EXECUTION COPY

 

TRANSMISSION PURCHASE AND SALE AGREEMENT

BY AND BETWEEN

DELMARVA POWER & LIGHT COMPANY

and

OLD DOMINION ELECTRIC COOPERATIVE

Dated as of June 13, 2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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TABLE OF CONTENTS

ARTICLE I          DEFINITIONS

1

          1.1

Definitions

1

          1.2

Construction

9

          13

U.S. Dollars

10

ARTICLE II          PURCHASE AND SALE

10

          2.1

Transfer of Assets

10

          2.2

Excluded Assets

11

          2.3

Assumed Liabilities

13

          2.4

Excluded Liabilities

14

          2.5

Control of Litigation

15

ARTICLE III         THE CLOSING

15

          3.1

Closing

15

          3.2

Purchase Price

15

          3.3

Establishment of Escrow

16

          3.4

Adjustment to Purchase Price

16

          3.5

Tax Reporting and Allocation of Purchase Price

17

          3.6

Prorations

18

          3.7

Deliveries by Seller

18

          3.8

Deliveries by Buyer

19

          3.9

Post-Closing Asset Deliveries

20

ARTICLE IV          REPRESENTATIONS AND WARRANTIES OF SELLER

20

          4.1

Organization; Qualification

20

          4.2

Authority

21

          4.3

Consents and Approvals; No Violation

21

          4.4

Insurance

22

          4.5

Title and Related Matters

22

          4.6

Seller's Environmental Matters

22

          4.7

Taxes

23

          4.8

Material Transferred Easements

24

          4.9

Certain Contracts and Arrangements

24

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          4.10

Legal Proceedings

24

          4.11

Permits

24

          4.12

Brokers; Finders

25

          4.13

Compliance with Laws

25

          4.14

No Material Adverse Effect

25

ARTICLE V          REPRESENTATIONS AND WARRANTIES OF BUYER

25

          5.1

Organization; Qualification

25

          5.2

Authority

25

          5.3

Consents and Approvals; No Violation

26

          5.4

Availability of Funds

26

          5.5

Legal Proceedings

26

          5.6

Ability to Close

26

          5.7

Brokers; Finders

27

ARTICLE VI          COVENANTS OF THE PARTIES

27

          6.1

Conduct of Business Relating to the Purchased Assets

27

          6.2

Access to Information

28

          6.3

Procedures with Respect to Certain Agreements and Other Assets

30

          6.4

Public Statements

30

          6.5

Further Assurances

30

          6.6

Consents and Approvals

31

          6.7

Certain Tax Matters

32

          6.8

Right to Update

33

          6.9

Employees

33

          6.10

Risk of Loss

34

          6.11

Equipment Relocation

34

          6.12

Meters

34

          6.13

Capacitors

34

          6.14

Transmission Matters with PJM

34

          6.15

Expenses

35

ARTICLE VII          CONDITIONS

35

          7.1

Conditions to Obligation of Buyer

35

          7.2

Conditions to Obligation of Seller

36

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          7.3

Conditions to Obligation of Buyer and Seller

37

ARTICLE VIII          INDEMNIFICATION AND ARBITRATION

37

          8.1

Indemnification

37

          8.2

Defense of Claims

39

          8.3

Arbitration

39

ARTICLE IX          TERMINATION

40

          9.1

Termination

40

          9.2

Effect of Termination

42

ARTICLE X          MISCELLANEOUS PROVISIONS

42

          10.1

Amendment and Modification

42

          10.2

Bulk Sales Laws

42

          10.3

Waiver of Compliance; Consents

42

          10.4

Survival

42

          10.5

Disclaimers

42

          10.6

Notices

43

          10.7

Assignment

44

          10.8

Governing Law; Forum; Service of Process

45

          10.9

Counterparts

45

          10.10

Interpretation

45

          10.11

Schedules

46

          10.12

Disclosure

46

          10.13

Entire Agreement

46

          10.14

Severability

46

          10.15

No Agency

46

LIST OF SCHEDULES

SCHEDULES

   

1.1(68)
1.1(83)
1.1(93)
2.1(b)
2.1(d)
2.2(a)
3.2(a)
4.3(a)

Permitted Encumbrances
Seller's Knowledge
Transferable Permits
Transmission Assets
Seller's Agreements
Distribution Assets
Net Book Value Calculation
Seller's Defaults and Violations

 

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4.3(b)
4.4
4.5(c)
4.6
4.8
4.9(a)
4.9(b)
4.9(c)
4.10
4.12
4.14
5.3(a)
5.3(b)
6.1
6.1(e)
7.1(c)
7.2(c)

Seller's Required Regulatory Approvals
Insurance
Transferred Easements Exceptions
Seller's Environmental Matters
Material Transferred Easements
Seller's Agreements
Seller's Agreements Exceptions
Seller's Agreements Defaults and Violations
Legal Proceedings
Brokers; Finders
Material Adverse Effects
Buyer's Defaults and Violations
Buyer's Required Regulatory Approvals
Conduct of Business Exceptions
Seller's Budget
Certain Buyer's Required Regulatory Approvals
Certain Seller's Required Regulatory Approvals

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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PURCHASE AND SALE AGREEMENT

          PURCHASE AND SALE AGREEMENT, dated as of June 13, 2007 (this
"Agreement"), by and between Delmarva Power & Light Company, a Virginia
corporation ("Seller"), and Old Dominion Electric Cooperative, a Virginia
utility aggregation cooperative ("Buyer"). Seller and Buyer may each be referred
to herein individually as a "Party," and together as the "Parties."

W I T N E S S E T H

          WHEREAS, Seller owns the transmission assets (as described below) and
certain properties and assets associated therewith and ancillary thereto; and

          WHEREAS, Buyer desires to purchase and assume, and Seller desires to
sell and assign, or cause to be sold and assigned, the Purchased Assets (as
defined below) and certain associated Liabilities (as defined below), upon the
terms and conditions hereinafter set forth in this Agreement;

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

ARTICLE I

DEFINITIONS

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

                         (1)     "Access Agreements" means the agreements
between Buyer and Seller, or any Affiliate thereof, to be delivered at the
Closing, which shall afford each Party access to certain property and assets as
mutually agreed and as necessary to ensure safe and reliable operations.

                         (2)     "Additional Agreements" means the Restated
Interconnection Agreement, the Facilities Agreement, the Operational
Coordination Agreement, the Access Agreements, the Special Warranty Deed, the
Assignment and Assumption Agreements, the Bill of Sale, the Assignment of
Transferred Easements and the Escrow Agreement.

                         (3)     "Affiliate" means, with respect to any
designated Person, any other Person directly or indirectly controlling, or
controlled by, or under direct or indirect common control with such designated
Person.

                         (4)     "Agreement" has the meaning set forth in the
preamble to this Agreement.

                         (5)    "Assignment and Assumption Agreements" means the
assignment and assumption agreements between Seller and Buyer, to be mutually
agreed by the Parties and delivered at the Closing, pursuant to which Seller
shall assign the Seller's Agreements, certain

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intangible assets and certain other Purchased Assets to Buyer, and Buyer shall
accept such assignment and assume the Assumed Liabilities.

                         (6)     "Assumed Liabilities" has the meaning set forth
in Section 2.3.

                         (7)     "Authorized Agent" has the meaning set forth in
Section 10.8.

                         (8)     "Benefit Plans" means Seller's material
deferred compensation, profit-sharing, retirement and pension plans, and all
material bonus, fringe benefit and other employee benefit plans, maintained or
with respect to which contributions are made by Seller for the benefit of any of
Seller's employees.

                         (9)     "Bill of Sale" means the bill of sale of
Seller, to be mutually agreed by the Parties and delivered at the Closing.

                         (10)    "Business Day" means any day other than
Saturday, Sunday and any day on which banking institutions in the Commonwealth
of Virginia or the State of New York are authorized or required by Law to close.

                         (11)    "Buyer" has the meaning set forth in the
preamble to this Agreement.

                         (12)    "Buyer's Indemnitee" has the meaning set forth
in Section 8.1(b).

                         (13)    "Buyer's Knowledge" means the actual knowledge
of Lisa D. Johnson or Richard Beam.

                         (14)    "Buyer's Permits" has the meaning set forth in
Section 6.5(a).

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

                         (16)    "Cap" has the meaning set forth in Section
8.1(a).

                         (17)    "CERCLA" means the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.

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

                         (19)    "Closing Adjustment Amount" has the meaning set
forth in Section 3.2(a).

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

                         (21)    "Closing Payment" has the meaning set forth in
Section 3.2(c).

                         (22)    "Closing Statement" has the meaning set forth
in Section 3.4(a).

                         (23)    "COBRA" means Sections 601 through 608 of ERISA
and Section 4980B of the Code.

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

                         (25)    "Commercial Arbitration Rules" has the meaning
set forth in Section 8.3(c).

                         (26)    "Commercially Reasonable Efforts" means efforts
which are designed to enable a Party to expeditiously satisfy a condition, or
otherwise assist, in the consummation of the transaction contemplated by, or the
performance of an obligation under, this Agreement, and which do not require the
performing Party to expend funds other than expenditures which are customary and
reasonable in transactions of the kind and nature contemplated by this Agreement
in order for the performing Party to satisfy its obligations hereunder.

                         (27)    "Confidentiality Agreement" means the
Confidentiality Agreement, dated June 29, 2006, between Seller, Buyer and the
Distribution Purchaser, as amended.

                         (28)    "Courts" has the meaning set forth in Section
10.8.

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

                         (30)    "Distribution Assets" has the meaning set forth
in Section 2.2(a).

                         (31)    "Distribution Purchaser" means A&N Electric
Cooperative.

                         (32)    "Distribution Purchase Agreement" means that
certain purchase agreement between Seller and the Distribution Purchaser.

                         (33)    "Easements" means, collectively, (i) all
easements, licenses, rights of way and other access rights to be granted by
Buyer to Seller or Seller to Buyer, or any Affiliate thereof, pursuant to the
Access Agreements, and (ii) all easements, licenses, rights of way and other
access rights reserved by Seller, or any Affiliate thereof, in the Special
Warranty Deed.

                         (34)    "Encumbrances" means any and all mortgages,
pledges, liens, leases, security interests, easements, activity and use
limitations, restrictions, defects of title or other similar encumbrances.

                         (35)    "Environmental Conditions" means the presence
in or Release to the environment, including air, surface and subsurface water,
groundwater, soil and sediments, of Hazardous Substances, including any
migration of Hazardous Substances through air, surface and subsurface water,
groundwater, soil and sediments, at, to or from the Site, or at, to or from any
Off-Site Location, regardless of when such presence or Release occurred or is
discovered.

                         (36)    "Environmental Laws" means all Laws relating to
pollution or protection of the environment, natural resources or human health
and safety, including Laws relating to Releases or threatened Releases of
Hazardous Substances or otherwise relating to the manufacture, formulation,
generation, processing, distribution, use, treatment, storage, disposal,
Release, transport, arrangement for transport for disposal or treatment,
arrangement for disposal or treatment, Remediation, abatement, cleanup or
handling of Hazardous Substances, including CERCLA.

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                         (37)    "Environmental Permits" means all permits,
certificates, licenses, approvals and other authorizations of, and required
filings with the subdivisions to, all Governmental Authorities under
Environmental Laws.

                         (38)    "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.

                         (39)    "ERISA Affiliate" has the meaning set forth in
Section 2.4(f).

                         (40)    "Escrow" has the meaning set forth in Section
3.3.

                         (41)    "Escrow Agent" has the meaning set forth in
Section 3.3.

                         (42)    "Escrow Agreement" means the Escrow Agreement,
dated as of the Closing Date, among the Parties and the Escrow Agent, to be
mutually agreed by the Parties and delivered at Closing.

                         (43)    "Escrow Amount" has the meaning set forth in
Section 3.3.

                         (44)    "Estimated Adjustment Amount" has the meaning
set forth in Section 3.2(b).

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

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

                         (47)    "Facilities Agreement" means the facilities
agreement between Buyer and Seller governing the physical interconnection of
Buyer's transmission facilities with Seller's transmission facilities.

                         (48)    "FERC" means the U.S. Federal Energy Regulatory
Commission or any successor agency thereto.

                         (49)    "Good Utility Practices" means any of the
practices, methods and acts engaged in or approved by a significant portion of
the electric utility industry during the relevant time period, or any of the
practices, methods or acts which, in the exercise of reasonable judgment in
light of the facts known at the time the decision was made by an entity owning
the applicable facilities or equipment throughout their entire useful lives,
would have been expected to accomplish the desired result at a reasonable cost
consistent with good business practices, reliability, safety and timing
requirements.

                         (50)    "Governmental Authority" means any executive,
legislative, judicial, regulatory, tribal or administrative agency, body,
commission, department, board, court, tribunal or authority of the U. S. or any
foreign country, or any state, local or other governmental subdivision thereof.

                         (51)    "Hazardous Substances" means (a) any
petrochemical or petroleum products, oil or coal ash, coal slag, radioactive
materials, radon gas, lead paint, asbestos in any

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form that is or could become friable, urea formaldehyde foam insulation and
transformers or other equipment that contain dielectric fluid which may contain
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" 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.

                         (52)    "Income Tax" means any Tax imposed by any
Governmental Authority (a) based upon, measured by or calculated with respect to
net income, profits or receipts (including capital gains Taxes and minimum
Taxes) or (b) based upon, measured by or calculated with respect to multiple
bases (including corporate franchise taxes) if one or more of such bases is
described in clause (a), in each case, together with any interest, penalties or
additions attributable thereto.

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

                         (54)    "Indemnifying Party" has the meaning set forth
in Section 8.1(d).

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

                         (56)    "Independent Accounting Firm" means such
nationally recognized, independent accounting firm as is mutually appointed as
provided in this Agreement.

                         (57)    "Initial Amount" has the meaning set forth in
Section 3.2(a).

                         (58)    "Inspection" means all tests, reviews,
examinations, inspections, investigations, verifications, samplings and similar
activities conducted by Buyer or its Representatives.

                         (59)    "Known Liabilities" means any liability or
obligation relating to all or a portion of the Purchased Assets and arising
prior to the Closing, whether liquidated or unliquidated, and whether or not the
same should be required by generally accepted accounting principles to be
reflected as liabilities in financial statements or disclosed in notes thereto,
but excluding any liability or obligation relating to environmental matters,
which is either (i) actually known by a member of supervisory management of the
Seller or any of its Affiliates, or (ii) reported to any Governmental Authority,
health care organization or provider, or emergency medical professional or
service.

                         (60)    "Laws" means all laws, statutes, rules,
regulations and ordinances of any Governmental Authority, including common law
obligations.

                         (61)    "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 due or to become due and whether or
not the same should be required by generally accepted accounting principles to
be

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reflected as liabilities in financial statements or disclosed in notes thereto),
including any liability for Taxes.

                         (62)    "Material Adverse Effect" means any change or
effect that is materially adverse to (a) the ownership or operation of the
Purchased Assets after the date hereof or that is materially adverse to the
results of operations or financial condition of the Purchased Assets, in all
cases, taken as a whole, or (b) the ability of Seller or Buyer to consummate the
Closing; other than, in either case, (i) any change or effect affecting the
international, national, regional or local electric industry as a whole, and not
specific and exclusive to the Purchased Assets, including any change or effect
in wholesale or retail markets or local electricity transmission or distribution
systems or operations thereof, (ii) changes in general economic conditions,
interest rates or securities markets in the United States or worldwide, (iii)
changes in Law, or any judgments, orders or decrees that apply generally to
similarly situated Persons, (iv) any change or effect to the extent constituting
or involving an Excluded Asset or an Excluded Liability, (v) strikes, work
stoppages or other labor disturbances (vi) any matter to the extent that (A) it
is disclosed in reasonable detail in any Schedule delivered by Seller and (B)
such disclosed matter does not worsen in a material manner, and (vii) any change
in or effect on the Purchased Assets which is cured (including by payment of
money) before the earlier of the Closing and the termination of this Agreement
pursuant to Section 9.1. For the avoidance of doubt, that Parties acknowledge
and agree that any increase in value of the Purchased Assets to the Seller
following the execution and delivery of this Agreement resulting from any
circumstance or event, including a change in Law or the grant of any consents or
approvals from any Governmental Authority, shall not constitute a Material
Adverse Effect.

                         (63)    "NERC" means the North American Electric
Reliability Council or any successor thereto.

                         (64)    "Net Book Value" means the acquisition or gross
plant value as recorded in account 101, Electric Plant, and 105, Electric Plant
Held for Future Use, less all related accumulated depreciation recorded in
accounts 108, Accumulated Provision for Depreciation of Electric Utility Plant
and account 111, Accumulated Provision for Amortization of Electric Utility
Plant. The balances in these accounts include accumulated depreciation and
amortization as well as cost of removal, salvage and gain/loss on retirement,
all as defined in the FERC Uniform System of Accounts CFR Part 18, Chapter 1.
Account 107, Construction Work in Progress, is a component of Utility Plant in
Service.

                         (65)    "Off-Site Location" means any real property
other than the Site.

                         (66)    "Operational Coordination Agreement" means the
operational coordination agreement between Seller and Buyer to be delivered at
Closing, as mutually agreed by the Parties.

                         (67)    "Party" and "Parties" have the respective
meanings set forth in the preamble to this Agreement.

                         (68)    "Permitted Encumbrances" means: (a) the
Easements; (b) those exceptions to title to the Purchased Assets listed on
Schedule 1.1(68); (c) statutory liens for Taxes or other

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charges or assessments of Governmental Authorities not yet due or delinquent, or
which are being contested in good faith by appropriate proceedings and as to
which adequate reserves have been made; (d) mechanics', carriers', workers',
repairers' and other similar liens arising or incurred in the ordinary course of
business which are not delinquent; (e) zoning, entitlement, conservation
restriction and other land use and environmental restrictions and regulations of
Governmental Authorities which do not materially detract from the value of the
Purchased Assets, taken as a whole, as currently used, or materially interfere
with the present use of the Purchased Assets, taken as a whole; (f) easements,
licenses and rights-of-way which do not materially detract from the value of the
Purchased Assets, taken as a whole, as currently used, or materially interfere
with the present use of the Purchased Assets, taken as a whole; and (g)
Encumbrances created by Buyer, or its successors and assigns; and (h) easements,
restrictions, covenants and other matters of record which do not materially
detract from the value of the Purchased Assets, taken as a whole, as currently
used, or materially interfere with the present use of the Purchased Assets,
taken as a whole.

                         (69)    "Person" means any individual, partnership,
limited liability company, joint venture, corporation, trust, unincorporated
organization, other entity, business association or Governmental Authority.

                         (70)    "PJM" means PJM Interconnection, L.L.C., and
any successor entity thereto.

                         (71)    "Prime Rate" has the meaning set forth in
Section 3.4(c).

                         (72)    "Proprietary Information" of a Party means all
information about any Party or its properties or operations furnished to the
other Party or its Representatives by such Party or its Representatives, from
and after the date hereof, regardless of the manner or medium in which it is
furnished. Proprietary Information does not include information that: (a) is or
becomes generally available to the public, other than as a result of a
disclosure by the other Party or its Representatives; (b) was available to the
other Party on a non-confidential basis prior to its disclosure by the Party or
its Representatives; (c) is or becomes available to the other Party on a
non-confidential basis from a source other than such Party; (d) is independently
developed by the other Party; or (e) was disclosed pursuant to the
Confidentiality Agreement and remains subject to the terms and conditions of the
Confidentiality Agreement as long as it is effective.

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

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

                         (75)    "Regulatory Material Adverse Effect" means,
with respect to any Party, any change in or effect resulting from any condition
imposed by any Governmental Authority in connection with the grant of such
Governmental Authority's consent or approval of the transactions contemplated
hereby or by the Additional Agreements that either (a) is materially adverse to
such Party, or its results of operations, condition (financial or otherwise),
business, properties, assets or liabilities, (b) materially adversely impairs
such Party's ability to operate its business, properties or assets substantially
in the manner operated on the date hereof, (c) materially detracts from the
value of such Party's business, properties or assets, (d) materially

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adversely affects the value of the transactions contemplated hereby or by the
Additional Agreements to such Party or the Purchased Assets; provided, that
notwithstanding the foregoing, if the changes and effects resulting from any
condition so imposed can be liquidated to the payment of money or the incurrence
of costs or valued, a "Regulatory Material Adverse Effect" means required
payments or the incurrence of costs or Liability which is reasonably expected to
equal or exceed $250,000. For the avoidance of doubt, the Parties acknowledge
and agree that any increase in value of the Purchased Assets to the Seller
following the execution and delivery of this Agreement resulting from any
circumstance or event, including a change in Law or the grant of any consents or
approvals from any Governmental Authority, shall not constitute a Regulatory
Material Adverse Effect.

                         (76)    "Release" means any release, spill, leak,
discharge, disposal of, pumping, pouring, emitting, emptying, injecting,
leaching, dumping or allowing to escape into or through the environment, whether
air, surface or subsurface water, groundwater, soil or sediment.

                         (77)    "Remediation" means an action of any kind to
address an Environmental Condition or a Release of Hazardous Substances,
including the following activities: (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, and making all relevant filings with and
submissions to the relevant Governmental Authorities for any such activity; (d)
the use, implementation, application, installation, operation or maintenance of
removal actions, remedial technologies applied to the surface or subsurface
soils, excavation and treatment or disposal of soils systems for long term
treatment of surface water or groundwater, engineering controls or institutional
controls; and (e) any other activities required under Environmental Laws to
address an Environmental Condition or a Release of Hazardous Substances.

                         (78)    "Representatives" of a Person means,
collectively, such Person's Affiliates and its and their respective directors,
officers, partners, members, employees, representatives, agents, advisors
(including accountants, legal counsel, environmental consultants, engineering
consultants and financial advisors), parent entities and other controlling
Persons.

                         (79)    "Restated Interconnection Agreement" means the
restated interconnection agreement between Buyer and Seller governing the
physical interconnection between Seller's transmission system and Buyer's
distribution system.

                         (80)    "Seller" has the meaning set forth in the
preamble to this Agreement.

                         (81)    "Seller's Agreements" means, collectively, the
contracts, agreements, arrangements, licenses and leases to which Seller is a
party, or by or to which Seller or the Purchased Assets is bound or subject,
excluding Benefit Plans in each case, relating to the ownership, lease,
maintenance or operation of the Purchased Assets.

                         (82)    "Seller's Indemnitee" has the meaning set forth
in Section 8.1(a).

                         (83)    "Seller's Knowledge" means the actual knowledge
of those individuals listed on Schedule 1.1(83).

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                         (84)    "Seller's Permits" has the meaning set forth in
Section 4.11.

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

                         (86)    "Site" has the meaning set forth in the
Distribution Purchase Agreement.

                         (87)    "Tax" or "Taxes" means all taxes, charges,
fees, levies, penalties and other assessments imposed by any Governmental
Authority, including Income Taxes, gross receipts, excise, property, sales,
transfer, use, franchise, payroll, withholding, social security and other taxes,
together with any interest, penalties or additions attributable thereto.

