Document:

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                                                                    Exhibit 10.1

                                                                  EXECUTION COPY

                                  $380,000,000

                                TECO ENERGY, INC.

                              10.50% NOTES DUE 2007

                          REGISTRATION RIGHTS AGREEMENT

                                                               November 15, 2002

Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010-3629

Dear Sirs:

            TECO Energy, Inc., a Florida corporation (the "COMPANY"), proposes
to issue and sell to Credit Suisse First Boston Corporation (the "INITIAL
PURCHASER"), upon the terms set forth in a purchase agreement of even date
herewith (the "PURCHASE AGREEMENT"), $380,000,000 aggregate principal amount of
its 10.50% Notes due 2007 (the "INITIAL SECURITIES"). The Initial Securities
will be issued pursuant to an Indenture, dated as of August 17, 1998 (the
"INDENTURE"), among the Company and The Bank of New York, as trustee (the
"TRUSTEE"). As an inducement to the Initial Purchaser to enter into the Purchase
Agreement, the Company agrees with the Initial Purchaser, for the benefit of the
Initial Purchaser and the holders of the Securities (as defined below)
(collectively the "HOLDERS"), as follows:

            1. Registered Exchange Offer. Unless not permitted by applicable
law, the Company shall prepare and, not later than 60 days (such 60th day being
a "FILING DEADLINE") after the date on which the Initial Purchaser purchases the
Initial Securities pursuant to the Purchase Agreement (the "CLOSING DATE"), file
with the Securities and Exchange Commission (the "COMMISSION") a registration
statement (the "EXCHANGE OFFER REGISTRATION STATEMENT") on an appropriate form
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), with
respect to a proposed offer (the "REGISTERED EXCHANGE OFFER") to the Holders of
Transfer Restricted Securities (as defined in Section 6 hereof), who are not
prohibited by any law or policy of the Commission from participating in the
Registered Exchange Offer, to issue and deliver to such Holders, in exchange for
the Initial Securities, a like aggregate principal amount of debt securities of
the Company issued under the Indenture, identical in all material respects to
the Initial Securities and registered under the Securities Act (the "EXCHANGE
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SECURITIES"). The Company shall use its reasonable best efforts to (i) cause
such Exchange Offer Registration Statement to become effective under the
Securities Act as soon as practicable and in any event within 120 days after the
Closing Date (such 120th day being an "EFFECTIVENESS DEADLINE") and (ii) keep
the Exchange Offer Registration Statement effective for not less than 30 days
(or longer, if required by applicable law) after the date notice of the
Registered Exchange Offer is mailed to the Holders (such period being called the
"EXCHANGE OFFER REGISTRATION PERIOD").

            If the Company commences the Registered Exchange Offer, the Company
(i) will be entitled to consummate the Registered Exchange Offer 30 days after
such commencement (provided that the Company has accepted all the Initial
Securities theretofore validly tendered in accordance with the terms of the
Registered Exchange Offer) and (ii) will be required to consummate the
Registered Exchange Offer no later than 40 days after the date on which the
Exchange Offer Registration Statement is declared effective (such 40th day being
the "CONSUMMATION DEADLINE").

            Following the declaration of the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder of Transfer Restricted Securities electing to exchange the
Initial Securities for Exchange Securities (assuming that such Holder is not an
affiliate of the Company within the meaning of the Securities Act, acquires the
Exchange Securities in the ordinary course of such Holder's business and has no
arrangements with any person to participate in the distribution of the Exchange
Securities and is not prohibited by any law or policy of the Commission from
participating in the Registered Exchange Offer) to trade such Exchange
Securities from and after their receipt without any limitations or restrictions
under the Securities Act and without material restrictions under the securities
laws of the several states of the United States.

            The Company, the Initial Purchaser and each Exchanging Dealer (as
defined herein) acknowledge that, pursuant to current interpretations by the
Commission's staff of Section 5 of the Securities Act, in the absence of an
applicable exemption therefrom, (i) each Holder that is a broker-dealer electing
to exchange Initial Securities, acquired for its own account as a result of
market making activities or other trading activities, for Exchange Securities
(an "EXCHANGING DEALER"), is required to deliver a prospectus containing the
information set forth in (a) Annex A hereto on the cover, (b) Annex B hereto in
the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer"
section, and (c) Annex C hereto in the "Plan of Distribution" section of such
prospectus in connection with a sale of any such Exchange Securities received by
such Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) if the
Initial Purchaser elects to sell Securities (as defined below) acquired in
exchange for Initial Securities constituting any portion of an unsold allotment,
it is required to deliver a prospectus containing the information required by
Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in
connection with such sale.

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            The Company shall use its best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the prospectus
contained therein, in order to permit such prospectus to be lawfully delivered
by all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Securities; provided, however, that (i) in the
case where such prospectus and any amendment or supplement thereto must be
delivered by an Exchanging Dealer or the Initial Purchaser, such period shall be
the lesser of 180 days and the date on which all Exchanging Dealers and the
Initial Purchaser have sold all Exchange Securities held by them (unless such
period is extended pursuant to Section 3(j) below) and (ii) the Company shall
make such prospectus and any amendment or supplement thereto available to any
broker-dealer for use in connection with any resale of any Exchange Securities
for a period of not less than 180 days after the consummation of the Registered
Exchange Offer.

            If, upon consummation of the Registered Exchange Offer, the Initial
Purchaser holds Initial Securities acquired by it as part of its initial
distribution, the Company, simultaneously with the delivery of the Exchange
Securities pursuant to the Registered Exchange Offer, shall issue and deliver to
the Initial Purchaser upon the written request of the Initial Purchaser, in
exchange (the "PRIVATE EXCHANGE") for the Initial Securities held by the Initial
Purchaser, a like principal amount of debt securities of the Company issued
under the Indenture and identical in all material respects to the Initial
Securities (the "PRIVATE EXCHANGE SECURITIES"). The Initial Securities, the
Exchange Securities and the Private Exchange Securities are herein collectively
called the "SECURITIES".

            In connection with the Registered Exchange Offer, the Company shall:

                        (a) mail to each Holder a copy of the prospectus forming
            part of the Exchange Offer Registration Statement, together with an
            appropriate letter of transmittal and related documents;

                        (b) keep the Registered Exchange Offer open for not less
            than 30 days (or longer, if required by applicable law) after the
            date notice thereof is mailed to the Holders;

                        (c) utilize the services of a depositary for the
            Registered Exchange Offer with an address in the Borough of
            Manhattan, The City of New York, which may be the Trustee or an
            affiliate of the Trustee;

                        (d) permit Holders to withdraw tendered Securities at
            any time prior to the close of business, New York time, on the last
            business day on which the Registered Exchange Offer shall remain
            open; and

                        (e) otherwise comply with all laws applicable to the
            Registered Exchange Offer.

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            As soon as practicable after the close of the Registered Exchange
Offer or the Private Exchange, as the case may be, the Company shall:

                        (x) accept for exchange all the Securities validly
            tendered and not withdrawn pursuant to the Registered Exchange Offer
            and the Private Exchange;

                        (y) deliver to the Trustee for cancellation all the
            Initial Securities so accepted for exchange; and

                        (z) cause the Trustee to authenticate and deliver
            promptly to each Holder of the Initial Securities, Exchange
            Securities or Private Exchange Securities, as the case may be, equal
            in principal amount to the Initial Securities of such Holder so
            accepted for exchange.

            The Indenture will provide that the Exchange Securities will not be
subject to the transfer restrictions set forth in the Indenture and that all the
Securities will vote and consent together on all matters as one class and that
none of the Securities will have the right to vote or consent as a class
separate from one another on any matter.

            Interest on each Exchange Security and Private Exchange Security
issued pursuant to the Registered Exchange Offer and in the Private Exchange
will accrue from the last interest payment date on which interest was paid on
the Initial Securities surrendered in exchange therefor or, if no interest has
been paid on the Initial Securities, from the date of original issue of the
Initial Securities.

            Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Securities received by such Holder
will be acquired in the ordinary course of business, (ii) such Holder will have
no arrangements or understanding with any person to participate in the
distribution of the Securities or the Exchange Securities within the meaning of
the Securities Act, (iii) such Holder is not an "affiliate," as defined in Rule
405 of the Securities Act, of the Company or if it is an affiliate, such Holder
will comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable, (iv) if such Holder is not a
broker-dealer, that it is not engaged in, and does not intend to engage in, the
distribution of the Exchange Securities and (v) if such Holder is a
broker-dealer, that it will receive Exchange Securities for its own account in
exchange for Initial Securities that were acquired as a result of market-making
activities or other trading activities and that it will be required to
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Securities.

            Notwithstanding any other provisions hereof, the Company will ensure
that (i) any Exchange Offer Registration Statement and any amendment thereto and
any prospectus

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forming part thereof and any supplement thereto complies in all material
respects with the Securities Act and the rules and regulations thereunder, (ii)
any Exchange Offer Registration Statement and any amendment thereto does not,
when it becomes effective, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading and (iii) any prospectus forming part of
any Exchange Offer Registration Statement, and any supplement to such
prospectus, does not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

            2. Shelf Registration. If, (i) because of any change in law or in
applicable interpretations thereof by the staff of the Commission, the Company
is not permitted to effect a Registered Exchange Offer, as contemplated by
Section 1 hereof, (ii) the Registered Exchange Offer is not consummated by the
160th day after the Closing Date, (iii) the Initial Purchaser so requests with
respect to the Initial Securities (or the Private Exchange Securities) not
eligible to be exchanged for Exchange Securities in the Registered Exchange
Offer and held by it following consummation of the Registered Exchange Offer or
(iv) any Holder is not eligible to participate in the Registered Exchange Offer
or, in the case of any Holder (other than an Exchanging Dealer) that
participates in the Registered Exchange Offer, such Holder does not receive
freely tradeable Exchange Securities on the date of the exchange and any such
Holder so requests, the Company shall take the following actions (the date on
which any of the conditions described in the foregoing clauses (i) through (iv)
occur, including in the case of clauses (iii) or (iv) the receipt of the
required notice, being a "TRIGGER DATE"):

                        (a) The Company shall promptly (but in no event more
            than 60 days after the Trigger Date (such 60th day being a "FILING
            DEADLINE")) file with the Commission and thereafter use its best
            efforts to cause to be declared effective as soon as practicable and
            in any event no later than 120 days after the Trigger Date (such
            120th day being an "EFFECTIVENESS DEADLINE") a registration
            statement (the "SHELF REGISTRATION STATEMENT" and, together with the
            Exchange Offer Registration Statement, a "REGISTRATION STATEMENT")
            on an appropriate form under the Securities Act relating to the
            offer and sale of the Transfer Restricted Securities by the Holders
            thereof from time to time in accordance with the methods of
            distribution set forth in the Shelf Registration Statement and Rule
            415 under the Securities Act (hereinafter, the "SHELF
            REGISTRATION"); provided, however, that no Holder (other than the
            Initial Purchaser) shall be entitled to have the Securities held by
            it covered by such Shelf Registration Statement unless such Holder
            agrees in writing to be bound by all the provisions of this
            Agreement applicable to such Holder.

