Exhibit 4.3.7.3
EXECUTION COPY

AMENDED AND RESTATED
SECOND SERIES E LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
Dated as of April 23, 1998
Among
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
as Account Party

SWISS BANK CORPORATION, STAMFORD BRANCH
(Successor to Swiss Bank Corporation, New York Branch)

as Issuing Bank and as Agent

and

THE PARTICIPATING BANKS
REFERRED TO HEREIN

Relating to

The Industrial Development Authority of the State of New Hampshire Pollution Control Revenue Bonds (Public Service Company of New Hampshire Project - 1991 Taxable Series E)

AMENDED AND RESTATED
SECOND SERIES E LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT

Dated as of April 23, 1998

This AMENDED AND RESTATED SECOND SERIES E LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT, dated as of April 23, 1998 (this "Agreement") is made by and among:

(i) Public Service Company of New Hampshire, a corporation duly organized and validly existing under the laws of the State of New Hampshire (the "Account Party");

(ii) Swiss Bank Corporation, Stamford Branch (as successor to Swiss Bank Corporation, New York Branch) ("Swiss Bank"), as issuer of the Letter of Credit (the "Issuing Bank");

(iii) The Participating Banks (as hereinafter defined) from time to time party hereto; and

(iv) Swiss Bank as agent (together with any successor agent hereunder, the "Agent") for such Participating Banks and the Issuing Bank.

and restates in its entirety the Existing Reimbursement Agreement referred to herein.

PRELIMINARY STATEMENT

The Business Finance Authority (formerly The Industrial Development Authority) of the State of New Hampshire (the "Issuer"), pursuant to a Series E Loan and Trust Agreement, dated as of May 1, 1991 (the "Original Indenture"), by and among the Issuer, the Account Party and State Street Bank and Trust Company, as trustee (such entity, or its successor as trustee, being the "Trustee"), previously issued $114,500,000 aggregate principal amount of The Industrial Development Authority of the State of New Hampshire Pollution Control Revenue Bonds (Public Service Company of New Hampshire Project - 1991 Taxable Series E) (such bonds being herein referred to as the "Taxable Bonds"). Pursuant to the Original Indenture, a First Supplement thereto, dated as of December 1, 1993 and a Second Supplement thereto, dated as of May 1, 1995 (the Original Indenture, as so supplemented by such First Supplement and such Second Supplement and as the same may be further supplemented, amended or modified from time to time with the written consent of the Issuing Bank, being herein referred to as the "Indenture"), the Issuer refunded $44,800,000 aggregate principal amount of the Taxable Bonds through the issuance of $44,800,000 aggregate principal amount of Business Finance Authority of the State of New Hampshire Pollution Control Refunding Revenue Bonds (Public Service Company of New Hampshire Project - 1993 Tax-Exempt Series E) (such bonds being herein referred to as the "Existing Tax-Exempt Refunding Bonds").

The Account Party previously caused Swiss Bank to issue its Irrevocable Letter of Credit No. S561992, dated May 2, 1995 in a stated amount of $119,129,000 (the "Existing Letter of Credit"), in support of the Taxable Bonds and the Existing Tax-Exempt Refunding Bonds, and, in connection therewith, the Account Party entered into a Second Series E Letter of Credit and Reimbursement Agreement dated as of May 1, 1995 (the "Existing Reimbursement Agreement") with Swiss Bank as issuing bank and agent thereunder and the participating banks referred to therein.

The Account Party now wishes to extend and amend the Existing Letter of Credit and, in furtherance thereof, the Account Party has requested the Issuing Bank to issue the Letter of Credit Amendment (as defined herein) to the Paying Agent. Following such extension and amendment and the Fixed-Rate Conversion described herein, the aggregate amount of the Letter of Credit, as so amended, will be $73,666,000 (the "Stated Amount"), of which (i) $69,700,000 shall support the payment of principal of the Taxable Bonds (or the portion of the purchase or redemption price of Bonds corresponding to principal), (ii) $3,966,000 shall support the payment of up to 128 days' interest on the principal amount of Taxable Bonds (or the portion of the purchase or redemption price of Taxable Bonds corresponding to interest), computed at a maximum interest rate of 16% per annum on the basis of the actual days elapsed and a year of 360 days, subject to modification as provided in Section 2.06 hereof, and (iii) $0.00 shall support the payment of premium on Taxable Bonds. The Issuing Bank has agreed to issue the Letter of Credit Amendment subject to the terms and conditions set forth herein and in the Amendment to which this Agreement is appended as Exhibit A (including the terms and conditions relating to the rights and obligations of the Participating Banks).

NOW, THEREFORE, in consideration of the premises set forth herein, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

SECTION I.1. Certain Defined Terms. In addition to the terms defined in the Preliminary Statement hereto, as used in this Agreement, the following terms shall have the following meanings (such meanings to be applicable to the singular and plural forms of the terms defined):

"Advances" means Initial Advances and Term Advances, without differentiation; individually, an "Advance".

"Affiliate" means, with respect to a specified Person, another Person that directly or indirectly through one or more intermediaries controls or is controlled by or is directly or indirectly under common control with such Person. A Person shall be deemed to control another entity if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting securities, by contract or otherwise.

"Agreement for Capacity Transfer" means the Agreement for Capacity Transfer, dated as of December 1, 1989, between The Connecticut Light and Power Company ("CL&P") and the Account Party, as amended by the First Amendment to Agreement for Capacity Transfer, dated as of May 1, 1992 between CL&P and the Account Party, which provides for capacity transfers from the Account Party to CL&P.

"Alternate Base Rate" means, for any period, a fluctuating interest rate per annum equal at all times to the higher from time to time of:

(a) the rate of interest announced publicly by Swiss Bank in New York, New York, from time to time, as Swiss Bank's prime rate; and

(b) 1/2 of one percent per annum above the Federal Funds Rate from time to time;

plus, in either case, the Applicable Margin for Base Rate Advances. Each change in the Alternate Base Rate shall take effect concurrently with any change in such prime rate or Federal Funds Rate, as the case may be.

"Amendment" means the First Amendment to the Existing Reimbursement Agreement, to which this Agreement is appended as Exhibit A.

"Amendment Closing Date" means the Business Day upon which each of the conditions precedent enumerated in Sections 3.01 and 3.02 of the Amendment shall be fulfilled to the satisfaction of the Agent, the Issuing Bank, the Participating Banks and the Account Party. All transactions contemplated to occur on the Amendment Closing Date shall occur contemporaneously on or prior to April 23, 1998, at the offices of King & Spalding, 1185 Avenue of the Americas, New York, New York 10036, at 12:01 A.M. (New York City time), or at such other place and time as the parties hereto may mutually agree.

"Applicable Commission" means, for any day, two and one-quarter percent (2.25%).

"Applicable Lending Office" means, with respect to each Participating Bank,
(i) (A) such Participating Bank's "Domestic Lending Office", in the case of a Base Rate Advance, and (B) such Participating Bank's "Eurodollar Lending Office," in the case of a Eurodollar Rate Advance, in each case as specified opposite such Participating Bank's name on Schedule I hereto (in the case of a Participating Bank initially party to this Agreement) or in the Participation Assignment pursuant to which such Participating Bank became a Participating Bank (in the case of any other Participating Bank), or (ii) such other office or affiliate of such Participating Bank as such Participating Bank may from time to time specify to the Account Party and the Agent.

"Applicable Margin" means, for any day: (i) two and one-quarter percent (2.25%), for any outstanding Eurodollar Rate Advance, and (ii) one and one- quarter percent (1.25%), for any outstanding Base Rate Advance.

"Arrangers" means Barclays Bank PLC and SBC Warburg Dillon Read, Inc.

"Available Amount" in effect at any time means the maximum aggregate amount available to be drawn at such time under the Letter of Credit, the determination of such maximum amount to assume compliance with all conditions for drawing and no reduction for (i) any amount drawn by the Paying Agent to make a regularly scheduled payment of interest on the Bonds (unless such amount will not be reinstated under the Letter of Credit) or (ii) any amount not available to be drawn because Bonds are held by or for the account of the Account Party and/or in pledge for the benefit of the Issuing Bank, but after giving effect nevertheless, to any reduction in the Stated Amount effected pursuant to Section 2.06 hereof.

"Bankruptcy Code" means Title 11 of the United States Code, as the same may be amended from time to time, or any successor bankruptcy law of the United States.

"Base Rate Advance" means an Advance in respect of which the Account Party has selected in accordance with Article III hereof, or this Agreement otherwise provides for, interest to be computed on the basis of the Alternate Base Rate.

"Bonds" means (i) the Taxable Bonds outstanding as of the date hereof, (ii) the Existing Tax-Exempt Refunding Bonds and (iii) any further Tax-Exempt Refunding Bonds (as defined in the Indenture) that may be issued in accordance with the Indenture and this Agreement to refund any of such remaining Taxable Bonds; provided, however, that upon the Fixed-Rate Conversion and reimbursement to the Issuing Bank and the Participating Banks of the Fixed-Rate Conversion Drawing, the Existing Tax-Exempt Refunding Bonds shall cease to be Bonds hereunder.

"Business Day" means a day of the year that is not a Sunday, legal holiday or a day on which banks are required or authorized to close in New York City and, (i) if the applicable Business Day relates to any Eurodollar Rate Advance, is a day on which dealings are carried on in the London interbank market and/or (ii) if the applicable Business Day relates to any action to be taken by, or notice furnished to or by, or payment to be made to or by, the Trustee, the Paying Agent, the Remarketing Agent or the First Mortgage Trustee, is a day on which (A) banking institutions are not authorized pursuant to law to close, (B) the corporate trust office of the First Mortgage Trustee is open for business, (C) banking institutions in all of the cities in which the principal offices of the Issuing Bank, the Trustee, the Paying Agent, the First Mortgage Trustee and, if applicable, the Remarketing Agent are located are not required or authorized to remain closed and (D) the New York Stock Exchange is not closed.

"Cash Account" has the meaning assigned to that term in Section 7.05(a).

"CL&P" has the meaning assigned to that term in the definition of Agreement for Capacity Transfer.

"Citibank" means Citibank, N.A.

"Collateral" means all of the collateral in which liens, mortgages or security interests are purported to be granted by any or all of the Security Documents.

"Collateral Agent" means The Chase Manhattan Bank and any successor as collateral agent under the Intercreditor Agreement.

"Commitment" means, for each Participating Bank, such Participating Bank's Percentage of the Available Amount. "Commitments" shall refer to the aggregate of the Commitments.

"Common Equity" means, at any date, an amount equal to the sum of the aggregate of the par value of or stated capital represented by, the outstanding shares of common stock of the Account Party and the surplus, paid-in, earned and other, if any, of the Account Party.

"Confidential Information" has the meaning assigned to that term in Section 10.09 hereof.

"Conversion", "Convert" or "Converted" each refers to a conversion of Term Advances pursuant to Section 3.04 hereof, including, but not limited to any selection of a longer or shorter Interest Period to be applicable to such Term Advances or any conversion of a Term Advance as described in Section 3.04(c) hereof.

"Credit Termination Date" means the date on which the Letter of Credit shall terminate in accordance with its terms.

"date hereof" means April 23, 1998.

"Debt" means, for any Person, without duplication, (i) indebtedness of such Person for borrowed money, (ii) obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) obligations of such Person to pay the deferred purchase price of property or services, (iv) obligations of such Person as lessee under leases which shall have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases (not including the Unit Contract), (v) obligations (contingent or otherwise) of such Person under reimbursement or similar agreements with respect to the issuance of letters of credit (vi) net obligations (contingent or otherwise) of such Person under interest rate swap, "cap", "collar" or other hedging agreements, (vii) obligations of such person to pay rent or other amounts under leases entered into in connection with sale and leaseback transactions involving assets of such Person being sold in connection therewith, (viii) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (i) through (vii), above, and (ix) liabilities in respect of unfunded vested benefits under ERISA Plans.

"Default Rate" means a fluctuating interest rate equal at all times to 2% per annum above the rate applicable to Base Rate Advances at such time.

"Disclosure Documents" means the Information Memorandum, the 1997 10-K and any Current Report on Form 8-K filed by the Account Party with the Securities and Exchange Commission after December 31, 1997 furnished to the Participating Banks prior to the execution and delivery of the Amendment.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time.

"ERISA Affiliate" means any trade or business (whether or not incorporated, that, together with the Account Party is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

"ERISA Multiemployer Plan" means a "multiemployer plan" subject to Title IV of ERISA.

"ERISA Plan" means an employee benefit plan (other than an ERISA Multiemployer Plan) maintained for employees of the Account Party or any ERISA Affiliate and covered by Title IV of ERISA.

"ERISA Plan Termination Event" means (i) a "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder (other than an event for which the 30-day notice period is waived) with respect to an ERISA Plan or an ERISA Multiemployer Plan, or (ii) the existence with respect to any ERISA plan of an "accumulated funding deficiency" (as defined in Section 412(d) of the Code or Section 302 of ERISA), whether or not waived; (iii) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any ERISA Plan; (iv) the incurrence by the Account Party or any of its ERISA Affiliates of any liability under Title IV or ERISA with respect to the termination of any ERISA Plan; (v) the receipt by Account Party or any of its ERISA Affiliates from the PBGC or a plan administrator of any notice relating to an intention to terminate any ERISA Plan or an ERISA Multiemployer Plan under Section 4041 of ERISA or to appoint a trustee to administer any ERISA Plan or ERISA Multiemployer Plan; (vi) the receipt by the Account Party or any of its ERISA Affiliates of any notice, or the receipt by an ERISA Multiemployer Plan from the Account Party or any of its ERISA Affiliates of any notice, concerning the imposition of liability due to any withdrawal of the Account Party or any of its ERISA Affiliates from an ERISA Plan or an ERISA Multiemployer Plan during a plan year in which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, or a determination that an ERISA Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA or (vii) any other event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any ERISA Plan or ERISA Multiemployer Plan.

"Eurocurrency Liabilities" has the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

"Eurodollar Rate" means for any Interest Period for any Eurodollar Rate Advances comprising part of the same Term Borrowing, an interest rate per annum equal at all times during such Interest Period to the sum of:

(i) the rate per annum (rounded upward to the nearest whole multiple of 1/100 of 1% per annum, if such rate is not such a multiple) determined by the Agent at which deposits in United States dollars in amounts comparable to the Eurodollar Rate Advance of Swiss Bank comprising part of such Term Borrowing and for comparable periods as such Interest Period are offered by the principal office of Swiss Bank in London, England to prime banks in the London interbank market at 11:00 A.M. (London time) two Business Days before the first day of such Interest Period, plus

(ii) the Applicable Margin.

"Eurodollar Rate Advance" means an Advance in respect of which the Account Party has selected in accordance with Article III hereof, and this Agreement provides for, interest to be computed on the basis of the Eurodollar Rate.

"Eurodollar Reserve Percentage" of any Participating Bank for each Interest Period for each Eurodollar Rate Advance means the reserve percentage applicable during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during which any such percentage shall be so applicable) under Regulation D or other regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement, without benefit of or credit for proration, exemptions or offsets) for such Participating Bank with respect to liabilities or assets consisting of or including "eurocurrency liabilities" having a term equal to such Interest Period.

"Event of Default" has the meaning assigned to that term in Section 8.01.

"Existing Letter of Credit" has the meaning assigned to that term in the Preliminary Statement.

"Existing Reimbursement Agreement" has the meaning assigned to that term in the Preliminary Statement.

"Existing Tax-Exempt Refunding Bonds" has the meaning assigned to that term in the Preliminary Statement.

"Extension Collateral" has the meaning assigned to that term in Section 7.05(b).

"Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published on the next succeeding Business Day, the average of the quotations for such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it.

"Final Plan" means the "Final Plan" implementing Chapter 374-F of the Revised Statutes Annotated of New Hampshire, adopted by the NHPUC on February 28, 1997, and any successor plan or proposal.

"First Mortgage Bonds" means first mortgage bonds issued or to be issued by the Account Party and secured, directly or indirectly, collectively or severally, by one or more first-priority liens on all or part of the Indenture Assets pursuant to the First Mortgage Indenture or another indenture in form and substance satisfactory to the Majority Lenders. For purposes hereof, all or part of the First Mortgage Bonds may be issued as collateral for pollution control revenue bonds or industrial revenue bonds, whether taxable or tax exempt issued by the Account Party or by a governmental authority at the Account Party's request.

"First Mortgage Indenture" means the General and Refunding Mortgage Indenture, between the Account Party and New England Merchants National Bank, as trustee and to which First Union National Bank is successor trustee, dated as of August 15, 1978, as amended and supplemented through the date hereof and as the same may thereafter be amended, supplemented or modified from time to time.

"First Mortgage Trustee" means the trustee from time to time under the First Mortgage Indenture.

"Fixed-Rate Conversion" means the Conversion (as defined in the Indenture) of the Existing Tax-Exempt Refunding Bonds to the Fixed-Rate Mode (as defined in the Indenture), which Conversion is proposed to occur on May 1, 1998.

"Fixed-Rate Conversion Drawing" means the Tender Drawing and the related Interest Drawing (as those terms are defined in the Letter of Credit) to effect the purchase on May 1, 1998 of the Existing Tax-Exempt Refunding Bonds immediately prior to the Fixed-Rate Conversion.

"Governmental Approval" means any authorization, consent, approval, license, permit, certificate, exemption of, or filing or registration with, any governmental authority or other legal or regulatory body required in connection with any of: (i) the execution, delivery or performance of the Rate Agreement, any Transaction Document, Loan Document, Related Document or Significant Contract, (ii) the grant and perfection of any security interest, lien or mortgage contemplated by the Security Documents, (iii) the nature of the Account Party's business as conducted or the nature of the property owned or leased by it or (iv) any NUG Settlement. For purposes of this Agreement, Chapter 362-C of the Revised Statutes Annotated of New Hampshire, in effect on the Original Closing Date, shall be deemed to be a Governmental Approval.

"Hazardous Substance" means any waste, substance or material identified as hazardous, dangerous or toxic by any office, agency, department, commission, board, bureau or instrumentality of the United States of America or of the State or locality in which the same is located having or exercising jurisdiction over such waste, substance or material.

"Indemnified Person" has the meaning assigned to that term in Section 10.04(b) hereof.

"Indenture" has the meaning assigned to that term in the Preliminary Statement.

"Indenture Assets" means fixed assets of the Account Party (including related Governmental Approvals and regulatory assets) which from time to time are subject to the first-priority lien under the First Mortgage Indenture.

"Information Memorandum" means the Confidential Information Memorandum, dated February, 1998 regarding the Account Party, as distributed to the Issuing Bank and the Participating Banks, including, without limitation, all schedules, attachments and supplements, if any, thereto.

"Initial Advance" has the meaning assigned to that term in Section 3.02(a) hereof.

"Initial Repayment Date" has the meaning assigned to that term in Section 3.02(a) hereof.

"Intercreditor Agreement" means the Collateral Agency and Intercreditor Agreement, dated as of the date hereof, among the Agent, Barclays Bank PLC, New York Branch as "Agent" under the Other Reimbursement Agreement and The Chase Manhattan Bank, as Administrative Agent under the Revolving Credit Agreement and as Collateral Agent.

"Interest Component" has the meaning assigned to that term in the Letter of Credit.

"Interest Drawing" has the meaning assigned to that term in the Letter of Credit.

"Interest Expense" means, for any period, the aggregate amount of any interest on Debt (including long-term and short-term Debt).

"Interest Period" has the meaning assigned to that term in Section 3.03(b) hereof.

"Issuer" has the meaning assigned to that term in the Preliminary Statement.

"Issuer Resolution" means the resolution adopted by the Issuer that authorized the issuance of the Bonds, approved the terms and provisions of the Bonds, and approved those of the documents related to the Bonds to which the Issuer is a party.

"Letter of Credit" means the Existing Letter of Credit, issued in the form of Exhibit 1.01A to the Existing Agreement, as extended and amended by the Letter of Credit Amendment, and as it may from time to time be further extended, amended or otherwise modified pursuant to the terms of this Agreement.

"Letter of Credit Amendment" means the First Amendment to Irrevocable Letter of Credit issued by the Issuing Bank in favor of the Paying Agent, in substantially the form of Exhibit 1.01A-2 hereto.

"Lien" has the meaning assigned to that term in Section 7.02(a) hereof.

"Loan Documents" means this Agreement and the Security Documents, as each may be amended, supplemented or otherwise modified from time to time.

"Major Electric Generating Plants" means the following nuclear, combustion turbine and coal, oil or diesel-fired generating stations of the Account Party: the Merrimack generating station located in Bow, New Hampshire; the Newington generating station located in Newington, New Hampshire; the Schiller generating station located in Portsmouth, New Hampshire; the White Lake combustion turbine located in Tamworth, New Hampshire; the Millstone Unit No. 3 generating station located in Waterford, Connecticut, and the Wyman Unit No. 4 generating station located in Yarmouth, Maine.

"Majority Lenders" means on any date of determination, (i) the Issuing Bank and (ii) Participating Banks who, collectively, on such date, have Participation Percentages in the aggregate of at least 66-2/3%. Determination of those Participating Banks satisfying the criteria specified above for action by the Majority Lenders shall be made by the Agent and shall be conclusive and binding on all parties absent manifest error.

"Material Adverse Effect" means a material adverse effect upon: (i) the Account Party's business, prospects, operations, properties, assets, or condition (financial or otherwise), (ii) the Account Party's ability to perform under any Loan Document, Related Document, the Rate Agreement or any Significant Contract, (iii) the value, validity, perfection and enforceability of the any Lien granted under or in connection with any Security Document, or (iv) the ability of the Collateral Agent, the Agent or the Issuing Bank to enforce any of the obligations or any of their material rights and remedies under the Loan Documents; provided, that, any material adverse development with respect to the Rate Proceeding, the Rate Agreement or the Final Plan that results in a material adverse effect on the Account Party other than as described in the Disclosure Documents shall automatically be deemed to be a Material Adverse Effect.

"Merger" means (i) the merger on June 5, 1992 of NU Acquisition Corp., a wholly-owned subsidiary of NU, with and into the Account Party and (ii) the transfer on the same date by the Account Party, as so merged, of its right, title and interest in Seabrook to NAEC.

"Moody's" means Moody's Investors Service, Inc. or any successor thereto.

"NAEC" means North Atlantic Energy Corporation, a wholly-owned subsidiary of
NU.

"NHPUC" means the New Hampshire Public Utilities Commission.

"1997 10-K" means the Account Party's 1997 Annual Report and its Annual Report on Form 10-K for the fiscal year ended December 31, 1997.

"NU" means Northeast Utilities, an unincorporated voluntary business association organized under the laws of the Commonwealth of Massachusetts.

"NUG Settlement" means any buy-out, buy-down or other transaction, or any other arrangement or agreement, entered into or proposed to be entered into by the Account Party to terminate or reduce, or to resolve a dispute concerning, an obligation of the Account Party to purchase power and/or capacity from a non-utility generator.

"NUSCO" means Northeast Utilities Service Company, a Connecticut corporation and a wholly-owned subsidiary of NU.

"Official Statement" means any Official Statement, Preliminary Official Statement or similar disclosure document relating to the Bonds (including in connection with the Fixed-Rate Conversion), and shall include any amendment, supplement or "sticker" thereto.

"Operating Income" means, for any period, the Account Party's operating income for such period, adjusted as follows:

(i) increased by the amount of income taxes (including New Hampshire Business Profits Tax and other comparable taxes) paid by the Account Party during such period, if and to the extent they are deducted in the computation of the Account Party's operating income for such period; and

(ii) increased by the amount of any depreciation deducted by the Account Party during such period; and

(iii) increased by the amount of any amortization of acquisition adjustment deducted by the Account Party during such period; and

(iv) decreased by the amount of any capital expenditures paid by the Account Party during such period.

"Original Closing Date" means the Business Day upon which each of the conditions precedent enumerated in Sections 5.01 and 5.02 of the Existing Reimbursement Agreement were fulfilled to the satisfaction of the Agent, the Issuing Bank, the Participating Banks and the Account Party, which date was May 2, 1995.

"Original Indenture" has the meaning assigned to that term in the Preliminary Statement.

"Other Reimbursement Agreement" means (i) the Second Series D Letter of Credit and Reimbursement Agreement, dated as of May 1, 1995, among the Account Party, Barclays Bank PLC, New York Branch, as issuing bank and agent thereunder and the Participating Banks referred to therein relating to the Issuer's Pollution Control Revenue Bonds (Public Service Company of New Hampshire Project-1991 Taxable Series D) and the Issuer's Pollution Control Refunding Revenue Bonds (Public Service Company of New Hampshire Project-1992 Tax-Exempt Series D), as amended by the Other Reimbursement Agreement Amendment and as the same may from time to time be further amended, modified or supplemented or (ii) any reimbursement agreement or similar agreement relating to a substitute credit facility applicable to such bonds.

"Other Reimbursement Agreement Amendment" means the First Amendment, dated the date hereof, to the Other Reimbursement Agreement.

"Participant" shall have the meaning assigned to that term in Section 10.06(b) hereof.

"Participating Banks" means: (i) as of any date of determination prior to the Letter of Credit Amendment becoming effective in accordance with its terms, the Participating Banks parties to the Existing Reimbursement Agreement and
(ii) thereafter, the Persons listed on the signature pages to the Amendment following the heading "Participating Banks" and any other Person who becomes a party hereto pursuant to Section 10.06 hereof.

"Participation Assignment" means a participation assignment entered into pursuant to Section 10.06 hereof by any Participating Bank and an assignee, in substantially the form of Exhibit 1.01B hereto.

"Participation Percentage" means, with respect to any Participating Bank: (i) as of any date of determination prior to the Letter of Credit Amendment becoming effective in accordance with its terms, such Participating Bank's Participation Percentage as determined pursuant to the Existing Reimbursement Agreement (which, in the case of Barclays Bank PLC, New York Branch is zero);
(ii) thereafter, (A) with respect to a Participating Bank initially a party to this Agreement, the percentage set forth opposite such Participating Bank's name on Schedule II to the Amendment, except as provided in clause
(iii), below and (B) with respect to a Participating Bank that becomes a party hereto by operation of Section 10.06(a) hereof, the Participation Percentage stated to be assumed by such assignee Participating Bank in the relevant Participation Assignment, except as provided in clause (iii), below, and (iii) at any time, with respect to any Participating Bank that assigns a percentage of its interests in accordance with Section 10.06(a) hereof, its Participation Percentage determined in accordance with clause (i) or clause
(ii), above, as reduced by the percentage so assigned.

