ASSET PURCHASE AGREEMENT

Exhibit 10.2

Execution Version

ASSET PURCHASE AGREEMENT

BY AND AMONG

THE POTOMAC EDISON COMPANY,

AND

SHENANDOAH VALLEY ELECTRIC COOPERATIVE

DATED AS OF MAY 4, 2009

TABLE OF CONTENTS

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ASSET PURCHASE AGREEMENT

     This ASSET PURCHASE AGREEMENT, dated as of May 4, 2009 (this “ Agreement ”), is made by and among The Potomac Edison Company, a Virginia and Maryland corporation (“ Seller ”), and Shenandoah Valley Electric Cooperative ( “ SVEC ” ), a Virginia utility consumer services cooperative (“ Buyer ”).

     A. Seller is engaged in the business of distributing electric power for retail and wholesale customers, providing electric generation service to retail customers, providing related services and products and engaging in related activities in the Commonwealth of Virginia (the “ VA Distribution Business ”).

     B. Seller desires to sell and assign, and Buyer desires to purchase and assume, certain assets and liabilities associated with the portion of Seller’s VA Distribution Business in the exclusive service territory described in Annex A hereto, as further set forth and subject to the terms and conditions herein. The Acquired Assets (as defined herein) and the Assumed Obligations (as defined herein) are collectively referred to herein as the “ Transferred Business .” The service territory described in Annex A allocated to Buyer is referred to herein as the “ Transferred Territory .”

     C. Concurrently herewith, Seller is entering into an asset purchase agreement with Rappahannock Electric Cooperative (“ REC ”) pursuant to which Seller is agreeing to sell and assign, and REC is agreeing to purchase and assume, certain assets and liabilities associated with the portion of Seller’s VA Distribution Business in the exclusive service territory described in Annex A hereto allocated to REC. Such agreement between Seller and REC is referred to herein as the “ Sister Purchase Agreement ” and the assets to be sold and liabilities to be assumed pursuant to such agreement are referred to herein as the “ Sister Business .” The service territories described in Annex A are intended to include all of Seller’s distribution service territory and distribution customers in the Commonwealth of Virginia (with certain exceptions expressly noted in Section 2.2 ).

     D. In connection with the transactions contemplated by this Agreement and the Sister Purchase Agreement, Seller wishes to assign all of its right and obligations under the Power Purchase Agreements (as defined herein) from and after the Effective Time (as defined herein); it is contemplated that the Power Purchase Agreements will be assigned to and assumed by Old Dominion Electric Cooperative, a Virginia utility aggregation cooperative (“ ODEC ”), with whom Buyer has a full requirements power supply agreement; should ODEC not accept such assignment and assumption then Buyer, together with REC, as buyer under the Sister Purchase Agreement, wish to assume such Power Purchase Agreements from and after the Effective Time.

     E. Buyer acknowledges that it is Seller’s intention to exit the VA Distribution Business in its entirety pursuant to the consummation of the transactions contemplated hereby and in the Sister Purchase Agreement and the assignment of the Power Purchase Agreements, and that except as otherwise expressly contemplated herein or in the Sister Purchase Agreement, such transactions are intended to be consummated simultaneously.

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants, representations, warranties and agreements hereinafter set forth, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS

     1.1 Definitions; Principles of Construction. Defined terms used in this Agreement have the meanings specified in this Agreement or in Exhibit A . In construing this Agreement, together with the Schedules, Exhibits and Annexes, the principles of construction set forth in Exhibit A shall apply.

ARTICLE II
PURCHASE AND SALE

     2.1 Acquired Assets . On the terms and subject to the conditions of this Agreement, at the Closing, Seller will sell, assign, convey, transfer and deliver to Buyer, and Buyer will purchase, assume and acquire from Seller, free and clear of all Encumbrances except for Permitted Encumbrances, all of Seller’s right, title and interest in and to the assets used by Seller to carry out its VA Distribution Business in the Transferred Territory as of the Effective Time, except for the assets expressly excluded below or excluded in Section 2.2 , including the assets more specifically described below and added after the date hereof pursuant to Section 2.6 (collectively, the “ Acquired Assets ”):

          (a) the real property described on Schedule 2.1(a) (including the control buildings and the other buildings and related improvements located thereon) (collectively, the “ Owned Real Property ”);

          (b) all of Seller’s Easements in the Transferred Territory that are primarily related to the VA Distribution Business, including the easements listed on Schedule 2.1(b) (including the control buildings and the other buildings and related improvements located thereon) (collectively, the “ Transferred Easements ”);

          (c) all of the substations, control buildings, service centers and other buildings, fixtures and improvements located on the Owned Real Property or a Transferred Easement, unless such substation, building, fixture or improvement is (i) used in both Seller’s VA Distribution Business and Seller’s transmission business (a “ Shared Location ”) and (ii) included on Schedule 2.2(a) ; Schedule 2.1(c)(1) lists all of the service centers and substations in the Transferred Territory, whether located on Owned Real Property or a Transferred Easement, that are used only in the VA Distribution Business; Schedule 2.1(c)(2) lists all of the Shared Locations in the Transferred Territory;

          (d) the Distribution Facilities;

          (e) Buyer’s Shared Equipment;

          (f) all Inventories, but excluding those Inventories not located at a facility listed on Schedule 2.1(c)(1) or 2.1(c)(2) or deemed to be included as an Acquired Asset pursuant to Section 2.6(c) hereof;

          (g) except for the Excluded Tangible Personal Property, all other machinery (mobile or otherwise), equipment (including computer and office equipment), tools, furniture and furnishings and other personal property that, in each case, are not classified as inventory under GAAP and that are owned by Seller and used or held for use by Seller primarily in the VA Distribution Business in the Transferred Territory (the “ Tangible Personal Property ”), provided , that with respect to vehicles and trailers owned by Seller, the Acquired Assets will only include those vehicles and trailers set forth on Schedule 2.1(g) ;

          (h) subject to Section 2.5 , all rights of Seller as lessee under the leases set forth on Schedule 2.1(h) (the “ Equipment Leases ”) to the extent relating to equipment or vehicles primarily related to the VA Distribution Business in the Transferred Territory; provided , that with respect to vehicles and trailers subject to an Equipment Lease, only those vehicles and trailers set forth on Schedule 2.1(h) ;

          (i) all Contracts in effect as of the date of this Agreement that relate primarily to the VA Distribution Business in the Transferred Territory, including operating agreements, franchise agreements, customer contracts, electrical service agreements, interconnect agreements, interchange agreements, borderline agreements, encroachment agreements, pole-attachment agreements, joint-use agreements, and including any Contracts that relate primarily to the VA Distribution Business in the Transferred Territory that are entered into by Seller after the date of this Agreement in accordance with the terms of Section 7.1 , but not including the Power Purchase Agreements except as otherwise provided in Section 7.23 (collectively, the “ Transferred Contracts ”);

          (j) all customer lists and customer information databases (including customer load data); vendor lists; operational and performance data for the Acquired Assets, GIS information, books and records; meter reading and service data; operating, safety and maintenance records; warranty information; engineering designs, plans, blueprints and as-built plans and specifications and procedures; system drawings; ledgers, files, documents, studies, reports, creative materials, advertising and promotional materials, and other written, printed or electronic materials, in each case, to the extent primarily related to the VA Distribution Business in the Transferred Territory and in Seller’s possession or in the possession of any third parties within Seller’s reasonable control or influence;

          (k) all Permits of Seller, including Transferable Permits, that relate primarily to the VA Distribution Business in the Transferred Territory;

          (l) all unexpired warranties relating to the Acquired Assets;

          (m) all Accounts Receivable and Unbilled Revenue, together with all rights to enforce, execute on or collect the same, and all rights relating to the Customer Deposits (but not the cash related to such deposits);

          (n) all claims, causes of action, rights of recovery, rights of set off and rights of recoupment of Seller against third parties to the extent relating to the Assumed Obligations;

          (o) all Intellectual Property described in Schedule 2.1(o) (the “ Acquired Intellectual Property ”);

          (p) rights to CRRs to which Seller is entitled as an LSE for the Transferred Territory pursuant to the PJM Agreements, including (i) all Auction Revenue Rights to which Seller is entitled that are allocable to the Transferred Territory and (ii) all Financial Transmission Rights to which Seller is entitled that are allocable to the Transferred Territory based on the Transferred Territory’s load ratio share of the peak load of Allegheny’s PJM Load Zone pursuant to the PJM Agreements, except to the extent such rights have been assigned by Seller pursuant to the Power Purchase Agreements;

          (q) rights to serve the existing certified service territory of Seller in the portion of the Commonwealth of Virginia described in Annex A hereto;

          (r) the Transferring Employee Records, to the extent permitted by Law;

          (s) the assets deemed to be Acquired Assets pursuant to Sections 2.5 or 2.6 ;

          (t) all carbon credits and renewable energy attributes, including renewable energy credits, green tags, carbon emissions reductions and similar attributes, if any, to the extent primarily related to the VA Distribution Business in the Transferred Territory; and

          (u) the rights and obligations related to Regulatory Assets.

