller and Buyer shall
cooperate and shall each use Commercially Reasonable Efforts after the Closing
to obtain an assignment of such Seller's Agreement to Buyer.

          For a reasonable time after the Closing Date, Buyer and Seller agree
to provide such services to each other as are reasonably required to the extent
necessary to ensure the continuity of support for Ginna and the Seller's other
facilities and the orderly completion of projects or other work in progress that
would be adversely affected if those services were interrupted, including
mutually acceptable arrangements regarding the lease of the emergency operations
facilities from Seller to Buyer for a period of up to three years. Buyer and
Seller will agree, as promptly as practicable, following the date hereof, on the
nature of such services, which shall be agreed upon in service agreements and
other agreements, as necessary, with the Seller or Buyer or their Affiliates.
The Party providing the services will be reimbursed for all its costs, including
development costs, in accordance with procedures to be mutually agreed upon by
Seller and Buyer or on an alternative cost reimbursement basis as mutually
agreed by Seller and Buyer. Notwithstanding anything to the contrary contained
in this Agreement, the Parties agree and understand that Seller will not be
providing transition services on or after the Closing Date to Buyer in the areas
of human resources, payroll, accounts receivable, accounts payable and general
ledger. Seller agrees to cooperate with Buyer and to reasonably assist Buyer in
a safe and adequate transition with respect to the provision of these services
by Buyer by the Closing Date; provided, however, that in the event Seller fails
to provide to Buyer within a reasonable period of time prior to Closing the
information, agreements (including, but not limited to, the Transferred Employee
Records and the records required pursuant to Section 6.10(f)) and assistance
Buyer reasonably needs in order to transition the areas of human resources,
payroll, accounts receivable, accounts payable and general ledger, then Seller
shall provide such transition services (at Seller's sole cost and expense) for
90 days after Closing such that Buyer is able to transition such services.

          Section 6.5     Public Statements.  Until thirty (30) days following
the Closing Date, the Parties shall not issue any press release or other public
disclosure with respect to this Agreement or the transactions contemplated
hereby without first affording the non-disclosing Party the opportunity to
review and comment on such disclosure, except as may be required by applicable
Laws or stock exchange rules.

          Section 6.6     Consents and Approvals.

          (a)     Seller and Buyer shall each file or cause to be filed with the
Federal Trade Commission and the Department of Justice any notifications
required to be filed under the HSR Act and the rules and regulations promulgated
thereunder with respect to the transactions contemplated hereby. The Parties
shall consult with each other as to the appropriate time of filing such
notifications and shall agree upon the timing of such filings, and respond
promptly to any requests for additional information made by either of such
agencies. The Parties shall use their Commercially Reasonable Efforts to cause
the waiting periods under the HSR Act to terminate or expire at the earliest
possible date after the date of filing. All filing fees under the HSR Act shall
be borne 50% by the Seller and 50% by the Buyer and each Party will bear its own
costs for the preparation of any such filing.

          (b)     As promptly as practicable after the date of this Agreement
and after the receipt of any findings required to be made by any other
Governmental Authority as a condition to Buyer and Seller making the filings
contemplated by this paragraph, (i) Buyer shall file with FERC (and if requested
by Buyer, Seller shall support) an application requesting Exempt Wholesale
Generator status for Buyer, which filing may be made individually by Buyer or
jointly with Seller, as reasonably determined by Buyer, (ii) Seller shall file,
with Buyer's support, an application with FERC requesting approval of the
Interconnection Agreement as an agreement grand-fathered from the effectiveness
of the Final Rule interconnection agreement adopted in FERC Docket RM02-1-000 on
July 24, 2003, and (iii) Buyer shall file with FERC any necessary applications
requesting approval of the Power Purchase Agreement. In fulfilling their
respective obligations set forth in the immediately preceding sentence, Buyer
and Seller shall each use Commercially Reasonable Efforts to effect the
referenced filings with FERC within thirty (30) days of the date of this
Agreement. Prior to submitting such applications with FERC, the Party preparing
the application shall submit the application to the other Party for review and
comment, and the filing Party shall in good faith consider any revisions
reasonably requested by the other Party. Each Party shall be solely responsible
for its own cost of preparing, reviewing and filing its respective application,
responses and any petition(s) for rehearing or any reapplication(s).

          (c)     As promptly as practicable after the date of this Agreement,
Buyer and Seller shall file with NYPSC a Petition for approval of the sale of
the Purchased Assets under Section 70 of the New York Public Service Law or
Buyer shall join in the Section 70 Petition Seller has already filed and such
Petition shall be amended accordingly. As promptly as practicable after the date
of this Agreement, Seller shall file with the NYPSC the Power Purchase Agreement
under Section 110 of the New York Public Service Law and Buyer shall file with
the NYPSC and any other applicable state Governmental Authority having
jurisdiction over Buyer or the Purchased Assets, an application requesting a
determination that allowing the Purchased Assets to be an eligible facility
under Section 32 of the Holding Company Act, (i) will benefit consumers, (ii) is
in the public interest, and (iii) does not violate state law. In fulfilling
their respective obligations set forth in the immediately preceding two
sentences, Buyer and Seller shall each use Commercially Reasonable Efforts to
effect or cause to be effected any such filings within thirty (30) days of the
date of this Agreement. Prior to any Party's submission of the applications
contemplated by this Section 6.6(c), the submitting Party shall give such
application to the other Parties for review and comment and the submitting Party
shall in good faith consider any revisions reasonably requested by the reviewing
Parties. Each Party will bear its own costs of the preparation and review of any
such filings.

          (d)     As promptly as practicable after the date of this Agreement,
Buyer shall file with FERC an application requesting authorization under Section
205 of the Federal Power Act to sell electric generating capacity and energy
(and, at Buyer's discretion, other services, including, without limitation,
ancillary services) at wholesale at market-based rates. In fulfilling its
obligations set forth in the immediately preceding sentence, Buyer shall use its
Commercially Reasonable Efforts to file the referenced application with FERC
within thirty (30) days of the date of this Agreement. Prior to Buyer's
submission of such application with FERC, Buyer shall submit such application to
Seller for review and comment and Buyer shall consider any revisions reasonably
requested by Seller. Buyer shall be solely responsible for the cost of preparing
and filing this application, any petition(s) for rehearing, or any
reapplication(s). Each Party will bear its own costs of the preparation and
review of any such filings.

          (e)     As promptly as practicable after the date of this Agreement,
Buyer and Seller shall file with NRC an application requesting consent under
Section 184 of the Atomic Energy Act and 10 C.F.R. Section 50.80 for the
transfer of the NRC License from Seller to Buyer, and approval of any conforming
license amendments or other related approvals. In fulfilling their respective
obligations set forth in the immediately preceding sentence, each of Buyer and
Seller shall use its Commercially Reasonable Efforts to effect any such filing
within thirty (30) days of the date of this Agreement. Each Party will bear its
own costs of the preparation of any such filing and NRC fees shall be borne 50%
by Buyer and 50% by Seller. Thereafter, Buyer and Seller shall cooperate with
one another to facilitate NRC review of the application by providing the NRC
staff with such documents or information that the NRC staff may reasonably
request or require any of the Parties to provide or generate.

          (f)     Seller and Buyer shall cooperate with each other and promptly
prepare and file notifications with, and request Tax clearances from, state and
local taxing authorities in jurisdictions in which a portion of the Purchase
Price may be required to be withheld or in which Buyer would otherwise be liable
for any Tax liabilities of Seller pursuant to such state and local Tax law.

          (g)     As promptly as practicable after the date of this Agreement,
but no later than thirty (30) days after Buyer supplies to Seller all of the
information regarding Buyer that is required to be included in the application
described in this Section 6.6(g), Seller and Buyer shall jointly prepare as
co-applicants, and Seller shall file with FERC, an application for approval of
this transaction under Section 203 of the Federal Power Act. In fulfilling their
respective obligations set forth in this Section 6.6(g), Seller and Buyer shall
use their Commercially Reasonable Efforts. Prior to Seller's submission of such
application with FERC, Seller shall submit such application to Buyer for review
and comment and Seller shall consider any revisions reasonably requested by
Buyer. Seller and Buyer shall respond promptly to all requests from FERC or its
staff for additional information regarding such application. Seller shall be
solely responsible for the cost of filing this application, any petition(s) for
rehearing, or any reapplication(s). Each Party will bear its own costs of the
review of such filings.

          (h)     Seller and Buyer shall cooperate with each other and, as
promptly as practicable after the date of this Agreement, (i) prepare and make
with FERC, NYPSC or any other Governmental Authority having jurisdiction over
Seller, Buyer or the Purchased Assets, all necessary filings required to be made
with respect to the transactions contemplated hereby (including those specified
above), (ii) effect all necessary applications, notices, petitions and filings
and execute all agreements and documents, (iii) use Commercially Reasonable
Efforts to obtain the transfer or reissuance to Buyer of all necessary Permits,
Environmental Permits, consents, approvals and authorizations of all
Governmental Authorities, and (iv) use Commercially Reasonable Efforts to obtain
all necessary consents, approvals and authorizations of all other parties, in
the case of each of the foregoing clauses (i), (ii) and (iii), necessary or
advisable to consummate the transactions contemplated by this Agreement
(including, without limitation, Seller's Required Regulatory Approvals and
Buyer's Required Regulatory Approvals) or required by the terms of any note,
bond, mortgage, indenture, deed of trust, license, franchise, permit,
concession, contract, lease or other instrument to which Seller or Buyer is a
party or by which any of them is bound. The Parties shall respond promptly to
any requests for additional information made by such agencies, and use their
respective Commercially Reasonable Efforts to cause regulatory approval to be
obtained at the earliest possible date after the date of filing. Each Party will
bear its own costs of the preparation and review of any such filing. Seller and
Buyer shall have the right to review in advance all characterizations of the
information relating to the transactions contemplated by this Agreement which
appear in any filing made in connection with the transactions contemplated
hereby and the filing Party shall consider in good faith any revisions
reasonably requested by the non-filing Party.

          (i)     Buyer shall have the primary responsibility for securing the
transfer, reissuance or procurement of the Permits and Environmental Permits
(other than Transferable Permits) effective as of the Closing Date. Seller shall
cooperate with Buyer's efforts in this regard and assist in any transfer or
reissuance of a Permit or Environmental Permit held by Seller or the procurement
of any other Permit or Environmental Permit when so requested by Buyer. In the
event that Buyer is unable, despite its Commercially Reasonable Efforts, to
obtain a transfer or reissuance of one or more of the Permits or Environmental
Permits as of the Closing Date, Buyer may use the applicable Permit or
Environmental Permit issued to Seller, provided (i) such use is not unlawful,
(ii) Buyer notifies Seller prior to the Closing Date, (iii) Buyer continues to
make Commercially Reasonable Efforts to obtain a transfer or reissuance of such
Permit or Environmental Permit after the Closing Date, and (iv) Buyer
indemnifies Seller for any losses, claims or penalties suffered by Seller in
connection with the Permit or Environmental Permit that is not transferred or
reissued as of the Closing Date resulting from Buyer's ownership or operation of
the Purchased Assets following the Closing Date. In no event shall Buyer use or
otherwise rely on a Permit or Environmental Permit issued to Seller beyond one
year after the Closing Date.