                        (b) The Company shall use its reasonable best efforts to
            keep the Shelf Registration Statement continuously effective in
            order to permit the prospectus

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            included therein to be lawfully delivered by the Holders of the
            relevant Securities, for a period of two years (or for such longer
            period if extended pursuant to Section 3(j) below) from the date of
            its effectiveness or such shorter period that will terminate when
            all the Securities covered by the Shelf Registration Statement (i)
            have been sold pursuant thereto or (ii) are no longer restricted
            securities (as defined in Rule 144 under the Securities Act, or any
            successor rule thereof) (the "SHELF REGISTRATION PERIOD"). The
            Company shall be deemed not to have used its reasonable best efforts
            to keep the Shelf Registration Statement effective during the
            requisite period if it voluntarily takes any action that would
            result in Holders of Securities covered thereby not being able to
            offer and sell such Securities during that period, unless such
            action is required by applicable law or otherwise permitted
            hereunder.

                        (c) Notwithstanding any other provisions of this
            Agreement to the contrary, the Company shall cause the Shelf
            Registration Statement and the related prospectus and any amendment
            or supplement thereto, as of the effective date of the Shelf
            Registration Statement, amendment or supplement, (i) to comply in
            all material respects with the applicable requirements of the
            Securities Act and the rules and regulations of the Commission and
            (ii) other than with respect to information included therein in
            reliance upon and in conformity with written information furnished
            to the Company by or on behalf of any Holder specifically for use
            therein (the "HOLDERS' INFORMATION"), not to contain any untrue
            statement of a material fact or omit to state a material fact
            required to be stated therein or necessary in order to make the
            statements therein (in the case of the prospectus, in light of the
            circumstances under which they were made) not misleading.

            3. Registration Procedures. In connection with any Shelf
Registration contemplated by Section 2 hereof and, to the extent applicable, any
Registered Exchange Offer contemplated by Section 1 hereof, the following
provisions shall apply:

                        (a) The Company shall (i) furnish to the Initial
            Purchaser, prior to the filing thereof with the Commission, a copy
            of the Registration Statement and each amendment thereof and each
            supplement, if any, to the prospectus included therein and, in the
            event that the Initial Purchaser (with respect to any portion of an
            unsold allotment from the original offering) is participating in the
            Registered Exchange Offer or the Shelf Registration Statement, the
            Company shall use its reasonable best efforts to reflect in each
            such document, when so filed with the Commission, such comments as
            the Initial Purchaser reasonably may propose; (ii) include the
            information set forth in Annex A hereto on the cover, in Annex B
            hereto in the "Exchange Offer Procedures" section and the "Purpose
            of the Exchange Offer" section and in Annex C hereto in the "Plan of
            Distribution" section of the prospectus forming a part of the
            Exchange Offer Registration Statement and include the information
            set forth in Annex D hereto in the Letter of Transmittal delivered
            pursuant to the Registered Exchange Offer; (iii) if requested by the
            Initial Purchaser, include the information required by Items 507 or
            508 of

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            Regulation S-K under the Securities Act, as applicable, in the
            prospectus forming a part of the Exchange Offer Registration
            Statement; (iv) include within the prospectus contained in the
            Exchange Offer Registration Statement a section entitled "Plan of
            Distribution," reasonably acceptable to the Initial Purchaser, which
            shall contain a summary statement of the positions taken or policies
            made by the staff of the Commission with respect to the potential
            "underwriter" status of any broker-dealer that is the beneficial
            owner (as defined in Rule 13d-3 under the Securities Exchange Act of
            1934, as amended (the "EXCHANGE ACT")) of Exchange Securities
            received by such broker-dealer in the Registered Exchange Offer (a
            "PARTICIPATING BROKER-DEALER"), whether such positions or policies
            have been publicly disseminated by the staff of the Commission or
            such positions or policies, in the reasonable judgment of the
            Initial Purchaser based upon advice of counsel (which may be
            in-house counsel), represent the prevailing views of the staff of
            the Commission; and (v) in the case of a Shelf Registration
            Statement, include the names of the Holders who propose to sell
            Securities pursuant to the Shelf Registration Statement as selling
            securityholders.

                        (b) The Company shall give written notice to the Initial
            Purchaser, the Holders of the Securities and any Participating
            Broker-Dealer from whom the Company has received prior written
            notice that it will be a Participating Broker-Dealer in the
            Registered Exchange Offer (which notice pursuant to clauses (ii)-(v)
            hereof shall be accompanied by an instruction to suspend the use of
            the prospectus until the requisite changes have been made):

                                    (i) when the Registration Statement or any
                        amendment thereto has been filed with the Commission and
                        when the Registration Statement or any post-effective
                        amendment thereto has become effective;

                                    (ii) of any request by the Commission for
                        amendments or supplements to the Registration Statement
                        or the prospectus included therein or for additional
                        information;

                                    (iii) of the issuance by the Commission of
                        any stop order suspending the effectiveness of the
                        Registration Statement or the initiation of any
                        proceedings for that purpose;

                                    (iv) of the receipt by the Company or its
                        legal counsel of any notification with respect to the
                        suspension of the qualification of the Securities for
                        sale in any jurisdiction or the initiation or
                        threatening of any proceeding for such purpose; and

                                    (v) of the happening of any event that
                        requires the Company to make changes in the Registration
                        Statement or the prospectus in order that the
                        Registration Statement or the prospectus do not contain
                        an untrue statement of a material fact nor omit to state
                        a material fact required to be

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                        stated therein or necessary to make the statements
                        therein (in the case of the prospectus, in light of the
                        circumstances under which they were made) not
                        misleading.

                        (c) The Company shall make every reasonable effort to
            obtain the withdrawal at the earliest possible time of any order
            suspending the effectiveness of the Registration Statement.

                        (d) The Company shall furnish to each Holder of
            Securities included within the coverage of the Shelf Registration,
            without charge, at least one copy of the Shelf Registration
            Statement and any post-effective amendment thereto, including
            financial statements and schedules, and, if the Holder so requests
            in writing, all exhibits thereto (including those, if any,
            incorporated by reference).

                        (e) The Company shall deliver to each Exchanging Dealer
            and the Initial Purchaser, and to any other Holder who so requests,
            without charge, at least one copy of the Exchange Offer Registration
            Statement and any post-effective amendment thereto, including
            financial statements and schedules, and, if any Initial Purchaser or
            any such Holder requests, all exhibits thereto (including those
            incorporated by reference).

                        (f) The Company shall, during the Shelf Registration
            Period, deliver to each Holder of Securities included within the
            coverage of the Shelf Registration, without charge, as many copies
            of the prospectus (including each preliminary prospectus) included
            in the Shelf Registration Statement and any amendment or supplement
            thereto as such person may reasonably request. The Company consents,
            subject to the provisions of this Agreement, to the use of the
            prospectus or any amendment or supplement thereto by each of the
            selling Holders of the Securities in connection with the offering
            and sale of the Securities covered by the prospectus, or any
            amendment or supplement thereto, included in the Shelf Registration
            Statement.

                        (g) The Company shall deliver to the Initial Purchaser,
            any Exchanging Dealer, any Participating Broker-Dealer and such
            other persons required to deliver a prospectus following the
            Registered Exchange Offer, without charge, as many copies of the
            final prospectus included in the Exchange Offer Registration
            Statement and any amendment or supplement thereto as such persons
            may reasonably request. The Company consents, subject to the
            provisions of this Agreement, to the use of the prospectus or any
            amendment or supplement thereto by the Initial Purchaser, if
            necessary, any Participating Broker-Dealer and such other persons
            required to deliver a prospectus following the Registered Exchange
            Offer in connection with the offering and sale of the Exchange
            Securities covered by the prospectus, or any amendment or supplement
            thereto, included in such Exchange Offer Registration Statement.

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                        (h) Prior to any public offering of the Securities
            pursuant to any Registration Statement the Company shall register or
            qualify or cooperate with the Holders of the Securities included
            therein and their respective counsel in connection with the
            registration or qualification of the Securities for offer and sale
            under the securities or "blue sky" laws of such states of the United
            States as any Holder of the Securities reasonably requests in
            writing and do any and all other acts or things necessary or
            advisable to enable the offer and sale in such jurisdictions of the
            Securities covered by such Registration Statement; provided,
            however, that the Company shall not be required to (i) qualify
            generally to do business in any jurisdiction where it is not then so
            qualified or (ii) take any action which would subject it to general
            service of process or to taxation in any jurisdiction where it is
            not then so subject.

                        (i) The Company shall cooperate with the Holders of the
            Securities to facilitate the timely preparation and delivery of
            certificates representing the Securities to be sold pursuant to any
            Registration Statement free of any restrictive legends and in such
            denominations and registered in such names as the Holders may
            request a reasonable period of time prior to sales of the Securities
            pursuant to such Registration Statement.