     2.2 Excluded Assets. Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement will constitute a transfer to Buyer, or will be construed as conferring on Buyer, and Buyer will not acquire, any right, title or interest in or to any of the following (collectively, the “ Excluded Assets ”):

          (a) the real property described on Schedule 2.2(a) (collectively, the “ Excluded Real Property ”);

          (b) (i) all of Seller’s easements in the Transferred Territory that are not primarily related to the VA Distribution Business, and (ii) all of Seller’s easements that are described on Schedule 2.2(b) (collectively, the “ Excluded Easements ”);

          (c) the Transmission Facilities;

          (d) items of Inventory excluded from the definition of Acquired Assets pursuant to Section 2.1(f) ;

          (e) all other machinery (mobile or otherwise), equipment (including computer and office equipment), tools, furniture and furnishings and other personal property that, in each case, are not classified as inventory under GAAP and are not owned by Seller or used or held for use by Seller primarily in the VA Distribution Business in the Transferred Territory and any vehicles or trailers owned by Seller that are not set forth on Schedule 2.1(g) ;

          (f) the Equipment Leases and all other Contracts that would be Transferred Contracts but for the fact that they relate primarily to assets or operations located outside the Transferred Territory or to assets or operations other than the VA Distribution Business (the “ Shared Contracts ”) and all other Contracts that are not Transferred Contracts;

          (g) Permits of Seller that are not primarily related to the VA Distributions Business in the Transferred Territory;

          (h) any other asset of Seller that is not primarily used by Seller in the VA Distribution Business in the Transferred Territory;

          (i) cash and cash equivalents, including cash held pursuant to money pool arrangements, and all other Current Assets of Seller except as provided in Section 2.1(f) , (g) , (m) or (s) , ;

          (j) all Intellectual Property other than the Intellectual Property described on Schedule 2.1(o) (the “ Retained Intellectual Property ”); subject to Buyer’s rights as provided in Section 7.9 ;

          (k) the property and equipment described on Schedule 2.2(k) plus any vehicles and trailers owned by Seller that are not listed on Schedule 2.1(g) (collectively, the “ Excluded Tangible Personal Property ”);

          (l) Seller’s Shared Equipment;

          (m) subject to Section 2.5 , any rights under an Equipment Lease or related equipment or vehicles that Seller is not permitted to assign at Closing;

          (n) all assets disposed of by Seller after the date of this Agreement, to the extent this Agreement does not prohibit the disposition;

          (o) all personnel records of Seller and its Affiliates relating to their employees other than Transferring Employee Records and other records that are required to be disclosed by applicable Laws, subpoena or legal or regulatory process;

          (p) except for the assignment and assumption of any Power Purchase Agreement otherwise contemplated hereby, all intercompany agreements between Seller and an Affiliate of Seller, and all accounts owing by and among Seller and any of its Affiliates, whether or not any such intercompany agreement or account relates to the provision of goods and services, payment arrangements, intercompany charges or balances, or the like;

          (q) subject to Section 7.7 , all rights to refunds of Taxes with respect to the VA Distribution Business or the Acquired Assets attributable to taxable periods, or portions thereof, ending prior to or as of the Effective Time, and any rights to refunds of Taxes with respect to any other assets, properties or operations of Seller or any of its Affiliates;

          (r) subject to Section 2.1(n) , all claims, causes of action, rights of recovery, rights of set off and rights of recoupment of Seller against third parties relating to the VA Distribution Business in the Transferred Territory prior to the Effective Time;

          (s) subject to Section 2.1(n) , all insurance policies, bonds, letters of credit or similar items, and any cash surrender value in regard thereto, including deposits made by Seller with regard to workers’ compensation coverage, and any and all claims related to any of the foregoing;

          (t) all assets attributable to or related to Benefit Plans;

          (u) the Collective Bargaining Agreement;

          (v) subject to Section 7.23 , all power purchase or supply agreements, transmission service agreements, power, fuel or commodity hedging or derivative or forward purchase agreements, and any other agreements not primarily related to the construction, ownership, operation or maintenance of the Acquired Assets; and

          (w) the real and personal property subject to the sale to the Town of Front Royal, Virginia pursuant to that certain ordinance of the town council of the Town of Front Royal, Virginia, dated January 12, 2009.

     2.3 Assumed Obligations . On the terms and subject to the conditions of this Agreement, at the Closing, Buyer will assume and agree to discharge, without recourse to Seller, all of the following Liabilities of Seller arising on or after the Effective Time (except as provided in clause (e) below) (the “ Assumed Obligations ”):

          (a) all Liabilities arising on or after the Effective Time (other than Taxes payable by Seller as a result of the consummation of the transactions contemplated hereby) arising out of or related to the ownership or operation of the Acquired Assets, and all Liabilities arising on or after the Effective Time relating to or arising under any tariffs to which the Transferred Business is subject, including tariffs being reviewed or processed by the applicable Governmental Entity, subject to the terms and conditions of each;

          (b) all Liabilities to the extent arising out of or related to the Transferred Business or the ownership or operation of the Acquired Assets in respect of Taxes attributable to taxable periods, or portions thereof, on or after the Effective Time;

          (c) all Liabilities relating to the Regulatory Liabilities;

          (d) except as provided in Section 7.8 , all Liabilities (i) arising on or after the applicable Hire Date with respect to Transferring Employees, or (ii) arising on or after the Effective Time with respect to workers’ compensation claims of the Transferring Employees;

          (e) all Liabilities relating to the Remediation of Hazardous Substances at, on or from any Site associated with the ownership, construction, operation, maintenance or retirement of the Acquired Assets at any time before or after the Effective Time, and all

Liabilities relating to compliance with all Environmental Laws and other Laws, on and after the Effective Time, except in each case Retained Obligations and subject to Section 2.4(j) ;

          (f) all Liabilities relating to unperformed service obligations, Easement relocation obligations, and engineering and construction required to complete scheduled construction, construction work in progress, and all other capital expenditure projects and obligations, in each case specifically related to the Acquired Assets and outstanding at the Effective Time;

          (g) all Liabilities related to Customer Deposits and unearned pole attachment rental revenue for the Transferred Territory;

          (h) all Liabilities classified as a cost of removal obligations or similar obligations related to the removal, abandonment, or retirement of assets associated with the VA Distribution Business in the Transferred Territory; and

          (i) all of Seller’s obligations to provide electric service in the Transferred Territory.

     2.4 Retained Obligations. Notwithstanding anything to the contrary in this Agreement, Buyer will not assume or be obligated to pay, perform or otherwise discharge liabilities or obligations of Seller or any of its Affiliates not expressly referenced in Section 2.3 (collectively, the “ Retained Obligations ”), including:

          (a) all Liabilities of Seller to the extent arising out of or related to the Excluded Assets;

          (b) all Tax Liabilities to the extent arising out of or related to the ownership or operation of Acquired Assets or the operations of the Transferred Business attributable to taxable periods, or portions thereof, ending prior to the Effective Time;

          (c) all Liabilities with respect to current and former employees of Seller other than the liabilities and obligations assumed by Buyer and its Affiliates as provided in Section 2.3(d) and in Section 7.8 with respect to the Transferring Employees;

          (d) any obligations to provide continuation coverage under COBRA (and notice of the right to elect such coverage) to Transferring Employees, Employees associated with the Acquired Assets or the Transferred Business who do not become Transferring Employees (and their dependents or former dependents), and former dependents of Transferring Employees who became eligible for continuation coverage under COBRA on account of a “qualifying event” (as defined under COBRA) occurring prior to the Effective Time;

          (e) all Liabilities of Seller, any Seller Subsidiary or any ERISA Affiliate of Seller relating to any Benefit Plan or Benefit Arrangements other than the liabilities and obligations assumed by Buyer and its Affiliates as provided in Section 7.8 with respect to the Transferring Employees;

          (f) all Liabilities (including Encumbrances) of Seller with respect to the mortgage bonds and any other existing indebtedness for money borrowed by Seller (including items due to Seller’s Affiliates), including indebtedness described on Schedule 2.4(f) and including any indebtedness for money borrowed by Seller on or after the date hereof;

          (g) Current Liabilities as of the Effective Time except as provided in Section 2.3(c) , (e) , (f) , (g) or (h) ;

          (h) any fines or penalties imposed by any Governmental Entity resulting from any violation of Permits or Law by Seller that occurred prior to the Effective Time;

          (i) all Liabilities that relate to Seller’s breach of a representation or warranty or other provision of, or a failure to perform any obligation under, any Transferred Contract or Shared Contract, or any such event which with the passing of time or the giving of notice, would constitute such breach or failure, in each case that occurred prior to the Effective Time; and

          (j) any Liabilities to the extent attributable to or resulting from the disposal or other Release of or exposure to Hazardous Substances associated with the Acquired Assets or any Site at any Off-Site Location prior to the Effective Time, but excluding any migration or other Release of Hazardous Substances from any Site onto adjacent or nearby properties.

