ENERGY SERVICES AGREEMENT Dated as of May 1, 2018 By and among EDF ENERGY SERVICES, LLC AND EDF TRADING NORTH AMERICA, LLC, SUMMER ENERGY, LLC AND SUMMER ENERGY NORTHEAST, LLC

(b)ESCO Deliverables to EDFT NA and Originator.  On or prior to the Effective Date and as a condition to the effectiveness of this Agreement, unless otherwise specified below, EDFT NA and Originator, as applicable, shall have received from ESCO and its applicable Subsidiaries the following: 

(i)a certificate of incumbency; 

(ii)a certificate of good standing; 

(iii)a copy of by-laws or operating agreement, as applicable; 

(iv)articles of incorporation or formation, as applicable, certified by an officer or manager of such Person as being true and correct; and 

(v)certified copies of resolutions or other actions or authorizations, duly adopted by its members or other authorized governing body, authorizing its execution, delivery, and performance of the Transaction Documents to which it is a party; and 

(vi)payment of closing-related fees and expenses actually incurred by Originator and EDFT NA, if any; provided, however, that ESCO shall not be responsible for any legal fees in excess of $10,000. 

(c)Additional ESCO Deliverables to Originator.  On or prior to the Effective Date and as a condition to the effectiveness of this Agreement, Originator shall have received from ESCO the following, each of which shall be in form and substance satisfactory to Originator: 

(i)a written general corporate and enforceability legal opinion from ESCO’s and its Subsidiaries counsel; 

(ii)a security interest opinion from ESCO’s and its Subsidiaries counsel; and 

(iii)Exhibit A which sets forth all the account numbers and required information for each ESCO Controlled Account subject to this Agreement. 

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Section 4.PERMITTED TRANSACTIONS 

4.1Transactions.  During the Term, ESCO shall not enter into any Commodity Transaction with any Person other than EDFT NA and ESCO shall not enter into a Commodity Transaction directly with any counterparty to an Approved Counterparty Transaction; provided, however, that ESCO may enter into Commodity Transactions with Persons other than EDFT NA for the purchase of RECs. 

4.2Other Transactions.  EDFT NA and EDFT NA’s Affiliates may enter into Commodity Transactions with Persons other than ESCO and its Affiliates, including such transactions where EDFT NA or an Affiliate of EDFT NA sells commodities to another Person at a price higher or lower than the price made available to ESCO under this Agreement and the ISDA Agreement.  EDFT NA and EDFT NA’s Affiliates may compete in the same markets as ESCO and its Affiliates without restriction based upon EDFT NA’s contractual relationship with ESCO.  Neither Originator’s contractual relationship with ESCO nor EDFT NA’s contractual relationship to ESCO is intended to create any fiduciary relationship, partnership, sole supply arrangement, or other similar relationship with ESCO or any of its Affiliates. 

Section 5.REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇ 

▇▇▇▇ represents and warrants as of the Effective Date on behalf of itself and its Subsidiaries, to which these representations and warranties shall apply on a consolidated basis, where applicable, unless otherwise noted, except to the extent that a representation and warranty expressly relates to a specified date, in which case such representation and warranty shall be true and correct as of such date or as otherwise provided in Section 3.7(d), as follows:

5.1 Existence, Qualification and Power; Compliance with Laws.  ESCO is a limited liability company duly organized, validly existing and in good standing under the laws of the state of its formation.  ESCO (i) has the full power and authority to own and operate its properties, to carry on its business as now conducted and proposed to be conducted and to execute and deliver this Agreement and the other Transaction Documents to which it is a party and to perform its obligations hereunder and thereunder; (ii) has delivered to Originator true and complete copies of its Organizational Documents as amended and in effect; (iii) is qualified to do business and in good standing in every jurisdiction where it owns, leases or operates property and wherever necessary to carry out its business and operations, except where the failure to so qualify would not reasonably be expected to have a Material Adverse Effect; (iv) has received all material governmental and regulatory approvals, licenses and authorizations necessary for the conduct of its business and is in good standing thereunder, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect; and (v) is in compliance with all Laws, except to the extent that a failure to do so would not reasonably be expected to have a Material Adverse Effect. 

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5.2Equity Interests.  Except as set forth on Schedule 5.2 (including any updates provided pursuant to Section 3.7(d)), ESCO does not own directly or indirectly, any Equity Interest in any Person. 

5.3Authorization; No Contravention.  The execution, delivery and performance by ESCO of the Transaction Documents to which it is a party has been and remain duly authorized by all necessary corporate or limited liability company action, as applicable, and does not and will not (i) contravene or violate any provision of its Organizational Documents or any order, judgment or decree of any court or Governmental Authority binding on ESCO; (ii) conflict with or result in any breach or contravention of, or require any payment to be made under (x) any contractual obligation to which ESCO is a party or affecting ESCO or the properties of ESCO, except to the extent such conflict or failure would not reasonably be expected to have a Material Adverse Effect, or (y) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which ESCO or its property is subject; (iii) violate any Law; (iv) result in the creation of any Lien other than a Permitted Lien; or (v) require any approval of members or any approval or consent of any Person, except for such approvals or consents which will be obtained on or before the Effective Date. 

5.4Governmental Authorization; Other Consents.  All governmental or regulatory consents, authorizations, approvals, registrations and declarations required for the due execution, delivery and performance by ESCO of this Agreement, the ISDA Agreement and the other Transaction Documents to which it is a party have been obtained from or, as the case may be, filed with the relevant Governmental Authorities having jurisdiction over ESCO (other than recordings and filings in connection with the Liens granted to Originator under the Security Documents) and remain in full force and effect, and all conditions thereof have been duly complied with and no other action by, and no notice to or filing with, any Governmental Authority is required for such execution, delivery or performance of this Agreement or the other Transaction Documents to which it is a party. 

5.5Binding Effect.  This Agreement and the each of the other Transaction Documents constitutes the legal, valid and binding obligations of ESCO, enforceable against it in accordance with its respective terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally or by general equity principles, whether such enforceability is considered in a Proceeding at law or in equity. 

5.6Property; Liens.  ESCO owns no real property.  ESCO is the tenant of real property leased to the ESCO under the leases set forth in Schedule 5.6 (including any updates provided pursuant to Section 3.7(d)) or any replacement or substitute lease executed after the date hereof.  Except as set forth in Schedule 5.6 (including any updates provided pursuant to Section 3.7(d)), no Person other than ESCO owns any equipment or other tangible assets or properties necessary for the operation of the Retail Power Business or Retail Gas Business.  ESCO has (i) valid leasehold interests in (in the case of leasehold interests in realty or personal property), or (ii) good title to (in the case of all other personal property), all of its material properties and assets reflected in the financial statements provided or to be provided pursuant to the ISDA Agreement, in each case except for assets disposed of since the date of such financial  

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statements in the ordinary course of business.  Except for (x) the security interests created by the Security Agreements, and (y) Permitted Liens, ESCO owns the Collateral free and clear of any Lien.  Except for filings naming Originator or EDFT NA as secured party or with respect to Permitted Liens, no effective financing statement or other instrument similar in effect covering all or any part of the Collateral is on file in any filing or recording office.

5.7Perfection.  The security interests in the Collateral granted to Originator and EDFT NA under the Security Agreements and the Pledge Agreements constitute valid first priority security interests (subject to Permitted Liens) in the Collateral, securing the payment of the Secured Obligations.  Upon the filing of UCC financing statements naming ESCO as “debtor,” naming Originator and EDFT NA as “secured party” and describing the Collateral in the applicable Office of the Secretary of State (or analogous office of the applicable state), the security interests in the Collateral granted to Originator and EDFT NA will constitute perfected security interests therein prior to all other Liens (other than Permitted Liens) in all such Collateral that may be perfected by the filing of a financing statement, and all filings and other actions necessary or desirable to perfect and protect such security interests shall have been duly made or taken. 

5.8Contracts and Arrangements.  ESCO has entered into all contracts and arrangements necessary to conduct the Retail Gas Business or Retail Power Business, as applicable, except to the extent the failure to do so would not reasonably be expected to have a Material Adverse Effect.  All such contracts and arrangements are in force and effect in all material respects, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability and ESCO is not in breach or default under any such contract or arrangement, except for such breach or default that would not reasonably be expected to have a Material Adverse Effect. 

5.9Litigation.  Except as set forth on Schedule 5.9 (including any updates provided pursuant to Section 3.7(d)), there are no Proceedings at law or in equity, or before or by any court or other Governmental Authority that are pending or, to the knowledge of ESCO, threatened against or affecting ESCO or any property of ESCO that, if determined adversely to ESCO, would reasonably be expected to have a Material Adverse Effect.  Except as set forth on Schedule 5.9 (including any updates provided pursuant to Section 3.7(d)), the ESCO is not subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or other Governmental Authority, except for those that would not reasonably be expected to result in a Material Adverse Effect. 

5.10Taxes.  All tax returns and reports of ESCO have been timely filed or a timely extension has been filed, and all taxes shown on such tax returns to be due and payable and all assessments, fees and other governmental charges upon ESCO and upon its properties, assets, income, businesses and franchises shown to be due and payable have been paid when due and payable, except (i) those which are being actively contested by it in good faith and by appropriate proceedings and for which adequate reserves or other appropriate provisions, if any, have been made or provided for in conformity with GAAP, or (ii) those the failure to pay would not reasonably be expected to have a Material Adverse Effect.  To the knowledge of ESCO, as of  

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the Effective Date there is no proposed tax assessment against ESCO that would reasonably be expected to have a Material Adverse Effect.

5.11Liens.  No Liens on the Collateral exist, other than Permitted Liens. 

5.12Insurance.  The properties of ESCO are insured with financially sound and reputable insurance companies, in such amounts, with such deductibles and covering such risks in accordance with Good Utility Practice. 

5.13ERISA Compliance. 

(a)ESCO has not established, operated or administered any Pension Plan. 

(b)No ERISA Event has occurred or is reasonably expected to occur. 

5.14Intellectual Property; Licenses, Etc.  ESCO owns, or possesses the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are necessary for the operation of their business as currently conducted, without conflict with the rights of any other Person, other than to the extent the failure to own or have such rights would not individually or in the aggregate result in a Material Adverse Effect.  To the knowledge of ESCO, no slogan or other advertising device, product, process, method, substance, part or other material employed by ESCO infringes upon any rights held by any other Person, except any such infringement that would not reasonably be expected to have a Material Adverse Effect.  ESCO has not received a written notice from a third party after the Effective Date asserting a claim that ESCO is infringing the IP Rights of such third party, except any such notice that would not reasonably be expected to have a Material Adverse Effect.  No IP Right is subject to any Lien, other than Permitted Liens. 

(a)ESCO owns or has access to (through arm’s length service contracts then in effect) the material Information Technology Systems necessary to operate the Retail Gas Business and Retail Power Business of ESCO, including Information Technology Systems providing capabilities consistent with the arrangements in place for the Retail Gas Business and Retail Power Business as of the Effective Date. 

