Text

Enclosure 4 - Asset Purchase & Sale Agreement
	ML033040208
Person / Time
Site:	Indian Point
Issue date:	12/12/2000
From:	Groth J; Consolidated Edison Co of New York, Entergy Nuclear Indian Point 2, Entergy Nuclear Operations
To:	; Document Control Desk, NRC/FSME
References
	-RFPFR
	Download: ML033040208 (147)
	v • d • e

Consolidated Edison Co. of New York, Inc.

Entergy Nuclear Indian Point 2, LLC Entergy Nuclear Operations, Inc.

Docket Nos.50-003 and 50-247 License Nos. DPR-5 and DPR-26 ENCLOSURE 4 Asset Purchase and Sale Agreement (without schedules)

Between Consolidated Edison Co. of New York, Inc.

and Entergy Nuclear Indian Point 2, LLC

CONFORMED COPY GENERATING PLANT AND.GAS 'TURBINE ASSET PURCHASE AND SALE AGREEMENT FOR INDIAN POINT GENERATING STATION-UNITS'1'AND 2 AND GAS TURBINE UNITS'2, 2.AND:73 AND TODDVILLE TRAINING CENTER LOCATED AT VILLAGE OF BUCHANAN AND/OR THE TOWN OF CORTLANDT WESTCHESTER"'COUNTY, NEW YORK By and Between CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.

'-- - -'--and ENTERGY NUCLEAR"INDIAN POINT 2, LLC.*

Dae s'f oe 9

.00 Dated as 'of NNovember 9, 2000 INYCorp;11'73312.1: 4738W:11/14/00-11:45a)

TABLE OF CONTENTS Pa2e ARTICLE I-Definitions SECTION 1.01.

Definitions..

1 SECTION 1.02.

Accounting Terms.

.. 23 ARTICLE II Purchase and Sale; Assumption of Certain Liabilities SECTION 2.01.

SECTION 2.02.

SECTION 2.03.

SECTION 2.04.

SECTION 2.05.

Purchase and'Sale Auctioned Assets'and Retained Assets.

Assumed Obligations and Retained Liabilities Third Party Consents.

Franchise Property..

. 23 23 29 34 35 ARTICLE III Closing SECTION 3.01.

SECTION 3.02.

SECTION 3.03.

SECTION 3.04.

Time and Place-of Closing Purchase Price..

Post-Closing Adjustment Allocation of Consideration

. 35

. 38

. 39 ARTICLE IV Representations and Warranties of Seller SECTION 4.01.

SECTION 4.02.

SECTION 4.03.

SECTION 4.04.

SECTION 4.05.

SECTION 4.06.

SECTION 4.07.

SECTION 4.08.

SECTION 4.09.

SECTION 4.10.

SECTION 4.11.

SECTION 4.12.

SECTION 4.13.

SECTION 4.14.

Organization; Qualification Authority Relative to This Agreement Consents and Approvals; No Violation Personal Property Real Estate Leases..

Contracts Legal Proceedings Permits; Compliance with Law.

Environmental Matters Labor Matters ERISA; Benefit Plans.

Taxes Undisclosed Liabilities

. 40

. 41

. 43

. 44

. 45

. 46

. 47

. 48 INYCor~p;1173312.1:4738W: 11/14/00-11:45aI

Paae SECTION 4.15.

Brokers SECTION 4.16.

Insurance SECTION 4.17.. Nuclear'Matters SECTION 4.18.

Qualified Decommissioning Fund..

SECTION 4.19.

Nonqualified Decommissioning Fund SECTION 4.20.

Sufficiency-of.Auctioned Assets..

SECTION 4.21. Condemnation.'...

I SECTION.4.22.. 'No Change in Accounting Methods or

-'~

Practices ARTICLE V Representations and Warranties of Buyer 48 48 49 49

. 50

..'. 51

. 51

. 51 SECTION 5.01.

SECTION 5.02.

SECTION 5.03.

SECTION.5'.04.'

SECTION 5.05.

Organization...

Authority Relative to This Agreement Consents.and-Approvals; No.Violation Availability of Funds Brokers',

52 52 52 54 54 ARTICLE VI

.,Covenants of the Parties.-

SECTION 6.01.

Conduct'of Business Relating to the Auctioned Assets.

.54 SECTION 6'.02.' Access to Information 57 SECTION 6.03.

Consents and Approvals; Transferable Permits 58 SECTION 6.04.

Further Assurances.

. 60 SECTION 6.05.,

Public-Statements 61 SECTION 6.-06-. Tax Matters.62 SECTION 6.07.

Decommissioning Funds.

.,.63 SECTION'6;.08.' Decommissioning.

64 SECTION 6.09.. Bulk Sales-or'Transfer Laws,.65 SECTION 6.10.' Stora~ge And Risk of Loss Concerning Certain Auctioned Assets.....

. 65 SECTION 6.11.

Information Resources

. 65 SECTION 6.12.

Witness Services..

. 66 SECTION 6.13.

Trade Names...

. 67 SECTION 6.14.

Steam Generator Storage Facility 67 SECTION 6.15.

Availability of.-Cooling Water Usage.--

Credits.'..

. 67 SECTION 6.16.

Nuclear Insurance

. 68 SECTION 6.17.

Update of-Schedules

. 68

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Pace ARTICLE VII' Conditions' SECTION 7.01.

SECTION 7.02.

SECTION 7.03.

Conditions Precedent to Each Party's Obligations*.

Conditions Precedent to Obligation of Buyer Conditions Precedent to Obligation of Seller 69 70 74 SECTION 8.01.

SECTION 8.02.

SECTION 8.03.

SECTION 8.04.

SECTION 8.05.

SECTION 8.06.

SECTION 8.07.

SECTION 8'.08.

SECTION 8.09.

- ARTICLE VIII--

Employee Matters Employee Matters.

Continuation of Equivalent Benefit Plans/Credited Service.

Pension Plan.

401(k) Plan Welfare-Plans Short-and Long-Term Disability Life'Insurance-and Accidental Death and Dismemberment Insurance Severance Workers Compensation...

76 78 80 81 82 83 84 84 86 ARTICLE IX Indemnification'and Dispute-Resolution

.SECTION 9.01.

Indemnification

.SECTION 9.02.

Third Party Claims Procedures SECTION 9.03.

Procedures Relating to Tax Indemnity.

86 89 91 ARTICLE X Termination SECTION 10.01.

Termination.

.. 92 ARTICLE XI Miscellaneous Provisions SECTION 11.01.

Expenses

.. 94

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Paae SECTION'11.02.

Amendment and Modification; Extension; Waiver

. 94 SECTION 11.03., Survival of Representations or-,-

Warranties

. 94 SECTION 11.04.

Notices.

.95 SECTION,-11.05.

Assignment; No Third Party.

Beneficiaries.

95 SECTION'11.06. Governing Law.

.97 SECTION 11.07.

Counterparts

.97 SECTION"11.08. 'Interpretation

. 97 SECTION 11.09'. Jurisdiction and Enforcement

. 98 SECTION 11.10.

Entire Agreement

. 99 SECTION 11.11.

Severability-.

99 SECTION 11.12.

Conflicts 99 C-fEILIMT7Trln nw7n.r"V"Ynymo 0 %.fl Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule 2.02(a) (i)

(A) 2.02(a) (i) (B) 2.02(a) (i)

(C).

2.02(a) (ii) 2.02(a) (iii) 2.02(a) (iv) 2.02 (a) (v)'

2.02(a) (x) 2.02(b) (i) 2.02(b) (ii)

(B, 2.05 (a) 3.02(c) (iv) 3.02(c) (vi)'

3.02(c) (vii)

Buyer Real Estate-Indian Point Buyer Real Estate-GT Site Buyer Real Estate-Toddville Spare Parts Buyer Personal Property

.-Contracts

-Transferable Permits,.

Nitrogen Oxide.Allowances

,'Seller Personal Property Located on Buyer Real Estate Communications Equipment Franchise Property,

Capital Projects

,Remediation Low-level Radioactive Waste Removal Fuel Inventory Methodology Contracts Requiring Third Party Consents Exceptions to Technical Specifications Leases Contracts Retained by Seller Legal Proceedings Exceptions Under Permits Non-Environmental Violations Environmental Matters Labor Matters Benefit Plans Statute of Limitations for Taxes Undisclosed Liabilities Insurance Schedule 3.03(a)

Schedule 4.03(a)

Schedule 4.04(b)

Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule 4.06 4.07 (a) 4.08 4.09(a) 4.09(b) 4.10 4.11 4.12 4.13

'Schedule 4.14 Schedule 4.16(a)

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I Schedule 4.16(b)

Schedule 4.17 Schedule 6.01(b)(vi)

Schedule 6.01(c)(i)

Schedule 6.01(c) (ii)

Schedule Schedule Schedule Schedule Schedule 6.01(c) (iii) 7.02(d) (i) 7.02(d) (ii) 8.01(a) 8.01(b)

Insurance Exceptions Nuclear Matters Employment Matters Contracts Entered Into Without Consent of Buyer Capital Projects-Dollar Amounts Remediation-Dollar Amounts

!Required Contracts Required Software Job Titles.

Collective Bargaining:

Agreements Exhibit A-1 Exhibit A-2 Exhibit Exhibit Exhibit Exhibit A-3 A-4 B

C Exhibit D Exhibit E

Form of Deed of Conveyance for Westchester County [Land and Improvements]

Form of Deed of Conveyance for Westchester County [Improvements on GT Site]

F6om of GT Site Ground Lease Form of Declaration of Easements Agreement Form of FIRPTA Affidavit

Form of Opinion of 'John D. McMahon, Esq.,

General Counsel of Seller Form of Affidavit Form of Opinion of General Counsel of Buyer and Entergy Nuclear, Inc.

Form of Guarantee Agreement Form of Opinion of Counsel.to Guarantor Form of Bill of Sale Application for Service for Non-Residential Customers Direct Retail Customer Operating and Transmission Service Agreement Direct Customer Operating Agreement Exhibit

Exhibit Exhibit Exhibit F

G H

I Exhibit J Exhibit K (NYCorp;1173312.1:4738W:11/14/00-11:45aI

GENERATING PLANT AND GAS TURBINE

.- ASSET PURCHASE.AND SALE AGREEMENT (including the Schedules hereto, this."'Agreement") dated

'as of November 9, 2000, by and between CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., a New'York corporation ("Seller"), and ENTERGY NUCLEAR INDIAN' POINT-2,:LLC, a Delaware limited liability company

("Buyer")(Buyer and Seller-are sometimes herein referred to collectively as the "Parties" and individually as a "Party").

WHEREAS--Seller.has;-conducted-an auction process in which it has solicited proposals to purchase' the Auctioned

Assets (as defined'herein);.and

'WHEREAS Buyer desires to purchase, and Seller desires to sell, the Auctioned Assets upon:the'terms and conditions hereinafter set forth.

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

ARTICLE I

.Definitions SECTION-l.Ol.'.Definitions.

As used in this Agreement, the following terms have-the following meanings:

"Accountants" ishall'have' the meafiing set forth in Section 3.03(b).:

-,s U.-!"Adlustment AMount"'shall have.-the meaning set forth in Section 3.03(a).

V'..-.

"Adustment-Date", shall have the meaning set forth in Section 3.03(c).

-' "AdiustmentfStatement" :shall have the meaning set forth in Section 3.03(a)'.

"Affected Employees" shall have'-the meaning set forth in Section 8.01(a).

"Affected Union-Employees" shall have the meaning set forth in Section 8.01(b).

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2 "Affiliate" shall have the meaning set forth in Rule 12b-2 of the General Rules and Regulations under the Securities.Exchange Act of 1934, as amended.

"Actreement" shall have the meaning set forth in the Preamble.:

"Allocation" shall have the meaning set forth in Section 3.04.

"Ancillary Agreements" means the Continuing Site Agreement, the Declaration of Easements Agreement, the GT Site Ground Lease, the Power Purchase Agreement, the Bill of Sale, the deeds contemplated by -

Section 7.02(e)(i) and any other agreement to which Buyer and Seller are party and which is expressly identified by its terms as an Ancillary Agreement hereunder. -

"ANI" means American Nuclear Insurers.

I"Assumed Obligations" shall have the meaning set forth in Section 2.03(a).

"Atomic Energy Act" means the Atomic Energy Act of 1954, as amended, and the rules and regulations promulgated thereunder.

"Auctioned Assets" shall have the meaning set forth in Section 2.02(a).

"Benefit Plans" shall have the meaning set forth in Section 4.12.

- "Bidder Confidentiality Agreements" shall have the meaning set forth in Section 6.02(b).

.."Bill of Sale" shall have the meaning set forth in Section 7.02(q) (i).

"Bowline" shall have the meaning set forth in Section 6.15(b).

"Business Day" means any day other than Saturday, Sunday and any day which is a legal holiday or a day on which banking institutions in New York are authorized or required by Law-or other action of a Governmental Authority to close.;

"Buyer" shall have the meaning set forth in the Preamble.

[NYCorp;1173312.1:4738W:11/14/00-11 :45aI

3 "Buyer Assets",meansany property, machinery,

-equipment, facilities-or systems (including Buyer Facilities) that are from time to time owned or leased by Buyer or its Affiliates after.-Closing and are employed by Buyer in connection with theperformance of the activities contemplated by the Ancillary Agreements.

"Buyer Benefit Plans" shall have the meaning set forth in Section 8.02.(c).

"Buyer'Decommrissionin4 Funds" means 'the trust funds maintained by-Buyer intinwhich the Decommissioning Funds are transferred at Closing, or any successor funds thereto.--

"Buyer Facilities"-shall mean the "Buyer Facilities" under the Declaration of-Easements Agreement.

"Buyer Indemnitees" shall have the meaning set forth in Section 9.01(a).. --

"Buyer Material Adverse Effect" shall have the meaning set forth in-Section-5.03(a):.

"Buyer Real Estate". shall have the meaning set forth in Section 2.02(a)(i)..

"Buyer Required Regulatory Approvals" shall have the meaning-set forth-in Section-5.03(b).

"Buyer's 401(k) Plans".shall have the meaning set

forth in 'Section 8.04(a).

7.

"Buyer's Pension Plans" shall have the meaning set

forth in :Section'-8.03(a)

"Buyer's Severance Plan" shall have the meaning set forth in Section,8.08(a).

"Buyer's Welfare Plans" shall have the meaning set forth in Section 8.05.(a)...

"Closing"'shall have the meaning set forth in Section 3.01.

"Closing Date" shall have the meaning set forth in Section 3.01.

-n s

o INYCorp;1173312.1:4738W:11/14/00-11 :45aI

4 "COBRA"-'means the Consolidated Omnibus Budget Reconciliation Act.

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

"Collective Bargaining Agreement" shall have the meaning set.forth in Section.8.01(b).

"Communications Equipment" means the equipment, systems, switches and lines used in connection with voice, data and other communications activities.

"Confidentiality Agreement" means the Confidentiality Agreement dated February 1, 2000 between Seller and Buyer.

"Consent Order" shall have the meaning set forth in Section 6.15(a).

-"Consumer Price Index" shall have the meaning set forth in Section 6.08(b).

"Continued Employees" shall have the meaning set forth in Section 8.01(a).

"Continued Emoloyee Records" shall.have the meaning set forth in Section 2.02(a)(vi).

"Continued Non-Union Employee" shall have the meaning set forth in Section 8.02(a).

"Continued Union Employee" shall have the meaning set forth in Section 8.01(b).

"Conlinuina Site Agreement" means the Continuing Site Agreement dated as of even date herewith between Seller and Buyer.

"Contracts" shall have the meaning set forth in Section 2.02.(a)(iv).

"Conveyance Plans" means the Indian' Point Conveyance Plan and the Toddville.Conveyance Plan.

"Declaration of Easements Aareement" means the Declaration of Easements Agreement.to be entered into between Seller and Buyer in the-form of Exhibit A-4.

"Decommissioning" means the complete retirement and removal of the Auctioned Assets from service and

[NYCorp;11.73312.1:4738V:11/14/00-11 :45aI

5 the restoration of the Buyer Real Estate (and all surface and,s ubsurfaicedlements thereof including soils, surface water and groundwater),

as well as any planning and other.-,activities relating thereto, including (i) the dismaritlment, decontamination, removal, storage or entrombment:-of the Auctioned Assets, in-whole or in part,..anddany reduction or removal, whether before or after termination of the NRC operating"license for-the Auctioned Assets, of radio6ctivity at-Ithe Buyer Real Estate.(and all surface and subsurface elements. thereof.including soils,

.surface water and groundwater),.-,and (ii);any activities necessary for the retirement, dismantlement, decontamination, removal, storage and entombment of the Auctioned Assets to.comply with applicable Laws, the NRC operating license for the Auctioned Assets and any related decommissioning plan.

"Decommission" shall have a correlative meaning..

"Decommissioning Accounting Records"--shall have the meaning set forth in Section 2.02(a)(vi).

"Decommissioning Funds" mean's-the Qualified Decommissioning Fund and the-Nonqualified DecommissioningFund,: collectively. l "Decommissioning-Indentures",means the Master NuclearDecommissioning -Trust.Agreement between Seller and Harris-Trust and Savings Bank made:as of December 30, 1988, as amended, regarding the Qualified Decommissioning Fund- (it:being.understood..that Mellon Bank (DE) National Association, rather that Harris Trust and Savings Bank, is currently Trustee) and the Master Nuclear Decommissioning Trust.Agreement between Seller.and Harris Trust and Savings*.Bank made as of June 30,.1993,.as amended,, regardingthe.Nonqualified Decommissioning.Fund (it;-being,understood::that Mellon Bank (DE). National.-Association,-rather than Harris Trust and Savings..Bank, is currently!Trustee).

-"Decon" means the process by which the radioactive structures, systems,_-componentseand equipment of a generating facility.are-removed or:decontaminated to a level that permits termination of such facility's NRC operating license-:after-cessation of-operations and release of such facility.by the--NRC in.;accordance with applicable NRC regulations.

."Deeds".shall have the meaning set forth in Section.7.02(e).

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6 "Department of Energv" means the United States Department of-Energy or any successor thereto.

"Department of. Energy Decontamination and Decommissioning Fees" means all-fees related to the Department of Energy's-Special Assessment of utilities for the Uranium-Enrichment Decontamination and Decommissioning Fund pursuant! to the Atomic Energy Act, or any similar-fees assessed under applicable Law relating to separative work units purchased from the Department of Energy in order to decommission the Department-of Energy's gaseous diffusion enrichment facilities."

"DOE Standard Contract" means the Contract For Disposal of Spent Nuclear Fuel-And/Or High Level Radioactive Waste, No: DE-CR0l-'83-NE44373, dated as of June 17, 1983, between the United States of America, represented by the United States Department of Energy, and Seller, as amended.;-

"Electric Service Contract" means an agreement for

.service in accordance with Seller's Schedule for Electricity'Service, P.S-.C. No. Electricity or Seller's Schedule for Retail Access, P.S.C. No. 2 -

Retail Access, as such Schedules may, be revised or superseded from-time to 'time, using (i) an Application for Servicefor Non-Residential Customers in the form of Exhibit I,' (ii) a Direct Retail Customer Operating and Transmission Service Agreement in the form of Exhibit J and (iii) a Direct Customer Operating Agreement-in the form of Exhibit K.

Encumbrances" means any mortgages, pledges, liens, security interests, conditional and installment sale agreements, activity and use limitations, exceptions, easements, rights-of-way, deed restrictions, encumbrances, charges of any kind, and any related documents and/or instruments of record.

"Energy Reorganization Act" means the Energy Reorganization Act of-1974, as amended, and the rules and regulations promulgated thereunder.

"ENO" means Entergy Nuclear Operations, Inc., an Affiliate of 'Buyer.

"Entomb" means the process by which radioactive structures, systems, components and equipment of a generating facility are encased in a structurally long-lived substance, such as concrete, whereby the entombed (NYCorp;1173312.1:4738W:11/14/00-11:45aI

7 structure isappropriately maintained, andicontinued surveillance-is carried out'until the radioactivity decays.to a level that permits termination-of the NRC 6peratpngt licenses ffoiri'such'facility "environment" Ci) mans ambient-air, surface water and groundwater (including potable water, navigable

.wat~er and wetlands), land surface or-subsurface strata or (ii) shall have the meaning set forth in any

-Environmental Law.

"Environmental Laws" means 'all former, current and future federal, 'state, local and foreign laws (includin'g common law), treaties, 'regulations,

rules, ordinances, codes, decrees, judgments, directives, orders (including consent orders), Environmental Permits and New York StateDepartment of Environmental Conservation-TechnicalAdministrative Guidance Memoranda, in each case, -relating to-pollution, protection of the environment,,natural resources or human health and safety,--including laws relating to the presence, Release of,- or.[exposure to, Hazardous Substances, or otherwise 'relating tothe generation, manufacture,.processing,. distribution, use, treatment, stor'age, transport, recycling or handling of, or arrangement for such activities with respect to, Hazardous Substances.

"Envirbnmental Liability"I eans all.liabilities, obligations, claims,',causes of action, -actions, suits, judgments, orders,,damages, injunctive relief, losses, fines, penalties, fees, expenses and.costs arising from, relating to, or in connection with or alleged to arise from,- relate to, or be -connected with (i) any actual or alleged violation of or compliance or noncompliance with, Environmental Laws prior to, on, or after the Closing.Date~in connection with the Auctioned Assets or any ownership,-operation, maintenance or control thereof; (ii) the presence, Release, use or

-.generation-of, or exposure,.to, Hazardous Substances at,

'in, under,, upon, "above, inc6hnection. with, or migrating to or from the Auctioned Assets prior to, on, or after the ClosingDate or the-transportation, or the arrangemenI'.thereof," of Hazardous'Sibstances to or from the Auctioned Assets prior to, on, or after the Closing Date;, (iii) any-action.to address such presence, Release, use-'or generation o f or exposure to,

- Hazardous Substances at, in,. under,-upon,,above, in connection with, or.migrating to or from the Auctioned Assets,.whether.such.action commenced before or commences on or after the Closing Date, including INYCorp;1173312.1:4738W:11/14/00-11:45aI

I-8 (A) sampling, analysis, monitoring, investigation, assessment,-treatment, remedidtion, cleanup, containment,- removal, mitigation, response, Decommissioning, closure, restoration', reclamation, institutional controls, deed restrictions, evacuation or "precautionary evacuation" -(as defined under the Atomic Energy Act and the rules and regulations promulgated thereunder); (B) obtaining any Permits or Environmental Permits or NRC Permits necessary to conduct or cease any such activities; (C) Preparing and implementing any plans or studies for any such activities; (D) fees and expenses of-engineers, consultants, laboratories and attorneys'; and (E) permitting and licensing fees, administrative oversight costs, 'insurance premiums and related costs and costs to establish -arid maintain fihancial -ass\\urance funds; and (iv) any-loss of life, injury to persons, property or business 'or damage to natural resources (regardless of whether such loss, injury or damage arose or was made manifest or is' 'alleged-to have arisen or manifested itself 'prior to, on, or after the Closing Date) arising from, 'relating to, or in connection with, or alleged to arise from, relate to, or be connected with any of the matters described in (i), (ii) or (iii) above.

"Environmental Permits" means all permits, licenses, consents, approvals and other governmental authorizations with respect to'-Environmental Laws relating primarily to the operations of the Generating Plants or the Gas Turbines, but not including any NRC Permits.

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

"ERISA Affiliate" shall have the meaning set forth in Section'4.12.

-"Estimated Adiustment Amount" shall have the meaning set forth in Section 3.02(d).

"Estimated Closing Statement" shall have the meaning'set forth in Section 3.02(d).

"Excess Decommissioning Funds" means, as of the Expiration Date, the amount, if-any, by-which the aggregate Decommissioning funds held by Buyer exceed the estimated cost to Buyer of Decommissioning by Safstor or Entomb.

For purposes of this definition, the estimated cost to Buyer of Decommissioning by INYCorp;1173312.1:4738W:11/14/00-11 :45aI

.9 Safstor or Entomb.shall-be determined as of the Expiration Date in accordance with the-cost estimates filed with the :NRC byBuyer-and standard-iindustry practices.

"Expiration-Date" shall have the meaning set forth in-Section 6.08.

"Fair Market-Value"-means, with-respect to the assets of-the Decommissioning: Funds, the value of such assets (including any accrued interest and dividends relating to such assets) as of the close of the Business Day immediately.'preceding-the Closing Date, which fair market value-shall.be'determined based on a statement prepared on behalf of Seller on a basis consistent with past practice by.the'financial institutions managing-the Decommissioning Funds and listing 'such assets, together:with the purchase price and fair market value of each asset.

"FERC"I means the Federal Energy Regulatory

~Commission or any successor thereto. -

'!'Federal Power'Act" shall have the meaning set forth in Section 4.03(b).

"Final Order" shall have the meaning set forth in Section 7.01(a).

"Franchise Pronertv!'-shall-have the meaning set forth in Section :2.05(a).

-"GAAP"'Kshall have the meaning.set'forth in

.Section -1.02.

I X-*

'"Gas Turbines", means the three gas turbines cdesignated as Indian Point Gas Turbine:Units 1, 2 and

3.

"Generatiny Facilities" means the Generating Plants, the Gas Turbines-and-any additional generating plants, gas turbines or other generating facilities constructed by Buyer after.the Closing'Date at the site of any Auctioned Assets.

-,"Generating Plants" means the -two nuclear generating units-designated as and known"as Indian Point Unit 1 and Indian Point Unit 2.

"Governmental'Authoritv" means--any federal, state, local, domestic or foreign government or any court, INYCorp;1173312.1:4738W:11/14/00-11 :45a)

10 administrative.or regulatory agency, board, committee or commission or other governmental entity or instrumentality, domestic, foreign or supranational or any department thereof.

"Greenfield".means the complete decontamination, dismantlement, and removal of-:a generating facility such that the NRC operating license for such facility is terminated and the site at;which such facility is located-is restored to an unrestricted and natural state..

"GT Site" shall have the-meaning set forth in Section 2'.02(a) (i)(B)(1).

."GT Site Ground-Lease" means the GT Site Ground Lease to be.entered into between Buyer and Seller in the form of Exhibit A-3.

"Guarantee Agreement" means the Guarantee Agreement to' be entered into between Guarantor and Seller substantially in the form of Exhibit F.

."Guarantor". means Entergy International Holdings Ltd LLC, a Delaware limited liability company and an Affiliate of Buyer.

"Hazardous Substances" means (i) any petroleum, petroleum products or byproducts and all other hydrocarbons, petrochemicals, crude oil or any fraction thereof, coal ash, radon gas, asbestos, asbestos-containing material, urea formaldehyde, polychlorinated biphenyls," chlorofluorocarbons and'other ozone-depleting substances; (ii) radiation, radioactive materials or wastes, including "low-level" or "high-level.radioactive wastes," "source material,"

"special nuclear material," "byproduct material,"

"spent nuclear fuel," and "transuranic waste," as those terms are defined under the Atomic Energy Act; and

-(iii) any chemical, material,.substance or waste (including thermal discharges) that is"prohibited, limited or regulated by or pursuant to any Environmental Law.

"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act-of 1976, as.amended, and the rules and regulationsipromulgated thereunder.

"Income Tax" means any U.S. federal, state, local or foreign Tax or surtax (i) based upon, measured by or calculated with respect to net income, profits or (NYCorp;1173312.1:4738W:11/14/00-11:45aI

11

,receipts, including the New York State Gross Receipts

.Tax (including any municipal gross receipts Taxes and excise Taxes, capital gains Taxes and minimum Taxes) or (ii)-based upon, measured by or-calculated with respect to-multiple bases (including corporate franchise Taxes) if one-.or more of:the bases-on'which such Tax may be

_based, measured by or calculated with-respect to, is described in clause (i), in each case, together with any interest, penalties, or additions to such Tax.

-"Indemnifiable Loss" shall have the meaning set

forth inSection.9.01(a).

"Indemnifyina Party" shall have the meaning set forth in Section ;9.01(c).

-n- "Indemnitee" shall have the meaning set forth in Section 9.01(c)

"Independent Appraiser" shall have-the meaning set forth in Section 3.04.

"Indian Point Conveyance Plan" means the ALTA/ACSM Land Title Survey prepared for Consolidated Edison Company. of New.York, Inc., captioned."Indian Point Generating Station.Site Survey" (Sheets-:1 -

7) completed on August 2, 2000 (Buyer Parcel -

Indian Point).and-August 17,-`.200Q0(Buyer--Parcel -

GT Site),

last revised on October 27,- 2000, and prepared by Badey

& Watson Surveying & Engineering, PC, as may hereafter be amended by Seller in immaterial respects.

."Indian Point Unit !'1"means the nuclear generating

,unit located in the Village of Buchanan-New York designated as -and known as Indian Point Unit 1.

.."Indian Point Unit 2" means the nuclear generating.

unit located in the Village of Buchanan,-New York designated as and known as Indian Point Unit 2. -

. "Information Memorandum" means the Information Memorandum dated January 2000 describing the Generating Plants-and-the Gas Turbines; land the materials delivered with such Information Memorandum, as such Information Memorandum and such materials may have been amended or supplemented.

"Intellectual Property".4means all trade secrets, copyrights, copyright applications, trademarks, trademark applications, trade names, service marks, INYCorp;1~173312.1~:4738W: 11/14/00-11:45aI

12 service mark applications, designs,.samples, specifications and know-how owned;by Seller.

-"Interconnection Facilities" meansiswitching equipment, -switchyard controlsr protective relays and related.-facilities of Seller that are used by Seller in connection with the provision of Interconnection Services.

"Interconnection Services" means the service provided-by Seller to Buyer to interconnect the Generating Facilities to the Transmission System.

"Inventory" means all materials and supplies (other than fuel, Nuclear Fuel or Spent-Nuclear Fuel),

spare parts (including the spare parts listed in Schedule 2.02(a)(ii)) and chemical-arid gas inventories owned by Seller at Closing and relating primarily to or used primarily in the operation of the Generating Plants and the Gas Turbines.

"IRS" means the Internal Revenue Service or any successor thereto.

"'ISO" means the New York Independent System Operator-or any successor thereto.

"loint-rulings" shall have the meaning set forth in Section 6.06(e).

"Knowledge" means the actual, current knowledge (without independent investigation) of a Party's or its Affiliates' board of directors, any of their officers or managers or any of the following persons:

Dan Keuter,- Connie Wells, Curt Bregar,- Renee Millison, Stuart Wentworth, Carl Crawford, Brent Dorsey, Dan Churchman, Jay Brister, Jay Adler, Dan Ropson, Frank Rives or Tom Ober.

"Law" means any statute, law (including common law), treaty, order, judgment, decree, directive, code, ordinance, rule or regulation or similar issuance by a Governmental Authority having the effect of law.

"Local 1-2" shall have the meaning set forth in Section 8.01(a).

"Local 2 Collective Bargaining Agreement" shall have the meaning set forth in Section 8.01(b).

INYCorp;1173312.1:4738W:11/14/00-11:45aI

13

' t "Low-level Radioactive Waste"--shall have the meaning set forth in 42 U.S.C.A.'-§ 2021b(9) (1994) and the rules and regulations promulgated thereunder.

"Material Adverse"Effect"'means any change or effect on the Auctioned Assets -that is materially adverse to the business, operat'ions-or condition (financial or otherwise) of the Auctioned Assets, taken as a whole, other than (i) any change, or effect

resulting' from changes -in' the'int'ernational, national, regional or local wholesale'bor retail energy, capacity or ancillary services markets,_(ii) any change or

-" effet 'resulting-from-changes-in the-international,

-national', regional or localmarkts

! forfuel used or usable in connection with the Generating Facilities, (iii)-any' change or effectresulting from changes in the-national, regional.'o'r;local-electric-'transmission

systems, (iv) any change-or effect resulting from any bid-cap, price limitation, market power mitigation measure or other Law-in respect of transmission services'or'the wholesale or retail energy, capacity or ancillary services markets adopted or approved (or

-failed to be adopted or approved) by any Governmental

'Authority or proposed by' any person, (v) any change or effect resulting from any other Law adopted or approved by.any Governmental Authority or proposed by any person (other than-any change or effect resulting from (a) any New York State Law that becomes'effective after the date of this Agreement or. (b) any NRC. Law that becomes

-' effective-after the date of this Agreement and relates solely "to the Auctiohned Assets), (vi) any change or effect resulting from any regulation,- rule, procedure or-order adopted'or proposed (or-failed to be adopted or proposed) by or with'respect to,-or relating to, the ISO; (vii) aany change or effect resulting from any action ormieasuire'taken or'adopted, or proposed to be taken or adopted, by any local, state,'regional, national or international reliability,organization and

-(viiii) any':materially adverse change' -in or effect on

-'the Auctioned Assets-which is cured'by-Seller prior to

-~~

Closing.

-' -_'1"Metaphase" means the Corporate' Drawing Management

- System; which is an'information'resou'rces 'system served by S6ller's mainframe compt i aneMSt mean'sthe'Material Managemeni^System, which isan information resources system'served by Seller's mainframe computer.

"NEIL" means Nuclear Electric Insurance Limited.

!NYCorp:1113312.1:4738W:11/14/00-11:45a1

I 14 "1975 Deed" shall have the meaning set forth in Section?7.02(j)..

"Nitroden Oxide Allowance" means the authorizations by. the, NYSDEC under the NOx Budget Trading Program to-emit up to one ton of nitrogen oxides,.during the control period of the specified year or any year thereafter.

."Non-Disputed Amount" shall have the meaning set forth in-Section 3.02(b)..

"Nonqualified Decommissioning Fund" means the external.trust.fund that does.not meet the requirements of Section 468A of the Code and Treas. Reg.

Section 1.468A-5, and which is maintained by Seller with respect-to the Auctioned Assets prior to Closing pursuant to the applicable Decommissioning Indenture.

"Non-Union Transition Period" shall have the meaning set forth in Section 8.02(a)..

"NPMEL" means the Nuclear Power Material Equipment List, which is a system that uses extract data from PPMIS.

"NRC" means the Nuclear Regulatory Commission or any successor thereto.

"NRC Permits" means all certificates, permits, licenses, consents, approvals and other governmental authorizations issued by the NRC on the basis of which Seller is authorized by the NRCrto own, possess, use and 'operate the Generating Plants and the Gas Turbines pri6r.to Closing, including Facility Operating License Nos. DPR 5aand DPR 26, but not including any Environmental Permits.

"Nuclear Fuel" means all fuel assemblies in the Generating Plants' reactors as of, Closing, any irradiated fuel assemblies that have been temporarily removed from the Generating Plants' reactors as of Closing (except any irradiated fuel assemblies that may have been removed from Indian Point Unit 1 for reprocessing prior to Closing),. all unirradiated fuel assemblies awaiting insertion into the Generating Plants' reactors and all fuel constituents in any stage of the :fuel cycle which are in process for use in the Generating Plants' reactors as of Closing.

INYCorp;1173312.1:4738W:11/14/00-l1:45aI

15 "Nuclear Insurance Policies" means all insurance policies carried by or for the benefit of Seller with respect to the Auctioned Assets, including all liability, propertydamage and business interruption

policies in respect-thereof. Without limiting the generality'of the foregoing, the-term "Nuclear Insurance' Policies" includes all' policies issued or administered'by NEIL'Ior ANI.

