Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

                                                                     EXHIBIT 2.1


                            ASSET PURCHASE AGREEMENT

                                  BY AND AMONG

                         COMMONWEALTH ENERGY CORPORATION

                                    AS BUYER
                                       AND

                           ACN UTILITY SERVICES, INC.,
                                ACN ENERGY, INC.
                                       AND
                                ACN POWER, INC.,

                                   AS SELLERS

                                       AND
                      AMERICAN COMMUNICATIONS NETWORK, INC.

                                       AND
                           COMMERCE ENERGY GROUP, INC.

                             WITH RESPECT TO CERTAIN
                           SPECIFIC PROVISIONS HEREIN

                          DATED AS OF FEBRUARY 9, 2005

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                    Page
                                                                                    ----
<S>         <C>                                                                     <C>
SECTION 1.  Certain Definitions ..................................................     5

SECTION 2.  Transfer of Assets ...................................................    10
      2.1   Assets To Be Transferred .............................................    10
      2.2   Consents and Novation ................................................    11
      2.3   Option Assets ........................................................    12

SECTION 3.  Consideration for Acquired Assets ....................................    12
      3.1   Amount of Purchase Price .............................................    12
      3.2   Assumption of Liabilities ............................................    13
      3.3   Excluded Liabilities .................................................    13
      3.4   Accounts Receivables and Closing Prorations ..........................    14
      3.5   Bulk Sales Law Compliance ............................................    15
      3.6   Allocation of Purchase Price .........................................    15

SECTION 4.  Representations and Warranties of Sellers ............................    15
      4.1   Good Standing ........................................................    15
      4.2   ACN Energy Entities ..................................................    15
      4.3   Authorization; Consents ..............................................    16
      4.4   Governmental Approvals ...............................................    16
      4.5   Financial Statements; Liabilities; Books and Records of Account. .....    16
      4.6   Taxes ................................................................    17
      4.7   Title to Assets; Liens and Encumbrances ..............................    17
      4.8   Trademarks, Service Marks, Trade Names, Patents and Copyrights .......    17
      4.9   Contracts ............................................................    18
      4.10  Purchase and Sales Commitments and Orders; Customers and Vendors .....    18
      4.11  Employees; Compensation; Labor Relations; Vacation Time, Bonuses, Etc     18
      4.12  Employee Benefits ....................................................    19
      4.13  Legal Proceedings ....................................................    20
      4.14  Orders, Decrees, Etc .................................................    20
      4.15  Compliance With Law; Permits and Licenses ............................    20
      4.16  Actions Not in Ordinary Course; No Change ............................    21
      4.17  Reserved .............................................................    21
      4.18  Bank Accounts; Powers of Attorney ....................................    21
      4.19  No Brokers ...........................................................    22
      4.20  Arrangements with Related Parties ....................................    22
      4.21  No Omissions .........................................................    22
      4.22  Stock Legend; Restricted Securities ..................................    22

SECTION 5.  Representations and Warranties of Buyer ..............................    23
      5.1   Good Standing ........................................................    23
      5.2   Authorization ........................................................    23
</TABLE>


                                       1

<TABLE>
<S>         <C>                                                                     <C>
      5.3   Governmental Approvals ...............................................    24
      5.4   No Brokers ...........................................................    24
      5.5   Authorization ........................................................    24
      5.6   Shares ...............................................................    24
      5.7   SEC Rules ............................................................    24

SECTION 6.  Conduct Prior to the End of the Phase-Out Period .....................    24
      6.1   Investigation by Buyer ...............................................    24
      6.2   Ongoing Operations ...................................................    25
      6.3   Other Transactions ...................................................    26
      6.4   Consents; Third-Party; Regulatory Approvals ..........................    26
      6.5   Public Announcements .................................................    27
      6.6   Employees and Employee Benefit Plans .................................    27
      6.7   Notification .........................................................    29
      6.8   Transfer Documents ...................................................    29
      6.9   Covenant to Satisfy Conditions .......................................    29
      6.10  Schedules ............................................................    29
      6.11  Schedule 4.2(A) Assets ...............................................    29

SECTION 7.  Conditions of Buyer's Obligations to Close ...........................    30
      7.1   Agreement and Conditions .............................................    30
      7.2   Representations and Warranties .......................................    30
      7.3   No Legal Proceeding ..................................................    30
      7.4   Certificate ..........................................................    30
      7.5   Lien Releases ........................................................    30
      7.6   Deliveries ...........................................................    30
      7.7   Schedules ............................................................    30

SECTION 8.  Conditions of the Sellers' Obligations to Close ......................    30
      8.1   Agreement and Conditions .............................................    31
      8.2   Representations and Warranties .......................................    31
      8.3   Deliveries ...........................................................    31
      8.4   Certificate ..........................................................    31


SECTION 9.  Deliveries of Sellers on the Closing Date ............................    31
      9.1   Title to Acquired Assets .............................................    31
      9.2   Certificates .........................................................    31
      9.3   Secretary's Certificate ..............................................    31
      9.4   Authorization ........................................................    31
      9.5   Escrow Agreement .....................................................    31
      9.6   Sales Agency Agreement ...............................................    31
      9.7   Transition Agreement .................................................    31
      9.8   Security Agreement ...................................................    32
      9.9   Energy Agreements ....................................................    32
      9.10  Operating Agency Agreement ...........................................    32
</TABLE>


                                       2

<TABLE>
<S>         <C>                                                                     <C>
      9.11  Other Deliveries .....................................................    32

SECTION 10. Deliveries of Buyer on the Closing Date ..............................    32
      10.1  Purchase Price .......................................................    32
      10.2  Secretary's Certificate ..............................................    32
      10.3  Escrow Agreement .....................................................    32
      10.4  Sales Agency Agreement ...............................................    32
      10.5  Transition Agreement .................................................    32
      10.6  Security Agreement ...................................................    32
      10.7  Energy Agreements ....................................................    32
      10.8  Operating Agency Agreement ...........................................    32

SECTION 11. Additional Covenants .................................................    32
      11.1  Mail .................................................................    33
      11.2  Further Assurances ...................................................    33
      11.3  Notification to Customers ............................................    33
      11.4  Non-Transferred Assets ...............................................    33
      11.5  Trading Restrictions .................................................    33

SECTION 12. Confidentiality ......................................................    33

SECTION 13. Indemnification ......................................................    34
      13.1  Indemnification by Sellers ...........................................    34
      13.2  Indemnification by Buyer .............................................    34
      13.3  Procedures for Indemnification .......................................    34

SECTION 14. Survival of Representations; Effect of Certificates ..................    35

SECTION 15. Fees and Disbursements ...............................................    35

SECTION 16. Notices ..............................................................    36

SECTION 17. Termination ..........................................................    36

SECTION 18. Miscellaneous ........................................................    37
      18.1  Entire Agreement .....................................................    37
      18.2  Taxes ................................................................    37
      18.3  Governing Law; Jurisdiction; Waiver of Jury Trial ....................    37
      18.4  Severability .........................................................    38
      18.5  Waiver ...............................................................    38
      18.6  Binding Effect; Assignment ...........................................    38
      18.7  No Third-Party Beneficiaries .........................................    38
      18.8  Expenses Related to Audit Rights .....................................    38
      18.9  Pronouns .............................................................    38
      18.10 Counterparts .........................................................    39
      18.11 Headings .............................................................    39
</TABLE>


                                       3

                                    EXHIBITS

Exhibit A   -  Form of Escrow Agreement
Exhibit B   -  Form of Sales Agency Agreement
Exhibit C   -  Form of Transition Agreement
Exhibit D   -  Form of Security Agreement
Exhibit E   -  Form of NAESB
Exhibit F   -  Form of EEI
Exhibit G   -  Form of ISDA
Exhibit H   -  Form of Operating Agency Agreements
Exhibit I   -  Form of Letter Netting Letter


                                    SCHEDULES

Schedule A            Acquired Assets
Schedule A-1          Assets with Closing Dates Cash Adjustments
Schedule A-2          Assets with Future Cash Adjustments (upon Assignment)
Schedule B            Option Assets
Schedule C            Phase-Out-Addendum
Schedule D            Disbursement of Share Escrow
Schedule 3.1(c)       Estimated Closing Adjustment
Schedule 4.2          Jurisdictions of Qualification
Schedule 4.2A         Activities conducted by ACN Energy's subsidiaries
Schedule 4.3          Authorization; Consents
Schedule 4.4          Seller Governmental Approvals
Schedule 4.5A         Financial Statements; Liabilities; Books and Records of
                      Account
Schedule 4.7A         Title to Assets; Liens and Encumbrances
Schedule 4.7B         Material Assets
Schedule 4.8          Trademarks, Service Marks, Trade Names, Patents and
                      Copyrights
Schedule 4.9A         Material Contracts
Schedule 4.9B         Bonds, Deposits, Guarantees or other Credit Support
Schedule 4.10         Purchase and Sales Commitments and Orders; Customers and
                      Vendors
Schedule 4.11         Employees of ACN Energy; Job Description Compensation
Schedule 4.11C        Vacation and Bonuses of Employees of ACN Energy
Schedule 4.12A        Employee Benefit Plans
Schedule 4.14         Orders, Decrees, Etc
Schedule 4.15B        Permits; Notice of Violation
Schedule 4.16A        Actions Not in the Ordinary Course
Schedule 4.18         Bank Accounts; Powers of Attorney
Schedule 4.20         Contracts with Related Parties
Schedule 5.3          Buyer Governmental Approvals
Schedule 5.6          CEG's Shares of Common Stock Reserved for Issuance
Schedule 6.6          Employee Information


                                       4

            AGREEMENT dated as of February 9, 2005 (the "Agreement") by and
among Commonwealth Energy Corporation, a California corporation ("Buyer"), and
ACN Utility Services, Inc., a Michigan corporation ("ACN Utility Services"), ACN
Energy, Inc., a Michigan corporation ("ACN Energy"), and ACN Power, Inc., a
Michigan corporation ("ACN Power", and collectively with ACN Utility Services
and ACN Energy, "Sellers" or the "ACN Energy Entities"), and, as to Sections
3.1(b) & 4.22 only, Commerce Energy Group, Inc., a Delaware corporation ("CEG"),
and as to Sections 4.22, 6.11 and Article 13 only, American Communications
Network, Inc. ("Parent").

                              W I T N E S S E T H:

            WHEREAS, Sellers own and operate a retail electric power and natural
gas sales business (the "Retail Energy Business"); and

            WHEREAS, Buyer desires to purchase from Sellers and Sellers desire
to sell, convey, transfer, assign and deliver to Buyer, all of the assets,
properties, rights and business of the Retail Energy Business, other than the
Excluded Assets (as defined below), upon the terms and conditions and for the
purchase price hereinafter set forth;

            NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration set forth herein, the
sufficiency of which is hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:

SECTION 1...Certain Definitions. For purposes of this Agreement, the following
terms shall have the respective meanings set forth below:

            "ACN Energy" means ACN Energy, Inc., a Michigan corporation and
wholly owned subsidiary of Seller.

            "ACN Energy Entities" has the meaning set forth in the recitals.

            "ACN Power" means ACN Power, Inc., a Michigan corporation and wholly
owned subsidiary of Seller.

            "ACN Utility Services" means ACN Utility Services, Inc., a Michigan
corporation and wholly owned subsidiary of Seller.

            "Acquired Assets" means the assets of the Retail Energy Business set
forth on Schedule A attached hereto and those of the Option Assets which Buyer
elects to purchase pursuant to the terms hereof.

            "Action" means any claim, action, suit, proceeding or investigation,
whether at law, in equity or in admiralty or before any court, arbitrator,
arbitration panel or Governmental Authority.

            "Affiliate" of a party means any Person which, directly or
indirectly, controls, is controlled by or is under common control with such
party.


                                       5

            "AMEX" means the American Stock Exchange.

            "Assumed Liabilities" has the meaning specified in Section 3.2
hereof.

            "Balance Sheet" has the meaning specified in Section 4.5 hereof.

            "Balance Sheet Date" means December 31, 2004.

            "Buyer" has the meaning set forth in the preamble hereof.

            "Buyer Designee" has the meaning specified in Section 2.1(b) hereof.

            "Closing" means the closing of the transactions contemplated hereby,
which shall take place at the offices of Jaffe Raitt Heuer & Weiss, P.C., on the
Closing Date at 10:00 A.M., or at such other time or place as the parties may
agree upon in writing.

            "Closing Date" means February 9, 2005 or such other date as the
parties may agree upon in writing.

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

            "CEG" means Commerce Energy Group, Inc., a Delaware corporation and
the parent of Buyer.

            "Contracts" mean contracts, agreements, mortgages, indentures,
licenses, leases, commitments, plans, arrangements, sales orders, purchase
orders and binding commitments of every kind, whether written or oral.

            "Counterparty" or "Counterparties" means any Person or Persons, as
applicable, other than the Seller, that is a party or are parties, as
applicable, to one or more of the Contracts.

            "Counterparty Consent" means, with respect to each Contract, an
assignment and assumption agreement duly executed and delivered by the
applicable assignor, the applicable assignee and one or more authorized officers
of the sole Counterparty or all Counterparties to such Contract, as applicable
which is reasonably satisfactory to the Buyer.

            "Customer Notification" has the meaning specified in Section 11.3.

            "Damages" mean all losses, liabilities, damages, deficiencies,
obligations, fines, expenses, claims, demands, actions, suits, proceedings,
judgments or settlements, including interest and penalties recovered by a third
party with respect thereto and out-of-pocket expenses and reasonable attorneys'
and accountants' fees and expenses incurred in the investigation or defense of
any of the same or in asserting, preserving or enforcing any of the Indemnified
Party's rights hereunder, suffered by an Indemnified Party.

            "EEI" means the EEI Master Power Purchase and Sale Agreement, dated
January 31, 2005, between ACN Utility and Buyer.


                                       6

            "Employee Benefit Plan" has the meaning set forth in Section 3(3) of
ERISA.

            "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder.

            "ERISA Affiliate" means any other corporation or trade or business
controlled by, controlling or under common control with a Seller within the
meaning of Section 414(c) of the Code or Section 4001(a)(14) or Section 4001(b)
of ERISA.

            "Escrow Agent" means Computershare Trust Company, Inc., 350 Indiana
Street, Suite 800, Golden, Colorado 80401.

            "Escrow Agreement" means the escrow agreement in substantially the
form of Exhibit A attached hereto to be entered into on the Closing Date among
Parent, Buyer CEG and the Escrow Agent.

            "Estimated Prepayment Amount" has the meaning set for in Section
3.1(c).

            "Excluded Assets" mean those assets of Sellers not listed on
Schedule A attached hereto and the Option Assets which Buyer does not elect to
purchase pursuant to the terms hereof.

            "Excluded Liabilities" has the meaning specified in Section 3.3
hereof.

            "Financial Statements" has the meaning specified in Section 4.5
hereof.

            "GAAP" means United States generally accepted accounting principles.

            "Governmental Authority" means any agency, instrumentality,
department, commission, court, tribunal or board of any government, whether
foreign or domestic and whether national, federal, state, provincial or local,
including any self-regulatory organization having jurisdiction over the Parties,
the Parent's Subsidiaries, the Contracts set forth on Schedule 4.9, the Retail
Energy Business, the Acquired Assets, the Option Assets, or otherwise relating
in any way to the subject matter hereof.

            "Indemnified Party" has the meaning specified in Section 13.3
hereof.

            "Indemnifying Party" has the meaning specified in Section 13.3
hereof.

            "ISDA" means the International Swaps and Derivatives Association,
Inc. 2002 Master Agreement and Credit Support Annex, dated January 31, 2005,
between ACN Utility and Buyer.

            "Last Seller Pay Date" means March 4, 2005.

            "Laws" mean laws, rules, regulations, codes, orders, ordinances,
judgments, injunctions, decrees and policies.


                                       7

            "Liabilities" mean debts, liabilities, obligations, duties and
responsibilities of any kind and description, whether absolute or contingent,
monetary or non-monetary, direct or indirect, known or unknown or matured,
unmatured, or of any other nature.

            "Lien" means any security interest, lien, mortgage, claim, charge,
pledge, restriction, equitable interest or encumbrance of any nature.

            "NAESB" means the NAESB Base Contract for Sale and Purchase of
Natural Gas, dated January 31, 2005, between ACN Utility and Buyer.

            "Netting Letter" means the letter agreement between ACN Utility and
Buyer, dated January 31, 2005, whereby the parties agree to enter into an EEI
Master Netting Agreement.

            "Non-Transferred Contract" has the meaning specified in Section
2.2(a) hereof.

            "Option Assets" means those assets of the Retail Energy Business set
forth on Schedule B attached hereto, which Buyer has an option to acquire on the
terms set forth herein. To the extent any assets, property, rights or business
of a Seller or any of Parent's Subsidiaries used in connection with or otherwise
related to the Retail Energy Business as a going concern do not appear or
Schedules A and B hereto, the general language shall govern and such assets,
property, rights and business shall be deemed Option Assets.

            "Option Expiration Date" means the close of business on the 60th day
after the Closing Date.

            "Parent" has the meaning set forth in the preamble hereof.

            "Parties" means, collectively, Buyer and Sellers.

            "Party" means any of such Persons.

            "Permits" has the meaning specified in Section 4.15(b) hereof.

            "Person" means any natural person, corporation, business trust,
joint venture, association, company, firm, partnership, or other entity or
government or Governmental Authority.

            "Pre-Closing Billed Receivables" has the meaning specified in
Section 3.4(b) hereof.

            "Phase-Out Addendum" means Schedule C attached hereto.

            "Phase-Out Period" has the meaning specified in the Phase-Out
Addendum.

            "Proprietary Right" means patents, patent applications, patent
disclosures and inventions (whether or not patentable and whether or not reduced
to practice); all registered and unregistered statutory and common law
copyrights; all registered and unregistered trademarks,


                                       8

service marks, licenses, logos, sales materials and trade names; all
registrations, applications and renewals for any of the foregoing; all trade
secrets, confidential information, know-how, customer lists, formulae,
manufacturing and production processes and techniques, research and development
information, product designations, quality standards, investigations, drawings,
specifications, designs, plans, improvements, proposals, technical and computer
data; all license agreements and sublicense agreements to and from third parties
relating to any of the foregoing; all other proprietary rights (including,
without limitation, all computer software and documentation); and all copies and
tangible embodiments of the foregoing (in whatever form or medium).

            "Proration Time" means, as to Contracts relating to the sale,
purchase, transportation or delivery of natural gas, 9:01 am Eastern Standard
Time on February 1, 2005, and as to any other Acquired Assets, 12:01 am in the
time zone of the Territory to which such Acquired Asset relates (or if such
Acquired Asset relates to no particular Territory, 12:01 am Eastern Standard
Time) on February 1, 2005.

            "PUC(s)" has the meaning specified in Section 11.3.

            "Purchase Price" has the meaning specified in Section 3.1 hereof.

            "Retail Energy Business" has the meaning set forth in the recitals.

            "Returns" mean all returns, declarations, reports, estimates,
information returns and statements required to be filed with or supplied to any
taxing authority in connection with any Taxes.

            "Sales Agency Agreement" means the Agency Agreement in substantially
the form of Exhibit B attached hereto to be entered into on the Closing Date
among Seller, Buyer and an entity designated by Buyer.

            "Securities Act" means the Securities Act of 1933, as amended.

            "Sellers" has the meaning set forth in the preamble hereof.

            "Seller Ancillary Documents" means all conveyances, covenants,
warranties, deeds, assignments, bills of sale, confirmations, powers of
attorney, approvals, consents and all further instruments as may be necessary,
expedient or proper in order to complete any and all conveyances, transfers, and
assignments provided for herein and to convey to Buyer such title to the
Acquired Assets as Sellers are obligated hereunder to convey.

            "Shares" has the meaning specified in Section 3.1(b) hereof.

            "Subsidiary" means, with respect to any Person, (i) any corporation
or other Person of which securities or other interests (other than securities or
other interests having such power only upon the happening of a contingency that
has not occurred) having the power (x) to elect a majority of that corporation's
or other Person's board of directors or similar governing body or (y) to direct
the business and policies of that corporation or other Person are held by


                                       9

such Person or one or more of Subsidiaries of such Person (or a combination
thereof) and (ii) any partnership or limited liability company (a) the sole
general partner or the managing general partner or managing member of which is
such Person or a Subsidiary of such Person or (b) the only general partners or
managing members of which are such Person or one or more Subsidiaries of such
Person (or a combination thereof).

            "Taxes" mean all taxes, charges, fees, levies or other assessments,
including, without limitation, income, gross receipts, excise, real and personal
property, sales, transfer, license, withholding, payroll and franchise taxes,
taxes or other charges in the nature of excise, withholding, ad valorem, stamp,
transfer, value added, or gains taxes, fuel taxes, environmental taxes, license,
registration and documentation fees, and customs' duties, tariffs and similar
charges, imposed by any Governmental Authority and shall include any interest,
penalties or additions to tax attributable to any of the foregoing.

            "Transaction Documents" means this Agreement, the Sales Agency
Agreement, Transition Agreement, Escrow Agreement, Security Agreement, NAESB,
EEI, ISDA, Operating Agency Agreements, and each Seller Ancillary Document.

            "Transferred Contracts" means all Contracts included within the
definition of Acquired Assets, and transactions outstanding under such
Contracts, except for such Contracts or transactions, if any, with respect to
which no Counterparty Consent has been received and such consent is required
under the terms of such Contract or transaction for that assignment thereof.

            "Transferred Customers" means those customers of the Retail Energy
Business for which regulatory approval, UDC approval and/or customers' approval
with respect to such transfer to Buyer has been received and which are actually
transferred to Buyer on and/or after the Closing.

            "Transferred Employee" has the meaning specified in Section 6.6
hereof.

            "Transition Agreement" means the Transition Services Agreement in
substantially the form of Exhibit C attached hereto to be entered into on the
Closing Date between Sellers and Buyer.

            "UDC(s)" has the meaning specified in Section 11.3 hereof.

            "Unbilled Receivables" has the meaning specified in Section 3.4
hereof.

            "WARN" has the meaning specified in Section 6.6 hereof.

            SECTION 2. Transfer of Assets.

            2.1 Assets To Be Transferred. (a) Based upon and subject to the
terms, agreements, warranties, representations and conditions of this Agreement,
Sellers hereby agree to sell, convey, transfer, assign and deliver to Buyer on
the Closing Date or from time to time thereafter as contemplated by Sections
2.2, 2.3 and 6.4, and Buyer hereby agrees to buy and


                                       10

accept on the applicable date, for the Purchase Price, free and clear of all
Liens, all of the Sellers' right, title and interest in and to the Acquired
Assets.

            (b) Buyer may designate one or more of its Subsidiaries as the
purchaser hereunder of all or any portion of the Acquired Assets (any such
Subsidiary so designated being referred to herein as a "Buyer Designee").
Buyer's rights under this Agreement shall be deemed automatically assigned to
any Buyer Designee with respect to the portion of the Acquired Assets to be
acquired by such Buyer Designee, provided that any such assignment shall not
relieve Buyer from any liability hereunder.

            2.2 Consents and Novation. (a) This Agreement shall not constitute
an agreement to assign any interest in any Contract or any claim, right or
benefit arising thereunder or resulting therefrom if an assignment without the
consent of a third party (including any Governmental Authority), or without
novation of the same, would constitute a breach or violation thereof or affect
adversely the rights of the Seller or the Buyer thereunder (any of such, a
"Non-Transferred Contract"). If novation is required in order to transfer and
assign any interest to the Buyer, or if the consent of a third party is required
in order to assign any such interest and such consent is not obtained prior to
the Closing Date, or if an attempted assignment would be ineffective or would
adversely affect the Sellers' ability to convey the benefit of such
Non-Transferred Contract to the Buyer, (i) the Buyer shall be entitled to the
benefits of each such Non-Transferred Contract accruing after the Proration
Time, (ii) the Buyer shall assume as Assumed Liabilities all obligations and
liabilities relating to or arising out of or incurred in connection with such
Non-Transferred Contract that relate to the period after the Proration Time,
(iii) except as provided in Section 2.2(b), the Sellers shall continue to deal
with the other contracting party(ies) as the prime contracting party and (iv)
the Sellers will use their best efforts to cooperate with Buyer in obtaining all
such consents and cooperate with the Buyer until such consent or novation is
obtained or effected in any lawful and economically feasible arrangement so that
the Buyer shall receive the interest of the Sellers in the benefits under any
such Non-Transferred Contract, including performance by the Sellers or the Buyer
as agent for the Sellers as set forth in Section 2.2(b). The Sellers shall
promptly assign to the Buyer each such Non-Transferred Contract after receipt of
the appropriate consent or novation.

            (b) From and after the Closing, Sellers authorize and appoint Buyer
as their exclusive agent to take all actions and administer all Non-Transferred
Contracts to the fullest extent allowed under the applicable contract and, to
the extent within Buyer's reasonable control, to manage the Retail Energy
Business for Sellers. Buyer shall indemnify and hold Sellers harmless from and
against all Liabilities and Damages from third party claims relating to the
period after the Proration Time relating to (x) such Non-Transferred Contract,
or (y) Buyer's management of the Retail Energy Business as aforesaid, except to
the extent arising out of the gross negligence, bad faith or willful misconduct
of the Sellers or their Affiliates. All expenses reasonably incurred by Sellers
with respect to the Non-Transferred Contracts utilized in the Retail Energy
Business from and after the Proration Time shall be paid by Buyer. All revenues
not associated with an unreimbursed expense paid by Sellers with respect to the
Non-Transferred Contracts from and after the Proration Time shall be for the
benefit of and paid to Buyer. Sellers shall take no action, nor cause any action
to be taken under the contracts and arrangements for which Buyer has been
appointed agent unless requested by Buyer to do so. Such Buyer-


                                       11

requested Sellers actions shall not be considered actions of Seller for the
purposes of expense or revenue recognition under this Agreement.

            2.3 Option Assets. From the date hereof until the Option Expiration
Date, Buyer shall have the option from time to time to designate any of the
Option Assets as Acquired Assets by delivering notice of such election to
Seller. If Buyer so elects, Buyer shall be required to pay to Sellers any cash
prepayment amounts as set forth in Section 3.1(d); otherwise there shall be no
purchase price adjustment. For purposes of this Agreement, all Option Assets
which Buyer elects to purchase pursuant to this Section shall be deemed Acquired
Assets and all Option Assets which Buyer does not elect to purchase on or before
the Option Expiration Date pursuant to this Section shall be deemed Excluded
Assets. Until the Option Expiration Date, any Option Assets which have not been
acquired pursuant to the terms hereof shall be treated under this Agreement as
Acquired Assets except insofar as doing so would obligate Buyer to acquire such
assets, assume any Liabilities with respect to them or otherwise increase
Buyer's Liabilities hereunder.

            SECTION 3. Consideration for Acquired Assets.

            3.1 Amount of Purchase Price. The total consideration (the "Purchase
Price") to be paid by Buyer for the Acquired Assets is as follows:

            (a) On the Closing Date, Buyer shall pay $6,500,000 plus the
Estimated Prepayment Amount, subject to adjustment as set forth Section 3.1(c),
to Sellers by means of a wire transfer of immediately available funds in such
amount to an account number and depository designated by Sellers.

            (b) As soon as practicable following the approval by the AMEX of the
listing of the Shares on the AMEX (CEG to promptly seek such approval), CEG
shall deposit in escrow a number of shares (rounded down to the nearest whole
number) (the "Shares") of CEG common stock, par value $.001 per share, equal to
(i) $2,000,000 divided by (ii) the per-share closing price of CEG's common stock
on the AMEX on the last trading day immediately prior to the Closing Date, (the
"Purchase Price Stock Escrow"). In reliance on the representations of the
Sellers in this Agreement, the Shares shall not be registered under the
Securities Act. The Shares shall be issued in the name of the Escrow Agent and
will be held by the Escrow Agent and released to Parent or CEG as applicable, in
accordance with the provisions set forth in Schedule D hereto and the Escrow
Agreement. Notwithstanding any provision of this Agreement or the Sales Agency
Agreement, CEG shall have no obligation to issue any shares of CEG common stock
pursuant to this Agreement or the Sales Agency Agreement, into escrow or
otherwise, if the issuance of such shares of CEG common stock, together with all
prior issuances under this Agreement and the Sales Agency Agreement in the
aggregate, would result in the issuance of more than 14.9% of the shares of CEG
Common Stock outstanding immediately prior to the execution of this Agreement.