                        (j) Upon the occurrence of any event contemplated by
            paragraphs (ii) through (v) of Section 3(b) above during the period
            for which the Company is required to maintain an effective
            Registration Statement, the Company shall promptly prepare and file
            a post-effective amendment to the Registration Statement or a
            supplement to the related prospectus and any other required document
            so that, as thereafter delivered to Holders of the Securities or
            purchasers of Securities, the prospectus (other than the Holders'
            Information) will not contain an untrue statement of a material fact
            or omit to state any material fact required to be stated therein or
            necessary to make the statements therein (in the case of the
            prospectus, in light of the circumstances under which they were
            made) not misleading; provided, however, that the Company may delay
            filing and distributing any such supplement or amendment if there is
            a possible acquisition or business combination or other transaction
            involving the Company that would require disclosure in the
            Registration Statement or the related prospectus, and the Company
            determines in the exercise of its reasonable judgment that such
            disclosure is not in the best interest of the Company and its
            stockholders at such time; and provided, further, that the Company
            will not be entitled to delay filing or distributing any such
            supplement or amendment for more than twenty (20) days (whether or
            not consecutive) in any period of twelve (12) consecutive months. If
            the Company notifies the Initial Purchaser, the Holders of the
            Securities and any known Participating Broker-Dealer in accordance
            with paragraphs (ii) through (v) of Section 3(b) above to suspend
            the use of the prospectus until the requisite changes to the
            prospectus have been made, then the Initial Purchaser, the Holders
            of the Securities and any such Participating Broker-Dealers shall
            suspend use of such prospectus and discontinue disposition of such
            Securities until such Holder's

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            receipt of copies of the supplemental or amended prospectus or until
            advised in writing by the Company that use of the applicable
            prospectus may be resumed, and the period of effectiveness of the
            Shelf Registration Statement provided for in Section 2(b) above and
            the Exchange Offer Registration Statement provided for in Section 1
            above shall each be extended by the number of days from and
            including the date of the giving of such notice to and including the
            date when the Initial Purchaser, the Holders of the Securities and
            any known Participating Broker-Dealer shall have received such
            amended or supplemented prospectus or authorization to resume use of
            the applicable prospectus pursuant to this Section 3(j); provided,
            however, that such period of effectiveness including any such
            extension shall not exceed the holding period applicable to Rule
            144(k) of the Securities Act or any substitution or modification
            thereof.

                        (k) Not later than the effective date of the applicable
            Registration Statement, the Company will provide a CUSIP number for
            the Initial Securities, the Exchange Securities or the Private
            Exchange Securities, as the case may be, and provide the applicable
            trustee with printed certificates for the Initial Securities, the
            Exchange Securities or the Private Exchange Securities, as the case
            may be, in a form eligible for deposit with The Depository Trust
            Company.

                        (l) The Company will comply with all rules and
            regulations of the Commission to the extent and so long as they are
            applicable to the Registered Exchange Offer or the Shelf
            Registration and will make generally available to its security
            holders (or otherwise provide in accordance with Section 11(a) of
            the Securities Act) an earnings statement satisfying the provisions
            of Section 11(a) of the Securities Act, no later than 45 days after
            the end of a 12-month period (or 90 days, if such period is a fiscal
            year) beginning with the first month of the Company's first fiscal
            quarter commencing after the effective date of the Registration
            Statement, which statement shall cover such 12-month period.

                        (m) The Company shall cause the Indenture to be
            qualified under the Trust Indenture Act of 1939, as amended, in a
            timely manner and containing such changes, if any, as shall be
            necessary for such qualification. In the event that such
            qualification would require the appointment of a new trustee under
            the Indenture, the Company shall appoint a new trustee thereunder
            pursuant to the applicable provisions of the Indenture.

                        (n) The Company may require each Holder of Securities to
            be sold pursuant to the Shelf Registration Statement to furnish to
            the Company such information regarding the Holder and the
            distribution of the Securities as the Company may from time to time
            reasonably require for inclusion in the Shelf Registration
            Statement, and the Company may exclude from such registration the
            Securities of any Holder that unreasonably fails to furnish such
            information within a reasonable time after receiving such request.

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                        (o) The Company shall enter into such customary
            agreements (including, if requested, an underwriting agreement in
            customary form) and take all such other action, if any, as any
            Holder of the Securities shall reasonably request in order to
            facilitate the disposition of the Securities pursuant to any Shelf
            Registration.

                        (p) In the case of any Shelf Registration, the Company
            shall (i) make reasonably available for inspection by the Holders of
            the Securities, any underwriter participating in any disposition
            pursuant to the Shelf Registration Statement and any attorney,
            accountant or other agent retained by the Holders of the Securities
            or any such underwriter all relevant financial and other records,
            pertinent corporate documents and properties of the Company and (ii)
            cause the Company's officers, directors, employees, accountants and
            auditors to supply all relevant information reasonably requested by
            the Holders of the Securities or any such underwriter, attorney,
            accountant or agent in connection with the Shelf Registration
            Statement, in each case, as shall be reasonably necessary to enable
            such persons, to conduct a reasonable investigation within the
            meaning of Section 11 of the Securities Act; provided, however, that
            the foregoing inspection and information gathering shall be
            coordinated on behalf of the Initial Purchaser and on behalf of the
            other parties, by one counsel designated by and on behalf of such
            other parties as described in Section 4 hereof; and, provided
            further, that such persons shall maintain in confidence and use
            solely for the purposes of exercising their rights under this
            Agreement any information that is reasonably and in good faith
            designated by the Company as confidential at the time of delivery of
            such information, until such time as (i) disclosure of such
            information is required by court or administrative order or is
            necessary to respond to inquiries of regulatory authorities, (ii)
            disclosure of such information is required by law (including any
            disclosure requirements pursuant to federal securities laws in
            connection with the filing of any Registration Statement or the use
            of any prospectus referred to in this Agreement), (iii) such
            information becomes generally available to the public other than as
            a result of a disclosure or failure to safeguard by such person, or
            (iv) such information becomes available to such person from a source
            other than the Company and, to the knowledge of such person after
            reasonable inquiry, such source is not bound by a confidentiality
            agreement.

                        (q) In the case of any Shelf Registration, the Company,
            if requested by Holders of a majority in aggregate principal amount
            of Securities covered thereby, their counsel or managing
            underwriter, if any, shall cause Palmer & Dodge LLP, counsel for the
            Company, to deliver an opinion and updates thereof relating to the
            Securities in customary form addressed to such Holders and the
            managing underwriters, if any, thereof and dated, in the case of the
            initial opinion, the effective date of such Shelf Registration
            Statement, and solely to the effect that:

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                                      (i) The Company has been duly incorporated
                          and is a validly existing corporation in good standing
                          under the laws of the State of Florida, with corporate
                          power and authority to own, lease and operate its
                          properties and conduct its business as described in
                          the Shelf Registration Statement and the related
                          prospectus, and any amendment or supplement thereto,
                          and to enter into and perform its obligations under
                          the relevant agreement referred to in Section 3(o)
                          hereof and the Indenture;

                                      (ii) Each of the Securities and the
                          Indenture has been duly authorized, executed and
                          delivered by the Company; the Securities have been
                          validly issued and conform as to legal matters to the
                          description thereof contained in the prospectus, as
                          then amended or supplemented; the Securities and the
                          Indenture constitute valid and binding obligations of
                          the Company, enforceable against the Company in
                          accordance with their respective terms, subject to
                          bankruptcy, insolvency, fraudulent conveyance,
                          reorganization, moratorium and other similar laws
                          relating to or affecting creditors' rights generally
                          and general equitable principles; and the Securities
                          are entitled to the benefits of the Indenture;

                                      (iii) No filing, registration, or
                          qualification with, or authorization, approval,
                          consent, license, order or decree of, any court or
                          governmental agency or body is necessary or required
                          in connection with the due authorization, execution
                          and delivery of the relevant agreement of the type
                          referred to in Section 3(o) hereof or the Indenture or
                          for the issuance or delivery of the Securities by the
                          Company, except such as have been obtained or made
                          under the Securities Act, the applicable rules and
                          regulations thereunder, and the Trust Indenture Act or
                          such as may be required under state securities laws as
                          to which such counsel need express no opinion;

                                      (iv) The execution, delivery and
                          performance by the Company of the relevant agreement
                          of the type referred to in Section 3(o) hereof, the
                          Securities and the Indenture, and the consummation of
                          the transactions contemplated by such agreement and in
                          the Shelf Registration Statement, do not and will not,
                          whether with or without the giving of notice or lapse
                          of time or both, (i) violate, constitute a breach of,
                          or default under, or result in the creation or
                          imposition of any lien, charge or encumbrance upon any
                          property or assets of the Company pursuant to any
                          agreement or instrument that is listed as an exhibit
                          to the Company's Form 10-K for the year ended December
                          31, 2001 or any of the Company's Forms 10-Q or 8-K
                          filed thereafter but on or prior to the date of such
                          opinion, or (ii) violate (x) the charter or by-laws of
                          the Company, (y) any applicable statute or rule or
                          regulation, or (z) any judgment, order, writ or decree
                          known to such counsel of any government, government
                          instrumentality or court;

                                      -12-
<PAGE>
                                      (v) The Company is not an "investment
                          company" as defined in the Investment Company Act of
                          1940;

                                      (vi) The Indenture has been duly qualified
                          under the Trust Indenture Act;

                                      (vii) The relevant agreement referred to
                          in Section 3(o) hereof has been duly authorized,
                          executed and delivered by the Company;

                                      (viii) The Company is exempt from the
                          provisions of the Public Utility Holding Company Act,
                          except Section 9(a)(2) thereof relating to the
                          acquisition of securities of other public utility
                          companies;

                                      (ix) The Shelf Registration Statement has
                          become effective under the Securities Act, the related
                          prospectus, as amended or supplemented, was filed with
                          the Commission pursuant to the subparagraph of Rule
                          424(b) specified in such opinion within the time
                          period required by Rule 424(b) and, to the knowledge
                          of such counsel, no stop order suspending the
                          effectiveness of the Shelf Registration Statement or
                          any part thereof has been issued under the Securities
                          Act and no proceedings for that purpose have been
                          instituted or are pending or threatened by the
                          Commission;

                                      (x) The Shelf Registration Statement, the
                          related prospectus, excluding the documents
                          incorporated by reference therein, and each amendment
                          or supplement thereto, excluding the documents
                          incorporated by reference therein, as of their
                          respective effective or issue dates (other than the
                          financial statements and supporting schedules included
                          therein or omitted therefrom and the statements of
                          Eligibility on Form T-1 of the Trustee, as to which
                          such counsel need not express an opinion) complied as
                          to form in all material respects with the requirements
                          of the Securities Act, the applicable rules and
                          regulations thereunder and the Trust Indenture Act;

                                      (xi) The documents incorporated by
                          reference in the related prospectus and each amendment
                          or supplement thereto (other than the financial
                          statements and supporting schedules included therein
                          or omitted therefrom and the statements of Eligibility
                          on Form T-1 of the Trustee, as to which such counsel
                          need not express an opinion), when they became
                          effective or were filed with the Commission or as
                          subsequently amended prior to the date of the relevant
                          agreement of the type referred to in Section 3(o), as
                          the case may be, complied as to form in all material
                          respects with the requirements of the Exchange Act and
                          the Rules and Regulations thereunder; and

                                      -13-
<PAGE>
                                      (xii) The statements made in the
                          prospectus, as amended or supplemented, under the
                          caption "Description of the Notes" or such similar
                          caption, insofar as such statements purport to
                          constitute a summary of the terms of any of the
                          Indenture or the Securities, constitute an accurate
                          summary thereof in all material respects.