"Paying Agent" means (i) U.S. Bank Trust National Association (formerly First Trust of New York, National Association), as the paying agent for the Bonds under the Indenture, and (ii) any successor paying agent for the Bonds under the Indenture.

"PBGC" means the Pension Benefit Guaranty Corporation (or any successor entity) established under ERISA.

"Permitted Investments" means (i) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than six (6) months from the date of acquisition by such Person; (ii) time deposits and certificates of deposit, with maturities of not more than six (6) months from the date of acquisition by such Person, of any international commercial bank of recognized standing having capital and surplus in excess of $500,000,000 and having a rating on its commercial paper of at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's; (iii) commercial paper issued by any Person, which commercial paper is rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's and matures not more than six (6) months after the date of acquisition by such Person; (iv) investments in money market funds substantially all the assets of which are comprised of securities of the types described in clauses (i) and (ii) above and (v) United States Securities and Exchange Commission registered money market mutual funds conforming to Rule 2a-7 of the Investment Company Act of 1940 in effect in the United States, that invest primarily in direct obligations issued by the United States Treasury and repurchase obligations backed by those obligations, and rated in the highest category by S&P and Moody's.

"Person" means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, estate, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

"Plan" means that certain Third Amended Joint Plan of Reorganization of the Account Party, dated December 28, 1989, as confirmed by order of the United States Bankruptcy Court for the District of New Hampshire on April 20, 1990.

"Pledge Agreement" means the Series E Pledge Agreement, dated as of May 1, 1991, by the Account Party in favor of Citibank, as amended by a First Amendment thereto, dated as of May 1, 1995 among the Account Party, Citibank and Swiss Bank, as agent and issuing bank under the Existing Reimbursement Agreement, and as the same may from time to time be amended, modified or supplemented.

"Pledged Bonds" shall have the meaning assigned to that term in the Pledge Agreement.

"Preferred Stock" means 5,000,000 shares of Series A Preferred Stock of the Account Party (par value $25).

"Premium Component" has the meaning assigned to that term in the Letter of Credit.

"Principal Component" has the meaning assigned to that term in the Letter of Credit.

"Rate Agreement" means the Agreement dated as of November 22, 1989, as amended by the First Amendment to Rate Agreement dated as of December 5, 1989, the Second Amendment to Rate Agreement dated as of December 12, 1989, the Third Amendment to Rate Agreement dated as of December 28, 1993, the Fourth Amendment to Rate Agreement dated as of September 21, 1994 and the Fifth Amendment to Rate Agreement dated as of September 9, 1994, among NUSCO, the Governor and Attorney General of the State of New Hampshire and adopted by the Account Party as of July 10,1990 (excluding the Unit Contract appended as Exhibit A thereto subsequent to the effectiveness of such contract).

"Rate Proceeding" means all regulatory proceedings relating to the Account Party and resulting from the NHPUC's adoption of the Final Plan, together with the Federal litigation commenced by the Account Party and certain of its Affiliates in response thereto.

"Recipient" has the meaning assigned to that term in Section 10.09 hereto.

"Related Documents" means the Letter of Credit, the Bonds, the Indenture and any Remarketing Agreement.

"Remarketing Agent" has the meaning assigned to that term in the Indenture.

"Remarketing Agreement" means (i) the Remarketing Agreement, dated as of May 1, 1991, between the Account Party and Goldman, Sachs Money Markets Inc. relating to the Taxable Bonds, (ii) the Remarketing Agreement, dated as of December 1, 1992, between the Account Party and Goldman, Sachs & Co. relating to the Existing Tax-Exempt Refunding Bonds, (iii) any similar agreement subsequently entered into with respect to any other Tax-Exempt Refunding Bonds and (iv) any successor agreement to any of the foregoing or any similar agreement between the Account Party and a successor Remarketing Agent as shall be in effect from time to time in accordance with the terms of the Indenture.

"Restricted Payment" has the meaning assigned to that term in Section 7.02(e) hereof.

"Revolving Credit Agent" means The Chase Manhattan Bank and any successor as "Administrative Agent" under (and as defined in) the Revolving Credit Agreement.

"Revolving Credit Agreement" means the $75,000,000 (original principal amount) Revolving Credit Agreement, dated as of the date hereof, among the Account Party, the Banks and Co-Agents named therein, and The Chase Manhattan Bank, as Administrative Agent; in each case as amended, modified or supplemented to the date hereof and as the same may be further amended, modified or supplemented from and after the date hereof.

"Revolving Credit Lenders" means the Lenders from time to time under (and as defined in) the Revolving Credit Agreement.

"S&P" means Standard and Poor's Ratings Group or any successor thereto.

"Seabrook" means the nuclear-fueled, steam-electric generating plant at a site located in Seabrook, New Hampshire, and the related real property interests and other fixed assets of such plant.

"Secured Party" has the meaning assigned to that term in the Intercreditor Agreement.

"Security Agreement" means the Assignment and Security Agreement, dated as of the date hereof, between the Account Party and the Collateral Agent, pursuant to which the Account Party has granted to the Collateral Agent a security interest in certain of the Account Party's accounts receivable, as the same may be amended, modified or supplemented from time to time in accordance with this Agreement and the Intercreditor Agreement.

"Security Documents" means the Pledge Agreement, the Security Agreement, the Intercreditor Agreement, the Indenture, the First Mortgage Indenture and the Series F First Mortgage Bonds.

"Series F First Mortgage Bonds" means the Account Party's Series F First Mortgage Bonds.

"Sharing Agreement" means the Sharing Agreement, dated as of June 1, 1992, among CL&P, Western Massachusetts Electric Company, Holyoke Water Power Company, Holyoke Power and Electric Company, the Account Party and NUSCO.

"Significant Contract" means the following contracts, in each case as the same may be amended, modified or supplemented from time to time in accordance with this Agreement:

(i) the Agreement for Capacity Transfer;

(ii) the Sharing Agreement;

(iii) the Tax Allocation Agreement; and

(iv) the Unit Contract.

"Stated Amount" has the meaning assigned to that term in the Preliminary Statement hereto.

"Stated Termination Date" means the expiration date specified in clause (i) of the first paragraph of Paragraph (1) of the Letter of Credit, as such date may be extended pursuant to Section 2.05 hereof

"Tax Allocation Agreement" means the Amended and Restated Tax Allocation Agreement, dated as of January 1, 1990, among NU and the members of the consolidated group of which NU is the common parent, including, without limitation, the Account Party.

"Taxable Bonds" has the meaning assigned to that term in the Preliminary Statement.

"Tender Drawing" has the meaning assigned to that term in the Letter of Credit.

"Term Advance" has the meaning assigned to that term in Section 3.02(b) hereof, and refers to a Base Rate Advance or a Eurodollar Rate Advance (each of which shall be a "Type" of Term Advance). The Type of a Term Advance may change from time to time when such Term Advance is Converted. For purposes of this Agreement, all Term Advances of a Participating Bank (or portions thereof) made as, or Converted to, the same Type and Interest Period on the same day shall be deemed a single Term Advance by such Participating Bank until repaid or next Converted.

"Term Borrowing" means a borrowing consisting of Term Advances of the same Type and Interest Period made on the same day by the Participating Banks, ratably in accordance with their respective Participation Percentages. A Term Borrowing may be referred to herein as being a "Type" of Term Borrowing, corresponding to the Type of Term Advances comprising such Term Borrowing. For purposes of this Agreement, all Term Advances made as, or Converted to, the same Type and Interest Period on the same day shall be deemed a single Term Borrowing until repaid or next Converted.

"Termination Date" means the Stated Termination Date or the earlier date of termination of the Commitments pursuant to Sections 2.02 or 8.02 hereunder.

"Total Capitalization" means, as of any day, the aggregate of all amounts that would, in accordance with generally accepted accounting principles applied on a basis consistent with the standards referred to in Section 1.03 hereof, appear on the balance sheet of the Account Party as at such day as the sum of (i) the principal amount of all long-term Debt of the Account Party on such day, (ii) the par value of, or stated capital represented by, the outstanding shares of all classes of common and preferred shares of the Account Party on such day, (iii) the surplus of the Account Party, paid-in, earned and other, if any, on such day and (iv) the unpaid principal amount of all short-term Debt of the Account Party on such day.

"Transaction Documents" means the Amendment, this Agreement, the Intercreditor Agreement, the Security Agreement, the Revolving Credit Agreement, the Other Reimbursement Agreement Amendment and the other documents to be delivered by or on behalf of the Account Party on or in connection with the Amendment Closing Date.

"Trustee" has the meaning assigned to that term in the Preliminary Statement hereto.

"Type" has the meaning assigned to such term in the definitions of "Term Advance" and "Term Borrowing" herein.

"Unit Contract" means the Unit Contract, dated as of June 1, 1992, between the Account Party and NAEC.

"Unmatured Default" means the occurrence and continuance of an event which, with the giving of notice or lapse of time or both, would constitute an Event of Default.

SECTION I.2. Computation of Time Periods. In the computation of periods of time under this Agreement any period of a specified number of days or months shall be computed by including the first day or month occurring during such period and excluding the last such day or month. In the case of a period of time "from" a specified date "to" or "until" a later specified date, the word "from" means "from and including" and the words "to" and "until" each means "to but excluding".

SECTION I.3. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles applied on a basis consistent with the application employed in the preparation of the financial projections and pro formas referred to in
Section 5.01 hereof.

SECTION I.4. Computations of Outstandings. Whenever reference is made in this Agreement to the principal amount outstanding on any date under this Agreement, such reference shall refer to the sum of (i) the Available Amount on such date, (ii) the aggregate principal amount of all Advances outstanding on such date and (iii) the aggregate amount of all demand loans under Section 3.01 hereunder on such date, in each case after giving effect to all transactions to be made on such date and the application of the proceeds thereof.

ARTICLE II
THE LETTER OF CREDIT

SECTION II.1. The Letter of Credit. The Issuing Bank issued the Existing Letter of Credit on the Original Closing Date. The Issuing Bank agrees, on the terms and conditions hereinafter set forth (including, without limitation, the applicable conditions precedent set forth in the Amendment), to issue the Letter of Credit Amendment to the Paying Agent, upon not less than three Business Days prior notice from the Account Party, on the Amendment Closing Date.

SECTION II.2. Termination of the Commitments. The obligation of the Issuing Bank to issue the Letter of Credit Amendment shall automatically terminate if not delivered at or prior to 5:00 P.M. (New York City time) on May 1, 1998.

SECTION II.3. Commissions and Fees. (a) The Account Party hereby agrees to pay to the Agent, for the account of the Participating Banks ratably in accordance with their respective Participation Percentages, a letter of credit commission on the Available Amount in effect from time to time from the date hereof until the Letter of Credit shall be surrendered for cancellation (disregarding for such purpose any temporary diminution thereof arising from drawings under the Letter of Credit to pay interest (or purchase price corresponding to interest) on the Bonds, regardless of whether the amount so drawn shall be thereafter reinstated), at a rate per annum equal to the Applicable Commission, payable on the last business day of each month and upon such surrender ; provided that if an Event of Default shall have occurred and is continuing, the Applicable Commission in effect from time to time shall be increased by a further 2%.

(b) The Account Party also agrees to pay to the Agent for the account of the Participating Banks ratably in accordance with their respective Participation Percentages, such participation fees as have been agreed among them, the Account Party and the Agent, such participation fee to be payable in full simultaneously with the issuance of the Letter of Credit Amendment.

(c) The Account Party also agrees to pay to the Agent, for the account of the Issuing Bank, such other fees as have been agreed upon by the Account Party and the Issuing Bank in that certain Fee Letter, dated February 25, 1998, between the Account Party and the Arrangers (the "Fee Agreement").

(d) The Account Party also agrees to pay to the Agent, for its own account and/or the account of Swiss Bank, such other fees as have been agreed upon by the Account Party and the Agent in the Fee Agreement.

SECTION II.4. Reinstatement of the Letter of Credit. (a) The Interest Component and the Principal Component shall, from time to time, be reinstated by the Issuing Bank in accordance with, and only to the extent provided in, the Letter of Credit. In no event shall reductions in the Premium Component be reinstated.

(b) Interest Component. With respect to reinstatement of reductions in the Interest Component resulting from Interest Drawings:

(i) The Issuing Bank may only deliver to the Paying Agent any notice of non- reinstatement pursuant to Paragraph 5(i)(A) of the Letter of Credit if (A) the Issuing Bank and/or the Participating Banks have not been reimbursed in full by the Account Party for one or more drawings, together with interest if any, owing thereon pursuant to this Agreement or (B) an Event of Default has occurred and is then continuing.

(ii) if, subsequent to any such delivery of a notice of non-reinstatement, the circumstances giving rise to the delivery of such notice of non- reinstatement shall have ceased to exist (whether as a result of reimbursement of unreimbursed drawings, or waiver or cure of an Event of Default, or otherwise), then, provided that no other Event of Default shall have occurred and be continuing, the Issuing Bank shall deliver to the Paying Agent, by hand delivery or facsimile transmission, a Notice of Reinstatement in the form of Exhibit 5 to the Letter of Credit reinstating that portion of the Interest Component in respect of which such notice of non-reinstatement was given.

(c) Principal Component. With respect to reinstatement of a reduction in the Principal Component resulting from any Tender Drawing, IF:

(i) such reduction has not been reinstated pursuant to Paragraph 5(ii)(A) of the Letter of Credit;

(ii) the Issuing Bank and/or the Participating Banks shall have been reimbursed by the Account Party for such Tender Drawing;

(iii) any demand loan(s) and Advance(s) made in respect of such Tender Drawing shall have been repaid by the Account Party, together with any interest thereon and any other amounts payable hereunder in connection therewith; AND

(iv) no Event of Default shall have occurred and then be continuing;

THEN, the Issuing Bank shall deliver to the Paying Agent, by hand delivery or facsimile transmission, a Notice of Reinstatement in the form of Exhibit 5 to the Letter of Credit reinstating the Principal Component to the extent of such Tender Drawing.

SECTION II.5. Extension of the Stated Termination Date. Unless the Letter of Credit shall have previously expired in accordance with its terms, at least 105 days but not more than 120 days before the Stated Termination Date, the Account Party may, by notice to the Agent (any such notice being irrevocable), request the Issuing Bank and the Participating Banks to extend the Stated Termination Date of the Letter of Credit for a period of one year. If the Account Party shall make such request, the Agent shall promptly inform the Issuing Bank and the Participating Banks and, no later than 60 days prior to the Stated Termination Date, the Agent shall notify the Account Party in writing (with a copy of such notice to the Trustee and the Paying Agent) if the Issuing Bank and the Participating Banks consent to such request and the conditions of such consent (including conditions relating to legal documentation). The granting of any such consent shall be in the sole and absolute discretion of the Issuing Bank and the Participating Banks, and if the Agent shall not so notify the Account Party, such lack of notification shall be deemed to be a determination not to consent to such request. No such extension shall occur unless the Issuing Bank and all of the Participating Banks consent thereto (or if less than all the Participating Banks consent thereto, unless one or more other Participating Banks agree to assume all of the Commitments of the non-consenting Participating Banks).

SECTION II.6. Modification of the Letter of Credit. In the event that the Account Party elects to cause the issuance of any additional series of Tax- Exempt Refunding Bonds (as defined in the Indenture) pursuant to Article IV of the Indenture, the Account Party may, but shall not be obligated to, propose amendments to the Letter of Credit to change the method of computing the Interest Component or such other terms thereof as may be necessary or appropriate in connection with such issuance. Any such proposal shall be furnished to the Issuing Bank in writing not later than 60 days prior to the date proposed for such issuance. If the Issuing Bank shall consent to such amendments (which consent, subject to the provisions of the next succeeding sentence, shall not be unreasonably withheld) the Issuing Bank shall, upon surrender of the Letter of Credit by the beneficiary thereof for amendment (or replacement, as the Issuing Bank may elect), amend the Letter of Credit accordingly (or issue a replacement Letter of Credit therefor reflecting such amendments but otherwise identical to the Letter of Credit so surrendered). Notwithstanding the foregoing, without the consent of the requisite Participating Banks as determined in accordance with Section 10.01, the Issuing Bank shall not consent to any amendment or amendments that (i) increase the Stated Amount or the then-existing Available Amount, (ii) change or modify in any respect the Credit Termination Date or any provision for determining the expiry or other termination of the Letter of Credit, (iii) change or modify in any respect the times, places or manner at or in which drawings under the Letter of Credit are to be presented or paid, (iv) change or modify in any respect the forms of drawing certificates and other annexes to the Letter of Credit, (v) change the beneficiary of the Letter of Credit or the method prescribed therein for the transfer of the Letter of Credit or
(vi) as determined in the good faith discretion of the Issuing Bank and its counsel, increase or enlarge the scope, or modify the nature, of the Issuing Bank's and the Participating Banks' credit exposure to the Account Party or any legal risks related thereto or expose the Issuing Bank to any additional liability. In furtherance of the foregoing, the Issuing Bank may condition the granting of such consent on the receipt by the Issuing Bank of such certificates, opinions of counsel and other assurances of the Account Party and its counsel, or bond counsel or the Trustee or Paying Agent, as the Issuing Bank may reasonably require. Each Participating Bank, by its execution of this Agreement, or of the Participation Assignment pursuant to which it became a Participating Bank, consents to, ratifies and affirms all actions taken and to be taken by the Issuing Bank pursuant to this Section 2.06.

ARTICLE III
REIMBURSEMENT AND ADVANCES

SECTION III.1. Reimbursement on Demand. Subject to the provisions of
Section 3.02 hereof, the Account Party hereby agrees to pay (whether with the proceeds of Initial Advances made pursuant to this Agreement or otherwise) to the Issuing Bank on demand (a) on and after each date on which the Issuing Bank shall pay any amount under the Letter of Credit pursuant to any draft, but only after so paid by the Issuing Bank, a sum equal to such amount so paid (which sum shall constitute a demand loan from the Issuing Bank to the Account Party from the date of such payment by the Issuing Bank until so paid by the Account Party), plus (b) interest on any amount remaining unpaid by the Account Party to the Issuing Bank under clause (a), above, from the date such amount becomes payable on demand until payment in full, at the Default Rate in effect from time to time. No reinstatement of the Interest Component or the Principal Component despite the failure by the Account Party to reimburse the Issuing Bank for any previous drawing to pay interest on the Bonds shall limit or impair the Account Party's obligations under this
Section 3.01.

SECTION III.2. Advances. Each Participating Bank agrees to make Initial Advances and Term Advances for the account of the Account Party from time to time upon the terms and subject to the conditions set forth in this Agreement; provided, that no Initial Advance or Term Advance shall be made in respect of the Fixed-Rate Conversion Drawing without the consent of the Issuing Bank and all of the Participating Banks.

(a) Initial Advances; Repayment of Initial Advances. If the Issuing Bank shall honor any Tender Drawing and if the conditions precedent set forth in
Section 5.03 of this Agreement have been satisfied as of the date of such honor, then, each Participating Bank's payment made to the Issuing Bank pursuant to Section 3.07 hereof in respect of such Tender Drawing shall be deemed to constitute an advance made for the account of the Account Party by such Participating Bank (each such advance being an "Initial Advance" made by such Participating Bank). Each Initial Advance shall be made as a Base Rate Advance, shall bear interest at the Alternate Base Rate and shall not be entitled to be Converted. Subject to Article VIII of this Agreement, each Initial Advance and all interest thereon shall be due and payable on the earlier to occur of (i) the date 30 days from the date of such Initial Advance (such repayment date being the "Initial Repayment Date" for such Initial Advance) and (ii) the Termination Date. The Account Party may repay the principal amount of any Initial Advance with (and to the extent of) the proceeds of a Term Advance made pursuant to subsection (b), below, and may prepay Initial Advances in accordance with Section 3.06 hereof.

(b) Term Advances; Repayment. Subject to the satisfaction of the conditions precedent set forth in Section 5.04 hereof and the other conditions of this subsection (b), each Participating Bank agrees to make one or more advances for the account of the Account Party ("Term Advances") on each Initial Repayment Date in an aggregate principal amount equal to the amount of such Participating Bank's Initial Advances maturing on such Initial Repayment Date. All Term Advances comprising a single Term Borrowing shall be made upon written notice given by the Account Party to the Agent not later than 11:00 A.M. (New York City time) (A) in the case of a Term Borrowing comprised of Base Rate Advances, on the Business Day of such proposed Term Borrowing or (B) in the case of a Term Borrowing comprised of Eurodollar Rate Advances, three Business Days prior to the date of such proposed Term Borrowing. The Agent shall notify each Participating Bank of the contents of such notice promptly after receipt thereof. Each such notice shall specify therein the following information: (W) the date on which such Term Borrowing is to be made, (X) the principal amount of Term Advances comprising such Term Borrowing, (Y) the Type of Term Borrowing and (Z) subject to Section 3.05(c), the duration of the initial Interest Period, if applicable, proposed to apply to the Term Advances comprising such Term Borrowing. The proceeds of each Participating Bank's Term Advances shall be applied solely to the repayment of the Initial Advances made by such Participating Bank and shall in no event be made available to the Account Party. The principal amount of each Term Advance, together with all accrued and unpaid interest thereon, shall be due and payable on the earlier to occur of (x) the same calendar date occurring 12 months following the date upon which such Term Advance is made (or, if such month does not have a corresponding date, on the last day of such month) and (y) the Termination Date.

SECTION III.3. Interest on Advances. The Account Party shall pay interest on the unpaid principal amount of each Advance from the date of such Advance until such principal amount is paid in full at the applicable rate set forth below:

(a) Alternate Base Rate. Except to the extent that the Account Party shall elect to pay interest on any Advance for any Interest Period pursuant to paragraph (c) of this Section 3.03, the Account Party shall pay interest on each Advance (including all Initial Advances) from the date thereof until the date such Advance is due, at a fluctuating interest rate per annum in effect from time to time equal to the Alternate Base Rate in effect from time to time. The Account Party shall pay interest on each Advance bearing interest in accordance with this subsection monthly in arrears on the last business day of each month and on the Termination Date or the earlier date for repayment of such Advance (including the Initial Repayment Date therefor, in the case of an Initial Advance); provided that if an Event of Default shall have occurred and is continuing, any principal amounts outstanding shall bear interest during such period, payable on demand, at a rate per annum equal at all times to 2% per annum above the Alternate Base Rate in effect from time to time.

(b) Interest Periods. Subject to the other requirements of this Section 3.03 and to Section 3.05(c), the Account Party may from time to time elect to have the interest on all Term Advances comprising part of the same Term Borrowing determined and payable for a specified period (an "Interest Period" for such Term Advances) in accordance with paragraph (c) of this Section
3.03. The first day of an Interest Period for such Term Advances shall be the date such Advance is made or most recently Converted, which shall be a Business Day. All Interest Periods shall end on or prior to the Stated Termination Date. Any Interest Period for a Term Advance that would otherwise end after the Termination Date or earlier date for the repayment of such Advance shall be deemed to end on the Termination Date or such earlier repayment date, as the case may be.

(c) Eurodollar Rate. Subject to the requirements of this Section 3.03 and Article V hereof, the Account Party may from time to time elect to have any Term Advances comprising part of the same Term Borrowing made as, or Converted to, Eurodollar Rate Advances. Subject to Section 3.05(c), the Interest Period applicable to such Eurodollar Rate Advances shall be of one, two, three or six whole months' duration, as the Account Party shall select in its notice delivered to the Agent pursuant to Section 3.02(b) or 3.04 hereof, as applicable. If the Account Party shall have made such election, the Account Party shall pay interest on such Eurodollar Rate Advances at the Eurodollar Rate for the applicable Interest Period for such Eurodollar Rate Advances, which interest shall be payable on the last day of such Interest Period, on the date for repayment for such Eurodollar Rate Advances and also, in the case of any Interest Period of six months' duration, on that day of the third month of such Interest Period which corresponds with the first day of such Interest Period (or, if any such month does not have a corresponding day, then on the last day of such month); provided that if an Event of Default shall have occurred and is continuing, any principal amounts outstanding shall bear interest during such period, payable on demand, at a rate per annum equal at all times to (A) for the remaining term, if any, of the Interest Period for such Advance, 2% per annum above the Eurodollar Rate for such Interest Period, and (B) thereafter, 2% per annum above the Alternate Base Rate in effect from time to time. Any Interest Period pertaining to Eurodollar Rate Advances that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month.

(d) Interest Rate Determinations. The Agent shall give prompt notice to the Account Party and the Participating Banks of the Eurodollar Rate determined from time to time by the Agent to be applicable to each Eurodollar Rate Advance.

SECTION III.4. Conversion of Term Advances. Subject to the satisfaction of the conditions precedent set forth in Section 5.03 hereof, the Account Party may elect to Convert one or more Term Advances of any Type to one or more Term Advances of the same or any other Type on the following terms and subject to the following conditions:

(a) Each Conversion shall be made as to all Term Advances comprising a single Term Borrowing upon written notice given by the Account Party to the Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Conversion. The Agent shall notify each Participating Bank of the contents of such notice promptly after receipt thereof. Each such notice shall specify therein the following information:
(A) the date of such proposed Conversion (which in the case of Eurodollar Rate Advances shall be last day of the Interest Period then applicable to such Term Advances to be Converted), (B) Type of, and Interest Period, if any, applicable to the Term Advances proposed to be Converted, (C) the aggregate principal amount of Term Advances proposed to be Converted, and (D) the Type of Term Advances to which such Term Advances are proposed to be Converted and, subject to Section 3.05(c), the Interest Period, if any, to be applicable thereto.

(b) During the continuance of an Unmatured Default or an Event of Default, the right of the Account Party to Convert Term Advances to Eurodollar Rate Advances shall be suspended, and all Eurodollar Rate Advances then outstanding shall be Converted to Base Rate Advances on the last day of the Interest Period then in effect, if, on such day, an Unmatured Default or an Event of Default shall be continuing.

(c) If no notice of Conversion is received by the Agent as provided in subsection (a) above with respect to any outstanding Eurodollar Rate Advances, the Agent shall treat such absence of notice as a deemed notice of Conversion providing for such Advances to be Converted to Base Rate Advances on the last day of the Interest Period then in effect for such Eurodollar Rate Advances.

SECTION III.5. Other Terms Relating to the Making and Conversion of Advances. (a) Notwithstanding anything in Section 3.02, 3.03 or 3.04, above, to the contrary:

(i) at no time shall more than six different Term Borrowings be outstanding hereunder; and

(ii) each Term Borrowing consisting of Eurodollar Rate Advances shall be in the aggregate principal amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof.