"NYPA" means the Power Authority of the State of

.New York or any successor thereto.

"NYSDEC" means the New York State Department of EnVironmental' Conser'vation or any successor thereto.

"NYSERDA" means'the-New York State Energy Research Development Agency or any successor thereto.

'"Off-Site" means any location except-(i) the Buyer Real Estate (and'all surface-and subsurface elements thereof including soils, -surface water and-groundwater) and (ii) any Io'cation to'or under which'Hazardous Substances present or Released at'or from the Auctioned Assets have migrated.>'

- -"Oera~tinq Records" shall have the meaning set forth in Section 2.02(a)'(vi)

"Parties" and "Partv" 1'shall have the 'respective meanings set forth in the Preamble.

' -"Patents" means with respect to the-patented items or processes relating primarily, to,' or used primarily

- in the -operadion of, the-Geierating Plants or the Gas Turbin'es,;'(i) a royalty-free license from3Seller to use such patented items ~or processes owned by Seller or (ii) Seller's 'existing licens- (or any part thereof) or a separate 'l'icense 'to th6 extent 'required to authorize Buyer's use' 'of 'such patented items or processes owned

'by third parties, 'in each '6ase',- at or-in connection with' the -Auction'ed As'sets in-"a manner consistent with Seller's 'use of such patented items or processes pursuant to the 'terns'and conditions'of Seller's "Payment Amouint" "'shall have the meaning set forth in Section 6.08.

i "Payment Date" 'shall have the meaning set forth in Section 6.08-(b).

INYCorp;1173312.1:4'738W: 11/14 /00-11:45a I

16 "PBGC';-shall have'the'meaning set forth in Section 4.12.,

"Permits" means all certificates, permits, licenses,, consents, approvals and other governmental authorizations (other than Environmental Permits and NRC Permits) relating primarily;to the Auctioned Assets, or the ownership, operation or use thereof.

"Permitted Exceptions" means '(i) all exceptions, restrictions, easements, charges, rights-of-way and monetary and.nonmonetary encumbrances which are set forth in any Permits, Environmental Permits or NRC Permits'; (ii) all statutory liens for current Taxes or assessments not yet delinquent, subject to proration as provided herein;;:,(iii) all mechanics', carriers',

workers', repairers' and other similar liens relating to obligations as to which Seller is not in default or the validity of.which is being contested in good faith by appropriate-proceedings, provided that Seller'shall cause the Title Company to omit such liens from the title insurance policy describedin Section 7.02; (iv) all zoning, building code, entitlement, conservation restriction and other land use and Environmental Laws by Governmental Authorities; (v) all matters set forth in Schedules B-2 tb Certificates of Title Nos. 231-W-08707 and 231-W-10117 issued by First American Title Insurance Company of New York, Inc.,

both'effective as of September 25, 2000 and last revised on October 26, 2000 and November 2, 2000, respectively, provided that the generic exception for "rights of tenants or persons in possession" shall be limited to the rights of tenants or. other parties under leases or other agreements which constitute Con'racts (vi)'all matters disclosed on the Conveyance Plans; (vii) 'all Encu'mbrances or other restrictions created pursuant to this Agreement or any Ancillary Agreement; (viii) all restrictions and regulations imposed by the ISO, any Governmental Authority or any local, state, regional, national or international reliability organization, and (ix) all Encumbrances on, imperfections. in or failures of title which do not secure indebtedness for borrowed money and which would not, individually or in the aggregate, reasonably be expected to materially impair the continued use and operation of the Auctioned-'Assets as currently conducted.

Notwithstanding the foregoing, Seller shall discharge.or cause the Title Company to omit or insure overall liens which secure indebtedness for borrowed money, judgments against Seller and any other liquidated sums of money capable of precise INYCorp;1113312.1:4738W:11/14/00-11:45aI

17 determination.

Nothing.in-this 'definition is intended to-affect the'obligations'of'the Parties with respect to Prorated Items.

"person" means any-individual, partnership, limited liability company, joint venture, corporation, trust, unincorporated' organization or-Governmental Authority.-

"Power-Purchase -A'reement"-means the Power Purchase'Agreement dated'as 'of'even date herewith between Seller and 'Buyer.,

"PPMIS" means the Power Plant Maintenance Information System, which'is an--information resources system served by Seller's mainframe computer.

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

"Prorated It6ms" shall' have the meaning set forth in Section 2.03(a)(x).

"Protective Relaying System" means the system relating to the Generating Facilities comprised of components collectively used to detect defective power system elements or :other.conditions of an abnormal nature,-'initiate appropriate control circuit action in response thereto and isolate'the.appropriate system elements in order to minimize'damage to equipment and interruption to service.

.."Prudent'Utilitv-Practices" means any of the practices, methods and'acts engaged in or approved by a significantportionhof the'nuclear power generation industry during the rele'vant-time period, or any of the practices, methods.or acts which, in the exercise of reasonable judgme'nt inhlight'of the facts known at the

. time the decision was made, could have been expected to accomplish the1 desired' result at a reasonable cost consistent with"applicable Laws'and good business

practices, relibili't"j safety and expedition.

Prudent Uti'lity'Practices.'a'rentintended to be limited to only the optimum pra6tice, 'method or act to the exclusion of all'others,' but rather are intended to include practices, 'methods or acts generally accepted in the nuclear power generation industry.

"PSC" means 'the New -York State Public Service Commission or any successor thereto.

INYCorp;1173312.1:4738W: 11/14/00-11:45a I

18 "PUHCA" shall have the meaning set forth in Section 4.03(b).

"Purchase Price" shall have the meaning set forth in Section 3.02(a).

"ualified Decommissioning Fund" means the external trust fund that meets the requirements of Section 468A of the Code and Treas. Reg.

Section 1.468A-5, and which is maintained by Seller with respect to the Auctioned Assets prior to Closing pursuant to the applicable Decommissioning Indenture.

"Release" means (i) any."extraordinary nuclear occurrence" or "nuclear incident," as those terms are defined under the Atomic Energy Act, and (ii) any actual or threatened release, spill,,,emission, emptying, escape, leaking, dumping-,-injection, pouring, deposit; disposal, discharge, dispersal, leaching or migration into the environment or within any building, structure, facility or fixture.,,

"Required Capital Expenditures Amount" means:

(i) if Closing occurs on or after January 1, 2001 but on or prior to March 31, 2001, an amount equal to the product of.,(A) $5,120,000 divided by 90 and (B) the number of days, up to a maximum of 90 days, between January 1, 2001 and the Closing Date; (ii) if Closing occurs on or after April 1, 2001 but on or prior to June 30,.2001, an amount equal to the sum of (i) $5,120,000 and (ii) the product of (A) $7,950,000 divided by 90 and (B) the number of days, up to a maximum of 90 days, between April 1, 2001 and the Closing Date; (iii) if Closing occurs on or after July 1, 2001 but on or prior to September 30, 2001, an amount equal to the sum of:(i) $13,070,000 and (ii) the product of j(A). $6,470,000 divided by.90 and (B) the number of days, up to a maximum of 90 days, between July 1, 2001 and the Closing Date; (iv) if Closing occurs on or after October 1, 2001 but on or prior to December-.31, 2001, an amount equal to the sum of. (i) $19,540,000 and (ii) the product of (A) $7,380,000 tNYCorp:1t73312.1:4738W:11/14/00-11:45aI

19 divided by 90 and (B)

-the number of days, up to a maximum of 90 days,.between October 1, 2001 and the Closing Date; and (v):

if Closing occurs onror after January 1, 2002,'.$26,920,000.

"Required Contracts".means those-contracts,

-agreements and other. legally binding arrangements set forth-in Schedule 7.02(d)(i).

"Required Software" means, with respect to the software-set-forth in-Schedule 7.02(d)(ii), Seller's existing-license.-(or any.part thereof) 'or a separate license, in each case, to the extent required to authorize Buyer's use of such~software at or in connection with the Auctioned-Assets in a manner consistent with Seller's.use of-such software pursuant to the terms and conditions of Seller's license.

i

¢,..

"Restraints" shall have the meaning set forth in

.. Section 7.01(b).

"Retained Assets"-shall have the'meaning set forth in Section 2.02(b).

-P"Retained-Liabilities" shall have the meaning set

. forth in Section 2.03(b)..

"Revenue Meters" means all meters measuring demand,' energy and reactive components, and all pulse isolation :relays, pulse conversion.relays and associated totalizing and remote access pulse recorder equipment, in each case, required to measure the transfer of energy.between the Parties.

."Revdcable"Consent"'shalljhave:the meaning set forth in Section 2.05(a).

"Safstor" means the-procedure by which a generating facility is temporarily placed--in a safe condition and maintained in that state until it is subsequently-decontaminated'and--dismaritled to levels that permit.termination 'of the NRC operating licenses for such facility and release of such facility by the NRC -in accordancewith applicable.NRC' regulations.

"Segregated Reimbursement Accounts" shall have the

. meaning set.forth in Section 8.05(b).

INYCorp;1173312.1:4738W:11/14/00-11:45aI

20 "Seller" shall have the meaning set forth in the Preamble.

"Seller Assets" means any property, machinery, equipment,'facilities or systems (including Seller Facilities but other than any Protective Relaying System or Substation Interface Cables).that are from time to time owned'or leased by Seller or its Affiliates after Closing and are employed by Seller in connection with the performance of the activities contemplated by the Ancillary Agreements.

"Seller Facilities" shall mean the "Seller Facilities" under the Declaration of Easements Agreement.

"Seller Indemnitees" shall have the meaning set forth inSection 9.01(b).

"Seller Material Adverse Effect" means any change, effect, event, occurrence or state of facts that is materially adverse to the business, operations, assets, properties, condition (financial or otherwise), results of operations or prospects of Seller.

"Seller Real Estate" means all real property and leaseholds or other interests -in real property of Seller (including the premises on which the Substation is located), other than Buyer Real Estate.

"Seller Required Regulatory Approvals" shall have the meaning set forth in Section 4.03(b).

"Seller's 4.12 Benefits" shall have the meaning set forth-in Section 8.02(a).

"Seller's 401(k) Plans" shall have the meaning set forth in Section 8.04(a).

"Seller's Pension Plans" shall have the meaning set forth in Section 8.03(a)..

"'Seller's Reimbursement-Account Plans" shall have the meaning set forth in Section 8.05(b).

"Seller's Severance Plan" shall have the meaning set forth in Section 8.08(a).

"Settlement Agreement" means that certain Settlement Agreement entered into on December 19, 1980, as amended, among Seller, Orange & Rockland Utilities, (NYcorp;1173312.1:4738W: 11/14/00-11:45aI

21

Inc., Central Hudson Gas, &: Electric Corporation, Niagara Mohawk Power Corporation, NYPA,.NYSDEC, the Attorney General of the State of New York, the United States Envi-ronmental Protection. Agency, Hudson River Fisherman's Association (currently-d/b/a the Hudson Riverkeeper Fund, Inc.), Scenic Hudson Preservation

..Conference.(currently.-Scenic Hudson':Inc.) and the National Resources Defense Councilf, in-connection with their disputes relating to the National Pollutant Discharge Elimination.System' permits-issued to certain utilities in 1975,' which, by its terms, has expired.

I.- -"Special Affected Employee". shall-have the meaning set-forth-in Section :8.01(a).-

"Spent Nuclear Fuel" means Nuclear Fuel that has

.-been withdrawn or-discharged from a nuclear reactor

..following irradiation--and has not been-chemically

'separated into its constituent.elements by reproces-

.sing..."Spent Nuclear Fuel"'includes the :special nuclear

- material, byproduct material,.source material and other

-radioactive materials associated with nuclear fuel assemblies.

-"Spent Nuclear Fuel Fees" means those fees assessed on-electricity generated at the Generating Plants and sold, as provided in the Nuclear Waste Policy-Act-of 1982,u-asjamended,':and the rules and regulations promulgated thereunder.,:

"Substation" shall have-the meaning set forth in

. Section 2.02(b)(i)..

"Substation Interface Cables" means (i) control cables and associated conduits located in the

-..Substation -which connectrthe Generating Facilities with Buyer Assets located in.the Substation:and (ii) control and low voltage power cables and associated conduits located in-the Substation which connect Seller Assets with Buyer Assets.-

"Tax Basis" means the-adjusted Tax basis determined for.U.S.'..federal';income-Tax purposes under

> Section'1011(a) of-the Code.,

"Tax; Benefit". means,.with respect to:any Indemnifiable Loss for any person, the positive excess, if'any,.of-the-Tax liability of such person without regard to such Indemnifiable Loss over the Tax liability of such person taking'into account such INYCorp:1173312.1:4738W:11/14/00-11:45aI

I 22 Indemnifiable Loss, with all-other circumstances remaining unchanged.

.."Tax Claim" shall have the meaning set forth in Section 9.03(a).

"Tax Contest" shall have the meaning set forth in Section 9.03(c).

"Tax Cost" means, with respect to any indemnity payment for any person, the positive excess, if any, of the Tax liability of such person taking such indemnity payment into-account over the Tax. liability of such person without regard to such'payment, with all other circumstances remaining unchanged.

"Taxes" means all taxes, surtaxes, charges, fees, levies, penalties or-other assessments imposed by any U.S. federal, state or local or foreign taxing authority, including income tax, excise, property, sales, transfer, franchise,-special franchise, payroll, recording, withholding, social-security or other taxes, or any liability for taxes incurred by reason of joining in the filing of any consolidated, combined or unitary Tax Returns, in each case, including any interest, penalties or additions attributable thereto.

"Tax Refund Suit" shall have the meaning set forth in Section 9.03(b).

"Tax Return" means any return, report, information return or other document (including any related or supporting information) required to be supplied to any authority with respect to Taxes.

"Termination Date" shall have the meaning set forth in Section 10.01(b).-

"Third Party Claim" shall have the meaning set forth in Section 9.02(a).

"Title Companv" means First American Title Insurance Company of New York, Inc. and Commonwealth Land Title Insurance Company on a 50/50 coinsurance basis or one or more other title insurance companies reasonably-acceptable to Buyer and Seller.

."TNMS" means the Tag Numbering Management System, which is an information resources system served by Seller's-mainframe computer.

(NYCorp;1173312.1:4738W: 11/14/00-11:45aI

23 "Toddville Conveyance Plan" means the ALTA/ACSM Land Title Survey-prepared-for Seller;'captioned.

"Toddville School-Site Survey" -(Sheet l of l)"completed

" on September 15, 2000.by Badey'& Watson'Surveying &

-Engineering, PC,'as-may hereafter'be amended by Seller

' in' immaterial respects.'

"Toddvi'l'le Training Center" means.the.training facility owned by Seller and located"'at Three Locust Avenue in the Town of Cortlandt,,New York.

'- '-'-"Transferable Permits".shall have the meaning set forth in Section 2.02(a).(v).

"Transmission Svstem". shall'have the meaning set forth in'Section.2:02(b) (i).

'."Trustee" means-the' trustee'of'the Decommissioning Funds appointed-by'Seller pursuant to the applicable Decommissioning Indenture. '

"Union Transition Period" shall have the meaning set forth in' Section 8.-01(b).

"Undated Schedules" shall have the meaning set forth in Section 6.17.

'"Westinghouse Contract" shall 'have the' meaning set forth in Section 6.01 (e).

SECTION 1.02.

Accounting Terms.

Any accounting terms used in this Agreement or the 'Ancillary.Agreements shall, unless' th6rwise specifically'provided, have the meanings customa'iiy given'themin accordance with United States generally accepted accounting principles ("GAAP") and all financial computations hereunder or the'reunder shall, unless'-otherwise specifically 'provided,' be 'computed in accordance' with 'GAAP consistently applied.

K

-ARTICLE II.

Purchase and Sale; Assumption of Certain-Liabilities SECTION 2'. 01. -Purchase and Sale.

Upon the terms and subject t thesati'sfaction of'the 'conditions contained in this Agreement,' at Closing, Sel'ler agrees to sell,

-assign, convey, transfer.and'deliver or cause to be sold, assigned, conveyed, transferred or delivered to 'Buyer, and

'Buyer agrees to-purchase, 'assume and acquire.from Seller all the Auctioned Assets'.

INYCorp;1173312.1:4738W: 11/14/00-11:45aI

24 SECTION 2.02.

Auctioned Assets and Retained Assets.' (a) 'Auctioned Assets.

The.term "Auctioned Assets" means all the assets, real and personal property, goodwill and rights of Seller of whatever kind and nature, whether tangible or intangible, in' each case,' 'constituting, relating primarily to, or used primarily'in the operation of, the Generating Plants or the Gas Turbines, other than the Retained-Assets, including:'

(i)'-(A)' all land owned by Seller relating primarily to the operations of the Generating Plants shown on the Indian Point Conveyance Plan as "Buyer Parcel -

Indian Point"'and described'in Schedule 2.02(a)(i),(A) together with all buildings and improvements'erected thereon, (B)'both (1).the leasehold interest in the land shown-on the Indian Point Conveyance Plan as "Buyer Parcel -

GT Site" and described'in-Schedule 2.02(a) (i)(B)(the "GT Site") to be created pursuant to'the GT Site Ground'Lease, and.

(2) all buildings and improvements erected'on the GT Site, and (C) all land owned by Seller constituting, relating primarily-to, or used primarily in the operation of the Toddville Training'Center shown on the Toddville Conveyance Plan and described in Schedule 2.02(a)(i)(C) together with all buildings and improvements erected thereon, subject in each case to all Permitted Exceptions (the "Buyer Real Estate");

(ii) subject, in each case, to Permitted Exceptions, all inventories of fuels (relating primarily 'to, or used primarily',in the operation of, the Generating 'Plants or the Gas'Turbines) and Nuclear Fuel, in each case owned by Seller on the Closing Date, Spent'Nucle'ar Fuel located-on Buyer Real Estate on the Closing Date,' and all Inventory, in each case other than 'assets that are'used,` consumed,' replaced'or disposed of in the ordinary course of business consistent with past practice or as permitted by this Agreement, together with all warranties from third parties, including manufacturers and vendors relating thereto, to the extent transferable; (iii) subject, in each case, to Permitted Exceptions, all machinery (mobile or otherwise),

equipme'nt,-facilities,- furniture,'and'other personal property relating primarily to, or used primarily in the operation of, the Generating Plants or'the Gas Turbines or the Toddville Training Center, including the it'ems of personal property.listed in Schedule 2.02(a)(iii), together with'all warranties from third parties, including manufacturer's and vendors relating INYCorp;1V13312.1:4?38W: 11/14/00-11:45aI

25

.thereto,,to the extent-transferable,.other than assets that areoused, consumed, replaced or disposed of in the ordinary course -of business consistent with past practice or as permitted by this 'Agreement; (iv) subject'to Sections.2.02(b)(x)'and 2.04, all right,,title and interest'.'of.Seller 'in, to and under

...all contracts, agreements;leases, licenses (whether

.,,Seller is lessor, l-essee,) licensor or -licensee thereunder), commitments, and'all other legally binding arrangements (A) set' forth'in-Schedule 2.02(a)(iv),

(B) associated with'emergency.preparedness' (including

-those,relating to-emergency. sirens-or radiation monitors), (C) between' Seller' and",NYPA primarily related to-the operation-or-maintenance of the Auctioned Assets,. butitekcluding'.anysuch contracts, agreements, leases, licenses, 'or' commitments pertaining to.>Seller's obligations relating. to the Transmission System, the Substation. or the supply-of power or (D) entered into.by"Seller'between the date of this Agreement and Closingin accordance with Section 6.01, in.'each case, to: thbeextent they haVe'not expired prior to "Closing (the..,"Contracts");

.() the Permits, Environmental Permits and NRC Permits that' are 'transferred or transferable by Seller

.to Buyer by.assignment or-otherwise oriwhich will pass to Buyer as successor-in title-to the Generating Plants or Gas Turbines (collectively,;the-."Transferable Permits"), including the' Transferable Permits set forth tin Schedule 2.02(a) (v); -

(vi). A) data, information,,books, operating records, operating,,-safety, quality,,assurance and maintenance-,manuals,.engineering-,design-information and plans, blueprints and as-built plans,. specifications, procedures, facility compliance plans, environmental

,procedures and other-records of Sellerirelating

.aily.t-.the design, construction,:licensing,

regulation, operation-or. Decommissioning of the Auctioned Assets,,whether existing in.paper, magnetic

.or,electironic form,.including third party designs, drawings; and specifications.used in, or necessary for, the llicensing,, operation.or Decommissioning of the

-Auctioned Assets (collectively, "Oneratina Records"),

,(B):.to the -extent permitted or required by Law, all

.. personnel files relating to Continued Employees, including files that pertain to (1) skill and development training and resumes, (2) seniority histories, (3) salary and benefit information, (4) active medical restriction forms, (5) records that INYCorp;1173312.1:4'738W:1II/14/00-11 :45a]

26 are required to be retained by Buyer pursuant to 10C CF.R. Section 26 and (6) any other matters, but not including--any performance evaluations, disciplinary records, fitness for duty reports-or Occupational Safety and Health Act medical reports.(other than such evaluations,-records or reports necessary for Buyer to satisfy the-requirements of NRC Law or any NRC permit)

(collectively, the "Coitiinued Employee Records") and (C) all-acc6unting and other records related to the Decommissioning Funds (other than general' ledger accounting records) (collectively, the "Decommissioning Accounting-Records") ;

provided,- however, that Seller shall.be permitted to retain copies to the extent it provides Buyer with copies or originals of same, of all Operating Records, Continued Employee Records and Decommissioning-Accounting Records; (vii) subject to Sections 2.04 and 7.02(d), the Patents, all rights'of Seller in and to the name "Indian Point 2-Nuclear Power Station" and any related or simillar names and the right to use at,:-r in

-connection 'with, the GeneratingPlants~or the Gas Turbines all other Intellectual Property relating primarily to, or used primarily in the operation of, the Generating Plants or the Gas Turbines;

-(viii) the-assets of the Decommissioning Funds contemplated by Sections'6.07(a) and (b) to be transferred to Buyer; (ix) any credit or credits associated' with assessments for the disposal of Low-level Radioactive

Waste accumulated by Seller prior to Closing pursuant to the New-:York Public Authorities Law Section 1854-d.2, as amended, to the extent assignable to Buyer;-

(x) the Nitrogen Oxide Allowances set forth in Schedule 2.02(a)'(x) that are allocated by'NYSDEC to the Gas Turbines;for the control periods in 2001 and 2002, but less any such Nitrogen Oxide Allowances (or portions thereof) that are used by Seller in connection with operating the Gas Turbines prior to Closing consistent with past practices 'and system reliability requirements of Seller (it being' understood that, for purposes-of this Agreement, one Nitrogen Oxide Allowance shall be deemed "used" for'each ton of nitrogen oxide emitted from the Gas Turbines between May 1 of any year and September 30 of such year, inclusive);-

(NYCorp;1173312.1:4738W: 11 /14/00-11:45aI

27 (xi) all..claims or-causes of action for the refund

,or return of any payments-made or to be made (including any Spent.Nuclear.Fuel-Fees paid or payable) pursuant to the DOEStandard Contract with regard to electricity generated at the Generating Plants and sold on or prior to Closing, but specifically excluding any-claims or causes of action in respect of damages to property or economic loss related-or pertaining to the Department of Energy.'s breach or-default under the DOE Standard Contract accrued'prior to Closing;.

(xii) to the extent transferable to Buyer, Seller's

ANI primarynuclear-liability.policy (facility policy),

secondary financial protection and master nuclear

.worker liability-policy'.-(master worker~policy), and all rights to premium refunds or premium returns (including shutdown credits and premium returns.-under the Industry Credit-Rating.Program) that relate to-premiums paid by Buyer (including premiums which are Prorated Items, to the.extent paid,by Buyer),for periods after Closing pursuant-to such policies;..and (xiii) Seller'.siclaims.'and rights against any third party arising out of or relating to any of the Assumed Obligations.

(b)

Retained Assets.

The term "Retained Assets" means:-

(i) except (A) as.set forthin Schedule 2.02(a)(iii) or (B) as located on Buyer Real Estate and not set forth in:Schedule 2.02(b)(i), all Interconnection Facilities and transmission and

... distribution assets owned,-,controlled or-operated by

,Seller-for purposes.,ofiprovidingtransmission service (including point-to-point transmission: service),

network integration;service andidistribution service and other related'purposes,.-including the real property and substation madhinery,,,equipment and facilities located at-,the.-Buchanan Substation>.(the "Substation")

. -usedin,controlling continuitybetween the-Generating

..Plants.ndGas Turbinxes--and,,the transmission and distribution facilities and for other purposes (the "Transmission-System",);

/

(ii)(A) -all>Revenue Meters installed by Seller; (B) all--Communications Equipment and-related support equipment,(1) located on-Buy~er Real Estate or temporarily,removed from Buyer Real Estate, for repairs, servicing or maintenance and listed in Schedule 2.02(b)(ii)(B) or acquired by Seller after the date of (NYCorp;1173322.1:4738W: 11/14/00-11 :45aI

28 this Agreement and' designated by Seller as a Retained Asset or (2) located on Seller Real Estate or temporarily removed from Seller Real Estate for repairs, servicing or maintenance; and (C) all Protective Relaying'Systems not located on Buyer Real Estate; (iii) except.as set forth in 'Section 2.02(a)(viii),

all cash, ccash equivalents, banik deposits and accounts receivable held or owned by Seller (including Seller's account balances with NEIL);

-(iv) (A) all mainframe computers of Seller and (B) all Intellectual Property-relating primarily to any other Retained Assets or any Retained Liabilities; (v) the names "Consolidated Edison", "Con Edison",

"Con Ed", "Consolidated Edison` Company", "Consolidated Edison Company of New York, Inc.", "Consolidated Edison, Inc.", "New York Edison", "Brooklyn Edison",

"Staten Island Edison" and "Edison" and any related or similar trade names, trademarks, service marks or logos (and any rights to and in the same, including any right to use the same);

(vi) subject to Section 6.06(c), any refund or credit related to Taxes or sewer rents or water charges or any other liabilities or obligations in respect of the Auctioned Assets, in each case, attributable to periods (or portions thereof) prior to Closing; (vii) except as set forth in Section 2.02(a)(xii),

(A) all insurance policies of Seller related to the Auctioned Assets, including all Nuclear Insurance Policies,:and (B) all rights to'distributions, credits (including-shutdown credits), premium refunds or premium:returns (including shutdown credits and premium returns under the Industry Credit Rating Program) under all insurance policies, including all such rights to (i) Seller's member insurance accounts, policyholder insurance records and policyholder percentages under its Nuclear Insurance Policies and (ii) Seller's future distributions, credits, premium'refunds or premium returns from its'Nuclear-Insurance Policies; A(viii) all claim's or causes of action for refunds of Department of Energy Decontamination and Decommissioning-'Fees, in each case, paid-by Seller as contemplated by Section 2.03(b)(iv);

INYCorp;1173312.1:4'738W: 11/14/00-11:45a1

29 (ix) all personnel records (other-than Continued

..Employee Records) and all other records -(other than Operating Records and Decommissioning Accounting Records);

.(x) all claimsor.causes of action in respect of damages to property or economic loss.related or pertaining to the Department of Energy's breach or

. default under the.DOE Standard Contract accrued prior

.~to.Closing, but specifically excluding any claims or causes of.action for-the'refund or-return,.of any payments made or to be made (including any:Spent Nuclear Fuel Fees paid or payable) pursuant to the DOE Standard Contract.with-regard to electricity generated at the Generating-Plants and sold.on or prior to Closing; (xi) all emission reduction-credits,.sulfur dioxide allowances and Nitrogen:Oxide Allowances3 that relate to the Retained Assets or any other of Seller's assets that are not Auctioned Assets,(excluding, for

,clarification, any Nitrogen OxideAllowances allocated by-NYSDEC to the Gas Turbines for~periods-.after Closing), and, except as set forth-in-Schedule 2.02(a)(x) and-except as set-forth in

..Section 2,.02(a)(ix), all other environmental related allowances and-credits-of anynature held or possessed by Seller; and a

-(xii)-any other.asset that is not described in this Agreement as an Auctioned.Asset.

SECTION 2.03.

Assumed Obligations and Retained Liabilities.

(a) Assumed Obliaations.- At Closing, Buyer

-.. shall-assume, and after-Closing,.- shall -discharge, all of the following liabilities and obligations, direct.or indirect,

-known or-unknown, absolute orkcontingent, which:relate to the Auctioned-Assets or are-otherwise specified-below (collectively, the Y"Assumed Obliaations").::-

(i)-except as set (forth :in Section 2.03(b) (ii),

any liabilities and obligations under. the.-Contracts, except, in-each.case,--to -the extent such:liabilities and.obligations,-butfor a breach or default by Seller prior. to Closing,-would-have been paid, performed or

..otherwise discharged on or prior to Closing, or to the

-extent-the same arise out of any such breach or default; (ii) any liabilities and obligations for goods delivered or services rendered, in the ordinary course (NYCorp;1273312.1:4738W:11/14/00-11:45aI

30 of business, after Closing-to, or for the benefit of, Buyer or the Auctioned Assets;' pr6vided7 however, that Buyer shall not be obligated to assume any liabilities and obligations for any such goods-and services to the extent the same are included in the determination of the, adjustment'of the Purchase Price pursuant to Sections"3.02(c) (i), (ii) and (v);

(iii)'except as set forth in Sections 2.03(b)(iii),

2.03(b)(v)-a'nd 2.03(b)(vi), any Environmental Liability, whether arising, accruing or occurring prior to, on, or after Closing; (iv) any"liabilities and obligations in respect of amounts*owing under the DOE'Standard Contract, including any Spent Nuclear Fuel Fees, and any other fees and expenses, in each case, associated with electricity gienerated at'the Generating Facilities and sold"afte'r the Closing Date; (v) any liabilities and obligations'(including any Environmental Liabilities) in respect of (A)

Decommissi'oning following permanent cessation of operations or-otherwise, (B) the management, storage, removal,'transportation and disposal of'Spent Nuclear Fuel'l'ocated in, on or at the Generating Facilities after Closing, and (C) any other disposition of the Auctioned Assets after Closing;

"(vi) (A) any liabilities and obligations for any ANI or Price-Anderson' Act secondary' financial protection retrospective premium obligations in conn'ection'with-the ANI or Price-Anderson Act policies and'financial'assurance or protection:applicable to any of the Generating Facilities for (i)'any nuclear worker liability attributable to employment by-Seller on or prior to Closing'or (ii) for any'thi'rd party nuclear liability arising out of any incident or occurrence on or prior to Closing (it being agreed that if Seller is unable to cause the assignment of all or any part of such retrospective premium obligations, Seller shall remain primari'ly'liable for such obligations and Buyer shall-indemnify Seller therefor pursuant to Section 9.01(b)) and (B) any liabilities and obl'igations of Seller for-retrospective premium obligations arising on or after Closing under Seller's NEIL insurance policies applicable to any of the Generating Facilities; (vii) except as set forth in Section 2.03(b)(v), any liabilities'and obligations with respect to the Permits (N~YCorp;1173312.1: 4738W: 11/14/00-11:45aI

31 and the NRC Permits*to the extent arising from events occurring after Closing;*.

.... (viii).-,(A),all wages, overtime, employment Taxes, s severance pay, transition payments,,.workers compensation benefits,,.sick pay, health care continuation coverageobligations under COBRA, occupational safety and health liabilities or other similar liabilities.and obligations in-respect of

'Continued Employees to the extent-arising from events

x

.occurring,after Closing,-,and (B)Iall other: liabilities and obligations with.respect to the Continued Employees for which.Buyer is responsible pursuant to Article VIII;.

(ix),except for Environmental Liabilities the allocation of which is governed by,.other;-provisions of Section.2.03(a) and by Section.2.03(b), any liabilities and obligations in respect2 of (A) any claims or causes of action by any-person in-respect of-;damages to property, personal injury, death or economic loss relating to,,resulting from-or.arising/-out of the' Auctioned Assets,.or.(B) any claims or-causes of action by any Continued Employees in~respect of discrimina-tion, retaliation, wrongful discharge, unfair labor

.. practice or-other-employment-related matter, in the

'case of each of the-foregoing-,clauses (A) and (B),

to the extent arising-from events.occurring after Closing; to h(x)any liabilities and obligations, with respect to the periods that include the-Closing Date, with respect to real or personal property rent, Taxes based on the ownership or;use.of property,--.utilities charges and similar charges,.'in-reach -ca'se, relating primarily

.to the operations. of.the -Genierating Plants ore the Gas Turbines or the.Toddville 2Training Center, and,

salaries, wages and otherrcosts and expenses in-respect of Continued Employees (collectively,' the "Prorated Items"),-torthe;extent such.*Prorated. Items relate to the period after.,Closing,..including, (A) personal property.Taxes,-real--estate and occupancy, Taxes, assessments'and other charges, (B) rent and all other -

items-.payable.by-Seller~under'any Contract, (C) any

.fees with 'respect to any Transferable, Permit, (D) sewer rents and. charges for.water, telephone,.,electricity and other utilities and (E) insurance premiums for the

-insurance.-described'in-.Section 2.02(a) (xii), in each case, calculated by multiplying the-amount of any such Prorated Item by a-fraction the numerator of which is

.the number of days--(orportions-thereof) in such period (NYCorp;1173312.1:4738W:1I1/14/OO-11:45aI S

i

32 after Closing and the denominator of which is the number of days in such period; (xi) any liabilities and obligations in respect of Taxes (other than Prorated Items)' attribiutable to the Auctioned Assets related-to Taxable periods (or portions thereof) beginning after Closing; (xii) except for Environmental-Liabilities the allocation'of which is governed by other-provisions of Section 2.03'(a) and by Section 2.03(b), any liabilities and-obligations'arising after Closing in respect of damage to property, personal'injury, death or economic loss relating to, resulting from or arising out of any

.Protective Relaying System or Substation Interface Cables'-owned,':maintained'or controlled by Seller, regardless of whether such liabilities or obligations are caused by-a Seller Indemnitee or a Buyer Indemnitee (except where caused by'the gross negligence or wilful misconduct of'a'Seller Indemnitee);-

(xiii)-any'other liabilities and' obligations expressly allocated to Buyer or ENO'in this Agreement or in any'Andillary Agreement; and (xiv);except as otherwise expressly set forth in this Agreement or-any Ancillary Agreement, any-other liabilities-'and obligations to the extent arising from or relating primarily to the use, ownership, lease, operation, maintenance or control of the Auctioned Assets -after Closing.

(b) Retained Liabilities.

