Document:

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                               SOFTWARE AGREEMENT

         This Software Agreement (this "Agreement") is effective as of this 6th
day of January, 2000, between Enron Energy Services, LLC, a Delaware limited
liability company ("EES"), and EMW Energy Services Corp., a Delaware corporation
(the "Company").

         EES and Company agree as follows:

1.       DEFINITIONS.   The following capitalized terms shall be used in this
Agreement with the meanings set forth in this Section 1:

         (a) "ASSIGNED SOFTWARE" means those EES computer programs in source
         code and machine-readable object code form identified in Schedule A
         with the functionality set forth in Schedule B, together with any
         Updates provided hereunder.

         (b) "DOCUMENTATION" means all user manuals, handbooks, written reports,
         flowcharts, specifications, analyses and other written materials
         regarding the Assigned Software which are supplied by EES at the time
         of this Agreement.

         (c) "FIELD OF USE" means the Small Commercial and Residential
         Businesses as defined in the purpose clause of the amended and restated
         charter for the Company as in effect on the Closing Date and as amended
         from time to time.

         (d) "MAINTENANCE AND SUPPORT SERVICES means the Services described in
         Schedule C.

         (e) "NONCOMPETITION AGREEMENT" means the Noncompetition Agreement dated
         as of January 6, 2000, entered into by Enron Corp., EES, and the
         Company.

         (f) "SPECIFICATIONS" mean the specifications attached as Schedule B.

         (g) "THIRD PARTY SOFTWARE" means the third party software identified on
         Schedule A.

         (h) "TAXES" means any and all governmental or quasi-governmental taxes,
         assessments, levies, duties, fees, charges and withholdings of any kind
         or nature whatsoever and howsoever described, including income, gross
         receipts, franchise, sales, use, excise, property, capital, value
         added, stamp, transfer, intangible, employment, occupation, generation,
         privilege, utility, BTU, gathering, energy, consumption, lease, permit,
         license, filing, custom, and recording tax, together with any and all
         penalties, fines, additions, or interest thereon.

         (i) "UPDATES" means the Assigned Software as modified and supplied to
         Company by EES pursuant to Section 6(b).

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2.       OWNERSHIP AND ASSIGNMENT.

         (a) ASSIGNMENT OF JOINT OWNERSHIP INTEREST IN ASSIGNED SOFTWARE. In
         consideration of the Contribution and Subscription Agreement dated as
         of December 23, 1999, entered into by EES, the Company and certain
         other persons, and other good and valuable consideration, the receipt
         and sufficiency of which is hereby acknowledged, EES hereby agrees to
         assign and transfer and hereby assigns and transfers to Company an
         undivided joint and equal interest in and to the Assigned Software, and
         any intellectual property rights (other than trademarks, tradenames,
         servicemarks, or other indication of source) in and to the Assigned
         Software and Documentation. EES and Company hereby agree as follows
         with respect to their respective rights and duties as to the Assigned
         Software and Documentation:

                  (i) Until the end of the term of the Noncompetition Agreement,
         both EES and Company shall have the right to use, copy, operate,
         modify, and process the Assigned Software, and to use the Documentation
         in connection with the Assigned Software. Prior to the end of the term
         of the Noncompetition Agreement, Company shall not transfer, license,
         or assign the right to use, copy, operate, modify, and process the
         Assigned Software to any third party (other than as permitted in
         Section 14). Prior to the end of the term of the Noncompetition
         Agreement EES shall not transfer, license, or assign the right to use,
         copy, operate, modify, and process the Assigned Software in the
         residential business portion of the Field of Use to any third party
         (other than as permitted in Section 14). Any such prohibited transfer,
         license or assignment prior to the end of the term of the
         Noncompetition Agreement shall be void and ineffective, and EES and
         Company shall be entitled to injunctive relief to prevent such
         transfer, license or assignment by the other party prior to the end of
         the term of the Non-competition Agreement. Nothing in this Section
         2(a)(i) shall prohibit EES from making any transfer, license or
         assignment of its right to use, copy, operate, modify, and process the
         Assigned Software to any third party for any use outside the
         residential business portion of the Field of Use or prevent EES from
         using the Assigned Software and Documentation.

                  (ii) Commencing at the end of the term of the Noncompetition
         Agreement, the restrictions on transfer, license, or assignment set
         forth in Section 2(a)(i) shall terminate, and both Company and EES
         shall both have the right to use, copy, operate, modify, and process
         the Assigned Software, and to use the Documentation in connection with
         the Assigned Software, and to license third parties (without the right
         to sublicense or utilize in connection with any form of service bureau
         activity) to use, copy, operate, modify, and process the Assigned
         Software solely for their own internal business purposes and to use the
         Documentation solely for their own internal business purposes in
         connection with the Assigned Software.

                  (iii) With respect to any transfers, licenses or assignments
         regarding the Assigned Software and Documentation, for any such
         transfer, license, or assignment to be effective, the party making or
         granting such transfer, license, or assignment must obligate any such
         transferee, licensee, or assignee to the restrictions on use, transfer,
         and confidentiality contained herein.

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         (b) If either party at any time shall become aware or receive notice of
         any infringement or misappropriation of the Assigned Software or the
         Documentation, then such party shall promptly give written notice
         thereof to other party setting forth all information in such party's
         possession regarding such infringement or misappropriation.

                  (i) Prior to the end of the term of the Noncompetition
         Agreement, if the infringement or misappropriation of the Assigned
         Software or the Documentation occurs solely in the residential business
         portion of the Field of Use then Company shall have the right (but not
         the obligation) to institute legal action to redress all such
         infringements or misappropriation. Prior to the end of the term of the
         Noncompetition Agreement, if the infringement or misappropriation of
         the Assigned Software or Documentation occurs in connection with any
         use other than the residential business portion of the Field of Use,
         then EES shall have the right (but not the obligation) to institute
         legal action to redress all such infringement or misappropriation. In
         either case, the party not instituting the legal action shall, at the
         filing party's expense, cooperate fully with the filing party in any
         legal action taken against any party alleged to be infringing,
         including, if necessary agreeing to be named as a party plaintiff in
         such suit.

                  (ii) Commencing at the end of the term of the Noncompetition
         Agreement, with respect to any intellectual property claims of
         infringement or misappropriation of the Assigned Software and the
         Documentation against third parties, both EES and Company shall have
         the right to sue in their own name (or if so required by the law of the
         forum, to bring suit in the name of other party or join the other party
         as a party plaintiff) for infringement or misappropriation of the
         Assigned Software. The other party shall have the right to join the
         suit as a plaintiff and shall be obligated to share equally in all out
         of pocket expenses and entitled to share equally in any monetary
         recovery. The party not responsible for instituting the legal action
         shall, at the filing party's expense, cooperate fully with the filing
         party in any legal action taken against any party alleged to be
         infringing, including, if necessary agreeing to be named as a party
         plaintiff in such suit.

                  (iii) In the event that the party with a right to institute an
         action hereunder fails to institute legal action within thirty (30)
         days of the notice described in Section 2(b) above, then the other
         party may institute such legal action, and the party that did not
         exercise its right to institute the action shall cooperate fully with
         the filing party in any legal action taken against any party alleged to
         be infringing, including, if necessary agreeing to be named as a party
         plaintiff in such suit. Any amount awarded or paid as a result of such
         legal action shall be first allocated in reimbursement of any costs and
         expenses incurred in pursuing such action, with any remaining amounts
         to be recovered by the party or parties instituting such litigation.

         (c) Except for transfers, licenses, assignments, or other exploitation
         of the Assigned Software or Documentation prohibited by this Agreement,
         each of EES and Company shall have no duty to compensate the other
         party for any transfer, license, assignment or other exploitation of
         the Assigned Software or Documentation. Each of EES and Company may
         transfer, license, assign, or otherwise exploit the Assigned Software
         or

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         Documentation other than as prohibited in this Agreement without the
         consent of and without accounting to the other party.

         (d) EES covenants not to sue the Company (or any of its licensees or
         permitted assignees) for the infringement of any United States patents
         based on the use of the Assigned Software and the Documentation.

3.       RESTRICTIONS.

         (a) NO DISCLOSURE. The Assigned Software and Documentation contain
         Confidential Information (as defined in Section 4(a)) of both parties
         and are considered by both parties to constitute valuable trade
         secrets. Neither party shall attempt (i) to disclose, copy (except as
         provided herein), display, loan, publish, transfer possession of, or
         otherwise disseminate the Assigned Software or Documentation, in whole
         or in part, to any third party without the prior written consent of
         both parties unless subject to an obligation of confidentiality, or
         (ii) to use the Assigned Software and Documentation except as allowed
         in Section 2 of this Agreement. Each party shall limit use of and
         access to the Assigned Software and Documentation to such of that
         party's employees and agents as are involved in the utilization of the
         Assigned Software internally within that party and who are obligated to
         preserve the confidentiality thereof.

         (b) TRADEMARKS AND SERVICEMARKS. EES does not grant to Company any
         right to use any trademark, servicemark, tradename, logo, or other
         proprietary mark of EES. Similarly, Company does not grant to EES any
         right to use any trademark, servicemark, tradename, logo, or other
         proprietary mark of Company.

         (c) NOTIFICATION OF VIOLATION. Each party shall promptly report to the
         other party any actual or suspected violation of this Section 3 and
         shall take all reasonable and necessary further steps requested by the
         other party to prevent any further violation or remedy any such
         violation.

4.       CONFIDENTIAL INFORMATION AND CONFIDENTIALITY.

         (a) CONFIDENTIAL INFORMATION. As used in this Agreement, the term
         "Confidential Information" shall mean all trade secrets or confidential
         or proprietary information designated as such in writing by either EES
         or Company (a "Disclosing Party") to the other (the "Recipient"),
         whether by letter or by the use of an appropriate proprietary stamp or
         legend, prior to or at the time any such trade secret or confidential
         or proprietary information is disclosed by the Disclosing Party to the
         Recipient. Notwithstanding the foregoing, information which is orally
         or visually disclosed or is disclosed in writing without an appropriate
         letter, proprietary stamp or legend shall constitute Confidential
         Information if the Disclosing Party (i) so indicates at the time of
         disclosure and (ii) within thirty (30) days after such disclosure,
         delivers to the Recipient a written document or documents designating
         or describing such Confidential Information and referencing the place
         and date of such oral, visual or written disclosure and the names of
         the employees or officers of the Recipient to whom such disclosure was
         made. The provisions of this

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         Section 4(a) notwithstanding, Confidential Information shall not
         include any information to the extent it:

                  (i)      is in the Recipient's possession at the time of
         disclosure otherwise than as a result of the Recipient's breach of any
         legal obligation;

                  (ii) becomes known to the Recipient through disclosure by
         sources other than the Disclosing Party who are not legally prohibited
         from disclosing such Confidential Information;

                  (iii) is independently developed by the Recipient without
         reference to, use of, or reliance upon the Disclosing Party's
         Confidential Information;

                  (iv)     is generally available to the public through no fault
         of the receiving party; or

                  (v) is required to be disclosed by the Recipient in the
         opinion of its legal counsel to comply with applicable laws,
         governmental regulations, or court order provided that the Recipient
         provides prior written notice of such disclosure to the Disclosing
         Party as soon as commercially practicable (so as to allow the
         Disclosing Party to protect such Confidential Information) and takes
         reasonable and lawful actions, as specified by and at the expense of
         the Disclosing Party, to avoid and/or minimize the extent of such
         disclosure.

Notwithstanding the foregoing, all Confidential Information in the Assigned
Software and Documentation delivered hereunder is Confidential Information of
both EES and Company.

         (b) CONFIDENTIALITY. Each of EES and Company shall hold the other's
         Confidential Information in confidence and shall not disclose the other
         party's Confidential Information to any person except such of the
         Recipient's employees and agents who have a need to know such
         Confidential Information in the course of the performance of their
         duties for the Recipient and who are bound to preserve the
         confidentiality of the Confidential Information. The Recipient shall
         use Confidential Information only for the purpose for which it was
         disclosed and shall not otherwise use or exploit the Confidential
         Information for its own benefit or the benefit of another without the
         prior written consent of the Disclosing Party. Each of EES and Company
         shall take appropriate action by instruction or agreement with its
         employees and agents to satisfy its obligations under this Section
         4(b). Each party shall promptly report to the other party any actual or
         suspected violation of this Section 4(b) and shall take all reasonable
         and necessary further steps requested by the other party to prevent any
         further violation or remedy any such violation.

         (c) RECORDS AND INSPECTION. Each of EES and Company shall maintain
         appropriate records of the number and locations of the original and all
         copies of the Confidential Information (including the Assigned Software
         and Documentation) and, upon request,

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         make the Confidential Information readily available at each party's
         facilities for reasonable inspection by the other party or its agents.

5.       DELIVERY AND INSTALLATION. Immediately after execution of the
Agreement, EES shall deliver to Company the number of copies of the Assigned
Software and the Documentation as set forth in Schedule A. Within thirty (30)
days of written notice from Company that Company desires EES to install the
Assigned Software, EES shall promptly install the Assigned Software at
Company's principal business address in Houston, Texas and verify the proper
operation thereof.

6.       MAINTENANCE AND SUPPORT SERVICES.

         (a) EES shall, at its expense, be obligated to provide Maintenance and
         Support Services as set forth on Schedule C for the Assigned Software
         delivered hereunder for a period of nine (9) months from the date
         hereof. In the event that an initial firm commitment underwritten
         public offering of shares of common stock of the Company registered
         under the Securities Act of 1933, as amended (an "IPO"), has not been
         consummated on or prior to nine (9) months following the Effective
         Date, EES shall, at the option of the Company (as described below),
         continue to provide to the Company the Maintenance and Support Services
         for the Assigned Software delivered under Section 5 (and, if Company
         exercises its option under Section 6(b), the Update) for an additional
         six (6) month period at EES' actual cost of providing such Services
         (including, but not limited to, an allocation of general and
         administrative costs and expenses, employee and employee benefit costs
         and expenses, and any out-of-pocket costs and expenses). Except as
         provided in this Section 6(a) or in Section 6(c), EES shall not be
         obligated to provide any Maintenance and Support Services with respect
         to the Assigned Software, and shall not be obligated to revise or
         update the Assigned Software in any manner whatsoever.

         (b) At the end of the nine (9) month period (and at the end of the
         fifteen (15) month period if extended) set forth in Section 6(a), EES
         grants the Company an option to have EES deliver to the Company a copy
         of the then current version of the Assigned Software and Documentation
         in use at EES (the "Update") on an "AS IS" basis to Company for
         Company's review and use subject to the restrictions of Section 2.
         Company shall exercise such option by notifying EES in writing of
         Company's intent to exercise such option at least two (2) weeks before
         the end of the nine (9) month (or, if relevant, fifteen (15) month)
         period. If the Company exercises this option, the Update shall be
         included in the definition of Assigned Software. In addition, whenever
         EES develops and places into production any improvements, corrections,
         modifications, or changes in or to the Assigned Software during the
         nine (9) month (or, if relevant, fifteen (15) month) period set forth
         in Section 6(a), EES agrees to provide such improvements, corrections,
         modifications, or changes on an "AS IS" basis to Company for Company's
         review and use subject to the restrictions of Section 2.

         (c) At the end of the the nine (9) month (or, if relevant, fifteen (15)
         month) period set forth in Section 6(a) and continuing for up to three
         years thereafter, EES shall offer to

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         provide to Company, on those offered by EES to any similarly situated
         non-affiliated software customer, the Maintenance and Support Services
         set forth on Schedule C for the Assigned Software.

         EES's obligations under Section 6 shall not extend to any modifications
         or changes made to the Assigned Software made by the Company.

7.       TRAINING SERVICES. EES shall provide reasonable training services for
employees of the Company (as designated by the Company) for a period of six (6)
months from the date hereof, but thereafter EES shall not be obligated to
provide any training services with respect to the Assigned Software.

8.       LIMITED WARRANTY AND EXCLUSION OF WARRANTIES.

         (a) LIMITED WARRANTY ON ASSIGNED SOFTWARE. For a period of one hundred
         eighty (180) days from the date of delivery of the Assigned Software
         under Section 5, EES warrants to Company that:

                  (i) The Assigned Software, when properly used by the Company
         with the Third Party Software on the hardware currently used by EES and
         specified in Schedule B, performs in compliance with the Specifications
         for the number of residential customers currently serviced by EES. EES
         does not warrant that the operation of the Assigned Software will be
         uninterrupted or error-free except as expressly provided in the
         Specifications, that the Assigned Software when used with the Third
         Party Software will be functional for an unlimited number of customers
         or for all states or jurisdictions, that the Assigned Software will
         achieve the results desired by the Company, or that Company or EES
         employees or agents will be error-free in their use or application of
         the Assigned Software. In addition, EES warrants that the Documentation
         and the documentation available from third party software vendors is
         sufficient to enable a reasonably skilled software engineer reasonably
         experienced in risk management software to support, maintain and modify
         the Assigned Software.

                  (ii) No portion of the Assigned Software as delivered shall
         contain any "Traps" or, to EES's knowledge, "Viruses." "Virus" means a
         set of computer instructions which are self-replicating or
         self-propagating and are designed to contaminate the Assigned Software,
         consume computer resources, or modify, destroy, record or transmit data
         or programming without the intent or permission of the user. "Traps"
         means any software routines or hardware components designed by EES to
         permit unauthorized access, to disable or erase software, hardware or
         data, or to perform any other such actions which will have the effect
         of materially impeding the normal and expected operation of the
         Assigned Software. EES further warrants that prior to the delivery of
         any Assigned Software to Company under Sections 5, EES shall use
         commercially reasonable efforts to detect and screen out any Virus
         through the use of the current virus detection programs specified by
         Company in advance of the delivery of the Assigned Software under
         Sections 5.