          Section 6.7     Brokerage Fees and Commissions.  Seller and Buyer each
represent and warrant to the other that, other than with respect to fees and
commissions of J.P. Morgan Securities Inc. and Concentric Energy Advisors Inc.,
which shall be the sole responsibility of Seller, no broker, finder or other
Person is entitled to any brokerage fees, commissions or finder's fees in
connection with the transaction contemplated hereby by reason of any action
taken by the Party making such representation. Seller and Buyer will pay to the
other or otherwise discharge, and will indemnify and hold the other harmless
from and against, any and all claims or liabilities for all brokerage fees,
commissions and finder's fees incurred by reason of any action taken by the
indemnifying party.

          Section 6.8     Tax Matters.

          (a)     All Transfer Taxes incurred in connection with this Agreement
and the transactions contemplated hereby shall be borne by Buyer. Buyer will
file, to the extent required by applicable Law, all necessary Tax Returns and
other documentation with respect to all such Transfer Taxes, and Seller will be
entitled to review such returns in advance and, if required by applicable Law,
will join in the execution of any such Tax Returns or other documentation. Prior
to the Closing Date, Buyer will provide to Seller, to the extent possible, an
appropriate exemption certificate in connection with this Agreement and the
transactions contemplated hereby, due from each applicable taxing authority.

          (b)     With respect to Taxes to be prorated in accordance with
Section 3.5 of this Agreement, Buyer shall prepare and timely file all Tax
Returns required to be filed after the Closing with respect to the Purchased
Assets, if any, and shall duly and timely pay all such Taxes shown to be due on
such Tax Returns. Buyer's preparation of any such Tax Returns shall be subject
to Seller's approval to the extent that such Returns relate to any period,
allocation or other amount for which the Seller is responsible, which approval
shall not be unreasonably withheld. Buyer shall make such Tax Returns and all
schedules and working papers supporting such Tax Returns available for Seller's
review and approval no later than fifteen (15) Business Days prior to the due
date for filing such Tax Return. Subject to Section 6.8(d), not less than five
(5) Business Days prior to the due date of any such Tax Return, Seller shall pay
to Buyer a portion of the amount shown as due on such Tax Return as determined
in accordance with Section 3.5 of this Agreement. In the event Buyer and Seller
cannot agree as to the preparation or the reporting of any material item on a
Tax Return to be filed by Buyer, the dispute shall be settled in the manner
provided by Section 6.8(d) hereof and the cost of such Independent Accounting
Firm shall be borne equally by the Parties.

          (c)     With respect to Seller's Qualified Decommissioning Fund, prior
to the Closing Date, the Trustee will cause the Qualified Decommissioning Fund
to pay estimated Income Taxes for the taxable period that ends on the Closing
Date in an amount equal to the estimated Income Tax Liability of Seller's
Qualified Decommissioning Fund for the taxable period that ends on the Closing
Date. To the extent the amount of estimated Income Taxes paid pursuant to this
section is in excess of the Income Tax Liability of Seller's Qualified
Decommissioning Fund for the taxable period that ends on the Closing Date, any
such refund will be forwarded to, and deposited in, the Buyer's Qualified
Decommissioning Fund. To the extent the amount of estimated Income Taxes paid
pursuant to this section is less than the Income Tax Liability of Seller's
Qualified Decommissioning Fund for the taxable period that ends on the Closing
Date, any such deficiency will be paid by, and from Buyer's Qualified
Decommissioning Fund.

          (d)     Each of the Parties shall provide the other with such
assistance as may reasonably be requested by the other Party in connection with
the preparation of any Tax Return, any audit or other examination by any taxing
authority, or any judicial or administrative proceedings relating to Liability
for Taxes, and each will retain and provide the requesting Party with any
records or information which may be relevant to such return, audit or
examination, proceedings or determination. Any information obtained pursuant to
this Section 6.8(d) or pursuant to any other Section hereof providing for the
sharing of information or review of any Tax Return or other schedule relating to
Taxes shall be kept confidential by the Parties hereto, except to the extent
such information is required to be disclosed by Law. Notwithstanding the
preceding sentence, each Party to this transaction (and each employee,
representative or agent of any taxpayer) may disclose to any and all Persons,
without limitations of any kind, the "structures" and "tax aspects" (as such
terms are used in Sections 6011, 6012 and 6112 of the Code and the regulations
promulgated thereunder) of the transactions and all materials of any kind
(including opinions and other tax analyses) that are provided to the Party
relating to such "structures" or "tax aspects", and no Party is subject to any
restriction concerning its consulting with its tax adviser regarding the
"structure" or "tax aspects" of this transaction at any time. Each Party intends
that this transaction will not constitute a "confidential transaction" under the
Code or the regulations promulgated thereunder.

          (e)     In the event that a dispute arises between Seller and Buyer as
to the preparation or the reporting of any material item on a Tax Return to be
filed by Buyer or the allocation of such Taxes between Seller and Buyer, the
Parties shall attempt in good faith to resolve such dispute, and any agreed
amount shall be paid to the appropriate Party within ten (10) Business Days of
the date on which the Parties reach agreement. If a dispute is not resolved
within thirty (30) days, the Parties shall submit the dispute to the Independent
Accounting Firm for resolution, which resolution shall be final, conclusive and
binding on the Parties. Notwithstanding anything in this Agreement to the
contrary, the fees and expenses of the Independent Accounting Firm in resolving
the dispute shall be borne fifty percent (50%) by Seller and fifty percent (50%)
by Buyer. Any payment required to be made as a result of the resolution of the
dispute by the Independent Accounting Firm shall be made within ten (10) days
after such resolution, together with any interest determined by the Independent
Accounting Firm to be appropriate. Submission of a dispute to the Independent
Accounting Firm shall not relieve any Party from any obligation under this
Agreement to timely file a Tax Return or pay a Tax.

          Section 6.9     Advice of Changes.  Prior to the Closing Date, each
Party will promptly advise the other in writing of any change or discovery
occurring after the date hereof that would constitute a material breach of any
representation, warranty or covenant of the advising or other Party under this
Agreement. If a Party advises the other Party of any such matter with respect to
a material breach of the advising Party, the other Party shall have the right to
terminate this Agreement in accordance with Sections 9.1(e) or (f) as the case
may be. If a Party advises the other Party of any such matter with respect to a
material breach by the other Party, the advising Party shall have the right to
terminate this Agreement in accordance with Sections 9.1(e) or (f) as the case
may be. If a Party fails to exercise its termination right, the written notice
under this Section 6.9 will be deemed to have amended this Agreement, including
the appropriate schedule, or to have qualified the representations and
warranties contained in Articles 4 and 5. Seller shall be entitled to amend,
substitute or otherwise modify any Seller's Agreement to the extent that such
Seller's Agreement expires by its terms prior to the Closing Date or is
terminable without Liability to Buyer on or after the Closing Date (other than
an amendment that would extend the term thereof for a new term of years in
excess of the then current term), or if the terms and conditions of such
modified Seller's Agreement constituting the Assumed Liabilities and Obligations
are on terms and conditions not less favorable to Buyer than the original
Seller's Agreement.

          Section 6.10     Employees.

          (a)     Buyer or a directly or indirectly wholly owned Subsidiary of
Buyer will offer employment, commencing as of the Closing Date, to all Ginna
Employees employed as of the Closing Date, which Ginna Employees are set forth
on Schedule 6.10(a), as amended between the date of this Agreement and the
Closing Date to reflect any changes in the identities of work force personnel.

          (b)     Each Ginna Employee who is offered and accepts continued
employment with Buyer will be referred to herein as a "Transferred Employee."

          (c)     For the period commencing on the Closing Date and ending
eighteen (18) months thereafter, and except as Buyer and any Transferred
Employee may otherwise mutually agree, Buyer shall provide each Transferred
Employee with total compensation including without limitation base pay,
authorized overtime, bonuses, incentive compensation and benefits provided under
all applicable employee benefits plans and programs, and fringe benefit
arrangements (other than each of the Performance Plans relating to the Ginna
divestiture and the severance agreements listed on Schedule 6.10(o) hereto)
(collectively, "Total Compensation") which in the aggregate is comparable in
value and nature to the Transferred Employee's annualized Total Compensation
received from Seller immediately prior to Closing. Buyer shall also: (i) pay the
reasonable relocation costs of any Transferred Employee who shall relocate at
Buyer's request during such 18 month period and (ii) maintain the defined
benefit plan described in Section 6.10(h) for the period specified in that
Section. Seller shall fully vest or shall cause to be fully vested no later than
the Closing Date any benefit accrued by Transferred Employees or granted by
Seller to Transferred Employees under the Non-Qualified Top-Hat Plans listed in
Schedule 4.12(a) other than the Energy East Corporation 2000 Stock Option Plan
and the Energy East Corporation Restricted Stock Plan. Buyer shall provide
top-hat, non-qualified and equity benefits to Transferred Employees that Buyer
determines are eligible under Buyer's applicable plans.

          (d)     As of the Closing Date, all Transferred Employees shall cease
to participate in the employee welfare benefit plans (as such term is defined in
ERISA) maintained or sponsored by Seller or its Affiliates and shall commence
participation (if applicable eligibility requirements are satisfied) in the
employee welfare benefit plans of Buyer or its Affiliates (the "Replacement
Welfare Plans") that for Transferred Employees will provide benefits and
coverage that are comparable in the aggregate to the benefits and coverage
provided to the Transferred Employees in the aggregate under Seller's, or its
Affiliate's, as the case may be, welfare benefit plans in effect for the
Transferred Employees immediately prior to the Closing Date. Buyer shall
(i) waive all limitations as to pre-existing condition exclusions and waiting
periods with respect to the Transferred Employees under the Replacement Welfare
Plans, other than, but only to the extent of, limitations or waiting periods
that were in effect with respect to such employees under the welfare plans
maintained by Seller or its Affiliates and that have not been satisfied as of
the Closing Date, and (ii) provide each Transferred Employee with credit for any
co-payments and deductibles paid prior to the Closing Date during a plan year
under Seller's or its Affiliates' plans that have not ended as of the Closing
Date, in satisfying any deductible or out-of-pocket requirements under the
Replacement Welfare Plans (on a pro-rata basis in the event of a difference in
plan years).

          (e)     Buyer shall give all Transferred Employees credit for all
service with Seller and its Affiliates under all employee welfare benefit plans
and arrangements and all fringe benefit plans, programs, and arrangements of
Buyer ("Replacement Benefit Plans") in which they become participants. The
service credit given is for purposes of eligibility, vesting and service related
level of benefits, but not benefit accrual (except as provided in the following
sentence). For purposes of benefit accrual, Buyer shall give Transferred
Employees credit for all service with Seller and its Affiliates under all
Replacement Benefit Plans, but the ultimate benefits provided under Replacement
Benefit Plans may be offset by the corresponding benefits previously provided by
Seller or its Affiliates or benefit plans of Seller or its Affiliates, or by the
corresponding benefits accrued under the benefit plans of Seller or its
Affiliates or otherwise committed to be provided by Seller or its Affiliates in
the future; provided, however, that such an offset shall not be permitted with
respect to the Replacement Defined Benefit Plan described in Section 6.l0(h).