The term "Retained

- Liabilities" means'-the following liabilities and obligations, directi'or indirect, known or unknown, absolute or contingent, which'relate to the Retained Assets or are otherwise specified below:

-(i)-:any-liabilities and obligations of Seller to the extent arising from any Retained'Assets (other than as contemplated by Section 2.03(a) (xii));

(ii)-'any liabilities and obligations of Seller, including under Contracts, for'g6ods delivered or services'rendered prior to Closing; (iii) (A) any'liabilities and-obligations of-Seller under or related to any Environmental Law to the extent arising as'a result of or in conrectio'n'with the Off-Site-remediation, transportation, storage, Release, handling or recycling of, or arrangement for such (NYCorp:1173312.1:4738W:11/14/00-11:45aI

33 activities with.,respect to, Hazardous Substances prior to Closing, in 'connection with 'the owner'ship or

...operation of the Auctioned Assets or (B) any liabilities and obligations of Seller 'for any loss of life or injury to persons or property-to'the extent arising from any,Release of.Hazardous Substances to the environment from the leak that-occurred on February 15,

'.. ' 2000 on No.,24 steam generator'.at.Indian Point Unit 2,

-but only.to the extent.that'any-such liabilities or

obligations are in'.excess of the proceeds or benefits recovered or recoverable by or paid or available to

Buyer under any insurance policies, including those transferred to Buyer-pursuant to Section.2.02(a)(xii),

.or pursuant.to the Price-Anderson Act, (iv) any-liabilities and obligations of Seller in respect of (A) amounts.-owing under the.DOE Standard Contract,.including any Spent Nuclear Fuel-Fees

,..associated with.electricity generated at!the Generating Facilities and sold prior to Closing and (B) any Department of.Energy.Decontamination and

.Decommissioning-Fees accrued-for periods prior to Closing under 42, U.S.C.A. § 2297g-1;',..

. (v)Many monetary fines (excluding. (A).natural

..resource.damages, (B). cleanup or rermediation costs and

' (C) other costs of a similar nature) imposed by a Governmental Authority to the extent resulting from an

,investigation, proceeding or inspection before or by a Gbvernmental Authority relating to actions or omissions or alleged actions or omissions-of;Seller prior to Closing; (vi) any liabilities and obligations of Seller for

. any. loss of, lifeor injury.to persons or property to

'theextent arising from exposure to asbestos or asbestos-containing-materials at the Auctioned Assets prior to Closing;

.(vii) (A).all wages, overtime, employment Taxes,

..,severance.pay, transition-payments, workers compensation, benefits, sick-.pay, health care continuation coverage obligations: under COBRA, occupational safety and health liabilities or other

.-.-,similar liabilities-and.obligations(in respect of

. Affected.Employees-to the extent arising; from events

-occurring'prior to.Closing and (B);all other liabilities-and obligations with respect to the

'Affected Employees forwhich.Seller is responsible pursuant to Article VIII; (NYCorp;1173312.1:4738W:11/14/00-11:45aI

34 (viii) except for Environmental Liabilities the allocation of which is governed by other provisions of Section 2.03(a) and by Section 2.03(b) and except for any'liabilities and obligations to which Section 2.03(a)(xii)'applies, any liabilities and obligations in respect of (A) any claims or causes of action by 'any person in'respect of damages to property, personal injury, death or economic'loss relating to, resulting from or arising out of the Auctioned Assets, or (B)-any claims or causes of'action by any Affected Employees'in respect of discrimination, retaliation, wrongful discharge, unfair labor'practice or other employm'ent-related matter, in the case of each of the foregoing clauses (A) and (B), to the extent arising from acts or omissions of Seller prior to Closing; (ix) any liabilities and obligations, with respect to the'period prior to Closing, 'for the Prorated Items, calculated'as set forth in Section 2.03(a)(x);.

(x)any-liabilities and obligations in respect of Taxes (other'than Prorated Items) attributable to the Auctioned Assets related to Taxable periods (or portions thereof) ending before Closing, including Income Taxes attributable to income realized by Seller pursuant to the transactions contemplated by this Agreement; (xi) any' iabilities and obligations arising after the date of this Agreement in respect of which Seller has providedpursuant to Section 6.01(d)(ii) that such liabilities and obligations shall not be assumed or retained by Buyer; (xii) any other liabilities and obligations expressly allocated to Seller in this Agreement or in any'Ancillary Agreement; (xiii) any mortgages, pledges, liens, security interests and conditional and installment sale agreements, in each case to the extent in existence prior to Closing and other than any Permitted.

Exceptions; and (xiv)'-except as otherwise expressly set forth in this Agreement`or any Ancillary Agreement, any other liabilities and obligations to the extent arising from or relating-'primarily to the use, ownership, lease, operation, maintenance or control of the Auctioned Assets prior to Closing.

INYCorp;1173312.1:4'738W: 11/14/00-11:45aI

35

:SECTION 2.04.. Third Party-Consents.

Seller and Buyer.agree that.if any consent-to an.assignment of any Contract,. warranty or Patent shall not be-obtained or if any attempted assignment would in Sel-ler'!s.reasonable-.opinion be ineffective or: would.impair any material-rights and

.... I I.

. J,..............................

obligations'of,:Buyer under such Contract, warranty or Patent, as applicable,-so that Buyerwould not acquire the benefit of all such rights and obligations, Seller, to the maximum extent permitted by Law and such Contract, warranty or Patent,.as applicable, shall after-Closing appoint Buyer to be Seller's representative and agent with respect to such Contract, warranty or.Patent," as;applicable,.and Seller shall, -to the maximum extent permitted.byLaw and such Contract, warranty-or Patent,.as applicable, enter into such reasonable arrangements with Buyer as are necessary to provide Buyer with the benefits and obligations of such Contract, warranty or Patent, as applicable; provided, however, that Seller shall;have the option to terminate any such Contract in accordance with Section 6.04(g) or any Patent that constitutes a-license authorizing Seller's use of patented items or processes owned by third parties.

Seller shall.use its-.reasonable~best efforts after Closing toobtain-an'assignme tof each such Contract, warranty or

-Patent,.as applicable, t'o:Buyer and Buyer-shall cooperate in good faith-in connection with Seller's efforts.--The

.exercise byBuyer and Seller-.of the terms of -this Section 2.04 prior to Closing shall in no event.dconstitute a

.waiver'Lof the conditions to Closing set forth in Section 7.02(d).

SECTION 2.05. -Franchise Property.

(a)- Not-withstanding-Section.2.02(a)(i),.(ii) and (iii), to the

-extent-it would be unlawful for Buyer--to operate,-use or

,maintain any of-the property listed in Schedule 2.05(a)

.'(collectively, the."Franchise Prooerty"') without Buyer obtaining from the appropriate-GovernmentalAuthority a revocable consent,. franchise--agreement-or other arrangement permitting Buyer to hold title to the Franchise Property (a

-,"Revocable Consent!), (i) -Buyer shall-use its reasonable best efforvts to.cause.a-Revocable Consent-to.be entered into

_prior toClosing,.includingfiling;a petition or petitions with the appropriate Governmental" Authority -in respect of such Revocable Consent, and Seller-sha'll cooperate in good

'faith in connection therewith, -(ii) if such Revocable

-Consent has not -been obtained by Buyer -prior to Closing (A) title to the-Franchise Property shall be deemed-not to

'-be transferred at'Closing, (B) Seller shall, after. Closing, appoint Buyer to be Seller'srepresentative-with-respect to the-Franchise Property,;.,(C) Seller shall operate, use and maintain the Franchise Property at-Buyer'-sexpense and Buyer shall pay all rea-l andpe'rsonalproperty taxes applicable lNYCorp;1273312.1:4738W:11/14/00-11 :45aI

36 thereto and (D) Buyer-shall use' its reasonable best efforts after Closing to' cause such Revocable--Consent to be entered into, at'which time title to the Franchise Pro'perty shall be deemed transferred from Seller to Buyer pursuant to this Agreement,'and Selleir shall cooperate it good 'faith in connection'therewith and I(iii) Buyer shall'pay all fees, charges and other'e'xpenses in connection-with such Revocable Consent.

(b) For purposes of (i) the Ancillary Agreements and Sections 2.03,'9.01 ah&9;02 of this Agreement, the terms "Auction-ed'Assets" and "Buyer'Facilities" shall in any event each 15bedeemed to include the. Franchise Property and (ii) the Franchise Property'shall in-any event be deemed to be owned by Buyer.

ARTICLE III Closing SECTION 3.01.

Time and Place of Closing. Upon the terms and subject to the satisfaction of the conditions contained in' Article VII, the closing'of'the sale of the Auctioned'Assets'c6ntemplated by this Agreement (the "Closing") will_'take place on such date as'the-Parties may agree, which-date shall be as soon as practicable, but no later'than ten Businiess Days, following the date on 'which all of the conditions set forth in Article VII-have been satisfied or waived by the Party or Parties for whose benefit such c6nditions exist, at the offices of Cravath, Swaine & Moore in New York City or at such other place or time as the'Pakties may agree.

The date' at which Closing actually occurs is hereinafter referred to as the "Closing

'Date" and Closing shall be effective for' all'purposes herein as of 12:00 noon'New York City time-(or such other time as the parties may agree) on such date.

SECTION-3.02.

Purchase Price.

(a) The purchase price for the Auctioned Assets shall be'$502,000,000, as adjusted pursuant-to'Sections 3.02(c)'below (as adjusted, the "Purchase Price").

(b) At Closing, Buyer will pay or cause to be paid to'Seller by wire transfer of immediately available funds to an account-previously designated in writing by Seller an amount'in United States dollars equal to the Purchase Price, adjusted in'accordance with'-and as contemplated by-Section 3.02'(d) for'amounts not in dispute (as adjusted,'the "Non-Disputed Amount").

(NYCorp;1173312.1:4738W: 11/14/00-11 :45a1

37 (c)

The Purchase Price shall be-adjusted as follows:

(i).the Purchase.Price shall be increased by the book value, as reflected on the books of.Seller as of Closing, of all fuel (including Nuclear Fuel) inventory included in the Auctioned Assets; (ii).the Purchase-Price shall be adjusted by the a,.

6uritof the-Prorated Items,.tothe extent such

. Prrat&d Items can be reasonably,determined at such time; (iii).,the Purchase. Price shall be increased by the

.amount,if, any, by.which the Fair Market Value of the

.assets 'of the Qualified;Decommissioning;Fund transferred to Buyer pursuant to-Section 6.07(a) is greater than $430,000,000; (iv) -if Seller-fails to spend the-Required Capital

'Expenditures-Amount, inmconnection with the capital projects -set-forth..onrSchedule 3.02(c)(iv),-then the Purchase Price shall be'..decreased by an amountequal to the'difference between(A) the Required Capital Expenditures Amount and (B).theiaggregate amount of capital'expenditures madeby Seller-on.or. after

' January 1,.2001 through the-.earlier ofbDecember 31, 2001and the Closing,-,Date in connection with.:the capitsal'projects set".forth on -Schedu16.,3.02(c) (iv);

(v) the-Purchase Price shall be (A) increased by the amount that the book value of all-,Inventories

-..,.(determined.in accordance with GAAP)- as --

of Closing is greater.-than $37,,590,000,.a-nd (B) decreased~by the amountthat the book value.of-such Inventories (determined'in accordance with -GAAP). as-of Closing is l'ess, than, $34,010,000J.;

r

,(vi) if thework specified in.Schedule-33.02(c) (vi)

'has not been' completed and paid for by.Seller prior to Closing, then the Purchase Price shall be decreased by an amount.equal to (A).-$207,,000. minus (B) the aggregate amountpaid by.Sellera's of Closing in connection with

.. the wo'rk specified-in.Schedule 3.02(c) (vi);

';.(vii) if the reasonably.estimated co'st as of.Closing to'disposeof Low-levelRadioactive,;Waste'-(other than asprovided on Schedule 3.02(c)(vii)) that is'stored on-site at-the,.Buyer Real Estate.as of Closing for the purpose of off-site disposal exceeds-$310,000, then the Purchase Price shall be decreased by,$1.00 for every INYCorp;1173312.1:4738W: 11/14/00-11 :45aI

38 dollar-that such reasonably estimated cost of such disposal exceeds $310,000; provided, however, that the calculation of such reasonably estimated costs of such disposal shall be determined by reference to applicable industry practices and prices-prevailing as of Closing; and (viii) if Buyer elects prior to Closing to purchase insurance to cover, among other things, the off-site migration-'or Release of Hazardous Substances from the Auctioned'-Assets, then the Purchase' Price shall be decreased by the lesser of the cost of-the premium for such insurance or $200,000; provided, that nothing in this:'Section 3.02(c)(viii) is intended to modify or alter the Parties' retention or assumption of liabilities' and obligations, as the'case may be, under Section 2.03.

(d) At least 20 Business Days prior to the Closing Date,' Seller shall prepare and deliver to Buyer an estimated closing-statement -(the "Estimated"Closinq Statement")-that shall set forth Seller's good faith

'estimate 6f the'adjustments required by Section 3.02(c) (the "Estimated' Adiustment Amount") as of 'Closing. Within 10 Business Days following'the delivery of the Estimated Closing'Statement-by Seller to Buyer, Buyer may object in good faith to th6'Estimated Adjustment-Amount in writing.

If Buyer.so'obj6cts to the Estimated' Adjustment Amount, the Parties shall-'attempt to resolve such dispute through good faith negotiation.

If the Parties are unable to resolve such dispute before five Business Days prior to the Closing Date (or-if Buyer fails to object to the'.Estimated

'Adjustment Amount by the date specified)the Purchase Price shall be adjusted for purposes of Closing by, as applicable, the amount of the Estimated Adjustment Amount riot disputed in good 'faith by-Buyer or by the Estimated Adjustment Amount (if the Buyer fails to object to the Estimated Adjustment Amount by the date specified), and the amount, if any, in good faith dispute shall be reserved for resolution in accordance with Section 3.03 below.

SECTION3.03.

Post-Closing' Adiustment.

(a) Within 20 Business Days after Closing, Seller shall prepare and deliver to Buyer-a statement (an "Adjustment Statement") which reflects the calculation of the Purchase Price taking' into account the adjustments required by Section 3.02(c) as of Closing (the "Adjustment Amount"),

and, upon request of-Buyer, related accounting material used by Seller to prepare'the Adjustment Statement.

The Adjustment Staterment'shall be prepared using' GAAP and the fuel adjustmenti'set forth in Section 3.02(c)(i) with respect INYCorp;1173312.1:4738W:11/14/00-11:45a)

39 to Nuclear Fuel.shall be prepared using the same unit cost methodology that Seller-has...historically used to calculate the;.book value of its.Nuclear Fuel asset forth in, Schedule 3.03(a).

Buyer agrees. to' cooperate with Seller in connection with the preparation of the.Adjustment Statement and related information, and-shall provide to Seller such access, books, records and information as may be reasonably requested from time to time.

(b) Buyer may in good-faith dispute the Adjustment Statement, by notifying Seller in writing of the disputed amount, and the basis of such dispute, within 20 Business.Days of Buyer's receipt of the Adjustment Statement'.'" Buyer.shall have no right to dispute the unit cost methodology (as.set qforth'in Schedule 3.03(a)) used to calculate-the book value-.df theNuclear Fuel inventory or the 'appropriateness,- under GAAP or.otherwise,-of. using such methodology.' In the event of, a dispute,-Buyer and Seller shall attempt to reconcile.their differences and any

resolution.by them as to any disputed amounts;shall be final,.binding.and conclusive'on the Parties.

If Buyer and Seller are unable to reach a resolution of,,such-differences within 20-Business Days.of receipt of Buyer's.written notice

..'of dispute to Seller,-BBuyer and Seller shall submit the amounts remaining in dispute.for determination and.

resolution to anindependent-accounting fi'rm.of recognized nation l!standing reasonably acceptable to-Seller and Buyer

(the "Accountants"),.which shall-be instructed to determine and report to'.the'Parties, within 20 Business Days-after such submission, upon such-.remaining disputed.-amounts, and

-. such report shall be final,- binding and conclusive.on the

..Parties with respect to--the amounts-disputed in respect of the Adjustment Amount.. The.fees-and disbursements of the Accountants in connection with the resolution of such

.-.-.disputed amounts shall-be borne by the Party whose-position

-.generally did not prevail,-.or if-the Accountants determine that neither Party could be fairly.;found to be the prevailing party,, then such *fees and disbursements shall be

.- borne.equally by Buyer and Seller..-

(c).-: If the Adjustment Amount-is greater.-or less

.than the. Non-Disputed Amount,* then -on the&Adjustment Date

--.(as.defined below),-_(A) to-the extent-that: thefAdjustment

,-,Amount exceeds the Non-Disputed Amount,.Buyer shall--pay to

. Seller -the amount-of such-excess and,:(B)-;to the extent that theAdjustment Amount-is-less than theNon-Disputed-Amount, Seller shall pay to Buyer the amount of such deficiency.

"Adjustment Date" means (1) to the extent that Buyer does not dispute the Adjustment Statement pursuant to Section 3.03(b), the twenty-third Business Day following

[NYCorp;1173312.1:4738W: 11/14/00-11:45aI

40 Buyer's receipt' of the Adjustment Statement or (2) to the extent that Buyer disputes'the'Adjustment Statement' pursuant to Section 3.03(b), the third Business Day following either the resolutionof such dispute by the Parties or a final determination by'the Accountants in accordance with Section 3.03'(b).' Any amount paid under'this Section 3.03(c)

-shall be paid'with interest for the period commencing on the Closing Date through the date'of payment, calculated at the prime rate of the Chase Manhattan Bank in effect on the Closing Date, and in cash by wire transfer of immediately available funds.'

' SECTION 3.04.

Allocation-of Consideration.

Buyer and Seller shall use their good faith efforts to agree on an allocation (the "Allocation") among the Auctioned Assets of the consideration paid' for Nuclear Fuel, the Assumed Liabilities and such'other consideration paid by Buyer pursuant to'thisAgireement consistent with Section 1060 of the Code'and"the treasury regulations thereunder and-private letter rulings issued by the IRS within 120 days of the'date of this Agreement'(or'such later date as'the Parties may mutually agree)but in no event fewer than 30 days-prior to Closing.' Buyer and Seller may obtain the services of an independent-engineer or appraiser (Independent Appraiser")

to assist in determining the&fair market value of the Auctioned Assets' and such'other consideration paid by Buyer solely for purposes of the Allocationh'under this Section 3.04.

If'such-'an appraisal is'made, Buyer and Seller shall accept' such Independent Appraiser's determination of fair market value of the Auctioned Assets and'such other consideration paid by Buyer.

The cost'of such appraisal shall be borne equally by Buyer and Seller.

To the extent such filings are required, Buyer and Seller shall file IRS Form 8594 and' all federal, state, local' and foreign Tax Returns in accordance with such agreed Allocation.

Except to the-extent required to comply with audit determinations by any authority with jurisdiction over'a-Party; Buyer and Seller-shall report the transactions contemplated by this Agreement and the Ancillary Agreements for all required federal Income Tax and all other Tax purposes in a manner consistent with'the'Allocation determined pursuant to this Section 3.04.' 'Buyer and Seller shall provide the other promptly with any other information required to complete Form 8594.

Buyer'and Seller shall provide'the other with reasonable assistance in'the event of an'examination, audit or other proceeding regarding the agreed Allocation.

INYCorp;1173312.1: 4'138I: 11114/00-11: 45aI

41

.ARTICLE IV.

Representations and Warranties of Seller follow

,-.Seller represents and warrants to Buyer as follows SECTION 4.01. _Organization; Oualification.

Seller is a corporation duly incorporated, validly existing and--in-good standing-under the-laws of the State of New York and-has all requisite:'corporate power and authority to own, lease and operate the Auctioned Assets and to carry on the business-of the Auctioned Assets ascurrently conducted.

SECTION 4.02. -Authority-.Relative to This-Agreement.

Seller has-all necessary-corporate power-and authority to execute-and deliver-thisAgreement and-the Ancillary Agreements and to consummate the transactions 6contemplated-hereby and thfreby. 'The execution and delivery by.Seller.of thisAgreement and the Ancillary Agreements and

..the.'consummation.-by Seller of the transactions contemplated

.hereby and-thereby have been-duly and validly authorized by

'the Board of Trustees of-Seller-or-by a.committee thereof to whom such authority has been.duly delegated-and no.other corporate proceedings on.the-part of Seller are.necessary to

-authorize-this Agreement or-.the Ancillary:Agreements or the consummation of the-transations contemplated hereby or thereby. :This.Agreement and the Ancillary Agreements have

.been'duly and validlyexecuted and delivered by Seller and, assuming that this Agreement andthe.AncillaryAgreements constitute'valid-and binding agreements of,:Buyer and.each other party thereto,-.(other than.Seller),

this Agreement and the&Ancillary..Agreements constitute valid and binding agreements.of Seller, enforceable against.Seller'in accordance with their respectiveterms,..

..SECTION.-4.03...Consents-and-Approvals; No.'

. Violation..- (a).-,Subject -,to-,obtaining--the Seller-Required Regulatory:Approvals and theBuyer.-Required-Regulatory Apprvals,.neithertheiexecution-and delivery'of this Agreement or-the Ancillary Agreements.~by Seller;nor.;the consummation of the transactions contemplated thereby, including the-saleby,-Seller of the Auctioned Assets p,,.Pursuant to thisAgreement,.will (i).-conflict with or result in any.,breach.of any.provision-ofjthe-Certificate of,

- Incorporation~or;By-aws-of-Seller,;(ii),.except'for..

Contracts: requiring consent for.assignment set forth in

. Schedule 4.03(a), result in a-default (or give rise to any right of. termination, cancelation-or acceleration) under any

-of-.the terms,,conditions.or-provisions of any note, bond, mortgage, indenture, license, agreement, lease or other INYCorp;1173312.1:4738W: 11/14/00-11:45a]

42 instrument or obligation to which Seller is a party or by which Seller, or any of the Auctioned Assets, may be bound or (iii)'violate'any'Law applicable to Seller, or the Auctioned Assets, except in the case of clauses (ii) and (iii) for such-failures to obtain a necessary consent, defaults (or rights) and violations which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.

(b) Except for (i) application by Seller to, and the approval' of, the'PSC, pursuant to Section 70 of the Public Service Law of the State of-New'York, of the transfer

'to Buyer of:the'Auctioned Assets, (ii) the filings by Seller and Buyer required by the HSR Act and the expiration or earlier termination'of'all-waiting periods under the HSR

.Act, (iii) application by Seller to, 'and the approval of, FERC-under (A)'Section 203 of the Federal Power Act'of 1935 (the."Federal'Power Adt")'with' respect to the transfer of Auctioned-Assets constituting jurisdictional'assets under the Federal-Power Act and (B)YSection 205 of'the Federal Power Act with-respect to the Continuing'Site Agreement and the Power Purchase-Agreement, (iv) application by Seller to; and the'approval of, the NRC for the transfer'of the-NRC licenses forl the Generating Plant under' the Atomic Energy Act, (v) application by Seller to,'and the approval of, the Securities and'Exchange Commission under the Public Utility Holding Company'Act'of 1935'("PUHCA"), of the'transfer to Buyer of the'"Auctioned Assets, unless (A) FERCI has determined that-Buyer is an exempt'wholesale generator or if Buyer'sapplication for'exempt wholesale generator status is

'deemed granted by operationrof law pursuant to Section 32 of PUHCA or (B) Seller, in its6sole discretion, elects to accept'that Buyer is'deemed-to be;such an exempt wholesale generator'by'virtiue of Buyer applying in good faith to FERC for a determination that Buyer is such an exempt wholesale generator, (vi) application to, and determination by the PSC and such state Governmental Authorities as may be required under PUHCA that,ifor purposes of Section 32(c) of PUHCA, allowing' the' Auctioned Assets to bel"an 'eligible facility" will benefit consumers, is in the public'interest and does

'"not violate state'law, 'and (vii) other declarations, filings or'registrations with, or notices to; or authorizations, consents or approvals of, any Governmental Authority-which become' applicable to Seller or'the transactions contemplated hereby or by the Ancillary'A'reementsdas a result of the specific regulatory'status or jurisdiction of-incorporation

'or organizationof'Buyer (or any of its Affiliates) or as a result of any-'other-facts that specifically relate to the business' or activities in which Buyer (or'any 6f its Affiliates) is or proposes to-be'engaged (collectively, the "Seller Repuird' Requlatory Approvals"), no declaration, LNYCorp;1173312.1:4738W:11/14/00-11:45aI

43 filing-or registration with, or notice.to,.or authorization,

-,-consent or approval of any. 'Governmental Authority is

' 'necessary for the consummatibh by.Seller'of'the transactions contemplated.hereby or by the Ancillary..Agreements,.other

'than @(A) such'declarations, 'filings, registrations, notices,

.authorizations, consents-or approvals which, if not obtained or made, would not, individually or. in the'; aggregate, be reasonably expected to create a Material Adverse Effect, (B)'any certificate.of occupancy, consent-,or similar approval to',authorize the dchange in occupancy of.the-'Buyer

'Real.Estate contemplated-'by 'this'Agreement and.required pursuant to..the Code'of'the.,Village of."Buchanan,.'including specifically 2

9Section211.'49'thereof and (C)';aiy consent of the Commiissioner;'of.General Services of the'State'6f.New York required.for-:the assignment from Seller to Buyer of the right to'install'and maintain'a fish return-pipeline-in an area.in the' Hudson River approximately 30 feet *wide'and 330 feet long.

(c). To theknowledge-of Seller,,there is no

!reason-that it.should to obtain' the Seller Required

-Regulatory Approvals.

.SECTION,4.04. ;Personal PropertV.._(a),Except for

'Permitted.Exc ptions, Seller,has good-and marketable title, free and clear-of all Encumbrances, to all personal property

.included

.in the.'Auctioned Assets..

the ~.

.(b)

Except.as set forth in Schedule 4.04(b), to the knowledge of Seller, the Generating Plants conform in all material respects,'to.the extent required, to the (i)

Technical Specifications included in the NRC Permits for Indian-Point-Unit-1-land Indian Point.Unit 2 in accordance

' 'ith'the requirements-of 1i0C.F.R.'-Section' 50.36.and (ii)

.the Updated'Final Safety! Analysis. Report-required to be

.,maintained.'for-.Indian Point, Unit-1and Indian-Point-Unit 2 in accordance with-the;.requirements of 10 C.F.R. Section 7.

50.71(e).

-ti.-

SECTION 4.05.

Real Estate.

The Conveyance Plans indicate-the location-of-.the Buyer-Real Estate.

Copies of

.,ithe.Conveyance.Plans and Certificates-of;Title Nos. 231-W-

-,08707'and-.231W0117 prepared by First-American-Title

...Insurance Company of New-York, Inc.,;the most.recent

.certificates. of, title in'- the possession of Seller-with

- 'irespect to the Buyer Real;,Estate-or.-any.portion thereof, have heretofore been delivered by Seller to Buyer.or:made available for inspection by Buyer, receipt of which is hereby acknowledged by Buyer.

INYCorp;1173312.1:4738W: 11/14/00-11:45aI

44 SECTION 4.06.

Leases.

As of the date of this Agreement, Seller i's neither a tenant nor a lessee under any real property-1eases which (a) are to be transferred and assigned to-Buyer on the Closing Date'and (b) (i) provide for annual payments-of more than $100,000 or (ii) are material to the Auctioned Assets, except, in each case, as set forth in Schedule 4.06.-

SECTION 4.07.

Contracts.

(a) Except for (i) any Contract'listed in Schedule 2'.02'(a)(iv), (ii) contracts which will expire prior to Closing or that are permitted to be entered into under this Agreement, (iii),contracts associated with :emergency preparedness-(including those relating to,' emergency sirens or radiation monitors),.

(iv) contracts with NYPA and (v) contracts listed in Schedule 4'.07(a),Seller is-not a party to any contract which is material to the business operations of the Auctioned Assets.

b (b)' Each'Contract (i) constitutes a valid and

-bindingobligation of Seller, and, to the knowledge of Seller, constitutes a valid and binding obligation of the other parties thereto, (ii) is in full.force and effect and (iii) except-for Contracts listed in Schedule 4.03(a), may be transferred to'Buyer pursuant to this

'Agreement and will continue-"in full'force and effect thereafter, in each case, without breaching the terms thereof or'resulting in the forfeiture or impairment of any rights thereunder, except.

for such breaches, forfeitures or impairments which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.

- (c)' 'There is not,; under any of the Contracts, any default or event which, with notice or-lapse of time or both, would constitute a default by Seller, except for such events-of default and other events as-to which requisite waivers or consents have been obtained'or which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.

(d) 'There are no suits or arbitration proceedings involving'Seller pending or, to-the'knowledge 6f Seller, threatened relating to any Required Contract which would, individually or in-the aggregate, be reasonably'expected to have a'material'adverse effect on such Required Contract and which is not reasonably likely to be cured by Seller prior to Closing.'

SECTION 4.08.

Legal Proceedinqs.

Except as set forth in Schedule 4.08, there are no claims, causes of action, proceedings or investigations pending or, to the (NYCorp;1173312.1:47381f:ll1/14/00-11:45aI

45 knowledge of Seller, threatened against or.relating to Seller which would, individually or in.the.aggregate, be reasonably expected to create a Material.Adverse Effect.

With respect-to thedbusiness.or operations of the Auctioned Assets, Seller is not, as of the date of this Agreement, subject to any outstanding-judgment, rule,; order, writ,

..injunction or.decree of any Governmental Authority.which would, 'individually or in the aggregate, be reasonably

..expected to create a Material Adverse Effect.

The representations and warranties of Seller set forth in this Secti6n 4.08 shall not apply to, and do not cover, any environmental matters which, with respect to any representations'and warranties of.Seller, are exclusively

.governed.by Section 4.10.

(a)...

SECTION 4..09.. Permits; Compliance with Law.

'(a) Except as set.forth in Schedule 4.09(a), Seller-holds, and.is in compliance with, all Permits necessary to conduct the business and operations of the Auctioned;Assets as currently conducted, and, to the knowledge. of Seller, Seller is otherwise in compliance with all Laws of any Governmental

.Authority;applicable-to the business and operations of the Auctioned Assets, except-for such.failures to hold or comply

-with sich Permits, or-such failures to be in compliance with such Laws, -which would not, individually or in the-.

aggregate, be reasonably expected to create a Material Adverse Effect.

(b), Except as-set forth-inSchedule 4.09(b),

,Seller has not receivedianyzwritten'notification that it is in.violation of any of such Permits or Laws, except for notifications of violations which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse-Effect. iThe-representations and warranties of Seller set forth in this Section.4.09.shall not apply to, and do not cover, (i)'any environmental-matters which, with respect..to any representations and warranties of Seller, are

-exclusively governed by Section-4.l0, (ii)-any ERISA matters

! which, with respect.to, any, representations-andlwarranties of Seller,,areexclusively governed by,:Section, 4.12,--,(iii) any tax matters which,iwith-respect to any.representations and warranties of Seller, are-exclusively governed by2 -W-'I Section 4.13 or (iv) any nuclear matters which, with respect to-any representations and warranties of Seller, are exclusively governed-by-Section 4.17. -

. SECTION 4..10.

Environmental.Matters.

(a), Except as set forth.in.Schedule.4.10, Seller holds, and is in compliance-with, all Environmental Permits required under applicable Environmental Laws to conduct the business and operations of the Auctioned Assets as currently conducted,

[NYCorp;1173312.1:4738W: 11/14/00-11 :45aI

46 and, to the'-knowledge of Seller, Seller is in compliance with Environmental'Laws applicable to the business and operations of the Auctioned Assets,'except for such' failures to hold or comply with such'Environmental Permits, or such failures to be in compliance with such Environmental'Laws, which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.

(b) -Except as set forth in Schedule 4.10, Seller has not received written notice from a Governmental Authority '(i) that it is in violation of any Environmental Law with respect to the Auctioned Assets or' (ii) that it is a potentially responsible party under the Federal Comprehen-sive Environmental Response,-Compensation, and Liability Act or any similar state law with respect to any real property included in' the-Buyer Real -Estate or'in any lease forming part of the'Auctioned Assets,- except for such'matters under such EnvironmentalLaws as would not, individually or in the aggregate,be reasonably expected to create a Material Adverse Effect.'

(c)` Except as set forth in Schedule 4.10, with respect to the 'business a'n'd-operations of the Auctioned Assets, Seller has-not entered into or agreed to any' consent decree or order-and-is not subject'to any-outstanding judgment, decree or judicial order'relating -to compliance with any Environmental Law or to the reniediation of Hazardous Substances under any Environmenttal Law, except for such-consent decrees and orders, judgments, decrees or judicial'orders that would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.,

(d) Except as set forth in'Schedule 4.10, 'there are no claims, 'causes of action, proceedings or investigations-pending, or to the knowledge of Seller, threatened against or relating'to Seller, under or relating to any Environmental Law, which would, individually or in the aggregate, be'reasonably expected'to'create a Material Adverse Effect'. The :representations'and'warranties made in

'this Section 4.10are Seller's exclusive representations and warranties relating'-to environmental matters.

SECTION 4.11.

Labor Matters.

Seller has previously made available to-Buyer copies of all collective bargaining agreements to which Seller is a party or is subject -and which'-relate to the business or operations of

-the Auctioned Assets.

Except-as 'set forth in'Schedule 4.11, with respect to-the'business and operations 6f the Auctioned Assets, (a) there is no labor strike,'slowdown or stoppage presently'affecting the'Auctioned Assets or, to'the

[NYCorp;1173312.1:4738W:11 /14/00-11:45aI

47 knowledge of Seller, threatened-.that-would affect the Auctioned Assets,,(b):Seller has not, receivednotice that any representation petition respecting the employees of Seller has been filed with~the National Labor Relations Board,,(c) Seller-has not experienced any.primary work stoppage.since at least December 31,,1997,:-(d) Seller has not received written notice of any unfair labor-practice

-.complaint-against:Seller pending before~the National Labor

. Relations.-Board-and.(e) no arbitration proceeding arising out of or~under.collective bargaining agreements is pending

,.against.-Seller except,,'in the-case of each of the foregoing

.clauses -'a) through (e),-for such matters as would not, individually-or in the aggregate, be-reasonably expected to create-a-MaterialAdverse-Effect..

SECTIONA4.12.- ERISA; Benefit Plans.

Schedule.-4.12 sets forth~a list, asof the date ofthis Agreement,,,of all material deferred-compensation,:

profit-sharing, retirement Land-pension plans and all-material bonus,and.other :material employee,--benefitor fringe benefit plans maintained, or. with respect-to which:,

contributions have been made,..by-Seller with respect to current employees-employed in connection with the operations of theyGenerating Plants and the Gas Turbines (collectively, "Benefit Plans")..Copies of-all such,'Benefit Plans.have been made'available to.-Buyer. ':Seller and each trade or business (whetheror not incorporated) which-are treated as a single employer with Seller under Section 414(b),.(c), (m) or (o) of the Code (an."ERISA Affiliate") have fulfilled their respective~obligations under.the minimum funding requirements of Section 302 of ERISA,,and Section 412 of the Code, with respect to each BenefitPlan which.is an-'-

"employee pension benefit plan", as defined in Section 3(2) of ERISA.

Each Benefit Plan is in compliance in.all..

material respects with the presently applicable provisions of ERISA andthe Code,-except for.suchfailures to fulfill such obligatfions or comply iwith such provisionswhich would not,.individually or-in.the aggregate, be reasonably expected to create. a Material Adverse Effect.