5.15Solvency.  ESCO is, and after giving effect to the incurrence of all obligations being incurred in connection with the Transaction Documents will be, Solvent. 

5.16No Other Accounts.  As of the Effective Date, no “deposit account” or “securities account” (each as defined in the UCC) or other account has been established or is maintained by ESCO or in ESCO’s name, other than the ESCO Controlled Accounts. 

5.17MBRA.  ESCO has market-based rate authority validly issued and outstanding from FERC authorizing ESCO to sell power at wholesale and at market-based rates. 

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Section 6.AFFIRMATIVE COVENANTS OF ESCO 

In addition to the other covenants contained in this Agreement, during the Term, ESCO shall adhere (and, where applicable, shall cause its Subsidiaries to adhere) to the following covenants:

6.1Payment of Taxes.  ESCO and each of ESCO’s Subsidiaries shall pay all taxes, assessments and other charges imposed upon it or any of its properties or assets or in respect of any of its income, businesses or franchises by any Governmental Authority before any penalty accrues thereon, and all claims (including claims for labor, services, materials and supplies) for sums that have become due and payable and that by law have or may become a Lien upon any of its properties or assets, prior to the time when any penalty or fine shall be incurred with respect thereto; provided that no such tax, assessment, charge or claim need be paid if (i) it is being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as (x) a reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor, and (y) in the case of a tax, assessment, charge or claim which has or may become a Lien against any of the Collateral, such proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such charge or claim, or (ii) the failure to pay would not reasonably be expected to have a Material Adverse Effect. 

6.2Maintenance of Accounting and Information Systems.  ESCO and each of ESCO’s Subsidiaries shall at all times maintain (i) a system of accounting established and administered in accordance with sound business practices to permit preparation of financial statements in conformity with GAAP, in all material respects, and (ii) its Information Technology Systems except, in each case, where the failure to do so would not reasonably be expected to have a Material Adverse Effect. 

6.3Books and Records.  ESCO and each of ESCO’s Subsidiaries shall (i) maintain up-to-date and proper books of record and account, in which entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of ESCO and its Subsidiaries, including records concerning its customers and its accounts receivable and adequate back-up records, and (ii) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over ESCO and its Subsidiaries, except, in each case, where the failure to do so would not reasonably be expected to have a Material Adverse Effect. 

6.4Maintenance of Properties.  ESCO and each of ESCO’s Subsidiaries shall (i) maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted; (ii) make all necessary repairs thereto and renewals and replacements thereof; and (iii) use the standard of care typical in the industry in the operation and maintenance thereof, except, in each case, where the failure to do so would not reasonably be expected to have a Material Adverse Effect; provided, however, it shall not be an Event of Default if a failure to comply with the foregoing is remedied or waived within thirty (30) days after written demand is provided to ESCO or any of ESCO’s Subsidiaries. 

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6.5Maintenance of Insurance.  ESCO and each of ESCO’s Subsidiaries shall maintain insurance covering its properties with financially sound and reputable insurers, in such amounts, with such deductibles and covering such risks in accordance with Good Utility Practice. 

6.6Inspection.  ESCO and each of ESCO’s Subsidiaries shall permit any authorized representatives designated by Originator to visit and inspect any of ESCO’s or its Subsidiaries’ properties, to inspect, copy and take extracts from its financial and accounting records, to inspect and audit its accounts receivable, and to discuss its affairs, finances and accounts with its officers and independent public accountants (so long as an authorized officer of ESCO is present at and allowed to participate in such discussion), all upon at least three (3) Local Business Days’ notice and at reasonable times during normal business hours, (an “Inspection”); provided, however, that so long as no Event of Default, Potential Event of Default or Termination Event has occurred with respect to ESCO and is continuing, then Originator shall not make such Inspections more often than once per calendar month and each such Inspection shall be at Originator’s expense, and provided further that any such Inspection shall not materially interfere with or create an undue burden on ESCO’s day-to-day operations. 

6.7Reporting.  ESCO shall deliver to Originator: 

(a)Notices of Termination Events and Other Events.  Promptly upon any of the chief financial officer, president, or the controller (or similarly situated officer) of ESCO obtaining knowledge (but in no event later than three (3) Local Business Days following the time at which any such officer reasonably obtained such knowledge):  (i) of any condition or event that constitutes a Specified Potential Event of Default, an Event of Default or a Termination Event under and as defined in this Agreement, (ii) that any Person has given any notice to ESCO or taken any other action with respect to a claimed default or event or condition that would constitute any of the events described in clause (i), (iii) of the institution of, or non-frivolous threat of, any Proceeding against or affecting ESCO or any property of ESCO not previously disclosed in writing to Originator by ESCO that, in any case if adversely determined, would reasonably be expected to have a Material Adverse Effect, or (iv) of any material development in any Proceeding that, in any case if adversely determined, would reasonably be expected to have a Material Adverse Effect, ESCO shall provide Originator with a written notice of such condition, event or change. 

(b)Annual Budget.  As soon as available, and in any event within ten (10) days prior to the beginning of each Fiscal Year, a budget for such Fiscal Year for ESCO and its Subsidiaries on a consolidated basis, in the form utilized by ESCO as of the Effective Date for such purpose (each, an “Annual Budget”) (substantially similar to the budget set forth in Schedule I-AGAEC), including projected statements of cash flows and projected statements of income and expenses on a monthly basis.  Such budget shall (i) be prepared in good faith and based upon reasonable assumptions, (ii) be accompanied by a certification of the chief financial officer or controller of ESCO as to the truthfulness and correctness thereof based upon the express assumptions stated therein.  The Annual Budget shall include an itemized budget for General and Administrative Expenses for ESCO and its Subsidiaries on a consolidated basis for each calendar quarter of the related Fiscal Year.  The budgeted General and Administrative  

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Expenses for ESCO and its Subsidiaries on a consolidated basis for any Fiscal Year shall not exceed the Annual General and Administrative Expenses Cap for such Fiscal Year.  ESCO shall review its Annual Budget on a quarterly basis and may, at such time, request a revision to the then-current Annual Budget for such Fiscal Year for ESCO on a consolidated basis by giving Originator at least fifteen (15) days written notice prior to the requested effective date of the requested revision to the Annual Budget.  Requested revisions to the Annual Budget shall be (i) prepared in good faith and based upon reasonable assumptions, and (ii) accompanied by a certification of the chief financial officer or controller of ESCO as to the true and correctness thereof based upon the express assumptions stated therein.  Annual Budget revision requests shall include projected statements of cash flows and projected statements of income and expenses on a monthly basis.  The Annual Budget shall be deemed modified after ESCO receives Originator’s prior written consent to incorporate any such revisions consented to by Originator in connection with any such quarterly review.

(c)Monthly Compliance Report.  On or before 11:59 p.m. (Houston time) (“End Of Day”) on the 45^th day after the end of each calendar month (or the next Local Business Day if not a Local Business Day) a monthly compliance package (the “Monthly Compliance Report”), certified by the chief financial officer or controller of ESCO as being true and correct in all material respects, reporting the calculation for ESCO, as of the end of such calendar month, of (i) the Facility Utilization, (ii) the Discounted Asset Coverage Test, (iii) Summary Portfolio Settlement Report (which will include a summary of net sales and supply volumes by month by zone and a calculation of the expected cash to be realized by period and a daily Transaction listing, including, without limitation, net gain/loss on position/market price changes, new Gas or Power Transactions, gas or power adjustments and curve shift), (iv) Unbilled Receivables Report, (v) Customer Collateral Deposit Report, (vi) the Distributable Cash, (vii) Closed Deal Volume Report, (viii) Collateral schedule reflecting Credit Support Amount posted by Originator in favor of ESCO, (ix) Monthly Financial Statements, (x) a report showing the current actual revenues and expenditures compared to budget, (xi) Accounts Receivable reports, and (xii) cash flow forecasts for the two month period commencing on the third month immediately following such month (the “Cash Flow Forecast”).   

(d)Weekly Reports.  On or before the End of Day of Tuesday of each week (or the next Local Business Day if not a Local Business Day), an electronic report detailing (i) a Weekly Compliance Certificate and (ii) a Weekly Cash Balance Report, in each case in a form approved by Originator in its reasonable discretion. 

(e)Quarterly REC Report.  Within fifteen (15) days following the end of any fiscal quarter, a report reflecting ESCO’s REC exposure by product and volume. 

(f)Other Information.  Any other information reasonably requested by Originator, which shall be provided in a reasonable period of time given the nature of the request. 

(g)Initially Capitalized Terms and Reports.  The initially capitalized terms in this Section 6.7 referring to reports, unless defined elsewhere, shall mean the reports described in Section 6.7(d). Each calculation required under this section will be shown in reasonable detail in  

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a form reasonably acceptable to Originator and will be based on ESCO systems and reports as currently in existence.  Where allocations or estimations are required in making such calculations, ESCO will use reasonable allocation and estimation procedures.

6.8Customer Payment Instructions. 

(a)ESCO and each of ESCO’s Subsidiaries shall direct each Customer and each other obligor of ESCO and its Subsidiaries to comply with the Customer Payment Instructions or, in the case of Customers in POR Markets, to comply with the credit and billing arrangements maintained by the applicable POR Market. 

(b)ESCO and each of ESCO’s Subsidiaries shall undertake commercially reasonable efforts to collect past due Receivables from its Customers and collect the defaulted claims from its counterparties, or, in the case of Customers in POR Markets, comply with the applicable arrangements maintained by the applicable POR Market, if any of its Customers or counterparties files for bankruptcy. 

6.9Credit Card Processor Payment Instructions.  ESCO and each of ESCO’s Subsidiaries shall direct each Credit Card Processor of ESCO and its Subsidiaries to comply with the Credit Card Processor Payment Instructions applicable to ESCO and its Subsidiaries. 

6.10Monies Held in Trust.  ESCO and each of ESCO’s Subsidiaries shall hold any checks or amounts received directly by ESCO or any Subsidiary of ESCO from any Customer or other Person in trust for Originator and promptly place or deposit such checks or amounts into the ESCO Revenue Account. 

6.11Compliance with Laws.  ESCO and each of ESCO’s Subsidiaries shall comply with all Requirements of Law, including, without limitation, those “anti-slamming” laws relating to the online enrollment of Customers, except where the failure to so comply would not reasonably be expected to have a Material Adverse Effect. 

6.12Customer.  ESCO and each of ESCO’s Subsidiaries shall use commercially reasonable efforts to at all times maintain (i) all Customer Contracts in full force and effect and (ii) payment arrangements and related directions between ESCO or any Subsidiary of ESCO and its Customers that are reasonably acceptable to Originator, except, in each case, where the failure to so comply would not reasonably be expected to have a Material Adverse Effect. 