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                  (iii) To EES's knowledge, with respect to any year 2000
         aspects of the Assigned Software itself, that when the Assigned
         Software is properly operated on hardware that is also year 2000
         compliant and used in combination with other data and software that are
         year 2000 compliant, the Assigned Software shall (a) correctly
         recognize and process (including calculating, comparing, and
         sequencing) data into and between the 20th and 21st Centuries) and all
         date sorting by the Assigned Software that includes a "year category"
         shall be done based on the four-digit year format code; (b) include
         calendar year 2000 date conversion and compatibility capabilities,
         including date data value calculations and user interface date data
         values that reflect the century; (c) include the indication of the
         correct century in all date related user interface functions and data
         fields that indicate the calendar year; and (d) not adversely be
         affected by the change of the millennium and shall continue to perform
         in accordance with the Specifications in this Agreement.

                  (iv) To EES's knowledge, the Company's internal use of the
         Assigned Software in combination with the Third Party Software does not
         infringe the intellectual property rights of any third party.

         (b) UPDATE. For purposes of Section 8(a), the Assigned Software shall
         not include the Update, as the Update will be provided on an AS IS
         basis. No warranties, express or implied are made with respect to the
         Update, and none of the warranties set forth in Section (a) are made
         with respect to the Update.

         (c) SOLE AND EXCLUSIVE REMEDY FOR BREACH OF WARRANTY. The Company's
         sole and exclusive remedy for the breach of any of the warranties made
         herein is follows: Without cost to Company, EES agrees to correct
         promptly or otherwise remedy (by replacing or modifying the Assigned
         Software so long as the Assigned Software thereafter is essentially
         unchanged) any failure of the Assigned Software to meet the warranties
         set forth in Section 8(a) provided that the failure occurs during the
         foregoing warranty period and is reported no later than fourteen (14)
         days after the end of the warranty period. Any claims made after this
         time period shall not be considered warranty claims for the purposes of
         this Agreement. In order to obtain warranty coverage pursuant to this
         Agreement, Company must provide EES with written notice of the warranty
         claim, which notice must contain as much of the following as possible
         using commercially reasonable efforts: (i) a description of the failure
         to perform, (ii) a description of the operating conditions, including
         the specific hardware and software configuration, under which the
         failure to perform occurred, and (iii) a representative sample of
         inputs for repeating and analyzing the failure to perform. THE
         FOREGOING STATES COMPANY'S SOLE AND EXCLUSIVE REMEDY, AND EES' SOLE AND
         EXCLUSIVE LIABILITY FOR, ANY BREACH OF WARRANTY, DEFECT, FAILURE OR
         OTHER PROBLEM WITH THE ASSIGNED SOFTWARE WHATSOEVER.

         (c) EXCLUSIONS FROM WARRANTY COVERAGE. The provisions of Section 8(a)
         notwithstanding, EES shall have no obligation to make corrections,
         repairs, or replacements which result, in whole or in part, from (i)
         catastrophe, fault or negligence of Company, (ii) use of the Assigned
         Software in a manner for which it was not designed,

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         (iii) modifications of the Assigned Software by the Company or anyone
         other than EES or its employees, agents and consultants, or (iv) causes
         external to the Assigned Software such as, but not limited to, power
         failure or electric power surges; provided, however, with respect to
         such exclusions, EES agrees to use reasonable efforts to assist Company
         in solving the failure of the Software to meet the warranties set forth
         in Section 8(a) so long as EES has personnel available to assist
         Company and Company pays EES for the time of such personnel at a
         reasonable fee to be set by EES.

         (e) DISCLAIMER OF OTHER WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN
         THIS SECTION 8, EES DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS OR
         IMPLIED, WRITTEN OR ORAL, STATUTORY OR OTHERWISE, WITH RESPECT TO THE
         ASSIGNED SOFTWARE AND DOCUMENTATION, INCLUDING, WITHOUT LIMITATION, ANY
         WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

9.       INDEMNIFICATION.

         (a) INDEMNIFICATION. If notified promptly in writing of any action (and
         all prior related claims) brought against Company that arises out of or
         is based on a claim that the Assigned Software or Documentation
         infringes any United States patent, copyright or other intellectual
         property right of another (other than claims made by licensees of
         Company for which Company agrees to indemnify EES as set forth below),
         EES shall defend, indemnify and hold harmless the Company in such
         action at its expense and pay all costs (including reasonable
         attorneys' fees) and damages finally awarded in the action or
         settlement which are attributable to such claim, except as provided in
         Section 10 hereof. EES shall have sole control of the defense of any
         such action and all negotiations for its settlement or compromise.
         Company shall cooperate fully at its expense (except that EES shall pay
         or reimburse Company for all reasonable out-of-pocket expenses,
         including travel, lodging, meal, and photocopy expenses reasonably
         incurred by Company at EES' request) with EES in the defense,
         settlement or compromise of any such action. EES shall not be liable to
         Company on account of any amounts paid in settlement if such settlement
         is effected without EES's consent. Except in the case of EES'
         obligations under this Section 9, if notified promptly in writing,
         Company shall indemnify, defend, and hold harmless EES against any
         claim, expense, judgment, damage, or loss (including reasonable
         attorneys' fees) arising from any claim against EES by a third party
         which arises out of or in any way relates to (i) use by Company of the
         Assigned Software or Documentation; or (ii) any transfer, license or
         assignment regarding the Assigned Software or Documentation granted by
         Company except resulting from a breach of the warranty made in Section
         8(a)(iv). The failure of the party seeking indemnity to promptly notify
         the other party of any action (or other related claims) shall not
         relieve the other party from any obligation which such other party
         would otherwise have pursuant to this Section 9 except to the extent
         that the other party has been materially prejudiced by such failure to
         promptly notify. The party defending an action will not settle it in a
         way that limits the other party's beneficial use without the other
         party's consent.

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                  In the event that a final injunction is obtained against
         Company's use of the Assigned Software or Documentation by reason of
         the inability of EES to grant the rights granted in Section 2,
         infringement or misappropriation by the Assigned Software or
         Documentation of a United States intellectual property right or, if in
         EES' reasonable opinion the Assigned Software or Documentation is
         likely to become the subject of a successful claim of such infringement
         or misappropriation, EES shall, at its expense, either (i) procure for
         Company the right to continue using the Assigned Software and
         Documentation as provided in this Agreement or (ii) replace or modify
         the Assigned Software or Documentation so that it or they become
         non-infringing or not misappropriating (so long as the functionality of
         the Assigned Software is essentially unchanged).

         (b) EXCLUSIONS FROM INDEMNIFICATION. EES shall not have any liability
         to Company under this Section 9 to the extent that any infringement or
         claim thereof is based upon (i) use of the Assigned Software in
         combination with equipment or software not supplied hereunder and not
         contemplated to be used with the Assigned Software where the Assigned
         Software would not itself be infringing, (ii) use of the Assigned
         Software with an application or in an environment for which it was not
         designed or contemplated under this Agreement, (iii) modifications of
         the Assigned Software or Documentation by anyone other than EES or its
         employees, agents and consultants, or (iv) any claims of infringement
         of any patent, copyright or other intellectual property right in which
         Company or any affiliate of Company has an interest or license.

         (c) SOLE AND EXCLUSIVE REMEDY. The foregoing states EES' entire
         liability, and Company's sole and exclusive remedy, with respect to
         infringement or alleged infringement of patents, copyrights, and other
         intellectual property rights by the Assigned Software, the
         Documentation, or the use thereof.

10.      LIMITATION OF LIABILITY. IN NO EVENT SHALL EES BE LIABLE TO COMPANY FOR
ANY CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES BASED UPON LIABILITY FOR BREACH
OF WARRANTY, BREACH OF CONTRACT, NEGLIGENCE, STRICT LIABILITY, TORT OR ANY
LIABILITY UNDER ANY OTHER LEGAL THEORY. SUCH EXCLUDED DAMAGES INCLUDE, BUT ARE
NOT LIMITED TO, LOST PROFITS, LOSS OF DATA, OR LOSS OF USE DAMAGES, ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE CREATION OR SUPPLYING OF THE ASSIGNED
SOFTWARE AND DOCUMENTATION, EVEN IF EES WAS AWARE OF, NOTIFIED OF OR ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL COMPANY BE LIABLE TO EES FOR
ANY CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES BASED UPON LIABILITY FOR BREACH
OF WARRANTY, BREACH OF CONTRACT, NEGLIGENCE, STRICT LIABILITY, TORT OR ANY
LIABILITY UNDER ANY OTHER LEGAL THEORY. SUCH EXCLUDED DAMAGES INCLUDE, BUT ARE
NOT LIMITED TO, LOST PROFITS, EVEN IF COMPANY WAS AWARE OF, NOTIFIED OF OR
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

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11.      TERMINATION.

         (a) TERMINATION BY EES. EES may terminate this Agreement and EES'
         obligations to Company hereunder if Company materially breaches its
         obligations under Sections 2, 3, 4, 9 or 14 of this Agreement by
         following the procedure specified in the next sentence. Prior to any
         such termination, EES shall provide written notice to Company of the
         material breach in sufficient detail to allow the Company to cure and
         if Company does not substantially cure the breach within sixty (60)
         days of such written notice, then EES may terminate this Agreement, and
         EES' obligations hereunder by notice to the Company. Such termination
         shall not prejudice EES' right to damages or any other remedy available
         at law or equity.

         (b) TERMINATION BY COMPANY. Company may terminate this Agreement at any
         time for convenience. Upon such termination, Company shall immediately
         (i) stop all use of the Assigned Software and Documentation, (ii)
         return to EES (or, at EES's option, destroy and certify in writing to
         EES that it has destroyed) the original and all copies of EES
         Confidential Information including, but not limited to, the original
         and all copies of the Assigned Software and Documentation, including
         archival copies, compilations, translations, partial copies, updates
         and modifications, if any, and (iii) delete all copies of the Assigned
         Software from its computer libraries or storage facilities.

         (c)      SURVIVAL. The provisions of Sections 2, 3, 4, 9, 10 and 13
         hereof shall survive the termination of this Agreement for any reason.

12.      NOTICES.

         (a) Any notice or other communication required or permitted hereunder
         shall be in writing and shall be delivered personally by hand or by
         recognized overnight courier, telecopied or mailed (by registered or
         certified mail, postage prepaid) as follows:

                 (i)      If to the Company, then to:

                          EMW Energy Services Corp.
                          c/o Enron Energy Services, LLC
                          1400 Smith Street
                          Houston, Texas 77002
                          Attention:  General Counsel
                          Facsimile:  (713) 646-2379

                 (ii)     If to EES, then to:

                          Enron Energy Services, LLC
                          1400 Smith Street
                          Houston, Texas 77002
                          Attention:  General Counsel
                          Facsimile:  (713) 646-2379

                                     -11-
<PAGE>

         (b) Each such notice or other communication shall be effective (i) if
         given by telecopier, when such telecopy is transmitted to the
         telecopier number specified in Section 12(a) (with confirmation of
         transmission), or (ii) if given by any other means, when delivered at
         the address specified in Section 12(a). Any party by notice given in
         accordance with this Section 12 to the other party may designate
         another address (or telecopier number) or person for receipt of notices
         hereunder. Notices by a party may be given by counsel to such party.

13.      GOVERNING LAW; ARBITRATION.

         (a) THIS AGREEMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND
         ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN
         ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, OTHER THAN THE
         CONFLICT OF LAWS RULES THEREOF.

         (b) Any and all claims, counterclaims, demands, cause of action,
         disputes, controversies, and other matters in question arising under
         this Agreement or the alleged breach of any provision hereof, (all of
         which are referred to herein as "Disputed Claims"), whether such
         Disputed Claims arise at law or in equity, under State or federal law,
         for damages or any other relief, shall be resolved by binding
         arbitration in the manner set forth on SCHEDULE D.

14.      ASSIGNMENT. This Agreement and all of its provisions, rights and
obligations shall be binding upon and shall inure to the benefit of the
parties hereto and their respective permitted successors and assigns. Except
as provided herein, either party may assign this Agreement without the
consent of the other, except that EES may not assign this Agreement for the
first eighteen (18) months of its term to an entity engaged in the
Residential Business portion of the Field of Use without the consent of
Company. The restrictions on the Assigned Software set forth herein,
including those in Section 2, 3 and 4, shall not be affected, altered or
changed by any assignment or transfer of this Agreement and no assignment or
transfer of this Agreement shall conflict with the provisions of Section 2 or
be effective to the extent that it conflicts with Section 2. In addition, the
indemnification obligations contained herein are personal to the parties and
any indemnification obligation owed to a party assigning this Agreement shall
terminate upon assignment of this Agreement.

15.      GENERAL.

         (a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
         between EES and Company with respect to the subject matter hereof and
         supersedes all prior agreements and understandings, whether oral or
         written, between the parties with respect to the subject matter hereof.
         EES makes no representations to Company except as expressly set forth
         herein.

         (b) FORCE MAJEURE. Neither party shall be liable for a delay in the
         performance of its obligations and responsibilities under this
         Agreement due to causes beyond its control,

                                      -12-
<PAGE>

         including, but not limited to, failures or delays in transportation or
         communication, failures or substitutions of equipment, labor disputes,
         accidents, shortages of labor, fuel, raw materials or equipment or
         technical failures, provided that the delayed party has taken
         reasonable measures to notify the other, in writing, of the delay. The
         time for completion of any obligation to which this provision applies
         shall be extended for a period equivalent to the  delay; provided,
         however, that no such extension of performance shall require EES to
         perform any obligation under this Agreement beyond the date or dates
         specified in this Agreement.

         (c) EXPORT LAWS. Both parties shall comply with all export restrictions
         imposed by the United States government from time-to-time which apply
         to the Assigned Software and Documentation. Neither party shall export
         or re-export the Assigned Software or Documentation without first
         obtaining the necessary license or approvals from the appropriate
         government agency or department which may require such approval. Each
         party shall obtain and pay for all licenses and approvals required and
         any related charges, and shall indemnify, defend, and hold harmless the
         other party for any claim brought against that party based upon the
         exporting party's export or re-export activities in relation to the
         Assigned Software or Documentation.

         (d) WAIVER. This Agreement may be amended, superseded, canceled,
         renewed or extended only by a written instrument signed by the parties
         hereto. The provisions hereof may only be waived in writing by the
         parties hereto. No delay on the part of any party in exercising any
         right, power or privilege hereunder shall operate as a waiver thereof,
         nor shall any waiver on the part of any party of any such right, power
         or privilege, nor any single or partial exercise of any such right,
         power or privilege, preclude any further exercise thereof or the
         exercise of any other such right, power or privilege. Except as
         otherwise provided herein and subject to Sections 10 and 13, the rights
         and remedies herein provided are cumulative and are not exclusive of
         any rights or remedies that any party may otherwise have at law or in
         equity.

         (e) 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, provisions,
         covenants and restrictions of this Agreement shall continue in full
         force and effect and shall in no way be affected, impaired or
         invalidated so long as the economic or legal substance of the
         transactions contemplated hereby is not affected in any manner
         materially adverse to any party. Upon such determination that any term,
         provision, covenant or restriction is invalid, void or unenforceable,
         the parties hereto shall negotiate in good faith to modify this
         Agreement so as to effect the original intent of the parties as closely
         as possible in an acceptable manner to the end that the transactions
         contemplated hereby are fulfilled to the fullest extent possible.

         (f) HEADINGS. Section headings are for reference purposes only and
         shall not control or alter the meaning of this Agreement as set forth
         in the text.

         (g) RELATIONSHIP OF PARTIES. In the performance of its services
         hereunder, EES will at all times be an independent contractor, and this
         Agreement shall not constitute, nor be

                                      -13-
<PAGE>

         deemed to constitute, either party as an employee, agent, partner or
         joint venturer of the other.

         (h) TAXES. Both Parties agree to use reasonable efforts to administer
         this Agreement in accordance with their intent to minimize any Taxes
         applicable to this Agreement or any agreement associated herewith.
         Either Party may provide to the other a certificate of exemption or
         other reasonably satisfactory evidence of exemption from or right to
         reduction of any Taxes otherwise due. Both Parties agree to cooperate
         in obtaining any exemption or reduction in Taxes upon request by the
         other. However, EES will proceed on the assumption that any applicable
         Taxes are due unless and until Customer presents EES satisfactory proof
         that Customer is entitled to any claimed exemption or reduction in
         Taxes. Upon presentation of such proof, no retroactive adjustments will
         be made, but EES will assign to Customer, to the extent assignable, any
         claims for refund EES has with respect to any prior payments of Taxes.
         None of the amounts payable to EES under this Agreement include any new
         or existing Taxes, and Customer shall be responsible for, pay and/or
         reimburse EES for all Taxes and other charges imposed or levied by any
         taxing authority on or related to any commodities, services, work,
         activities, materials, property and payments provided for, delivered,
         purchased, sold, consumed, fabricated, used or leased under or with
         respect to this Agreement, including any of the same provided, owned or
         leased by Customer and/or provided by Customer to EES, and with respect
         to any other agreement related hereto or entered into as part of or in
         implementation of this Agreement and any activities contemplated hereby
         or thereby, but not those in the nature of Taxes on EES

          (i) COUNTERPARTS. This Agreement may be executed in separate
         counterparts, each of which when so executed and delivered shall be an
         original, but all such counterparts shall together constitute but one
         and the same Agreement. All signatures need not be on the same
         counterpart.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the day and year indicated above.

ENRON ENERGY SERVICES, LLC               EMW ENERGY SERVICES CORP.