(b) Each notice of borrowing pursuant to Section 3.02(b) hereof and each notice of Conversion pursuant to Section 3.04 hereof shall be irrevocable and binding on the Account Party.

(c) Until such time, if any, as the Majority Lenders shall otherwise agree, the Interest Period for all Eurodollar Rate Advances shall be one month.

SECTION III.6. Prepayment of Advances. (a) The Account Party shall have no right to prepay any principal amount of any Advances except in accordance with subsections (b) and (c) below.

(b) The Account Party may, upon at least one Business Day's notice to the Agent stating the proposed date and aggregate principal amount of the prepayment (and if such notice is given the Account Party shall), prepay, in whole or ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid, the outstanding principal amount of (i) all Initial Advances made on the same date or (ii) all Term Advances comprising the same Term Borrowing, in each case as the Account Party shall designate in such notice; provided, however, that each partial prepayment shall be in an aggregate principal amount not less than $10,000,000, or, if less, the aggregate principal amount of all Advances then outstanding.

(c) Prior to or simultaneously with the resale of all of the Bonds purchased with the proceeds of a Tender Drawing, the Account Party shall prepay, or cause to be prepaid, in full, the then outstanding principal amount of all Initial Advances and of all Term Advances comprising the same Term Borrowing(s) arising pursuant to such Tender Drawing, together with all interest thereon to the date of such prepayment. If less than all of such Bonds are resold, then prior to or simultaneously with such resale the Account Party shall prepay or cause to be prepaid that portion of such Advances, together with all interest thereon to the date of such prepayment, equal to the then outstanding principal amount thereof multiplied by a fraction, the numerator of which shall be the principal amount of the Bonds resold and the denominator of which shall be the principal amount of all of the Bonds purchased with the proceeds of the relevant Tender Drawing.

SECTION III.7. Participation; Reimbursement of Issuing Bank. (a) The Issuing Bank hereby sells and transfers to each Participating Bank, and each Participating Bank hereby acquires from the Issuing Bank, an undivided interest and participation to the extent of such Participating Bank's Participation Percentage in and to (i) the Letter of Credit, including the obligations of the Issuing Bank under and in respect thereof and the Account Party's reimbursement and other obligations in respect thereof and (ii) each demand loan or deemed demand loan made by the Issuing Bank, whether now existing or hereafter arising.

(b) if the Issuing Bank (i) shall not have been reimbursed in full for any payment made by the Issuing Bank under the Letter of Credit on the date of such payment or (ii) shall make any demand loan to the Account Party, the Issuing Bank shall promptly notify the Agent and the Agent shall promptly notify each Participating Bank of such non-reimbursement or demand loan and the amount thereof. Upon receipt of such notice from the Agent, each Participating Bank shall pay to the Issuing Bank, directly, an amount equal to such Participating Bank's ratable portion (according to such Participating Bank's Participation Percentage) of such unreimbursed amount or demand loan paid or made by the Issuing Bank, plus interest on such amount at a rate per annum equal to the Federal Funds Rate from the date of such payment by the Issuing Bank to the date of payment to the Issuing Bank by such Participating Bank. All such payments by each Participating Bank shall be made in United States dollars and in same day funds:

(x) not later than 2:45 P.M. (New York City time) on the day such notice is received by such Participating Bank if such notice is received at or prior to 12:30 P.M. (New York City nine) on a Business Day; or

(y) not later than 12:00 Noon (New York City time) on the Business Day next succeeding the day such notice is received by such Participating Bank, if such notice is received after 12:30 P.M. (New York City time) on a Business Day.

If a Participating Bank shall have paid to the Issuing Bank its ratable portion of any unreimbursed amount or demand loan paid or made by the Issuing Bank, together with all interest thereon required by the second sentence of this subsection (b), such Participating Bank shall be entitled to receive its ratable share of all interest paid by the Account Party in respect of such unreimbursed amount or demand loan from the date paid or made by the Issuing Bank. If such Participating Bank shall have made such payment to the Issuing Bank, but without all such interest thereon required by the second sentence of this subsection (b), such Participating Bank shall be entitled to receive its ratable share of the interest paid by the Account Party in respect of such unreimbursed amount or demand loan only from the date it shall have paid all interest required by the second sentence of this subsection (b).

(c) Each Participating Bank's obligation to make each payment to the Issuing Bank, and the Issuing Bank's right to receive the same, shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the foregoing or Section 4.06 hereof, or the occurrence or continuance of an Event of Default, or the non-satisfaction of any condition precedent set forth in Sections 5.03 or 5.04 hereof, or the failure of any other Participating Bank to make any payment under this
Section 3.07. Each Participating Bank further agrees that each such payment shall be made without any offset abatement, withholding or reduction whatsoever.

(d) The failure of any Participating Bank to make any payment to the Issuing Bank in accordance with subsection (b) above, shall not relieve any other Participating Bank of its obligation to make payment, but neither the Issuing Bank nor any Participating Bank shall be responsible for the failure of any other Participating Bank to make such payment. If any Participating Bank shall fail to make any payment to the Issuing Bank in accordance with subsection (b) above, then such Participating Bank shall pay to the Issuing Bank forthwith on demand such corresponding amount together with interest thereon, for each day until the date such amount is repaid to the Issuing Bank at the Federal Funds Rate. Nothing herein shall in any way limit, waive or otherwise reduce any claims that any party hereto may have against any non-performing Participating Bank.

(e) If any Participating Bank shall fail to make any payment to the Issuing Bank in accordance with subsection (b) above, then, in addition to other rights and remedies which the Issuing Bank may have, the Agent is hereby authorized, at the request of the Issuing Bank, to withhold and to apply the payment of such amounts owing to such Participating Bank to the Issuing Bank and any related interest, that portion of any payment received by the Agent that would otherwise be payable to such Participating Bank. In furtherance of the foregoing, if any Participating Bank shall fail to make any payment to the Issuing Bank in accordance with subsection (b), above, and such failure shall continue for five Business Days following written notice of such failure from the Issuing Bank to such Participating Bank, the Issuing Bank may acquire, or transfer to a third party in exchange for the sum or sums due from such Participating Bank, such Participating Bank's interest in the related unreimbursed amounts and demand loans and all other rights of such Participating Bank hereunder in respect thereof, without, however, relieving such Participating Bank from any liability for damages, costs and expenses suffered by the Issuing Bank as a result of such failure. The purchaser of any such interest shall be deemed to have acquired an interest senior to the interest of such Participating Bank and shall be entitled to receive all subsequent payments which the Issuing Bank or the Agent would otherwise have made hereunder to such Participating Bank in respect of such interest.

ARTICLE IV
PAYMENTS

SECTION IV.1. Payments and Computations. (a) The Account Party shall make each payment hereunder (i) in the case of reimbursement obligations pursuant to Section 3.01 hereof (excluding any portion thereof in respect of which an Initial Advance is to be made), not later than 2:30 P.M. (New York City time) on the day the related drawing under the Letter of Credit is paid by the Issuing Bank, and (ii) in all other cases, not later than 12:30 P.M. (New York City time) on the day when due, in each case in lawful money of the United States of America to the Agent at its address referred to in Section 10.02 hereof in same day funds. The Agent will promptly thereafter cause to be distributed like funds relating to the payment of reimbursements, principal, interest, fees or other amounts payable to the Issuing Bank and the Participating Banks to whom the same are payable, ratably, at its address set forth in Section 10.02 hereof (in the case of the Issuing Bank) or for the account of their respective Applicable Lending Offices (in the case of the Participating Banks), in each case to be applied in accordance with the terms of this Agreement.

(b) The Account Party hereby authorizes the Issuing Bank, and each Participating Bank, if and to the extent payment owed to the Issuing Bank, or such Participating Bank, as the case may be, is not made when due hereunder, to charge from time to time against any or all of the Account Party's accounts with the Issuing Bank or such Participating Bank, as the case may be, any amount so due.

(c) All computations of interest based on the Alternate Base Rate when based on Swiss Bank's prime rate referred to in the definition of "Alternate Base Rate" shall be made by the Agent on the basis of a year of 365 or 366 days, as the case may be, for the actual days elapsed. All other computations of interest hereunder (including computations of interest based on the Eurodollar Rate and the Federal Funds Rate (including the Alternate Base Rate if and so long as such Rate is based on the Federal Funds Rate)), all computations of commissions and fees hereunder and all computations of other amounts pursuant to Section 4.03 hereof, shall be made by the Agent or the party claiming such other amounts, as the case may be, on the basis of a year of 360 days for the actual days elapsed. In each such case, such computation shall be made for the actual number of days (including the first day, but excluding the last day) occurring in the period for which such interest, commissions or fees are payable. Each such determination by the Agent or a Participating Bank, as the case may be, shall be conclusive and binding for all purposes, absent manifest error.

(d) Whenever any payment hereunder shall be stated to be due, or the last day of an Interest Period hereunder shall be stated to occur, on a day other than a Business Day, such payment shall be made and the last day of such Interest Period shall occur on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest, commissions and fees hereunder; provided, however, that if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made, or the last day of an Interest Period for a Eurodollar Rate Advance to occur, in the next following calendar month, such payment shall be made on the next preceding Business Day and such reduction of time shall in such case be included in the computation of payment of interest hereunder.

(e) Unless the Agent shall have received notice from the Account Party prior to the date on which any payment is due to the Issuing Bank or the Participating Banks hereunder that the Account Party will not make such payment in full, the Agent may assume that the Account Party has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to the Issuing Bank and/or each Participating Bank on such due date an amount equal to the amount then due the Issuing Bank and/or such Participating Bank. If and to the extent the Account Party shall not have so made such payment in full to the Agent, the Issuing Bank and/or each such Participating Bank shall repay to the Agent forthwith on demand such amount distributed to the Issuing Bank and/or such Participating Bank, together with interest thereon, for each day from the date such amount is distributed to the Issuing Bank and/or such Participating Bank until the date the Issuing Bank and/or such Participating Bank repays such amount to the Agent, at the Federal Funds Rate.

(f) If, after the Agent has paid to the Issuing Bank or any Participating Bank any amount pursuant to subsection (a) above, such payment is rescinded or must otherwise be returned or must be paid over by the Agent or the Issuing Bank to any Person, whether pursuant to any bankruptcy or insolvency law, Section 4.04 hereof or otherwise, such Participating Bank shall, at the request of the Agent or the Issuing Bank, promptly repay to the Agent or the Issuing Bank, as the case may be, an amount equal to its ratable share of such payment, together with any interest required to be paid by the Agent or the Issuing Bank with respect to such payment.

SECTION IV.2. Default Interest. Any amounts payable hereunder that are not paid when due shall (to the fullest extent permitted by law) bear interest, from the date when due until paid in full, at the Default Rate, payable on demand.

SECTION IV.3. Yield Protection. (a) Change in Circumstances. Notwithstanding any other provision herein, if after the date hereof; the adoption of or any change in applicable law or regulation or in the interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof (whether or not having the force of law) shall (i) change the basis of taxation of payments to the Issuing Bank or any Participating Bank of the principal of or interest on any Eurodollar Rate Advance made by such Participating Bank or any fees or other amounts payable hereunder (other than changes in respect of taxes imposed on the overall net income of the Issuing Bank or such Participating Bank, or its Applicable Lending Office, by the jurisdiction in which the Issuing Bank or such Participating Bank has its principal office or in which such Applicable Lending Office is located or by any political subdivision or taxing authority therein), or (ii) shall impose, modify or deem applicable any reserve, special deposit or similar requirement against letters of credit (or participatory interests therein) issued by, commitments or assets of, deposits with or for the account of, or credit extended by, the Issuing Bank or such Participating Bank, or (iii) shall impose on the Issuing Bank or such Participating Bank any other condition affecting this Agreement, the Letter of Credit or participatory interests therein or Eurodollar Rate Advances, and the result of any of the foregoing shall be (A) to increase the cost to the Issuing Bank or such Participating Bank of issuing, maintaining or participating in this Agreement or the Letter of Credit or of agreeing to make, making or maintaining any Advance or (B) to reduce the amount of any sum received or receivable by the Issuing Bank or such Participating Bank hereunder (whether of principal, interest or otherwise), then the Account Party will pay to the Issuing Bank or such Participating Bank, upon demand, such additional amount or amounts as will compensate the Issuing Bank or such Participating Bank for such additional costs incurred or reduction suffered.

(b) Capital. If the Issuing Bank or any Participating Bank shall have determined that the applicability of any law, rule, regulation or guideline adopted pursuant to or arising out of the July 1988 report of the Basle Committee on Banking Regulations and Supervisory Practices entitled "International Convergence of Capital Measurement and Capital Standards", or the adoption after the date hereof of any law, rule, regulation or guideline regarding capital adequacy, or any change in any of the foregoing or in the interpretation or administration of any of the foregoing by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Issuing Bank or any Participating Bank (or any Applicable Lending Office of the Issuing Bank or such Participating Bank), or any holding company of any such entity, with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect (i) of reducing the rate of return on such entity's capital or on the capital of such entity's holding company, if any, as a consequence of this Agreement, the Letter of Credit or such entity's participatory interest therein, any Commitment hereunder or the portion of the Advances made by such entity pursuant hereto to a level below that which such entity or such entity's holding company could have achieved, but for such applicability, adoption, change or compliance (taking into consideration such entity's policies and the policies of such entity's holding company with respect to capital adequacy), or (ii) of increasing or otherwise determining the amount of capital required or expected to be maintained by such entity or such entity's holding company based upon the existence of this Agreement, the Letter of Credit or such entity's participatory interest therein, any Commitment hereunder, the portion of the Advances made by such entity pursuant hereto and other similar such credits, participations, commitments, agreements or assets, then from time to time the Account Party shall pay to the Issuing Bank or such Participating Bank, upon demand, such additional amount or amounts as will compensate such entity or such entity's holding company for any such reduction or allocable capital cost suffered.

(c) Eurodollar Reserves. The Account Party shall pay to each Participating Bank upon demand, so long as such Participating Bank shall be required under regulations of the Board of Governors of the Federal Reserve System to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities, additional interest on the unpaid principal amount of such Participating Bank's portion of each Eurodollar Rate Advance, from the date of such Advance until such principal amount is paid in full, at an interest rate per annum equal at all times to the remainder obtained by subtracting (i) the rate described in clause (i) of the definition of "Eurodollar Rate" for the Interest Period for such Advance from
(ii) the rate obtained by dividing such rate by a percentage equal to 100% minus the Eurodollar Reserve Percentage of such Participating Bank for such Interest Period. Such additional interest shall be determined by such Participating Bank and notified to the Account Party and the Issuing Bank.

(d) Breakage Indemnity. The Account Party shall indemnify each Participating Bank against any loss, cost or reasonable expense which such Participating Bank may sustain or incur as a consequence of (i) any failure by the Account Party to fulfill on the date of any Advance or Conversion hereunder the applicable conditions set forth in Articles III and V, (ii) any failure by the Account Party to Convert any Advance hereunder after irrevocable notice of Conversion has been given pursuant to Section 3.04 hereof, (iii) any payment, prepayment or Conversion of a Eurodollar Rate Advance required or permitted by any other provision of this Agreement or otherwise made or deemed made on a date other than the last day of the Interest Period applicable thereto, (iv) any default in payment or prepayment of the principal amount of any Advance or any part thereof or interest accrued thereon, as and when due and payable (at the due date thereof, by irrevocable notice of prepayment or otherwise) or (v) the occurrence of any Event of Default, including, in each such case, any loss or reasonable expense sustained or incurred or to be sustained or incurred in liquidating or employing deposits from third parties acquired to effect or maintain such Advance or any part thereof as a Eurodollar Rate Advance. Such loss, cost or reasonable expense shall include an amount equal to the excess, if any, as reasonably determined by such Participating Bank, of (A) its cost of obtaining the funds for the Advance being paid, prepaid, Converted or not borrowed (based on the Eurodollar Rate) for the period from the date of such payment, prepayment, Conversion or failure to borrow to the last day of the Interest Period for such Advance (or, in the case of a failure to borrow, the Interest Period for such Advance which would have commenced on the date of such failure) over (B) the amount of interest (as reasonably determined by such Participating Bank) that would be realized by such Participating Bank in reemploying the funds so paid, prepaid, Converted or not borrowed for such period or Interest Period, as the case may be. For purposes of this subsection (d), it shall be presumed that each Participating Bank shall have funded each such Advance with a fixed-rate instrument bearing the rates and maturities designated in the determination of the applicable interest rate for such Advance.

(e) Notices. A certificate of the Issuing Bank or any Participating Bank setting forth such entity's claim for compensation hereunder and the amount necessary to compensate such entity or its holding company pursuant to subsections (a) through (d) of this Section 4.03 shall be submitted to the Account Party and the Issuing Bank and shall be conclusive and binding for all purposes, absent manifest error. The Account Party shall pay the Issuing Bank or such Participating Bank directly the amount shown as due on any such certificate within ten days after its receipt of the same. The failure of any entity to provide such notice or to make demand for payment under this
Section 4.03 shall not constitute a waiver of such Participating Bank's rights hereunder; provided, that such entity shall not be entitled to demand payment pursuant to subsections (a) through (d) of this Section 4.03 in respect of any loss, cost, expense, reduction or reserve if such demand is made more than one year following the later of such entity's incurrence or sufferance thereof or such entity's actual knowledge of the event giving rise to such entity's rights pursuant to such subsections. The protection of this
Section 4.03 shall be available to the Issuing Bank and each Participating Bank regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, guideline or other change or condition which shall have occurred or been imposed.

(f) Change in Legality. Notwithstanding any other provision herein, if the adoption of or any change in any law or regulation or in the interpretation or administration thereof by any governmental authority charged with the administration or interpretation thereof shall make it unlawful for any Participating Bank to make or maintain any Eurodollar Rate Advance or to give effect to its obligations as contemplated hereby with respect to any Eurodollar Rate Advance, then, by written notice to the Account Party and the Issuing Bank, such Participating Bank may:

(i) declare that Eurodollar Rate Advances will not thereafter be made by such Participating Bank hereunder, whereupon the right of the Account Party to select Eurodollar Rate Advances for any Advance or Conversion shall be forthwith suspended until such Participating Bank shall withdraw such notice as provided hereinbelow or shall cease to be a Participating Bank hereunder; and

(ii) require that all outstanding Eurodollar Rate Advances be Converted to Base Rate Advances, in which event all Eurodollar Rate Advances shall be automatically Converted to Base Rate Advances as of the effective date of such notice as provided hereinbelow.

Upon receipt of any such notice, the Agent shall promptly notify the Participating Banks thereof. Promptly upon becoming aware that the circumstances that caused such Participating Bank to deliver such notice no longer exist, such Participating Bank shall deliver notice thereof to the Account Party and the Agent withdrawing such prior notice (but the failure to do so shall impose no liability upon such Participating Bank). Promptly upon receipt of such withdrawing notice from such Participating Bank, the Agent shall deliver notice thereof to the Account Party and the Participating Banks and such suspension shall terminate. Prior to any Participating Bank giving notice to the Account Party under this subsection (f), such Participating Bank shall use reasonable efforts to change the jurisdiction of its Applicable Lending Office, if such change would avoid such unlawfulness and would not, in the sole determination of such Participating Bank, be otherwise disadvantageous to such Participating Bank. Any notice to the Account Party by any Participating Bank shall be effective as to each Eurodollar Rate Advance on the last day of the Interest Period currently applicable to such Eurodollar Rate Advance; provided that if such notice shall state that the maintenance of such Advance until such last day would be unlawful, such notice shall be effective on the date of receipt by the Account Party and the Agent.

(g) Market Rate Disruptions. If, (i) the Agent determines that an adequate basis does not exist for the determination of the Eurodollar Rate for Eurodollar Rate Advances or (ii) if the Majority Lenders shall notify the Agent that the Eurodollar Rate will not adequately reflect the cost to such Majority Lenders of making, funding or maintaining their respective Eurodollar Rate Advances, the right of the Account Party to select or receive or Convert into Eurodollar Rate Advances shall be forthwith suspended until the Agent shall notify the Account Party and the Participating Banks that the circumstances causing such suspension no longer exist, and until such notification from the Agent, each request for or Conversion into Eurodollar Rate Advances hereunder shall be deemed to be a request for or Conversion into Base Rate Advances.

SECTION IV.4. Sharing of Payments, Etc. If any Participating Bank shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise, but excluding any proceeds received by assignments or sales of participations in accordance with Section 10.06 hereof to a Person that is not an Affiliate of the Account Party) on account of the Advances owing to it (other than pursuant to Section 4.03 hereof) in excess of its ratable share of payments on account of the Advances obtained by all the Participating Banks, such Participating Batik shall forthwith purchase from the other Participating Banks such participation in the portions of the Advances owing to them as shall be necessary to cause such purchasing Participating Bank to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Participating Bank, such purchase from each Participating Bank shall be rescinded and such Participating Bank shall repay to the purchasing Participating Bank the purchase price to the extent of such recovery together with an amount equal to such Participating Bank's ratable share (according to the proportion of
(i) the amount of such Participating Bank's required repayment to (ii) the total amount so recovered from the purchasing Participating Bank) of any interest or other amount paid or payable by the purchasing Participating Bank in respect of the total amount so recovered. The Account Party agrees that any Participating Bank so purchasing a participation from another Participating Bank pursuant to this Section 4.04 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Participating Bank were the direct creditor of the Account Party in the amount of such participation. Notwithstanding the foregoing, if any Participating Bank shall obtain any such excess payment involuntarily, such Participating Bank may, in lieu of purchasing participation from the other Participating Banks in accordance with this Section 4.04, on the date of receipt of such excess payment, return such excess payment to the Agent for distribution in accordance with Section 4.01(a) hereof.

SECTION IV.5. Taxes. (a) All payments by the Account Party hereunder shall be made in accordance with Section 4.01, free and clear of and without deduction for all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Participating Bank and the Issuing Bank, taxes imposed on its overall net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Participating Bank or the Issuing Bank (as the case may be) is organized or any political subdivision thereof and, in the case of each Participating Bank, taxes imposed on its overall net income, and franchise taxes imposed on it, by the jurisdiction of such Participating Bank's Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"). If the Account Party shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Participating Bank or the Issuing Bank, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 4.05) such Participating Bank or the Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Account Party shall make such deductions and (iii) the Account Party shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

(b) In addition, the Account Party agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement (hereinafter referred to as "Other Taxes").

(c) The Account Party will indemnify each Participating Bank and the Issuing Bank for the full amount of Taxes and Other Taxes (including, without limitation, any Taxes and any Other Taxes imposed by any jurisdiction on amounts payable under this Section 4.05) paid by such Participating Bank or the Issuing Bank (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date such Participating Bank or the Issuing Bank (as the case may be) makes written demand therefor. If any Taxes or Other Taxes for which a Participating Bank or the Issuing Bank has received payments from the Account Party hereunder shall be finally determined to have been incorrectly or illegally asserted and are refunded to such Participating Bank, such Participating Bank shall promptly forward to the Account Party any such refunded amount. The Account Party's, the Issuing Bank's and each Participating Bank's obligations under this Section 4.05 shall survive the payment in full of the Advances.

(d) Within 30 days after the date of any payment of Taxes, the Account Party will furnish to the Issuing Bank, at its address referred to in Section 10.02 hereof the original or a certified copy of a receipt evidencing payment thereof.

(e) Each Participating Bank not incorporated in the United States or a jurisdiction within the United States shall, on or prior to the date it becomes a Participating Bank hereunder, deliver to the Account Party and the Issuing Bank such certificates, documents or other evidence, as required by the Internal Revenue Code of 1986, as amended from time to time (the "Code"), or treasury regulations issued pursuant thereto, including Internal Revenue Service Form 4224 and any other certificate or statement of exemption required by Treasury Regulation Section l.1441-1(a) or Section 1.1441-6(c) or any subsequent version thereof, properly completed and duly executed by such Participating Bank establishing that it is (i) not subject to withholding under the Code or (ii) totally exempt from United States of America tax under a provision of an applicable tax treaty. Each Participating Bank shall promptly notify the Account Party and the Issuing Bank of any change in its Applicable Lending Office and shall deliver to the Account Party and the Issuing Bank together with such notice such certificates, documents or other evidence referred to in the immediately preceding sentence. Unless the Account Party and the Issuing Bank have received forms or other documents satisfactory to them indicating that payments hereunder are not subject to United States of America withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty, the Account Party or the Issuing Bank shall withhold taxes from such payments at the applicable statutory rate in the case of payments to or for any Participating Bank organized under the laws of a jurisdiction outside the United States of America. Each Participating Bank represents and warrants that each such form supplied by it to the Issuing Bank and the Account Party pursuant to this Section 4.05, and not superseded by another form supplied by it is or will be, as the case may be, complete and accurate.

(f) Any Participating Bank claiming any additional amounts payable pursuant to this Section 4.05 shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document requested by the Account Party or to change the jurisdiction of its Applicable Lending Office if the making of such a filing or change would avoid the need for or reduce the amount of any such additional amounts which may thereafter accrue and would not, in the sole determination of such Participating Bank, be otherwise disadvantageous to such Participating Bank.

(g) Notwithstanding anything to the contrary set forth in this Section 4.05, the failure or inability of any Participating Bank to provide any of the forms referred to therein shall not relieve the Account Party from its obligations under Sections 4.05(a), 4.05(b) and 4.05(c).

SECTION IV.6. Obligations Absolute. The obligations of the Account Party under this Agreement shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement (as the same may be amended from time to time) under all circumstances, including, without limitation, the following circumstances:

(i) any lack of validity or enforceability of this Agreement or any of the Security Documents or Related Documents or any document or agreement delivered in connection therewith;

(ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Account Party in respect of the Letter of Credit or any other amendment or waiver of or any consent to departure from all or any of the Loan Documents or the Related Documents or any document or agreement delivered in connection therewith;

(iii) the existence of any claim, set-off, defense or other right which the Account Party may have at any time against the Paying Agent, the Trustee or any other beneficiary, or any transferee, of the Letter of Credit (or any persons or entities for whom the Paying Agent, the Trustee, any such beneficiary or any such transferee may be acting), the Agent, the Issuing Bank, or any other person or entity, whether in connection with this Agreement, the transactions contemplated in any of the Loan Documents or the Related Documents, or any unrelated transaction;

(iv) any statement or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect except to the extent that a court of competent jurisdiction shall determine that the Issuing Bank shall have engaged in gross negligence or willful misconduct with respect thereto;

(v) payment by the Issuing Bank under the Letter of Credit against presentation of a draft or certificate which does not comply with the terms of the Letter of Credit, except to the extent that a court of competent jurisdiction shall determine that the Issuing Bank shall have engaged in gross negligence or willful misconduct with respect thereto;

(vi) any exchange of, release of or non-perfection of any interest in any collateral, or any release or amendment or waiver of or consent to departure from any guarantee, for all or any of the obligations of the Account Party in respect of the Letter of Credit; or

(vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

SECTION IV.7. Evidence of Indebtedness. The Issuing Bank and each Participating Bank shall maintain, in accordance with their usual practice, an account or accounts evidencing the indebtedness of the Account Party resulting from each drawing under the Letter of Credit (in the case of the Issuing Bank) and from each Advance (in the case of each Participating Bank) made from time to time hereunder and the amounts of principal and interest payable and paid from time to time hereunder. In any legal action or proceeding in respect of this Agreement, the entries made in such account or accounts shall, in the absence of manifest error, be conclusive evidence of the existence and amounts of the obligations of the Account Party therein recorded.