Neither Seller-nor any ERISA AffiliateFhas.incurred any liability under Section 4062(b) of ERISA, or-any,.withdrawal liability

-.-under Section 4201 of ERISA,. to-the Pension Benefit Guaranty Corporation. (the "PBGC",)-in connection with~any Benefit Plan which.is'subject to Title.IV,-of-,ERISA whichliability

,remains outstanding., Neither-<Seller nor, any.ERISA Affiliate

-has engaged in,-any.-transaction within thewmeaning of Section-4069(b).or Section.,4212(c),of' ERISA.

No Benefit Plan and no "employee pension.benefit-plan" (as defined in Section.3.(2).-of ERISA) maintained;by-Selleror any ERISA Affiliate.or:to which Seller-or any ERISA Affiliate has contributed is a multiemployer plan..-Seller has theright, INYCorp;1173312.1:4738W: 11/14/00-11:45aI

48 in accordance with'and subject to the-terms thereof, to terminate--and modify each Benefit Plan.

SECTIONA4.13.

Taxes.

With respect to the-Auctioned Assets'and-businesses of-Seller related to the Auctioned'Assets,'(a) all-Tax Returns required to be filed havebeen filed and all such returns'were correct and complete in all respects and (b) all Taxes shown to be due on such Tax Returns, and all Taxes otherwise owed for which a Tax Return is not required to be filed, have been paid in full, except to the extent that any failure to file-or any failure of -filed returns to be dorrect-and complete or any failure to pay any Taxes would not, -individually oi: in the aggregate, be reasonably expected to create a Material Adverse Effect.

No written notice of deficiency or assessment has been.'received from-any taxing authority with respect to liabilities for Taxes-of Seller in respect of the Auctioned Assets-which has not been fully paid or finally settled or which is not being contested in good faith through appropriate proceedings, except-for'any-such notices regarding Taxes which would not, individually or in the aggregate, be reasonably expected to'create a Material Adverse Effect.

Except as set forth'in Schedule 4.13, there are no outstanding agreements or waivers extending the applicable statutory periods of limitation for-Taxes associated-with the Auctioned 'Assets-for any period, except for.any such agreements or waivers which would'not, individually or in-the aggregate, be reasonably expected to create a Material Adverse Effect.

The representations and warranties of Seller set-forth in this Section 4.13 shall not apply to,-and do not cover, any Decommissioning matters which, with respect to the representations and warranties of the Seller, are exclusively governed by Sections 4.18 and 4.19.

SECTION 4.14.' Undisclosed Liabilities. As of the date of this 'Agreement, there are no liabilities or obligations of any nature or kind (absolute, accrued, contingent or otherwise) with-'respect to the Auctioned Assets that,;-if they had existed as of December 31,

1999,

'would have.'been'required to be set forth'on Seller's December'31, 1999 balance-sheet or in the notes thereto

-prepared in accordance with GAAP, as applied by Seller in connection with such balance sheet (the "Balance Sheet"),

except for any such liabilities or obligations which (a) are disclosed,-'reflected or reserved against'in the Balance Sheet, (b) are disclosed in or contemplated 6r permitted by this Agreement 'or'the Ancillary Agreements (including the

' Assumed'-Obligations), (c) have been incurred in the ordinary course of'business, (d) are Retained Liabilities, or (e) are set forth-in-Schedule 4.14.

[INYCorp;1173312.1:4738W: 11/14/00-11:45a)

49 SECTION 4.15.

Brokers.

No broker, finder or

.,other-person is entitled to any brokerage fees, commissions or finder'.s fees in connection with the transaction.

contemplated hereby by reason of any action taken by Seller, except Morgan-Stanley & Co. Incorporated,- which is acting for and at.the expense of Seller.

SECTION 4.16.

Insurance.. Set-forth.in Schedule 4.16(a) is a description of the insurance program of Seller related to the ownership or operation of the Auctioned

.,.,Assets. Except as set-forth in Schedule 4.16(b), Seller

. carries policies of insurance covering fire, workers'

.compensation,iproperty all-risk, comprehensive bodily injury, property damage liability, automobile liability, product, liability, completed operations, explosion, collapse, contractual liability, personal injury liability and other forms of insurance relating to the Auctioned

'Assets,.or otherwise self-insures in accordance-with all s,.:statuto'ry-andir'egulatory-,criteria against any such--

liabilities, which insurance,.in all-material.respects, is

_in such amounts, has such deductibles-and retentions and is

. underwritten -bysuch companies'.s would be obtained in accordance with Prudent Utility Practices.

Suchinsurance policies and arrangements are in full force and effect, all premiums with~respect thereto are currently paid, and Seller is-in compliance in all' material-respects with the terms thereof.

SECTION-4.17.,, Nuclear Matters.

(a) Except as

.set forth in Schedule 4.17,-Seller-holds, and is in compliance with, all-NRC Permits-required under the.Atomic Energy Act and-the-Energy Reorganization'Act for Seller to conduct the business and operations.of.the Auctioned Assets as.currently conducted, and,:.to'.the !knowledge of:Seller, Seller;is in compliance with-the AtomicEnergy,-Act and the Energy.Reorganization Act and al lorders.or decisions of the NRC applicable to the business and operations of.the; Auctidned Assets, except for such failures to hold or comply

.-, with such NRC-Permits, or such.-failures to, be in compliance

'_.with the Atomic Energy Act: or-the.-Energy:.Reorganization Act, or any' such' orders or-decisions of the,<NRC,. which would not, individually-or in the-aggregate,- be-reasonably expected to

.- --create a Material-Adverse Effect-.,

_ cre

'I (b) Except as set'forth in Schedule 4.17, Seller has not-.received from any Governmental Authority any written

.,notice that-it is-currently-in violation.,of any-order, rule, regulation or decision of ;the NRC applicable to the

-.AuctionedAssets.

INYCorp;1173312.1:4738I: 11/14/00-11:45aI

50 SECTION 4.18'. Oualified Decommissioning Fund.

(a) Seller's-Qualified Decommissioning Fund-is a trust validly existing and in good standing under the laws of the State of New York.

Seller's Qualified Decommissioning Fund satisfies the reqiiirements necessary'foF such Fund to be treated as a "Nuclear Decommissioning Reserve Fund" within the meaning of Section 468A(a) of the Code and as a "nuclear decommissioning fund"-and a "qualified nuclear decommission-ing fund" within the meaning of Treas. Reg. Section 1.468A-l(b)(3).

Seller's.Qualified'Decommissioning Fund is in compliance with all applicable rules and regulations of the NRC, FERC, PSC and IRS, except for any such noncompli-ance which would not, individually or in the aggregate, be reasonably expected-to create a Material Adverse Effect.

Seller's Qualified Decommissioning Fund has not engaged in any acts of "self-dealing" as definedd in Treas. Reg.

Section 1.468A-5(b)(2).

No "excess contribution", as defined in Treas.:Reg. Section 1.468A-5(c)(2)(ii), has been made to the Qualified Decommiissioning Fund which has not

-been withdrawn within the period provided under Treas. Reg.

Section 1.468A-5(c)(2)(i).

Since 1988, Seller has made timely and valid elections to make annual contributions to the Qualified Decommissioning Fund.

(b) -'Seller has delivered-to Buyer a copy of the schedule of ruling amounts most recently issued by the IRS for the Qualified Decommissioning Fund, a copy of the request that was filed to obtain such schedule of ruling amounts and a.copy of-any-pending request for revised ruling amounts, in each'case, together with all exhibits, amend-ments and supplements thereto.

There are no interim rate orders that'may be retroactively adjusted, or retroactive adjustments to interim rate orders, that may materially affect amounts:that Buyer may contribute to the Qualified Decommissioning Fund or that may require material distributions to be made from the Qualified Decommissioning Fund.

(c) -The December 31, 1999 balance sheet for the Qualified Decommissioning Fund, previously made available to Buyer,-has.been prepared in accordance 'with GAAP applied on a consistent-basis (except as may be described in the notes thereto) and fairly presents the financial position of the Qualified Decommissioning Fund as of December 31, 1999.

(d) Seller's Qualified Decommissioning Fund has filed all Tax Returns required to be filed and all material Taxes shown to be due on such Tax Returns have been paid in full.

No written notice of any material deficiency or assessment has been received from any taxing authority with respect to liabilities for Taxes of the Qualified Decommis-(NYCorp;1173312.1:4738W:11/14/00-11: 45aI

51 sioning Fund which has-not-been fully-paid or finally

.-- settle dor whichis not being contested in.-good-faith

' through appropriate-proceedings.-

(e) To the extent-Seller-has, prior to-the Ciosing;Date,-pooled the.assets of -the -Quaiified-Decommis-sioningFund with those of any other assets for investment

- purposes, such-pooling arrangement is a partnership for U.S.

federal-income Tax purposes. a--.

--- a-- -.

'SECTION -4.19., Nonqualified Decommissioning Fund..

..-(a) Seller.'s.Nonqualified-Decommissioning-Fund is a trust

,validly existing and'in-good-standing-;under the-laws of the

State.of New York.. Seller.'s Nonqualified -Decommissioning

Fund-is in compliance with--all.applicable-rules and regula-tions of the -NRC.and FERC, except for any such noncompliance which would not, individually or-in the-aggregateibe reasonably expected to create a Material Adverse Effect.

(b) The December 31, 1999 balance sheet for the Nonqualified Decommissioning Fund, previously made available to Buyer, has been prepared in accordance with GAAP applied on a consistent basis (except-as'may'-be'described in the notes thereto),and fairly, presents.the.financial position of the Nonqualified Decommissioning Fund as of December 31, 1999.

SECTION,4.20.. Sufficiency of Auctioned-Assets.

Except (i) as set forth in Section 2.05,- (ii)-to the extent thatany Permit,- Environmental Permit, NRC Permit or

-Contract-may~not be transferable or assignable to;Buyer, (iii) contracts or other.agreements associated with emergency preparedness (includingthose-relating to emergency. sirens or.radiation monitors), (ivY-contracts or other agreements with NYPA-and (v). as expressly set forth in Schedules 4.09 or 4.10, the Auctioned Assets constitute all of the assets necessary--to-operate theGenerating Plants and the-Gas Turb'ines-'in-the-manner currently operated by Seller,

.. subject to Permitted Exceptions;...

SECTION 4.21.

Condemnation.

Seller.has not received-any Written.notice from any-Governmental -Authority of any-endingor threatened proceeding to-condemn or take

- by power-_of eminent-domain--or-otherwise all-or~any part of the Buyer Real Estate. -.

SECTION 4.22..-No Chanae in Accounting-Methods or Practices.. Since December.31, l999,-Seller has not-materially.changed its.accounting.methods.or'practices with respect to the.Auctioned Assets.

jlNYCorp;1173312.1:4738W:11/14/00-11:45aI

52 EXCEPT' FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER EXPRESSLY"SET-FORTH IN THIS AGREEMENT, THE ANCILLARY AGREEMENTS OR ANY CERTIFICATES, EXHIBITS OR SCHEDULES HERETO OR THERETO, THE AUCTIONED ASSETS ARE BEING SOLD,

ASSIGNED, CONVEYED',

TRANSFERRED-AND DELIVERED "AS IS; WHERE IS", AND SELLER IS NOT MAKING ANY OTHER REPRESENTATIONS-OR WARRANTIES WRITTEN OR-ORAL` STATUTORY, EXPRESS OR IMPLIED, CONCERNING SUCH AUCTIONED ASSETS OR WITH RESPECT TO THISAGREEMENT OR THE ANCILLARY AGREEMENTS OR'THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, INCLUDING, IN PARTICULAR WITH RESPECT TO THE AUCTIONED ASSETS,'ANYWARRANTY OF MERCHANTABILITY OR FITNESS FOR:'A PARTICULAR PURPOSE, 'ALL OF WHICH ARE HEREBY EXPRESSLY EXCLUDED-AND DISCLAIMED BY SELLER AND WAIVED BY

' BUYERM.'

WITHOUT'LIMITING THEGENERALITY OF THE FOREGOING, SELLER-MAKES-NO REPRESENTATION OR WARRANTY WITH RESPECT TO THE INFORMATION SET FORTH IN, OR CONTEMPLATED BY, THE INFORMATION MEMORANDUM.

ARTICLE V

'Repres~entations and Warranties of Buyer Buyer represents and warrants to Seller as follows:

SECTION 5.01.

Organization.

Buyer is a limited

- liability-company duly organized, validly existing and in

'good standing under the laws of the State of Delaware and has all requisite limited liability company power and authority'to'own, lease and operateits properties and to carry on its business as-is now being conducted.

At or prior to Clos:ing, Buyer will be duly qualified and licensed to do business as a foreign limited liability company and will be in-good standing in the State of New York.

SECTION 5'.02.

Authority Relative'to This

Agreement.. Buydr'has all necessary limited liability company power and authority to execute and deliver this Agreement and the Ancillary Agreements to which'it is a party and to consummate the transactions contemplated hereby

.:land thereby." The 'execution and delivery by Buyer of this Agreement and such Ancillary Agreements-and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly and validly authorized by the Board of Directors of Buyer or by a committee thereof to whom such authority has been-duly delegated and no other proceedings on the part' of Buyer are necessary to-authorize this Agreement br such Ancillary Agreements--or the consummation of the transactions contemplated hereby or thereby.

This Agreement and such Ancillary Agreements have been duly and INYCorp;1173312.1:4738W:11/14/00-11 :45aI

53

.validly executed.and delivered by Buyer:-and, assuming that this Agreement and-the Ancillary Agreements constitute valid

.,.and binding agreements of'Seller and each other-party thereto (other than *Buyer), 'this Agreement and such

.Ancillary'Agreements constitute valid and binding agreements of Buyer,.enforceable against Buyer in accordance with their

.respective, terms.

I..

SECTION 5.03.

Consents and Approvals;-No Violation.

(a)..Subject to obtaining:the.Buyer Required

.. Regulatory Approvals and the Seller-Required Regulatory Approvals, neither.the execution.and delivery of this Agreement or the.Ancillary:Agreements to.which it is party

..by Buyer nor the purchase by, Buyer.of-the-:Auctioned.Assets pursuant to this Agreement will (i)-.conflict with or result

...-in anybreach of any provision of the-Certificate of Formation or. Operating Agreement of Buyer,: (ii) result in a default.(or.-gives rise-to any right.of termination,

.cancelation..or acceleration).under any of the terms, conditions:or.provisions-of any.note, bond, mortgage, indenture, license, agreement, lease or-other-instrument or obligation to which Buyer.or.any of its subsidiaries is a party or by which any: of-their respective assets-may be bound, or (iii) violat6'any Law".applicable to Buyer, or any of its assets, except-in-the case of clauses (ii).rand (iii) for such..failures to obtain a necessary-consent,.defaults (or rights) and violations which would not, individually or in the aggregate,.be reasonably expected to have a material adverse effect on the-ability of Buyer to consummate the transactions contemplated by,,-and discharge its-obligations under,-this Agreement and the Ancillary Agreements-(a "Buyer Material Adverse Effect").

(b)

Except for,.(i) approval of-the PSC,,pursuant to Section'70 of'the Public Service Law of the State of New York, of the transfer to Buyer of the Auctioned 'Assets, (ii) a ruling or-approval of the.PSC granting Buyer lightened redgula'tory'treatment that is comparable-to regulatory treatment granted. to-other providers of.wholesale electric services in New York State and that would not

_,prevent Buyer from competing on a comparable basis with such

.. :mother providers,.i(iii) -the -filings-by Buyer and Seller required-by.the HSR Act and the expiration or-earlier termination -of all waiting periods under the.HSR Act, (iv) application by Buyer to, and the'approval of, FERC under (A) Section 203 of the Federal Power Act with respect to the transfer of Auctioned Assets constituting jurisdictional assets-,under the Federal Power Act and (B) Section 205 of the Federal Power Act with respect to

(1) the Continuing Site.Agreement and the Power Purchase Agreement, and (2) authorization to sell energy from the (NYCorp;1173312.1:4738W: 11/14/00-11 :45a]

54 Generating'Plants-and Gas Turbines at market-based rates, (v) application'byBuyer to, andithe'approval of, the NRC for the transfer of the'NRC licenses for the Generating Plants under the Atomic Energyi Act', (vi) application to, and determination by the"PSC and such state Governmental Authorities as may be required under PUHCA that,'for purposes of Section 32(c) of PUHCA, allowing the Auctioned Assets to be "an eligible facility"-will benefit consumers, is in the-public interest and does not violate state law, (viij qualificati6n'of'Buyer, with respect to-the Auctioned Assets; as'an'-exempt wholesale generator under the:'Energy Policy Act of 1992, (viii) an application for a'certificate

' of occupancy',consent or similarapproval'to authorize the change ihn'occupancy of the Buyer Real Estate contemplated by this Agreement required pursuant to th&'Code of'fthe Village of Buchanan, including specifically'Section 211.49 thereof and (ix) an-application for the consent-of'the Commissioner of General Services of'the State of New York'required for the assignment from Seller to Buyer' of the'right to install and maintain a'fish returnipipeline-inh an area in the Hudson River approximately 30 feet wide'and 330 feet long (collectively, the "Buyer Required Reculatory Approvals"),

no declaratio'n,'filing or registration with, or notice to, or authorization, consent or approval of any Governmental Authority is necessary' for the consummation by Buyer of the transactions contemplated hereby or by' the Ancillary

-Agreements, other than such declarations, filings, registrations,',notices, authorizations, consents or approvals which 'if not obtained or made, would not, individually or in the aggregate, be 'reasonably expected to have a Buyer Material Adverse Effect.'

(c) To the knowledge of Buyer, there is no reason that it should fail to obtain the'Buyer Required Regulatory Approvals.

-SECTION 5.04. Availability of Funds.

Buyer has sufficient funds available to it to provide sufficient funds prior to'Closing to pay'the Purchase Price (as adjusted).

-SECTION 5.05.

Brokers.

No-broker', finder or other person is entitled to any brokerage:fees', commissions or finder's'fees in connection with the transaction contem-plated hereby by reason of any action taken by Buyer.

ARTICLE VI Covenants of the Parties INYCorp;1173312.1:4738W: 11/14/00-11:45aI

55 SECTION 6.01.

Conduct of Business Relatinq to the Auctioned'Assets.

.(a)*..Except with the prior written consent of Buyer (such consent' not to be unreasonably

withheld or delayed) or-as maybe required to effect the purchase and;sale of the.Auctioned Assets.and related transactions..conteM plated by this Agreement.or the Ancillary Agreements or as-necessary to comply with applicable Law, du'ring'-the period from the.date of this Agreement to the "Closing'Date, Seller will operate and maintain-the Auctioned Asset. in.the.'usual, -regular-and ordinary course consistent

.with'Prudent Utility.Practices.

(b) :.Without limiting the generality, of the foregoing, except as may be required by this Agreement or the Ancillary Agreements.or as necessary to, comply with applicable Law, during the period-from the date-of this Agreement toClosing, without the prior written consent of Buyer (such consent not to be'unreasonably withheld or delayed), Seller will not:,.-.

(i) except for Permitted Exceptions, grant any Encumbrance on the Auctioned Assets;..

7 (ii) make any material change in the-levels-of Inventory customarily maintained by Seller-with respect to the Auctioned Assets, other-than consistent-with Prudent Utility-Practices;

. (iii) sell, lease (as. lessor), transfer or otherwise dispose of, any of the.Auctioned Assets, other than assets used, consumed.or:replaced in the ordinary course of-business 'consistent with Prudent-Utility

. Practices;. -.

(iv).,terminate,.materially, extend or.otherwise

- materially amend any -ofthe Contracts-or waive-any

.default-by, or.release,,settle or compromise any material claim against,-.any other party thereto; provided,.however,-.that-Seller, at its option,may (A) terminate any Contract-that-is not.a Required:Contract and (B) amend the Indian Point-FacilitiesAgreement between Selle'r-. nd NYPA dated.January.l, 1993 together

.. ;, with attached Memoranda-of Understanding Nos. l, 3-17,

. ' 20,.28, 30, 32-and-.33--to effect the'deletion therefrom of.any obligations of2Seller relating.to the.,,

Substation, the Transmission Systemr or-the supply of power;.

(v) terminate, extend or amend any.of the Transferable-Permits, other than (A) Transferable Permits not material to the operations of the Auctioned INYCorp:1173312.1:4738W: 11/14/00-11:45aJ

56 Assets as currently conducted, (B) routine renewals and (C) transfers contemplated by Section 6.03(b);

(vi) establish, adopt, enter into or" amfiend the Collective-'Bargaining Agreement, Benefits' Plans-or other-employment'plans, arrangements or practices, or grant to anyy Affected Employee any material increase in compensation, except; (A).to the extent required-by the terms of the Collective Bargaining Agreement, any employment 'agreement in effect as of'the'-date of this Agreement, or applicable Law, (B) 'in the ordinary course of business consistent with past practice or (C) as set forth in Schedule'6.01(b)(vi);

(vii) enter into, amend-or'otherwise modify'any real or jersonal'property Tax agre6ment,' treaty or settlement relating to the Auctioned Assets; or (viii) materially change its accounting methods or practices with respect to the Auctioned Assets.

(c) 'Except for contracts or agreements related to matters set forth in Schedule 6.01(c)(i) not to exceed the respective dollar'amounts specified for each such contract or agreement set forth in such schedule, Buyer shall not be required to assume the liabilities and obligations under any contracts or agreements entered into,'without the prior written consent of Buyer, by Seller during the period from the date of this-Agreement to-Closing, if such contracts or agreements (i) are for the purchase, sale or storage of Nuclear Fuel, (ii) at Closing, have individual future liability outstanding in'excess of $500,000 or aggregate future liability outstanding in excess of $5,000,000 or (iii) at Closing, have individual future liability

-outstanding of'less than or'equal to $500,000 or aggregate

'future liability outstanding of less'than or equal to

$5,000,000 and with'respect' to which Seller-has not used its reasonable best'efforts to provide that such contract or agreement may be terminated by Buyer at its option at any time'after Closing.'without penalty or cost (other than de minimis administrative costs); provided, that,

notwithstan'ding anything in this Section 6.01(c) to the contrary,'Buyer shall assume the liabilities and obligations of Seller under any contract or agreement entered into by Seller in-accordance with Prudent Utility Practices in connection with the capital projects listed in Schedule 6.01(c)(ii) and the work specified in Schedule 6.01(c)(iii) not to exceed the respective dollar amounts specified for such capital projects and work set forth in such schedules.

INYCorp;1173312.1:4738W:11/14/00-11:45aJ

57 (d) Notwithstanding anything in this Section 6.01 to.the.contrary, Seller may take any action, -incur any expense or enter into any obligation with respect-to the

-Auctioned Assets toithe extent that (i) all obligations and liabilities arising with respect thereto do,not constitute Assumed Obligations or. (ii) Seller otherwise provides that

-.such obligations and liabilities shall not-be-assumed or

'retained by.Buyer.

.. (e).-Promptly.after the date of this Agreement, Seller shall deliver-to Buyer a copy of the contract dated April 11,.1996 between Seller and Westinghouse-Electric Corporation-and relating to nuclear-fuel.fabrication (the "Westinghouse Contract").,, Within 30 days of. such delivery, Buyer.may elect, by written notice to.Seller, to assume the

-:Westinghouse Contract at Closing andoupon such election the Westinghouse Contract-shall-be deemed to be a:"Required

-Contract" for purposes of this Agreement; provided, however,

-.that Seller shall retain all-rights to credits;or discounts to which it is entitled under any settlement between Westinghouse Electric Corporation and Seller..

SECTION 6.02. 'Access to Information.

(a):

As part of the transition process, Buyer and Seller shall, or

-shall cause any committees established in connection there-with-to, negotiate inigood faith to establish.rules for

access to the information addressed in this--Section,6.02.

Pursuant to such rules -for access,,between-the.date-of this Agreement and the Closing-Date, Sellerowill, subject to the Confidentiality Agreement, during ordinary.business hours

-and upon-reasonable :notice and-subject to compliance with applicable Law:

(i) give;Buyer.or its-Affiliates and their representatives reasonable-access to (A)-al-l books,-records, plants, offices.and othersfacilities-and properties.

constituting the Auctioned Assets, including -for the purposes. of;-observing the operation by Seller of-the,

-Auctioned Assets and.(B).the Generating.'Plants:-or-Gas Turbines,and to applicable.employees-of Seller,-(ii) permit Buyer ornits Affiliates-to-make such-reasonable inspections

.thereofas.-Buyer-or its.Affiliates may'reasonably.-request, (iii) furnish Buyer or:its Affiliates with, such-financial

-and-operait'i'ng'dat-'a-and-6therginformation with-respect to the Auctioned Assets as Buyer or its Affiliates may from: time to time reasonably request, and *(iv) furnish Buyer or its Affiliates, upon--request,,,a copy of.each~material report, schedule-or-other document with respect to..the;Auctioned Assets. filed by Sellerwith,,-or received-,by Seller-from, the

-PSC,-NRC, IRS or FERC; provided, however,-that2 -(A) any such

,activities shall be.conducted in such a manner as not to interfere with the-operationof the Auctioned Assets, (B)

'Seller shall not be required to take any action which would INYCorp;1173312.1:4738W: 11/14/00-11:45aI

58 constitute a:waiver of the attorney-client privilege and (C)

Seller'need not supply'Bu'yer with (l) any information or access which' Seller is under'a legal obligation not to supply (Provided that upon the-'prior written request of Buyer,'Seller will use it's reasonable best efforts to obtain the necessary~consents) or (2) any documents attached as Item 4(c) studies, surveys, analyses or'reports to Seller's application pursuant to the HSR Act. -Notwithstanding anything in this Section 6.02 to the contrary, (I) Seller will not-be required to provide such'information or access to anyemployee records other than Continued'Employee Records,'(II) Buyer shall not-have the right to perform or conduct any environmental or radiological sampling or testing at,, in, on, around or underneath the Auctioned Assets and (ITI) Seller shall not be required to provide such access or information with respect-to any-Retained Asset or Retained Liabilities (unless;reasonably necessary in connection-with Buyer's observations or investigations relating to-the Auctioned-Assets).

Seller shall promptly provide-Buyer with copies of all binding and non-binding notices delivered by Seller relating to the ordering of, or scheduling of future delivery of, Nuclear Fuel under any

- Contract.

(b) Unless otherwise agreed to in writing by Buyer, Seller shall, for a period commencing on the Closing

-Date and-terminating three years after the Closing Date, keep confidential'and shall cause its'representatives to keep confidential all Confidential Information (as defined

-*in the Confidentiality Agreement)'on'the terms set forth in the Confidentiality Agreement.' Except as contemplated by the following sentence, Seller shall not release any person from-any confidentiality agreement now-existing with respect solely to-the-Auctioned Assets-or waive or amend any provision thereof.

After the Closing Date, upon reasonable request of'Buyer, Seller shall, to the maximum extent permitted'by'Law and the applicable Bidder Confidentiality Agreement (as defined below), appoint Buyer to-be Seller's representative and agent in respect of confidential information--relating to the'Auctioned'Assets under the confidentiality agreements ("Bidder'Confidentiality Agreements") between Seller and prospective purchasers of the Auctioned Assets.

(c)-i After Closing, Buyer shall retain all Operating'Records, Decommissioning Accounting Records and Continued Employee Records'(whether in electronic form or otherwise)-delivered by:Seller on the-Closing Date relating to the Auctioned'Assets prior to;Closing.

Buyer agrees that, after Closing Date, Seller shall have the right, upon reasonable'-request to Buyer, to receive from'Buyer copies of (NYCorp;1173312.1:4738W: 11/14/00-11:45aI

59 any Operating Records, Decommissioning Accounting Records, Continued Employee Records or other information in Buyer's possession relating to the Auctioned Assets, the Decommissioning Funds or the Continued Employees, as the case may be, for periods prior to Closing and required by Seller in order to comply with applicable Law or to the extent that such records or information may reasonably be required by Seller in connection with any claim, cause of action, proceeding or-investigation in which Seller may be involved, provided that there is no conflict between Buyer and Seller in such claim, cause of action, proceeding or investigation.

Seller shall reimburse Buyer for its reasonable costs and expenses incurred in connection with the foregoing sentence.

SECTION 6.03.

Consents and Approvals; Trans-ferable Permits.

(a) Seller and Buyer shall cooperate with each other and (i) prepare and file (or otherwise effect) as soon as practicable following the date of this Agreement, all applications, notices, petitions and filings and execute all agreements and documents with respect to and (ii) use their reasonable best efforts to (A) obtain (x) the Seller Required Regulatory Approvals and the Buyer Required Regulatory Approvals, (y) any other consents, approvals or authorizations of any other Governmental Authorities or third parties that are necessary to consummate the transactions contemplated by this Agreement or the Ancillary Agreements and (z) the transfer, issuance or reissuance to Buyer of all Transferable Permits and (B) as appropriate, facilitate the substitution of Buyer for Seller in connection with pending Transferable Permits.

Without limiting the generality of the foregoing, (1) each Party agrees to, upon the other Party's request, support such other Party's applications for regulatory approvals of the purchase and sale of the Auctioned Assets contemplated by this Agreement and (2) Buyer and Seller agree to defend any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the Ancillary Agreements, or the consummation of the transactions contemplated hereby or thereby, including seeking to have any stay or temporary restraining order entered by any Governmental Authority vacated or reversed.

(b) Following the date of this Agreement, Seller shall commence the process of transferring to Buyer the Transferable Permits; including completing and filing applications and related documents with the appropriate Governmental Authorities.

The Parties shall have the right to review and comment on in advance all filings relating to the transactions contemplated by this Agreement or the Ancillary Agreements proposed to be made by the other Party fNYCorp;1173312.1:4738W:11/14/00-11:45aI

60

,and such other. Party shall.have the right to appear in (i) any proceeding'relating t6'such filings-with

-Governmental Authorities and,(ii) any in-person meeting relating..to'such-fi'lings oraany announced or scheduled Meeting attended by~the.Chief Nuclear bfficer of.Seller, in

'each case,..'_.with the'NRC.or'NYSDEC. The Parties.shall in good'faith conside'r'.such comments beforeimaking any-such

-filings'to the extent permitted by Law. Notwithstanding the

'foregoing,.neither.Party shall be obligated to6-submit to the other' Party any'documentts attached as"Item 4(c) studies, surveys, analysesand reports to its application pursuant to the HSR Act.->

t (c

The"' f ilirig"f es in, '.6nnec'tion ithth filings by Seller and Buyer under the HSR Act that are part of.the Seller Required Regulatory Approvals and Buyer Required Regulatory Approvals shall be.borne-entirely by Buyer.-.

(d)' Seller shall-.beaithe costs and expenses in connection with the satisfaction of the-Closing condition set forth in Section 7.02(d) with respect to Required Software andPatents; provided,-that Buyer shall bear all costs and expenses associated with.any maintenance -or similar agreements associated with the-Required-Software and thIe Patents relating to periods after-_Closing; :provided, that such costs and expenses~are comparable,to the costs and expenses paid by Seller prior to Closing or are in accordance with applicableindustry pricing at the relevant time.

SECTION 6.04.

Further Assurances.

(a).Subject to the terms and conditions of this Agreement, each of the Parties will use its reasonable best efforts to take, or cause.to be-taken, as soon as possible, all action, and to

.do, orcause to be done,-as soon as-possible,;allithings necessary, proper:or-advisable under applicable-Laws to consummate thesale of the Auctioned-Assets pursuant,.to this Agreement as soon as possible,-including;using--its r--

reasonable best efforts to ensure satisfaction-of the conditions precedent to each Party's obligations. hereunder.

Neither of the Parties -will-,.withoutprior written.-consent of-the.,other Party,-, -take or fail to take, or.permit their respective Affiliates to take or fail to take, :any-action, which would reasonably be expected to prevent or materially jimpede, interfere withor -delay the consummation, as soon as possible, -of-the transactions contemplated by this jAgreement or the.Ancillary Agreements.

(b) From time tontime after the date-of this

-Agreement, without further consideration and at its own LNYCorp;1173312.1:4738W: 11/14/00-11:45aI j'...

61 expense, (i) Seller will'execute and deliver such instru-ments of-assignment or conveyance as Buyer may reasonably request to more effectively vest in Buyer Seller's title to the AuctionedjAssets (subject to Permitted Exceptions and the other teris of 'this Agreement) a'nd (ii) Buyer will execute and deliver such instruments of assumption as Seller may reasonably'request in 'order to more effectively consu-mmate the 'sale of the Auctioned Assets and the assumption of the Assumed"Obligations pursuant to this Agreement.

"(c)

Seller and Buyer shall cooperate in good faith to establish a transition committee to consider operational and business issues related to the purchase and sale of the Auctioned 'As'sets.

(d) Prior to theClosing Date, Seller'shall cooperate-in good faith with Buyer to enable Buyer to obtain insurance, including insurance required under the Price-Anderson Act, in respect of the Auctioned Assets comparable to that maintained by Seller as of the date of

this Agreement."

(e)

Not later-than five days prior to Closing, Seller'shall deliver to Buyer a schedule setting forth in reasonable detail' the liabilities and obligations which can be reasonably determined at such time that Buyer will assume at Closing pursuantito Section 2.03(a)(ii).

f (f)"'Buye'r may, at its own cost and expense, seek authorizations for the use of software, other than the Required Software, and patented items and processes, other than the Patents, and Seller shall cooperate in good faith in connection with such efforts.

(g)(i)' Not later than 60 days prior to Closing, Seller-shall deliver to Buyer a schedule setting forth the Contracts that,'"in accordance with Section 2.0'4-, will not be assigned to-Buyer at Closing and (ii) not'later than 30 days prior to'closing, Buyer shall deliver to Seller-a schedule setting 'forth'thesoftware, other'than the' Required Software,' and thepatented items and processe's, other than the Patents,' with respect to which Buyer 'has received or will receive prior to Closing authorizations for the use thereof;'

(h) To the extent that Westinghouse Electric

-Corporati'orris-the manufacturer or vendor.of,' or provider of service with respect to, machinery, equipment, facilities, furniture or other personal property that constitute Auctioned Assets, Buyer agrees to'be bound by and comply with any contractually-imposed waiver and/or limitation of LNYCorp;1173312.1:4738WI:11/14/00-11: 45aJ

62 liability-that has been contractually imposed on Seller by Westinghouse Electric Corporation-to the same extent as Seller.,

i SECTION 6.05.

Public Statements.

The Parties shall consult with-each other:-prior.to issuing any public announcement, statement or other.disclosure with respect to this Agreement, the Ancillary.Agreements-,or-.the transactions contemplated hereby or thereby, -including any statement appearing in any filing contemplated--hereby. or.,thereby, and shall not issue any such.public announcement, statement or other disclosure prior tosuch consultation, except-as may be required-by Law; provided that no-Partyshall issue its initial-public announcement, statement or-other disclosure with-respect to the transactions contemplated.hereby without the prior-consent of such-.other,-Party (which consent shall not be -unreasonably withheld or delayed).

SECTION 6.06.

-Tax Matters.'