By:      /s/ MARK S. MULLER              By:      /s/ JIMMIE L. WILLIAMS
   ---------------------------------        -------------------------------

Print:   Mark S. Muller                  Print:   Jimmie L. Williams
      ------------------------------           ----------------------------

Title:   Sr. Vice President              Title:   Vice President
      ------------------------------           ----------------------------

Date:    January 6, 2000                 Date:    January 6, 2000
     -------------------------------          ------------------------------

                                      -14-
<PAGE>

                                   SCHEDULE A

1.       ASSIGNED SOFTWARE:

         Forecaster
         Retail Gas System
         Electric Risk Book (includes Deal Tracker, Intra-Month Book)
         Rate Engine (includes Load Library, Load Wizard)
         PowerMod/BatchMod pricing model
         GasMod pricing model

2.       THIRD PARTY SOFTWARE

         Microsoft Office 97 Suite (including Access 97 and Excel 97)
         SQL Server7.0
         MDMA
         STAT

3.       DATABASES

         WeatherBank
         TeleRate
         ENA Price Curve Database
         Curve Management System Database
         Load Wizard Database
         Third party residential data from utilities (via internet or other
         public source)
         Third party residential profile data, to the extent available, from
         source such as Regional Economic Research

         Dept. of Energy Model database model (internet)

4.       DESCRIPTION OF DOCUMENTATION

         Specifications attached as Schedule B
         Rate Engine User Manual

                                     -15-
<PAGE>

                                   SCHEDULE B

                                 SPECIFICATIONS

1.       Forecaster and Associated Software: Present State - System Requirements
         Specification

2.       Rate Engine and Associated Software: Present State - System
         Requirements Specification

3.       Electric Risk Book and Associated Software: Present State - System
         Requirements Specification

4.       Retail Gas System and Associated Software: Present State - System
         Requirements Specification

                                     -16-
<PAGE>

                                   SCHEDULE C

                        MAINTENANCE AND SUPPORT SERVICES

         EMW Energy Services, Inc. - SSAEMW Software Support Agreement

                                     -17-
<PAGE>

                                   SCHEDULE D

                             ARBITRATION PROCEDURES

        (a) The parties to this Agreement agree that any dispute, controversy
or claim that may arise between or among them in connection with or otherwise
relating to this Agreement or the application, implementation, validity or
breach of this Agreement or any provision of this Agreement (including, without
limitation, claims based on contract, tort or statute), shall be finally,
conclusively and exclusively settled by binding arbitration in Wilmington,
Delaware in accordance with the commercial arbitration rules (the "Rules") of
the American Arbitration Association or any successor thereto ("AAA") then in
effect. The parties to this Agreement hereby expressly waive their right to
seek remedies in court, including the right to trial by jury, with respect to
any matter subject to arbitration pursuant to this Agreement. Any party to this
Agreement may bring an action, including, without limitation, a summary or
expedited proceeding in any court having jurisdiction, to compel arbitration of
any dispute, controversy or claim to which the provisions hereof apply. Except
with respect to the following provisions (the "Special Provisions") which shall
apply with respect to any arbitration pursuant hereto, the initiation and
conduct of arbitration shall be as set forth in the rules, which rules are
incorporated in this Agreement by reference with the same effect as if they
were set forth in this Agreement.

        (b) In the event of any inconsistency between the Rules and the Special
Provisions, the Special Provisions shall control. Any references in the Rules
to a sole arbitrator shall be deemed to refer to the tribunal of arbitrators
provided for under paragraph (d) hereof.

        (c) The arbitration shall be administered by the AAA. If the AAA is
unable or legally precluded from administering the arbitration, then the
parties shall agree upon an alternative arbitration organization, provided
that, if the parties cannot agree, such organization shall be selected by the
Chief Judge of the United States District Court for the District which includes
Wilmington, Delaware.

        (d) The arbitration shall be conducted by a tribunal of three (3)
arbitrators. Within ten (10) days after arbitration is initiated pursuant to
the Rules, the initiating party or parties (the "Claimant") shall send written
notice to the other party or parties (the "Respondent"), with a copy to the
office of the AAA having responsibility for Wilmington, Delaware, designating
the first arbitrator (who shall not be a representative or agent of any party
(i.e., shall be impartial and independent) but may or may not be an AAA panel
member and, in any case, shall be reasonably believed by the Claimant to
possess the requisite experience, education and expertise in respect of the
matters to which the claim relates to enable such person to competently perform
arbitral duties). With ten (10) days after receipt of such notice, the
Respondent shall send written notice to the Claimant, with a copy to the office
of the AAA having responsibility for Wilmington, Delaware and to the first
arbitrator, designating the second arbitrator (who shall not be a
representative or agent of any party (i.e., shall be impartial and independent)
but may or may not be an AAA panel member and, in any case, shall be reasonably
believed by the Respondent to possess the requisite experience, education and
expertise in respect of the matters to which the claim relates to enable such
person to competently perform arbitral duties). Within

                                     -18-
<PAGE>

ten (10) days after such notice from the Respondent is received by the
Claimant, the two designated arbitrators shall select any mutually agreeable
third arbitrator. If the respective designated arbitrators of the Respondent
and the Claimant cannot so agree within said ten (10) day period, then the
third arbitrator will be determined pursuant to the Rules. Prior to
commencement of the arbitration proceeding, each arbitrator shall have
provided the parties with a resume outlining such arbitrator's background and
qualifications and shall confirm that such arbitrator is not and has not been
a representative or agent of any of the parties. If any arbitrator shall die,
fail to act, resign, become disqualified or otherwise cease to act, then the
arbitration proceeding shall be delayed for fifteen (15) days and the party
by or on behalf of whom such arbitrator was appointed shall be entitled to
appoint a substitute arbitrator (meeting the qualifications set forth in this
paragraph (d) within such fifteen (15) day period; provided, however, that if
the party by or on behalf of whom such arbitrator was appointed shall fail to
appoint a substitute arbitrator within such fifteen (15) day period, the
substitute arbitrator shall be a neutral arbitrator appointed by the AAA
arbitrator within fifteen (15) days thereafter.

        (e) All arbitration hearings shall be commenced within ninety (90) days
after arbitration is initiated pursuant to the Rules, unless, upon a showing of
good cause by a party to the arbitration, the tribunal of arbitrators permits
the extension of the commencement of such hearing; provided, however, that any
such extension shall not be longer than sixty (60) days.

        (f) All claims presented for arbitration shall be particularly
identified and the parties to the arbitration shall each prepare a statement of
their position with recommended courses of action. These statements of position
and recommended courses of action shall be submitted to the tribunal of
arbitrators chosen as provided hereinabove for binding decision. The tribunal
of arbitrators shall not be empowered to make decisions beyond the scope of the
position papers.

        (g) The arbitration proceeding will be governed by the substantive
laws of the State of Delaware and will be conducted in accordance with such
procedures as shall be fixed for such purpose by the tribunal of arbitrators,
except that (i) discovery in connection with any arbitration proceeding shall
be conducted in accordance with the Federal Rules of Civil Procedure and
applicable case law, (ii) the tribunal of arbitrators shall have the power to
compel discovery, and (iii) unless the parties otherwise agree and except as
may be provided herein, the arbitration shall be governed by the Federal
Arbitration Act, 9 U.S. Sections 1-16, to the exclusion of any provision of
state law or other applicable law or procedure inconsistent therewith or
which would produce a different result. The parties shall preserve their
right to assert and to avail themselves of the attorney-client and
attorney-work product privileges, and any other privileges to which they may
be entitled pursuant to applicable law. No party to the arbitration or any
arbitrator may compel or require mediation and/or settlement conferences
without the prior written consent of all such parties.

        (h) The tribunal of arbitrators shall make an arbitration award as soon
as possible after the later of the close of evidence or the submission of final
briefs, and in all cases the award shall be made not later than thirty (30)
days following submission of the matter. The finding and decision of a majority
of the arbitrators shall be final and shall be binding upon the parties.
Judgment upon the arbitration award or decision may be entered in any court
having jurisdiction thereof or application may be made to any such court for a
judicial acceptance of the

                                     -19-
<PAGE>

award and an order of enforcement, as the case may be. The tribunal of
arbitrators shall have the authority to assess liability for pre-award and
post-award interest on the claims, attorneys' fees, expert witness fees and
all other expenses of arbitration as such arbitrators shall deem appropriate.
Unless otherwise agreed by the parties, the arbitration award shall include
findings of fact and conclusions of law. IT IS EXPRESSLY AGREED THAT
NOTWITHSTANDING ANY OTHER PROVISION HEREIN TO THE CONTRARY, THE ARBITRATORS
SHALL HAVE ABSOLUTELY NO AUTHORITY TO AWARD CONSEQUENTIAL DAMAGES (SUCH AS
LOSS OF PROFIT), TREBLE, EXEMPLARY OR PUNITIVE DAMAGES OF ANY TYPE UNDER ANY
CIRCUMSTANCES REGARDLESS OF WHETHER SUCH DAMAGES MAY BE AVAILABLE UNDER
DELAWARE LAW, THE LAW OF ANY OTHER STATE, OR FEDERAL LAW OR UNDER ANY RULES
OF ARBITRATION.

        (i) Notwithstanding any provision herein to the contrary, nothing
herein shall be construed to require arbitration of a claim or dispute
brought by a person who is not a party to this Agreement, or affect the
ability of any party to interplead or otherwise join another party in a
proceeding brought by a person who is not a party to this Agreement.

        (j) EACH PARTY UNDERSTANDS THAT THIS AGREEMENT CONTAINS AN AGREEMENT
TO ARBITRATE WITH RESPECT TO ANY DISPUTE OR NEED OF INTERPRETATION OF THIS
AGREEMENT. AFTER SIGNING THIS AGREEMENT, EACH PARTY UNDERSTANDS THAT IT WILL
NOT BE ABLE TO BRING A LAWSUIT GOVERNING ANY DISPUTE THAT MAY ARISE WHICH IS
COVERED BY THE ARBITRATION PROVISION, EXCEPT TO COMPEL ARBITRATION OR SEEK
INJUNCTIVE RELIEF. INSTEAD, EACH PARTY AGREES TO SUBMIT ANY SUCH DISPUTE TO
ARBITRATION.

                                     -20-<PAGE>

                    MASTER ENERGY PURCHASE & SALE AGREEMENT

Enron Energy Services, Inc., a Delaware corporation ("EESI"), and EMW Energy
Services Corp., a Delaware corporation ("EMW"), referred to individually as a
"PARTY" and collectively as the "PARTIES," enter into this Master Energy
Purchase & Sales Agreement (together with all Transactions, collectively, this
"AGREEMENT") effective as of December 23, 1999, (the "EFFECTIVE DATE"). The
General Provisions set forth in Appendix "1" will apply to this Agreement.

ARTICLE 1    TERM

This Agreement will govern all Transactions, be effective as of the Effective
Date and continue for a period of two (2) years from the Services Commencement
Date (the "PRIMARY TERM"); provided, however, EMW will have the option to extend
the term for an additional two (2) year period (the SECONDARY TERM") by
providing EESI written notice of such election at least ninety (90) Days prior
to the second (2nd) anniversary of the Services Commencement Date; provided
further, however, that in the event any Transaction provides for a Period of
Delivery extending beyond the Primary Term, or if applicable, the Secondary Term
of this Agreement, then this Agreement will continue to apply to all such
Transactions until all such Transactions are completed. Termination of this
Agreement in all instances will be subject to Article 10.4.

ARTICLE 2    SCOPE OF AGREEMENT

2.1.  CONTRACT FORMATION. EESI and EMW from time to time during the term hereof
      may, but are not obligated to, enter into Transactions for the purchase or
      sale of Energy to which this Agreement will apply. Each Transaction will
      (a) be formed, effectuated and evidenced by a written paper-based
      Transaction Agreement executed by the Parties, including by facsimile
      and/or counterparts; (b) constitute a part of this Agreement; (c) be valid
      and enforceable as a result of the use of these procedures for the mutual
      benefit of the Parties; (d) be resolved, in the case of any conflict
      between the provisions of this Agreement and those contained in a
      Transaction Agreement, in favor of the Transaction Agreement and (e)
      govern all Transactions between the Parties from and after the Effective
      Date.

2.2.  PARTIES BOUND. The Parties will be legally bound by each Transaction upon
      execution of the Transaction Agreement in accordance with this Article 2
      and acknowledge that each Party will rely thereon in doing business
      related to the Transaction.

2.3.  INTERRUPTIBLE OR FIRM. Each Transaction Agreement will indicate whether
      Energy purchased or sold, and delivered under this Agreement for each
      Transaction is interruptible or firm as set forth in Article 3. If a
      Transaction is not designated as interruptible or firm, it will be deemed
      to be interruptible. When the sale and purchase of Energy under this
      Article 2.3 is deemed interruptible by the Parties as set forth in Article
      3, nothing herein will obligate Seller to sell and deliver or Buyer to
      purchase and receive any quantity of Energy.

2.4.  TRANSACTION AGREEMENTS. The Parties agree that a Transaction will be
      confirmed by the execution of a Transaction Agreement. Upon execution of a
      Transaction Agreement, the Transaction Agreement will be (a) conclusive
      evidence of the Transaction made the subject matter thereof, (b) binding
      and enforceable against Seller and Buyer, and (c) the final expression of
      all the terms of such Transaction.

ARTICLE 3    QUANTITY OBLIGATIONS

3.1.  SALES BY EESI TO EMW

     A.   EESI'S SALES OBLIGATION. Subject to the conditions and requirements of
          the section entitled "Operations and Delivery" set forth in Appendix
          "1", EESI and EMW will Schedule, or cause to be Scheduled, at the
          Delivery Point(s) on an interruptible or firm basis, as the Parties so
          elect, a quantity of Energy and Ancillary Services for (a) requested
          Periods of Delivery equal to or in excess of one (1) Month (a "FORWARD
          TRANSACTION") and (b) for any period for which EMW has not requested
          that EESI provide either the Full Management Services or the Imbalance
          Management Services, requested Periods of Delivery during a Month (an
          "INTRA-MONTH TRANSACTION"), in both cases equal to the quantity
          requested by EMW pursuant to the terms of this Agreement (the
          "REQUESTED QUANTITY"); provided, however, in no event will EESI be
          obligated to sell or deliver an aggregate quantity of Energy (i) under
          all Transaction in excess of 2,000,000 kWh per Hour (the "MAXIMUM
          AGGREGATE QUANTITY")or (ii) under any one Transaction in excess of
          50,000 kWh per Hour (the "MAXIMUM DAILY QUANTITY").

<PAGE>

     B.   EESI'S FAILURE TO SCHEDULE. If EESI and EMW have elected in a
          Transaction for the sale and purchase and delivery of Energy on a firm
          basis, and if EESI fails to Schedule the Requested Quantity, then such
          occurrence, unless excused by Force Majeure or EMW's failure to
          perform, will constitute an "EESI DEFICIENCY DEFAULT" and the "EESI
          DEFICIENCY QUANTITY" will be the numerical difference between the
          Requested Quantity and the quantity of Energy Scheduled for such
          period, stated in MWhs. In the event of an EESI Deficiency Default,
          EESI will pay EMW the sum of the following: (i) an amount equal to the
          product of the EESI Deficiency Quantity and the Replacement Price
          Differential, PLUS (ii) liquidated damages equal to the product of
          $0.15 per MWh and the EESI Deficiency Quantity, to compensate EMW for
          its administrative and operational costs. During any Month in which
          EESI's nonperformance under this Article 3.1 B continues for a period
          of 5 consecutive Days, EMW may elect upon written notice to EESI,
          without liability, not to recommence Scheduling Energy or Ancillary
          Services hereunder for the remainder of such Month, but for no longer
          period. Subject to netting pursuant to Article 3.4, payment to EMW
          will be made upon receipt of an invoice by EESI pursuant to this
          Article 3.1 B and otherwise in accordance with the terms of the
          Financial Matters provision set forth in Appendix 1 of this Agreement.

     C.   EMW'S FAILURE TO SCHEDULE. If EESI and EMW have elected in a
          Transaction for the sale and purchase, and delivery of Energy on a
          firm basis, and if EMW fails to Schedule the Requested Quantity, then
          such occurrence, unless excused by Force Majeure or EESI's failure to
          perform, will constitute an "EMW DEFICIENCY DEFAULT" and the "EMW
          DEFICIENCY QUANTITY" will be the numerical difference between the
          Requested Quantity and the quantity of Energy Scheduled for such
          period, stated in MWhs. In the event of an EMW Deficiency Default, EMW
          will pay EESI the sum of the following: (i) an amount equal to the
          product of the EMW Deficiency Quantity and the Replacement Price
          Differential, PLUS (ii) liquidated damages equal to the product of
          $0.15 per MWh and the EMW Deficiency Quantity, to compensate EESI for
          its administrative and operational costs. During any Month in which
          EMW's nonperformance under this Article 3.1 C continues for a period
          of 5 consecutive Days, EESI may elect, upon written notice to EMW,
          without liability, not to recommence Scheduling Energy or Ancillary
          Services for the remainder of such Month, but for no longer period.
          Subject to netting pursuant to Article 3.4, payment to EESI will be
          made in accordance with the Financial Matters provisions set forth in
          Appendix "1."

3.2.  PURCHASES BY EESI FROM EMW.

     A.   EESI'S PURCHASE OBLIGATION. Subject to the conditions and requirements
          of the section entitled "Operations and Delivery" set forth in
          Appendix "1", EESI and EMW will Schedule, or cause to be Scheduled, at
          the Delivery Point(s) on an interruptible or firm basis as the Parties
          so elect, a quantity of Energy and Ancillary Services for (a) Forward
          Transactions and (b) for any period for which EMW has not requested
          that EESI provide either the Full Management Services or the Imbalance
          Management Services, Intra-Month Transactions, in both cases equal to
          the quantity offered by EMW pursuant to the terms of this Agreement
          (the "OFFERED QUANTITY"); provided, however, in no event will EESI be
          obligated to purchase or receive an aggregate quantity of Energy in
          excess of Maximum Aggregate Quantity or Maximum Daily Quantity.

     B.   EESI FAILURE TO SCHEDULE. If EESI and EMW have elected in a
          Transaction for the sale and purchase, and delivery of Energy on a
          firm basis, and if EESI fails to Schedule the Offered Quantity, then
          such occurrence, unless excused by Force Majeure or EMW's failure to
          perform, will constitute an "EESI PURCHASE DEFAULT" and the "EESI
          DEFAULT QUANTITY" will be the numerical difference between the Offered
          Quantity and the quantity of Energy Scheduled, stated in MWhs. In the
          event of an EESI Purchase Default, EESI will pay EMW the sum of the
          following: (i) an amount equal to the product of the EESI Default
          Quantity and the Replacement Price Differential, PLUS (ii) liquidated
          damages equal to the product of $0.15 per MWh and the EESI Default
          Quantity, to compensate EMW for its administrative and operational
          costs. During any Month in which EESI's nonperformance under this
          Article 3.2 B continues for a period of 5 consecutive Days, EMW may
          elect upon written notice to EESI, without liability, not to
          recommence Scheduling Energy or Ancillary Services for the remainder
          of the Month, but for no longer period. Subject to netting pursuant to
          Article 3.4, payment to EMW will be made in accordance with the
          Financial Matters provisions set forth in Appendix "1."