ARTICLE V
CONDITIONS PRECEDENT

SECTION V.1. Conditions Precedent to the Issuance of the Letter of Credit. The obligation of the Issuing Bank to issue the Letter of Credit and of each Participating Bank to make the Advances to be made by it is subject to the fulfillment of the conditions precedent that the Agent shall have received on or before the day of such issuance the following, each dated such day (except where specified otherwise below), in form and substance satisfactory to each Participating Bank (except where specified otherwise below) and in sufficient copies for each Participating Bank:

(a) Agreements:

(i) Counterparts of this Agreement, duly executed and delivered by the Account Party, the Agent, the Issuing Bank and each Participating Bank.

(ii) Counterparts of the Pledge Amendment, duly executed by the Account Party, Citibank, the Agent and the Issuing Bank, and copies of the Pledge Agreement.

(iii) For each Participating Bank who shall so request, executed copies (or duplicate copies thereof certified as of the Closing Date by the Account Party in a manner satisfactory to the Agent to be a true copy) of each other Security Document, duly executed by the parties thereto.

(iv) For each Participating Bank who shall so request, executed copies (or duplicate copies thereof certified as of the Closing Date by the Account Party in a manner satisfactory to the Agent to be a true copy) of the Rate Agreement and each Significant Contract and all amendments, modifications and supplements thereto, in each such case duly executed by the respective parties thereto.

(b) Corporate Matters:

(i) A certificate of the Secretary or an Assistant Secretary of the Account Party certifying that (A) there has been delivered to the Agent, and to each other Participating Bank known to such officers to have so requested, true and correct copies of the Articles of Incorporation of the Account Party and the By-laws of the Account Party, in each case as in effect on the Closing Date and (B) attached to such certificate are true and correct copies of the resolutions of the Boards of Directors of the Account Party approving, if and to the extent necessary, this Agreement, the other Loan Documents, the Related Documents to which it is a party and the other documents to be delivered by or on behalf of the Account Party hereunder and thereunder, and of all documents evidencing other necessary corporate action, if any, with respect to the execution, delivery and performance by or on behalf of the Account Party of this Agreement, the other Loan Documents and such Related Documents and certifying that such resolutions and other corporate actions, if any, are in full force and effect and have not been revoked, rescinded or modified.

(ii) A certificate of the Secretary or an Assistant Secretary of the Account Party certifying the names and true signatures of the officers of the Account Party authorized to sign this Agreement, the other Loan Documents and the other documents to be delivered hereunder and thereunder.

(c) Governmental Approvals, Litigation and the Merger:

(i) A certificate of a duly authorized officer of the Account Party certifying that attached thereto are true and correct copies of all Governmental Approvals referred to in clause (i) of the definition of "Governmental Approval" required to be obtained or made by the Account Party in connection with the execution and delivery of this Agreement and the issuance of the Letter of Credit.

(ii) A certificate signed by the Assistant General Counsel of NUSCO certifying that no court has granted a motion for stay or any request for similar relief in connection with the Plan, the Merger, the Loan Documents, the Related Documents or the transactions contemplated thereunder.

(iii) A certificate of a duly authorized officer of the Account Party to the effect that there is no pending or known threatened action or proceeding (including, without limitation, any action or proceeding relating to any environmental protection laws or regulations) affecting the Account Party or its properties before any court, governmental agency or arbitrator (A) which affects or purports to affect the legality, validity or enforceability of the Loan Documents or the Related Documents or any of them or (B) as to which there is a reasonable possibility of an adverse determination and which, if adversely determined, would materially adversely affect the financial condition, properties, prospects or operations of the Account Party; except, for purposes of clause (B) only, such as is described in the Account Party's Annual Report on Form 10-K for the fiscal year ended December 31, 1994 or in Schedule II hereto.

(iv) Certificates signed by duly authorized officers of the Account Party and NU to the effect that all conditions to the occurrence of the Merger were satisfied or waived and the Merger was consummated on June 5, 1992.

(d) Financial Accounting and Compliance Matters:

(i) An audited balance sheet of the Account Party as at December 31, 1994 and the related statements of the Account Party's results of operations, retained earnings and cash flows for and as of the year then ended, together with copies of all Current Reports, if any, filed by the Account Party with the Securities and Exchange Commission on or after December 31, 1994.

(ii) A certificate signed by the Treasurer or Assistant Treasurer of the Account Party, certifying as to the absence of any material adverse change in the financial condition, operations, properties or prospects of the Account Party since December 31, 1994.

(iii) Financial projections, on assumptions acceptable to the Participating Banks, demonstrating projected compliance with Section 7.01(i) of the Existing Agreement and the terms of this Agreement and the Financing Agreements.

(iv) A certificate signed by the Chief Financial Officer, Treasurer or Assistant Treasurer of NU, certifying as to the absence of any material adverse change in the financial condition, operations, properties or prospects of NU since December 31, 1994.

(v) A certificate of a duly authorized officer of the Account Party to the effect that:

(A) the representations and warranties contained in Section 6.01 are correct in all material respects on and as of the Closing Date before and after giving effect to the issuance of the Letter of Credit;

(B) no event has occurred and is continuing which constitutes an Event of Default or Unmatured Default, or would result from the issuance of the Letter of Credit;

(C) the Financing Agreements are in full force and effect and no "Event of Default" or "Unmatured Default" (as defined therein) has occurred and is continuing; and

(D) the Series F First Mortgage Bonds were duly issued to the Trustee in accordance with the Indenture, are presently outstanding, and no "Event of Default" (as defined in the First Mortgage Indenture) has occurred and is continuing.

(e) Relating to the Issuance of the Bonds:

(i) A letter from Palmer & Dodge, Bond Counsel, addressed to the Agent, the Issuing Bank and the Participating Banks and stating therein that the Agent, the Issuing Bank and the Participating Banks may rely on the opinions of such firm rendered in connection with the respective issuances of the Taxable Bonds and the Existing Tax-Exempt Refunding Bonds, together with copies of all such opinions.

(ii) A letter from Palmer & Dodge, counsel to the Issuer, addressed to the Agent, the Issuing Bank and the Participating Banks and stating therein that the Agent, the Issuing Bank and the Participating Banks may rely on the opinions of such firm rendered in connection with the respective issuances of the Taxable Bonds and the Existing Tax-Exempt Refunding Bonds, together with copies of all such opinions.

(iii) A letter from Sulloway & Hollis, New Hampshire counsel to the Account Party, addressed to the Agent, the Issuing Bank and the Participating Banks and stating therein that the Agent, the Issuing Bank and the Participating Banks may rely on the opinion of such firm rendered in connection with the issuance of the Taxable Bonds, together with a copy of such opinion.

(iv) A letter from Day, Berry & Howard, counsel to the Account Party, addressed to the Agent, the Issuing Bank and the Participating Banks and stating therein that the Agent, the Issuing Bank and the Participating Banks may rely on the opinions of such firm rendered in connection with the respective issuances of the Taxable Bonds and the Existing Tax-Exempt Refunding Bonds, together with copies of all such opinions.

(v) Copies of the opinions of Drummond Woodsum & MacMahon, special Maine counsel to the Account Party, rendered in connection with the respective issuances of the Taxable Bonds and the Existing Tax-Exempt Refunding Bonds, authorizing reliance thereon by (A) Day, Berry & Howard in connection with the corresponding opinions of that firm referred to in clause (iv), above, and (B) by any party authorized to rely on such opinions of Day, Berry & Howard.

(vi) Copies of the opinions of Zuccaro, Willis & Bent special Vermont counsel to the Account Party, rendered in connection with the respective issuances of the Taxable Bonds and the Existing Tax-Exempt Refunding Bonds, authorizing reliance thereon by (A) Day, Berry & Howard in connection with the corresponding opinions of that firm referred to in clause (iv), above, and (B) by any party authorized to rely on such opinions of Day, Berry & Howard.

(vii) Copies of all such other agreements, documents and materials (including opinions of counsel or reliance letters in respect thereof) as the Agent, the Issuing Bank or any Participating Bank may reasonably request relating to the issuance, offering and sale of the Taxable Bonds, the Existing Tax-Exempt Refunding Bonds and the Series F First Mortgage Bonds.

(f) Opinions of Counsel:

Favorable opinions of:

(i) Day, Berry & Howard, counsel to the Account Party, in substantially the form of Exhibit 5.01A and as to such other matters as the Majority Lenders, through the Agent, may reasonably request;

(ii) Rath, Young and Pignatelli, P.A., special New Hampshire counsel to the Account Party, in substantially the form of Exhibit 5.01B and as to such other matters as the Majority Lenders, through the Agent, may reasonably request;

(iii) Jeffrey C. Miller, Assistant General Counsel of NUSCO, in substantially the form of Exhibit 5.01C and as to such other matters as the Majority Lenders, through the Agent, may reasonably request;

(iv) Drummond Woodsum & MacMahon, special Maine counsel to the Account Party, in substantially the form of Exhibit 5.01D and as to such other matters as the Majority Lenders, through the Agent, may reasonably request;

(v) Zuccaro Willis & Bent, special Vermont counsel to the Account Party, in substantially the form of Exhibit 5.01E and as to such other matters as the Majority Lenders, through the Agent, may reasonably request; and

(vi) King & Spalding, special New York counsel to the Agent and the Issuing Bank, in substantially the form of Exhibit 5.01F.

(g) Miscellaneous:

(i) A certificate of Citibank, as agent thereunder, to the effect that (A) all amounts payable in connection with the Existing Reimbursement Agreement and the letter of credit issued thereunder have been paid to it and (B) it thereby surrenders any and all rights it may have under the Related Documents arising in connection with the Existing Reimbursement Agreement and the letter of credit issued thereunder, except for any such rights it may have as an indemnified party thereunder.

(ii) Letters from S&P and Moody's to the effect that the Taxable Bonds have been rated A-1+ and P-1, respectively, and the Tax-Exempt Refunding Bonds have been rated A-1+ and VMIG-1, respectively, and that the issuance of the Letter of Credit in substitution for the Existing Letter of Credit will not, by itself, result in a lowering of such ratings, such letters to be in form and substance satisfactory to the Issuing Bank.

(iii) Such other approvals, opinions and documents as the Majority Lenders, through the Issuing Bank, may reasonably request as to the legality, validity, binding effect or enforceability of the Loan Documents or the financial condition, properties, operations or prospects of the Account Party.

SECTION V.2. Additional Conditions Precedent to the Issuance of the Letter of Credit. The obligation of the Issuing Bank to issue the Letter of Credit and of each Participating Bank to make the Advances to be made by it shall be subject to the further conditions precedent that, on the date of the issuance of the Letter of Credit:

(a) the representations and warranties contained in Section 6.01 shall be correct in all material respects on and as of the Closing Date before and after giving effect to the issuance of the Letter of Credit;

(b) no event shall have occurred and be continuing which constitutes an Event of Default or Unmatured Default, or would result from the issuance of the Letter of Credit;

(c) no "Event of Default" (as defined in the First Mortgage Indenture) shall have occurred and be continuing;

(d) the Series F First Mortgage Bonds shall have been duly issued to the Trustee in accordance with the Indenture, and be outstanding, and no "Event of Default" (as defined in the First Mortgage Indenture) shall have occurred and be continuing; and

(e) The Account Party shall have paid all fees under or referenced in
Section 2.03 hereof, to the extent then due and payable.

SECTION V.3. Conditions Precedent to Initial Advances and Conversions of Advances. The obligation of each Participating Bank to make any Initial Advance or to Convert any Term Advance shall be subject to the conditions precedent that, on the date of such Initial Advance or Conversion, the following statements shall be true:

(a) the representations and warranties contained in Section 6.01 of this Agreement (other than the last sentence of subsection (e) and clause (ii) of subsection (f) thereof) are true and correct on and as of the date of such Initial Advance or Conversion, before and after giving effect to such Initial Advance or Conversion and to the application of the proceeds (if any) therefrom, as though made on and as of such date; and

(b) no event has occurred and is continuing which constitutes an Event of Default.

Unless the Account Party shall have previously advised the Agent in writing that one or more of the statements contained in subsections (a) and (b) of this Section 5.03 is no longer true, the Account Party shall be deemed to have represented and warranted, on and as of the date of any Initial Advance or Conversion, that the above statements are true.

SECTION V.4. Conditions Precedent to Term Advances. The obligation of each Participating Bank to make any Term Advance shall be subject to the conditions precedent that, on the date of such Term Advance the following statements shall be true:

(a) the representations and warranties contained in Section 6.01 of this Agreement (including the last sentence of subsection (e) and clause (ii) of subsection (f) thereof) are true and correct on and as of the date of such Term Advance, before and after giving effect to such Term Advance and to the application of the proceeds therefrom, as though made on and as of such date; and

(b) no event has occurred and is continuing which constitutes an Event of Default or an Unmatured Default.

Unless the Account Party shall have previously advised the Agent in writing that one or more of the statements contained in subsections (a) and (b) of this Section 5.04 is no longer true, the Account Party shall be deemed to have represented and warranted, on and as of the date of any Term Advance, that the above statements are true.

SECTION V.5. Reliance on Certificates. The Agent, the Issuing Bank and the Participating Banks shall be entitled to rely conclusively upon the certificates delivered from time to time by officers of the Account Party, NU, NUSCO and the other parties to the Loan Documents, Related Documents and the Significant Contracts as to the names, incumbency, authority and signatures of the respective persons named therein until such time as the Agent may receive a replacement certificate, in form acceptable to the Agent, from an officer of such Person identified to the Agent as having authority to deliver such certificate, setting forth the names and true signatures of the officers and other representatives of such Person thereafter authorized to act on behalf of such Person.

ARTICLE VI
REPRESENTATIONS AND WARRANTIES

SECTION VI.1. Representations and Warranties of the Account Party. The Account Party represents and warrants as follows:

(a) The Account Party is a corporation duly organized and validly existing under the laws of the State of New Hampshire. The Account Party is duly qualified to do business in, and is in good standing in, all other jurisdictions where the nature of its business or the nature of property owned or used by it makes such qualifications necessary.

(b) The execution, delivery and performance by the Account Party of the Rate Agreement and of each Transaction Document, Loan Document, Related Document and Significant Contract to which it is a party, are within the Account Party's corporate powers, have been duly authorized by all necessary corporate action, and do not and will not contravene (i) the Account Party's charter or bylaws or (ii) any law or legal or contractual restriction binding on or affecting the Account Party; and such execution, delivery and performance do not or will not result in or require the creation of any Lien (other than pursuant hereto or pursuant to the Security Documents) upon or with respect to any of its properties.

(c) All Governmental Approvals referred to in clauses (i) and (ii) of the definition of "Governmental Approvals" have been duly obtained or made, and all applicable periods of time for review, rehearing or appeal with respect thereto have expired, except as described in the several opinions of counsel delivered pursuant to Article III of the Amendment. The Account Party has obtained or made all Governmental Approvals referred to in clause (iii) of the definition of "Governmental Approvals", except those which are not yet required but which are obtainable in the ordinary course of business as and when required and those the absence of which would not materially adversely affect the financial condition, properties, prospects or operations of the Account Party as a whole.

(d) This Agreement, the Rate Agreement, each other Transaction Document, Loan Document, Related Document and each Significant Contract to which the Account Party is a party have been duly executed and delivered by or on behalf of the Account Party and are legal, valid and binding obligations of the Account Party enforceable against the Account Party in accordance with their respective terms; subject to the qualifications, however, that the enforcement of the rights and remedies herein and therein is subject to bankruptcy and other similar laws of general application affecting rights and remedies of creditors and the application of general principles of equity (regardless of whether considered in a proceeding in equity or law), that the remedy of specific performance or of injunctive relief is subject to the discretion of the court before which any proceedings therefor may be brought and that indemnification against violations of securities and similar laws may be subject to matters of public policy.

(e) The audited balance sheet of the Account Party as at December 31, 1997 and the related statements of the Account Party setting forth the results of operations, retained earnings and cash flows of the Account Party for the fiscal year then ended, copies of which have been furnished to each Participating Bank, fairly present in all material respects the financial condition, results of operations, retained earnings and cash flows of the Account Party at and for the year ended on such date, and have been prepared in accordance with generally accepted accounting principles consistently applied. Except as reflected in such financial statements, the Account Party has no material non-contingent liabilities, and all contingent liabilities have been appropriately reserved. The financial projections referred to in
Section 3.02(d)(ii) of the Amendment have been prepared in good faith and on reasonable assumptions. Since December 31, 1997, there has been no material adverse change in the financial condition, operations, properties or prospects of the Account Party, other than as disclosed in the Disclosure Documents; provided, however, that the existence of the Rate Proceeding shall not be deemed in and of itself to be a material adverse change; provided, further, however, that notwithstanding the foregoing, a material adverse change shall be deemed to have occurred and be continuing upon the occurrence of a material adverse change or development in the Rate Proceeding.

(f) Except as set forth in the Disclosure Documents, there is no pending or known threatened action or proceeding (including, without limitation, any action or proceeding relating to any environmental protection laws or regulations) affecting the Account Party or its properties before any court, governmental agency or arbitrator (i) which affects or purports to affect the legality, validity or enforceability of the Transaction Documents, the Loan Documents or the Related Documents, the Rate Agreement, or any Significant Contract, or any of them or (ii) which, if adversely determined, would materially adversely affect the financial condition, operations, properties or prospects of the Account Party as a whole. Notwithstanding the foregoing, any material adverse development in respect of the Rate Proceeding, the Rate Agreement or the Final Plan that results, or would reasonably be expected to result, in a material adverse effect on the financial condition, operations, properties or prospects of the Account Party as a whole, shall be deemed to be an event within clause (ii) of the preceding sentence.

(g) All insurance required by Section 7.01(c) hereof is in full force and effect.

(h) No ERISA Plan Termination Event has occurred nor is reasonably expected to occur with respect to any ERISA Plan which would materially adversely affect the financial condition, properties, prospects or operations of the Account Party, except as disclosed to and consented by the Majority Lenders in writing. Since the date of the most recent Schedule B (Actuarial Information) to the annual report of the Account Party (Form 5500 Series), if any, there has been no material adverse change in the funding status of the ERISA Plans referred to therein and no "prohibited transaction" has occurred with respect thereto, except as described in the 1997 10-K and except as the same may be exempt pursuant to Section 408 of ERISA and regulations and orders thereunder. Neither the Account Party nor any of its ERISA Affiliates has incurred nor reasonably expects to incur any material withdrawal liability under ERISA to any ERISA Multiemployer Plan, except as disclosed to and consented by the Majority Lenders in writing.

(i) The Major Electric Generating Plants are on land in which the Account Party owns a full or an undivided fee interest subject only to Liens permitted by Section 7.02(a) hereof, which do not materially impair the usefulness to the Account Party of such properties; the electric transmission and distribution lines of the Account Party in the main are located in New Hampshire and on land owned in fee by the Account Party or over which the Account Party has easements, or are in or over public highways or public waters pursuant to adequate statutory or regulatory authority, and any defects in the title to such transmission and distribution lands or easements are in the main curable by the exercise of the Account Party's right of eminent domain upon a finding that such eminent domain proceedings are necessary to meet the reasonable requirements of service to the public; the Account Party enjoys peaceful and undisturbed possession under all of the leases under which it is operating, none of which contains any unusual or burdensome provision which will materially affect or impair the operation of the Account Party; and the Security Documents will create valid Liens in the Collateral, subject only to Liens permitted by Section 7.02(a) hereof, and all filings and other actions necessary to perfect and protect such security interests (to the extent such security interests may be perfected or protected by filing) have been taken; provided, however, that no representation is made as to any Lien purported to be created in favor of the Trustee with respect to any interest of the Issuer in the Indenture.

(j) No material part of the properties, business or operations of the Account Party are materially adversely affected by any fire, explosion, accident, strike, lockout or other labor disputes, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (except for any such circumstance, if any, which is covered by insurance which coverage has been confirmed and not disputed by the relevant insurer or by fully-funded self-insurance programs).

(k) The Account Party has filed all tax returns (Federal, state and local) required to be filed and paid taxes shown thereon to be due, including interest and penalties, or, to the extent the Account Party is contesting in good faith an assertion of liability based on such returns, has provided adequate reserves in accordance with generally accepted accounting principles for payment thereof.

(l) No exhibit, schedule, report or other written information provided by the Account Party or its agents to the Agent, the Issuing Bank or the Participating Banks in connection with the negotiation, execution and closing of this Agreement and the other Transaction Documents, or the issuance of the Bonds (including, without limitation, the Information Memorandum and the Official Statements) knowingly contained when made any material misstatement of fact or knowingly omitted to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances under which they were made.

(m) No event has occurred and is continuing which constitutes a material default under the Rate Agreement or any Significant Contract.

(n) The Account Party has not, either directly or indirectly, made any investment in, or loans to, any Affiliate of the Account Party, other than such investments or loans as were outstanding on the date hereof.

(o) No proceeds of any Advance will be used (i) to acquire any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934 or (ii) to buy or carry any margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System) or to extend credit to others for such purpose. The Account Party (X) is not an "investment company" within the meaning ascribed to that term in the Investment Company Act of 1940 or (Y) is not engaged in the business of extending credit for the purpose of buying or carrying margin stock.

ARTICLE VII
COVENANTS OF THE ACCOUNT PARTY

SECTION VII.1. Affirmative Covenants. So long as any amounts shall remain available to be drawn under the Letter of Credit or any Advance or other amounts shall remain unpaid hereunder or any Participating Bank shall have any Commitment, the Account Party will, unless the Majority Lenders shall otherwise consent in writing:

(a) Use of Proceeds. Apply all proceeds of each Advance solely as specified in Section 3.02 and Section 6.01(o) hereof.

(b) Payment of Taxes, Etc. Pay and discharge before the same shall become delinquent all taxes, assessments and governmental charges, royalties or levies imposed upon it or upon its property except to the extent the Account Party is contesting the same in good faith by appropriate proceedings and has set aside adequate reserves for the payment thereof.

(c) Maintenance of Insurance. Maintain, or cause to be maintained, insurance (including appropriate plans of seif-insurance) covering the Account Party and its properties in effect at all times in such amounts and covering such risks as may be required by law and in addition as is usually carried by companies engaged in similar businesses and owning similar properties.

(d) Preservation of Existence, Etc. Preserve and maintain its corporate existence, material rights (statutory and otherwise) and franchises except as otherwise expressly provided for in the Security Documents.

(e) Compliance with Laws, Etc. Comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of any governmental authority, including without limitation any such laws, rules, regulations and orders relating to utilities, zoning, environmental protection, use and disposal of Hazardous Substances, land use, construction and building restrictions, and employee safety and health matters relating to business operations, except to the extent (i) that the Account Party is contesting the same in good faith by appropriate proceedings or (ii) that any such non-compliance, and the enforcement or correction thereof, would not materially adversely affect the financial condition, properties, prospects or operations of the Account Party as a whole.

(f) Inspection Rights. At any time and from time to time upon reasonable notice, permit the Agent and its agents and representatives to examine and make copies of and abstracts from the records and books of account of, and the properties of, the Account Party and to discuss the affairs, finances and accounts of the Account Party with the Account Party and of its officers, directors and accountants.

(g) Keeping of Books. Keep proper records and books of account, in which full and correct entries shall be made of all financial transactions of the Account Party and the assets and business of the Account Party, in accordance with good accounting practices consistently applied.

(h) Performance of Related Agreements. Perform and observe all material terms and provisions of the Revolving Credit Agreement, the Rate Agreement and each Significant Contract to be performed or observed by the Account Party and take all reasonable steps to enforce such agreements substantially in accordance with their terms and to preserve the rights of the Account Party thereunder; provided, that the foregoing provisions of this Section 7.01(h) shall not preclude the Account Party from any waiver, amendment, modification, consent or termination (i) made in accordance with the provisions of Section 7.04 hereof (in the case of the Revolving Credit Agreement) or (ii) permitted under Section 7.02(g) hereof (in the case of the Rate Agreement or any Significant Contract).

(i) Collection of Accounts Receivable. Promptly bill, and diligently pursue collection of, in accordance with customary utility practices, all accounts receivable owing to the Account Party and all other amounts that may from time to time be owing to the Account Party for services rendered or goods sold.

(j) Maintenance of Financial Covenants:

(i) Operating Income to Interest Expense. Maintain a ratio of Operating Income to Interest Expense of not less than 2.35 to 1.00 for each period of four consecutive fiscal quarters on each quarter-end ending after December 31, 1997.

(ii) Common Equity to Total Capitalization Ratio. Maintain at all times a ratio of Common Equity to Total Capitalization of not less than 0.325 to 1.00.

(k) Maintenance of Properties, Etc. (i) As to properties of the type described in Section 6.01(i) hereof, maintain title of the quality described therein; and (ii) preserve, maintain, develop, and operate in substantial conformity with all laws, material contractual obligations and prudent practices prevailing in the industry, all of its properties which are used or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted, except to the extent such non-conformity would not materially adversely affect the financial condition, properties, prospects or operations of the Account Party as a whole.

(l) Governmental Approvals. Duly obtain on or prior to such date as the same may become legally required, and thereafter maintain in effect at all times, all Governmental Approvals on its part to be obtained, except those the absence of which would not materially adversely affect the financial condition, properties, prospects or operations of the Account Party as a whole.

(m) Further Assurances. Promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or that any Participating Bank through the Issuing Bank may reasonably request in order to fully give effect to the interests and properties purported to be covered by the Security Documents.

(n) Related Documents. Perform and comply in all material respects with each of the provisions of each Related Document to which it is a party.