(a)

All transfer and sales Taxes-(including any-petroleum business Taxes and similar-excise-Taxes-on sales of petroleum-based products) incurred in, connection with this Agreement and the.trans-actions contemplated hereby shall be'borne byBuyer.. Buyer shall prepare and file in a timely manner any Tax Returns or

,-,.,-other documentation relatingto such Taxes; provided, however,,that, to the extent required by applicable Law,

-Seller will'join in the execution of any such Tax Returns or other.documentation relating to any such-Taxes. --Buyer shall provide.to Seller copies of each Tax-iReturn'described in the proviso in the-preceding sentence at least 30-days-prior to

the date such.Tax Return-is. required. to be filed.,

-.-,(b)

Each Partyshall-provide'the other Party with such assistance as may. reasonably.be-requested.by-the other

Party in connection.with the,preparation of any Tax-Return, any'audit-or other examination by any taxing-authority, or any judicial or.administrativefproceedings relating to liability for Taxes, and each Party-,shall retain and provide the other Party with any records or information which may be relevant to such Tax Return, audit, examination or proceedings..Any-information obtained pursuant to this Section 6.06(b) dor pursuarit,to any,-,ther; Section hereof providing,for the sharing of information or review of any Tax Return or other instrument relating,.to Taxes shall be

-kept confidentialby,-,the parties hereto. -

-~ _-,

(c) -- If-either-Buyer--or; Seller receives a refund with.-respect to Taxes to be prorated in accordance with Sections-2.03(a)(x) and.2.03(b)(ix) forwa taxable period includiAg the-Closing Date,;Buyer shall pay to Seller the portion of any such'refund attributable-to the portion of (NYCorp;1173312.1:4738W: 11/14/00-11:45aI

63 such taxable period prior to the Closing Date, and Seller shall pay to Buyer the portion of any'such refund attribu-table to the portion of such taxable period on and after the Closing Date.

(d) With'respect to Taxes 'to be prorated in

'accordaxice'with Sections 2.03(a)(x) 'and 2.03(b)(ix)', Buyer shall prepare'and timelyfile all Tax Returns, if any, required to be filed after'the Closing Date with respect to the Auctioned Assets-and shall duly and timely pay'all such Taxes shown to'be due on such Tax Returns.

Buyer's preparation of such Tax Returns'f6r the taxable period in

-which Closing occurs shall be subject to'Seller!s approval, which approval shall'not be unreasonably withheld or:

'delayed.- Buyer-shall make each such Tax Return'available for Seller's review and approval no later'than-30 days prior to the date such Tax Return is required to be'-filed, it being understood that Seller's failure to approve any such Tax Return shall not'limit!-Buyer's obligation to timely file such Tax'ReturnIand duly'and timely'pay all Taxes shown to be due-thereon.

Seller shall, to the extent'required by applicable Law, join in the execution'of any such Tax Returns.

(e)

-'Seller and Buyer shall-cooperate and provide 1 -each other with such'assistance as may be reasonably requested'by the other Party-in connection with obtaining

the rulings set-forth in Section 6.07(c).

Seller and Buyer shall jointly c6ntrol all proceedings in connection with obtaining the rulings set forth inSection 6.07(c)(i) (the "Joint rulinqs"@);} Qrovided, however, that neither Party shall take any action except in connection with any ruling set forth in Section6.07'(c)(i) directed'solely at such Party without'the'consent of the'other'Party, which consent

-shall n6t be uinreasonably'withheld; and orovided further that Buyer'ancd Seller shall-share equally all expenses (other than'their own legal fees) incurred in seeking and obtaining the joint rulings.

SECTION 6.07.

Decommissioning Funds.

(a) At

'Closing, Seller shall cause all of the assets of the Qualified Decommissioning Fund to be'-transferred to Buyer (or, if directed in'writing to do so'by Buyer, to the trustee of anv trust specified in such-written direction).

Such assets shall consist of equity securities, fixed income securitie's and'de minimis amounts of cash.

To the extent that the Fair Mark'et'Value of the assets of the Qualified Decommissioning Fund is greater than $430,000,000, the Purchase Price shall be adjusted pursuant to Section'3.02(c)(iii).

(NYCorp;1173312.1:47384: 11/14/00-11:45aI

64

,,(b). To the extent.that,the Fair Market Value of "the' assets'of 'the Qua'lified Decommissioning Fund'is less than, $430,000,000,.,Sell-erishall transfer to Buyer assets of the,.Nonqua'lified Decommissioning Fund,'such that..the aggre-gate"Fair Market.Value of the..assets.of 'the.Decommissioning Funds transferred to.Buyer;is equal 'to '$430,000,'000. If such a transfer' is required,such' assets shall c'onsist of equity securities, fixed inc'ome,.securities'.and de-minimis amounts of cash..

(c) As, soon as practicable,',;after the'date of this Agreement, (i) the Parties' shalljoin'tly request and' use, their reasonable best, efforts-to-obtain prior to the

,Closing'Date-rulings issued by' the' IRS to the effect that

,'(A),the Parties and the Qualifi'ed Decommissioning Fund shall not recognize.any gain or:.otherwise take.into account any income.forU.S. federal.incomeTax purposesby reason of the transfer of the assets 'of,,the Qualified Decommissioning Fund to Buyer and that'the trust'established by Buyer.into which the assets of the Qualified Decommissioning Fund' are to be transferred at Closing.will betreated as,a "Nuclear Decommissioning Reserve, Fund". within the meaning of Section 468A of the Code and'.as-a "nucle'ar decommissioning

fund" and a".'qualified nuclear decommissioning fund" within

-the meaning of Treas..'Reg. Section 1.468A-l'(b) (3), (B) Buyer

-will not recognize any'-gain or otherwise.'take into account

-.,any income.for U.S. federal income'.Tax'-purposes b'y'.reason of

.:.'.any,transfer of the.assets'of.the N6nqualified Decommissioning Fund to Buyer,.except to.the.,xtent 'that the "amount. of,cash and other' Cla'ss I assets (as,'such' "term is defined in, Treas. Reg. Section 1.338-6T) received byBuyer exceeds the amount of.con'sideration'-,.(as determinedaunder

.,.:.,Section'1060,o'f+/-th'e Code) pr6ovided by Buyer-'foi.:the

..Auctioned Assets and..(C).Seller will,.be-allowed current ordinary deduction's for U.S.'federal'income Tax purposes for any 'amounts'treated as realized by

-Se'Il'er,

'or otherwise recognized as' income t'o',Se'ller, as aresult'of.'Buyers

...,-assumpti6n 'of,'Decommi'ssioning liabilities"'with respect to the Auctioned Assets pursuant to Section'2.03(a).and (ii)

,Seller,,shallf'r equest a'nd use its reasonable' best efforts,'to 'obtain. prior to the' Closing Date'.an advisory opinion'from the Ne':

York.State.Tax'Department.that the tra'nsferto'Buyer of 'the asse'ts" 'of the Qualified-Decommissioning Fund 'and the;Nonqualified; Decommissioning

'.'Fund,'if any,,.'is not a-taxable transa'ctio'i;,subject-to NewYork StateGross

'sRebceicts o,-a.

Recet.

s.

I Be has SECTION 6.08. Decommissioning.

If Buyer has

.determined as ofthe expiration date of-.theNRC operating license for IndianPoint Unit!2,,including any extension thereof granted by the NRC (the,"Expiration Date".),.that LNYCorp;1173312.1:4738W:11/14/00-11:45,aI

65 Decommissioning shall occur by a method other than Decon, Buyer shall'cause to be paid to Seller from the Buyer Decommissioning Funds anamount equal to fifty percent of the Excess Decommissioning Funds (the "Payment Amount") on the Expiration Date, provided that 'such payment'is'permitted under NRC Law' and the trust indentures relating to the Buyer DecommissioningFunds (the "Buiver Trust Indentures").

If such paymient is not permitted under NRC Law or the Buyer Trust Indentures, then at the completion of Decommissioning, the Payment Amount, and any income with respect thereto accrued from the Expiration Date, shall be paid to Seller.

SECTION, 6.09.

Bulk Sales or Transfer Laws.' Buyer acknowledges'that Seller will not comply with the provisions of any-bulk-sales or transfer laws of any jurisdiction in connection with-the transactions contemplated by this Agree-ment.

Buyer'hereby waives compliance by Seller with the provisions of the bulk sales or transfer laws of all applicable jurisdictions.

SECTION 6.10.

Storage And Risk of Loss Concerning Certain Auctioned'Assets.

Seller shall'-store or cause to be stored for Buyer any Auctioned Assets not located at the Generating Plants, the Gas Turbines or the Toddville Training'_Center (including supplies, materials', and spare parts inventory)' at Seller's warehouse facilities located in Astoria, Queens County, New York or at such other facilities as the Parties mutually agree in-writing until the date that is six'months after the Closing Date or, in respect of all or a portion of'such Auctioned Assets', until one or more earlier-dates proposed by Buyer with-reasonable advance notice,' which schedule shall be reasonably acceptable to Seller.

Buyer agrees to reimburse Seller for its reasonable costs and expenses-in connection with such storage.

Buyer agrees that Seller shall have no responsibility or liability for the removal 'of such Auctioned Assets from the storage location-, and that Buyer shall have sole responsibility and liability therefor.' Seller shall cooperate and allow Buyer to remove the same.' Notwithstanding, the provisions of Section 9.01,' Buyer agrees that Seller shall have no

,liability or obligation whatsoever for loss or damage with respectt'o the matters contemplated by this Section 6.10 or such Auctione'd Assets, and Buyer agrees to hold each Seller "Indemnitee harmless from and against all loss or damage or Indemnifiable-L6sses, and to indemnify each Seller Indemnitee from and against all loss'or damage or Indemnifiable Losses incurred, asserted against or suffered

-as a result of any storage or other services provided by

- Seller pursuant'to this Section 6.10, in each case,'except to the extent-any such loss or damage' or Indemnifiable Loss results'in' whole'-or in part from the gross negligence or (NYCorp;1173312.1:4738W: 11/14/00-11:45aI

66 wilful or wanton acts or omissions to act of any Seller Indemnitee (or.'any contractor or subcontractor of Seller).

SECTION 6.11.

Information Resources.

From the Closing'Date until the date-that is, 180 days-'thereafter, Seller shall, at no cost to Buyer,.provide Buyer with access to Seller's'-'mainframe computer.only to,the.extent reasonably necessa'ry to.'e'nble.Buyer to use the PPMIS,'MMS (in`read only mode).,.NPMEL,.TNMS and Metaphase'systems and-,'-

.applications solely in connection with the.Auctioned Assets.

Buyer shall pay Seller a fee of,$25,000 for each 30-day period.(prorated for.partial periods), beyond such 180-day period during which Buyer uses.any or all of such systems or applications; provided that upon'the expiration of such 180-day period, Seller shall have the right to.terminate such

-use at any.time upon-60 Business-Days'-prior.written notice to Buyer.

Such payment-byBuyer-shall be due'and-payable to Seller not later than 10 Business Days after the end-of each 30-day period during which Buyer used any such system or application. -Any amount to be paid under this Section 6.11 shall be paid.with interest for the period.-commencing on the due date for'such payment through the payment date,,

calculated.at the prime.rate of The Chase.Manhattan Bank in effect.on such.due date, and'in cash by wire transfer of immediately available.'funds.

Buyer agrees that it will not use any such access for any purpose other than for,the use of the PPMIS, MMS, NPMEL, TNMS and Metaphase systems and

!applications. solely in connection with-the-Auctioned Assets.

'Buyer acknowledges that,' as long as it retains access to Seller's mainframe computer, Seller,, its employees and third

parties shall have access.to Buyer.'s information.resources syst6ms and apjlications' (including the PPMIS, MMS,' NPMEL, TNMS chd&Metaphase..systems andapplicatibhs that Buyer is permitted to use hereunder)'in'order to operate', maintain, modify, or secure.Seller's information resources systems and applications.(including PPMIS, MMS, NPMEL, TNMS-and.-

Metaphase systems) and, Seller' s mainframe.conputers.

Notwithstanding the.provisions 'of Section 9.01,-Buyer agrees

-thatSeller shall -have'ho liabilityor obligation whatsoever for loss or.damage'.with respect-toithe matters contemplated

.by.

this Section 6.11, and Buyer agrees to hold eachSeller

Indemnitee.'harmless.from>.and'against.'al'lloss or damage or Inrdenifiable Losses, and;'to 'indemnify.each Seller Indem-hit66'from arid.against all'loss or damage or Indemnifiable' Losses incurred, assertedi'against-or>-suffered as a result of Buyer's' a~cess to Seller 's mainframe'computer pursuant to this Section~ 6.11, in-each case, except to;the-extent any such-'loss-or damage or Indemnifiable Loss results in whole or. in-part',from the.gross, negligence or wilful or-.wanton acts or omissions to act of any Seller Indemnitee. '(or any contractor or subcontractor of Seller).

INYCorp;1173312.1:4738W:11/14/00-11:45a)

67 SECTION 6.12.

Witness Services. At all times from and after the Closing Date, each Party shall use reasonable best efforts to make available to the other Party, upon reasonable written request, its and its subsidiaries' then current-or former officers, directors, employees and-'agents as witnesses to the extent that (i) such' persons may reasonably be required by such requesting Party in connection with any claim, cause of action, proceeding" or investigation in'which such requesting Party may' be involved and (ii) there is-no conflict between Buyer and Seller in such claim, cause of action, proceeding or investigation.

Such other Party-shall be entitled to' receive' from such requesting Party,-iipon'the presentation of invoices for such witness services, payments for such amounts, relating to supplies, disbursements and other out-of-pocket'-expenses and direct and indirect costs 'of employees'who are-witnesses, as may be reasonably incurred in providing such witness services.

SECTION 6.13.

Trade Names.

In furtherance of the transfer of the 'Auctioned Assets described in' Section 2.02(a)(vii), Seller shall not object'to the'use by Buyer of'any trade names, trademarks, service marks or logos (and any right's to and in the same, including any right to use the same) primarily relating to the Generating Plants and Gas Turbines that contain the words "Indian Point".

SECTION-6.14.

Steam Generator Storage Facility.

Seller shall Cause a suitable storage-facility for the long-term on-site s'torage'of the replaced steam generators at Indian Poin't'Unit'2 to be constructed and the replaced steam generators shall-1 be stored therein in compliance with applicable Law p'rior to the Closing Date.

SECTION 6.15.

Availability-of Coolina Water Usane Credits.

(a)' At Buyer's option, which shall'be exercised by written'notice"'to Seller prior to Closing, Seller'shall transfer at Closing any environmental credit points that are held by' Indian Point Unit 2 pursuant to 'the Fourth Amended Stipulation of Settlement and Judicial Consent'Order in

-'NaturalResources-'Defense Council, ;Inc'. v. New York State Department of Environmental Conservation among the Natural Resources Defense Council, Inc., Hudson River Fishermen's Association, d/b/a Hudson Riverkeeper Fund,' Inc., Scenic Hudson, Inc-.,;NYSDEC, John P. Cahill as acting commissioner of NYSDEC, Seller, NYPA, Orange & Rockland Utilities, Inc.,

and Central Hudson'Gas & Electric Corporation, executed by the Honorable'Joseph'C. Teresi on October 23, 1997 (the "Consent'Order"), which Consent Order, by its terms, has expired.

INYCorp;1173312.1:4738W:11/14/00-11:45aI

68

.(b).If Buyer exercises its..option under Section

.'6.15(a) :and, notwithstanding the expiration of the'. Consent Order,-.for so long..as the July outage~requirement-at the

.... :Bowline_.Point electric-generating station ("Bowline"),

as specified~in paragraph-3 of the.Consent<Order,-. continues in effect upon the owner(s) 6f.Bowline and may be met by

.drawing.2.8 unit-days of outage.from Indian Point Unit 2's

existing balance of unit-days of,-outage that were-accrued in excess of those.,required by.Indian Point Unit 2 under the Settlement Agreement, as-provided for.under paragraph 3 of

,the Consent Order, Buyer shall.provide the owner(s)- of

..Bowline,'with such 2.8. unit-days of outage for use.at Bowline

.- at. no cost.

x

(

I..-'_.

ii..'

SECTION 6.16.

Nuclear Insurance.

Buyer shall maintain any Nuclear Insurance Policies transferred to Buyer as contemplated by Section:2.02(a) (xii) and shall obtain and maintain any other policies of liability and property insurance with respect to the ownership, operation, and maintenance of the'-Generating Plants which shall afford protection against insurable hazardsiand risks which meet the requirements of 1'0C.-F..R. -Section 50.54(w) and 10 C.F.R. Part 140 and-.are consistent with Pruden't Util-ity'Practices.

Such coverage shall include- (a) nuclear.liability insurance in such form and -in such amount as (i) will-provide.at least the same degree of.protection to Sellerrthat is provided to Seller under the Nuclear Insurance Policies' that are contemplated to~be transferred-to Buyer pursuant to Section 2.02(a) (xii).and (ii) will~meet the.-financial protection requirements of the Atomic Energy-Act, and (b) an indemnification agreement as-contemplated by Section. 170 of the Atomic Energy Act.

In.th& event that the nuclear liability protection system contemplated by Section 170 of the -Atomic Energy. Act is repealed or. changed, Buyer.-shall obtain' and maintain-alternate'-protection.against nuclear liability for such period astmay be necessary to'.cover liability arising-out of or resulting.from the Auctioned Assets, to the extent available and:.consistent with Prudent

-Utility.Practices,,providing substantially equivalent

-protection to -Seller-.that is provided to Seller under the

.Nuclear Insurance Policies'that are contemplated to be transferred to-Buyer-pursuant-to Section 2.02(a)-(xii).

SECTION 6.17.

Update of.Schedules.

- Seller shall promptly supplement_,or otherwise amend--the -Schedules 4.03(a),

4.04(b),

4.07(a), 4.08,.4.09(a),

4.09(b)t, 4.10, 4.11,.4.13, 4.16(a).,.-4.16(b) and 4.17.(together, as: .

supplemented.or amended,-.the "!'UPdated Schedules!)- with respect.to matters arising after the date of thisAgreement which, if-existing at the date of this.Agreement, would have been set forth in the Schedules.

Upon delivery to Buyer, INYCorp;1173312.1:4738W: 11/14/00-11:45aI

69 the Updated-Schedules' shall become-part of this Agreement in

' lieu of'the'relevant predecessor Schedules.

'In the event that Seller 'deliveirs Updated Schedules within five Business Days of the Closing Date, Buyer shall-be entitled to'extend,

'by written notice~'to Seller, the-Clos'ing Date to the fifth Busindss -'Day afterBuy'er ha's received such Updated' Schedules.

Notwithstanding-the foreg6ing, (i) any such Updated Schedules shall not, except as Buyer may otherwise agree in writing, be' deemed to have cu'red-'any breach-of any representationi or 'warranty'made by'Seller as of the date of this Agreement anida'(ii) to the extent that any Updated Schedule o Schedles shallcontain i'Material`Adverse Effect that is not cured or waived, the Closing condition set forth in Section 7.02(p) shall not be satisfied.

ARTICLE VII Conditions

-01.

Coiiin SECTION 7'01. Coiditions'Precedent to Each Party's Obligati6ns.- The respective obligations of each Party tol-effect the'purchase,'sale and transfer of the

' Auctioned'Assets con'templated by this:-Agreement shall be subject to the satisfaction or waiver by such Party on or prior to Closing of the following conditions:

(a) each of the Seller Required'Regulatory Approvals'and each-of the'Buyer Required Regulatory Approvals shall h'ave become a Final Order (a "Final Order" means any action by the relevant regulatory authority which has not been reversed, stayed, enjoined, set aside, annulled or suspended, as to which any waiting period prescribed by

'law for the consummation of the transactions contemplated hereby has. expired'and'as to which' all conditions to the consummation of'such transactions pr'escribed'by Law have been'sati'sfied), 'and such Final Orde'r'shall be in form and substance reasonably acceptable to the Party that sought the consent or approval granted by such Final Order (for purposes of-the immediately preceding'clause",'(i) if Seller is the Party that sought the consent or approval granted by a Final Order, such'Final Order shall be'deemffed to be' reasonably acceptable to Seller if it (A) complies in all material--respects with the terms and'conditions of Seller's application'-'therefor and (B) would not'reasonably be expecte'd to have a Seller Material Adverse Effect, (ii) if Buyer is-the Party that sought the' consent or approval granted by a-Final'Order, such-Final Order shall be deemed

'to be reasonably acceptable to Buyer'if it (A) complies in all material respects with the terms and'conditions of Buyer's application therefor and '(B) would not reasonably be

[NYCorp;1173312.1:473811: 11/14/00-11:45aI

70 expected to have a Buyer Material Adverse Effect, and (iii) if-Seller.-and'Buyer-jointly sought, in the same-application, the consent or approval granted bya Final Order,, such Final

'Order.shall..be deemed to be reasonably acceptable -to-Seller

..if '(A). it:,complies in.all'material respects with the terms and conditions of the joint application therefor-and,(B) it would not reasonably be expected to have a Seller Material

-,:;Adverse Effect, and..,such.-Final-'Ordershallbe deemed to be

'.reasonably acceptable to Buyer.Aif::it (A) complies in all mate~rial respects.with'.the.terms and conditions of the joint applicati6n therefor'.aind,(B).would-- not reasonably be expected to have a.Buyer Material Adverse Effect); provided,

.however, thatgif~there-shall be pending orUthreatened any

.. appeal or.,challenge to a-Final-Order, which, if, adversely determined,.would ;cause.such-Final Order not to be reasonably acceptable (within-the-meaning of. the immediately precedingparenthetical) to-.theXParty that sought such Final Order,..then if such Party-notifies the1tother-Party that such pending or threatened appeal or challenge exists (such notification to be made as soon as reasonably practicable following-,knowledge-.of such pending or threatened appeal or

..challenge),,then such~determination'ofwhether-a Final Order is reasonably acceptable to-.the.Party whoisought it shall be made.only after-.al opportunities for rehearingor judicial review are exhausted~and.provided,--further,:.that if the determination of whether a Final Order is reasonably acceptable,-to the Party-who:-sought,-.it'shall be delayed

,-pursuant:,to the.-foregoing proviso, the Termination Date shall.be--automatically extended for aperiod of-time equal

-to the period.of'time for which such-determination shall

-..have -been'delayed;

^(b) no. (A)

suit, action-or other-:proceeding that has a reasonable.,likelihood,.of success,.against any Party or its Affiliates-or any of.the-Auctioned;Assets:;shall be

-- pending.before any Governmental Authority:which..seeks to restrain or prohibit any of the transactionsrcontemplated hereby or by the Ancillary Agreements, or;>(B),preliminary or permanent injunction, judgment, order or decree by any federal or state court of competent.-jurisdiction and no statute, rule,,or regulation: enacted-,by any, Governmental Authority. preventing the;'consummation.-of any of-the transactions contemplated -herebty,or-by -the :Ancillary Agreements-(collectively, "Restraints") ;shallrbe in effect;

.and

! 1 hi, (c)C delivery of each of-the Deeds, the Continuing Site'Agreement, the Declaration of.:Easements;Agreement and a Memorandum of the GT Site Ground Lease to the Title Company

'for recording..

INYCorp;1173312.1:4738W: 11/14/00-11 :45a1

71 SECTION 7.02.

Conditions Precedent-to Obligation of Buyer.

The obligation of Buyer'to-effect the purchase, sale anditransfer-of the Auctioned Assets contemplated by this Agreement shall be subject to the satisfaction or waiver by Buyer 6n or prior to Closing of the following additional 6onditions:

g f t

.(a) Seller shall have-performed in all material respects its covenants, agreements and-obligations contained in'this'Agreement which are required to be performed on'or prior to Closing; (b) the representations-'and'warranties of 'Seller which areset forth in this Agre'ement'shall be'true and correct ifL'all material respects a'sof the date 'of this Agreement and'as'of the Closing-Date, as if made at and as of such time (except to the extent expressly'made as of the date of this Agreement, in which case as of such date)';

(c): Buyer shall have received'a'certificate from an authorized officer of Seller,'dated the Closing Date, to the effect that, to the" best'of'such officer's knowledge, the conditions set forth'in Sections 7.02(a) and (b) -have been satisfied; (d) all consents, waivers and approvals required to transfer the Required'Contracts, Required Software, Patents (to the extent necessary-to-operate the Generating Plants and the Gas'Turbines'-in the manner currently operated by Seller) and Transferable Permits to Buyer shall have been obtained on or prior to Closing' and all Required Contracts, Required Software, Patents- (to the' extent necessary tod operate the

-Generating Plants and the -Gas Turbines'in the manner currently operated by Seller) and Transferable Permits shall have been transferred to Buyer at or prior to

.Closing; (e) Buyer shall have received' (i)'deeds of conveyance substantially in the form of Exhibits A-1 and A-2 (thei"Deeds"), (ii) a-Foreign Investment in Real Property Tax Act Certification and Affidavit substantiallylin the'form of Exhibit'B and (iii) an opinion from John D. McMahon, Esq., General Counsel of Seller and/or other counsel reasonably acceptable to Buyer, dated the Closing Date, substantially in the form'set forth in Exhibit C; (f) unless Seller shall have made the election described in Section 9.01(a)(v), Buyer shall have INYCorp;1173312.1:4738W:11/14/00-1 1:45aI

72 received the IRS rulingscontemplated to be received by Buyer pursuant to Section.6.07(c);

(g) in accordance'with Section 6.-07(a), Seller shall' have transferred all of the assets of the Quali'fied'Decommissionin'g Fund toBuyer and the

'aggregate Fair-'Market'Value of the' assets of the Decommissioning Funds transferred to'Buyer pursuant to Sections 6.07.(a) nd (b)-shall not"'be l.'ss than

$430, 000, 000;'

(h) the Title Company shall have'agreed to issue (as evidenced by:.binding'. commitments 6ofthe Title Company which shall have--been delivered-:to Buyer) immediately after Closing to Buyer,'at"Buyer's expense and'at standard'rates,- a current ALTA (1992) Owner's Title Insurance Policy *(as'fi'ld 'in New"York with the standard New York'endorsement)'insuring'title to the

' fee and leasehold'interests-in the-Buyer Real Estate to be conveyed/granted to Buyer pursuant'-to this Agreement in an.amount equal to, that portion of.-the Purchase Price properly allocable.to such interests, subject only to Permitted Exceptions, and Seller'shall have delivered affidavits'to the TitleCompany in

' substantially the form'attached as'Exhibit. D; (i)'(A) 'Seller..shall have replaced the. steam generators at:Indian'Point'Un'it 2 with'.the spare steam generators-being stored 'by..Seller", (B)'.Indian Point Unit '2 shall have been'restarted 'and during any single 24-hour period subsequent to, such restart Indian Point Unit' 2 shall 'have, 'as applicable,'dembnstrated net electrical capacity of' (i') 941r'megawatt's (during the

...summer period)..or (ii) 976 megawatts.(during the winter

' period) and, (C) at, Closing,, no forced; reduction of greater than 5% of'such electrical capacity or no outage.shall be ongoingcat Indian Point Unit 2; (j)'

ellers

'a Chave obtained'a waiver that permits Seller, without first, offering'such undivided interests-to NYPA,' to tranisfer-toBuyer..the undivided interests of Seller as'a-tenant "in-comm-o'with NYPA to..

._-.the following..described.personal property, fixtures, structures, improvements,'or. other-interests, excepting the fee't6o'the'land on which,.over which, or under which such'interests-'are. erected or located, in each case as more specifically described in' the deed dated December.,30, 1975, executed by.Sellerand NYPA, and recorded.in the County' Clerk'.s Office' of.Westchester

'County, New York,"on'December 31,' 1975'in Liber 7306, page 736 (the "1975 Deed"): (1) that portion of the jNYCorp;1173312.1:4738W:11/14/00-11 :45aI

73 circulating-,water DischargeCanal lying south of a line parallel to 'and 135 feet south of the northerly boundary of "PARCEL A" (such term being as defined in the 1975 Deed), delineated on"MapNo. 1" (such term being,as defined-in the'1975.,Deed) and,designated thereon as-."PAC-3"; (2)-the outfall gates Control House and power and control conduits-serving the' Control House and.the outfall gates (but omitting such portion of such'power and control conduits as are found on the outfall gates and associated structures westerly of the westerly boundary of.PARCEL A within lands now or formerlyof,the New York State Atomic and Space Development"Authority or.its successor, the New York State Energy`Research and Development Authority), and appurtenancesf thereto, delineated on Map No. 1 and designated thereon as""PAC-4";j (3) the Meteorological Tower, the Meteorological Trailer, forward scatter meter, associated foundations,,structures, supports, anchors, and 'other associated facilities and appurtenances,,delineated on-Map No.1 and designated thereon 'as-'"PAC-8"; and,(4) the outfall gates power cables'running from PARCEL A underground through "EASEMENT PARCEL 1" (such term being defined in the 1975 Deed).to' MCC lOZ in the Screenwell Structure No. 1 on EASEMENT PARCEL 1 '(as delineated and designated on Map No. 1) and associated control.,wires from PARCEL A underground thro'ugh EASEMENT PARCEL 1 to Control Building No. 1',such facilities being designated as "CEC-3" on Map No. 1, together with appurtenances; (k) Seller shall have executed and delivered the GT Site Ground, Lease; (1) Seller shall have executed 'and delivered the Continuing Site Agreement; (m) Seller shall have executed and delivered the Declaration of.Easements Agreement; (n) Seller shall have executed and 'delivered the Power Purchase Agreement; (o) Seller shall have entered into an Electric Service Contract regarding the'provision and/or delivery of Station-Use Energy as defined in the Continuing Site Agreement; (p) since the date of this Agreement, there shall not have occurred and be continuing a Material Adverse Effect; and (NYCorp;11'73312.1:4738W: 11/14/00-11 :45aI

74 (q)

Seller.shall-have executed and delivered each of the; following: -,

(i) a bill of sale by which title, to Auctioned Assets constituting personal property shall be conveyed~to Buyer, substantially in the form of

-Exhibit H- (the "Bill ofSale");-.

,(ii) a copy,,certified by the Secretary of Seller, of-resblutions authorizing the execution and delivery of this Agreement and the Ancillary Agreements andinstruments attached as exhibits hereto andthereto,-and:the consummation of the

.transactions contemplated hereby;'-

.(iii).a certificate-of-the Secretary of Seller certifying the certificate of incorporation and

-:bylaws of Seller and.the authority of the officers of Seller executing this Agreement and the Ancillary Agreements;:

.) * (iv) certificatesrof title-for the' vehicles set forth in Schedule 2.02(a)(iii), to the extent such

-certificates of title are-necessary for the transfers of such vehicles;, and -

(v) such other agreements,- consents, documents, instruments and writings-as are reasonably requested to:be delivered-bySeller at or prior to

-Closing pursuant'to this Agreement or the

,,Ancillary Agreements,.-including all,such other

., -instruments of'sale,,transfer, conveyance, assignment or assumption as Buyer may, reasonably request in connection with the transactions contemplated hereby...

SECTION 7.03.

Conditions Precedent to Obligation of-Seller.,..The obligation of r,Seller to effect the purchase, sale and transfer of the;Auctioned.Assetscontemplated by this Agreement shall be subject to the satisfaction or waiver-by -Seller on,:or prior-.to:Closing of the following additional conditions:

(a)

Buyer shall-have performed: in all material respects its covenants,: agreements :and-obligations contained in this Agreement which are required to be performed on or prior-to'Closing; (b) the representations and warranties of Buyer which:are set forth.in-<this Agreement shall be true and correct-in all material;respects-as of the date of this INYCorp;1173312.1:4738W: 11/14/00-11 :45a1

75 Agreement'and'as of the Closing Date, as'if made at and as of such time (except to the extent expressly made as of the date of this Agreement, in which case as of such date)';

(c) Seller shall have received a certificate from an authorized-officer of Buyer,'dated the Closing Date, to the effect that, to the best of such officer's knowledge, the conditions set forth in Sections 7.03(a) and (b)-have been satisfied;

-(d)'Seller shall have received an opinion from Joseph" L.7Bloiint, Esq., General Counsel of Buyer and Entergy Nuclear, Inc. and/or-'other counsel reasonably acceptable to Seller, dated the Closing Date,

'substantially'in 'the form'set forth in Exhibit E; (e)' unless Buyer shall have made the election described in"Section 9.01(b)(iv), Seller shall have received the IRS rulings and the New York State Department of Taxation advisory opinion contemplated to be received by Seller pursuant to Section 6.07(c);

(f) Buyer shall have entered into an Electric Service Contract regarding the provision and/or delivery of Station-Use Energy as defined in the Continuing Site 'Agreement; (g) Guarantor shall have executed and delivered

'the Guarantee Agreement and Seller shall have received an opinion'substantially in the form of Exhibit G dated the Closing Date and from counsel reasonably acceptable to Seller; (h) Buyer shall have executed and delivered the GT Site Ground Lease; (i) Buyer shall have executed and delivered the

Continuing Site'Agreement;

('j) Buyer shall have executed and delivered the Declaration of Easements Agreement; (k) Buyer' shall have executed and delivered the Power Purchase Agreement; and-(1) Buyer shall' have executed and delivered each of the following:

(i) a' copy, certified by the Secretary of Buyer, of resolutions authorizing the execution (NYCorp:1173312.1:4738i: 11/14/00-11:45aI

76 and delivery.of this Agreement and the Ancillary

-Agreements and instruments-attached as exhibits hereto and thereto, and the_.consummation of the transactions contemplated~hereby;

'(ii) a certificate of'.the Secretary of Buyer

-i; ertifyingthe certificate of incorporation and

.bylaws of Buyer and the authority.-of the officers of.Buyer executing-this Agreement-.and the -

- Ancillary-Agreements;.,and

' '....(iii) such other agreements,.consents, documents-instruments and writings as-are.

'reasonably requested torbe delivered by Buyer at

' or~prior to Closing pursuant tothis'Agreement or the Ancillary.Agreements, including all such other instruments ofsale, transfer,.conveyance, assignment or assumption-ab' Seller may reasonably request in' connection with'the transactions contemplated.hereby.

ARTICLE VIII 4

- : -Emplovee-Matters,-.

SECTION 8.01.. Emplovee Matters.

(a).ENO shall offer equivalent-employment at the Auctioned.Assetsto those employees of Seller, regularly assigned~by Seller to work at

-the Auctioned-Assets as of Closing in the job titles listed in.Schedule-8.01(a) or in the Collective Bargaining-Agreement (all such employees described.above and' those individuals described in the following sentence'being hereinafter,-referred to as "Affected Employees").

Notwithstanding-the-foregoing, the-offer of employment to Affected Employees who.are officers as.of Closing need not be equivalent.

Affected Employees shall include each such employee of-Seller whopis not actively at work-duesolely to a temporary absence, whether paid.or-unpaid, in;accordance with applicable policies-of Seller,.including as a result of vacation, holiday, personal-time,' leavemof absence, union leave, sick allowance, -mi-litary-leave, Family or Medical

Leave Act leave or.jury'duty.- -Affected-Employees also include each such'former employee of Seller who is-reinstated as a result of a'legal proceeding arising-out of employment-with Seller,-(including anyarbitration-.,-

proceeding) during (i) the Union Transition Period,- in the case of.-an Affected Union'Employee and -(ii) th& Non-Union Transition Period, in the case of an Affected Employee who is not an Affected Union Employee, provided that Seller shall be responsible for any monetary obligations or expense (NYCorp;1173312.1:4738W:11/14/00-11:45aI

77

-involved with-'respect to each such reinstatement, including, without limitation, backpay, damage awards and attorneys' fees.