6.13Risk Management Policy.  ESCO and each of ESCO’s subsidiaries shall comply with the Risk Management Policy (the current version of which is attached as Exhibit E), as may be amended from time to time with the prior written approval of Originator. 

6.14Operations of the Retail Gas Business and Retail Power Business.  ESCO and each of ESCO’s Subsidiaries shall at all times during the Term operate the Retail Gas Business and Retail Power Business in accordance with Good Utility Practice, including without limitation, compliance with all load forecasting and related compliance requirements. 

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6.15Maintenance of Permits.  ESCO and each of ESCO’s Subsidiaries shall at all times maintain such Permits and Operating Agreements (including without limitation, to the extent applicable, market-based rate authorization from FERC) as may be necessary to operate the Retail Gas Business and Retail Power Business, as applicable, except where the failure to maintain any such Operating Agreement would not reasonably be expected to cause a Material Adverse Effect. 

6.16TDSPs.  If ESCO or any Subsidiary of ESCO serves or bills Customers through a transmission and distribution service provider (“TDSP”), ESCO or such Subsidiary will use commercially reasonable efforts to enter into any necessary Operating Agreement with such TDSP at its own expense. 

6.17Customer Contracts.  ESCO will provide Originator with its form Customer Contracts for any Applicable Market or new market it intends to enter (for Originator’s approval 

and inclusion in Exhibit B hereto) at least ten (10) Local Business Days prior to entering a new market or other jurisdiction in which ESCO has requested or anticipates doing business as permitted by this Agreement and the ISDA Agreement.  The Parties will use commercially reasonable efforts to revise and approve such Customer Contract forms in a reasonably expedient manner and add them to Exhibit B attached hereto.

6.19Collateral Assignment.  ESCO shall use its commercially reasonable efforts to deliver to Originator a landlord consent to collateral assignment for each location of leased real property substantially in the form attached as Exhibit E to the Security Agreement, within thirty (30) days of the Effective Date of this Agreement.  In the event ESCO is unable to procure one or more consents to collateral assignment despite such efforts, then ESCO shall use commercially reasonable efforts to obtain a landlord consent and waiver or similar document in form and substance to be agreed to by Originator and ESCO from such non consenting landlord. 

6.20Further Assurances.  Promptly upon the reasonable request by Originator, (a) correct any material defect or error that may be discovered in any Secured Document or in the execution, acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as Originator may reasonably require from time to time in order to (i) carry out more effectively the purposes of the Secured Documents, (ii) to the  

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fullest extent permitted by applicable Law, subject the properties, assets, rights or interests of ESCO to the Liens now or hereafter intended by the Parties thereto to be covered by any of the Secured Documents, (iii) perfect and maintain the validity, effectiveness and priority of any of the Secured Documents and any of the Liens intended by the Parties thereto to be created thereunder and (iv) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto Originator the rights granted or now or hereafter intended by the Parties hereto to be granted to Originator under any Secured Document or under any other instrument executed in connection with any Secured Document to which ESCO is or is to be a party.

6.21Receivables Financing.  ESCO acknowledges that Originator may, at its sole option, finance all or a portion of the Facility Utilization contemplated hereunder through the use of a receivables financing or similar vehicle and ESCO shall execute all necessary documents and take all other actions reasonably required by Originator or its source of funds to effect a true sale of assets for value or otherwise effect any such receivables financing, which may entail  

6.22ESCO providing additional pledges, security interests or other protections to Originator and/or its source of funds in a separate credit facility or financing vehicle; provided, however, that ESCO shall not be required to take any action and or execute any documentation that could reasonably be expected to impair ESCO’s business or operations, create any additional incremental material liabilities or obligations of ESCO, or materially modify the economic benefits of the transactions contemplated by any of the Transaction Documents to ESCO’s detriment.  Originator shall reimburse ESCO for any reasonable costs or expenses (including any legal fees and expenses) incurred by ESCO in connection with the foregoing. 

Section 7.NEGATIVE COVENANTS OF ESCO 

During the Term, ESCO shall adhere (and, where applicable, shall cause its Subsidiaries to adhere) to the following covenants:

7.1Indebtedness.  Neither ESCO nor any Subsidiary of ESCO shall directly or indirectly, create, incur, assume, or guaranty, or otherwise become or remain directly or indirectly liable with respect to, any Indebtedness other than Permitted Indebtedness. 

7.2Liens.  Neither ESCO nor any Subsidiary of ESCO shall directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or asset of any kind (including any document or instrument in respect of goods or accounts receivable) of ESCO or a Subsidiary of ESCO, whether now owned or hereafter acquired, or any income or profits therefrom, or file or permit the filing of any financing statement or other similar notice of any Lien with respect to any such property, asset, income or profits under the UCC or under any similar recording or notice statute, except for Permitted Liens. 

7.3Restrictive Agreements.  Neither ESCO nor any Subsidiary of ESCO shall enter into any agreement (other than this Agreement, the ISDA Agreement, the Secured Documents or any other agreement, document or arrangement relating to Permitted Indebtedness or Permitted Liens) prohibiting the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired, except (i) any agreement that does not restrict in any  

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manner (directly or indirectly) Liens created pursuant to the Security Documents on any Collateral securing the Secured Obligations and does not require the direct or indirect granting of any Lien securing any Indebtedness or other obligation by virtue of the granting of Liens on or pledge of property of ESCO or any Subsidiary of ESCO to secure the Secured Obligations; and (ii) any prohibition or limitation that (a) exists pursuant to applicable Law, (b) consists of customary restrictions and conditions contained in any agreement relating to the sale of any property permitted under this Agreement pending the consummation of such sale, (c) restricts subletting or assignment of leasehold interests contained in any lease, or (d) is imposed by any amendments or refinancings that are otherwise not prohibited by this Agreement or the contracts, instruments or obligations referred to above; provided that such amendments and refinancings are no more materially restrictive with respect to such prohibitions and limitations than those prior to such amendment or refinancing.

7.4Investments.  Except as otherwise agreed to by Originator in writing or in connection with any transaction permitted by the provisions of Section 3.7(d), neither ESCO nor any Subsidiary of ESCO shall directly or indirectly, make or own any Investment in any Person, including any joint venture, or acquire, by purchase or otherwise, all or substantially all the business, property or fixed assets of, or capital stock or other ownership interest of any Person, or any division or line of business of any Person, or acquire any Subsidiary; other than (i) Investments in Cash Equivalents, (ii) Interest Hedging Obligations, (iii) Investments in securities of trade creditors or customers in the ordinary course of business received upon foreclosure or pursuant to any plan of reorganization or liquidation or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers, (iv) deposits or advances associated with Permitted Indebtedness hereunder, (v) Investments funded in accordance with the Annual Budget, and (vi) amounts deposited in the ESCO Investment Accounts.  The amount of any Investment shall be the original cost of such Investment, minus the amount of any portion of such Investment repaid to such person as a dividend, repayment of loan or advance, release or discharge of a guarantee or other obligation or other transfer of property or return of capital, as the case may be, but without any other adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment or interest earned on such Investment. 

7.5Fundamental Changes.  Neither ESCO nor any Subsidiary of ESCO shall alter its corporate, capital or legal structure as a limited liability company, or enter into any transaction of merger or consolidation, or convey, sell, lease or sub-lease (as lessor or sublessor), transfer or otherwise dispose of, in one transaction or a series of transactions, all or substantially of its business, property or assets (including its notes or receivables), whether now owned or hereafter acquired, or enter into any merger or consolidation. 

7.6Asset Sales.  Neither ESCO nor any Subsidiary of ESCO shall dispose of any of its assets (whether tangible or intangible) other than (a) assets sold in the ordinary course of business, (b) dispositions of cash and Cash Equivalents, (c) any issuance or sale of any Equity Interests of ESCO or any Subsidiary of ESCO so long as no Event of Default results therefrom, (d) dispositions of used, worn out, obsolete or surplus property in the ordinary course of business and the abandonment or other disposition of intellectual property that is, in the reasonable judgment of ESCO, no longer economically practicable to maintain or useful in the conduct of  

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their respective business, (e) dividends and other distributions permitted by this Agreement, (f) licenses, assignments and sales of intellectual property in the ordinary course of business, (g) discounts, adjustments, settlements and compromises of accounts receivable and contract claims in the ordinary course of business, (h) non-exclusive licenses of intellectual property in the ordinary course of business, and (i) discounts, cancellations and forgiveness of accounts receivable in the ordinary course of business to the extent permitted by the Credit and Collection Policy.

7.7Transactions with Affiliates.  Neither ESCO nor any Subsidiary of ESCO shall directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any holder of any class of equity Securities of ESCO or any Affiliate of ESCO, on terms that are less favorable to ESCO or such Subsidiary of ESCO, other than those that might be obtained at the time from Persons who are not such a holder or Affiliate other than transactions for the purpose of financing prepaid broker commissions at then-prevailing market rates.   

7.8Line of Business.  Neither ESCO nor any Subsidiary of ESCO shall engage in any business other than the Retail Gas Business, Retail Power Business, or any other businesses reasonably related or ancillary thereto and performing under the Transaction Documents and any activities incidental or related thereto to the extent not prohibited under the Transaction Documents. 

7.9Restricted Payments.  Neither ESCO nor any Subsidiary of ESCO shall declare or pay any dividends or distributions (other than in additional Securities) or return any capital to its members or authorize or make any other distribution, payment, or delivery of property or cash to its members as such, or redeem, retire, purchase or otherwise acquire, directly or indirectly, for a consideration, any of its Securities, now or hereafter outstanding (or any warrants or options or stock appreciation rights in respect of any such Securities), or set aside any funds for any of the foregoing purposes; provided, however, that any distributions (i) by ESCO to any Subsidiary of ESCO or (ii) by any Subsidiary of ESCO to ESCO or (ii) made in accordance with Section 12, shall be permitted. 

7.10Risk Management and Credit Collection Policy.  Neither ESCO nor any Subsidiary of ESCO shall (a) fail to comply with, or, except as permitted under Section 6.13, amend, restate, supplement or waive, in any material respect, any provision or term of the Risk Management Policy, (b) amend, restate or supplement, in any material respect, any provision or term of the Credit and Collection Policy or (c) fail to comply with, or waive compliance with, in any material respect, the Credit and Collection Policy. 

7.11Billing Software.  Neither ESCO nor any Subsidiary of ESCO shall replace its computer software used to invoice Customers in the Retail Gas Business or Retail Power Business without providing prior written notice to Originator. 

7.12No Other Accounts.  Neither ESCO nor any Subsidiary of ESCO shall establish, maintain or permit to be maintained any “deposit account” or “securities account” (each as  

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defined in the UCC) or other account (including, without limitation, any lockbox or associated postal box) in the name of ESCO, other than the ESCO Controlled.

