Termination Agreement

Exhibit 10(b)

Execution Version

Termination
Agreement



between



ProGas Limited



and



Northeast Energy Associates,
A Limited Partnership



dated January 14, 2005

TERMINATION AGREEMENT

THIS TERMINATION AGREEMENT (the " Agreement ") is made this 14th day of January, 2005, (the " Effective Date ") by and between PROGAS LIMITED , a Canada corporation (" ProGas "), and NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP , a Massachusetts limited partnership (" NEA ") (each a " Party ", and collectively the " Parties ").

WITNESSETH:

WHEREAS, ProGas and NEA are parties to a contract pursuant to which ProGas sells natural gas to NEA for consumption at NEA's 300 MW natural gas-fired electrical and steam generation facility located in Bellingham, Massachusetts (the " Facility ");

WHEREAS, ProGas and NEA are parties to a Gas Purchase Contract, dated as of May 12, 1988, as amended by an Amending Agreement, dated as of April 17, 1989, and by a Second Amending Agreement, dated as of June 23, 1989, and by an Amending Agreement, dated as of November 1, 1991, and by an Amending Agreement and a Letter Agreement, both dated as of July 30, 1993, (collectively, the " NEA Base Contract "), as further amended by an Amending Agreement dated as of March 1, 2003 (the " Amending Agreement "), as further amended by a Partial Termination Agreement dated January 6, 2004, as amended, (the " Partial Termination Agreement ") (the NEA Base Contract, as amended by the Amending Agreement and the Partial Termination Agreement, the " Contract ");

WHEREAS, the Contract governs the purchase by NEA and sale by ProGas of 12,507 MMBtus/day of natural gas;

WHEREAS, pursuant to the terms and conditions set forth herein, the Parties desire to terminate their respective obligations under the Contract, including, without limiting the foregoing, any obligation to buy and sell the Daily Contract Quantity (as defined in the Contract and hereinafter referred to as the " Daily Contract Quantity ") equal to 12,507 MMBtus/day;

WHEREAS, the Parties agree that NEA will pay to ProGas or ProGas will pay to NEA, as appropriate, a Termination Payment (as hereinafter defined) in consideration for the termination of the Contract;

WHEREAS, pursuant to an agreement (the " Firm Service Agreement ") with TCPL (as hereinafter defined), ProGas has obtained firm gas transportation service from TCPL for the natural gas to be supplied to NEA under the Contract, and will incur costs in connection with such gas transportation arrangements in the event that the Contract is terminated;

WHEREAS, pursuant to the ProGas/TransCanada NE Assignment Agreement dated on or about July 30, 1993, by and between ProGas and TCPL (the " Assignment Agreement "), ProGas collaterally assigned to TCPL certain payments due to ProGas from NEA under the Contract as security for payment of amounts due to TCPL under the Firm Service Agreement;

WHEREAS, pursuant to the Northeast Notice and Consent dated as of July 30, 1993, by and among ProGas, TCPL and NEA, NEA consented to such collateral assignment and other terms and conditions under the Assignment Agreement;

WHEREAS, pursuant to Section 6.3 of the Assignment Agreement, ProGas may not amend, modify or terminate the Contract without the prior written consent of TCPL;

WHEREAS, pursuant to the Bond Indentures (as hereinafter defined), NEA is prohibited from amending, modifying or terminating the Contract unless certain requirements described therein have been satisfied; and

WHEREAS, the Parties have agreed to a certain calculation methodology for determining the amount of the Termination Payment, which will be based on certain prevailing market conditions on the Termination Payment Calculation Date (as hereinafter defined).

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows

1. DEFINITIONS; TERM; APPENDICES

In addition to terms defined in the recitals hereto, the following terms shall have the meanings set forth below.

1.1 Defined Terms .

" Affected Producers " means the producers who have entered into long-term gas purchase agreements with ProGas and who are entitled to cast ballots approving or disapproving the pricing under the Replacement Resale Arrangement.

" Annual After Tax Discount Rate " means the agreed-upon proxy for ProGas' after tax discount rate, equal to 6.98% and used for the calculation of the NYMEX Reference Price and NYMEX Final Price

" Approvals " has the meaning set forth in Section 13(f).