          (f)     Not less than four (4) weeks prior to the Closing Date, Seller
shall provide Buyer with such pertinent data or information as Buyer shall
reasonably require to comply with Sections 6.10 (c), (d), (e), (h), (l) and (m)
including each Transferred Employee's service, accrued but unused paid time off,
satisfaction of limitations or waiting periods, amounts of co-payments and
deductibles, accrued benefits available for offset under Section 6.10(e), each
as of the Closing Date, as well as such other information as Buyer shall
reasonably request for such purpose. To the extent the consent of a Transferred
Employee is required in order for Seller to deliver any such pertinent data or
information, Seller agrees to secure such consent. In the event that Seller is
unable to obtain such consent, Buyer may treat the refusal of consent as
declination of its employment offer and such employees shall be treated as if
they had never accepted the employment offer of Buyer and shall not be entitled
to any severance or other benefits to be provided to Transferred Employees
hereunder. Seller agrees to provide Buyer not less than four (4) weeks prior to
the Closing Date with a list of Ginna Employee participants in each
non-qualified or supplemental Benefit Plan, and also to disclose any outstanding
Ginna Employee equity grants.

          (g)     Buyer agrees to allow the Transferred Employees, as of the
Closing Date, to be eligible to commence participation in a tax-qualified 401(k)
plan sponsored by Buyer or its Affiliates that will provide benefits which in
the aggregate are comparable in value and nature to the benefits provided to the
Transferred Employees under the tax-qualified 401(k) plan sponsored by the
Seller or its Affiliates in effect for Transferred Employees immediately prior
to the Closing Date ("RG&E Savings Plan").

          To the extent allowable by law and by the applicable Seller plan,
Buyer shall take any and all necessary action to cause the trustee of any
tax-qualified 401(k) plan of Buyer or its Affiliates in which any Transferred
Employee becomes a participant to accept a direct "rollover" in cash of all or a
portion of said employee's "eligible rollover distribution" within the meaning
of Section 402 of the Code from the RG&E Savings Plan if requested to do so by
the Transferred Employee. However, any tax-qualified 401(k) plan of Buyer or its
Affiliates accepting such a rollover shall not be required to permit any
investment to be made in Energy East Corporation common stock on behalf of any
Transferred Employee after the Closing Date. Notwithstanding anything in this
paragraph to the contrary, if Transferred Employees are not entitled to
distributions from the RG&E Savings Plan as a result of being employed by Buyer,
then either (i) the parties may negotiate a direct transfer from the RG&E
Savings Plan trust to Buyer's tax-qualified plan trust under such terms and
conditions as are agreeable to both parties or (ii) if the parties are unable to
negotiate such an agreement, then Buyer agrees to provide Seller, in a timely
manner, with such information as Seller reasonably needs about the Transferred
Employees in order for Seller to administer the Transferred Employees' benefits
under the RG&E Savings Plan (e.g., information about when the Transferred
Employees retire, die, terminate employment).

          (h)     Effective as of the Closing Date, Buyer shall cause to be
provided a defined benefit pension plan for the benefit of the Transferred
Employees ("Replacement Defined Benefit Plan"). The Replacement Defined Benefit
Plan shall provide benefit formulas that are identical to the benefit plan
formulas in Article IV of the Rochester Gas and Electric Corporation Retirement
Plan ("RG&E Defined Benefit Plan") as of the Closing Date. For the purposes of
this Section 6.10(h), except as required by Law or as required by the IRS in
connection with Seller's application for a determination letter for the RG&E
Defined Benefit Plan, no improvements shall be made to such benefit formulas
referenced above in the RG&E Defined Benefit Plan for the Transferred Employees
after the date hereof and prior to the Closing Date without the written consent
of Buyer, which consent shall not be unreasonably withheld. Buyer agrees to
maintain such benefit formulas for Transferred Employees for a period of at
least eighteen (18) months after the Closing Date (and for an additional period
of at least thirty-six (36) months after the end of such eighteen (18) month
period, Buyer agrees to provide benefit formulas that are identical to the
benefit plan formulas in Sections 4.1 through 4.11 and Sections 4.13 through
4.15 of the RG&E Defined Benefit Plan (as such formulas are in effect on the
Closing Date)), (provided, however, that if changes in the Law require any such
terms to be modified or if any such terms are required by the IRS to be modified
in connection with Buyer's application for a determination letter for the
Replacement Defined Benefit Plan, Buyer may modify such terms to the extent
necessary to comply with such laws).

          The Transferred Employees shall be given credit in the Replacement
Defined Benefit Plan for all service with and compensation from Seller and its
Affiliates as if it were service with and compensation from Buyer for purposes
of determining eligibility for benefits, the amount of any benefits or benefit
accruals, vesting and service related levels of benefits under the Replacement
Defined Benefit Plan.

          At least thirty (30) days prior to the Closing Date, Seller and Buyer
shall file or cause to be filed any forms 5310-A that may be required to be
submitted to the IRS in connection with the transfers described in this Section
6.10(h). The transfers and payments described in this Section 6.10(h) shall in
no event be made prior to the thirtieth (30th) day following the filing of such
form 5310-A with the IRS. In the event that the IRS, the PBGC or any other
Governmental Authority raises any objections to the transfer, the Seller and
Buyer shall cooperate in good faith to resolve any such objections.

          On the Closing Date, the Seller shall cause to be transferred from the
RG&E Defined Benefit Plan to the corresponding Replacement Defined Benefit Plan,
assets equal to Seller's good faith estimate of the amount that Seller is
permitted to transfer in compliance with the requirements of Section 414(l) of
the Code and Treasury Regulation Section 1.414(l)-1 (determined under
assumptions used by the PBGC as of the Closing Date) multiplied by .80 (the
"Initial Transfer").

          Within sixty (60) days after the Closing Date, Seller shall calculate
the actual amount that Seller is permitted to transfer in compliance with the
requirements of Section 414(l) of the Code and Treasury Regulation Section
1.414(l)-1 (determined under assumptions used by the PBGC as of the Closing
Date) (the "Actual Amount"). To the extent that the Actual Amount is less than
the Initial Transfer, the amount of such differential (including any applicable
interest determined in good faith by Buyer) shall be transferred by the
Replacement Defined Benefit Plan to the RG&E Defined Benefit Plan. To the extent
that the Actual Amount is greater than the Initial Transfer, the Seller shall
cause to be transferred from the RG&E Defined Benefit Plan to the Replacement
Defined Benefit Plan the amount of such differential (including any applicable
interest determined in good faith by Seller).

          To the extent that the Actual Amount is less than Thirty Million
Dollars ($30,000,000.00), the Purchase Price shall be decreased by the amount of
the shortfall. To the extent that the Actual Amount is greater than Thirty
Million Dollars ($30,000,000.00), the Purchase Price shall be increased by the
amount of the differential.

          All assets transferred and payments made under this Section 6.10(h)
shall be made in cash, or in marketable securities that are reasonably
acceptable to Buyer.

          Upon completion of the Initial Transfer under this Section 6.10(h),
all benefit payments from the Replacement Defined Benefit Plan shall be the
responsibility of Buyer.

          In the event that the Closing occurs after June 30, 2004, the Purchase
Price shall be decreased by the amount of One Hundred Seventy-Five Thousand
Dollars ($175,000.00) per month in each of July, August and September, 2004,
prorated to the Closing Date; provided that if the Closing occurs on or after
October 1, 2004, the total decrease in the Purchase Price shall be Five Hundred
Twenty-Five Thousand Dollars ($525,000.00).

          (i)     Buyer and Seller do not anticipate the issuance of any notices
pursuant to the WARN Act. Notwithstanding the foregoing, Seller agrees to timely
perform and discharge all requirements under the WARN Act and under applicable
state and local laws and regulations for the notification of employees arising
from the sale of the Purchased Assets to Buyer up to the Closing Date for those
employees who will not become Transferred Employees effective as of the Closing
Date. On or after the Closing Date, Buyer shall be responsible for performing
and discharging all requirements under the WARN Act and under applicable state
and local laws and regulations for the notification of Transferred Employees
with respect to the Purchased Assets. At Closing, Seller shall provide to Buyer
a certificate setting forth the number of employees, if any, who suffered an
"employment loss," as defined under the WARN Act, at the Purchase Assets in the
ninety (90) days immediately preceding the Closing Date (the "WARN
Certificate").

          (j)     Seller is responsible for extending COBRA continuation
coverage to all employees and former employees, and qualified beneficiaries of
such employees and former employees, who become or became entitled to such COBRA
continuation coverage on or before the Closing Date by reason of the occurrence
of a qualifying event on or before the Closing Date, including those for whom
the Closing Date occurs during their COBRA election period. Buyer shall be
responsible for providing COBRA continuation coverage only to Transferred
Employees and qualified beneficiaries of such employees who become entitled to
such COBRA continuation coverage on or after the Closing Date by reason of the
occurrence of a qualifying event after the Closing Date.

          (k)     Seller shall remain responsible for paying Transferred
Employees for: (a) all salary, wages, and Benefit Plan benefits (excluding to
the extent provided in Sections 6.10(h) and 6.10(o)), a pro rata portion of any
bonuses or incentive compensation that were earned for time worked for Seller or
Seller's Affiliates prior to the Closing Date; and (b) all workers'
compensation, disability benefits, or other insurance benefits for which
entitlement to payment is based upon events occurring prior to the Closing Date
including any incurred but unreported claims under the Benefit Plans. Seller
shall pay to Buyer as set forth in Section 3.3, the cash equivalent for all
vacation time, floating holidays, sick days, personal days (including, but not
limited to, those related to the Personal Day Program of Seller) and bonuses and
incentive compensation for Transferred Employees which have accrued as of the
Closing Date (holiday time shall not be included in such payment). For purposes
hereof, the foregoing calculations shall be determined consistent with Seller's
past practices.

          (l)     Individuals who are otherwise "Transferred Employees" but who
on the Closing Date are not actively at work due to a leave of absence covered
by the Family and Medical Leave Act or similar state or local Law, or due to any
other authorized leave of absence, shall nevertheless be treated as "Transferred
Employees" but only if he or she is able to (i) return to work within the
protected period under the Family and Medical Leave Act or similar state or
local Law, or, in the case of any other type of authorized leave, within the
period established by Buyer in Buyer's reasonable discretion, and (ii) perform
the essential functions of their job, with or without a reasonable
accommodation.

