CENTRAL HUDSON GAS & ELECTRIC CORP
STOCK PURCHASE AGREEMENT
<DOCUMENT>
<TYPE>EX-10.(I)69
<SEQUENCE>5
<FILENAME>c23155_ex10-i69.txt
<DESCRIPTION>STOCK PURCHASE AGREEMENT
<TEXT>


                                                               EXHIBIT (10)(i)69

                            STOCK PURCHASE AGREEMENT

                                 BY AND BETWEEN


                          WPS POWER DEVELOPMENT, INC.,
                            A WISCONSIN CORPORATION,
                                  AS THE BUYER,


                                       AND


                      CENTRAL HUDSON ENERGY SERVICES, INC.
                             A NEW YORK CORPORATION,
                               AS THE STOCKHOLDER



                                DECEMBER 21, 2001

<PAGE>


                                TABLE OF CONTENTS

                                                                           PAGES

1.    DEFINITIONS.1
2.    SALE AND PURCHASE OF SHARES..............................................1
      2.01     Sale and Purchase of Shares.....................................1
      2.02     Purchase Price..................................................1
      2.03     Purchase Price Adjustment.......................................2
3.    ADDITIONAL UNDERTAKINGS AND COVENANTS....................................3
      3.01     Consents and Approvals..........................................3
      3.02     Access; Investigations by the Buyer.............................3
      3.03     Operation of Business of the Company............................4
      3.04     Public Announcements............................................5
      3.05     Employees.......................................................5
      3.06     Subsequent Events...............................................6
      3.07     Access to Records...............................................6
      3.08     Intercompany Accounts...........................................6
4.    REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER........................6
      4.01     Organization and Standing.......................................6
      4.02     Subsidiaries....................................................7
      4.03     Articles of Incorporation and Bylaws............................7
      4.04     Capitalization..................................................7
      4.05     Directors, Officers and Employees...............................8
      4.06     Financial Statements............................................8
      4.07     No Liabilities..................................................9
      4.08     Accounts Receivable.............................................9
      4.09     Taxes...........................................................9
      4.10     Conduct of Business; Absence of Material Adverse Effect........11
      4.11     Real Property..................................................12
      4.12     Assets.........................................................12
      4.13     Insurance......................................................13
      4.14     Intellectual Property..........................................13
      4.15     Debt Instruments...............................................14
      4.16     Leases.........................................................14
      4.17     Other Agreements...............................................15
      4.18     Books and Records..............................................16
      4.19     Litigation; Disputes...........................................16
      4.20     Labor Relations................................................16
      4.21     Benefit Plans..................................................17
      4.22     Environmental..................................................19
      4.23     Transactions with Related Parties..............................20
      4.24     Restrictions and Consents......................................21
      4.25     Authorization..................................................21
      4.26     Legal Compliance...............................................22

<PAGE>


      4.27     Binding Obligation.............................................22
      4.28     Title to Capital Stock.........................................22
      4.29     Authority and Capacity.........................................22
      4.30     Absence of Violation...........................................23
      4.31     Transfer of Title..............................................23
      4.32     Holding Company Act and EWG Status.............................23
      4.33     Market-Based Rates.............................................23
      4.34     NYISO..........................................................23
      4.35     Generating Facilities Information..............................24
      4.36     Emissions Allowances...........................................24
5.    REPRESENTATIONS AND WARRANTIES OF THE BUYER.............................24
      5.01     Organization and Standing......................................24
      5.02     Authorization..................................................24
      5.03     Binding Obligation.............................................24
      5.04     No Registration Under the Securities Act.......................25
      5.05     Acquisition for Investment.....................................25
      5.06     Evaluation of Merits and Risks of Investment...................25
      5.07     Consents.......................................................25
6.    COVENANTS OF THE BUYER..................................................26
      6.01     Maintenance of Plans...........................................26
      6.02     Environmental Liabilities and Site Assessments.................26
7.    COVENANTS OF THE STOCKHOLDER............................................26
      7.01     Severance......................................................26
      7.02     Environmental Matters..........................................27
      7.03     Closing Period Operations......................................27
      7.04     Transition Services............................................27
      7.05     Employees......................................................28
      7.06     Voltage Support Service........................................28
8.    CONDITIONS PRECEDENT TO OBLIGATIONS OF THE STOCKHOLDER..................28
      8.01     Representations and Warranties.................................28
      8.02     Performance....................................................29
      8.03     Buyer's Certificate............................................29
      8.04     Documents at Closing...........................................29
      8.05     Legal Opinion..................................................29
      8.06     Consents and Approvals.........................................29
9.    CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER........................29
      9.01     Representations and Warranties.................................29
      9.02     Performance....................................................30
      9.03     Absence of Adverse Changes.....................................30
      9.04     Legal Proceedings..............................................30
      9.05     Documents at Closing...........................................30
      9.06     Officer Certificate............................................30
      9.07     Consents.......................................................30
      9.08     Resignation of Directors.......................................30

                                      -ii-
<PAGE>


      9.09     Legal Opinion..................................................31
      9.10     Consents and Approvals.........................................31
      9.11     FIRPTA Statement...............................................31
      9.12     Real Estate....................................................31
      9.13     Reliance Letter................................................31
      9.14     Insurance......................................................32
10.   CLOSING ................................................................32
      10.01    Closing of Sale and Purchase...................................32
      10.02    Deliveries by the Stockholder..................................32
      10.03    Deliveries by the Buyer........................................34
11.   SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION; REMEDIES..................34
      11.01    Survival of Representations....................................34
      11.02    Agreement of Stockholder to Indemnify..........................35
      11.03    Agreement of the Buyer to Indemnify............................36
      11.04    Shared Environmental Costs.....................................36
      11.05    Conditions of Indemnification..................................36
      11.06    Remedies Cumulative............................................38
12.   TAX MATTERS ............................................................38
      12.01    Section 338(h)(10) Election....................................38
      12.02    Allocation of Purchase Price...................................38
      12.03    Tax Returns and Payments.......................................39
      12.04    Cooperation on Tax Matters.....................................40
      12.05    Certain Taxes..................................................40
      12.06    Tax Sharing Agreements.........................................41
      12.07    Contests.......................................................41
      12.08    Disputes.......................................................42
13.   TERMINATION ............................................................42
      13.01    Termination....................................................42
      13.02    Effect of Termination..........................................43
14.   MISCELLANEOUS...........................................................43
      14.01    Additional Actions and Documents...............................43
      14.02    Brokers........................................................43
      14.03    Expenses.......................................................44
      14.04    Assignment.....................................................44
      14.05    Entire Agreement; Amendment....................................44
      14.06    Waiver.........................................................45
      14.07    Consent to Jurisdiction........................................45
      14.08    Severability...................................................45
      14.09    Governing Law..................................................45
      14.10    Notices........................................................46
      14.11    Headings.......................................................47
      14.12    Execution in Counterparts......................................47
      14.13    Limitation on Benefits.........................................47
      14.14    Binding Effect.................................................48

                                     -iii-
<PAGE>


                                    EXHIBITS


EXHIBIT A - Definitions
EXHIBIT B - Guaranty of Stockholder Guarantor

<PAGE>


                          LIST OF SCHEDULES COMPRISING
                               DISCLOSURE SCHEDULE



--------------------------------- ----------------------------------------------
SCHEDULE:                                            TITLE:
--------------------------------- ----------------------------------------------
2.03(a)                           Purchase Price Adjustment
--------------------------------- ----------------------------------------------
3.01(b)                           Consents and Approvals
--------------------------------- ----------------------------------------------
3.03(b)(xii)                      Operation of Business of the Company
--------------------------------- ----------------------------------------------
4.02                              Subsidiaries
--------------------------------- ----------------------------------------------
4.03                              Certificates of Incorporation and Bylaws
--------------------------------- ----------------------------------------------
4.04(b)                           Capitalization
--------------------------------- ----------------------------------------------
4.05                              Directors, Officers and Employees
--------------------------------- ----------------------------------------------
4.06                              Financial Statements
--------------------------------- ----------------------------------------------
4.07                              No Liabilities
--------------------------------- ----------------------------------------------
4.08                              Accounts Receivable
--------------------------------- ----------------------------------------------
4.09(a), (c), (e), (f)            Taxes
--------------------------------- ----------------------------------------------
                                  Conduct of Business;
4.10(a), (d)                      Absence of Material Adverse Changes
--------------------------------- ----------------------------------------------
4.11(a), (b)                      Real Property
--------------------------------- ----------------------------------------------
4.12(a), (c)                      Assets
--------------------------------- ----------------------------------------------
4.13                              Insurance
--------------------------------- ----------------------------------------------
4.14                              Intellectual Property
--------------------------------- ----------------------------------------------
4.15                              Debt Instruments
--------------------------------- ----------------------------------------------
4.16                              Leases
--------------------------------- ----------------------------------------------
4.17(a), (b), (c)                 Other Agreements
--------------------------------- ----------------------------------------------
4.18                              Books and Records
--------------------------------- ----------------------------------------------
4.19(a), (b)                      Litigation; Disputes
--------------------------------- ----------------------------------------------
4.20                              Labor Relations
--------------------------------- ----------------------------------------------
4.21(a), (f), (h)                 Pension and Benefit Plans
--------------------------------- ----------------------------------------------
4.22(a), (b), (c), (f)            Environmental
--------------------------------- ----------------------------------------------
4.23 (a), (b)                     Transactions with Related Parties
--------------------------------- ----------------------------------------------
4.24 (a), (b), (c)                Restrictions and Consents
--------------------------------- ----------------------------------------------
4.25                              Authorizations
--------------------------------- ----------------------------------------------
4.30                              Absence of Violation
--------------------------------- ----------------------------------------------
4.35                              Generating Facility Information
--------------------------------- ----------------------------------------------
5.02                              Authorization
--------------------------------- ----------------------------------------------
5.07                              Consents
--------------------------------- ----------------------------------------------
7.02                              Environmental Matters
--------------------------------- ----------------------------------------------
14.02(a)                          Brokers
--------------------------------- ----------------------------------------------

<PAGE>


                            STOCK PURCHASE AGREEMENT


              This STOCK  PURCHASE  AGREEMENT  (this  "PURCHASE  AGREEMENT")  is
entered  into as of December  21,  2001,  by and between WPS POWER  DEVELOPMENT,
INC., a Wisconsin  corporation (the "BUYER") and CENTRAL HUDSON ENERGY SERVICES,
INC., a New York corporation (the "STOCKHOLDER").

              WHEREAS,  the  Stockholder  owns all of the issued and outstanding
shares of capital stock  (collectively,  the "SHARES") of CH Resources,  Inc., a
New York corporation (the "COMPANY"); and

              WHEREAS,  the Stockholder desires to sell and the Buyer desires to
purchase,  all of the  Shares at the  price  and upon the  terms and  conditions
hereinafter set forth.

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


1.     DEFINITIONS

       For all purposes of this Purchase  Agreement,  certain  capitalized terms
specified in EXHIBIT A shall have the meanings in this Purchase Agreement as are
ascribed to them in EXHIBIT A, except as  otherwise  expressly  provided in this
Purchase Agreement.


2.     SALE AND PURCHASE OF SHARES


       2.01   SALE AND PURCHASE OF SHARES

              On the basis of the  representations,  warranties  and  agreements
contained  herein,   and  subject  to  the  terms  and  conditions  hereof,  the
Stockholder  agrees to sell to the Buyer,  and the Buyer agrees to purchase from
the  Stockholder,  all of the Shares owned by the  Stockholder  for the purchase
price specified in SECTION 2.02.


       2.02   PURCHASE PRICE

              The  aggregate  purchase  price  for all of the  Shares  shall  be
Fifty-Seven   Million  One  Hundred  Fifty  Thousand  Dollars  $57,150,000  (the
"PURCHASE  PRICE")  payable  to the  Stockholder  on the  Closing  Date  by wire
transfer of immediately  available funds in accordance with written instructions
of the Stockholder  provided to the Buyer at least one (1) business day prior to
the Closing Date.

<PAGE>


       2.03   PURCHASE PRICE ADJUSTMENT

              (a)    The Purchase  Price will be adjusted  following  Closing to
compensate  for (i) any excess or deficiency as of the Closing Date with respect
to (A) the amount  reflected on the  September 30, 2001  unaudited  consolidated
balance  sheet of the Company for current  assets (less the amount of $1,664,400
attributable to the current  portion of the  Transmission  Congestion  Contracts
("TCCS") as of  September  30, 2001) less  current  liabilities  (except for the
items  treated  separately  in clause  (B) below) and (B) except as set forth in
this  Section  2.03(a),  the  book  value of  fuels,  materials,  supplies,  and
inventories on site at Closing;  (ii) the capital  expenditures set forth in the
Disclosure  Schedule;   (iii)  additional  capital  expenditures  not  exceeding
$150,000 in the aggregate,  and such further additional capital  expenditures in
excess of $150,000  as shall be  approved in writing by the Buyer;  and (iv) any
increase  or  reduction  in the  Purchase  Price as  determined  pursuant to the
Closing Date Purchase Price Adjustment set forth in Schedule 2.03(a).  The Buyer
shall be  responsible  (as an addition to the Purchase  Price) for the foregoing
capital  expenditures,  but only to the  extent  money  has been  expended  or a
liability has been incurred by the Company  during the period from September 30,
2001 to the Closing Date. For purposes of this Section 2.03(a),  inventory value
subject to  adjustment  includes  (i) fuel and  inventory  of  $1,166,427  as of
September 30, 2001,  and (ii) GP Mate inventory of $1,563,907 as of November 21,
2001,  and  excludes  the  Siemens  spare  parts  inventory  as set forth in the
Disclosure Schedule, as to which no adjustment shall be made.

              (b)    Stockholder  shall  provide  a  preliminary   statement  of
Purchase Price  adjustments at least thirty (30) days prior to the Closing Date.
Stockholder  shall provide a final statement of Purchase Price  adjustments (the
"ADJUSTMENT  STATEMENT")  to Buyer within five (5) business  days  following the
Closing Date.

              (c)    The  values  or  amounts  for each  item  reflected  on the
Adjustment  Statement  shall be binding  upon the Buyer,  unless the Buyer gives
written notice within thirty (30) days after receipt  thereof,  of  disagreement
with any of the values or amounts shown on the Adjustment Statement,  specifying
as to each  such  item in  reasonable  detail,  the  nature  and  extent of such
disagreement  (the  "DISPUTE  NOTICE").  Buyer  shall  have the  right to verify
quantities of fuel and inventory based upon a random sampling  methodology to be
agreed  between  Stockholder  and Buyer.  If the Buyer and the  Stockholder  are
unable to resolve any such  disagreement  within thirty (30) days after the date
of the  Dispute  Notice,  then the issues in dispute  will be  submitted  to the
Independent  Accounting  Firm,  for  resolution.  If the issues in  dispute  are
submitted to the Accountants for resolution,  (i) each party will furnish to the
Accountants such workpapers and other documents and information  relating to the
disputed  issues as the  Accountants may request and are available to that party
(or its independent public  accountants) and will be afforded the opportunity to
present to the Accountants  any material  relating to the  determination  and to
discuss the  determination  with the Accountants;  (ii) the determination by the
Accountants,  as  set  forth  in a  notice  delivered  to  both  parties  by the
Accountants,  will be binding and conclusive on the parties; and (iii) the Buyer
and the  Stockholder  will each bear 50% of the fees of the Accountants for such
determination. If as a result of the resolution of any disputes pursuant to this
Section 2.03, any amount shown in the

                                     - 2 -
<PAGE>


Adjustment Statement is determined to be erroneous,  such erroneous amount shall
be  deleted  from the  Adjustment  Statement  and the  correct  amount  shall be
inserted in lieu thereof.

              (d)    Immediately  upon the  expiration  of the  thirty  (30) day
period for giving  the  Dispute  Notice,  if a Dispute  Notice is not given,  or
within five (5)  business  days after the  determination  has been  completed in
accordance  with this Section 2.03, (i) the Buyer shall pay to  Stockholder  the
amount of any upward Purchase Price adjustment or, (ii) Stockholder shall pay to
the Buyer the amount of any downward Purchase Price adjustment.

3.     ADDITIONAL UNDERTAKINGS AND COVENANTS


       3.01   CONSENTS AND APPROVALS

              (a)    The Buyer and the  Stockholder  shall use their  respective
best  efforts to take all measures  reasonably  necessary or advisable to secure
such consents,  authorizations and approvals of Governmental  Authorities and of
private  persons or entities with respect to the  transactions  contemplated  by
this Purchase  Agreement,  and the performance of all other  obligations of such
parties hereunder, as may be required by any applicable Laws or by any Agreement
to which  the Buyer or the  Stockholder  is a party or by which the Buyer or the
Stockholder  is bound  including  those  set  forth in the  Disclosure  Schedule
pursuant to Sections 4.24 and 5.07 hereof.

              (b)    The Buyer and the  Stockholder  shall (i)  cooperate in the
filing of all forms,  notifications,  reports and information,  if any, required
pursuant  to  applicable   statutes,   rules,   regulations  or  orders  of  any
Governmental Authority in connection with the transactions  contemplated by this
Purchase  Agreement  and in any  event,  each of them  shall  have made all such
filings set forth in Disclosure Schedule 3.01(b),  whether jointly or severally,
not later than January 31, 2002, and (ii) use their  respective  best efforts to
cause any applicable  waiting periods thereunder to expire and any objections to
the transactions contemplated hereby to be withdrawn before the Closing.

       3.02   ACCESS; INVESTIGATIONS BY THE BUYER

              At all times through the Closing Date, the Stockholder shall, upon
reasonable   prior  notice  and  during  normal  business   hours,   provide  to
representatives  of the  Buyer  access  to the  Generating  Facilities  and  the
offices, books, Agreements,  records (including, without limitation, tax returns
and correspondence with accountants),  officers,  directors and employees of the
Company and the Real Property  Affiliates  (provided such access shall not cause
any unreasonable disruption in the conduct of the Company's business),  and will
furnish representatives of the Buyer such financial and operating data and other
information  with respect to the business and Assets of the Company as the Buyer
may reasonably request, including, without limitation,  Agreements with clients,
customers, vendors, lessors, licensors and suppliers of the Company and the Real
Property  Affiliates.  The Buyer agrees at all times through the Closing Date to
(i) keep confidential all such information that is identified by the Stockholder
as being of a confidential nature, (ii) not use such confidential information on
its own behalf, except


                                     - 3 -
<PAGE>


in connection with the  transactions  contemplated  hereby,  or on behalf of any
other  person,  firm  or  entity,  and  (iii)  not  disclose  such  confidential
information to any third party (other than to the Buyer's  counsel,  accountants
and other consultants in connection with the transactions  contemplated  hereby)
without the Stockholder's advance written authorization; PROVIDED, HOWEVER, that
the  Buyer  shall  have  no  such   obligations  with  respect  to  confidential
information that (A) was lawfully  obtained by it not subject to restrictions of
confidentiality;  (B) is a matter  of  public  knowledge;  or (C) has been or is
hereafter  publicly  disclosed  other than by or through the Buyer. In the event
this Purchase Agreement is terminated,  the Buyer will return to the Stockholder
or destroy,  as the Stockholder may direct, all documents,  workpapers and other
materials containing or developed with confidential information furnished to the
Buyer  relating to the  transactions  contemplated  hereunder  whether  obtained
before or after the execution of this Purchase Agreement.

       3.03   OPERATION OF BUSINESS OF THE COMPANY

              (a)    At all times  through the  Closing  Date,  the  Stockholder
shall  cause each of the  Company and the Real  Property  Affiliates  to use its
reasonable  best  efforts to (i)  preserve  its  business  organization  and its
present relationships with customers, suppliers, consultants,  employees and any
other persons having business  relations with the Company in the Ordinary Course
of Business; and (ii) maintain all of its Assets in good operating condition and
repair (normal wear and tear excepted) in the Ordinary Course of Business.

              (b)    Except  as set  forth in the  Disclosure  Schedule,  at all
times through the Closing Date, the Stockholder  shall cause each of the Company
and  the  Real   Property   Affiliates  to  conduct  its   respective   business
substantially in the manner heretofore conducted and only in the Ordinary Course
of Business and shall not,  without the prior written consent of the Buyer:  (i)
issue  any  capital  stock,   bonds  or  other  corporate   securities  or  debt
instruments,  grant  any  options,  warrants  or other  rights  calling  for the
issuance  thereof,  or borrow  any  funds;  (ii)  declare,  set aside or pay any
dividends or distributions of any Assets;  (iii) directly or indirectly  redeem,
purchase  or  otherwise  acquire  any  of  its  capital  stock,  any  securities
convertible  into capital stock, or any other  securities;  (iv) effect a split,
reclassification  or other change in or of any of its capital  stock;  (v) amend
its  certificate  of  incorporation  or bylaws;  (vi) except in  furtherance  of
Stockholder's   undertaking   in  Section  3.05,   grant  any  increase  in  the
compensation or benefits payable, or to become payable, by the Company to any of
its  directors,  officers,  employees  or  consultants,  or make any  accrual or
arrangement for or payment of bonuses or special compensation of any kind to any
director,  officer or employee;  (vii) directly or indirectly guarantee or agree
to guarantee the obligations of others;  (viii) enter into or make or permit any
amendment or  termination  of any  Agreement  which the  Stockholder  reasonably
believes is likely to have a Material Adverse Effect;  (ix) mortgage,  pledge or
subject to any  Encumbrance  any of its Assets;  (x) except with respect to debt
owing from Affiliates of the Stockholder,  cancel any indebtedness  owing to the
Company or the Real  Property  Affiliates or any claims which the Company or the
Real Property  Affiliates may possess (other than the resolution of claims under
any Agreement in the Ordinary Course of Business which would not have a Material
Adverse Effect),  or waive any rights of substantial value; (xi) sell, assign or
transfer any Intellectual  Property;  (xii) except for the TCCs, sell, exchange,
transfer or  otherwise

                                     - 4 -
<PAGE>


dispose of any  interest  in any Asset  (other  than in the  Ordinary  Course of
Business); (xiii) violate any Laws which have or could reasonably be expected to
have a Material  Adverse Effect;  (xiv) commit any act or omit to do any act, or
engage in any activity or  transaction  or incur any  obligation  (by conduct or
otherwise),  which the Stockholder reasonably expects to have a Material Adverse
Effect; or (xv) make any loan or advance to any stockholder, officer or director
of the  Company  or any  other  person,  other  than  payment  of  inter-company
indebtedness  owed to Affiliates of the Company.  Prior to the Closing Date, the
Stockholder  on behalf of the  Company (i) will not do or agree to do any of the
things  listed in clauses (b) through (s) of SECTION 4.10 and (ii) will maintain
all insurance, which shall meet the requirements of SECTION 4.13.

              (c)    The  Stockholder  shall  notify the Buyer  promptly  of any
material  adverse  change  in the  business,  operations,  prospects,  condition
(financial  or  otherwise),  Assets or  liabilities  of the  Company or the Real
Property  Affiliates,  including,  without limitation,  information  (including,
without  limitation,  copies of all Documents  relating thereto)  concerning all
claims  instituted,  threatened  or  asserted  against or  affecting  any of the
Company or the Real Property  Affiliates or its respective business or Assets at
law or in equity, before or by any court or Governmental Authority.