            (c) On the Closing Date Buyer shall pay to the Sellers the estimated
amount set forth in Schedule 3.1(c) in respect of certain cash prepayment items
which relate to the period subsequent to the Proration Time, and which relate to
those Acquired Assets set forth in


                                       12

Schedule A-1 ("Estimated Prepayment Amount"). Within 30 days following the
Closing, Sellers shall send to Buyer a statement in reasonable detail
recalculating the prepayment amount. Buyer shall have 30 days after receipt to
review such statement. On the 30th day, Buyer shall pay Sellers, or Sellers
shall pay Buyer, as applicable, any final adjustment to the Estimated Prepayment
Amount as shown on such schedule which has not been disputed by Buyer. If Buyer
disputes Sellers' final adjustment, Buyer shall so notify Sellers, and following
resolution of the dispute, Buyer shall pay Sellers, or Sellers shall pay Buyer,
as applicable, the final adjustment.

            (d) With respect to the Acquired Assets set forth on Schedule A-2 or
any Option Assets which Buyer has elected to purchase and which include
prepayment amounts, upon the actual assignment of such Assets to Buyer, Buyer
shall be responsible for paying Sellers the amount of any cash prepayment amount
relating to the period after assignment. On a monthly basis, Seller shall send
Buyer an invoice showing the prepayment amount, and Buyer shall have 30 days
from receipt to review such invoice. Thereafter, the procedures of 3.1(c) shall
apply.

            3.2 Assumption of Liabilities. Subject to Sections 2.2, 2.3 and 6.4
with respect to the timing of transfer, the Acquired Assets will be sold,
conveyed, transferred and assigned to the Buyer by Sellers on the Closing Date
(or with respect to any later acquired Option Assets, the date of the applicable
transfer thereof) free and clear of all liens, security interests, mortgages,
claims, restrictions, charges and encumbrances (collectively, "Liens")
whatsoever. The Buyer does not assume, accept or undertake any obligations,
duties, debts or liabilities of the Sellers, their shareholders, subsidiaries or
affiliates of any kind whatsoever, nor will Buyer provide any kind of credit
support to the Sellers, their shareholders, subsidiaries or affiliates pursuant
to this Agreement or otherwise, except as provided in Section 2.2 and except
that Buyer hereby agrees to assume the Sellers' Liabilities with respect to the
Acquired Assets from and after the Proration Time which are set forth on
Schedule A hereto, but in each case only to the extent such Liabilities arose in
the ordinary course of business, are to be performed after the Proration Time
and not in violation of any of the terms, agreements, warranties and
representations in this Agreement (collectively, the "Assumed Liabilities");
provided that if any Liability referred to in this sentence relates both to any
time period prior to the Proration Time and on the Proration Time such Liability
shall be prorated so that the Assumed Liabilities only include the portion
thereof directly relating to the Acquired Assets and/or to the period from and
after the Proration Time. Buyer is not assuming and shall not assume any
Liabilities of Parent or its Subsidiaries other than the Assumed Liabilities.

            3.3 Excluded Liabilities. Except as provided in Section 3.2 and
notwithstanding anything else to the contrary contained herein, the Sellers
shall retain, and Buyer is not assuming and shall not be liable for any
Liabilities of Sellers or other Affiliates of Sellers, including, without
limitation, any Liabilities (i) under Contracts which shall not have been
assigned to Buyer pursuant to this Agreement (including, but not limited to, any
union agreements); (ii) for indebtedness for borrowed money; (iii) by reason of
or arising as the result of any default or breach by Sellers of any Contract,
for any penalty assessed against Sellers under any Contract or relating to or
arising out of any event which with the passage of time or after giving of
notice, or both, would constitute or give rise to such a breach, default or
penalty, whether or not such Contract is being assigned to and assumed by Buyer
pursuant to this


                                       13

Agreement; (iv) the existence of which would conflict with or constitute a
breach of any representation, warranty, covenant or agreement of Sellers
contained herein; (v) to any shareholder or any ERISA Affiliate of Sellers, to
any present or former employee, officer or director of or consultant to Sellers
or their Affiliates (or independent contractor retained by Seller), or to any
Employee Benefit Plan sponsored or maintained by Sellers or any ERISA Affiliate,
including, without limitation, any bonuses, vacation or sick pay, any
termination or severance pay related to Sellers or Sellers' Affiliates'
employees, and any post retirement medical benefits or other compensation or
benefits; (vi) relating to the execution, delivery and consummation of this
Agreement and the transactions contemplated hereby, including, without
limitation, any and all Taxes incurred as a result of the sale contemplated by
this Agreement; (vii) for any Taxes of the Sellers including federal, state or
local taxes imposed as a result of being or having been a member of a group
filing a combined, consolidated or affiliated return); (viii) relating to or
arising out of any environmental matter, including, without limitation, any
violation of any environmental law or any other law relating to health and
safety of the public or the employees of Sellers or Sellers' Affiliates; (ix)
relating to, or arising out of, services rendered by Sellers or Sellers'
Affiliates, or the conduct or operation of the business of Sellers or Sellers'
Affiliates, prior to the Closing Date; or (x) relating to the Excluded Assets
(collectively, the "Excluded Liabilities").

            3.4 Accounts Receivables and Closing Prorations. (a) All prepaid
contracts assumed by Buyer, all unbilled customer accounts receivables and all
liabilities, including residual commissions, shall be prorated as of the
Proration Time such that pursuant to and consistent with the provisions of the
Phase-Out Addendum attached hereto as Schedule C, Sellers receive or are due all
income and pay all expenses related to any period prior to the Proration Time.

            (b) As provided herein, to the extent Buyer has hired employees of
Sellers performing such functions, Buyer shall collect receivables existing as
of the Proration Time that were billed as of the Closing (the "Billed
Receivables") and bill and collect (the "Unbilled Receivables"), as herein
provided and in accordance with the Phase-Out Addendum. As also provided herein,
to the extent Buyer has not yet hired employees of Sellers performing such
functions, Sellers shall cause their and their Affiliates' employees, at the
direction of Buyer, to collect the Billed Receivables and bill and collect the
Unbilled Receivables, as herein provided and in accordance with the Phase-Out
Addendum. With respect to all Billed Receivables, to the extent that Buyer has
hired employees of Sellers performing such functions, Buyer agrees to use
ordinary and customary industry efforts to collect the Billed Receivables, at
Buyer's cost. ACN Energy will maintain its current lockbox to which Buyer agrees
to direct payments of Billed Receivables in its ordinary course. Any payments
received by Buyer in its lockbox(es) for Sellers' Billed Receivables shall be
remitted to Sellers promptly, pursuant to the operation of the Phase-Out
Addendum, that it has received collection of such Billed Receivables. With
respect to all Unbilled Receivables, Buyer agrees to act as Sellers' agent and
to use ordinary and customary industry effort to bill the Unbilled Receivables
and to collect the Unbilled Receivables, at Buyer's cost. Buyer shall remit to
Sellers Sellers' pro rata share (based on the operation of the Phase-Out
Addendum) of each Unbilled Receivable which Buyer collects promptly pursuant to
the operation of the Phase-Out Addendum that it has received collection of such
Unbilled Receivables. In the event that any Billed Receivable or Unbilled
Receivable remains unpaid


                                       14

ninety (90) days after the date of the first invoice evidencing that Billed
Receivable or Unbilled Receivable and the date on which Seller is entitled to
exercise remedies under applicable Law, Buyer shall have no further obligations
with respect to such Billed Receivable or Unbilled Receivable and Sellers shall
be entitled to institute any such further collection efforts as Sellers deem
appropriate, at Sellers' cost. In the event Sellers receive in their lockbox
receivables attributable to the period following the Proration Time ("Buyer
Receivables"), Sellers shall remit such amount(s) to Buyer promptly pursuant to
the operation of the Phase-Out Addendum.

            3.5 Bulk Sales Law Compliance. Sellers agree to pay and discharge
all claims of creditors which may be asserted against Buyer by reason of Sellers
and Sellers' Affiliates' noncompliance with the provisions of the bulk sales or
transfer Law of any state, province or other applicable jurisdiction which may
require such compliance on account of the provisions herein and the transactions
contemplated hereby and to indemnify and hold Buyer harmless from and against
claims suffered or incurred by Buyer by reason of or arising out of (a) the
failure of Sellers or Sellers' Affiliates to pay or discharge the same when due
or (b) such noncompliance with any applicable Bulk Sales Law.

            3.6 Allocation of Purchase Price. As soon as reasonably practicable
after the Closing Date, Buyer's and Sellers' independent auditors shall agree on
an allocation of the Purchase Price and other consideration paid pursuant to
this Agreement, and based on such allocation, Buyer and Sellers shall prepare
Internal Revenue Service Form 8594, in accordance with Section 1060 of the Code
and the regulations thereunder, and such forms with respect to other
jurisdictions as may be required by all applicable laws relating to allocation
of the Purchase Price. Any adjustment to the Purchase Price or other
consideration paid pursuant to this Agreement shall result in an appropriate
adjustment to such allocation. Sellers and Buyer shall timely file with the
appropriate Governmental Authorities copies of said Form 8594 and any other such
required form as prepared by Buyer and Sellers and shall utilize the allocation
of the Purchase Price and other consideration paid pursuant to this Agreement
contained on said Form 8594 in the preparation of any Returns and forms
(including attachments thereto) which relate to the transactions contemplated
hereby. Neither Sellers nor Buyer shall file any Return containing an allocation
of the Purchase Price that differs from an allocation established pursuant to
this Section 3.6.

            SECTION 4. Representations and Warranties of Sellers. Each Seller
hereby warrants and represents to Buyer as of the date hereof and as of the
Closing as follows:

            4.1 Good Standing. Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of Michigan and has
all power and authority to own or lease its assets and to operate and carry on
its business as presently conducted.

            4.2 ACN Energy Entities. Except as listed in Schedule 4.2(A), all of
the activities of the Retail Energy Business are currently conducted by or
through the ACN Energy Entities, the ACN Energy Entities and all the Acquired
Assets and Option Assets are owned by the ACN Energy Entities, Parent has no
Subsidiaries involved in any aspect of the business of the Retail Energy
Business and neither Parent nor any of its Subsidiaries of Parent has made any
advances to or investments in, or owns any securities of or other interests in,
any firm,


                                       15

corporation, association, business organization, enterprise or entity, which are
related to the Retail Energy Business or its assets, properties or business.
Each ACN Energy Entity is duly organized, validly existing and in good standing
under the laws of its state of incorporation or organization, has full corporate
power and authority to conduct its business as it is presently being conducted
and to own, lease and operate its properties and assets. Each ACN Energy Entity
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the ownership of property or nature of its
business requires such qualification. Each jurisdiction in which each ACN Energy
Entity is qualified to do business as a foreign corporation is listed on
Schedule 4.2 hereto. There are no other jurisdictions where the failure of any
ACN Energy Entity to be qualified as a foreign corporation would materially
adversely affect the Acquired Assets, the business of the Retail Energy Business
or the transactions contemplated herein.

            4.3 Authorization; Consents. The execution and delivery of this
Agreement and the other Transaction Documents and the consummation of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of Parent and each Seller, to the extent required by applicable law,
the shareholders of Sellers and all other corporate action of Parent and Sellers
necessary to authorize the execution and delivery of this Agreement and the
other Transaction Documents and the consummation of the transactions
contemplated hereby and thereby have been taken. This Agreement and each
Transaction Document constitutes the legal, valid and binding obligation of
Parent and each Seller enforceable against them in accordance with its terms.
Except as set forth on Schedule 4.3 hereto, no consent of any lender, trustee,
security holder of Parent or any Seller, or other Person, is required for Parent
or any Seller to enter into and deliver this Agreement and each Transaction
Document or to consummate the transactions contemplated hereby, nor do the
articles of incorporation or by-laws or any Material Contract or other
instrument to which any Seller or Parent is bound, or affecting any of their
respective properties, conflict with or restrict the execution and delivery of
this Agreement or the other Transaction Documents or the consummation of the
transactions contemplated hereby or thereby.

            4.4 Governmental Approvals. Except as set forth in Schedule 4.4, no
governmental authorization, approval, order, license, permit, franchise, or
consent and no registration, declaration or filing by Parent or any Seller with
any Governmental Authority (including, without limitation, any filing or
registration pursuant to the Securities Act or the securities or blue sky laws
of any state or territory) is required in connection with the execution and
delivery of this Agreement and the other Transaction Documents and the
consummation of the transactions contemplated hereby or thereby.

            4.5 Financial Statements; Liabilities; Books and Records of Account.
(a) Annexed hereto as Schedule 4.5A are the following financial statements
(collectively, the "Financial Statements") with respect to the Retail Energy
Business: (a) the audited consolidated financial statements of the Retail Energy
Business for the years ended December 31, 2002 and 2003; and (b) the unaudited
consolidated financial statements of the Retail Energy Business as of December
31, 2004 (the unaudited consolidated statement of net worth of the Retail Energy
Business as of December 31, 2004 is referred to herein as the "Balance Sheet").
The Financial Statements, in each case, are true and complete with respect to
each item therein and have been


                                       16

prepared in conformity with GAAP heretofore adopted by, and applied consistently
with the past practices of, Sellers and fairly present the financial position,
results of operations and changes in financial position of the Retail Energy
Business as at, or for the periods ended on, such dates in all material
respects. All Financial Statements include all material elements of revenue and
cost associated with the conduct of the business of the Retail Energy Business
(whether direct or indirect and whether incurred at any of the leased premises
or at any other locations), including, without limitation, the allocated or
directly charged costs of any materially significant services provided to the
Retail Energy Business by Sellers or any Affiliate of Sellers. Other than
corporate overhead and rent, Schedule 4.5A reflects all group and division
overhead charges and intercompany allocations attributed to the Retail Energy
Business. Since December 31, 2002, the Retail Energy Business has conducted its
accounting procedures in a consistent manner without material change of policy
or procedure.

            (b) On the Balance Sheet Date, other than as listed on Schedule 4.5
there were no Liabilities of any Seller in connection with the Acquired Assets
other than those Liabilities disclosed or provided for in the Balance Sheet. On
the date hereof and on the Closing Date, there are no and will be no other
Liabilities any Seller in connection with the Acquired Assets except those
incurred since the Balance Sheet Date, in the ordinary course of the business of
the Retail Energy Business, and not in material violation of or in conflict with
any of the terms, agreements, warranties, representations and conditions of
Sellers contained in this Agreement.

            (c) The records and books of account of each Seller in any way
relating to the Retail Energy Business are complete and accurate in all material
respects. Copies of all such books and records have been provided or made
available to Buyer.

            4.6 Taxes. With respect to Taxes relating to the Retail Energy
Business, each Seller is in compliance with all applicable Laws, whether or not
such Taxes are owed by Seller.

            4.7 Title to Assets; Liens and Encumbrances. The ACN Energy Entities
are the owners of, and except as set forth in Schedule 4.7A, have good and
marketable title to, all of the Acquired Assets subject to no Liens. Except as
set forth in Schedule 4.7B, the Acquired Assets constitute all of the material
assets used in, related to or required by the Sellers for, the normal conduct of
the Retail Energy Business's business. The Acquired Assets do not include any
owned real property.

            4.8 Trademarks, Service Marks, Trade Names, Patents and Copyrights.
Schedule 4.8 hereto sets forth a true, correct and complete list of all
Proprietary Rights used by the Retail Energy Business in the conduct of its
business. Except as indicated on Schedule 4.8, each such Proprietary Right is
owned by the Sellers and is not subject to any license, royalty arrangement or
dispute. To Sellers' knowledge (a) no other Proprietary Rights are used in or
are necessary for the conduct of the Retail Energy Business's business as now
conducted, (b) none of such Proprietary Rights used by the Sellers nor the
Retail Energy Business as now conducted infringes any Proprietary Right or other
such right of any other Person and (c) no claim has been asserted or threatened
by any Person with respect to the ownership, validity, license or use of, or any
infringement resulting from, any of the Proprietary Rights used by the Retail
Energy Business and there is no basis for any such claim. No shareholder,
officer, director or employee


                                       17

of Parent or any of its Subsidiaries owns or has any interest in any Proprietary
Rights or any trade secret, invention or process, if any, used by the Retail
Energy Business in connection with its business.

            4.9 Contracts. (a) Schedule 4.9 hereto contains a true and complete
list of each Material Contract, including all amendments and modifications
thereto, to which any Seller is a party or to which it is subject or by which it
is bound relating to, or in any way affecting, the Retail Energy Business or the
Acquired Assets. As used herein, "Material Contract" means any contract that has
involved in calendar year 2004, or is likely (absent any unforeseen change from
the status quo) throughout calendar year 2005 or any year thereafter to involve
an annualized revenue or expense of $50,000.00 or more. True, correct and
complete copies of all Material Contracts listed on Schedule 4.9 have heretofore
been delivered by Sellers to Buyer. Except as set forth on Schedule 4.9, no
Material Contract requires the consent of any other Person or results in early
termination or acceleration of any right or obligation by reason of the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby. Each of the Material Contracts constitutes the
legal, valid binding obligation of such Seller enforceable in accordance with
its terms and, to Sellers' knowledge, is a valid and binding obligation of all
of the other parties thereto enforceable against them in accordance with their
terms and each such Material Contract is in full force and effect without
modification. To Seller's knowledge, each Seller has performed all obligations
required to be performed by it and is not in default under any Material
Contract, and no event has occurred thereunder which, with or without the lapse
of time or the giving of notice, or both, would constitute a default by it
thereunder. To Sellers' knowledge, no other party is in default under any
Material Contract. No shareholder, partner, member, officer, director or
employee of Parent or any of its Subsidiaries is a party to or subject to or
bound by any Material Contract or has any right which in any way relates to the
Acquired Assets.

            (b) Schedule 4.9B sets forth a true and complete list of all bonds,
deposits, guarantees or other credit support posted or accepted under any
Material Contract or otherwise in connection with the Acquired Assets.

            4.10 Purchase and Sales Commitments and Orders; Customers and
Vendors. Schedule 4.10 hereto sets forth a true and complete description and
number in accordance with the customary recordkeeping practices of the Seller of
the customers of the Retail Energy Business broken down by UDC. To Sellers'
knowledge, no Seller has received any oral or written notice from any
Governmental Authority threatening or intending to take action that would be
materially adverse to the Retail Energy Business, the Acquired Assets or with
respect to more than 10% of the Retail Energy Business customer base. To
Sellers' knowledge, no Seller has received any notice or has any knowledge that
any existing, significant group or sub-group of customers of the Retail Energy
Business (i) intends to terminate or is considering terminating its business
relationship with the Retail Energy Business or (ii) has requested such group or
sub-group be granted economic concessions, rebates or changes with respect to
products or services provided by the Retail Energy Business that would be
adverse to Buyer.

            4.11 Employees; Compensation; Labor Relations; Vacation Time,
Bonuses, Etc. (a) Schedule 4.11 hereto lists the names, title or job
description, employer and total annual


                                       18

compensation of all employees of ACN Energy, Inc. as of the date hereof (the
"Existing Employees").

            (b) There are no labor strikes, disputes, slow downs, work stoppages
union organizing efforts or other labor troubles or grievances pending or, to
any Sellers' knowledge, threatened against or involving the Retail Energy
Business. No unfair labor practice complaint before the National Labor Relations
Board or any similar or comparable state, local or foreign agency, no discharge
or grievance before the Equal Employment Opportunity Commission and no
complaint, charge or grievance of any nature before any similar or comparable
state, local or foreign agency, in any case relating to the Retail Energy
Business or the conduct of its business or the Acquired Assets is pending or, to
Seller's knowledge, threatened. To Seller's knowledge, no Seller has received
notice, nor has knowledge, of the intent of any Governmental Authority
responsible for the enforcement of labor or employment laws to conduct any
investigation of or relating to the Retail Energy Business or the conduct of its
business or the Acquired Assets. To the knowledge of each Seller, no officer or
key employee of the Retail Energy Business has any plans to terminate his or her
employment with the Retail Energy Business. No Existing Employees are subject to
any employment agreement or collective bargaining agreement. All such Existing
Employees are "at will."

            (c) The vacation periods for the Existing Employees normally occur
during the periods described on Schedule 4.11C hereto, which Schedule also sets
forth the method for accruing vacation pay used by Sellers on their books and
records. Except as set forth on such Schedule 4.11C, at the Balance Sheet Date
there were, at the date hereof there are and on the Last Seller Payment Date
there will be, no bonuses, profit sharing, incentives, commissions or other
compensation of any kind with respect to work done prior to the Balance Sheet
Date, the date hereof or the Last Seller Payment Date, respectively, due to or
expected by the Existing Employees, not fully paid prior to such date or, with
respect to compensation for work done prior to the Balance Sheet Date, not fully
accrued on the Balance Sheet. Except as set forth on Schedule 4.11C, no bonuses,
profit sharing or incentives and no increases in compensation have been paid,
accrued or granted by any Seller to Existing Employees for any period after the
Balance Sheet Date. The Existing Employees are employed by ACN Energy, Inc. All
brochures, agreements and other documents setting forth personnel policies
relating to the Existing Employees, including, without limitation, information
concerning compensation, severance, termination and other employee perquisites
and benefits, have been furnished to the Existing Employees by Seller's
affiliates and have been furnished to Buyer and are listed in Schedule 4.11C
hereof.

            4.12 Employee Benefits. (a) Except for those plans set forth on
Schedule 4.12A hereto (the "Plans"), Sellers do not maintain, contribute to or
have or have had an obligation to contribute to any Employee Benefit Plan,
whether or not such plan has been terminated and whether or not such plan is of
a legally binding nature or in the form of an informal understanding in which
former or present employees of the Retail Energy Business have participated or
currently participate.

            (b) True, correct and complete copies of all the material documents
embodying the Plans, including, without limitation, the plan and trust
instruments and summary


                                       19

plan description, have been furnished to Buyer. Each Plan which is intended to
comply with Section 401(a) of the Code and each trust related thereto is
qualified and exempt within the meaning of Sections 401 and 501 of the Code,
respectively, and a determination letter has been received from the Internal
Revenue Service with respect to each such Plan stating that such Plan and its
related trust are qualified and exempt within the meaning of Sections 401 and
501 of the Code, respectively, and a copy of each such determination letter has
been furnished to Buyer. To Seller's knowledge, nothing has occurred since the
date of the most recent determination letter of each such Plan that could
adversely affect the qualified status of such Plan or tax-exempt status of any
related trust.

            (c) With respect to any group health plan, the group health plan
continuation coverage requirements of Section 4980B of the Code and Part 6 of
Title I of ERISA ("COBRA"), have been fulfilled in all material respects.

            (d) Neither any Seller nor any ERISA Affiliate has ever (i)
terminated an Employment Benefit Plan subject to Title IV of ERISA or (ii)
contributed to any "multiemployer plan," as such term is defined in Section
3(37) of ERISA, and neither any Seller nor any ERISA Affiliate has effected
either a "complete withdrawal" or a "partial withdrawal," as those terms are
defined in Sections 4203 and 4205, respectively, of ERISA, from any such
multiemployer plan.

            (e) Sellers do not maintain or contribute to any "employee welfare
benefit plan" (as such term is defined in Section 3(1) of ERISA), or other
employee benefit plan or arrangement, providing post-employment or
post-retirement benefits (other than an "employee pension benefit plan," as such
term is defined in Section 3(2) of ERISA and other than COBRA continuation
coverage) or, if any such plan exists, it is listed on Schedule 4.12A. There has
been no written or oral communication to the Transferred Employees by the Parent
or any of its Subsidiaries that would reasonably be expected to promise or
guarantee such Transferred Employees retiree health or life insurance or other
retiree death benefits on a permanent basis.

            4.13 Legal Proceedings. To Sellers' knowledge, there are no material
Actions pending or, to the knowledge of Sellers, threatened against any Seller
respect to or otherwise affecting the Retail Energy Business or the Acquired
Assets. To the best knowledge of each Seller, no Seller is in default with
respect to any order, writ, injunction or decree of any Governmental Authority.

            4.14 Orders, Decrees, Etc. To Sellers' knowledge, except as set
forth in Schedule 4.14 hereto, there are no orders, decrees, injunctions,
rulings, publications, decisions, directives, consents, pronouncements or
regulations of any court or any Governmental Authority issued against, or
binding on, any Seller in any way relating to the Acquired Assets or the Retail
Energy Business's business which may have a material adverse effect over the
Acquired Assets or the Retail Energy Business's method or manner of doing
business.

            4.15 Compliance With Law; Permits and Licenses.


                                       20




            (a)   To Seller's knowledge, each Seller is in current compliance
with all Laws of any Governmental Authority applicable to the Retail Energy
Business, its assets, property, business, employees or operations in all
material requests.

            (b)   The Sellers presently hold, and will hold at the Closing Date
or the time of transfer of the applicable Acquired Assets, all required permits,
licenses, certificates and franchises from applicable Governmental Authorities
(the "Permits") which are necessary for or material to the ownership or
operation of the Acquired Assets or the conduct of the Retail Energy Business,
each of which is listed in Schedule 4.15(b) hereto; all such Permits are in full
force and effect and each Seller is in full compliance with the terms and
provisions of its applicable Permit. Except as set forth in Schedule 4.15(b), no
notice of violation of any Permit has been received. For any Permits which may
expire during the Phase Out Period, which are set forth in Schedule 4.15(b),
renewal applications have been or will be timely filed and prosecuted.

            4.16  Actions Not in Ordinary Course; No Change.

            (a)   Except as set forth on Schedule 4.16A hereto, since the
Balance Sheet Date, the Sellers have not, relating to the Retail Energy Business
or the Acquired Assets, (i) incurred any Liability, except current liabilities
in the ordinary course of business and Liabilities incurred under Contracts
entered into in the ordinary course of business of the Retail Energy Business;
(ii) made with respect to the Retail Energy Business any capital expenditures or
additional commitments for capital expenditures and none are planned; (iii)
discharged any Liability, other than current liabilities shown on the Balance
Sheet and current liabilities incurred since the Balance Sheet Date in the
ordinary course of business of the Retail Energy Business; (iv) sold or
transferred any assets or written off any receivables other than in the ordinary
cause of the Retail Energy Business; (v) mortgaged, pledged or subjected to any
other Lien any of its assets or properties; (vi) suffered any losses or waived
any rights of substantial value; (vii) granted any material bonuses or
commissions or materially increased the compensation payable to any of its
employees, directors or officers or increased the aggregate payment of any fees;
(viii) made any loans to any individuals, firms, corporations or other entities;
(ix) made any change in any method of accounting or auditing practice; or (x)
entered into any transaction not in the ordinary course of business or agreed
(whether or not in writing) to do any of the foregoing. From the Balance Sheet
Date to the Closing Date, the Retail Energy Business and the Acquired Assets has
been and will be operated only in the regular and ordinary course.

            (b)   Since the Balance Sheet Date, there has not been (i) any
material adverse change (whether or not in the ordinary course of business) in
the business, condition (financial or otherwise), prospects, operations,
customer base, employee or vendor relations, assets or Liabilities of the Retail
Energy Business or the Acquired Assets or (ii) any material damage, destruction
or loss, whether or not covered by insurance, materially affecting the business,
assets, properties or rights of the Retail Energy Business or the Acquired
Assets.

            4.17  Reserved.

            4.18 Bank Accounts; Powers of Attorney. Set forth on Schedule 4.18
hereto is a list of each bank or other financial institution in which the
Sellers maintain an account or safe


                                       21



deposit box related to the Retail Energy Business, including the current
lockbox, the corresponding number of each such account or safe deposit box and
the names of all persons holding check-signing or withdrawal powers or other
authority with respect thereto. Also set forth on Schedule 4.18 are the names of
all persons, if any, holding powers of attorney from the Sellers and a summary
statement of the terms thereof.

            4.19 No Brokers. None of the Sellers or any Affiliate of Sellers has
entered into any contract, agreement, arrangement or understanding with any
Person or firm which will result in the obligation of Buyer or its Affiliate to
pay any finder's fee or financial advisory fee, brokerage fee or commission or
similar payment in connection with the transactions contemplated hereby.

            4.20 Arrangements with Related Parties. Schedule 4.20 sets forth a
true and complete list of all contracts or other arrangements relating to the
Retail Energy Business among Parent or any of its Affiliates on one hand and any
other Affiliate of the Parent on the other. Except as expressly provided herein,
none of the Assumed Liabilities include any Liabilities owed to Sellers, their
Affiliates or their respective stockholders, partners, members, directors,
managers, officers, employees or agents.

            4.21 No Omissions. Sellers do not know of any facts or circumstances
not disclosed to Buyer which indicate that the Acquired Assets may be materially
adversely affected or which otherwise should be disclosed to Buyer in order to
make any of the representations or warranties made herein on the part of the
Sellers not misleading. To Seller's knowledge, no representation or warranty by
Sellers contained in this Agreement, and no statement contained in any Schedule,
Exhibit, certificate or other instrument furnished to Buyer under or in
connection with this Agreement, contains any untrue statement of any material
fact, or omits to state any material fact necessary in order to make the
statements contained herein or therein not misleading.