                        In giving such opinion, such counsel may limit its
            opinion to the law of The Commonwealth of Massachusetts and the
            federal law of the United States, and such counsel may rely as to
            all matters governed by the laws of jurisdictions other than the law
            of The Commonwealth of Massachusetts and the federal law of the
            United States, upon the opinion of counsel satisfactory to the
            Holders of a majority in aggregate principal amount of the
            Securities covered by the Shelf Registration Statement, their
            counsel or their managing underwriters, if any. Such counsel may
            also state that it has relied upon certificates of public officials
            and, insofar as such opinion involves factual matters, it has relied
            upon certificates of officers of the Company. In rendering its
            opinion, such counsel may rely as to matters of Florida law upon the
            opinion of Sheila M. McDevitt, Esq., and may assume the due
            authorization, execution and delivery of all documents by parties
            thereto, other than the Company. Such counsel shall also make a
            customary statement, as of the date of the opinion and as of the
            effective date of the Shelf Registration Statement or most recent
            post-effective amendment thereto, as the case may be, that no facts
            have come to such counsel's attention that causes such counsel to
            believe that the Shelf Registration Statement and the prospectus
            included therein, as then amended or supplemented, and any documents
            incorporated by reference therein contained any untrue statement of
            a material fact or omitted to state any material fact required to be
            stated therein or necessary to make the statements therein not
            misleading (in the case of any such documents, in the light of the
            circumstances existing at the time that such documents were filed
            with the Commission under the Exchange Act); and a customary
            statement that no facts have come to such counsel's attention that
            causes such counsel to believe that the prospectus included in the
            Shelf Registration Statement, as of its issue date or any closing
            date, or any amendment or supplement thereto, as of its issue date
            or any closing date, contained any untrue statement of a material
            fact or omitted to state any material fact necessary in order to
            make the statements therein, in the light of the circumstances under
            which they were made, not misleading; it being understood that such
            counsel need express no comment as to the Forms T-1 or the financial
            statements, including the notes thereto and supporting schedules, or
            other financial information and data contained in the Shelf
            Registration Statement of the prospectus, as amended or
            supplemented. With respect to such statement, such counsel may state
            that its belief is based upon procedures set forth therein
            satisfactory to the Holders of a majority in aggregate principal
            amount of Securities, their counsel or managing underwriter but is
            without independent investigation or verification.

                                      -14-

<PAGE>
                        (r) The Company, if requested by Holders of a majority
            in aggregate principal amount of Securities covered by the Shelf
            Registration Statement, their counsel or the managing underwriters,
            if any, shall further cause its general counsel to deliver an
            opinion and updates thereof relating to the Securities in customary
            form addressed to such Holders and the managing underwriters, if
            any, thereof and dated, in the case of the initial opinion, the
            effective date of such Shelf Registration Statement, and solely to
            the effect that:

                                      (i) The Company has been duly incorporated
                          and is a validly existing corporation in good standing
                          under the laws of the State of Florida, with corporate
                          power and authority to own, lease and operate its
                          properties and conduct its business as described in
                          the Shelf Registration Statement and the related
                          prospectus, and any amendment or supplement thereto,
                          and to enter into and perform its obligations under
                          the relevant agreement referred to in Section 3(o)
                          hereof and the Indenture;

                                      (ii) Each significant subsidiary (as such
                          term is defined in Rule 1-02 of Regulation S-X, each a
                          "Significant Subsidiary") has been duly incorporated
                          and is validly existing as a corporation in good
                          standing under the laws of the jurisdiction of its
                          incorporation, and has corporate power and authority
                          to own, lease and operate its properties and to
                          conduct its business as described in the Shelf
                          Registration Statement and the related prospectus, and
                          any amendment or supplement thereto; except as
                          otherwise disclosed in the prospectus, and any
                          amendment or supplement thereto, all of the issued and
                          outstanding capital stock of each Significant
                          Subsidiary has been duly authorized and validly
                          issued, is fully paid and non-assessable and is owned
                          of record and, to the best of such counsel's
                          knowledge, beneficially, by the Company, directly or
                          indirectly through subsidiaries of the Company, free
                          and clear of any lien, encumbrance or defect; and none
                          of the outstanding shares of capital stock of any
                          Significant Subsidiary was issued in violation of the
                          preemptive or, to the best of such counsel's
                          knowledge, similar rights of any securityholder of
                          such Significant Subsidiary;

                                      (iii) Each of the Securities and the
                          Indenture has been duly authorized, executed and
                          delivered by the Company; the Securities have been
                          validly issued and conform as to legal matters to the
                          description thereof contained in the prospectus, as
                          then amended or supplemented, and the Securities and
                          the Indenture constitute valid and binding obligations
                          of the Company, enforceable against the Company in
                          accordance with their respective terms, subject to
                          bankruptcy, insolvency, fraudulent conveyance,
                          reorganization, moratorium and other similar laws
                          relating to or affecting creditors' rights generally
                          and general equitable principles;

                                      -15-
<PAGE>
                                      (iv) All descriptions in the Shelf
                          Registration Statement of written contracts and other
                          documents to which the Company is a party are accurate
                          in all material respects; to the knowledge of such
                          counsel, there are no franchises, contracts,
                          indentures, mortgages, loan agreements, notes, leases
                          or other instruments required to be described or
                          referred to in the Shelf Registration Statement or to
                          be filed as exhibits thereto other than those
                          described or referred to therein or filed or
                          incorporated by reference as exhibits thereto, and the
                          descriptions thereof or references thereto are correct
                          in all material respects.

                                      (v) No filing, registration or
                          qualification with, or authorization, approval,
                          consent, license, order or decree of, any court or
                          governmental agency or body (including without
                          limitation the Florida Public Service Commission) is
                          necessary or required in connection with the due
                          authorization, execution and delivery of the relevant
                          agreement of the type referred to in Section 3(o)
                          hereof or the Indenture or for the issuance or
                          delivery of the Securities by the Company, except such
                          as may be required under state securities laws as to
                          which such counsel need express no opinion;

                                      (vi) The execution, delivery and
                          performance by the Company of the relevant agreement
                          of the type referred to in Section 3(o) hereof and the
                          Indenture, and the consummation of the transactions
                          contemplated by such agreement and the Shelf
                          Registration Statement do not and will not, whether
                          with or without the giving of notice or lapse of time
                          or both, (i) violate, constitute a breach of, or
                          default under, or result in the creation or imposition
                          of any lien, charge or encumbrance upon any property
                          or assets of the Company pursuant to any agreement or
                          instrument that is listed as an exhibit to the
                          Company's Form 10-K for the year ended December 31,
                          2001 or any of the Company's Forms 10-Q or 8-K filed
                          thereafter but on or prior to the date of such
                          opinion, or (ii) violate (x) the charter or by-laws of
                          the Company or any Significant Subsidiary, (y) any
                          applicable statute, rule or regulation, or (z) any
                          judgment, order, writ or decree known to such counsel
                          of any government, government instrumentality or
                          court; and

                                      (vii) the relevant agreement of the type
                          referred to in Section 3(o) hereof has been duly
                          authorized, executed and delivered by the Company;

                        In giving such opinion, such counsel may limit her
            opinion to the law of the State of Florida, and such counsel may
            rely as to all matters governed by the laws of jurisdictions other
            than the law of the State of Florida, upon the opinion of counsel
            satisfactory to the Holders of a majority in aggregate principal
            amount of the Securities covered by the Shelf Registration
            Statement, their counsel or their

                                      -16-
<PAGE>
            managing underwriters, if any. Such counsel may assume the due
            authorization, execution and delivery of documents by the parties
            thereto, other than the Company. Such counsel shall also make a
            customary statement, as of the date of the opinion and as of the
            effective date of the Shelf Registration Statement or most recent
            post-effective amendment thereto, as the case may be, that no facts
            have come to such counsel's attention that causes such counsel to
            believe that the Shelf Registration Statement and the prospectus
            included therein, as then amended or supplemented, and any documents
            incorporated by reference therein contained any untrue statement of
            a material fact or omitted to state any material fact required to be
            stated therein or necessary to make the statements therein not
            misleading (in the case of any such documents, in the light of the
            circumstances existing at the time that such documents were filed
            with the Commission under the Exchange Act); and a customary
            statement that no facts have come to such counsel's attention that
            causes such counsel to believe that the prospectus, as of its issue
            date or any closing date, or any amendment or supplement thereto, as
            of its issue date or any closing date, contained any untrue
            statement of a material fact or omitted to state any material fact
            necessary in order to make the statements therein, in the light of
            the circumstances under which they were made, not misleading; it
            being understood that such counsel need express no comment as to the
            Forms T-1 or the financial statements, including the notes thereto
            and supporting schedules, or other financial information and data
            contained in the Shelf Registration Statement of the prospectus, as
            amended or supplemented. With respect to such statement, such
            counsel may state that its belief is based upon procedures set forth
            therein satisfactory to the Holders of a majority in aggregate
            principal amount of Securities, their counsel or managing
            underwriter but is without independent investigation or
            verification.

                        (s) The Company, if requested by Holders of a majority
            in aggregate principal amount of Securities covered by the Shelf
            Registration Statement, their counsel or the managing underwriters,
            if any, shall further cause (i) its officers to execute and deliver
            all customary documents and certificates and updates thereof
            requested by any underwriters of the applicable Securities; and (ii)
            its independent public accountants to provide to the selling Holders
            of the applicable Securities and any underwriter therefor a comfort
            letter and updates thereof in customary form and covering matters of
            the type customarily covered in comfort letters in connection with
            primary underwritten offerings, subject to receipt of appropriate
            documentation as contemplated, and only if permitted, by Statement
            of Auditing Standards No. 72.