              (d)    The  Stockholder  shall  cause  the  Company  and the  Real
Property Affiliates to keep proper books of record and account in which true and
complete  entries will be made of all  transactions in accordance with generally
accepted accounting principles applied on a basis consistent with prior periods,
and shall  supply to the Buyer such  Documents  (financial  or  otherwise)  with
respect thereto as the Buyer shall reasonably request.

       3.04   PUBLIC ANNOUNCEMENTS

              The  Stockholder on the one hand, and the Buyer on the other hand,
agree that neither  they nor the Company nor their  respective  Affiliates  will
issue any press release or otherwise make any public statements  concerning this
Purchase Agreement or the transactions  contemplated hereby at any time prior to
the  Closing  Date  without  the  prior  written  consent  of the  Buyer  or the
Stockholder, as the case may be, which consent may not be unreasonably withheld,
PROVIDED that the Buyer,  the  Stockholder  or their  respective  Affiliates may
announce  the  execution  of  this  Purchase   Agreement  and  the  transactions
contemplated hereby on or after the date hereof.

       3.05   EMPLOYEES

              The Stockholder shall use its reasonable best efforts to encourage
the  current  employees  of the Company to continue  their  employment  with the
Company prior to and following the Closing  Date;  PROVIDED,  HOWEVER,  that the
Stockholder shall not be deemed to guarantee the continued  employment of any of
the Company's employees.

                                     - 5 -
<PAGE>


       3.06   SUBSEQUENT EVENTS

              The Stockholder  shall notify the Buyer promptly in writing of the
occurrence  of any event,  or the  failure  of any event to occur,  prior to the
Closing that results in a material  omission from, or material breach of, any of
the covenants, representations or warranties made by or on behalf of the Company
or the Stockholder in this Purchase Agreement or the Disclosure Schedule.  Prior
to the Closing, the Stockholder promptly will supplement or amend the Disclosure
Schedule delivered pursuant hereto with respect to any material matter hereafter
arising which,  if existing,  occurring or known at the date of this  Agreement,
would  have  been  required  to be set  forth or  described  in such  Disclosure
Schedule or which is necessary  to correct any  information  in such  Disclosure
Schedule which has been rendered materially inaccurate thereby.

       3.07   ACCESS TO RECORDS

              For a period of five (5) years after the Closing  Date,  the Buyer
shall, upon reasonable prior notice and during normal business hours, provide to
the Stockholder  access to the financial and accounting books and records of the
Company for periods  prior to the  Closing  Date and which are in the  Company's
possession as of Closing,  solely for purposes of assisting the  Stockholder  in
connection  with  any tax  audit  or  other  governmental  investigation  of the
Stockholder  relating to the  business  of the  Company for the period  prior to
Closing or for  purposes  of  defending  or  investigating  any Losses for which
indemnification  is  sought by the  Buyer  pursuant  to  SECTION  11.02  hereof;
PROVIDED,  HOWEVER,  such access shall not cause any unreasonable  disruption in
the conduct of the Buyer's  business.  The Buyer shall not dispose of such books
and records during the five (5) year period after the Closing Date.

       3.08   INTERCOMPANY ACCOUNTS

              The Stockholder shall cause all liabilities and obligations of the
Company  or  the  Real  Property  Affiliates  to the  Stockholder  or any of its
Affiliates to be paid or otherwise settled on or prior to the Closing.

4.     REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER

              The Stockholder represents and warrants to the Buyer as follows:

       4.01   ORGANIZATION AND STANDING

              The  Stockholder,  the  Company  and  each  of the  Real  Property
Affiliates is a corporation  duly organized and validly  existing under the laws
of the State of New York,  and has the  corporate  power and  authority  to own,
operate  and  lease  its  Assets,  and to carry on its  respective  business  as
currently conducted.

                                     - 6 -
<PAGE>


       4.02   SUBSIDIARIES

              Except  for the  Real  Property  Affiliates,  the  Company  has no
Subsidiaries  and,  except  as set  forth  in  the  Disclosure  Schedule  or the
Financial  Statements,  no equity  investment or other  interest in, nor has the
Company made advances or loans to, any  corporation,  association,  partnership,
joint venture or other entity or person.  The Real Property  Affiliates  have no
Subsidiaries  and,  except as set forth in the  Disclosure  Schedule,  no equity
investment  or other  interest in, nor have the Real  Property  Affiliates  made
advances or loans to, any corporation,  association,  partnership, joint venture
or other  entity or  person.  Except as set forth on the  Disclosure  Statement,
neither  the  Company  nor  any  Real  Property  Affiliate  is  subject  to  any
obligation,  or  requirement  to provide funds or to make any investment (in the
form of loan, capital contributions,  guaranty or otherwise) to or in any person
or entity.

       4.03   ARTICLES OF INCORPORATION AND BYLAWS

              The  Stockholder  has  furnished  to the Buyer a true and complete
copy of the certificate of incorporation of each of the Stockholder, the Company
and the Real  Property  Affiliates,  as currently  in effect,  certified as of a
recent date by the  Secretary of State of the State of New York,  and a true and
complete copy of the bylaws of each of the Stockholder, the Company and the Real
Property  Affiliates,  as currently in effect,  certified by each such company's
corporate secretary. Such certified copies are attached as exhibits to, and part
of, the Disclosure Schedule.

       4.04   CAPITALIZATION

              (a)    The authorized capital stock of the Company consists of one
million  (1,000,000)  shares of  capital  stock,  with a par value of one dollar
($1.00) per share, of which five hundred sixty-six thousand (566,000) shares are
duly   authorized   and  validly   issued  and   outstanding,   fully  paid  and
non-assessable  and not  subject  to  preemptive  rights.  All of the issued and
outstanding  shares of capital  stock of the  Company  are  beneficially  and of
record owned by the Stockholder, free and clear of all Encumbrances, except such
restrictions  on the transfer of such shares as may be applicable  under federal
and  state  securities  laws.  The  Shares  constitute  all  of the  issued  and
outstanding shares of capital stock of the Company as of the Closing Date.

              (b)    No  shares  of  capital  stock  of the  Company  have  been
reserved for any purpose.  There are no outstanding  securities convertible into
or  exchangeable  for capital stock of the Company and no  outstanding  options,
rights  (preemptive or  otherwise),  or warrants to purchase or to subscribe for
any shares of such stock or other securities of the Company. Except as set forth
in the Disclosure  Schedule,  there are no outstanding  Agreements  affecting or
relating to the voting, issuance, purchase,  redemption,  repurchase or transfer
of the Company's capital stock or any other securities of the Company.

              (c)    The  authorized  capital  of  each  of  the  real  Property
Affiliates  consists of one hundred  (100) shares of capital  stock,  with a par
value of $0.10 per  share,  of which ten (10)  shares  are duly  authorized  and
validly issued and outstanding, fully paid and non-assessable and

                                     - 7 -
<PAGE>


not subject to preemptive  rights.  All of the issued and outstanding  shares of
capital stock of each of the Real Property  Affiliates are  beneficially  and of
record owned by the  Company,  free and clear of all  Encumbrances,  except such
restrictions  on the transfer of such shares as may be applicable  under federal
and  state  securities  laws.  Such  shares  constitute  all of the  issued  and
outstanding  shares of capital stock of each of the Real Property  Affiliates as
of the Closing Date.

              (d)    No shares of capital stock of the Real Property  Affiliates
have  been  reserved  for  any  purpose.  There  are no  outstanding  securities
convertible  into  or  exchangeable  for  capital  stock  of the  Real  Property
Affiliates  and no outstanding  options,  rights  (preemptive or otherwise),  or
warrants  to  purchase  or to  subscribe  for any  shares of such stock or other
securities  of  the  Real  Property  Affiliates.  Except  as  set  forth  in the
Disclosure Schedule,  there are no outstanding  Agreements affecting or relating
to the voting,  issuance,  purchase,  redemption,  repurchase or transfer of the
Real  Property  Affiliates'  capital  stock or any other  securities of the Real
Capital Affiliates.

       4.05   DIRECTORS, OFFICERS AND EMPLOYEES

              The Disclosure Schedule lists all current directors,  officers and
employees of the Company and each of the Real Property Affiliates,  showing each
such person's name, position,  and annual remuneration,  bonuses (except bonuses
no portion of which is accrued  and payable  for the  current  fiscal  year) and
fringe  benefits  for the current  fiscal year and the most  recently  completed
fiscal year.

       4.06   FINANCIAL STATEMENTS

              The  Company  has  prepared  and  furnished  to the  Buyer (a) the
unaudited  consolidated  balance  sheet of the  Company  and the  Real  Property
Affiliates as of the Balance Sheet Date and the  unaudited  consolidated  income
statement  and  statements  of cash flow of the  Company  and the Real  Property
Affiliates  for the nine (9) months ended on the Balance Sheet Date, and (b) the
unaudited  consolidated  balance  sheet as of December  31,  2000 and  unaudited
consolidated  statements of income,  stockholder's equity and cash flows for the
twelve  (12)  month  period  ended  as of  December  31,  2000  (such  financial
statements,   including  the  notes   thereto,   collectively,   the  "FINANCIAL
STATEMENTS").  All of the Financial Statements,  including,  without limitation,
the notes  thereto:  (i) have been  prepared  from the books and  records of the
Company and the Real  Property  Affiliates,  (ii) present  fairly the  financial
position of the Company and the Real Property  Affiliates  as of the  respective
dates and the results of operations  and cash flows for the  respective  periods
indicated,  and (iii) have been prepared in accordance  with generally  accepted
accounting  principles  applied  on a basis  consistent  with  prior  accounting
periods  (subject  to  normal  audit   adjustments  in  the  case  of  unaudited
statements).  The  Disclosure  Schedule  sets forth all  changes  in  accounting
methods  (for  financial  accounting  purposes)  at any time  made,  agreed  to,
requested  or  required  with  respect  to  the  Company  or the  Real  Property
Affiliates for any of the periods covered by the Financial Statements.

                                     - 8 -
<PAGE>


       4.07   NO LIABILITIES

              Except as reflected in the Financial  Statements  (or disclosed in
the  associated  footnotes to the Financial  Statements)  or as described in the
Disclosure Schedule,  there exist no material liabilities individually or in the
aggregate  (whether  contingent  or  absolute,  matured or  unmatured,  known or
unknown) of the Company or the Real Property Affiliates.  Except as described in
the Disclosure Schedule or the Unaudited Financial Statements, since the Balance
Sheet Date,  neither the Company nor the Real Property  Affiliates  has incurred
any material liabilities (whether contingent or absolute,  matured or unmatured,
known or unknown) other than in the Ordinary Course of Business.

       4.08   ACCOUNTS RECEIVABLE

              Except  as set  forth in the  Disclosure  Schedule,  the  accounts
receivable of the Company and the Real Property  Affiliates shown on the balance
sheets included in the Financial  Statements,  or thereafter  acquired by any of
them,  have arisen only from bona fide  transactions  in the Ordinary  Course of
Business.  Neither the Company, the Real Property Affiliates nor the Stockholder
has any knowledge of any facts or  circumstances  generally  (other than general
market and economic  conditions)  which would result in any material increase in
the  uncollectability  of such  accounts  receivable  in excess of the  reserves
therefore set forth in the Financial Statements.

       4.09   TAXES

              (a)    Except as set forth in the Disclosure Schedule, the Company
and each Subsidiary has (or, in the case of returns  becoming due after the date
hereof and on or before the Closing  Date,  will have prior to the Closing Date)
duly and timely filed (or filed extensions therefor) all Tax Returns required to
be filed by the Company or Subsidiary on or before the Closing Date with respect
to all  applicable  Taxes,  and no penalties or other charges are or will become
due with  respect to any of the Tax  Returns  as the  result of the late  filing
thereof. All of the Company Tax Returns are (or, in the case of returns becoming
due after the date hereof and on or before the Closing  Date,  will be) true and
complete  in all  material  respects.  Except  as set  forth  in the  Disclosure
Schedule,  the Company and each  Subsidiary has paid all Taxes due or claimed to
be due by any taxing  authority  (whether  or not shown on any Tax  Return).  No
claim has ever been made by an authority in a jurisdiction  where the Company or
a Subsidiary  does not file Tax Returns that it is or may be subject to taxation
by that  jurisdiction.  There are no Security  Interests on any of the assets of
the  Company or any  Subsidiary  that arose in  connection  with any failure (or
alleged failure) to pay any Tax.

              (b)    The Company and each  Subsidiary  has withheld and paid all
Taxes required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor,  creditor,  stockholder, or other
third party.

              (c)    There is no action, suit, proceeding,  audit, investigation
or claim  pending  or,  to the  knowledge  of the  Company  or the  Stockholder,
threatened in respect of any Taxes for

                                     - 9 -
<PAGE>


which  the  Company  or any  Subsidiary  is or may  become  liable,  nor has any
deficiency  or claim  for any such  Taxes  been  proposed,  asserted  or, to the
knowledge of the Company or the Stockholder,  threatened. Except as set forth in
the Disclosure  Schedule,  the Company and each Subsidiary has not requested any
extension  of time within which to file any Tax Return in respect of any taxable
year which has not since been filed or consented to any waivers or extensions of
any statute of limitations  with respect to any taxable year of the Company or a
Subsidiary.  Except  as  set  forth  in the  Disclosure  Schedule,  there  is no
Agreement,  waiver or consent providing for an extension of time with respect to
the  assessment  or collection of any Taxes against the Company or a Subsidiary,
and no power of attorney  granted by the Company or a Subsidiary with respect to
any tax matters is currently in force.

              (d)    The Company has  furnished  to the Buyer true and  complete
copies of all the  Company  and  Subsidiary  Tax  Returns for the past three (3)
years and within 30 days of the date hereof the Stockholder shall have furnished
to the Buyer copies of all written  communications  relating to any such Company
and  Subsidiary  Tax  Returns  or to any  deficiency  or claim  proposed  and/or
asserted,  irrespective  of the outcome of such  matter,  but only to the extent
such items relate to tax years (i) which are subject to an audit, investigation,
examination  or other  proceeding,  or (ii) with respect to which the statute of
limitations has not expired.

              (e)    The  Disclosure  Schedule  sets forth (i) all  federal  tax
elections  that  currently  are in effect  with  respect  to the  Company or any
Subsidiary, and (ii) all elections for purposes of foreign, state or local Taxes
and all consents or Agreements for purposes of federal,  foreign, state or local
Taxes in each case that  reasonably  could be expected to have a material effect
on the Company or any of its Subsidiaries or any of their  respective  Assets or
operations after the Closing.  The Disclosure Schedule sets forth all changes in
accounting  methods for Tax purposes at any time made,  agreed to,  requested or
required with respect to the Company or any Subsidiary within the past three (3)
years.

              (f)    The  Disclosure  Schedule  sets  forth  all state and local
jurisdictions  in which the Company and any  Subsidiary  is required to file Tax
Returns.

              (g)    Neither the Company nor any  Subsidiary  has  requested  or
received  a ruling  from any  taxing  authority  or  signed a  closing  or other
agreement with any taxing authority which could materially  adversely affect any
of them.

              (h)    Except for the  Central  Hudson  Group  Federal  Income Tax
Allocation  Agreement,  the Company and each  Subsidiary are not parties to, are
not bound by, and have no  obligation  under,  any Tax  sharing  agreement,  Tax
indemnification agreement or similar contract or arrangement.

              (i)    No power of attorney  has been  granted with respect to the
Company or any Subsidiary as to any matter relating to Taxes.

              (j)    Neither the Company nor any  Subsidiary has filed a consent
pursuant to Section 341(f) of the Code (or any predecessor  provision) or agreed
to have Section  341(f)(2) of

                                     - 10 -
<PAGE>


the Code apply to any  disposition  of a subsection  (f) asset,  as such term is
defined  in  Section  341(f)(4)  of  the  Code,  owned  by  the  Company  or any
Subsidiary.

              (k)    Since  its  incorporation,  neither  the  Company  nor  any
Subsidiary  has  incurred  any  liability  for Taxes other than in the  ordinary
course of business.

              (l)    Neither the Company nor any  Subsidiary  has  liability for
Taxes of any person  pursuant to Treasury  Regulation  Section  1.1502-6 (or any
similar  provision  of  state,   local  or  foreign  law)  other  than  for  the
consolidated return group of which Stockholder is the parent.

              (m)    Neither the Company  nor any  Subsidiary  is a party to any
contract, agreement or other arrangement which could result in the payment by it
of amounts  that could be  nondeductible  by reason of Section 280G or 162(m) of
the Code.

       4.10   CONDUCT OF BUSINESS; ABSENCE OF MATERIAL ADVERSE EFFECT

              Other  than as set  forth in the  Disclosure  Schedule,  since the
Balance Sheet Date,  there has been no Material  Adverse  Effect,  and no change
except  in  the  Ordinary  Course  of  Business,  in the  business,  operations,
condition (financial or otherwise),  Assets or liabilities of the Company or the
Real Property Affiliates.  Except as set forth in the Disclosure Schedule, since
the Balance Sheet Date, each of the Company and the Real Property Affiliates has
conducted its business substantially in the manner heretofore conducted and only
in the Ordinary Course of Business,  and has not (a) incurred a significant loss
of, or  significant  injury to, any Assets of the  Company or the Real  Property
Affiliates as the result of any fire, explosion,  flood, windstorm,  earthquake,
labor trouble,  riot,  accident,  act of God or public enemy or armed forces, or
other  casualty;  (b)  issued  any  capital  stock,  bonds  or  other  corporate
securities or debt  instruments,  granted any options,  warrants or other rights
calling for the issuance thereof, or borrowed any funds; (c) incurred, or become
subject to, any  obligation  or liability  (absolute or  contingent,  matured or
unmatured,  known  or  unknown),  except  current  liabilities  incurred  in the
Ordinary Course of Business; (d) discharged or satisfied any Encumbrance or paid
any obligation or liability (absolute or contingent, matured or unmatured, known
or unknown) other than current  liabilities shown in the balance sheets included
in the Financial Statements,  and current liabilities incurred since the Balance
Sheet Date in the Ordinary Course of Business;  (e) declared or made payment of,
or set aside for payment,  any  dividends  or  distributions  of any Assets,  or
purchased,  redeemed  or  otherwise  acquired  any of  its  capital  stock,  any
securities  convertible  into  capital  stock,  or  any  other  securities;  (f)
mortgaged,  pledged or subjected to any Encumbrance any of its Assets; (g) sold,
exchanged,  transferred or otherwise  disposed of any of its Assets, or canceled
any debts or claims, except in each case in the Ordinary Course of Business; (h)
written down the value of any Assets or written off as  uncollectible  any notes
or accounts receivable, except write-downs and write-offs in the Ordinary Course
of  Business,  none of which had or would have a Material  Adverse  Effect;  (i)
entered into any transactions other than in the Ordinary Course of Business; (j)
except in furtherance of  Stockholder's  undertaking  under Section 3.05 hereof,
increased the rate of compensation or benefits payable, or to become payable, by
it to any of its directors,  officers,  employees or consultants  except such as
would not have a Material Adverse Effect; (k) made or permitted any amendment or
termination  of any Agreement to which it is a party which would have a Material
Adverse  Effect;  (l) through  negotiation  or otherwise  made any

                                     - 11 -
<PAGE>


commitment  or incurred any  liability to any labor  organization;  (m) made any
accrual or arrangement for or payment of bonuses or special  compensation of any
kind to any  director,  officer  or  employee;  (n)  except  in  furtherance  of
Stockholder's undertaking under Section 3.05 hereof, directly or indirectly paid
any severance or termination pay to any officer or employee in excess of two (2)
months'  salary;  (o) except as otherwise  provided in Section 2.03 above,  made
capital  expenditures,  or entered into commitments  therefor,  aggregating more
than  Fifty  Thousand  Dollars  ($50,000);  (p) made any change in any method of
accounting or accounting practice;  (q) entered into any transaction of the type
described in SECTION 4.23; (r) made any charitable  contributions or pledges; or
(s) made an Agreement to do any of the foregoing.

       4.11   REAL PROPERTY

              (a)    The Disclosure  Schedule lists and sets forth a description
of all the Real Property. Such Real Property constitutes all Real Property which
is necessary for the Company and the Real  Property  Affiliates to conduct their
business as presently  conducted and is suitable and adequate for uses for which
it is currently  devoted.  The Real Property is subject to no Encumbrances other
than those  disclosed on  Disclosure  Schedule  4.11 (a) and other  Encumbrances
which  would  not  have a  Material  Adverse  Effect  (collectively,  "Permitted
Liens").

              (b)    There  are  now  in  full  force  and  effect  duly  issued
certificates of occupancy  permitting the Real Property and improvements located
thereon  (including but not limited to the Generating  Facilities) to be legally
used and occupied as the same are now constituted. The Company has access to the
Real Property as shown on the surveys  described in Disclosure  Schedule 4.11(b)
(the  "Surveys").  Seller  has not  received  written  notice of any  pending or
threatened  restriction or denial,  governmental or otherwise,  upon the ingress
and egress to the Real  Property.  Except as shown on the Surveys,  there is not
(i) any  structure  located on any of the Real Property  which  encroaches on or
over the boundaries of neighboring or adjacent  properties or (ii) any structure
of any other party which  encroaches  on or over the  boundaries  of any of such
Real Property except, in each such instance,  in a manner which would not have a
Material  Adverse  Effect.  To  Seller's  knowledge,  except as set forth on the
Surveys,  the Real Property is not located in a flood plain,  flood hazard area,
wetland or lakeshore erosion area within the meaning of any law.

              (c)    Neither the whole nor any  portion of the Real  Property or
any other assets of the Company  and/or Real Property  Affiliates are subject to
any order to be sold or are being condemned,  expropriated or otherwise taken by
any government entity with or without payment of compensation  therefor, nor has
Stockholder received written notices of any such condemnation,  expropriation or
taking.

       4.12   ASSETS

              (a)    Except  as  set  forth  in  the  Disclosure  Schedule  (and
excluding  the  Real  Property),  each  of the  Company  and the  Real  Property
Affiliates has good, valid and marketable title to all of its Assets, including,
without  limitation,  all Assets reflected in the balance sheets included in the
Financial  Statements  and all  Assets  purchased  by the  Company  or the  Real

                                     - 12 -
<PAGE>


Property  Affiliates  since  the  Balance  Sheet  Date  (except  for (i)  Assets
reflected in such balance  sheets or acquired since the Balance Sheet Date which
have been sold or otherwise disposed of in the Ordinary Course of Business, (ii)
the TCCs,  and  (iii)  Assets  and  associated  liabilities  to be  retained  by
Stockholder  as set  forth in the  Disclosure  Schedule),  free and clear of all
Encumbrances.