            4.22  Stock Legend; Restricted Securities.  Parent and Sellers
represent and warrant to Buyer and CEG as follows:

            (a)   Parent is acquiring the Shares, when and if released to Parent
pursuant to Schedule D hereto and the Escrow Agreement, for its own account and
not with a present view to, or for sale in connection with, any distribution
thereof. Sellers consent to the placement of the following legend on each
certificate representing the Shares and acknowledge that stop transfer
instructions will be placed with CEG's transfer agent:

            "THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
            REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE
            TRANSFERRED OR SOLD UNLESS (i) A REGISTRATION STATEMENT UNDER
            SUCH ACT (OR AN EXEMPTION FROM SUCH REGISTRATION) IS THEN IN
            EFFECT WITH RESPECT THERETO, (ii) A WRITTEN OPINION FROM
            COUNSEL FOR THE ISSUER OR OTHER COUNSEL FOR THE HOLDER
            REASONABLY ACCEPTABLE


                                       22



            TO THE ISSUER HAS BEEN OBTAINED TO THE EFFECT THAT NO SUCH
            REGISTRATION IS REQUIRED OR (iii) A `NO ACTION' LETTER OR ITS
            THEN EQUIVALENT HAS BEEN ISSUED BY THE STAFF OF THE SECURITIES
            AND EXCHANGE COMMISSION WITH RESPECT TO SUCH TRANSFER OR
            SALE."

            (b)   Parent and Sellers understand that the Shares will not be
registered under the Securities Act for the reason that the sale provided for in
this Agreement is exempt pursuant to Section 4 of the Securities Act and that
the reliance of CEG and the Buyer on such exemption is predicated in part on the
Parent's and Sellers' representations set forth herein. Parent and each Seller
represents that it is experienced in evaluating companies such as CEG, has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of its investment, and has the ability to suffer
the total loss of its investment in the Shares. Parent and each Seller is an
accredited investor within the meaning of Rule 501 of Regulation D promulgated
under the Securities Act. Each Seller further represents that it has had access
during the course of the transaction and prior to its acquisition of the Shares
to such information relating to CEG as it has desired and that it has had the
opportunity to ask questions of and receive answers from CEG concerning the
transaction and to obtain additional information (to the extent CEG and the
Buyer possessed such information or could acquire it without unreasonable effort
or expense) necessary to verify the accuracy of any information furnished to it
or to which it had access.

            (c)   Parent and Sellers understand that the Shares may not be sold,
transferred or otherwise disposed of without registration under the Securities
Act or an exemption therefrom and that in the absence of an effective
registration statement covering the Shares or an available exemption from
registration under the Securities Act, the Shares must be held indefinitely.

            SECTION 5.  Representations and Warranties of Buyer.  Buyer
warrants and represents to Sellers as of the date hereof and the Closing
as follows:

            5.1   Good Standing.  Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
California.

            5.2   Authorization. The execution and delivery of this Agreement
and the other Transaction Documents and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by the Board of
Directors of Buyer, and all other corporate action of Buyer, including all
necessary shareholder approvals, authorizations and ratifications, necessary to
authorize the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been taken. This Agreement and the
other Transaction Documents constitute the legal, valid and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms. No consents of
any lender, trustee or security holder of Buyer or other Person is required for
Buyer to enter into and deliver this Agreement and the other Transaction
Documents and to consummate the transactions contemplated hereby and thereby.


                                       23



            5.3   Governmental Approvals. Except as set forth on Schedule 5.3,
no authorization, approval, order, license, permit, franchise, or consent and no
registration, declaration or filing by Buyer with any Governmental Authority is
required in connection with the execution and delivery of this Agreement and the
other Transaction Documents and the consummation of the transactions
contemplated hereby.

            5.4   No Brokers. Neither Buyer nor any of its Affiliates has
entered into any contract, agreement, arrangement or understanding with any
Person or firm which will result in the obligation of Sellers or their
Affiliates to pay any finder's fee or financial advisory fee, brokerage fee or
commission or similar payment in connection with the transactions contemplated
hereby.

            5.5  Authorization. No approval or authorization of this Agreement
or any other agreement to be entered into in connection with the transactions
contemplated by this Agreement is required by law or otherwise in order to make
this Agreement or any other agreements entered into in connection herewith
binding upon the Buyer, except for approval of the listing of the Shares on the
AMEX. Upon the execution and delivery of this Agreement and any other agreement
in connection therewith, such agreements will constitute legal, valid and
binding obligations of Buyer, enforceable in accordance with their respective
terms.

            5.6   Shares. The authorized common equity capital of CEG consists
of 150,000,000 shares of Common Stock , par value $.001 per share, of which
30,499,290 shares have been issued and are outstanding. Except for any shares of
Common Stock reserved for issuance under CEG's equity incentive plans or as
disclosed in CEG's SEC reports or Schedule 5.6 hereto, there are no options,
warrants, conversion privileges, preemptive rights, subscription or other rights
(or agreements for any such rights), commitments, arrangements or understandings
of any kind obligating CEG to issue or sell any shares of capital stock of any
class of CEG or any securities convertible into or exchangeable for any such
shares. The Shares, when issued, sold and delivered in accordance with the terms
and for the consideration set forth in this Agreement, will be validly issued,
fully paid and nonassessable and free of any liens or restrictions on transfer
other than restrictions on transfer under applicable state and federal
securities laws. Assuming the accuracy of the representations of the Parent and
Sellers in Section 4.22 of this Agreement, the Shares will be issued in
compliance with all applicable federal and state securities laws.

            5.7   SEC Rules. To Buyer's knowledge, CEG is in compliance with SEC
and AMEX rules and regulations.

            SECTION 6.  Conduct Prior to the End of the Phase-Out Period.

            6.1   Investigation by Buyer. Buyer may, prior to the end of the
Phase-Out Period (as defined in the Phase-Out Addendum), through its own
representatives (including its counsel, accountants and consultants) make such
reasonable inquiries and document reviews with respect to the Option Assets and
general operations of the Retail Energy Business and such review of the
financial records of the Retail Energy Business as it deems necessary or
advisable in connection with the transactions contemplated hereby to familiarize
itself with such Option


                                       24



Assets and general operations and financial records; such activities shall not,
however, affect Sellers' representations, warranties and agreements hereunder.
Sellers shall permit Buyer and its authorized representatives to have, after the
date hereof, reasonable access to the officers, employees and premises of each
Seller and to all books and records of the Retail Energy Business or related to
the Acquired Assets and Option Assets; and Buyer shall have the right to make
copies thereof and excerpts therefrom. Sellers shall furnish Buyer with such
financial and operating data and other information with respect to the Acquired
Assets, Option Assets and the Retail Energy Business as Buyer may from time to
time reasonably request. Sellers agree to permit Buyer and its authorized
representatives to visit suppliers, customers and others having business
relations with the Retail Energy Business. Sellers acknowledge that the rights
set forth in this Section 6.1 are essential to Buyer as a means of evaluating
the Acquired Assets and Option Assets and Sellers agree that in no event will
Sellers seek to recover costs or damages of any kind incurred as a result of the
exercise by Buyer of such rights and hereby waives any and all rights it might
have to recover any such costs or damages.

            6.2   Ongoing Operations.

            (a)   From the date hereof until the date that all Transferred
Customers and Acquired Assets have transferred to Buyer, Sellers shall take
direction from Buyer as to the conduct and operation of the business of the
Retail Energy Business and the Acquired Assets consistent with the requirements
of law and regulation applicable to the Retail Energy Business and the Acquired
Assets, conduct and operate the business of the Retail Energy Business and the
Acquired Assets in the ordinary and usual course consistent with past practice,
preserve intact the business organization of the Retail Energy Business, use
commercially reasonable efforts to preserve for Buyer the present relationship
between the Retail Energy Business on the one hand and its suppliers, customers
and others having business relations with it on the other, and take directions
from Buyer in conducting the Retail Energy Business in a manner which will
safeguard and maintain the commercial value of the Acquired Assets in all
material respects. From and after the Last Seller's Pay Day, Sellers'
obligations as aforesaid shall be limited to matters within their control. From
the date hereof until the date that all Transferred Employees have transferred
to Buyer, Sellers shall use commercially reasonable efforts to keep available to
Buyer the services of Existing Employees of the Retail Energy Business.

            (b)   Without limiting the generality of Section 6.2(a), Seller and
its Subsidiaries will not, in connection with the conduct of the business of the
Retail Energy Business, without the prior written consent of Buyer:

                  (i)   change for 2004 any accounting practices which would
have the effect of altering its calculation of EBITDA from that which would be
computed using the policies and practices in place with respect to 2003;

                  (ii)  increase the rate of salary, benefits or other
compensation of any employee or hire any employees other than to replace
terminated employees or make any changes in any benefit plan;


                                       25



                  (iii) enter into any agreement, Contract or commitment or
incur any Liability other than in the ordinary course of business and consistent
with its existing policies and having value of greater than $25,000.00 per
annum;

                  (iv)  waive any rights of substantial value;

                  (v)   dispose of, permit to lapse, or otherwise fail to
preserve any of its Proprietary Rights or other similar rights, dispose of or
permit to lapse any license, permit or other form of authorization, or dispose
of or disclose to any person, other than an authorized representative of Buyer,
any customer list, trade secret, formula process or know-how;

                  (vi)  pay, loan or advance any amount to or in respect of, or
sell, transfer or lease any assets (whether real, personal or mixed, tangible or
intangible) to, or enter into any agreement, arrangement or transaction with,
any of its officers or directors, any of its Affiliates or associates or any
Person having any direct or indirect interest in it or in which it or any of its
officers, directors, Affiliates or associates, has any direct or indirect
interest;

                  (vii) agree, whether in writing or otherwise, to take any
action prohibited in this Section 6.2; or

                  (viii) without limiting any of the foregoing, take or refrain
from taking any action the result of which would render any representation or
warranty made to Buyer in or in connection with this Agreement inaccurate.

            (c)   Sellers shall inform Buyer of any material action taken or
threatened to be taken by: (i) any party supplying energy or gas to Parent or
any of its Subsidiaries, (ii) any Governmental Authority having jurisdiction
over Parent or any of its Subsidiaries or any of their customers, (iii) any
financial institution with which Parent or any of its Subsidiaries has a
relationship, or (iv) any other party whose action or threatened action could
reasonably be determined to be materially adverse to the interests of Buyer with
respect to the Acquired Assets.

            6.3   Other Transactions. Sellers will not, and will cause their
Affiliates and their respective directors, officers, employees and agents not
to, directly or indirectly, solicit or initiate any discussions or negotiations
with, or encourage or respond to any inquiries or proposals by, or participate
in any negotiations with, or provide any information to, or otherwise cooperate
in any other way with, any corporation, partnership, person or other entity or
group, other than Buyer and its representatives, concerning (A) any sale or
other transfer of all or any substantial portion of the Retail Energy Business
or the Acquired Assets; or (B) any joint venture, agency, or similar agreement
that binds Sellers to sell or cause to be sold energy or energy-related products
or services with any entity other than Buyer.

            6.4   Consents; Third-Party; Regulatory Approvals. As soon as
practicable following the execution of this Agreement, Buyer and Sellers shall
work together to cause (a) the transfer of all state and federal licenses and
other Permits to Buyer, to the extent required and allowed by law for Buyer to
operate the Retail Energy Business, including any UDC and PUC notifications
and/or approvals, (b) assignment of Contracts which are included as Acquired
Assets to and assumption of such Contracts by Buyer, to the extent permissible
under such


                                       26



Contracts and by law, including any UDC and PUC notifications and/or approvals,
to the extent required by law, and (c) any other consents or approvals required
by law to transfer any of the Acquired Assets being acquired by Buyer pursuant
to this Agreement and any other consents required by law with respect to
approval of this Agreement. Buyer will take the lead with respect to all
activities identified in this Section 6.4 and bear the costs associated with
such activities with the exception of costs associated with obtaining the
approval of Seller's and its Affiliates' lenders and other such financing
parties. Sellers agree to assist in effectuating such approvals where requested
by Buyer and will bear their reasonable costs associated with such assistance.
In accordance with the foregoing, Buyer shall be responsible, and shall
reimburse Sellers for, all direct out-of-pocket costs and expenses incurred or
paid by them in connection with securing necessary approvals from, giving
required notices to, or making required filings with any third parties, provided
that any such costs and expenses incurred or paid by Sellers shall have been
first approved by Buyer in its reasonable judgment. Notwithstanding the
foregoing, Sellers will be unconditionally obligated at their expense to obtain
any required consents and releases of liens from their Affiliates.

            6.5   Public Announcements. Sellers and Buyer agree that they will
consult with each other before issuing any press releases or otherwise making
any public statements with respect to this Agreement or the transactions
contemplated hereby and shall not issue any press release or make any public
statement (including with respect to SEC reports and stock exchange disclosures
where reasonably practicable) prior to such consultation, except as may be
required by law.

            6.6   Employees and Employee Benefit Plans.

            (a)   Employment Offer. On or before the Last Seller Pay Date, Buyer
will deliver a letter in form and substance satisfactory to it to each employee
identified on Schedule 6.6 offering such employee employment with Buyer or an
Affiliate of Buyer. The offer of employment will be: (a) at pay levels
substantially equivalent to the levels in effect for such individuals
immediately prior to the Closing Date, as disclosed in Schedule 6.6 hereto; (b)
with benefits consistent with individuals in the employ of Buyer (which
individuals are performing similar work and receiving similar pay); (c)
conditioned on Buyer's usual terms and conditions with respect to offers of
employment; and (d) effective as of the close of business on the Last Seller Pay
Date. Those employees accepting such offer of employment shall be known as the
"Transferred Employees." All employees listed on Schedule 6.6 who are not
Transferred Employees shall be known as "Non-Transferred Employees." If Sellers,
between the date hereof and the Last Seller Payment Date hire additional
employees, Buyer is not required to hire or offer to hire such employees which
were not previously identified on such Schedule 6.6.

            (b)   Employee Benefits. Neither Buyer nor any of its Subsidiaries
shall assume any Liabilities with respect to, and shall not receive any right or
interest in, any Employee Benefit Plans of Sellers in which any of the
Transferred Employees participate. The Sellers shall cause all Transferred
Employees to be fully vested in their accrued benefits earned under any of
Sellers' defined contribution or defined benefit plans as of the Last Seller
Payment Date. Each Transferred Employee shall be credited with the period of
service for which he/she was credited under the employee pension benefit and
employee welfare benefit plans of Seller


                                       27



for purposes of (i) eligibility to participate in Buyer's Employee Benefit
Plans, and (ii) benefit accruals under each of Buyer's employee benefit plans
that is a vacation or sick leave plan. Those Transferred Employees who were
participants in Seller's employee welfare benefit plans (as defined in Section
3(1) of ERISA) as of the Closing Date shall participate in Buyer's employee
welfare benefit plans immediately upon commencement of employment with Buyer.
Transferred Employees shall not be subject to any waiting period or preexisting
condition limitation under any employee benefit plan of Buyer that is an
employee welfare benefit plan (as defined in Section 3(1) of ERISA), and any and
all year-to-date deductibles and co-pays for 2005 under the employee welfare
benefit plans of Seller shall be credited to the Transferred Employees for
purposes of their applicable deductibles and co-pay limits for 2005 under each
corresponding plan of Buyer. Transferring Employees who meet any applicable
service requirements for any Employee Benefit Plan of Buyer that an employee
pension benefit plan (as defined in Section 3(2) of ERISA) (after receiving
credit for service with Seller) shall become a participant in such plan of Buyer
no later than the last day of the month in which such Transferred Employee
commences employment with Buyer.

            (c)   Acceptance of Rollovers. Each employee benefit plan of Buyer
that is a tax-qualified defined contribution plan (as defined in Section 3(34)
of ERISA) that accepts rollover contributions shall accept qualifying rollover
contributions of benefits distributed from each Plan of Seller that is a
tax-qualified defined contribution plan, including to the extent possible notes
attributable to loans to Transferred Employees that are outstanding as of the
date of distribution from such Plan.

            (d)   Payments to Transferred Employees. Sellers shall pay to
Transferred Employees all accrued vacation owing to such Transferred Employees
as of the Last Seller Payment Date as well as bonuses, profit sharing, incentive
commissions or other compensation of any kind for periods prior to the Last
Seller Payment Date. Buyer shall not assume any vacation or sick time
Liabilities with respect to the Transferred Employees, nor shall Buyer assume
any Liabilities for bonuses, profit sharing, incentive commissions or other
compensation of any kind under any Seller plan or arrangement.

            (e)   Sellers' Retention of Employment Related Liabilities. Buyer is
not assuming any Liability of Parent or any of its Subsidiaries to their
employees or former employees (i) for benefits (including health and welfare
benefits), compensation (including vacation, holiday and overtime pay), worker's
compensation, contributions, insurance premiums and administrative expenses
incurred or accrued before the Closing Date, (ii) arising under the continuation
coverage requirements of Section 4980B(f) of the Code and Section 601 et seq. of
ERISA with respect to all United States employees of the Retail Energy Business
(or any beneficiary or dependent of such employees) who, on or before the Last
Seller Payment Date or otherwise, in connection with the transactions
contemplated by this Agreement, have exercised or are eligible to exercise their
right to such continuation coverage, (iii) to provide post-retirement health and
life insurance benefits to employees (or any beneficiary or dependent of such
employee) of the Retail Energy Business, or (iv) for any claims made by the
employees of the Retail Energy Business, and any liability resulting from same,
for events occurring on or before the Last Seller Payment Date.


                                       28



            (f)   Payroll. Sellers shall continue to process payroll and to pay
the Transferred Employees up to and including the Last Seller Pay Date. Buyer
shall assume payroll processing responsibilities thereafter. Such payroll
amounts (including taxes and benefits) as are paid by Sellers to such
Transferred Employees allocable to the period after Closing shall be reimbursed
by Buyer within 10 calendar days following receipt by Buyer of definitive
records of payment of such amounts.

            (g)   WARN Act. To the extent applicable, Sellers shall be
responsible for all obligations under the Federal Worker Adjustment Retraining
and Notification Act ("WARN") and/or analogous state and local laws, including,
without limitation, the obligation to provide WARN notices, in connection with
the transactions contemplated by this Agreement.

            (h)   Mutual Cooperation. Each of the parties hereto shall cooperate
with the other parties and provide the other parties with such records,
information, documentation and assistance as such parties reasonably request in
order to carry out the parties' respective obligations under this agreement.

            6.7   Notification. Upon becoming aware of same, until the final
transfer of the Acquired Assets, a party shall give prompt written notice to the
other of (i) the existence of any fact or the occurrence of any event which
constitutes, or with the giving of notice or the passage of time or both would
constitute, a breach or default under any Contract within the definitions of
Acquired Assets or Option Assets. The giving of any such notice shall not
affect, modify or limit in any way any representation, warranty, agreement or
covenant of a party made herein or pursuant hereto or the other party's right to
rely thereon.

            6.8   Transfer Documents. Sellers shall execute and deliver to Buyer
and/or the Buyer Designees, on the Closing Date or thereafter as and when Buyer
acquires any of the Acquired Assets not transferred as of the Closing or
exercises its option to acquire Option Assets, all further instruments as may be
reasonably necessary, expedient or proper in order to complete any and all
conveyances, transfers, and assignments provided for herein and to convey to
Buyer and the Buyer Designees such title to the Acquired Assets as Sellers are
obligated hereunder to convey, all in form and substance reasonably satisfactory
to Buyer.

            6.9   Covenant to Satisfy Conditions. The Parties shall use
commercially reasonable efforts to ensure that the conditions set forth herein
are satisfied, and that all the Acquired Assets are transferred to Buyer,
insofar as such matters are within their control.

            6.10  Schedules. As of the date hereof, this Agreement does not have
attached any Schedules other than Schedules A-D. Seller agrees to furnish all
other contemplated Schedules not later than close of business, Pacific time, on
February 2, 2005 ("Seller Disclosure Schedules").

            6.11  Schedule 4.2(A) Assets. With respect to any Acquired Assets or
Option Assets which are listed on Schedule 4.2(A), Parent agrees to cause the
applicable owner of such assets to (x) transfer same to Buyer as and when
required under this Agreement as if such asset was owned by a Seller hereunder
and under the same representations, warranties, terms and


                                       29



conditions and (y) otherwise perform all obligations of a Seller hereunder with
respect to such asset as if it were a party hereto.

            SECTION 7. Conditions of Buyer's Obligations to Close. The
obligations of Buyer under this Agreement are subject to the satisfaction of the
conditions set forth below, which conditions may be waived by Buyer without
releasing or waiving any of its rights hereunder.

            7.1   Agreement and Conditions. On or before the Closing Date,
Sellers shall have complied with and duly performed all agreements and
conditions on their part required to be complied with and performed pursuant to
or in connection with this Agreement.

            7.2   Representations and Warranties. The representations and
warranties of Sellers contained in this Agreement, or otherwise made in writing
in connection with the transactions contemplated hereby (including, without
limitation, any representations and warranties in the Transaction Documents),
shall be true and correct on and as of the date hereof and the Closing Date with
the same force and effect as though such representations and warranties had been
made on and as of the Closing Date.

            7.3   No Legal Proceeding. No Action shall have been instituted or
threatened before any court or Governmental Authority seeking to restrain or
prohibit the acquisition by Buyer, or the conveyance by Parent and its
Subsidiaries, of the Acquired Assets.

            7.4   Certificate. Buyer shall have received a certificate dated the
Closing Date and executed by a senior officer of each Seller on behalf of such
Seller to the effect that the conditions expressed in Sections 7.1 and 7.2 have
been fulfilled.

            7.5   Lien Releases. US Bank shall have executed documentation
terminating all security agreements and security interests, including related
UCC filings, with respect to the Acquired Assets and the Option Assets, in form
and substance reasonably acceptable to Buyer and the Acquired Assets and Option
Assets shall be subject to no Liens other than in favor of Tenaska Power
Services, Inc., pursuant to that certain Security Agreement dated March 17, 2003
and Buyer hereunder.

            7.6   Deliveries. Buyer shall have received the deliveries to be
made by Sellers pursuant to Section 9.

            7.7   Schedules. Buyer shall have received Seller's Disclosure
Schedules which shall be acceptable to Buyer in its sole discretion (it being
understood that Buyer's acceptance thereof shall not be deemed a waiver of any
right under Section 13.1 hereof).

            SECTION 8. Conditions of the Sellers' Obligations to Close. The
obligations of Sellers under this Agreement are subject to the satisfaction of
the conditions set forth below, which conditions may be waived by Sellers
without releasing or waiving any of their rights hereunder.


                                       30



            8.1   Agreement and Conditions. On or before the Closing Date, Buyer
shall have complied with and duly performed all agreements and conditions on its
part required to be complied with and performed pursuant to or in connection
with this Agreement on or before the Closing Date.

            8.2   Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement, or otherwise made in writing in
connection with the transactions contemplated hereby (including, without
limitation, any representations and warranties in the Transaction Documents),
shall be true and correct on and as of the date hereof and the Closing Date with
the same force and effect as though such representations and warranties had been
made on and as of the Closing Date.

            8.3   Deliveries. Sellers shall have received the deliveries to be
made by Buyer pursuant to Section 10.

            8.4   Certificate. Sellers shall have received a certificate dated
the Closing Date and executed by a senior officer of Buyer on behalf of Buyer to
the effect that the conditions expressed in Section 8.1 and 8.2 have been
fulfilled.

            SECTION 9.  Deliveries of Sellers on the Closing Date. Sellers agree
 on the Closing Date to deliver to Buyer the following:

            9.1   Title to Acquired Assets.  Seller Ancillary Documents as
are necessary to transfer the Acquired Assets to Buyer hereunder which are
being transferred at the Closing.

            9.2   Certificates. The certificates of Sellers referred to in
Section 7.4 hereof.

            9.3   Secretary's Certificate. A certificate of the Secretary or an
Assistant Secretary of each Seller setting forth a copy of the resolutions
adopted by the Board of Directors of each Seller authorizing and approving the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.

            9.4   Authorization. Appropriate instruments authorizing Buyer to
endorse in the name of Sellers all checks, drafts, notes and other instruments
for the payment of money and to receive for the account of Buyer all proceeds
thereof to which the Buyer is entitled under this Agreement.

            9.5   Escrow Agreement. A copy of the Escrow Agreement duly executed
by Sellers.

            9.6   Sales Agency Agreement. A copy of the Sales Agency Agreement
duly executed by Sellers.

            9.7   Transition Agreement. A copy of the Transition Agreement duly
executed by Sellers.


                                       31



            9.8   Security Agreement. A copy of the Security Agreement duly
executed by Sellers.

            9.9   Energy Agreements. Copies of the NAESB, EEI and ISDA duly
executed by the ACN Energy Entities.

            9.10  Operating Agency Agreement.  Copies of the Operating
Agency Agreements duly executed by each of the ACN Energy Entities.

            9.11  Netting Letter. A copy of the Netting Letter duly executed by
ACN Utility Services.

            9.12  Other Deliveries. Such other documents or instruments as Buyer
or its counsel may reasonably request.

            SECTION 10. Deliveries of Buyer on the Closing Date. Buyer agrees on
the Closing Date to deliver to Seller the following:

            10.1  Purchase Price. The cash portion of the Purchase Price to be
delivered pursuant to Section 3.1 hereof.

            10.2  Secretary's Certificate. A certificate of the Secretary or an
Assistant Secretary of Buyer setting forth a copy of the resolutions adopted by
the Board of Directors of Buyer authorizing and approving the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby.

            10.3  Escrow Agreement. A copy of the Escrow Agreement duly executed
by Buyer.

            10.4  Sales Agency Agreement. A copy of the Sales Agency Agreement
duly executed by Buyer.

            10.5  Transition Agreement. A copy of the Transition Agreement duly
executed by Buyer.

            10.6  Security Agreement. A copy of the Security Agreement duly
executed by Buyer.

            10.7  Energy Agreements. Copies of the NAESB, EEI and ISDA duly
executed by Buyer.

            10.8  Operating Agency Agreement. Copies of each of the Operating
Agency Agreements delivered by the ACN Energy Entities pursuant to Section 9.10
duly executed by Buyer.

            10.9  Netting Letter. A copy of the Netting Letter duly executed by
Buyer.

            SECTION 11. Additional Covenants.


                                       32



            11.1  Mail. Sellers authorize and empower Buyer from and after the
date hereof (i) to receive and open mail addressed to Parent or any of its
Subsidiaries and (ii) to deal with the contents thereof in a manner consistent
with the purpose of this Agreement and the other agreements described herein and
contemplated hereby, provided such mail and the contents thereof relate to the
Acquired Assets or otherwise to the business of the Retail Energy Business, as
conducted by Buyer or to any of the Assumed Liabilities. Sellers agree to
deliver to Buyer promptly upon receipt any mail, checks or other documents
received by it pertaining to the Acquired Assets or otherwise to the business of
the Retail Energy Business, as conducted by Buyer, or any of the Assumed
Liabilities. Buyer agrees to deliver to Sellers promptly any mail which it
receives to which it is not entitled by reason of this Agreement or otherwise
and to which Sellers are entitled.

            11.2  Further Assurances. Sellers agree at any time and from time to
time after the Closing Date, upon the request of Buyer, to do, execute,
acknowledge and deliver, or to cause to be done, executed, acknowledged and
delivered, all such further acts, assignments, transfers, powers of attorney and
assurances as may be reasonably required for the better assigning, transferring,
conveying, and confirming to Buyer, or to its successors and assigns, of any or
all of the Acquired Assets and to carry out the terms and conditions of this
Agreement.

            11.3  Notification to Customers. As soon as practicable following
the Closing, and only to the extent required by applicable laws, regulations and
tariffs, Sellers and Buyer will cause to be sent to Sellers' active customers a
notice of the proposed transfer of the active customer from Sellers to Buyer,
which notice will comply with all applicable requirements of the Public
Utilities Commission(s) (the "PUC(s)"), the Local Utility Distribution
Company(ies) ("UDC(s)") and all other relevant governmental agencies related to
the transfer of electric and/or natural gas customers (the "Customer
Notification"). The Customer Notification will contain such information
concerning Buyer and Sellers as is required by law and approved by Buyer and
Sellers, which approval will not be unreasonably withheld or delayed.