          (m)     For at least eighteen (18) months following the Closing Date,
Buyer shall provide all Transferred Employees with retiree medical, mental
health, prescription drug, and life insurance coverages (the "Replacement
Retiree Coverages") that are in the aggregate comparable in value and nature to
the Seller's retiree medical, mental health, prescription drug, and life
insurance coverages available to eligible Ginna Employees who retire from Seller
immediately prior to the Closing Date (the "RG&E Retiree Coverages"). Buyer
shall (i) waive all limitations as to pre-existing condition exclusions and
waiting periods with respect to the Transferred Employees under the Replacement
Retiree Coverages, other than, but only to the extent of limitations or waiting
periods that were in effect with respect to such employees under the RG&E
Retiree Coverages and that have not been satisfied as of the Closing Date, and
(ii) provide each Transferred Employee with credit for any co-payments and
deductibles paid prior to the Closing Date during a plan year under each
applicable Seller's plan that has not ended as of the Closing Date, in
satisfying any deductible or out-of-pocket requirements under the Replacement
Retiree Coverages (on a pro-rata basis in the event of a difference in plan
years). Effective as of the Closing Date, Seller shall have no responsibility to
provide retiree medical, mental health, prescription drug or life insurance
coverages for any Transferred Employee.

          (n)     Buyer shall pay to each Transferred Employee whose employment
is terminated without cause by Buyer or one of its Affiliates within eighteen
(18) months of the Closing Date a severance benefit package equal to or greater
than the following:

 * Severance Pay: A lump sum equal to two (2) weeks of base pay for each full
   year of service (including service with both Buyer and Seller), less
   applicable taxes and withholdings.
 * Transition Allowance: $7,500, less applicable taxes and withholdings.
 * Insurance Benefits: Health and Life Insurance comparable to coverage received
   by retirees (who were employed by Seller on or after January 1, 1983) on the
   Closing Date for one (1) year from the date of termination.
 * EAP Benefits: Benefits in accordance with the provisions of the Seller's
   Employee Assistance Program for one (1) year.
 * Outplacement Benefits: Employer paid retraining and/or outplacement allowance
   of up to $5,000, less applicable taxes and withholdings, for twelve (12)
   months after termination.

For purposes of calculating the level of any of the foregoing severance benefits
to which a terminated Transferred Employee is entitled, such calculation shall
be made as though the Transferred Employee's termination date is the eighteenth
(18th) month anniversary of the Closing Date, regardless of the actual date of
termination. A Transferred Employee's entitlement to the foregoing severance
benefits shall be contingent on the Transferred Employee's execution of an
agreement releasing Buyer, Seller and their respective Affiliates from any legal
claims. Nothing contained herein shall alter the at-will employment relationship
of any Transferred Employee.

          (o)     Notwithstanding any other provision of this Agreement, Buyer
shall assume the Liabilities for the obligations of Seller under the Performance
Plans relating to Ginna Divestiture listed on Schedule 6.10(o) hereto. Seller
shall retain any and all Liability for the obligations of Seller under the
severance agreements listed on Schedule 6.10(o) hereto.

          Section 6.11     Risk of Loss.

          (a)     Prior to the Closing, Buyer shall not bear any risk of loss or
damage to the property included in the Purchased Assets. Seller shall replace or
repair any damage to the Purchased Assets in accordance with Good Utility
Practices, except as otherwise provided in paragraphs (b) or (c) below.

          (b)     If, before the Closing, all or any portion of the Purchased
Assets is taken by eminent domain or is the subject of a pending or (to the
Knowledge of Seller) contemplated taking which has not been consummated, Seller
shall notify Buyer promptly in writing of such fact. If such taking would create
a Material Adverse Effect, Buyer and Seller shall negotiate in good faith to
settle the loss resulting from such taking (including, without limitation, by
making a fair and equitable adjustment to the Purchase Price) and, upon such
settlement, consummate the transactions contemplated by this Agreement pursuant
to the terms of this Agreement. If no such settlement is reached within sixty
(60) days after Seller has notified Buyer of such taking, then Buyer or Seller
may terminate this Agreement pursuant to Section 9.1(g).

          (c)     If, before the Closing, all or any portion of the Purchased
Assets is damaged or destroyed by fire or other casualty, Seller shall notify
Buyer promptly in writing of such fact. If such damage or destruction would
create a Material Adverse Effect and Seller have not notified Buyer of their
intention to cure such damage or destruction within fifteen (15) days after its
occurrence (such cure to be reasonably satisfactory to Buyer), Buyer and Seller
shall negotiate in good faith to settle the loss resulting from such casualty
(including, without limitation, by making a fair and equitable adjustment to the
Purchase Price) and, upon such settlement, consummate the transactions
contemplated by this Agreement pursuant to the terms of this Agreement. If no
such settlement is reached within sixty (60) days after Seller have notified
Buyer of such casualty, then Buyer may terminate this Agreement pursuant to
Section 9.1(g).

          (d)     The provisions of Section 5-1311 of the New York General
Obligations Law shall not apply to this Agreement.

          Section 6.12     Decommissioning Funds.

          (a)     On the Closing Date, Seller shall cause to be transferred to
the Trustee under the Post-Closing Decommissioning Trust Agreement (1) all of
the assets of the Seller's Qualified Decommissioning Fund and (2) to the extent
necessary to comply with Seller's Required Regulatory Approvals, all or a
portion of the assets of the Seller's Nonqualified Decommissioning Fund, in each
case, consisting solely of cash or cash equivalents; provided that in no event
shall the aggregate amount of the transferred assets of the Seller's
Decommissioning Funds be less than the Decommissioning Target. Seller shall
retain all assets of the Seller's Nonqualified Decommissioning Fund not required
to be transferred under clause (2) above.

          (b)     In the event that the NRC requires the Buyer to provide
Decommissioning funding assurance in an amount in excess of the Decommissioning
Target (the "Excess Decommissioning Funds"), Buyer agrees to cause Buyer's
Parent to post a Buyer's Parent Guaranty in an amount sufficient to cover the
Excess Decommissioning Funds and in such form as required by the NRC. If Buyer's
Parent Guaranty is not accepted by the NRC, or in all events if Seller is
required to transfer Excess Decommissioning Funds to the Buyer, the Buyer shall
earmark such Excess Decommissioning Funds and, upon completion of
Decommissioning and termination or conversion of the NRC License by the NRC, pay
to Seller an amount in dollars equal to the Excess Decommissioning Funds,
together with allocated earnings on such Excess Decommissioning Funds from the
Closing Date through the date such payment is made.

          (c)     To the extent (i) requested by Buyer, (ii) permitted by Law
and (iii) that no adverse consequences result to the Seller, immediately prior
to Closing, Seller shall cause to be transferred into Seller's Qualified
Decommissioning Fund either (1) all of the assets in Seller's Nonqualified
Decommissioning Fund, or (2) if Seller is permitted to transfer to the Trustee
under the Post-Closing Decommissioning Trust Agreement only that portion of the
assets of Seller's Decommissioning Funds such that the aggregate amount of the
transferred assets of Seller's Decommissioning Funds equals the Decommissioning
Target, that portion of the assets in Seller's Nonqualified Decommissioning Fund
necessary so that the assets of Seller's Qualified Decommissioning Fund equals
the Decommissioning Target. All fees in connection with implementing this
Section 6.12(c), including all fees and external costs incurred for Seller to
obtain a revised schedule of ruling amounts in a private letter ruling from the
IRS to permit such transfer, shall be borne by Buyer.

          (d)     The Parties shall not take any actions that would cause the
actual Tax consequences of the transactions contemplated by this Agreement to
differ from or be inconsistent with the Requested Rulings set forth in Section
6.18.

          Section 6.13     Spent Nuclear Fuel Fees.

          (a)     Except as provided in the third sentence of this paragraph and
Sections 2.1(b) and 2.3(h), between the date hereof and the Closing Date, and at
all times thereafter, Seller will remain liable for all Spent Nuclear Fuel Fees
and any other fees associated with electricity generated at Ginna and sold prior
to the Closing Date, and the One-Time DOE Pre-1983 Fee, and Buyer shall have no
Liability or responsibility therefore. Buyer shall pay and discharge all Spent
Nuclear Fuel Fees and any other fees associated with electricity generated at
Ginna and sold from and after the Closing Date, and Seller shall have no
Liability or responsibility therefore. On the Closing Date, Buyer shall assume
title to, and responsibility for the management, storage, removal,
transportation and disposal of all Spent Nuclear Fuel and High Level Waste of
Ginna as of the Closing Date. Seller shall assign to Buyer its undivided right,
title and interest in and to the Standard Spent Fuel Disposal Contract,
including, without limitation, any and all damage claims arising under such
contract subject to Sections 2.1(p), 2.2(k), 6.13(b) and 6.13(d) hereof
concerning the rights of Seller with respect to the One-Time DOE Pre-1983 Fee,
and shall provide the required notice to the Department of Energy of the
assignment of the Standard Spent Fuel Disposal Contract to Buyer within ninety
(90) days of Closing, such notice to be in a form reasonably acceptable to
Seller and Buyer.

          (b)     Prior to January 31, 2004, Seller shall commence an action in
the United States Court of Federal Claims for damages resulting from the
Department of Energy's failure to commence the removal, transportation,
acceptance or any delay in accepting Spent Nuclear Fuel and High Level Waste for
disposal pursuant to the Standard Spent Fuel Disposal Contract (the "DOE
Litigation"). All rights relating to the DOE Litigation shall be exercised in
good faith and such claims shall be preserved for the benefit of the Buyer.
Buyer shall assume all of the rights and obligations under the Standard Spent
Fuel Disposal Contract as of the Closing Date, including but not limited to the
right to pursue and recover damages resulting from the DOE Litigation, subject
to Seller's rights relating to the One-Time DOE Pre-1983 Fee, and provided that,
in the event that Buyer shall recover any form of monetary relief (including but
not limited to monetary damages or relief which is reasonably calculable from
economic obligations, as a direct or indirect result of the DOE Litigation)
Buyer shall pay to Seller an amount equal to the amount of the economic value
received by Buyer as a result of such litigation up to a maximum payment to
Seller of Ten Million Dollars ($10,000,000). Seller shall submit the complaint
to be filed in the action to Buyer for prompt review, comment and approval (such
approval to be in Buyer's reasonable discretion). Consistent with the
obligations of this Section 6.13, Seller shall take no additional actions with
respect to the DOE Litigation that may affect Buyer's interests in the suit,
including but not limited to filing damages estimates or entering into any
settlement discussions, without Buyer's express prior written consent; provided
that Seller may take any action necessary to preserve the rights of Seller and
Buyer in the DOE Litigation, or to respond to an order or request of the court
or other procedural requirement, if expeditious action is required and Seller
has been unable to contact or obtain a response from Buyer despite reasonable
efforts to do so.

          (c)     Buyer agrees to provide Seller with a copy within two (2)
Business Days of receipt of all notices provided to Buyer from the Department of
Energy regarding the date on which the One-Time DOE Pre-1983 Fee is due and
payable in accordance with the terms of the Standard Spent Fuel Disposal
Contract.

          (d)     Seller agrees to cause the One-Time DOE Pre-1983 Fee to be
duly paid when due, subject to any rights to which Seller may be entitled by
reason of the Department of Energy's defaults (or alleged defaults) under the
Standard Spent Fuel Disposal Contract.