" Base Termination Payment " has the meaning set forth in Section 3.2.

" Bond Indentures " means, collectively, the Trust Indenture dated as of November 15, 1994 among ESI Tractebel Funding Corp. (as successor to IEC Funding Corp.), as Issuer, NEA, NJEA and State Street Bank and Trust Company, as Trustee, as amended to date, and the Indenture dated as of February 19, 1998 by and among ESI Tractebel Acquisition Corp., as Issuer, Northeast Energy, L.P. and State Street Bank and Trust, as Trustee and Collateral Agent, as amended to date, pursuant to which senior notes and subordinated bonds, respectively, were issued to finance, in part, the Facility, together with any successor loan and security documents resulting from a refinancing, defeasance or exchange of such senior notes or subordinated bonds.

" Broker Quotes " means the written Mid-Market price quotations for monthly NYMEX Henry Hub Gas Prices obtained from OTC Brokers.

" Business Day " means Monday through Friday, excluding any day on which banks in either Calgary, Alberta (Canada) or New York, New York (U.S.A.) are closed for business.

" Calculation Period " means the period from November 1, 2005, through October 31, 2013.

" Calendar Year Swap Spread " has the meaning set forth in Section 3.4(a)(ii).

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

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

" Corporate Approvals " has the meaning set forth in Section 2.6(e).

" Deviation Percentage " has the meaning set forth in Section 3.4(b).

" Effective Date " has the meaning set forth in the Preamble hereto.

" Eligible Broker Quotes " has the meaning set forth in Section 3.4(a)(ii).

" Expiration Date " has the meaning set forth in Section 2.2.

" Indemnified Person " has the meaning set forth in Section 17(a).

" Mid-Market " means the average of the "bid" and "offer" prices for natural gas. If bid and offer pricing is not simultaneously available, then for the purposes of this Agreement, the Mid-Market shall mean the "settlement" price published or quoted by NYMEX on the day that such pricing was sought, or the price most reasonably equivalent thereto.

" NEA Payment Cap " has the meaning set forth in Section 3.2(a).

" NEA PPA Restructuring " has the meaning set forth in Section 2.4(c)

" NEA Termination Payment " means the amount to be paid by NEA to ProGas, to the extent required pursuant to Section 3.2(a), in consideration for the termination of the Contract on the Termination Date, the spreadsheet showing the final calculations of which shall be attached hereto on the Closing Date as Appendix C .

" NYMEX " means the New York Mercantile Exchange, Inc.

" NYMEX Final Price " means the average of the NYMEX Henry Hub Gas Prices for each month in the Calculation Period calculated as of the Termination Payment Calculation Date using the average of (1) the relevant prices for such date, (2) the relevant prices for the Business Day immediately preceding such date, and (3) the relevant prices for the date that is two (2) Business Days prior to such date. An example of this calculation is shown on Appendix A.

" NYMEX Henry Hub Gas Prices " means the gas futures contract price for natural gas delivered at Henry Hub in U.S. Dollars per MMBtu, for each month from November 1, 2005 up to and including the year 2013 as determined in accordance with Section 3.4.

" NYMEX Price Differential " means the NYMEX Final Price minus the NYMEX Reference Price. The NYMEX Price Differential may be a negative number. An example of this calculation is shown on Appendix A.

" NYMEX Reference Price " means the average of the NYMEX Henry Hub Gas Prices for each month in the Calculation Period calculated as of October 7, 2004 and as calculated and shown on Appendix A as US$ 5.329/MMBtu.

" OTC Brokers " means the brokers listed on Appendix D and any other brokers agreed to in writing by the Parties for the purpose of providing Broker Quotes; provided , that any broker that is currently a counterparty to ProGas or NEA or who is in negotiations with ProGas or NEA to become a counterparty to ProGas or NEA respectively under any contract or other business arrangement or who for any other reason may not be a disinterested party for purposes of providing fair, arms-length, unbiased quotations under this Agreement shall not be an OTC Broker.

" Release " has the meaning set forth in Sections 2.5(f) and 2.6(h)

" Termination Date " has the meaning set forth in Section 2.1.

" Termination Payment " means either the NEA Termination Payment or the ProGas Termination Payment.