            11.4  Non-Transferred Assets. Upon the expiration of the Phase-Out
Period, the remaining Acquired Assets not transferred to Buyer shall be disposed
of in a manner mutually agreed to by the Parties and if the Parties shall be
unable to agree, such assets shall, to the extent applicable, be terminated or,
if termination of any such asset is not possible, remain with the applicable
Seller. In the event that the transfer of any asset listed on Schedule 4.15(b)
remains pending in any particular jursidiction at the expiration of the
Phase-Out Period, and the parties reasonably believe that permission for the
transfer of such asset is likely to be granted, the Buyer may request in writing
a 60-day extension of the Phase-Out Period from the Seller, which will not be
unreasonably witheld or delayed.

            11.5  Trading Restrictions. Sellers agree that neither they nor
their Affiliates will in any manner, directly or indirectly, purchase or sell
securities of CEG during any period or on any day for which the market value of
the Shares is or will be determined for purposes of this Agreement, any
attachment hereto or any Transaction Agreement.

            SECTION 12. Confidentiality.


                                       33



            12.1  Sellers agree not to, and to cause their officers, directors,
employees, stockholders and Affiliates not to, directly or indirectly, without
the prior written consent of Buyer, use or disclose to any person, firm or
corporation, any information, trade secrets, confidential customer information,
technical data or know-how relating to the products, processes, methods,
equipment or business practices of the Retail Energy Business.

            12.2  Buyer agrees not to, and to cause its officers, directors,
employees, stockholders and Affiliates not to, directly or indirectly, without
the prior written consent of Parent, use or disclose to any person, firm or
corporation, any information, trade secrets, confidential customer information,
technical data or know-how relating solely to any Acquired Assets or Option
Assets which are not ultimately acquired by Buyer for any reason.

            12.3  Each of the Parties acknowledges and agrees that any breach of
this Section 12 is likely to result in irreparable injury to the other Party,
that monetary damages will be an inadequate remedy of such breach and that,
accordingly, in addition to any other remedy that such other Party may have,
such other Party shall be entitled to enforce the specific performance of this
Section 12 and to seek both permanent and temporary relief in the event of any
breach hereof.

            12.4  The foregoing shall not prevent any person from disclosing
such information if already in the public domain, or if required by applicable
law or stock exchange rule or if requested by a regulator.

            SECTION 13. Indemnification.

            13.1  Indemnification by Sellers. Parent and Sellers shall jointly
and severally indemnify, defend and hold harmless Buyer and its Affiliates from
and against, and pay or reimburse Buyer and its Affiliates for, any and all
Damages as incurred, relating to or arising from (i) noncompliance with any
applicable bulk sales or transfer law, (ii) the Excluded Liabilities, (iii) any
Liability or claim arising in any way from any action taken by, or relating to
the operations or employees, including former employees of, Parent or any of its
Subsidiaries prior to the Closing Date, or (iv) the breach or inaccuracy of or
failure to comply with any of the warranties, representations, conditions,
covenants or agreements of Sellers or Parent contained in this Agreement or in
any agreement or document delivered pursuant hereto or in connection herewith
(including, without limitation, the Transaction Documents), or arising out of
the consummation of the transactions contemplated hereby.

            13.2  Indemnification by Buyer. Buyer shall indemnify, defend and
hold harmless Sellers from and against, and pay or reimburse Sellers for, any
and all Damages as incurred, relating to or arising from (i) any Assumed
Liability or (ii) the breach or inaccuracy of or failure to comply with any
warranties, representations, conditions, covenants or agreements of Buyer
contained in this Agreement or in any agreement, certificate or document
delivered pursuant to or in connection with this Agreement or arising out of the
closing of the transactions contemplated hereby.

            13.3  Procedures for Indemnification.


                                       34



            (a)   In the event that any claim is asserted against any party
hereto, or any party hereto is made a party defendant in any action or
proceeding, and such claim, action or proceeding involves a matter which is the
subject of this indemnification, then such party (an "Indemnified Party") shall
give written notice to the other party hereto (the "Indemnifying Party") of such
claim, action or proceeding, and such Indemnifying Party shall have the right to
join in the defense of said claim, action or proceeding at such Indemnifying
Party's own cost and expense and, if the Indemnifying Party agrees in writing to
be bound by and to promptly pay the full amount of any final judgment from which
no further appeal may be taken and if the Indemnified Party is reasonably
assured of the Indemnifying Party's ability to satisfy such agreement, then at
the option of the Indemnifying Party, such Indemnifying Party may take over the
defense of such claim, action or proceeding with counsel reasonably satisfactory
to the Indemnified Party, except that, in such case, the Indemnified Party shall
have the right to join in the defense of said claim, action or proceeding at its
own cost and expense. The Indemnified Party may not settle any proceeding
without the consent of the Indemnifying Party, not to be unreasonably withheld.

            (b)   At Sellers' or Buyers' option, any indemnity payment shall be
deemed to be an adjustment to the Purchase Price.

            SECTION 14. Survival of Representations; Effect of Certificates.

            14.1  All representations, warranties, covenants and obligations in
this Agreement or in any agreement, instrument or other document delivered in
connection herewith shall survive the execution and delivery hereof and the
Closing Date. Notwithstanding the preceding sentence, neither party may make or
assert any claim under any representation or warranty of the other party
contained herein later than one year after the Closing Date, except that the
representations in Sections 4.6, 4.19 and 5.4 shall survive until 6 months after
the statute of limitations with respect to the matters addressed therein has
expired (including all waivers or extensions thereof); and provided that any
claims made or asserted by a party within the applicable time period prescribed
above shall survive such expiration until such claim is finally resolved and all
obligations with respect thereto are fully satisfied. All statements contained
in any officer's certificate delivered by or on behalf of any party hereto
pursuant to this Agreement shall constitute and have the same force and effect
as the representations and warranties of such party set forth herein.

            14.2  Each statement contained in any certificate delivered in
connection with this Agreement or the consummation of the transactions
contemplated hereby shall constitute the representation, warranty and agreement
of the party delivering such certificate and shall have the same force and
effect as if it had been incorporated into this Agreement as a representation,
warranty and agreement by such party.

            SECTION 15. Fees and Disbursements. Except as otherwise provided
herein, each party will pay its own fees and expenses in connection with this
Agreement and the completion of the transactions contemplated by this Agreement.


                                       35



            SECTION 16. Notices. All notices, requests, demands and other
communications provided for by this Agreement shall be in writing and shall be
deemed to have been given when hand delivered, when received if sent by
telecopier or by same day or overnight recognized commercial courier service or
three business days after being mailed in any general or branch office of the
United States Postal Service, enclosed in a registered or certified postpaid
envelope, addressed to the address of the parties stated below or to such
changed address as such party may have fixed by notice:

     To Sellers:              American Communications Network, Inc.
                              32991 Hamilton Court
                              Farmington Hills, Michigan  48334
                              Attention:  Chief Financial Officer
                              Telecopier:  (248) 489-8901

                                    - copy to -

                              Jaffe, Raitt, Heuer & Weiss, P.C.
                              27777 Franklin Road, Suite 2500
                              Southfield, Michigan  48034
                              Attention:  Ralph R. Margulis
                              Telecopier:  (248) 351-3082

     To Buyer:                Commonwealth Energy Corporation
                              c/o Commerce Energy Group
                              600 Anton Blvd., Suite 2000
                              Costa Mesa, CA  92626
                              Attention:  General Counsel
                              Telecopier:  (714) 259-2575

                                    - copy to -

                              Stroock & Stroock & Lavan LLP
                              180 Maiden Lane
                              New York, New York  10038
                              Attention:  Michael S. Shenberg, Esq.
                              Telecopier:  212-806-6006

provided that any notice of change of address shall be effective only upon
receipt.

            SECTION 17. Termination.

            17.1  This Agreement may be terminated at any time prior to the
Closing by any of the following:

            (a)   By mutual written agreement of Buyer and Sellers; or



                                       36



            (b)   By either Buyer or Sellers, if the Closing has not occurred on
or before the 10th day following the date hereof upon written notice by such
terminating party, provided that at the time such notice is given a material
breach of this Agreement by such terminating party shall not be the reason for
the Closing's failure to occur.

            17.2  If this Agreement is terminated as provided in Section 17.1,
then this Agreement shall forthwith become void and there shall be no liability
or obligation on the part of any party hereto (or any of their respective
officers, directors or employees), except based upon the obligations set forth
in Sections 12, 15, and 17.2, or for any breach thereof occuring prior to
termination.

            SECTION 18. Miscellaneous.

            18.1  Entire Agreement. This Agreement and the other Transaction
Documents, including the Exhibits and Schedules hereto and thereto, sets forth
the entire agreement and understanding between the parties and merges and
supersedes all prior discussions, agreements and understandings of every kind
and nature among them as to the subject matter hereof, and no party shall be
bound by any condition, definition, warranty or representation other than as
expressly provided for in this Agreement or as may be on a date on or subsequent
to the date hereof duly set forth in writing signed by each party which is to be
bound thereby. Unless otherwise expressly defined, terms defined in this
Agreement shall have the same meanings when used in any Exhibit or Schedule and
terms defined in any Exhibit or Schedule shall have the same meanings when used
in this Agreement or in any other Exhibit or Schedule. This Agreement (including
the Exhibits and Schedules hereto) shall not be changed, modified or amended
except by a writing signed by each party to be charged and this Agreement may
not be discharged except by performance in accordance with its terms or by a
writing signed by each party to be charged.

            18.2  Taxes. Any Taxes in the nature of a sales or transfer tax
(including any realty transfer tax or realty gains transfer tax), and any stock
transfer tax, payable on the sale or transfer of all or any portion of the
Acquired Assets or Shares or the consummation of any other transaction
contemplated hereby shall be paid by Sellers.

            18.3  Governing Law; Jurisdiction; Waiver of Jury Trial.

            (a)   This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, applicable to agreements made
and to be performed entirely within such State, without regard to the conflict
of laws principles thereof.

            (b)   Any disputes or claims arising out of or in connection with
this Agreement and the transactions contemplated or documents required hereby
shall be submitted to the exclusive jurisdiction of the courts of the State of
New York and the federal courts of the United States of America located in New
York, New York, and appropriate appellate courts therefrom. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable Law, any
objection which they may now or hereafter have to the laying of venue of any
dispute arising out of or relating to this Agreement or any of the transactions
contemplated hereby brought in such court or any defense of inconvenient forum
for the maintenance of such dispute. Each of the


                                       37



parties hereto agrees that a judgment in any such dispute may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
Law. This consent to jurisdiction is being given solely for purposes of this
Agreement and is not intended to, and shall not, confer consent to jurisdiction
with respect to any other dispute in which a party to this Agreement may become
involved. Each of the parties hereto hereby consents to process being served by
any party to this Agreement in any suit, action, or proceeding of the nature
specified in this Section 18.3(b) by the mailing of a copy thereof in the manner
specified by the provisions of Section 18.3.

            18.4  Severability. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to this Agreement to the
fullest extent possible. In any event, all other provisions of this Agreement
shall be deemed valid and enforceable to the fullest extent possible.

            18.5  Waiver. Waiver of any term or condition of this Agreement by
any party hereto shall only be effective if in writing and shall not be
construed as a waiver of any subsequent breach or failure of the same term or
condition or any other term or condition of this Agreement.

            18.6  Binding Effect; Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned (whether voluntarily, involuntarily, by operation of law or otherwise)
by any of the parties hereto without the prior written consent of the other
parties; provided, however, that the Buyer may assign this Agreement, in whole
or in any part, and from time to time, to a wholly owned, direct or indirect,
Subsidiary of the Buyer or an Affiliate of the Buyer.

            18.7  No Third-Party Beneficiaries. Nothing in this Agreement shall
confer any rights upon any person or entity that is not a party to this
Agreement except as expressly provided hereunder.

            18.8  Expenses Related to Audit Rights. Wherever either party has an
audit right, the party exercising its audit right shall be entitled to
reimbursement of its reasonable and customary expenses associated with such
audit from the other party in the event such audit results in a determination
that there was a material inaccuracy adverse to the party conducting the audit.
Further, the party being audited shall be entitled to reimbursement of its
reasonable and customary expenses associated with supporting such audit from the
party conducting the audit in the event such audit results in a determination
that the subject matter audited was materially accurate. Any inaccuracies
determined by any such audit shall be corrected in the favor of the party to
whom the inaccuracy was adverse.

            18.9  Pronouns. Whenever the context requires, the use in this
Agreement of a pronoun of any gender shall be deemed to refer also to any other
gender, and the use of the singular shall be deemed to refer also to the plural.


                                       38



            18.10 Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures to each counterpart were
upon a single instrument, and all such counterparts together shall be deemed an
original of this Agreement.

            18.11 Headings. The headings in the sections, paragraphs, Schedules
and Exhibits of this Agreement are inserted for convenience of reference only
and shall not constitute a part hereof. The words "herein," "hereof," "hereto"
and "hereunder," as well as other words of similar import, refer to this
Agreement as a whole and not to any particular provision of this Agreement.


                                       39




            IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed on the day and year first above written.

                                    COMMONWEALTH ENERGY CORPORATION

                                       By: /S/ PETER WEIGAND
                                           ---------------------------
                                           Name:  Peter Weigand
                                           Title:  President


                                    ACN UTILITY SERVICES, INC.

                                       By: /S/ JAMES F. MULCAHY
                                           ----------------------------
                                           Name:  James F. Mulcahy
                                           Title:   Secretary/Treasurer

                                    ACN ENERGY, INC.

                                       By: /S/ JAMES F. MULCAHY
                                           ----------------------------
                                           Name:  James F. Mulcahy
                                           Title:   Secretary/Treasurer


                                    ACN POWER, INC.

                                       By: /S/ JAMES F. MULCAHY
                                           ----------------------------
                                           Name:  James F. Mulcahy
                                           Title:   Secretary/Treasurer

As to Section 4.22, 6.11 and Article 13 only:

                                    AMERICAN COMMUNICATIONS NETWORK, INC.

                                       By: /S/ JAMES F. MULCAHY
                                           -----------------------------
                                           Name:  James F. Mulcahy
                                           Title:   Secretary/Treasurer


                [Signature page to Asset Purchase Agreement]





As to Sections 3.1(b) and 4.22 only:

                                    COMMERCE ENERGY GROUP, INC.

                                       By: /S/ PETER WEIGAND
                                           -------------------------
                                           Name:  Peter Weigand
                                           Title:  President



                [Signature page to Asset Purchase Agreement]

                                                                   EXHIBIT - 2.2
                                                                  EXECUTION COPY


                               TRANSITION SERVICES

                                    AGREEMENT


                                 BY AND BETWEEN


                      AMERICAN COMMUNICATIONS NETWORK, INC.

                             A MICHIGAN CORPORATION


                                       AND


                         COMMONWEALTH ENERGY CORPORATION

                            A CALIFORNIA CORPORATION

                                TABLE OF CONTENTS
<TABLE>
<S>          <C>                                                                                            <C>
Section 1.   Definitions:....................................................................................1
Section 2.   Services to be Provided:........................................................................3
Section 3.   Reserved........................................................................................8
Section 4.   Term and Termination............................................................................8
Section 5.   Billing and Payment of Costs of Services; Invoices for Services.................................8
Section 6.   Administration of Agreement.....................................................................9
Section 7.   Relationships Among the Parties.................................................................9
Section 8.   Other Agreements...............................................................................10
Section 9.   Indemnification; Release; Limit on Liability...................................................10
Section 10.  Headings.......................................................................................11
Section 11.  Schedules......................................................................................11
Section 12.  Required Insurance.............................................................................11
Section 13.  Force Majeure..................................................................................11
Section 14.  Notices........................................................................................11
Section 15.  Successors and Assigns.........................................................................13
Section 16.  Signatures Counterparts........................................................................13
Section 17.  Amendments.....................................................................................13
Section 18.  Governing Law..................................................................................13
Section 19.  Entire Agreement...............................................................................14
Section 20.  Negotiated Agreement...........................................................................14
Section 21.  Waiver.........................................................................................14
Section 22.  Severability...................................................................................14
Section 23.  Interpretation.................................................................................14
Section 24.  No Third Party Beneficiaries...................................................................14
Section 25.  Specific Performance and Other Equitable Rights................................................14
Section 26.  Press Release..................................................................................15
Section 27.  Further Assurance..............................................................................15
</TABLE>


                                       i

                          TRANSITION SERVICES AGREEMENT

         THIS TRANSITION SERVICES AGREEMENT (this "Agreement"), dated as of
February 9, 2005, is by and between American Communications Network, Inc., a
Michigan corporation ("ACN") and COMMONWEALTH ENERGY CORPORATION, a California
corporation ("Buyer").

                                    Recitals

         WHEREAS, ACN and Buyer have entered into an Asset Purchase Agreement,
dated as of February 9, 2005 (the "Purchase Agreement"), under which ACN has
agreed to sell the assets of ACN Energy, Inc, ACN Power, Inc. and ACN Utility
Services, Inc. (the "Energy Companies") identified in the Purchase Agreement
("Energy Assets" or "Assets") and Buyer has agreed to purchase from ACN the
Energy Assets identified in the Purchase Agreement; and

         WHEREAS, the parties are entering into this Agreement to provide for
certain transition services following the Closing under the Purchase Agreement.

         NOW, THEREFORE, the parties hereto agree as follows:

SECTION 1. Definitions:

         Capitalized terms used, but not otherwise defined, herein shall have
the meanings given to them in the Purchase Agreement or as follows:

         "AAA" is defined in Section 18.

         "ACN Indemnified Party" is defined in Section 9(a).

         "ACN Representatives" means, collectively, the officers, employees,
counsel, accountants, financial advisors, consultants and authorized
representatives of ACN or its Affiliates.

         "ACN Service Providers" shall mean any Affiliate of ACN that on or
prior to the Closing Date was providing or had provided to the Energy Companies
any services that fall within the definition of Transition Services set out in
Section 2(a) below, whether pursuant to a written or oral arrangement or
otherwise.

         "ACN System" means the systems and equipment owned or leased by the
Energy Companies and used by the Energy Companies from December 1, 2004 through
the Closing Date in the conduct of the Business.

         "Business" means the business of owning, managing and operating the
Energy Assets.

         "Buyer Indemnified Party" is defined in Section 9(a).

         "Buyer-Related Transition Services" is defined in Section 2(c).

         "Buyer Representatives" means, collectively, the officers, employees,
counsel, accountants, financial advisors, consultants and authorized
representatives of the Buyer.

         "Call Center Services" means those customer care services provided by
ACN for the Energy Companies during the period December 1, 2004 through the
Closing Date.

         "Contract Administration Officers" is defined in Section 6.

         "FERC" means the Federal Energy Regulatory Commission and any
Governmental Authority that succeeds to the jurisdiction now or hereafter vested
in the FERC by applicable Laws.

         "Force Majeure Event" means an act of God; fire, flood, earthquake,
storm, lightning or similar disaster; an act of Governmental Authority, or
necessity for compliance with any court order, law, statute, ordinance or
regulation promulgated by a Governmental Authority having jurisdiction with
respect to the applicable subject matter; a strike, lockout or other industrial
disturbance; an act of the public enemy, sabotage, war, act of terrorism,
insurrection or blockade; riot or other civil disturbance; epidemic; explosions;
or any other similar event that, in each such case, prevents, in whole or in
part, the performance of a party's obligations under this Agreement, is not
reasonably within the control of the affected party and which by the exercise of
commercially reasonable efforts the affected party is unable to overcome or
prevent, provided however that no party will be required to settle any labor
dispute.

         "Governmental Approval" means any consent, authorization, certificate,
permit, grant or approval of any Governmental Authority that is necessary for
the operation of the Assets in accordance with applicable Laws.

         "Governmental Authority" means any court or tribunal in any
jurisdiction or any federal, state, tribal, municipal or local government or
other governmental body, agency, authority, department, commission, board,
bureau, instrumentality, arbitrator or arbitral body or any quasi-governmental
or private body lawfully exercising any regulatory or taxing authority, and
shall include, without limitation, the FERC and state public utility commissions
(however such commissions are named).

         "Interest Rate" shall mean the prime rate of interest as published in
the Wall Street Journal on the date of overpayment..

         "IT Assets" means those applications, hardware and related systems
identified as the "Impacted Systems/Business Areas" to be set forth in the
Migration Plan.

         "IT Services" means the information technology and data processing
services of the same nature and quality, using the same or comparable levels of
support, computer hardware, software and programs, as are being used and as are
being provided to the Energy Companies in connection with the Assets by ACN or
any ACN Service Provider from and after December 1, 2004 through the Closing
Date.

         "Laws" means any applicable statute, common law, rule, regulation,
judgment, order, ordinance, writ, injunction or decree issued or promulgated by
any Governmental Authority.


                                       2

         "Loss" is defined in Section 9(a).

         "Migration Plan" means that detailed plan for migration of IT Assets to
the Buyer to be developed by the parties pursuant to Section 2(a)(iii).

         "Reimbursable Costs" means, with respect to Call Center Services
provided by ACN and the ACN Service Providers, $[CONFIDENTIAL TREATMENT
REQUESTED] per full time equivalent employee performing Call Center Services per
month and the out of pocket cost of providing the T-1 phone line and 800
numbers, and with respect to the Buyer-Related Transition Services provided by
the Buyer, $0.00.

         "Service Period" means the term beginning immediately following the
Closing on the Closing Date and ending at 12:00 midnight prevailing Eastern Time
on July 31, 2005, subject to early termination, in whole or in part, in
accordance with Section 4, provided that with respect to the Call Center
Services, the Service Period shall be for the lesser of one year from the
Closing Date or sixty days following notice from Buyer to Seller of Buyer's
intent to terminate Call Center Services hereunder.

         "Service Provider" means, with respect to the Transition Services or
the IT Services, each of ACN and the ACN Service Providers, and, with respect to
the Buyer-Related Transition Services, the Buyer.

         "Services" means, when used in this Agreement, the Transition Services
provided by ACN and the ACN Service Providers hereunder or the Buyer-Related
Transition Services provided by the Buyer hereunder, as the case may be.

         "Transition Services" is defined in Section 2(a)(i).

SECTION 2. Services to be Provided:

         (a) Transition Services.

            (i) Definition. ACN hereby agrees to provide or to cause the ACN
         Service Providers to provide to the Buyer the services (x) that ACN or
         any ACN Service Provider has provided to the Energy Companies during
         the period from December 1, 2004 through the Closing Date or are
         otherwise necessary for the conduct of the Business in the ordinary
         course and were being provided by ACN or any ACN Provider during such
         period and, in each case, have not been previously performed by the
         Transferred Employees of the Energy Companies and (y) consistent with
         ACN practices, such other services, including prosecution of the
         Migration Plan and employee training, as are reasonably required to
         enable ACN and the Buyer to separate or Buyer to operate the Assets
         (the "Transition Services"). Notwithstanding anything in this Agreement
         to the contrary, Transition Services shall not include providing legal
         or auditing services (without limiting Buyer's and the Energy
         Companies' rights to access legal or auditing records and to request
         assistance in transferring ongoing matters to new counsel) or
         procurement or maintenance of insurance or surety bonds.


                                       3

            (ii) Scope of Transition Services. During the Service Period, ACN
         and the Buyer agree to consult with each other at regular intervals and
         at such times as may be reasonably requested by the other party with
         respect to the performance by ACN and the ACN Service Providers of the
         Transition Services, the continued desirability of ACN and the ACN
         Service Providers providing specific Transition Services, the timing of
         the early termination of, or desirability for an extension of the
         Service Period with respect to any specific Transition Services, the
         occurrence of any events or circumstances negatively affecting ACN and
         the ACN Service Providers' continued ability to provide any specific
         Transition Service and other matters specifically relating to, or
         impacting, the provision of the Transition Services.

            (iii) Migration Plan. ACN shall, and shall cause the ACN Service
         Providers to, and Buyer shall, and shall cause the Buyer to, perform
         their respective obligations set forth in the Migration Plan. The
         parties shall cooperate with each other to develop a mutually
         acceptable Migration Plan by February 28, 2005.

         (b) ACN's Covenants.

            (i) ACN's Ability to Provide Transition Services. ACN shall
         maintain, and shall use its commercially reasonable efforts to cause
         the ACN Service Providers to maintain, sufficient personnel and
         facilities to provide the Transition Services at all times in
         accordance with this Agreement.

            (ii) Standards for the Provision of Transition Services. The
         Transition Services will be performed in a commercially reasonable
         manner and with at least the same standard of care and timeliness that
         the Transition Services were provided to the Energy Companies during
         the period between December 1, 2004 and the Closing Date. EXCEPT AS SET
         FORTH IN THIS SECTION 2(b)(ii), ACN AND THE ACN SERVICE PROVIDERS MAKE
         NO REPRESENTATION, WARRANTY OR GUARANTY, EXPRESS OR IMPLIED, OF ANY
         KIND CONCERNING THE TRANSITION SERVICES AND ANY RESULTS OR WORK PRODUCT
         AND SPECIFICALLY MAKE NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
         PARTICULAR PURPOSE, AND NONE SHALL BE IMPLIED. ALL OTHER
         REPRESENTATIONS, WARRANTIES OR GUARANTEES, WRITTEN OR ORAL, EXPRESS OR
         IMPLIED IN FACT OR IN LAW, AND WHETHER OR NOT BASED ON STATUTE ARE
         EXCLUDED.

            (iii) Other.

            A. General. Systems, personnel, infrastructure and applications used
            by ACN or any ACN Service Provider to perform the Transition
            Services, including the IT Services and Call Center Services, shall
            be managed by ACN or any ACN Service Provider using substantially
            the same management practices as are currently in use by ACN or any
            ACN Service Provider. ACN shall use commercially reasonable efforts
            to ensure that any code written by ACN or any ACN Service Provider
            to be provided pursuant to this Agreement does not contain any
            disabling devices, or time bombs.


                                       4

            B. Technology Changes. Changes that add or revise services,
            functions or features affecting the Transition Services or the
            Business (a "Technology Change") shall be made only if such
            Technology Change will have no adverse affect on the Business or the
            cost of Transition Services. ACN and Buyer agree to the following
            general procedures and practices for managing and controlling
            Technology Changes: (I) before using new software or equipment in a
            production environment in order to provide the Transition Services,
            ACN shall use commercially reasonably efforts to verify that the
            item had been properly installed and tested, and is operating in
            accordance with its specifications, and (II) ACN shall use
            commercially reasonable efforts to document movement of programs
            from development and test environments to production environments.
            Notwithstanding the foregoing to the contrary, ACN shall have the
            right to move the Energy Companies' data and processing, if
            necessary, within functionally equivalent equipment owned by ACN or
            an ACN Service Provider so long as such movement does not adversely
            impact the Business or the performance of the Transition Services.
            Such movements shall not constitute Technology Changes. All
            Technology Changes which relate to the Assets shall be assigned to
            Buyer.

            C. Consents. ACN in cooperation with the Buyer shall use
            commercially reasonable efforts to obtain appropriate vendor
            consents for ACN and ACN Service Providers to use any software
            needed by Buyer to conduct the Business, provided; that, until the
            earlier to occur of (i) the consent of Excelergy is obtained or (ii)
            expiration of the Excelergy licenses, ACN shall provide Buyer with
            the use or benefit of such software in a mutually agreeable manner
            and at no cost.

            D. Security Measures. ACN shall continue existing security measures
            under the circumstances which restrict access to the Energy
            Companies' information, data and software used in the performance of
            the Transition Services to ACN and the ACN Service Providers'
            employees performing such services and any other individuals
            authorized by the Buyer in writing.

            E. Access. The Energy Companies shall provide access to its computer
            equipment, hardware, software and employees as reasonably necessary
            for ACN and the ACN Service Providers to provide the Transition
            Services.

            F. Assets Acquired in Connection with the IT Services and Call
            Center Services. Any assets that are acquired in connection with the
            provision of the IT Services, Call Center Services or other services
            described in the Migration Plan for the benefit of the Buyer
            (including any purchased hardware or software and any licenses to
            use software or other intellectual property) shall, to the extent
            the purchase price or acquisition costs thereof are included in the
            Migration Plan Costs or the assets are otherwise included in the
            Acquired Assets under the Purchase Agreement, be the property of the
            Buyer. ACN agrees that it shall, at the request of the Buyer, and at
            the sole cost of the Buyer, cooperate with the Buyer to ensure that
            the Buyer has good and valid title or a valid license to such
            assets.


                                       5

            G. Termination of IT Services. The Buyer may elect to terminate any
            of the IT Services in accordance with Section 4(b), if the Buyer
            will not require any of the functions within that IT Service and any
            Call Center Services on at least 60 days' prior notice.

   (c) Buyer-Related Transition Services.