7.13Changes in Fiscal Periods.  Neither ESCO nor any Subsidiary of ESCO shall permit the fiscal year of ESCO or any Subsidiary of ESCO to end on any day other than December 31 or change the method of determining fiscal quarters of ESCO or any Subsidiary of ESCO without the prior written consent of Originator. 

7.14Customer Concentration Limit.  ESCO shall not permit the Customer Concentration Percentage for commercial and industrial Customers and residential Customers that are not located in POR Markets to exceed the percentage cap for same set forth on Exhibit D, unless approved in writing by Originator; provided, however, it shall not be an Event of Default if any breach of the foregoing is remedied or waived within thirty (30) days after written demand is provided to ESCO. 

7.15Permits.  Neither ESCO nor any Subsidiary of ESCO shall abandon, terminate or permit to lapse any Permit existing on the date hereof or thereafter acquired by ESCO or any Subsidiary of ESCO that may be necessary to operate the Retail Gas Business and Retail Power Business, as applicable, unless agreed by Originator or unless the failure to have such Permit would not reasonably be expected to cause a Permit Material Adverse Effect. 

7.16Certain Contracts.  Neither ESCO nor any Subsidiary of ESCO shall terminate, materially breach or otherwise cause or permit to terminate (for reason other than the end of the stated term) any contract set forth, or required to be set forth in Schedule 5.6, unless such termination or breach would not reasonably be expected to cause a Material Adverse Effect. 

7.17Portfolio Margin.  ESCO shall not undertake a portfolio of Customer Contracts with, and shall not enter into new Customer Contracts that, if entered, would cause ESCO’s portfolio of Customer Contracts to have a weighted average (by volume) Gross Margin per MWh or MMBtu, as applicable, plus the ▇▇▇▇-to-market values of any applicable ▇▇▇▇▇▇, less than zero; provided, however, it shall not be an Event of Default if any breach of the foregoing is remedied or waived within thirty (30) days after written demand is provided to ESCO. 

7.18Governmental Limitation.  ESCO shall not permit the aggregate volume of Commodity Transactions with Customers that are Governmental Authorities to exceed 25% of the total aggregate volume of ESCO’s portfolio of Commodity Transactions without Originator’s prior written consent; provided, however, it shall not be an Event of Default if such failure is remedied or waived within thirty (30) days after written demand is provided to ESCO; and, provided, further, that the foregoing shall not apply with respect to public school districts, municipal aggregation communities and villages or local municipalities even if the foregoing are otherwise treated as Governmental Authorities. 

7.19Term of Fixed Price Contracts.  Neither ESCO nor any Subsidiary of ESCO shall permit any Fixed Price Contract to exceed a term of four (4) years; provided, however, it shall not be an Event of Default if any breach of the foregoing is remedied or waived within thirty (30) days after written demand is provided to ESCO. 

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7.20Contract Ratios.   

(a)ESCO shall, at all times, maintain a “matched risk book” with respect to Fixed Price Contracts that involve the purchase and sale of electric power, such that the net exposure on the sell side and buy side all such Fixed Price Contracts shall not expose ESCO to a mismatch risk of more than 10% of the total volume of such Fixed Price Contracts. 

(b)ESCO shall, at all times, maintain a “matched risk book” with respect to Variable Price Contracts that involve the purchase and sale of electric power, such that the net exposure on the sell side and buy side all such Variable Price Contracts shall not expose ESCO to a mismatch risk of more than 10% of the total volume of such Variable Price Contracts during the next 30 days. 

(c)For any calendar month, ESCO shall not permit the aggregate volume of Variable Price Contracts to be less than 10% of the aggregate realized volume of ESCO’s portfolio of Customer Contracts. 

7.21No Prepay to Affiliated Brokers.  Neither ESCO nor any Subsidiary of ESCO shall prepay any broker that is an Affiliate of ESCO or such Subsidiary of ESCO. 

7.22Customer Contracts.  Neither ESCO nor any Subsidiary of ESCO shall enter into any material Customer Contract other than an Approved Customer Contract, unless approved by Originator. 

Section 8.CERTAIN FEES AND EXPENSES 

8.1Monthly Fees.  ESCO shall, on each Monthly Payment Date, pay to Originator an amount equal to the sum of the Credit Fee – Power Transactions, the Credit Fee – Gas Transactions, Credit Fee – REC Transactions and Credit Fee – Capacity Transactions. 

8.2REC Penalty Reimbursement.  Where applicable, ESCO shall reimburse EDFT NA for and be responsible for the cost incurred by EDFT NA, if any, with respect to REC penalties assessed by any regional transmission organization or independent system operator related to ESCO (provided such penalties do not result (i) from EDFT NA’s failure to purchase RECs on behalf of ESCO after EDFT NA has been given reasonable advance notice by ESCO that it is to purchase such RECs and such RECs are available for purchase, or (ii) primarily from any other action or omission or Originator or any Affiliate thereof). 

8.3Pricing Adjustments.  ESCO acknowledges and agrees that the pricing and allocation of certain costs and expenses between the Parties are based on laws and market regulation in effect on the Effective Date.  Reasonable adjustments to the pricing and allocation of fees and expenses shall be made by the Parties upon the request of a Party, for new Transactions entered into after changes in law or market regulation to reflect the increased or decreased out-of-pocket costs resulting from such changes in law or market regulation or to otherwise account for new or additional products or services required by ESCO; provided, however, that any such increase or decrease shall be charged to ESCO on a pass through basis  

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without ▇▇▇▇-up by EDFT NA (unless otherwise addressed in this Agreement).  Each Party agrees to provide the other Parties with at least thirty (30) days advance written notice of any such pricing adjustments (unless such pricing adjustments are applicable on a shorter notice period, in which case such notice shall be as soon as reasonably practical) together with an explanation thereof.  With respect to any applicable price increase or decrease attributable to an increase or decrease in Applicable Market fees, charges, or other amounts assessed by Applicable Market, as the case may be, if feasible, ESCO may notify EDFT NA of its election within ten (10) days (or such earlier time when such pricing adjustments become effective) of its receipt or delivery of the applicable notice, instead of settling such price increase or decrease with EDFT NA in a new Transaction, that such increase or decrease shall be settled as a pass through charge payable by the appropriate Party.

8.4Payments.  Payment of any amounts due and owing under this Agreement shall be due and payable by ESCO on the dates specified for payment of Power and Gas Transactions in the ISDA Agreement and otherwise accomplished in accordance with the payment provisions of this Agreement. 

Section ▇.▇▇▇▇▇▇ OF DEFAULT OF ESCO 

Each of the following shall constitute an Event of Default under this Agreement with respect to ESCO and its subsidiaries:

9.1Change of Control.  A Change of Control consummated without the prior written consent of Originator. 

9.2Judgments; Cross Default.   

(a)Any judgment, writ or warrant of attachment or similar process involving in any individual case or in the aggregate at any time an amount in excess of $250,000 after any insurance coverage has been applied to such amount (and provided the insurance carrier has not denied coverage) is taken against ESCO, any cure period has expired, and a court has issued an order authorizing such judgment creditor to attach or levy upon any assets of ESCO to enforce any such judgment. 

(b)(i) Any default under one or more contracts (other than the Secured Documents) in the payment of any principal of or interest on any Indebtedness in excess of $250,000 beyond any period of grace provided with respect thereto, or (ii) any default in the performance of or compliance with any term of any Indebtedness in excess of $250,000 and as a consequence of such default or condition such Indebtedness has become, or has been declared (or one or more Persons are entitled to declare such Indebtedness to be), due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iii) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Indebtedness to convert such Indebtedness into equity interests), (x) any obligation to purchase or repay Indebtedness in excess of $250,000 before its regular maturity or before its regularly scheduled dates of payment, or (y) one or more Persons have the right to require ESCO to purchase or repay such Indebtedness.  

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9.3Failure to be in Force and Effect; Credit Support Default.  At any time after the execution and delivery thereof, (a) any Secured Document, any guarantee issued to Originator in connection herewith or any provision of such documents, for any reason other than the satisfaction in full of all obligations thereunder, shall (i) cease to be in full force and effect (other than in accordance with its terms), (ii) be terminated by ESCO or any Affiliate of ESCO or (iii) be declared to be null and void; (b) Originator shall not have a valid and perfected First Priority Lien in any material Collateral, except as permitted hereunder or under the Security Documents, purported to be covered by the Security Documents; (c) ESCO shall contest the validity or enforceability of any Secured Document or any provision thereof in writing or deny in writing that it has any further liability under any Secured Document or any provision thereof; or (d) any Credit Support Provider shall contest the validity or enforceability of any Secured Document to which it is a party or any provision thereof in writing or deny in writing that it has any further liability under any Secured Document to which it is a party or any provision thereof unless ESCO provides cash collateral in an amount equal to all then outstanding Secured Obligations within one (1) Business Day of any such act by a Credit Support Provider. 

9.4Discounted Asset Coverage Test.  At any time, failure by ESCO to satisfy the Discounted Asset Coverage Test (as described in Schedule 9.4 attached hereto) and such failure is not remedied or waived within thirty (30) calendar days after written notice of such failure is given to ESCO. 

9.5Minimum Adjusted Equity Requirement.  At any time, failure by ESCO to satisfy the minimum Adjusted Equity requirement (as described in, and subject to the cure periods of, Section 6.18). 

9.6Breach of Facility Size.  At any time, the Facility Utilization exceeds the Approved Facility Size, and is not remedied or waived within thirty (30) calendar days after written notice of same is provided to ESCO. 

9.7Breach of Deferred Supply Amount.  At any time the Deferred Supply Amount shall exceed the Maximum Deferred Supply Amount and such condition is not remedied or waived within five (5) Local Business Days after written notice of such condition is given to ESCO or (b) the Deferred Supply Amount is not paid in full by the next regularly scheduled Payment Date per Section 3.7 and such condition is not remedied or waived within five (5) Local Business Days after written notice of such condition is given to ESCO. 

9.8Regulatory Material Adverse Effect.  ESCO shall fail to materially comply with any material and applicable regulations imposed by Law, and such failure would reasonably be expected to result in a Material Adverse Effect. 

9.9Weighted Average Contract Life.  As of the last day of any calendar month, the Weighted Average Contract Life for (a) Fixed Price Contracts with commercial and industrial Customers shall exceed thirty-six (36) months or (b) Fixed Price Contracts with residential Customers shall exceed thirty-six (36) months, and in each case, such condition is not remedied or waived within thirty (30) calendar days after written notice of such condition is provided to ESCO. 

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9.10Repudiation of Agreements.  ESCO repudiates the validity or enforceability of this Agreement or any of the Transaction Documents. 

9.11Covenant Violation; Failure to Perform.  Except where a specific failure to perform is otherwise provided herein, failure by ESCO to comply with any affirmative or negative covenant or performance obligation of ESCO under this Agreement and such failure is not remedied within thirty (30) calendar days after written notice of such failure is given to ESCO (or such different period if expressly set forth in other provisions of this Agreement). 