SECTION VII.2. Negative Covenants. So long as any amount shall remain available to be drawn under the Letter of Credit or any Advance or other amounts shall remain unpaid hereunder or any Participating Bank shall have any Commitment, the Account Party will not without the written consent of the Majority Lenders:

(a) Liens, Etc. Create, incur, assume or suffer to exist any lien, security interest, or other charge or encumbrance (including the lien or retained security title of a conditional vendor) of any kind, or any other type of preferential arrangement the intent or effect of which is to assure a creditor against loss or to prefer one creditor over another creditor upon or with respect to any of its properties of any character (any of the foregoing being referred to herein as a "Lien") whether now owned or hereafter acquired, or sign or file under the Uniform Commercial Code of any jurisdiction a financing statement which names the Account Party as debtor, sign any security agreement authorizing any secured party thereunder to file such financing statement, or assign accounts, excluding, however, from the operation of the foregoing restrictions the following, whether now existing or hereafter created or perfected:

(i) The Liens of the First Mortgage Indenture, the Security Agreement, the Pledge Agreement, the "Pledge Agreement" referred to in the Other Reimbursement Agreement, and any lien created pursuant hereto; and

(ii) Permitted Liens (as defined in the First Mortgage Indenture as in effect on the date hereof) on the Indenture Assets; provided, however, that (A) the exclusion contained in clause (a) of such definition with respect to Liens junior to the Lien of the First Mortgage Indenture shall not apply to any Lien created after the date hereof; (B) the exclusion contained in clauses (g) and (h) of such definition shall apply only to the extent that all Liens of the type described therein from time to time existing do not, in the aggregate, materially and adversely affect the value of the security granted under the First Mortgage Indenture and no such Lien secures Debt of the Account Party for borrowed money; and (C) the Account Party shall not, on or after the date hereof, create, incur or assume any purchase money Debt secured by Liens of the type described in clause (o) of such definition; provided, however, that this Section 7.02(a) shall not be construed to authorize the Account Party to incur, assume, be liable for or suffer to exist any Debt not otherwise permitted hereunder.

(b) Debt. From and after the Amendment Closing Date, create, incur or assume any Debt, other than pursuant to this Agreement, the Other Reimbursement Agreement, the Revolving Credit Agreement and unsecured debt in an aggregate amount not to exceed $25,000,000, and then only if, after giving effect thereto, (i) no Event of Default or Unmatured Default shall have occurred and be continuing on the date of such creation, incurrence or assumption and (ii) the Account Party shall have determined that on the basis of the assumptions and forecasts set forth in the most recent operating budget/forecast of operations delivered pursuant to Section 7.03(iv) hereof (which the Account Party continues to believe to be reasonable), the Account Party will continue to be in compliance at all times with the provisions of
Section 7.01(j) hereof. The Account Party will furnish evidence of its compliance with this subsection (b) for each fiscal quarter pursuant to
Section 7.03(ii) hereof.

(c) Mergers, Etc. Merge with or into or consolidate with or into, or acquire all or substantially all of the assets of, any Person.

(d) Sales, Etc., of Assets. Sell, lease, transfer or otherwise dispose of all or any substantial part of its assets, whether in a single transaction or series of transactions during any consecutive 12-month period, except for (i) the sale of the Account Party's generating assets on an arms'-length basis in a transaction (or series of transactions) subject to approval by the NHPUC as part of a settlement of the Rate Proceeding and (ii) sales, leases, transfers or other dispositions in the ordinary course of the Account Party's business in accordance with ordinary and customary terms and conditions. For purposes of this subsection (d), any transaction or series of transactions during any consecutive 12-month period shall be deemed to involve a "substantial part" of the Account Party's assets if, in the aggregate, (A) the book value of such assets equals or exceeds 7.5% of the total assets, net of regulatory assets, of the Account Party reflected in the financial statements of the Account Party delivered pursuant to Section 7.03(ii) or 7.03(iii) hereof in respect of the fiscal quarter or year ending on or immediately prior to the commencement of such 12-month period or (B) for the four calendar quarters ending on or immediately prior to commencement of such 12-month period, the gross revenue derived by the Account Party from such assets shall equal or exceed 7.5% of the total gross revenue of the Account Party.

(e) Restricted Payments and NUG Settlements. Declare or pay any dividend, or make any payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any share of any class of capital stock of the Account Party (other than stock splits and dividends payable solely in equity securities of the Account Party), or purchase, redeem, retire, or otherwise acquire for value any shares of any class of capital stock of the Account Party or any warrants, rights, or options to acquire any such Debt or shares, now or hereafter outstanding, or make any distribution of assets to any of its shareholders (any such transaction being a "Restricted Payment"), or make any payment of or on account of any NUG Settlement (a "NUG Settlement Payment"); provided, that the Account Party may make one or more Restricted Payments or NUG Settlement Payments after July 1, 1998 if:

(i) at the time such payment is made and after giving effect thereto, no advances will be outstanding under the Revolving Credit Agreement;

(ii) the aggregate amount of all such payments shall not exceed $40,000,000;

(iii) without limitation of the foregoing, the aggregate amount of all Restricted Payments shall not exceed $25,000,000;

(iv) in the case of a NUG Settlement Payment, such NUG Settlement shall have been approved by the NHPUC and all other Governmental Approvals related thereto shall have been obtained and be in full force and effect;

(v) no Event of Default or Unmatured Default shall have occurred and be continuing;

(vi) after giving effect to such payment, the Account Party shall be in full compliance with Section 7.01(j) hereof (for purposes of determining compliance with Section 7.01(j) under this clause (vi), computations under
Section 7.01(j) shall be made as of the date of such payment, except that, retained earnings shall be determined as of the last day of the immediately preceding fiscal quarter (adjusted for all Restricted Payments made after the last day of such preceding fiscal quarter)); and

(vii) the Account Party shall have determined that, on the basis of the assumptions and forecasts set forth in the most recent operating budget/forecast of operations delivered pursuant to Section 7.03(iv) hereof (which the Account Party continues to believe to be reasonable) and after giving effect to such payment, the Account Party will continue to be in compliance at all times with the provisions of Section 7.01(j) hereof.

Notwithstanding anything to the contrary contained in this Section 7.02(e), the Account Party may declare and pay regularly scheduled quarterly dividends and regularly scheduled sinking fund payments on the Preferred Stock, if, immediately prior to and after giving effect to any such payment, no Event of Default or Unmatured Default shall have occurred and be continuing.

(f) Compliance with ERISA. (i) terminate, or permit any ERISA Affiliate to terminate, any ERISA Plan so as to result in any material (in the opinion of the Majority Lenders) liability of the Account Party to the PBGC, or (ii) permit to exist any occurrence of any event described in clause (i) of the definition of ERISA Plan Termination Event, or any other event or condition, which presents a material (in the opinion of the Majority Lenders) risk of such a termination by the PBGC of any ERISA Plan and such a material liability to the Account Party.

(g) Related Agreements.

(i) Amendments. Amend, modify or supplement or give any consent, acceptance or approval to any amendment, modification or supplement or deviation by any party from the terms of, the Rate Agreement or any Significant Contract, except, with respect only to the Significant Contracts, any amendment, modification or supplement thereto that would not reduce the rights or entitlements of the Account Party thereunder in any material way.

(ii) Termination. Cancel or terminate (or consent to any cancellation or termination of) the Rate Agreement or any Significant Contract prior to the expiration of its stated term, provided that this subsection (ii) shall not restrict the rights of the Account Party to enforce any remedy against any obligor under any Significant Contract in the event of a material breach or default by such obligor thereunder if and so long as the Account Party shall have provided to the Agent at least 30 days prior written notice of the enforcement action proposed to be undertaken by the Account Party.

(h) Change in Nature of Business. Engage in any material business activity other than those established and engaged in on the date hereof.

(i) Ownership in Nuclear Plants. Acquire, directly or indirectly, any ownership interest or any additional ownership interest of any kind in any nuclear-powered electric generating plant.

(j) Subsidiaries. Create or suffer to exist any active subsidiaries other than Properties, Inc., a New Hampshire corporation; or permit any material assets or business to be maintained at or conducted by any subsidiary except for the assets owned by Properties, Inc. not exceeding $20,000,000.

(k) Prepayment or Alteration of Debt. (i) Prepay, redeem, reduce or voluntarily retire, or make or agree to make any change in the terms of, any Debt of the Account Party, other than repayments and prepayments of advances under, and modifications of, the Revolving Credit Agreement, in each case to the extent permitted by Section 7.04; (ii) without limitation of the foregoing, amend, modify or supplement the Indenture or the First Mortgage Indenture or (iii) issue any First Mortgage Bonds as collateral security for any existing or future debt, or grant any other security to any holder of existing Debt of the Account Party, except to the extent permitted by Section 7.04.

(l) Loans and Investments. Make any loans to or investments in any Person, other than investments in Permitted Investments.

(m) Affiliate Receivables. Permit the aggregate balance of accounts receivable from Affiliates (other than such receivables constituting receivables for wholesale sales of power) to equal or exceed $12,500,000 as of the end of any calendar month.

SECTION VII.3. Reporting Obligations. So long as any amount shall remain available to be drawn under the Letter of Credit or any Advance or other amounts shall remain unpaid hereunder or any Participating Bank shall have any Commitment, the Account Party will, unless the Majority Lenders shall otherwise consent in writing, furnish to the Agent in sufficient copies for the Issuing Bank and each Participating Bank, the following:

(i) as soon as possible and in any event within five (5) days after the occurrence of each Event of Default or Unmatured Default continuing on the date of such statement, a statement of the Chief Financial Officer, Treasurer or Assistant Treasurer of the Account Party setting forth details of such Event of Default or Unmatured Default and the action which the Account Party proposes to take with respect thereto;

(ii) as soon as available and in any event within fifty (50) days after the end of each of the first three quarters of each fiscal year of the Account Party, (A) if and so long as the Account Party is required to submit to the Securities and Exchange Commission a report on Form 10-Q, a copy of the Account Party's report on Form 10-Q submitted to the Securities and Exchange Commission with respect to such quarter and (B) if the Account Party ceases to be required to submit such report, a balance sheet of the Account Party as of the end of such quarter and statements of income and retained earnings and of cash flows of the Account Party for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, all in reasonable detail and duly certified (subject to year-end audit adjustments) by the Chief Financial Officer, Treasurer or Assistant Treasurer of the Account Party as having been prepared in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements referred to in Section 6.01(e) hereof, in each such case, delivered together with a certificate of said officer (x) stating that no Event of Default or Unmatured Default has occurred and is continuing or, if an Event of Default or Unmatured Default has occurred and is continuing, a statement as to the nature thereof and the action which the Account Party proposes to take with respect thereto, (y) demonstrating compliance with
Section 7.01(j) hereof for and as of the end of such fiscal quarter and compliance with Sections 7.02(b) and (e) hereof, as of the dates on which any Debt was created, incurred or assumed (using the Account Party's most recent annual actuarial determinations in the computation of Debt referred to in clause (ix) in the definition of "Debt") or any Restricted Payment or NUG Settlement Payment was made during such quarter, and (z) demonstrating, after giving effect to the incurrence of any Debt created, incurred or assumed during such fiscal quarter (using the Account Party's most recent annual actuarial determinations in the computation of Debt referred to in clause
(ix) in the definition of "Debt") and after giving effect to any Restricted Payments or NUG Settlement Payments made during such fiscal quarter, compliance with Section 7.01(j) hereof for the remainder of the fiscal year of the Account Party based on the operating budget/forecast of operations delivered pursuant to Section 7.03 (iv) hereof for such fiscal year, such demonstrations to be in a schedule (in form satisfactory to the Majority Lenders) which sets forth the computations used by the Account Party in determining such compliance;

(iii) as soon as available and in any event within 105 days after the end of each fiscal year of the Account Party, (A) if and so long as the Account Party is required to submit to the Securities and Exchange Commission a report on Form 10-K, a copy of the Account Party's report on Form 10-K submitted to the Securities and Exchange Commission with respect to such year and (B) if the Account Party ceases to be required to submit such report, a copy of the annual audit report for such year for the Account Party including therein a balance sheet of the Account Party as of the end of such fiscal year and statements of income and retained earnings and of cash flows of the Account Party for such fiscal year, in each case certified by a nationally- recognized independent public accountant, in each such case delivered together with a certificate of the Chief Financial Officer, Treasurer or Assistant Treasurer (x) stating that the financial statements were prepared in accordance with generally accepted accounting principles consistent with those applied in the preparation of financial statements referred to in
Section 6.01(e) hereof, and that no Event of Default or Unmatured Default has occurred and is continuing, or if an Event of Default or Unmatured Default has occurred and is continuing, stating the nature thereof and the action which the Account Party proposes to take with respect thereto and (y) demonstrating compliance with Section 7.01(j) hereof for and as of the end of such fiscal year and compliance with Sections 7.02(b) and (e) hereof, as of the dates on which any Debt was created, incurred or assumed (using the Account Party's most recent annual actuarial determinations in the computation of Debt referred to in clause (ix) in the definition of "Debt") or any Restricted Payment or NUG Settlement Payment was made during the last fiscal quarter of the Account Party, such demonstrations to be in a schedule (in form satisfactory to the Majority Lenders) which sets forth the computations used by the Account Party in determining such compliance.

(iv) as soon as available and in any event before March 31 of each fiscal year, a copy of an operating budget/forecast of operations of the Account Party as approved by the Board of Directors of the Account Party in form satisfactory to the Participating Banks for such fiscal year of the Account Party, together with a certificate of the Chief Financial Officer, Treasurer or Assistant Treasurer of the Account Party stating that such budget/forecast was prepared in good faith and on reasonable assumptions;

(v) not later than ten days following the end of each fiscal quarter of the Account Party, a report on the progress of and developments in the Rate Proceeding, the Final Plan and any negotiations concerning the foregoing;

(vi) as soon as available and in any event no later than the New Hampshire Public Utilities Commission shall have received the Account Party's annual submission, if any, relating to the "return on equity collar" referred to in the Rate Agreement, a copy of such annual submission of the Account Party;

(vii) as soon as possible and in any event (A) within 30 days after the Account Party knows or has reason to know that any ERISA Plan Termination Event described in clause (i) of the definition of ERISA Plan Termination Event with respect to any ERISA Plan or ERISA Multiemployer Plan has occurred and (B) within 10 days after the Account Party knows or has reason to know that any other ERISA Plan Termination Event with respect to any ERISA Plan or ERISA Multiemployer Plan has occurred, a statement of the Chief Financial Officer, Treasurer or Assistant Treasurer of the Account Party describing such ERISA Plan Termination Event and the action, if any, which the Account Party proposes to take with respect thereto;

(viii) promptly after receipt thereof by the Account Party or any of its ERISA Affiliates from the PBGC, copies of each notice received by the Account Party or any such ERISA Affiliate of the PBGC's intention to terminate any ERISA Plan or ERISA Multiemployer Plan or to have a trustee appointed to administer any ERISA Plan or ERISA Multiemployer Plan;

(ix) promptly and in any event within 30 days after the filing thereof with the Internal Revenue Service, copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with respect to each ERISA Plan (if any) to which the Account Party is a contributing employer;

(x) promptly after receipt thereof by the Account Party or any of its ERISA Affiliates from an ERISA Multiemployer Plan sponsor, a copy of each notice received by the Account Party or any of its ERISA Affiliates concerning the imposition or amount of withdrawal liability in an aggregate principal amount of at least $10,000,000 pursuant to Section 4202 of ERISA in respect of which the Account Party may be liable;

(xi) promptly after the Account Party becomes aware of the occurrence thereof, notice of all actions, suits, proceedings or other events (A) of the type described in Section 6.01(f), or (B) which purport to affect the legality, validity or enforceability of the Rate Agreement, or any Transaction Document, Loan Document, Related Document or Significant Contract;

(xii) promptly after the sending or filing thereof, copies of all such proxy statements, financial statements, and reports which the Account Party sends to its public security holders (if any) or files with, and copies of all regular, periodic and special reports and all registration statements and periodic or special reports, if any, which the Account Party files with, the Securities and Exchange Commission or any governmental authority which may be substituted therefor, or with any national securities exchange;

(xiii) promptly after receipt thereof, any assertion of the character described in Section 8.01(h) hereof and the action the Account Party proposes to take with respect thereto;

(xiv) promptly after knowledge of any material default under the Rate Agreement or any Significant Contract, notice of such default and the action the Account Party proposes to take with respect thereto;

(xv) promptly after knowledge of any amendment, modification, or other change to the Rate Agreement or any Significant Contract or to any Governmental Approval affecting the Rate Agreement, notice of such amendment, modification or other change, it being understood that for purposes of this clause (xiv) any filing by the Account Party in the ordinary course of the Account Party's business with, or order issued or action taken by, a governmental authority or regulatory body after May 16, 1991 to implement the terms of the Rate Agreement shall not be considered an amendment, modification or change to a Governmental Approval affecting the Rate Agreement; and

(xvi) promptly after requested, such other information respecting the financial condition, operations, properties, prospects or otherwise, of the Account Party as the Issuing Bank or Majority Lenders may from time to time reasonably request in writing.

SECTION VII.4. Most Favored Lender Covenants. So long as any amount shall remain available to be drawn under the Letter of Credit or any Advance or other amounts shall remain unpaid hereunder or any Participating Bank shall have any Commitment:

(a) The Account Party will not amend, modify or supplement, or consent to any amendment, modification or supplement to, the Other Reimbursement Agreement or the Revolving Credit Agreement (whether the same relates to pricing, tenor, reduction, prepayment, covenants, other credit terms or otherwise), unless the Account Party shall first have offered to amend, modify or supplement the Loan Documents in a like manner, subject however, to the provisions of subsection (b), to the extent applicable.

(b) If at any time the Account Party shall be unable to borrow under the Revolving Credit Agreement (or any successor revolving facility) because the Account Party is unable to satisfy any "material adverse change" or other condition precedent to borrowing (a "Funding Suspension"), and (x) the failure to satisfy such condition does not itself constitute an Event of Default hereunder and (y) no Event of Default or Unmatured Default shall have occurred and be continuing hereunder, the provisions of subsection (a) shall be subject to the following:

(i) The Account Party will be free to negotiate with the lenders under the Revolving Credit Agreement (or the lenders under such successor facility) (the"Non-Funding Lenders") and may resolve or not resolve such Funding Suspension in such manner as it may see fit, without any requirement that the Agent, the Issuing Bank or the Participating Banks consent thereto;

(ii) Any improvement in pricing, covenants or other credit terms afforded to the Non-Funding Lenders to resolve the Funding Suspension shall be offered to the Agent, the Issuing Bank and the Participating Banks in the manner prescribed by subsection (a). Any additional security granted to the Non-Funding Lenders to resolve the Funding Suspension shall be afforded equally and ratably to the Agent, the Issuing Bank and the Participating Banks, subject to the provisions of Section 7.05; and

(iii) If in connection with the resolution of a Funding Suspension, the Non-Funding Lenders' facility shall be permanently reduced such that any amounts repaid or prepaid as part of such resolution are not available to be re-borrowed, the Account Party will pay to the Agent, for the benefit of the Issuing Bank and the Participating Banks an amount equal to such repayment or prepayment, dollar-for-dollar, to be applied to the reduction of the Available Amount or to be held as cash collateral for the obligations of the Account Party under the Loan Documents. For the avoidance of doubt:

(A) a reduction in the unfunded portion of the Non-Funding Lenders' commitments will not, by itself, entitle the Agent, the Issuing Bank and the Participating Banks to any such payment or to any reduction in the Available Amount; and

(B) the Agent, the Issuing Bank and the Participating Banks will not be entitled to any payment or reduction in the Available Amount solely as a result of repayments and prepayments of advances under such facility, if such repayment or prepayment results in the Non-Funding Lenders' commitments becoming again available to the Account Party in at least the amount of the repayment or prepayment.

(c) The provisions of subsection (b) shall not apply during the continuance of an Event of Default.

SECTION VII.5. Covenants Concerning Certain Collateral.

(a) Cash Account. Subject to the provisions of subsection (b), below, upon the occurrence and during the continuance of any Event of Default, the Agent shall at the request, or may with the consent, of the Majority Lenders, direct the Account Party to, and if so directed, the Account Party shall, deposit with the Agent an amount in the cash account (the "Cash Account") described below equal to the Available Amount of the Letter of Credit. Such Cash Account shall at all times be free and clear of all rights or claims of third parties. The Cash Account shall be maintained with the Agent in the name of, and under the sole dominion and control of, the Agent, and amounts deposited in the Cash Account shall bear interest at a rate equal to the rate generally offered by Swiss Bank for deposits equal to the balance in the Cash Account, for a term to be agreed to between the Account Party and the Agent. If any Letter of Credit drawings then outstanding or thereafter made are not reimbursed in full immediately after being made and upon demand, then, in any such event, the Agent may apply the amounts then on deposit in the Cash Account, in such priority as the Agent shall elect, toward the payment in full of any or all of the Account Party's obligations hereunder as and when such obligations shall become due and payable. Upon payment in full, after the termination of the Letters of Credit, of all such obligations, the Agent will repay to the Account Party any cash then on deposit in the Cash Account. The Issuing Bank hereby confirms its obligation as set forth in the Letter of Credit to make all payments under the Letter of Credit with its own funds and not with any funds of the Account Party or the Issuer, and nothing in this subsection (a) or otherwise shall in any way limit such obligation.

(b) Waiver and Surrender of Rights to Certain Collateral. Without in any way modifying the payment provisions of Article III, and subject in all respects to the provisions of subsection (c), below, the Agent, the Issuing Bank and the Participating Banks hereby waive and surrender, effective upon the commencement of any case by or against the Account Party seeking relief in respect of the Account Party under the Bankruptcy Code, any and all right, title and interest of the Agent, the Issuing Bank and the Participating Banks in and to the Cash Account, the Collateral described in the Security Agreement and all other collateral security, if any, granted to the Agent, the Issuing Bank or the Participating Banks on or after April 23, 1998 (all of the foregoing being hereinafter referred to as the "Extension Collateral", which term shall exclude absolutely the Account Party's Series G First Mortgage Bonds), and agree that upon any such commencement, the rights of the Agent, the Issuing Bank and the Banks in and to the Extension Collateral shall be null and void and the Agent, the Issuing Bank and the Banks shall not thereafter seek or accept any benefits they may have in and to the Extension Collateral; provided that the foregoing shall not apply to any benefit to Agent, the Issuing Bank or any Participating Bank of any Extension Collateral, if and only if: (i) a valid and perfected lien on or security interest in such Extension Collateral was granted to one or more other Secured Parties under the Intercreditor Agreement, (ii) such benefit to the Agent, the Issuing Bank or any Participating Bank is no greater than such as derives from its rights under the Intercreditor Agreement to share in the benefits of all Collateral referred to therein on the terms and subject to the conditions thereof, and (iii) after giving effect to such sharing, the aggregate amount of secured claims against the bankruptcy estate of the Account Party would not be increased.

(c) The waiver, surrender and agreement set forth in subsection (b), above, shall terminate and be of no force and effect (i) if and to the extent that such termination and the retention and enjoyment by the Agent, the Issuing Bank and the Participating Banks of such right, title and interest would not result in the grant of the Extension Collateral to the Agent, the Issuing Bank and the Participating Banks being deemed to (X) constitute a transfer of property of the Account Party avoidable under Section 547(b) of the Bankruptcy Code or (Y) otherwise constitute a basis for the recovery of any amounts realized with respect to the Collateral or the value thereof from the Trustee or any holder of the Bonds as an avoidable transfer under Section 547(b) of the Bankruptcy Code and (ii) in any case, as to any item of Extension Collateral, on the 91st day following the date on which a lien on or security interest in such Extension Collateral in favor of the Agent, the Issuing Bank or the Participating Banks was first perfected under applicable law, so long as no such case has been commenced and is pending.

(d) Acknowledgment. The Agent, the Issuing Bank and the Participating Banks, each by its execution and delivery of this Agreement, acknowledge and agree to the provisions of this Section 7.05.