" Termination Payment Calculation Date " has the meaning set forth in Section 3.1(a).

" Producer Approval " means a Finding of Producer Support (as defined in the Alberta Natural Gas Marketing Act) issued by the Alberta Petroleum Marketing Commission pursuant to the Alberta Natural Gas Marketing Act which evidences the consent of the Affected Producers to the pricing under the Replacement Resale Arrangement.

" ProGas Termination Payment " means the amount to be paid by ProGas to NEA, to the extent required pursuant to Section 3.2(b), in consideration for the termination of the Contract on the Termination Date, the spreadsheet showing the final calculations of which shall be attached hereto on the Closing Date as Appendix C .

" ProGas Payment Cap " has the meaning set forth in Section 3.2(b).

" Published Values " means for any month the price for natural gas published by NYMEX in respect of that month on its website (www.nymex.com/jsp/markets/ng_fut_csf.jsp) in the table titled "Session Expanded Table" under the column "Most Recent Settle" on the day in which the value is sought, or if such website, table or column, as the case may be is discontinued or no longer available, the correlative information available on such website or on or through any successor or substantially equivalent information repository agreed to by the Parties.

" Replacement Resale Arrangement " means the resale arrangement or arrangements entered into or to be entered into by ProGas to resell gas volumes that would otherwise have been sold or made available to NEA under the Contract.

" Required Ballots " has the meaning set forth in Section 2.3(b).

" Swap Spread-Derived Price " has the meaning set forth in Section 3.4(a)(ii).

" Swap Spread-Derived Price Calculation " has the meaning set forth in Section 3.4(a)(ii).

" TCPL " means TransCanada PipeLines Limited, a Canada corporation and its successors and assigns.

" TCPL Consent " means the final and irrevocable consent of TCPL to the termination of the Contract required under the Assignment Agreement and obtained by ProGas pursuant to the terms hereof on terms and conditions reasonably acceptable to each of ProGas and NEA.

" Visible Market " means for any NYMEX Henry Hub Gas Price during any month, the Published Values or the Broker Quotes meeting the criteria set forth in Section 3.4(a)(ii).

1.2 Calculational Appendices .

(a) Appendices A and B to this Agreement set forth specific numerical values used to calculate various components of the Termination Payment and sample numerical values used to calculate a sample Termination Payment, which sample values shall be replaced with actual values (as of the Termination Payment Calculation Date) in order to calculate the actual Termination Payment, which shall be set forth on Appendix C. The Parties acknowledge and agree that the mathematical operations (addition, subtraction, multiplication and division) performed on the numerical values contained or to be contained in Appendices A through C in order to calculate the Termination Payment are embedded as functions in a Microsoft Excel spreadsheet, a copy of which has been provided to each Party's legal counsel.

(b) It is the intent of the Parties that the provisions of Articles 1 through 18 of this Agreement shall be construed consistently with Appendices A through C and sample calculations contained therein, and that together such provisions and appendices shall embody the agreement of the Parties with respect to the calculation of the Termination Payment.

2. TERMINATION; TERMINATION DATE; CONDITIONS PRECEDENT.

2.1 Termination of the Contract . Subject to the terms and conditions set forth below and provided that the Closing Date occurs on or prior to the Expiration Date the Parties agree that the Contract shall be terminated effective as of 9:59 a.m. (Eastern time) on November 1, 2005 (the " Termination Date "), and each Party agrees to deliver to the other a certificate acknowledging that the Release is effective as of the Termination Date. The delivery of such certificates shall not be a condition to the termination of the Contract or to the obligation of the Parties to make the Termination Payment pursuant to Section 3.1(a), herein.

2.2 Termination of Agreement . This Agreement shall be effective as of the Effective Date. If the Closing Date does not occur on or prior to March 31, 2005 (or such later date as extended pursuant to Section 3.1(a) or by mutual written agreement of the Parties) (the " Expiration Date "), this Agreement shall terminate effective 12:01 a.m. Eastern time on the first Business Day following the Expiration Date, unless this Agreement is terminated earlier pursuant to Section 2.3(c), 3.2(a) or Section 3.2(b). In the event of any such termination of this Agreement, the Contract shall continue unamended and unaffected by virtue of this Agreement; provided, however, such termination shall not release either Party from any claims by the other Party that it did not use commercially reasonable efforts in connection with its obligations under Sections 2.3 or 2.4 as applicable.