     C.   EMW'S FAILURE TO SCHEDULE. If EESI and EMW have elected in a
          Transaction for the sale and purchase, and delivery of Energy on a
          firm basis, and if EMW fails to Schedule the Offered Quantity, then
          such occurrence unless excused by Force Majeure or EESI's failure to
          perform will constitute an "EMW SALES

                                      -2-
<PAGE>

          DEFAULT" and the "EMW DEFAULT QUANTITY" will be the numerical
          difference between the Offered Quantity and the quantity of Energy
          Scheduled for such period, stated in MWhs. In the event of an EMW
          Sales Default, EMW will pay EESI the sum of the following: (i) an
          amount equal to the product of the EMW Default Quantity and the
          Replacement Price Differential, PLUS (ii) liquidated damages equal to
          the product of $0.15 per MWh and the EMW Default Quantity, to
          compensate EESI for its administrative and operational costs. During
          any Month in which EMW's nonperformance under this Article 3.2 C
          continues for a period of 5 consecutive Days, EESI may elect, upon
          written notice to EMW, without liability, not to recommence Scheduling
          Energy or Ancillary Services hereunder for the remainder of the Month,
          but for no longer period. Subject to netting pursuant to Article 3.4,
          payment to EWSI will be made upon receipt of an invoice by EMW
          pursuant to Article 3.2 B and otherwise in accordance with the
          Financial Matters provisions set forth in Appendix "1".

3.3.  SCHEDULING QUANTITIES AND DELIVERY POINTS. Unless otherwise agreed,
      nothing in this Agreement, and in particular this Article 3, will require
      or permit either Party to Schedule Energy at a point other than at a
      Delivery Point or in quantities in excess of the Requested Quantity or
      Offered Quantity.

3.4.  NETTING.

     A.  INTRAAGREEMENT. In the event that EMW and EESI are each required to pay
         an amount to the other Party in the same Month under this Agreement,
         then such amounts with respect to each Party may be aggregated and the
         Parties may discharge their obligations to pay through netting, in
         which case the Party, if any, owing the greater aggregate amount may
         pay to the other Party the difference between the amounts owed.

     B.  INTERAGREEMENT. In the event that a Termination Event occurs under
         either this Agreement or that certain Master Purchase and Sale
         Agreement between the Parties under even date herewith (the "MASTER GAS
         AGREEMENT") and EMW and EESI are each required to pay an amount to the
         other Party in the same Month pursuant to this Agreement and/or the
         Master Gas Agreement, then such amounts with respect to each Party may
         be aggregated and the Parties may discharge their obligations to pay
         through netting, in which case the Party, if any, owing the greater
         aggregate amount may pay to the other Party the difference between the
         amounts owed.

ARTICLE 4    MANAGEMENT SERVICES

4.1.  INITIAL SERVICES. For a period commencing as of the Services Commencement
      Date and extending for a period of six (6) months (the "INITIAL PERIOD"),
      EESI will provide EMW, at no cost, the following services, other than the
      third-party related Ancillary Services (collectively referred to as the
      "FULL MANAGEMENT SERVICES"):

     A.   LOAD FORECASTING. EESI will estimate the full Energy requirements each
          Hour for those customers which EMW has notified EESI that it has
          acquired and for whom EMW desires to purchase Energy each Hour from
          EESI (the "LOAD FORECAST") pursuant to Article 3.1. (the "LOAD
          FORECASTING SERVICE").

     B.   SCHEDULING. EESI will Schedule Energy each Hour during a Period of
          Delivery under each Transaction; provided, however, in no event will
          such quantity of Energy exceed the Maximum Daily Quantity or be
          permitted if it would cause EMW to exceed the Maximum Aggregate
          Quantity (the "SCHEDULING SERVICE"):

         1.   During any Month for which EMW has requested that EESI provide the
              Full Management Services or the Imbalance Management Services,
              EESI will Schedule the Load Forecast, as the Requested Quantity,
              for delivery by EMW's Transmission Provider from the Delivery
              Point to EMW's customers.

         2.   During any Month for which EMW has not requested that EESI provide
              the Full Management Services or the Imbalance Management Services,
              EESI will Schedule the Requested Quantity for delivery by EMW's
              Transmission Provider from the Delivery Point to EMW's customers.

         3.   EESI will Schedule the Offered Quantity for receipt by EESIs
              Transmission Provider at the Delivery Point.

     C.   IMBALANCE MANAGEMENT SERVICE. EESI will, during any Month for which
          EMW has requested that EESI provide the Full Management Services
          (other than the Invoicing Services), adjust as deemed necessary the
          quantity then currently Scheduled with all Transmission Providers,
          perform imbalance trades and

                                      -3-
<PAGE>

          settlements and all other activities deemed necessary to assure
          compliance with the Scheduling tolerances of the Transmission
          Providers (the "IMBALANCE MANAGEMENT SERVICES"). In the event a
          Transmission Provider(s) assess any charge and/or penalty for
          variances between the actual Energy consumption of EMW's customers and
          the quantity of Energy Scheduled on EMW's behalf ("VARIANCES"),
          including the cost of replacement Energy or cash outs (the "IMBALANCE
          SETTLEMENTS"), EESI will be responsible for all Imbalance Settlements
          properly imposed pursuant to the terms and conditions of such
          Transmission Providers rates and tariffs, as long as (i) such
          Imbalance Settlements are not due to deviations in the actual Energy
          consumption from the Energy consumption data obtained by EESI from or
          through EMW or the telemetering facilities of EMW's customers, as
          applicable (ie, the Load Forecasting Services that EMW is required to
          receive to obtain the Imbalance Management Services), other than those
          data deviations occurring from the gross negligence, willful
          misconduct or bad faith of EESI; and (ii) EMW promptly complied with
          any and all Curtailment Orders.

     D.   INVOICING SERVICE. EESI will prepare the written statement setting
          forth Energy Scheduled during the preceding Month, and other charges
          due EMW, including, without limitation, deficiency or default charges
          under Article 3 of this Agreement, as required under the Financial
          Matters provisions set forth in Appendix "1" for all purchases of
          Energy and/or Ancillary Services by EESI pursuant to Article 5.2
          hereof (the "INVOICING SERVICES").

     E.   OTHER ACTIONS. EESI will take such actions and enter into such
          additional agreements as may be required from time to time by EMW or
          third parties so as to enable EESI to perform the above referenced
          actions.

4.2. SUBSEQUENT SERVICES. EESI will provide EMW the Full Management Services or
     any or all of the individual services referenced in Sections A, B, D, or E
     of Article 4.1 above (it being specifically recognized and agreed that EMW
     may not elect to receive the Imbalance Management Services, except as a
     part of the Full Management Services) commencing as of the 6 Month
     anniversary of the Services Commencement Date and extending for the Primary
     Term (plus any Secondary Term) of this Agreement at the following prices:

<TABLE>
<CAPTION>
                        TIME PERIOD                                                       SERVICE COSTS
<S>                                                                  <C>
      A period from the six (6) Month anniversary of the Services    The actual costs incurred (including out-of-pocket,
      Commencement Date and extending until the first anniversary    general and administrative, employee and employee
      of the Services Commencement Date; provided, however if an     benefit and any reasonable internal allocations
      initial firm commitment underwritten public offering of        received in connection with the provision of the Full
      shares of common stock of EMW registered under the             Management Services) by EESI in providing the services
      Securities Act of 1933, as amended, has not been consummated   selected by EMW, but in no event will such cost of
      on or prior to six (6) Months following the Effective Date,    service exceed an amount equal to $3.00 per MWh.
      then EMW may elect to extend this period for an additional
      six (6) Months beyond the first anniversary of said Services
      Commencement Date by giving EESI written notice of such
      election at least ten (10) Days prior to said first
      anniversary date.

      A period from the first anniversary of the Services              An amount indicated below for each service:
      Commencement Date (or the eighteen (18) month anniversary in       Load Forecasting Service:         $5,000 per Month
      the event EMW has extended the above period pursuant to the        Scheduling Service:               $4,000 per Month
      above provisions) and extending through the Primary Term of        Imbalance Management Service:        $0.50 per MWh
      this Agreement.                                                    Invoicing Service:               $6,000 per Month.

                                      -4-
<PAGE>

 A period from the expiration of the Primary Term and                An amount mutually agreed to by the Parties, not to exceed
 extending through the Secondary Term, if any, of this               the following amounts:
 Agreement.                                                              Load Forecasting Service:         $20,000 per Month
                                                                         Scheduling Service:               $16,000 per Month
                                                                         Imbalance Management Service:      $2.000 per MWh
                                                                         Invoicing Service:                $24,000 per Month.
</TABLE>

4.3. EMW'S OBLIGATION. To enable EESI to perform any or all of the services
     specified as a component of Full Management Services:

     A.   LIMITED NON-EXCLUSIVE AGENT. EMW appoints and authorizes EESI as its
          limited, non-exclusive agent to take actions necessary to perform the
          Full Management Services during the Initial Period and any individual
          service comprising the Full Management Services thereafter; provided,
          however such appointment is a limited agency wherein the duties of
          EESI are specifically limited to the subject matter thereof and will
          not create or result in the imposition on EESI of any other duties of
          any kind, including without limitation any duties that otherwise may
          arise by operation of law. Nothing herein will cause EESI to be or to
          be deemed a party to any transmission agreement with EMW's
          Transmission Provider(s) and particularly, without limitation, EESI
          does not hereby assume any obligation, liability or responsibility of
          EMW to EMW's Transmission Provider(s) in connection with the
          obligation to pay transmission invoices.

     B.   ENERGY CONSUMPTION DATA. EMW will provide EESI (or allow EESI access
          to during the applicable Period of Delivery) the actual Energy
          consumption data for EMW's customers; and/or provide or allow EESI to
          obtain the actual real-time Energy consumption data of such customers
          through existing telemetering facilities connected to the electric
          power distribution facilities of EMW's customer's utility. Said data
          consumption information is subject to the operational requirements of
          EMW's customer's utility and will be deemed confidential information
          pursuant to Article 10.7 of this Agreement;

     C.   IMBALANCE SETTLEMENTS. Be responsible for Imbalance Settlements to the
          extent such Imbalance Settlements are due to deviations in the actual
          Energy consumption from the Energy consumption data obtained by EESI
          from or through EMW and/or the telemetering facilities connected to
          the electric power distribution facilities of EMW's customer's
          utility, as applicable (other than those data deviations occurring
          from the gross negligence, willful misconduct or bad faith of EESI);
          or EMW's failure to promptly comply with any and all Curtailment
          Orders.

     D.   OTHER ACTIONS. EMW will take such actions and enter into such
          additional agreements as may be required from time to time by EESI or
          third parties so as to enable EESI to perform the above referenced
          actions.

4.4. LIABILITY FOR PERFORMANCE OF FULL MANAGEMENT SERVICES. EESI WILL BE LIABLE
     FOR ANY ACT OR OMISSION BY EESI IN CONNECTION WITH EESI'S PERFORMANCE OF
     THE FULL MANAGEMENT SERVICES OR ANY INDIVIDUAL SERVICE COMPRISING THE FULL
     MANAGEMENT SERVICES DUE TO OR ARISING OUT OF EESI'S NEGLIGENCE OR WILLFUL
     MISCONDUCT; PROVIDED, HOWEVER, IN THE EVENT THE PARTIES ARE CONCURRENTLY
     NEGLIGENT, EESI'S LIABILITY WILL BE LIMITED TO THAT PERCENTAGE ASSOCIATED
     WITH ITS NEGLIGENCE; PROVIDED FURTHER, HOWEVER, IN NO EVENT WILL EESI BE
     LIABLE FOR ANY CLAIM RESULTING, IN WHOLE OR PART, FROM THE WILLFUL
     MISCONDUCT OR BAD FAITH OF EMW.

ARTICLE 5    PRICING OPTIONS

5.1.  CONTRACT PRICE ELECTION FOR SALES BY EESI TO EMW. The Contract Price for
      all quantities of Energy or Ancillary Services sold by EESI to EMW
      pursuant to this Agreement will be specified on the applicable Transaction
      Agreement pursuant to one of the following options:

                                      -5-
<PAGE>

     A.   FORWARD TRANSACTIONS IN EXISTING MARKETS. EMW may elect, subject to
          the maximum Transaction size specified in Article 3.1 A, to receive a
          Contract Price for the purchase of Energy or Ancillary Services from
          EESI for any Forward Transaction in the markets and at the Delivery
          Points specified on Exhibit "C" (an "EXISTING MARKET") equal to either
          of the following:

          1.   EMW may request EESI's then current sales price per MWh
               applicable to wholesale transactions for the Existing Markets
               based on the applicable index specified for such Existing Market
               for the specified Period of Delivery and adjusted for the
               applicable load shape and service delivery voltage and applicable
               locational basis adjustment from the Delivery Point to EMW's
               customers (but specifically excluding any premiums for the Full
               Management Services, any individual service comprising the Full
               Management Services or associated with the Requested Quantity,
               such as small quantity, odd lot or illiquidity premiums or any
               costs or ancillary charges associated with EESI's delivery of the
               Energy to the Delivery Point), the "QUOTED CURVE PRICE" by
               contacting EESI between the hours from 8:00 a.m. to 4:00 p.m.
               C.T. of each Business Day (the "PRICING HOURS") requesting any
               such price for a specified quantity of Energy to be Scheduled
               during a selected Period of Delivery. If EMW accepts the Quoted
               Curve Price within the time period specified by EESI, EESI will
               promptly prepare a Transaction Agreement documenting such
               Transaction. If EMW fails to accept the Quoted Curve Price within
               the time period specified by EESI, EMW will be deemed to have
               declined the Quoted Curve Price and no Transaction will be formed
               and effectuated; or

          2.   EMW may request EESI's final sales price per MWh applicable to
               wholesale transactions for the Existing Markets based on the
               applicable index specified for such Existing Market for the
               specified Delivery Point for the specified Period of Delivery and
               adjusted for the applicable load shape and service delivery
               voltage and applicable locational basis adjustment from the
               Delivery Point to EMW's customers (but specifically excluding any
               premiums for the Full Management Services, any individual service
               comprising the Full Management Services or associated with the
               Requested Quantity, such as small quantity, odd lot or
               illiquidity premiums or any costs or ancillary charges associated
               with EESI's delivery of the Energy to the Delivery Point), as of
               the end of the applicable Business Day (the "SETTLED CURVE
               PRICE") by contacting EESI during the Pricing Hours requesting
               any such price for a specified quantity of Energy to be Scheduled
               during the selected Period of Delivery. Upon receipt of EMW's
               request, EESI will promptly prepare a Transaction Agreement
               documenting such Transaction and the applicable Settled Curve
               Price. If EMW fails to request the Settled Curve Price within the
               Pricing Hours, then EMW will be deemed to have declined the
               Settled Curve Price and no Transaction will be formed and
               effectuated.

     B.   FORWARD TRANSACTIONS IN NEW MARKETS.

         1.   For any market in the United States that EMW proposes to enter
              that is not specified on Exhibit "C" (a "NEW MARKET"), EMW may
              request, in writing, that EESI provide an applicable index and
              Delivery Point for each New Market upon which the Contract Price
              for sales of Energy and Ancillary Services by EESI in a Forward
              Transaction in the New Market would be based. EESI will propose
              such index and associated Delivery Point within 10 Business Days
              of receipt of EMW's written request.

         2.   If EMW accepts the proposed index and Delivery Point, then the
              Contract Price for any purchases of Energy and Ancillary Services
              by EMW for a Forward Transaction in a New Market will be the
              amount determined pursuant to the procedures identified in Article
              5.1. A. 1. or 2. above, as elected by EMW, utilizing the index and
              Delivery Point identified by EESI. Upon establishment of the
              Contract Price for the sale of Energy and Ancillary Services by
              EESI in the applicable New Market, Exhibit "C" will be amended to
              reflect such New Market, index and Delivery Point.

         3.   If EMW rejects the proposed index and Delivery Point, then the
              Parties will use all commercially reasonable efforts to determine
              a mutually agreeable substitute index and Delivery Point for the
              applicable New Market; provided, however, if the Parties are
              unable to determine such mutually acceptable index and Delivery
              Point within a reasonable time period, then the Parties will use
              the Alternate Price Redetermination procedures provided in
              Appendix "1".

         4.   EESI will determine the index and Delivery Point for each New
              Market based on EESI's operational market analysis.

                                      -6-
<PAGE>

     C.   INTRA-MONTH QUANTITIES. For any Hour for which EMW has not requested
          that EESI provide either the Full Management Services or the Imbalance
          Management Services for an Existing Market or New Market, as
          applicable, the Contract Price for the sale of Energy and Ancillary
          Services by EESI in an Intra-Month Transaction will be the cash price
          offer per MWh by EESI for delivery at the applicable delivery point.

     D.   SETTLED CURVE PRICE STATEMENTS. EESI will provide, on a Monthly basis,
          a statement for any Existing Market and those mutually agreeable New
          Markets in which EESI is actively engaged in the sale of Energy and
          Ancillary Services specifying the Settled Curve Price for the current
          forward twelve Month period for each Business Day.