ARTICLE VIII
DEFAULTS

SECTION VIII.1. Events of Default. The following events shall each constitute an "Event of Default" if the same shall occur and be continuing after the grace period and notice requirement (if any) applicable thereto:

(a) The Account Party shall fail to pay any interest on any Advance or pursuant to Section 4.02 hereof within two days after the same becomes due; the Account Party shall fail to reimburse the Issuing Bank for any Interest Drawing (as defined in the Letter of Credit) within two days after such reimbursement becomes due; or the Account Party shall fail to make any other payment required to be made pursuant to Article II or Article III hereof when due; or

(b) Any representation or warranty made by the Account Party (or any of its officers or agents) in any Loan Document or Transaction Document or in any certificate or other writing delivered pursuant to any Loan Document or Transaction Document shall prove to have been incorrect in any material respect when made or deemed made; or

(c) The Account Party shall fail to perform or observe any term or covenant on its part to be performed or observed contained in Sections 7.01(a), (d) or
(j), Section 7.02 or Section 7.03(i) hereof; or

(d) The Account Party shall fail to perform or observe any other term or covenant on its part to be performed or observed contained in any Loan Document or Transaction Document and such failure shall remain unremedied, after written notice thereof shall have been given to the Account Party by the Agent, the Issuing Bank or any Participating Bank, for a period of 30 days; or

(e) The Account Party shall fail to pay any of its Debt when due (including any interest or premium thereon but excluding Debt arising hereunder and excluding other Debt aggregating in no event more than $10,000,000 in principal amount at any one time) whether by scheduled maturity, required prepayment, acceleration, demand or otherwise, and such failure shall continue after the applicable grace period, if any, specified in any agreement or instrument relating to such Debt; or any other default under any agreement or instrument relating to any such Debt, or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of such Debt; or any such Debt shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment or as a result of the Account Party's exercise of a prepayment option) prior to the stated maturity thereof; unless in each such case the obligee under or holder of such Debt or the trustee with respect to such Debt shall have waived in writing such circumstance without consideration having been paid by the Account Party so that such circumstance is no longer continuing; or

(f) The Account Party shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make an assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Account Party seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of its debts under any law relating to bankruptcy, insolvency, or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property and, in the case of a proceeding instituted against the Account Party, either the Account Party shall consent thereto or such proceeding shall remain undismissed or unstayed for a period of 90 days or any of the actions sought in such proceeding (including without limitation the entry of an order for relief against the Account Party or the appointment of a receiver, trustee, custodian or other similar official for the Account Party or any of its property) shall occur; or the Account Party shall take any corporate or other action to authorize any of the actions set forth above in this subsection (f); or

(g) Any judgment or order for the payment of money in excess of $10,000,000 shall be rendered against the Account Party or its properties and either enforcement proceedings shall have been commenced by any creditor upon such judgment or order and shall not have been stayed or there shall be any period of 15 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

(h) Any material provision of any Loan Document, the Rate Agreement, any Significant Contract or any Related Document shall for any reason other than the express terms thereof or the exercise of any right or option expressly contained therein cease to be valid and binding on any party thereto except as otherwise expressly permitted by the exceptions and provisions contained in Section 7.02(g) hereof; or any party thereto other than the Participating Banks shall so assert in writing, provided that in the case of any party other than the Account Party making such assertion in respect of the Rate Agreement, any Significant Contract or any Related Document, such assertion shall not in and of itself constitute an Event of Default hereunder until (i) such asserting party shall cease to perform under and in compliance with the Rate Agreement, such Significant Contract or such Related Document, (ii) the Account Party shall fail to diligently prosecute, by appropriate action or proceedings, a rescission of such assertion or a binding determination as to the merits thereof or (iii) such a binding determination shall have been made in favor of such asserting party's position; or

(i) The Security Documents shall for any reason, except to the extent permitted by the terms thereof, fail or cease to create valid and perfected Liens (to the extent purported to be granted by such documents and subject to the exceptions permitted thereunder) in any of the applicable Collateral (other than Liens in favor of the Trustee with respect to the interests of the Issuer under the Indenture), provided, that such failure or cessation relating to any non-material portion of such Collateral shall not constitute an Event of Default hereunder unless the same shall not have been corrected within 30 days after the Account Party becomes aware thereof; or

(j) The Account Party shall not have in full force and effect any or all insurance required under Section 7.01(c) hereof or there shall be incurred any uninsured damage, loss or destruction of or to the Account Party's properties in an amount not covered by insurance (including fully-funded self-insurance programs) which the Majority Lenders consider to be material; or

(k) A default by the Account Party shall have occurred under the Rate Agreement and shall not have been effectively cured within the time period specified therein for such cure (or, if no such time period is specified therein, 10 days); or a default by any party shall have occurred under any Significant Contract and such default shall not have been effectively cured within 30 days after notice from the Agent to the Account Party stating that, in the opinion of the Majority Lenders, such default may have a material adverse effect upon the financial condition, operations, properties or prospects of the Account Party as a whole; or

(l) Any Governmental Approval (whether federal, state or local) required to give effect to the Rate Agreement (including, without limitation, Chapter 362-C of the New Hampshire Revised Statutes and the enabling order of the NHPUC issued pursuant thereto) shall be amended, modified or supplemented, or any other regulatory or legislative action or change (whether federal, state or local) having the effect, directly or indirectly, of modifying the benefits or entitlements of the Account Party under the Rate Agreement shall occur, and in any such case such amendment, modification, supplement, action or change may have, in the opinion of the Majority Lenders, a material adverse effect upon the financial condition, operations, properties or prospects of the Account Party as a whole; or

(m) NU shall cease to own all of the outstanding common stock of the Account Party, free and clear of any Liens; or

(n) An event of default (as defined therein) shall have occurred and be continuing under the Indenture or the First Mortgage Indenture; or

(o) An event of default (as defined therein) shall have occurred and be continuing under the Revolving Credit Agreement or the Other Reimbursement Agreement; or

(p) The Fixed-Rate Conversion shall fail to be consummated on May 1,1998.

SECTION VIII.2. Remedies Upon Events of Default. Upon the occurrence and during the continuance of any Event of Default, then, and in any such event the Agent with the concurrence of the Issuing Bank may, and upon the direction of the Majority Lenders the Agent shall (i) if the Letter of Credit Amendment shall not have been issued, instruct the Issuing Bank to (whereupon the Issuing Bank shall) by notice to the Account Party declare its commitment to issue the Letter of Credit Amendment to be terminated, whereupon the same shall forthwith terminate, (ii) instruct the Issuing Bank to (whereupon the Issuing Bank shall) furnish to the Trustee and the Paying Agent written notice of such Event of Default in accordance with Section 6.01(a)(iv) of the Indenture and of the Issuing Bank's determination to terminate the Letter of Credit on the fifth business day (as defined in the Indenture) following the Trustee's and Paying Agent's receipt of such notice, (iii) instruct the Issuing Bank to (whereupon the Issuing Bank shall) furnish to the Trustee and the Paying Agent written notice that the Interest Component will not be reinstated in the amount of one or more Interest Drawings, all as provided in the Letter of Credit; (iv) direct the Account party to pay cash into the Cash Account in accordance with Section 7.05(a); (v) declare the Advances and all other principal amounts outstanding hereunder, all interest thereon and all other amounts payable hereunder to be forthwith due and payable, whereupon the Advances and all other principal amounts outstanding hereunder, all such interest and all such other amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Account Party, and (vi) instruct the Issuing Bank to (whereupon the Issuing Bank shall) exercise all the rights and remedies provided herein and under and in respect of the Security Documents; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to the Account Party under the Federal Bankruptcy Code, (A) the commitment of the Issuing Bank to issue the Letter of Credit, the Commitments and the obligations of the Participating Banks to make Advances shall automatically be terminated, and (B) the Advances and all other principal amounts outstanding hereunder, all interest accrued and unpaid thereon and all other amounts payable hereunder shall automatically become due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Account Party.

SECTION VIII.3. Issuing Bank to Notify First Mortgage Trustee, Others. The Issuing Bank shall, if so directed by the Majority Lenders, promptly notify the First Mortgage Trustee by telephone, confirmed in writing, of the occurrence of any Event of Default. In addition, the Issuing Bank shall furnish to the Agent, the Account Party, the Paying Agent and the Issuer a copy of (a) any notice furnished to the First Mortgage Trustee pursuant to the preceding sentence and (b) any notice delivered to the Trustee pursuant to clause (ii) or clause (iii) of Section 8.02. Notwithstanding the foregoing, no failure of the Issuing Bank to give any notice (or copy of a notice) as contemplated by this Section 8.03 shall limit or impair any rights of the Issuing Bank, the Agent or any Participating Bank or the exercise of any remedy hereunder, nor shall the Issuing Bank, the Agent or any Participating Bank incur any liability as a result of any such failure.

ARTICLE IX
THE AGENT, THE PARTICIPATING BANKS AND THE ISSUING BANK

SECTION IX.1. Authorization of Agent; Actions of Agent and Issuing Bank. The Issuing Bank and each Participating Bank hereby appoint and authorize the Agent to take such action as agent on their behalf and to exercise such powers under this Agreement as are delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental thereto; provided, however, that neither the Agent nor the Issuing Bank shall be required to take any action which exposes the Agent or the Issuing Bank to personal liability or which is contrary to this Agreement or applicable law. As to any matters not expressly provided for by any Related Document (including, without limitation, enforcement or collection thereof), neither the Agent nor the Issuing Bank shall be required to exercise any discretion or take any action. The Agent agrees to deliver promptly (i) to the Issuing Bank and each Participating Bank copies of each notice delivered to it by the Account Party and (ii) to each Participating Bank copies of each notice delivered to it by the Issuing Bank, in each case pursuant to the terms of this Agreement.

SECTION IX.2. Reliance, Etc. Neither the Agent, the Issuing Bank, nor any of their directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement or any Related Document, except for its or their own gross negligence or willful misconduct as determined by a court of competent jurisdiction. Without limitation of the generality of the foregoing, each of the Agent and the Issuing Bank (i) may consult with legal counsel (including counsel for the Account Party), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or representation to any Participating Bank and shall not be responsible to any Participating Bank for any statements, warranties or representations made in or in connection with this Agreement or any Related Document; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any Related Document on the part of the Account Party to be performed or observed, or to inspect any property (including the books and records) of the Account Party; (iv) shall not be responsible to any Participating Bank for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any Related Document or any other instrument or document furnished pursuant hereto and thereto; and (v) shall incur no liability under or in respect of this Agreement or any Related Document by acting upon any notice, consent certificate or other instrument or writing (which may be by telegram, cable or telex), including, without limitation, any thereof from time to time purporting to be from the Trustee, believed by it to be genuine and signed or sent by the proper party or parties.

SECTION IX.3. The Agent, the Issuing Bank and Affiliates. The Agent and the Issuing Bank shall have the same rights and powers under this Agreement as any other Participating Bank and may exercise (or omit from exercising) the same as though they were not the Agent and the Issuing Bank, respectively, and the term "Participating Bank" shall, unless otherwise expressly indicated, include Swiss Bank in its individual capacity. The Agent, the Issuing Bank and their respective Affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, the Account Party, any of its subsidiaries and any Person who may do business with or own securities of the Account Party or any such subsidiary, all as if Swiss Bank was not the Agent or the Issuing Bank, and without any duty to account therefor to the Participating Banks.

SECTION IX.4. Participating Bank Credit Decision. Each of the Issuing Bank and each Participating Bank acknowledges that it has, independently and without reliance upon the Arrangers, the Agent, the Issuing Bank or any other Participating Bank and based on the financial information referred to in
Section 6.01(e) hereof and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each of the Issuing Bank and each Participating Bank also acknowledges that it will, independently and without reliance upon the Arrangers, the Agent, the Issuing Bank or any other Participating Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement.

SECTION IX.5. Indemnification. The Participating Banks agree to indemnity the Arrangers, the Agent and the Issuing Bank (to the extent not reimbursed by the Account Party), ratably according to their respective Participation Percentages, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Arrangers, the Agent or the Issuing Bank in any way relating to or arising out of this Agreement or any action taken or omitted by the Arrangers, the Agent or the Issuing Bank under or in connection with this Agreement, provided that no Participating Bank shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Arrangers', the Agent's or the Issuing Bank's (as the case may be) gross negligence or willful misconduct. Without limitation of the foregoing, each Participating Bank agrees to reimburse the Arrangers, the Agent and the Issuing Bank promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by the Arrangers, the Agent and the Issuing Bank in connection with the preparation, execution, delivery, administration, modification, amendment, waiver or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement to the extent that the Arrangers, the Agent and the Issuing Bank (as the case may be) are entitled to reimbursement for such expenses pursuant to Section 10.04 hereof but are not reimbursed for such expenses by the Account Party.

SECTION IX.6. Successor Agent. The Agent may resign at any time by giving written notice thereof to the Issuing Bank, the Participating Banks and the Account Party, with any such resignation to become effective only upon the appointment of a successor Agent pursuant to this Section 9.06. Upon any such resignation, the Issuing Bank shall have the right to appoint a successor Agent, which shall be another commercial bank or trust company reasonably acceptable to the Account Party, organized or licensed under the laws of the United States, or of any State thereof. Upon the acceptance of any appointment as Agent hereunder by a successor Agent and the execution and delivery by the Account Party and the successor Agent of an agreement relating to the fees, if any, to be paid to the successor Agent in connection with its acting as Agent hereunder, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Agent's resignation hereunder as Agent, the provisions of this Article IX shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.

SECTION IX.7. Issuing Bank. (a) All notices received by the Issuing Bank pursuant to this Agreement or any Related Document (other than the Letter of Credit) shall be promptly delivered to the Agent for distribution to the Participating Banks.

(b) Except to the extent permitted by Section 2.06, the Issuing Bank shall not amend or waive any provision or consent to the amendment or waiver of any Related Document without the written consent of the Majority Lenders. Notwithstanding the foregoing, each Participating Bank, by its execution and delivery of this Agreement, authorizes and directs the Issuing Bank to execute and deliver the Second Supplement, dated as of May 1, 1995, to the Original Indenture.

(c) Upon receipt by the Issuing Bank from time to time of any amount pursuant to the terms of any Related Document (other than pursuant to the terms of this Agreement), the Issuing Bank shall promptly deliver to the Agent such amount.

SECTION IX.8. Certain Authorizations and Consent. The Issuing Bank and each Participating Bank, by its acceptance hereof, and each other Participating Bank by its execution and delivery of the Participant Assignment pursuant to which it became a Participating Bank, consents to, authorizes, ratifies and confirms in all respects:

(i) the execution, delivery, acceptance and performance by the Agent and by the Collateral Agent of the Intercreditor Agreement, as the same may be from time to time amended in accordance with the terms thereof and Section 10.01 hereof;

(ii) the execution, delivery and acceptance by the Collateral Agent of, and the taking by the Collateral Agent of all actions under, the Security Agreement, as the same may be from time to time amended in accordance with the terms thereof and Section 10.01 hereof;

the execution and delivery of this Agreement by the Issuing Bank or such Participating Bank, or the execution and delivery of such Participant Assignment by such Participating Bank, as the case may be, constituting (without further act or deed) the Issuing Bank or such Participating Bank's acceptance and approval of, and agreement to the terms of, the Intercreditor Agreement and the Security Agreement with the same effect as if the Issuing Bank or such Participating Bank were itself a party thereto.

ARTICLE X
MISCELLANEOUS

SECTION X.1. Amendments, Etc. No amendment or waiver of any provision of this Agreement or the Pledge Agreement, nor consent to any departure by the Account Party therefrom, shall in any event be effective unless the same shall be in writing and signed by the Majority Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed by the Issuing Bank and all the Participating Banks, do any of the following: (a) waive, modify or eliminate any of the conditions specified in Article V of this Agreement or Article III of the Amendment, (b) increase the Commitments of the Participating Banks that may be maintained hereunder or subject the Participating Banks to any additional obligations, (c) reduce the principal of, or interest on, the Advances, any amount reimbursable on demand pursuant to Section 3.01, or any fees or other amounts payable hereunder, (d) postpone any date fixed for any payment of principal of, or interest on, the Advances, such reimbursable amounts or any fees or other amounts payable hereunder (other than fees payable to the Issuing Bank or the Agent pursuant to Section 2.03 hereof), (e) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Advances, or the number of Participating Banks which shall be required for the Participating Banks or any of them to take any action hereunder, (f) amend this Agreement or the Pledge Agreement in a manner intended to prefer one or more Participating Banks over any other Participating Banks, (g) amend this Section 10.01, or
(h) release any of the Collateral otherwise than in accordance with any provisions for such release contained in the Security Documents, or change any provision of any Security Document providing for the release of all or substantially all of the Collateral; and provided, further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the Issuing Bank or the Agent in addition to the Participating Banks required above to take such action, affect the rights or duties of the Issuing Bank or the Agent, as the case may be, under this Agreement or the Pledge Agreement and (ii) no amendment, waiver or consent shall, unless in writing and signed by the "Majority Lenders" under the Other Reimbursement Agreement and the "Majority Lenders" under the Revolving Credit Agreement, shall change the percentage of the Commitments or of the aggregate unpaid principal amount of the Advances, or the number of Participating Banks which shall be required for the Participating Banks or any of them to take, or to direct the Collateral Agent to take, any action under the Intercreditor Agreement and the Security Agreement.

SECTION X.2. Notices, Etc. All notices and other communications provided for hereunder and under the other Loan Documents shall be in writing (including telegraphic, telex, telecopy or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered:

(i) if to the Account Party, to it in care of NUSCO at NUSCO's address at 107 Selden Street, Berlin, Connecticut 06037 (telecopy: (860) 665-5457), Attention: Assistant Treasurer - Finance;

(ii) if to the Issuing Bank or the Agent, to it at its address at 222 Broadway, 12th Floor, New York, New York 10038, Attention: Customer Service Unit, (telephone: (212) 412-3363, telecopy: (212) 412-3080, Telex: 12-6946), with a copy to: Utilities Finance Group, (telephone (212) 412-2551, telecopy:
(212) 412-7575) and with a further copy to Credit Enhancement Unit (telephone
(212) 412-3578, telecopy (212) 412-6969);

(iii) if to any Participating Bank, to it at its address set forth on the signature pages to the Amendment or in the Participation Assignment pursuant to which it became a Participating Bank; or

as to each party other than any Participating Bank, at such other address as shall be designated by such party in a written notice to the other parties, and, as to any Participating Bank, at such other address as shall be designated by such Participating Bank in a written notice to the Account Party and the Agent. All such notices and communications shall, when mailed, telegraphed, telexed, telecopied or cabled, be effective five days after when deposited in the mails, or when delivered to the telegraph company, confirmed by telex answerback, telecopied or delivered to the cable company, respectively, except that notices and communications to the Agent or the Issuing Bank pursuant to Article II, III or IV shall not be effective until received by the Agent or the Issuing Bank, as the case may be.

SECTION X.3. No Waiver of Remedies. No failure on the part of any Participating Bank or the Issuing Bank to exercise, and no delay in exercising, any right hereunder or under any Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

SECTION X.4. Cost; Expenses and Indemnification. (a) The Account Party agrees to pay on demand all costs and expenses, if any (including, without limitation, reasonable counsel fees and expenses), of (i) the Arrangers, the Agent and the Issuing Bank in connection with the preparation, negotiation, execution and delivery of the Loan Documents and Transaction Documents and the administration of the Loan Documents and Transaction Documents, the care and custody of any and all collateral, and any proposed modification, amendment, or consent relating thereto; and (ii) the Arrangers, the Agent, the Issuing Bank and each Participating Bank in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement or any other Loan Document or Transaction Document.

(b) The Account Party hereby agrees to indemnify and hold the Arrangers, the Agent, the Issuing Bank and each Participating Bank and their respective officers, directors, employees, professional advisors and affiliates (each, an "Indemnified Person") harmless from and against any and all claims, damages, losses, liabilities, costs or expenses (including reasonable attorney's fees and expenses, whether or not such Indemnified Person is named as a party to any proceeding or investigation or is otherwise subjected to judicial or legal process arising from any such proceeding or investigation) which any of them may incur or which may be claimed against any of them by any person or entity (except to the extent such claims, damages, losses, liabilities, costs or expenses arise from the gross negligence or willful misconduct of the Indemnified Person):

(i) by reason of or in connection with the execution, delivery or performance of any of the Loan Documents, the Transaction Documents or the Related Documents or any transaction contemplated thereby, or the use by the Account Party of the proceeds of any Advance or the use by the Paying Agent or the Trustee of the proceeds of any drawing under the Letter of Credit;

(ii) in connection with or resulting from the utilization, storage, disposal, treatment, generation, transportation, release or ownership of any Hazardous Substance (A) at, upon or under any property of the Account Party or any of its Affiliates or (B) by or on behalf of the Account Party or any of its Affiliates at any time and in any place;

(iii) in connection with any documentary taxes, assessments or charges made by any governmental authority by reason of the execution and delivery of any of the Loan Documents;

(iv) by reason of or in connection with the execution and delivery or transfer of, or payment or failure to make payment under, the Letter of Credit; provided, however, that the Account Party shall not be required to indemnity the Arrangers, the Agent, the Issuing Bank or any Participating Bank pursuant to this Section for any claims, damages, losses, liabilities, costs or expenses to the extent caused by (A) the Issuing Bank's willful misconduct or gross negligence, as determined by a court of competent jurisdiction, in determining whether documents presented under the Letter of Credit are genuine or comply with the terms of the Letter of Credit or (B) the Issuing Bank's willful or grossly negligent failure, as determined by a court of competent jurisdiction, to make lawful payment under the Letter of Credit after the presentation to it by the Paying Agent of a draft and certificate strictly complying with the terms and conditions of the Letter of Credit; or

(v) by reason of any inaccuracy or alleged inaccuracy in any material respect, or any untrue statement or alleged untrue statement of any material fact, contained in any Official Statement, except to the extent contained in or arising from information in such Official Statement supplied in writing by and describing the Issuing Bank or any previous issuer of a letter of credit relating to the Bonds.

(c) Nothing contained in this Section 10.04 is intended to limit the Account Party's obligations set forth in Articles II, III and IV. The Account Party's obligations under this Section 10.04 shall survive the creation and sale of any participation interest pursuant to Section 10.06 hereof and shall survive as well the repayment of all amounts owing to the Agent, the Issuing Bank and the Participating Banks under the Loan Documents and the termination of the Commitments. If and to the extent that the obligations of the Account Party under this Section 10.04 are unenforceable for any reason, the Account Party agrees to make the maximum contribution to the payment and satisfaction thereof which is permissible under applicable law.

SECTION X.5. Right of Set-off. (a) Upon (i) the occurrence and during the continuance of any Event of Default and (ii) the taking of any action or the giving of any instruction by the Agent as specified by Section 8.02 hereof, the Issuing Bank and each Participating Bank are hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Issuing Bank or such Participating Bank to or for the credit or the account of the Account Party against any and all of the obligations of the Account Party now or hereafter existing under this Agreement in favor of the Issuing Bank or such Participating Bank, irrespective of whether or not the Issuing Bank or such Participating Bank shall have made any demand under this Agreement and although such obligations may be unmatured. The Issuing Bank and each Participating Bank agrees promptly to notify the Account Party after any such set-off and application provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Issuing Bank and each Participating Bank under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Issuing Bank and/or such Participating Bank may have.

(b) The Account Party agrees that it shall have no right of off-set, deduction or counterclaim in respect of its obligations hereunder, and that the obligations of the Issuing Bank and of the several Participating Banks hereunder are several and not joint. Nothing contained herein shall constitute a relinquishment or waiver of the Account Party's rights to any independent claim that the Account Party may have against the Issuing Bank or any Participating Bank, but no Participating Bank shall be liable for the conduct of the Issuing Bank or any other Participating Bank, and the Issuing Bank shall not be liable for the conduct of any Participating Bank.

SECTION X.6. Binding Effect; Assignments and Participants. (a) This Agreement shall become effective when it shall have been executed and delivered by the Account Party, the Agent, the Issuing Bank and each Participating Bank named on the signature pages to the Amendment and thereafter shall be binding upon and inure to the benefit of the Account Party, the Agent, the Issuing Bank and each Participating Bank and their respective successors and assigns, except that the Account Party shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Issuing Bank and each Participating Bank, and the Issuing Bank may not assign its commitment to issue the Letter of Credit or its obligations under or in respect of the Letter of Credit.

(b) Each Participating Bank may assign all or any portion of its rights under this Agreement, under the Letter of Credit or in any security hereunder, including, without limitation, any instruments securing the Account Party's obligations hereunder; provided that (i) no assignment by any Participating Bank may be made to any Person, other than to another Participating Bank, except with the prior written consent of the Issuing Bank and the Account Party (which consent in the case of the Account Party, (A) shall not be unreasonably withheld and (B) shall not be required if an Event of Default shall have occurred and be continuing and the Agent or the Issuing Bank shall have exercised any remedy described in clause (ii), (iii) or (v) of Section 8.02), (ii) any assignment shall be of a constant and not a varying percentage of all of the assignor's rights and obligations hereunder and (iii) the parties to each such assignment shall execute and deliver to the Agent a Participation Assignment, together with a processing fee of $2,500. Upon receipt of a completed Participation Assignment and the processing fee, the Agent will record in a register maintained for such purpose the name of the assignee and the percentage participation interest assigned by the assignor and assumed by the assignee for purposes of the determination of such assignor's and assignee's respective Participation Percentages. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Participation Assignment, which effective date shall be at least five Business Days after the execution thereof, the assignee shall, to the extent of such assignment, become a party hereto and have all of the rights and obligations of a Participating Bank hereunder and, to the extent of such assignment, such assigning Participating Bank shall be released from its obligations hereunder (without relieving such Participating Bank from any liability for damages, costs and expenses suffered by the Issuing Bank or the Account Party as a result of the failure by such Participating Bank to perform its obligations hereunder).

(c) Each Participating Bank may grant participations to one or more Persons in all or any part of, or any interest (undivided or divided) in, such Participating Bank's rights and obligations under this Agreement (any such Person being referred to hereinafter as a "Participant" and such interests are collectively, referred to hereinafter as the "Rights"); provided, however, that (i) such Participating Bank's obligations under this Agreement shall remain unchanged; (ii) any such Participant shall be entitled to the benefits and cost protections provided for in Section 4.03 hereof on the same basis as if it were a Participating Bank hereunder; (iii) the Account Party, the Agent and the Issuing Bank shall continue to deal solely and directly with such Participating Bank in connection with such Participating Bank's rights and obligations under this Agreement; and (iv) no such Participant, other than an Affiliate of such Participating Bank, shall be entitled to require such Participating Bank to take or omit to take any action hereunder, unless such action or omission would have an effect of the type described in subsections (c), (d) or (h) of Section 10.01 hereof.

(d) Notwithstanding anything contained in this Section 10.06 to the contrary, the Issuing Bank and any Participating Bank may assign and pledge all or any portion of the Advances (or participating interests therein) owing to the Issuing Bank or such Participating Bank to any Federal Reserve Bank (and its transferees) as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank. No such assignment shall release the Issuing Bank or such Participating Bank from its obligations hereunder.

SECTION X.7. Relation of the Parties; No Beneficiary. No term, provision or requirement, whether express or implied, of any Loan Document, or actions taken or to be taken by any party thereunder, shall be construed to create a partnership, association, or joint venture between such parties or any of them. No term or provision of the Loan Documents shall be construed to confer a benefit upon, or grant a right or privilege to, any Person other than the parties hereto.

SECTION X.8. Issuing Bank Not Liable. As between the Agent, the Issuing Bank and the Participating Banks on the one hand, and the Account Party on the other, the Account Party assumes all risks of the acts or omissions of the Paying Agent, the Trustee and any other beneficiary or transferee of the Letter of Credit with respect to its use of the Letter of Credit. Neither the Agent, the Issuing Bank, any Participating Bank, nor any of their respective officers or directors shall be liable or responsible for: (a) the use which may be made of the Letter of Credit or any acts or omissions of the Paying Agent, the Trustee and any other beneficiary or transferee in connection therewith; (b) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Bank against presentation of documents which do not comply with the terms of the Letter of Credit, including failure of any documents to bear any reference or adequate reference to the Letter of Credit; or (d) any other circumstances whatsoever in making or failing to make payment under the Letter of Credit, except that the Account Party shall have a claim against the Issuing Bank, and the Issuing Bank shall be liable to the Account Party, to the extent of any direct, as opposed to consequential, damages suffered by the Account Party which the Account Party proves were caused by (i) the Issuing Bank's willful misconduct or gross negligence, as determined by a court of competent jurisdiction, in determining whether documents presented under the Letter of Credit are genuine or comply with the terms of the Letter of Credit or (ii) the Issuing Bank's willful or grossly negligent failure, as determined by a court of competent jurisdiction, to make lawful payment under the Letter of Credit after the presentation to it by the Paying Agent of a draft and certificate strictly complying with the terms and conditions of the Letter of Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank may accept original or facsimile (including telecopy) sight drafts and accompanying certificates presented under the Letter of Credit that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary.