      (i) Definition. Buyer hereby agrees to provide or cause to be provided to
   ACN and its Affiliates during the Service Period services requested by ACN or
   any of its Affiliates (A) that were provided to ACN or its Affiliates by the
   Energy Companies during the period from December 1, 2004 through the Closing
   Date, including, without limitation, services relating to financial and
   accounting services relating to ACN or its Affiliates' financial reporting
   obligations with respect to the Energy Companies and (B) Buyer is able to
   provide such services with employees hired by Buyer from ACN and the Acquired
   Assets (the "Buyer-Related Transition Services"). Notwithstanding anything in
   this Agreement to the contrary, Buyer-Related Transition Services shall not
   include providing legal or auditing services (without limiting ACN's and its
   Affiliates' rights to access legal records) or procurement or maintenance of
   insurance or surety bonds.

      (ii) Scope of Buyer-Related Transition Services. During the Service
   Period, ACN and the Buyer agree to consult with each other at regular
   intervals and at such times as may be reasonably requested by the other party
   with respect to the performance by the Energy Companies of the Buyer-Related
   Transition Services, the Energy Companies providing specific Buyer-Related
   Transition Services, the timing of the early termination of, or desirability
   for an extension of the Service Period with respect to any specific
   Buyer-Related Transition Services, the occurrence of any events or
   circumstances negatively affecting the Energy Companies' continued ability to
   provide any specific Buyer-Related Transition Service and other matters
   specifically relating to, or impacting, the provision of the Buyer-Related
   Transition Services.

   (d) Buyer Covenants.

      (i) Buyer's Ability to Provide Buyer-Related Transition Services. Buyer
   shall use commercially reasonable efforts to maintain sufficient personnel
   and facilities to provide the Buyer-Related Transition Services at all times
   in accordance with this Agreement.

      (ii) Standards for the Provision of Buyer-Related Transition Services. The
   Buyer-Related Transition Services will be performed in substantially the same
   manner and with at least the same standard of care and timeliness that the
   Buyer-Related Transition Services were provided by the Energy Companies to
   ACN and its Affiliates during the period between December 1, 2004 and the
   Closing Date. EXCEPT AS SET FORTH IN THIS SECTION 2(d)(ii), BUYER MAKES NO
   REPRESENTATION, WARRANTY OR GUARANTY, EXPRESS OR IMPLIED, OF ANY KIND
   CONCERNING THE BUYER-RELATED TRANSITION SERVICES AND ANY RESULTS OR WORK
   PRODUCT AND SPECIFICALLY MAKE NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
   PARTICULAR PURPOSE, AND


                                       6

   NONE SHALL BE IMPLIED. ALL OTHER REPRESENTATIONS, WARRANTIES OR GUARANTEES,
   WRITTEN OR ORAL, EXPRESS OR IMPLIED IN FACT OR IN LAW, AND WHETHER OR NOT
   BASED ON STATUTE ARE EXCLUDED.

   (e) Certain Covenants. The parties agree to the following additional
       covenants:

      (i) Access and Record Retention.

      A. To the extent allowed by applicable Law, Buyer and its duly authorized
      representatives may inspect, review, copy and utilize at reasonable times
      and during regular business hours, ACN's and the ACN Service Providers'
      files, books, records, accounts, servicing practices, policies and
      procedures and quality control policies and procedures relating to the
      Energy Companies and to the Transition Services. ACN will, and will cause
      the ACN Service Providers to, maintain complete and accurate records
      relating to the Transition Services in accordance with ACN and the ACN
      Service Providers standard practices and for so long as required for tax
      and other regulatory purposes.

      B. To the extent allowed by applicable Law, ACN and its duly authorized
      representatives may inspect, review, copy and utilize at reasonable times
      and during regular business hours, the Buyer's and the Energy Companies'
      files, books, records, accounts, servicing practices, policies and
      procedures and quality control policies and procedures relating to the
      Buyer-Related Transition Services. Buyer will maintain complete and
      accurate records relating to the Buyer-Related Transition Services in
      accordance with Buyer's standard practices and for so long as required for
      tax and other regulatory purposes.

      C. Records Retention. Each party shall retain all records relating to this
      Agreement for so long as required by any governmental authority or
      regulatory authority having jurisdiction.

      (ii) No Breach. Notwithstanding anything to the contrary herein, no
   Service Provider shall be deemed to be in breach of its obligations hereunder
   by reason of any of the following: (a) the failure of a party to grant its
   consent to any matter requiring such consent prior to such Service Provider's
   performance of its obligations with respect to such matter; (b) the failure
   of a party to provide funds which are necessary for a Service Provider to
   perform its obligations with respect to such matter; (c) the failure of a
   party to enter into a contract or agreement with a third party which is
   necessary for such Service Provider to perform its obligations with respect
   to such matter; or (d) any acts of a Service Provider based in reliance upon
   a direction of, in the case of ACN or a ACN Service Provider, a Buyer
   Representative, and, in the case of Buyer, an ACN Representative.


                                       7

SECTION 3. Reserved

SECTION 4. Term and Termination.

         (a) Term. The term of this Agreement shall begin on the Closing Date
and continue through the Service Period.

         (b) Option to Terminate Transition Services. Unless otherwise provided
for hereunder, a party receiving Services hereunder may elect, by giving written
notice to the Service Provider for such Services thirty (30) days in advance, to
terminate the provision by such Service Provider of all or any item or category
of such Services, or to have all or any item or category of such Services
performed by its own employees or any other third party retained by such party
prior to the expiration of the Service Period.

         (c) Right to Suspend Performance or to Terminate the Agreement. A
Service Provider shall have the right to suspend the performance of its
obligations under this Agreement in the event of the receiving parties' failure
to make payments due, owing and not disputed in good faith pursuant to Section 5
hereof to such Service Provider as required under this Agreement, and such
failure has not been cured within ten (10) days after written notice of such
failure to such receiving party. If the receiving party cures such payment
default, the Service Provider shall not be entitled to suspend performance
hereunder. The Service Provider shall have the right to terminate this Agreement
in the event such failure to make payment has not been cured within thirty (30)
days after written notice of such failure to the receiving party and the party
failing to make payment is not disputing the payment in good faith.

         (d) Effect of Termination. Upon termination of this Agreement, each
Service Provider shall transfer to the party receiving Services hereunder all
materials and supplies procured in connection with the provision of such
Services, the cost of which has been included in Reimbursable Costs already paid
by the receiving party for such Services.

SECTION 5. Billing and Payment of Costs of Services; Invoices for Services.

         (a) Payment. Subject to the following sentence, on or before the
fifteenth (15th) day of each month, ACN shall provide to Buyer one or more
written invoices setting out the total amount due for Reimbursable Costs
provided by ACN for the prior month, showing for each category the Reimbursable
Costs for the period covered by such invoice, together with such supporting
documentation for all such costs as shall be reasonably requested by Buyer.
Items properly invoiced and not disputed in good faith by the owing party are
due and payable within fifteen (15) days following the date of such invoice. No
costs or fees shall be charged for Transition Services by either party except as
provided in the definition of Reimbursable Costs, provided that if ACN
reasonably anticipates significant software programming costs as part of the
Migration Plan, the parties shall agree on reasonable compensation for ACN
before ACN will be obligated to perform such significant software programming
pursuant to the Migration Plan.

         (b) Audit Rights. The owing party on any invoice shall have the right,
at any time within six (6) months after the date of any such invoice to audit
those books and records of the invoicing party with respect to the Services
reflected on such invoice, which books and records


                                       8

relate to the Services covered by such invoice, to verify the Reimbursable Costs
reflected on such invoice. Any such audit shall be conducted during normal
business hours by the auditing party or its designated auditor after ten (10)
days prior written notice to the invoicing party, at such auditing party's sole
cost and expense, in the offices of the invoicing party or such other location
as may be mutually agreed. The invoicing party shall cooperate with and provide
reasonable assistance to the auditing party and/or its auditor in connection
with the performance of any such audit. The auditing party shall assert any
claim for refund of costs of Services under the audited invoice within sixty
(60) days after the completion of the audit. The invoicing party shall have
ninety (90) days from receipt of the auditing party's claim for refund to
respond. If the invoicing party does not dispute the auditing party's refund
claim, the invoicing party shall offset the overpayment against future invoices;
or, if there are no additional invoices to be paid, the invoicing party shall
pay such refund within such 90-day period; such offset or refund shall be
credited or paid together with interest at the Interest Rate from the date of
the auditing party's overpayment to the invoicing party until the date of such
offset or refund of such overpayment is credited or paid. If the invoicing party
disputes the claim and refuses to pay any refund claim by the auditing party
resulting from the exercise of the auditing party's audit rights, each of the
parties shall be entitled to seek any remedy with respect to such matter
available at law or in equity.

SECTION 6. Administration of Agreement.

         ACN and the Buyer shall each designate in writing person(s) to act as
contract administration officers ("Contract Administration Officers"), who shall
perform the following functions under this Agreement for their respective
principals:

         (a) reporting to senior management of their respective principals with
respect to matters relating to the administration of this Agreement, the
provision of Services hereunder and any outstanding invoice disputes;

         (b) monitoring the costs of Services; and

         (c) serving as sole recipients of notices between the parties.

         (d) The initial Contract Administration Officers for each party shall
be their respective Chief Financial Officers. Each party may replace its
Contract Administration Officers from time to time upon written notice to the
other party.

SECTION 7. Relationships Among the Parties.

         Each Service Provider shall be an independent contractor with respect
to the Services it performs hereunder. Nothing in this Agreement shall cause the
relationship between ACN and the ACN Service Providers on the one hand, and
Buyer on the other hand, to be deemed to constitute an agency, partnership or
joint venture. The terms of this Agreement are not intended to constitute a
joint employer for any purpose between any of the parties and their affiliates.
No Service Provider shall have or hold itself out as having, any authority to
enter into any contract or create any obligation or liability on behalf of, in
the name of, or binding upon the party receiving Services from such Service
Provider under this Agreement or such party's Affiliates except as provided in
this Agreement.


                                       9

SECTION 8. Other Agreements

         (a) ACN Regulatory Covenant. During the Service Period, ACN will
cooperate, and will use its commercially reasonable efforts to cause the ACN
Service Providers to cooperate, with the Buyer and any Governmental Authority
that regulates the Buyer, solely at Buyer's cost and expense, to satisfy any
regulatory requirements applicable to entities that provide services to Buyer or
the Governmental Authority.

         (b) Buyer's Regulatory Covenant. During the Service Period, Buyer will
cooperate with ACN and the ACN Service Providers and any Governmental Authority
that regulates ACN and the ACN Service Providers, solely at ACN and the ACN
Service Providers cost and expense, to satisfy any regulatory requirements
applicable to entities that provide services to ACN or the Governmental
Authority.

SECTION 9. Indemnification; Release; Limit on Liability.

         (a) Transition Services.

            (i) Indemnification by ACN. ACN shall indemnify and hold harmless
         the Buyer, and each of its officers, directors, employees, agents, and
         affiliates (and the officers, directors, employees and agents of such
         affiliates) (each, a "Buyer Indemnified Party") if any such Buyer
         Indemnified Party shall at any time or from time to time suffer any
         damage, judgment, fine, penalty, demand, settlement, liability, loss,
         cost, expense (including reasonable attorneys', consultants' and
         experts' fees), claim or cause of action (each, a "Loss") arising out
         of, relating to or resulting from ACN's or ACN Service Providers'
         performance of Transition Services under this Agreement, to the extent
         such Loss results from the gross negligence or willful misconduct of
         ACN or a ACN Service Provider in performing the Transition Services.

            (ii) Indemnification by Buyer. Buyer shall indemnify and hold
         harmless ACN and ACN Service Providers, and each of their officers,
         directors, employees, agents, and affiliates (and the officers,
         directors, employees and agents of such affiliates) (each, an "ACN
         Indemnified Party") if any such ACN Indemnified Party shall at any time
         or from time to time suffer any Loss arising out of, relating to or
         resulting from Buyers' performance of Transition Services under this
         Agreement, to the extent any such losses result from the gross
         negligence or willful misconduct of Buyer in performing the Transition
         Services.

         (b) Survival. The provisions of this Article 9 shall survive the
termination of this Agreement for a period of two (2) years.

         (c) Limit of Liability. Neither ACN nor the ACN Service Providers for
their part nor Buyer nor the Buyer Service Parties for their part shall be
liable to the other, and each hereby releases the other and their Affiliates,
and each officer, director, employee and agent of the other and/or any of its
Affiliates from, any Loss arising from any act, omission, or other fault of the
other in connection with the Transition Services, except to the extent any such
Loss results from gross negligence or willful misconduct. NOTWITHSTANDING
ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THE AGGREGATE LIABILITY OF A PARTY
TO


                                       10

THE OTHER UNDER THIS AGREEMENT SHALL NOT EXCEED THE AGGREGATE AMOUNT OF PAYMENTS
RECEIVED HEREUNDER BY THE PARTY NOT EXPERIENCING THE LOSS. IN NO EVENT SHALL ANY
PARTY BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INDIRECT, INCIDENTAL
CONSEQUENTIAL OR PUNITIVE LOSS, DAMAGES OR EXPENSES (INCLUDING LOST PROFITS OR
SAVINGS) ("CONSEQUENTIAL DAMAGES") ARISING FROM THIS AGREEMENT OR THE
PERFORMANCE OR NON-PERFORMANCE OF SERVICES HEREUNDER.

SECTION 10. Headings. The headings in this Agreement are for reference only, and
shall not affect the interpretation of this Agreement.

SECTION 11. Schedules. All references herein to Articles, Sections, subsections,
paragraphs, subparagraphs, clauses and Schedules shall be deemed references to
such parts of this Agreement, unless the context shall otherwise require.

SECTION 12. Required Insurance.

         (a) Until expiration of the Service Period, ACN or each ACN Service
Provider, and Buyer shall maintain a level of insurance coverage substantially
similar to that held by each prior to Closing with financially sound and
reputable insurance companies.

         (b) Upon request of one party under this Agreement, certificates of
insurance evidencing the above-required insurance shall be provided to the other
party under this Agreement.

SECTION 13. Force Majeure. If by reason of a Force Majeure Event either party is
rendered unable, in whole or in part, to perform its obligations under this
Agreement, other than the obligation to make payments of money then due, such
party shall be excused from such performance to the extent it is prevented by,
and during the continuance of, such Force Majeure Event. The party whose
performance is affected by an Force Majeure Event shall (i) give the other party
notice of the occurrence of such Force Majeure Event as soon as practicable and
(ii) use all commercially reasonable efforts to remedy the cause(s) and
effect(s) of such Force Majeure Event with all reasonable dispatch; provided,
however, that the affected party shall not be obligated to undertake
unreasonable costs or burdens in order to overcome the effects of the Force
Majeure Event and reinstate full performance of its obligations under this
Agreement.

SECTION 14. Notices.

         (a) Any notice or other communication required or permitted hereunder
shall be in writing and shall be deemed given if delivered personally, by
facsimile (which is confirmed) or sent by first class notice certified mail or
overnight courier (providing proof of delivery), to the parties at the following
address:

         If to ACN:

                 American Communications Network, Inc.
                 32991 Hamilton Court
                 Farmington Hills, Michigan 48334


                                       11

                 Facsimile:       (284) 489-8901
                 Attention:  Chief Financial Officer

                 with a copy to:

                 Jaffe, Raitt, Heuer & Weiss, P.C.
                 27777 Franklin Road, Suite 250
                 Southfield, Michigan 48034
                 Facsimile:  (248) 351-3082
                 Attention:  Ralph Margulis

         If to the Buyer:

                 Commonwealth Energy Corporation
                 600 Anton Blvd, Ste 2000
                 Costa Mesa, CA 92626
                 Attention:  Peter Weigand
                 Facsimile:  (714) 259-2575

                 with a copy to:

                 Stroock & Stroock & Lavan LLP
                 180 Maiden Lane
                 New York, New York 10038
                 Attention: Michael Shenberg, Esq.
                 Facsimile:  (212) 806-6006

         (b) Any party may, by notice given in accordance with this Section 14
to the other parties, designate another address or person for receipt of notices
hereunder, provided that notice of such a change shall be effective upon
receipt.


                                       12

SECTION 15. Successors and Assigns. This Agreement will be binding upon and
inure to the benefit of ACN and Buyer and their respective successors, permitted
assigns and legal representatives. No party may assign this Agreement or any
right or obligation hereunder (whether by acquisition, merger, operation of law,
other transaction constituting a change of control or otherwise) without the
prior written consent of the other party, which consent shall not be
unreasonably withheld, however; any assignment without such consent shall be
void.

SECTION 16. Signatures Counterparts. Facsimile transmission of any signed
original document and/or retransmission of any signed facsimile transmission
shall be the same as delivery of an original. At the request of Buyer or ACN,
the parties will confirm facsimile transmission by signing a duplicate original
document. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall be considered
one and the same agreement.

SECTION 17. Amendments. This Agreement may be amended, modified or supplemented
only by a written instrument executed by ACN and Buyer.

SECTION 18. Governing Law.

         (a) This Agreement will be governed by the laws of the state of New
York without regard to conflict of law principles

         (b) Any claim, controversy or dispute between the parties shall be
resolved by binding arbitration of the issue in accordance with the following
procedures:

            (i) Either party may request arbitration by giving the other
         involved party written notice, which notice shall describe, in
         reasonable detail, the nature of the dispute, controversy or claim. The
         arbitration shall be governed by the rules of the American Arbitration
         Association ("AAA") and held in Houston, Texas or other mutually agreed
         upon location.

            (ii) If both parties agree an arbitrator within 30 days after a
         request for arbitration is made hereunder, that arbitrator shall be
         selected to hear the dispute in accordance with AAA rules. If the
         parties are not able to agree upon an arbitrator within such 30 day
         period, then that party who requested arbitration may request that the
         AAA select an arbitrator who has business experience in the energy
         industry similar to the Business and the selected arbitrator shall hear
         the dispute in accordance with AAA rules.

            (iii) Each of the parties shall bear its own fees, costs and
         expenses of the arbitration and its own legal expenses, attorneys' fees
         and costs of all experts and witnesses; provided, however, that if the
         claim of either party is upheld by the arbitrator in all material
         respects, the arbitrator may apportion between the parties as the
         arbitrator may deem equitable the costs incurred by the prevailing
         party. The fees and expenses of the arbitration procedures, including
         the fees of the arbitrator, will be shared equally by the parties.


                                       13

            (iv) Any award rendered pursuant to an arbitration proceeding shall
         be final, conclusive, non-appealable and binding upon the parties, and
         any judgment thereon may be entered and enforced in any court of
         competent jurisdiction.

SECTION 19. Entire Agreement. This Agreement and the Purchase Agreement and all
Schedules attached thereto constitute the entire agreement between the parties
hereto relating to the subject matter hereof and supersede all prior and
contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties, and there are no general or specific
warranties, representations or other agreements by or among the parties in
connection with the entering into of this Agreement or the subject matter hereof
except as specifically set forth or contemplated herein or therein.

SECTION 20. Negotiated Agreement. This Agreement has been negotiated by the
parties and the fact that the initial and final draft will have been prepared by
either party will not give rise to any presumption for or against any party to
this Agreement or be used in any respect or forum in the construction or
interpretation of this Agreement or any of its provisions.

SECTION 21. Waiver. No consent or waiver, express or implied, by any party to or
of any breach or default by any other party in the performance by such other
party of its obligations hereunder shall be deemed or construed to be a consent
or waiver to or of any other breach or default in the performance of obligations
hereunder by such other party hereunder. Failure on the part of any party to
complain of any act or failure to act of any other party or to declare any other
party in default, irrespective of how long such failure continues, shall not
constitute a waiver by such first party of any of its rights hereunder.

SECTION 22. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, each of ACN and Buyer directs that such court interpret and
apply the remainder of this Agreement in the manner that it determines most
closely effectuates their intent in entering into this Agreement, and in doing
so particularly take into account the relative importance of the term,
provision, covenant or restriction being held invalid, void or unenforceable.

SECTION 23. Interpretation. Whenever the words "include," "includes," or
"including," are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."

SECTION 24. No Third Party Beneficiaries. Except for Buyer and ACN Service
Providers, which are intended third party beneficiaries, and except as set forth
in Sections 9 and 15, nothing in this Agreement is intended or shall be
construed to give any person, other than the parties hereto, their successors
and permitted assigns, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.

SECTION 25. Specific Performance and Other Equitable Rights.

         (a) ACN recognizes and acknowledges that Buyer would not have entered
into the Purchase Agreement unless ACN had agreed to execute this Agreement and
perform the Transition Services in accordance herewith, and that a breach by ACN
of any covenants or other commitments contained in this Agreement will cause
Buyer to sustain injury for which it would not have an adequate remedy at law
for money damages. Therefore ACN agrees that in the event


                                       14

of any such breach, the Buyer shall be entitled to the remedy of specific
performance of such covenants or commitments and preliminary and permanent
injunctive and other equitable relief in addition to any other remedy to which
Buyer may be entitled, at law or in equity.

         (b) Buyer recognizes and acknowledges that ACN would not have entered
into the Purchase Agreement unless Buyer had agreed to execute this Agreement
and perform the Transition Services in accordance herewith, and that a breach by
Buyer of any covenants or other commitments contained in this Agreement will
cause ACN to sustain injury for which it would not have an adequate remedy at
law for money damages. Therefore Buyer agrees that in the event of any such
breach, ACN shall be entitled to the remedy of specific performance of such
covenants or commitments and preliminary and permanent injunctive and other
equitable relief in addition to any other remedy to which ACN may be entitled,
at law or in equity.

SECTION 26. Press Release. Except as required by Laws or applicable stock
exchange rules, neither party shall issue any press releases or any other public
disclosure relating to or arising out of the performance of this Agreement
without the prior written consent and approval of the content of such statement
by the other party. The disclosing party shall notify the other party of any
such requirement of Law to disclose and shall promptly provide a copy of the
relevant disclosure to the other.

SECTION 27. Further Assurance. Each of the parties agrees at any time and from
time to time during the Service Period, upon the request of the other party, to
do, or to cause to be done, all such further acts and assurances as may be
required to carry out the terms and conditions of this Agreement.

                  [Remainder of Page Intentionally Left Blank]


                                       15

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.

                                       AMERICAN COMMUNICATIONS NETWORK, INC.
                                       a Michigan Corporation



                                       By:      /S/ JAMES F. MULCAHY
                                                ----------------------------
                                       Name:    Name:  James F. Mulcahy
                                                ----------------------------
                                       Title:   Title:   Secretary/Treasurer
                                                ----------------------------



                                       COMMONWEALTH ENERGY CORPORATION
                                       a California Corporation



                                       By:      /S/ PETER WEIGAND
                                                ----------------------------
                                       Name:    Name:  Peter Weigand
                                                ----------------------------
                                       Title:   Title:  President
                                                ----------------------------



                [Signature page to Transition Services Agreement]

                                                                   EXHIBIT - 2.3

                             SALES AGENCY AGREEMENT

         AGREEMENT, dated as of February 9, 2005, by and between Commonwealth
Energy Corporation, a California corporation ("Buyer"), and American
Communications Network, Inc., a Michigan corporation ("ACN"), and, as to Section
8 only, Commerce Energy Group, Inc., a Delaware corporation ("CEG").


                               W I T N E S S E T H

         WHEREAS, Buyer, ACN and ACN Utility Services Inc., ACN Energy Inc. and
ACN Power, Inc. (the "ACN Parties") have entered into that certain Asset
Purchase Agreement, dated as of February 9, 2005 (the "Purchase Agreement"),
pursuant to which the ACN Parties are selling substantially all of the assets,
properties, rights and businesses of the Retail Energy Business to Buyer;

         WHEREAS, as a condition to entering into the Purchase Agreement, ACN
has agreed that its network of independent sales representatives (the
"Representatives") shall act as a limited agent for Buyer to sell electric
commodity and natural gas products and related services of the Retail Energy
Business (the "Energy Products") to retail residential and commercial consumers
from and after the Closing Date, subject to the terms and conditions set forth
herein;

         NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration set forth herein, the
sufficiency of which is hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:

         1. Defined Terms. Terms used herein but not defined herein shall have
the meaning ascribed to them in the Purchase Agreement. In addition, the
following terms shall have the following meanings:

         "Accepted Customer" shall mean those customers of ACN which are
accepted by Buyer pursuant to standards to be determined from time-to-time by
Buyer in its sole discretion and applied by Buyer in a consistent manner as
gauged on a same UDC market, same energy product or commodity, and same customer
class basis.

         "ACN Call-Center-sourced Customers" shall mean those customers of ACN
which have initiated contact with ACN, via an inbound call, to ACN's call
center, and requested to become a customer of ACN and have ultimately purchased
one or more Energy Products from ACN, which customers (a) are Accepted Customers
and (b) have been or will be billed by Buyer during or as of the relevant
measurement period.

         "ACN Commission Reports" shall have the meaning ascribed to such term
in Schedule A attached hereto.

         "ACN Indemnified Person" shall have the meaning ascribed to such term
in Section 10(c).




         "ACN-Sourced Customers" shall mean those customers presented by ACN or
the Representatives under this Agreement to Buyer which customers (a) are
Accepted Customers and (b) have been or will be billed by Buyer during or as of
the relevant measurement period.

         "Agency Customers" shall have the meaning ascribed to such term in
Section 7(a).

         "Agency Period" shall have the meaning ascribed to such term in Section
3(a).

         "Average Closing Price" shall mean, for any date of determination, the
average closing sale price per share of the Stock for the five (5) trading days
immediately preceding the date of determination on the American Stock Exchange
or, if not listed on such exchange, on such other national exchange or quotation
system upon which the Stock is then listed or quoted.

         "Benchmark" shall have the meaning ascribed to such term in Section
7(a).

         "Billing Report" shall have the meaning ascribed to such term in
Section 6(a)(ii).

         "Billing Report Date" shall have the meaning ascribed to such term in
Section 8(b).

         "Buyer Indemnified Person" shall have the meaning ascribed to such term
in Section 10(a).

         "Buyer RSG Liaison" shall have the meaning ascribed to such term in
Section 4(g).

         "CAB's" shall have the meaning ascribed to such term in Schedule A
attached hereto.

         "CEG" shall have the meaning ascribed to such term in the preamble.

         "CEG Common Stock" shall mean the common stock, $0.001 par value, of
CEG.

         "Commencement Date" shall have the meaning ascribed to such term in
Section 7(a).

         "Commission Notice" shall have the meaning ascribed to such term in
Schedule A.

         "Commissions" shall have the meaning ascribed to such term in Section
6(a)(ii).

         "Confidential Information" shall have the meaning ascribed to such term
in Section 9(a).

         "Customer Acquisition Fee" shall have the meaning ascribed to such term
in Section 7(b).

         "Earned Level" shall have the meaning ascribed to such term in Schedule
A attached hereto.

         "Energy Products" shall have the meaning ascribed to such term in the
Whereas clause.

         "Initial Agency Period" shall have the meaning ascribed to such term in
Section 3(a).


                                      -2-


         "Month-End Period" shall have the meaning ascribed to such term in
Section 7(a).

         "Post-Closing Call Center Customers" shall mean those ACN
Call-Center-sourced Customers generated after the Closing Date.

         "Purchase Agreement" shall have the meaning ascribed to such term in
the Whereas clause.

         "Rep" shall have the meaning ascribed to such term in Schedule A
attached hereto.

         "Representatives" shall have the meaning ascribed to such term in the
Whereas clause.

         "Representative-Sold Customer" shall have the meaning ascribed to such
term in Section 6(a)(i).

         "Restrictive Period" shall have the meaning ascribed to such term in
Section 9(c).

         "RVP" shall have the meaning ascribed to such term in Schedule A
attached hereto.

         "Share Issuance Limitation" shall have the meaning ascribed to such
term in Section 8(c).

         "Standards" shall have the meaning ascribed to such term in Section
2(a).

         "Stock" shall have the meaning ascribed to such term in Section 8(a).

         "SVP" shall have the meaning ascribed to such term in Schedule A
attached hereto

         "Territory" means North America.

         2. Sales Agency.

            (a) During the Agency Period, ACN shall provide, or cause to be
provided, to Buyer its network of Representatives to act as the limited agent
for Buyer to sell Energy Products on behalf and for the benefit of Buyer. ACN
shall use its commercially reasonable efforts to cause the Representatives: (i)
to sell Energy Products and otherwise promote the Retail Energy Business in a
manner consistent with the manner in which such products were sold for the
Retail Energy Business prior to the Closing Date, and (ii) to act as agent for
the sale of Energy Products exclusively for or on behalf of Buyer. Buyer shall
have the right to cause ACN to direct the Representatives with respect to sales
of Energy Products, customer service and regulatory matters in accordance with
Buyer's Licenses or Certificates, the statutes, rules, regulations, or policies
of the applicable jurisdictions in which Buyer has authorized ACN and
Representatives to conduct customer acquisition activities (the "Standards"),
but in no event shall it have the right to cause ACN to take any actions (or
inaction) with respect to management and oversight of, or the commissions or
other fees paid or payable to, the Representatives.