              (b)    All Real  Property  and other Assets owned or leased by the
Company or Real Property  Affiliates are in good operating  condition and repair
(excepting  ordinary wear and tear),  have been  maintained  consistent with the
standards  generally followed in the industry and are sufficient to carry on the
business of the Company as  conducted  during the  preceding  twelve (12) months
except  such as  would  not  reasonably  have a  Material  Adverse  Effect.  All
Buildings,  plants  and other  structures  owned or  otherwise  utilized  by the
Company or Real Property Affiliates (including but not limited to the Generating
Facilities) are in good condition and repair except such as would not reasonably
have a Material Adverse Effect.

              (c)    The  Disclosure  Schedule  shows the quantities of (i) fuel
and  inventory as of  September  30, 2001  included in the amount of  $1,166,427
referred to in Section  2.03(a),  and (ii) GP Mate  inventory as of November 21,
2001 included in the amount of $1,563,907 referred to in Section 2.03(a).

       4.13   INSURANCE

              The Disclosure  Schedule lists all policies of title, Asset, fire,
hazard,  casualty,  liability,  life,  worker's  compensation and other forms of
insurance  of any kind  owned or held by or  maintained  for the  benefit of the
Company or the Real Property Affiliates.  All such insurance is owned or held by
the Company except as otherwise indicated on the Disclosure  Schedule.  All such
policies: (a) are with insurance companies financially sound and reputable;  (b)
are in full force and effect;  (c) are sufficient for compliance in all material
respects by the Company or the Real Property Affiliates with all requirements of
Law and of all Agreements to which the Company or a Real Property Affiliate is a
party; (d) are valid and outstanding  policies  enforceable against the insurer;
(e) insure against risks of the kind customarily  insured against and in amounts
customarily  carried by companies similarly situated and by companies engaged in
similar  businesses and owning similar properties and provide adequate insurance
coverage  for the  business  and Assets of the Company and (f) provide that they
will remain in full force and effect through the  respective  dates set forth in
the Disclosure Schedule.

       4.14   INTELLECTUAL PROPERTY

              The  Disclosure  Schedule  lists  all  Intellectual  Property  and
applications  therefor  owned or  licensed by or  registered  in the name of the
Company or the Real Property Affiliates. Except as otherwise specifically stated
in the Disclosure  Schedule,  the Company owns or a Real Property Affiliate owns
all of the Intellectual  Property listed in the Disclosure Schedule purported to
be owned by it and has the right to bring  action for the  infringement  of such
Intellectual  Property  purported to be owned by the Company or a Real  Property
Affiliate.  Each of the Company or a Real Property  Affiliate  owns or possesses
adequate rights to use all

                                     - 13 -
<PAGE>


Intellectual  Property necessary to the conduct of its present business.  Except
as otherwise set forth in the Disclosure Schedule, neither the Company or a Real
Property  Affiliate nor the Stockholder has any knowledge,  and has not received
any notice to the  effect,  that any  product  the  Company  or a Real  Property
Affiliate  sells or that any service the  Company or a Real  Property  Affiliate
renders,  or  that  the  marketing  or  use by the  Company  or a Real  Property
Affiliate  or  another  of any such  product  or  service,  may or is claimed to
infringe any Intellectual Property or legally protectable right of another.

       4.15   DEBT INSTRUMENTS

              The  Disclosure   Schedule  sets  forth  all  material  mortgages,
indentures,  notes,  guarantees and other Agreements for or relating to borrowed
money (including,  without limitation,  conditional sales agreements and capital
leases) to which the Company or a Real  Property  Affiliate  is a party or which
have been  assumed by the Company or a Real  Property  Affiliate or to which any
Assets of the Company or a Real Property Affiliate are subject. The Company or a
Real  Property  Affiliate,  as the case may be, has  performed  all the material
obligations  required to be performed by it to date and is not in default in any
material  respect  under any of the  foregoing,  and, to the  Company's  and the
Stockholder's knowledge, there has not occurred any event which (whether with or
without notice, lapse of time or the happening or occurrence of any other event)
would constitute such a default.

       4.16   LEASES

              The  Disclosure  Schedule  lists all leases  and other  Agreements
under which the Company or a Real Property  Affiliate is lessee or lessor of any
Asset,  or holds,  manages or operates  any Asset owned by any third  party,  or
under which any Asset owned by the Company or a Real Property Affiliate is held,
operated or managed by a third party.  Each such lease and other Agreement is in
full force and effect and constitutes a legal,  valid and binding obligation of,
and is legally enforceable against, the Company or a Real Property Affiliate, as
the case may be, and, to the  knowledge of the  Stockholder,  the other  parties
thereto. All governmental  approvals required under applicable Laws to have been
obtained by the Company  with  respect to such leases and other  Agreements,  if
any, have been obtained,  all filings or registrations required under applicable
Laws to have been made by the Company or a Real Property Affiliate therefor,  if
any, have been made, and, to the knowledge of the  Stockholder,  there have been
no threatened  cancellations  thereof and are no outstanding  material  disputes
thereunder.  The Company has in all material respects  performed all obligations
thereunder  required to be performed by the Company to date.  The Company is not
and, to the  knowledge of the  Stockholder,  no other party is in default in any
material  respect under any of the  foregoing,  and,  except as set forth in the
Disclosure  Schedule,  there  has  not,  to the  knowledge  of the  Stockholder,
occurred any event which (whether with or without  notice,  lapse of time or the
happening or occurrence of any other event) would constitute such a default. The
Stockholder  has  provided  to the Buyer  copies  of each  such  lease and other
Agreement listed on the Disclosure Schedule.

                                     - 14 -
<PAGE>


       4.17   OTHER AGREEMENTS

              (a)    The Disclosure  Schedule  lists all material  Agreements to
which the  Company  or a Real  Property  Affiliate  is a party or by which it is
bound at the date  hereof.  Each such  Agreement is in full force and effect and
constitutes a legal, valid and binding obligation of, and is legally enforceable
against,  the Company or a Real Property Affiliate,  as the case may be, and, to
the knowledge of the Stockholder,  the other parties  thereto.  All governmental
approvals required under applicable Laws to have been obtained by the Company or
a Real Property  Affiliate  with respect to such  Agreements,  if any, have been
obtained,  all filings or  registrations  required under applicable Laws to have
been made by it therefor,  if any, have been made,  and, to the knowledge of the
Stockholder,  there have been no threatened  cancellations thereof and there are
no  outstanding  material  disputes  thereunder  known  to  the  Company  or the
Stockholder.  The Company or a Real Property Affiliate,  as the case may be, has
in all material respects performed all the obligations thereunder required to be
performed by it to date.  Neither the Company nor a Real  Property  Affiliate is
and, to the  knowledge of the  Stockholder,  no other party is in default in any
material  respect  under  any  of the  Agreements  described  in the  Disclosure
Schedule,  and there has not, to the knowledge of the Stockholder,  occurred any
event which (whether with or without  notice,  lapse of time or the happening or
occurrence  of any other  event)  would  constitute  such a  default.  Except as
otherwise  indicated  on the  Disclosure  Schedule,  all  Agreements  have  been
completed, executed and delivered by the parties thereto. None of the Agreements
entered  into after the date  hereof for the  purchase of  materials,  supplies,
services,  merchandise  or equipment  shall obligate the Company for a period of
more than one year.  The  Stockholder  has  provided to the Buyer  copies of all
material Agreements listed on the Disclosure Schedule.

              (b)    Except as set forth in the Disclosure Schedule, neither the
Company nor a Real  Property  Affiliate  is a party to any oral or written:  (i)
Agreement for the employment of any officer, employee,  consultant,  independent
contractor  or  advisor;   (ii)  license   agreement  or  distributor,   dealer,
manufacturer's representative, sales agency, advertising, property management or
brokerage  agreement;  (iii)  Agreement  with any  labor  organization  or other
collective bargaining unit; (iv) Agreement for the future purchase of materials,
supplies,  services,  merchandise or equipment  involving  payments of more than
Twenty-Five  Thousand  Dollars  ($25,000)  over its remaining  term  (including,
without limitation, periods covered by any option to renew by either party); (v)
Agreement  for the  purchase,  sale or lease of any real estate;  (vi) except in
furtherance   of   Stockholder's   obligations   under   Section   3.05  hereof,
profit-sharing,  bonus, incentive  compensation,  deferred  compensation,  stock
option,   severance   pay,  stock   purchase,   employee   benefit,   insurance,
hospitalization,  pension,  retirement or other similar plan or Agreement; (vii)
Agreement for the purchase, sale or lease of any of its Assets other than in the
Ordinary Course of Business or the grant of any preferential  rights to purchase
any of its Assets or rights;  (viii)  Agreement  which  contains any  provisions
requiring the Company or a Real Property  Affiliate to indemnify any other party
thereto;  (ix) joint venture agreement or other Agreement  involving the sharing
of profits;  (x) outstanding loan to any person or entity or receivable due from
the Stockholder or any Affiliate of the Company;  or (xi) Agreement  (including,
without limitation,  Agreements not to compete and exclusivity  Agreements) that
imposes any  restriction  on any  business  operations  of the Company or a Real
Property Affiliate which, either individually or in the aggregate,  would have a
Material Adverse Effect.

                                     - 15 -
<PAGE>


              (c)    The Disclosure  Schedule sets forth those  Agreements as to
which  Stockholder  shall  retain  certain   liabilities  as  described  in  the
Disclosure Schedule.

       4.18   BOOKS AND RECORDS

              Except  as set  forth in the  Disclosure  Schedule,  the  books of
account,  stock  records,  minute books and other records of the Company and the
Real Property Affiliates are true and complete in all material respects, and the
matters  contained  therein are  appropriately  and accurately  reflected in the
Financial  Statements  to the extent  required  to be  reflected  therein  under
generally accepted accounting principles consistently applied.

       4.19   LITIGATION; DISPUTES

              (a)    Except as set forth in the  Disclosure  Schedule and except
such as are to be retained by or  assigned to the  Stockholder,  as set forth in
the Disclosure  Schedule,  there are no actions,  suits,  claims,  arbitrations,
proceedings or investigations  pending, or, to the knowledge of the Stockholder,
threatened against, affecting or involving any of the Company or a Real Property
Affiliate or its respective business or Assets, or the transactions contemplated
by this Purchase  Agreement,  at Law or in equity or admiralty,  or before or by
any court, arbitrator or Governmental Authority,  domestic or foreign. Except as
set forth in the  Disclosure  Schedule,  neither the Company nor a Real Property
Affiliate  is  operating  under,  subject to or in default  with  respect to any
order, award, writ, injunction,  decree or judgment of any court,  arbitrator or
Governmental Authority.

              (b)    Except as set forth in the Disclosure Schedule, neither the
Company  nor a Real  Property  Affiliate  is  currently  involved in and, to the
knowledge of the Company and the Stockholder,  there are no threatened  disputes
with any of its  current or former  employees,  agents,  brokers,  distributors,
vendors,   customers,    business   consultants,    franchisees,    franchisors,
representatives or independent contractors which, if adversely determined, would
have a Material Adverse Effect.

       4.20   LABOR RELATIONS

              There are no strikes, work stoppages, grievance proceedings, union
organization  efforts  or  other  material  controversies  pending,  or,  to the
Company's and the Stockholder's  knowledge,  threatened  between the Company and
(i) any  current or former  employees  of the Company or (ii) any union or other
collective  bargaining unit representing such employees.  Except as set forth in
the Disclosure  Schedule,  the Company has complied with and is in compliance in
all material  respects with all Laws  relating to  employment or the  workplace,
including,  without limitation,  provisions relating to wages, hours, collective
bargaining, safety and health, work authorization, equal employment opportunity,
immigration,  withholding,  unemployment  compensation,  worker's  compensation,
employee  privacy  and  right to know.  Except  as set  forth in the  Disclosure
Schedule, there are no collective bargaining agreements or employment agreements
between  the  Company  and any of its  employees  not  terminable  at will.

                                     - 16 -
<PAGE>


The  consummation  of the  transactions  contemplated  hereby will not cause the
Buyer or the Company to incur or suffer any liability relating to, or obligation
to pay, severance, termination or other payments to any person or entity.

       4.21   BENEFIT PLANS

              (a)    Except as set forth in the Disclosure Schedule, the Company
(i) does not maintain and has not during the past six (6) years  maintained  any
Plan or Other Arrangement, (ii) is not and has not during the past six (6) years
been a party to any Plan or Other Arrangement and (iii) has no obligations under
any Plan or Other Arrangement.

              (b)    The Company has  furnished  to the Buyer true and  complete
copies of each of the following  Documents:  (i) the Documents setting forth the
terms of each Plan; (ii) all related trust agreements or annuity agreements (and
any other  funding  Document)  for each Plan;  (iii) for the two (2) most recent
plan years,  all annual reports ("Form 5500 Series") on each Plan that have been
filed with any  governmental  agency;  (iv) the current summary plan description
and subsequent  summaries of material  modifications  for each Title I Plan; (v)
all DOL opinions on any Plan and all correspondence  relating to the request for
and receipt of each opinion; (vi) all Internal Revenue Service rulings, opinions
or technical advice relating to any Plan and all correspondence  relating to the
request for and receipt of each ruling,  opinion or technical advice;  and (vii)
all Agreements with service  providers or fiduciaries for providing  services on
behalf of any Plan. For each Other Arrangement, the Company has furnished to the
Buyer true and  complete  copies of each  policy,  Agreement  or other  Document
setting  forth or  explaining  the terms of the Other  Arrangement,  all related
trust  agreements or other funding  Documents  (including,  without  limitation,
insurance  contracts,  certificates of deposit,  money market  accounts,  etc.),
other submissions with any governmental  agency within the last three (3) years,
and all Agreements with service providers or fiduciaries for providing  services
on behalf of any material Other Arrangement.

              (c)    None of the  Plans is an ESOP,  or a funded  Welfare  Plan.
Further,  neither the Company nor any ERISA  Affiliate  maintains or contributes
to,  or  during  the  last  six  (6)  years  maintained  or  contributed  to,  a
Multiemployer Plan.

              (d)    None of the Plans is a Pension  Plan subject to Title IV of
ERISA. Further, as of September 30, 2001, no Pension Plan subject to Title IV of
ERISA  maintained by an ERISA  Affiliate has an accumulated  funding  deficiency
under Title IV of ERISA.

              (e)    The Company has made all  contributions  and other payments
required  by and  required  to have been  paid  under the terms of each Plan and
Other  Arrangement  and has  taken no  action  (including,  without  limitation,
actions  required by Law)  relating to any Plan or Other  Arrangement  that will
increase  any  obligation  of the Buyer or the  Company  under any Plan or Other
Arrangement other than increases in employee compensation in the Ordinary Course
of Business.

                                     - 17 -
<PAGE>


              (f)    The Disclosure  Schedule sets forth a list of all Qualified
Plans.  All  Qualified  Plans  and  any  related  trust  agreements  or  annuity
agreements (or any other funding  Document) comply and have complied with ERISA,
the Code (including,  without limitation, the requirements for Tax qualification
described in Section 401 thereof),  and all other Laws.  The trusts  established
under such  Qualified  Plans are exempt from federal  income taxes under Section
501(a) of the Code. The Company has received determination letters issued by the
Internal  Revenue  Service with respect to each  Qualified  Plan or the remedial
amendment  period under Code Section  401(b) within which to request a favorable
determination  letter has not yet expired,  and the Company has furnished to the
Buyer  true and  complete  copies  of all  such  determination  letters  and all
correspondence  relating to the applications  therefor.  All material statements
made  by or on  behalf  of  the  Company  to the  Internal  Revenue  Service  in
connection with applications for  determinations  with respect to each Qualified
Plan  were true and  complete  when made and  continue  to be true and  complete
except  that  demographic  data and  composition  of  controlled  group may have
changed. To the knowledge of the Company, nothing has occurred since the date of
the most recent applicable  determination letter that would adversely affect the
tax-qualified  status of any Qualified  Plan or, if it has  occurred,  it can be
corrected under an IRS correction program.

              (g)    The Company has complied in all material  respects with all
applicable  provisions of the Code,  ERISA,  the National  Labor  Relations Act,
Title VII of the Civil Rights Act of 1964, the Age  Discrimination in Employment
Act, the Fair Labor Standards Act, the Securities Act, the Exchange Act, and all
other Laws  pertaining to the Plans,  Other  Arrangements  and other employee or
employment  related benefits,  and all premiums and assessments  relating to all
Plans or Other  Arrangements.  The Company has no liability  for any  delinquent
contributions  within the  meaning of Section 515 of ERISA  (including,  without
limitation,  related attorneys' fees, costs, liquidated damages and interest) or
for any  arrearages of wages.  The Company has no pending  unfair labor practice
charges,  contract grievances under any collective bargaining  agreement,  other
administrative  charges,  claims,  grievances  or  lawsuits  before  any  court,
governmental agency, regulatory body, or arbiter arising under any Law governing
any Plan, and, to the knowledge of the Company and the Stockholder,  there exist
no facts that could give rise to such a claim.

              (h)    The Disclosure Schedule describes all transactions in which
the Company or any of the Plans has engaged in  violation  of Section  406(a) or
406(b) of ERISA for which no exemption exists under Section 408 of ERISA and all
"prohibited  transactions" (as such term is defined in Section 4975(c)(1) of the
Code), for which no exemption exists under Section  4975(c)(2) or 4975(d) of the
Code and for which the liability could be material (e.g., no representation that
elective  deferrals  were  remitted  to trustee as soon as they were  reasonably
segregable from corporate assets).

              (i)    Except for  payments  under the  dependent  care and health
care  reimbursement  plans  no  Plan  or  Other  Arrangement,   individually  or
collectively,  provides  for any  payment  by the  Company  to any  employee  or
independent  contractor that is not deductible under Section 162(a)(1) or 404 of
the Code or that is an "excess  parachute  payment"  pursuant to Section 280G of
the Code.

                                     - 18 -
<PAGE>


              (j)    The Company  has not filed,  and has had no  obligation  to
file,  any Form 5330 (Return of Excise Taxes Related to Employee  Benefit Plans)
on any Plan for  which the  liability  would be  material.  The  Company  has no
liability for Taxes required to be reported on Form 5330.

              (k)    Except as required under Code Section  4980B(f) of the Code
or pursuant to the terms of a  tax-qualified  plan, no Plan promises or provides
post-retirement  medical,  life  insurance  or other  benefits due now or in the
future to current, former or retired employees of the Company.

              (l)    The Company has (i) filed or caused to be filed all returns
and  reports on the Plans that they are  required  to file and (ii) paid or made
adequate   provision  for  all  fees,   interest,   penalties,   assessments  or
deficiencies  that have  become  due  pursuant  to those  returns  or reports or
pursuant to any  assessment or  adjustment  that has been made relating to those
returns or reports. All other fees, interest, penalties and assessments that are
payable  by or for the  Company  have  been  timely  reported,  fully  paid  and
discharged.  There are no unpaid fees,  penalties,  interest or assessments  due
from the Company or from any other person that are or could become a lien on any
Asset of the Company or could otherwise  adversely affect the business or Assets
of the  Company.  The Company has  collected  or withheld  all amounts  that are
required to be collected or withheld by them to discharge their obligations, and
all of those amounts have been paid to the appropriate  governmental agencies or
set aside in appropriate accounts for future payment when due.

       4.22   ENVIRONMENTAL

              Except as set forth in the Disclosure Schedule:

              (a)    The  Company  and  the  Real  Property  Affiliates  are  in
compliance with, and the Company's use of the Real Property and all improvements
thereon  are  in  compliance  with,  all  Environmental  Laws,  except  for  any
noncompliance which has not had, and would not reasonably be expected to have, a
Material Adverse Effect.

              (b)    There are no  pending  or to the  Stockholder's  knowledge,
threatened  actions,  suits,  claims,  legal  proceedings  or other  proceedings
("ENVIRONMENTAL  CLAIMS") based on, and neither the Company or the Real Property
Affiliates nor the Stockholder has directly or indirectly received any notice of
any complaint, order, directive,  citation, notice of responsibility,  notice of
potential responsibility, or information request from any Governmental Authority
or any  other  person  or entity  or knows  any  fact(s)  which the  Stockholder
reasonably  believes  form(s) the basis for any such actions or notices  arising
out of or  attributable  to:  (i) the  current  or  past  presence,  Release  or
threatened  Release  at or from  any part of the Real  Property  related  to the
operations  of the Company or the Real  Property  Affiliates;  (ii) the off-site
disposal or  treatment of Hazardous  Materials  originating  on or from the Real
Property  with  respect  to the  business  or Assets of the  Company or the Real
Property Affiliates; (iii) any facility operations, procedures or designs of the
Company or the Real Property  Affiliates which do not conform to

                                     - 19 -
<PAGE>


requirements of the  Environmental  Laws; or (iv) any violation of Environmental
Laws at any part of the Real  Property  or arising  from the  activities  of the
Company of the Real Property Affiliates (or to the Stockholder's  knowledge, the
activities  of  the  Company's   predecessors  in  title)  involving   Hazardous
Materials;  and with respect to each of the  foregoing  (i)-(iv)  except for any
such  Environmental  Claims  which  would not  reasonably  be expected to have a
Material Adverse Effect.

              (c)    The Company or a Real Property  Affiliate,  as the case may
be, has been duly  issued,  and  currently  has and will  maintain  through  the
Closing Date, all permits,  licenses,  certificates and approvals required to be
obtained by the Company under any Environmental Laws. The Company is in material
compliance  with  the  terms  and  conditions  of  all  permits,   licenses  and
certificates  required to be obtained  by the  Company  under any  Environmental
Laws. A true and  complete  list of such  permits,  licenses,  certificates  and
approvals,  all of which are valid and in full force and  effect,  is set out in
the Disclosure Schedule.

              (d)    The  Company  has  furnished  to  the  Buyer  accurate  and
complete copies of any environmental  reports,  assessments or other records, if
any, relating to the  environmental  condition of the Real Property of which the
Company, the Real Property Affiliates or the Stockholder is in possession.

              (e)    The  Company  will  promptly  furnish to the Buyer  written
notice of any Release or of any actions or notices  described in SECTION 4.22(B)
that are received prior to Closing.

              (f)    None of the Stockholder,  the Company, or the Real Property
Affiliates  (i) is a party to or has agreed to any consent decree or order under
any Environmental Laws relating to the Assets or the Generating Facilities,  nor
(ii)  to  the   Stockholder's   knowledge,   is  subject   to  any   outstanding
investigation,  judgment,  decree  or  order  relating  to  compliance  with any
Environmental  Laws or to the  investigation  or cleanup of Hazardous  Materials
under any Environmental Laws.

       4.23   TRANSACTIONS WITH RELATED PARTIES

              (a)    Except as set forth in the Disclosure Schedule, neither any
present or former officer, director,  stockholder or person known by the Company
or the  Stockholder  to be an Affiliate of the Company,  nor any person known by
the  Company  or the  Stockholder  to be an  Affiliate  of any such  person,  is
currently a party to any  transaction or Agreement with the Company,  including,
without limitation, any Agreement providing for the employment of, furnishing of
services by,  rental of Assets from or to, or otherwise  requiring  payments to,
any such officer, director, stockholder or Affiliate.