     2.5 Assignment of Equipment Leases . To the extent requested by Buyer, Seller will use its commercially reasonable efforts to assign to Buyer at the Closing Seller’s rights under the Equipment Leases, including seeking to obtain any required consents to such assignments from the lessor(s) to such Equipment Leases with respect to the equipment covered by such leases and used or held by used in the Transferred Territory. In the event Seller is unable to assign any such rights under the Equipment Leases (or the portion thereof relating to the Transferred Business) as of the Closing as a result of the failure to obtain any consent of any lessor under such Equipment Lease, it will notify Buyer promptly that it will not be able to assign such Equipment Lease (or such portion thereof) to Buyer at the Closing. From and after receipt of such notice, Buyer may renegotiate the Equipment Leases as leases of Buyer on terms and conditions (including with respect to costs and expenses with respect to such Equipment Leases) substantially similar to the terms and conditions contained in the Equipment Leases (or the portion thereof relating to the Transferred Business). In the event that both (A) Seller is unable to assign any Equipment Lease (or the portion thereof relating to the Transferred Business) to Buyer at the Closing and (B) Buyer is unable to renegotiate any Equipment Lease as a lease of Buyer on terms and conditions satisfactory to it, then Seller will, if requested by Buyer, exercise any “buy-out” rights contained in such Equipment Leases, such that Seller will acquire the personal property, equipment or vehicles underlying such Equipment Lease to the extent relating to the Transferred Business (a “ Seller Lease Buy-Out ”). Any Seller Lease Buy-Out consummated by Seller pursuant to this Section 2.5 will be at the sole cost and expense of Buyer, and any personal property, equipment or vehicles acquired by Seller upon the exercise of a Seller Lease Buy-Out will be transferred to Buyer at the Closing for no additional consideration. Any personal property, equipment or vehicles transferred to Buyer pursuant to this Section 2.5 will be deemed an “ Acquired Asset ” for all purposes under this Agreement.

     2.6 VA Distribution Business; Inventory .

          (a) Prior to Closing, Buyer and Seller agree to work together in good faith to separate the buildings, improvements, fixtures and other equipment at the Shared Locations based on the intention of the parties expressed in this Agreement and Good Utility Practices. The Assignment and Assumption Agreement to be entered into at Closing may further define the separation of assets at the Shared Locations. Notwithstanding anything to the contrary in this Agreement, assets identified as Distribution Facilities on such Assignment and Assumption Agreement shall be deemed to be Distribution Facilities for all purposes of this Agreement, and assets identified as Transmission Facilities on such Assignment and Assumption Agreement shall be deemed to be Transmission Facilities for purposes of this Agreement.

          (b) Buyer and Seller acknowledge that this Agreement reflects a division of Seller’s VA Distribution Business between Buyer and REC pursuant to the Sister Purchase Agreement. The division of Seller’s VA Distribution Business has been agreed between Buyer and REC and generally is based on the division of circuits reflected on Annex A hereto. Seller has undertaken in good faith to reflect such division in the terms of, and schedules and exhibits to, this Agreement and the Sister Purchase Agreement. Buyer and Seller acknowledge and agree that prior to Closing Buyer may request certain revisions to or clarifications of such divisions (which revisions or clarifications also will require the agreement of the buyer to the Sister Purchase Agreement) and Seller agrees to cooperate with Buyer and REC in regards thereto and to enter into amendments hereto to further reflect such division as may be reasonably requested by Buyer and REC.

          (c) Buyer may request, no later than sixty (60) days prior to the expected Closing Date, that Seller add certain materials or supplies to Inventory at a service center or substation so that such materials or supplies shall be included as Acquired Assets, and Seller will use its commercially reasonable efforts to the extent it has available such materials in supplies to meet Buyer’s reasonable requests relating thereto, including Buyer’s specifications for such materials and supplies. Inventory moved prior to the Effective Time to a service center or substation at Buyer’s request pursuant to this Section 2.6(c) shall be deemed an Acquired Asset.

ARTICLE III
PURCHASE PRICE

     3.1 Purchase Price .

          (a) In consideration of the sale, assignment, conveyance, transfer and delivery to Buyer of the right, title and interest as of the Effective Time of Seller in the Acquired Assets, Buyer will (i) pay to Seller at Closing an aggregate amount equal to the Closing Payment and (ii) assume, as of the Effective Time, the Assumed Obligations.

          (b) Not less than five (5) Business Days prior to the Closing Date, Seller will prepare and deliver to Buyer a certificate (the “ Purchase Price Certificate ”) of an authorized officer of Seller setting forth (i) Seller’s best good faith estimate of the Net Book Value of the Acquired Assets (the “ Estimated NBV ”), Customer Deposits and the Designated Assets Value, all as of the Effective Time, and (ii) the amount of the Closing Payment. The Purchase Price

Certificate shall be prepared on the same basis and in the same format as the 2008 Statement will be presented on Schedule 5.5 . As used herein, the term “ Closing Payment ” means the sum of (i) the Estimated NBV multiplied by 1.65, plus (ii) the estimated Designated Assets Value, less (iii) the estimated Customer Deposits, all as of the Effective Time.

          (c) From and after the delivery of the Purchase Price Certificate until the Closing, Buyer will be permitted to review Seller’s working papers relating to the preparation of the Purchase Price Certificate, and Seller will provide Buyer with reasonable access to the persons involved in preparing or reviewing the Purchase Price Certificate. The purpose of such review will be to allow Buyer to review changes to the Net Book Value of the Acquired Assets, the Designated Assets Value and Customer Deposits from December 31, 2008 to the Effective Time.

     3.2 Post-Closing True-Up .

          (a) Seller will deliver, no later than sixty (60) days after the Effective Time, Seller’s determination of the Net Book Value of the Acquired Assets, Customer Deposits and Designated Assets Value, all as of the Effective Time and taking into account any Correction Adjustments (the “ Closing Statement ”). The Closing Statement shall be prepared on the same basis as the 2008 Statement to be presented on Schedule 5.5 and at the level of detail as set forth on and consistent with Schedule 3.2(a) . Buyer will reasonably cooperate with Seller in connection with the preparation of the Closing Statement and related information, and will provide to Seller reasonable access to such books, records, personnel and other information as may be reasonably requested from time to time.

          (b) Buyer may dispute the Closing Statement or any item set forth thereon; provided , however , that Buyer will notify Seller in writing of any disputed item, and the basis of such dispute, within thirty (30) days of Buyer’s receipt of the Closing Statement (the “ Closing Statement Review Period ”); and provided , further , that Buyer’s dispute of any item set forth on the Closing Statement shall be limited to (i) changes in the Net Book Value of the Acquired Assets, Customer Deposits or the Designated Assets Value between December 31, 2008 as set forth in the 2008 Statement and the Effective Time and (ii) the Correction Adjustments. During the Closing Statement Review Period, Buyer may review Seller’s working papers and other information reasonably requested relating to the Closing Statement, and Seller will provide Buyer with reasonable access to persons involved in preparing or reviewing the Closing Statement. In the event of a dispute with respect to any part of the Closing Statement, Buyer and Seller will use reasonable efforts to reconcile their differences. If Buyer and Seller are unable to reach a resolution of such differences within thirty (30) days of receipt of Buyer’s written notice of dispute to Seller, Buyer and Seller will submit the amounts remaining in dispute for determination and resolution to the Independent Accounting Firm, which will be instructed to issue a report, to be delivered to Buyer and Seller within thirty (30) days of submission of the amounts remaining in dispute to the Independent Accounting Firm, stating its determinations and resolutions regarding the amounts disputed, with such report being final, binding and conclusive on the parties hereto with respect to the amounts disputed (such determination, an “ Independent Accounting Firm Closing Statement Determination ”). Seller and Buyer will each make available to the Independent Accounting Firm all work papers, books and records relating to the

Transferred Business to the extent relevant to the determination of amounts set forth on the Closing Statement.

          The Independent Accounting Firm shall, within five (5) Business Days of its agreement to resolve the disputed items submitted to it, provide to Buyer and Seller the names and resumes of at least three partners of the Independent Accounting Firm (which resumes shall include a description of each such individual’s substantial experience in the preparation and audit of financial statements of corporations engaged in businesses similar to the Transferred Business and a disclosure of each such individual’s existing or prior business and/or personal relationships (if any) with Buyer, Seller or any employees or counsel of any such Person) who are willing to serve as the individual responsible for determining and resolving the matters submitted by Buyer and Seller to the Independent Accounting Firm (such person, the “ Independent Accounting Firm Partner ”). If, on or before the third Business Day after their receipt of the information called for by the preceding sentence, Buyer and Seller have been unable after good faith negotiation to agree upon and select one of the individuals so identified to act as the Independent Accounting Firm Partner, then Buyer and Seller shall each have the right on or before the fifth Business Day after their receipt of such information to deliver to the Independent Accounting Firm a confidential communication striking any or all of the individuals previously identified as a potential Independent Accounting Firm Partner as to whom an existing business and/or personal relationship was disclosed pursuant to the preceding sentence, and/or striking no more than one of the other individuals previously identified as a potential Independent Accounting Firm Partner. The Independent Accounting Firm shall then proceed to select the Independent Accounting Firm Partner from among the previously identified individuals who have not been stricken from consideration; if all such previously identified individuals are so stricken, the Independent Accounting Firm shall designate at least three additional partners who are eligible to serve as the Independent Accounting Firm Partner and the forgoing selection procedure shall be repeated until an Independent Accounting Firm Partner is selected.