            (b) ACN shall be responsible for directing the Representatives to
adhere to the Standards in selling the Energy Products and otherwise in
connection with the performance of


                                      -3-


any obligations of ACN or the Representatives under this Agreement. Neither ACN
nor the Representatives nor their respective personnel shall have the power or
authority to act as attorney-in-fact of Buyer or bind Buyer in any way without
the prior written consent of Buyer. All customers acquired by the
Representatives shall be subject to acceptance by Buyer to the extent permitted
by law.

            (c) ACN's and Representatives' agency on behalf of Buyer shall be
limited to the following acts: (i) solicitation of customers, (ii) the offering
of Buyer's Energy Products as set forth in Buyers marketing materials,
applications, and sales agreements, or (iii) recommending Buyer's Energy
Products to retail customers.

            (d) ACN's and the Representatives' limited agency shall not include
(i) the negotiation of prices or rates, terms or conditions of service for
Buyer's Energy Products, (ii) taking title to Energy Products, (iii) arranging
for the purchase, transportation, scheduling or delivery of Energy Products,
(iv) interaction or transactions with pipelines, utilities, local distribution
companies, other suppliers or marketers, or state or federal energy/utility
regulators, or (v) execution of contracts or agreements on behalf of Buyer.

            (e) Buyer shall have the right to cause ACN to take appropriate
actions with respect to the conduct of a Representative in order to comply with
a notice or inquiry of any applicable Governmental Authority by providing at
least 5 days' prior written notice (or such lesser period of notice as may be
required by such Governmental Authority) to ACN specifying the applicable
remedial or corrective actions required by the Governmental Authority.

            (f) ACN shall provide Buyer with true and complete copies of all
independent representative form agreements and updates thereto from time to
time.

            (g) In providing the Representatives hereunder, ACN agrees (i)(A)
not to take any actions that it knows or, in the exercise of reasonable care,
should know would be harmful in any material respect to the business and
operations of the Buyer, (B) to use its commercially reasonable efforts to
promote the Retail Energy Business and the interests of Buyer in the same manner
as it promotes its own business, and (C) to comply with all applicable energy
federal, state and local laws, the Standards, and Buyer's policies and
procedures established in accordance with Section 5(a) hereof as in effect from
time to time, and (ii) to use its commercially reasonable efforts to cause the
Representatives to do (or not to do, as applicable) the same.

         3. Agency Period; Termination.

            (a) The Agreement shall become effective as of the date hereof and
continue for a period of one year (the "Initial Agency Period") or until earlier
terminated as provided herein. Upon the expiration of such one-year period, this
Agreement shall be automatically renewed on a year-to-year basis unless
terminated by either Buyer or ACN by the giving of written notice of termination
to the other party hereto at least 90 days' prior to the expiration of the
initial term or any successive term. The Initial Agency Period and any
successive term being collectively referred to herein as the "Agency Period."


                                      -4-


            (b) This Agreement may be terminated at any time prior to the
expiration of the Agency Period by any of the following:

                  (i) by mutual written agreement of the parties;

                  (ii) by either party upon the occurrence of a material breach
by the other party that remains uncured for a period of thirty (30) days after
such breaching party receives written notice describing the breach in reasonable
detail from the non-breaching party.

            (c) In the case of termination other than as provided in Section
3(b)(ii), notwithstanding any other provision of this Agreement, any such
termination shall be without liability to either party. Any termination as
provided in Section 3(b)(ii) shall be without prejudice to the non-breaching
party's rights to seek damages for such breach.

         4. Duties of ACN. ACN will use its best efforts to cause the
Representatives to sell standard offer contracts of the Retail Energy Business
as approved by Buyer to pre-approved customer classes in electric and gas
markets as designated by Buyer in which ACN-Sourced Customers are located; and
will perform the following functions:

            (a) process, reconcile, and make payments to Representatives of
commissions received from Buyer on each Representative-Sold Customer;

            (b) provide Buyer with information similar in all material respects
to that set forth in Schedule A attached hereto for the purpose of identifying
the amount of Commissions to be paid by Buyer to ACN in accordance with Section
6 hereof for ACN payment to Representatives;

            (c) at Buyer's option, ACN will perform all Representative-service
functions;

            (d) ACN will use its best efforts to give Buyer access to ACN's
Representative conventions and regional training and orientation sessions and
regional and local level conferences, training sessions, meetings and gatherings
at which ACN's other training and product/service familiarization is scheduled
to occur so that Buyer may train the Representatives on products, processes, and
procedures to sell Energy Products;

            (e) ACN and Buyer will agree from time to time to provide
Representatives material to be provided by Buyer for presentation through ACN's
website area(s) serving Representatives, including potential links to Buyer's
website area(s) intended to inform the Representatives of Energy Products
available for Representatives to sell;

            (f) ACN will use its commercially reasonable efforts to promote the
agency relationship created hereunder to the Representatives;

            (g) ACN will permit a representative of Buyer (a "Buyer RSG
Liaison") to work in ACN's offices housing its RSG (and provide an amount of
enclosed office space with a locking door customary for a senior executive) for
the purpose of assisting RSG management in


                                      -5-


understanding energy products, answering energy sales questions and generally
assisting with the interface between the two organizations (ACN and Buyer) with
respect to activities under this Agreement; and

            (h) ACN will obtain and maintain any licenses or certificates
required to perform its obligations under this Agreement.

         5. Duties of Buyer. Buyer shall provide Energy Products for the
Representatives to sell in accordance with the following terms:

            (a) Buyer shall set all pricing and terms of service, as well as
establish the policies and procedures for the Representatives to sell Energy
Products for the Retail Energy Business;

            (b) Buyer shall undertake all business functions relating to
customers generated by the Representatives pursuant to this Agreement,
including, but not limited to, order entry, provisioning, billing, collections,
energy supply and scheduling, utility interfaces, and customer tracking;

            (c) Buyer shall provide ACN with reports and/or electronic data
reasonably satisfactory to ACN, at such times as are reasonably acceptable to
ACN, in order for ACN to properly administer its incentive compensation and
other programs for the Representatives and so that ACN may reconcile its records
with those of Buyer;

            (d) Buyer shall be entitled to provide training for Representatives
at such times as may be reasonably acceptable to ACN at ACN's Representative
conventions, and regional training and orientation sessions and regional and
local level conferences, training sessions, meetings and gatherings at which
ACN's other training and product/service familiarization is scheduled to occur
and Buyer shall provide all product literature, contractual forms, and any other
materials needed for the Representatives (including web-based information) to be
able to sell Buyer energy products and services;

            (e) Buyer may provide a Buyer RSG Liaison, which liaison shall be
reasonably acceptable to ACN, to be co-located in the offices of ACN housing its
RSG during the normal business hours of the RSG management; and

            (f) Buyer will comply with all applicable energy federal, state and
local laws necessary to satisfy the purposes of this Agreement.

         6. Commission Payment.

            (a) Buyer shall pay ACN commission payments for all sales generated
by the Representatives in the following manner:

                  (i) For each (A) Transferred Customer and (B) ACN-sourced
Customer and ACN Call-Center-sourced Customer (i.e., excluding Post-Closing Call
Center


                                      -6-


Customers) which (1) is an Accepted Customer and (2) has been billed by Buyer
(each such customer hereinafter referred to as a "Representative-Sold
Customer"), Buyer shall pay ACN amounts equivalent to the actual commissions
(without taking into account any deduction by ACN from such commissions of ACN's
customary out-of-pocket costs) and which ACN, using its policies and procedures
as in effect on the date hereof (taking into account the deduction by Buyer of
the 10% of commission deduction by ACN for presumed bad-debt), will in turn pay
to the Representative(s) as such amounts are further defined and limited as
specified in Section 6(a)(ii) hereof. Except with the prior written consent of
Buyer, ACN shall direct the Representatives not to sell, and Buyer shall have no
obligation to pay ACN any commissions with respect to, any Energy Products other
than "standard offers".

                  (ii) Within ten (10) days after the end of each month, Buyer
shall provide ACN with a report (the "Billing Report") setting forth the billed
revenue from the sale of Energy Products with respect to all Representative-Sold
Customers during the prior month, and within ten (10) days after receiving the
Billing Report, ACN shall send Buyer the Commission Notice. Buyer shall pay any
undisputed commissions directly to ACN within sixty (60) days after the end of
the month to which the Commission Notice applies, with any disputed commission
paid, if necessary, promptly after resolution thereof by the parties. Each party
shall be entitled to conduct audits of the other's books and records as it deems
necessary or advisable in order to verify the information set forth in the
Billing Report or the Commission Notice, as applicable.

            (b) All commission payments shall be made by Buyer directly to ACN.
ACN shall be solely liable for the payment of any and all compensation of
whatever kind to the Representatives, other out of pocket expenses incidental to
the paying of the Representatives or the Representatives' sale of Energy
Products and benefits received by such independent contractors (including the
Representatives). To the extent required, ACN (and not Buyer under any
circumstance) shall issue an IRS Form 1099 to each of the Representatives with
respect to any commissions or fees that any of the Representatives earns for the
Energy Products provided hereunder.

            (c) Prior to an ACN customer becoming a Transferred Customer, Buyer
shall provide ACN the information necessary to calculate Representatives'
commissions substantially as set forth on Schedule A attached hereto and
thereafter ACN shall provide reports substantially as set forth on Schedule A
attached hereto so that Buyer may remit to ACN amounts in accordance with this
Section 6 which are commission amounts for ACN to pay to the Representatives.

            (d) Subsequent to an ACN customer becoming a Transferred Customer,
and for all Representative-Sold Customers, Buyer shall provide ACN the
information necessary to calculate Representatives' commissions substantially as
set forth on Schedule A attached hereto and thereafter ACN shall provide reports
substantially as set forth on Schedule A attached hereto so that Buyer may remit
to ACN amounts in accordance with this Section 6 which are commission amounts
for ACN to pay to the Representatives.


                                      -7-


         7. Customer Acquisition Payment Structure.

            (a) During the Initial Agency Period, Buyer shall calculate, not
less frequently than by each month-end and shall report such calculation to ACN
within twenty (20) days after the end of each month, the sum of Transferred
Customers, ACN-Sourced Customers and Post-Closing Call Center Customers which it
has sent a bill to during the billing cycle ending as of the last day of the
immediately preceding month (hereafter referred to as "Agency Customers"). Buyer
shall have an obligation to pay ACN a Customer Acquisition Fee upon the earlier
to occur of (i) the expiration of the Initial Agency Period, or (ii) the day
immediately after the last day of the month during the Initial Agency Period on
which Buyer has at least [CONFIDENTIAL TREATMENT REQUESTED] Agency Customers
(the "Commencement Date"). The number of Agency Customers of Buyer on the
Commencement Date and on any month-end anniversary of the Commencement Date
which is greater than the highest prior Benchmark shall be referred to herein as
a "Benchmark" for the succeeding calendar month-end period (any such period, a
"Month-End Period"). A Customer Acquisition Fee, to the extent payable, shall be
paid by Buyer to ACN within 30 days of the expiration of the prior Month-End
Period, for each Agency Customer enrolled as of the end of the prior Month-End
Period in excess of the applicable Benchmark. Each party shall be entitled to
conduct audits of all reports, calculations and determinations made by the other
party with respect to the Customer Acquisition Fee.

            (b) The "Customer Acquisition Fee" shall equal an amount calculated
by multiplying (i) the number of Agency Customers at the end of the Month-End
Period in excess of the applicable Benchmark by (ii) [CONFIDENTIAL TREATMENT
REQUESTED].

         8. Payment of Customer Acquisition Fee(s) Post-Initial Period.

            (a) Subject to the Share Issuance Limitation, upon the Commencement
Date, CEG shall place into escrow, pursuant to the Escrow Agreement, a number of
shares of CEG Common Stock, rounded down to the nearest whole number, determined
by dividing $1,250,000 by the Average Closing Price on the day immediately prior
to the Commencement Date.

            (b) Within twenty (20) business days after the date of receipt of
the Billing Report (such date of receipt being referred to as a "Billing Report
Date") most closely following the conclusion of a Month-End Period, a number of
shares of CEG Common Stock shall be released from the escrow to ACN equal to (i)
the Customer Acquisition Fee payable by Buyer to ACN with respect to the
immediately prior Month-End Period divided by (ii) the Average Closing Price as
of the Billing Report Date. If there is no CEG Common Stock remaining on deposit
in the escrow at the time a release is required in accordance with the prior
sentence, subject to the Share Issuance Limitation, CEG shall promptly deposit
in escrow not less than a number of additional shares of CEG Common Stock equal
to (1) $1,250,000 divided by (2) the Average Closing Price as of the Billing
Report Date; provided, however, CEG shall have no obligation to deposit
additional shares of CEG Common Stock into escrow unless such shares have been
duly approved for listing on the American Stock Exchange (or such other national
exchange or quotation system upon which the CEG Common Stock is then listed or
quoted), provided that Buyer and CEG have used commercially reasonable efforts
to do so.


                                      -8-


            (c) Notwithstanding any provision of this Agreement or the Purchase
Agreement, CEG shall have no obligation to issue any shares of CEG Common Stock
pursuant to this Agreement or the Purchase Agreement, into escrow or otherwise,
if the issuance of such shares of CEG Common Stock, together with all prior
issuances under the Purchase Agreement and this Agreement in the aggregate,
would result in the issuance of more than 14.9% of the shares of CEG Common
Stock outstanding immediately prior to the date of execution of the Purchase
Agreement (the "Share Issuance Limitation").

            (d) If (i) there is insufficient CEG Common Stock remaining on
deposit in the escrow at the time a release is required pursuant to this
Agreement due to the Share Issuance Limitation or (ii) there is any failure to
have CEG Common Stock listed on the American Stock Exchange (or such other
national exchange or quotation system upon which the CEG Common Stock is then
listed or quoted) within the timeframe provided in Section 8(b), then, in lieu
of such release of CEG Common Stock, ACN shall be entitled to, and Buyer shall
make, such payment in cash within thirty (30) days.

            (e) The procedures for payment of Post-Initial Period Customer
Acquisition Fees shall be reasonably similar to those procedures for payment of
Customer Acquisition Fees applicable to the Initial Period. Upon expiration of
the Agency Period or termination of this Agreement, after payment of all amounts
to ACN pursuant to this Section 8, all shares of CEG Common Stock remaining in
the escrow shall be released to Buyer.

            (f) Each party shall have the same right to audit the methods of
calculating the number of Agency Customers used in the determination of the
Customer Acquisition Fee in the Post-Initial Period as granted to the such party
during or applicable to the Initial Period.

            (g) ACN represents and warrants to Buyer and CEG as follows:

                  (i) ACN is acquiring the CEG Common Stock, when and if
                  released to ACN pursuant to this Agreement and the Escrow
                  Agreement, for its own account and not with a present view to,
                  or for sale in connection with, any distribution thereof. ACN
                  consents to the placement of the following legend on each
                  certificate representing the shares of CEG Common Stock and
                  acknowledges that stop transfer instructions will be placed
                  with CEG's transfer agent:

                  "THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE
                  TRANSFERRED OR SOLD UNLESS (i) A REGISTRATION STATEMENT UNDER
                  SUCH ACT (OR AN EXEMPTION FROM SUCH REGISTRATION) IS THEN IN
                  EFFECT WITH RESPECT THERETO, (ii) A WRITTEN OPINION FROM
                  COUNSEL FOR THE ISSUER OR OTHER COUNSEL FOR THE HOLDER
                  REASONABLY ACCEPTABLE TO THE ISSUER HAS BEEN OBTAINED TO THE
                  EFFECT THAT NO SUCH REGISTRATION IS REQUIRED OR (iii) A 'NO
                  ACTION' LETTER OR


                                      -9-


                  ITS THEN EQUIVALENT HAS BEEN ISSUED BY THE STAFF OF THE
                  SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH
                  TRANSFER OR SALE."

                  (ii) ACN understands that the CEG Common Stock will not be
                  registered under the Securities Act for the reason that the
                  sale provided for in this Agreement is exempt pursuant to
                  Section 4(2) of the Securities Act and that the reliance of
                  CEG and the Buyer on such exemption is predicated in part on
                  ACN's representations set forth herein. ACN represents that it
                  is experienced in evaluating companies such as CEG and the
                  Buyer, has such knowledge and experience in financial and
                  business matters as to be capable of evaluating the merits and
                  risks of its investment, and has the ability to suffer the
                  total loss of its investment in the CEG Common Stock. ACN is
                  an accredited investor within the meaning of Rule 501 of
                  Regulation D promulgated under the Securities Act. ACN further
                  represents that it has had access during the course of the
                  transaction and prior to its acquisition of the shares of CEG
                  Common Stock to such information relating to CEG and the Buyer
                  as it has desired and that it has had the opportunity to ask
                  questions of and receive answers from the CEG and the Buyer
                  concerning the transaction and to obtain additional
                  information (to the extent CEG and the Buyer possessed such
                  information or could acquire it without unreasonable effort or
                  expense) necessary to verify the accuracy of any information
                  furnished to it or to which it had access.

                  (iii) ACN understands that the shares of CEG Common Stock may
                  not be sold, transferred or otherwise disposed of by ACN
                  without registration under the Securities Act or an exemption
                  therefrom and that in the absence of an effective registration
                  statement covering the shares of CEG Common Stock or an
                  available exemption from registration under the Securities
                  Act, the shares of CEG Common Stock must be held indefinitely.

                  (iv) At each time of delivery of the shares of CEG Common
                  Stock from the escrow in accordance with this Section 8 and
                  the Escrow Agreement, before any shares are released from
                  escrow in accordance with the terms of this Agreement and the
                  Escrow Agreement, ACN shall deliver to Buyer and CEG a
                  certificate confirming that each of the representations and
                  warranties set forth in this Section 8(g) continue to be true
                  and correct in all respects.

            (h) ACN agrees that neither it nor its Affiliates will in any
manner, directly or indirectly, purchase or sell securities of the CEG during
any period during and within three trading days of the determination of the
Average Closing Price.

            (i) Should any fractional share result from the calculations
described in this Agreement, the number shares of CEG Common Stock released from
escrow shall be rounded up


                                      -10-


to the next greater whole number if the fraction is greater or equal to one-half
and rounded down to the next lesser whole number if the fraction is less than
one-half; provided, however, that the number of shares to be released, as
applicable, after giving effect to such rounding up shall not exceed the total
number of shares of CEG Common Stock available and held by Escrow Agent.

            (j) Notwithstanding any other provision of this Agreement, the
Purchase Agreement or the Escrow Agreement or any other agreement entered into
by the parties in connection with the transactions contemplated hereby or
thereby, if at any time ACN, together with its Affiliates, beneficially owns
more than 9.9% of the outstanding common stock of CEG (any such period of time,
a "10% Holder Period"), ACN shall provide Buyer and CEG with written notice
thereof, and Buyer shall have the right to provide written notice to ACN
electing to suspend the stock escrow payments under this Section 8 for the
duration of the 10% Holder Period and, in lieu thereof, make any such required
payments in cash.

         9. Confidential Information; Return of Documents; Non-Competition;
Non-Solicitation.

            (a) ACN agrees not to, and to cause its officers, directors,
employees, stockholders, Affiliates and representatives (including, but not
limited to, the Representatives) not to, directly or indirectly, without the
prior written consent of Buyer, use or disclose to any Person any information,
trade secrets, customer information, technical data or know-how relating to the
products, processes, methods, equipment or business practices (collectively,
"Confidential Information") of the Retail Energy Business.

            (b) Upon expiration of the Agency Period or termination of this
Agreement, ACN shall, and shall cause its officers, directors, employees,
stockholders, Affiliates and representatives (including, but not limited to, the
Representatives) to, immediately deliver to Buyer all plans, designs, drawings,
specifications, listings, manuals, memoranda, projections, minutes, records,
notebooks, computer programs and files and similar repositories of or containing
Confidential Information, including all copies, then in the possession or
control of any of the foregoing persons or otherwise available to them, whether
prepared by any of them or others, and none of the foregoing persons shall
retain any copies or abstracts of any such documents, other than those copies
ACN is required by law to retain.

            (c) During the Agency Period and for a period of one year following
the earlier of the expiration thereof or the termination of this Agreement (the
"Restrictive Period"), ACN agrees that:

                  (i) neither ACN nor any of its Affiliates will, directly or
indirectly, anywhere in the Territory, (A) engage in any business the same as or
similar to, or engage in competition with, the Retail Energy Business as
heretofore engaged in by ACN or any of its Subsidiaries or engaged in by Buyer
or its Subsidiaries during the Restrictive Period, (B) render services to or
have any interest, as a shareholder, owner, agent, consultant, lender or
guarantor or any other interest, in any other Person (other than ACN) engaged in
the manufacture or sale of energy-related products, or the rendering of
energy-related services, which are currently being manufactured or sold or
rendered by the Retail Energy Business, or similar energy-related


                                      -11-


products or services, or (C) engage in competition with, or manufacture or sell,
such products or services as are referred to in clause (ii) of this Section
9(c)(i); and

                  (ii) neither ACN nor any of its Affiliates or representatives
will, directly or indirectly, (i) solicit or attempt to solicit (either for
itself or as agent for another) for employment or induce, persuade or encourage
any person to leave the employ of Buyer or any of its Affiliates who, prior to
the Closing Date was, or during the Restrictive Period will be, employed or
retained by Buyer or any of its Affiliates as a consultant, agent, employee or
otherwise or (ii) divert or attempt to divert from Buyer or any of its
Affiliates any business whatsoever by influencing or attempting to influence any
existing or prospective customer or supplier of the Retail Energy Business or
Buyer or any of its Affiliates. Notwithstanding the foregoing, ACN shall be
permitted to hire or otherwise utilize any person terminated or not employed by
Buyer.

            (d) During the Restrictive Period, except as set forth in the
Purchase Agreement, this Agreement or in connection with the transactions
contemplated hereby and thereby, Buyer agrees that neither it nor any of its
Affiliates or representatives will, directly or indirectly, (i) solicit or
attempt to solicit (either for itself or as agent for another) for employment or
induce, persuade or encourage any person to leave the employ of ACN or any of
its Affiliates who, prior to the Closing Date was, or during the Restrictive
Period will be, employed or retained by ACN or any of its Affiliates as a
consultant, agent, employee or otherwise or (ii) divert or attempt to divert
from ACN or any of its Affiliates any business whatsoever by influencing or
attempting to influence any existing or prospective customer or supplier of ACN
or any of its Affiliates. Notwithstanding the foregoing, Buyer shall be
permitted to hire or otherwise utilize any person terminated or not employed by
ACN.

            (e) Each party acknowledges and agrees that any breach of this
Section 9 is likely to result in irreparable injury to the other, that monetary
damages will be an inadequate remedy of such breach and that, accordingly, in
addition to any other remedy that such party may have, such party shall be
entitled to enforce the specific performance of this Section 9 and to seek both
permanent and temporary injunctive relief in the event of any breach hereof. All
expenses, including, without limitation, attorney's fees and expenses incurred
in connection with any legal proceeding arising as a result of a breach or
threatened breach of this Section 9 shall be borne by the losing party to the
fullest extent permitted by law and the losing party hereby agrees to indemnify
and hold the other party harmless from and against all such expenses.

            (f) The parties acknowledge that the time, scope, geographic area
and other provisions of this Section 9 have been specifically negotiated by
sophisticated commercial parties and agree that all such provisions are
reasonable under the circumstances of the transactions contemplated by this
Agreement. If any portion of this Section 9 shall be determined to be invalid
and unenforceable as written, each such portion shall be enforced to the extent
reasonable under the circumstances and such determination shall not affect the
validity or enforceability of the balance hereof, and such balance shall remain
in full force and effect. It is understood that ACN is entering into the
provisions of this Section 9 in order to induce Buyer to enter into the Purchase
Agreement and consummate the transactions contemplated thereby. The parties
acknowledge that the business of ACN is currently conducted throughout the
Territory.


                                      -12-


In view of the statements made in the preceding sentence, the parties agree that
the Territory is reasonable in scope. The provisions of this Section 9 shall
survive the expiration of the Agency Period and any termination of this
Agreement.

         10. Waiver of Liability; Indemnification.

            (a) ACN hereby waives, releases and discharges Buyer and its
directors, officers, employees, stockholders, Affiliates and agents (each, a
"Buyer Indemnified Person" and collectively, the "Buyer Indemnified Persons")
from any and all claims or demands which ACN may have or acquire against any of
the Buyer Indemnified Persons with respect to any claim for any Damages incurred
or sustained by any of the Buyer Indemnified Persons arising out of, resulting
from or based upon the actions (or inactions) of ACN, its Affiliates or the
Representatives in selling the Energy Products and otherwise performing their
obligations hereunder, other than as a result of the breach of this Agreement or
the gross negligence, bad faith, willful misconduct or criminal conduct of such
Buyer Indemnified Person.

            (b) ACN hereby agrees to indemnify and hold each Buyer Indemnified
Person harmless from and against all Damages which any Buyer Indemnified Person
may sustain, incur or assume as a result of any allegation, claim, civil or
criminal action, proceeding, charge or prosecution which may be alleged, made,
instituted or maintained against any Buyer Indemnified Person arising out of,
resulting from or based upon (i) any breach by ACN of any of its
representations, warranties, covenants or agreements contained in this
Agreement, or (ii) any claim asserted or threatened to be asserted by any third
party in connection with ACN, its Affiliates or the Representatives, selling the
Energy Products or serving or having served pursuant to this Agreement;
provided, however, ACN shall not be liable to indemnify and hold any Buyer
Indemnified Person harmless from any such Damages to the extent it is the result
of the gross negligence, bad faith, willful misconduct or criminal conduct of,
or the breach of this Agreement by, the party seeking indemnification hereunder.

            (c) Buyer hereby agrees to indemnify and hold ACN and its directors,
officers, employees, stockholders, Affiliates and agents (each, an "ACN
Indemnified Person" and collectively, the "ACN Indemnified Persons") harmless
from and against all Damages which any ACN Indemnified Person may sustain, incur
or assume as a result of any allegation, claim, civil or criminal action,
proceeding, charge or prosecution which may be alleged, made, instituted or
maintained against any ACN arising out of, resulting from or based upon (i) any
breach by Buyer of any of its representations, warranties, covenants or
agreements contained in this Agreement, or (ii) any claim asserted or threatened
to be asserted by any third party in connection with Buyer's obligations
pursuant to this Agreement, in each case solely to the extent that any such
Damages is the direct result of the gross negligence, bad faith, willful
misconduct or criminal conduct with respect to any training, sales materials,
literature, forms or documents provided by Buyer for use by the Representatives
of, or the breach of this Agreement by, any of the Buyer Indemnified Persons.

         11. Independent Contractors. The parties acknowledge that they are
entering into this Agreement as independent contractors and that this Agreement
shall not create and shall not be construed to create a relationship of joint
venturers, co-partners, employer and employee, master


                                      -13-


and servant or any similar relationship between the parties.

         12. Expenses. Except as otherwise provided for herein, each party will
pay its own expenses in connection with this Agreement and the completion of the
transactions contemplated hereby.

         13. Expenses Related to Audit Rights. Wherever either party has an
audit right, the party exercising its audit right shall be entitled to
reimbursement of its reasonable and customary expenses associated with such
audit from the other party in the event such audit results in a determination
that there was a material inaccuracy adverse to the party conducting the audit.
Further, the party being audited shall be entitled to reimbursement of its
reasonable and customary expenses associated with supporting such audit from the
party conducting the audit in the event such audit results in a determination
that the subject matter audited was materially accurate. Any inaccuracies
determined by any such audit shall be corrected in the favor of the party to
whom the inaccuracy was adverse.

         14. Force Majeure. In the event that war, fire, explosion, flood,
accident, strike, riot, act of governmental authority, act of terrorism, act of
God or other contingency beyond the reasonable control of ACN causes cessation
or interruption of ACN's or the Representatives' performance hereunder,
performance by ACN shall be temporarily excused for the period of the
disability, without liability, provided that ACN shall promptly after they have
actual knowledge of the beginning of any excusable delay, notify Buyer of such
delay, the reason therefor, and the probable duration and consequence thereof.
ACN shall use its reasonable best efforts to resume performance of its and the
Representatives' obligations hereunder with the least possible delay.