                         (88)    "Tax Return" means any return, report,
information return or other document, together with all amendments and
supplements thereto (including any related or supporting information), required
to be supplied to any Governmental Authority responsible for the administration
of Laws governing Taxes.

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

                         (90)    "Threshold" has the meaning set forth in
Section 8.1(a).

                         (91)    "Transfer Taxes" has the meaning set forth in
Section 6.7(a).

                         (92)    "Transferred Easements" has the meaning set
forth in Section 6.3.

                         (93)    "Transferable Permits" means those Seller's
Permits and Environmental Permits (and all applications pertaining thereto)
which are transferable under applicable Laws by Seller to Buyer (with or without
a filing with, notice to, consent or approval of any Governmental Authority), as
identified on Schedule 1.1(93).

                         (94)    "VSCC" means Virginia State Corporation
Commission.

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

          1.2.         Construction. In construing this Agreement, together with
the Schedules hereto, the following principles shall be followed:

                         (a)     references to this Agreement shall include a
reference to all schedules hereto;

                         (b)     the terms "herein," "hereof," "hereby,"
"hereunder" and other similar terms refer to this Agreement as a whole and not
only to the particular Article, Section or other subdivision in which any such
terms may be employed;

                         (c)     except as otherwise set forth herein,
references to Articles, Sections, Schedules, and other subdivisions refer to the
Articles, Sections, Schedules, and other subdivisions of this Agreement;

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                         (d)     a reference to any Person shall include such
Person's predecessors;

                         (e)     all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with U.S. generally
accepted accounting principles;

                         (f)     no consideration shall be given to the captions
of the Articles, Sections, Schedules, subdivisions, subsections or clauses,
which are inserted for convenience in locating the provisions of this Agreement
and not as an aid in its construction;

                         (g)     examples shall not be construed to limit,
expressly or by implication, the matter they illustrate;

                         (h)     the word "includes" and "including" and their
syntactical variants mean "includes, but is not limited to" and "including,
without limitation," and corresponding syntactical variant expressions;

                        (i)     a defined term has its defined meaning
throughout this Agreement, regardless of whether it appears before or after the
place in this Agreement where it is defined;

                         (j)     the plural shall be deemed to include the
singular and vice versa;

                         (k)    references to any agreement, document or
instrument will be construed at a particular time to refer to such agreement,
document or instrument as the same may be amended, modified, supplemented or
replaced as of such time;

                         (l)     references to any tariff, rate, or order of any
Governmental Authority will mean such tariff, rate or order, as the same may be
amended, modified, supplemented or restated and be in effect from time to time;

                         (m)     if any action or obligation is required to be
taken or performed on any day which is not a Business Day, such action or
obligation must be performed on the next succeeding Business Day; and

                         (n)     references to an applicable Law will mean a
reference to such applicable Law as the same may be amended, modified,
supplemented or restated and be in effect from time to time.

          1.3.         U.S. Dollars. When used herein, the term "dollars" and
the symbol "$" refer to the lawful currency of the United States.

ARTICLE II
PURCHASE AND SALE

          2.1.         Transfer of Assets. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing, Seller shall sell,
assign, convey, transfer and deliver to Buyer, and Buyer shall purchase, assume
and acquire from Seller, free and clear of all Encumbrances, except for the
Permitted Encumbrances, all of Seller's right, title and interest in, to and
under the

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following assets and properties, except as otherwise provided in Section 2.2
(collectively, the "Purchased Assets"):

                         (a)     [Reserved];

                         (b)     The transmission assets of the Seller located
on the Virginia Eastern Shore and identified on Schedule 2.1(b).

                         (c)     [Reserved];

                         (d)     Subject to the receipt of necessary consents
and approvals with respect to assignment, the Seller's Agreements identified on
Schedule 2.1(d);

                         (e)     Subject to the receipt of necessary consents
and approvals with respect to assignment, the Transferable Permits;

                        (f)     [Reserved];

                         (g)     All books, vendor lists (including electronic
records), operating records, maintenance records, engineering designs, plans,
system drawings, operating, safety and maintenance manuals, engineering design
plans, blueprints and as-built plans, specifications, procedures, and similar
items to the extent principally relating to the Purchased Assets (subject to the
right of Seller to retain copies of same for its use), other than such items as
are proprietary to third parties and accounting records (it being understood
that Seller's obligation to transfer such items is for items existing and in
such form as currently used with respect to the Purchased Assets); and

                        (h)     Any other assets of Seller principally related
to or necessary for the provision of electric transmission services from Seller
through the Purchased Assets on the Virginia Eastern Shore, except for the
facilities, or the provision of transmission service over the facilities,
identified in Section 2.2.

          2.2.         Excluded Assets. Notwithstanding any provision to the
contrary in this Agreement, nothing in this Agreement shall constitute or be
construed as to require Seller to sell, assign, convey, transfer or deliver, and
Buyer shall not be entitled to purchase, assume or acquire, any right, title or
interest in, to or under any property, asset, business, operation or division of
Seller, or any Affiliate thereof, not identified in Section 2.1, including the
following assets and properties which are hereby specifically excluded from the
definition of Purchased Assets (collectively, the "Excluded Assets"):

                         (a)     Assets summarized on Schedule 2.2(a);

                         (b)     The 138kV and 69kV transmission substation
equipment at Oak Hall and Wattsville (Account 353), and certain of the 138kV and
69kV transmission lines, poles, fixtures, and conductors (Accounts 355 and 356),
including Kenny to Wattsville, Wattsville to Oak Hall, Oak Hall to Pocomoke, New
Church to Oak Hall, and Piney Grove/Oak Hall, New Church;

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                         (c)     All certificates of deposit, shares of stock,
securities, bonds, debentures, evidences of indebtedness, and interests in joint
ventures, partnerships, limited liability companies and other entities;

                         (d)     All cash, cash equivalents, bank deposits,
notes receivable, and prepaid expenses, including such as relate to any Excluded
Assets or the operation of the Purchased Assets prior to the Closing Date and
any income, sales, payroll or other Tax receivables (in each case, whether held
by Seller or any third party);

                         (e)     The right, title and interest of Seller and its
successors, assigns and Representatives in, to and under all intellectual
property, including, but not limited to, the names "Delmarva Power & Light
Company," "Delmarva Power," "DPL," "Conectiv," "Conectiv Power Delivery,"
"Pepco," "Pepco Holdings" or any derivation thereof, as well as any related or
similar name, or any other trade names, trademarks, service marks, corporate
names and logos, or any part, derivation, colorable imitation or combination
thereof;

                         (f)     The right, title and interest of Seller and its
successors, assigns and Representatives in, to and under all claims against
third parties, if any, relating to the ownership, lease, maintenance or
operation of any Purchased Assets, by Seller prior to the Closing Date, other
than as provided in Section 2.1(f), whether accruing prior to, on or after the
Closing Date, including all claims for refunds, prepayments, offsets,
recoupment, insurance proceeds, insurance distributions, dividends or other
proceeds, condemnation awards, judgments and the like, whether received as
payment or credit against future Liabilities;

                         (g)     All Tax refunds or credits, which refunds or
credits are with respect to periods ending prior to the Closing Date, whether
directly or indirectly, regardless of when actually paid;

                         (h)     All employment agreements and personnel records
of Seller and its successors, assigns and Representatives;

                         (i)     The minute books, stock transfer books,
corporate seal and other corporate records of Seller and its successors, assigns
and Representatives;

                         (j)     The right, title and interest of Seller and its
successors, assigns and Representatives in, to and under all contracts,
agreements, arrangements, licenses and leases of any nature, other than the
Seller's Agreements set forth on Schedule 2.1(d);

                         (k)     All assets and properties owned or held by any
Benefit Plan;

                         (l)     All insurance policies relating to the
ownership, lease, maintenance or operation of the Purchased Assets;

                         (m)     All other assets and properties owned or leased
by Seller or its successors, assigns and Representatives which are not
principally used in or necessary for the operation of the Purchased Assets;

                         (n)     All of Seller's vehicles;

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                         (o)     The right, title and interest of Seller and its
successors, assigns and Representatives under this Agreement and the Additional
Agreements;

                         (p)     All real property (including all improvements
thereon and all appurtenances thereto), but excluding, pursuant to Section 6.3,
to the extent transferable, the Transferred Easements; and

                        (q)     All inventory.

          2.3.          Assumed Liabilities. On the Closing Date, Buyer shall
assume and agree to pay, perform and otherwise discharge when due all of the
following Liabilities of Seller arising or accruing on or after the Closing Date
unless otherwise specified (collectively, the "Assumed Liabilities"):

                        (a)     All Liabilities of Seller, arising or accruing
on or after the Closing Date, under (i) the Seller's Agreements identified on
Schedule 2.1(d) and the Transferable Permits, in accordance with the respective
terms thereof, and (ii) Seller's Agreements entered into by Seller primarily
with respect to the Purchased Assets on or after the date hereof consistent with
the terms of this Agreement, other than leases of vehicles;

                        (b)     All Liabilities of Seller which relate to the
Purchased Assets in respect of Taxes for which Buyer is liable pursuant to
Sections 3.6 or 6.7;

                        (c)     Except as set forth in Section 2.4(a), (b) or
(e), all Liabilities relating to or resulting from the following: (i) any
violation of or alleged violation, or non-compliance with, Environmental Laws or
Environmental Permits arising from events, conditions or circumstances existing
or occurring prior to or on or after the Closing Date, with respect to the
ownership, lease, maintenance, construction, modification or operation of the
Purchased Assets, including the cost of correcting any such violations or
non-compliance, but excluding any fines or penalties arising out of the
ownership, maintenance, lease, construction, modification or operation of the
Purchased Assets prior to the Closing Date; and (ii) Environmental Conditions or
exposure to Hazardous Substances at, on, in, under or adjacent to, or migrating
or discharged to or from, the Purchased Assets prior to, on or after the Closing
Date, including loss of life, injury to persons or property (including from
exposure to asbestos-containing materials) and damage to natural resources
(whether or not such loss, injury or damage arose or was made manifest before
the Closing Date or arises or becomes manifest after the Closing Date) and
Remediation of Environmental Conditions on or after the Closing Date;

                        (d)     All Taxes that may be imposed by any federal,
state or local government on the ownership, lease, maintenance, operations, use
or sale of the Purchased Assets (except for Income Taxes) with respect to the
period commencing on or after the Closing Date, except for Taxes for which
Seller is liable pursuant to Section 3.6; and

                        (e)     To the extent not identified as one of the
Excluded Liabilities pursuant to Section 2.4(a) to (j), all Liabilities relating
to the Purchased Assets (i) arising prior to Closing which are not Known
Liabilities on or before the date six months after the Closing Date, or (ii)
arising on or after the Closing.

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          2.4.         Excluded Liabilities. Notwithstanding any provision to
the contrary in this Agreement, nothing in this Agreement shall constitute or be
construed as to require Buyer to pay, perform or otherwise discharge when due
any Liabilities of Seller or any of its Affiliates with respect to the Purchased
Assets not expressly referenced in Section 2.3, including the following
Liabilities which are hereby specifically excluded from the definition of
Assumed Liabilities (the "Excluded Liabilities"):

                        (a)     Any Liabilities of Seller in respect of any
Excluded Assets, including Environmental Conditions existing on, or Releases
occurring prior to, the Closing Date on the locations occupied by, or resulting
from the construction, ownership or operation of, any of the assets summarized
on Schedule 2.2(a), including the Tasley generating facility and any other
generating facility of Seller or its Affiliates, whether commissioned or
decommissioned;

                        (b)     Remediation, loss of life, injury to persons or
property and damage to natural resources arising from the storage,
transportation, treatment, disposal, discharge, recycling or Release, at any
Off-Site Location;

                        (c)     Any Liabilities of Seller in respect of Taxes
attributable to the Purchased Assets for taxable periods ending before the
Closing Date, except for Taxes for which Buyer is liable pursuant to Section 3.6
or 6.7;

                        (d)     Any Liabilities of Seller accruing prior to the
Closing Date under any of the Seller's Agreements;

                        (e)     Any fines or penalties imposed by any
Governmental Authority resulting from any violation of Law or any Seller's
Permit by Seller that occurred prior to the Closing Date, it being understood
that costs associated with modifications to the Purchased Assets or the manner
of operating the Purchased Assets to correct such violations shall not be deemed
to be fines or penalties for purposes hereof;

                        (f)     Any Liabilities relating to any Benefit Plan
maintained by Seller or 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 and any ERISA Affiliate
contributed thereunder, maintained by, contributed to, or obligated to
contribute to, by Seller or any ERISA Affiliate, including any Liability (i) to
the Pension Benefit Guaranty Corporation under Title IV of ERISA, or (ii) with
respect to any noncompliance by Seller with ERISA;

                        (g)     Any Liabilities relating to the employment or
termination of employment, including discrimination, wrongful discharge or
unfair labor practices by Seller of any individual, attributable to any action
or omission by Seller prior to the Closing Date;

                        (h)     Any obligation to provide continuation coverage
under COBRA (and notice of the right to elect such coverage) to Seller's
employees associated with the Purchased Assets or former dependents of Seller's
employees who became eligible for continuation coverage under COBRA on account
of a "qualifying event" (as defined under COBRA) occurring prior to the Closing
Date;

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                        (i)     Any Liabilities under lease agreements for any
vehicles;

                        (j)     Any payment Liabilities secured by Permitted
Encumbrances and arising prior to Closing relating to (i) mechanics', carriers',
workers', repairers' and other similar liens, (ii) obligations for borrowed
money or with respect to deposits or advances of any kind, including any
Liabilities relating to the lien on the Site in favor of The Bank of New York,
individually or as trustee, (iii) obligations upon which interest charges are
customarily paid, (iv) all obligations under conditional sale or other title
retention agreements, (v) obligations in respect of the deferred purchase price
of property or services, (vi) guarantees of indebtedness of others, (vii)
capital lease obligations, or (viii) obligations (contingent or otherwise) as an
account party in respect of letters of credit or letters of guaranty; and

                        (k)     To the extent not expressly identified as one of
the Assumed Liabilities pursuant to Section 2.3(a) to (d), any Liabilities
arising prior to Closing, which become Known Liabilities on or before the date
six months after the Closing Date.

          2.5.         Control of Litigation. Seller shall be entitled
exclusively to control, defend and settle any suit, action or proceeding, and
any investigation, arising out of or relating to any Excluded Assets or Excluded
Liabilities, and Buyer shall reasonably cooperate with Seller, at Seller's sole
cost and expense for out-of-pocket expenses, in connection therewith.

ARTICLE III
THE CLOSING

          3.1.          Closing. The sale, assignment, conveyance, transfer and
delivery of the Purchased Assets by Seller to Buyer, and the purchase,
assumption and acquisition by Buyer of the Purchased Assets and the Assumed
Liabilities, and the consummation of the other transactions contemplated hereby,
shall take place at a closing (the "Closing") to be held at such location as is
mutually agreed by the Parties, within five (5) Business Days after the date on
which the last of the conditions precedent to the Closing set forth in Article
VII of this Agreement, shall have been satisfied or, to the extent permitted by
applicable Law, waived by the Party for whose benefit such conditions precedent
exist, or at such other date as may be agreed upon between Buyer and Seller. The
date on which the Closing actually occurs is hereinafter called the "Closing
Date." The Closing shall be effective for all purposes as of 12:01 a.m., New
York City time, on the Closing Date.

          3.2.          Purchase Price.

                         (a)     Upon the terms and subject to the conditions
set forth in this Agreement, in consideration of the aforesaid sale, assignment,
conveyance, transfer and delivery of the Purchased Assets, Buyer shall (i) pay
to Seller cash in an aggregate amount equal to Four Million Eight Hundred
Thousand Dollars ($4,800,000) (the "Initial Amount") plus or minus such
adjustments set forth in this Section 3.2 below ("Closing Adjustment Amount"),
subject to Section 3.4 (collectively, the "Purchase Price"), and (ii) assume and
agree to pay, perform and otherwise discharge the Assumed Liabilities. For the
avoidance of doubt, Buyer acknowledges that its assumption of, and agreement to
pay, perform or otherwise discharge, the Assumed Liabilities constitutes an
integral part of the consideration to be received by Seller in respect of

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the sale, assignment, conveyance, transfer and deliver of the Purchased Assets
hereunder, and that, in the absence of such assumption and agreement by Buyer,
Seller would not enter into this Agreement. The Purchase Price shall be (A)
increased by the actual installed cost of Purchased Assets acquired since
November 30, 2006, and (B) decreased by the Net Book Value of assets or
properties which otherwise would have constituted "Purchased Assets" hereunder
but for the retirement, disposition or abandonment of such assets or properties
prior to the Closing Date. An example of this calculation is set forth on
Schedule 3.2(a).

                        (b)     At least three (3) Business Days prior to the
Closing Date, Seller shall provide to Buyer its good faith estimate of the
Closing Adjustment Amount, which estimate shall be certified in writing by an
appropriate officer of Seller which officer shall be consented to by the Buyer
(the "Estimated Adjustment Amount").

                        (c)     At the Closing, in furtherance but not in
duplication of Section 3.2(a), Buyer shall pay to Seller cash in an aggregate
amount equal to the Initial Amount, minus the Escrow Amount and plus or minus
the Estimated Adjustment Amount (the "Closing Payment"). The Closing Payment
shall be paid to Seller by Buyer at the Closing by wire transfer of immediately
available funds to the account of Seller designated by Seller at least two (2)
Business Days prior to the Closing Date.

          3.3.         Establishment of Escrow. At Closing, Buyer shall deliver,
or cause to be delivered, an amount equal to Fifty Thousand Dollars ($50,000) of
the Purchase Price (the "Escrow Amount") to be paid by Buyer under Section 3.2
to an escrow agent mutually agreed upon by the Parties (the "Escrow Agent"). The
Escrow Agent shall hold such funds in escrow (the "Escrow") for three months
after the Closing Date, to be used for payments to be made by Seller pursuant to
Section 3.2, if any, pursuant to the terms of the Escrow Agreement.

          3.4.         Adjustment to Purchase Price.

                        (a)     Within ninety (90) days after the Closing Date,
the Parties shall mutually prepare a statement setting forth the Closing
Adjustment Amount (the "Closing Statement") and the amount of any payment to be
made, and by whom, pursuant to Section 3.4(c).

                        (b)     In the event there is disagreement with respect
to the preparation of only a portion of the Closing Statement, Buyer or Seller,
as the case may be, shall pay all remaining amounts in the manner set forth in
Section 3.4(c); and all other amounts shall be paid at such time as all
disagreements are resolved provided in accordance with this Section 3.4(b) or
otherwise. If the Parties cannot mutually agree on the Closing Statement, then
the Parties shall promptly attempt to resolve such disagreements by negotiation.
If the Parties are unable to resolve such disagreements within thirty (30) days
following such notice of disagreement, then the Parties shall appoint an
Independent Accounting Firm within forty-five (45) days following such notice to
review the disputed portions of the draft Closing Statement and determine the
Closing Adjustment Amount. In the event that Buyer and Seller cannot promptly
agree on the selection of an accounting firm to act as the Independent
Accounting Firm following the expiration of such forty-five (45) day period,
either Party may request the American Arbitration Association to appoint an
Independent Accounting Firm, and such appointment shall be final, binding and
conclusive on Buyer and Seller. Resolution of any disagreements shall be made by

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the Independent Accounting Firm in a writing addressed to all Parties within
thirty (30) days following referral to it by the Parties of such disagreements
in accordance with this Agreement. The findings of such Independent Accounting
Firm shall be final, binding and conclusive on the Parties. The fees and
expenses of the Independent Accounting Firm incurred in the resolution of such
dispute shall be borne by the Parties in such proportion as is appropriate to
reflect the relative benefits received by Seller on the one hand and Buyer on
the other from the resolution of the dispute. For example, if Buyer challenges
items underlying the calculation of the Closing Adjustment Amount in the net
amount of $100,000, but the Independent Accounting Firm determines that Buyer
has a valid claim for only $40,000, Buyer shall bear 60% of the fees and
expenses of the Independent Accounting Firm and Seller shall bear the other 40%
of such fees and expenses.

                        (c)     No later than the fifth (5th) Business Day
following the determination of the Closing Adjustment Amount pursuant to
Section 3.4(b), either (i) Seller shall pay Buyer the amount, if any, by which
the Estimated Adjustment Amount exceeds the Closing Adjustment Amount, or
(ii) Buyer shall pay Seller the amount, if any, by which the Closing Adjustment
Amount exceeds the Estimated Adjustment Amount, in either case, together with
simple interest accruing on such payment at the Prime Rate from and after the
Closing Date through but not including the date of payment, by wire transfer of
immediately available funds to an account designated by the receiving Party. As
used herein, "Prime Rate" means, as of any date, the prime rate as published in
The Wall Street Journal on such date or, if not published on such date, on the
most recent date of publication.

          3.5.         Tax Reporting and Allocation of Purchase Price. Buyer and
Seller shall use their Commercially Reasonable Efforts to agree in good faith
upon an allocation among the Purchased Assets of the sum of the Purchase Price
and the Assumed Liabilities consistent with Section 1060 of the Code and the
Treasury Regulations thereunder within sixty (60) days after the determination
of the Closing Adjustment Amount pursuant to Section 3.4. In the event that the
Parties cannot agree on a mutually satisfactory allocation within such sixty
(60) day period, the Parties shall appoint an Independent Accounting Firm that
shall, at Seller's and Buyer's joint expense, determine the appropriate
allocation. In the event that Buyer and Seller cannot promptly agree on the
selection of an accounting firm to act as the Independent Accounting Firm,
either Party may request the American Arbitration Association to appoint an
Independent Accounting Firm, and such appointment shall be final, binding and
conclusive on Buyer and Seller. Resolution of any disagreements shall be made by
the Independent Accounting Firm in a writing addressed to all Parties within
thirty (30) days following referral to it by the Parties of such disagreements
in accordance with this Agreement. The finding of such Independent Accounting
Firm shall be final, binding and conclusive on the Parties. After determination
of the allocation by agreement of the Parties or by binding determination of the
Independent Accounting Firm, Buyer and Seller shall file, for the tax year in
which the Closing occurs, Internal Revenue Service Form 8594, and all Tax
Returns, in accordance with such allocation. Buyer and Seller shall report the
transactions contemplated by this Agreement for U.S. federal Income Tax and all
other Tax purposes in a manner consistent with the allocation determined
pursuant to this Section 3.5. Buyer and Seller shall provide the other promptly
with any information required to complete Form 8594. Buyer and Seller shall
notify and provide the other with reasonable assistance in the event of an
examination, audit or other proceeding regarding the agreed-upon allocation of
the Purchase Price and the Assumed Liabilities.

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          3.6.         Prorations.