                        (t) In the case of the Registered Exchange Offer, if
            requested by the Initial Purchaser or any known Participating
            Broker-Dealer, the Company shall cause (i) its counsel to deliver to
            the Initial Purchaser or such Participating Broker-Dealer signed
            opinions in the form set forth in Section 6(c) and 6(d) of the
            Purchase Agreement with such changes as are customary in connection
            with the preparation of a Registration Statement and (ii) its
            independent public accountants

                                      -17-
<PAGE>
            to deliver to the Initial Purchaser or such Participating
            Broker-Dealer a comfort letter, in customary form, meeting the
            requirements as to the substance thereof as set forth in Section
            6(a) of the Purchase Agreement, with appropriate date changes.

                        (u) If a Registered Exchange Offer or a Private Exchange
            is to be consummated, upon delivery of the Initial Securities by
            Holders to the Company (or to such other Person as directed by the
            Company) in exchange for the Exchange Securities or the Private
            Exchange Securities, as the case may be, the Company shall mark, or
            cause to be marked, on the Initial Securities so exchanged that such
            Initial Securities are being canceled in exchange for the Exchange
            Securities or the Private Exchange Securities, as the case may be;
            in no event shall the Initial Securities be marked as paid or
            otherwise satisfied.

                        (v) In the event that any broker-dealer registered under
            the Exchange Act shall underwrite any Securities or participate as a
            member of an underwriting syndicate or selling group or "assist in
            the distribution" (within the meaning of the Conduct Rules (the
            "RULES") of the National Association of Securities Dealers, Inc.
            ("NASD")) thereof, whether as a Holder of such Securities or as an
            underwriter, a placement or sales agent or a broker or dealer in
            respect thereof, or otherwise, the Company will assist such
            broker-dealer in complying with the requirements of such Rules,
            including, without limitation, by (i) if such Rules, including Rule
            2720, shall so require, engaging a "qualified independent
            underwriter" (as defined in Rule 2720) to participate in the
            preparation of the Registration Statement relating to such
            Securities, to exercise usual standards of due diligence in respect
            thereto and, if any portion of the offering contemplated by such
            Registration Statement is an underwritten offering or is made
            through a placement or sales agent, to recommend the yield of such
            Securities, (ii) indemnifying any such qualified independent
            underwriter to the extent of the indemnification of underwriters
            provided in Section 5 hereof and (iii) providing such information to
            such broker-dealer as may be required in order for such
            broker-dealer to comply with the requirements of the Rules.

                        (w) The Company shall use its reasonable best efforts to
            take all other steps necessary to effect the registration of the
            Securities covered by a Registration Statement contemplated hereby.

            4.          Registration Expenses.

                        (a) All expenses incident to the Company's performance
            of and compliance with this Agreement will be borne by the Company,
            regardless of whether a Registration Statement is ever filed or
            becomes effective, including without limitation;

                                      (i) all registration and filing fees and
                          expenses;

                                      -18-
<PAGE>
                                      (ii) all fees and expenses of compliance
                          with federal securities and state "blue sky" or
                          securities laws;

                                      (iii) all expenses of printing (including
                          printing certificates for the Securities to be issued
                          in the Registered Exchange Offer and the Private
                          Exchange and printing of prospectuses), messenger and
                          delivery services and telephone;

                                      (iv) all fees and disbursements of counsel
                          for the Company;

                                      (v) all application and filing fees in
                          connection with listing the Exchange Securities on a
                          national securities exchange or automated quotation
                          system pursuant to the requirements hereof; and

                                      (vi) all fees and disbursements of
                          independent certified public accountants of the
                          Company (including the expenses of any special audit
                          and comfort letters required by or incident to such
                          performance).

            Notwithstanding the foregoing, in no event shall the Company be
            responsible for underwriting discounts or commissions or brokerage
            fees or commissions incurred by the selling Holders in connection
            with a Shelf Registration Statement. The Company will bear its
            internal expenses (including, without limitation, all salaries and
            expenses of its officers and employees performing legal or
            accounting duties), the expenses of any annual audit and the fees
            and expenses of any person, including special experts, retained by
            the Company. The Holders participating in any underwritten offering
            shall be responsible for any underwriting discounts and commissions
            and fees and expenses of counsel to the managing underwriters and
            the selling securityholders to the extent not required to be paid by
            the Company pursuant to this Section 4.

                        (b) In connection with any Registration Statement
            required by this Agreement, the Company will reimburse the Initial
            Purchaser and the Holders of Transfer Restricted Securities who are
            tendering Initial Securities in the Registered Exchange Offer and/or
            selling or reselling Securities pursuant to the "Plan of
            Distribution" contained in the Exchange Offer Registration Statement
            or the Shelf Registration Statement, as applicable, for the
            reasonable fees and disbursements of not more than one counsel, who
            shall be Ropes & Gray unless another firm shall be chosen by the
            Holders of a majority in principal amount of the Transfer Restricted
            Securities for whose benefit such Registration Statement is being
            prepared.

            5.          Indemnification.

                        (a) The Company agrees to indemnify and hold harmless
            each Holder of the Securities, any Participating Broker-Dealer and
            each person, if any, who

                                      -19-
<PAGE>
            controls such Holder or such Participating Broker-Dealer within the
            meaning of the Securities Act or the Exchange Act (each Holder, any
            Participating Broker-Dealer and such controlling persons are
            referred to collectively as the "INDEMNIFIED PARTIES") from and
            against any losses, claims, damages or liabilities, joint or
            several, or any actions in respect thereof (including, but not
            limited to, any losses, claims, damages, liabilities or actions
            relating to purchases and sales of the Securities) to which each
            Indemnified Party may become subject under the Securities Act, the
            Exchange Act or otherwise, insofar as such losses, claims, damages,
            liabilities or actions arise out of or are based upon any untrue
            statement or alleged untrue statement of a material fact contained
            in a Registration Statement or prospectus or in any amendment or
            supplement thereto or in any preliminary prospectus relating to a
            Shelf Registration, or arise out of, or are based upon, the omission
            or alleged omission to state therein a material fact required to be
            stated therein or necessary to make the statements therein not
            misleading, and shall reimburse, as incurred, the Indemnified
            Parties for any legal or other expenses reasonably incurred by them
            in connection with investigating or defending any such loss, claim,
            damage, liability or action in respect thereof; provided, however,
            that (i) the Company shall not be liable in any such case to the
            extent that such loss, claim, damage or liability arises out of or
            is based upon any untrue statement or alleged untrue statement or
            omission or alleged omission made in a Registration Statement or
            prospectus or in any amendment or supplement thereto or in any
            preliminary prospectus relating to a Shelf Registration in reliance
            upon and in conformity with written information pertaining to such
            Holder and furnished to the Company by or on behalf of such Holder
            specifically for inclusion therein and (ii) with respect to any
            untrue statement or omission or alleged untrue statement or omission
            made in any preliminary prospectus relating to a Shelf Registration
            Statement, the indemnity agreement contained in this subsection (a)
            shall not inure to the benefit of any Holder or Participating
            Broker-Dealer from whom the person asserting any such losses,
            claims, damages or liabilities purchased the Securities concerned,
            to the extent that a prospectus relating to such Securities was
            required to be delivered by such Holder or Participating
            Broker-Dealer under the Securities Act in connection with such
            purchase and any such loss, claim, damage or liability of such
            Holder or Participating Broker-Dealer results from the fact that
            there was not sent or given to such person, at or prior to the
            written confirmation of the sale of such Securities to such person,
            a copy of the final prospectus if such loss, claim, damage or
            liability is determined by a court of competent jurisdiction to
            arise out of an untrue statement or omission that was corrected in
            the final prospectus and the Company had previously furnished
            sufficient copies thereof to such Holder or Participating
            Broker-Dealer in sufficient time to enable such Holder or
            Participating Broker-Dealer to deliver to such person such
            prospectus; provided further, however, that this indemnity agreement
            will be in addition to any liability which the Company may otherwise
            have to such Indemnified Party. The Company shall also indemnify
            underwriters, their officers and directors and each

                                      -20-
<PAGE>
            person who controls such underwriters within the meaning of the
            Securities Act or the Exchange Act to the same extent as provided
            above with respect to the indemnification of the Holders of the
            Securities if requested by such Holders.

                        (b) Each Holder of the Securities, severally and not
            jointly, will indemnify and hold harmless the Company and each
            person, if any, who controls the Company within the meaning of the
            Securities Act or the Exchange Act from and against any losses,
            claims, damages or liabilities or any actions in respect thereof, to
            which the Company or any such controlling person may become subject
            under the Securities Act, the Exchange Act or otherwise, insofar as
            such losses, claims, damages, liabilities or actions arise out of or
            are based upon any untrue statement or alleged untrue statement of a
            material fact contained in a Registration Statement or prospectus or
            in any amendment or supplement thereto or in any preliminary
            prospectus relating to a Shelf Registration, or arise out of or are
            based upon the omission or alleged omission to state therein a
            material fact necessary to make the statements therein not
            misleading, but in each case only to the extent that the untrue
            statement or omission or alleged untrue statement or omission was
            made in reliance upon and in conformity with written information
            pertaining to such Holder and furnished to the Company by or on
            behalf of such Holder specifically for inclusion therein; and,
            subject to the limitation set forth immediately preceding this
            clause, shall reimburse, as incurred, the Company for any legal or
            other expenses reasonably incurred by the Company or any such
            controlling person in connection with investigating or defending any
            loss, claim, damage, liability or action in respect thereof. This
            indemnity agreement will be in addition to any liability which such
            Holder may otherwise have to the Company or any of its controlling
            persons.

                        (c) Promptly after receipt by an indemnified party under
            this Section 5 of notice of the commencement of any action or
            proceeding (including a governmental investigation), such
            indemnified party will, if a claim in respect thereof is to be made
            against the indemnifying party under this Section 5, notify the
            indemnifying party of the commencement thereof; but the omission so
            to notify the indemnifying party will not, in any event, relieve the
            indemnifying party from any obligations to any indemnified party
            other than the indemnification obligation provided in paragraph (a)
            or (b) above. In case any such action is brought against any
            indemnified party, and it notifies the indemnifying party of the
            commencement thereof, the indemnifying party will be entitled to
            participate therein and, to the extent that it may wish, jointly
            with any other indemnifying party similarly notified, to assume the
            defense thereof, with counsel reasonably satisfactory to such
            indemnified party (who shall not, except with the consent of the
            indemnified party, be counsel to the indemnifying party), and after
            notice from the indemnifying party to such indemnified party of its
            election so to assume the defense thereof the indemnifying party
            will not be liable to such indemnified party under this Section 5
            for any legal or other expenses, other than reasonable costs of
            investigation, subsequently incurred by such indemnified party in
            connection with

                                      -21-
<PAGE>
            the defense thereof. No indemnifying party shall, without the prior
            written consent of the indemnified party, effect any settlement of
            any pending or threatened action in respect of which any indemnified
            party is or could have been a party and indemnity could have been
            sought hereunder by such indemnified party unless such settlement
            (i) includes an unconditional release of such indemnified party from
            all liability on any claims that are the subject matter of such
            action, and (ii) does not include a statement as to or an admission
            of fault, culpability or a failure to act by or on behalf of any
            indemnified party.