9.12Payment Default.  ESCO shall fail to make, when due, any payment under this Agreement required to be made by it if such failure is not remedied on or before the fifth (5^th) Local Business Day after notice of such failure is given to ESCO. 

9.13ISDA Agreement.  A Termination Event under the ISDA Agreement occurs in respect of ESCO and an Early Termination Date is declared thereunder. 

9.14Bankruptcy.  A Bankruptcy Event occurs with respect to ESCO. 

9.15Representations and Warranties.  Any representation or warranty made or repeated or deemed to have been made or repeated by ESCO in this Agreement proves to have been incorrect or misleading in any material respect when made or repeated or deemed to have been made or repeated. 

Section ▇▇.▇▇▇▇▇▇ OF DEFAULT OF ORIGINATOR and EDFT NA 

Each of the following shall constitute an Event of Default under this Agreement with respect to Originator and EDFT NA:

10.1Payment Default.  Failure by Originator or by EDFT NA to comply with any obligation set forth in Section 3 of this Agreement or failure by Originator or by EDFT NA to pay ESCO any amount owing to ESCO under this Agreement within five (5) Local Business Days after written notice of such failure is given to Originator or to EDFT NA, as applicable. 

10.2ISDA Agreement.  An Event of Default or Termination Event (each as defined in the ISDA Agreement) under the ISDA Agreement occurs in respect of EDFT NA and an Early Termination Date (as defined in the ISDA Agreement) is declared thereunder. 

10.3Covenant Violation; Failure to Perform.  Failure by Originator or by EDFT NA to comply with any affirmative or negative covenant or performance obligation of Originator or of EDFT NA, as applicable, under this Agreement and such failure is not remedied or waived within thirty (30) Local Business Days after written notice of such failure is given to Originator or to EDFT NA, as applicable. 

10.4Representations and Warranties.  Any representation or warranty made or repeated or deemed to have been made or repeated by Originator or EDFT NA in this Agreement proves to have been incorrect or misleading as to such Person in any material respect when made or repeated or deemed to have been made or repeated. 

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10.5Repudiation of Agreements.  Originator or EDFT NA repudiates the validity or enforceability of this Agreement or any of the Transaction Documents. 

10.6Bankruptcy.  The occurrence of a Bankruptcy Event in respect of Originator or EDFT NA. 

Section 11.REMEDIES 

11.1Remedies Generally.  The rights of each Party under this Agreement are in addition to, and not in limitation or exclusion of, any other rights such Party may have (whether by agreement, operation of law or otherwise).  Upon the occurrence of and during the continuation of any Event of Default (after passage of any applicable cure period) under this Agreement on the part of a Party (the “Defaulting Party”), the non-Defaulting Party may in addition to any remedies available at law or in equity:  (a) suspend (or, as applicable, cause its Affiliate to suspend) its performance under any Transactions existing under the ISDA Agreement; (b) discontinue the execution of any Transactions under this Agreement; (c) suspend its performance of its obligations under this Agreement generally; (d) take any action that it may otherwise be entitled to take as provided in the Transaction Documents; and (e) terminate this Agreement and pursue any damages that may be available at law or in equity against the Defaulting Party; provided, however, if an Event of Default shall occur with respect to ESCO under Section 9.6, which is not also an Event of Default under Section 9.4, then Originator and EDFT NA shall be limited to the remedy contained in Section 11.1(b). 

11.2Hedge Strategy Compliance Transactions.  Upon the occurrence of an Event of Default pursuant to Section 9.4 or the breach by ESCO of Section 7.10, Originator shall, in addition to any other rights Originator may have pursuant to this Agreement or otherwise, have the right, but not the obligation to, for the account of ESCO and without assumption of any obligation to take any such action in the future, cause EDFT NA on commercially reasonable terms that are at EDFT NA’s costs without ▇▇▇▇-up to unilaterally execute Transactions with ESCO under this Agreement with an objective to cause ESCO to be in compliance with the Risk Management Policy or the Discounted Asset Coverage Test, as the case may be. 

11.3Indemnification.  In the event an Event of Default occurs under this Agreement, the Party in default will, on demand, indemnify and hold harmless the other Parties to this Agreement for and against all reasonable out-of-pocket expenses, including legal fees, and execution fees, incurred by such other Parties by reason of the enforcement and protection of its rights under this Agreement and the ISDA Agreement, including, but not limited to, costs of collection. 

11.4Interim Remedies.  Upon the occurrence and continuation of an Event of Default, Potential Event of Default, or Termination Event and in addition to the other remedies set forth this Article, Originator may (a) require that ESCO immediately suspend activities with respect to contracting with or entering into new Customer Contracts with prospective Customers outside the course of ordinary business (including specifically with the entering into such new Customer Contracts at below then-prevailing prices for such contracts as falling outside of the ordinary course of business); (b) withhold Originator’s consent that would allow ESCO to enter into new  

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markets or areas of operation; (c) require that ESCO immediately refrain from entering into any material third party agreements (other than Customer Contracts and renewals and other modifications of existing agreements in the course of ordinary course of business); (d) require that ESCO immediately refrain from hiring new employees or entering into arrangements with third party consultants; (e) require that ESCO not implement salary increases even if previously set forth in the Budget; and (f) if such Event of Default, Potential Event of Default or Termination Event includes (i) ESCO’s Adjusted Equity being negative, and (ii) ESCO failing the Discounted Asset Coverage Test (which situation is not remedied within thirty (30) days therefrom), immediately appoint a third party representative at EDF’s cost to oversee the day to day operations of ESCO for a period of up to ninety (90) days, in which case ESCO shall consult with such representative and where required by Originator, follow the instructions of such representative in the context of continuing operations, curing any Events of Default, making disposition and sale of assets, liquidating commodity positions and engaging in such other activities as such representative and Originator may require.

Section 12.PAYMENTS FROM ACCOUNTS 

12.1ESCO Controlled Accounts.  During the Term, ESCO agrees on behalf of itself and its Subsidiaries, to which these representations and warranties and covenants shall apply on a consolidated basis, where applicable, unless otherwise noted: 

(a)ESCO does and shall hold all money and Cash Equivalents of ESCO in the ESCO Controlled Accounts. 

(b)ESCO shall direct all payments on receivables, collections of receivables, and other proceeds of the Collateral to be deposited promptly to the ESCO Revenue Account (and to no other account).  Without limiting the foregoing, ESCO shall in any event cause all such payments and other proceeds that are not deposited directly to the ESCO Revenue Account to be transferred to and held in the ESCO Revenue Account within five (5) Local Business Days of ESCO’s receipt of same. 

(c)ESCO Revenue Account.  Unless otherwise directed by Originator during the existence of a Specified Potential Event of Default, an Event of Default or Termination Event or following the occurrence of a Termination Event or an Early Termination Date, all amounts that are available for distribution from the ESCO Revenue Account shall be applied upon direction of ESCO at the following times (and as otherwise reasonably requested by ESCO) and in the following order of priority (to the extent such distributions would not reasonably be expected to result in a Specified Potential Event of Default or an Event of Default or a Termination Event or an Early Termination Date); provided, in each case, that ESCO has given Originator no fewer than two (2) Local Business Days’ notice of the intended distribution amount with reasonable written supporting documentation: 

(i)First, on each Bi-Monthly Payment Date, to the extent funds are available for disbursement in the ESCO Revenue Account, to the ESCO Company Account in an amount equal to the General and Administrative Expenses (but not in excess of, when combined with all other General and Administrative Expenses  

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disbursed on such Bi-Monthly Payment date by ESCO, the Maximum General and Administrative Expenses as of such Bi-Monthly Payment Date) and Approved Capital Expenditures to be incurred by ESCO prior to the next Bi-Monthly Payment Date reduced by the amount on deposit in the ESCO Company Account immediately prior to such payment on each Local Business Day;

(ii)Second, on each Local Business Day, to the extent that funds are available for disbursement in the ESCO Revenue Account, for transfer to the ESCO Company Account for the payment of amounts due to (A) to TDSPs, LDCs, and similar utility, transmission or transportation entities any charge amounts and deposits, (B) to taxing authorities, any amounts owed with respect to sales, local, gross receipts, “Public Utility Commission”, or other taxes, (C) deposits and amounts owed to other Governmental Authorities, (D) amounts owed to ISOs or RTOs for balancing energy and related services, and (E) reimbursement for amounts drawn plus interest (cash collateral, LCs, guarantees, bonds); 

(iii)Third, on each Local Business Day, to the extent that funds are available for disbursement in the ESCO Revenue Account, to the ESCO Company Account for amounts due to Controlled Account Institutions in an amount equal to the service charges then due in connection with maintaining the ESCO Controlled Accounts; 

(iv)Fourth, on the last Local Business Day that is five (5) days immediately preceding each January 15, April 15, June 15 and September 15 of each calendar year (each, a “Tax Distribution Date”) or otherwise on the date that any such taxes are due and owing the to the applicable taxing authority, and to the extent funds are available, to the ESCO Investment Account in an amount equal to ESCO’s good faith estimate of the Permitted Tax Distribution amount as of such Tax Distribution Date, with the amount of such payment to be verified by Originator; provided, however, if the total Permitted Tax Distributions for a calendar year exceed the amount of tax due for such calendar year, then ESCO shall return any such excess to the ESCO Controlled Account; 

(v)Fifth, on each Local Business Day, to the extent that funds are available for disbursement in the ESCO Revenue Account, to the ESCO Company Account in an amount equal to the amount due to third parties with which ESCO has entered into transactions pursuant to the terms of Section 4.1 and for deposits required to be maintained with such third parties related to such transactions; 

(vi)Sixth, on each Monthly Payment Date, to the extent that funds are available for disbursement in the ESCO Revenue Account, to Originator in the amount equal to all amounts then due and payable to Originator for interest on outstanding Deferred Supply Amounts and for an amount equal to the aggregate amount necessary to reimburse Originator for any amount drawn by any  

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beneficiary of any cash collateral or guarantee or similar credit support instrument provided by Originator (or any Affiliate of Originator) pursuant to Section 3.4 and any amount paid by Originator (or any Affiliate of Originator) to any beneficiary of any guaranty or similar credit support instrument provided by Originator (or any Affiliate of Originator) pursuant to Section 3.4, in each case, together with interest accrued on such amounts as contemplated by Section 3.4;

(vii)Seventh, on each Local Business Day, to the extent that funds are available for disbursement in the ESCO Revenue Account, to Originator in an amount up to the outstanding Deferred Supply Amount; 

(viii)Eighth, on each Monthly Payment Date, to the extent that funds are available for disbursement in the ESCO Revenue Account, to the ESCO Investment Account to the extent that there is no Event of Default, Potential Event of Default or Termination Event and that after such transfer the Discounted Asset Coverage Ratio equals no less than 1.7 and the minimum Adjusted Equity position described in Section 6.18 is maintained; 

(ix)Ninth, on each Monthly Payment Date, to the extent that funds are available for disbursement in the ESCO Revenue Account, to EDFT NA in the amount of the Outstanding Payable Amount then due and payable; 

(x)Tenth, on each Monthly Payment Date, to the extent that funds are available for disbursement in the ESCO Revenue Account, to Originator and EDFT NA in an amount equal to all amounts then due and payable to Originator and to EDFT NA under the Secured Documents not previously paid pursuant to items (i) through (ix) above; and 

(xi)Eleventh, on each Monthly Payment Date, so long as (A) the Discounted Asset Coverage Test would be satisfied after giving effect to any proposed distribution, (B) the Deferred Supply Amount balance is zero Dollars ($0), (C) after giving effect to any proposed distribution, ESCO shall meet or exceed minimum Adjusted Equity requirements outlined in Section 6.18, and (D) to the extent that funds are available for disbursement in the ESCO Revenue Account, to the ESCO Investment Account in an amount equal to the Distributable Cash as of such date. 