                        (a)     Except as otherwise provided in this Agreement,
all of the items customarily prorated relating to the ownership, lease,
maintenance or operation of the Purchased Assets that are attributable to a
period commencing prior to the Closing Date and terminating on or after the
Closing Date, including those listed below (but expressly excluding Income
Taxes), shall be prorated as of the Closing Date, with Seller liable to the
extent such items relate to any period prior to the Closing Date, and Buyer
liable to the extent such items relate to any period on or after the Closing
Date (measured in the same units used to compute the item in question, and
otherwise measured by calendar days):

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

                                  (ii)     Rent and all other items (including
prepaid services), in each case, payable by or to Seller under any of the
Seller's Agreements assigned to and assumed by Buyer hereunder; and

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

                        (b)     Seller or Buyer, as the case may be, shall
promptly reimburse the other Party that portion of any amount paid by such other
Party to the extent relating to the period for which Seller or Buyer, as the
case may be, is liable under Section 3.6(a), in each case, upon presentation of
a statement setting forth in reasonable detail the nature and amount of any such
payment. In connection with the prorations set forth in Section 3.6(a), if
actual amounts are not available on the Closing Date, the proration shall be
calculated based upon the respective amounts accrued through the Closing Date or
paid for the most recent year or other appropriate period for which such amounts
paid are available. All prorated amounts shall be recalculated and paid to the
appropriate Party, if practicable, on the date of the payment of the Closing
Adjustment Amount pursuant to Section 3.4(c) or otherwise within sixty (60) days
after the date that the previously unavailable actual amounts become available.
Seller and Buyer shall furnish each other with such documents and other records
as may be reasonably requested in order to confirm all proration calculations
made pursuant to this Section 3.6. Notwithstanding anything to the contrary
herein, no proration shall be made under this Section 3.6 with respect to (i)
real property Tax refunds that are Excluded Assets under Section 2.2(h) or (ii)
Taxes payable by Buyer pursuant to Section 6.7(a).

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

                        (a)     The Special Warranty Deed, duly executed by
Seller and in recordable form;

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

                        (c)     The Assignment and Assumption Agreements, duly
executed by Seller;

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                        (d)     The Access Agreements, duly executed by Seller
and in recordable form;

                        (e)     The Escrow Agreement, duly executed by Seller;

                        (f)     The Operational Coordination Agreement, duly
executed by Seller;

                        (g)     Evidence, in form and substance reasonably
satisfactory to Buyer, demonstrating that Seller has obtained the Seller's
Required Regulatory Approvals set forth on Schedule 7.2(c);

                        (h)     Copies, certified by the Secretary or Assistant
Secretary of Seller, of resolutions authorizing the execution, delivery and
performance of this Agreement, each Additional Agreement to which Seller is a
party and all of the other agreements and instruments, in each case, to be
executed, delivered and performed by Seller in connection herewith;

                        (i)     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, each
Additional Agreement to which Seller is a party and the other agreements and
instruments contemplated hereby;

                        (j)     A certificate contemplated by Section 7.1(f);

                        (k)     All such other agreements, documents,
instruments and writings as shall, in the reasonable opinion of Buyer and its
counsel, be necessary to sell, assign, convey, transfer and deliver to Buyer the
Purchased Assets, in accordance with this Agreement and, where necessary or
desirable, in recordable form, provided that Seller shall not be required to
prepare or obtain any survey, abstract, title opinion or title insurance policy
with respect to the Site;

                        (l)     A certificate of good standing with respect to
Seller from the VSCC;

                        (m)     Evidence satisfactory to the Buyer of the
release and discharge of the lien of the Bank of New York, individually or as
trustee, with respect to the Purchased Assets;

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

                        (o)     All books, records and other materials
referenced in Section 2.1(g) in both hard copy and electronic version, as
available; provided that such property shall be delivered to such locations
other than the place of Closing as Buyer may reasonably direct.

          3.8.         Deliveries by Buyer. At the Closing, Buyer shall deliver,
or cause to be delivered, the following to Seller:

                        (a)     The Closing Payment, by wire transfer of
immediately available funds, in accordance with Seller's instructions to the
account of Seller designated by Seller at least two (2) Business Days prior to
the Closing Date and the Escrow Amount to the Escrow Agent, which shall have
entered into the Escrow Agreement;

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                        (b)     The Assignment and Assumption Agreements, duly
executed by Buyer;

                        (c)     The Access Agreements, duly executed by Buyer;

                        (d)     The Escrow Agreement, duly executed by Buyer;

                        (e)     The Operational Coordination Agreement, duly
executed by Buyer;

                        (f)     Evidence, in form and substance reasonably
satisfactory to Seller, demonstrating that Buyer has obtained the Buyer's
Required Regulatory Approvals set forth on Schedule 7.1(c);

                        (g)     Copies, certified by the Secretary or Assistant
Secretary of Buyer, of resolutions authorizing the execution, delivery and
performance of this Agreement, each Additional Agreement to which Buyer is a
party, and all of the other agreements and instruments, in each case, to be
executed, delivered and performed by Buyer in connection herewith;

                        (h)     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, each
Additional Agreement to which Buyer is a party and the other agreements
contemplated hereby;

                        (i)     A certificate contemplated by Section 7.2(f);
and

                        (j)     Such other permits, 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 requested by
Seller in connection herewith.

          3.9.         Post-Closing Asset Deliveries. In the event that Seller
or Buyer, or any of their respective Representatives, shall determine after the
Closing that any Purchased Asset is in the possession of the Seller (or any of
its Representatives) or that any Excluded Asset is in the possession of the
Buyer (or any of its Representatives), the Party in possession of such asset or
assets shall, or shall cause their respective Representatives to, promptly, but
in no event later than five (5) Business Days following such determination, pay
or deliver, or cause to be paid or delivered, to the other Party such asset or
assets, at the sole cost and expense of the Party in possession of such asset or
assets.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER

          As an inducement to Buyer to enter into this Agreement and consummate
the transactions contemplated hereby, Seller hereby represents and warrants to
Buyer as follows:

          4.1.         Organization; Qualification. Seller is a corporation
validly existing and in good standing under the laws of the Commonwealth of
Virginia and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as it is now being
conducted. Seller is duly qualified to do business as a foreign corporation and
is in good

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standing under the laws of each jurisdiction in which its business as now being
conducted requires it to be so qualified, except to the extent that the failure
to be so qualified is not, individually or in the aggregate, reasonably expected
to have a Material Adverse Effect.

          4.2.         Authority. Seller has full corporate power and authority
to execute and deliver this Agreement and each Additional Agreement to which it
is a party and to consummate the transactions contemplated hereby and thereby.
The execution and delivery by Seller of this Agreement and each Additional
Agreement to which it is a party and the consummation by Seller of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action required on the part of Seller. This Agreement has
been duly executed and delivered by Seller; and this Agreement constitutes, and
upon the execution and delivery by Seller of each Additional Agreement to which
it is a party, each such Additional Agreement will constitute, the valid and
binding obligation of Seller, enforceable against Seller in accordance with its
terms, except that (a) such enforceability may be subject to any bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other Laws now
or hereafter in effect affecting or relating to enforcement of creditors' rights
generally and (b) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.

         4.3.         Consents and Approvals; No Violation.

                        (a)     Except as set forth on Schedule 4.3(a), subject
to obtaining or making all Seller's Required Regulatory Approvals, neither the
execution and delivery by Seller of this Agreement and the Additional Agreements
to which it is a party nor the consummation by Seller of the transactions
contemplated hereby and thereby will (i) conflict with or result in any breach
of any provision of the certificate of incorporation or bylaws of Seller; (ii)
result in a default (or give rise to any right of termination, cancellation or
acceleration or result in the imposition of a lien on any of its assets) under
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, agreement, lease or other instrument or obligation to which Seller is
a party or by which it, or any of the Purchased Assets, may be bound, except for
such defaults (or rights of termination, cancellation, acceleration or resulting
liens) as to which requisite consents, approvals or waivers have been or will
prior to the Closing be obtained, or which are not reasonably expected to
individually or in the aggregate, have a Material Adverse Effect; or (iii)
violate any Law, order, judgment or decree applicable to Seller or any of the
Purchased Assets, which violation, individually or in the aggregate, is not
reasonably expected to result in a Material Adverse Effect.

                        (b)     Except for consents, approvals, filings and
notices (including those consents, approvals, filings and notices required in
connection with the transfers by Seller to Buyer of Transferable Permits) set
forth on Schedule 4.3(b) (the consents, approvals, filings and notices referred
to in this paragraph are collectively referred to herein as the "Seller's
Required Regulatory Approvals"), no consent or approval of, filing with, or
notice to, any Governmental Authority is necessary for the execution and
delivery by Seller of this Agreement and the Additional Agreements to which it
is a party or the consummation by Seller of the transactions contemplated hereby
or thereby, other than (i) such consents, approvals, filings and notices which,
if not obtained or made, do not materially impair Seller's ability to perform
its material

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obligations under this Agreement or such Additional Agreements; (ii) such
consents, approvals, filings and notices which become applicable to Seller or
the Purchased Assets as a result of the status of Buyer (or any of its
Affiliates) or as a 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; and (iii) such consents, approvals, filings and notices, the
failure of which to obtain or make are not, individually or in the aggregate,
reasonably expected to have a Material Adverse Effect.

          4.4.         Insurance. Schedule 4.4 sets forth all material
liability, property, workers' compensation and other insurance policies with
respect to the Purchased Assets. To Seller's Knowledge, the Purchased Assets are
insured in such amounts and against such risks and losses as are customary in
accordance with Good Utility Practices, no premiums due under any such material
insurance policy have not been paid (to the extent any such non-payment would
entitle the insurer to terminate such policy) and Seller has not received any
written notice of cancellation, termination or denial of a claim thereunder with
respect to any material insurance policy of Seller providing coverage in respect
of the Purchased Assets which was not replaced prior to the date of cancellation
or termination. To Seller's Knowledge, all material insurance policies of Seller
covering the Purchased Assets are in full force and effect, provided, however,
that coverage of the Purchased Assets under the Seller's insurance policies will
terminate as of the Closing. Seller has not been refused any such insurance with
respect to any material Purchased Asset.

          4.5.         Title and Related Matters.

                        (a)     Except for Permitted Encumbrances, Seller has
good and valid title to the Purchased Assets, free and clear of all
Encumbrances.

                        (b)     To Seller's Knowledge, the Purchased Assets have
been maintained consistent with Good Utility Practice, except to the extent that
the failure to so maintain the Purchased Assets, taken as a whole, is not
reasonably expected to have a Material Adverse Effect.

                        (c)     Except as set forth on Schedule 4.5(c), the
Transferred Easements are all of the easements, railroad crossing rights and
rights of way, and similar rights (other than public rights of way) necessary
for the operation of the Purchased Assets as currently operated, except those
that are not reasonably expected to have a Material Adverse Effect.

          4.6.        Seller's Environmental Matters. Notwithstanding anything
contained herein, Sections 4.3, 4.6 and 4.10 are the only Sections containing
representations and warranties relating to environmental matters. Except as set
forth on Schedule 4.6:

                        (a)     Seller holds, and is in compliance and has been
in compliance over the last six (6) years, in all respects with, all
Environmental Permits that Seller requires in order to own, lease, maintain and
operate the Purchased Assets, and Seller is and has been over the last six (6)
years, otherwise in compliance in all respects with applicable Environmental
Laws with respect to the ownership, lease, maintenance or operation of the
Purchased Assets, except in all cases for such failures to hold or comply with
required Environmental Permits, and such failures to be in

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compliance with applicable Environmental Laws, as are not, individually or in
the aggregate, reasonably expected to have a Material Adverse Effect .

                        (b)     Seller has not received any written or, to
Seller's Knowledge, oral (i) request for information or notice that it is a
potentially responsible party under CERCLA or any similar state law, with
respect to the Site, or (ii) unresolved notice alleging any material violations
of Environmental Laws or Environmental Permits.

                        (c)     Seller has not entered into or agreed to any
decree, order or judgment under any Environmental Law relating to the Purchased
Assets, and, to Seller's Knowledge, Seller is not subject to any outstanding
decrees, orders or judgments relating to compliance with any Environmental Law
or to the Remediation of Hazardous Substances under any Environmental Law
relating to the Purchased Assets or the Site except for such decrees, orders and
judgments as are not material.

                        (d)     Seller has delivered or made available all
material environmental reports (including all Phase I Environmental Site
Assessment reports, or Phase II Environmental Site Assessment reports, if
applicable), investigations and studies relating to any of the Purchased Assets
within the last six (6) years.

                        (e)     To Seller's Knowledge, there has been no Release
of Hazardous Substances on, in, under or onto any part of the Site in respect of
which a Governmental Authority has required or may require under applicable
Environmental Laws any material Remediation except as are not, individually or
in the aggregate, reasonably expected to have a Material Adverse Effect.

                        (f)     To Seller's Knowledge, there are no underground
storage tanks or related piping, asbestos-containing materials or
polychlorinated biphenyl-containing transformers or other equipment, active or
abandoned, on the Site or included in the Purchased Assets, except as are not,
individually or in the aggregate, reasonably expected to have a Material Adverse
Effect.

          4.7.         Taxes. Seller has timely filed all Tax Returns required
to be filed by Seller with respect to the conduct and ownership of the Purchased
Assets, including Tax Returns for all applicable federal, state and local
income, franchise, sales, use, property, excise and other Taxes, and such Tax
Returns are true and correct in all material respects. Seller has paid all
material Taxes required to be paid pursuant to such Tax Returns or otherwise
required by Law to be paid by it, and there are no other material Taxes payable
on account of the ownership of the Purchased Assets from the date of the
inception of Seller's investment in the Purchased Assets, except for Taxes not
yet due in the ordinary course of business (for which adequate reserves have
been established). All other federal, state and local Taxes which Seller was or
is required by Law to withhold or collect have been and are being withheld or
collected by it and are being paid over to the proper Governmental Authorities
or are being held by Seller in accordance with Law for such payment. Seller has
not made any Tax elections with respect to the Purchased Assets that will bind
Buyer. None of the Purchased Assets is tax-exempt use property within the
meaning of Section 168(h) of the Code or tax-exempt bond financed property
within the meaning of Section 168(g)(5) of the Code and none of such assets is
subject to any lease made pursuant to

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Section 168(f)(8) of the Code (as in effect prior to the enactment of the Tax
Reform Act of 1986).

          4.8.         Material Transferred Easements. Schedule 4.8 sets forth a
description of the material Transferred Easements. Seller has not received
written notice of any pending or, to Seller's Knowledge, threatened proceedings
or actions by any Governmental Authority to modify the zoning classification of
or to condemn or take by eminent domain or to classify as a landmark all or any
material part of the Purchased Assets.

          4.9.         Certain Contracts and Arrangements.

                        (a)     Schedule 4.9(a) sets forth a list of all written
Seller's Agreements, other than such contracts, licenses, agreements,
arrangements and leases as (i) constitute Excluded Assets or relate solely to
Excluded Liabilities, (ii) may be terminated after the Closing by Buyer upon
notice of no more than sixty (60) days, (iii) have been entered into in the
ordinary course of business and do not individually involve annual payment
obligations in excess of $250,000, (iv) are expected to expire or terminate
prior to the Closing, or (v) are entered into by Seller after the date hereof
consistent with the terms of this Agreement.

                        (b)     Except as set forth on Schedule 4.9(b), each
Seller's Agreement set forth on Schedule 4.9(a) constitutes a legal, valid and
binding obligation of Seller and, to Seller's Knowledge, the other parties
thereto.

                        (c)     Except as set forth on Schedule 4.9(c), (i)
there is not under any Seller's Agreement set forth on Schedule 4.9(a) any
default or event which, with notice or lapse of time or both, would constitute a
default on the part of Seller or, any other party thereto, except such defaults
as are not, individually or in the aggregate, reasonably expected to have a
Material Adverse Effect, or (ii) to Seller's Knowledge, no party has repudiated
any provision of any Seller's Agreements.

          4.10.       Legal Proceedings. Except as set forth on Schedule 4.10,
there are no suits, actions or proceedings pending or, to Seller's Knowledge,
threatened against Seller or relating to the Purchased Assets by or before any
Governmental Authority, which are, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. Except as set forth on Schedule
4.10, Seller is not subject to any judgment, order or decree of any Governmental
Authority which are, individually or in the aggregate, reasonably expected to
have a Material Adverse Effect.

          4.11.       Permits. Seller holds, and is in compliance with, all
permits, certificates, licenses and other authorizations of all Governmental
Authorities (collectively, "Seller's Permits") that Seller requires in order to
own, lease, maintain and operate the Purchased Assets, except for (a) those
Environmental Permits which are governed by Section 4.6 and (b) such failures to
hold, or comply with, Seller's Permits as individually or in the aggregate are
not reasonably expected to have a Material Adverse Effect. Except as disclosed
in Section 4.6, or individually or in the aggregate are not reasonably expected
to have a Material Adverse Effect, (i) Seller has not received any written
notification that it is in violation of any such Seller's Permits, and (ii)
Seller is in compliance in all material respects with all such Seller's Permits.

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          4.12.       Brokers; Finders. Except as set forth on Schedule 4.12,
Seller has not, and none of Seller's Affiliates have, retained any financial
advisor, broker, agent, or finder or paid or agreed to pay any financial
advisor, broker, agent, or finder on account of this Agreement or the
transactions contemplated hereby. Buyer shall not have any responsibility or
liability (financial or otherwise) with respect to any Person set forth on
Schedule 4.12.

          4.13.       Compliance with Laws. Except as individually or in the
aggregate are not reasonably expected to have a Material Adverse Effect, Seller
is in compliance with all applicable Laws or orders of any Governmental
Authority applicable to the Purchased Assets. To Seller's Knowledge, no
investigation by any Governmental Authority with respect to Seller or any of its
Affiliates is pending or threatened, except as individually or in the aggregate
are not reasonably expected to have a Material Adverse Effect.

          4.14.       No Material Adverse Effect. Except as set forth in
Schedule 4.14, or as required by the terms of this Agreement, since November 30,
2006, no change, effect, development or event has occurred which, either
individually or in the aggregate, taken as a whole, with all effects, events,
developments or changes, has or is reasonably expected to result in a Material
Adverse Effect.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER

          As an inducement to Seller to enter into this Agreement and consummate
the transactions contemplated hereby, Buyer hereby represents and warrants to
Seller as follows:

          5.1.         Organization; Qualification. Buyer is a utility
aggregation cooperative validly existing and in good standing under the laws of
the Commonwealth of Virginia and has all requisite cooperative power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted. Buyer is, or by the Closing will be, qualified to
do business in the Commonwealth of Virginia.

         5.2.         Authority. Buyer has full cooperative power and authority
to execute and deliver this Agreement and each Additional Agreement to which it
is a party and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement and each such Additional Agreement
by Buyer and the consummation by Buyer of the transactions contemplated hereby
and thereby have been duly authorized by all necessary action required on the
part of Buyer. This Agreement has been duly executed and delivered by Buyer; and
this Agreement constitutes, and upon the execution and delivery by Buyer of each
Additional Agreement to which it is a party, each such Additional Agreement will
constitute, the valid and binding obligation of Buyer, enforceable against Buyer
in accordance with its terms, except that (a) such enforceability may be subject
to any bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium
or other Laws now or hereafter in effect affecting or relating to enforcement of
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.

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          5.3.         Consents and Approvals; No Violation.

                        (a)     Except as set forth on Schedule 5.3(a), and
subject to obtaining or making all Buyer's Required Regulatory Approvals,
neither the execution and delivery by Buyer of this Agreement and the Additional
Agreements to which it is a party nor the consummation by Buyer of the
transactions contemplated hereby and thereby will (i) conflict with or result in
any breach of any provision of the articles of incorporation or bylaws of Buyer;
(ii) result in a default (or give rise to any right of termination, cancellation
or acceleration or result in the imposition of a lien on any of its assets)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, agreement, lease or other instrument or obligation to which Buyer is
a party or by which Buyer or any of its properties and assets may be bound,
except for such defaults (or rights of termination, cancellation, acceleration
or resulting liens) as to which requisite consents, approvals or waivers have
been or will be prior to the Closing obtained, or which are not reasonably
expected to, individually or in the aggregate, have a Material Adverse Effect;
or (iii) violate any Law, order, judgment or decree applicable to Buyer or its
assets, which violation, individually or in the aggregate, is not reasonably
expected to result in a Material Adverse Effect.

                        (b)     Except for consents, approvals, filings and
notices set forth on Schedule 5.3(b) (such consents, approvals, filings and
notices referred are collectively referred to herein as the "Buyer's Required
Regulatory Approvals"), no consent or approval of, filing with, or notice to,
any Governmental Authority is necessary for the execution and delivery by Buyer
of this Agreement and the Additional Agreements to which it is a party or the
consummation by Buyer of the transactions contemplated hereby or thereby, other
than such consents, approvals, filings or notices which, if not obtained or
made, are not reasonably expected to have a Material Adverse Effect on Buyer's
ability to consummate the transactions contemplated hereby or by any Additional
Agreement to which it is a party, or to perform its material obligations
hereunder or thereunder.

          5.4.         Availability of Funds. Buyer has sufficient funds on hand
or available to it pursuant to existing lines of credit, or has received binding
written commitments from creditworthy financial institutions, true and correct
copies of which have been provided to Seller, to permit Buyer on the Closing
Date to pay the Purchase Price, all other amounts payable by Buyer hereunder or
under any Additional Agreement, including all Assumed Liabilities, and all fees
and expenses incurred by Buyer in connection with the transactions contemplated
hereby and by the Additional Agreements, and to permit Buyer to timely pay or
perform all of its other obligations under this Agreement and the Additional
Agreements.

          5.5.         Legal Proceedings. There are no suits, actions or
proceedings pending or threatened against Buyer or its assets by or before any
Governmental Authority, which are, individually or in the aggregate, reasonably
expected to have a Material Adverse Effect. Buyer is not subject to any
judgments, orders or decrees of any Governmental Authority which, individually
or in the aggregate, have a Material Adverse Effect.

         5.6.         Ability to Close. The Buyer has no reason to believe that
it will not be able to satisfy on a timely basis any term or condition contained
in this Agreement, or that the full

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amount of the consideration payable by the Buyer to the Seller, pursuant to this
Agreement will not be available to it as of the Closing.

          5.7.         Brokers; Finders. Buyer has not, and none of Buyer's
Affiliates have, retained any financial advisor, broker, agent, or finder or
paid or agreed to pay any financial advisor, broker, agent, or finder on account
of this Agreement or the transactions contemplated hereby.