          (c) The Closing Statement and the Net Book Value of the Acquired Assets or amount of Customer Deposits or the Designated Assets Value set forth thereon will be adjusted (including with respect to Correction Adjustments) (i) in accordance with any amount mutually agreed to in writing by Seller and Buyer with respect to any item set forth on the Closing Statement, and (ii) in accordance with any Independent Accounting Firm Closing Statement Determination. As used herein, the term “ Final NBV ” means, as applicable, (x) the Net Book Value of the Acquired Assets set forth on the Closing Statement, as so adjusted pursuant to either clause (i) and/or (ii) of the immediately preceding sentence, as applicable, or (y) if Buyer fails to dispute in writing the Net Book Value of the Acquired Assets, the Designated Assets Value, or the Customer Deposits (including the Correction Adjustments related thereto) set forth on the Closing Statement within the Closing Statement Review Period, the computation of such Net Book Value of the Acquired Assets set forth on the Closing Statement. The fees and disbursements of the Independent Accounting Firm with respect to this Section 3.2 will be allocated between Buyer and Seller so that Buyer’s share of such fees and disbursements will be in the same proportion that the aggregate amount of such disputed amounts so submitted by Buyer to the Independent Accounting Firm that is unsuccessfully disputed by Buyer (as finally determined by the Independent Accounting Firm or mutually agreed by the parties) bears to the total amount of all disputed amounts so submitted by Buyer to the Independent Accounting Firm.

          (d) Upon final determination of the Final NBV, the Designated Assets Value, and Customer Deposits (including the Correction Adjustments related thereto), all as of the Effective Time in accordance with Section 3.2(c) , Buyer or Seller, as applicable, shall pay to the other no later than five (5) days following the final determination thereof by wire transfer of immediately available funds to an account designated by the party to receive funds, as applicable, the amount that (i)(A) the sum of the Estimated NBV multiplied by 1.65, plus (B) the estimated Designated Assets Value, less (C) the estimated Customer Deposits, is greater or less than (ii)(A) the Final NBV multiplied by 1.65, plus (B) the Designated Assets Value as of the Effective Time, less (C) the Customer Deposits as of the Effective Time.

          (e) Except as otherwise provided in this Agreement, items relating to the ownership, lease, maintenance or operation of the Transferred Business attributable to a period commencing prior to the Effective Time and terminating on or after the Effective Time, including personal property or real estate taxes, utilities, rents (including poll attachment rental revenue but excluding Income Taxes), shall be prorated based on the same units used to compute the item in question, and otherwise measured by calendar days.

          (f) Any amount paid under Section 3.2(d) will be paid with interest for the period beginning on the Closing Date and ending on the day preceding the date of payment, calculated at the U.S. prime rate as in effect on the Closing Date as published in the Wall Street Journal, Eastern Edition (the “ Applicable Rate ”) and will, to the maximum extent allowed by applicable Laws, constitute an adjustment to the Final Purchase Price.

     3.3 Allocation of Final Purchase Price . Buyer and Seller agree that the Final Purchase Price shall be allocated among the Acquired Assets, in accordance with Section 1060 of the Code and the Treasury Regulations thereunder, as set forth on Schedule 3.3 (the “ Allocation ”). Seller shall prepare a post-Closing allocation (“ Post-Closing Allocation ”) taking into account any post-Closing adjustment to the Final Purchase Price pursuant to Section 3.2 and consistent with the methods and allocations used in the Allocation within thirty (30) days following any adjustment to the Final Purchase Price pursuant to Section 3.2 and shall deliver such proposed Post-Closing Allocation to Buyer for Buyer’s review and comment. If Buyer does not object in writing to the proposed Post-Closing Allocation, it shall be deemed to be accepted by Buyer as proposed by Seller. If Buyer objects to the Post-Closing Allocation, Buyer shall provide Seller written reasons for Buyer’s objection(s) with thirty (30) days following delivery of the proposed Post-Closing Allocation. Buyer and Seller shall use their commercially reasonable efforts to agree upon such Post-Closing Allocation. If agreement cannot be reached within twenty (20) days of the Buyer’s receipt of Seller’s written objections, the parties shall submit the disagreement to an Independent Accounting Firm Partner selected pursuant to the procedures outlined in Section 3.2(b) who shall determine and resolve the matter by issuing a report, to be delivered to Buyer and Seller within thirty (30) days of submission of the disagreement to the Independent Accounting Firm, stating its determinations and resolutions regarding the disagreement, with such report being final, binding and conclusive on the parties hereto with respect to the amounts disputed. Buyer and Seller shall (i) file Internal Revenue Service Form 8594 and all federal, state and local Tax Returns, in accordance with such agreed allocation, and (ii) report the transactions contemplated by this Agreement for Tax purposes in a manner consistent with the final allocation of the Final Purchase Price (as the same may be adjusted) pursuant to this Section 3.3 . Buyer and Seller shall provide the other promptly with

any other information reasonably required to complete Form 8594. Pursuant to the provisions of Section 7.7 , Buyer and Seller will notify the other in the event of an examination, audit or other proceeding regarding the agreed upon allocation of the Final Purchase Price (as the same may be adjusted).

ARTICLE IV
THE CLOSING

     4.1 Time and Place of Closing . Upon the terms and subject to the satisfaction or waiver of the conditions contained in Article VIII of this Agreement, the closing of the transactions contemplated by this Agreement (the “ Closing ”) will take place at the offices of Vinson & Elkins L.L.P., 1455 Pennsylvania Avenue, N.W., Washington, D.C. 20004 on the last Business Day of the full calendar month in which all of the conditions contained in Article VIII have been satisfied or waived (other than those conditions that by their nature are to be satisfied or waived at the Closing, but subject to the satisfaction or waiver at the Closing of such conditions), or at such other place or time as the parties may agree in writing. The date on which the Closing actually occurs is hereinafter referred to as the “ Closing Date .” The transactions contemplated hereby shall be effective at 12:00:00 a.m., Eastern Prevailing Time, on the first calendar day of the month following the date on which the Closing Date occurs (the “ Effective Time ”). Risk of loss with respect to the Acquired Assets shall transfer to Buyer at the Effective Time.

     4.2 Payment of Closing Payment . Upon the terms and subject to the satisfaction of the conditions contained in this Agreement, Buyer will pay to Seller at the Closing an aggregate amount in United States dollars equal to the Closing Payment as set forth in the Purchase Price Certificate by wire transfer of immediately available funds to an account designated by Seller to Buyer at least two (2) Business Days prior to the Closing Date.

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

          (a) The Related Agreements, duly executed by Seller and any Affiliates of Seller that are party thereto;

          (b) All consents, waivers or approvals obtained by Seller with respect to the Seller Third-Party Consents and those consents and approvals described in Schedule 5.3(b) ;

          (c) Transferring Employee Records;

          (d) Copies of the documents and information described in Section 2.1(j) , 2.1(k) , and 2.1(l) ;

          (e) Such other agreements, documents, instruments and writings as are required to be executed and delivered by Seller at or prior to the Closing pursuant to the terms of this Agreement or that may be reasonably requested by Buyer in connection with the transfer to Buyer of the Acquired Assets, the absence of any Encumbrances thereon (other than Permitted Encumbrances), and the retention by Seller of the Retained Obligations; and

          (f) A certificate required by Section 8.2(e) .

     4.4 Deliveries by Buyer . At the Closing, Buyer will deliver, or cause to be delivered, the following to Seller or its designees:

          (a) The Closing Payment as set forth in the Purchase Price Certificate, by wire transfer or transfers of immediately available funds to the account or accounts designated pursuant to Section 4.2 ;

          (b) The Related Agreements, duly executed by Buyer and any Affiliates of Buyer that are party thereto;

          (c) All consents, waivers or approvals obtained by Buyer as described in Schedule 6.3(b) ;

          (d) All Tax certificates and Tax forms applicable to the transfers contemplated by this Agreement, including direct pay permits and Tax exemption certificates;

          (e) Such other agreements, documents, instruments and writings as are required to be executed and delivered by Buyer at or prior to the Closing pursuant to the terms of this Agreement or that may be reasonably requested by Seller in connection with the assumption by Buyer of the Assumed Obligations; and

          (f) A certificate required by Section 8.3(d) .

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SELLER

     Except as set forth in the disclosure schedules attached to this Agreement, Seller hereby represents and warrants to Buyer as follows:

     5.1 Organization; Power and Authority .

          (a) Seller is a corporation duly organized, validly existing and in good standing under the Laws of Maryland and Virginia.