5.2. CONTRACT PRICE FOR PURCHASES BY EESI FROM EMW. Purchases of Energy or
     Ancillary Services by EESI subsequent to the expiration of the Initial
     Period for any Market that EMW has not requested that EESI provide either
     the Full Management Services or the Imbalance Management Services, the
     Contract Price for all quantities of Energy and Ancillary Services
     purchased by EESI from EMW pursuant to this Agreement will be specified on
     the applicable Transaction Agreement pursuant to one of the following
     options:

     A.   FORWARD TRANSACTIONS IN EXISTING MARKETS. EMW may elect to receive a
          Contract Price for the sale of Energy and/or Ancillary Services to
          EESI for any Forward Transaction in an Existing Market equal to either
          of the following:

          1.   EMW may request EESI's then current purchase price per MWh
               applicable to wholesale transactions for the Existing Markets
               based on the applicable index specified for such Existing Market
               for the specified Period of Delivery and adjusted for the
               applicable load shape and service delivery voltage and applicable
               locational basis adjustment from the Delivery Point to EMW's
               customers (but specifically excluding any premiums for the Full
               Management Services, any individual service comprising the Full
               Management Services or associated with the Offered Quantity, such
               as small quantity, odd lot or illiquidity premiums or any costs
               or ancillary charges associated with EESI's delivery of the
               Energy to the Delivery Point), the "PURCHASE CURVE PRICE" by
               contacting EESI during the Pricing Hours requesting any such
               price for a specified quantity of Energy to be Scheduled during a
               selected Period of Delivery. If EMW accepts the Purchase Curve
               Price within the time period specified by EESI, then EESI will
               promptly prepare a Transaction Agreement documenting such
               Transaction. If EMW fails to accept the Purchase Curve Price
               within the time period specified by EESI, then EMW will be deemed
               to have declined the Purchase Curve Price and no Transaction will
               be formed and effectuated; or

          2.   EMW may request EESI's final purchase price per MWh applicable to
               wholesale transactions for the Existing Markets based on the
               applicable index specified for such Existing Market for the
               specified Delivery Point for the specified Period of Delivery and
               adjusted for the applicable load shape and service delivery
               voltage and applicable locational basis adjustment from the
               Delivery Point to EMW's customers (but specifically excluding any
               premiums for the Full Management Services, any individual service
               comprising the Full Management Services or associated with the
               Offered Quantity, such as small quantity, odd lot or illiquidity
               premiums or any costs or ancillary charges associated with EESI's
               delivery of the Energy to the Delivery Point), as of the end of
               the applicable Business Day (the "SETTLED PURCHASE CURVE PRICE")
               by contacting EESI during the Pricing Hours requesting any such
               price for a specified quantity of Energy to be Scheduled during a
               selected Period of Delivery. Upon receipt of EMW's request, then
               EESI will promptly prepare a Transaction Agreement documenting
               such Transaction and the applicable Settled Purchase Curve Price.
               If EMW fails to request and accept the Settled Purchase Curve
               Price within the Pricing Hours, then EMW will be deemed to have
               declined the Settled Purchase Curve Price and no Transaction will
               be formed and effectuated.

     B. FORWARD TRANSACTIONS IN NEW MARKETS.

          1.   In the event EMW has proposed to enter a New Market and has
               requested that EESI provide an index and Delivery Point for each
               New Market upon which the Contract Price for sales of Energy
               and/or Ancillary Services by EESI in a Forward Transaction in the
               New Market would be based, then EMW may additionally request, in
               writing, that EESI utilize such index and Delivery Point in the

                                      -7-
<PAGE>

               establishment of the Contract Price for purchases of Energy and
               Ancillary Services by EESI in a Forward Transaction in such New
               Market.

         2.    If EMW thereafter elects to sell Energy and Ancillary Services to
               EESI in a Forward Transaction in the specified New Market, then
               the Contract Price for any purchases of Energy and Ancillary
               Services by EESI for a Forward Transaction in such New Market
               will be the amount determined pursuant to the procedures
               identified in Article 5.2. A. 1 or 2. above, as elected by EMW,
               utilizing the index and Delivery Point identified by EESI. Upon
               establishment of the Contract Price for the purchase of Energy
               and Ancillary Services by EESI in the applicable New Market,
               Exhibit "C" will be amended to reflect such New Market, index and
               Delivery Point.

     C.  INTRA-MONTH QUANTITIES. The Contract Price for the purchase of Energy
         and Ancillary Services by EESI in an Intra-Month Transaction will be
         equal to the cash price bid per MWh by EESI for receipt at the
         applicable Delivery Point.

5.3. SETTLED PURCHASE CURVE PRICE STATEMENTS. EESI will provide, on a Monthly
     basis, a statement for any Existing Market and those mutually agreeable New
     Markets in which EESI is actively engaged in the purchase of Energy and
     Ancillary Services specifying the Settled Purchase Curve Price for the
     current forward twelve (12) Month period for each Business Day.

5.4. INTENT. The intent of Articles 5.1 and 5.2 is to give EMW the benefit of
     access to EESI's wholesale Energy and Ancillary Services pricing for retail
     loads without the premiums associated with odd lot or new market
     illiquidity.

ARTICLE 6    DEFAULTS AND REMEDIES

6.1. EARLY TERMINATION. If a Triggering Event (defined in Article 6.2) occurs
     with respect to either Party at any time during the term of this Agreement,
     the other Party (the "NOTIFYING PARTY") may (i) upon two (2) Business Days'
     written notice to the Affected Party (defined in Article 6.2), which notice
     will be given no later than sixty (60) Days after the discovery of the
     occurrence of the Triggering Event, establish a date on which all
     Transactions and this Agreement in respect thereof will terminate ("EARLY
     TERMINATION DATE") except as provided in Article 10.4, and (ii) withhold
     any payments due in respect of such Transactions; provided, however, upon
     the occurrence of any Triggering Event listed in item (i) of Article 6.2 as
     it may apply to any Party, all Transactions and this Agreement in respect
     thereof will automatically terminate, without notice, as if an Early
     Termination Date had been immediately declared except as provided in
     Article 10.4. If an Early Termination Date occurs, the Notifying Party will
     in good faith calculate its Gains, Losses and Costs, resulting from
     termination of each Transaction in the manner described above, and
     aggregate such Gains, Losses and Costs for all such terminated Transactions
     into a single net amount (the "TERMINATION PAYMENT"). The Termination
     Payment will be determined by (i) comparing the value of (a) the remaining
     term, quantities and prices under each such Transaction had it not been
     terminated to (b) the equivalent quantities and relevant market prices for
     the remaining term either quoted by a bona fide third party offer or which
     are reasonably expected to be available in the market under a replacement
     contract for each such Transaction and (ii) ascertaining the associated
     costs and attorneys' fees; provided, however, if the Termination Payment is
     due to a Triggering Events listed in item (i) of Article 6.2, then in the
     event the Termination Payment would result in a Gain to the Notifying
     Party, the Termination Payment will be the absolute value of such Gain and
     in the event the Termination Payment is due to a Triggering Events listed
     in item (ii), (iii), (iv), or (v) of Article 6.2, then in the event the
     Termination Payment would result in a Gain to the Notifying Party, the
     Termination Payment will be zero (0). To ascertain the market prices of a
     replacement contract the Notifying Party may consider, among other
     valuations, any or all of the settlement prices of NYMEX electric power
     futures contracts, quotations from leading dealers in electric power swap
     contracts and other bona fide third party offers, all adjusted for the
     length of the remaining term and the basis differential. The Notifying
     Party will give the Affected Party written notice of the amount of the
     Termination Payment, inclusive of a statement showing the basis for its
     calculation and determination. The Affected Party will pay the Termination
     Payment to the Notifying Party within ten (10) Days of receipt of such
     notice. At the time for payment of any amount due under this Article 6,
     each Party will pay to the other Party all additional amounts payable by it
     pursuant to this Agreement, but all such amounts will be netted and
     aggregated with any Termination Payment payable hereunder. If the Affected
     Party disagrees with the calculation of the Termination Payment, the issue
     will be

                                      -8-
<PAGE>

     submitted to arbitration in accordance with this Agreement and the
     resulting Termination Payment will be due and payable within three (3)
     Business Days after the award.

6.2. TRIGGERING EVENT means, with respect to a Party (the "AFFECTED PARTY"), a
     "MAJOR BREACH" which will occur upon (i) either Party (a) making an
     assignment for the benefit of creditors, (b) filing a petition or not
     opposing a proceeding under any bankruptcy or similar law, including,
     without limitation, receivership or dissolution pursuant to federal or
     state law, or has such petition filed against it which remains undismissed
     for 30 Days, or (c) becoming insolvent or is unable to pay its debts when
     due;(ii) unless excused by Force Majeure, EESI fails to Schedule the
     Requested Quantity or EMW fails to Schedule the Offered Quantity, as
     applicable, for five (5) consecutive Days in any three (3) cumulative
     Months in a twelve (12) cumulative Month period; (iii) either Party's
     failing to make payment when due within five (5) Days of receipt of notice
     of such failure (except good faith disputes); (iv) any Party's
     representation hereunder proving to be false or misleading in a material
     respect, causing a material adverse effect on such Party's ability to
     perform under this Agreement or (v) the happening of any other event
     specified in any Transaction Agreement as a "Major Breach".

6.3. OTHER EVENTS. If either Party under a Transaction is regulated by a
     federal, state or local regulatory body, and such body will disallow all or
     any portion of any costs incurred or yet to be incurred by such Party under
     any provision of this Agreement, such action will neither operate to excuse
     such Party from performance of any obligation nor give rise to any right of
     such Party to any refund or retroactive adjustment of the Contract Price
     provided in any Transaction. Notwithstanding the foregoing, if either
     Party's activities hereunder become subject to regulation of any kind
     whatsoever under any law to a greater or different extent than that
     existing on the Effective Date and such regulation either (i) renders this
     Agreement illegal or unenforceable or (ii) materially adversely affects the
     business of the Affected Party, with respect to its financial position or
     otherwise, then in the case of (i) above, either Party, and in the case of
     (ii) above, only the Party affected (for purposes of this Article only, the
     "DEFAULTING PARTY"), will at such time have the right to declare an Early
     Termination Date in accordance with the provisions hereof; provided,
     notwithstanding the rights of the Parties to declare an Early Termination
     Date as above stated, the Defaulting Party will be liable for payment of
     the Termination Payment calculated by the other Party pursuant to Article
     6.1.

6.4.  OFFSET.

     A.   INTRAAGREEMENT. Each Party reserves to itself all rights, set-offs,
          counterclaims and other remedies and defenses consistent with Article
          10.3 (to the extent not expressly herein waived or denied) which such
          Party has or may be entitled to arising from or out of this Agreement.
          All outstanding Transactions and the obligations to make payment in
          connection therewith or under this Agreement may be offset against
          each other, set off or recouped therefrom.

     B.   INTERAGREEMENT. Each Party reserves, in the event that a Termination
          Event occurs under either this Agreement or the Master Gas Agreement,
          to itself all rights, set-offs, counterclaims and other remedies and
          defenses consistent with Article 10.3 (to the extent not expressly
          herein waived or denied) which such Party has or may be entitled to
          arising from or out of this Agreement. All outstanding Transactions
          and the obligations to make payment in connection therewith or under
          this Agreement or the Master Energy Agreement may be offset against
          each other, set off or recouped therefrom.

ARTICLE 7    FORCE MAJEURE

This Article 7 is the sole and exclusive excuse of performance permitted under
this Agreement and all other excuses at law or in equity are WAIVED to the
extent permitted by law. Except with respect to payment obligations, in the
event either Party is rendered unable, wholly or in part, by Force Majeure to
carry out its obligations hereunder, it is agreed that upon such Party's giving
notice and full particulars of such Force Majeure to the other Party as soon as
reasonably possible (such notice to be confirmed in writing), the obligations of
the Party giving such notice, to the extent they are affected by such event,
will be suspended from the inception and during the continuance of the Force
Majeure for a period not to exceed sixty (60) Days in the aggregate during any
twelve (12) Month period, but for no longer period. The Party receiving notice
of Force Majeure may immediately take such action as it deems necessary at its
expense for the entire sixty (60) Day period or any part thereof. The Parties
expressly agree that upon the expiration of the sixty (60) Day period, the Force
Majeure will no longer apply to the obligations hereunder and both EMW and EESI
will be obligated to perform. The cause of the Force Majeure will be remedied
with all reasonable diligence and dispatch; provided, unless otherwise agreed,
no

                                      -9-
<PAGE>

provision herein will require or permit EESI or EMW to Schedule quantities of
Energy or Ancillary Services (i) in excess of the Requested Quantity or Offered
Quantity or (ii) at points other than the Delivery Point(s).

-------------------------------------------------------------------------------
ARTICLE 8    TAXES
-------------------------------------------------------------------------------

8.1. TAXES.  Buyer will be responsible for, pay, and/or reimburse Seller for all
     Taxes and/or other charges imposed or levied by any taxing authority on or
     related to any Energy sold and/or delivered to Buyer, all other services or
     property provided in connection therewith or pursuant to this Agreement,
     and any payments made under this Agreement or any Agreement related hereto
     to the extent such Taxes are from time to time customarily billed, imposed
     or levied on or against such Energy, services, property or payments. Each
     Party will and does hereby indemnify, release, defend and hold harmless the
     other Party from and against any and all liability for Taxes that are the
     responsibility of such Party pursuant to this Agreement. Either Party, upon
     request of the other Party, will provide a certificate of exemption or
     other reasonably satisfactory evidence of exemption if either Party or any
     Transaction hereunder is exempt from Taxes, and each Party will use
     reasonable efforts to (1) obtain and cooperate in obtaining any exemption
     or reduction of such Taxes and (2) administer this Agreement and implement
     the provisions in accordance with the intent to minimize such Taxes. Buyer
     will not be liable for any Tax for which a valid exemption certificate in a
     form acceptable to the applicable state or local taxing authorities is
     timely completed and timely furnished by Buyer to Seller. Buyer may provide
     Seller additional reasonable Tax instructions as are allowed by law (or
     will provide such if requested by Seller) including, but not limited to,
     Buyer's accrual and payment of Taxes and/or special jurisdictional
     exemptions. However, Seller will proceed on the assumption that any
     applicable Taxes are due unless and until Buyer presents Seller
     satisfactory proof that Buyer is entitled to any claimed exemption or
     reduction in Taxes. Upon presentation of such proof, no retroactive
     adjustments will be made, but Seller will assign to Buyer, to the extent
     assignable, any Claims for refund Seller has with respect to any prior
     payments of Taxes. Seller and Buyer agree to cooperate with each other and
     provide such information to each as is reasonably necessary to facilitate
     the filing of any returns for Taxes which are directly related to and
     imposed on the Energy or services, property or payments to be provided
     under this Agreement. EESI agrees to assume Tax liability if it has the
     benefit of an exemption, which said exemption would not otherwise exist for
     EMW if it had the liability, but in no event will EESI assume such
     liability if the exemption is lost or repealed; provided, however, in the
     event EESI fails to qualify for the exemption for any reason, then EMW will
     reimburse EESI for any Tax liability so incurred.

8.2. TAX RECORDS. During the term of this Agreement and for seven (7) full
     calendar years thereafter, Seller, as limited Tax agent of Buyer, will
     retain on Buyer's behalf, possession of Buyer's Tax records related to the
     Energy and/or Ancillary Services sold and/or delivered to Buyer, all other
     services or property provided in connection therewith or pursuant to this
     Agreement, and any payments made under this Agreement or any Agreement
     related hereto (the "TAX RECORDS"). Buyer will have the right to inspect
     and make copies of these Tax Records during normal business hours, in
     connection with Tax returns, reports, audits and litigation with respect to
     such activities, services, materials, equipment, items or payments. Should
     Seller or Buyer become involved in an audit or contest with respect to
     sales, use or other Taxes resulting from this Agreement, they will
     cooperate in the defense of the same.

-------------------------------------------------------------------------------
ARTICLE 9    TITLE, RISK OF LOSS, INDEMNITY AND BALANCING
-------------------------------------------------------------------------------

9.1. TITLE, RISK OF LOSS AND INDEMNITY. As between the Parties, Seller will be
     deemed to be in exclusive control and possession of Energy Scheduled
     hereunder and responsible for any damage or injury caused by Energy
     Scheduled and delivered to Buyer prior to the Delivery Point. After
     delivery of the Energy at the Delivery Point(s), Buyer will be deemed to be
     in exclusive control and possession thereof and responsible for any injury
     or damage caused thereby. Title and risk of loss related to the Energy
     Scheduled hereunder will pass from Seller to Buyer at the point of transfer
     to Buyer's Transmission Provider at the Delivery Point(s). Seller and Buyer
     each assumes all liability for and will indemnify, defend and hold harmless
     the other Party from any Claims, including injury to and death of persons,
     arising from any act or incident occurring when title to the Energy is
     vested in the Indemnifying Party. IT IS THE INTENT OF THE PARTIES THAT THIS
     INDEMNITY AND THE LIABILITY ASSUMED UNDER IT BE WITHOUT REGARD TO THE CAUSE
     OR CAUSES THEREOF, INCLUDING, WITHOUT LIMITATION, THE NEGLIGENCE OF ANY
     INDEMNIFIED PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR
     ACTIVE OR PASSIVE; PROVIDED, NEITHER PARTY WILL BE LIABLE IN RESPECT OF ANY
     CLAIM TO THE EXTENT THE

                                     -10-
<PAGE>

    CLAIM RESULTED FROM THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR BAD FAITH OF
    THE INDEMNIFIED PARTY.

9.2.CORRECTION OF IMBALANCES, CASHOUTS AND PENALTIES. Differences between
    Scheduled quantities and actual quantities delivered and received hereunder
    ("IMBALANCES") will be corrected or settled in cash or Energy or by offset
    as the Parties agree within forty-five (45) Days from the date of notice of
    the Imbalance. Additionally, if (i) an Imbalance on Buyer's Transmission
    Provider's system caused by Seller or Seller's Transmission Provider's
    delivery of less or more than the Scheduled quantity for any Hour (in which
    case Seller will be the "RESPONSIBLE PARTY") or (ii) an Imbalance on
    Seller's Transmission Provider's system caused by Buyer or Buyer's
    Transmission Provider's receipt of more or less than the Scheduled quantity
    for any Hour (in which case Buyer will be the "RESPONSIBLE PARTY"), the
    Responsible Party will be liable for and reimburse to the other Party any
    associated Transmission Provider cashout costs and losses or penalties
    incurred by such other Party to the relevant Transmission Provider. If the
    tariff of either Buyer's or Seller's Transmission Provider provides for
    cashouts on the basis of the aggregation of all over deliveries and under
    deliveries between such Transmission Provider and Buyer or Seller,
    respectively ("AGGREGATE TRANSMISSION PROVIDER IMBALANCE"), and the nature
    of the Imbalance (over delivery or under delivery) attributable to the
    Responsible Party is the same as the Aggregate Transmission Provider
    Imbalance (over or under delivery), the Responsible Party will participate
    in the other Party's cashout settlement of the Aggregate Transmission
    Provider Imbalance on the basis of only the Responsible Party's pro-rata
    share thereof.