ARTICLE VI
COVENANTS OF THE PARTIES

          6.1.         Conduct of Business Relating to the Purchased Assets.
Except as set forth on Schedule 6.1, as required for Seller to comply with
applicable Law, as contemplated by this Agreement or any Additional Agreement,
or to the extent Buyer otherwise consents in writing (such consent not to be
unreasonably withheld or delayed), during the period from the date of this
Agreement to the Closing Date, Seller shall operate the Purchased Assets in the
ordinary course of business consistent with the past practices of Seller and in
accordance with Good Utility Practices, and shall use all Commercially
Reasonable Efforts to preserve intact the Purchased Assets, and endeavor to
preserve the goodwill and relationships with customers, vendors, suppliers,
employees and others having business dealings with the Seller. Without limiting
the generality of the foregoing, and, except as set forth on Schedule 6.1, as
required for Seller to comply with applicable Law, as contemplated by this
Agreement or any Additional Agreement, or to the extent Buyer otherwise consents
in writing (such consent not to be unreasonably withheld or delayed), between
the date hereof and the Closing Date, Seller shall not, with respect to the
Purchased Assets:

                        (a)     Sell, lease (as lessor), encumber, pledge,
transfer or otherwise dispose of, any Purchased Assets (except for Purchased
Assets used, consumed or replaced in the ordinary course of business consistent
with past practices of Seller or and in accordance with Good Utility Practices)
other than to the extent that any such action results in a Permitted
Encumbrance;

                        (b)     Modify, amend or voluntarily terminate prior to
the expiration date any material Seller's Agreement set forth on Schedule
2.1(d), other than (i) in the ordinary course of business, to the extent
consistent with the past practices of Seller and in accordance with Good Utility
Practices or (ii) as may be required in connection with transferring Seller's
rights or obligations thereunder to Buyer pursuant to this Agreement;

                        (c)     Enter into any contract, agreement, commitment
or arrangement relating to the Purchased Assets that provides for future
payments in any twelve-month period that individually exceed $100,000 or in the
aggregate exceed $250,000, unless it is terminable by Seller without penalty or
premium upon no more than sixty (60) days' notice, other than any contract,
commitment or arrangement relating to any capital expenditure;

                        (d)     Make any material change in the level of
inventories customarily maintained by Seller with respect to the Purchased
Assets, other than in the ordinary course of business or consistent with Good
Utility Practice;

                        (e)     Make or commit to any capital expenditures
relating to the Purchased Assets in excess of 110% of the amount reflected for
such expenditures in the Seller's budget

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attached hereto as Schedule 6.1(e), for the year in which those capital
expenditures are made, except for capital expenditures (A) required under any
Seller's Agreement or by a Governmental Authority; (B) incurred in connection
with the repair or replacement of facilities destroyed or damaged due to
casualty or accident (whether or not covered by insurance); or (C) necessary or
appropriate under Good Utility Practices to provide or maintain safe and
adequate electric transmission services on the Virginia Eastern Shore;

                        (f)     Except as consistent with past practice, agree
or consent to any material changes in courses of dealing with the VSCC, PJM or
the FERC, in each case in respect of the operations of the Purchased Assets,
except as required by applicable Law, with respect to the SOS case currently
pending, or to obtain or renew Transferable Permits or agreements in the
ordinary course of business consistent with past practice;

                        (g)     Fail to maintain insurance on the Purchased
Assets with financially responsible insurance companies (or if applicable, self
insure) in such amounts and against such risks in the ordinary course of
business consistent with past practice;

                        (h)     Other than in the ordinary course of business,
amend in any material respect or allow to terminate or lapse in any material
respect, any Seller's Permit material to the Purchased Assets, taken as a whole,
other than as required by applicable Law;

                        (i)     Enter into any agreements which would be
transferred to Buyer under Section 2.1(d) that would limit or otherwise restrict
in any material respect the use of the Purchased Assets;

                        (j)     With respect to the Purchased Assets, change, in
any material respect, its accounting methods or practices (except in accordance
with changes in generally accepted accounting principles, subject to FERC's
uniform system of accounts), credit practices, collection policies, or
investment, financial reporting, or inventory practices or policies or the
manner in which the books and records relating to the Purchased Assets are
maintained; and

                        (k)     Except as otherwise provided herein, enter into
any written or oral contract, agreement, commitment or arrangement with respect
to any of the prohibited transactions set forth in the foregoing paragraphs (a)
through (j).

                        To Seller's Knowledge and to Buyer's Knowledge, neither
Party shall take any action that is intended to result in any of the conditions
to Closing set forth in Article VII not being satisfied.

          6.2.        Access to Information.

                        (a)     Between the date of this Agreement and the
Closing Date, Seller shall: (i) give Buyer and its Representatives, during
normal business hours and upon reasonable notice, reasonable access to all
books, records, plans, offices and other facilities and properties in the
possession of Seller included in the Purchased Assets (it being understood that
Seller shall have the right to have a Representative present at all times during
any such access); (ii) furnish Buyer with such financial and operating data and
other information in the possession of Seller with respect to the Purchased
Assets as Buyer may from time to time reasonably request; and (iii)

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furnish Buyer with all such other information in the possession of Seller and
provide such other cooperation as shall be reasonably necessary to enable Buyer,
at its request, to verify the accuracy of the representations and warranties of
Seller contained in this Agreement; provided, however, that (A) any such access
or requests shall be conducted in such 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 or other
privilege, and (C) Seller need not supply Buyer with any information which
Seller is under a legal or contractual obligation not to supply if Seller so
notifies Buyer.

                        (b)     All information furnished to or obtained by
Buyer and Buyer's Representatives pursuant to this Section 6.2 shall be
Proprietary Information and shall be kept confidential in accordance with the
terms of the Confidentiality Agreement. Nothing in this Section 6.2 is intended
to or shall be deemed to amend, supplement or otherwise modify the obligations
of Buyer, its Representatives or its Affiliates under the Confidentiality
Agreement, all of which remain in effect until termination of such agreement in
accordance with its terms.

                        (c)     For a period of seven (7) years from and after
the Closing Date, each Party and its Representatives shall have reasonable
access during normal business hours to all of the books and records of the
Purchased Assets in the possession of the other Party to the extent that such
access may reasonably be required by such Party in connection with the Assumed
Liabilities or the Excluded Liabilities, or other matters relating to or
affected by the ownership, lease, maintenance or operation of the Purchased
Assets or the Excluded Assets. Such access shall be afforded by the Party in
possession of any such books and records upon receipt of reasonable advance
notice and during normal business hours. The Party exercising this right of
access shall be solely responsible for any costs or expenses incurred by it or
any out-of-pocket costs of the other Party with respect to such access pursuant
to this Section 6.2(c). If the Party in possession of such books and records
shall desire to dispose of any books and records upon or prior to the expiration
of such seven-year period, such Party shall, prior to such disposition, give the
other Party a reasonable opportunity, at such other Party's cost and expense, to
segregate and remove such books and records as such other Party may select.
Buyer's right of examination and access pending the Closing with respect to
environmental matters relating to the Purchased Assets shall in no event include
physical testing of or collection of samples from the Site or the Purchased
Assets.

                        (d)     Buyer shall not, prior to the Closing Date,
contact any customer, vendor, supplier of, or director, officer, partner, member
or employee of, or any other Person having business dealings with, Seller or its
Affiliates with respect to any aspect of the Purchased Assets or the
transactions contemplated hereby or by any Additional Agreement, including any
Governmental Authority, without the prior consent of Seller; provided, that
Buyer may request from a Governmental Authority information which is publicly
available. Notwithstanding the foregoing, Seller shall work with Buyer to
prepare statements that Buyer or Seller may provide in response to inquiries
from any such Person having business dealings with Seller or its Affiliates,
with respect to the Purchased Assets or transactions contemplated hereby or by
any Additional Agreement. Except as otherwise provided herein, prior to Closing,
Buyer shall not investigate or inquire as to any matter with any Governmental
Authority having jurisdiction over any aspect of the Purchased Assets, unless
and until the written consent of Seller (not to be unreasonably withheld or
delayed) to the making of such investigation or inquiry has been

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received by Buyer and after consultation with Seller as to the scope and manner
of the investigation or inquiry.

                        (e)     All communications and consultations
contemplated by Sections 6.2(a), 6.4 and 6.5 shall take place between the
respective designated Representatives of Seller and Buyer, as may be designated
from time to time by Seller and Buyer in the manner contemplated by Section
10.6. Seller's initial designated Representatives shall be Charles R. Dickerson
and Buyer's initial designated Representatives shall be Lisa D. Johnson.

          6.3.         Procedures with Respect to Certain Agreements and Other
Assets. Seller has easements, real property license agreements (including
railroad crossing rights), rights-of-way, and leases for rights-of-way, which
relate solely to the Purchased Assets (the "Transferred Easements"). At the
Closing, to the extent transferable, Seller will convey and assign to Buyer,
subject to the obtaining of any necessary consents, (i) by the Assignment of
Transferred Easements, all Transferred Easements, and (ii) to the extent
practicable, by separate, recordable Assignment of Easement as to all
Transferred Easements in each separate county.

          6.4.         Public Statements. Subject to Section 6.2(d), except as
required by applicable Law or by applicable rules of any national securities
exchange, the Parties shall consult with each other in advance, prior to the
Closing Date, with respect to any press release or other public announcement,
statement or comment relating to the transactions contemplated by this
Agreement; provided, however, that, notwithstanding the provisions of Section
6.2(d) relating to any other Person having business dealings with any Party, the
Parties shall be permitted, subject to applicable Law and the Confidentiality
Agreement, to discuss with members of the investment and financing community the
transactions contemplated hereby, and the financial and operational effects of
consummating such transactions, in each case, in connection with bona fide
financing and credit-related endeavors.

          6.5.         Further Assurances.

                        (a)     Subject to the terms and conditions of this
Agreement, each of the Parties hereto shall use its Commercially Reasonable
Efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable Laws to
consummate and make effective the purchase and sale of the Purchased Assets
pursuant to this Agreement or the assumption of the Assumed Liabilities,
including using its Commercially Reasonable Efforts to ensure satisfaction of
the conditions precedent to each Party's obligations hereunder, including
obtaining all necessary consents, approvals and authorizations of, and making
all required notices or filings with, third parties required to be obtained or
made in order to consummate the transactions hereunder, including the transfer
of the Transferable Permits to Buyer. Seller shall use Commercially Reasonable
Efforts to cooperate with Buyer in its efforts to obtain all permits,
certificates, licenses and other authorizations of all Governmental Authorities
that Buyer requires to own, lease, maintain and operate the Purchased Assets
("Buyer's Permits"), Environmental Permits and Buyer's Required Regulatory
Approvals necessary for Buyer to operate the Purchased Assets substantially in
the manner operated by Seller prior to the Closing Date. Buyer shall use
Commercially Reasonable Efforts to cooperate with Seller in its efforts to
obtain all of Seller's Required Regulatory Approvals. No Party shall, without
prior written consent of the other Party, take or fail to take any action which
might

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reasonably be expected to prevent or materially impede, interfere with or delay
the transactions contemplated by this Agreement or any Additional Agreement.

                        (b)     Without limiting the generality of Section
6.5(a):

                                   (i)       In the event that any Purchased
Asset shall not have been conveyed to Buyer at the Closing, Seller shall,
subject to Section 6.5(b)(ii), use Commercially Reasonable Efforts after the
Closing to convey such asset to Buyer as promptly as practicable.

                                   (ii)      To the extent that Seller's right,
title and interest in, to and under any material Seller's Agreement set forth in
Section 2.1(d) may not be assigned without the consent, approval or
authorization of any third party which consent, approval or authorization has
not been obtained by the Closing Date, this Agreement shall not constitute an
agreement to assign such right, title and interest if an attempted assignment
would constitute a breach of such Seller's Agreement or violate any applicable
Law. If any consent, approval or authorization to such assignment of any
material Seller's Agreement set forth in Section 2.1(d) shall not be obtained,
or if any attempted assignment would be ineffective or would materially impair
Buyer's rights and obligations under such Seller's Agreement, such that Buyer
would not acquire and assume the benefit and detriment of all such rights and
obligations, the Parties, to the fullest extent permitted by applicable Law and
such Seller's Agreement, shall, from and after the Closing Date, agree to either
appoint Buyer to be Seller's agent with respect to such Seller's Agreement, or,
to the fullest extent permitted by applicable Law and such Seller's Agreement,
enter into such reasonable arrangements with Buyer or take such other actions as
are necessary to provide Buyer with the same or substantially similar rights and
obligations under such Seller's Agreement.

          6.6.         Consents and Approvals. Without limiting the generality
of Section 6.5(a):

                        (a)     The Parties shall use Commercially Reasonable
Efforts to take, or cause to be taken, all actions, and do, or cause to be done,
all things necessary, proper or advisable under applicable Laws to obtain all
required consents and approvals of all other Governmental Authorities as
promptly as practicable after the date hereof, including the VSCC, and make all
other filings and give all other notices required to be made prior to the
Closing with respect to the transactions contemplated hereby and by the
Additional Agreements, including with respect to the Seller's Required
Regulatory Approvals and Buyer's Required Regulatory Approvals. The Parties
shall respond promptly to any requests for additional information made by such
Persons, and use their respective Commercially Reasonable Efforts to cause all
such consents and approvals, without conditions, to be obtained or waived at the
earliest possible date after the date of filing. Each Party shall bear its own
costs and expenses of the preparation of any such filing or notice.

                        (b)     The Parties shall use Commercially Reasonable
Efforts to make all filings with the VSCC required by such Party under the
applicable Laws of Virginia as promptly as practicable after the date hereof,
but in any event within forty-five (45) days after the date of this Agreement.
Prior to filing any application with the VSCC for an approval required by both
Parties, the Parties shall jointly prepare such application and shall
incorporate into such application all revisions reasonably requested by the
other Party. Each Party shall be solely

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responsible for its own cost of preparing and filing such application, as well
as any petitions for rehearing and any reapplications.

          6.7.         Certain Tax Matters.

                        (a)     All transfer, sales and similar Taxes ("Transfer
Taxes") incurred in connection with this Agreement and the Additional
Agreements, and the transactions contemplated hereby and thereby (including (i)
sales and use Tax on the sale or purchase of the Purchased Assets imposed by
Virginia and (ii) Transfer Tax on conveyances of interests in real property
imposed by Virginia or any political subdivision thereof) shall be borne by
Buyer (and, to the extent paid by Seller, Buyer shall reimburse Seller upon
request). Buyer, at its expense, shall prepare and file, to the extent required
by, or permissible under, applicable Law, all necessary Tax Returns and other
documentation with respect to all such Transfer Taxes, and, if required by
applicable Law, Seller shall join in the execution of all such Tax Returns and
other documentation; provided, however, that prior to the Closing Date, to the
extent applicable, Buyer shall provide to Seller appropriate certificates of Tax
exemption from each applicable Governmental Authority.

                        (b)     With respect to Taxes to be prorated in
accordance with Section 3.6, Seller shall prepare and timely file all Tax
Returns required to be filed (without regard to extensions) prior to the Closing
Date with respect to the Purchased Assets, if any, and with respect to the
periods prior to the Closing Date shall timely pay all Taxes shown to be due on
such Tax Returns. With respect to Taxes to be prorated in accordance with
Section 3.6, Buyer shall prepare and timely file all Tax Returns required to be
filed (without regard to extensions) on or after the Closing Date with respect
to the Purchased Assets, if any, and shall timely pay all Taxes shown to be due
on such Tax Returns with respect to periods on or after the Closing Date. Tax
Returns prepared by either Party pursuant to this Section 6.7(b) shall be
promptly provided to the other Party following filing.

                        (c)     Buyer and Seller 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, audit or other examination, or any
proceeding, by or before any Governmental Authority relating to Liability for
Taxes, and each Party shall retain and provide the requesting Party with all
books and records or other information which may be relevant to such Tax Return,
audit, examination or proceeding. All books, records and information obtained
pursuant to this Section 6.7(c) or pursuant to any other Section that provides
for the sharing of books, records and information or the review of any Tax
Return or other instrument relating to Taxes shall be kept confidential by the
parties hereto in accordance with the terms and conditions set forth in the
Confidentiality Agreement.

                        (d)     In the event that a dispute arises between
Seller and Buyer regarding Taxes or any amount due under this Section 6.7, the
Parties shall attempt in good faith to resolve such dispute and any agreed-upon
amount shall be promptly paid to the appropriate Party. If any such dispute is
not resolved within thirty (30) days after notice thereof is given to any Party,
the Parties shall submit the dispute to an Independent Accounting Firm for
resolution, which resolution shall be final, binding and conclusive on the
Parties. In the event that Buyer and Seller cannot promptly agree on the
selection of an accounting firm to act as the Independent

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Accounting Firm, either Party may request the American Arbitration Association
to appoint an Independent Accounting Firm, and such appointment shall be final,
binding and conclusive on Buyer and Seller. Notwithstanding anything in this
Agreement to the contrary, the costs, fees and expenses of the Independent
Accounting Firm in resolving the dispute shall be borne equally by Seller and
Buyer. Any payment required to be made as a result of the resolution by the
Independent Accounting Firm of any such dispute shall be made within five (5)
Business Days after such resolution, together with any interest determined by
the Independent Accounting Firm to be appropriate.

                        (e)     Seller shall be entitled to any Tax refund or
credit relating to any period ending on or prior to the Closing Date (and, if
received by Buyer, shall be promptly paid by Buyer to Seller); Buyer shall be
entitled to any Tax refund or credit relating to any period commencing after the
Closing Date (and, if received by Seller, shall be promptly paid by Seller to
Buyer); and any Tax Refund or credit relating to a period commencing prior to
the Closing Date and terminating subsequent to the Closing Date shall be
prorated in accordance with Section 3.6, with an appropriate portion of the Tax
Refund or credit being promptly paid by the Party receiving the same to the
other Party.

          6.8.         Right to Update. Until the Closing Date, Seller and Buyer
shall each have the right to update or amend in any respect its disclosure of
any matter set forth or permitted to be set forth on any Schedule with respect
to Article IV or V to the extent permitted herein. No change or addition to a
Schedule made pursuant to this Section 6.8 shall be deemed to cure any breach of
any representation or warranty resulting from such change or addition unless (i)
such breach is not reasonably expected to have a Material Adverse Effect, (ii)
Buyer or Seller, as applicable, specifically agrees to such change or addition
in writing or (iii) consummates the Closing under this Agreement. No such change
or addition to any Schedule with respect to Article IV or V shall be considered
to constitute or give rise to a waiver by Buyer or Seller, as applicable, of any
condition set forth in this Agreement, unless (A) such change is not reasonably
expected to have a Material Adverse Effect, (B) such Party specifically agrees
to such change or addition in writing or (C) consummates the Closing under this
Agreement after receipt of such updated Schedules. Further, if any change or
addition to a Schedule made pursuant to this Section 6.8 is specifically agreed
to in writing by the Buyer or Seller, as applicable, or if the Closing is
consummated after receipt of such updated Schedules, in each case the updated
Schedules to the extent agreed to or existing at the time of Closing, as
applicable, shall be deemed so amended and used for purposes of determining
whether any Indemnitee is entitled to indemnification under Article VIII hereof.
Neither Buyer nor Seller shall have any right to update or amend any Schedule
with respect to any other Article of this Agreement.

          6.9.         Employees.

                        (a)     Seller shall be responsible, with respect to the
Purchased Assets, for performing and discharging all requirements under the WARN
Act and under applicable state and local Laws for the notification of employees
associated with the Purchased Assets of any "employment loss" (within the
meaning of the WARN Act) which occurs prior to the Closing Date.

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          6.10.     Risk of Loss.

                        (a)     From the date hereof to but not including the
Closing Date, all risk of loss or damage to the Purchased Assets shall be borne
by Seller, other than loss or damage caused by the negligent acts or omissions
of Buyer or any Buyer Representative, which loss or damage shall be the
responsibility of Buyer.

                        (b)     Notwithstanding any provision hereof to the
contrary, subject to Section 9.1(g), if, before the Closing Date, all or any
portion of the Purchased Assets is (i) condemned or taken by eminent domain or
is the subject of a pending or threatened condemnation or taking which has not
been consummated, or (ii) materially damaged or destroyed by fire or other
casualty, Seller shall notify Buyer promptly in writing of such fact, and (x) in
the case of a condemnation or taking, Seller shall assign or pay, as the case
may be, any net proceeds thereof to Buyer at the Closing and (y) in the case of
a fire or other casualty, Seller shall restore such damage. Notwithstanding the
foregoing, if such condemnation, taking, damage or destruction results in a
Material Adverse Effect, Buyer and Seller shall negotiate to resolve the loss
resulting from such condemnation, taking, damage or destruction (and such
negotiation shall include the negotiation of a fair and equitable adjustment to
the Purchase Price). If no such resolution can be agreed upon prior to the
earlier to occur of (i) the date that is ninety (90) days after Seller has
notified Buyer of such loss and (ii) the date on which the Closing, pursuant to
Section 3.1, would otherwise occur, then Buyer or Seller may terminate this
Agreement pursuant to Section 9.1(g).

          6.11.       Equipment Relocation. From and after the Closing Date,
Buyer shall cooperate with Seller to facilitate Seller's relocation of any
Excluded Assets at Seller's sole cost and expense. To the extent that such
relocation requires Seller to gain access to the Site on or after the Closing
Date such access shall not be unreasonably withheld by Buyer.

          6.12.       Meters. Buyer shall be responsible for ensuring that
revenue quality metering is installed at all interconnection points with the
Seller's transmission system at Buyer's expense. Buyer and Seller agree to work
jointly to accomplish this prior to Closing or as soon as possible and will
utilize existing metering equipment, wherever possible. Once metering is
installed, this metering shall be owned by the Seller.

          6.13.       Capacitors. Buyer shall replace existing PCB contaminated
capacitors included within the Purchased Assets at its sole cost and expense
within two (2) years following the Closing Date. Seller shall promptly take
possession of any replaced capacitors at the site of the replacement at its sole
cost and expense and dispose of such capacitors at an Off-Site Location.

          6.14.       Transmission Matters with PJM.

                        (a)     Seller shall construct the transmission projects
that PJM has determined necessary through the PJM Regional Transmission
Expansion Plan ("RTEP") process at the time of Closing that will impact the
transmission assets acquired by Buyer. Buyer shall reimburse Seller for the
actual costs of such facilities and will own the facilities, subject to any
required FERC approval. Any construction projects for transmission facilities
that will impact the acquired transmission assets facilities and be in Virginia,
identified through the PJM/RTEP process after the Closing, will become Buyer's
responsibility to build.

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                        (b)     If any such RTEP construction project is in
progress, contracts have been awarded for such project, or materials have been
ordered or purchased for such project as of the Closing Date, Seller shall
complete such construction even if such completion occurs after the Closing
Date.

          6.15.       Expenses. Except to the extent provided herein or any
Additional Agreement, and except due to any breach, whether or not the
transactions contemplated hereby are consummated, all costs, fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be borne by the Party incurring such costs, fees and expenses,
including the fees and commissions referred to in Sections 4.12 and 5.7.