                        (d) If the indemnification provided for in this Section
            5 is unavailable or insufficient to hold harmless an indemnified
            party under subsections (a) or (b) above, then each indemnifying
            party shall contribute to the amount paid or payable by such
            indemnified party as a result of the losses, claims, damages or
            liabilities (or actions in respect thereof) referred to in
            subsection (a) or (b) above in such proportion as is appropriate to
            reflect the relative fault of the indemnifying party or parties on
            the one hand and the indemnified party on the other in connection
            with the statements or omissions that resulted in such losses,
            claims, damages or liabilities (or actions in respect thereof) as
            well as any other relevant equitable considerations. The relative
            fault of the parties shall be determined by reference to, among
            other things, whether the untrue or alleged untrue statement of a
            material fact or the omission or alleged omission to state a
            material fact relates to information supplied by the Company on the
            one hand or such Holder or such other indemnified party, as the case
            may be, on the other, and the parties' relative intent, knowledge,
            access to information and opportunity to correct or prevent such
            statement or omission. The amount paid by an indemnified party as a
            result of the losses, claims, damages or liabilities referred to in
            the first sentence of this subsection (d) shall be deemed to include
            any legal or other expenses reasonably incurred by such indemnified
            party in connection with investigating or defending any action or
            claim which is the subject of this subsection (d). Notwithstanding
            any other provision of this Section 5(d), the Holders of the
            Securities shall not be required to contribute any amount in excess
            of the amount by which the net proceeds received by such Holders
            from the sale of the Securities pursuant to a Registration Statement
            exceeds the amount of damages which such Holders have otherwise been
            required to pay by reason of such untrue or alleged untrue statement
            or omission or alleged omission. No person guilty of fraudulent
            misrepresentation (within the meaning of Section 11(f) of the
            Securities Act) shall be entitled to contribution from any person
            who was not guilty of such fraudulent misrepresentation. For
            purposes of this paragraph (d), each person, if any, who controls
            such indemnified party within the meaning of the Securities Act or
            the Exchange Act shall have the same rights to contribution as such
            indemnified party and each person, if any, who controls the Company
            within the meaning of the Securities Act or the Exchange Act shall
            have the same rights to contribution as the Company.

                                      -22-
<PAGE>
                        (e) The agreements contained in this Section 5 shall
            survive the sale of the Securities pursuant to a Registration
            Statement and shall remain in full force and effect, regardless of
            any termination or cancellation of this Agreement or any
            investigation made by or on behalf of any indemnified party.

            6.          Additional Interest Under Certain Circumstances.

                        (a) Additional interest (the "ADDITIONAL INTEREST") with
            respect to the Transfer Restricted Securities shall be assessed as
            follows if any of the following events occur (each such event in
            clauses (i) through (iv) below being herein called a "REGISTRATION
            DEFAULT"):

                                      (i) any Registration Statement required by
                          this Agreement is not filed with the Commission on or
                          prior to the applicable Filing Deadline;

                                      (ii) any Registration Statement required
                          by this Agreement is not declared effective by the
                          Commission on or prior to the applicable Effectiveness
                          Deadline;

                                      (iii) the Registered Exchange Offer has
                          not been consummated on or prior to the Consummation
                          Deadline; or

                                      (iv) any Registration Statement required
                          by this Agreement has been declared effective by the
                          Commission but (A) such Registration Statement
                          thereafter ceases to be effective or (B) such
                          Registration Statement or the related prospectus
                          ceases to be usable (except as permitted in paragraph
                          (b)) in connection with resales of Transfer Restricted
                          Securities during the periods specified herein because
                          either (1) any event occurs as a result of which the
                          related prospectus forming part of such Registration
                          Statement would include any untrue statement of a
                          material fact or omit to state any material fact
                          necessary to make the statements therein in the light
                          of the circumstances under which they were made not
                          misleading, or (2) it shall be necessary to amend such
                          Registration Statement or supplement the related
                          prospectus, to comply with the Securities Act or the
                          Exchange Act or the respective rules thereunder.

            Each of the foregoing will constitute a Registration Default
whatever the reason for any such event and whether it is voluntary or
involuntary or is beyond the control of the Company or pursuant to operation of
law or as a result of any action or inaction by the Commission.

            Additional Interest shall accrue on the Transfer Restricted
Securities over and above the interest set forth in the title of the Transfer
Restricted Securities from and

                                      -23-
<PAGE>
including the date on which any such Registration Default shall occur to but
excluding the date on which all such Registration Defaults have been cured, at a
rate of 0.50% per annum (the "ADDITIONAL INTEREST RATE") for the first 90-day
period immediately following the occurrence of such Registration Default. The
Additional Interest Rate shall increase by an additional 0.50% per annum with
respect to each subsequent 90-day period until all Registration Defaults have
been cured, up to a maximum Additional Interest Rate of 2.0% per annum.

                        (b) A Registration Default referred to in Section
            6(a)(iv) hereof shall be deemed not to have occurred and be
            continuing in relation to a Shelf Registration Statement or the
            related prospectus if (i) such Registration Default has occurred
            solely as a result of (x) the filing of a post-effective amendment
            to such Shelf Registration Statement to incorporate annual audited
            financial information with respect to the Company where such
            post-effective amendment is not yet effective and needs to be
            declared effective to permit Holders to use the related prospectus
            or (y) other material events, with respect to the Company that would
            need to be described in such Shelf Registration Statement or the
            related prospectus and (ii) in the case of clause (y), the Company
            is either proceeding promptly and in good faith to amend or
            supplement such Shelf Registration Statement and related prospectus
            to describe such events or the Company has delayed filing and
            distributing such amendment or supplement pursuant to the first and
            second provisos of the first sentence of Section 3(j) of this
            Agreement; provided, however, that in any case if such Registration
            Default occurs for a continuous period in excess of 30 days,
            Additional Interest shall be payable in accordance with the above
            paragraph from the day such Registration Default occurs until such
            Registration Default is cured.

                        (c) Any amounts of Additional Interest due pursuant to
            Section 6(a) will be payable in cash on the regular interest payment
            dates with respect to the Transfer Restricted Securities. The amount
            of Additional Interest will be determined by multiplying the
            applicable Additional Interest Rate by the principal amount of the
            Transfer Restricted Securities and further multiplied by a fraction,
            the numerator of which is the number of days such Additional
            Interest Rate was applicable during such period (determined on the
            basis of a 360-day year comprised of twelve 30-day months), and the
            denominator of which is 360.

                        (d) "TRANSFER RESTRICTED SECURITIES" means each Security
            until (i) the date on which such Security has been exchanged by a
            person other than a broker-dealer for a freely transferable Exchange
            Security in the Registered Exchange Offer, (ii) following the
            exchange by a broker-dealer in the Registered Exchange Offer of an
            Initial Security for an Exchange Security, the date on which such
            Exchange Security is sold to a purchaser who receives from such
            broker-dealer on or prior to the date of such sale a copy of the
            prospectus contained in the Exchange Offer Registration Statement,
            (iii) the date on which

                                      -24-
<PAGE>
            such Security has been effectively registered under the Securities
            Act and disposed of in accordance with the Shelf Registration
            Statement or (iv) the date on which such Security is distributed to
            the public pursuant to Rule 144 under the Securities Act or is
            saleable pursuant to Rule 144(k) under the Securities Act.

            7. Rules 144 and 144A. The Company shall use its reasonable best
efforts to file the reports required to be filed by it under the Securities Act
and the Exchange Act in a timely manner and, if at any time the Company is not
required to file such reports, it will, upon the request of any Holder of
Transfer Restricted Securities, make publicly available other information so
long as necessary to permit sales of their securities pursuant to Rules 144 and
144A. The Company covenants that it will take such further action as any Holder
of Transfer Restricted Securities may reasonably request, all to the extent
required from time to time to enable such Holder to sell Transfer Restricted
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rules 144 and 144A (including the requirements of
Rule 144A(d)(4)). The Company will provide a copy of this Agreement to
prospective purchasers of Initial Securities identified to the Company by the
Initial Purchaser upon request. Upon the request of any Holder of Initial
Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements. Notwithstanding the foregoing,
nothing in this Section 7 shall be deemed to require the Company to register any
of its securities pursuant to the Exchange Act.

            8. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Shelf Registration are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will administer the offering ("MANAGING UNDERWRITERS") will be selected by
the Holders of a majority in aggregate principal amount of such Transfer
Restricted Securities to be included in such offering, subject to the approval
of the Company (which shall not be unreasonably withheld) and provided that at
least 10% of the outstanding Transfer Restricted Securities are included in such
underwritten offering. The Company shall not be obligated to arrange for more
than two underwritten offerings during the Shelf Registration Period.

            No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.

            9.          Miscellaneous.

                        (a) Remedies. The Company acknowledges and agrees that
            any failure by the Company to comply with its obligations under
            Section 1 and 2 hereof may result in material irreparable injury to
            the Initial Purchaser or the Holders for which there is no adequate
            remedy at law, that it will not be possible to measure

                                      -25-
<PAGE>
            damages for such injuries precisely and that, in the event of any
            such failure, the Initial Purchaser or any Holder may obtain such
            relief as may be required to specifically enforce the Company's
            obligations under Sections 1 and 2 hereof. The Company further
            agrees to waive the defense in any action for specific performance
            that a remedy at law would be adequate.

                        (b) No Inconsistent Agreements. The Company will not on
            or after the date of this Agreement enter into any agreement with
            respect to its securities that is inconsistent with the rights
            granted to the Holders in this Agreement or otherwise conflicts with
            the provisions hereof. The rights granted to the Holders hereunder
            do not in any way conflict with and are not inconsistent with the
            rights granted to the holders of the Company's securities under any
            agreement in effect on the date hereof.