              (b)    The  Disclosure  Schedule  sets forth a list of  Agreements
between Affiliates of the Company and third parties which are for the benefit of
the  Company and which shall be assigned to the Company on or before the Closing
Date.

                                     - 20 -
<PAGE>


       4.24   RESTRICTIONS AND CONSENTS

              (a)    Except as set forth in the Disclosure  Schedule,  there are
no Agreements,  or other restrictions to which the Company or the Stockholder is
a party or subject  that would  prevent or restrict the  execution,  delivery or
performance  of this  Purchase  Agreement  by the  Stockholder  or result in any
penalty,   forfeiture,   Agreement  termination,   or  restriction  on  business
operations of the Company as a result of the execution,  delivery or performance
of this Purchase Agreement by the Stockholder. The Disclosure Schedule lists all
such Agreements that require the consent or acquiescence of any person or entity
which is not party to this  Purchase  Agreement  with respect to the  execution,
delivery or performance of this Purchase Agreement by the Stockholder.

              (b)    Except  as  set  forth  in  the  Disclosure  Schedule,   no
declaration,  filing,  or  registration  with,  or notice to, or  authorization,
consent  or  approval  of any  Governmental  Authority  or any  other  Person is
necessary  for  the   consummation  by  the  Stockholder  of  the   transactions
contemplated hereby.

              (c)    The  Disclosure   Schedule   lists  all   non-environmental
permits, consents,  certificates of occupancy,  approvals and licenses necessary
for operation of the Generating  Facilities as currently conducted.  The Company
is  in  material   compliance   with  the  terms  and  conditions  of  all  such
non-environmental  permits, consents,  certificates of occupancy,  approvals and
licenses listed in the Disclosure Schedule.

       4.25   AUTHORIZATION

              The execution, delivery and performance by the Stockholder of this
Purchase  Agreement  and all other  Documents  executed  by the  Stockholder  in
connection with the  transactions  contemplated  hereby,  the fulfillment of and
compliance with the respective terms and provisions hereof and thereby,  and the
consummation  by the  Stockholder of the  transactions  contemplated  hereby and
thereby,  have been duly  authorized  by all necessary  corporate  action (which
authorization  has not been  modified  or  rescinded  and is in full  force  and
effect),  and do not and will  not,  subject  to such  consents,  approvals  and
filings as are set forth in the  Disclosure  Schedule:  (a)  conflict  with,  or
violate any provision of, any Law having  applicability to the Stockholder,  the
Company or any Real Property  Affiliate,  or any provision of the certificate of
incorporation  or bylaws of the  Stockholder,  the Company or the Real  Property
Affiliates;  (b)  conflict  with,  or result in any breach of, or  constitute  a
default  under any Agreement to which the  Stockholder,  the Company or any Real
Property  Affiliate is a party or by which it or any of its Assets may be bound;
or (c) result in or  require  the  creation  or  imposition  of or result in the
acceleration  of any  indebtedness  (other  than  intercompany  indebtedness  to
Affiliates of the Company),  or of any  Encumbrance  of any nature upon, or with
respect to, the Company or the Real Property Affiliates or any of the Assets now
owned or hereafter acquired by the Company or the Real Property Affiliates.

                                     - 21 -
<PAGE>


       4.26   LEGAL COMPLIANCE

              None  of  the  Company  or  the  Real  Property  Affiliates  is in
violation of or default under, nor has it breached, any term or provision of its
certificate of  incorporation  or bylaws or any Agreement to which it is a party
or by which  it or any  Asset  thereof  is bound  or  affected,  except  for any
violations,  breaches or defaults under Agreements which do not, individually or
in the aggregate with any other such violations,  breaches and defaults,  have a
Material Adverse Effect.  Except as set forth in Disclosure  Schedule 4.22, each
of the Company and the Real Property  Affiliates is in compliance with all Laws,
the failure to comply with which could have a Material Adverse Effect.

       4.27   BINDING OBLIGATION

              This  Purchase  Agreement  constitutes,  and each  Document  to be
executed by the  Stockholder  pursuant  hereto,  when  executed and delivered in
accordance with the provisions  hereof,  shall  constitute,  a valid and binding
obligation of the Stockholder,  enforceable in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium  and other  similar  laws of  general  applicability  relating  to or
affecting  creditors'  rights  generally  and  by  the  application  of  general
principles of equity.

       4.28   TITLE TO CAPITAL STOCK

              The  Stockholder  is and on the  Closing  Date  will be,  the sole
legal,  beneficial and record owner of all of the issued and outstanding  shares
of capital stock of the Company as set forth in Section 4.04 above hereto,  with
good,  valid and marketable title thereto,  free and clear of all  Encumbrances,
except such  restrictions  on the  transfer of such shares as may be  applicable
under federal and state securities laws, with full right and lawful authority to
sell and transfer the shares to the Buyer  pursuant to this Purchase  Agreement.
The Company is and on the Closing Date will be, the sole legal,  beneficial  and
record owner of all of the issued and outstanding shares of capital stock of the
Real Property  Affiliates as set forth in Section 4.04 above hereto,  with good,
valid and marketable title thereto,  free and clear of all Encumbrances,  except
such  restrictions  on the  transfer of such shares as may be  applicable  under
federal and state securities laws.

       4.29   AUTHORITY AND CAPACITY

              The  Stockholder  has  full  legal  right,  capacity,   power  and
authority to execute and deliver this Purchase Agreement and all other Documents
executed or to be executed by the Stockholder pursuant hereto, and to consummate
the transactions contemplated hereby and thereby.

                                     - 22 -
<PAGE>


       4.30   ABSENCE OF VIOLATION

              The execution, delivery and performance by the Stockholder of this
Purchase  Agreement and all other  Documents  contemplated  hereby to which such
Stockholder  is a  party,  the  fulfillment  of  and  the  compliance  with  the
respective terms and provisions hereof and thereof,  and the consummation of the
transactions  contemplated  hereby and thereby,  do not and will not,  except as
otherwise set forth in the  Disclosure  Schedule:  (a) conflict with, or violate
any  provision of, any Laws having  applicability  to such  Stockholder;  or (b)
conflict  with, or result in any breach of, or constitute a default  under,  any
Agreement to which the Stockholder is a party.

       4.31   TRANSFER OF TITLE

              Upon  payment at Closing for the Shares to be  purchased  from the
Stockholder  pursuant to the terms of this  Purchase  Agreement,  the Buyer will
acquire  good,  valid  and  marketable  title  thereto,  free  and  clear of all
Encumbrances,  except such restrictions on the transfer of such shares as may be
applicable under federal and state securities laws.

       4.32   HOLDING COMPANY ACT AND EWG STATUS

              The  Company is not an  "electric  utility  company" or a "holding
company"  as defined in the  Public  Utility  Holding  Company  Act of 1935,  as
amended  ("PUHCA").  The Company has been determined to be an "exempt  wholesale
generator"  under  Section  32 of PUHCA.  The  execution  and  delivery  of this
Agreement by the Stockholder does not violate any provision of PUHCA or any rule
or regulation thereunder.

       4.33   MARKET-BASED RATES

              On or before the Closing Date,  the Company will have authority to
sell wholesale electric power at market-based rates.

       4.34   NYISO

              The Generating  Facilities are all currently owned and operated in
full compliance with all applicable NYISO rules and regulations.

       4.35   GENERATING FACILITIES INFORMATION

              The  information  provided by  Stockholder  at Section 4.35 of the
Disclosure  Schedule  regarding the Generating  Facilities  contains no material
misstatement  with respect to the subject  matter  thereof as of the date hereof
which would result in a Material Adverse Effect.

                                     - 23 -
<PAGE>


       4.36   EMISSIONS ALLOWANCES

              All Emission  Allowances  of vintage  years 2003 and 2004,  as set
forth in Disclosure Schedule 7.02, are held by the Company free and clear of all
Encumbrances.

5.     REPRESENTATIONS AND WARRANTIES OF THE BUYER

              The Buyer hereby  represents  and warrants to the  Stockholder  as
follows:

       5.01   ORGANIZATION AND STANDING

              The Buyer is a corporation duly organized, validly existing and in
active  status  under the laws of the State of Wisconsin  and has the  corporate
power and authority to enter into this  Purchase  Agreement and to carry out the
transactions contemplated hereby.

       5.02   AUTHORIZATION

              The  execution,  delivery  and  performance  by the  Buyer of this
Purchase  Agreement  and all other  Documents  executed or to be executed by the
Buyer in connection with the transactions  contemplated  hereby, the fulfillment
of and the  compliance  with the  respective  terms and  provisions  hereof  and
thereof,  and the  consummation  by the Buyer of the  transactions  contemplated
hereby and thereby have been duly authorized by all necessary  corporate  action
(which authorization has not been modified or rescinded and is in full force and
effect), and do not and will not except as set forth in the Disclosure Schedule:
(a) conflict with, or violate any provision of, any Law having  applicability to
the Buyer or any  provision  of the articles of  incorporation  or bylaws of the
Buyer; or (b) conflict with, or result in any breach of, or constitute a default
under,  any  Agreement  to which  the  Buyer is a party or by which the Buyer is
bound. No other  corporate  action is necessary for the Buyer to enter into this
Purchase Agreement and all other Documents contemplated hereby and to consummate
the transactions contemplated hereby and thereby.

       5.03   BINDING OBLIGATION

              This  Purchase  Agreement  constitutes,  and each  Document  to be
executed by the Buyer pursuant hereto, when executed and delivered in accordance
with the provisions  hereof,  shall constitute a valid and binding obligation of
the  Buyer,   enforceable  in  accordance   with  its  terms,   except  as  such
enforceability  may  be  limited  by  bankruptcy,  insolvency,   reorganization,
moratorium  and other  similar  laws of  general  applicability  relating  to or
affecting  creditors'  rights  generally  and  by  the  application  of  general
principles of equity.

       5.04   NO REGISTRATION UNDER THE SECURITIES ACT

              The Buyer understands that the capital stock to be purchased by it
under this Purchase  Agreement has not been registered  under the Securities Act
or any state securities laws,

                                     - 24 -
<PAGE>


in reliance  upon  exemptions  contained  in the  Securities  Act and such state
securities laws or interpretations thereof, and cannot be offered for sale, sold
or otherwise  transferred  unless such capital  stock being  acquired  hereunder
subsequently is so registered or qualifies for exemption from registration under
the Securities Act and such state securities laws.

       5.05   ACQUISITION FOR INVESTMENT

              The capital stock is being acquired under this Purchase  Agreement
by the Buyer in good faith solely for its own account,  for  investment  and not
with a view  toward  resale or other  distribution  within  the  meaning  of the
Securities  Act.  Such  capital  stock  will not be  offered  for sale,  sold or
otherwise transferred by the Buyer without either registration or exemption from
registration under the Securities Act and applicable state securities laws.

       5.06   EVALUATION OF MERITS AND RISKS OF INVESTMENT

              The Buyer has such  knowledge  and  experience  in  financial  and
business matters that the Buyer is capable of evaluating the merits and risks of
the Buyer's investment in such capital stock being acquired hereunder. The Buyer
understands  and is  able  to bear  any  economic  risks  associated  with  such
investment (including, without limitation, the necessity of holding such capital
stock for an indefinite  period of time,  inasmuch as such capital stock has not
been registered under the Securities Act or any state securities laws).

       5.07   CONSENTS

              Except as set forth in the Disclosure  Schedule,  no declarations,
filings  or  registrations  with,  or notice  to, or  authorization,  consent or
approval of any Governmental  Authority or any other Person is necessary for the
consummation  by the  Buyer of the  transaction  contemplated  by this  Purchase
Agreement.

6.     COVENANTS OF THE BUYER

       6.01   MAINTENANCE OF PLANS

              (a)    The Buyer  shall  maintain  either (i) each of the  benefit
plans  currently  maintained  by the Company (as set forth on Schedule  4.21(a),
other than items 1 and 10) and,  with  respect to a defined  contribution  plan,
provide  for  participation  by the  Company's  employees  in a similar  defined
contribution plan of the Buyer,  which plan may be an existing plan of the Buyer
or one established  specifically  for purposes of this  transaction  (the "BUYER
DEFINED  CONTRIBUTION  PLAN") or (ii) benefit  plans which in the  aggregate are
substantially  comparable  in value to the benefit  plans in which the Company's
employees  participate  as of the  Closing  Date,  on  behalf  of the  Company's
employees from the Closing Date through the end of calendar year 2005.

                                     - 25 -
<PAGE>


              (b)    As  soon  as  practicable   after  the  Closing  Date,  the
Stockholder  shall  cause the trustee of the  Griffith  Savings  Incentive  Plan
(currently known as the CH Resources, Inc. Savings Incentive Plan), as in effect
from time to time (the  "SIP"),  to  effectuate,  and the Buyer  shall cause the
trustee of the Buyer Defined  Contribution Plan to accept, a transfer,  in cash,
of the entire account balances attributable to the Company's employees under the
SIP (including appropriate earnings adjustments  attributable to the period from
the Closing Date to the date of transfer).  The Buyer Defined  Contribution Plan
and the trust therefor,  and the SIP and the trust therefor,  shall be qualified
and  exempt  from  taxation  under  Sections  401(a)  and  501(a)  of the  Code,
respectively, and each shall have a favorable determination letter or such other
evidence of  qualifications  or exemption  as is  reasonably  acceptable  to the
parties.

       6.02   ENVIRONMENTAL LIABILITIES AND SITE ASSESSMENTS

              (a)    At Closing, and except as set forth in Sections 6.02(b) and
11.04 below, the Buyer covenants to assume all past,  present and future on-site
and  off-site  liability,   legally  binding  obligation  or  responsibility  or
Environmental  Claim under or related to Environmental Law or common law arising
from the pre-Closing and post-Closing ownership and operation of the Assets, and
the  pre-Closing  AND  POST-CLOSING   environmental   condition  of  the  Assets
(collectively,  "Environmental Costs"). The Buyer further covenants to indemnify
the  Stockholder  and hold the  Stockholder  harmless for all such  liabilities,
obligations and responsibilities as of Closing.

              (b)    Except as provided in Section 11.04 below,  the Stockholder
shall retain potential  off-site liability arising from waste shipments prior to
Closing  from the  Generating  Facilities  to  facilities  owned and operated by
non-related companies; provided such liabilities arose solely from the Company's
operation  of the  Generating  Facilities.  The Buyer  covenants  that any other
off-site liabilities relating to waste shipments from the Generating  Facilities
will become the obligation of the Buyer at Closing.

              (c)    The  Generating   Facilities  operate  under  environmental
permits, licenses, registration, certificates, and other provisions administered
by federal,  state,  county,  and  municipal  agencies.  At  Closing,  the Buyer
covenants to assume and become  responsible  for compliance  with  Environmental
Laws,  environmental  permits,  requirements,  and obligations applicable to the
Generating  Facilities.  The  Stockholder  shall use its  reasonable  efforts to
assist the Buyer in obtaining  the  transfer or  re-issuance  of the  applicable
environmental permits, licenses, registration, and certificates as necessary.

7.     COVENANTS OF THE STOCKHOLDER

       7.01   SEVERANCE

              (a)    The Stockholder  shall assume severance  obligations as set
forth in ss. 7.01(b) below to all current employees to whom Buyer does not offer
continued employment in accordance with the following terms: (i) each employee's
offer must be made in writing,  (ii)  salaries must be equal to or greater than,
current base salaries,  (iii) employees must receive

                                     - 26 -
<PAGE>


equivalent  benefits in the aggregate (as determined by the  Stockholder),  (iv)
employees  must continue to be employed at the location where they are currently
assigned;  (v) service time  accrued with the Company will be fully  credited in
the Buyer's  vacation plan, (vi) there will be no waiting period for eligibility
in the  Buyer's  401(k)  plan;  and (vii)  there will be no lapse in health care
coverage and the Buyer's  benefit plan will assume  liability  for  pre-existing
medical conditions.

              (b)    In the event that Buyer does not offer continued employment
to any employee upon the foregoing terms,  Stockholder  shall be liable for such
employee's severance.

       7.02   ENVIRONMENTAL MATTERS

              (a)    The Stockholder  covenants that subject to applicable legal
and regulatory  provisions,  the Stockholder  will transfer to the Buyer any and
all  post-Closing  environmental  entitlements  or credits  associated  with the
Generating   Facilities;   PROVIDED  that  Stockholder   shall  retain  Emission
Allowances for 2001-2002 and Buyer shall receive the Emission Allowances for the
years 2003 through 2004 in the manner set forth in the Disclosure Schedule.

              (b)    The  Stockholder  covenants that all other future  Emission
Allowances  and/or  environmental  entitlements or credits issued after the date
hereof by any  Governmental  Authority for the Generating  Facilities  shall, at
Closing, become the sole property of, and be for the sole benefit of, the Buyer.
Without  limitation,  this  covenant  pertains  to any federal or New York State
Emission  Allowance  program or similar program  administered by the U.S. EPA or
NYSDEC or similar Governmental  Authority and by which the U.S. EPA or the State
of New York administers a NOx or SO2 Emission Allowance program.

       7.03   CLOSING PERIOD OPERATIONS

              The Stockholder  covenants to cause the Company to continue to own
and operate the Generating Facilities during the period between execution of the
Purchase  Agreement  and  Closing.  The Company  shall  operate  the  Generating
Facilities and administer  activities in the Ordinary  Course of Business during
this period but will consult with the Buyer on significant  operating decisions,
major capital expenditures and material contract executions.  Material decisions
will be subject to joint approval by the Stockholder and the Buyer.

       7.04   TRANSITION SERVICES

              The  Stockholder  covenants  to provide the Buyer with  reasonable
post-Closing  transition  services  as  requested  by the  Buyer  to  assist  in
effectuating  the  transition  of  operating,  administrative  and other support
services. Such services shall be provided at arms-length commercial rates.

                                     - 27 -
<PAGE>


       7.05   EMPLOYEES

              Stockholder  covenants  and agrees to not offer  employment to any
employee of the Company or the Real Property Affiliates, or allow its Affiliates
to  offer  employment  to any  employee  of the  Company  or the  Real  Property
Affiliates,  without the prior written consent of the Buyer.  Stockholder  shall
provide all  commercially  reasonable  assistance  and  cooperation  to Buyer as
requested by Buyer in connection with the retention of the Company's employees.

       7.06   VOLTAGE SUPPORT SERVICE

              (a)    Stockholder   covenants   that   each  of  the   Generating
Facilities will have an automatic voltage regulator prior to Closing.

              (b)    Stockholder  covenants  that  prior to Closing it shall use
Commercially  Reasonable  Efforts  to have  each  Generating  Facility  become a
Supplier  of Voltage  Support  Service,  as those terms are defined in the NYISO
tariffs.  Such actions  shall  include all testing and other steps  necessary to
qualify for payments as described in Section 1.1 of Rate Schedule 2 of the NYISO
ISO Market Administration and Control Area Services Tariff.

              (c)    In  the  event  that  Stockholder  fails  to  complete  all
necessary  testing  and  other  steps  contemplated  in  Section  7.06(b),  then
Stockholder  shall  compensate  Buyer  for all  costs  directly  and  reasonably
incurred in completing  all such testing and other steps,  but  excluding  costs
incurred in the Ordinary  Course of Business in connection with the operation of
the Generating  Facilities and excluding any revenues  foregone by reason of the
failure to complete such testing and other steps.

8.     CONDITIONS PRECEDENT TO OBLIGATIONS OF THE STOCKHOLDER

       The  obligations  of the  Stockholder  under this Purchase  Agreement are
subject to the fulfillment, at or prior to the Closing, of each of the following
conditions, and failure to satisfy any such condition shall excuse and discharge
all  obligations of the Stockholder to carry out the provisions of this Purchase
Agreement, unless such failure is agreed to in writing by the Stockholder:

       8.01   REPRESENTATIONS AND WARRANTIES

              The  representations  and  warranties  made by the  Buyer  in this
Purchase  Agreement or in any Document  furnished by the Buyer  pursuant to this
Purchase  Agreement shall be true and correct in all material respects when made
and on and as of the Closing Date as though such  representations and warranties
were made on and as of the Closing Date.

                                     - 28 -
<PAGE>


       8.02   PERFORMANCE

              The Buyer  shall  have  performed  and  complied  in all  material
respects with all Agreements and conditions  required by this Purchase Agreement
to be performed or complied with by the Buyer prior to the Closing Date.

       8.03   BUYER'S CERTIFICATE

              The Buyer shall have  delivered to the  Stockholder a certificate,
dated as of the  Closing  Date and  executed  by a senior  officer of the Buyer,
certifying to the  fulfillment  of the  conditions set forth in SECTION 8.01 and
SECTION 8.02.

       8.04   DOCUMENTS AT CLOSING

              All  Documents  required  to be  furnished  by  the  Buyer  to the
Stockholder prior to or at the Closing shall have been so furnished.

       8.05   LEGAL OPINION

              The  Stockholder  shall  have  received  an  opinion  from Foley &
Lardner,  counsel to the Buyer, in form and substance reasonably satisfactory to
the Stockholder.

       8.06   CONSENTS AND APPROVALS

              The Stockholder  shall have obtained all of the waivers,  permits,
consents,  approvals or other  authorizations  set forth in Disclosure  Schedule
4.24(b), in form and substance reasonably satisfactory to Stockholder (including
expiration of any applicable appeal periods), all of which are in full force and
effect on the Closing Date.

9.     CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER

       The obligations of the Buyer under this Purchase Agreement are subject to
the  fulfillment,  at or  prior  to  the  Closing,  of  each  of  the  following
conditions, and failure to satisfy any such condition shall excuse and discharge
all  obligations  of the Buyer to carry out the  provisions  of this  Agreement,
unless such failure is agreed to in writing by the Buyer:

       9.01   REPRESENTATIONS AND WARRANTIES

              The representations and warranties made by the Stockholder in this
Purchase Agreement and the statements  contained in the Disclosure  Schedule and
Exhibits  attached  hereto or in any  Document  furnished  by the Company or the
Stockholder pursuant to this Purchase Agreement shall be true and correct in all
material  respects  when made,  and on and as of the Closing Date as though such
representations and warranties were made on and as of the Closing Date.

                                     - 29 -
<PAGE>


       9.02   PERFORMANCE

              The Stockholder  shall have performed and complied in all material
respects with all Agreements and conditions  required by this Purchase Agreement
to be performed or complied with prior to the Closing Date.

       9.03   ABSENCE OF ADVERSE CHANGES

              There shall have been no Material Adverse Effect since the Balance
Sheet Date in the business,  operations,  condition  (financial  or  otherwise),
Assets or liabilities of the Company or the Real Property Affiliates.

       9.04   LEGAL PROCEEDINGS

              No action or  proceeding by or before any  Governmental  Authority
shall  have  been  instituted  or  threatened  (and  not  subsequently  settled,
dismissed or otherwise  terminated)  which is  reasonably  expected to restrain,
prohibit or invalidate the transactions contemplated by this Purchase Agreement.