Each Affected Employee who accepts an offer of employment from ENO'shall be referred to herein as a "Continued Emplovee."

Continued Employees shall cease to be employees of Seller as. of Closing and the period of employment by ENO'of-'the Continued Employees shall begin at Closing. Notwithstanding the 'immedi'ately'preceding sentence, any Affected Employee who, on'Closing, is not actively at work and has been absent for a continuous six-month period immediately prior to Closing on account of an illness or injury' (a "Siecial"Affected Emplbvee"') shall not become a

'-Continued Employee.until he or she is able to report to work for ENO.-A Special Affected Employee shall remain on

'Seller'spayroll until the earlier of (i) the expiration of his or her Seller's'sick allowance and termination from employment by Seller, or (ii) he or she is able to report to

work for ENO.

Seller shall.reimburse-Buyer for all wages, compensation, or other benefits paid by ENO to any Continued Employee who was not actively at work on account of an illness or injury as of Closing, and who, on account of such illness or injury does not report to work for ENO before his or her sick allowance benefits expire.

As to each such Continued Employee, his or her employment shall terminate on the date immediately after his or her sick allowance benefits expire.

Seller's reimbursement shall in no event exceed the compensation and benefits to which each such Continued Employee would have been entitled had he or she continued t'o be employed by Seller until his or her sick allowance benefits expired.

Seller shall be responsible for any obligation'to provide employee benefits to Affected Employees prior to Closing.

All such-offers of employment to Affected Employees will be'mad6 (i) in accordance'with'all applicable Laws and (ii) for employees represented by Utility Workers' Union of America AFL-CIO and its Local Union 1-2 ("Local 1-

-2"),

in accordance with the Local 1-2 Collective'Bargaining Agreement (as defined in Section 8.01(b)).

ENO may extend

'offers' for employment to Affected Employees beginning four

-weeks prior to Closing.' To the extent ENO continues to employ Continued Non-Union Employees, ENO shall maintain equivalent employment of such employees'for a period of not less than twelve months after Closing. <At least'four weeks prior to Closing and at Closing, Seller shall-confirm to ENO that'each'Affected Empl'oyee (prior to Closing);or Continued Employee (at'Closing), as applicable, (A) is qualifi6d, licensed, certified or trained in accordance with applicable government requirements or standards'to perform the duties and responsibilities of his or her current job assignment and (B) has the'appropriate nuclear power plant (NYCorp;1173312.1:4'7381: 11/14/00-11:45aj

78

. authorization..Subject to.the provisions of this-Article VIII,.ENO retains. the right -to assign and direct the work of the. Continued.-Non.Union.Employees and to.conduct:its business-and operations consistent with its business needs.

(b) Schedule-8.01(b): sets forth the 2000-2004

-collectivec.bargaining agreement, -and amendments.thereto, to whichSeller -is a.party:in-connection.with the Auctioned Assets-(the--"Collective Bargaining Agreement")., Affected

>Employees,who..are included in'the collective bargaining unit covered by the.Collective2Bargaining-Agreement are referred

to.herein.-as-'"Affected-Union Emplovees",..Each Continued

-Employee who' is an-Affected':Union Employee-shall-be-referred to. herein as a "Continued'Union-Emilovee"..At Closing, ENO will assume the-terms and conditions.of.the Collective Bargaining Agreement, except as.set forth in:Section,8.02(b) below and.negotiated in-good-faith. with:Local 1-2, as they relate to. Continued)Union Employeesluntilr-.the expiration date.of the Collective:Bargaining Agreement;(the-,"Union

.Transition Period").

ENO'will-comply-with'its-legal--

obligations with: respect;-to. collective. bargaining-under federal.labor-law for the_'employees~at-the Auctioned:Assets in the job titles or related.work!responsibilities-of the Affected Union Employees, and ENO will comply with all applicable obligations-thereunder.

-ENO shall recognize Local 1-2 as the exclusive collective bargaining - -.

representative of.the..employeesoat -the Auctioned'Assets in the job-titles.-or-related work-responsibilities-of the Affected Union Employees and-Buyer.and ENO agree-that, should any other business.entity.'(regardless of-its.:

relationship toiBuyer or-ENO) acquire.-all-or.a portion of

-theAuctioned Assets from Buyer.-prior to-the expiration date of the:Collective.Bargaining Agreement, Buyer andENO will

require such business-'entity.tob (i) offer employmentto Affected Union (Employees-.employed-by-ENO-at the Auctioned Assets immediately-prior ito the.-change in ownershipp;'(ii) recognize Local.1-2 as'the.-exclusive.'collective bargaining representative~of ENO's:.employees atthe Auctioned:Assets in

-the:.job titles-or--related work responsibilities, of :the Affected-Union.Employees, and-.(iii).assume the terms.and conditions of the :Collective.Bargaining-Agreement as they

,relate.to Affected Union!.Employees from the-datelof-such

.acquisition'through the expiration date of the Collective

--BargainingiAgreement.

SECTION 8.02. --Continuation of--Equivalent;'Benefit Plans/Credited-Service.

(a) Fortnot less than-three years

.. following Closing (the "Non-Union Transition Period"),, ENO

_shall maintain compensation (including'base pay.and;bonus compensation) and employee benefits. and'employee benefit

.plans, nonqualified plans-and arrangements for~each INYCorp;1173312.1:4738W: 11/14/00-11:45aI

79 Continued Employee-who is not a Continued Union Employee (a

."Continued Non-Union Employee") which are at least equivalent to-those provided-to such Continued Non-Union Employee pursuant to Seller's compensation, employee benefits and employee benefit plans, nonqualified plans and arrangements described in Section 8.02 through 8.09, that are in effect as of Closing.

Seller's'benefits, plans and

-arrangements listed on Schedule 4.12, but not specifically enumerated-in Section.8.02 through..8.09, are-'referred to as "Seller's 4.12 Benefits".

Inwaddition~to those benefit plans.listed in.-Section 8.02 through-8.09, ENO shall maintain benefits which, in the aggregate, are equivalent in value to Seller's 4.12.Benefits. 'ENO may substitute for the Seller's employee stock purchase plan an enhancement to ENO's 401(k) Plans described:-in Section.8.04 below or an alternative plan'or arrangement that is at least of equivalent value to-the.Seller.'s stock purchase plan.

Such compensation shall:be based upon (x)'-such employee's

,.existing'.individual base pay,.(y) such employee's authorized overtime, if applicable, and (z) the average bonus and benefit component for such employee's salary plan level, as consistently applied by Seller, apportioned according to such employee's base pay..

(b) During the Union Transition Period, ENO shall provide to-each Continued Union Employee benefits and employee benefit plans and arrangements which are equivalent to those provided under such Collective Bargaining Agreement.

Such-benefits, plans andrarrangements include the following:>: (i) hospital, medical, dental, vision care and prescription drug benefits (including employee contributions to be made on a pre-tax basis), (ii) health care and dependent care flexible spending accounts; (iii) employer-provided basic groupterm life and accidental death and dismemberment insurance; '(iv) employee-paid group universal life and spousal and dependent child life insurance; (v) sick allowance (short term disability) and long term disability benefits; (vi)- business travel-accident insurance and crime protection insurance; (vii) occupational accidental death insurance; (viii) adoption benefits and child care and elder care referral benefits; (ix) tuition aid benefits; (x) vacation and.holidays; (xi) employee stock purchase-;plan (including employer matching contributions) or such alternat:ive plan or arrangement.negotiated in good faith with Local 1-2; and (xii) defined benefit pension and

-401(k) plan benefits.

In providing such benefits, ENO shall have the right, subject to any applicable Laws and the Collective Bargaining Agreement, to use different providers from those-used by.Seller and to establish ENO's own benefit

plans or use-ENO's existing benefit plans. For purposes hereof, except as provided in Section 8.04(b), ENO shall not (NYCorp:1173312.1:4738#: 11/14/00-11:45aI

80 have any obligation to maintain a fund holding,.or measured

by common stockof.Seller's parent-under any of.ENO's plans or arrangements,, notwithstanding-anysuch fund maintained by Seller funder its plans and:arrangements.

(c)

Continued-Employees shall-be.given credit by ENO for all'service with Seller andits Affiliates under all

existing, or future employee -benefit and fringe benefit

.plans, programs and,arrangements of EN- ("Buyer Benefit Plans") in which they.becomewparticipants-and in which prior

service is recognized for crediting the-amount or value of the benefit.- The servicecredit,-given-by ENO shall be for purposes of,-eligibility, vesting, eligibility.for -early retirement and.early retirement-subsidies,,benefit.accrual, pre-existing scondition limitation, employerccontributions,

.- matching:contributions,,,severance allowance and service-related.level of benefits.-.-,ENO.,shall assume and honor all

.vacation, sick and personal days accrued-and, unused.by

,--.Continued Employees as of.Closing-in accordance--,with, Seller's applicable policies and arrangements.,.

SECTION 8.03..Pension Plan.-,,.(a);. -Effective as of Closing,-.ENO-shall-havein effect defined.-benefit-pension plans ("Buyer's Pension Plans") intendedlto be,:(i) qualified pursuant to Section 401(a) of the Code and

(ii),,nonqualified, in orderito.provide forbenefits which

,would otherwise be payable.under, the applicable-qualified plan but-.for the.application ofSections.401(a)(17)-and 415 of the Code,:providing,benefits as of Closing identical in all material respects.(except.,for such-changes as may be required.by Law) to the benefits provided, tothemunder

-,,.Seller'slPension-Plans.,(as defined below),-in:-particular (x)

.,,for Continued Non-Union-Employees, such1 Buyer's.Pension

,-Plans to provide benefits identical in,:all,-material respects

.,\\to those~benefits-:providedunder Seller's-:Retirement Plan for Management Employees, or its successor plan,,-and Seller's Supplemental Retirement Income Plan, and (y) for

, Continued Union Employees, such'Buyer',s:Pension Plans to

provide-benefitsidenitical in all material respects to those

-provided.,under Seller's Pension and Benefits-Plan,,,or its successor plan. (collectively, "Seller's Pension Plans"),

in

,eachcase,;as-of;Closing. -,ENO acknowledges--and-.agrees that

-one suchmaterial--respect is tocount'age-after termination of employment,;with ENO for purposes of-satisfying-<

,- -requirements'in Buyer,'s Pension Plans;for early retirement eligibility and early-retirement subsidies.-,

i

,, E r,

rt

.-.(b).Continued Employees participating-in Seller's

,.PensionPlans immediately,.prior to Closihg-shall become

...participants inBuyer's; Pension:Plans as of-Closing.

Without limiting thegen7erality of Section,8.02(c),

INYCorp;1173312.1:4738W:11/14/00-11:45aI

81 Continued Employ.e's shall receive credit for all compensation and's'ervice with Seller'(subject tothe terms

-of Sellers Pension Plans as then in effect) for purposes of eligibility for participation, vesting,'eligibility for early retirement and early retirement subsidies and benefit accrual under Buyer's Pension Plans.

Seller shall be responsible and'shall retain the assets for the Continued Employees' p-nsi n benefits accrued-up t6 Closing, and ENO shall be-responsible for pension benefits accrued by such Continued'Emp.loyees after Closing as provided herein.

ENO may offset'against the accrued benefits determined under

-Buyer's Pension Plans the accrued benefits'determined under Seller's.Pens.ion'Plans.

For the purpose-of this

-'Section 8.03(b), "accrued benefit" means the amount that

'would be'paid'as a life annuity at'normal retirement age irrespective'of-the date of actual distribution: from either Seller's or Buyer's:Pension Plans.

Seller shall make pension'distr~ibutions-to Continued Employees of the vested portion'-of-'their accrued benefits in accordance with the terms of Selleir's Pension Plans as in.effect from time to time.

As soon as reasonably practicable following Closing, Seller-shall.provide-ENO a list showing, as of Closing, the accrued benefit of-each Continued Employee under Seller's Pension Plans.'

(c) In the event that any other business entity (regardless of its relationship-to Buyer-'or ENO) acquires all or a portion of the Auctioned Assets from Buyer at any time during tlih Non-Union 'Transition Period-in the case of Continued Non-Union Employees and during the Union Transition 'Period in the case of Continued Union Employees, Buyer and ENO will require such entity to maintain ENO's.'

defined benefit'plans, provide the benefits and recognize compensation !and service with Seller and ENO to the same extent as ENO is required under Sections 8.03(a) and (b) above.'

SECTION 8.04.

401(k) Plan.

(a) Effective as.of Closing,'ENO shall'have in effect tax-qualified defined contribution'plans' and trust arrangements'thereunder'that

include a-qualified'cash or deferred arrangement within the meaning of-Section-401(k) of the Code ("Buyer's 401(k)

Plans") that will provide benefits that are identical in all material respects (except for such changes as may-be

-required by Law) to those provided'by (i) Seller's Thrift Savings Plan for-Management Employees, in the case of Continued Non-Union Employees, and (ii) Seller's Retirement Income-Savings' Plan'for Weekly Employees, -in the case of Continued'UnionEmployees (such Seller-plans herein referred to collectively as "Seller's 401(k)"'Plans"),- in each case, as of Closing.

Each Continued Employee participating in fNYCorp;1173312.1:4738fl:11/14/00-11 :45aI

82 Seller's 401(k); Plans immediately prior to Closing shall become.a participant in Buyer~'s 401(k) Planfsas of Closing.

Continued',Employees shall' receiv6e credit for all service with'Seller for purposes.of'eligibility,' vesting and, employer matching and,-if'applicable, profit sharing contributions -under-,Buyer'.s 401(k)

Plans'.

(b)' At, such time:.'afte'r'Closing as Seller is reasonably..,satisfied that Buy'er.'s401(k)' Plans'meet the requirementsfor qualific'ation:,uhder' Section 401(a) of the

'Code 'Seller shall cause-'to be't'rahsferred'to' Buy'e'r's 401(k)

,Plans','in'a.trust-to-trust tr'a'nsferin' c6mmon'stock'of

,.j~'

Seller's parent (as sprovided in the following sentence) and cash,A(or otherproperty reasonably acceptable toENO) an

..,amount equal toithe~value of the-assets held in the accounts of-all-Continued Employees"(including any outstanding loan

'.,'balances.'of ContinuedEmployes in'Seller's 401(k)' Plans) subject'.toany qualified dome'stic relations orders.

Prior to such'.transfer,'Seller shalL'.make' all' employer; contributions':'that accrued" pprior'i to Closing with,respect to the'accounts of Continued.'Employees.'unde 'rSeller'.s 401(k)

Plans.

In connection'therewith, ENO shall establish an

..investment,.fund under.Buyer's.401(k)-.Plans,to which shall be transferred'.the shares. of common stock ofSeller's parent

'(or any' successor thereto) [which, as? o'f the datbe of

,.,,transfer,'are 'credited tb'.theaccounts of-the;Continued

', :'.Employeessunder Seller's_'401(k) Plans.

Theinvestment

.'.'fund(s),'.available'under. -the 'Buyer's.,401(k) Plan's shall offer

- abroad-range of -investment'.

alternatives, including'at least three.diversified investm'ent alternatives,..each6of the three having',mate'rially:different;risk'and return' characteristics and containing-diversified.'assets." <After Closing',and prior to'any such transfer,.ENO;shall cooperate with Selle'r in the administration.,o6f'distr'ibutions toand'lYoanhrepayments by Cont'inuedEmployees.Prior to' such transfer bf assets, Seller'shall vest-any 'unvested,.benefits'of Continued' Employees.. underSeller's401(k) :Plans.

Following-any such transfer of' assets, ENO 'shall"a'ssume all' obligations-,and liabilities of Seller under Seller's 401(k) Plans 'with

,respect.to.suchContinued,Employees, and.Seller shall have

-nofurther'liability to;ENO orany,,Continued Employee with respect thereto:.

'SECTION '8.05.'-Welfare Plans. (a')

Continued Employees,.and their d6pendents~who are eligible to

_,participate6 in'.SelleI's'currnt -welfare.

benefitsIplans, "p..programsor arrangements shall:'be eligible.,to.participate in equivalent'welfare benefits' plans, programs or arrangements maintained'orteistablished by 'ENO' ("Buyer's Welfare Plans"),

effective.as6of Closing.

Effective as of-Closing,-.any limitations. as to pre-existing conditions and-actively-at-INYCorp;1173312.1:4738W:I11/14 /00-w1 :45a I

83 work exclusions and waiting periods-under Buyer's Welfare Plans.shall be waived by ENO with respect to.Continued Employe'es and their eligible dependents to the extent satisfied uhnder Seller's applicable Welfare Plans.

In addition, effective as of Closing, ENO shall cause'Buyer's Welfare Plans'to recognize any out-of-pocket expenses incurred by Continued Employees and their eligible dependents'prior to Closing and'during the calendar year in which. such Closing occurs for-purposes of determining their deductibles and' out-of-pocket maximums 'under Buyer's-.Welfare Plans.

Seller shall-retain responsibility uinder Seller's welfare'plans for-claims or causes'ofaction relating to expenses incurred by Continued Employees and their eligible dependents prior"'to Closing'.

ENO'shall have responsibility under Buyer's Welfare Plans for-claims or causes of action relating to.expenses.incurred by Continued Employees and their eligible dependents'on and after Closing.

Seller expressly agrees to remaih 'responsible for making COBRA continuation-."coverage available to 'Affected-Employees and Special Affected.Employee's and their eligible'dependents who do not become Continued Employees.

(b) Effective as of-Closing, ENO shall have in effect'health care and dependent care reimbursement account plans for the benefit of each'Continue'd Employee, the terms of which shall (i) be identical in-all material respects to the Flexible Reimbursement Account Plans',for Management and Weekly Employees of Seller"("Seller's Reimbursement-Account Plans")'as in effect as of Closing' and,(ii) give full effect to, 'and continue in effect,- salary reduction.elections made under Seller's Reimbursement Account Plans. 'Prior to Closing, Seller shall cause the accounts of Continued Employees under Seller's Reimbursement Account Plans to be

-segregated into' separate health care, dependent care and

'transportation'reiibursement accounts (the "Seareaat'ed Reimbursement Accounts")., and such Segregated Reimbursement Accounts shall be-transferred to and'assumed by ENO as of Closing.

'(c) 'ENO' shall, subject to anyapplicable' Laws, provide'a^-retiree health program identical in all material respects to Seller's retiree health program'as in effect as of Closing to each Continued Employee who terminates his employment with':ENO'during the'Non-Union Transition Period, in the' case'`of a Continued'Non-Union Employee, and during the Union2'Transition Period, in the case-of a Continued

Union'Employee,-'iand, in each case, who at the'time of such termination of employment satisfies the eligibility requirements-:for-such retiree health-program provided by ENO;'provided,'however, that Seller shall remain liable, pursuant' to Seller's retiree health program, for all INYCorp;1173312.1:4738f: 11/14/00-11:45aI

84 Continued Employees who satisfy, as ofClosing, the, eligibility-requirements then in-effect',for Seller',s retiree

..health program.-,,

t

'I

.'.i,'i 4,

7.

SECTION, 8.06. -Short-and Long-Term mDisability.

.Effective-as of Closing,:;ENO shall have in-effect short-and

long-term disability plans-for the benefit.of-,Continued Employees, the cost of which'to Continued: Employees~shall be the same as under, andthe.,terms ofwhich are identical in

-.,all material respects to,. Seller.'s,applicable plans as in effect as of-Closing.. Any waiting periods and pre-existing c

ioon clausesshallbe.waived under:ENO's short-and

..long-term disability.plans-with respect*.toContinued-

.Employees to-the extent satisfied.under Seller's short-and long-term disability, plans. -

-SECTION 8.07.

Life Insurance and Accidental Death and-Dismemberment-Insurance. - Effective as,of_.Closing,- ENO-shall have in effect.group term life insurance,.group

,universal.life insurance, accidental death and-dismemberment insurance, occupational;accidental death insurance,- business travel accident insurance and-crime protection--insurance plans-for the benefit-ofContinued Employees,'the-.cost of

,,..which to-Continued--Employees shall-be the same-as,:under, and terms of,-which are identical:-in all material-respects to, Seller'sapplicable plans that provide such benefits to Continued-Employees immediately.prior to.Closing. w

_..r,..: *,~~~-

4, SECTION 8.08.- Severance. (a)L,-Effective as of

. Closing,,ENO shall-.have in-effect-a,sev~erance plan (.""Buver's Severance Plan").,covering.Continued Non-Union.Employees.that

-containsterms identical:in all material-respects to:

-,.Seller'.s Severance,-Pay Plan for Management-Employees, as in effect-as-,of.,-;Closing-("Seller's Severance Plan".)... Continued

_,Non-Union Employeeswho become,,officers ofENO,:;if

!any,

,shall participate in-the officers.';,severance plans.available rto ENO ;officers.: With-,respect to. Affected-,Employees.:who are officers, of-Seller, ENO shall:, assume -all-..,liabi-lities -and obligations, if(any, under-Seller's.Severance, Program for Officers of Consolidated Edison,..Inc.-;andits Subsidiaries

- -orany, such officer',s employment:agreementset.,forthin Schedule:2.02-(a)- (ivx),.as:applicable,;-.larising,:from;ENO's

--,,offers, of-,employment to-such, officers.

^-(b),-,ENO shall, subject to:,any.applicable Laws,

-provide-a special separation allowance-for, 4 any.Continued Employee whose-employment.iwith ENO,,i&sterminated

,involuntarily by.ENO,,,other than for cause'during-,the-Non-

-.'Union Transition Period,,,in.the case~of.Continued Non-Union Employees, and-during-the UnionTransition Period, in the case of.Continued-Union.Employees.

Such allowance shall be

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85 not less than'the sum of four weeks pay plus one week pay for each completed year of service (as determined by

aggregating each affected individual's respective service with Seller and ENO) and shall be payable by ENO in a lump sum within-30-days-after termination of employment.

In addition,-in the-case of each Continued Non-Union Employee described in the first sentence-of this Section 8.08(b), ENO

- shall pay the-Continued Non-Union Employee a lump sum equal to the excess of (i) the-actuarial equivalent of the Continued Non-Union Employee's "potential benefit" under the applicable Buyer's Pension Plans, which'such Continued Non-Union Employee would&receive if such Continued Non-Union Employee's employment continued until three years after Closing and-such-Continued Non-Union Employee's base and incentive compensation for such deemed additional period was the same as in effect on the date of such Continued Non-Union.Employee.'stermination of employment with ENO, over (ii) the actuarial equivalent-of such Continued Non-Union Employee's-"actual benefit" under the applicable Buyer's Pension Plans, asof the date of such;Continued Non-Union Employee's termination of employment from ENO.

For the purposefof'the foregoing sentence, (i) the term "potential benefit" shall refer to the monthly pension that--would have been payable'to the applicable Continued Non-Union Employee commencing on the first day of the month following the latest of (A) the last day of the deemed additional period, (B) Continued-Non-Union Employee's attainment of age 55, or (C) the earlier of (1) the first date as of which the sum of such Continuecl(Non-Union Employee's age and years of service, -as taken into account in determining the actuarial reduction for commencement prior to.normal retirement age that is to be applied to such Continued Non-Uhion Employee's accrued benefit under the applicable Buyer's Pension Plans, equals 75 or (2) such Continued Non-Union'Employee's attainment of age 65, (ii) the term "actual benefit" shall refer to the~monthly pension payable to'such:Continued Non-

"Union Employee'under the applicable Buyer's Pension Plans commencing as of the-date determined in accordance with clause (i) of-this-sentenbe, and (iii) the actuarial equivalent of-the "potential benefit"'and the "actual

benefit",shall each be a lump:sum payable aslof the date of such Continued-Non-Union Employee's termination of-employment from-ENO, determined on the basis-of the interest rate used to determine the amount of lump sum distributions and, to the-extent applicable, other actuarial assumptions then in effect under the applicable Buyer.'s Pension Plans.

ENO shall also provide-outplacement services to such

terminated-Continued Non-Union Employee appropriate to the level of. the Continued Non-Union: Employee's position and job responsibilities.' ENO shall also-continue to provide or cause to'be-provided to any such terminated Continued INYCorp:1173312.1:4738Wf:11/14/00-11:45a)

86 Employee health insurance-coverage and group. term and universal life.insurance coverage at the same rates as for active Continued Employees for a period equal to the number of weeks ofiseparation allowance which-any-such terminated Continued-.Erployee is entitled to from ENO.

ENO shall have the right to require a release in a form-reasonably satisfactory to ENO as a condition for eligibility to receive such separation allowance.

The allowance shall not apply to. Continued:Employees.whose employment is terminated due to 'death 'or' expiration of sick allowance or other authorized-leave of absence or who terminate employment voluntarily,.,. If at, any time -during-,the three-year period following Closing, ENO shall assign a Continued-Non-Union Employee to work on a regular basis at a location that is

.more than.fifty-miles from the location to.which such Employee is assigned-as of Closing,. ENO shall offer such Continued. Non-Union Employee the option--to terminate employment and.receive the severance benefits set forth in this Section 8.08(b)-in lieu of the reassignment.'

.- SECTION 8.09.

Workers Compensation. -Effective as of Closing, ENO shall have in effect-.a--workers compensation

.program for Continued Employees-that shall-provide coverage

.identical-in all material respects to -Seller's workers

compensation program as of: Closing.-

ARTICLE IX Indemnification and Dispute Resolution SECTION 9.01.-- Indemnification..(a) -.Seller will indemnify,-and hold harmless-;Buyer and its-Affiliates and their respective directors, officers, employees, agents and representatives. (collectively:with Buyer and its Affiliates, the "Buver-Indemnitees") from-.and.against any claims-or causes of action, 2demands,-.or.suits by-any person,7-and all

- losses, liabilities,tdamages,-.obligations' payments

.(including-amounts paid in-settlement-in accordance with this Article -IX),-judgments,7-orders, decrees, -rulings,

- liens, -charges, costs-and expenses. (including reasonable legal fees and expenses and including costs and expenses incurred in connection with investigations and settlement

-,proceedings).(each, an 'Indemnifiable Loss"),,as incurred, asserted-against or suffered by-any-Buyer,-Indemnitee

-.relating.to, resulting'from or arising out of:-

-,(i) any breach by Seller of (A) any covenant or agreement of Seller contained in this Agreement (other than covenants or agreements relating to the Power Purchase-Agreement) or.(B) prior--to their expiration in (NYCorp;1173312.1:4738W: 11/14/00-11:45aI

87 accordance with Section 11.03, the representations and warranties contained in Article IV; (ii)athe Retained Liabilities (other than Retained Liabilities arising under the Power Purchase Agreement);

(iii) noncompliance by Seller'with any bulk sales or transfer laws referred to in Section 6.09;

(iv)-'any'breach by Seller of any Ancillary Agreement (other than 'breaches of the Power Purchase Agreement); or (v) if Buyer has failed-to`receive' any of the IRS rulings contemplated to-be receivedhby!Buyer pursuant to Section'607(c)'?and'Seller has'elected-that the condition set'forth in Section 7.02(f)'shall not'apply, all Taxes, including,-'for purposes 'of clause (A),

estimated Taxes, (net of any refunds or credits) incurred solely as.-'a result of (A) inthe case of the failure to' receive an IRS ruling contemplated to be received'pursuant to Section 6.07'(c)(i)(A), the failure to-be-entitled to take the positions requested in such ruling on any Tax'Return of Buyer'or (B) in the'case of the failure to receive an IRS ruling contemplated to be received pursuant to Section 6.07(c)(i)(B) or 6.07(c)(i)(C), the failure of the positions requested in such ruling to be sustained following: any

proceedings.'described in Section 9.03(a), the failure of Seller to request a Tax Refund Suit pursuant to Section.9.03(b).or, if Seller does so request, the failure of such Tax-Refund Suit, as applicable.

(b) Buyer will indemnify and hold'harmless Seller and its Affiliates and their respective directors, officers, trustees, employees, agents and representatives (collectively with Seller and its Affiliates; the "Seller Indemnitees") from and against any Indemnifiable Losses, as incurred,'asserted against or suffered'by any'Seller Indemnitee'relatin'g to, resulting from or arising out of:

'(i) any'breach by Buyer of (A) any covenant or agreement of Buyer contained in this Agreement (other than-covenants'or agreements relating to the Power Purchase Agreement) or (B) prior to their expiration in accordance with Section 11.03, the representations and warranties contained in Sections 5.01, 5.02, 5.03 and 5.05;

'(ii) the Assumed Obligations' (other than Assumed fNYCorp;1173312.1:41381i: 11/14/00-11:45aI

88 Obligations arising under the Power Purchase Agreement);

(iii) any breach by Buyer of any Ancillary Agreement (other than breaches of the Power Purchase Agreement); or (iv) if Seller has failed to receive any of the IRS rulings or the New York State Department of Taxation advisory opinion contemplated to be received by Sell.er pursuant to Section 6.07(c) and Buyer has elected that the condition set forth in Section 7.03(e) shall not apply, all Taxes, including, for purposes of clause (A), estimated Taxes (net of any refunds or credits) incurred by the Decommissioning Funds and Seller solely as a result of (A) in the case of the failure to receive an IRS ruling contemplated to be received pursuant to Section 6.07(c)(i)(A), the failure to be entitled to take the positions requested in such ruling on any Tax Return of the Qualified Decommissioning Fund of Seller or (B) in the case of the failure to receive an IRS ruling or an advisory opinion contemplated to be received pursuant to Section 6.07(c)(i)(B), 6.07(c)(i)(C) or 6.07(c)(ii),

the failure of the positions requested in such ruling to be sustained following: any proceedings described in Section 9.03(a), the failure of Buyer to request a Tax Refund Suit pursuant to Section 9.03(b) or, if Buyer does so request, the failure of such Tax Refund Suit, as applicable.

I (c) The amount of any Indemnifiable Loss shall be reduced to the extent that the relevant Buyer Indemnitee or Seller Indemnitee (each, an "Indemnitee"') receives any insurance proceeds with respect to an Indemnifiable Loss and shall be (i) increased to take account of any Tax Cost incurred by the Indemnitee arising from the receipt of indemnity payments hereunder (grossed up for such increase) and (ii) reduced to take account of any Tax Benefit realized by the Indemnitee arising from the incurrence or payment of any such Indemnifiable Loss.

If the amount of any Indemnifiable Loss, at any time subsequent to the making of-an indemnity payment in respect thereof, is reduced by recovery, settlement or otherwise under or pursuant to any insurance coverage, or pursuant to any claim or cause of action, recovery, settlement or payment by or against any other person, the amount of such reduction, less any costs, expenses or premiums incurred in connection therewith, will promptly be repaid by the Indemnitee to the Party required to provide indemnification hereunder (the "Indemnifying Party") with respect to such Indemnifiable Loss.

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89 (d) No claim may be made against Seller for indemnification with respect to breaches,of representations and-warranties' pursuanttoSectioi 9.01(a).(i)(B) unless and until'the aggregate amount'of Indemnifiable Losses incurred by the Buyer.'Indemnitees'thereunder.exceeds-$l,000,000 at which-'point all claims.(including those previously barred by such-threshold):may'be made againstSeller. Notwithstanding the foregoing,'the maximum amount recoverable for all claims under.'Section' 9.01(a)'(i)'(B).shall'be.$17, 000,000 (other than claims based upon fraud).:

No'claim'Tmay be made against Buyer'for indemnification with'respect to breaches of representations 'and wa'rranties' pursuant to Section.

9.01'(b)(i)(B), unless and until'the aggregate amount of Indemnifiable Losses incurred.by the Seller Indemnitees thereunder exceeds'$1,000,000.at which point all claims (including those previously'barred by such threshold) may be made against Seller.

Notwithstanding the foregoing, the maximum amount recoverable for.all claims under Section 9.01(b) (i) (B) shall be'$17,000,000 (other-than.claims based upon fraud).

(e)i':No6 Indemnifying Party shallJ..have any_.

liability to anyIndemnitee'under Section 9.01(a)(i)(B) or

'9.01(b)(i)(B),'as'applicable after Closing,.for.any breach of a.representation or'-warranty.to the extent that such claim for-indemnification is based upon facts of.which any

'such Indemnitee'-had.KKnowledge'prior to Closing,.,unless such Indemnitee provided written notice to such Indemnifying Party of-the existence of such facts promptly-after,-.

receiving Knowledge thereof and such Indemnifying Party thereafte'r.failed to cure such breach within a reasonable period of time2'prior-to Closing.

.(f) To the fullest extent.permitted by:Law, neither Party nor any Buyer-Indemnitee or any Seller-Indemnitee shall be-liable'to the other-Party or.-any other Buyer Indemnitee or Seller Indemnitee for-any claims or causes of action, demands or suits for consequential,

-incidental, 'special, 'exemplary, punitive', indirect or multiple damages.connected.with or resu'ltinig.from any breach of this Agreement or-the'Ancillary Agreements (other-than breach of this Article_'IX)-, or any'actions undertaken in connection with'or relateddher'eto'or-thereto,' including any such damages which are'based upon breach of contract, tort (including :negligence, and misrepresentation),' breach 'of warranty, strict l'iability,', statute, operation-of law or any other theory of'recovery..-

(g) The' i

'hts-and remedies of Seller and Buyer under this Article-IX are, solely as between Seller and Buyer, exclusive and in lieu of any other rights and LNYCorp;1173312.1:47138W: 11/14/00-11 :45aI

90 remedies-which Seller and Buyer may have under this Agreement, the'Ancillary Agreements (except as expressly provided in' ahy such Ancillary Agreement) or otherwise for monetary relief with'-respect to (i) any breach of, or failure to perform,'any covenant or agreement set forth in this Agreemeiit or the Ancillary'Agreements by Seller or Buyer, (ii) any'breach of any representation or warranty by Seller or.Buyer, (iii) the Assumed Obligations.or the

Retained Liabilities and (iv) noncompliance by Seller with any bulk sales or transfer laws. 'Each Party agrees-.that the previous sentence-shall'not limit'or otherwise affect any non-rnofetary right' r remedy which either Party may1have under-this Agreement or the Ancillary Agreements or' otherwise limit or affect either Party's right to seek equitable relief, including the'remedy of specific performance.

(h) -Except with respect to breaches of representations-and warranties pursuant to Sections 9.01(a)(i)(B) and 9.01(b)(i)(B) which are governed exclusively.by Section 9.01(d), Buyer and Seller agree that, notwithstanding' Section 9.01(g), each Party shall retain,

-subject to the other provisions of this'Agreement, including Sections 9.01(f)' and 11.03, all remedies at'law or in equity with respect to (i) fraud or' wilful or intentional breaches of this Agreement'or the Ancillary Agreements and (ii) gross negligence or wilful or wanton acts or omissions to act of any Indemnitee (or any contractor or subcontractor thereof) on or after Closing.

SECTION 9;02.

Third Party Claims Procedures.