                        (c) Amendments and Waivers. The provisions of this
            Agreement may not be amended, modified or supplemented, and waivers
            or consents to departures from the provisions hereof may not be
            given, except by the Company and the written consent of the Holders
            of a majority in principal amount of the Securities affected by such
            amendment, modification, supplement, waiver or consents. Without the
            consent of the Holder of each Security, however, no modification may
            change the provisions relating to the payment of Additional
            Interest.

                        (d) Notices. All notices and other communications
            provided for or permitted hereunder shall be made in writing by hand
            delivery, first-class mail, facsimile transmission, or air courier
            which guarantees overnight delivery:

                                    (1) if to a Holder of the Securities, at
                          the most current address given by such Holder to the
                          Company.

                                    (2) if to the Initial Purchaser;

                                    Credit Suisse First Boston Corporation
                                    Eleven Madison Avenue
                                    New York, NY 10010-3629
                                    Fax No.:  (212) 325-8278
                                    Attention:  Transactions Advisory Group

                          with a copy to:

                                    Ropes & Gray
                                    One International Place
                                    Boston, MA 02110
                                    Fax No.: (617) 951-7050
                                    Attention: Mark V. Nuccio

                                      -26-
<PAGE>
                                    (3) if to the Company, at its address as
                          follows:

                                    TECO Energy, Inc.
                                    702 North Franklin Street
                                    Tampa, FL 33602
                                    Attention:  General Counsel

                          with a copy to:

                                    Palmer & Dodge LLP
                                    111 Huntington Avenue
                                    Boston, MA 02199-4111
                                    Attention: David R. Pokross, Jr.

            All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; three
business days after being deposited in the mail, postage prepaid, if mailed;
when receipt is acknowledged by recipient's facsimile machine operator, if sent
by facsimile transmission; and on the day delivered, if sent by overnight air
courier guaranteeing next day delivery.

                        (e) Third Party Beneficiaries. The Holders shall be
            third party beneficiaries to the agreements made hereunder between
            the Company, on the one hand, and the Initial Purchaser, on the
            other hand, and shall have the right to enforce such agreements
            directly to the extent they may deem such enforcement necessary or
            advisable to protect their rights or the rights of Holders
            hereunder.

                        (f) Successors and Assigns. This Agreement shall be
            binding upon the Company and its successors and assigns.

                        (g) Counterparts. This Agreement may be executed in any
            number of counterparts and by the parties hereto in separate
            counterparts, each of which when so executed shall be deemed to be
            an original and all of which taken together shall constitute one and
            the same agreement.

                        (h) Headings. The headings in this Agreement are for
            convenience of reference only and shall not limit or otherwise
            affect the meaning hereof.

                        (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
            AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
            WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

                        (j) Severability. If any one or more of the provisions
            contained herein, or the application thereof in any circumstance, is
            held invalid, illegal or

                                      -27-
<PAGE>
            unenforceable, the validity, legality and enforceability of any such
            provision in every other respect and of the remaining provisions
            contained herein shall not be affected or impaired thereby.

                        (k) Securities Held by the Company. Whenever the consent
            or approval of Holders of a specified percentage of principal amount
            of Securities is required hereunder, Securities held by the Company
            or its affiliates (other than subsequent Holders of Securities if
            such subsequent Holders are deemed to be affiliates solely by reason
            of their holdings of such Securities) shall not be counted in
            determining whether such consent or approval was given by the
            Holders of such required percentage.

                        (l) Submission to Jurisdiction. The Company hereby
            submits to the non-exclusive jurisdiction of the Federal and state
            courts in the Borough of Manhattan in The City of New York in any
            suit or proceeding arising out of or relating to this Agreement or
            the transactions contemplated hereby.

                                      -28-
<PAGE>
            If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Initial Purchaser and the Company in accordance with its terms.

                                               Very truly yours,

                                               TECO ENERGY, INC.

                                               By /s/ Sandra W. Callahan
                                                  -------------------------
                                                  Name:  Sandra W. Callahan
                                                  Title: Vice President/Treasury
                                                         and Risk Management and
                                                         Treasurer

The foregoing Registration
Rights Agreement is hereby
confirmed and accepted as
of the date first above
written.

CREDIT SUISSE FIRST BOSTON CORPORATION

By /s/ James Bartlett
   -----------------------------
    Name:  James Bartlett
    Title: Managing Director
<PAGE>
                                                                         ANNEX A

            Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. The Letter
of Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Securities received in exchange for Initial Securities
where such Initial Securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution."
<PAGE>
                                                                         ANNEX B

            Each broker-dealer that receives Exchange Securities for its own
account in exchange for Initial Securities, where such Initial Securities were
acquired by such broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Securities. See "Plan of
Distribution."
<PAGE>
                                                                         ANNEX C

                              PLAN OF DISTRIBUTION

            Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received in
exchange for Initial Securities where such Initial Securities were acquired as a
result of market-making activities or other trading activities. The Company has
agreed that, for a period of 180 days after the Expiration Date, it will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, until , 200 , all dealers
effecting transactions in the Exchange Securities may be required to deliver a
prospectus.(1)

            The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers for
their own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Securities or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any such Exchange
Securities. Any broker-dealer that resells Exchange Securities that were
received by it for its own account pursuant to the Exchange Offer and any broker
or dealer that participates in a distribution of such Exchange Securities may be
deemed to be an "underwriter" within the meaning of the Securities Act and any
profit on any such resale of Exchange Securities and any commission or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that, by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.

--------

(1) In addition, the legend, if any, required by Item 502(b) of Regulation S-K
will appear on the inside front cover page of the Exchange Offer prospectus
below the Table of Contents.
<PAGE>
            For a period of 180 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for the
Holders of the Securities) other than commissions or concessions of any brokers
or dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
<PAGE>
                                                                         ANNEX D

[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

          Name:_______________________________________

          Address:____________________________________

If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Initial Securities that were
acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.<PAGE>

                             SHAREHOLDERS AGREEMENT

         This SHAREHOLDERS AGREEMENT (the "Agreement") is dated as of September
18, 2002 by and among the persons identified as shareholders on the signature
pages attached hereto (individually, a "Shareholder" and collectively, the
"Shareholders") and Valesc Inc., a Delaware corporation (the "Company").

         WHEREAS, the parties hereto deem it in their best interests to enter
into this Agreement in order to set forth their respective rights and
obligations in connection with the sale of shares of these shares of Common
Stock;

         WHEREAS, the shares issued upon exercise of warrants are registered
pursuant to a registration statement declared effective by the Securities and
Exchange Commission on August 8, 2002;

         WHEREAS, the parties hereto desire to restrict the sale, assignment,
transfer, encumbrance, or other disposition of Common Stock pursuant to the
terms hereof;

         NOW, THEREFORE, for and in consideration of the mutual agreements and
understandings set forth herein, the parties hereby agree as follows:

                                   ARTICLE I
                         DEFINITIONS AND RELATED MATTERS

         Section 1.1  Definitions. When used in this Agreement, the following
terms shall have the meanings set forth below:

         "Common Stock" means the common stock, $.0001 par value per share, of
the Company.

         "Disposition" means any (a) offer to sell, sale, contract to sell,
pledge, grant of any option to purchase, grant of a security interest in or
otherwise encumbering or directly or indirectly otherwise disposing of, any
Shares or any security or other right that represents the right to acquire or
receive any Shares, or (b) entering into any swap, hedge or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of any Shares, whether any such transaction described in clause (a)
or (b) above is to be settled by delivery of equity securities, in cash or
otherwise.

         "Person" means an individual, partnership, limited partnership, limited
liability company, foreign limited liability company, trust, estate,
corporation, association, enterprise, custodian, trustee, executor,
administrator, nominee, or entity in a representative capacity.

         "Personal Representative" means the executor, administrator, guardian,
or other personal representative of any natural person who has become deceased
or subject to Disability, or any successor or assignee thereof whether by
operation of law or otherwise.

         "Securities Act" means the Securities Act of 1933, as amended from time
to time and any successor statute thereto, and the rules and regulations
promulgated thereunder.

<PAGE>

         "Shareholders" has the meaning given in the preamble to this Agreement.

         "Shares" means the shares of Common Stock issued to the Shareholders on
the date hereof upon exercise of warrants, in the amounts specified on the
signature page hereto, and shall include the community interest, if any, of the
spouse of such Shareholder in such Common Stock.

         Section 1.2  Related Definitional Matters. As used in this Agreement,
pronouns in masculine, feminine and neuter genders shall be construed to include
any other gender, and words in the singular form shall be construed to include
the plural and vice versa, unless the context clearly otherwise requires. As
used in this Agreement, the term "including" shall be construed to be expansive
rather than limiting in nature and to mean "including without limitation",
except where the context clearly otherwise requires.

         Section 1.3  Shares Subject to Agreement. This Agreement shall apply to
all Shares acquired by each of the Shareholders on the date hereof upon exercise
of warrants, in the amounts specified on the signature page hereto, whether such
Shares constitute the separate property or community property of any of the
individual Shareholders, and regardless of the capacity in which title to such
shares is held or taken.

                                   ARTICLE II
                     RESTRICTIONS ON DISPOSITIONS OF SHARES

Section 2.1  Restrictions on Dispositions.

         (a) General Restriction. Notwithstanding that the Shares are registered
under the Securities Exchange Act of 1933, as amended, no Shareholder, any
spouse of any Shareholder, any Personal Representative of any Shareholder, or
any legal representative, agent, or assignee of any Shareholder or any spouse of
any Shareholder, as the case may be, shall make any Disposition of any Shares,
or any right or interest therein, except as provided in this Article. The
parties agree that the restrictions contained in this Agreement are fair and
reasonable and in the best interests of the Company and the Shareholders.

         (b) Compliance with Securities Laws. Anything in this Agreement to the
contrary notwithstanding, no Disposition of Shares otherwise permitted or
required by this Agreement shall be made unless such Disposition is in
compliance with federal and state securities laws.

         (c) Transferees Subject to Agreement. Except for Dispositions in
accordance with paragraph (e) below, unless otherwise agreed to in writing by
the Company, no Disposition of Shares shall be effective unless and until the
transferee shall execute and deliver to the Company an Addendum Agreement in the
form attached hereto as Exhibit A in which such transferee agrees to be bound by
this Agreement and to observe and comply with this Agreement and with all
obligations and restrictions imposed on Shareholders hereby; each person to whom
a Disposition of Shares is permitted by this Agreement who receives a
Disposition of Shares during the period when this Agreement is in effect, and
who agrees in writing to be bound by the provisions hereof, shall thereafter
become a "Shareholder" for all purposes of this Agreement.