       9.05   DOCUMENTS AT CLOSING

              All Documents  required to be furnished by the  Stockholder to the
Buyer prior to or at the Closing shall have been so furnished.

       9.06   OFFICER CERTIFICATE

              The  Stockholder  shall have delivered to the Buyer a certificate,
dated as of the  Closing  Date and  executed  by an  authorized  officer  of the
Stockholder,  certifying  to the  fulfillment  of the  conditions  specified  in
SECTIONS 9.01 THROUGH 9.05.

       9.07   CONSENTS

              All consents, authorizations, approvals and notifications required
to be obtained or made by the Stockholder in connection with the consummation of
the  transactions  contemplated by this Purchase  Agreement shall have been duly
obtained  or  made  in form  and  substance  reasonably  satisfactory  to  Buyer
(including  expiration of all  applicable  appeal  periods) and shall be in full
force and effect as of the Closing Date.

       9.08   RESIGNATION OF DIRECTORS

              The Buyer shall have received the written  resignations  of all of
the members of the Board of Directors and to the extent  requested by the Buyer,
the officers of the Company (effective as of the Closing Date).

                                     - 30 -
<PAGE>


       9.09   LEGAL OPINION

              The Buyer shall have  received an opinion  from  Winston & Strawn,
counsel to the Stockholder, in form and substance reasonably satisfactory to the
Buyer.

       9.10   CONSENTS AND APPROVALS

              The  Buyer  shall  have  obtained  all  of the  waivers,  permits,
consents,  approvals or other  authorizations  set forth in Disclosure  Schedule
5.07,  in  form  and  substance  reasonably  satisfactory  to  Buyer  (including
expiration of all applicable appeal periods), all of which are in full force and
effect on the Closing Date.

       9.11   FIRPTA STATEMENT

              Stockholder shall have furnished to Buyer on or before the Closing
Date a  certification  of  Stockholder's  non-foreign  status  as set  forth  in
Treasury Regulation Section 1.445-2(b).  If Stockholder shall not have furnished
such a statement at or prior to the Closing,  Buyer may close and withhold  such
amounts  from the  Purchase  Price  as Buyer  and  Stockholder  reasonably  deem
appropriate under Section 1445 of the Code.

       9.12   REAL ESTATE

              Buyer  shall have  received:  (1) a  "non-imputation"  endorsement
(protecting  the Company and/or Real Property  Affiliates  against  matters that
might have been known to Stockholder or the Company's  prior  management  and/or
employees)  in a form  reasonably  acceptable  to Buyer;  (2) new owner's  title
policies  insuring the full value of all Real Property owned,  leased or used as
of the date of Closing; (3) estoppel certificates from Niagara County Industrial
Development  Authority,  Onandaga County  Industrial  Development  Authority and
Lewis County Industrial Development  Authority,  in a form reasonably acceptable
to Buyer;  and (4) current ALTA surveys of all Real  Property  owned,  leased or
used by the  Company  and/or Real  Property  Affiliates  (including  appurtenant
easements)  all of which items (1) through (4) above  disclose no matters  which
would have a Material  Adverse  Effect except insofar as such matters shall have
been cured to  Buyer's  reasonable  satisfaction.  Such  title  commitments  and
policies and ALTA surveys shall be at Buyer's expense. If Buyer elects to obtain
updates of the Surveys,  or new surveys,  Buyer shall order same within  fifteen
(15) days of this Purchase Agreement. Buyer shall receive such items for review,
if ordered, not later than thirty (30) days prior to Closing.

       9.13   RELIANCE LETTER

              Buyer shall have received a letter report  addressed to Buyer from
the applicable environmental consultant,  dated within thirty (30) days prior to
the Closing Date, (a) updating the environmental site assessments concerning the
Generating Facilities and (b) permitting Buyer

                                     - 31 -
<PAGE>


to rely on the  environmental  site  assessments,  as  updated,  as though  such
assessment(s)  had  originally  been  performed  on  behalf  of,  addressed  and
delivered to Buyer.

       9.14   INSURANCE

              Buyer shall have obtained all insurance  coverages that are usual,
customary and reasonably necessary for operation of the Generating Facilities in
accordance with prevailing industry  standards;  PROVIDED that if such insurance
coverages  are not  available at any cost on or after April 30, 2002,  Buyer may
elect to delay the  Closing  until such  coverages  become  available,  PROVIDED
FURTHER that no Closing Date Purchase Price Adjustment shall be made if Buyer so
elects and all other  conditions to Buyer's  obligation to close shall have been
met or waived.

10.    CLOSING

       10.01  CLOSING OF SALE AND PURCHASE

              Subject to the terms and  conditions of this  Purchase  Agreement,
the Closing shall be initially scheduled for April 15, 2002 to take place on the
Closing Date at the offices of Winston & Strawn,  1400 L St., N.W.,  Washington,
D.C.  or at such  other  date,  time and place  acceptable  to the Buyer and the
Stockholder.  The Closing  shall be effective  for all purposes as of 11:59 p.m.
Eastern time, on the Closing Date.

       10.02  DELIVERIES BY THE STOCKHOLDER

              At the Closing,  the  Stockholder  shall  deliver to the Buyer the
following:

              (a)    certificates representing the shares of capital stock being
sold to the Buyer pursuant to SECTION 2.01,  duly endorsed in blank or with duly
executed stock powers attached;

              (b)    a copy of the resolutions adopted by the Board of Directors
of the Stockholder, the Company and the Real Property Affiliates authorizing the
transactions  contemplated by this Purchase Agreement certified by the Secretary
or other duly  authorized  officer of the  Stockholder,  the Company or the Real
Property Affiliates, as applicable;

              (c)    the written  resignations  of all of the current members of
the Board of Directors of the Company and the Real  Property  Affiliates  and to
the extent  requested  by the Buyer,  the  officers  of the Company and the Real
Property Affiliates (effective as of the Closing Date);

              (d)    the certificate required by SECTION 9.06;

              (e)    certificates  of incumbency and specimen  signatures of the
signatory  officers  of the  Stockholder,  the  Company  and the  Real  Property
Affiliates;

                                     - 32 -
<PAGE>


              (f)    a  certificate  of good  standing of the  Stockholder,  the
Company and the Real Property  Affiliates  issued by the state of New York, each
such  certificate to be dated as of a date not more than seven (7) days prior to
the Closing Date;

              (g)    the certificate of incorporation,  bylaws, minute books and
stock books of the Company and the Real Property  Affiliates and all other books
and records reasonably requested by the Buyer;

              (h)    the legal opinion described in SECTION 9.09;

              (i)    the Guaranty, duly executed by Stockholder Guarantor;

              (j)    (A) all  books  and  records  of the  Company  and the Real
Property  Affiliates  held  by  the  Stockholder  and  any  of  its  Affiliates,
including,  without  limitation,  minute  books,  or other  registers,  books of
account,  Company Agreements,  all data, information,  books, operating records,
operating,  safety  and  maintenance  manuals,  engineering  and  design  plans,
blueprints and as-built plans,  specifications,  drawings, reports,  procedures,
facility  compliance plans, test records and results  (including tests performed
in accordance  with NYISO and NYSRC rules),  other records and filings made with
regulatory   agencies  regarding   operations  at  the  Generating   Facilities,
environmental  procedures and similar  records of Stockholder  necessary for the
operation  of the  Generating  Facilities,  to the  extent in the  Stockholder's
possession or readily  available,  other than such items that are proprietary to
third parties and accounting records  (collectively,  the "OPERATING  RECORDS"),
and (B) all  personnel  files  relating to the  employees,  to the extent in the
Stockholder's  possession  and  including  files  pertaining  to (1)  skill  and
development  training  and  resumes,  (2)  seniority  histories,  (3) salary and
benefit information, (4) Occupational Safety and Health Act medical reports, (5)
medical records and restriction  forms,  (6)  performance  evaluations,  and (7)
disciplinary  records   (collectively,   the  "TRANSFERRED  EMPLOYEE  RECORDS");
PROVIDED, HOWEVER, that (x) the Stockholder shall be permitted to retain copies,
or  originals  to the  extent it  provides  Buyer  with  copies of same,  of all
Operating  Records and  Transferred  Employee  Records,  and (y) the Stockholder
shall  cooperate  with Buyer to transfer all  electronic  Operating  Records and
Transferred  Employee  Records in a format that is reasonably  acceptable to and
useable by Buyer;

              (k)    (i)  the  monthly  UCAP  determinations  for  each  of  the
Generating  Facilities  from NYISO from and including  November 2001 to Closing,
and (ii) the  monthly  Generator  Availability  Data  System  event logs for the
14-month period prior to Closing;

              (l)    executed  instruments  of  assignment  with  respect to the
Agreements listed on Disclosure Schedule 4.23 (b);

              (m)    an instrument of assignment and assumption as shall, in the
reasonable  opinion of the Buyer, be necessary for the Stockholder to obtain the
right and  claims  and  assume  the  liabilities  and  obligations  set forth in
Schedule 4.19(b) of the Disclosure Schedule; and

                                     - 33 -
<PAGE>


              (n)    all such other  documents,  instruments and certificates as
may be reasonably requested by Buyer to effectuate the transactions contemplated
hereby.

       10.03  DELIVERIES BY THE BUYER

              At the Closing, the Buyer shall deliver the following:

              (a)    the Purchase Price as set forth in SECTION 2.02;

              (b)    a  certified  copy (i) of the  resolutions  adopted  by the
Board of Directors of the Buyer  authorizing  the  transactions  contemplated by
this Purchase Agreement and (ii) the articles of incorporation and the bylaws of
the Buyer;

              (c)    certificates  of incumbency and specimen  signatures of the
signatory officers of the Buyer;

              (d)    a  certificate  of active status of the Buyer issued by the
state of Wisconsin  dated as of a date not more than seven (7) days prior to the
Closing Date;

              (e)    the certificate required by SECTION 8.03; and

              (f)    the legal opinion described in SECTION 8.05.

11.    SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION; REMEDIES

       11.01  SURVIVAL OF REPRESENTATIONS

              All representations,  warranties, covenants, indemnities and other
Agreements  made by any party to this  Purchase  Agreement  herein  or  pursuant
hereto, or made pursuant to any Disclosure Schedule, shall be deemed made on and
as of the Closing Date as though such  representations,  warranties,  covenants,
indemnities and other  Agreements were made on and as of such date, and all such
representations,  warranties,  covenants, indemnities and other Agreements shall
survive the Closing and any investigation,  audit or inspection at any time made
by or on behalf of any party hereto, as follows:  (a) unless otherwise specified
herein  below,  representations  and  warranties  shall  survive for a period of
twelve (12) months after the Closing Date;  (b)  representations  and warranties
with  respect to Taxes shall  survive  until the  expiration  of the  applicable
statute of  limitations;  (c)  representations,  warranties  and  covenants  for
matters  relating to title to the capital stock of the Company shall continue in
full  force and  effect  in  perpetuity;  (d)  representations,  warranties  and
covenants for matters  relating to title to the Company's  Assets shall continue
in full force and effect for a period of two (2) years after the  Closing  Date;
(e) representations,  warranties and covenants with respect to the Environmental
Laws  shall  survive  for a period of four (4) years  after  the  Closing  Date;
subject to Section 11.04 below;  (f) the  representations  in Section 4.11 shall
not survive the Closing and (g) the covenants and  agreements in this ARTICLE 11
and the covenants and agreements which by their terms survive

                                     - 34 -
<PAGE>


Closing  shall  continue  in full  force  and  effect  until  fully  discharged.
Notwithstanding  anything herein to the contrary, any representation,  warranty,
covenant  or  Agreement  which is the  subject of a claim  which is  asserted in
writing prior to the expiration of the  applicable  period set forth above shall
survive  with  respect  to such  claim or  dispute  until the  final  resolution
thereof.

       11.02  AGREEMENT OF STOCKHOLDER TO INDEMNIFY

              Subject to the  conditions  and provisions of this ARTICLE 11, the
Stockholder  hereby  agrees to  indemnify,  defend and hold  harmless  the Buyer
Indemnified  Persons  from and  against  and in respect of all Losses  resulting
from,  imposed upon or incurred by the Buyer  Indemnified  Persons,  directly or
indirectly,  by reason of or resulting from: (a) any misrepresentation or breach
of any representation or warranty,  or noncompliance with any covenants or other
Agreements,  given or made by the  Stockholder in this Purchase  Agreement or in
the  Disclosure  Schedules  or  Exhibits  attached  hereto  or in  any  Document
furnished by or on behalf of any such party pursuant to this Purchase Agreement;
(b) any arrangements  between the Company and/or the Stockholder and any broker,
finder,   agent  or  similar  advisor  in  connection   with  the   transactions
contemplated by the Purchase Agreement,  and any claim for fees or other amounts
arising out of any such arrangement or alleged  arrangement;  and (c) any claims
made under any Agreements or  arrangements  between the  Stockholder  and/or the
Company and any former officer, director or stockholder of the Company that were
entered into prior to the Closing Date; PROVIDED,  HOWEVER, that, except for (x)
Losses  arising  out of a willful  or  intentional  breach  of  representations,
warranties or covenants by the Company or the  Stockholder,  (y) Losses  arising
out of any breach of representations or warranties for matters relating to title
to the capital stock of the Company,  and (z) any  liabilities or obligations in
respect of (i) Taxes of the Company or any  Subsidiary  for taxable  periods (or
portions thereof) beginning before and ending on or before the Closing Date, and
(ii) Taxes  payable by the Company or any  Subsidiary  solely by reason of being
severally  liable for the tax of the  Stockholder  or any Tax  Affiliate  of the
Stockholder  pursuant to Treasury  Regulation  Section 1.1502-6 or any analogous
state  or local  tax  law,  none of which  shall  be  subject  to the  following
limitations, the Stockholder shall not have any liability under SECTION 11.02(a)
except to the extent  that the  aggregate  amount of claims for Losses  asserted
under such Section exceeds One Hundred  Thousand Dollars  ($100,000);  PROVIDED,
FURTHER,  HOWEVER,  in no event shall the  aggregate  amount of liability of the
Stockholder  for Losses  asserted  under  SECTION  11.02(a)  (except  for Losses
arising out of a willful or intentional breach of representations, warranties or
covenants  by the Company,  or the  Stockholder,  and Losses  arising out of any
breach of  representations  or warranties  for matters  relating to title to the
capital stock of the Company), exceed Six Million Dollars ($6,000,000). It shall
be a condition to the right of any Buyer Indemnified  Person to  indemnification
pursuant to this Section that such Buyer Indemnified Person shall assert a claim
for such  indemnification  within the applicable  survival  periods set forth in
SECTION 11.01 hereof.  Notwithstanding  the  foregoing,  the  Stockholder  shall
indemnify  Buyer  from the first  dollar of Losses in  connection  with the OSHA
litigation  matter set forth in Disclosure  Schedule 4.19(a) even if such Losses
are less than One Hundred Thousand Dollars ($100,000).

                                     - 35 -
<PAGE>


       11.03  AGREEMENT OF THE BUYER TO INDEMNIFY

       Subject to the  conditions  and  provisions of this ARTICLE 11, the Buyer
hereby agrees to indemnify, defend and hold harmless the Stockholder Indemnified
Persons from and against and in respect of all Losses  resulting  from,  imposed
upon or incurred by the Stockholder Indemnified Persons, directly or indirectly,
by  reason  of  or  resulting  from  any  misrepresentation  or  breach  of  any
representation  or  warranty,  or  noncompliance  with  any  covenants  or other
Agreements,  given or made by the  Buyer in this  Purchase  Agreement  or in the
Exhibits or in any Document  furnished by or on behalf of the Buyer  pursuant to
this Purchase Agreement;  PROVIDED, HOWEVER, that, except for Losses arising out
of a willful or intentional breach of  representations,  warranties or covenants
by the Buyer, none of which shall be subject to the following  limitations,  the
Buyer shall have no  liability  under this  SECTION  11.03  until the  aggregate
amount of claims for Losses  asserted  under such  Section  exceeds  One Hundred
Thousand Dollars ($100,000);  PROVIDED,  FURTHER, HOWEVER, in no event shall the
aggregate  amount of  liability  of the Buyer for  Losses  asserted  under  this
SECTION 11.03 (except for Losses arising out of a willful or intentional  breach
of  representations,  warranties or covenants by the Buyer),  exceed Six Million
Dollars  ($6,000,000).  It shall be a condition to the rights of the Stockholder
Indemnified  Persons  to  indemnification  pursuant  to this  Section  that such
parties  shall  assert a claim for such  indemnification  within the  applicable
survival periods set forth in SECTION 11.01 hereof.

       11.04  SHARED ENVIRONMENTAL COSTS.

              Subject to the  conditions  and  provisions of this Article 11 and
the specific aggregate  thresholds and limits established in this Section 11.04,
the Buyer and the Stockholder hereby agree to share  Environmental Costs arising
as a result of  pre-Closing  operations  of the  Assets and  arising  during the
period of four years after the date of Closing ("SHARED ENVIRONMENTAL COSTS") as
follows: all Environmental Costs arising during (a) year one shall be shared 50%
by Stockholder and 50% by Buyer; (b) year two shall be shared 50% by Stockholder
and 50% by Buyer;  (c) year three shall be shared 33% by Stockholder  and 67% by
Buyer;  (d) year four shall be shared 17% by Stockholder  and 83% by Buyer,  and
(e) year five and  thereafter  shall be 100%  Buyer's  liability.  Environmental
Costs shall not be deemed Shared  Environmental Costs until the aggregate of all
Environmental  Costs shall  exceed five  hundred  thousand  dollars  ($500,000).
Stockholder's  obligation  to share  Environmental  Costs shall accrue for those
Environmental  Costs in excess of five hundred thousand  dollars  ($500,000) and
shall not under any  circumstances  exceed an  aggregate  amount of four million
dollars ($4,000,000).

       11.05  CONDITIONS OF INDEMNIFICATION

              The  obligations  and liabilities of the Stockholder and the Buyer
hereunder with respect to their respective  indemnities pursuant to this ARTICLE
11, resulting from any Third Party Claim shall be subject to the following terms
and conditions:

              (a)    The party seeking indemnification (the "INDEMNIFIED PARTY")
must give the other party (the  "INDEMNIFYING  PARTY") notice of any Third Party
Claim which is asserted  against,  resulting to, imposed upon or incurred by the
Indemnified Party and which may give rise to

                                     - 36 -
<PAGE>


liability of the Indemnifying Party pursuant to this ARTICLE 11, stating (to the
extent known or reasonably anticipated) the nature and basis of such Third Party
Claim and the amount  thereof;  PROVIDED  that the  failure to give such  notice
shall not affect the rights of the  Indemnified  Party  hereunder  except to the
extent that the Indemnifying Party shall have suffered actual material damage by
reason of such failure.

              (b)    Subject to SECTION 11.05(C) below,  the Indemnifying  Party
shall have the right to undertake,  by counsel or other  representatives  of its
own choosing,  the defense of such Third Party Claim at the Indemnifying Party's
risk and expense.

              (c)    In the event that (i) the  Indemnifying  Party  shall elect
not to undertake such defense,  (ii) within a reasonable  time after notice from
the  Indemnified  Party of any such Third Party Claim,  the  Indemnifying  Party
shall fail to  undertake  to defend  such Third  Party  Claim,  (iii) there is a
reasonable  probability that such Third Party Claim may materially and adversely
affect the  Indemnified  Party other than as a result of money  damages or other
money  payments,  or (iv) there is a reasonable  probability  that the amount of
Losses asserted under such Third Party Claim may exceed the Indemnifying Party's
obligations  under this  ARTICLE 11, then the  Indemnified  Party (upon  further
written notice to the Indemnifying  Party) shall have the right to undertake the
defense, compromise or settlement of such Third Party Claim, by counsel or other
representatives  of its own choosing,  on behalf of and for the account and risk
of the Indemnifying  Party;  PROVIDED,  HOWEVER,  that if the Indemnified  Party
undertakes  defense of such Third  Party Claim  under  clause  (iv)  above,  the
Indemnified  Party shall not, without the  Indemnifying  Party's written consent
(which  consent  shall not be  unreasonably  withheld),  settle such Third Party
Claim if the  Indemnifying  Party will be responsible for any amounts under such
settlement.  In the event that the Indemnified Party undertakes the defense of a
Third Party Claim under this SECTION 11.05(C),  the Indemnifying Party shall pay
to the  Indemnified  Party,  in addition  to the other sums  required to be paid
hereunder,  the reasonable costs and expenses  incurred by the Indemnified Party
in connection with such defense, compromise or settlement as and when such costs
and expenses are so incurred.

              (d)    Anything   in   this   SECTION   11.05   to  the   contrary
notwithstanding,  (i) the Indemnifying  Party shall not, without the Indemnified
Party's written consent,  settle or compromise such Third Party Claim or consent
to entry of any judgment which does not include as an unconditional term thereof
the  giving by the  claimant  or the  plaintiff  to the  Indemnified  Party of a
release  from all  liability  in respect of such Third  Party  Claim in form and
substance  satisfactory  to the  Indemnified  Party;  (ii) in the event that the
Indemnifying Party undertakes defense of such Third Party Claim, the Indemnified
Party,  by counsel or other  representative  of its own choosing and at its sole
cost and expense, shall have the right to participate in the defense, compromise
or settlement  thereof and each party and its counsel and other  representatives
shall  cooperate  with the other party and its counsel  and  representatives  in
connection  therewith;  and  (iii)  in the  event  that the  Indemnifying  Party
undertakes  defense of such Third Party Claim, the Indemnifying Party shall have
an  obligation  to keep the  Indemnified  Party  informed  of the  status of the
defense of such Third Party Claim and  furnish  the  Indemnified  Party with all
documents,   instruments  and  information  that  the  Indemnified  Party  shall
reasonably request in connection therewith.

                                     - 37 -
<PAGE>


              (e)    With respect to the  indemnification  obligations set forth
in Section 11.04 regarding Environmental Costs which become Shared Environmental
Costs,  the Parties shall  cooperate to effectuate the successful  completion of
remediation  or corrective  action in compliance  with  Environmental  Laws. The
Buyer shall control and lead all such  remediation  or corrective  actions which
give rise to Shared  Environmental  Costs.  Upon  discovery of any  condition it
reasonably believes will require remediation or corrective action giving rise to
Shared  Environmental  Costs, Buyer shall promptly notify and afford Stockholder
an  opportunity  to review and approve its proposed  remediation  or  corrective
actions, which Stockholder approval shall not be unreasonably withheld.

       11.06  REMEDIES CUMULATIVE

              The remedies  provided  herein shall be  cumulative  and shall not
preclude the  assertion by the  Stockholder  or the Buyer of any other rights or
the  seeking  of any other  remedies  against  the  other,  or their  respective
successors or assigns.