(d)ESCO Customer Deposit Account.  To the extent required by rule or order of the applicable regulatory agency and unless otherwise directed by Originator during the existence of a Specified Potential Event of Default, an Event of Default or Termination Event or following the occurrence of a Termination Event or an Early Termination Date, all amounts that are available for distribution from any ESCO Customer Deposit Account shall be applied upon direction of ESCO (to the extent such distributions would not reasonably be expected to result in a Specified Event of Default or an Event of Default or a Termination Event or an Early Termination Date): 

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(i)to the ESCO Company Account in an amount equal to the amount of refundable Customer deposits and, to the extent required by rule or order of the applicable regulatory agency, Customer credit balances permitted to be applied to the applicable Customers’ payment obligations since the last such transfer under this clause; and 

(ii)to any Customer of ESCO in an amount equal to the amount of refundable Customer deposits and, to the extent required by rule or order of the applicable regulatory agency, Customer credit balances due and owing to such Customer in accordance with the Credit and Collection Policy. 

(e)ESCO Company Account.  All amounts that are available for distribution from the ESCO Company Account, shall (to the extent such distributions would not reasonably be expected to result in a Potential Event of Default, an Event of Default, a Termination Event or an Early Termination Date) be distributed by ESCO to pay the Operating Expenses and Approved Capital Expenditures of ESCO that are then due and payable. 

(f)ESCO Investment Account.  All amounts that are available in the ESCO Investment Accounts may be retained by ESCO for investment in ESCO in any manner not prohibited hereunder or distributed by ESCO to its members, as determined by ESCO in its sole discretion. 

(g)▇▇▇▇ ▇▇ Collateral Accounts.  ESCO shall direct all cash posted by Originator as collateral for the issuance of a letter of credit pursuant to Section 3.4 to be deposited promptly to an ▇▇▇▇ ▇▇ Collateral Account (and to no other account).  On the third (3^rd) Local Business Day after the amount of any letter of credit supported by such collateral is reduced as a result of expiration, cancellation, or return, all amounts that are available for disbursement from the ▇▇▇▇ ▇▇ Collateral Account in respect of the applicable letter of credit shall be disbursed to Originator for an amount equal to the aggregate amount necessary to reimburse Originator. 

(h)ESCO Vendor Payment Accounts.  ESCO may deposit cash prepayments required by any third-party vendors or service providers in ESCO’s ordinary course of business into the ESCO Vendor Payment Accounts.  On the third (3^rd) Local Business Day after any amounts deposited in any ESCO Vendor Payment Account are available for disbursement to ESCO, such amounts shall be disbursed to the ESCO Revenue Account. 

(i)If the amounts on deposit in any ESCO Controlled Account are not sufficient to make required payments, that condition shall not relieve ESCO of its obligations to make such payments when due and payable. 

(j)During the existence of a Specified Potential Event of Default or an Event of Default or following the occurrence of a Termination Event or an Early Termination Date, all amounts that are deposited or held in the ESCO Controlled Accounts shall be applied as reasonably determined by Originator in its sole discretion, and Originator may issue instructions to the applicable Controlled Account Institution. 

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(k)ESCO shall maintain in effect and perform all of ESCO’s material obligations under each Control Agreement to which ESCO is a party, without modification thereto, except as approved in writing by Originator. 

(l)Without limiting the rights of the Parties to equitable relief with respect to other provisions of this Agreement, the Parties agree that in the event of any actual or threatened breach of the terms or conditions of this Section 12.1, the party who is or is to be thereby aggrieved shall have the right of specific performance and injunctive relief to give effect to such terms and conditions to the extent permitted by applicable Law. 

(m)If a payment received from a Customer is erroneously deposited into any ESCO Controlled Account, then such deposit may be transferred to the appropriate ESCO Controlled Account, notwithstanding the other provisions hereof. 

(n)The parties acknowledge that pursuant to standing wire instructions agreed to by Originator and ESCO under the Deposit Account Control Agreement with respect to the Revenue Account, amounts in the Revenue Account may distributed to an account of EDF (“EDF Account”) prior to the distributions contemplated by this Section 12.   Originator agrees that (i) Section 12.1(c) shall apply to any such amounts deposited into the EDF Account mutatis mutandis and (ii) Originator will make all payments from funds deposited from the Revenue Account to the EDF Account as if such funds were held in the Revenue Account. 

Section 13.REPRESENTATIONS AND WARRANTIES OF ORIGINATOR AND EDFT NA 

Each of Originator and EDFT NA represents and warrants to ESCO as of (i) the Effective Date and (ii) on each date that ESCO enters into a Transaction:

13.1Existence; Qualification and Power; Compliance with Laws.  Originator is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and is qualified to do business and is in good standing in every jurisdiction in which it is required to be so qualified, except where failure to be so qualified would not reasonably be expected to materially and adversely affect the ability of Originator to perform its obligations under this Agreement.  EDFT NA is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Texas and is qualified to do business and is in good standing in every jurisdiction in which it is required to be so qualified, except where failure to be so qualified would not reasonably be expected to materially and adversely affect the ability of EDFT NA to perform its obligations under this Agreement.  Each of Originator and EDFT NA (i) has received all material governmental and regulatory approvals, licenses and authorizations necessary for the conduct of its business and is in good standing thereunder; and (ii) is in compliance will all Laws, except to the extent that a failure to be in compliance would not reasonably be expected to materially and adversely affect Originator’s or EDFT NA’s ability to perform its obligations under this Agreement. 

13.2Enforceability.  This Agreement constitutes the legal, valid and binding obligations of Originator and of EDFT NA, enforceable against them in accordance with its  

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terms, except as enforcement hereof or thereof may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally or by general equity principles, whether such enforceability is considered in a proceeding at law or in equity.

13.3Due Authorization.  The execution, delivery and performance of this Agreement by Originator and by EDFT NA have been and remain duly authorized by all necessary limited liability company action and does not and will not conflict with any provisions of Originator’s or of EDFT NA’s Organizational Documents, any applicable Law, or any material agreement or instrument to which Originator or EDFT NA is a party or by which Originator or EDFT NA, or Originator or EDFT NA’s property or assets may be bound or affected. 

13.4Government Authorizations; Other Consents.  All governmental or regulatory consents, authorizations, approvals, registrations and declarations required for the due execution, delivery and performance by Originator and by EDFT NA of this Agreement, the ISDA Agreement and the other Transaction Documents to which Originator or EDFT NA is a party have been obtained from or, as the case may be, filed with the relevant Governmental Authorities having jurisdiction over Originator and EDFT NA, as applicable, and remain in full force and effect, and all conditions thereof have been duly complied with and no other action by, and no notice to or filing with, any Governmental Authority is required for such execution, delivery or performance of this Agreement or the other Transaction Documents. 

13.5Litigation.  There are no Proceedings at law or in equity, or before or by any court or other Governmental Authority that are pending or, to the knowledge of Originator or of EDFT NA, as applicable, threatened against or affecting Originator or EDFT NA, or any property of Originator or EDFT NA that, if determined adversely to Originator or to EDFT NA, would reasonably be expected to have a Material Adverse Effect.  Neither Originator nor EDFT NA is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or other Governmental Authority, except for those that would not reasonably be expected to result in a Material Adverse Effect. 

Section 14.MISCELLANEOUS 

14.1Confidentiality. 

(a)Except as provided in Section 14.1(a), each Party agrees to hold in confidence, and not use except in connection with this Agreement and the other Transaction Documents, any information imparted to it by the other Party which pertains to Originator’s or ESCO’s, as the case may be, business activity in any manner, including, without limitation, proprietary processes, technical information and know-how, information concerning such Party’s management policies, economic policies, financial and other data (“Confidential Information”).  Confidential Information shall not include:  (i) information furnished without restriction by one Party to the other; (ii) information in the public domain (other than as a result of a breach of this Agreement); or (iii) information obtained by one Party from a Third Party not to its knowledge under an obligation of nondisclosure to Originator or ESCO, as the case may be.  This obligation  

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shall continue to remain in full force and effect during the Term of this Agreement and for two (2) years after the date of termination or expiration of this Agreement.

(b)Either Party shall have the right to disclose Confidential Information to (i) any Governmental Authority (in each case, to the extent required or requested by any such entity); provided, that, to the extent permitted by applicable Law, notice shall be given to the other Party with as much advance written notice as is practical under the circumstances to enable such party to seek a protective order; (ii) its officers, directors, employees, agents, advisors, auditors, legal counsel and insurers; (iii) its Affiliates; (iv) lenders, potential lenders, investors (direct or indirect), potential investors (direct or indirect) of such Party; (v) bona fide potential purchasers of an interest in the Retail Gas Business or Retail Power Business, provided, any such recipient in subsections (ii) through (v) (collectively, “Representatives”) above are advised of the restrictions in this Section 14.1 with respect to Confidential Information Each Party will be responsible for its Representatives’ breach of this Agreement.  Lenders shall be entitled to disclose Confidential Information to any Governmental Authority (in each case, to the extent required by any such entity) and to their advisors, auditors, insurers and supervisory bodies.  Without limiting the foregoing, Originator and EDFT NA acknowledge that ESCO will be required to disclose the terms of this Agreement with the SEC, which disclosure is publicly available, pursuant to the terms of the Exchange Act. 

14.2Change of Control.  In the event there is a proposed Change of Control, ESCO shall observe the following protocols: 

(a)ESCO shall provide no less than thirty (30) days prior written notice to Originator of any such proposed Change of Control along with all related documentation and information regarding the proposed transaction and the new control entity; 

(b)Within five (5) Local Business Days thereafter Originator shall notify ESCO of whether it agrees to proposed Change of Control and any conditions to its consent; 

(c)Within five (5) Local Business Days thereafter, ESCO shall notify Originator as to whether it agrees to such required conditions; 

(d)If Originator consents to the proposed Change of Control with no conditions or if ESCO agrees to and performs and/or complies with Originator’s conditions, the Change of Control may be consummated and it shall not be an Event of Default hereunder; and 

(e)If Originator does not consent to the proposed Change of Control or ESCO does not accept Originator’s conditions, and ESCO decides to effectuate the contemplated Change of Control, ESCO shall terminate this Agreement on or prior to the effective date of the Change of Control pursuant to Section 2.2 provided that notwithstanding Section 2.2 to the contrary, ESCO may provide the written notice of the date of termination within five (5) Local Business Days of the effective date of the Change of Control.  For the avoidance of doubt, nothing in this clause (e) is intended to waive the Early Termination Fee that may be due under Section 2.3. 