-------------------------------------------------------------------------------
ARTICLE 10   MISCELLANEOUS
-------------------------------------------------------------------------------

10.1.  NOTICES.  All notices, including, without limitation, consents, and
       communications made under this Agreement will be made as specified in
       Exhibit "A." Notices required to be in writing will be delivered in
       written form by letter, facsimile or other documentary form. Notice by
       facsimile or hand delivery will be deemed to have been received by the
       close of the Business Day on which it was transmitted or hand
       delivered (unless transmitted or hand delivered after close of the
       Business Day in which case it will be deemed received at the close of
       the next Business Day) or such earlier time confirmed by the receiving
       Party. Notice by overnight mail or courier will be deemed to have been
       received 2 Business Days after it was sent or such earlier time
       confirmed by the receiving Party. Any notices given hereunder in
       respect of the declaration of an Early Termination Date will be also
       sent to the address or facsimile number so specified in Exhibit "A."
       Any Party may change its addresses by providing notice of same in
       accordance herewith.

10.2.  TRANSFER.  This Agreement, including, without limitation, each
       indemnification, will inure to and bind the successors and permitted
       assigns of the Parties; provided, neither Party will transfer this
       Agreement without the prior written approval of the other Party, which
       approval may not be unreasonably withheld or delayed. Any Party's
       transfer in violation of this Article 10.2 will be void.

10.3.  LIMITATION OF REMEDIES, LIABILITY AND DAMAGES AND MITIGATION.  THE
       PARTIES DO HEREBY CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES OF
       DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES
       HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR
       MEASURE OF DAMAGES IS HEREIN PROVIDED, SUCH EXPRESS REMEDY OR MEASURE
       OF DAMAGES WILL BE THE SOLE AND EXCLUSIVE REMEDY HEREUNDER, THE
       OBLIGOR'S LIABILITY WILL BE LIMITED AS SET FORTH IN SUCH PROVISION AND
       ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF NO
       REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY HEREIN PROVIDED, THE
       OBLIGOR'S LIABILITY WILL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY,
       SUCH DIRECT ACTUAL DAMAGES WILL BE THE SOLE AND EXCLUSIVE REMEDY
       HEREUNDER AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE
       WAIVED. UNLESS EXPRESSLY HEREIN PROVIDED, NEITHER PARTY WILL BE LIABLE
       FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT
       DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, IN TORT,
       CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. NOTWITHSTANDING
       ANY OTHER PROVISION IN THIS AGREEMENT, IN NO EVENT WILL EITHER PARTY
       BE LIABLE FOR ANY PENALTIES OR CHARGES ASSESSED BY ANY TRANSMISSION
       PROVIDER OR OTHER ENTITY FOR THE UNAUTHORIZED RECEIPT OF ENERGY BY THE
       OTHER PARTY (OTHER THAN EESI'S RESPONSIBILITY FOR IMBALANCE
       SETTLEMENTS PURSUANT TO ARTICLE 4.1 C). IT IS

                                     -11-
<PAGE>

       THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON
       REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR
       CAUSES RELATED THERETO, INCLUDING, WITHOUT LIMITATION, THE NEGLIGENCE
       OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR
       ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID
       HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE
       DIFFICULT OR IMPOSSIBLE TO DETERMINE, OTHERWISE OBTAINING AN ADEQUATE
       REMEDY IS INCONVENIENT AND THE LIQUIDATED DAMAGES CONSTITUTE A
       REASONABLE APPROXIMATION OF THE HARM OR LOSS. BUYER ACKNOWLEDGES THAT
       IT HAS ENTERED INTO THIS AGREEMENT AND IS CONTRACTING FOR THE GOODS TO
       BE SUPPLIED BY SELLER BASED SOLELY UPON THE EXPRESS REPRESENTATIONS
       AND WARRANTIES HEREIN SET FORTH AND SUBJECT TO SUCH REPRESENTATIONS
       AND WARRANTIES, ACCEPTS SUCH GOODS "AS-IS" AND "WITH ALL FAULTS."
       SELLER EXPRESSLY NEGATES ANY OTHER REPRESENTATION OR WARRANTY, WRITTEN
       OR ORAL, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY
       REPRESENTATION OR WARRANTY WITH RESPECT TO CONFORMITY TO MODELS OR
       SAMPLES, MERCHANTABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSE. The
       Parties acknowledge the duty to mitigate damages hereunder. The
       Parties recognize that the ability to effectuate arrangements for the
       sale or purchase of Energy is conditioned upon the volatility of
       Energy markets, the creditworthiness and reliability of potential
       customers, the complexity and size of the portfolios of contracts
       managed by each Party and the need to conduct market business in an
       orderly manner. Therefore, the Parties agree that (i) three (3)
       Business Days is a commercially reasonable period to purchase or sell
       Energy in respect of an EESI Deficiency Default, EMW Deficiency
       Default, EESI Purchase Default or EMW Sales Default and (ii) three (3)
       Business Days after the end of the Month in which the Early
       Termination Date occurs is a commercially reasonable period after the
       establishment of an Early Termination Date to determine the
       Termination Payment; provided, notwithstanding the foregoing, if
       Energy volumes made the basis of an EESI Deficiency Default, EMW
       Deficiency Default, EMW Sales Default or EESI Purchase Default or a
       Party's determination of the Termination Payment are in excess of
       25,000 kWh per Hour, the Parties recognize that a longer period may
       ordinarily be required to effectuate cover or determine the
       Termination Payment in an orderly manner so as not to adversely affect
       the Energy market. Each Party may utilize its discretion, with
       commercially reasonable foresight, to adjust the timing and staggering
       of the purchases or sales of Energy volumes in its efforts to mitigate
       damages. No claim that a Party failed to mitigate damages will be
       grounded solely on the basis of counter Energy market movement.

10.4.  WINDING UP ARRANGEMENTS.  Upon the expiration or termination of the
       Parties' sale and purchase obligations under this Agreement, any
       moneys, penalties or other charges due and owing Seller or Buyer, as
       applicable, will be paid, any corrections or adjustments to payments
       previously made will be determined, and any refunds due Buyer or
       Seller, as applicable, made, within 60 Days. Any Imbalances in
       receipts or deliveries will be corrected to zero balance within 60
       Days. All indemnity, tax and confidentiality obligations and audit
       rights will survive the termination of this Agreement for a period of
       two (2) years. The Parties' obligations provided in this Agreement
       will remain in effect for the purpose of complying herewith.

10.5.  APPLICABLE LAW. THIS AGREEMENT AND EACH TRANSACTION AND THE RIGHTS AND
       DUTIES OF THE PARTIES ARISING OUT OF THIS AGREEMENT WILL BE GOVERNED BY
       AND CONSTRUED, ENFORCED AND PERFORMED IN ACCORDANCE WITH THE LAWS OF THE
       STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

10.6.  DOCUMENT, RECORD RETENTION AND EVIDENCE.  This Agreement, the Exhibits
       and Appendices hereto, if any, and each Transaction Agreement,
       constitute the entire agreement between the Parties relating to the
       subject matter contemplated by this Agreement. There are no prior or
       contemporaneous agreements or representations (whether oral or
       written) affecting the subject matter other than those herein
       expressed. No amendment or modification to this Agreement will be
       enforceable, unless reduced to writing and executed by both Parties.
       The provisions of this Agreement will not impart rights enforceable by
       any person, firm or organization not a Party or not bound as a Party,
       or not a successor or permitted assignee of a Party bound to this
       Agreement. No waiver by a Party of any default by the other Party will
       be construed as a waiver of any other default. Nothing in this
       Agreement will be construed to create a partnership or joint venture
       between the Parties. The term "including" when used in this Agreement
       will be by way of example only and will not be considered in any way
       to be in limitation. Except as otherwise

                                     -12-
<PAGE>

       herein stated, any provision, article or section declared or rendered
       unlawful by a court of law or regulatory agency with jurisdiction over
       the Parties or deemed unlawful because of a statutory change will not
       otherwise affect the lawful obligations that arise under this
       Agreement. The headings used for the Articles herein are for
       convenience and reference purposes only. All Exhibits and Appendices
       referenced in this Agreement, if any, are incorporated. Any original
       executed Agreement or Transaction Agreement may be photocopied and
       stored on computer tapes and disks (the "IMAGED AGREEMENT"). The
       Imaged Agreement, if introduced as evidence on paper, the Transaction
       Agreement, if introduced as evidence in automated facsimile form, and
       all computer records of the foregoing, if introduced as evidence in
       printed format, in any judicial, arbitration, mediation or
       administrative proceedings, will be admissible as between the Parties
       to the same extent and under the same conditions as other business
       records originated and maintained in documentary form. Neither Party
       will contest the admissibility of the Imaged Agreement under either
       the business records exception to the hearsay rule or the best
       evidence rule on the basis that such were not originated or maintained
       in documentary form.

10.7.  CONFIDENTIALITY & PUBLICITY. Each Party will not disclose the Contract
       Price or any Energy consumption data of Buyer's customers under any
       Transaction to a third party (other than the Party's and its
       Affiliates' employees, prospective purchasers of either Party,
       lenders, counsel or accountants who have agreed to keep such terms
       confidential and to use such information solely in connection with
       this Agreement and the Transaction Agreements) except in order to
       comply with any applicable law, order, regulation or exchange rule;
       provided (except with respect to tax matters) each Party will notify
       the other Party of any proceeding of which it is aware which may
       result in disclosure and use reasonable efforts to prevent or limit
       the disclosure. The provisions of this Agreement other than the terms
       of any Transaction are not subject to this confidentiality obligation
       and expressly include revealing that there is a business relationship
       between the Parties. The Parties will be entitled to all remedies
       available at law or in equity to enforce, or seek relief in connection
       with, this confidentiality obligation; provided, all monetary damages
       will be limited in accordance with Article 10.3. Notwithstanding the
       foregoing, from time to time as the Parties may mutually agree, in
       writing, each Party may authorize the other Party use its name and to
       disclose the existence and nature of this Agreement and any
       Transaction Agreement in customer lists and other promotional
       materials that either Party may develop from time to time.

10.8.  UCC. Except as otherwise provided for herein, the provisions of the
       Uniform Commercial Code ("UCC") of the state whose laws will govern this
       Agreement will be deemed to apply to all Transactions and Energy will be
       deemed to be a "good" for purposes of the UCC.

The Parties have executed this Agreement in multiple counterparts to be
construed as one effective as of the Effective Date.

ENRON ENERGY SERVICES, INC.                             EMW ENERGY SERVICES CORP

By:        /s/ MARK S. MULLER                   By:       /s/ JIMMIE L. WILLIAMS
       ---------------------------                    --------------------------
Name:         MARK S. MULLER                    Name:    Jimmie L. Williams
       ---------------------------                    --------------------------
         Attorney-in-Fact                       Title:   Vice President
                                                      --------------------------

                                     -13-
<PAGE>

                                  APPENDIX "1"

                               GENERAL PROVISIONS

-------------------------------------------------------------------------------
-    USAGE AND DEFINITIONS
-------------------------------------------------------------------------------

All references to Articles and Sections are to those set forth in this
Agreement. Reference to any document means such document as amended from time to
time and reference to any Party includes any successor or permitted assignee
thereof. The following definitions and any terms defined internally in this
Agreement will apply to this Agreement and all notices and communications made
pursuant to this Agreement.

"AFFILIATE" means, with respect to any person or entity, any other entity or
person that directly or indirectly, through one or more intermediaries, controls
or is controlled by, or is under common control with, such person or entity. For
this purpose, "CONTROL" means the direct or indirect ownership of 10% or more of
the outstanding capital stock or other equity interests having ordinary voting
power of the entity or person.

"ANCILLARY SERVICES" means incremental or operating capacity requirements,
spinning reserve, non-spinning reserve, replacement reserves, AGC or frequency
control, voltage support or reactive power requirements, black start capability,
grid management charges or other similar ancillary services which may be
required by the Control Area Operator to ensure transmission grid reliability.

"BUSINESS DAY" means a Day on which Federal Reserve member banks in New York
City are open for business and a Business Day will open at 8:00 a.m. and close
at 5:00 p.m. local time for each Party's principal place of business.

"BUYER" means, (a) EMW for Transactions providing for the sale of Energy or
Ancillary Services by EESI pursuant to Article 3.1 and (b) EESI for Transactions
providing for the purchase of Energy or Ancillary Services by EESI pursuant to
Article 3.2.

"CLAIMS" means all claims or actions, threatened or filed and whether
groundless, false or fraudulent, that directly or indirectly relate to the
subject matters of the indemnity, and the resulting losses, damages, reasonable
expenses, reasonable attorneys' fees and court costs, whether incurred by
settlement or otherwise, and whether such claims or actions are threatened or
filed prior to or after the termination of this Agreement.

"CONTRACT PRICE" means the price in U.S. dollars per MWh, as established
pursuant to Article 5, payable by Buyer to Seller for the purchase of Energy
pursuant to a Transaction pursuant to Article 3.

"CONTROL AREA OPERATOR" means the Transmission Provider, independent system
operator, independent system administrator, or electric utility that is
responsible for maintaining transmission grid reliability and managing
transmission and distribution system scheduling practices.

"COSTS" means, with respect to a Party, brokerage fees, commissions and other
similar transaction costs and expenses reasonably incurred by such Party either
in terminating any arrangement pursuant to which it has hedged its obligations
or entering into new arrangements which replace a Transaction and attorneys' and
consultants fees, if any, reasonably incurred in connection with enforcing its
rights under a Transaction.

"C.T." means Central Time.

"DAY" means a period of twenty-four (24) consecutive hours, beginning at
midnight C.T. on any calendar Day.

<PAGE>

"DELIVERY POINT(S)" means the agreed point(s) of delivery, generally to the
control area boundary of the utility providing distribution service to EMW's
customers, pursuant to a Transaction and identified in Exhibit "C".

"ENERGY" means Merchantable Energy expressed in megawatt hours (MWh) or capacity
to the extent designated in the Transaction Agreement.

"FORCE MAJEURE" means an event not anticipated as of the Effective Date, which
is not within the reasonable control of the Party, or in the case of third party
obligations or facilities, the third party, claiming suspension, and which by
the exercise of due diligence such Party, or third party, is unable to overcome
or obtain or cause to be obtained a commercially reasonable substitute
performance therefor; provided, neither (i) the loss of Buyer's markets nor
Buyer's inability economically to use or resell Energy purchased hereunder nor
(ii) the loss of Seller's Energy supply nor Seller's ability to sell Energy to a
market at a more advantageous price, will constitute an event of Force Majeure.
"Force Majeure" will include an event of Force Majeure occurring with respect to
the facilities or services of Buyer's or Seller's Transmission Provider.

"GAAP" means generally accepted accounting principles, consistently applied.

"GAINS" means, with respect to a Party, an amount equal to the present value of
the economic benefit (exclusive of Costs), if any, to such Party resulting from
the termination of its obligations with respect to a Transaction determined in a
commercially reasonable manner.

"HOUR" means a period of sixty minutes.

"INDEMNIFIED PARTY" and "INDEMNIFYING PARTY" means the Party receiving and
providing an indemnity, respectively.

"INTEREST RATE" means, for any date, 2% over the per annum rate of interest
announced as the "Prime Rate" from time to time for commercial loans by
Citibank, N. A. as established by the administrative body of such bank charged
with the responsibility of establishing such rate, as same may change from time
to time; provided, the Interest Rate will never exceed the maximum lawful rate
permitted by applicable law.

"LOSSES" means, with respect to a Party, an amount equal to the present value of
the economic loss (exclusive of Costs), if any, to such Party resulting from the
termination of its obligations with respect to a Transaction determined in a
commercially reasonable manner.

"MERCHANTABLE ENERGY" means electric energy of the character commonly known as
three-phase, sixty-hertz electric energy that is delivered at the nominal
voltage of the Delivery Point.

"MONTH" means a period of time beginning at midnight C.T. on the first Day of
any calendar Month and ending at midnight C.T. on the first Day of the following
calendar Month.

"PERIOD OF DELIVERY" means the period from the date Scheduling obligations are
to commence to the date Scheduling obligations are to terminate under a
Transaction.

"REPLACEMENT PRICE DIFFERENTIAL" means the following:

1.   In the event of (a) an EESI Deficiency Default, the positive difference, if
     any, obtained by subtracting the Contract Price FROM the price at which
     EMW, acting in a commercially reasonable manner, purchases substitute
     Energy not delivered by EESI (as adjusted for any additional transmission
     charges, if any, incurred by the other party to the Delivery Point) or,
     absent a purchase, the market price for such quantity at such Delivery
     Point as determined by the other party in a commercially reasonable manner;
     provided, however, in no event will the Replacement Price include any
     penalties (other than commercially reasonable purchases from the applicable
     utility or provider of last resort which might otherwise be labeled a
     penalty), ratcheted demand or similar charges, in no event

                                 Appendix 1--2
<PAGE>

     exceeding the sum of the Contract Price plus the emergency service
     tariff rate for imbalance or replacement Energy, and (b) in the event of
     an EMW Deficiency Default, the positive difference, if any, obtained by
     subtracting the price at which EESI, acting in a commercially reasonable
     manner, sells a quantity equal to the quantity not received by EMW (as
     adjusted for any additional transmission charges, if any, incurred by
     the other party to the Delivery Point) or, absent a purchase, the market
     price for such quantity at such Delivery Point as determined by the
     other party in a commercially reasonable manner; provided, however, in
     no event will the Replacement Price include any penalties, ratcheted
     demand or similar charges.