          (b) Seller has all requisite corporate power and authority to own, lease, and operate the assets used in the Transferred Business except where the failure to have such power and authority, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

     5.2 Authority . Seller has full corporate power and authority to execute and deliver this Agreement and the Related Agreements and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Related Agreements and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by the board of directors of Seller and no other corporate proceedings on the part of Seller are necessary to authorize this Agreement or the Related Agreements or to consummate the transactions contemplated hereby and thereby. This Agreement and the Related Agreements have been duly and validly executed and delivered by Seller, and, assuming that this Agreement and the Related Agreements constitute valid and

binding agreements of Buyer, constitute valid and binding agreements of Seller, enforceable against Seller in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general equity principles (the “ Bankruptcy and Equity Exception ”).

     5.3 Consents and Approvals; No Violation .

          (a) Other than obtaining the consents of third parties set forth on Schedule 5.3(a) (the “ Seller Third-Party Consents ”), the Seller Required Regulatory Approvals and the Buyer Required Regulatory Approvals, neither the execution and delivery of this Agreement and the Related Agreements by Seller, the sale by Seller of the Acquired Assets pursuant to this Agreement, the assignment by Seller of the Assumed Obligations pursuant to this Agreement, nor Seller’s performance under this Agreement or the Related Agreements will: (i) conflict with or result in any breach of any provision of the Certificate of Incorporation or Bylaws of Seller; (ii) require Seller or any of its Affiliates to obtain any consent, approval, authorization or permit of, or require Seller or any of its Affiliates to make any filing with or provide any notice to, any Governmental Entity, except (x) where Seller’s failure to obtain such consent, approval, authorization or Permit, or to make such filing or notification, would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect or (y) for those requirements that become applicable to Seller as a result of the specific regulatory status of Buyer (or any of its Affiliates) or as a result of any other facts that specifically relate to the business or activities in which Buyer (or any of its Affiliates) is or proposes to be engaged; (iii) result in a default (or give rise to any right of termination, cancellation or acceleration or result in any Encumbrance (other than a Permitted Encumbrance) on the Acquired Assets) under any Contract to which Seller is a party or by which Seller or any of the Acquired Assets, may be bound, except for such defaults (or rights of termination, cancellation or acceleration or resulting Encumbrance (other than a Permitted Encumbrance)) as to which requisite waivers or consents have been obtained or will have been obtained prior to Closing or that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; or (iv) violate any Law or Order applicable to Seller or any of the Acquired Assets, which violation, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

          (b) Except for the consents and approvals listed in Schedule 5.3(b) (the “ Seller Required Regulatory Approvals ”), no declaration, filing or registration with, or notice to, or authorization, consent or approval of, any Governmental Entity is necessary for the consummation by Seller (or its Affiliates) of the transactions contemplated hereby or by the Related Agreements, other than such declarations, filings, registrations or notices that, if not obtained or made, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and as noted in Section 7.3(i) .

     5.4 Company Reports .

          (a) Seller has made available to Buyer complete copies of the following financial statements, which are attached hereto as Schedule 5.4(a) (collectively, the “ Financial Statements ”): the audited consolidated balance sheet of Seller as of December 31, 2008 and the related audited consolidated statements of income and cash flows and the notes thereto for the

fiscal year then ended. The Financial Statements (i) have been prepared in accordance with GAAP, consistently applied throughout the periods covered thereby, except as otherwise noted therein, and (ii) fairly present in all material respects the financial condition and results of operations of Seller on a consolidated basis, as of the respective dates thereof and for the respective periods covered thereby; provided , however , that this representation and warranty shall be deemed true and correct to the extent that any failure of this representation and warranty to be true and correct related to matters other than, and does not affect, the Transferred Business.

          (b) For periods beginning on or after January 1, 2006, Seller has filed or caused to be filed with the Virginia Commission all forms, statements, reports and documents (including all exhibits, amendments and supplements thereto) required to be filed by Seller with respect to the Transferred Business, all of which complied in all material respects with all applicable requirements of the rules and regulations of the Virginia Commission as in effect on the date each such report was filed.

          (c) The books and records of Seller have been maintained in accordance with GAAP and the FERC’s Uniform System of Accounts applied on a consistent basis in accordance with Seller’s past practice as reflected on Schedule 5.5 .

     5.5 2008 Statement .

          (a) Attached hereto as Schedule 5.5 is a statement of the Net Book Value of the Acquired Assets, Customer Deposits and the Designated Assets Value as of December 31, 2008 for Seller’s VA Distribution Business (including the Sister Business) (the “ Initial 2008 Statement ”). The defined terms used in the preceding sentence shall be understood for purposes of this Section 5.5(a) only to include the portion of the VA Distribution Business in the Sister Territory as well as the Transferred Territory. The Initial 2008 Statement (a) is unaudited and derived on a consistent basis from the books and records and consolidated financial statements of Seller, (b) has been prepared based upon amounts derived from the records of Seller that have been maintained in accordance with GAAP and the FERC’s Uniform System of Accounts, (c) accurately and completely reflects the Acquired Assets and Assumed Liabilities taken together with the Acquired Assets and Assumed Liabilities in the Sister Purchase Agreement (as such terms are defined therein), in each case as of December 31, 2008 and except as otherwise expressly noted herein, and (d) has been prepared on the basis of internal direct or indirect allocations of certain assets and liabilities between the states in which Seller operates in a manner consistent with Seller’s historical practice.

          (b) On or before June 8, 2009, Seller will provide Buyer with an amended Schedule 5.5 which will be a statement of the Net Book Value of the Acquired Assets, Customer Deposits and the Designated Assets Value as of December 31, 2008 for only the Transferred Business (the “ 2008 Statement ”). The 2008 Statement when delivered (a) will be unaudited and derived on a consistent basis from the books and records and consolidated financial statements of Seller, (b) prepared based upon amounts derived from the records of Seller that have been maintained in accordance with GAAP and the FERC’s Uniform System of Accounts, (c) will accurately and completely reflect the Acquired Assets and Assumed Liabilities as of December 31, 2008 and except as otherwise expressly noted herein, and (d) will have been prepared on the

basis of internal direct or indirect allocations of certain assets and liabilities between the states in which Seller operates in a manner consistent with Seller’s historical practice.

          (c) Buyer acknowledges that the Initial 2008 Statement and 2008 Statement include entries for the Tangible Personal Property included as an Acquired Asset pursuant to Section 2.1(g) , notwithstanding that such property has been expensed under GAAP.

     5.6 Undisclosed Liabilities . Except for (a) the Liabilities set forth in Schedule 5.6 , (b) Liabilities reflected or reserved against in the 2008 Statement and (c) Liabilities incurred after December 31, 2008 that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect, Seller has not incurred any Liabilities that will be Assumed Obligations as of the Closing.

     5.7 Absence of Certain Changes or Events . Since December 31, 2008, Seller has operated the Transferred Business in the ordinary course consistent with past practices and except as set forth in Schedule 5.7 , there has not occurred any event, occurrence or conditions that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

     5.8 Title and Related Matters .

          (a) Seller has good, valid and marketable title to the Acquired Assets free and clear of all Encumbrances other than the Permitted Encumbrances and those Encumbrances that are to be released at or prior to Closing. Except as set forth in Schedule 5.8(a) , Seller has not leased or otherwise granted to any Person the right to use or occupy the Owned Real Property, and there are no outstanding options, rights of first offer or rights of first refusal to purchase such Owned Real Property.

          (b) Except for any Excluded Assets and for any assets being transferred by Seller pursuant to the Sister Purchase Agreement (for which Buyer may elect or need to acquire joint use arrangements with the buyer thereunder), (i) the Owned Real Property and the Transferred Easements represent all of the material real property interests used or held for use by Seller in connection with the Transferred Business and necessary to conduct the Transferred Business in all material respects as conducted on the date of this Agreement and, except to the extent permitted by Section 7.1 , as of the Effective Time, and (ii) the Acquired Assets include the material property, plant and equipment used by Seller in the VA Distribution Business in the Transferred Territory (other than as expressly contemplated hereby).

          (c) Except as set forth on Schedule 5.8(c) , Seller has not received written notice from any Person within three years prior to the date of this Agreement asserting that Seller does not have the right, as a result of title defects or title failures, to use or occupy any portion of the Owned Real Property or lands covered by the Transferred Easements, other than those notices that would not individually, or in the aggregate, reasonably be expected to have a Material Adverse Effect.

          (d) The buildings on the Owned Real Property are in good operating condition relative to their age and use and have been maintained in accordance with Good Utility Practices. The Tangible Personal Property, Inventories and Distribution Facilities are in good operating

condition relative to their age and use and have been maintained in accordance with Good Utility Practices.

          (e) No condemnation or eminent domain proceeding against any part of the Owned Real Property or the Transferred Easements is pending or, to the Knowledge of Seller, threatened, other than such proceedings that would not individually, or in the aggregate, reasonably be expected to have a Material Adverse Effect.

          (f) To the Knowledge of Seller, (i) there are no public improvements that have been ordered to be made or that have not been previously assessed, and (ii) there are no special, general or other assessments pending, threatened against, or affecting any parts of the Owned Real Property or any of the Transferred Easements.

          (g) All of the Inventories included as Acquired Assets consist of a quality, and are not more than the quantity, reasonably expected to be usable in the ordinary course of business.