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14.3Certain Agreements Regarding Relationship.  The Parties agree the relationship between Originator and EDFT NA, on the one hand, and ESCO, on the other hand, established under the Secured Documents is not a joint venture, partnership, or agency relationship, and that ESCO will be solely responsible for conducting and managing the business activities of ESCO, including performing under the Customer Contracts.  The Parties agree that nothing in the Secured Documents shall be deemed to constitute or be construed as making the contractors or agents of ESCO the contractors or agents of Originator or EDFT NA, or making Originator or EDFT NA the contractors or agents of ESCO.  In addition, nothing in the Secured Documents shall be construed to create a joint or co-employment relationship between the Parties. 

(a)Each Party agrees not to misrepresent to third parties the relationship such Party has with the other Party, as such relationship is described in the Secured Documents.  Each Party shall have the right to review and approve all press releases of the other Party and any of its Affiliates mentioning, making reference to, or implying that Originator or EDFT NA is associated with ESCO. 

(b)To the extent permitted by applicable Law, each Party hereby waive the Texas Deceptive Trade Practices Act—Consumer Protection Law, TEX. BUS. & COM. CODE §§17.41—63. 

14.4Photocopied Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed will be deemed an original but all of which together will constitute one and the same instrument.  Furthermore, a facsimile or photocopied counterpart of this Agreement will be sufficient to bind a party hereto to the same extent as an original. 

14.5Severability.  The invalidity, in whole or in part, of any of the foregoing Sections or provisions of this Agreement will not affect the validity of the remainder of such Sections or provisions. 

14.6Entire Agreement.  This Agreement together with the Transaction Documents contains the complete agreement between Originator and ESCO with respect to the subject matter of this Agreement and supersedes all other agreements, whether written or oral, with respect to the matters contained therein. 

14.7Amendment.  No modification, amendment, or other change will be binding on any Party unless consented to in writing by all Parties to this Agreement. 

14.8Assignment.  No assignment or transfer of this Agreement by a Party or such Party’s rights or obligations hereunder shall be effective without the written consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed); provided that (i) Originator may assign its rights (but not its obligations) without obtaining the consent of ESCO in connection with any financing arrangements undertaken by Originator where this Agreement or any of the collateral of ESCO that is the subject of the Security Documents is pledged in connection with any such financing arrangements, and (ii) Originator may transfer or assign its rights and obligations hereunder to an Affiliate of Originator, including without limitation, EDFT  

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NA or to any entity succeeding to all or substantially all of the assets of Originator.  Any purported assignment in contravention of this Section 14.8 shall be void.

14.9Notices.  All notices required or provided for in this Agreement shall be in writing and shall be delivered as follows: 

If to EDFT NA:

EDF Trading North America, LLC
Attention:  General Counsel and Contract Administration
▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇  ▇▇▇▇▇
Telephone:  ▇▇▇-▇▇▇-▇▇▇▇
Facsimile:  ▇▇▇-▇▇▇-▇▇▇▇

If to Originator:

EDF Energy Services, LLC
▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇  ▇▇▇▇▇
Attn:  General Counsel
Telephone:  ▇▇▇-▇▇▇-▇▇▇▇
Facsimile:  ▇▇▇-▇▇▇-▇▇▇▇

If to ESCO:

Summer Energy, LLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

Attention:  ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone:  ▇▇▇-▇▇▇-▇▇▇▇
Facsimile:  ▇▇▇-▇▇▇-▇▇▇▇
Email:  ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

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

▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ PC

▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇

Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇

Telephone: ▇▇▇-▇▇▇-▇▇▇▇

Facsimile: ▇▇▇-▇▇▇-▇▇▇▇

Notices shall, unless otherwise specified herein, be in writing and may be delivered by hand delivery, United States mail, overnight courier service or facsimile.  Notice will be deemed

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effective as indicated:  (i) if in writing and delivered in person or by courier, on the date it is delivered; (ii) if sent by telex, on the date it is delivered; (iii) if sent by facsimile transmission, on the date that transmission is received by a responsible employee of the recipient in legible form (it being agreed that the burden of proving receipt will be on the sender and will not be met by a transmission report generated by the sender’s facsimile machine); (iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent (return receipt requested), on the date that mail is delivered or its delivery is attempted; or (v) if sent by electronic messaging system, on the date that electronic message is received; unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a Local Business Day or that communication is delivered (or attempted) or received, as applicable, after the close of business on a Local Business Day, in which case that communication shall be deemed given and effective on the first following day that is a Local Business Day.  A Party may change its addresses by providing notice of same in accordance herewith.

14.10Additional Documents and Actions.  ESCO agrees to execute and deliver to Originator such other such additional documents, and take such additional actions, as may be reasonably required by the other to effect the interest of this Agreement, to cure grammatical or typographical errors, to make corrections generally to this Agreement, or to perfect the security interest in any collateral described in the Security Documents. 

14.11Waiver.  Failure by either Party to exercise any of its rights under this Agreement shall not constitute a waiver of such rights.  Neither Party shall be deemed to have waived any right resulting from any failure to perform by the other unless it has made such waiver specifically in writing. 

14.12Captions.  The captions contained in this Agreement are for convenience and reference only and in no way define, describe, extend or limit the scope or intent of this Agreement or the intent of any provision contained herein.  The headings are inserted for convenience and are to be ignored for the purposes of construction.  The Schedules and Exhibits to this Agreement form part of this Agreement and will be of full force and effect as though they were expressly set forth in the body of this Agreement. 

14.13No Third Party Beneficiary.  This Agreement is for the sole and exclusive benefit of the Parties hereto and shall not create a contractual relationship with, or cause of action in favor of, any other party. 

14.14Governing Law and Venue.   

agreement, operating agreement, joint venture agreement, or other similar organizational instrument or document governing such entity.

Originator shall have the meaning assigned to such term in the preamble of this Agreement.

Outstanding Payable Amount means, at the time of determination, the aggregate of all amounts accrued and unpaid with respect to natural gas, electricity, capacity, RECs, Ancillary Services and any other commodities or products delivered in accordance with this Agreement and the ISDA Agreement, including deliveries made by EDFT NA.

Party and Parties shall each have the respective meanings assigned to such terms in the preamble of this Agreement.

Pension Plan means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by ESCO or any ERISA Affiliate or to which ESCO or any ERISA Affiliate contributes or has an obligation to contribute or with respect to which ESCO or any ERISA Affiliate has any direct or contingent liability, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

Permits means the licenses, permits, authorizations, approvals, orders, and consents issued by any of the Applicable Markets or any Governmental Authority that are required for ESCO to operate the Retail Power Business or the Retail Gas Business, as applicable.

Permitted Indebtedness means (a) Indebtedness created under this Agreement and the other Transaction Documents; (b) trade payables incurred and to be paid in the ordinary course of

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business; (c) Indebtedness under Interest Hedging Obligations; (d) Indebtedness in respect of Capital Leases and purchase money Indebtedness, and refinancings or renewals thereof, in an aggregate amount not to exceed $1,000,000 at any time outstanding; (e) Indebtedness in respect of performance or surety bonds, workers’ compensation claims, self-insurance obligations and bankers acceptances issued for the account of any Person in the ordinary course of business, including guarantees or obligations of any Person with respect to letters of credit supporting such performance or surety bonds, workers’ compensation claims, self-insurance obligations and bankers acceptances (in each case other than for an obligation for money borrowed); (f) guarantees and other contingent obligations in respect of other Permitted Indebtedness; (g) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five (5) Local Business Days of incurrence; (h) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business; (i) Indebtedness in respect of insurance premium financing for insurance being acquired by any Person under customary terms and conditions, in an aggregate amount not to exceed $100,000 at any time outstanding; (j) amounts owed to brokers, finders, and other referral sources for generating Customer leads and obtaining Customer Contracts, to the extent such amounts are paid by the applicable party within 60 days of the date due; (k) Indebtedness to any banking institution in respect of ACH transactions in connection with any deposit accounts maintained as part of the applicable party’s ordinary cash management program; (l) any reimbursement obligations arising from Required Letters of Credit; (m) Indebtedness of ESCO to any Subsidiary of ESCO, or of any Subsidiary of ESCO to ESCO or to any other Subsidiary of ESCO; (n) Indebtedness due and owing to Blue Water Capital Funding, LLC pursuant to the Loan Agreement, dated June 29, 2016, between ESCO and Blue Water Capital Funding, LLC, and related documentation in an amount not to exceed $5,000,000, which shall at all times be subordinate to all obligations to Originator and EDFT NA pursuant to the Intercreditor Agreement; and (o) other Indebtedness in an aggregate amount not to exceed $1,000,000 at any time outstanding.

Permitted Liens means (i) Liens created pursuant to the Security Documents, (ii)  Liens securing taxes, assessments, or governmental charges or levies that are not yet due and payable or are being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP, which proceedings (or orders entered in connection with such proceedings) have the effect of preventing the forfeiture or sale of the property subject to any such Lien; (iii) Liens arising out of judgments or awards not in excess of $150,000, but only so long as an appeal or proceeding for review is being prosecuted in good faith; (iv) Liens to secure deposits for the Applicable Market transmission and distribution services, statutory or regulatory obligations, and other obligations of a like nature incurred in the ordinary course of business; (v) Liens imposed by Requirements of Law or arising in the ordinary course of business, which Liens do not secure Indebtedness for borrowed money, such as carriers’, warehousemen’s, materialmen’s, landlords’, workmen’s, suppliers’, repairmen’s and mechanics’ Liens and other similar Liens arising in the ordinary course of business, (A) which do not in the aggregate materially detract from the value of the property of ESCO, taken as a whole, and do not materially impair the use thereof in the operation of the business of ESCO, taken as a whole, and (B) which, if they secure obligations that are then due and unpaid, are being contested in