ARTICLE VII
CONDITIONS

          7.1.         Conditions to Obligation of Buyer. The obligation of
Buyer to effect the transactions contemplated by this Agreement shall be subject
to the satisfaction (or the waiver, to the extent permitted by applicable Law,
by Buyer) at or prior to the Closing of the following conditions:

                        (a)     No preliminary or permanent injunction, order or
decree by any Governmental Authority which prevents the consummation of the
transactions contemplated hereby or by the Additional Agreements shall have been
issued and remain in effect (Buyer agreeing to use Commercially Reasonable
Efforts to have any such injunction, order or decree lifted), and no applicable
Law shall be in effect which prohibits the consummation of the transactions
contemplated hereby or thereby;

                        (b)     Buyer shall have obtained each and every one of
the Buyer's Required Regulatory Approvals set forth on Schedule 7.1(c), which
shall be final and non-appealable, and Buyer shall have received evidence
thereof, in form and substance reasonably satisfactory to Buyer, and all
conditions to the effectiveness thereof prescribed therein or otherwise by Law
shall have been satisfied or waived, it being understood that the imposition by
any Governmental Authority of any such condition to the grant or issuance of any
such consent or approval requiring any action or omission by Buyer shall not
affect Buyer's obligation to consummate the transactions contemplated hereby or
by the Additional Agreements unless such condition is, individually or in the
aggregate, reasonably expected to have a Regulatory Material Adverse Effect on
Buyer;

                        (c)     Seller shall have obtained each and every one of
the Seller's Required Regulatory Approvals set forth on Schedule 7.2(c), which
shall be final and non-appealable, and which shall not include any condition
requiring any action or omission by Buyer which is, individually or in the
aggregate, reasonably expected to have a Regulatory Material Adverse Effect on
Buyer; and Buyer shall have received evidence thereof;

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

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                        (e)     The representations and warranties of Seller set
forth in this Agreement shall be true and correct as though made at and as of
the Closing Date (other than representations and warranties that are made as of
a specific date which shall have been true and correct as of such date);
provided that this condition shall be deemed satisfied unless the failure of
such representations and warranties (and with respect to those qualified by
materiality without consideration of such qualifiers) to be so true and correct
is, individually or in the aggregate, reasonably expected to have a Material
Adverse Effect;

                        (f)     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 Sections 7.1(d) and (e)
have been satisfied by Seller; and

                        (g)     Buyer shall have received an opinion from
Seller's counsel, which counsel shall be reasonably acceptable to Buyer, dated
the Closing Date, in form and substance reasonably satisfactory to Buyer and its
counsel.

          7.2.         Conditions to Obligation of Seller. The obligation of
Seller to effect the transactions contemplated by this Agreement shall be
subject to the satisfaction (or the waiver, to the extent permitted by
applicable Law, by Seller) at or prior to the Closing of the following
conditions:

                        (a)     No preliminary or permanent injunction or other
order or decree by any Governmental Authority which prevents the consummation of
the transactions contemplated hereby or by the Additional Agreements shall have
been issued and remain in effect (Seller agreeing to use its Commercially
Reasonable Efforts to have any such injunction, order or decree lifted), and no
applicable Law shall be in effect which prohibits the consummation of the
transactions contemplated hereby or thereby;

                        (b)     Seller shall have obtained each and every one of
the Seller's Required Regulatory Approvals set forth on Schedule 7.2(c), which
shall be final and non-appealable, and Seller shall have received evidence
thereof, in form and substance reasonably satisfactory to Seller; and all
conditions to the effectiveness thereof prescribed therein or otherwise by Law
shall have been satisfied or waived, it being understood that the imposition by
any Governmental Authority of any such condition to the grant or issuance of any
such consent or approval requiring any action or omission by Seller shall not
affect Seller's obligation to consummate the transactions contemplated hereby or
by the Additional Agreements unless such condition is, individually or in the
aggregate, reasonably expected to have a Regulatory Material Adverse Effect on
Seller;

                        (c)     Buyer shall have obtained each and every one of
the Buyer's Required Regulatory Approvals set forth in Schedule 7.1(c), which
shall be final and non-appealable, and which shall not include any condition
requiring any action or omission by Seller which condition is, individually or
in the aggregate, reasonably expected to have a Regulatory Material Adverse
Effect on Seller; and Seller shall have received evidence thereof;

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

                        (e)     The representations and warranties of Buyer set
forth in this Agreement shall be true and correct as though made at and as of
the Closing Date (other than representations and warranties that are made as of
a specific date which shall have been true and correct as of such date);
provided that this condition shall be deemed satisfied unless the failure of
such representations and warranties (and with respect to those qualified by
materiality without consideration of such qualifiers) to be so true and correct
is, individually or in the aggregate, reasonably expected to have a Material
Adverse Effect;

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

                        (g)     Seller shall have received an opinion from one
or more of Buyer's counsel, which counsel shall be reasonably acceptable to
Seller, dated the Closing Date, in form and substance reasonably satisfactory to
Seller and its counsel.

          7.3.         Conditions to Obligation of Buyer and Seller. The
obligation of Buyer and Seller to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction (or the waiver, to the extent
permitted by applicable Law, by Seller and Buyer) at or prior to the Closing of
the following condition:

                        (a)     Seller shall consummate the transactions
contemplated by the Distribution Purchase Agreement prior to or simultaneously
with the Closing.

ARTICLE VIII
INDEMNIFICATION AND ARBITRATION

          8.1.         Indemnification.

                        (a)     From and after the Closing Date, Buyer shall
indemnify, defend and hold harmless, Seller and its Representatives (each, a
"Seller's Indemnitee"), from and against any and all claims, demands, suits,
losses, liabilities, penalties, damages, obligations, payments, costs and
expenses (including reasonable attorneys' fees and expenses in connection
therewith) (each, an "Indemnifiable Loss"), asserted against or suffered by any
Seller's Indemnitee relating to, resulting from or arising out of (i) any breach
by Buyer of any representation, warranty, covenant or agreement of Buyer
contained in this Agreement, (ii) the Assumed Liabilities, or (iii) any Third
Party Claim against any Seller's Indemnitee in connection with Buyer's
ownership, lease, maintenance, construction, modification or operation of any of
the Purchased Assets on or after the Closing Date; provided, however, that Buyer
shall be liable to Seller only for Indemnifiable Losses for which any Seller's
Indemnitee gives written notice to Buyer (setting forth with reasonable
specificity the nature and amount of the Indemnifiable Loss) during the period
for which such representation, warranty, covenants or agreements survive the
Closing in accordance with Section 10.4. In addition, notwithstanding anything
contained herein to the contrary, Buyer shall not be required to indemnify any
Seller's Indemnitee until the aggregate dollar amount of

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all Indemnifiable Losses exceeds $750,000 (the "Threshold"). In no event shall
all Indemnifiable Losses paid by Buyer to Seller's Indemnitees, in the
aggregate, exceed 35% of the Purchase Price (the "Cap"), other than with respect
to actual or constructive fraud.

                        (b)     From and after the Closing, Seller shall
indemnify, defend and hold harmless, Buyer and its Representatives (each, a
"Buyer's Indemnitee" and, together with Seller's Indemnitees, an "Indemnitee"),
from and against any and all Indemnifiable Losses asserted against or suffered
by any Buyer's Indemnitee relating to, resulting from or arising out of (i) any
breach by Seller of any representation, warranty, covenant or agreement of
Seller set forth in this Agreement or (ii) the Excluded Liabilities; provided,
however, that Seller shall be liable to Buyer only for Indemnifiable Losses for
which any Buyer's Indemnitee gives written notice to Seller (setting forth with
reasonable specificity the nature and amount of the Indemnifiable Loss) during
the period for which such representation, warranty, covenants or agreements
survive the Closing in accordance with Section 10.4; and provided further
however, that notwithstanding anything contained herein to the contrary, in no
event shall Seller be required to indemnify Buyer for any obligations of
Seller's Affiliates or any Indemnifiable Losses which are Liabilities of
Seller's Affiliates, including without limitation, the Excluded Liabilities set
forth in Sections 2.4(a) and 2.4(b). In addition, notwithstanding anything
contained herein to the contrary, Seller shall not be required to indemnify any
Buyer's Indemnitee until the aggregate dollar amount of all Indemnifiable Losses
which would otherwise be indemnifiable exceeds the Threshold. In no event shall
all Indemnifiable Losses paid by Seller to Buyer's Indemnitees, in the
aggregate, exceed the Cap, other than with respect to actual or constructive
fraud. Notwithstanding anything contained herein to the contrary, for the
avoidance of doubt, except for the representations and warranties set forth in
Article IV, Seller shall have no indemnification obligations to Buyer relating
to the condition of the Purchased Assets, and such Purchased Assets are being
sold subject to the disclaimer set forth in Section 10.5.

                        (c)     The rights and remedies of Seller and Buyer set
forth in this Article VIII are exclusive and in lieu of any and all other rights
and remedies which Seller and Buyer may have under this Agreement, under
applicable Law, whether at common law or in equity, including for declaratory,
injunctive or monetary relief, in each case, with respect to any Indemnifiable
Loss, other than with respect to the rights of a Party to enforce this Section
8.1.

                        (d)     Notwithstanding anything to the contrary herein,
no Person (including an Indemnitee) shall be entitled to recover from any other
Person (including any Party required to provide indemnification under this
Agreement (an "Indemnifying Party")) any amount in excess of the actual
compensatory damages, court costs and reasonable attorneys' fees suffered by
such Party. In furtherance of the foregoing, Buyer and Seller hereby irrevocably
waive any right to recover punitive, indirect, special, exemplary and
consequential damages arising in connection with or with respect to this
Agreement (other than with respect to indemnification for a Third-Party Claim).

                        (e)     Any Indemnitee shall use Commercially Reasonable
Efforts to mitigate all losses, damages and the like relating to a claim under
the indemnification provisions in this Section 8.1, including availing itself of
any defenses, limitations, rights of contribution, claims against third Persons
and other rights at law or equity.

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          8.2.         Defense of Claims

                        (a)     If any Indemnitee receives notice of the
assertion of any Indemnifiable Loss or of the commencement of any suit, action
or proceeding made or brought by any Person who is not an Indemnitee (a
"Third-Party Claim") 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 no event later than ten (10)
Business 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 incurred by the Indemnitee. The
Indemnifying Party shall 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. If an Indemnifying Party elects not to assume the defense of any
Third-Party Claim, the Indemnitee may defend, compromise or settle such
Third-Party Claim with counsel selected by it, provided that, without the prior
written consent of the Indemnifying Party, the Indemnitee shall not agree to the
entry of any judgment with respect to, or any compromise or settlement of, any
Third-Party Claim.

                        (b)     If, within twenty (20) Business Days after an
Indemnitee gives written notice to the Indemnifying Party of any Third-Party
Claim, such 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), then the Indemnifying Party shall not be
liable for any costs, fees or expenses subsequently incurred by the Indemnitee
in connection with the defense, compromise or settlement thereof.

                        (c)     Subject to Section 8.3, any claim by an
Indemnitee on account of an Indemnifiable Loss which does not constitute a
Third-Party Claim (a "Direct Claim") shall be asserted by giving the
Indemnifying Party reasonably prompt written notice thereof, in no event later
than twenty (20) Business Days after the Indemnitee becomes aware of such Direct
Claim, stating the nature of such claim in reasonable detail and indicating the
estimated amount, if practicable, of such Indemnifiable Loss. The Indemnifying
Party shall have a period of twenty (20) Business Days within which to respond
to such Direct Claim. If the Indemnifying Party fails to respond during such
twenty (20) Business Day period, the Indemnifying Party shall be deemed to have
accepted such claim and, subject to this Article VIII, shall promptly reimburse
the Indemnitee for the Indemnifiable Losses set forth in the Indemnitee's
notice.

                        (d)     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 to the extent that the Party which was entitled to receive such
notice was actually prejudiced as a result of such failure.

          8.3.         Arbitration.

                        (a)     Except as otherwise provided herein, in the
event of any dispute between Seller and Buyer arising after the Closing (whether
relating to facts, events or circumstances occurring or existing prior to, on or
after the Closing Date) and relating to, resulting from or arising out of any
provision of this Agreement (other than disputes arising under Section 8.1),
including with respect to Direct Claims and Third-Party Claims, the Party
asserting such dispute

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shall give written notice to the other of the fact that a dispute has arisen
pursuant hereto. Such notice shall include (i) a statement setting forth in
reasonable detail the facts, events, circumstances, evidence and arguments
underlying such dispute and (ii) proposed arrangements for a meeting to attempt
to resolve the dispute to be held within sixty (60) days after such notice is
given. Within thirty (30) days after such notice is given, the other Party
hereto shall submit to the Party giving such notice a written summary responding
to such statement of facts, events, circumstances, evidence and arguments
contained in the notice and an acceptance of or proposed alternative to the
meeting arrangements set forth in the initial notice.

                        (b)     The chief executive officers (or any other
executive officer or officers directly reporting to, or duly designated by, such
chief executive officers) of each of the Parties shall meet at a mutually
acceptable time and place to attempt to settle any dispute in good faith;
provided, however, that such meeting shall be held at the principal offices of
the Party receiving the notice of dispute unless otherwise agreed; and provided
further, that any such meeting shall be held no later than sixty (60) days after
the written notice of dispute is given pursuant to Section 8.3(a). Each Party
shall bear its own costs and expenses with respect to preparation for,
attendance at and participation in such meeting.

                        (c)     In the event that (i) a meeting has been held in
accordance with Section 8.3(b), (ii) any such dispute of the kind referred to in
Section 8.3(a) shall not have been resolved at such meeting and (iii) the
aggregate amount in dispute exceeds $100,000, then either Party may submit such
dispute to binding arbitration pursuant to the Commercial Arbitration Rules of
the American Arbitration Association (the "Commercial Arbitration Rules"). In
the event that such dispute is submitted to arbitration pursuant to the
Commercial Arbitration Rules, then the arbitration tribunal shall be composed of
three arbitrators (one arbitrator selected by each Party within thirty (30) days
after the meeting held in accordance with Section 8.3(b) with the third selected
by the other two arbitrators or, in the absence of agreement between them, the
American Arbitration Association), the venue of the arbitration shall be
Washington, D.C., the language of the arbitration shall be English and the
arbitration shall commence no later than sixty (60) days after the meeting held
in accordance with Section 8.3(b). The decision, judgment and order of the
arbitration tribunal shall be final, binding and conclusive as to the Parties
and their respective Representatives, and may be entered in any court of
competent jurisdiction. The Parties intend the provisions of this Section 8.3 to
be the sole and exclusive remedy of any dispute not arising under Section 8.1.
Other than the fees and expenses of the arbitrators, which shall be shared
equally by the Parties, each Party shall bear its own costs and expenses
(including attorneys' fees and expenses) relating to the arbitration.

ARTICLE IX
TERMINATION

          9.1.         Termination.

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

                        (b)     This Agreement may be terminated by Seller or
Buyer upon written notice to the other Party, (i) at any time prior to the
Closing if any court of competent jurisdiction shall

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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 non-appealable; provided that the Party seeking to terminate
this Agreement pursuant to this Section 9.1(b)(i) shall have used Commercially
Reasonable Efforts to seek relief from such order, judgment or decree; (ii) at
any time prior to the Closing if any Law shall have been enacted or issued by
any Governmental Authority which prohibits the consummation of the transactions
contemplated by this Agreement or by any Additional Agreement; or (iii) at any
time after the first anniversary of the date of this Agreement if the Closing
shall not have occurred on or before such date; provided, however, that the
right to so terminate this Agreement under this Section 9.1(b)(iii) shall not be
available to any Party whose breach of this Agreement has caused, or resulted
in, the failure of the Closing to occur on or before such date; and provided,
further, that if on such anniversary, any Buyer's Required Regulatory Approval
set forth in Schedule 7.1(c) or any Seller's Required Regulatory Approval set
forth in Schedule 7.2(c) shall not have been obtained, or shall not be then
final and non-appealable, but all other conditions to the Closing shall be
satisfied or shall be capable of being satisfied, then no Party shall be
entitled to terminate this Agreement pursuant to this Section 9.1(b)(iii) prior
to the date that is 180 days after such anniversary.

                        (c)     This Agreement may be terminated by Buyer, upon
written notice to Seller, if any of 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 Section 7.1(c), shall have been denied.

                        (d)     This Agreement may be terminated by Seller, upon
written notice to Buyer, if any of the Seller's Required Regulatory Approvals,
the receipt of which is a condition to the obligation of Seller to consummate
the Closing as set forth in Section 7.2(c), shall have been denied.

                        (e)     This Agreement may be terminated by Buyer, upon
written notice to Seller, if there has been a material breach by Seller of any
covenant, agreement, representation or warranty contained in this Agreement,
which breach has had or is reasonably expected to have a Material Adverse Effect
and such breach is not cured by the earlier of the Closing Date or the date that
is thirty (30) days after receipt by Seller of notice specifying in reasonable
detail the nature of such breach, unless Buyer shall have previously waived such
breach.

                        (f)     This Agreement may be terminated by Seller, upon
written notice to Buyer, if there has been a material breach by Buyer of any
covenant, agreement, representation or warranty contained in this Agreement,
which breach has had or is reasonably expected to have a Material Adverse Effect
and such breach is not cured by the earlier of the Closing Date or the date that
is thirty (30) days after receipt by Buyer of notice specifying in reasonable
detail the nature of such breach, unless Seller shall have previously waived
such breach.

                        (g)     This Agreement may be terminated by Seller or
Buyer upon written notice to the other Party, in accordance with the provisions
of the last sentence of Section 6.10(b), provided that the Party seeking to so
terminate shall have complied with its obligations under Section 6.10.

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                        (h)     This Agreement may be terminated by either
Party, upon written notice to the other Party, if any final and non-appealable
injunction, order or decree by any Governmental Authority, which prohibits the
consummation of the transactions contemplated hereby or by the Additional
Agreements, shall have been issued and remain in effect, provided that the Party
seeking to terminate this Agreement pursuant to this Section 9.1(h) shall have
used its Commercially Reasonable Efforts to have any such injunction, order or
decree lifted.

          9.2.         Effect of Termination. Upon termination of this Agreement
prior to the Closing pursuant to Section 9.1, this Agreement shall be null and
void and of no further force or effect (except that the provisions set forth in
Section 6.2(b), Section 6.4, this Section 9.2 and Article X, and the
Confidentiality Agreement, shall remain in full force and effect in accordance
with their respective terms); and no Party shall have any further Liability
under this Agreement.

ARTICLE X
MISCELLANEOUS PROVISIONS

          10.1.       Amendment and Modification. This Agreement may be amended,
supplemented or otherwise modified only by written agreement entered into by
both Parties.

          10.2.       Bulk Sales Laws. Buyer acknowledges that Seller will not
comply with the provisions of any bulk sales or transfer laws of any
jurisdiction in connection with the transactions contemplated by this Agreement;
and Buyer hereby irrevocably waives compliance by Seller with the provisions of
the bulk sales or transfer laws of all applicable jurisdictions. Notwithstanding
anything to the contrary in this Agreement, Seller shall indemnify and hold
Buyer harmless from and against any and all losses, Liabilities, claims or
expenses which shall arise against or be incurred by Buyer due to the failure of
Seller to comply with such requirements.

          10.3.       Waiver of Compliance; Consents. To the extent permitted by
applicable Law, any failure of any of the Parties to comply with any
representation, warranty, covenant, agreement or condition set forth herein may
be waived by the Party entitled to the benefit thereof only by a written
instrument signed by such Party, but any such waiver shall not operate as a
waiver of, or estoppel with respect to, any prior or subsequent failure to
comply therewith or of any other provision set forth herein.

          10.4.       Survival. All representations and warranties contained in
this Agreement shall survive for a period of six (6) months following the
Closing Date except that, (i) the representations and warranties contained in
Section 4.6 will expire nine (9) months following the Closing Date; (ii) the
representations and warranties set forth in Section 4.7 will expire in
accordance with any applicable statutes of limitation period plus ninety (90)
days; and (iii) the representations and warranties set forth in Section 4.4
shall not survive the Closing. The covenants and agreements of the Parties
contained in this Agreement shall survive the Closing in accordance with their
respective terms.

          10.5.       Disclaimers. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
SET FORTH IN ARTICLE IV, THE PURCHASED ASSETS ARE SOLD "AS IS, WHERE IS," AND
SELLER EXPRESSLY DISCLAIMS ALL OTHER REPRESENTATIONS AND

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WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO SELLER AND THE
PURCHASED ASSETS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT FOR
THE REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE IV: SELLER EXPRESSLY
DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES REGARDING LIABILITIES,
OWNERSHIP, LEASE, MAINTENANCE OR OPERATION OF THE PURCHASED ASSETS, THE TITLE,
CONDITION, VALUE OR QUALITY OF THE PURCHASED ASSETS OR THE PROSPECTS (FINANCIAL
AND OTHERWISE), RISKS AND OTHER INCIDENTS OF THE PURCHASED ASSETS; AND SELLER
EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES OF MERCHANTABILITY,
USAGE, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THE
PURCHASED ASSETS, OR ANY PART THEREOF, OR AS TO THE WORKMANSHIP THEREOF, OR THE
ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT, OR COMPLIANCE WITH
ENVIRONMENTAL REQUIREMENTS, OR THE APPLICABILITY OF ANY GOVERNMENTAL AUTHORITY,
INCLUDING ANY ENVIRONMENTAL LAWS, OR WHETHER SELLER POSSESSES SUFFICIENT REAL
PROPERTY OR PERSONAL PROPERTY TO OPERATE THE PURCHASED ASSETS. EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED HEREIN, SELLER FURTHER EXPRESSLY DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES REGARDING THE ABSENCE OF HAZARDOUS SUBSTANCES OR
LIABILITY OR POTENTIAL LIABILITY ARISING UNDER ENVIRONMENTAL LAWS WITH RESPECT
TO THE PURCHASED ASSETS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, SELLER EXPRESSLY DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES OF ANY KIND REGARDING THE CONDITION OF THE
PURCHASED ASSETS OR THE SUITABILITY OF THE PURCHASED ASSETS FOR OPERATION AS
TRANSMISSION FACILITIES, AS APPLICABLE, AND NO SCHEDULE OR EXHIBIT TO THIS
AGREEMENT, NOR ANY OTHER MATERIAL OR INFORMATION PROVIDED, OR COMMUNICATIONS
MADE, BY SELLER OR ITS REPRESENTATIVES, INCLUDING ANY BROKER OR INVESTMENT
BANKER, SHALL CONSTITUTE OR CREATE ANY SUCH REPRESENTATION OR WARRANTY, EXPRESS
OR IMPLIED, AS TO THE TITLE, CONDITION, VALUE OR QUALITY OF THE PURCHASED
ASSETS.