2.   In the event of (a) an EESI Purchase Default, the positive difference, if
     any, obtained by subtracting the price at which EMW, acting in a
     commercially reasonable manner, sells a quantity of Energy equal to the
     quantity not purchased by EESI (as adjusted for any additional transmission
     charges, if any, incurred by the other party to the Delivery Point) or,
     absent a purchase, the market price for such quantity at such Delivery
     Point as determined by the other party in a commercially reasonable manner;
     provided, however, in no event will the Replacement Price include any
     penalties, ratcheted demand or similar charges, FROM the Contract Price and
     (b) in the event of an EMW Sales Default, the positive difference, if any,
     obtained by subtracting the Contract Price FROM the price at which EESI,
     acting in a commercially reasonable manner, purchases substitute Energy not
     delivered by EESI (as adjusted for any additional transmission charges, if
     any, incurred by the other party to the Delivery Point) or, absent a
     purchase, the market price for such quantity at such Delivery Point as
     determined by the other party in a commercially reasonable manner;
     provided, however, in no event will the Replacement Price include any
     penalties (other than commercially reasonable purchases from the applicable
     utility or provider of last resort which might otherwise be labeled a
     penalty), ratcheted demand or similar charges, in no event exceeding the
     sum of the Contract Price plus the emergency service tariff rate for
     imbalance or replacement Energy.

"SERVICES COMMENCEMENT DATE" means the earlier of (i) the date, subsequent to
EMW obtaining all licenses and permits required to enter into a Transaction
under this Agreement, the Parties first elect to Schedule Energy or Ancillary
Services pursuant to first Transaction Agreement entered into pursuant to this
Agreement or (ii) December 31, 2000.

"SCHEDULING" or "SCHEDULE," when used in reference to Seller, means to make
Energy available, or cause Energy to be made available, at the Delivery Point(s)
for delivery to or for the account of Buyer, including notifying, requesting and
confirming the quantity and type of Energy to be delivered Hourly on any given
Day or Days during the Period of Delivery at the specified Delivery Points, and
when used in reference to Buyer, means to cause Buyer or Buyer's Transmission
Provider to make available at the Delivery Point(s) transmission capacity
sufficient to permit Buyer or Buyer's Transmission Provider to receive on a firm
or interruptible basis, as designated in the applicable Transaction Agreement,
the quantities Seller has available at such Delivery Point(s), including
notifying, requesting and confirming the quantity and type of Energy to be
delivered Hourly on any given Day or Days during the Period of Delivery at the
specified Delivery Points. Energy will be deemed to have been Scheduled when
confirmed by a Transmission Provider.

"SELLER" means (a) EESI for Transactions providing for the sale of Energy or
Ancillary Services by EESI pursuant to Article 3.1 and (b) EMW for Transactions
providing for the purchase of Energy or Ancillary Services by EESI pursuant to
Article 3.2.

"TAXES" means any or all government or quasi governmental taxes, assessments,
levies, duties, fees, charges and withholdings of any kind or nature whatsoever
and howsoever described, including gross receipts, franchise, sales, use,
excise, property, capital, value added, stamp, transfer, intangible, employment,
occupation, generation, privilege, utility, MWh, gathering, energy, consumption,
lease, permit, license, filing, custom and recording tax, together with any and
all penalties, fines, additions or interest thereon, other than taxes based on
net income or net worth.

                                 Appendix 1--3
<PAGE>

"TRANSACTIONS" means an agreement and any amendment or modification thereof made
in accordance herewith for the purchase or sale of Energy to be performed
hereunder.

"TRANSACTION AGREEMENT" means a written paper-based agreement executed by the
Parties to form and effectuate a Transaction which may be substantially in the
form set forth in Exhibit "B."

"TRANSMISSION PROVIDERS" means the entity or entities transmitting Energy on
behalf of Seller prior to the Delivery Point in a Transaction or receiving
Energy on behalf of Buyer at or from a Delivery Point in a Transaction.

-------------------------------------------------------------------------------
-    REPRESENTATIONS AND WARRANTIES
-------------------------------------------------------------------------------

As a material inducement to entering into this Agreement, including each
Transaction, each Party, with respect to itself, hereby represents and warrants
to the other Party continuing throughout the term of this Agreement as follows:
(i) there are no suits, proceedings, judgments, rulings or orders by or before
any court or any governmental authority that materially adversely affect its
ability to perform this Agreement or the rights of the other Party under this
Agreement, (ii) it is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its formation, and it has the legal right,
power and authority and is qualified to conduct its business, and to execute and
deliver this Agreement and perform its obligations under the same and each
Transaction Agreement, and all regulatory authorizations have been maintained as
necessary for it to legally perform its obligations hereunder, (iii) the making
and performance by it of this Agreement is within its powers, has been duly
authorized by all necessary action on its part, and does not and will not
violate any provision of law or any rule, regulation, order, writ, judgment,
decree or other determination presently in effect applicable to it or its
governing documents, (iv) each of this Agreement and each Transaction when
entered into constitutes a legal, valid and binding act and obligation of it,
enforceable against it in accordance with its terms, subject to bankruptcy,
insolvency, reorganization and other laws affecting creditor's rights generally,
and with regard to equitable remedies, to the discretion of the court before
which proceedings to obtain same may be pending, (v) there are no bankruptcy,
insolvency, reorganization, receivership or other arrangement proceedings
pending or being contemplated by it, or to its knowledge threatened against it,
(vi) BUYER WAIVES ITS RIGHTS, IF ANY, UNDER THE TEXAS DECEPTIVE TRADE PRACTICES
- CONSUMER PROTECTION ACT, SECTION 17.41 ET. SEQ., BUSINESS AND COMMERCE CODE, A
LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER CONSULTATION WITH
AN ATTORNEY OF ITS OWN SELECTION, BUYER VOLUNTARILY CONSENTS TO THIS WAIVER.

-------------------------------------------------------------------------------
-    OPERATIONS AND DELIVERY
-------------------------------------------------------------------------------

SCHEDULING REQUESTS.

     A.   REQUESTED QUANTITIES.  EESI will arrange and be responsible for
          transmission service to the Delivery Point and will Schedule or
          arrange for Scheduling services with its Transmission Providers to
          deliver the Requested Quantity to the Delivery Point for each Hour
          During a Period of Delivery and EMW will arrange and be responsible
          for transmission service at and from the Delivery Point and will
          Schedule or arrange for Scheduling services with its Transmission
          Providers to receive the Requested Quantity at the Delivery Point for
          each Hour during a Period of Delivery. Scheduling requests to EESI
          will be accepted at the telephone number and will be confirmed by
          facsimile as set forth in Exhibit "A.." Each Party will designate
          authorized representatives to effect the Scheduling of the Requested
          Quantity of Energy.

     B.   OFFERED QUANTITIES.  EMW will arrange and be responsible for
          transmission service to the Delivery Point and will Schedule or
          arrange for Scheduling services with its Transmission Providers to
          deliver the Offered Quantity to the Delivery Point for each Hour
          During a Period of Delivery and EESI will arrange and be responsible
          for transmission service at and from the Delivery Point and will
          Schedule or arrange for Scheduling services with its Transmission
          Providers to receive the Offered Quantity at the Delivery Point for
          each Hour during a Period of

                                 Appendix 1--4

          Delivery. Scheduling requests to EMW will be accepted at the telephone
          number and will be confirmed by facsimile as set forth in Exhibit "A."
          Each Party will designate authorized representatives to effect the
          Scheduling of the Offered Quantity of Energy.

     C.   CHANGES. If the Parties have deemed a Forward Transaction to be firm,
          no later than ten (10) Days prior to the first Day of each Month of
          the Period of Delivery, Seller will provide to Buyer nominations of
          the Requested Quantity or Offered Quantity, as applicable, Seller
          expects to Schedule during each Hour of the Period of Delivery and
          Buyer will confirm such quantities to Seller prior to the first Day of
          each Month of the Period of Delivery. If EMW has not elected to
          receive Full Management Services or Imbalance Management Services from
          EESI pursuant to Article 4 of this Agreement, then should either Party
          desire to change the Requested Quanity or the Offered Quantity for a
          Forward Transaction, the Parties will promptly enter into an
          additional Transaction to reflect the desired change, either an
          Intra-Month Transaction for desired changes during a Month or a
          Forward Transaction for desired changes for an ensuing Month. In
          either case, the Party desiring such change will provide notice to the
          other Party not later than twelve (12) hours prior to the applicable
          or EESI's Transmission Provider's nomination deadline for the
          applicable Hour (the "NOMINATION DUE DATE") and the Parties will
          thereafter consummate such Transaction in a timely manner. If the
          nomination or Scheduling deadline of a Transmission Provider conflicts
          with these notification dates, EMW and EESI agree to modify the
          notification dates accordingly. If the Parties have deemed a
          Transaction to be interruptible or otherwise non-firm in a Transaction
          Agreement, then either Party may, in its sole discretion and without
          liability, except as provided in Section 9.2 of this Agreement,
          interrupt, in whole or in part, the Scheduling of Energy at any time
          for any reason upon prior notice by telephone and confirmed by
          facsimile to the other Party specifying the amount and duration of the
          interruption sufficient to allow the notified Party to make changes to
          its Transmission Provider nominations in accordance with its
          Transmission Provider's procedures. No notice of interruption may be
          retroactive to a prior time. Should an interruption occur without the
          notice herein required and such interruption is not otherwise excused
          by Force Majeure, the notifying Party will be liable and pay for all
          associated penalties and cashout costs and losses charged by all
          Transmission Providers, if any, as provided in Section 9.2 of this
          Agreement

     D.   NO MAKE-UP RIGHTS. Buyer will have no rights to make up any Energy
          tendered hereunder by Seller but not taken by Buyer. In addition,
          Buyer will have no recourse nor any right, title, or interest in any
          Energy paid for but not taken under this Agreement. Imbalances will be
          treated pursuant to Article 9.2 of this Agreement.

TRANSMISSION. EESI will be responsible for any costs or charges imposed on or
associated with the delivery of the Requested Quantity, including control area
services, inadvertent energy flows, transmission losses and loss charges
relating to the transmission of the Requested Quantity, up to the Delivery
Point. EMW will be responsible for any costs or charges imposed on or associated
with the Requested Quantity, including control area services, inadvertent energy
flows, transmission losses and loss charges relating to the transmission of the
Requested Quantity, at and from the Delivery Point. EMW will be responsible for
any costs or charges imposed on or associated with the delivery of the Offered
Quantity, including control area services, inadvertent energy flows,
transmission losses and loss charges relating to the transmission of the Offered
Quantity, up to the Delivery Point. EESI will be responsible for any costs or
charges imposed on or associated with the Offered Quantity, including control
area services, inadvertent energy flows, transmission losses and loss charges
relating to the transmission of the Offered Quantity, at and from the Delivery
Point.

ENERGY SPECIFICATIONS. Seller represents that all Energy delivered hereunder
will meet or exceed the quality specifications of EMW's Transmission Provider
for acceptance of Energy at the applicable receipt point. In the event Energy
tendered by Seller to its Transmission Provider does not meet or exceed the
Transmission Provider's quality specifications, Buyer, in addition to all other
remedies allowed hereunder, will have the right to refuse to accept Energy until
such time as Seller is again able to tender Energy complying with such
Transmission Provider's quality specifications.

                                 Appendix 1--5
<PAGE>

CURTAILMENT ORDERS. Should either Party receive an curtailment order or other
order or notice from a Transmission Provider requiring action to be taken in
connection with this Agreement or Energy flowing under this Agreement
("CURTAILMENT ORDER"), such Party will immediately notify the other Party of
the Curtailment Order and provide the other Party a copy of same by facsimile.
The Parties will take all actions required by the Curtailment Order within the
time prescribed. Each Party will indemnify, defend and hold harmless the other
Party from any Claims, including, without limitation, all non-compliance
penalties and reasonable attorneys' fees, associated with an Curtailment Order
(i) of which the Indemnifying Party failed to give the Indemnified Party the
notice required hereunder or (ii) under which the Indemnifying Party failed to
take the action required by the Curtailment Order within the time prescribed.

-------------------------------------------------------------------------------
-    FINANCIAL MATTERS
-------------------------------------------------------------------------------

BILLING, INVOICE DATE, CHARGES AND PAYMENT. Seller will provide Buyer with a
written statement for each calendar month during which purchases and/or sales
are made, a statement setting forth the total quantity of Energy that was
Scheduled or that Buyer was obligated to purchase and any other charges due
Seller, including payments or credits between the Parties pursuant to Article 3
under this Agreement during the preceding month and the amounts due to Seller
from Buyer therefor. Billing and payment will be based on Scheduled Hourly
quantities. Buyer will remit any amounts due within five (5) Business Days
after receipt of Seller's statement. If the due date for any payment to made
under this Agreement is not a Business Day, the due date for such payment will
be the next Business Day following the due date. Payment of all funds will be
made by wire transfer on the due date in U. S. currency. Each Party will take
all actions necessary to effect payments in accordance with the process stated
in Exhibit "A". If EMW or EESI should fail to remit any amounts in full when
due hereunder, interest on the unpaid portion will accrue from the date due at
a rate equal to the Interest Rate. Billings, payments and statements will be
made to the accounts or the addresses/facsimiles specified in Exhibit "A."

DISPUTES. If either Party fails to make a timely payment and such failure is
not remedied within five (5) Business Days after such Party receives written
notice of default, the non defaulting Party, in addition to other remedies, may
suspend the Scheduling of Energy until such amount, including interest at a
rate equal to the Interest Rate, is paid; provided, if the defaulting Party, in
good faith, will dispute the amount of any such billing or part thereof and
will pay such amounts as it concedes to be correct, no suspension will be
permitted. In the event any invoice is disputed by the Party receiving such
invoice, the receiving Party will pay the undisputed amounts and will, within
twenty (20) Days from the date of receipt of such invoice, give the invoicing
Party written notification setting forth the disputed amount and the basis
therefor. Buyer and Seller will use reasonable diligence to resolve disputed
amounts within thirty (30) Days following written notification. If the
undisputed amount is not paid when due, the undisputed amount will bear
interest at a rate equal to the Interest Rate. Any disputed amount which later
is determined to be due to the invoicing Party will bear interest at a rate
equal to the Interest Rate from the original due date.

AUDIT RIGHTS. During the term of this Agreement and for a period of two (2)
years from the date of termination of a Transaction, EMW or EESI or any third
party representative thereof will have the right, at is expense and upon
reasonable notice and at reasonable times, to examine the books and records of
the other Party to the extent reasonably necessary to verify the accuracy of
any billing statement, payment demand, charge, payment or computation made
under this Agreement. No adjustment or correction will be made and all records
and payments will be conclusively presumed to be final unless notice specifying
the error or inaccuracy is given within two (2) calendar years from the end of
the calendar year during which such error or inaccuracy occurred. The records
of the Parties will be retained in accordance with Article 10.6 for a like
period to facilitate the audit rights of the Parties.

FINANCIAL INFORMATION. If requested by EMW, EESI will deliver as soon as
available, but in any case (i) within 120 Days following the end of each fiscal
year, a copy of the annual report of Enron Corp. containing audited
consolidated financial statements for such fiscal year certified by independent
certified public accountants and (ii) within 60 Days after the end of each of
its first three fiscal quarters of each fiscal year, a copy of the quarterly
report of Enron Corp. containing unaudited consolidated financial

                                Appendix 1 -- 6
<PAGE>

statements for such fiscal quarter. If requested by EESI, EMW will deliver as
soon as available, but in any case (i) within 120 Days following the end of
each fiscal year, a copy of its annual report containing consolidated financial
statements for such fiscal year certified by independent certified public
accountants and (ii) within 60 Days after the end of each of its first three
fiscal quarters of each fiscal year, a copy of its quarterly report containing
unaudited consolidated financial statements for such fiscal quarter. In all
cases the statements will be for the most recent accounting period and prepared
in accordance with GAAP; provided, should any such statements not be timely due
to a delay in preparation or certification, such delay will not be considered a
default so long as such Party diligently pursues the preparation, certification
and delivery of the statements.

-------------------------------------------------------------------------------
-    WARRANTY OF TITLE TO ENERGY
-------------------------------------------------------------------------------

Seller in any Transaction warrants that title to Energy to be Scheduled by
Seller is free from all production burdens, liens and adverse Claims (other
than Taxes not yet due and payable) and warrants its right to sell the same.
Seller agrees to indemnify, defend and hold harmless Buyer against all Claims
to or against the title of said Energy. In the event any Claim is asserted to
said Energy, Buyer, in addition to other remedies, may suspend its obligation
to pay for said Energy up to the amount of such Claim, without interest.

-------------------------------------------------------------------------------
-    ALTERNATE PRICE REDETERMINATION
-------------------------------------------------------------------------------

If any or all of the indices used to determine the Spot Price or Contract Price
are not available in the future, the Parties agree to promptly negotiate a
mutually satisfactory alternate index for the Spot Price or Contract Price
(each an "ALTERNATE PRICE"). If the Parties cannot agree by the end of the
first Month for which the Spot Price or Contract Price could not be determined,
then EESI and EMW will each prepare a prioritized list of up to three (3)
alternative published reference postings or prices representative of spot
prices for Energy delivered in the same geographic area. Each Party will submit
its list to the other within ten (10) Days after the end of the first Month for
which the price could not be determined. The first listed index appearing in
EESI's list that also appears in EMW's list will constitute the replacement
index. If no common indices appear on the lists, each Party will submit a new
list adding two indices within 10 Days. If either Party fails to provide timely
a list, such Party's list will not be considered. From and after the
"RENEGOTIATION DATE," which will be the date the Spot Price or Contract Price,
as applicable, calculated on the referenced index is no longer available, until
the Alternate Price is determined, the Alternate Price will be the average of
the Spot Price or Contract Price(s) in effect during the three (3) Months
preceding the Month in which the Renegotiation Date occurred, which price will
be effective until the Alternate Price is determined. Upon determination of a
new Alternate Price, the Spot Price or Contract Price, as applicable, will be
adjusted retroactively to the Renegotiation Date.