         (d) Non-conforming Dispositions Void. Dispositions of Shares may only
be made in strict compliance with all applicable terms of this Agreement, and
any purported Disposition of Shares that does not so comply with all applicable
provisions of this Agreement shall be null and

                                       2

<PAGE>

void and of no force or effect, and the Company shall not recognize nor be bound
by any such purported Disposition and shall not effect any such purported
Disposition on the stock transfer books of the Company.

         (e) Volume Limitations. Beginning on the date 60 days after the date on
which the Company's Common Stock is listed for trading on the OTC Bulletin
Board, each of the Shareholders may dispose of up to 10% of the aggregate Shares
they each own. Thereafter, on each one month anniversary, each of the
Shareholders may dispose of up to 10% of their remaining Shares.

         Section 2.2  Endorsement of Stock Certificates. Conformed copies of
this Agreement shall be filed with the Secretary of the Company and kept with
the records of the Company at its principal office. An officer of the Company
shall endorse each certificate representing the shares of Common Stock
heretofore or hereafter issued by the Company by causing to be placed on the
face thereof the following:

                  TRANSFER IS SUBJECT TO RESTRICTIVE STOCK LEGEND ON BACK

and by causing to be placed on the back thereof the following legend:

                  THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE
                  SUBJECT TO THE TERMS OF A SHAREHOLDERS AGREEMENT DATED AS OF
                  SEPTEMBER 18, 2002, BY AND AMONG THE COMPANY AND CERTAIN
                  OTHER PERSONS, WHICH AGREEMENT CONTAINS, AMONG OTHER
                  PROVISIONS, RESTRICTIONS ON THE TRANSFER, SALE, PLEDGE,
                  HYPOTHECATION, ASSIGNMENT, OR OTHER DISPOSITION OF THE SHARES
                  OF STOCK REPRESENTED BY THIS CERTIFICATE. A COPY OF SUCH
                  SHAREHOLDERS AGREEMENT HAS BEEN FILED, AND IS AVAILABLE FOR
                  REVIEW BY THE RECORD HOLDER OF THIS CERTIFICATE, AT THE
                  PRINCIPAL OFFICE OF THE COMPANY.

         Section 2.3  Specific Performance. Each of the Shareholders
acknowledges that it shall be impossible to measure in money the damage to the
Company, if any of them or any transferee or any legal representative of any
party hereto fails to comply with any of the restrictions or obligations imposed
by this Article, that every such restriction and obligation is material, and
that in the event of any such failure, the Company shall not have an adequate
remedy at law or in damages. Therefore, each Shareholder consents to the
issuance of an injunction or the enforcement of other equitable remedies against
him at the suit of an aggrieved party without the posting of any bond or other
security, to compel specific performance of all of the terms of this Article and
to prevent any disposition of Shares in contravention of any terms of this
Article, and waives any defenses thereto, including, without limitation, the
defenses of (i) failure of consideration, (ii) breach of any other provision of
this Agreement, and (iii) availability of relief in damages.

                                       3

<PAGE>

                                   ARTICLE III
                                  MISCELLANEOUS

         Section 3.1  Manner of Giving Notice. All notices, requests, demands,
and other communications required or permitted to be given or made hereunder by
any party hereto shall be in writing and shall be deemed to have been duly given
or made (a) if delivered personally, at the time of such delivery, (b) if
transmitted by first class registered or certified mail, postage prepaid, return
receipt requested, three business days after the date of such mailing, (c) if
sent by prepaid overnight delivery service, the next business day after being
sent, or (d) if transmitted by cable, telegram, facsimile, or telex, at the time
of such transmission, in each case to the parties at the following addresses (or
at such other addresses as shall be specified by the parties by like notice):

         If to the Company:

                  Valesc Inc.
                  2300 Coit Road, Suite 300B
                  Plano, TX 75075
                  Fax:  (972) 496-5135

         With a copy to:

                  Hecht & Associates, P.C.
                  60 East 42nd Street, Suite 5101
                  New York, NY 10165
                  Attn:  Perry Nagle, Esq.
                  Fax:  (212) 490-3263

If to a Shareholder, at the address on file with the Company on the date hereof.

         Any such notice shall, if delivered personally, be deemed received upon
delivery; shall, if delivered by telecopy, be deemed received when confirmed;
and shall, if delivered by mail, be deemed received upon the earlier of actual
receipt thereof or five business days after the date of deposit in the United
States mail.

         Section 3.2  Waiver of Notice. Whenever any notice is required to be
given to any Shareholder under the provisions of this Agreement, a waiver
thereof in writing signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.

         Section 3.3  Counterpart Signatures. This Agreement may be executed in
any number of counterparts, all of which together shall constitute a single
instrument. It shall not be necessary that any counterpart be signed by all of
the Shareholders so long as each counterpart shall be signed by one or more of
the Shareholders and so long as each of the other Shareholders shall sign at
least one counterpart which shall be delivered to the Company.

         Section 3.4  Severability. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under present or future laws effective
during the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and

                                       4

<PAGE>

enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement; and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of each such illegal, invalid or unenforceable
provision, there shall be added automatically as a part of this Agreement a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.

         Section 3.5  Entire Agreement; Amendments.

         (a) This Agreement supersedes all prior agreements among the parties
with respect to the subject matter hereof. This Agreement contains the entire
agreement among the parties with respect to such subject matter and may not be
amended, supplemented, or discharged, and no provision hereof or thereof may be
modified or waived, except by an instrument in writing signed by the Company and
all persons then a party to this Agreement as Shareholders of the Company.

         (b) No waiver of any provision hereof by any party shall be deemed a
waiver by any other party nor shall any such waiver by any party be deemed a
continuing waiver of any matter by such party.

         (c) No amendment, modification, supplement, discharge or waiver hereof
or hereunder shall require the consent of any person not a party to this
Agreement as a Shareholder or as the Company.

         Section 3.6  Governing Law and Jursidiction. This Agreement shall be
governed and construed in accordance with the laws of the State of New York,
without regard to the conflicts of law principles of such state. For purposes of
any dispute under this Agreement, the parties consent to the exclusive
jurisdiction of the federal district court for the Southern District of New
York.

         Section 3.7  Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the Company and each Shareholder and its
respective heirs, permitted successors, permitted assigns, permitted
distributees and legal representatives, and by their signatures hereto, the
Company and each Shareholder intends to and does hereby become bound. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person other than the parties hereto and their respective permitted
successors and assigns any legal or equitable right, remedy or claim under, in
or in respect of this Agreement or any provision herein contained.

         Section 3.8  Future Actions. The Company and the Shareholders shall
execute and deliver all such future instruments and take such other and further
action as may be reasonably necessary or appropriate to carry out the provisions
of this Agreement and the intention of the parties as expressed herein.

         Section 3.9  Headings; Exhibits. All article and section headings
herein are for convenience of reference only and are not part of this Agreement,
and no construction or inference shall be derived therefrom. The Exhibits
attached hereto and referred to herein are a

                                       5

<PAGE>

part of this Agreement as if fully set forth herein. All references to Sections
and Exhibits shall be deemed references to such parts of this Agreement, unless
the context shall otherwise require.

         Section 3.10  Termination of this Agreement. Notwithstanding any
provision of this Agreement to the contrary, but subject to the provisions of
the following sentence, this Agreement shall immediately and automatically
terminate, without any further action by any party, upon the consummation of any
merger or consolidation to which the Company is a party and is not the surviving
entity (the Company shall not be deemed to be the surviving entity except in the
case of any merger or consolidation immediately following which a majority of
the capital stock of the surviving or resulting company shall be held by the
Shareholders).

         IN WITNESS WHEREOF, the parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.

                                       VALESC INC.

                                       By:
                                           -------------------------------------
                                       Name:  Jeremy Kraus
                                       Title:  Chief Executive Officer

                                       SHAREHOLDERS:

                                       -----------------------------------------
                                       Harry Kraus - 50,000 Shares

                                       -----------------------------------------
                                       Edward Kraus - 100,000 Shares

                                       -----------------------------------------
                                       Milton and Golda Toorans - 50,000 Shares

                                       6

<PAGE>

                                                                       EXHIBIT A

                           FORM OF ADDENDUM AGREEMENT

         This Addendum Agreement is made as of ________________________, 200__,
by and among ____________________________________________ (the "New
Shareholder") and ____________________________________________, the New
Shareholder's spouse, and VALESC INC., a Delaware corporation (the "Company"),
pursuant to that certain Shareholders Agreement dated as of September ___, 2002
(the "Agreement"), by and among the Company and certain of its Shareholders (as
defined in the Agreement).

         WHEREAS, the Company and the Shareholders entered into the Agreement to
impose certain restrictions and obligations upon themselves, and to provide
certain rights, with respect to the common stock of the Company (the "Common
Stock"); and

         WHEREAS, the New Shareholder desires to become a Shareholder of the
Company; and

         WHEREAS, the Company and the Shareholders have required in the
Agreement that all persons to whom shares of Common Stock subject to the
Agreement are transferred and any other person acquiring shares of Common Stock
must enter into an Addendum Agreement binding the New Shareholder to the
Agreement to the same extent as if he was an original party thereto and imposing
the same restrictions and obligations on the New Shareholder and the shares of
Common Stock to be acquired by the New Shareholder as are imposed upon the
Shareholders under the Agreement;

         WHEREAS, the New Shareholder shall be subject to the volume limitations
set forth in the table in Section 2.1(e) of the Agreement;

         NOW, THEREFORE, in consideration of the mutual promises of the parties
and as a condition of the purchase of Common Stock, the New Shareholder
acknowledges that he has received and read the Agreement and that the New
Shareholder shall be bound by, and shall have the benefit of, all of the terms
and conditions set out in the Agreement to the same extent as if he was an
original party to the Agreement. In the vent the New Shareholder is part of a
transfer from a Shareholder to more than one person, then for purposes of the
volume limitations in Article II, all of the shares of the transferees shall be
aggregated. This Addendum Agreement shall be attached to and become a part of
the Agreement.

-----------------------------------
New Shareholder

Address:

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

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

<PAGE>

         AGREED TO as of the date written above by the undersigned for itself
and on behalf of the Shareholders of the Company pursuant to the Agreement:

VALESC INC.

By:
   --------------------------------
Name:
Title:

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