         15. Miscellaneous.

            (a) Entire Agreement; Amendment; Waiver. This Agreement, together
with the Purchase Agreement and the Schedules and Exhibits hereto and thereto,
contains the entire understanding of the parties as to the subject matter hereof
and fully supersedes all prior agreements and understandings between the parties
as to such subject matter. This Agreement may not be amended, supplemented,
canceled or discharged, except by a written instrument executed by the party as
to whom enforcement is sought. No failure to exercise, and no delay in
exercising, any right, power or privilege hereunder shall operate as a waiver
thereof. No waiver of any breach of this Agreement shall be deemed to be a
waiver of any preceding or succeeding breach of this Agreement.

            (b) Severability. The parties acknowledge that the terms of this
Agreement are fair and reasonable at the date signed by them. However, in light
of the possibility of a change of conditions or differing interpretations by a
court of what is fair and reasonable, the parties stipulate as follows: if any
one or more of the terms, provisions, covenants or restrictions of this
Agreement shall be determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; further, if any
one or more of the terms, provisions, covenants, and restrictions contained in
this Agreement shall for any reason be determined by a court of competent


                                      -14-


jurisdiction to be excessively broad as to duration, geographical scope,
activity or subject, it shall be construed, by limiting or reducing it, so as to
be enforceable to the maximum extent compatible with then applicable law.

            (c) Notices. All notices, requests, demands and other communications
provided for by this Agreement shall be in writing and mailed in the United
States enclosed in a registered or certified post-paid envelope, return receipt
requested, or transmitted by facsimile, or delivered by same-day or overnight
courier service, and addressed to the addresses of the respective parties as set
forth in Section 16 of the Purchase Agreement or to such changed addresses as
such parties may fix by notice in accordance therewith.

            (d) Successors and Assigns. This Agreement is personal in its nature
to ACN and ACN shall not, without the consent of Buyer, assign or transfer this
Agreement or any rights or obligations hereunder. Buyer may freely transfer the
Agreement to any Person then conducting the Retail Energy Business. This
Agreement shall be binding upon and inure to the benefit of Buyer and its
successors and assigns and upon ACN and its successors and permitted assigns.

            (e) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
principles of conflict of laws.

            (f) Arbitration. Any claim, controversy or dispute between the
parties shall be resolved by binding arbitration of the issue in accordance with
the following procedures:

                  (i) Either party may request arbitration by giving the other
involved party written notice, which notice shall describe, in reasonable
detail, the nature of the dispute, controversy or claim. The arbitration shall
be governed by the rules of the American Arbitration Association ("AAA") and
held in New York, New York or other mutually agreed upon location.

                  (ii) If both parties agree to an arbitrator within 30 days
after a request for arbitration is made hereunder, that arbitrator shall be
selected to hear the dispute in accordance with AAA rules. If the parties are
not able to agree upon an arbitrator within such 30 day period, then that party
who requested arbitration may request that the AAA select an arbitrator who has
business experience in the sales industry and the selected arbitrator shall hear
the dispute in accordance with AAA rules.

                  (iii) Each of the parties shall bear its own fees, costs and
expenses of the arbitration and its own legal expenses, attorneys' fees and
costs of all experts and witnesses; provided, however, that if the claim of
either party is upheld by the arbitrator in all material respects, the
arbitrator may apportion between the parties as the arbitrator may deem
equitable the costs incurred by the prevailing party. The fees and expenses of
the arbitration procedures, including the fees of the arbitrator, will be shared
equally by the parties.


                                      -15-


                  (iv) Any award rendered pursuant to an arbitration proceeding
shall be final, conclusive, non-appealable and binding upon the parties, and any
judgment thereon may be entered and enforced in any court of competent
jurisdiction.

            (g) Headings. The headings in this Agreement are for convenience of
reference only and shall not control or affect the meaning or construction of
this Agreement.

            (h) Further Assurances. Each party agrees at any time, and from time
to time, to execute, acknowledge, deliver and perform, and/or cause to be
executed, acknowledged, delivered and performed, all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney and/or assurances as may
be necessary, and/or proper to carry out the provisions and/or intent of this
Agreement. Each party further agrees that if the standards applicable to
oversight and responsibility of the Representatives is not acceptable to, or in
compliance with, any applicable Governmental Authority, the standards shall be
revised accordingly in a manner reasonably acceptable to the parties.

            (i) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all such
counterparts shall constitute one and the same instrument.


                                      -16-


         IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written.

                                           COMMONWEALTH ENERGY CORPORATION

                                                By:  /S/ PETER WEIGAND
                                                     ---------------------------
                                                     Name:  Peter Weigand
                                                     Title:  President

                                           AMERICAN COMMUNICATIONS NETWORK, INC.

                                                By:  /S/ JAMES F. MULCAHY
                                                     ---------------------------
                                                     Name:  James F. Mulcahy
                                                     Title:  Secretary/Treasurer


                                           As to Section 8 only:

                                           COMMERCE ENERGY GROUP, INC.

                                                By:  /S/ PETER WEIGAND
                                                     ---------------------------
                                                     Name:  Peter Weigand
                                                     Title:  President


                   [Signature page to Sales Agency Agreement]




                                   SCHEDULE A


               REPRESENTATIVE COMMISSION CALCULATION PROCESS MODEL

Commissions are processed on a monthly basis. The Buyer will provide a file of
all billings of the ACN -Sourced Customers on a monthly basis, no later than the
last business day of the month following the billing month (a Billing Month
Report). Each record in such Billing Month Report will contain customer
information including but not limited to the customer account number, Billed
Energy Amount, and RepID (which ID will tie to the RepID in ACN's VIP system).
In this file, there is no allowance made for the paid or outstanding status of
any ACN -Sourced Customer account.

ACN conducts at least a three-pass process with respect to calculating
Representative Commissions for each monthly Billing Report prior to determining
the actual Representative Commissions for each Representative for such Billing
Month. The first of the three process passes against each Billing Month Report
is called the Trial Preprocessing pass. The importance of the Daily Customer
Reports to ACN is that the RVP's (RVP being a designation for one status level
of an ACN Representative or "Rep") and SVP's (SVP being another designation for
one status level of an ACN Rep) will have their commission amount change based
upon "Earned Level." Earned Level also affects the Customer Acquisition Bonuses
("CAB's") paid to all applicable Reps (i.e., the selling Rep and all upline
Reps).

In addition to the Monthly Billing Report, the Buyer will provide ACN each
Business Day a file containing customer records where the REPID Field contains a
value associated with a Representative of ACN. Any new customer order received
by the Buyer from an independent representative and accepted by Buyer pursuant
to the Sales Agency Agreement by 2:00 PM ET each Business Day will be included
in the daily customer file (Daily Customer Report). The Daily Customer Report
will also include information on all ACN -Sourced Customers where the status of
the customer has changed.

The Daily Customer Reports are required daily since the compensation plan for
the ACN's Representatives determines qualifications for bonuses and earned
positions based on the number of active customers that an independent
representative has either personally acquired or acquired through the other
people in his/her sales organization. The status of each customer is displayed
by the ACN to the independent representative on their personal customer list.
The number of active personal customers is also used to determine eligibility
for commission levels 1 through 7.

CABs (Customer Acquisition Bonuses) are amounts paid to Reps by ACN independent
of commissions and CAB payment amounts do not affect amounts paid by Buyer to
ACN. Nevertheless, ACN requires the daily customer load files in order to
calculate CAB amounts.

Commissions are finalized for mailing and dated the third Friday of each month.
The commissions are paid based on the billings from the third month prior to
when commissions are paid. For example, commissions paid in April are based on
billing in January. During the Trial




Preprocessing pass the billing files of all of ACN's services from all countries
are loaded into the ACN's VIP system. The amounts are then verified to ensure
that they match with the total billing for the applicable month. This step is
completed the month prior to when commissions are paid.

The second step in the Commission process is called the Preprocessing step.
During this step the billing data is loaded into the VIP system and provided to
the representatives on their reports. In addition, during Preprocessing any
customers that are no longer active are removed and stop counting towards
qualifications. Preprocessing occurs the last weekend of the month prior to the
calculation of the commissions. Again, to support this Preprocessing ACN
requires the Daily Customer Report.

The third step in ACN's three-pass process is called the Processing step. The
calculation of commissions to be paid is made during the Processing step which
is a process conducted by ACN the weekend of the first Friday of each month.
Those calculations are made based on customer billings (from the Applicable
Billing Month Report), the commission level that each representative is
qualified to receive and the qualifications of the Regional Vice Presidents
(RVPs) and Senior Vice Presidents (SVPs).

Each Rep's Personal Commission Percentage is calculated during the Processing
step. Only one Personal Commission Percentage applies to a Rep for any given
commission payment month.

Each Rep's actual Upline Commission Percentage is calculated at the Processing
Step. Commissions paid on levels one through seven are made if the
representative is eligible by having the required number of customers active on
the first Friday of the month. Representatives are eligible to receive RVP or
SVP commissions if they are qualified as a RVP or SVP on the first Friday of the
month.

If a Rep moves up to RVP (or SVP) between billing month and payment month, their
Upline Commission Percentage will change (upwards) before payment is made.
Likewise, if a Rep moves down from an SVP (or RVP) between billing month and
payment month, their Upline Commission Percentage will change (downwards) before
payment is made. In addition, the promotion of a new RVP below an existing RVP
will change the percentage commission of the existing upline RVP(s).

An Open Line is defined as a downline progression of Reps and customers where,
down to such level there is a Rep at the same position of higher. For example,
the commission percentage on revenue along an RVP Open Line, (downline from an
RVP, after level 7 through until the 7th level of the next RVP or SVP) is 1/4%.
Whenever there is an RVP or higher (i.e., an SVP) below an RVP or higher, this
lower-down RVP (or higher), referred to as the 1st generation RVP, stops the
accumulation of Open Line RVP commissions until the Level 7 of the 1st
generation RVP. If this 1st generation RVP (or SVP) "disappears", the levels
below the higher up RVP (or SVP) are then reconstituted up to level 7; and then,
below level 7, the downline progression is once again an Open line down from the
higher RVP (or SVP as applicable) based upon who (i.e., the RVP or SVP) sat at
the top. ACN reserves the right to modify its compensation plan, including
earned positions and commissions, as it sees fit to enhance the business
opportunity for its Reps; provided that it provides written notice to Buyer
before the end of the month for which the




change is applicable; provided, further, that, Seller shall not make any such
modification which would reasonably be expected to have a material adverse
effect on the Retail Energy Business without the prior written consent of Buyer.

Information to be Supplied by ACN to Buyer Under this Attachment 1 to the Sales
Agency Agreement in Order to Provide Buyer with Commission Calculation and
Commission Amount Information ("ACN Commission Reports"). Buyer shall provide to
ACN a functional design specification for the ACN Commission Report that ACN
will produce monthly to enable Buyer to reconcile and validate the Commission
Notice, which design specifications and form of ACN Commission Report shall be
mutually agreeable to Buyer and ACN, it being recognized by Buyer that the
design specification shall be consistent with ACN's existing software
capabilities. The actual cost of the first 40 hours of development work shall be
borne by ACN and thereafter shared equally by Buyer and ACN.

ACN will provide ACN Commission Reports to Buyer containing at least the
following information in (an) electronic file(s) in a mutually agreed layout:

         1) Billing revenue used in the calculation of commissions;

         2) The amount of the billing revenue deemed to be commissionable
            (excludes non-commissionable services and includes a deduction of an
            allowance for bad debt);

         3) Number of commissionable customers, the total commissionable revenue
            of billed customers and the total commissions generated at the
            Personal Commission Level.

         4) Number of commissionable customers, the total commissionable revenue
            of the upline billed customers and the total commissions generated
            for Upline Commissions.

         5) The amount of commissions generated by level. This will include the
            calculation of commissions on the personal commission volume, levels
            1 through 7 and the RVP and SVP levels; and

         6) The cash disbursements information on energy commissions which
            summarizes the amounts paid by ACN to representatives.

         Amounts generated in step #5 above may not all be paid in the same
month. For example, if a representative has earned less than the minimum
commission amount of $13.00 then the commissions will be held until the
following month; provided, however, if the commission amount for a month is less
than $13.00, such commissions shall be carried forward and paid at the time that
the minimum commission amount for the representative equals or exceeds $13.00.

                                                                   EXHIBIT 2.4

                                                                  EXECUTION COPY

                                ESCROW AGREEMENT

            ESCROW AGREEMENT, dated as of February 9, 2005, by and among
Commonwealth Energy Corporation, a California corporation ("Buyer"), Commerce
Energy Group, Inc., a Delaware corporation ("CEG"), American Communications
Network, Inc., a Michigan corporation ("ACN"), ACN Utility Services, Inc., a
Michigan corporation, ACN Energy, Inc., a Michigan corporation and ACN Power,
Inc., a Michigan corporation (ACN, ACN Utility Services, Inc., ACN Energy, Inc.,
and ACN Power, Inc. are collectively referred to as "Sellers") and Computershare
Trust Company, Inc., as escrow agent ("Escrow Agent").

                              W I T N E S S E T H:

            WHEREAS, Buyer, Sellers, ACN and CEG have entered into that certain
Asset Purchase Agreement, dated as of February 9, 2005 (the "Asset Purchase
Agreement"), pursuant to which Sellers are selling substantially all of the
assets, properties, rights and business of the Retail Energy Business (as
defined in the Asset Purchase Agreement) to Buyer;

            WHEREAS, as consideration for the purchase of the Retail Energy
Business, Section 3.1(b) of the Asset Purchase Agreement provides for the
delivery of 930,233shares (the "APA Shares") of common stock, par value $0.001
per share (the "CEG Common Stock") of CEG to the Escrow Agent on the Closing
Date, such APA Shares to be delivered to and maintained by the Escrow Agent in
accordance with the terms of this Agreement;

            WHEREAS, Buyer, CEG and ACN have entered into that certain Sales
Agency Agreement, dated as of February 9, 2005 (the "Sales Agency Agreement"),
pursuant to which ACN agreed that its network of independent sales
representatives shall act as limited agents for Buyer to sell electric commodity
and natural gas products and related services of the Retail Energy Business; and

            WHEREAS, Section 8(a) of the Sales Agency Agreement provides for the
delivery, from time to time, of certain shares of common stock (the "SAA Shares"
and, collectively with the APA Shares, the "Shares") of CEG, such SAA Shares to
be delivered to and maintained by the Escrow Agent in accordance with the terms
of this Agreement.

            NOW, THEREFORE, in consideration of the foregoing and the respective
covenants and agreements hereinafter contained, the parties hereby agree as
follows:

            SECTION 1. Definitions. Terms used herein but not defined herein
shall have the meaning ascribed to them in the Purchase Agreement. In addition,
the following terms shall have the following meanings:

            (a) "CEG Common Stock" shall have the meaning set forth in the
recitals.

            (b) "Proceeds" shall mean, as to any given APA Share or SAA Share,
any stock or liquidating dividends, other distributions in property, return of
capital or other distributions made on or in respect of such APA Share or the
SAA Share (other than dividends payable out of the earnings of CEG), whether
resulting from a subdivision, combination or reclassification of the outstanding
capital stock of CEG or received in exchange for such Share or as a result of
any merger, consolidation, acquisition or other exchange of assets to which CEG
may be a party or otherwise.

            (c) "Shares" shall mean the APA Shares and the SAA Shares.

SECTION 2.  Deposit of Shares.

            (a) APA Shares. Upon receipt, the Escrow Agent shall acknowledge
that it has received and deposited in a separate account maintained by the
Escrow Agent hereunder (the "APA Escrow Account") the APA Shares delivered by
CEG. Such APA Shares shall be held and dealt with by Escrow Agent subject to the
terms and conditions of this Agreement.

            (b) SAA Shares. From time to time and as required by the Sales
Agency Agreement, CEG may deliver to the Escrow Agent the SAA Shares which shall
be acknowledged as received by the Escrow Agent to each party and deposited in a
separate account maintained by the Escrow Agent hereunder (the "SAA Escrow
Account"). Such SAA Shares shall be held and dealt with by Escrow Agent subject
to the terms and conditions of this Agreement.

            SECTION 3. Use of Shares and Proceeds. The Shares and any Proceeds
shall be held in escrow hereunder by Escrow Agent as herein provided. Escrow
Agent shall not dispose of or distribute any of the Shares or Proceeds other
than as provided in this Agreement. Unless the context otherwise requires,
references in this Agreement to the Shares also shall be deemed to refer to any
Proceeds. Each of CEG and ACN agree to cause all Proceeds received by it, prior
to distribution of the Shares to which said distribution of Proceeds relates, to
be deposited in the Escrow Account.

            SECTION 4. Dividends and Proxies with Respect to Shares. So long as
any Shares are held by Escrow Agent hereunder:

            (a) CEG shall be entitled to exercise any and all voting and
consensual rights and powers accruing to an owner of the APA Shares and the SAA
Shares or any part thereof for any purposes not inconsistent with the terms of
this Agreement, the Asset Purchase Agreement or the Sales Agency Agreement;
provided, however, that Buyer shall give Escrow Agent and Seller at least five
(5) business days' prior written notice of the manner in which he intends to
exercise any such right or power.

            (b) Until such time as a joint written instruction from CEG and the
Buyer, on the one hand, and ACN, on the other hand, is given with respect to any
of the APA Shares and the SAA Shares, CEG shall be entitled to receive and
retain any and all nonliquidating cash dividends payable in respect of the APA
Shares and the SAA Shares. All Proceeds in respect of


                                       2

the Shares held by Escrow Agent shall be retained by Escrow Agent and shall not
be distributed except in accordance with the terms of this Agreement.

            (c) The APA Shares and the SAA Shares and any proceeds thereof shall
not be commingled. Upon final disbursement of the APA Shares or the SAA Shares,
the escrow relating thereto shall be terminated.

            (d) Escrow Agent, ACN and the Sellers shall execute and deliver to
CEG, or cause to be executed and delivered to CEG, all such proxies, powers of
attorney, dividend orders and other instruments for the purpose of enabling them
to exercise the voting and consensual rights and powers which they are entitled
to exercise pursuant to Section 4(a) and to receive the dividends which they are
authorized to retain pursuant to Section 4(b).

SECTION 5.  Release from Escrow.

            (a) Upon joint written instruction from CEG and the Buyer, on the
one hand, and ACN, on the other hand, the Escrow Agent shall release such amount
of APA Shares or SAA Shares in accordance with such joint written instruction.
In the absence of such joint written notice, the Escrow Agent shall release the
Shares upon receipt of an order of a court of competent jurisdiction.

            (b) Each of the parties agree to join, at the request of the other
party, in joint written notice authorizing the Escrow Agent to release the APA
Shares or the SAA Shares when such shares are allowed to be released under the
applicable agreement.

            (c) Any APA Shares remaining in escrow 14 months from the date
hereof shall be released to CEG.

            (d) Any SAA Shares remaining in escrow following termination of the
Sales Agency Agreement, as certified to Escrow Agent by CEG or ACN, shall be
released to CEG.

            SECTION 6. Liability of Escrow Agent. The duties and obligations of
Escrow Agent hereunder shall be determined solely by the express provisions of
this Agreement, and Escrow Agent shall be under no obligation to refer to any
other documents between or among the parties related in any way to this
Agreement, it being specifically understood that the following provisions are
accepted by all of the parties hereto:

            (a) Escrow Agent shall not be liable to anyone whomsoever by reason
of any error of judgment or for any act done or step taken or omitted by it, or
for any mistake of fact or law or anything which it may do or refrain from doing
in connection herewith unless caused by or arising out of its own gross
negligence or willful misconduct. CEG, the Buyer, ACN and Sellers shall jointly
and severally indemnify and hold Escrow Agent harmless from and against any and
all liability and expense which may arise out of any action taken or omitted by
Escrow Agent in accordance with this Agreement, except such liability and
expense as may result from the gross negligence or willful misconduct of Escrow
Agent.


                                       3

            (b) Escrow Agent shall be entitled to rely on, and shall be
protected in acting in reliance upon, any instructions or directions furnished
to it in writing signed by CEG, the Buyer, ACN and Sellers pursuant to any
provision of this Agreement and shall be entitled to treat as genuine, and as
the document it purports to be, any letter, paper or other document furnished to
it by CEG, the Buyer, ACN or Sellers, and believed by Escrow Agent to be genuine
and to have been signed and presented by the proper party or parties.

            SECTION 7. Expenses. Any stock transfer taxes incurred in connection
with the release and delivery of the Shares by Escrow Agent hereunder shall be
borne by the Sellers.. Any fees or expenses charged by the Escrow Agent in
connection with this agreement, including but not limited to the fees described
on Exhibit A attached hereto, shall be borne 50% by Sellers and 50% by Buyer.

            SECTION 8. Settlement of Disputes. Any dispute which may arise under
this Agreement with respect to the delivery and/or ownership or right of
possession of the APA Shares and the SAA Shares, or the duties of the Escrow
Agent hereunder, shall be settled either (i) by mutual agreement of CEG, the
Buyer and ACN (evidenced by appropriate instructions in writing to the Escrow
Agent, signed by such parties) or (ii) by binding arbitration of the issue in
accordance with the following procedures:

            (a) Any party may request arbitration by giving the other involved
party written notice, which notice shall describe, in reasonable detail, the
nature of the dispute, controversy or claim. The arbitration shall be governed
by the rules of the American Arbitration Association ("AAA") and held in New
York, New York or other mutually agreed upon location.

            (b) If both parties agree an arbitrator within 30 days after a
request for arbitration is made hereunder, that arbitrator shall be selected to
hear the dispute in accordance with AAA rules. If the parties are not able to
agree upon an arbitrator within such 30 day period, then that party who
requested arbitration may request that the AAA select an arbitrator who has
business experience in the energy industry similar to the Business and the
selected arbitrator shall hear the dispute in accordance with AAA rules.

            (c) Each of the parties shall bear its own fees, costs and expenses
of the arbitration and its own legal expenses, attorneys' fees and costs of all
experts and witnesses; provided, however, that if the claim of either party is
upheld by the arbitrator in all material respects, the arbitrator may apportion
between the parties as the arbitrator may deem equitable the costs incurred by
the prevailing party. The fees and expenses of the arbitration procedures,
including the fees of the arbitrator, will be shared equally by the parties.

            (d) Any award rendered pursuant to an arbitration proceeding shall
be final, conclusive, non-appealable and binding upon the parties, and any
judgment thereon may be entered and enforced in any court of competent
jurisdiction.

            (e) The Escrow Agent shall continue to hold any disputed funds
hereunder until the Escrow Agent shall have received either of (i) or (ii)
above; immediately following its receipt of (i) or (ii) above, the Escrow Agent
shall distribute the amount in the Escrow Account, in accordance with such
written instruction or certified copy of any such award, order, decree or


                                       4

judgment. The Escrow Agent shall be under no duty whatsoever to institute or
defend any such proceedings. Prior to the settlement of any such dispute, the
Escrow Agent is authorized and directed to retain in its possession, without
liability to anyone, the APA Shares and/or the SAA Shares which are the subject
of such dispute.

            SECTION 9. Resignation and Removal of Escrow Agent. Escrow Agent may
resign from the performance of its duties hereunder at any time by giving thirty
(30) days' prior written notice to the parties or may be removed, with or
without cause, by the parties, acting jointly, by furnishing a Joint Written
Direction to Escrow Agent, at any time by the giving of ten (10) days' prior
written notice to Escrow Agent as provided herein below. Such resignation or
removal shall take effect upon the appointment of a successor Escrow Agent as
provided herein below. Upon any such notice of resignation or removal, the
parties, acting jointly, shall appoint a successor Escrow Agent hereunder. If
the parties shall fail to appoint a successor Escrow Agent within thirty (30)
days after such notice of resignation or removal, the Escrow Agent shall have
the right to deposit the Escrow Funds with a court of competent jurisdiction and
to petition such court for the appointment of a successor Escrow Agent.

            SECTION 10. Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given (i) on the date of service if served personally on the
party to whom notice is to be given; (ii) on the day of transmission if sent via
facsimile transmission to the facsimile number given below, and telephonic
confirmation of receipt is obtained promptly after completion of transmission;
(iii) on the day after delivery to Federal Express or similar overnight courier
or the Express Mail service maintained by the United States Postal Service; or
(iv) on the fifth day after mailing, if mailed to the party to whom notice is to
be given, by first class mail, registered or certified, postage prepaid and
properly addressed, to the party as follows:

            If to the Buyer or CEG:

                  Commerce Energy Group, Inc.
                  Commonwealth Energy Corporation
                  600 Anton Blvd, Suite 2000
                  Costa Mesa, CA 92626
                  Attention: Peter Weigand
                  Telecopier: (714) 259-2575

            with a copy to:

                  Stroock & Stroock & Lavan LLP
                  180 Maiden Lane
                  New York, NY  10038-4982
                  Attn:  Michael Shenberg, Esq.
                  Telecopy:  (212) 806-6006

            If to ACN or Sellers:

                  American Communications Network, Inc.


                                       5

                  32991 Hamilton Court
                  Farmington Hills, Michigan 48334
                  Facsimile:  (284) 489-8901
                  Attention:  Chief Financial Officer

                  with a copy to:

                  Jaffe, Raitt, Heuer & Weiss, P.C.
                  27777 Franklin Road, Suite 250
                  Southfield, Michigan 48034
                  Facsimile:  (248) 351-3082
                  Attention:  Ralph Margulis

            If to Escrow Agent:

                  Computershare Trust Company, Inc.
                  350 Indiana Street, Suite 800
                  Golden, CO 80401
                  Attn:  Corporate Trust
                  Telecopy:  (303) 262-0700

            Any party may change its address for the purpose of this Section by
giving the other party written notice of its new address in the manner set forth
above.

            SECTION 11. Governing Law. This Agreement shall be construed,
performed and enforced in accordance with, and governed by, the laws of the
State of New York, without giving effect to the principles of conflicts of laws
thereof.

            SECTION 12. Successors and Assigns. The rights and obligations of
the parties under this Agreement shall not be assigned to any person or entity,
without the written consent of the other parties. This Agreement shall be
binding upon and shall inure to the benefit of the successors and assigns of the
parties hereto.

            SECTION 13. Headings. Section headings contained herein have been
inserted for reference purposes only and shall not be construed as part of this
Agreement

            SECTION 14. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which shall
constitute the same instrument.


                                       6

            IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.

                                    COMMERCE ENERGY GROUP, INC.


                                    By: /S/ PETER WEIGAND
                                        ---------------------------------------

                                        Name:  Peter Weigand
                                        Title:  President

                                    COMMONWEALTH ENERGY CORPORATION


                                    By: /S/ PETER WEIGAND
                                        ---------------------------------------

                                        Name:  Peter Weigand
                                        Title:  President

                                    AMERICAN COMMUNICATIONS NETWORK, INC.


                                    By: /S/ JAMES F. MULCAHY
                                        ---------------------------------------

                                    Name:  James F. Mulcahy
                                    Title:  Secretary/Treasurer

                                    ACN UTILITY SERVICES, INC.



                                    By: /S/ JAMES F. MULCAHY
                                        ---------------------------------------

                                    Name:  James F. Mulcahy
                                    Title:  Secretary/Treasurer


                      [Signature page to Escrow Agreement]

                                    ACN ENERGY, INC.


                                    By: /S/ JAMES F. MULCAHY
                                        ---------------------------------------

                                    Name:  James F. Mulcahy
                                    Title:  Secretary/Treasurer

                                    ACN POWER, INC.


                                    By: /S/ JAMES F. MULCAHY
                                        ---------------------------------------

                                    Name:  James F. Mulcahy
                                    Title:  Secretary/Treasurer

                                    COMPUTERSHARE TRUST COMPANY, INC.


                                    By: /s/ JOHN M. WAHL
                                        ---------------------------------------
                                        Name: John M. Wahl
                                        Title: Corporate Trust Officer


                                    By: /s/ ZACHARY DELISA
                                        ---------------------------------------
                                        Name: Zachary DeLisa
                                        Title: Operations Manager & Trust
                                               Officer


                      [Signature page to Escrow Agreement]

                                    EXHIBIT A

                        Computershare Trust Company, Inc.

                  Commonwealth Energy Group, Inc. / ACN Escrow

<TABLE>
<CAPTION>
Escrow Agent Fee Schedule
<S>                                                  <C>
Account Acceptance Fee                                 $2,500

Annual Administrative Fee                              $2,500

Overnight Delivery Charges                            At cost

Out-of-Pocket Expenses                                At cost
</TABLE>

The acceptance and first year's annual fee are payable at closing. Annual
administrative fees are due in advance of the period for which service is to be
rendered. Special or extraordinary events, such as amendments to the documents
or disputes are not included in the above fees, and we reserve the right to
charge an additional amount based on the time incurred in handling such events
should they occur. Late charges are 1 1/2% per month on outstanding balances
owing 45 days from date of invoice.