12.    TAX MATTERS

       12.01  SECTION 338(H)(10) ELECTION

              At  Buyer's  request,  the  Stockholder  shall  join with Buyer in
making an election under Section  338(h)(10) of the Code (and any  corresponding
election under state, local or foreign tax law) with respect to the purchase and
sale of stock of the Company (the  "SECTION  338(H)(10)  ELECTION")  in form and
substance  satisfactory to the Buyer.  Buyer shall be responsible for the filing
of any Form 8023 or  analogous,  ancillary or  supporting  forms,  documents and
statements  under  state,  local or foreign law to make the  Section  338(h)(10)
Elections (the "SECTION 338 FORMS").  The  Stockholder  will include any income,
gain, loss,  deduction,  or other tax item resulting from the Section 338(h)(10)
Election  on its Tax  Returns to the extent  required by  applicable  Laws.  The
Stockholder shall also pay any Tax liability imposed on the Company attributable
to or in any way  arising  from the making of the Section  338(h)(10)  Election,
including,   but  not  limited  to,  (a)  any  Tax   imposed   under  Reg.   ss.
1.338(h)(10)-1,  or (b) any state, local or foreign Tax imposed on the Company's
gain, and the  Stockholder  shall  indemnify  Buyer and the Company  against any
Losses arising out of any failure to pay the Taxes attributable to the Company.

       12.02  ALLOCATION OF PURCHASE PRICE

              Buyer,  the Company and the  Stockholder  agree that the  Purchase
Price and the  liabilities  of the Company (plus other  relevant  items) will be
allocated  to the Assets of the  Company  for all  purposes  (including  Tax and
financial  accounting) in accordance with their fair market values as reasonably
determined by Buyer in accordance  with the  applicable  rules of Section 338 of
the Code and the  regulations  thereunder  and  consented to by the  Stockholder
(which consent shall not be unreasonably  withheld),  which  allocation shall be
binding upon the

                                     - 38 -
<PAGE>


parties.   Within  ninety  (90)  days  following  the  Closing,  Buyer  and  the
Stockholder shall agree on a list of assets to which the "Aggregate Deemed Sales
Price" (as defined under applicable  Treasury  Regulations) of the assets of the
Company shall be allocated.  All allocations contained in such schedule shall be
used by each party in  preparing  the  Section  338 Forms and all  relevant  Tax
Returns (including amended returns and claims for refund), subject to adjustment
to reflect (a) Stockholder's  selling expenses as a reduction of sales proceeds,
and (b) Buyer's  acquisition  expenses as an addition to the Purchase  Price. In
the event that the parties  cannot  agree on mutually  satisfactory  allocations
within said time period, the Independent Accounting Firm shall, at Stockholder's
and Buyer's joint and equal expense, determine the appropriate allocations based
solely on presentations of Buyer and Stockholder (and not by independent review)
within sixty (60) days of its  engagement.  The  allocations  determined  by the
Independent  Accounting Firm shall be binding on the parties.  The parties shall
take no action  inconsistent  with, or fail to take any action necessary for the
validity of the  Section  338(h)(10)  Election,  and shall adopt and utilize the
asset values  determined in making such  allocations  for the purpose of all Tax
Returns filed by them, and shall not  voluntarily  take any action  inconsistent
therewith  upon  examination  of any Tax  Return,  in any refund  claim,  in any
litigation or otherwise with respect to such Tax Returns.  Buyer and Stockholder
shall notify and provide the other with reasonable assistance in the event of an
examination, audit or other proceeding regarding the agreed upon allocations.

       12.03  TAX RETURNS AND PAYMENTS

              The Stockholder shall prepare or cause to be prepared and/or cause
to be filed all Tax  Returns for the  Company  and each  Subsidiary  for all Tax
periods ending on or prior to the Closing Date ("PRE-CLOSING PERIODS") which are
due after the Closing Date,  including  (without  limitation) the Tax Returns on
which the deemed assets sales resulting from the Section 338(h)(10) Election are
reported.  Such  returns  shall  be  prepared  in a manner  consistent  with the
Company's prior practice. The income or loss shall be reported on the Tax Return
to be filed for the  Company  and the  Subsidiaries  for the period  that begins
January  1,  2002  and  ends  on the  Closing  Date,  consistent  with  Treasury
Regulation Section 1.1502-76(b).  At least fifteen (15) days prior to the filing
of each such return,  the Stockholder  shall provide the return to the Buyer for
its review and comment and the  Stockholder  shall make such  revisions  to such
return  as  are  reasonably  requested  by  the  Buyer.   Stockholder  shall  be
responsible for payment of any Taxes for any Pre-Closing  Periods,  and shall be
entitled to any refunds or credits  shown on such  returns  necessary to conform
the Tax Return with the preceding  sentence or to be consistent  with applicable
Law and shall provide the Tax Return, as revised,  to the Buyer for filing.  The
Buyer shall  prepare or cause to be prepared  and the Buyer shall timely file or
cause to be filed any Tax Returns of the  Company  for Tax  periods  which begin
before the Closing Date and end after the Closing Date (the "STRADDLE PERIODS").
Such Tax Returns  shall be prepared in a manner  consistent  with the  Company's
prior practice to the extent  consistent with applicable  Laws. At least fifteen
(15) days prior to the filing of each such Tax Return  with  respect to Straddle
Periods,  the Buyer shall provide  copies of such Tax Return to the  Stockholder
for the Stockholder's review and comment and the Buyer shall make such revisions
to such Tax Returns as are reasonably requested by the Stockholder.  For returns
relating to the Straddle Periods,  the Stockholder shall pay to the Buyer within
fifteen  (15) days  after the date on which  Taxes are paid the  portion of such
Taxes which relates to the portion of such Taxable  period ending on the

                                     - 39 -
<PAGE>


Closing  Date in excess of any reserve for such Tax  liability  (rather than any
reserve for deferred Taxes  established to reflect  timing  differences  between
book and Tax income)  shown on the  balance  sheet in the  Financial  Statements
(such excess  "STRADDLE  PERIOD  TAXES").  Such  Straddle  Period Taxes shall be
calculated as though the taxable year of the Company  terminated as of the close
of business on the Closing Date;  PROVIDED,  HOWEVER,  that in the case of a Tax
not based on income, receipts, proceeds, profits or similar items, such Straddle
Period  Taxes  shall  be  equal  to the  amount  of Tax for the  taxable  period
multiplied  by a fraction,  the  numerator  of which shall be the number of days
from the  beginning  of the taxable  period  through  the  Closing  Date and the
denominator  of which shall be the number of days in the taxable  period.  After
the  Closing,  Buyer  shall not amend any Tax Returns  filed  before the Closing
without Stockholder's consent.

       12.04  COOPERATION ON TAX MATTERS

              (a)    The Buyer and the  Stockholder  shall  cooperate fully with
each other and with each party's  accounting firms and legal counsel,  as and to
the extent  reasonably  requested by the other  party,  in  connection  with the
filing of Tax Returns  pursuant to this SECTION 12 and any audit,  litigation or
other  proceeding  with  respect  to Taxes  or  pertaining  to the  transactions
contemplated by this Agreement. Such cooperation shall include the retention and
(upon the other party's request) the provision of records and information  which
are  reasonably  relevant  to  any  such  filing,  audit,  litigation  or  other
proceeding  and making  employees  available on a mutually  convenient  basis to
provide  additional   information  and  explanation  of  any  material  provided
hereunder.  The  Stockholder  agrees  (i) to retain all books and  records  with
respect to Tax matters  pertinent  to each of the  Company  and each  Subsidiary
relating  to any taxable  period  beginning  before the  Closing  Date until the
expiration of the statute of  limitations  (and,  to the extent  notified by the
Buyer or the  Stockholder,  any extensions  thereof) of the  respective  taxable
periods,  and to abide by all record retention  agreements entered into with any
taxing  authority,  and (ii) to give the other party  reasonable  written notice
prior to transferring,  destroying or discarding any such books and records and,
if the other party so requests  the  Stockholder  shall allow the other party to
take possession of such books and records prior to such transfer, destruction or
discarding.

              (b)    The Buyer and the Stockholder  further agree, upon request,
to use their reasonable best efforts to obtain any certificate or other document
from any  Governmental  Authority  or any other  person as may be  necessary  to
mitigate, reduce or eliminate any Tax that could be imposed (including,  but not
limited to, with respect to the transactions contemplated hereby).

       12.05  CERTAIN TAXES

              Except as otherwise agreed, all transfer, documentary, sales, use,
stamp,  registration  and other such Taxes and fees (including any penalties and
interest)  incurred in connection with this Purchase Agreement  (including,  but
not  limited  to any real  estate  transfer  tax,  sales  and use tax,  mortgage
recording  tax,  and any other city  transfer  tax or any similar tax imposed in
other states or  subdivisions),  shall be paid by the Buyer when due. Subject to
the preceding  sentence,  the party  required by  applicable  law shall file all
necessary Tax Returns and

                                     - 40 -
<PAGE>


other documentation with respect to all such transfer,  documentary, sales, use,
stamp,  registration  and other Taxes and fees,  and, if required by  applicable
Laws, the other party or its  Affiliates  will join in the execution of any such
Tax Returns and other documentation.

       12.06  TAX SHARING AGREEMENTS

              The  obligations and liabilities of the Company and any Subsidiary
to the  Stockholder  and  its  other  Tax  Affiliates,  and the  obligations  of
Stockholder  and all its other Tax Affiliates to the Company and any Subsidiary,
under the Central Hudson Group Federal Income Tax Allocation  Agreement shall be
terminated as of the Closing Date.

       12.07  CONTESTS

              (a)    Stockholder  and the Buyer shall  notify the other party in
writing  within thirty (30) days of receipt of written  notice of any pending or
threatened tax examination, audit or other administrative or judicial proceeding
(a  "TAX  CONTEST")   that  could   reasonably  be  expected  to  result  in  an
indemnification  obligation of such other party pursuant to this  Agreement.  If
the  recipient  of such notice of a Tax Contest  fails to provide such notice to
the other  party,  it shall not be  entitled  to  indemnification  for any Taxes
arising in  connection  with such Tax Contest,  but only to the extent,  if any,
that such  failure  or delay  shall have  adversely  affected  the  indemnifying
party's  ability to defend  against,  settle,  or satisfy  any  action,  suit or
proceeding  against  it, or any  damage,  loss,  claim or  demand  for which the
indemnified party is entitled to indemnification hereunder.

              (b)    If a Tax  Contest  relates  to  any  Taxes  for  which  the
Stockholder is liable in full hereunder,  the Stockholder shall, at its expense,
control the  defense and  settlement  of such Tax  Contest.  If such Tax Contest
relates to any Taxes for which Buyer is liable in full  hereunder,  Buyer shall,
at its own expense,  control the defense and settlement of such Tax Contest. The
party not in control of the defense  shall have the right to observe the conduct
of any Tax Contest at its expense,  including  through its own counsel and other
professional  experts.  Buyer and the  Stockholder  shall jointly  represent the
Company or any  Subsidiary  in any Tax Contest  relating to Taxes for which both
are liable hereunder, and fees and expenses related to such representation shall
be paid by the Buyer  and the  Stockholder  in  proportion  to their  respective
liabilities.

              (c)    Notwithstanding   anything  to  the   contrary  in  Section
12.06(b),  to the extent that an issue raised in any Tax Contest  controlled  by
one party or jointly  controlled could materially affect the liability for Taxes
of the other party,  the  controlling  party shall not, and neither party in the
case of joint control shall,  enter into a final settlement  without the consent
of the other party,  which consent shall not be unreasonably  withheld.  Where a
party withholds its consent to any final settlement,  that party may continue to
initiate further proceedings, at its own expense, and the liability of the party
that wished to settle (as between the consenting and non-consenting party) shall
not  exceed the  liability  that would have  resulted  from the  proposed  final
settlement including interest, additions to Tax, and penalties that have accrued
at that time, and the non-consenting  party shall indemnify the consenting party
for such Taxes.

                                     - 41 -
<PAGE>


              (d)    Notwithstanding  any other  provision of this  Agreement to
the  contrary,  if a Tax  Contest  results in an increase in Taxes for which the
Stockholder  is  liable   hereunder,   and  such  increase  is  attributable  to
adjustments  based on timing  differences  which will reverse in taxable periods
ending  subsequent to the Closing Date, and, Buyer shall pay to the Stockholder,
upon the  Stockholder's  request,  an amount  equal to the present  value of the
reduction in Taxes  payable by the Buyer and its  Affiliates  in future  taxable
periods by reason of such  reversal,  determined by using a discount rate of 12%
and an assumed tax rate of 40%,  and by assuming  that such  reduction  in Taxes
will occur in the year or years of reversal.

       12.08  DISPUTES

              In the event that a dispute arises between the Stockholder and the
Buyer as to the  amount of  Taxes,  or  indemnification  with  respect  to Taxes
(whether or not attributable to the Company),  the parties shall attempt in good
faith to resolve such  dispute,  and any agreed upon amount shall be paid to the
appropriate  party. If such dispute is not resolved thirty (30) days thereafter,
the parties  shall  submit the dispute to the  Independent  Accounting  Firm for
resolution,  which  resolution  shall be final,  conclusive  and  binding on the
parties.  Notwithstanding  anything in this Agreement to the contrary,  the fees
and expenses of the  Independent  Accounting Firm in resolving the dispute shall
be borne in proportion to the determination of the Independent  Accounting Firm.
Any payment  required to be made as a result of the resolution of the dispute by
the  Independent  Accounting  Firm shall be made within ten (10) days after such
resolution (together with any interest determined by the Independent  Accounting
Firm to be appropriate).

13.    TERMINATION

       13.01  TERMINATION

              This  Purchase  Agreement may be terminated at any time before the
Closing Date under any one or more of the following circumstances:

              (a)    by the mutual written consent of all of the parties hereto;

              (b)    by the  Buyer or the  Stockholder,  by  written  notice  of
termination  delivered  to the  other  parties  if the  Closing  shall  not have
occurred prior to June 21, 2003; PROVIDED,  HOWEVER, that the right to terminate
this Purchase  Agreement  under this SECTION  13.01(B) shall not be available to
any party whose breach of representations,  warranties,  covenants or agreements
contained in this Purchase  Agreement has been the cause of, or resulted in, the
failure of the Closing to occur by such date;

              (c)    by the Buyer if the  Stockholder  shall have  breached,  or
failed to comply with, in any material  respect any of its material  obligations
under this  Purchase  Agreement or any  representation  or warranty  made by the
Stockholder shall have been incorrect in any material respect when made or shall
have since  ceased to be true and  correct  in any  material  respect,  and such
breach,  failure or misrepresentation is not cured within thirty (30) days after
notice thereof;

                                     - 42 -
<PAGE>


              (d)    by the  Stockholder  if the Buyer shall have  breached,  or
failed to comply with, in any material  respect any of its material  obligations
under this  Purchase  Agreement or any  representation  or warranty  made by the
Buyer shall have been incorrect in any material  respect when made or shall have
since  ceased to be true and correct in any material  respect,  and such breach,
failure or  misrepresentation  is not cured within thirty (30) days after notice
thereof; and

              (e)    by the Buyer or the  Stockholder  if any decree,  permanent
injunction,   judgment,  order  or  other  action  by  any  court  of  competent
jurisdiction  or  any  governmental  or  regulatory   authority   preventing  or
prohibiting consummation of the transactions under this Purchase Agreement shall
have become final and non-appealable.

       13.02  EFFECT OF TERMINATION

              In the event this Purchase  Agreement is terminated as provided in
this ARTICLE 13, this Purchase  Agreement shall forthwith become wholly void and
of no effect,  and the  parties  shall be released  from all future  obligations
hereunder;  PROVIDED,  HOWEVER,  that  the  obligations  of  the  parties  as to
confidentiality  provided in SECTION 3.02 and the  provisions  of SECTION  14.03
relating to the payment of expenses, shall not be extinguished but shall survive
such  termination,  and nothing herein shall relieve any party for any breach of
this  Agreement.  The parties  hereto shall have any and all remedies to enforce
such obligations  provided at law or in equity (including,  without  limitation,
specific performance).

14.    MISCELLANEOUS

       14.01  ADDITIONAL ACTIONS AND DOCUMENTS

              Each of the parties  hereto  hereby  agrees to take or cause to be
taken  such  further  actions,  to  execute,  deliver  and  file or  cause to be
executed,  delivered and filed such further  Documents as may be necessary or as
may be reasonably requested in order to fully effectuate the purposes, terms and
conditions of this Purchase Agreement.

       14.02  BROKERS

              (a)    The Stockholder  represents and warrants to the Buyer that,
except as set  forth in the  Disclosure  Schedule,  it has not (i)  engaged  any
broker, finder or agent in connection with the transactions contemplated by this
Purchase  Agreement or (ii) incurred (or will incur) any unpaid liability to any
broker,  finder or agent for any brokerage  fees,  finders' fees or commissions,
with respect to the transactions contemplated by this Purchase Agreement.

              (b)    The Buyer represents and warrants to the Stockholder  that,
except for PricewaterhouseCoopers Securities LLC, which is acting for and at the
expense of the Buyer, the Buyer has not (i) engaged any broker,  finder or agent
in connection with the transactions  contemplated by this Purchase  Agreement or
(ii) incurred (and will not incur) any unpaid liability

                                     - 43 -
<PAGE>


to any  broker,  finder  or  agent  for any  brokerage  fees,  finders'  fees or
commissions,  with respect to the  transactions  contemplated  by this  Purchase
Agreement.

              (c)    Each party agrees to  indemnify,  defend and hold  harmless
each of the other parties from and against any and all claims  asserted  against
such  parties  for any fees or  commissions  other  than those set forth in this
Section by any  persons  purporting  to act or to have acted for or on behalf of
the indemnifying party.

       14.03  EXPENSES

              All costs, fees and Taxes (except as otherwise provided in Section
12.01 hereof in connection with the Section 338(h)(10)  Election) imposed by any
Governmental  Authority in connection with the transactions  contemplated hereby
shall  be  borne  by the  Buyer,  including  without  limitation,  transfer  and
recording  taxes.  Subject to the foregoing and to the provisions of ARTICLE 11,
each party hereto shall pay its own expenses incident to this Purchase Agreement
and the  transactions  contemplated  hereby,  including all legal and accounting
fees and disbursements.

       14.04  ASSIGNMENT

              No party  shall  assign  its  rights  and  obligations  under this
Purchase  Agreement,  in  whole  or in  part,  whether  by  operation  of law or
otherwise,  without the prior written consent of the other parties  hereto,  and
any such  assignment  contrary to the terms hereof shall be null and void and of
no force  and  effect.  In no event  shall  the  assignment  by any party of its
respective rights or obligations under this Purchase  Agreement,  whether before
or after the Closing,  release such party from its  respective  liabilities  and
obligations  hereunder.  Notwithstanding the foregoing,  (i) Buyer may assign or
otherwise  transfer  its  rights  under  this  Purchase  Agreement  to any bank,
financial   institution  or  other  lender  providing  financing  to  Buyer,  as
collateral  security  for such  financing  and (ii)  Buyer may assign all of its
rights  and  obligations  under  this  Purchase  Agreement  to any  wholly-owned
Subsidiary  (direct or indirect) upon written  notice to the  Stockholder of any
such assignment;  provided, however, that no such assignment shall (x) impair or
materially delay the consummation of the transactions contemplated hereby or (y)
relieve or discharge Buyer from any of its obligations hereunder.

       14.05  ENTIRE AGREEMENT; AMENDMENT

              This Purchase Agreement,  including the Disclosure  Schedule,  the
Exhibits and other Documents  referred to herein or furnished  pursuant  hereto,
constitute  the entire  Agreement  among the parties  hereto with respect to the
transactions  contemplated  herein,  and  supersede  all prior  oral or  written
Agreements,  commitments or understandings  with respect to the matters provided
for herein. No amendment,  modification or discharge of this Purchase  Agreement
shall be valid or  binding  unless set forth in writing  and duly  executed  and
delivered by the party against whom enforcement of the amendment,  modification,
or discharge is sought.

                                     - 44 -
<PAGE>


       14.06  WAIVER

              No delay or failure on the part of any party hereto in  exercising
any right,  power or privilege under this Purchase  Agreement or under any other
Documents  furnished in connection  with or pursuant to this Purchase  Agreement
shall  impair any such right,  power or privilege or be construed as a waiver of
any default or any  acquiescence  therein.  No single or partial exercise of any
such right,  power or  privilege  shall  preclude  the further  exercise of such
right,  power  or  privilege,  or the  exercise  of any  other  right,  power or
privilege.  No waiver  shall be valid  against any party  hereto  unless made in
writing  and signed by the party  against  whom  enforcement  of such  waiver is
sought and then only to the extent expressly specified therein.

       14.07  CONSENT TO JURISDICTION

              (a)    This Purchase  Agreement and the duties and  obligations of
the parties  hereunder and under each of the Documents  referred to herein shall
be  enforceable  against any party in the federal or state courts sitting in the
State of New York.  For such  purpose,  each  party  hereto  hereby  irrevocably
submits to the  non-exclusive  jurisdiction of such courts,  and agrees that all
claims in respect of this  Purchase  Agreement  and such other  Documents may be
heard  and  determined  in any of such  courts.  Neither  party  shall  make any
objection to the venue of such courts and each party hereby  waives the right to
assert that such courts constitute an inconvenient forum.

              (b)    Each party hereto  hereby  irrevocably  agrees that a final
judgment  of any of the  courts  specified  above in any  action  or  proceeding
relating to this Purchase Agreement or to any of the other Documents referred to
herein or therein shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law.

       14.08  SEVERABILITY

              If any part of any  provision  of this  Purchase  Agreement or any
other  Agreement  or  document  given  pursuant  to or in  connection  with this
Purchase  Agreement shall be invalid or unenforceable in any respect,  such part
shall be ineffective to the extent of such invalidity or unenforceability  only,
without  in any way  affecting  the  remaining  parts of such  provision  or the
remaining provisions of this Purchase Agreement.

       14.09  GOVERNING LAW

              This Purchase Agreement, the rights and obligations of the parties
hereto,  and any claims or disputes relating  thereto,  shall be governed by and
construed in accordance  with the laws of the State of New York  (excluding  the
choice of law rules thereof).