SECTION X.9. Confidentiality. In connection with the negotiation and administration of this Agreement and the other Loan Documents, the Account Party has furnished and will from time to time furnish to the Agent, the Issuing Bank and the Participating Banks (each, a "Recipient") written information which is identified to the Recipient when delivered as confidential (such information, other than any such information which (i) was publicly available, or otherwise known to the Recipient at the time of disclosure, (ii) subsequently becomes publicly available other than through any act or omission by the Recipient or (iii) otherwise subsequently becomes known to the Recipient other than through a Person whom the Recipient knows to be acting in violation of his or its obligations to the Account Party, being hereinafter referred to as "Confidential Information"). The Recipient will not knowingly disclose any such Confidential Information to any third party (other than to those persons who have a confidential relationship with the Recipient), and will take all reasonable steps to restrict access to such information in a manner designed to maintain the confidential nature of such information, in each case until such time as the same ceases to be Confidential Information or as the Account Party may otherwise instruct. It is understood, however, that the foregoing will not restrict the Recipient's ability to freely exchange such Confidential Information with prospective assignees of or participants in the Recipient's position herein, but the Recipient's ability to so exchange Confidential Information shall be conditioned upon any such prospective assignee's or participant's entering into an understanding as to confidentiality similar to this provision. It is further understood that the foregoing will not prohibit the disclosure of any or all Confidential Information if and to the extent that such disclosure may be required (i) by a regulatory agency or otherwise in connection with an examination of the Recipient's records by appropriate authorities, (ii) pursuant to court order, subpoena or other legal process or (iii) otherwise, as required by law; in the event of any required disclosure under clause (ii) or (iii) above, the Recipient agrees to use reasonable efforts to inform the Account Party as promptly as practicable.

SECTION X.10. Waiver of Jury Trial. The Account Party, the Arrangers, the Agent, the Issuing Bank, and the Participating Banks each hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim arising out of or relating to this Agreement or any other Loan Document, any Transaction Document or any other instrument or document delivered hereunder or thereunder.

SECTION X.11. Governing Law. This Agreement, the Amendment and the Pledge Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. The Account Party, the Arrangers, the Agent, the Issuing Bank and each Participating Bank each (i) irrevocably submits to the jurisdiction of any New York State Court or Federal court sitting in New York City in any action arising out of any Loan Document, (ii) agrees that all claims in such action may be decided in such court, (iii) waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum and (iv) consents to the service of process by mail. A final judgment in any such action shall be conclusive and may be enforced in other jurisdictions. Nothing herein shall affect the right of any party to serve legal process in any manner permitted by law or affect its right to bring any action in any other court.

SECTION X.12. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written, such execution being conclusively evidenced by the execution and delivery by such parties of the Amendment to which this Amended and Restated Second Series E Letter of Credit and Reimbursement Agreement is attached.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

THE ACCOUNT PARTY:

PUBLIC SERVICE COMPANY OF
NEW HAMPSHIRE

By: /S/David R. McHale

     Title: Assistant Treasurer

THE AGENT AND ISSUING BANK:
SWISS BANK CORPORATION,
STAMFORD BRANCH,
as Agent and as Issuing Bank

By: /S/ PETER V. MATTON

     Title: Executive Director


By: /S/ WILLIAM A. ROCHE

     Title: Director

THE PARTICIPATING BANKS:

BARCLAYS BANK PLC,
NEW YORK BRANCH

By: /S/ SYDNEY DENNIS

    Title: Managing Director

Address for Notices

Barclays Bank PLC
222 Broadway
New York, New York 10038
Attention:      Sydney Dennis
Telephone:      (212) 412-2570
Fax:            (212) 412-6709

SWISS BANK CORPORATION,
STAMFORD BRANCH

                                        By: /S/ WILLIAM A. ROCHE

                                             Title: Director

By: /S/ DAVID C. HEMINGWAY

                                             Title: Director

                                        Address for Notices

                                        Swiss Bank Corporation
                                        677 Washington Boulevard
Stamford, Connecticut   06912

                                        Attention:      Darryl M. Monasebian
                                        Telephone:      (203) 819-8005
                                        Fax:            (203) 819-8610

BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION

By: /S/ VERN HOWARD

     Title: Managing Director

Address for Notices

Bank of America NT & SA
555 California Street
San Francisco, California 94104
Attention:      Vern Howard
Telephone:      (415) 953-0590
Fax:            (415) 622-0632

LTCB TRUST COMPANY

By: /S/ GREGORY L. HONG

     Title: Senior Vice President

Address for Notices

LTCB Trust Company
165 Broadway, 49th Floor
New York, New York 10006
Attention:      Gregory H. Hong
Telephone:      (212) 335-4534
Fax:            (212) 608-2371

TORONTO DOMINION (NEW YORK), INC.

By: /S/ DEBBIE A. GREENE

     Title: Vice President

Address for Notices

The Toronto-Dominion Bank
909 Fannin Street, Suite 1700
Houston, Texas 77010
Attention:      Debbie Greene
Telephone:      (713) 653-8250
Fax:            (713) 951-9921

UNION BANK OF CALIFORNIA

By: /S/ KARYSSA M. BRITTON

     Title: Vice President

Address for Notices

Union Bank of California
445 S. Figueroa Street, 15th Floor
Los Angeles, CA 90071
Attention:      John M. Edmonston
Telephone:      (213) 236-5809
Fax:            (213) 236-4096

THE BANK OF NOVA SCOTIA

By: /S/FRAN PITCHLEY

     Title:

Address for Notices

The Bank of Nova Scotia
28 State Street, 17th Floor
Boston, Massachusetts 02109
Attention:      Paula A. MacDonald
Telephone:      (617) 624-7613
Fax:            (617) 624-7607

THE CHASE MANHATTAN BANK

By: /S/ PAUL V. FARRELL

     Title: Vice President

                                        Address for Notices

                                        The Chase Manhattan Bank
                                        270 Park Avenue
                                        New York, New York 10017
                                        Attention:      Paul V. Farrell
                                        Telephone:      (212) 270-7653
                                        Fax:            (212) 270-3089

                                        CITIBANK, N.A.


                                        By: /S/ ROBERT J. HARRITY, JR.

                                             Title: Managing Director



                                        Address for Notices

                                        Citibank, N.A.
                                        399 Park Avenue
4th Floor, Zone 20
                                        New York, New York 10043
                                        Attention:      Robert J. Harrity, Jr.
                                        Telephone:      (212) 559-6482
                                        Fax:            (212) 793-6130

BANKBOSTON, N.A.

By: /S/ MICHAEL M. PARKER

     Title: Managing Director

Address for Notices

BankBoston, N.A.
100 Federal Street, M/S 01-08-04
Boston, MA 02110
Attention:      Michael M. Parker
Telephone:      (617) 434-7829
Fax:            (617) 434-3652

THE FIRST NATIONAL BANK OF CHICAGO

By: /S/ MADELEINE N. PEMBER

     Title: Assistant Vice President

Address for Notices

The First National Bank of Chicago
One First National Plaza, Suite 0363
Chicago, Illinois 60670
Attention:      Kenneth J. Bauer
Telephone:      (312) 732-6282
Fax:            (312) 732-3055

THE FUJI BANK, LIMITED

By: /S/ RAYMOND VENTURA

     Title: Vice President & Manager

Address for Notices

The Fuji Bank, Limited
Two World Trade Center
New York, New York 10048
Attention:      Michael Gebauer
Telephone:      (212) 898-2064
Fax:            (212) 321-9407

THE INDUSTRIAL BANK OF JAPAN
TRUST COMPANY

By: /S/ JOHN DIPPO

     Title: Senior Vice President

Address for Notices

The Industrial Bank of Japan Trust Company
1251 Avenue of the Americas
New York, New York 10020-1104
Attention:      John Cunningham
Telephone:      (212) 282-3411
Fax:            (212) 282-4988

THE NIPPON CREDIT BANK, LTD.

By: /S/ KOICHI SUNAGAWA

     Title: Representative

Address for Notices

The Nippon Credit Bank, Ltd.
101 East 52nd Street, 14th Floor
New York, New York 10022
Attention:      Koichi Sunagawa
Telephone:      (212) 751-7330
Fax:            (212) 751-0987

FLEET NATIONAL BANK

By: /S/ DANIEL D. BUTLER

     Title: Vice President

Attention:      Fred N. Manning
Telephone:      (401) 459-4845
Fax:            (401) 459-4963

SOCIETE GENERALE


By: /S/GORDON EADON

     Title:

Address for Notices

Societe Generale
1221 Avenue of the Americas
New York, New York 10020
Attention: Gordon Eadon
Telephone: (212) 278-6880
Fax: (212) 278-7430
THE SUMITOMO BANK, LIMITED,
NEW YORK BRANCH

By: /S/ KAZUYOSHI OGAWA

     Title: Joint General Manager

Address for Notices

The Sumitomo Bank, Limited,
New York Branch
277 Park Avenue
New York, New York 10172
Attention:      J. Bruce Meredith
Telephone:      (212) 244-4129
Fax:            (212) 224-5188

MELLON BANK, N.A.

By: /S/ KURT HEWETT

     Title: Vice President

Address for Notices

Mellon Bank, N.A.
One Mellon Bank Center, Room 4425
Pittsburgh, Pennsylvania 15258
Attention:      Kurt Hewett
Telephone:      (412) 234-7355
Fax:            (412) 234-0286

CREDIT LYONNAIS (NEW YORK)

By: /S/ ALAN SIDRANE

                                             Title: Senior Vice President

Address for Notices

Credit Lyonnais (New York)
1301 Avenue of the Americas
New York, New York 10019
Attention:      David Bonington
Telephone:      (212) 261-7861
Fax:            (212) 261-3259

THE YASUDA TRUST AND BANKING

CO., LTD., NEW YORK BRANCH

By: /S/ ROHN LAUDENSCHLAGER

     Title: Senior Vice President

Address for Notices

The Yasuda Trust and Banking Co., Ltd.,
New York Branch
666 Fifth Avenue, Suite 801
New York, New York 10103
Attention:      Rohn Laudenschlager
Telephone:      (212) 373-5713
Fax:            (212) 373-5796

Exhibit 10.23.2

RESTATED

NEW ENGLAND

POWER POOL AGREEMENT

(Restated to reflect changes effected by the Fifth Supplement to Thirty- Third Agreement Amending New England Power Pool Agreement, and the Thirty-Sixth Agreement Amending New England Power Pool Agreement, and all prior amendments)

TABLE OF CONTENTS

                                                              Page

PART ONE - INTRODUCTION. . . . . . . . . . . . . . . . . . . . .1

SECTION 1 - DEFINITIONS. . . . . . . . . . . . . . . . . . . . .1
     1.1  Adjusted Load. . . . . . . . . . . . . . . . . . . . .2
     1.2  Adjusted Monthly Peak. . . . . . . . . . . . . . . . .2
     1.3  Adjusted Net Interchange . . . . . . . . . . . . . . .2
     1.4  AGC Capability . . . . . . . . . . . . . . . . . . . .3
     1.5  AGC Entitlement. . . . . . . . . . . . . . . . . . . .3
     1.6  Agreement. . . . . . . . . . . . . . . . . . . . . . .4
     1.7  Annual Transmission Revenue Requirements . . . . . . .4
     1.8  Automatic Generation Control or AGC. . . . . . . . . .4
     1.9  Bid Price. . . . . . . . . . . . . . . . . . . . . . .5
     1.10 Commission . . . . . . . . . . . . . . . . . . . . . .5
     1.11 Control Area . . . . . . . . . . . . . . . . . . . . .5
     1.12 Curtailment. . . . . . . . . . . . . . . . . . . . . .6
     1.13 Direct Assignment Facilities . . . . . . . . . . . . .7
     1.14 Dispatch Price . . . . . . . . . . . . . . . . . . . .7
     1.15 EHV PTF. . . . . . . . . . . . . . . . . . . . . . . .8
     1.16 Electrical Load. . . . . . . . . . . . . . . . . . . .8
     1.17 Eligible Customer. . . . . . . . . . . . . . . . . . .9
     1.18 Energy . . . . . . . . . . . . . . . . . . . . . . . 10
     1.19 Energy Entitlement . . . . . . . . . . . . . . . . . 10
     1.20 Entitlement. . . . . . . . . . . . . . . . . . . . . 11
     1.21 Entity . . . . . . . . . . . . . . . . . . . . . . . 11
     1.22 Excepted Transaction . . . . . . . . . . . . . . . . 12
     1.23 Executive Committee. . . . . . . . . . . . . . . . . 12
     1.24 Facilities Study . . . . . . . . . . . . . . . . . . 13
     1.25 Firm Contract. . . . . . . . . . . . . . . . . . . . 13
     1.26 First Effective Date . . . . . . . . . . . . . . . . 13
     1.27 Good Utility Practice. . . . . . . . . . . . . . . . 13
     1.28 HQ Contracts . . . . . . . . . . . . . . . . . . . . 14
     1.29 HQ Energy Banking Agreement. . . . . . . . . . . . . 14
     1.30 HQ Interconnection . . . . . . . . . . . . . . . . . 14
     1.31 HQ Interconnection Agreement . . . . . . . . . . . . 15
     1.32 HQ Interconnection Capability Credit . . . . . . . . 15
     1.33 HQ Interconnection Transfer Capability . . . . . . . 16
     1.34 HQ Net Interconnection Capability Credit . . . . . . 17
     1.35 HQ Phase I Energy Contract . . . . . . . . . . . . . 17
     1.36 HQ Phase I Percentage. . . . . . . . . . . . . . . . 17
     1.37 HQ Phase I Transfer Credit . . . . . . . . . . . . . 18
     1.38 HQ Phase II Firm Energy Contract . . . . . . . . . . 18
     1.39 HQ Phase II Gross Transfer Responsibility. . . . . . 18
     1.40 HQ Phase II Net Transfer Responsibility. . . . . . . 19
     1.41 HQ Phase II Percentage . . . . . . . . . . . . . . . 19
     1.42 HQ Phase II Transfer Credit. . . . . . . . . . . . . 19
     1.43 HQ Use Agreement . . . . . . . . . . . . . . . . . . 19
     1.44 Installed Capability . . . . . . . . . . . . . . . . 20
     1.45 Installed Capability Entitlement . . . . . . . . . . 20
     1.46 Installed Capability Responsibility. . . . . . . . . 21
     1.47 Installed System Capability. . . . . . . . . . . . . 21
     1.48 Interchange Transactions . . . . . . . . . . . . . . 21
     1.49 Internal Point-to-Point Service. . . . . . . . . . . 21
     1.50 Interruption . . . . . . . . . . . . . . . . . . . . 21
     1.51 ISO. . . . . . . . . . . . . . . . . . . . . . . . . 22
     1.52 Kilowatt . . . . . . . . . . . . . . . . . . . . . . 22
     1.53 Load . . . . . . . . . . . . . . . . . . . . . . . . 22
     1.54 Local Network. . . . . . . . . . . . . . . . . . . . 24
     1.56 Lower Voltage PTF. . . . . . . . . . . . . . . . . . 24
     1.57 Management Committee . . . . . . . . . . . . . . . . 25
     1.58 Market Reliability Planning Committee. . . . . . . . 25
     1.59 Monthly Peak . . . . . . . . . . . . . . . . . . . . 25
     1.60 NEPOOL . . . . . . . . . . . . . . . . . . . . . . . 25
     1.61 NEPOOL Control Area. . . . . . . . . . . . . . . . . 25
     1.62 NEPOOL Installed Capability. . . . . . . . . . . . . 26
     1.63 NEPOOL Installed Capability Responsibility . . . . . 27
     1.64 NEPOOL Objective Capability. . . . . . . . . . . . . 27
     1.65 New Unit . . . . . . . . . . . . . . . . . . . . . . 27
     1.66 Non-Participant. . . . . . . . . . . . . . . . . . . 27
     1.67 Operable Capability. . . . . . . . . . . . . . . . . 28
     1.68 Operable Capability Entitlement. . . . . . . . . . . 28
     1.69 Operable Capability Requirement  . . . . . . . . . . 29
     1.70 Operable System Capability . . . . . . . . . . . . . 29
     1.71 Operating Reserve. . . . . . . . . . . . . . . . . . 29
     1.72 Operating Reserve Entitlement. . . . . . . . . . . . 29
     1.73 Other HQ Energy. . . . . . . . . . . . . . . . . . . 30
     1.74 Participant. . . . . . . . . . . . . . . . . . . . . 30
     1.75 Pool-Planned Facility. . . . . . . . . . . . . . . . 31
     1.76 Pool-Planned Unit. . . . . . . . . . . . . . . . . . 31
     1.77 Power Year . . . . . . . . . . . . . . . . . . . . . 31
     1.78 Prior NEPOOL Agreement . . . . . . . . . . . . . . . 31
     1.79 Proxy Unit . . . . . . . . . . . . . . . . . . . . . 31
     1.80 PTF. . . . . . . . . . . . . . . . . . . . . . . . . 32
     1.81 Regional Market Operations Committee . . . . . . . . 32
     1.82 Regional Network Service . . . . . . . . . . . . . . 32
     1.83 Regional Transmission Operations Committee . . . . . 32
     1.84 Regional Transmission Planning Committee . . . . . . 32
     1.85 Related Person . . . . . . . . . . . . . . . . . . . 33
     1.86 Scheduled Dispatch Period. . . . . . . . . . . . . . 33
     1.87 Second Effective Date. . . . . . . . . . . . . . . . 33
     1.88 Service Agreement. . . . . . . . . . . . . . . . . . 34
     1.89 Summer Capability. . . . . . . . . . . . . . . . . . 34
     1.90 Summer Period. . . . . . . . . . . . . . . . . . . . 34
     1.91 System Contract. . . . . . . . . . . . . . . . . . . 34
     1.92 System Impact Study. . . . . . . . . . . . . . . . . 35
     1.93 System Operator. . . . . . . . . . . . . . . . . . . 35
     1.94 Target Availability Rate . . . . . . . . . . . . . . 36
     1.95 Tariff . . . . . . . . . . . . . . . . . . . . . . . 36
     1.96 Third Effective Date . . . . . . . . . . . . . . . . 36
     1.97 Through or Out Service . . . . . . . . . . . . . . . 36
     1.99 Transmission Customer. . . . . . . . . . . . . . . . 37
     1.100     Transmission Provider . . . . . . . . . . . . . 37
     1.101     Unit Contract . . . . . . . . . . . . . . . . . 37
     1.102     Voting Share. . . . . . . . . . . . . . . . . . 38
     1.103     Winter Capability . . . . . . . . . . . . . . . 38
     1.104     Winter Period . . . . . . . . . . . . . . . . . 38
     1.105     10-Minute Spinning Reserve. . . . . . . . . . . 38
     1.106     10-Minute Non-Spinning Reserve. . . . . . . . . 39
     1.107     30-Minute Operating Reserve . . . . . . . . . . 40
     1.108     33rd Amendment. . . . . . . . . . . . . . . . . 41
     1.109     Modification of Certain Definitions When a
               Participant Purchases a Portion of Its
               Requirements from Another Participant Pursuant
               to Firm Contract. . . . . . . . . . . . . . . . 42

SECTION 2 - PURPOSE; EFFECTIVE DATES . . . . . . . . . . . . . 45
     2.1  Purpose. . . . . . . . . . . . . . . . . . . . . . . 45
     2.2  Effective Dates; Transitional Provisions . . . . . . 45

SECTION 3 - MEMBERSHIP . . . . . . . . . . . . . . . . . . . . 46
     3.1  Membership . . . . . . . . . . . . . . . . . . . . . 46
     3.2  Operations Outside the Control Area. . . . . . . . . 48
     3.3  Lack of Place of Business in New England . . . . . . 48
     3.4  Obligation for Deferred Expenses . . . . . . . . . . 49
     3.5  Financial Security . . . . . . . . . . . . . . . . . 49

SECTION 4 - STATUS OF PARTICIPANTS . . . . . . . . . . . . . . 50
     4.1  Treatment of Certain Entities as Single Participant. 50
     4.2  Participants to Retain Separate Identities . . . . . 51

SECTION 5 - NEPOOL OBJECTIVES AND COOPERATION BY
            PARTICIPANTS . . . . . . . . . . . . . . . . . . . 52
     5.1  NEPOOL Objectives. . . . . . . . . . . . . . . . . . 52
     5.2  Cooperation by Participants. . . . . . . . . . . . . 53

PART TWO - GOVERNANCE. . . . . . . . . . . . . . . . . . . . . 54

SECTION 6 - MANAGEMENT COMMITTEE . . . . . . . . . . . . . . . 54
     6.1  Membership . . . . . . . . . . . . . . . . . . . . . 54
     6.2  Term of Members. . . . . . . . . . . . . . . . . . . 55
     6.3  Votes. . . . . . . . . . . . . . . . . . . . . . . . 55
     6.4  Number of Votes Necessary for Action . . . . . . . . 64
     6.5  Proxies. . . . . . . . . . . . . . . . . . . . . . . 65
     6.6  Alternates . . . . . . . . . . . . . . . . . . . . . 65
     6.7  Officers . . . . . . . . . . . . . . . . . . . . . . 65
     6.8  Meetings . . . . . . . . . . . . . . . . . . . . . . 66
     6.9  Notice of Meetings . . . . . . . . . . . . . . . . . 66
     6.10 Adoption of Budgets. . . . . . . . . . . . . . . . . 66
     6.11 Adoption of Bylaws . . . . . . . . . . . . . . . . . 67
     6.12 Establishing Reliability Standards . . . . . . . . . 67
     6.13 Appointment and Compensation of NEPOOL Personnel . . 68
     6.14 Duties and Authority . . . . . . . . . . . . . . . . 68
     6.15 Attendance of Members of Management Committee at
          Other Committee Meetings . . . . . . . . . . . . . . 74

SECTION 7 - EXECUTIVE COMMITTEE. . . . . . . . . . . . . . . . 74
     7.1  Organization . . . . . . . . . . . . . . . . . . . . 74
     7.2  Membership . . . . . . . . . . . . . . . . . . . . . 75
     7.3  Term of Members. . . . . . . . . . . . . . . . . . . 77
     7.4  Alternates . . . . . . . . . . . . . . . . . . . . . 78
     7.5  Votes. . . . . . . . . . . . . . . . . . . . . . . . 78
     7.6  Number of Votes Necessary for Action . . . . . . . . 79
     7.7  Officers . . . . . . . . . . . . . . . . . . . . . . 79
     7.8  Meetings . . . . . . . . . . . . . . . . . . . . . . 80
     7.9  Notice of Meetings . . . . . . . . . . . . . . . . . 80
     7.10 Notice to Members of Management Committee of
          Actions by Executive Committee . . . . . . . . . . . 81
     7.11 Appeal of Actions to Management Committee. . . . . . 81

SECTION 8 - MARKET RELIABILITY PLANNING COMMITTEE. . . . . . . 82
     8.1  Organization . . . . . . . . . . . . . . . . . . . . 82
     8.2  Membership . . . . . . . . . . . . . . . . . . . . . 82
     8.3  Term of Members. . . . . . . . . . . . . . . . . . . 84
     8.4  Voting . . . . . . . . . . . . . . . . . . . . . . . 85
     8.5  Alternates . . . . . . . . . . . . . . . . . . . . . 86
     8.6  Officers . . . . . . . . . . . . . . . . . . . . . . 87
     8.7  Meetings . . . . . . . . . . . . . . . . . . . . . . 87
     8.8  Notice of Meetings . . . . . . . . . . . . . . . . . 87
     8.9  Notice to Members of Management Committee. . . . . . 88
     8.10 Appeal of Actions to Management Committee. . . . . . 88
     8.11 Responsibilities . . . . . . . . . . . . . . . . . . 89
     8.12 Functional Planning Committees . . . . . . . . . . . 91
     8.13 Appointment of Task Forces . . . . . . . . . . . . . 92
     8.14 Consultants, Computer Time and Expenses. . . . . . . 93
     8.15 Further Powers and Duties. . . . . . . . . . . . . . 93
     8.16 Reports to Management Committee. . . . . . . . . . . 93
     8.17 Joint Meetings With Regional Transmission Planning
          Committee. . . . . . . . . . . . . . . . . . . . . . 94

SECTION 9 - REGIONAL TRANSMISSION PLANNING COMMITTEE . . . . . 94
     9.1  Organization . . . . . . . . . . . . . . . . . . . . 94
     9.2  Membership . . . . . . . . . . . . . . . . . . . . . 95
     9.3  Term of Members. . . . . . . . . . . . . . . . . . . 97
     9.4  Voting . . . . . . . . . . . . . . . . . . . . . . . 97
     9.5  Alternates . . . . . . . . . . . . . . . . . . . . . 99
     9.6  Officers . . . . . . . . . . . . . . . . . . . . . . 99
     9.7  Meetings . . . . . . . . . . . . . . . . . . . . . . 99
     9.8  Notice of Meetings . . . . . . . . . . . . . . . . .100
     9.9  Notice to Members of Management Committee. . . . . .100
     9.10 Appeal of Actions to Management Committee. . . . . .101
     9.11 Responsibilities . . . . . . . . . . . . . . . . . .101
     9.12 Functional Planning Committees . . . . . . . . . . .103
     9.13 Appointment of Task Forces . . . . . . . . . . . . .105
     9.14 Consultants, Computer Time and Expenses. . . . . . .105
     9.15 Further Powers and Duties. . . . . . . . . . . . . .105
     9.16 Reports to Management Committee. . . . . . . . . . .106
     9.17 Joint Meetings With Market Reliability Planning
          Committee. . . . . . . . . . . . . . . . . . . . . .106

SECTION 10 - REGIONAL MARKET OPERATIONS COMMITTEE. . . . . . .106
     10.1 Organization . . . . . . . . . . . . . . . . . . . .106
     10.2 Membership . . . . . . . . . . . . . . . . . . . . .107
     10.3 Terms of Members . . . . . . . . . . . . . . . . . .109
     10.4 Voting . . . . . . . . . . . . . . . . . . . . . . .109
     10.5 Alternates . . . . . . . . . . . . . . . . . . . . .111
     10.6 Officers . . . . . . . . . . . . . . . . . . . . . .111
     10.7 Meetings . . . . . . . . . . . . . . . . . . . . . .111
     10.8 Notice of Meetings . . . . . . . . . . . . . . . . .112
     10.9 Notice to Members of Management Committee. . . . . .112
     10.10     Appeal of Actions to Management Committee . . .113
     10.11     Appointment of Task Forces. . . . . . . . . . .113
     10.12     Consultants, Computer Time and Expenses . . . .114
     10.13     Responsibilities. . . . . . . . . . . . . . . .114
     10.14     Further Powers and Duties . . . . . . . . . . .117
     10.15     Development of Rules Relating to Non-
               Participant Supply and Demand-side Resources. .117
     10.16     Joint Meetings with Regional Transmission
               Operations Committee. . . . . . . . . . . . . .118