                                                                     EXHIBIT-2.5

                                                                  EXECUTION COPY

                               SECURITY AGREEMENT

      Security Agreement, dated as of February 9, 2005 and entered into by and
among Commonwealth Energy Corporation, a California corporation (the "Secured
Party") and ACN Utility Services, Inc., a Michigan corporation, ACN Energy,
Inc., a Michigan corporation and ACN Power, Inc., a Michigan corporation
(collectively, the "Debtors" and each a "Debtor").

                                    RECITALS

      WHEREAS, the Secured Party and the Debtors have entered into that certain
Asset Purchase Agreement dated as of February 9, 2005 (the "Purchase
Agreement"), pursuant to which the Debtors, acting as Seller have agreed to sell
and Secured Party, acting as Buyer, has agreed to buy the assets set forth
therein;

      WHEREAS, as partial inducement to the Secured Party to purchase all of the
assets, properties, rights and business of the Retail Energy Business (the
"Acquired Assets"), the Debtors have agreed to grant a security interest in the
Collateral (as defined herein) to the Secured Party to secure the performance of
its Obligations (as defined herein) thereunder; and

      WHEREAS, it is a condition precedent to the purchase of the Acquired
Assets under the Purchase Agreement that Debtors shall have granted the security
interest in the Collateral and undertaken the obligations contemplated by this
Agreement.

      NOW, THEREFORE, based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Secured Party and each of the Debtors hereby agree as follows:

1.    Definitions

      All capitalized terms used but not defined herein shall have the meanings
      set forth in the Purchase Agreement or, if not so defined therein, in
      Article 9 of the UCC (as defined below). If a term is defined in Article 9
      of the UCC differently than in another Article of the UCC, the term has
      the meaning assigned to it in Article 9. In addition, the following terms
      shall have the following meanings:

      "Collateral" shall have the meaning assigned to it in Section 2 hereof.

      "Collateral Records" shall mean books, records, computer software,
      computer printouts, customer lists, blueprints, technical specifications,
      manuals, and other items which provide information or records concerning
      any Collateral.

      "Event of Default" shall have the meaning set forth in Section 7 hereof.


                                       1

      "Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
      arrangement, encumbrance, lien (statutory or other), preference, priority
      or other security agreement of any kind or nature whatsoever, including,
      without limitation, any publicly available evidence of a lien, including
      the filing of any financing statement or similar instrument under the UCC
      or comparable law of any jurisdiction, domestic or foreign.

      "Obligations" shall mean all obligations, liabilities and indebtedness of
      every nature of each of the Debtors to the Secured Party, individually or
      collectively, whether direct or indirect, joint or several, absolute or
      contingent, due or to become due, now existing or hereafter incurred,
      arising under or in connection with the Transaction Documents, and this
      Security Agreement.

      "TPS" means Tenaska Power Services Co., a Nebraska corporation.

      "TPS Collateral" shall mean the Collateral subject to the TPS Security
      Agreement.

      "TPS Security Agreement" means that Security Agreement, dated as of March
      17, 2003 by and between TPS and ACN Energy, Inc.

      "UCC" shall mean the Uniform Commercial Code as in effect from time to
      time in the State of New York.

2.    Grant of Security Interests

            As security for the prompt and complete payment and performance in
full of all the Obligations, each Debtor hereby grants to the Secured Party a
security interest in and continuing lien on all of such Debtor's right, title
and interest in and to all of the Acquired Assets and the Option Assets, whether
tangible or intangible, whether now owned or hereafter acquired, including the
proceeds from the sale or other disposition of any such property (but not
including the Purchase Price or other sums due to Debtor under the Purchase
Agreement), wherever the same may be located and whether or not subject to the
Uniform Commercial Code (the "UCC") as it exists on the date of this Agreement,
or as it may hereafter be amended in the State of New York (the "Collateral"),
including, without limitation, but only to the extent the same are part of the
Acquired Assets or the Option Assets: all Accounts Receivables; Inventory;
Equipment; Fixtures; Software; all other Goods (including any software embedded
in any good); Instruments (including promissory notes); Deposit Accounts;
General Intangibles (including Payment Intangibles); and all cash and non-cash
Proceeds of any and all of the foregoing; provided, that, the Secured Party
shall not have a lien on the TPS Collateral until such time as such lien may be
granted so as not to conflict with the TPS Security Agreement and the lien and
security interest granted to TPS pursuant thereto.

3.    Authorization to File Financing Statements

      Each Debtor hereby irrevocably authorizes the Secured Party at any time
      and from time to time to file in any jurisdiction in which the Uniform
      Commercial Code has been enacted (a "UCC Jurisdiction") any initial
      financing statements and amendments thereto identifying such Debtor as the
      "debtor" thereon including, but not limited to, such financing statements
      that:


                                       2

            3.1 describes the Collateral in reasonable details, and

            3.2 contain any other information required by part 5 of Article 9 of
      the UCC for the sufficiency or filing office acceptance of any financing
      statement or amendment, including (i) whether such Debtor is an
      organization, the type of organization and any organization identification
      number issued to such Debtor and, (ii) in the case of a financing
      statement filed as a fixture filing, a sufficient description of real
      property to which the Collateral relates. Each Debtor (but solely to the
      extent applicable) agrees to furnish any such information to the Secured
      Party promptly upon the Secured Party's request. Each Debtor also ratifies
      its authorization for the Secured Party to have filed in any UCC
      Jurisdiction any like initial financing statements or amendments thereto
      if filed prior to the date hereof.

4.    Representations and Warranties

      Each Debtor hereby represents and warrants to the Secured Party, which
      representations and warranties shall survive execution and delivery of
      this Security Agreement, as follows:

            4.1 Title to, and Information Concerning, the Collateral. Such
      Debtor is the sole owner of, and has all rights in or power to transfer,
      the Collateral free from any right or claim of any Person, and no Lien
      exists upon such Collateral and the security interest created in favor of
      the Secured Party hereunder. All other information set forth in this
      Agreement pertaining to the Collateral is accurate and complete.

            4.2 Nature of Collateral

            (a) None of the Collateral constitutes, or is the proceeds of, "farm
      products" as defined in Section 9-102(a)(34) of the UCC.

            (b) Except as set forth on Schedule 2, none of the account debtors
      or other persons obligated on any of the Collateral is a governmental
      authority covered by the Federal Assignment of Claims Act or like federal,
      state or local statute or rule in respect of such Collateral; provided,
      however, that the Debtors may, in the ordinary course of their business,
      enter into future arrangements with governmental authorities, whether or
      not listed on Schedule 2.

            (c) Such Debtor holds no commercial tort claim except as indicated
      herein.

            4.3 [Reserved]

            4.4 Name and Organization

            (a) The full and exact legal name, type of organization,
      jurisdiction of organization, organizational identification number or
      statement that such Debtor has no such number, and mailing address of such
      Debtor as of the date hereof are correctly set forth in Schedule 1 hereto.


                                       3

            (b) Schedule 1 correctly specifies the place of business of such
      Debtor or, if such Debtor has more than one place of business, the
      location of its chief executive office.

            (c) Such Debtor is duly organized and validly existing in good
      standing under the laws of the jurisdiction of its organization; and

            (d) Such Debtor has the power and authority to execute, deliver and
      carry out the terms and provisions of this Security Agreement and has
      taken all necessary action to authorize the execution, delivery and
      performance by it of this Security Agreement. Such Debtor has duly
      executed and delivered this Security Agreement, and this Security
      Agreement constitutes its legal, valid and binding obligation, enforceable
      against it in accordance with its terms.

            4.5 Changes in Circumstances. Such Debtor has not (i) within the
      period of four months prior to the date hereof, changed its location (as
      defined in Section 9-307 of the UCC), (ii) except as specified in Schedule
      1, heretofore changed its name, or (iii) heretofore become a "new debtor"
      (as defined in Section 9-102(a)(56) of the UCC) with respect to a
      currently effective security agreement previously entered into by any
      other Person.

            4.6 Validity, Perfection and Priority

            The security interests in the Collateral granted to the Secured
      Party hereunder constitute valid and continuing first priority security
      interests in the Collateral and such Debtor has rights in or the power to
      transfer the Collateral superior and prior to all Liens, rights or claims
      of all other Persons.

            4.7 No Liens; Other Financing Statements

            (a) No financing statement or other evidence of Lien covering or
      purporting to cover any of the Collateral is on file in any public office
      other than financing statements filed or to be filed in connection with
      the security interests granted to the Secured Party hereunder.

5.    Further Covenants

      Each Debtor covenants and agrees with the Secured Party that from and
      after the date of this Security Agreement:

            5.1 Further Assurances. Each Debtor will from time to time at the
      expense of such Debtor, promptly execute, deliver, file and record all
      further instruments, endorsements and other documents, and take such
      further action as the Security Party may determine to be necessary or
      useful in obtaining the full benefits of this Security Agreement and of
      the rights, remedies and powers herein granted, including, without
      limitation, the covenants set forth in this Section 5.


                                       4

            5.2 Ownership of Collateral. Each Debtor will continue to own each
      item of the Collateral free and clear of any and all Liens, rights or
      claims of all other Persons, except as contemplated in the Purchase
      Agreement, and each Debtor shall defend the Collateral against all claims
      and demands of all Persons at any time claiming the same or any interest
      therein adverse to the Secured Party.

            5.3 Change of Name, Identity, Corporate Structure, or Chief
      Executive Office; Location of Inventory and Equipment. No Debtor will
      change its name, identity, corporate structure (including, without
      limitation, its jurisdiction of formation) or the location of its chief
      executive office or location of its Inventory or Equipment without (i)
      giving the Secured Party at least thirty (30) days' prior written notice
      clearly describing such new name, identity, corporate structure or new
      location and providing such other information in connection therewith as
      the Secured Party may reasonably request, and (ii) taking all action
      satisfactory to the Secured Party as the Secured Party may reasonably
      request to maintain the security interest of the Secured Party in the
      Collateral intended to be granted hereby at all times fully perfected with
      the same or better priority and in full force and effect.

            5.4 Maintain Records. Each Debtor will keep and maintain at its own
      cost and expense satisfactory and complete records of the Collateral until
      transferred to the Secured Party.

            5.5 Right of Inspection. The Secured Party shall have full and free
      access during normal business hours to all Collateral Records, including,
      without limitation, all books, correspondence and records of each Debtor,
      and the Secured Party and its representatives may examine the same, take
      extracts therefrom and make photocopies thereof, and each Debtor agrees to
      render the Secured Party at such Debtor's cost and expense, such clerical
      and other assistance as may be reasonable requested with regard thereto.
      The Secured Party and its representatives shall during normal business
      hours also have the right to enter into and upon any premises where any of
      the Inventory or Equipment is located for the purpose of inspecting the
      same, observing its use or otherwise protecting its interests therein.

            5.6 Payment of Obligation. Each Debtor will pay promptly when due
      all taxes, assessments and governmental charges or levies imposed upon the
      Collateral, as well as all claims of any kind (including, without
      limitation, claims for labor, materials, supplies and services) against or
      with respect to, or incurred in connection with the use or operation of,
      the Collateral or incurred in connection with this Agreement, except that
      no such obligation need be paid if (i) the validity thereof is being
      contested in good faith by appropriate proceedings, (ii) such proceedings
      do not involve, in the sole opinion of the Secured Party, any material
      danger for the sale, forfeiture or loss of any of the Collateral or any
      interest therein, and (iii) such charge is adequately reserved against on
      such Debtor's books in accordance with generally accepted accounting
      principles; provided that Secured Party shall reimburse the Debtors for
      all payments made relating to periods following the Proration Time.


                                       5

            5.7 Negative Pledge. The Debtors will not create, incur or permit to
      exist, will defend the Collateral against, and will take such other action
      as is necessary to remove, any Lien or claim on or to the Collateral,
      other than the Liens created hereby.

            5.8 Performance by the Secured Party of the Debtors' Obligations;
      Reimbursement. If any Debtor fails to perform or comply with any of its
      agreements contained herein, the Secured Party may, without notice to or
      consent by such Debtor, perform or comply or cause performance or
      compliance therewith and the expenses of the Secured Party incurred in
      connection with such performance or compliance shall be payable by such
      Debtor to the Secured Party on demand and such reimbursement obligation
      shall be secured hereby.

            5.9 [Reserved]

6.    Power of Attorney

            6.1 General. Each Debtor hereby irrevocably constitutes and appoints
      the Secured Party and any officer or agent thereof, with full power of
      substitution, as its true and lawful attorney-in-fact with full
      irrevocable power and authority in the place and stead of such Debtor and
      in the name of such Debtor or in its own name, from time to time in the
      Secured Party's discretion, for the purpose of carrying out the terms of
      this Agreement, to take any and all appropriate action by any
      technologically available means, which may include, without limitation,
      any form of electronic data transmission, and to execute and authenticate
      in any appropriate manner, which may include, without limitation, using
      any symbol that the Secured Party may adopt to signify such Debtor's
      intent to authenticate, any and all documents and instruments which may be
      necessary or desirable to accomplish the purposes of this Agreement.

            6.2 Specific Powers. Without limiting the generality of the
      foregoing, each Debtor hereby gives said attorneys the power and right, on
      behalf of such Debtor, without notice to or assent by such Debtor, to do
      the following:

            (a) upon the occurrence and during the continuance of an Event of
      Default, generally to sell, transfer, pledge, make any agreement with
      respect to or otherwise dispose of or deal with any of the Collateral as
      in such manner as is consistent with the UCC fully and completely as
      though the Secured Party were the absolute owner thereof for all purposes,
      and to do, at such Debtor's expense, at any time, or from time to time,
      all acts and things which the Secured Party determines, in its sole
      discretion, to be necessary or useful to protect, preserve or realize upon
      the Collateral and the Secured Party's security interest therein, in order
      to effect the intent of this Agreement, all at least as fully and
      effectively as such Debtor might do, including, without limitation, (i)
      the filing and prosecuting of registration and transfer applications with
      the appropriate federal, state, local or other agencies or authorities
      with respect to trademarks, copyrights and patentable inventions and
      processes, (ii) upon written notice to such Debtor, the exercise of voting
      rights with respect to voting securities, which rights may be exercised,
      if the Secured Party so elects, with a view to causing the liquidation of
      assets of the issuer of any such securities, and (iii) the execution,
      delivery and


                                       6

      recording, in connection with any sale or other disposition of any
      Collateral, of the endorsements, assignments or other instruments of
      conveyance or transfer with respect to such Collateral, and

            (b) to the extent that such Debtor's authorization given in Section
      3 is not sufficient, to file such financing statements with respect
      hereto, as the Secured Party may deem appropriate.

            6.3 Each Debtor hereby ratifies all that said attorneys shall
      lawfully do or cause to be done by virtue hereof. This power of attorney
      is a power coupled with an interest and shall be irrevocable.

            6.4 The powers conferred on the Secured Party hereunder are solely
      to protect its interests in the Collateral and shall not impose any duty
      upon it to exercise any such powers. The Secured Party shall be
      accountable only for the amounts that it actually receives as a result of
      the exercise of such powers, and neither it nor any of its officers,
      directors, employees or agents shall be responsible to any Debtor for any
      act or failure to act, except for the Secured Party's own gross negligence
      or willful misconduct.

7.    Events of Default

      The occurrence of any default by Debtor under this Agreement or any
      Transaction Documents shall, at the option of the Secured Party,
      constitute an "Event of Default".

8.    Remedies; Rights Upon Default

            8.1 Rights and Remedies Generally. If an Event of Default shall
      occur and be continuing, then and in every such case, the Secured Party
      shall have all the rights of a secured party under the UCC, shall have all
      rights now or hereafter existing under all other applicable laws, and,
      subject to any mandatory requirements of applicable law then in effect,
      shall have all the rights set forth in this Security Agreement and all the
      rights set forth with respect to the Collateral or this Security Agreement
      in any other security agreement between the parties.

            8.2 Assembly of Collateral. If an Event of Default shall occur and
      be continuing, upon five days notice to the Debtors, each Debtor shall, at
      its own expense, assemble the Collateral (or from time to time any portion
      thereof) and make it available to the Secured Party at any place or places
      designated by the Secured Party which is reasonably convenient to both
      parties.

            8.3 Disposition of Collateral. To the extent required by the UCC,
      the Secured Party will give the Debtors reasonable notice of the time and
      place of any public sale of the Collateral or any part thereof or of the
      time after which any private sale or any other intended disposition
      thereof is to be made. Each Debtor agrees that the requirements of
      reasonable notice to it shall be met if such notice is mailed, postage
      prepaid to its address specified in Section 10 of this Agreement (or such
      other address


                                       7

      that such Debtor may provide to the Secured Party in writing) at least ten
      (10) days before the time of any public sale or after which any private
      sale may be made.

            8.4 Notification to Account Debtors and Other Persons Obligated on
      Collateral. If an Event of Default shall have occurred and be continuing,
      each Debtor shall, at the request of the Secured Party, notify account
      debtors and other persons obligated on any of the Collateral of the
      security interest of the Secured Party in any account, general intangible,
      instrument or other Collateral and that payment thereof is to be made
      directly to the Secured Party or to any financial institution designated
      by the Secured Party as the Secured Party's agent therefor, and the
      Secured Party may itself, if an Event of Default shall have occurred and
      be continuing, without notice to or demand upon the Debtors, so notify
      account debtors and other persons obligated on Collateral; it being agreed
      and understood that such notices may not be enforceable with respect to
      any such account debtors or other persons obligated on any of the
      Collateral that are governmental entities. After the making of such a
      request or the giving of any such notification, each Debtor shall hold any
      proceeds of collection of accounts, general intangibles, instruments and
      other Collateral received by such Debtor as trustee for the Secured Party
      without commingling the same with other funds of such Debtor and shall
      turn the same over to the Secured Party in the identical form received,
      together with any necessary endorsements or assignments. The Secured Party
      shall apply the proceeds of collection of accounts, general intangibles,
      instruments and other Collateral received by the Secured Party to the
      Obligations, such proceeds to be immediately entered after final payment
      in cash or other immediately available funds of the items giving rise to
      them.

            8.5 Collateral Maintained with Secured Party Regardless of the
      adequacy of Collateral or any other security for the Obligations, any
      deposits or other sums at any time credited by or due from the Secured
      Party to any Debtor may at any time be applied to or set off against any
      of the Obligations then due and owing.

            8.6 Recourse: The Debtors shall remain jointly and severally liable
      for any deficiency if the proceeds of any sale or other disposition of the
      Collateral are insufficient to satisfy the Obligations. The Debtors shall
      also be jointly and severally liable for all expenses of the Secured Party
      incurred in connection with collecting such deficiency, including, without
      limitation, the fees and disbursements of any attorneys employed by the
      Secured Party to collect such deficiency.

            8.7 Expenses; Attorneys Fees; Proceeds of Disposition. The Debtors
      shall pay to the Secured Party on demand any and all expenses, including
      reasonable attorneys' fees and disbursements, incurred or paid by the
      Secured Party in protecting, preserving or enforcing the Secured Party's
      rights and remedies under or in respect of any of the Obligations or any
      of the Collateral. All such expenses shall also constitute Obligations.
      After deducting all of said expenses, the residue of any proceeds of
      collection or sale or other disposition of the Collateral shall, to the
      extent actually received in cash, be applied to the payment of the
      Obligations in such order or preference as the Secured Party may
      determine.


                                       8

            8.8 Limitation on Duties Regarding Preservation of Collateral

            (a) The Secured Party's sole duty with respect to the custody,
      safekeeping and physical preservation of the Collateral in its possession
      shall be to deal with it in the same manner as the Secured Party deals
      with similar property for its own account.

            (b) Neither the Secured Party nor any of its directors, officers,
      employees or agents shall be liable for failure to demand, collect or
      realize upon all or any part of the Collateral or for any delay in doing
      so or shall be under any obligation to sell or otherwise dispose of any
      Collateral upon the request of any Debtor or otherwise.

9.    MISCELLANEOUS

            9.1 Indemnity. Each Debtor agrees to indemnify, reimburse and hold
      the Secured Party and its officers, directors, employees, representatives,
      attorneys and agents ("Indemnitees") harmless from any and all
      liabilities, obligations, losses, damages, penalties, claims, actions,
      judgments, suits, costs or expenses or disbursements (including reasonable
      attorneys' fees and expenses) for whatsoever kind or nature which may be
      imposed on, asserted against or incurred by any of the Indemnitees in any
      way relating to or arising out of this Security Agreement or the
      transactions contemplated hereby. The obligations of Debtors under this
      Section shall be secured hereby and shall survive payment and performance
      or discharge of the Obligations and the termination of this Security
      Agreement.

            9.2 Governing Law and Consent to Jurisdiction. THIS SECURITY
      AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
      CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF
      NEW YORK. Each Debtor agrees that any action or claim arising out of, or
      any dispute in connection with, this Agreement, any rights, remedies,
      obligations, or duties hereunder, or the performance or enforcement hereof
      or thereof, may be brought in the courts of the State of New York located
      in the County of New York or any federal court sitting therein and
      consents to the non-exclusive jurisdiction of such court and to service of
      process in any such suit being made upon the Debtors by mail at the
      address specified in Section 10.6 of this Agreement. Each Debtor hereby
      waives any objection that it may now or hereafter have to the venue of any
      such suit or any such court or that such suit is brought in an
      inconvenient court.

            9.3 Waiver of Jury Trial. EACH PARTY HERETO WAIVES ITS RIGHT TO A
      JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE
      IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS, REMEDIES, OBLIGATIONS, OR
      DUTIES HEREUNDER, OR THE PERFORMANCE OR ENFORCEMENT HEREOF OR THEREOF.
      Except as prohibited by law, each Debtor waives any right which it may
      have to claim or recover in any litigation referred to in the preceding
      sentence any special, exemplary, punitive or consequential damages or any
      damages other than, or in addition to, actual damages. Each Debtor: (i)
      certifies that neither the Secured Party nor any representative, agent or


                                       9

      attorney of the Secured Party has represented, expressly or otherwise,
      that the Secured Party would not, in the event of litigation, seek to
      enforce the foregoing waivers or other waivers contained in this
      Agreement.

            9.4 Notices. Except as otherwise expressly provided herein, all
      notices, requests and demands to or upon the respective parties hereto to
      be effective shall be in writing (including by facsimile, telecopy, telex,
      or cable communication), and shall be deemed to have been duly given or
      made when delivered by hand, or five days after being deposited in the
      United States mail, postage prepaid, or in the case of telex notice, when
      sent, answer-back received, or in the case of telecopy notice, when sent,
      of in the case of facsimile, upon confirmed transmittal, or in the case of
      a nationally recognized overnight courier service, one business day after
      delivery to such courier service, addressed, in the case of each party
      hereto, at its address specified opposite its signature below, or to such
      other address as may be designated by any party in a written notice to the
      other party hereto.

            If to any of the Debtors:

            American Communication Network, Inc.
            32991 Hamilton Court
            Farmington Hills, Michigan 48334
            Facsimile:        (284) 489-8901
            Attention:  Chief Financial Officer

            with a copy to:
            Jaffe, Raitt, Hener & Weiss, P.C.
            27777 Franklin Road, Suite 250
            Southfield, Michigan 48034
            Facsimile:  (248) 351-3082
            Attention: Ralph Margulis

            If to the Secured Party:

            Commonwealth Energy Corporation
            600 Anton Blvd, Suite 2000
            Costa Mesa, CA 92626
            Attention:  Peter Weigand
            Facsimile:  (714) 259-2575

            with a copy to:

            Stroock & Stroock & Lavan LLP
            180 Maiden Lane
            New York, New York 10038
            Attention: Michael Shenberg, Esq.
            Facsimile:  (212) 806-6006


                                       10

            9.5 Successors and Assigns This Security Agreement shall be binding
      upon and inure to the benefit of each of the Debtors, the Secured Party,
      all future holders of the Obligations and their respective successors and
      assigns, except that no Debtor may assign or transfer any of its rights or
      obligations under this Security Agreement without the prior written
      consent of the Secured Party.

            9.6 Waivers and Amendments. None of the terms or provisions of this
      Security Agreement may be waived, amended, supplemented or otherwise
      modified except by a written instrument executed by the party against whom
      enforcement is sought. In the case of any waiver, each of the Debtors and
      the Secured Party shall be restored to their former position and rights
      hereunder and under the outstanding Obligations, and any Event of Default
      waived shall be deemed to be cured and not continuing, but no such waiver
      shall extend to any subsequent or other Event of Default, or impair any
      right consequent thereon.

            9.7 No Waiver; Remedies Cumulative No failure or delay on the part
      of the Secured Party in exercising any right, power or privilege hereunder
      and no course of dealing between any Debtor and the Secured Party shall
      operate as a waiver thereof; nor shall any single or partial exercise of
      any right, power or privilege hereunder preclude any other or further
      exercise thereof or the exercise of any other right, power or privilege.
      The Secured Party shall not be deemed to have waived any of its rights or
      remedies in respect of the Obligations or the Collateral unless such
      waiver shall be in writing and signed by the Secured Party. A waiver by
      the Secured Party of any right or remedy hereunder on any one occasion
      shall not be construed as a bar to any right or remedy which the Secured
      Party would otherwise have on any future occasion. The rights and remedies
      herein expressly provided are cumulative and may be exercised singly or
      concurrently and as often and in such order as the Secured Party deems
      expedient and are not exclusive of any rights or remedies which the
      Secured Party would otherwise have whether by security agreement or now or
      hereafter existing under applicable law. No notice to or demand on any
      Debtor in any case shall entitle such Debtor to any other or further
      notice or demand in similar or other circumstances or constitute a waiver
      of the rights of the Secured Party to any other or future action in any
      circumstances without notice or demand.

            9.8 Termination; Release When the Obligations have been paid and
      performed in full this Security Agreement shall terminate, and the Secured
      Party, at the request and sole expense of the Debtors, will thereupon
      execute and deliver to the Debtors the proper instruments (including UCC
      termination statements) acknowledging the termination of this Security
      Agreement, and will duly assign, transfer and deliver to the Debtors,
      without recourse, representation or warranty of any kind whatsoever, such
      of the Collateral as may be in possession of the Secured Party and has not
      theretofore been disposed of, applied or released.

            9.9 Headings Descriptive The headings of the several Sections and
      subsections of this Security Agreement are inserted for convenience only
      and shall not in any way affect the meaning or construction of any
      provision of this Security Agreement.


                                       11

            9.10 Severability In case any provision in or obligation under this
      Security Agreement or the Obligations shall be invalid, illegal or
      unenforceable in any jurisdiction, the validity, legality and
      enforceability of the remaining provisions or obligations, or of such
      provision or obligation in any other jurisdiction, shall not in any way be
      affected or impaired thereby.




                            [SIGNATURE PAGE FOLLOWS]


                                       12

      In Witness Whereof, each of the Debtors and the Secured Party have caused
this Security Agreement to be duly executed and delivered as of the date first
above written.

                                       ACN UTILITY SERVICES, INC.

                                       By: /S/ JAMES F. MULCAHY
                                           -----------------------------------

                                       Name:  James F. Mulcahy
                                       Title:  Secretary/Treasurer



                                       ACN ENERGY, INC.

                                       By: /S/ JAMES F. MULCAHY
                                           -----------------------------------

                                       Name:  James F. Mulcahy
                                       Title:  Secretary/Treasurer



                                       ACN POWER, INC.

                                       By: /S/ JAMES F. MULCAHY
                                           -----------------------------------

                                       Name:  James F. Mulcahy
                                       Title:  Secretary/Treasurer



                                       COMMONWEALTH ENERGY CORPORATION

                                       By: /S/ PETER WEIGAND
                                          ------------------------------------

                                       Name:  Peter Weigand
                                       Title:  President




                     [Signature page to Security Agreement]

                                   SCHEDULE 1



DEBTOR NAMES AND CORPORATE JURISDICTIONS:

ACN Utility Services, Inc., a Michigan corporation (MI Corporate Identification
Number: 532765)

ACN Energy, Inc., a Michigan corporation (MI Corporate Identification Number:
545052)

ACN Power, Inc., a Michigan corporation (MI Corporate Identification Number:
547938)


PRINCIPAL PLACE OF BUSINESS AND MAILING ADDRESS FOR ALL DEBTORS:

32991 Hamilton Court, Farmington Hills, MI 48334

                                   SCHEDULE 2

           Account Debtors covered by Federal Assignment of Claims Act
                   or like federal or state statutes or rules




NONE.