          10.6.       Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given on the day when delivered
personally or by facsimile transmission (with confirmation), on the next
Business Day when delivered to a nationally recognized overnight courier or five
(5) Business Days after deposited as registered or certified U.S. mail (return
receipt requested), in each case, postage prepaid, addressed to the recipient
Party at its address set forth below (or at such other address or facsimile
number for a Party as shall be specified by like notice; provided, however, that
any such notice of a change of address or facsimile number shall be effective
only upon receipt thereof):

                        (a)

If to Seller, to:

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Delmarva Power & Light
800 King Street
P.O. Box 231
Wilmington, Delaware 19899
Attention: President
Facsimile: (302) 429-3367

 

with a copy (which shall not constitute notice) to:

 

Pepco Holdings, Inc.
Suite 1100, 10th Floor
701 Ninth Street, NW
Washington, D.C. 20068
Attention: Vice President, Legal Services
Facsimile: (202) 872-3281

 

and a copy (which shall not constitute notice) to:

 

McGuireWoods LLP
One James Center
901 East Cory Street
Richmond, Virginia 23219-4030
Attention: Patrick T. Horne, Esquire
Facsimile: (804) 698-2064

                        (b)

If to Buyer, to:

 

Old Dominion Electric Cooperative
4201 Dominion Boulevard
Glen Allen, Virginia 23060
Attention: Lisa D. Johnson
Facsimile: 804-968-4025

 

with a copy (which shall not constitute notice) to:

 

Orrick, Herrington & Sutcliffe LLP
666 Fifth Avenue
New York, NY 10103
Attention: Carl F. Lyon, Esq.
Facsimile: 212-506-5151

          10.7.       Assignment. This Agreement shall be binding upon and inure
solely to the benefit of the Parties and their respective successors and
permitted assigns, but neither this Agreement nor any of the rights, interests,
obligations or remedies hereunder shall be assigned by any Party hereto,
including by operation of law, without the prior written consent of the other
Party, nor is this Agreement intended to confer upon any other Person any
rights, interests,

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obligations or remedies hereunder. Without limiting the generality of the
foregoing, 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), including with respect to 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. Notwithstanding the foregoing, either Party may, without the prior
written consent of the other Party, assign all or any portion of its rights,
interests, obligations and remedies hereunder, pursuant to instruments of
transfer in form and substance reasonably satisfactory to the other Party, to
one or more direct or indirect wholly owned subsidiaries of such Party;
provided, however, that (i) no such assignment shall relieve such Party of any
of its Liabilities hereunder, (ii) Buyer shall guarantee the obligations of its
assignee, which guarantee shall be in form and substance reasonably satisfactory
to Seller, (iii) no such assignment shall result in any Party requiring any
additional consent, approval, filing, or notice of, with or to, any third party,
including any Governmental Authority, to consummate the transactions
contemplated by this Agreement or any Additional Agreement, and (iv) such
assignment does not otherwise prevent or materially impede, interfere with or
delay the transactions contemplated by this Agreement or any Additional
Agreement.

          10.8.       Governing Law; Forum; Service of Process. This Agreement
shall be governed by and construed in accordance with the laws of the
Commonwealth of Virginia (without giving effect to conflicts of law principles)
as to all matters, including validity, construction, effect, performance and
remedies. Venue in any and all suits, actions and proceedings related to the
subject matter of this Agreement shall be in the state and federal courts
located in and for the Commonwealth of Virginia (the "Courts"), which shall have
exclusive jurisdiction for such purpose, and the Parties hereby irrevocably
submit to the exclusive jurisdiction of such courts and irrevocably waive the
defense of an inconvenient forum to the maintenance of any such suit, action or
proceeding. Service of process may be made in any manner recognized by such
Courts. Each of the Parties hereby irrevocably waives its right to a jury trial
arising out of any dispute in connection with this Agreement or the transactions
contemplated hereby. Buyer has irrevocably appointed Lisa D. Johnson as its
authorized agent (the "Authorized Agent") upon which process may be served in
any suit, action or proceeding based on this Agreement which may be instituted
in the Courts by Seller, and Buyer expressly accepts the jurisdiction of any
such Court in respect of any such suit, action or proceeding. Buyer represents
and warrants that the Authorized Agent has agreed to act as such agent for
service of process, and Buyer shall take any and all actions, including the
filing of any and all documents and instruments, which may be necessary or
appropriate to continue such appointment in full force and effect. Service of
process upon the Authorized Agent and written notice of such service to Buyer
shall be deemed, in every respect, effective service of process upon Buyer.

          10.9.       Counterparts. This Agreement may be executed by facsimile
transmission (with confirmation) and in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

          10.10.     Interpretation. The Article and Section 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
construction of this Agreement. Ambiguities and uncertainties in the wording of
this Agreement shall not be construed for or against any Party, but shall be

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construed in the manner that most accurately reflects the Parties' intent as of
the date of this Agreement. Each Party acknowledges that it has been represented
by counsel in connection with the review and execution of this Agreement, and,
accordingly, there shall be no presumption that this Agreement or any provision
hereof be construed against the Party that drafted this Agreement.
Notwithstanding any provision of any Additional Agreement to the contrary, the
provisions of this Agreement shall govern and control any conflict or
inconsistency between or among the provisions of this Agreement and the
provisions of any such Additional Agreement.

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

          10.12.     Disclosure. Certain information set forth on the Schedules
is included solely for informational purposes, is not an admission of liability
or materiality with respect to the matters covered by the information and may
not be required to be disclosed pursuant to this Agreement. The specification of
any dollar amount in the representations and warranties contained in this
Agreement or the inclusion of any specific item in the Schedules is not intended
to imply that such amounts (or higher or lower amounts) or such items are or are
not material, and no Party shall use the fact of the setting of such amounts or
the fact of the inclusion of any such item in the Schedules in any dispute or
controversy among the Parties as to whether any obligation, item or matter not
described herein or included in a Schedule is or is not material for purposes of
this Agreement.

          10.13.     Entire Agreement. This Agreement (including the Schedules),
together with the Additional Agreements (when executed and delivered by the
Parties) and the Confidentiality Agreement, constitutes a single integrated
agreement between the Parties and, together, embodies the entire agreement and
understanding of the Parties hereto in respect of the transactions contemplated
hereby and thereby, and supersedes all prior agreements and understandings
between the Parties with respect to such transactions. There are no
representations, warranties, covenants or agreements between the Parties with
respect to the subject matter set forth in such agreements, other than those
expressly set forth or referred to herein or therein. Without limiting the
generality of the foregoing, Buyer hereby acknowledges and agrees that there are
no representations, warranties, covenants or agreements between the Parties with
respect to the subject matter set forth in such agreements contained in any
material made available to Buyer pursuant to the terms of the Confidentiality
Agreement , as amended.

          10.14.     Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provision, covenants
and restrictions of this Agreement shall continue in full force and effect and
shall in no way be affected, impaired or invalidated unless such an
interpretation would materially alter the rights and privileges of any Party or
materially alter the terms of the Transaction.

          10.15.     No Agency. Neither Buyer nor the Distribution Purchaser is
an agent of the other or authorized to bind the other in negotiations with
Seller. Any obligation of Buyer or the Distribution Purchaser to Seller will be
a several and not a joint obligation.

SIGNATURE PAGE FOLLOWS

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          IN WITNESS WHEREOF, Seller and Buyer have caused this Purchase and
Sale Agreement to be duly executed and delivered by their respective duly
authorized officers as of the date first above written.

 

DELMARVA POWER & LIGHT COMPANY

 

By:

  /s/ T. S. SHAW                         

Name:  Thomas S. Shaw
Title:    President and CEO  

OLD DOMINION ELECTRIC COOPERATIVE

 

By:

  /s/ ROBERT L. KEES                

Name:  Robert L. Kees
Title:    Senior Vice President and
                Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

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Disclosure schedules

to the

TRANSMISSION purchase and sale agreement

by and between

delmarva power & light company

and

old dominion electric cooperative

Dated as of June 13, 2007

          These Schedules are qualified in their entirety by reference to the
specific provisions of the referenced Transmission Purchase and Sale Agreement
(the "Agreement") and are not intended to constitute, and shall not be construed
as constituting, representations or warranties of any Person except as and to
the extent explicitly provided in the Agreement. Certain of the representations
and warranties set forth in the Agreement contemplate that there will be
attached Schedules setting forth information that might be "material" or have a
"Material Adverse Effect." The Seller may, at its option, include in such
Schedules items or information that are not material or are not likely to have a
Material Adverse Effect for the convenience of the Parties, but any such
inclusion shall not be deemed to be an acknowledgment or representation that
such items are material or would have a Material Adverse Effect, to establish
any standard of materiality, Material Adverse Effect, or to define further the
meaning of such terms for purposes of the Agreement. Each Section of these
Schedules qualifies the correspondingly numbered representation and warranty or
covenant in the Agreement to the extent specified therein. Unless otherwise
defined in these Schedules, capitalized terms used in these Schedules have the
meanings set forth in the Agreement.

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 1.1(68)

Permitted Encumbrances

1.

Mortgage with Bank of New York, individually or as trustee, which shall not be a
Permitted Encumbrance as of Closing.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 1.1(83)

Seller's Knowledge

Thomas S. Shaw
President and CEO
Delmarva Power & Light Company

Vincent Maione
Regional Resource Manager
Bay Regional Office

Charles R. Dickerson
Vice President Strategic Planning and Chief Risk Officer
Pepco Holdings, Inc.

Robert J. Jubic, Jr.
Manager Environmental Services
New Castle Regional Office

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 1.1(93)

Transferable Permits

1.

See Schedule 2.1(d), to the extent transferable.

2.

Permit from the Virginia Marine Resources Commission that permits the
Wattsville-Chincoteague 69kV circuits (6745 and 6746).

3.

See Schedule 4.8, to the extent transferable.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 2.1(b) 1

Transmission Assets

1.

See attached Continuing Property Records - Transmission.

2.

Virginia Transmission Circuits

 

·

Circuit # 6721 (Kellam, Tasley)

 

·

Circuit # 6745 (Chincoteague, Wattsville)

 

·

Circuit # 6746 (Chincoteague, Wattsville)

 

·

Circuit # 6748 (Wallops Island)

 

·

Circuit # 6750 (Bayview, Kellam)

 

·

Circuit # 6778 (Oak Hall, Tasley)

 

·

Circuit # 6790 (Oak Hall, Tasley)

3.

Transmission Lines

 

·

69kV transmission line # 6745 to Chincoteaque Substation emanating at Wattsville
substation from switch # 6745-L1

 

·

69kV transmission line # 6746 to Chincoteaque Substation emanating at Wattsville
substation from switch # 6746-L1

 

·

69kV transmission line # 6790 to Tasley Substation emanating at Oak Hall
substation from switch # 6790-L1

 

·

69kV transmission line # 6778 to Tasley Substation emanating at Oak Hall
substation from switch # 6778-L2

 

·

69kV transmission line # 6721 from Tasley Substation to Kellam Substation

 

·

69kV transmission line # 6750 from Kellam Substation to Bayview Substation

 

·

69kV transmission line # 6748 to Wallops Island Substation tapped from
Transmission line 6745 via a three way switch

4.

Poles

Unit

Quantity

50
50-1
50-2
50-3
55
55-1
55-2
55-3

19
37
5
77
6
46
22
100

_____________________
1 Any assets referenced on this Schedule that are owned by Connectiv Energy will
not transfer with the sale.

[image1.jpg]

55C
60
60-1
60-2
60-3
60C
65
65-1
65-2
65-3
70
70-1
70-2
70-3
70C
70-H1
75
75-1
75-2
75-3
75C
75-H1
75ST
80
80-1
80-2
80C
80-H1
85
85-1
85-2

2
66
261
25
152
1
38
61
42
59
35
257
170
47
27
39
23
95
31
4
24
6
3
3
29
8
9
2
4
5
2

5.

OH Transmission Spans

Unit

Quantity

C336.4-26/7
C4/0-7
C477-24/7
C954-42/7
C954-45/7
SW7#8
Unset

43122
240
4176
3039
2013
1279
2,348,003

[image1.jpg]

6.

UG Transmission Segment

Unit

Quantity

Unset

3,477

7.

Chincoteague channel crossings

8.

Line 6745, 69kV medium pressure oil filled self contained cable 350kcmil copper,
approximately 950 ft.

9.

Line 6746, 69kV medium pressure oil filled self contained cable 350 kcmil
copper, approximately 850 ft.

10.

Bayview 69kV Substation

Account

Asset

Asset description

Location

00003530

13573

CONTROL INSTALLATION (9138)

Bayview

00003530

27568

BREAKER,CIRCUIT,72.5KV,1200A

Bayview

00003530

30601

STRUCTURES; Steel

Bayview

00003530

30602

RELAY; Panels

Bayview

00003530

30603

SWITCH; Disconnect, 69KV 1200A PASCOR

Bayview

00003530

30604

BREAKER; Circuit Power,72.5KV,2000A

Bayview

00003530

30605

SWITCHER; Circuit 115kV, 1200A, PRE-Z

Bayview

00003530

30606

CAPACITOR; Bank 69kV, 2.7MVAR

Bayview

00003530

30607

TRANSFORMER; Potential 69kV,350kV BIL

Bayview

00003530

30608

ARRESTER; 60kV, 48kV MCOV

Bayview

00003530

30609

CABLE; Control

Bayview

00003530

30610

SECONDARY; Material Misc

Bayview

00003530

30611

PRIMARY; Material (Misc)

Bayview

00003530

37527

EQUIPMENT; GPR

Bayview

00003620

38766

PANEL; Relay Line 6750 Front Line E2

Bayview

00003620

38761

SWITCH; Hookstick 1Ph 69kV 600A SS MT-H1

Bayview

00003620

10505

SURGE ARRESTERS (LIGHTNING) 60KV (9565)

Bayview

00003620

10585

SWITCHES, AIR BREAK,69KV,600A,N/A (9565)

Bayview

00003620

10589

SWITCHES,DISCONNECT,(INDIVIDUAL) 69KV,600A,N/A

Bayview

00003620

38742

ARRESTER; Surge 60kV 48kV MCOV

Bayview

00003620

38758

INSULATOR; Poly 69kV Strain

Bayview

00003620

38759

INSULATOR; Poly 138kV Strain

Bayview

11.

Chincoteague 69kV Substation

Account

Asset

Asset description

Location

00003530

19827

CIRCUIT SWITCHER, 115KV/1200A (USED AT 69KV)

Chincoteague

00003530

19828

CIRCUIT SWITCHER, 115KV/1200A (USED AT 69KV)

Chincoteague

 

[image1.jpg]

00003530

19831

SURGE ARRESTER (LIGHTNING), 60KV

Chincoteague

00003530

19833

BUS

Chincoteague

00003530

19835

INSULATORS, 115KV

Chincoteague

00003530

19837

STRUCTURE FORMING

Chincoteague

00003530

19839

SWITCH, AIR BREAK (INDIV) 69KV/600A

Chincoteague

00003530

19841

FOUNDATION

Chincoteague

00003530

37026

SWITCH; Gang Oper Air Brk 69kV 1200A w/Aux Cont Sw

Chincoteague

00003530

37027

STRUCTURE; Steel Switch Stand 69kV Sw BT-D2

Chincoteague

00003530

37028

CONDUIT; Sw BT-D2 Aux Switch

Chincoteague

00003530

37029

GROUNDING; Sw BT-D2

Chincoteague

00003530

37030

FOUNDATION; Modifications Sw BT-D2

Chincoteague

00003530

37031

CABLE; Control Aux Switches BT-D1 & BT-D2

Chincoteague

00003530

37032

PANEL; Wiring Modifications

Chincoteague

00003530

37033

BUS; Fittings and Connectors 69kV

Chincoteague

12.

Kellam 69kV Substation

Account

Asset

Asset description

Location

00003520

4473

OTHER BUILDING - CONTROL HOUSE (9195)

Kellam

00003520

4475

FENCE PERIMETER - 440' W/1-20'GATE (9786)

Kellam

00003520

4477

FENCE - PERIMETER - ADDITION (9603)

Kellam

00003520

4479

LAND IMPROVEMENT - GRADING & FILL (9195)

Kellam

00003520

4481

LAND IMPROVEMENTS - GRADING & FILL (9603)

Kellam

00003520

4483

ROADS & DRIVES - (9786)

Kellam

00003530

10476

BUS - (9195)

Kellam

00003530

10478

BUS - (9603)

Kellam

00003530

10480

CABLE - CONTROL (9195)

Kellam

00003530

10482

CABLE-CONTROL - (9603)

Kellam

00003530

10484

CABLE TROUGH - (9195)

Kellam

00003530

10486

CONDUIT - (9603)

Kellam

00003530

10488

CONTROL INSTALLATION - (9603)

Kellam

00003530

10490

FIRE PROTECTION - (9561)

Kellam

00003530

10492

FUSE EQUIPMENT, SET OF HIGH VOLTAGE (9195)

Kellam

00003530

10494

FOUNDATIONS - (9195)

Kellam

00003530

10496

FOUNDATIONS - (9603)

Kellam

00003530

10498

LIGHTING SYSTEM - (9603)

Kellam

00003530

10500

SURGE ARRESTER - 21KV (9195)

Kellam

00003530

10502

SURGE ARRESTERS - 69KV (9603)

Kellam

00003530

10504

OIL CIRCUIT BREAKER - SER# K6206467-202 69KV J213

Kellam

00003530

10507

PANEL - RELAY AND CONTROL (9195)

Kellam

00003530

10509

PANEL - STATION POWER CONTROL (9195)

Kellam

00003530

10511

PANEL - 69KV BREAKER RELAY

Kellam

00003530

10513

STATION GROUNDING SYSTEM - (9195)

Kellam

00003530

10515

STATION GROUNDING SYSTEM - (9786)

Kellam

00003530

10517

STATION GROUNDING SYSTEM - (9603)

Kellam

00003530

10519

STRUCTURES - (9195)

Kellam

00003530

10521

STRUCTURE - (9603)

Kellam

 

[image1.jpg]

00003530

10523

SWITCHES, DISCONNECT (9195)

Kellam

00003530

10525

SWITCHES, DISCONNECT - (9603)

Kellam

00003530

10527

PANEL - 69KV BREAKER RELAY (9813)

Kellam

00003530

17166

BUS - (J213)

Kellam

00003530

17169

CABLE-CONTROL - (J213)

Kellam

00003530

17170

CONTROL INSTALLATION - (J213)

Kellam

00003530

17171

FOUNDATIONS - (J213)

Kellam

00003530

17173

CIRCUIT BREAKER - 69KV SER #0203-A-5847-202 (J213)

Kellam

00003530

17174

PANEL - LINE RELAY (J213)

Kellam

00003530

17175

PANEL - 69KV CONTROL (J213)

Kellam

00003530

17177

PANEL - 69KV STK BRK (J213)

Kellam

00003530

17182

SWITCHES, DISCONNECT - (J213)

Kellam

00003530

19843

FOUNDATIONS

Kellam

00003530

19845

CAPACITOR POTENTIAL DEVICE

Kellam

00003530

19847

BUS

Kellam

00003530

19849

CAPACITOR,SHUNT

Kellam

00003530

19851

CARRIER EQUIPMENT

Kellam

00003530

19853

OIL CIRCUIT BREAKER 69KV/1200A

Kellam

00003530

19855

SWITCHES,DISCONNECT 69KV/1200A

Kellam

00003530

38416

RELAY; Panel Backup L6750 (7R)

Kellam

00003530

38417

RELAY; Panel Backup Transformer T-1 (8R)

Kellam

00003530

38418

PANEL; Annunciator(ANN)

Kellam

00003530

38419

BATTERY; Storage 58Cell 127AH

Kellam

00003530

38420

BATTERY; Charger 130V 20A

Kellam

00003530

38421

TRANSFORMER 40,250:120/67.5 350Kv BIL

Kellam

00003530

38422

ARRESTERS; Surge 48kV MCOV 60kV DC

Kellam

00003530

38423

STRUCTURE;

Kellam

00003530

38424

CABLE; Control

Kellam

00003620

10603

SURGE ARRESTERS - 60KV (9786)

Kellam

00003620

22922

POWER CIRCUIT BREAKER, 72.5KV, 1200A

Kellam

00003620

22924

POWER CIRCUIT BREAKER, 72.5KV, 1200A

Kellam

00003620

22926

POWER CIRCUIT BREAKER, 72.5KV, 1200A

Kellam

13.

Tasley 69kV Substation

Account

Asset

Asset description

Location

00003520

4509

FENCE-PERIMETER 1856'-6' (ADJ 237)

Tasley

00003520

4513

LAND IMPROVEMENT (ADJ 237)

Tasley

00003520

4515

LAND IMPROVEMENTS-GRADING & FILL (ADJ 237)

Tasley

00003520

4517

LAND IMPROVEMENTS-GRADING & FILL (ADJ 237)

Tasley

00003520

4519

OTHER BUILDING,N/A CONTROL HOUSE (JV35)

Tasley

00003520

12258

LAND IMPROVEMENTS-GRADING & FILL (ADJ 237)

Tasley

00003520

18943

ADDITION TO CONTROL HOUSE

Tasley

00003530

10655

BUS (9446)

Tasley

00003530

10659

BUS (9809)

Tasley

00003530

10662

CABLE (9809)

Tasley

00003530

10664

CABLE TROUGH (9688)

Tasley

00003530

10666

CONDUIT (9809)

Tasley

00003530

10668

ANNUNCIATOR (9688)

Tasley

 

[image1.jpg]

00003530

10670

CONTROL INSTALLATION (9688)

Tasley

00003530

10673

FOUNDATIONS (9688)

Tasley

00003530

10675

FOUNDATIONS (9809)

Tasley

00003530

10677

INSULATORS (9688)

Tasley

00003530

10679

LIGHTING SYSTEM (9688)

Tasley

00003530

10685

PANEL (9688)

Tasley

00003530

10686

PANEL (9809)

Tasley

00003530

10688

PANEL (JV435)

Tasley

00003530

10692

SWITCHES, AIR BREAK,69KV,600A,N/A,

Tasley

00003530

10694

STATION GROUNDING SYSTEM (9787)

Tasley

00003530

10698

STATION GROUNDING SYSTEM (9809)

Tasley

00003530

10700

POTENTIAL TRANSF,60KV,N/A,SER #B909044,G.E.