          Section 6.14     Department of Energy Decontamination and
Decommissioning Fees.

          Seller will continue to pay all Department of Energy Decontamination
and Decommissioning Fees relating to Nuclear Fuel purchased and consumed at
Ginna prior to the Closing Date, including but not limited to all annual Special
Assessment invoices to be issued after the Closing Date by the Department of
Energy, as contemplated by its regulations at 10 C.F.R. Part 766 implementing
Sections 1801, 1802, and 1803 of the Atomic Energy Act.

          Section 6.15     Cooperation Relating to Insurance and Price-Anderson
Act.  Until the Closing, Seller will maintain in effect (a) insurance in amounts
and against such risks and losses as is customary in the commercial nuclear
power industry and (b) not less than the level of property damage and liability
insurance for the Facilities as in effect on the date hereof. Seller shall
cooperate with Buyer's efforts to obtain insurance, including insurance required
under the Price-Anderson Act or other Nuclear Laws with respect to the Purchased
Assets. In addition, subject to Buyer's written commitment to satisfy its
indemnification obligations under Section 8.1(a), Seller agrees to use
Commercially Reasonable Efforts to assist Buyer in making any claims against
pre-Closing insurance policies of Seller that may provide coverage related to
Assumed Liabilities and Obligations. Buyer agrees to indemnify Seller for its
reasonable out-of-pocket expenses incurred in providing such assistance and
cooperation and not to take any action which shall adversely affect any residual
rights of Seller in such insurance policies.

          Section 6.16     Tax Clearance Certificates.  Seller and Buyer shall
cooperate and use their Commercially Reasonable Efforts to cause the Tax
clearance certificates described in Schedule 4.20 of this Agreement to be issued
by the appropriate taxing authorities prior to the Closing Date or as soon as
practicable thereafter. Buyer shall, at least ten (10) days prior to the Closing
Date, file Form AU-196.10, Notification of Sale, Transfer or Assignment in Bulk,
with the New York State Department of Taxation and Finance.

          Section 6.17     Release of Seller.  Buyer shall use Commercially
Reasonable Efforts to support Seller's efforts to obtain a written release of
Seller effective as of the Closing with respect to obligations arising on or
after the Closing Date under any of the Seller's Agreements, Fuel Contracts or
Non-material Contracts assigned to Buyer hereunder.

          Section 6.18     Private Letter Ruling.  The Parties agree to
cooperate in good faith in the preparation and joint filing of any private
letter ruling request(s) to be made by Buyer and Seller in order to obtain the
Tax treatment desired by the Parties with respect to the transfer of the
Decommissioning Funds pursuant to the terms of this Agreement. Without limiting
the generality of the foregoing, Buyer and Seller shall use Commercially
Reasonable Efforts to obtain one or more private letter ruling(s) from the IRS
determining that (i) the transfer of assets from the Seller's Qualified
Decommissioning Fund to the Buyer's Qualified Decommissioning Fund is a
disposition that is treated as satisfying the requirements of Treas. Reg.
1.468A-6(b) pursuant to the IRS's exercise of discretion under Treas. Reg.
1.468A-6(g)(1), and accordingly (a) neither Seller, Buyer nor their respective
Qualified Decommissioning Funds will recognize gain or loss upon the transfer of
assets from the Seller's Qualified Decommissioning Fund to the Buyer's Qualified
Decommissioning Fund, (b) the Buyer's Qualified Decommissioning Fund will be
treated as satisfying the requirements of Code Section 468A and (c) the Buyer's
Qualified Decommissioning Fund will have a carryover Tax basis in the assets
received from the Seller's Qualified Decommissioning Fund, (ii) Buyer will not
recognize gain or otherwise take into account any income for U.S. federal income
tax purposes by reason of the receipt of all or a portion of the assets of the
Seller's Nonqualified Decommissioning Fund, (iii) for the taxable year that
includes the Closing Date, Seller shall be entitled to a current deduction equal
to the total of any amounts realized by Seller as a result of Buyer's assumption
of the decommissioning obligations with regard to the Purchased Assets, (iv) at
Closing , Buyer will have a Tax basis in the Purchased Assets (excluding the
assets of the Qualified Decommissioning Fund) equal to the sum of the Purchase
Price and the Assumed Liabilities and Obligations that will be taken into
account as liabilities for federal income Tax purposes, and (v) Seller's net
operating loss attributable to the decommissioning obligations assumed by Buyer
will qualify for specified liability loss treatment under Section 172 of the
Code (the "Requested Rulings"). The Requested Rulings shall be modified, as
necessary, to take into account any Legislation or Treasury Regulations enacted
on or after the date of this Agreement including, but not limited to, for the
Seller to obtain a revised schedule of ruling amounts from the IRS to permit the
transfer of assets in Seller's Nonqualified Decommissioning Fund to Seller's
Qualified Decommissioning Fund as provided in Section 6.12(c). Neither Buyer nor
Seller shall take any action that would cause the transfer of assets from the
Seller's Qualified Decommissioning Fund to the Buyer's Qualified Decommissioning
Fund to fail to be treated as satisfying the requirements of Treas. Reg.
1.468A-6(b) (assuming solely for purposes of this sentence that the interest
acquired by Buyer constitutes a "qualified interest" in a "nuclear power plant"
as defined in Treas. Reg. 1.468A-5(b)), or cause Buyer and Seller to fail to
obtain such a private letter ruling. The user fee set forth in the applicable
IRS Revenue Procedure for substantially identical letter rulings by a common
sponsor shall be shared equally by both Parties. Each Party will bear its own
legal fees with respect to any requests. The Parties agree to file the private
letter ruling request seeking the Requested Rulings within 30 days of the date
of this Agreement.

          Section 6.19     NRC Commitments.  Buyer shall maintain and operate
the Facilities in accordance with the NRC Commitments to the extent required by
the NRC License, applicable NRC regulations and policies and with applicable
Nuclear Laws.

          Section 6.20     Decommissioning.  Buyer hereby agrees to commit to
the NYPSC as part of receiving Buyer's Required Regulatory Approvals that it
will complete, at its expense, the Decommissioning of the Facilities and the
Site once the Site is no longer utilized either for power generation of any kind
or for any storage of Spent Nuclear Fuel or High Level Waste, and that it will
complete all Decommissioning activities in accordance with all Nuclear Laws and
Environmental Laws, including applicable requirements of the Atomic Energy Act
and the NRC's rules, regulations, orders and pronouncements thereunder in effect
on the date hereof.

          If Buyer at any time notifies and receives approval from the NRC that
it will utilize the entombment (or ENTOMB) method of Decommissioning and
subsequently initiates entombment Decommissioning methods, either alone or in
combination with any other Decommissioning method or methods, in accordance with
then-existing NRC regulations, then Buyer shall cause to be paid to Seller
within ninety (90) days following such initiation of entombment Decommissioning
methods an amount in dollars equal to the Excess Decommissioning Funds. To the
extent permitted by Law and the trust agreements relating to the Buyer's
Decommissioning Funds, such payment may be made from the Buyer's Decommissioning
Funds. All payments made by Buyer to Seller pursuant to this Section 6.20 shall
be flowed through by Seller to its ratepayers as directed by the NYPSC;
provided, however, that Seller shall be obligated to flow through benefits to
ratepayers only if and to the extent that payments are received from Buyer. In
no event shall Seller or its shareholders be financially responsible for flowing
through payments to ratepayers based on payments owed to Seller but not received
from Buyer. The Parties acknowledge that Seller shall have no obligation to
audit, monitor or enforce rights and obligations with respect to this Section
6.20 and anticipate that the NYPSC will assume all such obligations.

          Section 6.21     Uprate.

          (a)     Between the date hereof and the Closing Date, Seller shall
enter into a contract with a technically qualified vendor(s), as required, to
complete the necessary nuclear steam supply system and balance of plant
licensing and engineering uprate reports (together, the "Uprate Reports"),
including but not limited to a sufficient NRC License amendment request ("LAR")
with the goal of uprating the licensed thermal output of the Facilities to 1781
MegaWatt thermal (the "Uprate"). Seller shall use its commercially reasonable
best efforts to complete the Uprate Reports and prepare the LAR as soon as
practicable.

          (b)     Buyer and Seller agree to cooperate in good faith in the
preparation of the Uprate Reports and any related activities. Seller agrees that
Buyer approval is required in connection with all material aspects of the
preparation of the Uprate Reports, including but not limited to vendor
selection, costs, content, deliverables, and schedule. Seller shall accommodate
any reasonable request of Buyer with respect to preparation or implementation
activities associated with the Uprate to the extent that Seller reasonably
determines on the advice of legal counsel that such activity is permitted in
accordance with its authority under its NRC License. Such activities may include
the design, material procurement, scheduling of, and preparation for, reasonable
Uprate related modifications to be performed in the Spring refueling outage, or
sooner.

          (c)     Subject to Seller's compliance with subsection (b), Buyer
shall reimburse to the Seller, in accordance with Section 3.3, the vendor costs
associated with preparing the Uprate Reports and any other vendor associated
with the Uprate that were requested by the Buyer prior to the Closing. In the
event that Closing does not occur, Seller and Buyer agree to negotiate in good
faith the sharing of vendor costs associated with the preparation of the Uprate
Reports and related vendor costs associated with Uprate activities requested by
the Buyer.

          Section 6.22     Right of First Refusal.  Buyer and Seller agree to
negotiate in good faith with respect to a right of first refusal agreement from
Seller in favor of Buyer containing reasonable terms for the acquisition after
the Closing Date of the approximately 15 acre site now or formerly owned by
Roxdel Corporation and acquired by Roxdel Corporation from Elizabeth Gates.