(a) If any Indemnitee receives notice of the assertion of any claim or cause of action or of the commencement of any claim, cause of-action, or proceeding made or brought by any person who is not'a Party or an Affiliate of a Party (a "Third-Parity'Claim") with' respect to' which indemnification is to be-sought from an Indemnifying Party, the Indemnitee will give such Indemnifying Party reasonably prompt written notice'thereoE, 'but in any event not later than 20 Business Days after the'Indemnitee's receipt of notice of such Third Party Claim;

'provided, however, that a failure to give timely'notice will not affect the rights or obligations of

' any Indemfiitee except if, and only to the extent that, as a result of such failure, the Indemnifying Party was actually prejudiced.' Such notice shall describe the nature of the Third Party'Claim in reasonable detail and will indicate the estimated amount, if practicable, of the Indemnifiable Loss that has been or may be sustained by the Indemnitee.

(b)' If a Third Party Claim is made.against' an Indemnitee, the Indemnifying Party will be entitled to

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91 participate in the defense thereof and, if it so chooses, to assume the defense thereof withucounsel selected by the Indemnifying Party; provided,- however, that such'counsel is

-not' reasonably objected to.by the Indemnitee; and provided further that the Indemnifying Party firstadmits in writing its.liability to the Indemnitee with respect to. all material

'elements of such, claim.

Should the Indemnifying Party so

-elect to;assume the defense of a Third Party Claim, the Indemnifying Party will not be-liable to the Indemnitee for any.legalexpenses subsequently incurred by.,the Indemnitee in connection with the-defense thereof.

If,-the.Indemnifying Party so elects to'assume..the defense_,of a-Third Party Claim, the Indemnitee will (i) cooperate in,-all.reasonable respects with the Indemnifying Party in connection with such defense, (ii) not admit any liabilitywith respect to, or settle, compromise.or discharge, any Third Party Claim without the Indemnifying Party's prior written-consent and (i'ii) agree to any settlement, compromise or discharge of a

Third Party Claim which the Indemnifying Party may recommend and which by its terms obligates the Indemnifying Party to pay the full amount of the liability in connection with such Third Party Claim and releases the'Indemnitee completely in connection with such Third Party Claim.

In-the event the Indemnifying Party shall so assume the.:defense of any Third Party Claim,,the Indemnitee shall be entitled to participate in.'(but.not control) such defense with its own counsel at

-its.own expense.

1f the Indemnifying.Party does not assume the defense of any su'ch,Third Party-Claim, the Indemnitee mayy'defend the same in such manner as it may deem appropri-ate, including settling such claim or litigation-after givingnotice to the Indemnifying Party-of the terms of the proposdd-settlement and,the Indemnifying Party will-promptly reimburse the Indemnitee upon written request.

Anything contained in this Agreementto.the contrary notwithstanding, nolhidemnifying'Partyshallbe entitled toassume the

.,defense of-any Third.Party Claim if suchThird-Party Claim seeks an order,,',injunction or other equitable relief or relief for other than,monetary damages against-the Indem-nitee which, if successful, would materially adversely affect the busine'ss of the Indemnitee; provided, however, that such Indemnifying, Party -shall continue to. be obligated to such Indemnitee pursuant. to,-Section.9.01(a).or (b), as the case may-be,- for all, Indemnifiable.Losses relating to, resulting fromor arising out of such Third Party.Claim.

SECTION 9.03.

Procedures Relating to Tax.

Indemnitv.

-(a).- If(i)..Buyer (Seller) hastfailed to receive anyof the IRS rulings (or the advisory opinion)..

contemplated to be received by-Buyer (Seller) pursuant to Section 6.07(c) (other than the rulings contemplated to be received pursuant to Section 6.07(c)(i)(A)) and Seller gNYCorp;1173312.1:4738W: 11/14/00-11:45aI

92 (Buyer) has'elected that the condition set forth in Section 7.02(f) (Section 7.03(e)) shall not apply, (ii) Buyer (Seller)' has filed its-Tax Returns taking positions as though Buyer (Seller) actually'received such IRS rulings (or the advisory opinion) and (iii) a claim shall be made by any taxing authority which, if successful, might result in an indemnity'payment pursuant to Section 9.01(a)(v)(B)

(Section 9.01(b)(iv)(B)), the Indemnitee shall promptly notify the'Indemnifying Party in writing of such claim (a "Tax Claim") and shall' keep the Indemnifying Party reasonably-informed of all proceedings'taken pursuant to this Section 9.03(a) in connection with such Tax Claim.

At the reasonable-request of the-Indemnifying Party,'the Indemnitee'shall contest such Tax Claim; provided, however, that the Indemnitee shall control all proceedings'taken in connection with contesting such Tax Claim; and provided

further that the Indemnitee shall not settle such Tax Claim without the consent of the Indemnifying Party, which consent shall not be unreasonably withheld.

(b) If"(i) Buyer (Seller) has failed to receive any of the IRS rulings (or the advisory opinion) contemplated to be received by Buyer'(Seller) pursuant to Section 6.07(c)

(other than the rulings'contemplated to'be received pursuant to Section-6.07(c)(i)(A))

and Seller (Buyer) has elected that the condition set forth in Section 7.02(f) (Section 7.03(e))' shall not apply and (ii)

Buyer (Seller) has filed its Tax Returns taking positions different from those Buyer (Seller) requested in such IRS rulings (or the advisory opinion),' the Indemnitee shall, at the reasonable request of

theIndemnifying Party, sue for a refund (a "Tax Refund Suit") of any Taxes incurred solely as a result of the positions'taken by the Indemnitee oh'its Tax Returns being

'different from the positions requested in such IRS rulings; provided,' however, that the Indemnitee shall control all proceedings taken i'n connection with such Tax Refund Suit; and provided,' further, that the Indemnitee shall not settle such Tax Refund Suit without the consent of the Indemnifying Party, which'consent shall not'be unreasonably withheld.

(c) If an indemnity payment has'been made pursuant to Section 9.01(a) (v)(A) or 9.01(b)(iv)(A), the Indemnitee shall, at the request and'sole expense of the Indemnifying Party, sue for a refund of the Taxes that gave rise to such indemnity payment (a "Tax Contest").

The Indemnifying Party shall control'all proceedings taken in connection with such Tax Contest; Provided, however, that the Indemnifying Party shall keep the Indemnitee reasonably informed of all' proceedings-taken in connection with such Tax Contest.

The Indemniteeshall cooperate with the Indemnifying Party (at the Indemnifying Party's expense) in such Tax Contest, which (NYCorp;1173312.1: 4738W: 11/14/00-11:45aI

93 cooperation shall include, without limitation,,the retention and. (upon'the Indemnifying Party'.s request)-the provision to theIndemnifying Party-of records and-information which are reasonably relevant to such Tax Contest, and making employees available on a mutually convenient-basis,-to provide.-additional information or.explanation of-any material provided hereunder or to testify at--proceedings relating to such.Tax Contest.

,, ARTICLE X Termination,,

SECTION 10.01.

Termination.,(a)

This.Agreement

' may be terminated atany-,time prior to Closing by -an-

. instrument in writing signed-on behalf of.each of the Parties.

(b). This Agreement may be terminated by Seller or Buyer if.Closingshall.not have occurred on or before the date.that is' 5 months from the date of-,thisiAgreement (the

.,eTermination Date'.'); orovided,..however, that the-right to

-terminate this Agreement~pursuant to this, Section,10.01(b) shal'l~not be available-to any-Party whose failure-.to,.fulfill

..a~ny-obligationf under-this.Agreement has-been the cause of, or resulted in,.the failure of Closing to occur-on or before such date.

(c)

This.Agreement may be terminated by either Seller or Buyer if any Restraint having any of the effects set-forth-in Section.7.01(b)-shall be-in.effect and shall hav6 become final and nonappealable;,provided,, however, that the Party seeking.to,-terminate. this Agreement,-pursuant to

this Section 10.0(c)j.shall have used its reasonable best efforts to prevent the entry. of and to remove such Restraint;.-

(d),This,'Agreement may-be terminated-byBuyer prior to;;Closingif,-ther6-has been a material violation or breach"'by. Seller,.of any covenant, representation or.warranty of Seller contained in this',Agreement which has rendered the satisfaction of any conditions.to the obligations of-Buyer under this Agreement impossible or has resulted in a Material Adverse Effect, and such violation or breach has not been curedby Seller.within 30:days after..receipt by Seller of written-notice-,from Buyer specifying in reasonable detail such violation or-breach;,provided,,however, that Buyer shall not have the right-to terminate.pursuant to this Section 10.01(d) if-(i).such violation or breach is not reasonably capable of being cured-by Seller-within such 30-(NYCorp;1173312.1:4738W: 11/14/00-11:45aI

94 day period'but is-reasonably capable of being cured by Seller within a reasonable additional period and Seller,

-within such 30-day'period, shall have commenced good faith efforts to cure'such.violation or breach and shall have diligently continued-such good faith efforts during such reasonable additional period, which additional period shall in'no event extend' beyond the Termination Date, or (ii) such violation or breach shall have been waived in writing by Buyer.

(e) This Agreement.may be terminated by Seller prior to Closing if there has been a material violation or breach by Buyer of-any covenant, representation or warranty of Buyer contained in this Agreement which has rendered the satisfaction of-'any conditions to-the obligations of Seller under this Agreenient impossible and such'violation or breach has not been cured by Buyer within'30 days after receipt by Buyer of written notice from Seller specifying in reasonable detail such violation or breach; provided, however, that

-Seller' shall not have the right to terminate pursuant to this Section 10.01(e) if (i) such violation or breach is not reasonably capable of being cured by Buyer within such 30-day period'but is reasonably capable of being cured by Buyer within a'

'reasonable additional period and Buyer, within such 30-day period, shall have commenced good faith efforts to cure such violation or' breach and shall'have diligently continued' such good'faith efforts during such reasonable additional period, which additional period shall in no event extend beyond the Termination Date, or (ii) such violation

'or breach shall have been waived by Seller.

(f)' This Agreement may be terminated by Buyer by giving written notice to Seller any time prior to Closing if any Buyer Required Regulatory Approvals or Seller Required Regulatory-Approvals, the receipt of which is a condition to the obligation of Buyer to consummate Closing as set forth in Section 7.01(a), shall have been finally denied (and a petition for rehearing or refiling of an application initially denied without prejudice shall also have been denied) or, 'in the case of Buyer Required' Regulatory Approvals, a Final Order shall have been 'granted but such

'Final Order'is not reasonably acceptable to Buyer in

-accordance with Section 7.01(a).

(g) This Agreement may be terminated by Seller by giving written notice to Buyer any time prior to Closing if any Seller.Required Regulatory Approvals or Buyer Required Regulatory Approvals,'the receipt of which is a condition to

'the obligation of Seller to consummate Closing as set forth in Section 7.01(a), shall have been finally denied (and a petition for rehearing or refiling of an application jNYCorp;1173312.1:4'73814: 11/14/00-11:45aI

95 initially denied without prejudice-shall also have been

..denied):or, in.the.case of Seller Required Regulatory Approvals, a Final Order.shall have been granted but-such

.Final Order is not reasonably acceptable to Seller in accordance with Section.-7.01(a).

ARTICLE XI

..,Miscellaneous Provisions SECTION 11.01.

Expenses.

Except to the extent specifically provided-herein, all costs and expenses incurred in connection with-this Agreement and the trans-actions contemplated hereby shall be borne by the Party incurring such costs and expenses, whether or not the transactions contemplated hereby are consummated.

SECTION 11.02.

Amendment and Modification; Extension; Waiver.

This Agreement may-be amended, modified or supplemented-only byean-instrument in writing signed on behalf of each of the Parties., Any-agreement on the part of a Party to any extension or waiver in respect of this Agreement shall be valid only if set :forth in an instrument in writing signed on behalf of such Party.

The failure of a Party to this Agreement-to'assert any of-,its rights under this Agreement or otherwise-shall not constitute a waiver of such rights.

SECTION 11.03.

Survival of Representations or Warranties.

The representations and warranties contained in Article IV (other than the first sentence of Section 4.11) and Article V (other than Section 5.04) survive for 6 months from the Closing Date and each 'and every other representation and warranty contained:-:in this Agreement shall expire with, and be-terminated.,and extinguished by Closing and no.such-representation or.warranty shall survive Closing.

From and after-Closing, :none -of Seller, Buyer or any officer, director, trustee or Affiliate of any of them shall have any liability;whatsoever with respect to any such representationhor warranty:that-doesjnot. survive Closing.

The expiration of 1rthe representationsand warranties contained in Article IV (other than--the first sentence of Section 4.11) and Article-V; (other than Section--5.04) shall not affect the Parties' obligations under Article:IX if the Indemnitee. provided;the Indemnifying-;Party:with proper notice of the claim-or-event for-which indemnification is sought-prior to such expiration.

SECTION 11.04., Notices.

All notices and other communications hereunder shall be in writing and shall be

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96 deemed given (ascof the time of delivery or,-in'the case of a telecopied cominunicationr,'of confirmation) if delivered personally,' telecopied (which is confirmed) or sent by overnight courier (providing proof of delivery) to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice):

if to Seller, to:

Consolidated Edison Company of New York, Inc.

4 Irving Place New York, NY 10003 Telecopy No.:

(212) 677-0601 Attention:

General Counsel' with a copy on or prior to the Closing Date to:

Cravath, Swaine & Moore 825 Eighth Avenue New York, NY 10019 Telecopy No.:

(212) 474-3700 Attention:

George W. Bilicic, Jr., Esq.

if to Buyer, to:

Entergy Nuclear Indian Point 2, LLC 440 Hamilton Avenue White Plains, NY 10601 Telecopy No.:

(914) 272-3406 Attention:

Chief Operating Officer

with a copy on or prior to the Closing Date to:

C/o Entergy Nuclear, Inc.

P.O. Box'31995 Jackson, MS 39286-1995 Telecopy No.:

(601) 368-5694 Attention:

Assistant Secretary' SECTION 11.05; Assignment; No Third Party Beneficiaries.

(a) This Agreement and all of the provisions hereofishall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned

-by any'Party, including by operation'of'law,'without the prior written consent'of the other Party, such consent not to be unreasonably withheld or delayed. Notwithstanding the foregoing but subject to all legal requirements, (i) Seller may assign or pledge its rights (A) to an Affiliate of

'Seller or a'third party in connection with the transfer of INYCorp;1173312.1:4738W:11/14/00-11:45a)

97 the Transmission System to.such Affiliate orthird.party or (B) toga lending:institution -or.trustee in connection with a

.pledge;or granting of a security.interestin all or any part of the Transmission System -and/or this Agreement and (ii)

Buyer may assign or pledge-its-rights (A) to an Affiliate of Buyer or.(B).to a lending institution or trustee in

,connection with a pledge or granting of a security. interest in the Auctioned Assets,and/or this Agreement; provided, however, that.(i) withlrespect to an assignmentor~transfer of rights or obligations by Seller, no such assignment or

.transfer shall relieveSeller from the full liabilities and the full financial responsibility,.as provided-for under this Agreement, unless and until the transferee or. assignee shall agree in writing' to assume such obligations and duties and Buyer has consented in writing to,-such assumption, and (ii) with respect to an assignment or transfer of rights or obligations by Buyer, no-such assignment or transfer (A) may be'.consummated unless'the:assignee or-transferee expressly.

agrees in writing and in a form satisfactory-to Seller to be jointly'and severally liable with Buyer-.for all of the liabilities and'obligations of Buyer under this Agreement and (B). shall relieve Buyer from the full-liabilities and

'.the full financial responsibility as: provided for-under this Agreement; provided that, in the event of a subsequent transfer..pursuant to this clause (ii),. if-such subsequent transferee-shall agree-to be-jointly andseverally-liable with Buyerfor all of the liabilities andobligations of Buyer under this.Agreement, then the prior transferee shall be..relieved of its liability upon such transfer.. Any assignment in contravention -of-this Section 11.05 shall be nulil and void and without legal effect..

(b) Nothing in this Agreement is intended to Confer upon any other person except-.the,Parties-any rights or remedies-hereunder or shall-create any third party beneficiary rights in any, person,.including,...withfrespect to continued-or.resumed employment, any employee or former employee of Seller-,(including any beneficiary or dependent thereof).

No provision of-this-Agreement shall.create any rights in any such-persons-in respectof anybenefits that may be provided, directly or indirectly, underany-employee benefit plan or arrangement.

.(c)

Buyer may.request (i) upon not less than 30 days' -.prior written notice to-Seller,_that-Seller transfer-the BuyerReal Estate and-.personal property constituting the Toddville Training Center-and (ii) upon not less than 90 days' prior'written notice to Seller, that Seller assign the leaseand personal property relating to 1 Park Place, Peekskill, New York set forth in Schedule 4.06 to an-Affiliate of Buyer-at-Closing.

Seller shall not (NYCorp;1173312.1:4738W: 11/14/00-11 :45aI

98 unreasonably deny-such requests; provided, that (i) no such transfer shall-be made unless the transferee expressly agrees in writing-and in a form satisfactory to Seller to be jointly and severally liable with Buyer for all of the liabilities and obligations arising 'from or relating primarily to the use, *ownership, lease, operation, maintenance or control of such Auctioned Assets 'and (ii) no such transfer shall relieve Buyer from any liabilities or obligations' provided' for under this Agreement.

SECTION 11.06.

Governing Law.

This Agreement shall be governed' by' and construed in accordance with the laws of the State'of New York (regardless of the laws that might otherwise govern under applicable principles of conflicts of law).

SECTION 11.07.

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

SECTION 11.08.

Interpretati6n.

When a reference is made in this Agreement to an Article, Section, Schedule or Exhibit, such-reference shall be to an Article or Section of, or Sdhedule or-Exhibit to, this Agreement unless otherwise indicated.

The table of contents and headings contained in this Agreement are for reference purposes only and shall-not affect in any way the meaning or' interpretation of 'this Agreement.

Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation" or equivalent words.

The words "hereof", "herein"-'and "hereunder" and words of similar

'import when used in'this Agreement shall refer to this Agreement as a' whole and not to any particular provision of this Agreement. All terms defined in this Agreement shall have the defined meanings when used in the Ancillary Agreements and any certificate or other document made or delivered pursuant hereto or thereto unless otherwise defined therein.

The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term.

Any agreement, instrument or Law defined or referred to herein' or in any agreement'or instrument that is referred to herein means such agreement, instrument or Law as from time to time

-amended, 'modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of Laws)' by succession of comparable Laws and references to all attachments thereto and instruments incorporated therein.

References to a person are also to INYCorp;1173312.1:4738I: 11/14/00-11:45aI

99 its permitted successors and assigns.

-SECTION 11.09.' 'Jurisdiction and Enforcement.

(a).Each of the Parties irrevocably submits to the exclusive jurisdiction of;,(i) the Supreme Court of the State of-New York,' New York.County and '(ii) -the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out' 'of this Agreement~or'any transaction contemplated hereby.

Each of the Parties agrees to commence any action, suit.or proceeding.relating hereto either-in the United' States District Court for the Southern-District of New York'or,' if such.suit, action or-proceeding may not be

'brought in such court for, jurisdict'ional.reasons,-in the Supreme Court. of the State.of._New York, New York-County.

Each of the Parties further agrees that service-,of process, summons, -notice or document'by hand delivery or U.S..

registered mail at the address specified for such Party in Section 11.'04 (or such other'address specified by such Party from-time to time pursuant,'to Section 11.04)-shall be effective 'service.of.process for any action, suit,-or proceeding brought-against,.siich.Party:'in any such court.

Each of the Parties irrevocably and.'un'conditionally.waives any objection to the laying of venue of any action, suit or proceeding arising-out of this.Agreement or the transactions contemplated hereby in (i)-the Supreme Court-of the State of New York, New York County, or,,(ii) the Uniled.States--

District Court

-for-- the' Southern District of New York, and hereby further irrevocably and 'unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

(b) The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement or any Ancillary Agreement were not performed in accordance with their specific terms or were otherwise breached.

It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent

breaches of thi's Agreement or any Ancillary Agreement and to enforce specifically the terms and provisions of this Agreement or any Ancillary Agreement, this being in addition to any other remedy to which they are entitled at law or in equity.

SECTION 11.10.

Entire Agreement.

This Agreement, the Confidentiality Agreement and the Ancillary Agreements including the Exhibits, Schedules, documents, certificates and instruments referred to herein or therein and other contracts, agreements and instruments contemplated hereby or (NYCorp;1173312.1:4738W: 11/14/00-11:45a1

100 thereby, embody the'entire agreement and understanding of the Parties in respect of the transactions contemplated by this Agreement.L-There'are no restrictions, promises, representations, warranties, covenants or undertakings other

'than those-expressly set forth or referred to herein'or therein.

This-Agreement and the Ancillary Agreements supersede all prior agreements and understandings between the Parties with respect to the transactions contemplated by this Agreement other than the Confidentiality Agreement.

SECTION'11.11. Severability.

If any term or other provision-of this Agreement is invalid, illegal or incapable of--being enforced'by any rule of'law or public

-5olicy, all other conditions and provisions of this Agreement shal nevertheless remain 'in full force and effect. 'Upon such determination that any-term or other provision is'invalid, illegal or incapable of being-enforced,'the Parties shall'negotiate in good faithto

,modify this Ai'reement'so asto effect the'original intent of the Parties as closely as possible to'the fullest extent permitted by 'abplicable Law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent' possible.

SECTION 11.12.

Conflicts.

Except as expressly otherwise provided herein or therein, in the event of any conflict or inconsistency between the terms of this Agreement and the terms of any Ancillary Agreement, the terms of this Agreement shall prevail.

jNYCorp;1173312.1:4738W:11/14/00-11:45aI

ie 101 IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be signed-by-their respective duly authorized officers:.as.of the date first,.above written.

CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.,

by Is! Kevin Burke Name:

Kevin Burke

Title:

President ENTERGY NUCLEAR INDIAN POINT 2, LLC, by Is!

Michael R. Kansler Name:

Michael R. Kansler

Title:

Senior Vice President and Chief Operating Officer PROVISIONS OF ARTICLE VIII ACCEPTED AND AGREED TO BY COUNTERSIGNING BELOW:

ENTERGY NUCLEAR OPERATIONS, INC.,

by Is!

Michael R. Kansler Name:

Michael R. Kansler,

Title:

Senior Vice President and Chief Operating'Officer INYCorp;1173312.1:4738W:11l/14/00-11:45aI

I 12/12/00 TUE 13:46 FAX 12128138973 GOODWIN.PROCTER & HOAR

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

CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.,

by Name:

Title:

Senior e

President and Chief operating Officer PROVISIONS OF ARTICLE VIII ACCEPTED AND AGRl.EED TO BY CouNTrERSIGNING BELOW:

,f Operating Officer

[uyCorp:11705fl.1: 1735W+/-it/09/00-10 S2&]

12/12/00 TUE 13:46 FAX 12128138973 GOODWIN.PROCTER & HOAR I1002 IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be signed by their respective duly authorized officers as of the date first above written.

CONSOLIDATED E ISON NEW YORK INC.

by COMPANY OFdi Name: Kevin Burke

Title:

President ENTERGY NUCLEAR INDIAN POINT 2,

LLC, by Name:

Title:

PROVISIONS OF ARTICLE VIII ACCEPTED AND AGREED TO BY COUNTERSIGNING BELOW:

ENTERGY NUCLEAR OPERATIONS, INC.,

by Name:

Title:

[NyCocp:1170S91.1:4739W:11/09/00-1 334:3

I as

-1 Il.

EXHIBITS TO GENERATING PLANT AND GAS TURBINE ASSET PURCHASE AND SALE AGREEMENT FOR-INDIAN POINT GENERATING STATION UNITS 1 AND 2

- AND GAS TURBINE UNITS 1, 2 AND 3 AND TODDVILLE TRAINING CENTER LOCATED AT VILLAGE OF BUCHANAN, WESTCHESTER COUNTY, NEW YORK (NYCorp;1173312.1:4738W: 11/14/00-11:45aI

EXHIBIT A-1 FORM OF DEED OF CONVEYANCE FOR WESTCHESTER COUNTY

[LAND AND IMPROVEMENTS]

THIS INDENTURE, made the day of.,

two thousand BETWEEN Consolidated Edison Company.of New York,.Inc.,-a New York corporation, having a principal place of business at No. 4 Irving Place, New York, NY.-10003

party of the first part, and a Shaving a-principal place of business at party of the second part,'

WITNESSETH, that the party of-the first part, in-consideration of ten.dollars.and othervaluable

-consideration paid by the'.party of the.second part, does hereby grant andelease unto-the party' of the second part,

'the heirs or successors and-assigns of the party of..the second part forever, ALL those certain plots,"-pieces or parcels of land and land under water, with the buildings and-improvements thereon erected, situate, lying and~beihgin the Village of Buchanan and/or the Town of Cortlandt in the County'of Westchester and State of New York and more particularly described on Schedule A attached hereto and made a part hereof ("said premises").

Said premises' are subject to all covenants, conditions, easements,agreements anrd restrictions-of record.'including, but not limited to, provisions 'of.letters'patent and.water grants, zonirig 'and'building regulation,and any-state of facts that an'accura e survey and pe sonal inspection may z~~ ~ ~

d

.~o a

inse

ti;'

TOGETHER with, and SUBJECT to,-'all covenants, conditions, easements, agreements, restrictions and other interests granted, reserved, and/or'imposed.'in.thatcertain Indenture made-as ofthe 30th'day of December, 1975 by Consolidated Edison Company of New York Inc. to Power Authority of the State of New York (the "PASNY Deed")

recorded in Liber 7306, Page 736 in the Westchester County Clerk's Office (the "Clerk's Office") on December 31, 1975 INYCorp;1173312.1:4738W: 11/14/00-11:45aI

2 and/or shown on Map. Numbers 18702 and 18703 on file in the Clerk's Office (the "PASNY Maps"), including without limitation, the pre-emptive rights to purchase certain undivided or tenancy in common interests and the waiver of partition or sale for division with respect to such undivided interests set forth on pages 28 and 29 of the PASNY Deed, but EXCLUDING the 345KV transmission line easement described in paragraph 1 on page 7 of the PASNY Deed and delineated and designated "CE-4" on the PASNY Maps, TOGETHER with, and SUBJECT to, all of the grants, rights, reservations and obligations more particularly described in the Declaration of Easements Agreement dated of even date herewith between the party of the first part and the party of the second part, which shall be recorded herewith and being and-intended to be part of this conveyance of said premises, and in particular to the retention by the party of the first part of title to the "Seller Facilities", as such term is defined therein, TOGETHER with.all right, title and interest, if any, of the party of the first part in and to any streets and roads abutting'the above described premises to the center lines thereof; TOGETHER with the appurtenances and all the estate and rights of the party of the first part in and to said premises; TO HAVE AND TO HOLD the premises herein granted unto the party of the second part, the heirs or successors and assigns of the party of the second part forever.

This conveyance is made in the ordinary course of business and does not constitute all of the assets of the party of the first part.

AND the party of the first part, in compliance with Section 13 of the Lien Law, covenants that the party of the first part will receive the consideration for this

-conveyance-and will hold the 'right to receive such consideration as-a trust fund to be..applied first for the purpose of paying'the cost of the improvements and will apply the same first 'to the payment of the cost of the improvements before using any part of the total of the same for any other purpose.

The word "party" shall be construed as if it read "parties" whenever the sense of this indenture so requires.

(NYCorp;1173312.1: 4738W':11/14/00-11:45aI

3 IN WITNESS WHEREOF, the party of the first part has.duly executed this deed the day and year first above written.,

(Corporate Seal).

ATTEST:

Secretary CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.