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good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP, which proceedings (or orders entered in connection with such proceedings) have the effect of preventing the forfeiture or sale of the property subject to any such Lien; (vi) Liens (other than any Lien imposed by ERISA) (A) imposed by applicable law or deposits made in connection therewith in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security legislation or (B) incurred in the ordinary course of business to secure the performance of tenders, statutory obligations, surety, stay, customs and appeal bonds, letters of credit, statutory bonds, bids, leases, government contracts, trade contracts, performance and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money); provided that such Liens are for amounts not yet due and payable or delinquent or, to the extent such amounts are so due and payable, such amounts are being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP, which proceedings for orders entered in connection with such proceedings have the effect of preventing the forfeiture or sale of the property subject to any such Lien; (vii) Liens securing Indebtedness incurred pursuant to clause (d) of the definition of Permitted Indebtedness; provided that any such Liens attach only to the property (and proceeds thereof) being financed pursuant to such Indebtedness and do not encumber any other property of such Person; (viii) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by such Person, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that, unless such Liens are non-consensual and arise by operation of law, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness; (ix) Liens on property of a Person existing at the time such Person or such property is acquired or such person is merged with or into or consolidated with ESCO to the extent permitted hereunder (and not created in anticipation or contemplation thereof); provided that such Liens do not extend to property not subject to such Liens at the time of acquisition (other than improvements thereon and proceeds thereof) and are no more favorable to the lienholders than such existing Lien; (x) licenses of intellectual property granted in the ordinary course of business and not interfering in any material respect with the ordinary conduct of business; (xi) Liens securing Indebtedness incurred pursuant to clause (i) of the definition of Permitted Indebtedness; provided that no such Lien may extend to or cover any property other than the insurance being acquired with such financing, the proceeds thereof and any unearned or refunded insurance premiums relating thereto; (xii) Liens securing utilities in POR Markets; (xiii) Liens on amounts held in ▇▇▇▇ ▇▇ Cash Collateral Accounts securing Required Letters of Credit; (xiv) Liens on ESCO Vendor Payment Accounts in favor of the applicable third-party vendors or service providers; (xv) Liens in favor of Blue Water Capital Funding, LLC securing ESCO’s obligations under the Loan Agreement, dated June 29, 2016, between ESCO and Blue Water Capital Funding, LLC, and related documentation in an amount not to exceed $5,000,000; which shall at all times be subordinate to all Liens held by Originator and EDFT NA pursuant to the Intercreditor Agreement and (xvi) other Liens with respect to obligations that do not in the aggregate exceed $250,000 at any time outstanding.

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Permitted Tax Distribution means, as of each Tax Distribution Date, an amount equal to the greater of (a) (i) 40% and (ii) the combined effective federal and state income tax rate applicable to the majority of the holders of equity interest in ESCO multiplied by (b) the aggregate net taxable income attributable to ESCO for the preceding quarter.

Person means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority, or other entity of whatever nature.

PJM means the PJM Interconnection, L.L.C. or such other entity that succeeds to the functions now performed by the PJM Interconnection, L.L.C.

Pledge Agreement means the Pledge Agreement, dated as of May 1, 2018, by and among ESCO and its corporate parent as grantors, and Originator and EDFT NA as secured party, as amended, supplemented, or otherwise modified from time to time.

POR Market(s) means markets where Customer Contract receivables are pledged for utility-based billing.  

Potential Event of Default means an event, condition or circumstance which, with notice or the passage of time or both, would constitute an Event of Default.  

Power Transactions means Transactions between EDFT NA and ESCO whereby EDFT NA sells power to ESCO.

Present Value of Contracts means the sum of components (1), (2), and (3) below:

(3) PVF-VP-MM = VF-VP-MM x GMVP-MM

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PVF-VP-MMValue of Variable Price Contracts that are month-to-month  

VF-VP-MMFuture volumes under all Variable Price Contracts that are month-to-month for the next two (2) months’ service 

GMVP-MMVariable Price Contract gross margin per MWh or MMBtu, which is determined by calculating a running three (3) month average unit margin (using ESCO’s then existing gross margin target pricing policy in the event there is insufficient information to determine such three (3) month average) calculated as the retail sales price minus the wholesale energy cost, the applicable Commodity Fee, broker commissions, and any applicable charges for LDCs, local utilities, transporters, demand charges, and settlement and other similar charges. 

Proceeding(s) means any action, suit, proceeding (whether administrative, judicial or otherwise and including without limitation any regulatory proceeding), governmental investigation or arbitration.

Proposal shall have the meaning assigned to such term in Section 3.8 of this Agreement.

PUCs means state public utilities commissions.

RCE(s) means residential customer equivalent, which is a unit of measurement equivalent to, with respect to gas, ▇▇▇ ▇▇▇▇▇ per year, or with respect to electricity, 10 MWh per year without regard to contract duration or expiration.

REC means a renewable energy certificate.

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REC Transactions mean Transactions between EDFT NA and ESCO whereby EDFT NA sells RECs to ESCO.

Receivable means any Indebtedness and other obligations payable by any Customer to ESCO or any Subsidiary of ESCO under any Customer Contract or any right of ESCO or any Subsidiary of ESCO to payment from or on behalf of a Customer; provided that, security deposits from Customers held by ESCO or a Subsidiary of ESCO shall not constitute a Receivable.

Related Services mean products and services necessary to deliver electrical service and natural gas to the end use customers in any Applicable Market, including Ancillary Services and gas transportation services.

Renewal Term shall have the meaning assigned to such term in Section 2.1 of this Agreement.

Representatives shall have the meaning assigned to such term in Section 14.1(b) of this Agreement.

Required Letter of Credit means any letter of credit posted by ESCO or any of its Subsidiaries as required by any Applicable Market, any state utility commission, any transmission or transportation provider or distribution company or any other similar utility or otherwise funded pursuant to Section 3.4.  

Requirements of Law means, with respect to any Person, the charter and by laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or directive or determination (including, without limitation, any judgment, injunction, order, award or decree) of any Governmental Authority, in each case applicable to or binding upon such Person or any of its property or assets or to which such Person or any of its property or assets is subject.

Retail Gas Business means (i) the business of providing natural gas to commercial and industrial Customers, and any business incidental or related thereto, and (ii) performing under the Transaction Documents and any activities incidental or related thereto to the extent not prohibited under the Transaction Documents.

Retail Power Business means (i) the business of providing retail power to commercial and industrial Customers, and any business incidental or related thereto, and (ii) performing under the Transaction Documents and any activities incidental or related thereto to the extent not prohibited under the Transaction Documents.  

Risk Management Policy means the Risk Management Policy attached as Exhibit E to this Agreement, as may be amended from time to time in accordance with Section 6.13.

S&P means Standard & Poor's Ratings Services, a Standard & Poor's Financial Services LLC business and any successor or successors thereto.

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Scheduled Maturity Date means through and including April 31, 2021.

Secured Documents means this Agreement, the ISDA Agreement (including any Confirmation thereunder), the Security Documents, and any other documents made, delivered, or given from time to time between or among (or for the benefit of) ESCO, any of its Affiliates, on the one hand, and Originator or any of its Affiliates, on the other hand, related to the foregoing named documents and agreements.

Secured Obligations means all obligations of ESCO or any Affiliate of ESCO to (i)  Originator or any of Originator’s Affiliates, or (ii) EDFT NA or any of EDFT NA’s Affiliates, whether direct or indirect, absolute or contingent, due or to become due or now existing or hereafter incurred, arising under or owed under the terms of any and all Secured Documents (including post-petition interest or other obligations arising under the terms of any Secured Document for which ESCO obtains relief under bankruptcy or other laws providing for relief from creditors) and any renewals, extensions, increases or rearrangements of foregoing.

Security Agreement means the Security Agreement dated May 1, 2018 made by ESCO in favor of Originator and EDFT NA, as amended, supplemented, or otherwise modified from time to time.  

Security Documents means the Credit Support Annex, the Security Agreement, the Pledge Agreement, the Control Agreements, the Guaranty, and any other agreements from time to time executed in favor of or delivered to Originator or EDFT NA granting, supporting, evidencing or consenting to a Lien or setoff rights to secure or support the Secured Obligations or to any rights of Originator or EDFT NA in connection therewith.

Solvent when used with respect to any Person, means that, as of any date of determination, (a) the amount of the “present fair saleable value” of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise”, as of such date, as such quoted terms are determined in accordance with applicable Federal and state laws governing determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the value of its liabilities, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, and (d) such Person will be able to pay its debts as they mature.  For purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any (x) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured, or unsecured.  The term “Solvency” shall have a correlative meaning.

Specified Potential Event of Default means a Potential Event of Default arising from either (i) the failure of ESCO or any of its Subsidiaries to make, when due, any payment under this

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Agreement or the ISDA Agreement or (ii) a proceeding instituted against ESCO, any of its Subsidiaries or any Credit Support Provider of ESCO seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or similar law affecting creditors’ rights.

Subsidiary with respect to any Person, means any corporation, partnership, trust, limited liability company, association, joint venture or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the members of the board of directors or similar governing body is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof.

Summary Portfolio Settlement Report means a report summarizing net sales and supply volumes by month by zone and including a calculation of the expected cash to be realized by period and a daily Transaction listing, including, without limitation, net gain/loss on position/market price changes, new Power Transactions, new Gas Transactions, power and gas adjustments and curve shifts.

Supply Payment means amounts then due and payable to EDFT NA by ESCO for natural gas, electricity, capacity, RECs, Ancillary Services or other commodities or products delivered pursuant to any Gas Transaction, Power Transaction, Capacity Transaction or REC Transaction, as applicable, prior to any Early Termination Date with respect to such Transaction.

Tax Distribution Date shall have the meaning assigned to such term in Section 12.1(c)(iv) of this Agreement.

TDSP shall have the meaning assigned to such term in Section 6.16 of this Agreement.

Term shall have the meaning assigned to such term in Section 2.1 of this Agreement.  

Termination Event means either a Termination Event or an Event of Default (each as defined in the ISDA Agreement) with respect to ESCO.

Three-Month LIBOR means, on any day, (a) the rate per annum appearing at Reuters Reference LIBOR01 page (or on any successor or substitute therefor provided by Reuters, providing rate quotations comparable to those currently provided on such page for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, on such day (or, if such day is not a London Banking Day, on the first preceding London Banking Day) as the rate for dollar deposits with a maturity of three months; (b) if for any reason the rate specified in clause (a) of this definition does not so appear on Reuters Reference LIBOR01 (or any successor thereto or substitute therefor provided by Reuters), the rate per annum appearing on Bloomberg Financial Markets Service (or any successor or substitute page) as the London interbank offered rate for deposits in dollars at approximately 11:00 a.m., London time, on such day (or, if such day is not London Banking Day, on the first preceding London Banking Day) for a maturity of three months; and (c) if the

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rate specified in clause (a) of this definition does not so appear on Reuters Reference LIBOR01 (or any successor or substitute page provided by Reuters) and if no rate specified in clause (b) of this definition so appears on Bloomberg Financial Markets Service (or any successor or substitute page), the average of the interest rates per annum at which dollar deposits for a maturity three months are offered to major banks in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, on such day (or, if such day is not London Banking Day, on the first preceding London Banking Day).

Transaction shall have the meaning assigned to such term in the ISDA Agreement.

Transaction Documents means the Secured Documents, the Intercreditor Agreement and the Organizational Documents of ESCO.