ARTICLE 7

CONDITIONS

          Section 7.1     Conditions to Obligations of Buyer.  The obligations
of Buyer to purchase the Purchased Assets and to consummate the other
transactions contemplated by this Agreement shall be subject to the fulfillment
at or prior to the Closing Date (or the waiver by Buyer) of the following
conditions:

          (a)     All applicable waiting periods under the HSR Act relating to
the consummation of the transactions contemplated hereby shall have expired or
been terminated;

          (b)     No preliminary or permanent injunction or other order or
decree by any federal or state court or Governmental Authority which restrains
or prevents the consummation of the transactions contemplated hereby shall have
been issued and remain in effect (each Party agreeing to cooperate in all
efforts to have any such injunction, order or decree lifted) and no statute,
rule or regulation shall have been enacted by any state or federal government or
Governmental Authority which prohibits the consummation of the transactions
contemplated hereby;

          (c)     Buyer shall have received all of Buyer's Required Regulatory
Approvals, in form and substance reasonably satisfactory (including no
materially adverse conditions as described in Section 9.1(c)) to Buyer and such
approvals shall be in full force and effect and either (i) shall be final and
non-appealable or (ii) if not final and non-appealable, shall not be subject to
the possibility of appeal, review or reconsideration which, in the reasonable
opinion of Buyer is likely to be successful and, if successful, would have a
Material Adverse Effect, or a material adverse effect on the business, assets,
operations or condition (financial or otherwise) of Buyer;

          (d)     Seller shall have received all of Seller's Required Regulatory
Approvals (other than those the failure of which to obtain could not reasonably
be expected to result in a Material Adverse Effect or a material adverse effect
on the business, assets, operations or condition (financial or otherwise) of
Buyer), none of such approvals shall contain any conditions that could
reasonably be expected to result in a Material Adverse Effect, or a material
adverse effect on the business, assets, operations or condition (financial or
otherwise) of Buyer, and such approvals shall be in full force and effect and
either (i) shall be final and non-appealable or (ii) if not final and non-
appealable, shall not be subject to the possibility of appeal, review or
reconsideration which, in the reasonable opinion of Buyer is likely to be
successful and, if successful, would have a Material Adverse Effect, or a
material adverse effect on the business, assets, operations or condition
(financial or otherwise) of Buyer;

          (e)     Seller shall have performed and complied in all material
respects with the covenants and agreements contained in this Agreement which are
required to be performed and complied with by Seller on or prior to the Closing
Date;

          (f)     The representations and warranties of Seller set forth in this
Agreement that are qualified by materiality shall be true and correct as of the
Closing Date and all other representations and warranties of Seller shall be
true and correct in all material respects as of the Closing Date, in each case
as though made at and as of the Closing Date;

          (g)     Buyer shall have received a certificate from an authorized
officer of Seller, dated the Closing Date, to the effect that, to such officer's
knowledge, the conditions set forth in Section 7.1(e), (f), (k), (m) and (q)
have been satisfied by Seller;

          (h)     Buyer shall have received an opinion from Seller's counsel and
Seller's Parent's counsel reasonably acceptable to Buyer, dated the Closing Date
and reasonably satisfactory in form and substance to Buyer and its counsel,
substantially in the form of Exhibit "H" hereto;

          (i)     Seller shall have delivered, or caused to be delivered, to
Buyer at the Closing, Seller's closing deliveries described in Sections 3.6 and
3.8;

          (j)     Buyer shall have received from a title insurance company
selected by Buyer (collectively with any co-insurer or re-insurer, as
applicable, the "Title Company") an ALTA owner's title insurance policy on the
Real Property and the Cooling Tunnel Easement, in form and substance reasonably
satisfactory to Buyer, insuring (at the Title Company's regular rates) fee
simple title as described in Section 4.7 subject only to Permitted Encumbrances;
provided, however, that if any title insurance company selected by Buyer
declines to issue such a policy, Buyer shall select another title insurance
company (if a title insurance company reasonably acceptable to Buyer is willing
to issue such a policy); and further provided, however, that any such policy
will not insure fee simple title to the Cooling Tunnel Easement and the
Facilities associated therewith. Buyer shall provide Seller with a copy of each
title report received by Buyer from the Title Company.

          (k)     Since the date hereof, no Material Adverse Effect shall have
occurred and be continuing;

          (l)     The lien of the Mortgage Indenture on the Purchased Assets
shall have been released and any documents necessary to evidence such release
shall have been delivered to Buyer and the Title Company;

          (m)     The Seller shall have transferred to the Trustee of
Post-Closing Decommissioning Trust Agreement a portion or all of the
Decommissioning Funds, in accordance with Section 6.12;

          (n)     Legislation or Treasury Regulations shall have not been
enacted or promulgated that, in the opinion of nationally-recognized tax
counsel, would have a material adverse effect on the tax consequences to Buyer
contemplated in Section 6.18;

          (o)     The NRC shall have issued a renewed NRC License for Ginna for
a period of not less than twenty (20) years beyond its original license term;

          (p)     The Ancillary Agreements shall be in full force and effect as
of the Closing Date; and

          (q)     The Facilities shall have been operating at an average of not
less than 95% of their licensed thermal output for a period of fourteen (14)
days immediately preceding the Closing Date.

          Section 7.2     Conditions to Obligations of Seller.  The obligation
of Seller to sell the Purchased Assets and to consummate the other transactions
contemplated by this Agreement shall be subject to the fulfillment at or prior
to the Closing Date (or the waiver by Seller) of the following conditions:

          (a)     All applicable waiting periods under the HSR Act relating to
the consummation of the transactions contemplated hereby shall have expired or
been terminated;

          (b)     No preliminary or permanent injunction or other order or
decree by any federal or state court or Governmental Authority which restrains
or prevents the consummation of the transactions contemplated hereby shall have
been issued and remain in effect (each Party agreeing to use its Commercially
Reasonable Efforts to have any such injunction, order or decree lifted) and no
statute, rule or regulation shall have been enacted by any state or federal
government or Governmental Authority in the United States which prohibits the
transactions contemplated hereby;

          (c)      Seller shall have received all of the Seller's Required
Regulatory Approvals, in form and substance reasonably satisfactory (including
no materially adverse conditions as described in Section 9.1(d)) to Seller and
such approvals shall be in full force and effect and either (i) shall be final
and non-appealable or (ii) if not final and non-appealable, shall not be subject
to the possibility of appeal, review or reconsideration which, in the reasonable
opinion of the Seller (A) is likely to be successful and (B), if successful,
would have a material adverse effect on the operations or conditions (financial
or otherwise) of the Seller;

          (d)     Buyer shall have received all Buyer's Required Regulatory
Approvals (other than those the failure of which to obtain could not reasonably
be expected to result in a material adverse effect on the business, assets,
operations or condition (financial or otherwise) of Seller), none of such
approvals shall contain any conditions that could reasonably be expected to
result in a material adverse effect on the business, assets, operations or
condition (financial or otherwise) of Seller, and such approvals shall be in
full force and effect and either (i) shall be final and non-appealable or (ii)
if not final and non-appealable, shall not be subject to the possibility of
appeal, review or reconsideration which, in the reasonable opinion of Seller (A)
is likely to be successful and (B) if successful, would have a material adverse
effect on the business, assets, operations or condition (financial or otherwise)
of Seller;

          (e)     Buyer shall have performed and complied with in all material
respects the covenants and agreements contained in this Agreement which are
required to be performed and complied with by Buyer on or prior to the Closing
Date;

          (f)     The representations and warranties of Buyer set forth in this
Agreement that are qualified by materiality shall be true and correct as of the
Closing Date and all other representations and warranties of Buyer shall be true
and correct in all material respects as of the Closing Date, in each case as
though made at and as of the Closing Date;

          (g)     Seller shall have received certificates from an authorized
officer of Buyer, dated the Closing Date, to the effect that, to the knowledge
of such officer the conditions set forth in Sections 7.2(e) and (f) have been
satisfied by Buyer;

          (h)     Seller shall have received an opinion from Buyer's counsel and
Buyer's Parent's counsel reasonably acceptable to Seller, dated the Closing Date
and reasonably satisfactory in form and substance to Seller and its counsel,
substantially in the form of Exhibit "I" hereto;

          (i)     Buyer shall have delivered, or caused to be delivered, to
Seller at the Closing, Buyer's closing deliveries described in Section 3.7;

          (j)     The lien of the Mortgage Indenture on the Purchased Assets
shall have been released and any documents necessary to evidence such release
shall have been delivered to the title company;

          (k)     Legislation or Treasury Regulations shall have not been
enacted or promulgated that, in the opinion of nationally-recognized tax
counsel, would have a material adverse effect on the tax consequences to Seller
contemplated in Section 6.18; and

          (l)     The NRC shall have issued a renewed NRC License for Ginna for
a period of not less than twenty (20) years beyond its original license term.

ARTICLE 8

INDEMNIFICATION

          Section 8.1     Indemnification.

          (a)     Following the Closing, Buyer shall indemnify, defend and hold
harmless Seller, its officers, directors, employees, shareholders, Affiliates
and agents (each, a "Seller Indemnitee") from and against any and all claims,
demands, suits, losses, liabilities, damages, obligations, payments, costs and
expenses (including, without limitation, the costs and expenses of any and all
actions, suits, proceedings, assessments, judgments, settlements and compromises
relating thereto and reasonable attorneys' fees and reasonable disbursements in
connection therewith) (each, an "Indemnifiable Loss"), asserted against or
suffered by any Seller Indemnitee relating to, resulting from or arising out of
(i) any breach by Buyer of the representations and warranties which survive the
Closing or any covenants contained in this Agreement; provided, however, that in
the case of breaches of representations, warranties or covenants contained in
Article V, only to the extent that such Indemnifiable Loss in the aggregate
exceed One Million Dollars ($1,000,000), and provided further that in no event
shall Buyer have liability for indemnification for an Indemnifiable Loss
relating to, resulting from or arising out of matters set forth in this clause
(i) of Section 8.1(a) that individually is less than Two Hundred and Fifty
Thousand Dollars ($250,000), (ii) the Assumed Liabilities and Obligations, (iii)
any Third Party Claims against a Seller Indemnitee arising out of or in
connection with Buyer's ownership or operation of the Purchased Assets on or
after the Closing Date, (iv) any actions taken by Buyer which shall result in
tax consequences to the Seller or Seller's Qualified Decommissioning Fund which
are different for Seller or Seller's Qualified Decommissioning Fund from those
contemplated in Section 6.18, and (v) all Transfer Taxes for which Buyer is
liable under Section 6.8.

          (b)     Following the Closing, Seller shall indemnify, defend and hold
harmless Buyer, its officers, directors, members, employees, shareholders,
Affiliates and agents (each, a "Buyer Indemnitee") from and against any and all
Indemnifiable Losses asserted against or suffered by any Buyer Indemnitee
relating to, resulting from or arising out of (i) any breach by Seller of the
representations and warranties which survive the Closing or any covenants
contained in this Agreement provided, however, in the case of breaches of
representations, warranties or covenants contained in Article IV, only to the
extent that such Indemnifiable Losses in the aggregate exceed One Million
Dollars ($1,000,000), and provided further that in no event shall Seller have
any liability for indemnification for an Indemnifiable Loss relating to,
resulting from or arising out of matters set forth in this clause (i) of Section
8.1(b) that individually is less than Two Hundred and Fifty Thousand Dollars
($250,000), (ii) the Excluded Liabilities, (iii) noncompliance by Seller with
any bulk sales or transfer laws as provided in Section 10.11, (iv) any Third
Party Claims against a Buyer Indemnitee arising out of or in connection with
Seller's ownership or operation of the Purchased Assets on or prior to the
Closing Date (other than any Third Party Claims that are Assumed Liabilities),
(v) any Third Party Claims against a Buyer Indemnitee arising out of or in
connection with Seller's ownership or operation of the Excluded Assets, (vi) all
Taxes incurred by reason of any act of Seller that either constitutes an act of
"self-dealing" as defined in Treas. Reg. Section 1.468A-5(b)(2) or results in
the disqualification of the Qualified Decommissioning Funds under Treas. Reg.
Section 1.468A-5 other than as a result of any action required or contemplated
by this Agreement including, without limitation, the transfer contemplated by
Section 5.7 hereof, or (vii) any claims or attachments of Seller or Seller's
creditor against the Decommissioning Funds after the Closing Date.