     5.9 Insurance . Schedule 5.9 lists and provides a summary of the material policies of fire, liability, worker’s compensation and other forms of insurance owned or held by Allegheny Energy, Inc. (“ Allegheny ”), of which Seller is a wholly-owned subsidiary, or Allegheny’s or Seller’s Affiliates insuring the Acquired Assets or the operations and personnel of the Transferred Business. All such insurance policies are in full force and effect, subject to the terms of each policy, all premiums with respect thereto covering all periods up to and including the date as of which this representation is being made have been paid (other than retroactive premiums that may be payable with respect to comprehensive general liability and worker’s compensation insurance policies), and no notice of cancellation or termination has been received with respect to any such policy that was not replaced on substantially similar terms prior to the date of such cancellation. As of the date of this Agreement, none of Allegheny, Seller or any of their Affiliates have been refused any insurance with respect to the Acquired Assets or the operations and personnel of the Transferred Business, nor has such coverage been limited by any insurance carrier to which any of Allegheny, Seller or any of their Affiliates have applied for any such insurance or with which it has carried insurance during the last twelve months.

     5.10 Environmental, Health and Safety Matters . Except as set forth in Schedule 5.10 and for such matters that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect:

          (a) Seller is and, during the relevant time periods specified in applicable statutes of limitations, has been in compliance with applicable Environmental Laws with respect to its operation of the Transferred Business;

          (b) Seller holds and is in compliance with all Permits required under applicable Environmental Laws to construct and operate the Acquired Assets and to own and operate the Transferred Business as currently operated, and has timely filed any renewal applications required to be filed by a specific date in order to maintain the effectiveness of such Permits;

          (c) There are no claims, actions, suits, or proceedings pending or, to Seller’s Knowledge, threatened against Seller under applicable Environmental Laws with respect to the operation of the Transferred Business or the Acquired Assets;

          (d) There have been no Releases of Hazardous Substances on, under or from the Acquired Assets in violation of, or that require reporting or Remediation under, any applicable Environmental Laws, and Seller has not received any written notification or request for information indicating that it is a potentially responsible party under CERCLA or any similar state law with respect to the Acquired Assets or its operation of the Transferred Business;

          (e) Seller has delivered to Buyer all environmental reports (including all Phase I and Phase II Environmental Site Assessment reports, investigations and studies) relating to any of the Acquired Assets or the Transferred Business that are in the possession of the Seller or any of its Representatives; and

          (f) Seller is not subject to any Order under any Environmental Law relating to the Acquired Assets or the Transferred Business.

          (g) There currently are not and never have been any power generation facilities (other than back-up generation equipment) on any of the Owned Real Property or Transferred Easements.

     Notwithstanding any other provision in this Agreement to the contrary, the representations and warranties made in this Section 5.10 are Seller’s exclusive representations and warranties relating to compliance with, and possession of Permits required under, Environmental Laws, and with respect to any Releases of Hazardous Substances.

     5.11 Regulation as a Utility . Seller is subject to regulation as a “public utility” by the Virginia Commission pursuant to the Laws of the Commonwealth of Virginia and is subject to regulation as a “public utility” by the FERC pursuant to Part II of the Federal Power Act. Seller also is subject to regulation as a public utility (or similar designation) by the States of Maryland and West Virginia, but no other states in the United States or by any foreign country. Seller is a subsidiary of Allegheny, which is a “registered holding company” under the Holding Company Act. Schedule 5.11 lists all of the currently operative tariffs authorized and approved prior to the date of this Agreement by the Virginia Commission applicable to the Transferred Business and all of the currently pending rate, certificate or other filings made prior to the date of this Agreement by Seller before the Virginia Commission. All currently effective filings with the Virginia Commission were made in compliance in all material respects with all Laws then applicable thereto. Except as reported on Schedule 5.11 , Seller, with respect to the Transferred Business, does not have rates that have been or are being collected subject to refund, pending final resolution of any proceeding pending before a Governmental Entity or on appeal to the courts, where the potential refund, resolution or outcome of appeal, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect.

     5.12 Labor and Employment Matters . Seller has previously made available to Buyer copies of the Collective Bargaining Agreement, which is the only collective bargaining agreement that relates to the Transferred Business. With respect to the Transferred Business and except for such matters as would not reasonably be expected to have, individually or in the

aggregate, a Material Adverse Effect: (a) except as set forth in Schedule 5.12(a) , Seller is in compliance with all applicable Laws respecting employment and employment practices, terms and conditions of employment and wages and hours with respect to the Employees; (b) within the last three years, Seller has not received written notice of any unfair labor practice complaint against it before the National Labor Relations Board with respect to the Employees and no such claim is pending; (c) there is no labor strike, slowdown or stoppage actually pending or, to the Knowledge of Seller, threatened against or affecting the Transferred Business; (d) there is no charge pending or, to Seller’s Knowledge, threatened against Seller alleging violation of any Laws related to employment and employment practices, terms and conditions of employment and wages and hours with respect to employees, including, but not limited to unlawful discrimination in employment practices; (e) within the last three years, no one has filed a petition seeking representation with respect to the Employees of Seller with the National Labor Relations Board and no petition is pending; (f) except as reported on Schedule 5.12(f) , no arbitration proceeding arising out of or under any Collective Bargaining Agreement is pending against Seller; and (g) Seller has not experienced any primary work stoppage with respect to the Employees in the past five years.

     5.13 Employee Benefit Plans .

          (a) All “employee benefit plans,” within the meaning of Section 3(3) of ERISA, covering any of the Employees (collectively, the “ Benefit Plans ”) are listed in Schedule 5.13(a) . True and complete copies of all Benefit Plans or a written summary thereof have been made available to Buyer.

          (b) Schedule 5.13(b) lists or describes all material employee benefit arrangements, including any other material deferred compensation, profit-sharing, retirement and pension plans and all material bonus, fringe benefit and other employee benefit plans, maintained, or with respect to which contributions are made, by Seller for the Employees, other than those arrangements that are Benefit Plans or are base or regular cash compensation (collectively, the “ Benefit Arrangements ”).

          (c) There has been no amendment to, announcement by Seller or any of its subsidiaries relating to, or change in employee participation or coverage under, any Benefit Plan or Benefit Arrangement that would increase materially the benefits provided to the Employees under such plan or arrangement above the level of the benefits provided thereunder for the most recent fiscal year.

          (d) Schedule 5.13(d) contains a true and correct list of the names of each Employee for the Transferred Business and each “Employee” as defined in the Sister Purchase Agreement.

     5.14 Contracts .

          (a) Schedule 5.14(a) contains a true and complete list of the following Transferred Contracts and the “Transferred Contracts” as defined in the Sister Purchase Agreement, as of the date hereof:

               (i) franchise agreements authorizing the provision of electric service in a city or municipality;

               (ii) electric service agreements or similar customer agreements that generated more than $1,000,000 in net revenues for the twelve month period ended December 31, 2008;

               (iii) facilities agreements;

               (iv) transmission service agreements;

               (v) interchange, borderline or joint use agreements;

               (vi) pole attachment agreements;

               (vii) any other Contract related to the Transferred Business that require known expenditures by Seller of $100,000 or more per annum or $250,000 or more in the aggregate over the term of such Contract;

               (viii) Contracts containing covenants restricting in any material respect the freedom of Seller to engage in the Transferred Business or to compete with any Person that would affect, or be reasonably expected to affect, the Transferred Business or the operation or use of the Acquired Assets;

               (ix) joint venture agreements, joint development agreements, joint use agreements, common or shared facilities agreements, partnership agreements, limited liability company agreements, limited liability company operating agreements or similar agreements;

               (x) Contracts for the purchase or sale of any business, corporation, partnership or other business entity;

               (xi) encroachment agreements;

               (xii) electric supply agreements;

               (xiii) Equipment Leases; and

               (xiv) Contracts that are otherwise material to the Transferred Business.

          (b) Schedule 5.14(b) contains a true and complete list of all Shared Contracts that would be included in clauses (i) through (xiv) of Section 5.14(a) if such Contracts related primarily to the VA Distribution Business.

          (c) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, each of the Transferred Contracts and Shared Contracts (i) constitutes a valid and binding obligation of Seller and, to Seller’s Knowledge, constitutes a valid and binding obligation of the other parties thereto, subject to the Bankruptcy and Equity

Exception, and (ii) is in full force and effect except to the extent such contract expires by its own terms after the date of this Agreement.

          (d) There is not, under any of the Transferred Contracts or Shared Contracts, any default or event that, with notice or lapse of time or both, would constitute a default on the part of Seller or, to Seller’s Knowledge, would constitute a default on the part of any of the other parties thereto, except such events of default and other events as to which requisite waivers or consents have been obtained, the receipt of the Seller Third Party Consents or that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

     5.15 Legal Proceedings, Etc . Except as set forth in Schedule 5.15 , there are no claims, actions, proceedings or investigations pending or, to the Knowledge of Seller, threatened against Seller or any of its Affiliates relating to the Acquired Assets or the Transferred Business before any Governmental Entity or alternative dispute resolution proceedings that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Seller is not subject to any outstanding judgment, rule, Order, writ, injunction or decree of any court or Governmental Entity or alternate dispute resolutions that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. As of the date of this Agreement, Seller is not aware of any reason relating to it or its Affiliates that all Seller Required Regulatory Approvals will not be obtained.