                                     - 45 -
<PAGE>


       14.10  NOTICES

              All notices, demands,  requests, or other communications which may
be or are required to be given,  served, or sent by any party to any other party
pursuant  to this  Purchase  Agreement  shall be in  writing  and  shall be hand
delivered,  sent by overnight  courier or mailed by  first-class,  registered or
certified mail,  return receipt  requested,  postage prepaid,  or transmitted by
telegram, telecopy or telex, addressed as follows:

              (a)    If to the Buyer:

                     WPS Power Development, Inc.
                     1088 Springhurst Drive
                     Green Bay, WI 54304
                     Attention:  Charles A. Schrock, President
                     Facsimile No.: 920-617-6140

                     with a copy (which shall not constitute notice) to:

                     WPS Power Development, Inc.
                     1088 Springhurst Drive
                     Green Bay, WI 54304
                     Attention:  B. Frank Moon
                     Facsimile No.:  920-617-6140

                     with a copy (which shall not constitute notice) to:

                     Foley & Lardner
                     777 E. Wisconsin Ave.
                     Milwaukee, WI 53202
                     Attention:  Edward J. Hammond, Esq.
                     Facsimile No.: 414-297-4900

              (b)    If to the Stockholder:

                     Central Hudson Energy Services, Inc.
                     110 Main Street
                     Poughkeepsie, NY 12601
                     Attention:  Allan R. Page
                     Facsimile No.: 845-473-7316

                                     - 46 -
<PAGE>


                     with a copy (which shall not constitute notice) to:

                     Winston & Strawn
                     1400 L Street, N.W.
                     Washington, DC  20005-3502
                     Attention:  Donald K. Dankner
                     Facsimile No.:  (202) 371-5950

Each party may designate by notice in writing a new address to which any notice,
demand,  request or  communication  may thereafter be so given,  served or sent.
Each notice,  demand,  request,  or communication which shall be hand delivered,
sent,  mailed,  telecopied or telexed in the manner  described  above,  or which
shall be delivered to a telegraph company,  shall be deemed  sufficiently given,
served,  sent,  received  or  delivered  for all  purposes at such time as it is
delivered to the addressee (with the return receipt,  the delivery  receipt,  or
(with respect to a telecopy or telex) the  answerback  being deemed  conclusive,
but not  exclusive,  evidence of such  delivery)  or at such time as delivery is
refused by the addressee upon presentation.

       14.11  HEADINGS

              Article and Section headings  contained in this Purchase Agreement
are inserted for convenience of reference only, shall not be deemed to be a part
of this Purchase  Agreement for any purpose,  and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.

       14.12  EXECUTION IN COUNTERPARTS

              To facilitate  execution,  this Purchase Agreement may be executed
in as many  counterparts as may be required.  It shall not be necessary that the
signatures  of, or on behalf  of,  each  party,  or that the  signatures  of all
persons required to bind any party, appear on each counterpart;  but it shall be
sufficient  that the  signature  of, or on behalf of,  each  party,  or that the
signatures of the persons  required to bind any party,  appear on one or more of
the  counterparts.  All  counterparts  shall  collectively  constitute  a single
Agreement.  It shall not be necessary in making proof of this Purchase Agreement
to produce  or account  for more than a number of  counterparts  containing  the
respective signatures of, or on behalf of, all of the parties hereto.

       14.13  LIMITATION ON BENEFITS

              The  covenants,  undertakings  and  agreements  set  forth in this
Purchase  Agreement shall be solely for the benefit of, and shall be enforceable
only by, the parties hereto and their respective successors,  heirs,  executors,
administrators,  legal  representatives  and permitted assigns,  except that the
agreements  set  forth in  ARTICLE  10 also  shall be for the  benefit  of,  and
enforceable by, the Buyer Indemnified  Persons and their respective  successors,
heirs, executors, administrators, legal representatives or permitted assigns.

                                     - 47 -
<PAGE>


       14.14  BINDING EFFECT

              Subject to any  provisions  hereof  restricting  assignment,  this
Purchase  Agreement  shall be binding upon and shall inure to the benefit of the
parties   hereto   and   their   respective   successors,    heirs,   executors,
administrators, legal representatives and assigns.

              IN WITNESS  WHEREOF,  the parties  hereto have duly  executed this
Stock Purchase  Agreement,  or have caused this Stock  Purchase  Agreement to be
duly executed on their behalf, as of the day and year first above written.


                                            BUYER:

                                            WPS POWER DEVELOPMENT, INC.


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


                                            STOCKHOLDER:

                                            CENTRAL HUDSON ENERGY SERVICES, INC.


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

                                     - 48 -
<PAGE>


                                                                EXHIBIT A TO THE
                                                        STOCK PURCHASE AGREEMENT


                                   DEFINITIONS

              "ADJUSTMENT  STATEMENT"  has the meaning set forth in SECTION 2.03
(b) of the Purchase Agreement.

              "AFFILIATE"  means: (a) with respect to an individual  person, any
member of such person's immediate family,  consisting of such person's spouse or
children; (b) with respect to an entity, any officer or director of such entity;
and (c) with  respect to an  individual  person or entity,  any person or entity
which directly or indirectly,  through one or more intermediaries,  Controls, is
Controlled by, or is under common Control with such person or entity.

              "AGREEMENT"  means any binding  agreement  (including  any and all
exhibits or attachments  thereto) between two or more persons (or entities) with
respect to their relative  rights and/or  obligations or with respect to a thing
done or to be done.

              "ALTA" means American Land Title Association.

              "ARTICLE" means an Article of this Purchase Agreement.

              "ASSETS" means assets of every kind and everything  that is or may
be  available  for the payment of  liabilities  (whether  inchoate,  tangible or
intangible),  including,  without limitation, real and personal property. Solely
for purposes of this Purchase Agreement,  Assets of the Real Property Affiliates
shall be deemed Assets of the Company.

              "BALANCE SHEET DATE" means September 30, 2001

              "BUYER"   means  WPS  Power   Development,   Inc.,   a   Wisconsin
corporation.

              "BUYER  DEFINED  CONTRIBUTION  PLAN" has the  meaning set forth in
SECTION 6.01(A) of the Purchase Agreement.

              "BUYER  INDEMNIFIED  PERSONS"  means the  Buyer and its  officers,
directors and employees.

              "CENTRAL  HUDSON GROUP FEDERAL  INCOME TAX  ALLOCATION  AGREEMENT"
means that certain Central Hudson Group Federal Income Tax Allocation  Agreement
dated as of  December  31,  1998 by and  among  Central  Hudson  Gas &  Electric
Corporation and the corporations identified on Exhibit A thereto.

              "CLOSING"  means the closing of the sale and purchase of shares of
the Company's capital stock pursuant to this Purchase Agreement.

<PAGE>


              "CLOSING  DATE" means  10:00 a.m.  local time on the date on which
the satisfaction or, if permissible,  waiver of the closing conditions set forth
in  ARTICLES  8 AND 9  occurs,  or such  other  time and  such  date as shall be
mutually agreed upon by the Buyer and the Stockholder.

              "CLOSING DATE PURCHASE  PRICE  ADJUSTMENT"  means the Closing Date
price adjustment as set forth in SCHEDULE 2.03(A).

              "COMMERCIALLY   REASONABLE   EFFORTS"   means  efforts  which  are
reasonably   necessary  to  cause,  or  assist  in,  the   consummation  of  the
transactions  contemplated  by this  Agreement  and  which  do not  require  the
performing  party to expend funds,  incur expenses or assume  liabilities  other
than those which are  reasonable  in nature and amount within the context of the
transactions contemplated by this Agreement in order for the performing party to
satisfy its obligations hereunder.

              "CODE" means the Internal  Revenue Code of 1986,  as amended,  and
all regulations promulgated thereunder.

              "COMPANY"  means  CH  Resources,  Inc.,  a New  York  corporation.

              "CONTROL" means  possession,  directly or indirectly,  of power to
direct or cause  the  direction  of  management  or  policies  (whether  through
ownership of voting securities, by Agreement or otherwise).

              "DEFINED  BENEFIT  PLAN"  means a Plan  that is or was a  "defined
benefit plan" as such term is defined in Section 3(35) of ERISA.

              "DISCLOSURE  SCHEDULE" means the disclosure schedule identified as
the  Disclosure  Schedule  to  the  Purchase  Agreement.  The  sections  of  the
Disclosure Schedule shall be numbered to correspond to the applicable Section of
this Purchase Agreement and together with all matters under such heading,  shall
be deemed to qualify the applicable Section and any other Section, subsection or
clause hereof to which such disclosure clearly relates.

              "DISPUTE  NOTICE" has the meaning set forth in SECTION 2.03 (c) of
the Purchase Agreement.

              "DOCUMENTS"  means any  written  or similar  material  (including,
without  limitation,  computer  storage media) on which is recorded (by letters,
numbers  or other  marks)  information,  including,  without  limitation,  legal
opinions,  mortgages,   indentures,  notes,  instruments,   leases,  Agreements,
insurance policies,  reports, studies, financial statements (including,  without
limitation, the notes thereto), other written financial information,  schedules,
certificates, charts, maps, plans, letters, memoranda and all similar materials.

              "DOL" means the Department of Labor or its successors.

                                      -ii-
<PAGE>


              "EMISSION  ALLOWANCE"  means an  authorization by any Governmental
Authority to emit a specified amount of nitrogen oxide ("NOx") or sulfur dioxide
("SO2") from a specified source during or after a specified time frame.

              "ENCUMBRANCE"  means  any  mortgage,  lien,  pledge,  encumbrance,
security interest,  deed of trust,  option,  encroachment,  reservation,  order,
decree, judgment, restriction, charge, Agreement, claim or equity of any kind.

              "ENVIRONMENTAL  CLAIMS" has the meaning set forth in SECTION  4.22
(b) of the Purchase Agreement.

              "  ENVIRONMENTAL  COSTS" has the  meaning set forth in the SECTION
6.02 (a) of the Purchase Agreement.

              "ENVIRONMENTAL   LAWS"   means   any  Laws   (including,   without
limitation,  the  Comprehensive   Environmental  Response,   Compensation,   and
Liability Act), including any regulations promulgated pursuant to such Laws, now
in effect relating to the generation,  production,  installation,  use, storage,
treatment, transportation, release, threatened release, or disposal of Hazardous
Materials, noise control, or the protection of human health or the environment.

              "ERISA" means the Employee Retirement Income Security Act of 1974,
as  amended,  and  all  Laws  promulgated  pursuant  thereto  or  in  connection
therewith.

              "ERISA  AFFILIATE"  means  any  entity  which  is  required  to be
aggregated with the Company in accordance with the terms of Section 414(b), (c),
(m) or (o) of the Code.

              "ESOP" means any "employee  stock  ownership plan" as such term is
defined in Section 407(d)(6) of ERISA or Section 4975(c)(7) of the Code.

              "EXCHANGE  ACT"  means the  Securities  Exchange  Act of 1934,  as
amended, and all regulations promulgated thereunder.

              "EXHIBIT" means an exhibit attached to the Purchase Agreement.

              "FERC" has the meaning set forth in SECTION  8.07 of the  Purchase
Agreement.

              "FINANCIAL  STATEMENTS"  has the meaning set forth in SECTION 4.06
of the Purchase Agreement.

              "FIRPTA" means Foreign  Investor in Real Property Tax Act of 1980,
as amended.

              "FORM 5500 SERIES" means Internal Revenue Service Form 5500 Annual
Return/Report of Employee Benefit Plan.

                                     -iii-
<PAGE>


              "FORM 5330" has the  meaning  set forth in SECTION  4.21(J) of the
Purchase Agreement.

              "GENERATING  FACILITIES"  means  the three  generating  facilities
owned and operated by the Company as described below:

              (a)    Beaver Falls  Generating  Facility - an approximately 95 MW
                     natural gas and oil-fired  generating  facility  located in
                     Crogham, New York.

              (b)    Syracuse  Generating  Facility  - an  approximately  109 MW
                     natural gas and oil-fired  generating  facility  located in
                     Solvay, New York outside of Syracuse.

              (c)    Niagara Falls Generating  Facility - an approximately 50 MW
                     generating  facility,  utilizing bituminous coal, petroleum
                     coke and potentially other fuels, located in Niagara Falls,
                     New York.

              "GOVERNMENTAL  AUTHORITY"  means  any  court,   administrative  or
regulatory agency or commission or other governmental entity or instrumentality,
domestic, foreign or supranational or any department thereof.

              "GP MATE"  means  the  accounting  software  licensed  by  General
Physics.

              "GUARANTY" means that certain  Guaranty by Stockholder  Guarantor,
to be dated the Closing Date, in the form attached hereto as Exhibit B.

              "HAZARDOUS MATERIALS" means any wastes,  substances,  radiation or
materials  (whether  solids,   liquids  or  gases)  (i)  which  are  defined  as
"pollutants", "contaminants", "hazardous wastes", "hazardous substances", "toxic
substances",  "radioactive  materials",  or other  similar  designations  in, or
otherwise  subject to regulation  under,  any  Environmental  Laws; (ii) without
limitation,   which  contain  polychlorinated  biphenyls  (PCBs),  asbestos  and
asbestos-containing   materials,   lead-based  paints,   urea-formaldehyde  foam
insulation, and petroleum or petroleum products (including,  without limitation,
crude oil or any fraction  thereof) or (iii) which are known to the  Stockholder
to pose a hazard to human health, safety, natural resources, industrial hygiene,
or the environment.

              "INDEMNIFIED  PARTY" has the meaning set forth in SECTION 11.05(A)
OF THE PURCHASE AGREEMENT.

              "INDEMNIFYING PARTY" has the meaning set forth in SECTION 11.05(A)
OF THE PURCHASE AGREEMENT.

              "INDEPENDENT ACCOUNTING FIRM" means Ernst & Young, LLP.

                                      -iv-
<PAGE>


              "INDIVIDUAL  ACCOUNT  PLAN"  means  a  Plan  that  is  or  was  an
"individual account plan" as such term is defined in Section 3(34) of ERISA.

              "INTELLECTUAL  PROPERTY"  means all  franchises,  patents,  patent
qualifications,  trademarks,  service marks, trade names, trade styles,  brands,
private labels, copyrights,  know-how, computer software, industrial designs and
drawings and general intangibles of a like nature, trade secrets,  licenses, and
rights and filings with respect to the foregoing,  and all reissues,  extensions
and renewals thereof.

              "IRS" has the  meaning set forth in SECTION  4.21 of the  Purchase
Agreement.

              "LAWS" means all foreign, federal, state and local statutes, laws,
ordinances,   regulations,  rules,  and  legally-binding  resolutions,   orders,
determinations,  writs,  injunctions,  awards  (including,  without  limitation,
awards of any  arbitrator),  judgments  and decrees  applicable to the specified
persons or entities and to the businesses and Assets thereof (including, without
limitation,  Laws relating to securities registration and regulation;  the sale,
leasing,  ownership or management of real property;  employment practices, terms
and conditions,  and wages and hours;  building standards,  land use and zoning;
safety,  health and fire prevention;  and  environmental  protection,  including
Environmental Laws).

              "LOSSES" means all demands,  losses,  claims, actions or causes of
action,  assessments,  damages,  liabilities,  costs  and  expenses,  including,
without  limitation,  interest,  penalties and  reasonable  attorneys'  fees and
disbursements.

              "MATERIAL ADVERSE EFFECT" means a material adverse effect upon the
business,  operations,  Assets or  condition  (financial  or  otherwise)  of the
Company taken as a whole.

              "MULTIEMPLOYER  PLAN" means a "multiemployer plan" as such term is
defined in Section 3(37) of ERISA.

              "NYISO" means (i) New York Independent System Operator and (ii) if
the New York  Independent  System Operator is no longer the  independent  system
operator for the bulk power  transmission  system,  then any  successor  thereto
performing  similar  functions in the State of New York,  including any regional
transmission organization,  independent system operator,  transco, and any other
independent  system  administrator that possesses  operational  control over the
bulk power transmission system.

              "NYSDEC"  means  New  York  State   Department  of   Environmental
Conservation and any successor thereto.

              "NYPSC" means the New York State Public Service Commission and any
successor thereto.

              "NYSRC"  means  the New York  State  Reliability  Council  and any
successor  thereto.

                                      -v-
<PAGE>


              "OPERATING RECORDS" has the meaning set forth in SECTION 10.02 (j)
of the Purchase Agreement.

              "ORDINARY  COURSE  OF  BUSINESS"  means  ordinary  course  of  the
Company's business consistent with past practices.

              "OTHER  ARRANGEMENT" means a benefit program or practice providing
for bonuses,  incentive  compensation,  vacation pay, severance pay,  insurance,
restricted  stock,  stock options,  employee  discounts,  company cars,  tuition
reimbursement or any other perquisite or benefit (including, without limitation,
any fringe  benefit under Section 132 of the Code other than a de minimus fringe
under Code Section  132(e)) to employees,  officers or  independent  contractors
that is not a Plan.

              "PENSION  PLAN" means an "employee  pension  benefit plan" as such
term is defined in Section 3(2) of ERISA.

              "PERMITTED LIENS" has the meaning set forth in SECTION 4.11 of the
Purchase Agreement.

              "PERSON"  means  any   individual,   corporation   (including  any
non-profit  corporation),  general or limited  partnerships,  limited  liability
company, joint venture, estate, trust, association, organization, labor union or
other entity.

              "PLAN" means any written plan, program or arrangement,  that is or
was an "employee  benefit plan" as such term is defined in Section 3(3) of ERISA
and (a) which was or is established  or maintained by the Company;  (b) to which
the Company  contributed  or was  obligated to  contribute or to fund or provide
benefits;  or (c) which provides or promises benefits to any person who performs
or who has performed  services for the Company and because of those  services is
or has been (i) a participant therein or (ii) entitled to benefits thereunder.

              "PUHCA" has the meaning set forth in SECTION  4.32 of the Purchase
Agreement.

              "PRE-CLOSING  PERIODS" has the meaning set forth in SECTION  12.03
of the Purchase Agreement.

              "PURCHASE   AGREEMENT"   means  this  Stock  Purchase   Agreement,
including the Disclosure Schedules and all Exhibits hereto.

              "PURCHASE  PRICE" has the meaning set forth in SECTION 2.02 of the
Purchase Agreement.

              "QUALIFIED  PLAN"  means  a  Pension  Plan  that  satisfies  or is
intended to satisfy, the requirements for tax qualification described in Section
401 of the Code.

              "REAL  PROPERTY"  means the  portions  of real  property  (and all
improvements  thereon) leased or used by the Company or Real Property Affiliates
(including appurtenant easements).

                                      -vi-
<PAGE>


              "REAL PROPERTY AFFILIATES" means CH Syracuse  Properties,  Inc., a
New  York  corporation  and  wholly  owned   non-regulated   subsidiary  of  the
Stockholder and CH Niagara  Properties,  Inc. a New York  corporation and wholly
owned non-regulated subsidiary of the Stockholder.

              "RELEASE"  means  any  emission,  spill,  seepage,  leak,  escape,
discharge,  leaching,  injection, pumping, pouring, emptying, dumping, disposal,
or release of Hazardous  Materials  from the Real Property into or upon the air,
soil, improvements,  surface water, groundwater, the sewer, septic system, storm
drain,  publicly owned treatment works, or waste treatment,  storage or disposal
systems at, on, above, or under the Real Property.

              "SEC"  means  the  Securities  and  Exchange  Commission  and  any
successor thereto.

              " SECTION  338 (H) (10)  ELECTION"  has the  meaning  set forth in
SECTION 12.01 of the Purchase Agreement.

              "SECTION"  means  a  Section  (or a  subsection)  of the  Purchase
Agreement.

              "SECTION 338 FORMS" has the meaning set forth in SECTION  12.01 OF
THE PURCHASE AGREEMENT.

              "SECURITIES ACT" means the Securities Act of 1933, as amended, and
all regulations promulgated thereunder.

              "SECURITY   INTERESTS"   means   any   mortgage,   pledge,   lien,
encumbrance,  charge,  or other security  interest,  other than (a)  mechanic's,
materialmen's,  and similar liens,  (b) liens for Taxes not yet due and payable,
(c) purchase money liens and liens securing  rental payments under capital lease
arrangements, and (d) other liens arising in the ordinary course of business and
not incurred in connection with the borrowing of money.

              "SHARED  ENVIRONMENTAL COSTS" has the meaning set forth in SECTION
11.04 of the Purchase Agreement.

              "SHARES" has the meaning set forth in the Recitals.

              "SIEMENS" means Siemens Westinghouse Power Corporation.

              "STOCKHOLDER"  means Central Hudson Energy  Services,  Inc., a New
York corporation.

              "STOCKHOLDER GUARANTOR" means CH Energy Group, Inc.

              "STOCKHOLDER  INDEMNIFIED  PERSONS" means the  Stockholder and its
Affiliates and their respective officers, directors and employees.

                                     -vii-
<PAGE>


              "STRADDLE  PERIODS" has the meaning set forth in SECTION  12.01 of
the Purchase Agreement.

              "STRADDLE PERIOD TAXES" has the meaning set forth in SECTION 12.01
of the Purchase Agreement.

              "SUBSIDIARY" means any corporation,  partnership, joint venture or
other  legal  entity of which the Company  (either  alone or through or together
with any other Subsidiary) (i) owns, directly or indirectly, fifty percent (50%)
or more of the  stock,  partnership  interests  or other  equity  interests  the
holders of which are generally entitled to vote for the election of the board of
directors  or  other  governing  body of such  corporation,  partnership,  joint
venture or other  legal  entity;  or (ii)  possesses,  directly  or  indirectly,
control  over the  direction  of  management  or policies  of such  corporation,
partnership,  joint venture or other legal entity (whether through  ownership of
voting securities, by agreement or otherwise).

              "SURVEYS"  has the  meaning  set forth in SECTION  4.11 (B) of the
Purchase Agreement.

              "TAX AFFILIATE" means any entity that is a member of an affiliated
group of corporations (within the meaning of Section 1540(a) of the Code) filing
a consolidated U.S. federal income tax return, or a group of corporations filing
a consolidated or combined tax return for state, local or foreign purposes (each
a  "Consolidated  Group"),  if the Company could be held liable for the Taxes of
such entity or Consolidated Group.

              "TAX  CONTEST"  has the meaning set forth in SECTION  12.07 of the
Purchase Agreement.

              "TAX  RETURNS"  means  all  returns,  reports,   declarations  and
information  statements  required to be filed by the  Company or any  Subsidiary
(without  regard to extensions of time  permitted by law or otherwise)  with any
federal,  state, local or foreign governmental  authority or agency with respect
to Taxes, including amendments thereto.

              "TAXES"  means  all  federal,   state,  local  and  foreign  taxes
(including,  without limitation,  income,  profit,  franchise,  sales, use, real
property, personal property, ad valorem, excise, employment, social security and
wage  withholding  taxes) and  installments  of  estimated  taxes,  assessments,
deficiencies,  levies, imports, duties,  withholdings,  or other similar charges
imposed by any governmental or quasi-governmental authorities, and any interest,
penalties or additions to tax imposed thereon or in connection therewith.

              "THIRD  PARTY  CLAIM"  means  any  claim  or  other  assertion  of
liability by any third party.

              "TITLE I PLAN" means a Plan that is subject to Title I of ERISA.

                                     -viii-
<PAGE>


              "TRANSFERRED  EMPLOYEE  RECORDS  " has the  meaning  set  forth in
SECTION 10.02 (J) of the Purchase Agreement.

              "TRANSMISSION  CONGESTION CONTRACTS" or "TCCS" means those certain
transmission  congestion contracts (ID Nos. 2645 and 2646) currently held by the
Company.

              "UCAP" has the meaning established and promulgated by NYISO, as in
effect from time to time.

              "VOLTAGE  SUPPORT   SERVICE"  has  the  meaning   established  and
promulgated by NYISO, as in effect from time to time.

              "WELFARE  PLAN" means an "employee  welfare  benefit plan" as such
term is defined in SECTION 3(1) of ERISA.