2.3 ProGas Covenants Pending Closing .

(a) Beginning on the Effective Date, ProGas shall use commercially reasonable efforts to obtain at its sole cost and expense, as promptly as practicable:

(i) the TCPL Consent, and

(ii) the Producer Approval.

(b) ProGas shall promptly and with due diligence following the Effective Date solicit in writing the consent of the Affected Producers to the pricing under the Replacement Resale Arrangement, and shall, provided it receives the requisite number of ballots with the requisite level of support, from such Affected Producers (the " Required Ballots "), petition the Alberta Petroleum Marketing Commission to issue, on an expedited basis, a Finding of Producer Support (as defined in the Alberta Natural Gas Marketing Act). ProGas shall provide NEA with periodic status reports as to its undertaking with respect to the TCPL Consent, the Required Ballots and the Producer Approval, and shall provide NEA with written notice within three (3) Business Days of receipt of each of the TCPL Consent and the Producer Approval; provided, however if ProGas notifies NEA in writing that ProGas has solicited the Affected Producers in writing but has determined that it has not received the Required Ballots and that Producer Approval cannot be obtained, then ProGas shall be released from its obligations under this Section 2.3(b) and shall have no liability for failure to obtain the Producer Approval. For the purposes of this Agreement, "Producer Approval" shall include a Finding of Producer Support.

(c) If ProGas has not obtained the Producer Approval by the later of (i) January 31, 2005, or (ii) the Business Day following the date on which NEA provides ProGas notice that the conditions precedent to the PPA Restructuring have been met, ProGas shall so notify NEA in writing of such fact, together with its best estimate of whether, and if applicable the date by which, it expects the Producer Approval to be obtained, and NEA shall have the right to terminate this Agreement within ten (10) days of such written notice by delivering a notice of termination of this Agreement to ProGas; provided, however, if ProGas has obtained the Required Ballots by January 31, 2005, and such Required Ballots are sufficient in ProGas' reasonable judgment to require the Alberta Petroleum Marketing Commission to issue a Finding of Producer Support, then ProGas shall have the right, but not the obligation, to irrevocably waive the condition precedent set forth in Section 2.5(d) by delivering to NEA written notice of such waiver, in which case NEA shall not have the right to terminate the Agreement pursuant to this Section 2.3(c). For the avoidance of doubt, if ProGas waives the condition precedent set forth in Section 2.5(d) in accordance with this section, and subsequent thereto, the Alberta Petroleum Marketing Commission fails to issue, refuses to issue or rescinds the issuance of a Finding of Producer Support, ProGas shall not be relieved from its obligation to consummate the transactions contemplated herein and shall bear all risk and costs associated therewi th.

(d) If NEA terminates this Agreement by delivery of a termination notice in accordance with Section 2.3(c), this Agreement shall terminate as of the date of such notice and be of no further force and effect. In the event of such termination, the Contract shall continue in full force and effect, unamended and unaffected by virtue of this Agreement; provided, however, such termination shall not release either Party from any claims by the other Party that it did not use commercially reasonable efforts in connection with its obligations under Sections 2.3 or 2.4 as applicable.

(e) ProGas covenants and agrees that once any of the TCPL Consent, the Required Ballots or the Producer Approval is obtained, ProGas shall not take or consent to the taking of any action to rescind, cancel or abrogate the effectiveness or finality of the TCPL Consent, the Required Ballots or the Producer Approval.

2.4 NEA Covenants Pending Closing .

(a) Beginning on the Effective Date, NEA shall use commercially reasonable efforts and due diligence to obtain, at NEA's sole cost and expense, as promptly as practicable, (a) the Corporate Approvals and (b) the NEA PPA Restructuring. NEA shall provide ProGas with periodic status reports as to NEA's undertaking with respect thereto.