(Corporate Seal)

~~~~~0 S

S ATTEST:

Secretary

[NYCorp;1173312.1:4738W: 11/14/00-11:45aI

SCHEDULE A Description of Land

[From Schedule 2.02(a)(i)(A) and Schedule 2.02(a)(i)(C)]

INYCorp;1173312.1: 4138W: 11/14/00-11: 45a)

EXHIBIT A-2 FORM OF DEED OF CONVEYANCE FOR WESTCHESTER COUNTY

[IMPROVEMENTS ON GT SITE]

THIS INDENTURE, made the

day of two thousand BETWEEN Consolidated Edison'Company of New,:York, Inc.,.a New York corporation, having a,.principal place 1of business at No. A Irving Place, New York,.NY 10003 party of the first part,,and-a having a principal place of business at party of the second part, WITNESSETH, that the party,'of'the.first part, in considerationLO'f ten dollars and other valuable'.

consideration paid-by the party.,of.the secondpart, does hereby-grant-and' release.-:unto.the party'of',the second part, the heirs 'or-`successors and assigns 'of the'.party 6f the second part forever, ALL buildings-and improvements..("said improvements") 'erected on those certain plots,;pieces or parcels of land'situate, lying and being in the Village of Buchanan,.Town-of, Cortlandt, County of Westchester and State of N6w-Yokk and more particularly described'on Schedule A attached hereto and made a part hereof, EXCEPTING THEREFROM the land on which said improvements stand.

Said improvements.are subject to all covenants,_

-conditions, easements, -agreements.and-restrictions of record including,' but'-not limited to, provisions of letters patent and water grants, zoning and building regulations, and any state of facts that an accurate survey and personal inspection may reveal.

TOGETHER with, and SUBJECT to, all of the grants, rights, reservations and obligations more particularly described in the Declarations'of Easements Agreement and the GT Site Ground Lease, both dated of even date herewith, between the party of the first part and the party of the second part, both of which shall be-recorded herewith, and in particular to the retention by the party of the first part of title to the "Seller Facilities", as such term is defined in the Declaration of Easements Agreement INYCorp;1173312.1: 4738W:11/14/00-11:45aI

2 TOGETHER with all the estate and rights of the party of the first part in and to said improvements; TO HAVE AND TO HOLD the improvements herein granted unto the party of the second part, the heirs'or' successors and assigns of the party of the second part forever.'

This conveyance is made in the ordinary course of business and does not constitute all of the assets of the party of the first part.

AND the party of the first part, in compliance with Section 13 of the Lien Law, covenants that the party of the first part will receive the consideration for this conveyance and will hold the right to receive such consideration as a trust'fund to be applied first for the purpose of'paying the cost,of -the 1'improvementsand will apply the same first to the' payment of'the cost of the improvements before using any part of the total of the same for any 'other purpose.

The word "party" shall be construed as if it read "parties" whenever the sense of this indentureso requires.

IN WITNESS WHEREOF, the party of the first part has duly executed this deed the day'and year first above written.

(Corporate Seal)

ATTEST:

CONSOLIDATED EDISON COMPANY OF Secretary NEW YORK, INC.

(Corporate Seal)

ATTEST:__

Secretary S

0 I

INYCorp;1173312.1: 4738W:11/14/00-11:45aI

SCHEDULE A Description of Land

[From Schedule 2.02(a)(i)(B)]

INYCorp:1173312.1:4738W:11/14/00-11 :45aI

EXHIBIT A-3 FORM OF GT SITE GROUND LEASE

[provided separately]

INYCorp;1173312.1:4738I: 11/14/00-11:45aI

EXHIBIT A-4 FORM OF DECLARATION OF EASEMENTS AGREEMENT

[provided separately]

.~~-

C.:

1 ' I,

I, I,.

I t

I INYCorp;1173312.1:4738W: 11/14/00-11:45aI

EXHIBIT B CERTIFICATION OF NON-FOREIGN STATUS Section 1445 of the Internal Revenue-Code of 1986,'

as amended (the "Code"), provides that a transferee of a U.S. real property interest must withhold Tax if the transferor is a foreign person.

To inform Entergy Nuclear Indian Point 2, LLC ("Buyer"), that a withholding of Tax is not required upon the disposition of a U.S. real property interest by Consolidated Edison Company of New York, Inc., a New York corporation ("Seller"), the undersigned hereby certifies the following on behalf of Seller:

1.

Seller is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as those terms are defined in the Code and Income Tax Regulations);

2.

Seller's employer identification number is 13-5009340;

3.

Seller's office address is 4 Irving Place, New York, NY 10003.

Seller and the undersigned understand that this certificate may be disclosed to the Internal Revenue Service by Buyer and that any false statement contained herein could be punished by fine, imprisonment or both.

Under penalty of perjury, I declare that I have examined this certificate and to the best of my knowledge and belief it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of Seller.

Date:

[

], 2001 By:y Name:

Title:

[NYCorp;1173312.1: 4738W: 11/14/00-11: 45al

EXHIBIT C FORM OF OPINION OF GENERAL COUNSEL OF SELLER

-- -3: - --

[

2001 Entergy Nuclear Indian Point: 2, LLC'-

- -440 Hamilton'Aveiiue''..........-'

White Plains, NY 10601 Consolidated Edison'Companv of'NewrYork. Inc.

Ge'neratinga Plant and Gas 'Turbine -

'Asset:

Purchase'afid'SaleAareement Ladies and Gentlemen:

I'am General'Courisel'of Consolidated Edison-'Company of

-;,,New.York, Inc'.,-'a'New York 'corporation ("Seller"), and have

-acted for Seller n connection'with the Generating Plant and

.Gas Turbine-Asset Purchase and-Sale-Agreement (the "Asset

'Purchase-and-Sale Agreement") dated '-as of 'November 9, 2000,

' between Seller'and Entergy Nuclear Indian Point'2, -LLC, a Delaware limited'liability cbmpany ("Buver") 'and the' Ancillary Agreements '(collectively,-"the "Aqreements") and

'the transactions contemplat'd' thereby.- Capitalized terms used but not defined'herein have-the meanings assigned to them in the Asset Purchase'and Sale'Ag'reement'.'

In that connection, I have examined originals, 'or copies certified or otherwise identified to my satisfaction,

'of such 'documents, corporate records and other instruments as I have deemed necessary or appropriate for'the purposes of-this opinion, including:

'(a)!'the Agreements, (b) the

_Ceitificateof 'Incorporation of' Seller, (c) the By-laws of Seller and (d) resoluti'ons-of the B6ord of Trustees of Seller.

In rendering'-my opinion, I have assume -the due.

authorization, exe6utionfiand delivery' of each Agreement by each party-thereto other-than Seller..'

Based upon th foregoing and slbject' to the'-

qualifi'cations'hereinafter.'setforth', I am of-the opinion as follows:'

1. Based solely on a certificate from the Secretary of State of the' Statd of -NewYork, Seller is a' corpo6ation validly existing and"in good standing uhder theb-laws of the State of New York.'Seller has-all necessary corporate power "and authority'to execute and-d6liver~ eachAgreement and to consummate the transactions' contemplated thereby; and the execution and delivery by Seller of each Agreement and the INYCorp;1173312.1:4738W: 11/14/00-11:45a1

2 consummation by Seller of the transactions contemplated thereby have been duly and validly authorized by all necessary corporate action on the part of Seller.

2. Each of Seller's Qualified Decommissioning Fund and Nonqualified Decommissioning Fund is a trust validly existing and in good standing under the. laws of the State of New York.

3. Each Agreement has been duly executed and delivered by Sell'r,:-and--assu'mingtliat' such Agre'ement constitutes a valid and bindi'ng obligati6n of each other party thereto, such Agreement 'constitutes a'v'alid and binding obligation of Seller, enforceable against Seller in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws affecting creditors' rights generally from time to time in.effect and to general principles of equity,

.including, withoutlimitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of

' whether considered in a proceeding in equity or at law).

With respect to.the foregoing opinion, (i) insofar as provisions contained in the Agreements provide for indemnification,,.the.enforceability,thereof may be limited by public policy considerations and (ii) the availability of a decree for specific performance or an injunction is subject to the discretion of the court requested to issue any such decree or injunction.

4.. Subject to obtaining the Seller Required Regulatory Approvals and the. Buyer Required Regulatory Approvals, neither the execution and delivery of the Agreements by Seller nor.the consummation of the.transaction contemplated

.thereby, including the saleby Seller of the Auctioned Assets pursuant to the Asset Purchase and Sale Agreement will (i) conflict with or result in any breach of any provision of the Certificate of Incorporation or By-laws of Seller, (ii) except as set forth in Schedule 4.03(a) to the Asset Purchase and Sale Agreement, result in a default (or give rise to any right of termination, cancelation or acceleration) under any of the terms, conditions or provisions of any note, bond, mortgage,.indenture, license, agreement, lease or other instrument or obligation to which Seller is a party or by which Seller, or any of the Auctioned Assets maybe bound or (iii) violate any Law applicable to Seller, or the Auctioned Assets, except in the case of clauses (ii) and (iii) for such failures to obtain a

necessary consent, defaults (or rights) and violations which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.

(NJYCorp;1173312.1: 4738W:11/14/00-11:45aI

3

5. Except for the Seller Required Regulatory Approvals, no declaration, filing or registration with, or notice to, or authorization, consent or approvals-of;any United States federal or New York State Governmental Authority is necessary for the consummation by Seller of the transactions contemplated by the Agreements, other than (A) such declarations, filings, registrations, notices, authorizations, consents or approvals wh'ich, if not obtained or'made,' would'not',' individually or'in the aggregate, be reasonably expected to cr-ate`a Material Adverse-Effect, (B) 'any-'certificate of occupancy, consent or similar approval to authorize the-change in occupancy'of the'Buyer

Real Estate`,'contemplated by the Asset`Purchase and Sale Agreement and required pursuant to the'Code of the Village of Buchanan, including specifically Section 211.49 thereof and (C)Iany consent of the Commissioner of General Services

'of the'St'ate of New York 'required for the assignment from

-Seller to' Bu'y'er of the right 'to install -and maintain a fish return pipeline in an area in the Hudson River approximately 30 feet wide and 330 feet long.,

The opinions expressed hereiri are 'subject tothe

' qualifidation that I express no opinion regarding' the applicability of, or compliance'with, any bulk sales, bulk transfer or similar laws in connection with 'the transfer of the Auctioned'Assets pursuant'to the Ass'et Purchase and Sale

'Agreement.'-

I express no opinion herein as to6 (i) 'the provisions of -the Agreements' insofar as tsuch 'provisions relate to the 'subject' matter jurisdiction "of the United States District Court for the Southern District' of New York to adjudicate any cont'roversy'related thereto and (ii) the waiver of an inconvenient forum set' forth in the provisions of the Agreements.

h pvi I am "admitted to practice 'irnithe State of New York, and I express no opinion as to mattedrs'govrned by any laws

' other than the laws 6f:`the State of New York'and the Federal

'laws' ofthe United-States of"America.

I am furnishing this opinion to'you pursuant to Section 7.02(e) of the&Asset Purch1ase and Sale Agreement, solely for your -benefit in-connection 'with'-the transactions contemplatied by the"'Asset 'Purchase'`and Sale Agreement.

This opinion may not be relied upon by any'other person or for any other purpose or used, circulated, quoted or otherwise referred'to for any-oth'er'turpose.

Very truly yours,

.~

INYCorp;1173312.1:4738W:11/14/00-11 :45a)

EXHIBIT D FORM OF AFFIDAVIT STATE.OF NEW YORK, )

ss.

COUNTY OF NEW YORK,)

The undersigned, on behalf of Consolidated Edison Company of New York,. Inc., a.New York.corporation (the "Owner"), in consideration of [

.] (the "Title Company") issuing its Owner's Policy pursuant-to its Certificate of Title No. [

] (the "Commitment"), and being first duly-sworn on oath, deposes' and.states that:.

1. Owner.is the owner. of the real estate described in.Schedule-A to the Commitment (the "Premises") but does not warrant the accuracy of such description or the acreage thereof..

2. All New York State Franchise Taxes, Gross Receipts Taxes and Excise Taxes imposed on Owner under Articles 9.9 and 9(A) of the Tax Law and which are currently due havebeen paid in full.

3. Except for and as provided in that certain Generating Plant and Gas Turbine Asset, Purchase and Sale Agreement dated November 9, 2000 (the "APSA") between Owner and Entergy Nuclear Indian Point. 2, LLC, a Delaware limited.liability-company (the."Purchaser"), the Owner is not-a party to-any outstanding,.contracts of sale, deeds, mortgages,!easements or other.conveyances affecting the Premises which are not disclosed by the public records as of [

] or described in the Commitment and will not execute.any such conveyances after-the date hereof except in accordance~with the terms of the APSA. [Note:

THE MUTUAL WAIVER OF THE POWER AUTHORITY OF THE STATE OF NEW YORK (("PASNY")/OWNER ROFR, THE WATER AND SEWER LINE EASEMENTS TO BE GRANTED BY OWNER TO PASNY, THE WATER SUPPLY AND ACCESS ROADS EASEMENT.BETWEEN PASNY AND OWNER AND THE DECLARATION.OF EASEMENTS TO BE EXECUTED PURSUANT TO THE.APSA.ARE.DESCRIBED IN THE-COMMITMENT PROVIDED TO PURCHASER BY OWNER AND MUST BE RECORDED/DESCRIBED IN ANY FUTURE COMMITMENT.].

4. There are no tenants in the Premises except [

Affiant makes this Affidavit solely in his capacity as (TITLE] of the Owner, and recourse (if any) hereunder shall be solely against the Owner and not against Affiant personally.

INYCorp;1173312.1:4738W:11/14/00-11:45aI

2

,CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.,

by Name:

Title:

Sworn to before day of [

me this

]-

Notary P~ublic I.1 I

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. -,,f, INYCorp;1173312.1:4738W:11/14/00-11:45aI

EXHIBIT E FORM OF OPINION OF GENERAL COUNSEL OF BUYER AND ENTERGY NUCLEAR, INC.

[

], 2001 Consolidated Edison Company of New York, Inc.

4 Irving Place New York, NY 10003 Generating Plant and Gas Turbine Asset Purchase and Sale Agreement Ladies and Gentlemen:

I am General Counsel of Entergy Nuclear Indian Point 2, LLC, a Delaware limited liability company ("Buyer")

and Entergy Nuclear, Inc. and have acted for Buyer in connection with the Generating Plant and Gas Turbine Asset Purchase and Sale Agreement (the "Asset Purchase and Sale Agreement") dated as of November 9, 2000, between Buyer and Consolidated Edison Company of New York, Inc., a New York corporation ("Seller") and the Ancillary Agreements (collectively, the "Agreements") and the transactions contemplated thereby.

Capitalized terms used but not defined herein have the meanings assigned to them in the Asset Purchase and Sale Agreement.

In that connection, we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments as we have deemed necessary or appropriate for the purposes of this opinion, including:

(a) the Agreements, (b) the Certificate of Incorporation and By-laws (or other similar governing documents) of Buyer and (c) resolutions of the Board of Directors of Buyer.

In rendering our opinion, we have assumed the due authorization, execution and delivery of each Agreement by each party thereto other than Buyer.

Based upon the foregoing and subject to the qualifications hereinafter set forth, we are of the opinion as follows:

1. Buyer is a limited liability company validly existing and in good standing under the laws of the State of tNYCorp;1173312.1:4738W: 11/14/00-11:45a)

2 Delaware.

Buyer has all necessary-limited liability company power and authority to execute;and deliver each Agreement and.to consummate the transactions contemplated. thereby; and the-execution and delivery byBuyerof.each Agreement and the..consummation -by Buyer of the transactions contemplated thereby.have beenduly and-validly authorized by all necessary limited.liability company-action on the part of Buyer.'

2. Each Agreement has been duly executed and delivered by Buyer, and assuming that such Agreement constitutes a valid.and-.binding. obligation of each other party.thereto, such Agreement.constitutes a valid and binding obligation of Buyer, enforceable against Buyer in accordance,with.its terms..(subject..to applicable bankruptcy, insolvency, fraudulent transfer, reorganization,. moratorium and other similar laws affecting creditors,' rights;generally from time to time in effect and to general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of.whethergconsidered mina proceeding in equity

.- or at law).

With respect-to-the foregoing opinion, (i) insofar as provisions-contained in the Agreements-provide for..indemnification,. the enforceability thereof may-be

,limited by public.policy considerations and (ii) the.

availability of a decree for specific performance or an injunction is subject to the discretion of the court requested-to issue any such decree or injunction.

3. Subject to obtaining the Buyer Required Regulatory Approvals and the Seller Required Regulatory Approvals, neither the execution and delivery of the Agreements nor the consummation of the transactions contemplated thereby, including the purchase by Buyer of the Auctioned Assets pursuant to the Asset Purchase and Sale Agreement will (i) conflict with or result in any breach of any provision of the Certificate of Formation or Operating Agreement (or other similar governing documents) of Buyer, (ii) result in a default (or give rise to any right of termination, cancelation or acceleration) under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, agreement, lease or other instrument or obligation to which Buyer or any of its subsidiaries is a party or by which any of their respective assets may be bound or (iii) violate any Law applicable to Buyer, or any of its assets, except in the case of clauses (ii) and (iii) for such failures to obtain a necessary consent, defaults (or rights) and violations which would not, individually or in the aggregate, be reasonably expected to have a Buyer Material Adverse Effect.

INYCorp;1173312.1:4738W:11/14/00-11 :45a)

I

3

4. Except for the Buyer Required Regulatory Approvals, no declaration,-filing or'registration with, or notice to, or authorization, consent or approval of any Governmental Authority is necessary for the consummation by Buyer of the transactions contemplated by the-Agreements, other-than' (A) such'decla'rations, filings, registrations, notices, authorizations, consents or approvals which, if not obtained or made, would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.

We express no opinion herein as to (i) the provisions of'the Agreements-insofar as-such provisions relate to the subject'matter jurisdiction of the United States District Court for the Southern District of New York to adjudicate any'controversy related thereto'and (ii) the

-waiv6r of an inconvenient forum set forth in the provisions of the Agreements'.

We are furnishing this opinion to you pursuant to Section 7'.03(d) of the Asset'Purchase and Sale Agreement, solely for your benefit in connection'with the transactions contemplated by the Asset Purchase and-Sale Agreement.

This opinion may not 'be relied upon by any other person or for any other purpose or used,'circulated, quoted or otherwise referred to for any other purpose.

Very truly yours, INYCorp;1173312.1:4738W:11/14/00-11:45aI

EXHIBIT F GUARANTEE AGREEMENT dated as of

.[

2001, between ENTERGY

INTERNATIONAL:HOLDINGS.LTD 'LLC, a Delaware -limited liability company

("Guarantor"), and CONSOLIDATED EDISON COMPANY-OF NEW YORKi'INC., a New York corporation (the "Seller" and, collectively with!Guarantor, the "Parties").

-WHEREAS.Buyer (as defined-below) and'Seller have entered into a Generating Plant and Gas Turbine Asset

- Purchase and-Sale:Agreemefit'-dated'a's of November 9, 2000 (the "Sale Agreement")-

pursuant to which Buyer has'agreed

.,to purchase'and Seller has-agreed-to sell certain-nuclear generating-assets, as more particularly.set'forth therein, and each of Buyer,-and-Seller undertook certain duties, responsibilities and obligations as-set forthlin the Sale

-Agreement-and'the-Ancillary Agreements.-(as defined in the Sale Agreement);.

WHEREAS Guarantor has'agreed, as limited herein, to guarantee payment and performance of Buyer's covenants, agreements, obligations, liabilities, representations and warranties. under the Sale Agreement and under each'Ancillary Agreement; and

.WHEREAS-Guarantor-will benefit'from the'-'-

transactions contemplated by the-Sale Agreement.

-NOW, THEREFORE, the Parties agree as follows:

- SECTION 1. Definitions.

Capitalized'-terms used herein.shall have-the meanings-assigned to-them'herein or, if not defined-herein, thensuch'terms shall have the

meanings assigned to'them in the Sale'Agreement.Fdr the purpose of this:Agreement, "Buyer"'-shall'mean Ente'rgy

.Nuclear Indianu Point 2,-LLC, a-Delawaie.limited-'liability company, and any successors and assigns under the Sale Agreement or any Ancillary Agreement.

'~

i..--.

'SECTION 2'.; Guarantee.-.'Guarantor'absolutely, irrevocably~,and unconditionally!guarantees,. as-limited

-herein,:-as a-.primary obligor rand not merely as -a siurety,

-(a) the!dueand punctual payment-'of' (i) each paymhent-'

required to be made by Buyer under the Sale Agr-eement or any Ancillary Agreement, when and as due, including payments in respect.of reimbursement of.di'sbursements and interest thereon and (ii) 'all other monetary'obligati'ons,. including

.indemnities,-fees; costs and expensesr-whether primary,

-secondary, direct, contingent, fixedvor-otherwise (including (NYCorp;1173312.1:4738W: 11/14/00-11:45aI

2 monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding,.-.regardless of whether allowed or allowable in such proceeding), of Buyer under the Sale Agreement or any Ancillary Agreement (all such obligations referred to in the clause (a) being collectively referred to as the "Monetarv Obligations") and (b) the due and punctual performance and observance of, and compliance with, all covenants, agreements, obligations, liabilities, representations and warranties of Buyer.under or pursuant to the Sale Agreement or any Ancillary Agreement-(all such obligations referred to in the preceding clauses (a) and (b).being.collectively referred to as the "Obligations").

Guarantor further agrees that the Obligations may be amended:or modified in whole or in part,,without notice to or.further'assent from it, and that it will-remain boundupon its guarantee notwithstanding any amendment or modification of any Obligation.

Notwithstanding anything to the contrary.contained herein, Guarantor shall not be required to pay or otherwise make out-of-pocket expenditures in excess of $10,000,000 in the aggregate hereunder in respect of the Obligations.

SECTION 3. Oblia tions Not Waived.

To the fullest extent permitted by applicable Law, Guarantor waives presentment to, demand of payment from and protest to Buyer of any of the Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment. To the-fullest extent permitted by applicable Law, the obligations of Guarantor hereunder shall not be affected by (a) the failure of Seller to assert any claim or

..cause of action or demand or to enforce or exercise any right or remedy against Buyer in respect of the Obligations or otherwise under the provisions of.the Sale Agreement and any Ancillary Agreement or.otherwise or, in each case, any delay in connection therewith, or (b) any.rescission, waiver,,amendment or modification of,-or any release from any of the.terms or provisions of, this Agreement, the Sale Agreement, any Ancillary Agreement or any other agreement or instrument.

SECTION 4. Continuing Guarantee of Payment and Performance. Guarantor further agrees that its guarantee constitutes a continuing guarantee of payment and performance when due and not of collection, and waives any right to require that any resort be had by Seller to any security..

SECTION 5. No Discharge or Diminishment of Guarantee.' (a) Subject to the last sentence of Section 2, the obligations.of Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination, or INYCorp;1173312.1:4738W: 11/14/00-11 :45aJ

3 be subject to any defense or,.setoff (except, as provided in clause (c) below),, counterclaim, recoupment or, subject to

-Section 10, termination whatsoever, or, otherwise be-affected, for any reason (other than (1) the-performance in full of all Obligations, including the indefeasible payment

.in full of all Monetary Obligations, and the termination and satisfaction'of all the-Obligations or (2) the-failure of Seller to perform an.obligation of Seller under. the Sale Agreement that affects Buyer's performance of its obligations under the Sale Agreement), including:

(i) any claim of waiver,.release, surrender, alteration or compromise of any of the Obligations; (ii) the inval-idity, illegality or.unenforceability of the Obligations;.

.(iii) the.occurrence-or-continuance of-any event of bankruptcy,-reorganization,-insolvency, receivership or

-other similar proceeding with respect-to Buyer-or any other person (for purposesphereof, "person". means any individual,--partnership, limited liability, company, joint venture,.corporation, trust,-unincorporated organization or:Governmental-Authority), or-the dissolution, liquidationfor winding-up of.Buyer or any other person; -

- -(iv).any permitted assignment or other--transfer of this-Agreement by Seller or any permitted assignment or other transfer of the Sale-Agreement.or any Ancillary

Agreement or any other. agreement orlinstrument in whole or in part; (v) 1any sale, transfer or other disposition by Guarantor-of any direct--or indirect interest.it may have.;in Buyer orany other.:change in ownership.or control of Buyer; or (vi) the absence of any notice to, or knowledge on behalf of, Guarantor-of the existence or occurrence of any-of-the -matters or events set forth in the foregoing clauses.

(b) --Without limiting the generality of the foregoing, the obligation~s'!of-Guarantor-hereunder shall not be discharged or impaired or otherwise affected by the failure of-Seller to assert any claim or cause of action or

,demand or.to enforce any'-remedy under the-Sale-Agreement, any Ancillary Agreement or any other agreement-or instru-ment, by any waiver or modification-of any provision thereof, by any default, failure or delay, wilful or (NYCorp;1173312.1:4738W:11/14/00-11:45aI

4 otherwise, in' the performance of the Obligations, or by any

'other act or omission that may or might in any manner or to any extent vary the risk of Guarantor or that would other-wise operate as a'discharge of Guarantor as a matter of law or equity'(other than the performance in full of all Obligations-, including'the indefeasible payment in full in cash of'all'Monetary Obligations, and the termination and

'satisfaction of all the Obligations).

(c) Guarantor shall be entitled to set off claims that Buyer may have against Seller under the Sale Agreement or any Ancillary Agreement.

SECTION 6. Defenses of Buyer Waived.

To the fullest 'extent permitted by applicable law, Guarantor waives any defense based on or arising'out of any defense of Buyer or the unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of

'the liability of Buyer'(other'than'(1) the'performance in full of all Obligations, including the indefeasible payment in-'full in cash of all'Monetary Obligations," and the termination and 'satisfaction of all' the Obligations or

-(2) the failure of'Seller to perform'an obligation of Seller under the-Sale Agreement that'affects Buyer's performance of its obligations under the Sale Agreement).

Seller may compromise or adjust any part of the Obligations, make any other accommodation with Buyer or exercise any other right or remedy available to it against Buyer, without affecting or impairing in any way the liability of Guarantor hereunder except'to the extent all the Obligations have been fully and finally performed, 'including the indefeasible payment in full in cash of all Monetary Obligations, and terminated.

To the fullest extent permitted by applicable Law, Guarantor waives any defense.arising out of-any'such election even though such election operates, pursuant to applicable Law, to impair or-to'extinguish any right of reimbursement or subrogation or other right or remedy of Guarantor against Buyer or any security.

SECTION 7. Representations and Warranties of Guarantor.

Guarantor represents and warrants to Seller as follows:

(a) Organization.

Guarantor is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware-and-has all requisite limited liability company power and authority to own, lease and operate its properties and to carry on its business as is now being conducted.

INYCorp;1173312.1:4738;1:11/14/00-11:45aI

5 (b) Authority Relative to-this'Agreement.

Guarantor has all necessary limited liability company power and authority to execute and deliver this

..Agreement and to perform its obligations hereunder.

..The execution and de'livery by Guarantor-of this Agreement and performance by Guarantor of-its

.obligations hereunder have been-duly-and-validly authorized by the.Board of Directors (or equivalent governing body) of Guarantor and no other proceedings on the part of Guarantor.are necessary to authorize this Agreement or-~performance by Guarantor-of its

.- obligations hereunder.- This Agreement has been duly and validly executed and delivered by Guarantor and this Agreement constitutes a valid and binding.

- agreement of Guarantor, enforceable-against Guarantor in accordance' with its terms.-

(c)

,Consents and Approvals; No Violation.

(i) -Neither the execution;and delivery of.-.this.

Agreement by Guarantor nor performance by.Guarantor of its obligations hereunder will (A) conflict with or

.result in'any breach of any.:provisiono6f the-Certifi-cate of Formation or Operating-Agreement of Guarantor, (B) result in a default (or give rise to any right of termination, cancelation or acceleration) under any of the terms, conditions or-provisions

~of any note, bond, mortgagefindentu, license, agreement, lease or other

-instrument or obligation-to-which Guarantor or any of

... its-subsidiaries is a party or by-which-any-of their

.respective assets may be bound or-(C):violate.any Law applicable to Guarantor,- or any of its assets, except in the case of clauses (B) and :(C)-for.such failures to obtain-a necessary..consent, defaults;and violations which-woild not,-individually or-in-the aggregate, be

. -reasonably expected to have a material:,adverse-effect on the ability of Guarantor.to discharge-its-obligations under this Agreement.

.(ii)- No declaratio'n, filing or-registration with,

..or notice to, or authorization, consent or'.approval of

any-Governmental Authority is-necessary for, performance by Guarantor ofits obligations hereunder.--

~

I t

SECTION 8. Agreement toPerform and-Pay., In furtherance of the foregoing-and not-in limitation of any other.-right that Seller-has at law or in equity against Guarantor by virtue hereof, upon the failure of Buyer to perform or pay any Obligation when and as the same shall become due, Guarantor;hereby promises to and will forthwith, as the case may be, (a) 'perform, or cause to:be -performed, such unperformed Obligations and (b) pay,-or cause-to be (NYCorp;1173312.1:4738W:11/14/00-11:45aI

6 paid,.to Seller"in cash the amount of such unpaid Obligations.

SECTION'9. Information.

Guarantor assumes all responsibility for being and keeping itself informed of Buyer's financial'condition-'and assets, and of all other circumstances bearing upon the'risk'of nonperformance of the Obligations (including the nonpayment of Monetary Obliga-tions) and the'nature, scope and extent of the risks that Guarantor assumes-and incurs hereunder, and agrees that Seller will'not have any duty to advise Guarantor of informationknown to it regarding such circumstances or risks.

SECTION-10. Termination and Reinstatement.

The guarantee made hereunder (a)-shall terminate when all the Obligations have been (i) performed in full, including the indefeasible-payment in full of the Monetary Obligations and (ii)-terminated-dand satisfied and (b) shall continue to be effective or bedreinstated, as the case may be, if at'any time any payment, or any part thereof, of any Obligation is rescinded or'must-otherwise be restored by Seller upon the bankruptcy or reorganization of Buyer' or Guarantor or for any other reason.

SECTION'11. Assignment; No Third Party Benefici-aries.

ThisAgreement'and all'of'the provisions hereunder shall be binding'upon and inure to the benefit of the

'Parties'and their respective successors'and permitted assigns, but-neither this Agreement or any of-the rights, interests and obligations hereunder-shall-be assigned by

'Guarantor,-including by operation 6f Law', without the prior Uwritten consent of Seller; provided, however, that Guarantor shall'have the-right to assign this Agreement-and its rights, interests`and obligations hereunder to Entergy Corporation-or-its successors.

SECTION 12.

Amendment and Modification; Exten-sion; Waiver.

This-Agreement'may be amended, modified or supplemented'only-by an instrument in writing signed on behalf ofeach of the Parties.

Any agreement on the part of a Party to6any extension or waiver in respect of this Agreement shall be valid only if set forth in an instrument in writing, signed on behalf of such Party.

The failure of a Party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute'a waiver of such rights.

-SECTION

13.

Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of the State of New York (regardless of the laws that might INYCorp;1173312.1:4738W: 11/14/00-11: 45a1

7

.otherwise govern underapplicable.principles of conflicts of law).

SECTION 14. -Notices. All notices'and other communications hereunder shall be in-writing and shall be deemed given (as of the time of delivery or, in the case of

.a telecopied communication,,of confirmation) if delivered

.personally,--telecopied; (which is confirmed) or sent by overnight-courier.(providing proof of delivery) to the Parties at the following addresses (or at such-other address for.ajParty. as shall be specified by.like notice):

if to Guarantor,-to:

..Entergy International Holdings Ltd LLC-.-

639,Loyola-Avenue

.New Orleans, LA-70161 Telecopy No.: -'(504) 576-4009.-

..Attention:

Chief Financial-Officer with a copy.on or prior to the Closing Date to:

c/o Entergy Nuclear, Inc.-.

P.O. Box 31995

-Jackson, -MS.39286-1995

..Telecopy No.;:

(601) 368-5694 -

Attention:

Assistant Secretary._.

if to Seller, to:

, ~~~-

£

Consolidated Edison Company-of New York, Inc.

4 Irving Place

New York, NY-10003 Telecopy No.:

(212) 677-0601 Attention:; General-Counsel--

with.a copy on.or prior to the Closing Date to:

.. Cravath, Swaine.& Moore 825 Eighth Avenue

-New York,, NY-.10019 Telecopy No.:<

(212) 474-3700 Attention:

George W. Bilicic, Jr., Esq.

SECTION 15. -.Jurisdiction and Enforcement.

(a) Each of-the Parties irrevocably, submits to-the.

exclusive jurisdiction of (i)-:.the Supreme Court of the State of New York,. -New YorkCounty.and (ii) the United States District Court for the Southern District of New -York, for the purposes of any suit, action or other proceeding arising out of this Agreement or any-transaction contemplated INYCorp;1173312.1:4736W:11/14/00-11:45aI

8 hereby.

Each 'of the Parties'agrees'to'commence any action, suit or proceeding relating hereto either in the United States District Court for the Southern District of New York or, if such suit, action or-proceeding may not be brought in such court for jurisdictional'treasons, in the Supreme Court of the State of New York, New York-County.

Each of the Parties-further agrees that service-of process', summons,

'notice or document by hand delivery'or U.S. registered mail at the address specified for'such Party-in Section 14 (or such other address specified by such'Party from time to time pursuant to Section 14) shall be effective service of process for any action, suit or proceeding brought against such Party in any such court.

Each of the Parties irrevo-cably and unconditionally waives any objection to the laying of Venue of anyaction, suit' or proceeding arising out of this Agreement or the transactions'contemplated hereby in (i) the Supreme Court of the State of New York, New York County, or (ii) the United States' District Court for the Southern District'of New York, and'hereby further irrevo-cably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

(b)

The Parties agree that irreparable damage would occur in the event that any'of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.

It is accor-dingly agreed that the Parties shallbe entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce'specifically the terms and provi-sions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity.

SECTION 16.

Survival of Agreement.

All cove-nants, agreements, representations and warranties made by Guarantor herein 'shall be considered to have been relied upon by Seller and shall survive the consummation of the transactions contemplated by the Sale Agreement regardless of any investigation made by Seller or on its behalf, and shall continue in full force and effect as long as any Obligations remaihn-outstanding.

SECTION 17.

Effectiveness; Counteroarts.

This Agreement.shall become effective when executed by Guarantor and'Seller.' This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.'

SECTION 18.

Rules of Interpretation.

The rules (NYCorp;1173312.1:4738W: 11/14/00-11:45aI

9 of interpretation'specified in Section 11.08 of the Sale Agreement shall be'applicable tb, this-Agreement. ;.

SECTION 19.

Severability.

'(a)

If any term or other provision of this Agreement is invalid, illegal or incapable of beingenforced by any rule of law or public policy, all other conditions and provisions of this Agree-ment shall nevertheless remain in full force and effect.

Upon-such determination that any term or other provision is invalid, illegal,or incapable of being enforced, the Parties shall negotiate-in 'good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible to the fullest extent permitted by applicable law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

-- - (b) In--the event that the provisions of this Agreement are claimed or held to be inconsistent with any other agreement'or instrument evidencing the Obligations, the terms of this Agreement shall remain fully valid and effective.

SECTION 20.

Entire Agreement.

This Agreement embodies the entire agreement and understanding of the Parties in respect of the matters contemplated hereby.

There are no restrictions, promises, representations, warranties, covenants or undertakings other than those expressly set forth or referred to herein or therein.. This Agreement supersedes all prior agreements and understandings between the Parties with respect to the matters contemplated hereby.

INYCorp;1173312.1;4738W:11/14/00-11:45a)

IN WITNESS WHEREOF, the parties hereto have caused this Agreement~to be signed by their respective duly authorized officers as of the date first above written as of the day and year first above written.

ENTERGY INTERNATIONAL HOLDINGS LTD LLC, by Name:

Title:

CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.,

by Name:

Title:

[NYCorp;1173312.1:4738W: 11/14/00-11:45a3

EXHIBIT G FORM OF OPINION OF COUNSEL TO GUARANTOR

], 2001 Consolidated Edison Company of New York, Inc.

4 -Irving' Place; New York,' NY-10003 Guarantee Acreemen't Ladies' and Gentlemen:

~

':'We have acted-as counsel to Entergy International Holdings Ltd LLC, a-Delaware limited liability company

('Guarantor"),' in connection with the Guarhntee Agreement (the "Guarantee") dated as of [

-],'2001, between Guarantor and"Consolidated Edison Company of New"York, Inc.,

a -'New York' corporation -("Seller")

Capitalized terms used but not defined herein have the meanings assigned'to'them in the Guarantee.

In that connection, we have examined originals, or copies certified or othe rwise'identified to-our satisfaction, of such documents, corp6rate records and other instruments as we have deemfed necessary or appropriate for the-purposes of'this opinion, including:

(a) the Guarantee, (b) the Certificate of Incorporation and By-laws (or other similar governing documents) of Guarantor, (c) -resolutions of-the Board' of Directors-of Guarantor and (d) the

-Generating Plant and Gas-Turbine Asset Purchase and Sale Agreement dated-as of4Novernbe'r 9, 2000,'between Entergy Nucleai-IIndian Point'-'2, LLC, a Delawa're'limited liability company, and Seller (the "Sale-Agreement") and the"Ancillary

'Agreements (as'defined'in the,'Sale Agreement).

In rendering our-opinion, we have'assumed the due authorizationi, execution and'deliVery' of -the Guara'ntee by Seller.

Based upon the foregoing and-subject to-the qualifications hereinafter set forth, we are of the opinion as follows:

1. Guarantor is a-limited liability company validly existing and in good' standing under the laws of the State of Delaware.

Guarantor has all necessary limited fNYCorp;1173312.1:4738W: 11/14/00-11 :45aI

2 liability company power and authority to execute and deliver the Guarantee and to consummate the transactions contemplated thereby; and the execution and delivery by Guarantor of the Guarantee and the performance by Guarantor of its obligations thereunder have been duly and validly authorized by all necessary limited liability company action on the part of Guarantor.

2. The Guarantee has been duly executed and delivered by Guarantor, and assuming that the Guarantee constitutes a valid and binding obligation of Seller, the Guarantee constitutes a valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including, without limitation, concepts of materiality, reasonableness,.good faith and fair dealing, regardless of whether considered in a., proceeding in equity or at law).

With respect to the foregoing opinion, the availability of a decree for specific performance or an injunction is subject to the discretion of the court requested to issue any such decree or injunction.

3. Subject to obtaining Guarantor Required Regulatory Approvals, neither the execution and delivery of the Guaranteenor the performance by Guarantor of its obligations thereunder will (i) conflict with or result in any breach of any provision of the Certificate of Formation or Operating Agreement (or other similar governing documents) of.Guarantor, (ii) result-in a default (or give rise to any right of termination, cancelation or acceleration) under any of-the terms, conditions or provisions 6f any note, bond, mortgage, indenture, license, agreement, lease or other instrument or obligation to which Guarantor or any of its subsidiaries is a party or by which any of their respective assets may be bound or (iii) violate any Law applicable to Guarantor, or any of its assets, except in the case of clauses (ii) and (iii) for such failures to.obtain a necessary consent,..defaults and violations which w6uld not, individually or in the aggregate, be reasonably expected to have a material adverse effect on the ability of Guarantor to discharge its obligations under the Guarantee.

4. No declaration, filing or registration with, or notice to, or authorization, consent or approval of any Governmental;Authority is necessary for performance by Guarantor of its.obligations under the Guarantee.

INYCorp;1173312.1: 4738WI: 11/14/00-11 :45 a I

3 We express no opinion-herein as to (i) the provisions of the Guarantee insofar as such provisions relate to the subject matter jurisdiction of the United States District Court 'for-the Southern District of New York to adjudicate-any'controversy related thereto.and (ii) the waiver of an inconvenientf6orum set forth in'the provisions of the Guarantee.

We are furnishing this opinion to you pursuant to Section 7.03(g) of the Sale Agreement, solely for your benefit in connection with the-transactions contemplated by the Guarantee and the Sale Agreement.

This opinion may not

' be-relied upon:by an'y'other'personfor for any-otherlpurpose

.or used, circulated, quoted or otherwise referred to.for any

-other purpose.

Very-truly yours, (NYCorp;1173312.1:4738W:11/14/00-11 :45a)

EXHIBIT H FORM OF BILL OF SALE BILL OF SALE, made, executed and delivered on

[

], 2001, by CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., a New York corporation ("Seller") and ENTERGY NUCLEAR INDIAN POINT 2, LLC, a Delaware limited liability company ("Buyer").

W I T N E S S E.T H:

WHEREAS, Seller and Buyer are parties to a Generating Plant and Gas Turbine Asset Purchase and Sale Agreement dated as of November 9, 2000 (the "Agreement"); capitalized terms which are used in this Bill of Sale but are not defined herein shall have the meaning ascribed to such terms in the Agreement; and NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and subject to the terms and conditions of the Agreement, Seller does hereby sell, assign, convey, transfer and deliver to Buyer, subject to the terms of the Agreement, the Auctioned Assets that constitute personal property, including the items of personal property set forth in Schedule 2.02(a)(iii) to the Agreement.

This Bill of Sale and Assignment is subject to the terms and conditions of the Agreement, and the representations, agreements and obligations of Seller and Buyer contained in the Agreement are incorporated herein by reference and constitute an integral part of this Bill of Sale.

This instrument shall be binding upon and shall inure to the benefit of the respective successors and assigns of Seller and Buyer.

This Bill of Sale shall be construed and enforced in accordance with the laws (other than the conflict of law rules) of the State of New York.

This Bill of Sale may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.

[NYCorp:1173312.1:4738W: 11/14/00-11:45aI

2 IN WITNESS -WHEREOF, Seller has duly executed this Bill of Sale on the Date first above written.

' -CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.

By:

Name:

Title:

Agreed and accepted:

ENTERGY NUCLEAR INDIAN POINT 2, LLC By:

Name:

Title:

INYCorp;1273312.1:4738W:11/14/00-11 :45a)

EXHIBIT I APPLICATION FOR SERVICE FOR NON-RESIDENTIAL CUSTOMERS

-[provided separately]

INYCorp;1173312.1:4738W:11/14/00-11:45aI

EXHIBI.T J DIRECT RETAIL CUSTOMER OPERATING AND TRANSMISSION SERVICE AGREEMENT

[provided separately]

(NYCorp:1173312.1:4738W: 11/14/00-11 :45a1

EXHIBIT K DIRECT CUSTOMER OPERATING AGREEMENT (provided separately]

INYCorp;1173312.1:4738W: 11/14/00-11:45a)

ML033040208

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