     5.16 Compliance with Permits and Laws . Seller holds and is in compliance with all Permits (other than with respect to Environmental Laws, which are addressed in Section 5.10 ) necessary to own, operate and maintain the Transferred Business as presently conducted, except where the failure to have such Permits would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Seller is in compliance with all Permits and Laws of all Governmental Entities applicable to it with respect to the Transferred Business or the Acquired Assets, except for violations that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

     5.17 Tax Matters . All Tax Returns required to be filed before the Effective Time by Seller with respect to the Transferred Business or with respect to the ownership or operation of the Acquired Assets, have been or will be timely filed, and all Taxes that are, or as of the Effective Time will be, due have been or will be timely paid in full. Except as set forth in Schedule 5.17 , Seller has not received any notice of deficiency or assessment from any taxing authority with respect to liabilities for Taxes in respect of the Transferred Business or Acquired Assets that could adversely affect the Transferred Business or Buyer’s ownership of such Acquired Assets, which have not been fully paid or finally settled, and any such deficiency shown in such Schedule 5.17 is being contested in good faith through appropriate proceedings. No claim has ever been made by any authority in a jurisdiction where Seller does not file a Tax Return with respect to the Transferred Business that it is or may be subject to taxation in that jurisdiction with respect to the Transferred Business. Except as set forth in Schedule 5.17 , (i) there are no audits, claims, assessments, levies, administrative proceedings, or lawsuits pending, or to Seller’s Knowledge, threatened against Seller in respect of the Transferred Business or any of the Acquired Assets that could adversely affect the Transferred Business or Buyer’s ownership of such Acquired Assets, and (ii) there are no outstanding agreements or waivers extending the applicable statutory periods of limitation for the assessment or collection of any

Taxes associated with the ownership or operation of the Transferred Business or the Acquired Assets that could adversely affect the Transferred Business or Buyer’s ownership of such Acquired Assets for any period. There are no Encumbrances for Taxes, other than Permitted Encumbrances, on any of the Acquired Assets.

     5.18 Related Party Matters . Except as set forth in Schedule 5.18 , with respect to Transferred Business, Seller is not party to any Contract with any of its Affiliates, except for Contracts not assigned or conveyed to Buyer pursuant to this Agreement and the Power Purchase Agreement with a subsidiary of Allegheny.

     5.19 Intellectual Property . Seller owns, or possesses licenses or other valid rights to use, all patents, patent rights, trademarks, trademark rights, trade names, trade name rights, copyrights, service marks, service mark rights, trade secrets, applications to register, and registrations for the foregoing trademarks, service marks and patents, know-how and other proprietary rights and information necessary in connection with the Transferred Business as currently conducted, except where the failure to possess such rights or licenses or valid rights to use would not reasonably be expected to have a Material Adverse Effect, and to the Knowledge of Seller (i) the conduct by Seller of the Transferred Business does not infringe upon any Intellectual Property of any third party, except where such infringement would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, nor has Seller received any written claim, alleging any such infringement, and (ii) no Person is infringing upon any Intellectual Property of Seller as it relates to the Transferred Business except where such infringement would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Schedule 5.19 contains the material information technology applications currently used in the VA Distribution Business.

     5.20 Fees and Commissions . There is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of Seller or any Affiliate or Subsidiary of Seller, who might be entitled to any fee or commission from Buyer in connection with the transactions contemplated hereby.

     5.21 Disclaimers . EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE V , THE ACQUIRED ASSETS ARE SOLD “AS IS, WHERE IS” AND SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO SELLER, THE LIABILITIES, OPERATIONS OF THE ACQUIRED ASSETS OR THE TRANSFERRED BUSINESS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE V : SELLER EXPRESSLY DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES REGARDING LIABILITIES, OWNERSHIP, LEASE, MAINTENANCE, OR OPERATION OF THE ACQUIRED ASSETS AND THE TRANSFERRED BUSINESS, THE TITLE, CONDITION, VALUE OR QUALITY OF THE ACQUIRED ASSETS OR THE PROSPECTS (FINANCIAL AND OTHERWISE), RISKS AND OTHER INCIDENTS OF THE ACQUIRED ASSETS AND THE TRANSFERRED BUSINESS; AND SELLER SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, USAGE, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THE ACQUIRED ASSETS OR THE

TRANSFERRED BUSINESS, OR ANY PART THEREOF, OR AS TO THE WORKMANSHIP THEREOF, OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT OR AS TO THE PHYSICAL CONDITION THEREOF, OR WHETHER SELLER POSSESSES SUFFICIENT REAL PROPERTY OR PERSONAL PROPERTY TO OPERATE THE ACQUIRED ASSETS OR THE TRANSFERRED BUSINESS. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, SELLER FURTHER SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING THE ABSENCE OF HAZARDOUS SUBSTANCES OR LIABILITY OR POTENTIAL LIABILITY ARISING UNDER ENVIRONMENTAL LAWS WITH RESPECT TO THE ACQUIRED ASSETS OR THE TRANSFERRED BUSINESS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, SELLER EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES OF ANY KIND REGARDING THE CONDITION OF THE ACQUIRED ASSETS OR THE TRANSFERRED BUSINESS OR THE SUITABILITY OF THE ACQUIRED ASSETS AS A DISTRIBUTION FACILITY, AS APPLICABLE, AND NO SCHEDULE TO THIS AGREEMENT, NOR ANY OTHER MATERIAL OR INFORMATION PROVIDED, OR COMMUNICATION MADE, BY SELLER OR ITS REPRESENTATIVES SHALL CONSTITUTE OR CREATE SUCH REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, CONDITION, VALUE OR QUALITY OF THE ACQUIRED ASSETS OR THE TRANSFERRED BUSINESS.

     5.22 Acknowledgement . Seller acknowledges and agrees that the representations and warranties set forth in Article VI of this Agreement constitute the sole and exclusive representations and warranties of Buyer to Seller in connection with the transactions contemplated hereby and by the Related Agreements. Except for the representations and warranties expressly set forth in Article VI of this Agreement, Seller disclaims reliance on any representations or warranties, either express or implied, by or on behalf of Buyer or its Affiliates or Buyer’s Representatives.

ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer hereby represents and warrants to Seller as follows:

     6.1 Power and Authority . Buyer is a utility consumer services cooperative duly organized, validly existing and in good standing under the Laws of the Commonwealth of Virginia and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to have such power and authority, individually or in the aggregate, would not reasonably be expected to have a Buyer Material Adverse Effect.

     6.2 Authority . Buyer has full power and authority to execute and deliver this Agreement and the Related Agreements and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Related Agreements and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by the Board of Directors of Buyer and, except as set forth on Schedule 6.2 , no other corporate proceedings on the part of Buyer are necessary to authorize this Agreement and the Related Agreements or to consummate the transaction contemplated hereby or thereby.

This Agreement and the Related Agreements have been duly and validly executed and delivered by Buyer, and, assuming that this Agreement and the Related Agreements constitute valid and binding obligations of Seller, constitute valid and binding agreements of Buyer, enforceable against Buyer in accordance with their terms, subject to the Bankruptcy and Equity Exception.

     6.3 Consents and Approvals; No Violation .

          (a) Other than obtaining the consent set forth on Schedule 6.2 , the Buyer Required Regulatory Approvals and the Seller Required Regulatory Approvals, neither the execution and delivery of this Agreement and the Related Agreements by Buyer, the purchase by Buyer of the Acquired Assets or the assumption by Buyer of the Assumed Obligations pursuant to this Agreement nor the performance by Buyer under this Agreement or the Related Agreements will, except as would not reasonably be expected to have, individually or in the aggregate, a Buyer Material Adverse Effect: (i) conflict with or result in any breach of any provision of the Certificate of Incorporation or Bylaws (or other similar governing documents) of Buyer, (ii) require Buyer or its Affiliates to obtain any consent, approval, authorization or permit of, or require Buyer or its Affiliates to make any filing with or provide any notice to, any Governmental Entity except (x) where Buyer’s failure to obtain such consent, approval, authorization or permit, or to make such filing or notification, would not individually or in the aggregate, have a Buyer Material Adverse Effect, or (y) for those requirements that become applicable to Buyer as a result of the specific regulatory status of Seller (or any of its Affiliates) or as a result of any other facts that specifically relate to the business or activities in which Seller (or any of its Affiliates) is or propose to be engaged; (iii) result in a default (or give rise to any right of termination, cancellation or acceleration) under any Contract to which Buyer or any of Buyer’s Subsidiaries is a party or by which any of their respective assets may be bound, except for such defaults (or rights of termination, cancellation or acceleration) as to which requisite waivers or consents have been obtained or will have been obtained prior to Closing or that would not reasonably be expected to have, individually or in the aggregate, a Buyer Material Adverse Effect; or (iv) violate any Law or Order applicable to Buyer, or any of its assets, which violation, individually or in the aggregate would reasonably be expected to have a Buyer Material Adverse Effect.