          (c)     The expiration or termination of any representation or
warranty shall not affect the Parties' obligations under this Section 8.1 if the
Indemnitee provided the Person required to provide indemnification under this
Agreement (the "Indemnifying Party") with proper notice of the claim or event
for which indemnification is sought prior to such expiration, termination or
extinguishment.

          (d)     Except to the extent otherwise provided in Article 9 or in
Section 6.8(e), the rights and remedies of Seller and Buyer under this Article 8
are exclusive and in lieu of any and all other rights and remedies which Seller
and Buyer may have under this Agreement or otherwise for monetary relief, with
respect to (i) any breach of or failure to perform any covenant, agreement, or
representation or warranty set forth in this Agreement, after the occurrence of
the Closing, or (ii) the Assumed Liabilities and Obligations or the Excluded
Liabilities, as the case may be. The indemnification obligations of the Parties
set forth in this Article 8 apply only to matters arising out of this Agreement,
excluding the Ancillary Agreements. Any Indemnifiable Loss arising under or
pursuant to an Ancillary Agreement shall be governed by the indemnification
obligations, if any, contained in the Ancillary Agreement under which the
Indemnifiable Loss arises. The maximum aggregate exposure for indemnity by
Seller or Buyer for any and all claims of breaches of representations or
warranties made hereunder and indemnification of claims relating thereto shall
be Twenty Million Dollars ($20,000,000).

          (e)     Notwithstanding anything to the contrary herein except for
Section 6.8(e), no Party (including an Indemnitee) shall be entitled to recover
from any other Party (including an Indemnifying Party) for any liabilities,
damages, obligations, payments, losses, costs or expenses under this Agreement
any amount in excess of the actual compensatory damages, court costs and
reasonable attorney's and other advisor fees suffered by such Party. Buyer and
Seller waive any right to recover punitive, incidental, special, exemplary and
consequential damages arising in connection with or with respect to this
Agreement including, but not limited to, losses or damages caused by reason of
unavailability of Ginna, plant shutdowns or service interruptions, loss of use,
profits or revenue, inventory or use charges, cost of purchased or replacement
power, interest charges or cost of capital. The provisions of this Section
8.l(e) shall not apply to indemnification for a Third Party Claim.

          (f)     The Parties agree to treat all payments relating to
indemnifications as adjustments to the Purchase Price to the extent allowed by
law.

          Section 8.2     Defense of Claims.

          (a)     If any Indemnitee receives notice of the assertion of any
claim or of the commencement of any claim, action, or proceeding made or brought
by any Person who is not a Party to this Agreement or any Affiliate of a Party
to this Agreement (a "Third Party Claim"), including but not limited to an
information document request or a notice of proposed disallowance issued by the
Internal Revenue Service relating to a matter covered by Section 5.7, with
respect to which indemnification is to be sought from an Indemnifying Party, the
Indemnitee shall give such Indemnifying Party reasonably prompt written notice
thereof, but in any event such notice shall not be given later than twenty (20)
calendar days after the Indemnitee's receipt of notice of such Third Party
Claim. Such notice shall describe the nature of the Third Party Claim in
reasonable detail and shall indicate the estimated amount, if practicable, of
the Indemnifiable Loss that has been or may be sustained by the Indemnitee. The
Indemnifying Party will have the right to participate in or, by giving written
notice to the Indemnitee, to elect to assume the defense of any Third Party
Claim at such Indemnifying Party's expense and by such Indemnifying Party's own
counsel, provided that the counsel for the Indemnifying Party who shall conduct
the defense of such Third Party Claim shall be reasonably satisfactory to the
Indemnitee. The Indemnitee shall cooperate in good faith in such defense at such
Indemnitee's own expense. If an Indemnifying Party elects not to assume the
defense of any Third Party Claim, the Indemnitee may compromise or settle such
Third Party Claim over the objection of the Indemnifying Party, which settlement
or compromise shall conclusively establish the Indemnifying Party's Liability
pursuant to this Agreement; provided, however, the Indemnitee provides written
notice to the Indemnifying Party of its intent to settle and such notice
reasonably describes the terms of such settlement at least ten (10) Business
Days prior to entering into any settlement.

          (b)     (i)     If, within twenty (20) calendar days after an
Indemnitee provides written notice to the Indemnifying Party of any Third Party
Claims, the Indemnitee receives written notice from the Indemnifying Party that
such Indemnifying Party has elected to assume the defense of such Third Party
Claim as provided in Section 8.2 (a), the Indemnifying Party will not be liable
for any legal expenses subsequently incurred by the Indemnitee in connection
with the defense thereof; provided, however, that if the Indemnifying Party
shall fail to take reasonable steps necessary to defend diligently such Third
Party Claim within twenty (20) calendar days after receiving notice from the
Indemnitee that the Indemnitee believes the Indemnifying Party has failed to
take such steps, the Indemnitee may assume its own defense and the Indemnifying
Party shall be liable for all reasonable expenses thereof.

                    (ii)      Without the prior written consent of the
Indemnitee, which consent shall not be unreasonably withheld or delayed, the
Indemnifying Party shall not enter into any settlement of any Third Party Claim
which would lead to Liability or create any financial or other obligation on the
part of the Indemnitee for which the Indemnitee is not entitled to
indemnification hereunder. If a firm offer is made to settle a Third Party Claim
without leading to Liability or the creation of a financial or other obligation
on the part of the Indemnitee for which the Indemnitee is not entitled to
indemnification hereunder and the Indemnifying Party desires to accept and agree
to such offer, the Indemnifying Party shall give written notice to the
Indemnitee to that effect. If the Indemnitee fails to consent to such firm offer
within twenty (20) calendar days after its receipt of such notice, the
Indemnifying Party shall be relieved of its obligations to defend such Third
Party Claim and the Indemnitee may contest or defend such Third Party Claim. In
such event, the maximum Liability of the Indemnifying Party as to such Third
Party Claim will be the amount of such settlement offer plus reasonable costs
and expenses paid or incurred by Indemnitee up to the date of said notice.

          (c)     Any claim by an Indemnitee on account of an Indemnifiable Loss
which does not result from a Third Party Claim (a "Direct Claim") shall be
asserted by giving the Indemnifying Party reasonably prompt written notice
thereof, stating the nature of such claim in reasonable detail and indicating
the estimated amount, if practicable, but in any event such notice shall not be
given later than twenty (20) calendar days after the Indemnitee becomes aware of
such Direct Claim, and the Indemnifying Party shall have a period of twenty (20)
calendar days within which to respond to such Direct Claim. If the Indemnifying
Party does not respond within such twenty (20) calendar day period, the
Indemnifying Party shall be deemed to have accepted such claim. If the
Indemnifying Party rejects such claim, the Indemnitee will be free to seek
enforcement of its right to indemnification under this Agreement.

          (d)     The amount of any Indemnifiable Loss shall be reduced to the
extent that the Indemnitee receives any insurance proceeds with respect to an
Indemnifiable Loss. If the amount of any Indemnifiable Loss, at any time
subsequent to the making of an indemnity payment in respect thereof, is reduced
by recovery, settlement or otherwise under or pursuant to any insurance
coverage, or pursuant to any claim, recovery, settlement or payment by, from or
against any other entity, the amount of such reduction, less any costs, expenses
or premiums incurred in connection therewith (together with interest thereon
from the date of payment thereof to the date or repayment at the "prime rate" as
published in The Wall Street Journal) shall promptly be repaid by the Indemnitee
to the Indemnifying Party.

          (e)     A failure to give timely notice as provided in this Section
8.2 shall not affect the rights or obligations of any Party hereunder except if,
and only to the extent that, as a result of such failure, the Party which was
entitled to receive such notice was actually prejudiced as a result of such
failure.

ARTICLE 9

TERMINATION

          Section 9.1     Termination.

          (a)     This Agreement may be terminated at any time prior to the
Closing Date by mutual written consent of Seller and Buyer.

          (b)     This Agreement may be terminated by Seller or Buyer, if (i)
any federal or state court of competent jurisdiction shall have issued an order,
judgment or decree permanently restraining, enjoining or otherwise prohibiting
the Closing, and such order, judgment or decree shall have become final and
nonappealable; (ii) any statute, rule, order or regulation shall have been
enacted or issued by any Governmental Authority which, directly or indirectly,
prohibits the consummation of the Closing; or (iii) the Closing contemplated
hereby shall have not occurred on or before December 31, 2004 (the "Termination
Date"); provided that the right to terminate this Agreement under this Section
9.1(b)(iii) shall not be available to any Party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Closing to occur on or before such date and provided, further,
that if on the Termination Date the conditions to the Closing set forth in
Sections 7.1(c), 7.1(d), 7.2(c) or 7.2(d) shall not have been fulfilled but all
other conditions to the Closing shall be fulfilled or shall have been capable of
being fulfilled, then the Termination Date shall be June 30, 2005.

          (c)     This Agreement may be terminated by Buyer if any of Seller's
Required Regulatory Approvals or Buyer's Required Regulatory Approvals, the
receipt of which is a condition to the obligation of Buyer to consummate the
Closing as set forth in Sections 7.1(c) and 7.1(d), shall have been denied or
shall have been granted but are not in form and substance reasonably
satisfactory to Buyer because one of such approvals contains a condition that
would have a Material Adverse Effect or a material adverse effect on the
business, assets, operations or condition (financial or otherwise) of Buyer.

          (d)     This Agreement may be terminated by Seller if any of the
Seller's Required Regulatory Approvals or Buyer's Regulatory Approvals, the
receipt of which are a condition to the obligation of Seller to consummate the
Closing as set forth in Section 7.2(c) and Section 7.2(d), shall have been
denied or shall have been granted but are not in form and substance reasonably
satisfactory to Seller, because one of such approvals contains a condition that
would have a material adverse effect on the business, assets, operations or
condition (financial or otherwise) of Seller.

          (e)     This Agreement may be terminated by Buyer if there has been a
material violation or breach by Seller of any applicable covenant,
representation or warranty contained in this Agreement and such violation or
breach (i) is not cured by the earlier of the Closing Date or thirty (30) days
after receipt by Seller (or by Buyer in the case of notice by Seller pursuant to
Section 6.9) of written notice specifying particularly such violation or breach
(provided that in the event Seller is attempting to cure the violation or breach
in good faith, then Buyer may not terminate pursuant to this provision unless
the violation or breach is not cured by the earlier of the Closing Date or the
Termination Date), and (ii) such violation or breach has not been waived by
Buyer.

          (f)     This Agreement may be terminated by Seller if there has been a
material violation or breach by Buyer or Parent of any covenant, representation
or warranty contained in this Agreement and such violation or breach (i) is not
cured by the earlier of the Closing Date or thirty (30) days after receipt by
Buyer or Parent (or by Seller in the case of notice by Buyer or Parent pursuant
to Section 6.9) of written notice specifying particularly such violation or
breach (provided that in the event Buyer or Parent, as the case may be, is
attempting to cure the violation or breach in good faith, then Seller may not
terminate pursuant to this provision unless the violation or breach is not cured
by the earlier of the Closing Date or the Termination Date), and (ii) such
violation or breach has not been waived by Seller.