                                      -ix-
<PAGE>


                                                                EXHIBIT B TO THE
                                                        STOCK PURCHASE AGREEMENT

                                FORM OF GUARANTY

              THIS GUARANTY (this "Guaranty") is made as of ________, 2002 by CH
Energy Group, Inc., a New York corporation ("Guarantor"),  in favor of WPS Power
Development, Inc., a Wisconsin corporation ("Buyer").

                                    RECITALS

              Concurrently  herewith  (such date the  "Closing  Date"),  Central
Hudson Energy Services, Inc., a New York corporation and wholly-owned subsidiary
of Guarantor ("Seller"), is consummating the sale to Buyer of all of the capital
stock of CH Resources,  Inc., a New York corporation and wholly-owned subsidiary
of Seller ("Company"),  pursuant to that certain Stock Purchase Agreement, dated
as of December __, 2001 (the  "Purchase  Agreement"),  between  Seller and Buyer
(any capitalized  terms used herein and not defined herein having the respective
meanings assigned in the Purchase Agreement).

              To  induce  Buyer  to  enter  into  the  Purchase   Agreement  and
consummate  the  transactions  contemplated  thereby,  Guarantor  has  agreed to
execute and deliver this Guaranty.

              The execution and  performance by Buyer of the Purchase  Agreement
and the transactions  contemplated thereby will benefit Guarantor.  Without this
Guaranty,  Buyer  would not  execute  and  deliver  the  Purchase  Agreement  or
consummate the transactions contemplated thereby. Therefore, in consideration of
the execution and delivery by Buyer of the Purchase  Agreement and  consummation
of the transactions  contemplated  thereby,  Guarantor has agreed to execute and
deliver this Guaranty.

              NOW,  THEREFORE,  in consideration of the premises,  and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Guarantor agrees as follows:

1.            GUARANTY.   Guarantor   guarantees  to  Buyer  and  its  permitted
successors and assigns the full and prompt payment and  performance  when due of
all of the obligations of Seller under the Purchase Agreement (such obligations,
the "Guaranteed Obligations").

2.            UNCONDITIONAL OBLIGATIONS.  This Guaranty is a guaranty of payment
and  performance  and not of collection  and is an absolute,  unconditional  and
irrevocable guarantee of the full and prompt payment and performance when due of
all of the Guaranteed  Obligations,  whether or not from time to time reduced or
extinguished or hereafter increased or incurred, and whether or not recovery may
be, or hereafter may become,  barred by any statute of limitations or otherwise.
If any payment made by Seller or any other Person and applied to the  Guaranteed
Obligations is at any time annulled, set aside, rescinded, invalidated, declared
to be fraudulent or preferential or otherwise  required to be repaid or refunded
for any reason, including bankruptcy,  insolvency,  or reorganization,  then, to
the  extent of such  payment or  repayment,  the  liability  of

<PAGE>


Guarantor  will  continue to be in full force and effect (or be  reinstated,  if
applicable) as fully as if such payment had never been made. Guarantor covenants
that this Guaranty will not be fulfilled or  discharged,  except by the complete
payment and  performance of the Guaranteed  Obligations,  whether by the primary
obligor or Guarantor under this Guaranty. Without limiting the generality of the
foregoing, Guarantor's obligations hereunder will not be released, discharged or
otherwise affected by the following:

              (a)    any change in the Purchase  Agreement or the obligations of
Seller thereunder, or any insolvency, bankruptcy or similar proceeding affecting
Seller  or its  assets  or any  defense  that  may  arise  in  such  insolvency,
bankruptcy or similar proceeding;

              (b)    the  existence  of any claim or set-off  that seller has or
that Guarantor may have against Buyer,  whether in connection with this Guaranty
or any  unrelated  transaction,  provided  that nothing in this Guaranty will be
deemed a waiver by Guarantor of any claim or prevent the  assertion of any claim
by separate suit;

              (c)    any law now or  hereinafter  in effect in any  jurisdiction
affecting any of the terms of the Purchase Agreement or the rights of Buyer with
respect thereto;

              (d)    any  change  in  the  corporate  existence,   structure  or
ownership of Guarantor  or Seller or any  assignment  by Seller of its rights or
obligations under the Purchase Agreement;

              (e)    the existence of any default,  breach,  or  dissolution  in
connection with the Purchase Agreement;

              (f)    the  existence  of any release or amendment or waiver of or
consent to departure  from any other  guaranty for all or any of the  Guaranteed
Obligations;

              (g)    any  exchange  of,  release  of or  non-perfection  of  any
interest in any collateral,  or any release or amendment or waiver of or consent
to departure from any guaranty, for all or any of the obligations of Seller; and

              (h)    any other act,  omission  to act,  delay of any kind by any
party hereto or any other Person, or any circumstance whatsoever that might, but
for the provisions of this Section, constitute a legal or equitable discharge of
the obligations of Guarantor hereunder.

              This Guaranty will in all respects be a continuing,  absolute, and
unconditional guaranty irrespective of the genuineness,  validity, regularity or
enforceability  of  the  Guaranteed  Obligations  or  any  part  thereof  or any
instrument  or  agreement  evidencing  any of  the  Guaranteed  Obligations  ore
relating thereto, or the existence,  validity,  enforceability,  perfection,  or
extent of any  collateral  therefor or any other  circumstances  relating to the
Guaranteed  Obligations  which  might  otherwise  constitute  a  defense  to the
Guaranteed Obligations or this Guaranty.

3.            INDEPENDENT  OBLIGATIONS.  Guarantor  agrees  that the  Guaranteed
Obligations  are  independent  of the  obligations  of Seller under the Purchase
Agreement and if any default occurs hereunder,  a separate action or actions may
be brought  and  prosecuted  against  Guarantor  whether

                                     - 2 -
<PAGE>


or not Seller is joined therein. Buyer may maintain successive actions for other
defaults of Guarantor.  Buyer's  rights  hereunder  will not be exhausted by the
exercise of any of its rights or remedies or by any such action or by any number
of successive actions until and unless all Guaranteed Obligations have been paid
and fully performed.

              (a)    Guarantor  agrees that Buyer may enforce this Guaranty,  at
any  time and from  time to time,  without  the  necessity  of  resorting  to or
exhausting  any security or  collateral  and without the necessity of proceeding
against  Seller.  Guarantor  hereby waives the right to require Buyer to proceed
against Seller, to exercise any right or remedy under the Purchase Agreement, or
to pursue any other remedy or to enforce any other right.

              (b)    Guarantor  will  continue  to be subject  to this  Guaranty
notwithstanding:  (i) any modification,  agreement or stipulation  between Buyer
and Seller,  or their  respective  successors  and assigns,  with respect to the
Purchase Agreement or the Guaranteed Obligations;  (ii) any waiver of or failure
to enforce any of the terms,  covenants or conditions  contained in the Purchase
Agreement  or any  modification  thereof;  (iii) any  release of Seller from any
liability  with  respect  to the  Purchase  Agreement;  or (iv) any  release  or
subordination  of any  collateral  then  held  by  Buyer  as  security  for  the
performance by Seller of the Guaranteed Obligations.

              (c)    The   Guaranteed   Obligations   are  not   conditional  or
contingent upon the genuineness,  validity,  regularity or enforceability of the
Purchase  Agreement or the pursuit by Buyer of any  remedies  which Buyer either
now has or may hereafter have with respect thereto under the Purchase Agreement.

4.            LIABILITY OF GUARANTOR.

              (a)    Buyer may enforce this  Guaranty  upon the  occurrence of a
breach by  Seller  of any of the  Guaranteed  Obligations,  notwithstanding  the
existence of any dispute  between Seller and Buyer with respect to the existence
of any such breach.

              (b)    Guarantor's  performance  of  some,  but  not  all,  of the
Guaranteed  Obligations  will  in  no  way  limit,  affect,  modify  or  abridge
Guarantor's  liability  for  those  Guaranteed  Obligations  that  have not been
performed.

              (c)    Buyer,  upon such  terms as it deems  appropriate,  without
notice or demand and without  affecting the validity or  enforceability  of this
Guaranty or giving rise to any reduction,  limitation,  impairment, discharge or
termination of Guarantor's  liability hereunder,  from time to time may (i) with
respect to Seller's financial obligations,  renew, extend, accelerate,  increase
the rate of interest on, or otherwise change the time, place, manner or terms of
payment of financial obligations that are Guaranteed Obligations, or subordinate
the payment of the same to the payment of any other  obligations,  or any or all
of the above, (ii) settle, compromise, release or discharge, or accept or refuse
any offer of performance with respect to, or  substitutions  for, the Guaranteed
Obligations or any agreement  relating  thereto,  (iii) request and accept other
guarantees  of the  Guaranteed  Obligations  and take and hold  security for the
payment of this Guaranty or the Guaranteed Obligations, (iv) release, surrender,
exchange, substitute,  compromise, settle, rescind, waive, alter, subordinate or
modify,  with or without  consideration,

                                     - 3 -
<PAGE>


any security for performance of the Guaranteed Obligations, any other guarantees
of the  Guaranteed  Obligations,  or any other  obligation  of any  Person  with
respect  to the  Guaranteed  Obligations,  (v)  enforce  and apply any  security
hereafter held by or for the benefit of Buyer in respect of this Guaranty or the
Guaranteed  Obligations  and  direct  the  order or manner  of sale  thereof  or
exercise  of any other  right or remedy  that  Buyer may have  against  any such
security, as Buyer in its discretion may determine,  and (vi) exercise any other
rights available to it under the Purchase Agreement.

              (d)    This Guaranty and the  obligations  of Guarantor  hereunder
will be  valid  and  enforceable  and  will  not be  subject  to any  reduction,
limitation,  impairment,  discharge or  termination  for any reason  (other than
indefeasible  performance  in full  of the  Guaranteed  Obligations),  including
without  limitation  the  occurrence  of any of the  following,  whether  or not
Guarantor  will have had notice or knowledge of any of them:  (i) any failure or
omission to assert or enforce or agreement or election not to assert or enforce,
or the stay or enjoining,  by order of court,  by operation of law or otherwise,
of the  exercise or  enforcement  of any claim or demand or any right,  power or
remedy  (whether  arising  under the  Purchase  Agreement,  at law, in equity or
otherwise)  with  respect to the  Guaranteed  Obligations  or any  agreement  or
instrument  relating  thereto;  (ii)  any  rescission,   waiver,   amendment  or
modification  of,  or any  consent  to  departure  from,  any of  the  terms  or
provisions  (including  without  limitation  provisions  relating  to  events of
default) of the Purchase  Agreement  or any  agreement  or  instrument  executed
pursuant  thereto;  (iii)  Buyer's  consent  to the  change,  reorganization  or
termination  of the  corporate  structure  or  existence  of  Seller;  (iv)  any
defenses,  set-offs or  counterclaims  Seller or Guarantor  may allege or assert
against  Buyer in  respect  of the  Guaranteed  Obligations,  including  but not
limited to failure of  consideration,  breach of warranty,  payment,  statute of
frauds,  statute of limitations,  accord and satisfaction and usury; and (v) any
other act or thing or omission, or delay to do any other act or thing, which may
or might in any manner or to any extent vary the risk of Guarantor as an obligor
in respect of the Guaranteed Obligations.

5.            WAIVERS.  To the fullest extent permitted by law, Guarantor hereby
waives and agrees not to assert or take  advantage  of: (a) any right to require
Buyer to proceed  against  Seller or any other  Person or to proceed  against or
exhaust any security  held by Buyer at any time or to pursue any right or remedy
under the  Purchase  Agreement  or any  other  remedy in  Buyer's  power  before
proceeding  against  Guarantor;  (b) any defense that may arise by reason of the
incapacity,  lack of authority,  death or disability of, or revocation hereby by
Guarantor  or  Seller or any other  Person  or the  failure  of Buyer to file or
enforce a claim against the estate (either in administration,  bankruptcy or any
other  proceeding) of any such Person;  (c) any defense that may arise by reason
of any presentment,  demand for payment or performance or otherwise,  protest or
notice of any other kind or lack thereof;  (d) any right or defense  arising out
of an election of remedies by Buyer; (e) all notices to Guarantor, to Seller, or
to any other Person, including, but not limited to, notices of the acceptance of
this Guaranty or the creation, renewal, extension,  modification, accrual of any
of  Seller's  obligations  under the  Purchase  Agreement,  or of default in the
payment or  performance  of any such  obligations,  enforcement  of any right or
remedy with respect thereto or notice of any other matters relating thereto; (f)
any statute of  limitations  affecting  Guarantor's  liability  hereunder or the
enforcement thereof; (g) any requirements of diligence or promptness on the part
of  Buyer;  (h)  any  defense  arising  out  of  the  lack  of  validity  or the
unenforceability  of the  Guaranteed  Obligations or any agreement or instrument
relating

                                     - 4 -
<PAGE>


thereto or by reason of the cessation of the  liability of Seller,  or any other
Person  from  any  cause  other  than  indefeasible  performance  in full of the
Guaranteed  Obligations;  (i) any defense  based upon any statute or rule of law
which  provides that the obligation of a surety must be neither larger in amount
nor in other  respects  more  burdensome  than  that of the  principal;  (j) any
defense  based upon any act or  omission of Buyer that  directly  or  indirectly
results  in or aids the  discharge  or  release  of Seller or  Guarantor  or any
security given or held by Buyer in connection  with the Guaranteed  Obligations;
and (k) any and all surety ship defenses under applicable law.

6.            CUMULATIVE  RIGHTS.  All  rights  powers  and  remedies  of  Buyer
hereunder  are in  addition to and not in lieu of all other  rights,  powers and
remedies given to Buyer, whether at law, in equity or otherwise.

7.            REPRESENTATIONS AND WARRANTIES.  Guarantor represents and warrants
that:

              (a)    it is a corporation duly organized,  validly existing,  and
in good  standing  under the laws of the State of New York and has all requisite
corporate  powers  and  all  material  governmental  licenses,   authorizations,
consents and approvals  required to own its properties and carry on its business
as now conducted;

              (b)    it has all  requisite  corporate  power  and  authority  to
execute, deliver and perform this Guaranty;

              (c)    the execution,  delivery,  and  performance by Guarantor of
this Guaranty have been duly authorized by all necessary corporate action on the
part of Guarantor;

              (d)    this  Guaranty  has been duly  executed and  delivered  and
constitutes the legal,  valid and binding  obligation of Guarantor,  enforceable
against Guarantor in accordance with its terms;

              (e)    neither the  execution  nor  delivery of this  Guaranty nor
compliance with or fulfillment of the terms,  conditions,  and provisions hereof
will  conflict  with,  result in a material  breach or  violation  of the terms,
conditions,  or  provisions  of, or constitute a material  default,  an event of
default,  or  an  event  creating  rights  of  acceleration,   termination,   or
cancellation, or a loss of rights under, (1) the certificate of incorporation or
by-laws of Guarantor (or equivalent  governing  instruments),  (2) any judgment,
decree,  order,  contract,  agreement,  indenture,  instrument,  note, mortgage,
lease,  governmental  permit, or other  authorization,  right,  restriction,  or
obligation to which Guarantor is a party or any of its property is subject or by
which  Guarantor is bound,  or (3) any federal,  state,  or local law,  statute,
ordinance, rule or regulation applicable to Guarantor;

              (f)    it now has and will  continue  to have  full  and  complete
access to any and all information  concerning the  transactions  contemplated by
the Purchase Agreement and Seller's financial status, and its ability to perform
the Guaranteed Obligations;

              (g)    it  has  reviewed  and  approved  a copy  of  the  Purchase
Agreement  and is fully  informed  of the  remedies  Buyer may  pursue,  with or
without notice to Seller or any other Person,  in the event of default of any of
the Guaranteed Obligations;

                                     - 5 -
<PAGE>


              (h)    it has made and so long as the Guaranteed  Obligations  (or
any portion thereof) remain unsatisfied, it will make its own credit analysis of
Seller and will keep itself  fully  informed as to all aspects of the  financial
condition of Seller,  the  performance  of the Guaranteed  Obligations,  and all
circumstances  bearing  upon the risk of non  payment or  nonperformance  of the
Guaranteed Obligations. Guarantor hereby waives and relinquishes any duty on the
part of Buyer to disclose any matter,  fact or thing  relating to the  business,
operations or conditions of Seller now known or hereafter known by Buyer.

              (i)    no  consent,   authorization,   approval,  order,  license,
certificate,  or permit or act of or from, or  declaration  or filing with,  any
Governmental  Authority  or any party to any  contract,  agreement,  instrument,
lease,  or license to which Guarantor is a party or by which Guarantor is bound,
is required for the execution,  delivery, or compliance with the terms hereof by
Guarantor, except as have been obtained prior to the date hereof; and

              (j)    there  is no  pending  or,  to  its  knowledge,  threatened
action, suit, proceeding, arbitration, litigation, or investigation of or before
any Governmental  Authority or any other entity which challenges the validity or
enforceability of this Guaranty.

8.            GOVERNING  LAW. The  validity,  interpretation  and effect of this
Guaranty are governed by and will be  construed in  accordance  with the laws of
the State of New York  applicable to contracts made and performed in such State,
without regard to conflicts of law doctrines.

9.            ENTIRE  AGREEMENT.  This Guaranty contains the entire agreement of
Guarantor with respect to the transactions  contemplated  hereby, and supersedes
all negotiations,  representations,  warranties,  commitments, offers, contracts
and  writings  prior to the date  hereof,  written or oral,  with respect to the
subject matter hereof. No waiver,  modification or amendment of any provision of
this Guaranty shall be effective unless made in writing and duly signed by Buyer
referring  specifically to this Guaranty, and then only to the specific purpose,
extent and interest so provided.

10.           SEVERABILITY.  If any  provision of this Guaranty is determined to
be  unenforceable  for any  reason by a court of  competent  jurisdiction,  this
Guaranty  will be  adjusted  rather  than  voided,  to achieve the intent of the
parties, and all of the provisions not deemed unenforceable will be deemed valid
and enforceable to the greatest extent possible.

11.           NOTICES. All notices,  requests,  demands and other communications
under this  Guaranty  must be in writing and must be delivered in person or sent
by certified  mail,  postage  prepaid,  or by overnight  delivery,  and properly
addressed as follows:

                                     - 6 -
<PAGE>


              If to Guarantor:

              CH Energy Group, Inc.
              110 Main Street
              Poughkepsie, NY  12601
              Attention:  Allan R. Page
              Facsimile No.  (845) 473-7316

              With a copies to:

              Winston & Strawn
              1400 L Street, N.W.
              Washington, DC  20005-3502
              Attention:  Donald K. Dankner
              Facsimile No.:  (202) 371-5950

              Gould & Wilkie LLP
              One Chase Manhattan Plaza (58th Floor)
              New York, NY  10005-1401
              Attention:  John E. Gould
              Facsimile:  (212) 809-6890


              If to Buyer:

              WPS Power Development, Inc.
              1088 Springhurst Drive
              Green Bay, WI  54304
              Attention:  Charles A. Schrock
              Facsimile No.:  (920) 617-6140

              With a copies to:

              WPS Power Development, Inc.
              1088 Springhurst Drive
              Green Bay, WI  54304
              Attention:  B. Frank Moon
              Facsimile No.:  (920) 617-6140

              Foley & Lardner
              777 East Wisconsin Avenue
              Milwaukee, WI  53202-5367
              Attention:  Edward J. Hammond
              Facsimile No.:  (414) 297-4900

                                     - 7 -
<PAGE>


              Either Guarantor or Buyer may from time to time change its address
for the purpose of notices by a similar notice specifying a new address,  but no
such change is  effective  until  actually  received  by the party  sought to be
charged with its contents.

              All notices and other  communications  required or permitted under
this  Guaranty  which are  addressed  as  provided  in this  Section 11 shall be
effective upon delivery, if delivered personally or by overnight mail, and shall
be effective five (5) days following deposit in the United States mail,  postage
prepaid, if delivered by mail.

12.           CAPTIONS.  The captions of the various  Sections of this  Guaranty
have been inserted for convenience of reference only and do not modify, explain,
enlarge or restrict any of the provisions of this Guaranty.

13.           ASSIGNABILITY.  This  Guaranty  is binding  upon and inures to the
benefit of the  successors  and  assigns  of  Guarantor  and  Buyer,  but is not
assignable by either Party without the prior written consent of the other Party,
which consent will not be  unreasonably  withheld,  except that Buyer may assign
this  Guaranty  to an  Affiliate  without  obtaining  any further  consent  from
Guarantor.  Any assignment by Guarantor is further conditioned on the assignee's
agreement  in writing to assume all of the  Guarantor's  obligations  hereunder;
provided,  however, that any assignment by Guarantor effected in accordance with
this Section 13 shall not relieve  Guarantor of its  obligations and liabilities
under this Guaranty.

14.           CONSTRUCTION  OF AGREEMENT.  Ambiguities or  uncertainties  in the
wording of this  Guaranty  will not be construed  for or against any party,  but
will be  construed  in the manner that most  accurately  reflects  the  parties'
intent as of the date hereof.

15.           NO WAIVER.  Any forbearance or failure to exercise,  and any delay
by Buyer in exercising, any right, power or remedy hereunder will not impair any
such right, power or remedy or be construed to be a waiver thereof,  nor will it
preclude the further exercise of any such right,  power or remedy.  The remedies
herein  provided are  cumulative  and not exclusive of any remedies  provided by
law, by agreement or otherwise.

16.           BANKRUPTCY; POST-PETITION INTEREST.

              (a)    The  obligations of Guarantor  under this Guaranty will not
be reduced, limited, impaired, discharged,  deferred, suspended or terminated by
any proceeding, voluntary or involuntary,  involving the bankruptcy, insolvency,
receivership,  reorganization,  liquidation  or  arrangement of Seller or by any
defense which Seller may have by reason of the order,  decree or decision of any
court or  administrative  body resulting from any such proceeding.  Buyer is not
obligated to file any claim  relating to the  Guaranteed  Obligations  if Seller
becomes subject to a bankruptcy,  reorganization, or similar proceeding, and the
failure of Buyer so to file will not affect  Guarantor's  obligations under this
Guaranty.

              (b)    Guarantor  acknowledges and agrees that any interest on any
portion of the Guaranteed  Obligations  which accrues after the  commencement of
any  proceeding  referred to in clause (a) above (or, if interest on any portion
of the Guaranteed  Obligations ceases to accrue by

                                     - 8 -
<PAGE>


operation of law by reason of the commencement of said proceeding, such interest
as would have  accrued on such  portion of the  Guaranteed  Obligations  if said
proceedings  had  not  been  commenced)  will  be  included  in  the  Guaranteed
Obligations  because  it is the  intention  of  Guarantor  and  Buyer  that  the
Guaranteed Obligations should be determined without regard to any rule of law or
order that may  relieve  Seller of any portion of such  Guaranteed  Obligations.
Guarantor will permit any trustee in bankruptcy, receiver, debtor-in-possession,
assignee  for the benefit of creditors  or any similar  Person to pay Buyer,  or
allow the claim of Buyer in respect of any such interest accruing after the date
on which such proceeding is commenced.

              IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the
date first written above.

                                       CH ENERGY GROUP, INC.


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


                                     - 9 -

</TEXT>
</DOCUMENT>