(b) NEA covenants and agrees that once the NEA PPA Restructuring and the Corporate Approvals have been obtained in accordance with Section 2.4(a), NEA shall not take any action to rescind, cancel or abrogate the effectiveness or finality of the Corporate Approvals; provided, however, it is understood and agreed that the finality of the NEA PPA Restructuring shall be contingent upon receipt of the Corporate Approvals.

(c) Beginning on the Effective Date, NEA shall use commercially reasonable efforts and due diligence to consummate, at NEA's sole cost and expense, as promptly as practicable, the term restructuring of the four (4) power purchase agreements between NEA and certain utility subsidiaries of NSTAR Electric & Gas Corporation (" NSTAR ") (the " NEA PPA Restructuring ") on terms and conditions acceptable to NEA; provided however , if NEA notifies ProGas in writing that NEA has determined that the NEA PPA Restructuring cannot be consummated consistent with such acceptable terms and conditions, then NEA shall be released from any and all obligations under this Section 2.4(c) and shall have no liability hereunder to ProGas for failure to pursue a NEA PPA Restructuring.

2.5 Conditions Precedent to Obligations of ProGas . ProGas' obligation to effect the transactions set forth herein is subject to the satisfaction at or before the Closing Date of the following conditions (any of which ProGas may waive):

(a) Representations and Warranties . All of the representations and warranties of NEA in Section 14 shall be true and correct in all respects as though made on and as of the Closing Date (unless the incorrectness of such representations and warranties does not have a material adverse effect on the rights of ProGas), and NEA shall have delivered a certificate, duly executed by an authorized officer, with respect to such representations and warranties. NEA shall have performed, or caused to be performed, all of the agreements and covenants to be performed by it under this Agreement as of the Closing Date, unless the non-performance of such agreements and covenants does not have a material adverse effect on the rights of ProGas hereunder.

(b) No Legal Restraint . Neither Party shall be subject to any order, decree, injunction, or other legal restraint or prohibition of a court or agency of competent jurisdiction which enjoins, prohibits or materially interferes with the consummation of the closing on the Closing Date or the Reduction Amendment.

(c) TCPL Consent . The TCPL Consent shall have been obtained and remain in full force and effect.

(d) Producer Approval . ProGas shall have obtained the Producer Approval.

(e) Release . NEA shall have executed and delivered to ProGas a written release and waiver substantially in the form attached as Appendix E (the " Release ").

2.6 Conditions Precedent to Obligations of NEA . NEA's obligation to effect the transactions set forth herein is subject to the satisfaction at or before the Closing Date of the following conditions (any of which NEA may waive):

(a) Representations and Warranties . All of the representations and warranties of ProGas in Section 13 shall be true and correct in all respects as though made on and as of the Closing Date (unless the incorrectness of such representations and warranties does not have a material adverse effect on the rights of NEA), and ProGas shall have delivered a certificate, duly executed by an authorized officer, with respect to such representations and warranties. ProGas shall have performed, or caused to be performed, all of the agreements and covenants to be performed by it under this Agreement as of the Closing Date, unless the non-performance of such agreements and covenants does not have a material adverse effect on the rights of NEA hereunder.

(b) No Legal Restraint . Neither Party shall be subject to any order, decree, injunction, or other legal restraint or prohibition of a court or agency of competent jurisdiction which enjoins, prohibits or materially interferes with the consummation of the closing on the Closing Date or the Reduction Amendment.

(c) TCPL Consent . The TCPL Consent shall have been obtained and remain in full force and effect.

(d) NEA PPA Restructuring . The closing for the NEA PPA Restructuring and the transactions contemplated therein shall have occurred.

(e) NEA Corporate Approvals . All partnership and corporate approvals of (i) NEA and its general partner and limited partners, (ii) FPL Group, Inc., FPL Energy LLC and/or FPL Group Capital Inc. (as the case may be) and (iii) Tractebel Power Inc., Tractebel North America Inc., Tractebel Electricity and Gas International S.A., and Suez-Tractebel S.A. (as the case may be) that are required for the consummation of the transactions contemplated herein or hereby, including without limitation, the termination of the Contract, the payment of the NEA Termination Payment and the consummation of an Indenture Compliance Arrangement, shall have been obtained (collectively, the " Corporate Approvals ").