          (g)     This Agreement may be terminated by Buyer or Seller in
accordance with the provisions of Sections 6.11(b) or (c).

          (h)     This Agreement may be terminated by Seller if one of the
events the non-occurrence of which is a condition to closing in Section 7.2(l)
occurs, which is reasonably likely to have a material adverse effect on the
business, assets, operations or condition (financial or otherwise) of Seller.

          (i)     This Agreement may be terminated by Buyer if one of the events
the non-occurrence of which is a condition to Closing in Section 7.1(n) occurs,
which is reasonably likely to have a material adverse effect on the business,
assets, operations or condition (financial or otherwise) of Buyer.

          Section 9.2     Procedure and Effect of No Default Termination.  In
the event of termination of this Agreement by any Party pursuant to this Section
9, written notice thereof shall forthwith be given by the terminating Party to
the other Parties, whereupon (but only in the case of termination pursuant to
Subsections (e) or (f) of Section 9.1 where a breach of a covenant,
representation or warranty by the non-terminating Party is not willful), the
liabilities of the Parties hereunder will terminate, except as otherwise
expressly provided in this Agreement, and thereafter no Party shall have any
recourse against any of the other Parties by reason of this Agreement.

ARTICLE 10

MISCELLANEOUS PROVISIONS

          Section 10.1     Amendment and Modification.  Subject to applicable
law, this Agreement may be amended, modified or supplemented only by written
agreement of Seller and Buyer.

          Section 10.2     Waiver of Compliance; Consents.  Except as otherwise
provided in this Agreement, any failure of any of the Parties to comply with any
obligation, covenant, agreement or condition herein may be waived by the Party
entitled to the benefits thereof only by a written instrument signed by the
Party granting such waiver, but such waiver of such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent failure to comply therewith.

          Section 10.3     Survival of Representations, Warranties, Covenants
and Obligations.

          (a)     The representations and warranties given or made by any Party
to this Agreement or in the certificates required by Section 7.1(f) or 7.2(g)
shall survive the Closing for a period of twelve (12) months except that (i) all
representations and warranties relating to Taxes and Tax Returns and the
representations and warranties in Sections 4.10 and 4.12 shall survive the
Closing for the period of the applicable statutes of limitation plus any
extensions or waivers thereof and (ii) all representations and warranties set
forth in Sections 4.1, 4.2, 4.21, 4.22, 5.7 and 6.7 hereof shall survive the
Closing indefinitely. Each Party shall be entitled to rely upon the
representations and warranties of the other Party or Parties set forth herein,
notwithstanding any investigation or audit conducted before or after the Closing
Date or the decision of any Party to complete the Closing.

          (b)     The covenants and obligations of the Parties set forth in this
Agreement, including without limitation the indemnification obligations of the
Parties under Article 8 hereof, shall survive the Closing indefinitely, and the
Parties shall be entitled to the full performance thereof by the other Parties
hereto without limitation as to time or amount (except as otherwise specifically
set forth herein).

          Section 10.4     Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or by facsimile transmission, or mailed by overnight courier or registered or
certified mail (return receipt requested), postage prepaid, to the recipient
Party at its address (or at such other address or facsimile number for a Party
as shall be specified by like notice; provided, however, that notices of a
change of address shall be effective only upon receipt thereof):

 

(a)

If to Seller, to:

   

Rochester Gas and Electric Corporation
89 East Avenue
Rochester, NY 14649
Attention: President

   

with a copy to:

   

Huber Lawrence & Abell
605 Third Avenue
New York, NY 10158
Attention: John D. Draghi, Esq.

   

and

   

LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, NY 10019
Attention: Sheri E. Bloomberg, Esq.

 

(b)

if to Buyer, to:

   

Constellation Generation Group, LLC
750 East Pratt Street
18th Floor
Baltimore, Maryland 21202
Attention: President

   

with a copy to:

   

Constellation Energy Group, Inc.
750 East Pratt Street
18th Floor
Baltimore, Maryland 21202
Attention: General Counsel

 

(c)

if to Buyer's Parent, to:

   

Constellation Energy Group, Inc.
750 East Pratt Street
18th Floor
Baltimore, Maryland 21202
Attention: Vice President - Corporate Strategy and Development

   

with a copy to:

   

Constellation Energy Group, Inc.
750 East Pratt Street
18th Floor
Baltimore, Maryland 21202
Attention: General Counsel

          Section 10.5     Assignment.  This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the Parties hereto and
their respective successors and permitted assigns, but neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any Party hereto, including by operation of law, without the prior written
consent of each other Party, such consent not to be unreasonably withheld, nor
is this Agreement intended (except as specifically provided herein) to confer
upon any other Person except the Parties hereto any rights, interests,
obligations or remedies hereunder. Any assignment in contravention of the
foregoing sentence shall be null and void and without legal effect on the rights
and obligations of the Parties hereunder. No provision of this Agreement shall
create any third party beneficiary rights in any employee or former employee of
Seller (including any beneficiary or dependent thereof) in respect of continued
employment or resumed employment, and no provision of this Agreement shall
create any rights in any such Persons in respect of any benefits that may be
provided, directly or indirectly, under any employee benefit plan or arrangement
except as expressly provided for thereunder. Notwithstanding the foregoing, but
subject to all applicable legal requirements, (i) Buyer or its permitted
assignee may grant a security interest in the rights and interests hereunder to
a trustee, lending institution or other party for the purposes of leasing,
financing or refinancing the Purchased Assets, (ii) Buyer or its permitted
assignee may assign, transfer, pledge or otherwise dispose of (absolutely or as
security) its rights and interests hereunder to a directly or indirectly
wholly-owned Affiliate of Buyer; provided, however, that no such assignment
shall relieve or discharge Buyer from any of its obligations hereunder or shall
be made if it would reasonably be expected to prevent or materially impede,
interfere with or delay the transactions contemplated by this Agreement or
materially increase the costs (to the non-assigning party) of the transactions
contemplated by this Agreement. Seller agrees, at Buyer's expense, to execute
and deliver such documents as may be reasonably necessary to accomplish any such
assignment, transfer, pledge or other disposition of rights and interests
hereunder so long as Seller's rights under this Agreement are not thereby
altered, amended, diminished or otherwise impaired. In the event Buyer assigns
this agreement pursuant to this Section 10.5, such assignee shall be defined as
"Buyer" for all purposes hereunder thereafter.

          Section 10.6     Governing Law.  This Agreement shall be governed by
and construed in accordance with the law of the State of New York (without
giving effect to conflict of law principles) as to all matters, including but
not limited to matters of validity, construction, effect, performance and
remedies. THE PARTIES HERETO AGREE THAT VENUE IN ANY AND ALL ACTIONS AND
PROCEEDINGS RELATED TO THE SUBJECT MATTER OF THIS AGREEMENT SHALL BE IN THE
STATE AND FEDERAL COURTS FOR MONROE COUNTY, NEW YORK, WHICH COURTS SHALL HAVE
EXCLUSIVE JURISDICTION FOR SUCH PURPOSE (EXCEPT WHERE SUCH ACTION OR PROCEEDING
IS REQUIRED BY LAW TO BE IN WAYNE COUNTY), AND THE PARTIES HERETO IRREVOCABLY
SUBMIT TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS AND IRREVOCABLY WAIVE THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR
PROCEEDING. SERVICE OF PROCESS MAY BE MADE IN ANY MANNER RECOGNIZED BY SUCH
COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL
WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION
WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

          Section 10.7     Counterparts.  This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

          Section 10.8     Interpretation.  The articles, section and schedule
headings contained in this Agreement are solely for the purpose of reference,
are not part of the agreement of the Parties and shall not in any way affect the
meaning or interpretation of this Agreement.

          Section 10.9     Schedules and Exhibits.  Except as otherwise provided
in this Agreement, all Exhibits and Schedules referred to herein are intended to
be and hereby are specifically made a part of this Agreement.

          Section 10.10     Entire Agreement.  This Agreement, the
Confidentiality Agreement and the Ancillary Agreements, including the Exhibits,
Schedules, documents, certificates and instruments referred to herein or
therein, and any other documents that specifically reference this Section 10.10,
embody the entire agreement and understanding of the Parties hereto in respect
of the transactions contemplated by this Agreement and supersedes all prior
agreements and understandings between the Parties other than the Confidentiality
Agreement with respect to such transactions. There are no restrictions,
promises, representations, warranties, covenants or undertakings, other than
those expressly set forth or referred to herein or therein. It is expressly
acknowledged and agreed that there are no restrictions, promises,
representations, warranties, covenants or undertakings contained in any material
made available to Buyer pursuant to the terms of the Confidentiality Agreement.

          Section 10.11     Bulk Sales Laws.  Buyer acknowledges that,
notwithstanding anything in this Agreement to the contrary, Seller will not
comply with the provision of the bulk sales 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 laws of all
applicable jurisdictions.

          Section 10.12     No Joint Venture.  Nothing in this Agreement creates
or is intended to create an association, trust, partnership, joint venture or
other entity or similar legal relationship among the Parties, or impose a trust,
partnership or fiduciary duty, obligation, or liability on or with respect to
the Parties. Except as expressly provided herein, neither Party is or shall act
as or be the agent or representative of the other Party.

          Section 10.13     Change in Law.  If and to the extent that any Laws
or regulations that govern any aspect of this Agreement shall change, so as to
make any aspect of this transaction unlawful, then the Parties agree to make
such modifications to this Agreement as may be reasonably necessary for this
Agreement to accommodate any such legal or regulatory changes, without
materially changing the overall benefits or consideration expected hereunder by
any Party.

          Section 10.14     Buyer's Parent Support.  From the date hereof until
the effectiveness of the Closing, Buyer's Parent agrees to provide Buyer any and
all financial support necessary to permit Buyer to perform its obligations
hereunder.

          Section 10.15     Severability.  Any term or provision of this
Agreement that is held invalid or unenforceable in any situation shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation, provided, however, that the remaining terms and provisions
of this Agreement may be enforced only to the extent that such enforcement in
the absence of any invalid terms and provisions would not result in (a)
deprivation of a Party of a material aspect of its original bargain upon
execution of this Agreement or any of the Ancillary Agreements, (b) unjust
enrichment of a Party, or (c) any other manifestly unfair or inequitable result.

          IN WITNESS WHEREOF, the Parties have caused this Agreement to be
signed by their respective duly authorized officers as of the date first above
written.

 

ROCHESTER GAS AND ELECTRIC CORPORATION

 

By:   /s/ Joseph J. Syta                  
Name: Joseph J. Syta
Title: Controller and Treasurer

     

CONSTELLATION GENERATION GROUP, LLC

 

By:   /s/ Michael J. Wallace              
Name: Michael J. Wallace
Title: President

     

Solely for purposes of Article 5 and Sections 6.12(b) and 10.14:
CONSTELLATION ENERGY GROUP, INC.

 

By:   /s/ Mark P. Huston                 
Name: Mark P. Huston
Title: Vice President - Strategy