Tasley

00003530

10702

POTENTIAL TRANSF,69KV,N/A,SER#71M1278, WEST

Tasley

00003530

10703

POTENTIAL TRANSF,69KV,N/A,SER #72A9416,WEST

Tasley

00003530

10705

POTENTIAL TRANSF, 69KV,N/A,SER #72A9418, WEST

Tasley

00003530

10707

POTENTIAL TRANSF,69KV,N/A, SER#721918,WEST

Tasley

00003530

10709

POTENTIAL TRANSF,69KV,N/A, SER #721927,WEST

Tasley

00003530

10711

POTENTIAL TRANSF,69KV,N/A,SER # 721924,WEST

Tasley

00003530

10717

SURGE ARRESTERS,LIGHTNING, 60KV (9787)

Tasley

00003530

10719

SURGE ARRESTERS (LIGHTNING),60KV (9688)

Tasley

00003530

10723

STRUCTURE (9809)

Tasley

00003530

10725

SWITCHES,DISCONNECT (INDIVIDUAL),69KV,600A,N/A

Tasley

00003530

10727

SWITCHES,DISCONNECT (INDIVIDUAL)69KV,600A,N/A

Tasley

00003530

10728

SWITCHES,DISCONNECT (INDIVIDUAL)69KV,600A,N/A

Tasley

00003530

10730

CAPACITOR,SHUNT (9809)

Tasley

00003530

13598

FOUNDATIONS (9257)

Tasley

00003530

13599

INSULATORS (9257)

Tasley

00003530

13600

OIL CIR BKR,69KV, 1200A,#7450,SER 33Y6125 WEST

Tasley

00003530

13601

OIL CIR BKR,69KV,1200A,#7460 SER 537Y6125WH

Tasley

00003530

13602

PANEL (9488 & 9409)

Tasley

00003530

13603

STATION GROUNDING SYSTEM (9257)

Tasley

00003530

13604

POTENTIAL TRANSF,69KV,N/A,SER#S7621336,WEST

Tasley

00003530

13605

POTENTIAL TRANSF,69KV,N/A,SER#7621340, WEST

Tasley

00003530

13606

POTENTIAL TRANSF,69KV,N/A, SER #S7621341,WEST

Tasley

00003530

13607

SURGE ARRESTERS (LIGHTNING) 69KV (9257)

Tasley

00003530

13608

STRUCTURE (9257)

Tasley

00003530

13609

SWITCHES,DISCONNECT (INDIVIDUAL) 69KV,600A,N/A

Tasley

00003530

13610

COMMUNICATION EQUIPMENT ,CARRIER EQUIP

Tasley

00003530

17209

CAPACITOR SHUNT (324801)

Tasley

00003530

19859

BREAKER,CIRCUIT,POWER,72.5KV,1200A

Tasley

00003530

19861

BREAKER,CIRCUIT,POWER,72.5KV,1200A

Tasley

00003530

19863

CABLE

Tasley

00003530

19865

CONDUIT

Tasley

00003530

19867

BUS

Tasley

00003530

19869

STATION GROUNDING SYSTEM

Tasley

 

 

[image1.jpg]

00003530

27576

BREAKER,POWER,CIRCUIT,72.5KV,1200A

Tasley

00003530

27577

BREAKER,POWER,CIRCUIT,72.5KV,1299A

Tasley

00003530

27578

CABLE

Tasley

00003530

27579

FOUNDATION

Tasley

00003530

27580

CONDUIT

Tasley

00003530

27581

LOAD SHEDDING

Tasley

00003530

27582

PROTECTIVE RELAYS

Tasley

00003530

29143

Power Circuit Breaker SF6, 1200A, 72.5 KV

Tasley

00003530

34743

RELAY; Panels

Tasley

00003530

36869

BATTERY STORAGE; 60 Cell Lead Acid 150AHr

Tasley

00003530

36870

BATTERY CHARGER; 130V DC 16Amp

Tasley

00003530

37530

BREAKER; Circuit 72.5 2000A 40kA SPS2

Tasley

00003530

37531

PANEL; Relay Line Protection

Tasley

00003530

37532

ARRESTER; 69kV

Tasley

00003530

37533

CVT; 69kV

Tasley

00003530

37534

PANEL; Relay Bus Protection

Tasley

00003530

37535

PANEL; Control Breaker 60

Tasley

00003530

37536

STRUCTURES;

Tasley

00003530

37537

SWITCH; Disc 69kV 3Phase 1200A

Tasley

00003530

37538

BUS; Primary

Tasley

00003530

37539

CABLE; Control

Tasley

00003530

37540

CONDUIT;

Tasley

00003530

37541

GROUNDING;

Tasley

00003620

10867

SURGE ARRESTER (LIGHTNING) 60KV (9446)

Tasley

00003620

10886

SWITCH,AIR BKR,69KV,600A,R&IE & DELTA (9446)

Tasley

00003620

15144

SWITCHES,DISCONNECT (INDIVIDUAL) 69KV,600A,N/A

Tasley

14.

Wallops 69kV Substation

Account

Asset

Asset description

Location

00003530

19879

SWITCHES, AIR BREAK (INDIV), 138 KV (USED AT 69KV)

Wallops

00003530

19881

CIRCUIT SWITCHER, 138KV/1200A (USED AT 69KV)

Wallops

00003530

19883

SURGE ARRESTER (LIGHTNING), 60KV

Wallops

00003530

19885

BUS

Wallops

00003530

19887

FOUNDATION

Wallops

00003530

19889

STRUCTURE FORMING

Wallops

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 2.1(d)

Seller's Agreements

1.

Service Agreements

2

Vendor Name

Service Provided

Term of Agreement

BRUCE GRIFFIN SR

CUSTODIAL SERVICES

4/30/2008

D PAGE KELLAM JR

LANDSCAPING

12/31/2006

Lucas Underground Utilities

Electric utility UG trenching and boring & cable installation

12/31/2007

Utiliquest *

Electric UG cable locating

12/31/2007

*Indicates that the contract serves the entire DPL area and may not be
assignable. Seller will use commercially reasonable efforts to assign this
agreement to the extent it can be separated.

2.

Agreement between Delmarva Power & Light and the Town of Chincoteague, dated
October 29, 1991, as amended by letter dated February 6, 2006.3

3.

Special Agreement for Turn of Century Street Lights between Delmarva Power &
Light and the Town of Chincoteague, dated March 23, 2006.4

4.

Off-Peak Service Agreement between Delmarva Power & Light Company and Zieger and
Sons, dated November 1, 1994.5

5.

See attached "File: C142" - Wattsville to Chincoteague (Ckt 6745 and 6746)

6.

See attached "File: C143" - Oakhall to Tasley (Ckt 6778)

7.

See attached "File: C144" - Oakhall to Tasley (Ckt 6790)

_________________________________

2

ODEC and A&N to determine who will receive these agreements in the sale.

3

ODEC and A&N to determine who will receive this agreement in the sale.

4

ODEC and A&N to determine who will receive this agreement in the sale.

5

ODEC and A&N to determine who will receive this agreement in the sale.

[image1.jpg]

8.

See attached "File: C145" - Tasley to Kellam (Ckt 6721)

9.

See attached "File: C146" - Kellam to Bayview (Ckt 6750)

10.

See attached "File: C147" - Wattsville to Wallops Island (Ckt 6748)

11.

See Transmission Virginia Railroad Crossings provided by microfiche (consent or
approval may be required to transfer).

12.

Agreement for Electric Transmission Lines across the right-of-way, tracks and
property of The Pennsylvania Railroad Company, dated February 17, 1967.

13.

Agreement for Electric Transmission Lines across the right-of-way, tracks and
property of The Pennsylvania Railroad Company, dated April 23, 1948.

14.

Agreement for Electric Transmission Lines across the right-of-way, tracks and
property of The Pennsylvania Railroad Company, dated April 15, 1964.

15.

See Schedule 1.1(93).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 2.2(a)

Retained Assets

1.

Transmission Circuits:

 

·

Circuit # 13763 (New Church, Oak Hall)

 

·

Circuit # 13764 (New Church, Piney Grove)

 

·

Circuit # 13765 (New Church, Oak Hall)

 

·

Circuit # 13787 (Oak Hall, Pocomoke)

 

·

Circuit # 6712 (Wattsville, Stockton)

 

·

Circuit # 6717 (Oak Hall, Wattsville)

2.

See attached "Exhibit 1-A, Assets Retained by DPL"

3.

See attached "Exhibit 1-B, Assets Not Purchased by A&N"

4.

69kV capacitor bank at Oak Hall

5.

2 step 69kV capacitor bank at Wattsville

6.

2- 138/69kV autotransformers at Oak Hall

7.

All 69kV potential transformers and potential devices at Wattsville and Oak Hall

8.

All 138kV potential transformers and potential devices at Oak Hall

9.

Mobile Transformer

10.

All Microwave Equipment

11.

All Licensed Microwave Frequencies

12.

MAS Radio System (MAS Controller at Oak Hall)

13.

MAS hardware (communications/computer equipment) at Chincoteague & Wallops
Island

14.

All MAS Licenses

15.

All Land Mobile Radio Frequencies

16.

All Land Mobile Radio Equipment at Oak Hall, Onancock, Exmore and Bayview

17.

Fiber assets between New Church & Oak Hall and MW from Piney Grove to Oak Hall,
and associated terminal equipment

18.

Unlicensed Radio Equipment located at Onancock & Tasley supporting Conectiv
Energy.

[image1.jpg]

19.

Service Agreement with Atlantic Coast Alarm, Inc. for monitoring of security
systems.

20.

Service Agreement with Atlantic Coast Alarm, Inc. for repair of security
systems.

21.

Service Agreement with JC Ehrlich Co. Inc. for pest control.

22.

Service Agreement with Trugreen Chemlawn for landscaping.

23.

Service Agreement with Waste Management of Delmarva for trash removal services.

24.

Wattsville 69kV Substation consisting of: 6 breaker ring bus with associated
breaker disconnect switches

 

·

69 kV steel structures and wood poles

 

·

69 kV line, transformer and capacitor disconnect switches

 

·

69 kV rigid and aerial bus, insulators, supports, lightning arresters, potential
devices

 

·

69 kV capacitor banks and 2 circuit switchers with associated bus, structures

 

·

Fence, yard lighting, control house, grounding system, foundation, metering

 

·

69 kV relaying and controls and associated equipment

 

·

69 kV metering

 

·

RTU and EMS equipment and associated equipment

 

·

AC and DC station service systems

 

·

69 kV transmission line 6712 to Stockton Substation

 

·

69 kV transmission line 6717 to Oak Hall Substation

25.

Oak Hall 138kV Substation consisting of:

 

·

6 breaker ring bus with associated breaker disconnect switches

 

·

2 -138/69kV autotransformers

 

·

138kV steel structures and wood poles

 

·

138kV line and transformer disconnect switches

 

·

138kV lines, intermediate poles and terminations

 

·

138 kV rigid and aerial bus, insulators, supports, lightning arresters,
potential devices

 

·

Fence, yard lighting, control house, grounding system, foundation, metering

 

·

138kV relaying and controls and associated equipment

 

·

RTU and EMS equipment and associated equipment

 

·

AC and DC station service systems

 

·

138kV transmission line 13763 to New Church Substation

 

·

138kV transmission line 13787 to Pocomoke Substation

 

·

138kV transmission line 13765 to New Church Substation

 

·

69 kV transformer switches 7655 and 7624, distribution AC and DC station service
and grounding, and distribution station fencing

26.

Oak Hall 69kV Substation consisting of:

 

·

6 breaker ring bus with associated breaker disconnect switches

 

·

69 kV steel structures and wood poles

 

·

69 kV line and transformer disconnect switches

[image1.jpg]

 

·

69 kV rigid and aerial bus, insulators, supports, lightning arresters, potential
devices

 

·

69 kV capacitor bank, circuit breaker and associated bus and structures

 

·

Fence, yard lighting, control house, grounding system, foundation, metering

 

·

69 kV relaying and controls and associated equipment

 

·

RTU and EMS equipment and associated equipment

 

·

AC and DC station service systems

 

·

69 kV transmission line 6717 to Wattsville 69kV Substation

27.

New Church 138 kV Substation (retained in it entirety)

28.

RTU at Tasley and Bayview

29.

Right of continued use of the space on communication towers in Virginia for PHI
Microwave Land Mobile Radio Communications, MAS Radio equipment and Controller
and some unlicensed radio equipment located between Onancock and Tasley.

30.

Retained Wattsville Substation Transmission Assets

Account

Asset

Asset description

Location

00003530

10736

BUS - (9810)

Wattsville

00003530

10738

FOUNDATION - (3259)

Wattsville

00003530

10740

FOUNDATION - (J30)

Wattsville

00003530

10742

FOUNDATION - (9993)

Wattsville

00003530

10744

FOUNDATION - (9810)

Wattsville

00003530

10746

FOUNDATION - (332101)

Wattsville

00003530

10748

FUSE EQUIPMENT, SET OF HIGH VOLTAGE 7.5KV (3249)

Wattsville

00003530

10750

INSTRUMENT - (9754)

Wattsville

00003530

10752

INSTRUMENT - (9993)

Wattsville

00003530

10766

INSULATORS - (J30)

Wattsville

00003530

10768

INSULATORS - (9993)

Wattsville

00003530

10770

INSULATORS - (9993)

Wattsville

00003530

10772

CABLE - (3259)

Wattsville

00003530

10774

CABLE

Wattsville

00003530

10776

CABLE - (9754)

Wattsville

00003530

10778

CABLE

Wattsville

00003530

10780

CONDUIT (3259)

Wattsville

00003530

10782

CONDUIT (J30)

Wattsville

00003530

10784

CONDUIT (9002)

Wattsville

00003530

10786

CONTROL INSTALLATION (9993)

Wattsville

00003530

10788

OIL CIRCUIT BREAKER 69KV,#7650,SER #0139A940201 GE

Wattsville

00003530

10790

OIL CIRCUIT BREAKER 69KV,#7630,SER#0139A4940202 GE

Wattsville

00003530

10792

OIL CIRCUIT BREAKER 69KV,#7620,SER#0139A4940203 WH

Wattsville

00003530

10796

PANEL (9754)

Wattsville

00003530

10797

PANEL - (9993)

Wattsville

00003530

10799

PANEL (9810)

Wattsville

00003530

10803

STATION GROUNDING SYSTEM (3259)

Wattsville

00003530

10805

STATION GROUNDING SYSTEM (J30)

Wattsville

 

[image1.jpg]

00003530

10807

STRUCTURE (3259)

Wattsville

00003530

10809

STRUCTURE (J30)

Wattsville

00003530

10811

STRUCTURE (9993)

Wattsville

00003530

10813

STRUCTURE (9810)

Wattsville

00003530

10815

SWITCH,AIRBREAK,69KV,600A, N/A (J30)

Wattsville

00003530

10817

SWITCH,AIR BREAK,69KV,1200A, N/A (9993)

Wattsville

00003530

10819

SWITCH,DISCONNECT (INDIVIDUAL),69KV,600A,SOUTH STS

Wattsville

00003530

10821

POWER TRANSFORMER ,10KVA,N/A,SER #804693, MOL

Wattsville

00003530

10823

SURGE ARRESTER (LIGHTNING) 69KV (3259)

Wattsville

00003530

17210

ENGERGY CONTROL SYSTEM DEVICES J563

Wattsville

00003530

17211

FOUNDATION - (J30)

Wattsville

00003530

17212

CABLE (332101)

Wattsville

00003530

17213

CONTROL INSTALLATION (J563)

Wattsville

00003530

17214

SURGE ARRESTERS (LIGHTNING) 69KV (332101)

Wattsville

00003530

17215

GAS CIRCUIT BREAKER,72.5KV,#7660,SER#167Y1752,WEST

Wattsville

00003530

17216

GAS CIRCUIT BREAKER,72.5KV,#7610,SER#267Y1752,WEST

Wattsville

00003530

17217

PANEL (J563)

Wattsville

00003530

17218

STRUCTURE (J563)

Wattsville

00003530

19870

CABLE

Wattsville

00003530

19873

SURGE ARRESTER(LIGHTNING) 69KV

Wattsville

00003530

19875

PANELS

Wattsville

00003530

19877

PROTECTIVE RELAYS

Wattsville

00003530

35663

CAPACITOR; Bank 69kV 10.8MVAR

Wattsville

00003530

35664

SWITCHER; Circuit 69kV 1200Amps Pre Insert Z

Wattsville

00003530

35665

TRANSFORMER; Voltage 69kV 40250;115/67

Wattsville

00003530

35666

ARRESTER; Surge 69kV 40kV MCOV

Wattsville

00003530

35667

STRUCTURES; Steel

Wattsville

00003530

35668

PANEL; Relay

Wattsville

00003530

35669

CABLE; Control

Wattsville

00003530

35670

ENCLOSURE; Control Prefabricated

Wattsville

00003530

35671

BUS;

Wattsville

00003530

35672

FOUNDATIONS;

Wattsville

00003530

35673

PCB; SPS2-72.5-40-2000 SF6

Wattsville

00003530

35674

SYSTEM; Grounding

Wattsville

00003530

35675

TRANSFORMER; Voltage 34kV 20125:115

Wattsville

00003530

35676

CONDUIT;

Wattsville

00003530

35677

SWITCH; Gang Operated 69kV 1200A

Wattsville

00003530

35940

BUS; Conductor, Connectors, etc

Wattsville

00003530

36147

PANEL; Relay

Wattsville

00003530

36148

CCVT; 69kV/11567v 350kV BIL Trench

Wattsville

00003530

36149

CCVT; 69kV/11567v 350kV BIL Trench

Wattsville

00003530

37484

BUS; Primary

Wattsville

00003530

37485

TROUGH; Conduit and Cable

Wattsville

00003530

37498

CABLE; Control

Wattsville

00003530

37499

PANEL; Relay SEL351S "CA1"

Wattsville

00003530

37500

SWITCHER; Circuit 69kV 1200A Pre-Z Mark V

Wattsville

00003530

37501

GROUNDING;

Wattsville

00003530

37502

STRUCTURE; Steel 3Phase Bus Support

Wattsville

[image1.jpg]

00003530

37503

ARRESTER; Surge 69kV Metal Oxide Polymer

Wattsville

00003530

37504

FOUNDATION; Cap Bank

Wattsville

00003620

11029

SWITCHES,AIR BREAK, 69KV,600A,DELTA STAR (9993)

Wattsville

00003620

22958

DISCONNECT SWITCH, 72.5KV, 1200A

Wattsville

00003520

4528

HEATING SYSTEM - (J30)

Wattsville

00003520

4541

OTHER BUILDING - 20' X 30' (9993)

Wattsville

00003520

4543

YARD LIGHTING SYSTEM - (9806)

Wattsville

00003971

37427

MASTER; MDS9790 Backup

Wattsville

00003971

37428

REMOTE; MDS9710 Backup

Wattsville

31.

Retained Wattsville Substation Transmission Assets

00003530

10533

BUS (9746)

Oak Hall

00003530

10535

BUS (9955)

Oak Hall

00003530

10537

CABLE (9746)

Oak Hall

00003530

10539

CABLE (9955)

Oak Hall

00003530

10541

CABLE (9098)

Oak Hall

00003530

10543

CABLE (9098)

Oak Hall

00003530

10545

CAPACITOR,SHUNT (9098)

Oak Hall

00003530

10549

OIL CIR BKR,69KV,1200A,#7240,SER #137671,AC

Oak Hall

00003530

10551

OIL CIR BKR,69KV,1200A,#7260,SER#0139A9080205,GE

Oak Hall

00003530

10553

OIL CIR BKR,138KV,1200A,#181,SER#0139A6467205,GE

Oak Hall

00003530

10555

CONDUIT (C851)

Oak Hall

00003530

10557

CABLE TROUGH (9955)

Oak Hall

00003530

10559

CABLE TROUGH (9098)

Oak Hall

00003530

10561

CONTROL INSTALLATION (9955)

Oak Hall

00003530

10563

FOUNDATION (9514)

Oak Hall

00003530

10565

FOUNDATION (9746)

Oak Hall

00003530

10567

FOUNDATION (9955)

Oak Hall

00003530

10569

FOUNDATION (9098)

Oak Hall

00003530

10571

INSULATOR (9514)

Oak Hall

00003530

10574

INSULATORS (9746)

Oak Hall

00003530

10576

INSULATORS (9955)

Oak Hall

00003530

10578

INSULATORS (9098)

Oak Hall

00003530

10580

PANEL (9746)

Oak Hall

00003530

10582

PANEL (9955)

Oak Hall

00003530

10584

PANEL (9098)

Oak Hall

00003530

10586

PANEL (9744)

Oak Hall

00003530

10588

POTENTIAL TRANSF,69KV,N/A,SER #6169, AC (9746)

Oak Hall

00003530

10592

POTENTIAL TRANSF,69KV,N/A,SER#6197,AC (9746)

Oak Hall

00003530

10598

STATION GROUNDING SYSTEM (9514)

Oak Hall

00003530

10600

STATION GROUNDING SYSTEM (9768)

Oak Hall

00003530

10602

STATION GROUNDING SYSTEM (9746)

Oak Hall

00003530

10604

STATION GROUNDING SYSTEM (9955)

Oak Hall

00003530

10606

STATION GROUNDING SYSTEM (9098)

Oak Hall

00003530

10608

SURGE ARRESTERS,(LIGHTNING) 69KV

Oak Hall

00003530

10610

SURGE ARRESTERS (LIGHTNING) 60KV

Oak Hall

00003530

10612

SURGE ARRESTERS (LIGHTNING) 69KV

Oak Hall

00003530

10614

SURGE ARRESTERS (LIGHTNING)60KV

Oak Hall

00003530

10616

SURGE ARRESTERS (LIGHTNING) 20KV

Oak Hall

00003530

10618

SWITCHES,AIR BREAK,69KV,600A,N/A (9514)

Oak Hall

[image1.jpg]

00003530

10620

STRUCTURE (3334)

Oak Hall

00003530

10622

STRUCTURE (9514)

Oak Hall

00003530

10624

STRUCTURE (J35)

Oak Hall

00003530

10626

STRUCTURE (9746)

Oak Hall

00003530

10628

STRUCTURE (9955)

Oak Hall

00003530

10630

STRUCTURE (9098)

Oak Hall

00003530

10632

SWITCHES, DISCONNECT,INDIVIDIUAL 69KV,600A,N/A

Oak Hall

00003530

10636

SWITCHES,DISCONNECT,INDIVIDUAL,69KV,600A,N/A

Oak Hall

00003530

10638

SWITCHES,DISCONNET,INDIVIDUAL,69KV,600A,N/A

Oak Hall

00003530

10640

SWITCHES ,DISCONNECT,INDIVIDUAL,161KV,1200A,N/A

Oak Hall

00003530

10642

SWITCHES,DISCONNECT,INDIVIDUAL,69KV,600A,N/A

Oak Hall

00003530

10647

REGULATOR, INDUCTION 69 KV

Oak Hall

00003530

13574

BUS (9241)

Oak Hall

00003530

13575

CABLE (9354)

Oak Hall

00003530

13576

OIL CIR BKR,69KV,1200A,#7270,SER#23Y6125,WEST

Oak Hall

00003530

13578

CABLE TROUGH (9515)

Oak Hall

00003530

13579

CONTROL INSTALLATION (9685)

Oak Hall

00003530

13580

FOUNDATION (9241)

Oak Hall

00003530

13581

FOUNDATION (9515)

Oak Hall

00003530

13582

INSULATORS (9241)

Oak Hall

00003530

13583

INSULATORS (9515)

Oak Hall

00003530

13584

PANEL (9354)

Oak Hall

00003530

13585

PANEL (J563)

Oak Hall

00003530

13590

STATION GROUNDING SYSTEM (9241)

Oak Hall

00003530

13591

STATION GROUNDING SYSTEM (9515)

Oak Hall

00003530

13592

SURGE ARRESTER (LIGHTNING) 69KV (9241)

Oak Hall

00003530

13593

SWITCHES,AIR BREAK,138KV,1200A,N/A, (9515)

Oak Hall

00003530

13594

STRUCTURE (9241)

Oak Hall

00003530

13595

STRUCTURE (9515)

Oak Hall

00003530

13596

SWITCHES,DISCONNECT,INDIVIDUAL,69KV,1200A,N/A

Oak Hall

00003530

13597

SWITCHES,DISCONNECT,INDIVIDUAL,138KV,1200A, RUMSEY

Oak Hall

00003530

17183

ANNUNCIATOR (9685)

Oak Hall

00003530

17184

BUS (312801)

Oak Hall

00003530

17185

CABLE (312801)

Oak Hall

00003530

17187

CABLE TROUGH (312801)

Oak Hall

00003530

17188

CONTROL INSTALLATION (9685)

Oak Hall

00003530

17189

CONTROL INSTALLATION (312801)

Oak Hall

00003530

17190

FOUNDATION (312801)

Oak Hall

00003530

17191

INSULATORS (312801)

Oak Hall

00003530

17192

PANEL (9685)

Oak Hall

00003530

17193

PANEL (312801)