          (b) Except for the consents and approvals listed in Schedule 6.3(b) (the “ Buyer Required Regulatory Approvals ”), no declaration, filing or registration with, or notice to, or authorization, consent or approval of any Governmental Entity is necessary for the consummation by Buyer (or any of its Affiliates) of the transactions contemplated hereby or by the Related Agreements, other than such declarations, filings, registrations, notices, authorizations, consents or approvals that, if not obtained or made, would not reasonably be expected to have, individually or in the aggregate a Buyer Material Adverse Effect.

     6.4 Availability of Funds . Buyer has available or has received a binding written commitment from a creditworthy financial institution, a true and correct copy of which has been provided to Seller, as of the date hereof, and Buyer will have available on the Closing Date sufficient funds to enable Buyer to pay the Purchase Price on the terms and conditions of this Agreement, any amounts due after the Closing Date pursuant to Section 3.2(c) , and the purchase price under the Sister Purchase Agreement if Buyer elects or is obligated to consummate the transactions contemplated in the Sister Purchase Agreement pursuant to Section

7.20 hereof. Buyer acknowledges that its obligations hereunder (including Section 7.20 ) are not subject to any conditions regarding Buyer’s ability to obtain financing for the consummation of the transactions contemplated hereby.

     6.5 Litigation; Regulatory Approvals . There are no claims, actions, proceedings or investigations pending or, to the Knowledge of Buyer, threatened against Buyer or any of its Affiliates before any Governmental Entity, which question, challenge the validity of, or could be reasonably expected to have, individually or in the aggregate, a Buyer Material Adverse Effect. As of the date of this Agreement, Buyer is not aware of any reason relating to it or its Affiliates that all Buyer Required Regulatory Approvals will not be obtained.

     6.6 Qualified Buyer . Buyer is qualified to obtain any Permits necessary for Buyer to own and operate the Acquired Assets and the Transferred Business as of the Closing.

     6.7 WARN Act . Buyer does not intend to engage in a “Plant Closing” or “Mass Layoff” as such terms are defined in the WARN Act within ninety days of the Closing Date.

     6.8 Fees and Commissions . There is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of Buyer or any Subsidiary or Affiliate of Buyer, who might be entitled to any fee or commission from Seller in connection with the transactions contemplated hereby.

     6.9 Inspections . Buyer is knowledgeable about the usual and customary practices of companies engaged in businesses similar to the Transferred Business. Buyer acknowledges and agrees that the representations and warranties set forth in Article V of this Agreement constitute the sole and exclusive representations and warranties of Seller to Buyer in connection with the transactions contemplated hereby and by the Related Agreements. Except for the representations and warranties expressly set forth in Article V of this Agreement, Buyer disclaims reliance on any representations or warranties, either express or implied, by or on behalf of Seller or its Affiliates or Seller’s Representatives.

ARTICLE VII
COVENANTS OF THE PARTIES

     7.1 Conduct of Business Prior to the Closing . Except as described in Schedule 7.1 , as required by applicable Laws or by a Governmental Entity or to the extent Buyer otherwise consents in writing (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement to the Effective Time, Seller will operate the Transferred Business in the usual, regular and ordinary course consistent with Good Utility Practices and past practice and shall use all commercially reasonable efforts to preserve intact the Transferred Business, keep available the services of its Employees and agents and endeavor to preserve the goodwill and relationships with customers, suppliers and others having business dealings with the Transferred Business. Without limiting the generality of the foregoing, and, except as contemplated in this Agreement or as described on Schedule 7.1 or as required under applicable Laws or by any Governmental Entity, until the Effective Time, without

the prior written consent of Buyer (such consent not to be unreasonably withheld, conditioned or delayed), Seller will not:

          (a) except for Permitted Encumbrances and other Encumbrances that will be discharged at or prior to Closing, create, incur, assume or suffer to exist any Encumbrance on an Acquired Asset;

          (b) sell, lease (as lessor), transfer or otherwise dispose of any of the Acquired Assets, other than immaterial assets and assets (including Inventories) used, consumed or replaced in the ordinary course of business consistent with Good Utility Practices;

          (c) modify, amend or voluntarily terminate or permit to lapse, prior to the respective expiration date of any of the Transferred Contracts, Shared Contracts, Transferred Easements or any of the Permits with respect to such Acquired Assets in any material respect, other than (i) in the ordinary course of business, to the extent consistent with the past practices of Seller or Good Utility Practices, (ii) with cause, to the extent consistent with past practices of Seller or Good Utility Practices, or (iii) as may be required in connection with transferring Seller’s rights or obligations thereunder to Buyer pursuant to this Agreement; provided that Seller may take any action otherwise prohibited by this subsection (c) with respect to Shared Contracts as long as such action does not discriminate against the Transferred Business or Transferred Territory as compared to Sellers other businesses or service territories of Seller or its Affiliates.

          (d) except as otherwise required by the terms of the Collective Bargaining Agreement, (i) solicit, hire or transfer any Employees; provided , however , that Seller and its Affiliates may hire or transfer any Employees who apply for positions offered by Seller and its Affiliates in the ordinary course of business consistent with past practices, (ii)  increase salaries or wages of Employees prior to the Closing, other than (A) with respect to non-union Employees, wage adjustments up to the unadjusted Consumer Price Index for the Washington – Baltimore metro area “Summary Data from the Consumer Price Index” published by the Bureau of Labor Statistics, U.S. Department of Labor, For All Urban Consumer for All items, (B) with respect to any union Employee, any wage adjustment contemplated in the Collective Bargaining Agreement, or (C) wage increases for workers temporarily assigned but whose wages return to prior levels on or prior to the Effective Time, (iii) take any action prior to the Closing to affect a material change in the Collective Bargaining Agreement, provided , however , that Seller may engage in good faith bargaining concerning the effects of this Agreement on Employees covered by the Collective Bargaining Agreement, or (iv) take any action prior to the Closing to materially increase the aggregate benefits payable to the Employees (considered as a group);

          (e) (i) fail to make capital expenditures previously budgeted for 2009 or 2010 in accordance with Schedule 7.1(e) , except for modification and revisions to such expenditures made in the ordinary course of business consistent with Good Utility Practices and for immaterial variances in the periods in which such expenditures are made, or (ii) make other capital expenditures except (A) as required by applicable Laws or Good Utility Practices and (B) for capital expenditures to repair or replace facilities destroyed or damaged due to casualty or accident (whether or not covered by insurance);

          (f) Except as otherwise permitted or contemplated by this Section 7.1 , enter into any Contract primarily relating to the Transferred Business that provides for future expenditures by Seller of $250,000 or more per annum or $500,000 or more in the aggregate over the term of such Contract, unless terminable without penalty or premium upon no more than 60-day notice;

          (g) make material changes to management personnel relating to the Transferred Business without prior consultation with Buyer;

          (h) make any material change in the level of Inventories customarily maintained by Seller with respect to the Transferred Business, other than in the ordinary course of business and consistent with Good Utility Practices;

          (i) fail to maintain the VA Distribution Business in a state of repairs and conditions consistent with the requirements and normal conduct of Seller’s business and Good Utility Practices;

          (j) consent to any material modifications of Transferred Contracts or material changes in courses of dealing with the Virginia Commission in respect of the operations of the Transferred Business or the Acquired Assets, except as required by applicable Law to obtain or renew Transferable Permits or agreements in the ordinary course of business consistent with Seller’s past practices and Good Utility Practices;

          (k) fail to maintain the insurance policies set forth on Schedule 5.9 , or policies comparable thereto, with respect to the Acquired Assets with financially responsible insurance companies (or if applicable, self insure), insurance in such amounts and against such risks and losses as are consistent with past practices and customary for companies of the size and financial condition of Seller that are engaged in businesses similar to the Seller’s VA Distribution Business;

          (l) other than in the ordinary course of business, amend in any material respect, breach in any material respect, terminate or allow to lapse or become subject to default in any material respect or subject to termination, any Transferable Permit material to the Transferred Business other than as required by applicable Law;

          (m) except as required by Law and except for non-material filings in the ordinary course of business consistent with past practice or those filings listed on Schedule 7.1(m) , (A) implement any changes in Seller’s rates or charges (other than automatic cost pass-through rate adjustment clauses), standards of service or accounting, in any such case, as relates to the Transferred Business or execute any Contract with respect thereto (other than as otherwise permitted under this Agreement), without consulting with Buyer prior to implementing any such changes or executing any such Contract, or (B) settle any rate proceeding reducing revenues or establishing a rate moratorium or phasing-in rate increases (other than automatic cost pass-through rate adjustment clauses) with respect to the Transferred Business after the Closing Date;

          (n) with respect to the Transferred Business, change, in any material respect, its accounting methods or practices (except in accordance with changes in GAAP), credit

practices, collection policies, or investment, financial reporting, or Inventory practices or policies or the manner in which the books and records of the Transferred Business are maintained;

          (o) accept a letter of credit, surety bond or similar instrument as security for the performance of any obligation which may be completed by Buyer unless such letter of credit, surety bond or similar instrument permits Buyer to draw thereunder following the Effective Time; or

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