(f) Producer Approval . The Producer Approval shall have been obtained (except to the extent waived by ProGas pursuant to Section 2.3(c)).

(g) Release. ProGas shall have executed and delivered to NEA a written release and waiver substantially in the form attached as Appendix E (the " Release ").

3. CALCULATION OF TERMINATION PAYMENT; TERMINATION PAYMENT DATE.

3.1 Closing Date and Termination Payment Calculation Date .

(a) Within one (1) Business Day of the last of the following events to occur or be waived by the Party entitled to the benefit of such condition precedent: (i) NEA's determining, in its sole discretion, that the conditions precedent to the PPA Restructuring have been met, (ii) NEA's obtaining the Corporate Approvals, (iii) receipt by ProGas of the Producer Approval, and (iv) receipt of an executed copy of the TCPL Consent, NEA shall deliver to ProGas a written notice (the " Closing Notice ") in accordance with Section 5 stating that the foregoing conditions precedent (those listed in clauses (i) through (v)) have been satisfied (or been waived by the Party entitled to the benefit of such condition precedent). The calculation of the NYMEX Final Price and the calculation of the Termination Payment by ProGas in accordance with Section 3.2 shall occur on the Business Day after NEA delivers the Closing Notice (the " Termination Payment Calculation Date "). The date upon which: (i) the conditions precedent set forth in Sections 2.5 and 2.6 have been satisfied, and, (ii) a final Termination Payment has been determined in accordance with Sections 3.2 and 3.4 and has been agreed to by ProGas and NEA or as otherwise determined in accordance with Section 3.2(a) or (b), shall be the closing date (or as otherwise mutually agreed to by the Parties) (the " Closing Date "). On the Termination Date, the Termination Payment shall be paid in accordance with Section 3.5 and the Parties shall execute and deliver the Release certificate as contemplated in Section 2.1.

(b) The Parties acknowledge and agree that the Closing Date will occur prior to the Termination Date and that nothing in this Agreement shall modify, relieve or excuse ProGas' or NEA's respective obligations to deliver, receive and pay for, the full Daily Contract Quantity of 12,507 MMBtus/day under the Contract through 9:59 a.m. (Eastern time) on the day following the Termination Date.

3.2 Calculation of Termination Payment . The " Base Termination Payment " shall be equal to (1) negative nine million five hundred thousand U.S. dollars (-US$9,500,000) plus (2) the product of negative twenty-eight million two hundred thousand U.S. dollars (-US$28,200,000) times the NYMEX Price Differential. An example of this calculation is shown on Appendix B .

(a) NEA shall have no obligation to make an NEA Termination Payment to ProGas and, as such, the NEA Payment Cap is zero U.S. dollars (US$0) (the " NEA Payment Cap "); provided, however, if the Base Termination Payment is a positive number, then NEA may elect to pay to ProGas the NEA Termination Payment, which shall be an amount equal to the Base Termination Payment. If the Base Termination Payment exceeds the NEA Payment Cap, then:

(1) ProGas shall notify NEA, concurrently with providing documentation of its calculation of the amounts in Section 3.2(a) above, as to whether ProGas elects to accept payment of the NEA Termination Payment in the amount of the NEA Payment Cap, or

(2) If ProGas' notice provided for in Section 3.2(a)(1) states that ProGas declines to accept the election described in Section 3.2(a)(1), then within one (1) Business Day of receipt of such notice, NEA shall notify ProGas as to whether NEA agrees to waive the NEA Payment Cap and pay to ProGas the NEA Termination Payment in the amount of the Base Termination Payment.

If ProGas declines to accept its election under Section 3.2(a)(1) and NEA declines to exercise its election under Section 3.2(a)(2), then the Parties shall enter good-faith negotiations, for a period not to exceed two (2) Business Days from the date NEA declines to exercise its waiver provided for in Section 3.2(a)2, during which time the Parties shall seek to arrive at a mutually acceptable NEA Termination Payment. Notwithstanding the Parties' agreement to negotiate in good faith, NEA shall not be obligated to make any NEA Termination Payment exceeding the NEA Payment Cap unless NEA agrees to make such a payment in its sole discretion. If the Parties' good faith negotiations do not result in a mutually acceptable NEA Termination Payment