Oak Hall

00003530

17197

POTENTIAL TRANSF,138KV,N/A,SER#1503254 GE

Oak Hall

00003530

17198

POTENTIAL TRANSF,138KV,N/A,SER#1503255 GE

Oak Hall

00003530

17199

POTENTIAL TRANSF,138KV,N/A,SER#1503256 GE

Oak Hall

00003530

17200

STATION GROUNDING SYSTEM (312801)

Oak Hall

00003530

17201

SURGE ARRESTERS (LIGHTNING) 138KV (312801)

Oak Hall

00003530

17202

STRUCTURE (312801)

Oak Hall

00003530

17203

STRUCTURE (332003)

Oak Hall

00003530

17204

POWER TRANSF,138KV,N/A/,N/A,SER #C0654351 ME

Oak Hall

00003530

17205

SWITCHES,DISCONNECT,INDIVIDUAL,69KV,1200A, RUMSEY

Oak Hall

[image1.jpg]

00003530

17206

SWITCHES,DISCONNECT,INDIVIDUAL,69KV,600A,N/A

Oak Hall

00003530

17207

BATTERY CHARGER,N/A,N/A,N/A (312801)

Oak Hall

00003530

17208

BATTERY,STORAGE,105A,125V,105A/H (312801)

Oak Hall

00003530

19857

RELAY

Oak Hall

00003530

27569

BREAKER,POWER,CIRCUIT,72.5KV,1200A

Oak Hall

00003530

27570

BREAKER,POWER,CIRCUIT,72.5KV,1200A

Oak Hall

00003530

27571

CABLE

Oak Hall

00003530

27572

PROTECTIVE RELAY

Oak Hall

00003530

27573

FOUNDATION

Oak Hall

00003530

27574

PANELS

Oak Hall

00003530

27575

PROTECTIVE RELAY

Oak Hall

00003530

35464

SWITCH; Disconnect 69kV 1200A 61kA

Oak Hall

00003530

35465

WIRE; 954 ACSR Aluminum

Oak Hall

00003530

35466

PRIMARY; Miscellaneous Connectors

Oak Hall

00003530

35467

INSULATORS; 69kV Suspension Polymer

Oak Hall

00003530

35468

SECONDARY; Miscellaneous Material

Oak Hall

00003530

35469

PANEL; Relay Line 13765 BU

Oak Hall

00003530

35470

PANEL; Relay Line 13765 FL

Oak Hall

00003530

35471

PANEL; Relay PCB 180 SB

Oak Hall

00003530

35472

BREAKER; Power Circuit 145kV 2000A 40kA

Oak Hall

00003530

35473

BREAKER; Power Circuit 145kV 2000A 40kA

Oak Hall

00003530

35474

BREAKER; Power Circuit 145kV 2000A 40kA

Oak Hall

00003530

35475

BREAKER; Power Circuit 145kV 2000A 40kA

Oak Hall

00003530

35476

BREAKER; Power Circuit 145kV 2000A 40kA

Oak Hall

00003530

35477

BREAKER; Power Circuit 72.5kV 2000A 40kA

Oak Hall

00003530

35478

TRANSFORMER; Auto 144/72kV 60/80/100MVA AT2

Oak Hall

00003530

35479

SWITCH; Disconnect 69kV 1200A 61kA

Oak Hall

00003530

35480

SWITCH; Disconnect 69kV 1200A 61kA

Oak Hall

00003530

35481

SWITCH; Disconnect 138kV 1200A 61kA

Oak Hall

00003530

35482

SWITCH; Disconnect 138kV 2000A 61kA

Oak Hall

00003530

35483

TRANSFORMER; Coupling Capacitor Voltage 80.5kV

Oak Hall

00003530

35484

TRANSFORMER; Coupling Capacitor Voltage 40kV

Oak Hall

00003530

35485

ARRESTER; Lightning 108kV 88kV MCOV PVN

Oak Hall

00003530

35486

ARRESTER; Lightning 60kV 48kV MCOV PVN

Oak Hall

00003530

35487

BUS;

Oak Hall

00003530

35488

INSULATORS; 138kV Suspension Polymer

Oak Hall

00003530

35489

INSULATORS; 138kV Station Post Porcelain

Oak Hall

00003530

35490

INSULATORS; 69kV Suspension Polymer

Oak Hall

00003530

35491

INSULATORS; 69kV Station Post Porcelain

Oak Hall

00003530

35492

PRIMARY; Miscellaneous Connectors

Oak Hall

00003530

35493

SECONDARY; Miscellaneous Material

Oak Hall

00003530

35494

CABLE; Control 3C#6

Oak Hall

00003530

35495

CABLE; Control 3C#10

Oak Hall

00003530

35496

CABLE; Control 5C#10

Oak Hall

00003530

35497

CABLE; Control 12C#12

Oak Hall

00003530

35498

FOUNDATIONS;

Oak Hall

00003530

35499

SYSTEM; Station Grounding

Oak Hall

00003530

35500

CONDUIT; Miscellaneous

Oak Hall

00003530

35501

STRUCTURES; Steel

Oak Hall

00003530

35502

PANEL; Relay Auxiliary Alarm

Oak Hall

[image1.jpg]

00003530

35503

PANEL; Relay Auto-Sync Check

Oak Hall

00003530

35504

PANEL; Relay AT2 FL

Oak Hall

00003530

35505

PANEL; Relay AT2 BU

Oak Hall

00003530

35506

PANEL; Relay Line 13763 FL

Oak Hall

00003530

35507

PANEL; Relay Line 13763 BU

Oak Hall

00003530

35508

PANEL; Relay Line 13787 FL

Oak Hall

00003530

35509

PANEL; Relay Line 13787 BU

Oak Hall

00003530

35510

PANEL; Relay Line 13787 SBTT

Oak Hall

00003530

35511

PANEL; Relay Line 6790 BU

Oak Hall

00003530

35512

PANEL; Relay Line 6717 BU

Oak Hall

00003530

35513

PANEL; Relay Line 6778 BU

Oak Hall

00003530

35514

PANEL; Relay PCB 183 SB

Oak Hall

00003530

35515

PANEL; Control PCB 184

Oak Hall

00003530

35516

PANEL; Relay PCB 184 SB

Oak Hall

00003530

35517

PANEL; Control PCB 185

Oak Hall

00003530

35518

PANEL; Relay PCB 185 SB

Oak Hall

00003530

35519

PANEL; Control PCB 186

Oak Hall

00003530

35520

PANEL; Relay PCB 186 SB

Oak Hall

00003530

35521

PANEL; Control PCB 183

Oak Hall

00003530

35522

PANEL; Relay PCB 80 SB

Oak Hall

00003530

35523

PANEL; Relay PCB 7270 SB

Oak Hall

00003530

35524

PANEL; Relay PCB 7260 SB

Oak Hall

00003530

35525

PANEL; Relay PCB 7220 SB

Oak Hall

00003530

35526

PANEL; Control PCB 7290

Oak Hall

00003530

35527

PANEL; Relay PCB 7290 SB

Oak Hall

00003530

35528

PANEL; Relay PCB 7210 SB

Oak Hall

00003530

35529

BATTERY SYSTEM; 330AH 125VDC 60 Cell Lead Calcium

Oak Hall

00003530

35530

BATTERY CHARGER; 25A 125VDC Output 120/208/240VAC

Oak Hall

00003530

35531

RTU; Nells Automation Sage 2100

Oak Hall

00003530

36119

BREAKER; Gas Circuit SPS2-72.5 69kV 2000A

Oak Hall

00003520

4485

FENCE PERIMETER 6' GALV (ADJ 239)

Oak Hall

00003520

4487

FENCE-PERIMETER 1259 FT (ADJ239)

Oak Hall

00003520

4490

FIRE PROTECTION SYSTEM (ADJ 239)

Oak Hall

00003520

4492

LANDSCAPING (INITIAL) (ADJ 239)

Oak Hall

00003520

4494

LAND IMPROVEMENT-GRADING & FILL (ADJ 239)

Oak Hall

00003520

4496

YARD LIGHTING SYSTEM (ADJ 239)

Oak Hall

00003520

4498

YARD LIGHTING SYSTEM (ADJ 239)

Oak Hall

00003520

4500

OTHER BUILDING N/A (9955)

Oak Hall

00003520

4503

LAND IMPROVEMENT-GRADING & FILL (ADJ 257)

Oak Hall

00003520

4505

ROADS & DRIVES N/A (ADJ 257)

Oak Hall

00003520

12257

FENCE-PERIMETER N/A (ADJ 239)

Oak Hall

00003520

16826

ROADS & DRIVES N/A (ADJ 239)

Oak Hall

00003520

16827

OTHER BUILDING 25 X 20 (ADJ 257)

Oak Hall

00003520

16828

YARD LIGHTING SYSTEM (ADJ 257)

Oak Hall

00003520

16829

HEATING SYSTEM (ADJ 257)

Oak Hall

00003971

39190

AMPLIFIER; Crescend 150W 800MHz

Oak Hall

00003971

39191

AMPLIFIER; Crescend 150W 800MHz

Oak Hall

00003971

39192

AMPLIFIER; Crescend 150W 800MHz

Oak Hall

00003971

39193

AMPLIFIER; Crescend 150W 800MHz

Oak Hall

00003971

39194

AMPLIFIER; Crescend 150W 800MHz

Oak Hall

[image1.jpg]

00003972

35552

RADIO EQUIPMENT

030

00003972

19873E1RADIO

RADIO EQUIPMENT

030

00003972

19893E1RADIO

RADIO EQUIPMENT

030

00003972

19903E1RADIO

RADIO EQUIPMENT

030

00003972

19913E1RADIO

RADIO EQUIPMENT

030

00003972

19943E1RADIO

RADIO EQUIPMENT

030

00003972

19953E1RADIO

RADIO EQUIPMENT

030

00003972

19963E1RADIO

RADIO EQUIPMENT

030

00003971

34494

Radio Equipment - HT1000 Portables ( 800 MHZ sys)

030

00003971

34495

Radio Equipment - MC2000 Mobiles ( 800 MHZ sys)

030

00003971

34496

Radio Equipment -MTS 2000 Portables( 800 MHZ sys)

030

00003971

34497

Radio Equipment -Astro Control Stations and

030

00003971

34498

Radio Equipment - Telecom infra upgrades, IDNX Exp

030

32.

Retained Transmission Line Assets

Account

Asset

Asset description

Location

SPLIT
ASSETS

00003550

35095

POLE; 75 Ft Wood Class 1

13763

00003550

35096

POLE; 80 Ft Wood Class 1

13763

00003550

35097

POLE; 85 Ft Wood Class 1

13763

00003550

35100

POLE; 50 Ft Wood Class 1

13763

00003550

35087

POLE; 80 Ft Wood Class 1

13764

00003550

35088

POLE; 85 Ft Wood Class 1

13764

00003550

36931

POLE; 45ft Wood

6712

00003550

36932

POLE; 60ft Wood

6712

00003550

36933

POLE; 70ft Wood

6712

00003550

35124

POLE; 70FT Wood Class H1

6717

00003550

35125

POLE; 75FT Wood Class H1

6717

00003550

35126

POLE; 80FT Wood Class H1

6717

00003560

35098

WIRE; 7#8 AW 7STR Bare

13763

00003560

35099

WIRE; 954-45/7 ACSR Bare

13763

00003560

35127

WIRE; 954-45/7 ACSR Bare

6717

00003560

35128

WIRE; 7#8 -7STR AW Bare

6717

00003502

3836

LAND AND LAND RIGHTS - RIGHTS OF WAY

030

00003502

3840

LAND AND LAND RIGHTS - RIGHTS OF WAY

030

00003502

3849

LAND AND LAND RIGHTS - RIGHTS OF WAY

030

00003502

3855

LAND AND LAND RIGHTS - RIGHTS OF WAY

030

00003502

27182

LAND RIGHTS

030

Portion to be sold to ODEC

00003550

19483E000005

POLES AND FIXTURES

030

00003550

19523E000005

POLES AND FIXTURES

030

00003550

19533E000005

POLES AND FIXTURES

030

00003550

19563E000005

POLES AND FIXTURES

030

 

 

 

[image1.jpg]

00003550

19583E000005

POLES AND FIXTURES

030

00003550

19603E000005

POLES AND FIXTURES

030

00003550

19613E000005

POLES AND FIXTURES

030

00003550

19653E000005

POLES AND FIXTURES

030

00003550

19673E000005

POLES AND FIXTURES

030

00003550

19693E000005

POLES AND FIXTURES

030

00003550

19703E000005

POLES AND FIXTURES

030

00003550

19713E000005

POLES AND FIXTURES

030

00003550

19763E000005

POLES AND FIXTURES

030

00003550

19793E000005

POLES AND FIXTURES

030

00003550

19823E000005

POLES AND FIXTURES

030

00003550

19833E000005

POLES AND FIXTURES

030

Portion to be sold to ODEC

00003550

19843E000005

POLES AND FIXTURES

030

00003550

19883E000005

POLES AND FIXTURES

030

Portion to be sold to ODEC

00003550

19903E000005

POLES AND FIXTURES

030

Portion to be sold to ODEC

00003550

19913E000005

POLES AND FIXTURES

030

Portion to be sold to ODEC

00003550

19923E000005

75 FT. POLE (VOC)

030

Portion to be sold to ODEC

00003550

19933E000005

POLES AND FIXTURES

030

00003550

19953E000005

POLES AND FIXTURES

030

Portion to be sold to ODEC

00003560

19413E000008

OVERHEAD CONDUCTORS AND DEVICES

030

Portion to be sold to ODEC

00003560

19483E000008

OVERHEAD CONDUCTORS AND DEVICES

030

00003560

19533E000008

OVERHEAD CONDUCTORS AND DEVICES

030

00003560

19643E000008

OVERHEAD CONDUCTORS AND DEVICES

030

Portion to be sold to ODEC

00003560

19673E000008

OVERHEAD CONDUCTORS AND DEVICES

030

00003560

19763E000008

OVERHEAD CONDUCTORS AND DEVICES

030

Portion to be sold to ODEC

00003560

19833E000008

OVERHEAD CONDUCTORS AND DEVICES

030

Portion to be sold to ODEC

00003560

19933E000008

OVERHEAD CONDUCTORS AND DEVICES

030

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 3.2(a)

Net Book Value Calculation

SAMPLE SALES PRICE ADJUSTMENT:

Sales Price $ 4,800,000

Plus: Additional asset investment since November 30, 2006 $ 200,000

Less: NBV of Retirements, Disposals, and Abandoned
Equipment since November 30, 2006 $ 75,000

Adjusted Sales Price $ 4,925,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 4.3(a)

Seller's Defaults and Violations

None

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 4.3(b)

Seller's Required Regulatory Approvals

1.

Approval under the Virginia Utilities Transfers Act from the Virginia State
Corporation Commission

2.

FERC approval of the Restated Interconnection Agreement

3.

FERC approval of the Facilities Agreement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 4.4

Insurance

All DPL properties in Virginia which are covered by insurance are covered under
blanket policies which also cover properties of other PHI entities and
properties located in other states.

Property: Coverage is provided on an all-risk basis for specified locations.
There is no coverage for transmission and distribution lines. The limits are
$400 million per occurrence and deductibles vary.

Liability: Coverage is provided on a claims made basis and includes pollution
coverage. The limits are $150 per occurrence and retention is $2 million.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 4.5(c)

Required Easements

Seller has wire crossings with Eastern Shore Railroad, Inc. but cannot locate
permits for the following locations:

·

MP # 45.05

·

MP # 52.90

·

MP # 55.70

·

MP # 64.60

·

MP # 67.80

·

MP # 68.90

·

MP # 70.12

·

MP # 76.30

·

MP # 77.70

·

MP # 79.21

·

MP # 84.50

·

MP # 86.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 4.6

Seller's Environmental Matters

1.

All matters identified on Phase I and Phase II reports prepared by NTH
Consultants, Ltd.

2.

Seller received a letter dated January 3, 2006 from the United States
Environmental Protection Agency (the "EPA"). The letter requested that Seller
respond to a "First Information Request," pursuant to Section 104 of CERCLA and
Section 3007 of RCRA with respect to a Carolina Transformer Site in
Fayetteville, Cumberland County, North Carolina. According to the letter, the
EPA received information from parties operating the Site that Seller may have
conducted business with, or sent materials to, the site. Seller provided a
timely response to the EPA's request, dated February 22, 2006. On August 25,
2006, Seller received a letter from the EPA stating that Seller has been
identified as a party that sent PCB-laden oil to the Carolina Transformer
Superfund Site and may potentially be a responsible party under Section 107(a)
of CERCLA.

3.

Underground Storage Tanks

 

The Exmore site includes two underground storage tanks, located outdoors to the
west of the main building in the central portion of the Exmore Complex. One is a
10,000 gallon diesel double-walled fiberglass tank and the other is a 10,000
gallon diesel double-walled fiberglass tank.

4.

PCB Contaminated Equipment

              ·

    7 PCB Capacitors at Wattsville Substation:

  

o

B-399-CAP-10

 

o

B-399-CAP-19

 

o

B-399-CAP-20

 

o

B-399-CAP-21

 

o

B-399-CAP-22

 

o

B-399-CAP-23

 

o

B-399-CAP-24

 

Additionally, to the Seller's Knowledge, the PCB status of substation electrical
equipment is described in the equipment inventory contained in the SPCC Plan for
each substation, which have been provided in due diligence

5.

See attached list of Oil Spills from 1997 to 2007 and Manifests from 1998-2007.

 

 

[image1.jpg]

SCHEDULE 4.8

Real Property and Transferred Easements

1.

See Schedule 1.1(93).

2.

See Schedule 2.1(a).

3.

See Transmission Army Corps Water Crossings provided by microfiche (consent or
approval may be required to transfer).

4.

See Transmission Virginia Railroad Crossings provided by microfiche (consent or
approval may be required to transfer).

5.

Agreement for Electric Transmission Lines across the right-of-way, tracks and
property of The Pennsylvania Railroad Company, dated February 17, 1967.

6.

Agreement for Electric Transmission Lines across the right-of-way, tracks and
property of The Pennsylvania Railroad Company, dated April 23, 1948.

7.

Agreement for Electric Transmission Lines across the right-of-way, tracks and
property of The Pennsylvania Railroad Company, dated April 15, 1964.

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 4.9(a)

Seller's Agreements

1.

See Schedule 1.1(93) and Schedule 2.1(d).

2.

Service Agreement with Atlantic Coast Alarm, Inc. for monitoring of security
systems.

3.

Service Agreement with Atlantic Coast Alarm, Inc. for repair of security
systems.

4.

Service Agreement with JC Ehrlich Co. Inc. for pest control.

5.

Service Agreement with Trugreen Chemlawn for landscaping.

6.

Service Agreement with Waste Management of Delmarva for trash removal services.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 4.9(b)

Seller's Agreements Exceptions

None

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 4.9(c)

Seller's Agreements Defaults and Violations

None

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 4.10

Legal Proceedings

1.

On March 10, 2006, DPL filed for a rate increase with the VSCC for its Virginia
Default Service customers to take effect on June 1, 2006, which was intended to
allow DPL to recover its higher cost for energy established by the competitive
bid procedure. On June 19, 2006, the VSCC issued an order that granted a rate
increase for DPL of $11.5 million ($8.5 million less than requested by DPL in
its March 2006 filing), to go into effect July 1, 2006. In determining the
amount of the approved increase, the VSCC applied the proxy rate calculation to
DPL's fuel factor, rather than allowing full recovery of the costs DPL incurred
in procuring the supply necessary for its Default Service obligation. The
estimated after-tax earnings and cash flow impacts of the decision are
reductions of approximately $3.6 million in 2006 (including the loss of revenue
in June 2006 associated with the Default Service rate increase being deferred
from June 1 until July 1) and $2.0 million in 2007. The order also mandated that
DPL file an application for Default Service rates to become effective June 1,
2007, including a calculation of the fuel factor that is consistent with the
procedures set forth in the order. On April 2, 2007, DPL filed the application
in accordance with the terms of the order. The calculations in the application
result in a rate decrease of approximately $1.7 million for the first period,
June 1 to June 30, 2007, and an increase of approximately $4.2 million for the
second period, July 1, 2007 to May 31, 2008, or an overall annual rate increase
of approximately $2.5 million.

2.

In February 2007, the Virginia General Assembly passed amendments to the
Virginia Electric Utility Restructuring Act to become effective on July 1,
2007(the Virginia Restructuring Act) that modified the method by which
investor-owned electric utilities in Virginia will be regulated by the VSCC. The
amendments provide that, as of December 31, 2008, the following will terminate:
(i) capped electric base rates (the previous expiration date was December 31,
2010); (ii) DPL's Default Service obligation (previously, DPL was obligated to
continue to offer Default Service until relieved of that obligation by the
VSCC); and (iii) customer choice, except that customers with loads of five
megawatts or greater will continue to be able to buy from competitive suppliers,
as will smaller non-residential customers that aggregate their loads to reach
the five-megawatt threshold and obtain VSCC approval. Additionally, if an
ex-customer of Default Service wants to return to DPL as its energy supplier, it
must give five years notice or obtain approval of the VSCC that the return is in
the public interest. In this event, the ex-customer must take DPL's service at
market based rates.

 

DPL also believes that the amendments to the Virginia Restructuring Act will
terminate, as of December 31, 2008, the ratemaking provisions within the
memorandum of agreement entered into by DPL, the staff of the VSCC and the
Virginia Attorney General's office in the docket approving DPL's generating
asset divestiture in 2000 (the MOA), including the application of the proxy rate
calculation to DPL's fuel factor as discussed above; however, the VSCC's
interpretation of these provisions is not known.

[image1.jpg]

3.

See Schedule 4.6.

4.

See the Order by the Virginia State Corporation Commission in Case No.
PUE-2007-00013, Application of Delmarva Power & Light For an increase in its
electric rates pursuant to Va. Code §: 56-249.6 and § 56-582.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 4.12

Brokers; Finders

None

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 4.14

Material Adverse Effects

1.

See Schedule 4.10.

2.

See Schedule 4.6.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 5.3(a)

Buyer's Defaults and Violations

None

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 5.3(b)

Buyer's Required Regulatory Approvals

1.

Approval under the Virginia Utilities Transfers Act from the Virginia State
Corporation Commission

2.

Certificate of Public Convenience & Necessity from the Virginia State
Corporation Commission

3.

FERC approval of the Restated Interconnection Agreement

4.

FERC approval of the Facilities Agreement.

5.

FERC approval of a revenue requirement related to the purchased transmission
facilities.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 6.1

Conduct of Business Exceptions

1.

Seller plans to install a 138 kV to 69 kV step-down transformer in the
Wattsville 69 kV substation, with an in-service date of May 2009.

2.

Replacement of Tasley CB 3450

3.

Replacement of CB 20 at Kellam

4.

Replacement of CB 570 at Wattsville

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 6.1(e)

Seller's Budget

See attached Seller's Budget.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 7.1(c)

Certain Buyer's Required Regulatory Approvals

See Schedule 5.3(b).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]

SCHEDULE 7.2(c)

Certain Seller's Required Regulatory Approvals

See Schedule 4.3(b).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[image1.jpg]