-------------------------------------------------------------------------------
-    EFFECT OF WAIVER OR CONSENT
-------------------------------------------------------------------------------

No waiver or consent by either Party, express or implied, of any one or more
defaults by the other Party in the performance of any provision of this
Agreement will operate or be construed as a waiver or consent of any other
default or defaults whether of a like or different nature. Failure by a Party
to complain of any act of the other Party or to declare the other Party in
default with respect to this Agreement, regardless of how long that failure
continues (except as limited pursuant to Article 7 of this Agreement), will not
constitute a waiver by that Party of its rights with respect to that default
until the applicable statute of limitations period has run.

-------------------------------------------------------------------------------
-    INDEMNIFICATION
-------------------------------------------------------------------------------

With respect to each indemnification included in this Agreement the indemnity
is given to the fullest extent authorized by applicable law and the following
provisions will be considered applicable. The Indemnified Party will promptly
notify the Indemnifying Party in writing of any Claim and the Indemnifying
Party will have the right to assume the investigation and defense thereof,
including the employment of counsel, and

                                Appendix 1 -- 7
<PAGE>

will be obligated to pay the related reasonable attorneys' fees; provided,
however, the Indemnified Party will have the right to employ separate counsel
at its expense and participate in the defense of any Claim, however, the
reasonable attorneys' fees of such counsel will be paid by the Indemnified
Party unless the Indemnifying Party has failed to assume the defense and employ
counsel in a timely manner; provided further, if the named parties to any Claim
include both Parties, and the Indemnified Party will have been advised by
counsel that there may be a legal defense available to it which is different
from those available to the Indemnifying Party, the Indemnified Party may elect
to employ separate counsel at the expense of the Indemnifying Party, in which
case the Indemnifying Party will pay all reasonable attorneys' fees of such
counsel and will not have the right to assume the defense of the Claim on
behalf of the Indemnified Party. The Parties will use reasonable efforts to
cooperate in the defense of any Claim. The Indemnifying Party will not be
liable for any settlement of a Claim without its express written consent
thereto. The Indemnified Party will reimburse the Indemnifying Party for
payments made or costs incurred in respect of an indemnity with the proceeds of
any judgment, insurance, bond, surety or other recovery made with respect to a
covered event.

-------------------------------------------------------------------------------
-    ARBITRATION
-------------------------------------------------------------------------------

DISPUTES TO BE ARBITRATED. Any and all Claims, counterclaims, demands, cause of
action, disputes, controversies, and other matters in question arising under
this Agreement or the alleged breach of any provision hereof (all of which are
referred to herein as "DISPUTED CLAIMS"), whether such Disputed Claims arise at
law or in equity, under state or federal law, for damages or any other relief,
shall be resolved by binding arbitration in the manner set forth below.

ARBITRATION PROCEDURES.

     A.   THE PARTIES TO THIS AGREEMENT AGREE THAT ANY DISPUTE, CONTROVERSY OR
          CLAIM THAT MAY ARISE BETWEEN OR AMONG THEM IN CONNECTION WITH OR
          OTHERWISE RELATING TO THIS AGREEMENT OR THE APPLICATION,
          IMPLEMENTATION, VALIDITY OR BREACH OF THIS AGREEMENT OR ANY PROVISION
          OF THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, CLAIMS BASED ON
          CONTRACT, TORT OR STATUTE), SHALL BE FINALLY, CONCLUSIVELY AND
          EXCLUSIVELY SETTLED BY BINDING ARBITRATION IN WILMINGTON, DELAWARE IN
          ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES (THE "RULES") OF THE
          AMERICAN ARBITRATION ASSOCIATION OR ANY SUCCESSOR THERETO ("AAA") THEN
          IN EFFECT. THE PARTIES TO THIS AGREEMENT HEREBY EXPRESSLY WAIVE THEIR
          RIGHT TO SEEK REMEDIES IN COURT, INCLUDING THE RIGHT TO TRIAL BY JURY,
          WITH RESPECT TO ANY MATTER SUBJECT TO ARBITRATION PURSUANT TO THIS
          AGREEMENT. ANY PARTY TO THIS AGREEMENT MAY BRING AN ACTION, INCLUDING,
          WITHOUT LIMITATION, A SUMMARY OR EXPEDITED PROCEEDING IN ANY COURT
          HAVING JURISDICTION, TO COMPEL ARBITRATION OF ANY DISPUTE, CONTROVERSY
          OR CLAIM TO WHICH THE PROVISIONS HEREOF APPLY. EXCEPT WITH RESPECT TO
          THE FOLLOWING PROVISIONS (THE "SPECIAL PROVISIONS") WHICH SHALL APPLY
          WITH RESPECT TO ANY ARBITRATION PURSUANT HERETO, THE INITIATION AND
          CONDUCT OF ARBITRATION SHALL BE AS SET FORTH IN THE RULES, WHICH RULES
          ARE INCORPORATED IN THIS AGREEMENT BY REFERENCE WITH THE SAME EFFECT
          AS IF THEY WERE SET FORTH IN THIS AGREEMENT.

     B.   In the event of any inconsistency between the Rules and the Special
          Provisions, the Special Provisions shall control. Any references in
          the Rules to a sole arbitrator shall be deemed to refer to the
          tribunal of arbitrators provided for under paragraph (D) hereof.

     C.   The arbitration shall be administered by the AAA. If the AAA is unable
          or legally precluded from administering the arbitration, then the
          Parties shall agree upon an alternative arbitration organization,
          provided that, if the Parties cannot agree, such organization shall be
          selected by

                                Appendix 1 -- 8
<PAGE>

          the Chief Judge of the United States District Court for the District
          which includes Wilmington, Delaware.

     D.   The arbitration shall be conducted by a tribunal of three (3)
          arbitrators. Within ten (10) Days after arbitration is initiated
          pursuant to the Rules, the initiating Party or Parties (the
          "CLAIMANT") shall send written notice to the other Party or Parties
          (the "RESPONDENT"), with a copy to the office of the AAA having
          responsibility for Wilmington, Delaware, designating the first
          arbitrator (who shall not be a representative or agent of any Party
          but may or may not be an AAA panel member and, in any case, shall be
          reasonably believed by the Claimant to possess the requisite
          experience, education and expertise in respect of the matters to which
          the Claim relates to enable such person to competently perform
          arbitral duties). Within ten (10) Days after receipt of such notice,
          the Respondent shall send written notice to the Claimant, with a copy
          to the office of the AAA having responsibility for Wilmington,
          Delaware and to the first arbitrator, designating the second
          arbitrator (who shall not be a representative or agent of any Party
          but may or may not be an AAA panel member and, in any case, shall be
          reasonably believed by the Respondent to possess the requisite
          experience, education and expertise in respect of the matters to which
          the Claim relates to enable such person to competently perform
          arbitral duties). Within ten (10) Days after such notice from the
          Respondent is received by the Claimant, the Respondent and the
          Claimant shall cause their respective designated arbitrators to select
          any mutually agreeable AAA panel member as the third arbitrator. If
          the respective designated arbitrators of the Respondent and the
          Claimant cannot so agree within said ten (10) Day period, then the
          third arbitrator will be determined pursuant to the Rules. Prior to
          commencement of the arbitration proceeding, each arbitrator shall have
          provided the Parties with a resume outlining such arbitrator's
          background and qualifications and shall certify that such arbitrator
          is not and has not been a representative or agent of any of the
          Parties. If any arbitrator shall die, fail to act, resign, become
          disqualified or otherwise cease to act, then the arbitration
          proceeding shall be delayed for fifteen (15) Days and the Party by or
          on behalf of whom such arbitrator was appointed shall be entitled to
          appoint a substitute arbitrator (meeting the qualifications set forth
          in this paragraph (D) within such fifteen (15) Day period; PROVIDED,
          HOWEVER, that if the Party by or on behalf of whom such arbitrator was
          appointed shall fail to appoint a substitute arbitrator within such
          fifteen (15) Day period, the substitute arbitrator shall be a neutral
          arbitrator appointed by the AAA arbitrator within fifteen (15) Days
          thereafter.

     E.   All arbitration hearings shall be commenced within ninety (90) Days
          after arbitration is initiated pursuant to the Rules, unless, upon a
          showing of good cause by a Party to the arbitration, the tribunal of
          arbitrators permits the extension of the commencement of such hearing;
          PROVIDED, HOWEVER, that any such extension shall not be longer than
          sixty (60) Days.

     F.   All Claims presented for arbitration shall be particularly identified
          and the Parties to the arbitration shall each prepare a statement of
          their position with recommended courses of action. These statements of
          position and recommended courses of action shall be submitted to the
          tribunal of arbitrators chosen as provided hereinabove for binding
          decision. The tribunal of arbitrators shall not be empowered to make
          decisions beyond the scope of the position papers.

     G.   The arbitration proceeding will be governed by the substantive laws
          of the State of Delaware and will be conducted in accordance with
          such procedures as shall be fixed for such purpose by the tribunal of
          arbitrators, except that (i) discovery in connection with any
          arbitration proceeding shall be conducted in accordance with the
          Federal Rules of Civil Procedure and applicable case law, (ii) the
          tribunal of arbitrators shall have the power to compel discovery, and
          (iii) unless the Parties otherwise agree and except as may be
          provided herein, the arbitration shall be governed by the Federal
          Arbitration Act, 9 U.S. Sections 1-16, to the exclusion of any
          provision of state law or other applicable law or procedure
          inconsistent therewith or which would produce a different result. The
          Parties shall preserve their right to assert and to avail themselves
          of the attorney-client and attorney-work product privileges, and any
          other privileges to which they may be entitled pursuant to applicable
          law. No Party to the arbitration or any arbitrator may compel or
          require mediation

                                Appendix 1 -- 9
<PAGE>

          and/or settlement conferences without the prior written consent of all
          such Parties and the tribunal of arbitrators.

     H.   The tribunal of arbitrators shall make an arbitration award as soon as
          possible after the later of the close of evidence or the submission of
          final briefs, and in all cases the award shall be made not later than
          thirty (30) Days following submission of the matter. The finding and
          decision of a majority of the arbitrators shall be final and shall be
          binding upon the Parties. Judgment upon the arbitration award or
          decision may be entered in any court having jurisdiction thereof or
          application may be made to any such court for a judicial acceptance of
          the award and an order of enforcement, as the case may be. The
          tribunal of arbitrators shall have the authority to assess liability
          for pre-award and post-award interest on the Claims, attorneys' fees,
          expert witness fees and all other expenses of arbitration as
          reasonably incurred by any Party as such arbitrators shall deem
          appropriate based on the outcome of the Claims arbitrated. Unless
          otherwise agreed by the Parties to the arbitration in writing, the
          arbitration award shall include findings of fact and conclusions of
          law. IT IS EXPRESSLY AGREED THAT NOTWITHSTANDING ANY OTHER PROVISION
          HEREIN TO THE CONTRARY, THE ARBITRATORS SHALL HAVE ABSOLUTELY NO
          AUTHORITY TO AWARD CONSEQUENTIAL DAMAGES (SUCH AS LOSS OF PROFIT),
          TREBLE, EXEMPLARY OR PUNITIVE DAMAGES OF ANY TYPE UNDER ANY
          CIRCUMSTANCES REGARDLESS OF WHETHER SUCH DAMAGES MAY BE AVAILABLE
          UNDER DELAWARE LAW, THE LAW OF ANY OTHER STATE, OR FEDERAL LAW OR
          UNDER ANY RULES OF ARBITRATION.

     I.   Notwithstanding any provision herein to the contrary, nothing herein
          shall be construed to require arbitration of a Claim or dispute
          brought by a person who is not a Party to this Agreement, or affect
          the ability of any Party to interplead or otherwise join another Party
          in a proceeding brought by a person who is not a Party to this
          Agreement.

     J.   EACH PARTY UNDERSTANDS THAT THIS AGREEMENT CONTAINS AN AGREEMENT TO
          ARBITRATE WITH RESPECT TO ANY DISPUTE OR NEED OF INTERPRETATION OF
          THIS AGREEMENT. AFTER SIGNING THIS AGREEMENT, EACH PARTY UNDERSTANDS
          THAT IT WILL NOT BE ABLE TO BRING A LAWSUIT GOVERNING ANY DISPUTE THAT
          MAY ARISE WHICH IS COVERED BY THE ARBITRATION PROVISION, EXCEPT TO
          COMPEL ARBITRATION OR SEEK INJUNCTIVE RELIEF. INSTEAD, EACH PARTY
          AGREES TO SUBMIT ANY SUCH DISPUTE TO ARBITRATION.

                                Appendix 1 -- 10
<PAGE>

                                   EXHIBIT "A"
                                     TO THE
                    MASTER ENERGY PURCHASE AND SALE AGREEMENT

                       NOTICES , COMMUNICATION AND PAYMENT

<TABLE>
<CAPTION>

EESI:

<S>                                                      <C>
NOTICES & CORRESPONDENCE:                                PAYMENTS:
Enron Energy Services, Inc.                              Citibank NY
P. O. Box 1188                                           for:  Enron Energy Services, Inc.
Houston, Texas 77210-1188                                ABA Routing #021-000-089
Attn.:  Mr. Danny Clark, Manager, Contracts              Account #4074-0994
FAX #: (713) 646-8860

INVOICES:
Enron Energy Services, Inc.
P. O. Box 1188
Houston, Texas  77210-1188
Attn.:   Ms. Derenda Plunkett
Telephone No.:    (713) 853-9340
FAX No.:          (713) 646-2505

EMW:

NOTICES & CORRESPONDENCE:                                     PAYMENTS:
EMW Energy Services Corp.                                     EMW Energy Services Corp.
______________________________________                        ABA No.:  ________________________
______________________________________                        Account No.:  ____________________
Attn.:_______________________________                         Confirmation:  ___________________
FAX No.:       (_____)________________                        Phone No.:  (____)_________________
Phone No.:     (_____)________________

INVOICES:
EMW Energy Services Corp.
_________________________________
_________________________________
Attn.:____________________________
Telephone No.:    (____)_________________
FAX No.:          (____)_________________

</TABLE>

Or to such other address as EMW or EESI will from time to time designate by
letter properly addressed

                                 Exhibit A -- 1
<PAGE>

                                   EXHIBIT "B"
                                     TO THE
                    MASTER ENERGY PURCHASE AND SALE AGREEMENT

                          FORM OF TRANSACTION AGREEMENT

                              TRANSACTION AGREEMENT

This Transaction Agreement will form and effectuate the current proposal between
EMW Energy Services Corp. ("EMW") and Enron Energy Services, Inc. ("EESI")
regarding the purchase and sale of Energy under the following terms and
conditions:

         SELLER:                                   _____________________.

         BUYER:                                    _____________________.

         COMMODITY:                                _____________________.

         ANCILLARY SERVICES:                       _____________________.

         TERM:                                     _____________________.

         CONTRACT PRICE (PER MWh):                 _____________________.

         REQUESTED [OFFERED] QUANTITY:             _____________________.

         DELIVERY POINT:                           _____________________.

         SCHEDULING:                               _____________________.

         SPECIAL CONDITION(S):                     _____________________.

         PERIOD OF DELIVERY:                       _____________________.

         OTHER:                                    _____________________.

This Transaction Agreement is being provided pursuant to and in accordance with
the Master Energy Purchase and Sale Agreement dated December 23, 1999 (the
"Agreement") between EMW and EESI, and constitutes part of and is subject to all
of the terms and provisions of such Agreement. Terms used but not defined herein
will have the meanings ascribed to them in this Agreement.

Please execute this Transaction Agreement and return an executed copy to EESI no
later than __ a.m. on ________ , 19__ ("Notification Time"). Your execution
should reflect the appropriate party in your organization who has the authority
to cause EMW to enter into this Transaction. In the event EMW fails to execute
and deliver this Transaction Agreement by the Notification Time or alters the
terms of this Transaction Agreement in any manner, there will be no Transaction
pursuant to this Transaction Agreement.

EMW ENERGY SERVICES CORP.                    ENRON ENERGY SERVICES, INC.

By:____________________________          By:____________________________

Title:_________________________          Title:_________________________

Date:__________________________          Date:__________________________

                                 Exhibit B -- 1
<PAGE>

                                   EXHIBIT "C"
                                     TO THE
                    MASTER ENERGY PURCHASE AND SALE AGREEMENT

                     APPLICABLE INDICES FOR EXISTING MARKETS

<TABLE>
<CAPTION>
   --------------------------- ----------------------------------- -------------------------------------------------------
        MARKET LOCATION                  DELIVERY POINT                                    INDEX
   --------------------------- ----------------------------------- -------------------------------------------------------
<S>                            <C>                                 <C>
           California                                              The Day Ahead California PX hourly price in the
                                                                   applicable Load Zone adjusted to reflect the delivery
                                                                   related costs to customer.*

   --------------------------- ----------------------------------- -------------------------------------------------------

          Pennsylvania                                             The PJM  marginal  clearing  price  for  the  customer
                                                                   location  adjusted  to reflect  the  delivery  related
                                                                   costs to customer.*
   --------------------------- ----------------------------------- -------------------------------------------------------

           New Jersey                                              The PJM marginal clearing price for the customer
                                                                   location adjusted to reflect the delivery related costs
                                                                   to customer.*

   -----------------------------------------------------------------------------------------------------------------------

   * The delivery  related  costs  associated  with  delivering  the Energy to the customer  meter may include  ancillary
   services,  ISO administrative fees, PX administrative fees,  distribution losses, utility unaccounted for energy (UFE)
   costs or other similar charges imposed on the entity scheduling the Energy with the host utility or Control Area Operator.

   -----------------------------------------------------------------------------------------------------------------------
</TABLE>

                       APPLICABLE INDICES FOR NEW MARKETS

<TABLE>
<CAPTION>

---------------------------------------------------- -------------------------------------------------------------------------

                  MARKET LOCATION                                                     INDEX
---------------------------------------------------- -------------------------------------------------------------------------
<S>                                                  <C>
To Be Determined Pursuant to Section 5.1 B           To Be Determined Pursuant to Section 5.1 B.
---------------------------------------------------- -------------------------------------------------------------------------

</TABLE>

                                 Exhibit C -- 1

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