SECTION 11 - REGIONAL TRANSMISSION OPERATIONS COMMITTEE. . . .118
     11.1 Organization . . . . . . . . . . . . . . . . . . . .118
     11.2 Membership . . . . . . . . . . . . . . . . . . . . .118
     11.3 Terms of Members . . . . . . . . . . . . . . . . . .121
     11.4 Voting . . . . . . . . . . . . . . . . . . . . . . .121
     11.5 Alternates . . . . . . . . . . . . . . . . . . . . .123
     11.6 Officers . . . . . . . . . . . . . . . . . . . . . .123
     11.7 Meetings . . . . . . . . . . . . . . . . . . . . . .123
     11.8 Notice of Meetings . . . . . . . . . . . . . . . . .124
     11.9 Notice to Members of Management Committee. . . . . .124
     11.10     Appeal of Actions to Management Committee . . .125
     11.11     Appointment of Task Forces. . . . . . . . . . .125
     11.12     Consultants, Computer Time and Expenses . . . .126
     11.13     Responsibilities. . . . . . . . . . . . . . . .126
     11.14     Further Powers and Duties . . . . . . . . . . .127
     11.15     Joint Meetings with Regional Market Operations
               Committee . . . . . . . . . . . . . . . . . . .128

PART THREE - MARKET PROVISIONS . . . . . . . . . . . . . . . .128

SECTION 12 - INSTALLED CAPABILITY AND OPERABLE CAPABILITY
             OBLIGATIONS AND PAYMENTS. . . . . . . . . . . . .128
     12.1 Obligations to Provide Installed Capability and
          Operable Capability. . . . . . . . . . . . . . . . .128
     12.2 Computation of Installed Capability
          Responsibilities . . . . . . . . . . . . . . . . . .129
     12.3 Computation of Operable Capability Requirements. . .147
     12.4 Bids to Furnish Installed Capability or Operable
          Capability . . . . . . . . . . . . . . . . . . . . .148
     12.5 Consequences of Deficiencies in Installed
          Capability Responsibility. . . . . . . . . . . . . .148
     12.6 Consequences of Deficiencies in Operable Capability
          Requirements . . . . . . . . . . . . . . . . . . . .151
     12.7 Payments to Participants Furnishing Installed
          Capability and Operable Capability . . . . . . . . .153

SECTION 13 - OPERATION, GENERATION, OTHER RESOURCES,
             AND INTERRUPTIBLE CONTRACTS . . . . . . . . . . .155
     13.1 Maintenance and Operation in Accordance with Good
          Utility Practice . . . . . . . . . . . . . . . . . .155
     13.2 Central Dispatch . . . . . . . . . . . . . . . . . .155
     13.3 Maintenance and Repair . . . . . . . . . . . . . . .156
     13.4 Objectives of Day-to-Day System Operation. . . . . .157
     13.5 Satellite Membership . . . . . . . . . . . . . . . .158

SECTION 14 - INTERCHANGE TRANSACTIONS. . . . . . . . . . . . .158
     14.1 Obligation for Energy, Operating Reserve and
          Automatic Generation Control . . . . . . . . . . . .158
     14.2 Obligation to Bid or Schedule, and Right to
          Receive Energy, Operating Reserve and Automatic
          Generation Control . . . . . . . . . . . . . . . . .162
     14.3 Amount of Energy, Operating Reserve and Automatic
          Generation Control Received or Furnished . . . . . .168
     14.4 Payments by Participants Receiving Energy Service,

Operating Reserve and Automatic Generation Control. 171
14.5 Payments to Participants Furnishing Energy Service, Operating Reserve, and Automatic Generation Control.173

14.6 Energy Transactions with Non-Participants. . . . . .176
14.7 Participant Purchases Pursuant to Firm Contracts
     and System Contracts . . . . . . . . . . . . . . . .178
14.8 Determination of Energy Clearing Price . . . . . . .180
14.9 Determination of Operating Reserve Selling Price
     and Clearing Price . . . . . . . . . . . . . . . . .181
14.10     Determination of AGC Clearing Price . . . . . .185
14.11     Funds to or from which Payments are to be Made.186
14.12     Development of Rules Relating to Nuclear and
          Hydroelectric Generating Facilities, Limited-
          Fuel Generating Facilities, and Interruptible
          Loads . . . . . . . . . . . . . . . . . . . . .196
14.13     Dispatch and Billing Rules During Energy
          Shortages . . . . . . . . . . . . . . . . . . .197
14.14     Congestion Uplift.. . . . . . . . . . . . . . .197
14.15     Additional Uplift Charges.  . . . . . . . . . .202

     15.1 Definition of PTF. . . . . . . . . . . . . . . . . .203
     15.2 Maintenance and Operation in Accordance with Good
          Utility Practice . . . . . . . . . . . . . . . . . .207
     15.3 Central Dispatch . . . . . . . . . . . . . . . . . .207
     15.4 Maintenance and Repair . . . . . . . . . . . . . . .207
     15.5 Additions to or Upgrades of PTF. . . . . . . . . . .208

SECTION 16 - SERVICE UNDER TARIFF. . . . . . . . . . . . . . .211
     16.1 Effect of Tariff . . . . . . . . . . . . . . . . . .211
     16.2 Obligation to Provide Regional Service . . . . . . .211
     16.3 Obligation to Provide Local Network Service. . . . .212
     16.4 Transmission Service Availability. . . . . . . . . .215
     16.5 Transmission Information . . . . . . . . . . . . . .215
     16.6 Distribution of Transmission Revenues. . . . . . . .216
     16.7 Changes to Tariff. . . . . . . . . . . . . . . . . .219

SECTION 17 - POOL-PLANNED UNIT SERVICE . . . . . . . . . . . .220
     17.1 Effective Period . . . . . . . . . . . . . . . . . .220
     17.2 Obligation to Provide Service. . . . . . . . . . . .220
     17.3 Rules for Determination of Facilities Covered by
          Particular Transactions. . . . . . . . . . . . . . .221
     17.4 Payments for Uses of EHV PTF During the
          Transition Period. . . . . . . . . . . . . . . . . .223
     17.5 Payments for Uses of Lower Voltage PTF . . . . . . .228
     17.6 Use of Other Transmission Facilities by
          Participants . . . . . . . . . . . . . . . . . . . .228
     17.7 Limits on Individual Transmission Charges. . . . . .229

PART FIVE - GENERAL. . . . . . . . . . . . . . . . . . . . . .230

SECTION 18 - GENERATION AND TRANSMISSION FACILITIES. . . . . .230
     18.1 Designation of Pool-Planned Facilities . . . . . . .230
     18.2 Construction of Facilities . . . . . . . . . . . . .231
     18.3 Protective Devices for Transmission Facilities and
          Automatic Generation Control Equipment . . . . . . .231
     18.4 Review of Participant's Proposed Plans . . . . . . .232
     18.5 Participant to Avoid Adverse Effect. . . . . . . . .233

SECTION 19 - EXPENSES. . . . . . . . . . . . . . . . . . . . .235
     19.1 Annual Fee . . . . . . . . . . . . . . . . . . . . .235
     19.2 NEPOOL Expenses. . . . . . . . . . . . . . . . . . .235

SECTION 20 - INDEPENDENT SYSTEM OPERATOR . . . . . . . . . . .236

SECTION 21 - MISCELLANEOUS PROVISIONS. . . . . . . . . . . . .242
     21.1 Alternative Dispute Resolution . . . . . . . . . . .242
     21.2 Payment of Pool Charges; Termination of Status as
          Participant. . . . . . . . . . . . . . . . . . . . .255
     21.3 Assignment . . . . . . . . . . . . . . . . . . . . .259
     21.4 Force Majeure. . . . . . . . . . . . . . . . . . . .260
     21.5 Waiver of Defaults . . . . . . . . . . . . . . . . .261
     21.6 Other Contracts. . . . . . . . . . . . . . . . . . .261
     21.7 Liability and Insurance. . . . . . . . . . . . . . .262
     21.8 Records and Information. . . . . . . . . . . . . . .263
     21.9 Consistency with NPCC and NERC Standards . . . . . .264
     21.10     Construction. . . . . . . . . . . . . . . . . .264
     21.11     Amendment . . . . . . . . . . . . . . . . . . .264
     21.12     Termination . . . . . . . . . . . . . . . . . .267
     21.13     Notices to Participants . . . . . . . . . . . .267
     21.14     Severability and Renegotiation. . . . . . . . .269
     21.15     No Third-Party Beneficiaries. . . . . . . . . .270
     21.16     Counterparts. . . . . . . . . . . . . . . . . .270

RESTATED NEPOOL POWER POOL AGREEMENT

THIS AGREEMENT dated as of the first day of September, 1971, as amended,

was entered into by the signatories thereto for the establishment by them

of a bulk power pool to be known as NEPOOL and is restated by an amendment

dated as of July 20, 1998.

In consideration of the mutual agreements and undertakings herein, the

signatories hereby agree as follows:

PART ONE

INTRODUCTION

SECTION 1

DEFINITIONS

Whenever used in this Agreement, in either the singular or plural number,

the following terms shall have the following respective meanings (an

asterisk (*) indicates that the definition may be modified in certain cases

pursuant to Section 1.109):

1.1 ADJUSTED LOAD * (not less than zero) of a Participant during any

particular hour is the Participant's Load during such hour less any

Kilowatts received (or Kilowatts which would have been received except

for the application of Section 14.7(b)) by such Participant pursuant

to a Firm Contract.

1.2 ADJUSTED MONTHLY PEAK of a Participant for a month is its Monthly

Peak, provided that if there has been a transfer between Participants,

in whole or part, of the responsibilities under this Agreement during

such month pursuant to a Firm Contract, the Adjusted Monthly Peak of

each such Participant shall reflect the effect of such transaction,

but the Adjusted Monthly Peak of a Participant shall not be changed

from the Monthly Peak to reflect the effect of any other transaction.

1.3 ADJUSTED NET INTERCHANGE of a Participant for an hour is (a) the

Kilowatts produced by or delivered to the Participant from its Energy

Entitlements or pursuant to arrangements entered into under Section

14.6, as adjusted in accordance with uniform market operation rules

approved by the Regional Market Operations Committee to take account

of associated electrical losses, as appropriate, MINUS (b) the sum of

(i) the Electrical Load of the Participant for the hour, and (ii) the

kilowatthours delivered by such Participant to other Participants

pursuant to Firm Contracts or System Contracts, in accordance with the

treatment agreed to pursuant to Section 14.7(a), together with any

associated electrical losses.

1.4 AGC CAPABILITY of an electric generating unit or combination of

units is the maximum dependable ability of the unit or units to

increase or decrease the level of output within a time frame specified

by market operation rules approved by the Regional Market Operations

Committee, in response to a remote direction from the System Operator

in order to maintain currently proper power flows into and out of the

NEPOOL Control Area and to control frequency.

1.5 AGC ENTITLEMENT is (a) the right to all or a portion of the AGC

Capability of a generating unit or combination of units to which an

Entity is entitled as an owner (either sole or in common) or as a

purchaser, REDUCED BY (b) any portion thereof which such Entity is

selling pursuant to a Unit Contract, and (c) further REDUCED OR

INCREASED, as appropriate, to recognize rights to receive or

obligations to supply AGC pursuant to Firm Contracts or System

Contracts in accordance with Section 14.7(a). An AGC Entitlement in a

generating unit or units may, but need not, be combined with any other

Entitlements relating to such generating unit or units and may be

transferred separately from the related Installed Capability

Entitlement, Operable Capability Entitlement, Energy Entitlement, or

Operating Reserve Entitlements.

1.6 AGREEMENT is this restated contract and attachments, including the

Tariff, as amended and restated from time to time.

1.7 ANNUAL TRANSMISSION REVENUE REQUIREMENTS of a Participant's PTF or

of all Participants' PTF for purposes of this Agreement are the

amounts determined in accordance with Attachment F to the Tariff.

1.8 AUTOMATIC GENERATION CONTROL OR AGC is a measure of the ability of a

generating unit or portion thereof to respond automatically within a

specified time to a remote direction from the System Operator to

increase or decrease the level of output in order to control frequency

and to maintain currently proper power flows into and out of the

NEPOOL Control Area.

1.9 BID PRICE is the amount which a Participant offers to accept, in a

notice furnished to the System Operator by it or on its behalf in

accordance with the market operation rules approved by the Regional

Market Operations Committee, as compensation for (i) furnishing

Installed Capability or Operable Capability to other Participants

pursuant to this Agreement, or (ii) preparing the start up or starting

up or increasing the level of operation of, and thereafter operating,

a generating unit or units to provide Energy to other Participants

pursuant to this Agreement, or (iii) having a unit or units available

to provide Operating Reserve to other Participants pursuant to this

Agreement, or (iv) having a unit or units available to provide AGC to

other Participants pursuant to this Agreement, or (v) providing to

other Participants Installed Capability, Operable Capability, Energy,

Operating Reserve and/or AGC pursuant to a Firm Contract or System

Contract in accordance with Section 14.7.

1.10 COMMISSION is the Federal Energy Regulatory Commission.

1.11 CONTROL AREA is an electric power system or combination of electric

power systems to which a common automatic generation control scheme is

applied in order to:

(l) match, at all times, the power output of the generators

within the electric power system(s) and capacity and energy

purchased from entities outside the electric power

system(s), with the load within the electric power

system(s);

(2) maintain scheduled interchange with other Control Areas,

within the limits of Good Utility Practice;

(3) maintain the frequency of the electric power system(s)

within reasonable limits in accordance with Good Utility

Practice and the criteria of the applicable regional

reliability council or the North American Electric

Reliability Council; and

(4) provide sufficient generating capacity to maintain operating

reserves in accordance with Good Utility Practice.

1.12 CURTAILMENT is a reduction in firm or non-firm transmission service

in response to a transmission capacity shortage as a result of system

reliability conditions.

1.13 DIRECT ASSIGNMENT FACILITIES are facilities or portions of

facilities that are Non-PTF and are constructed for the sole

use/benefit of a particular Transmission Customer requesting service

under the Tariff or Generator Owner or Interconnection Requester

requesting an interconnection. Direct Assignment Facilities shall be

specified in a separate agreement with the Transmission Provider whose

transmission system is to be modified to include and/or interconnect

with said Facilities, shall be subject to applicable Commission

requirements and shall be paid for by the Transmission Customer or a

Generator Owner or Interconnection Requester in accordance with the

separate agreement and not under the Tariff.

1.14 DISPATCH PRICE of a generating unit or combination of units, or a

Firm Contract or System Contract permitted to be bid to supply Energy

in accordance with Section 14.7(b), is the price to provide Energy

from the unit or units or Contract, as determined pursuant to market

operation rules approved by the Regional Market Operations Committee

to incorporate the Bid Price for such Energy and any loss adjustments,

if and as appropriate under such market operation rules.

1.15 EHV PTF are PTF transmission lines which are operated at 230 kV or

above and related PTF facilities, including transformers which link

other EHV PTF facilities, but do not include transformers which step

down from 230 kV or a higher voltage to a voltage below 230 kV.

1.16 ELECTRICAL LOAD (in Kilowatts) of a Participant during any

particular hour is the total during such hour (eliminating any

distortion arising out of (i) Interchange Transactions, or (ii)

transactions across the system of such Participant, or (iii)

deliveries between Entities constituting a single Participant, or (iv)

other electrical losses, if and as appropriate), of

(a) kilowatthours provided by such Participant to its retail

customers for consumption, PLUS

(b) kilowatthours of use by such Participant, PLUS

(c) kilowatthours of electrical losses and unaccounted for use

by the Participant on its system, PLUS

(d) kilowatthours used by such Participant for pumping Energy

for its Entitlements in pumped storage hydroelectric

generating facilities, PLUS

(e) kilowatthours delivered by such Participant to Non-

Participants.

The Electrical Load of a Participant may be calculated in any

reasonable manner which substantially complies with this definition.

1.17 ELIGIBLE CUSTOMER is the following: (i) Any Participant that is

engaged, or proposes to engage, in the wholesale or retail electric

power business is an Eligible Customer under the Tariff. (ii) Any

electric utility (including any power marketer), Federal power

marketing agency, or any person generating electric energy for sale or

for resale is an Eligible Customer under the Tariff. Electric energy

sold or produced by such entity may be electric energy produced in the

United States, Canada or Mexico. However, with respect to

transmission service that the Commission is prohibited from ordering

by Section 212(h) of the Federal Power Act, such entity is eligible

only if the service is provided pursuant to a state requirement that

the Transmission Provider with which that entity is directly

interconnected offer the unbundled transmission service, or pursuant

to a voluntary offer of such service by the Transmission Provider with

which that entity is directly interconnected. (iii) Any end user

taking or eligible to take unbundled transmission service pursuant to

a state requirement that the Transmission Provider with which that end

user is directly interconnected offer the transmission service, or

pursuant to a voluntary offer of such service by the Transmission

Provider, is an Eligible Customer under the Tariff.

1.18 ENERGY is power produced in the form of electricity, measured in

kilowatthours or megawatthours.

1.19 ENERGY ENTITLEMENT is (i) a right to receive Energy under a System

Contract or a Firm Contract in accordance with Section 14.7(a), or

(ii) a right to receive all or a portion of the electric output of a

generating unit or units to which an Entity is entitled as an owner

(either sole or in common) or as a purchaser pursuant to a Unit

Contract, REDUCED BY (iii) any portion thereof which such Entity is

selling pursuant to a Unit Contract. An Energy Entitlement in a

generating unit or units may, but need not, be combined with any other

Entitlements relating to such generating unit or units and may be

transferred separately from the related Installed Capability

Entitlement, Operable Capability Entitlement, Operating Reserve

Entitlements, or AGC Entitlement.

1.20 ENTITLEMENT is an Installed Capability Entitlement, Operable

Capability Entitlement, Energy Entitlement, Operating Reserve

Entitlement, or AGC Entitlement. When used in the plural form, it may

be any or all such Entitlements or combinations thereof, as the

context requires.

1.21 ENTITY is any person or organization whether the United States of

America or Canada or a state or province or a political subdivision

thereof or a duly established agency of any of them, a private

corporation, a partnership, an individual, an electric cooperative or

any other person or organization recognized in law as capable of

owning property and contracting with respect thereto that is either:

(a) engaged in the electric power business (the

generation and/or transmission and/or distribution

of electricity for consumption by the public or

the purchase, as a principal or broker, of

Installed Capability, Operable Capability, Energy,

Operating Reserve, and/or AGC for resale); or

(b) an end user of electricity that is taking or eligible to

take unbundled transmission service pursuant to an effective

state requirement that the Participant that is the

Transmission Provider with which that end user is directly

interconnected offer the transmission service, or pursuant

to a voluntary offer of unbundled transmission service to

that end user by the Participant that is the Transmission

Provider with which that end user is directly

interconnected.

1.22 EXCEPTED TRANSACTION is a transaction specified in Section 25 of

the Tariff for the applicable period specified in that Section.

1.23 EXECUTIVE COMMITTEE is the committee established pursuant to

Section 7.

1.24 FACILITIES STUDY is an engineering study conducted pursuant to this

Agreement or the Tariff by the System Operator and/or one or more

affected Participants to determine the required modifications to the

NEPOOL Transmission System, including the cost and scheduled

completion date for such modifications, that will be required to

provide a requested transmission service or interconnection.

1.25 FIRM CONTRACT is any contract, other than a Unit Contract, for the

purchase of Installed Capability, Operable Capability, Energy,

Operating Reserves, and/or AGC, pursuant to which the purchaser's

right to receive such Installed Capability, Operable Capability,

Energy, Operating Reserves, and/or AGC is subject only to the

supplier's inability to make deliveries thereunder as the result of

events beyond the supplier's reasonable control.

1.26 FIRST EFFECTIVE DATE is March 1, 1997.

1.27 GOOD UTILITY PRACTICE shall mean any of the practices, methods, and

acts engaged in or approved by a significant portion of the electric

utility industry during the relevant time period, or any of the

practices, methods, and acts which, in the exercise of reasonable

judgement in light of the facts known at the time the decision was

made, could have been expected to accomplish the desired result at a

reasonable cost consistent with good business practices, reliability,

safety and expedition. Good Utility Practice is not limited to a

single, optimum practice, method or act to the exclusion of others,

but rather is intended to include acceptable practices, methods, or

acts generally accepted in the region.

1.28 HQ CONTRACTS are the HQ Interconnection Agreement, the HQ Phase I

Energy Contract, and the HQ Phase II Firm Energy Contract.

1.29 HQ ENERGY BANKING AGREEMENT is the Energy Banking Agreement entered

into on March 21, 1983 by Hydro-Quebec, the Participants, New England

Electric Transmission Corporation and Vermont Electric Transmission

Company, Inc., as it may be amended from time to time.

1.30 HQ INTERCONNECTION is the United States segment of the transmission

interconnection which connects the systems of Hydro-Quebec and the

Participants. "Phase I" is the United States portion of the 450 kV

HVDC transmission line from a terminal at the Des Cantons Substation

on the Hydro-Quebec system near Sherbrooke, Quebec to a terminal

having an approximate rating of 690 MW at a substation at the

Comerford Generating Station on the Connecticut River. "Phase II" is

the United States portion of the facilities required to increase to

approximately 2000 MW the transfer capacity of the HQ Interconnection,

including an extension of the HVDC transmission line from the terminus

of Phase I at the Comerford Station through New Hampshire to a

terminal at the Sandy Pond Substation in Massachusetts. The HQ

Interconnection does not include any PTF facilities installed or

modified to effect reinforcements of the New England AC transmission

system required in connection with the HVDC transmission line and

terminals.

1.31 HQ INTERCONNECTION AGREEMENT is the Interconnection Agreement

entered into on March 21, 1983 by Hydro-Quebec and the Participants,

as it may be amended from time to time.

1.32 HQ INTERCONNECTION CAPABILITY CREDIT of a Participant for a month

during the Base Term (as defined in Section 1.38) of the HQ Phase II

Firm Energy Contract is the sum in Kilowatts of (1)(a) the

Participant's percentage share, if any, of the HQ Phase I Transfer

Capability TIMES (b) the HQ Phase I Transfer Credit, PLUS (2)(a) the

Participant's percentage share, if any, of the HQ Phase II Transfer

Capability, TIMES (b) the HQ Phase II Transfer Credit. The Management

Committee shall establish appropriate HQ Interconnection Capability

Credits to apply for a Participant which has such a percentage share

(i) during an extension of the HQ Phase II Firm Energy Contract, and

(ii) following the expiration of the HQ Phase II Firm Energy Contract.

1.33 HQ INTERCONNECTION TRANSFER CAPABILITY is the transfer capacity of

the HQ Interconnection under normal operating conditions, as

determined in accordance with Good Utility Practice. The "HQ Phase I

Transfer Capability" is the transfer capacity under normal operating

conditions, as determined in accordance with Good Utility Practice, of

the Phase I terminal facilities as determined initially as of the time

immediately prior to Phase II of the Interconnection first being

placed in service, and as adjusted thereafter only to take into

account changes in the transfer capacity which are independent of any

effect of Phase II on the operation of Phase I. The "HQ Phase II

Transfer Capability" is the difference between the HQ Interconnection

Transfer Capability and the HQ Phase I Transfer Capability.

Determinations of, and any adjustment in, transfer capacity shall be

made by the Regional Market Operations Committee in accordance with a

schedule consistent with that followed by it in its determination of

the Winter Capability and Summer Capability of generating units.

1.34 HQ NET INTERCONNECTION CAPABILITY CREDIT of a Participant at a

particular time is its HQ Interconnection Capability Credit at the

time in Kilowatts, MINUS a number of Kilowatts EQUAL TO (1) the

percentage of its share of the HQ Interconnection Transfer Capability

committed or used by it for an "Entitlement Transaction" at the time

under the HQ Use Agreement, TIMES (2) its HQ Interconnection

Capability Credit for the current month.

1.35 HQ PHASE I ENERGY CONTRACT is the Energy Contract entered into on

March 21, 1983 by Hydro-Quebec and the Participants, as it may be

amended from time to time.

1.36 HQ PHASE I PERCENTAGE is the percentage of the total HQ

Interconnection Transfer Capability represented by the HQ Phase I

Transfer Capability.

1.37 HQ PHASE I TRANSFER CREDIT is 60/69 of the HQ Phase I Transfer

Capability, or such other fraction of the HQ Phase I Transfer

Capability as the Management Committee may establish.

1.38 HQ PHASE II FIRM ENERGY CONTRACT is the Firm Energy Contract dated

as of October 14, 1985 between Hydro-Quebec and certain of the

Participants, as it may be amended from time to time. The "Base Term"

of the HQ Phase II Firm Energy Contract is the period commencing on

the date deliveries were first made under the Contract and ending on

August 31, 2000.

1.39 HQ PHASE II GROSS TRANSFER RESPONSIBILITY of a Participant for any

month during the Base Term of the HQ Phase II Firm Energy Contract (as

defined in Section 1.38) is the number in Kilowatts of (a) the

Participant's percentage share, if any, of the HQ Phase II Transfer

Capability for the month TIMES (b) the HQ Phase II Transfer Credit.

Following the Base Term of the HQ Phase II Firm Energy Contract, and

again following the expiration of the HQ Phase II Firm Energy

Contract, the Management Committee shall establish an appropriate HQ

Phase II Gross Transfer Responsibility that shall remain in effect

concurrently with the HQ Interconnection Capability Credit.

1.40 HQ PHASE II NET TRANSFER RESPONSIBILITY of a Participant for any

month is its HQ Phase II Gross Transfer Responsibility for the month

minus a number of Kilowatts EQUAL TO (1) the highest percentage of its

share of the HQ Interconnection Transfer Capability committed or used

by it on any day of the month for an "Entitlement Transaction" under

the HQ Use Agreement, TIMES (2) its HQ Phase II Gross Transfer

Responsibility for the month.

1.41 HQ PHASE II PERCENTAGE is the percentage of the total HQ

Interconnection Transfer Capability represented by the HQ Phase II

Transfer Capability.

1.42 HQ PHASE II TRANSFER CREDIT is 90/131 of the HQ Phase II Transfer

Capability, or such other fraction of the HQ Phase II Transfer

Capability as the Management Committee may establish.

1.43 HQ USE AGREEMENT is the Agreement with Respect to Use of Quebec

Interconnection dated as of December 1, 1981 among certain of the

Participants, as amended and restated as of September 1, 1985 and as

it may be further amended from time to time.

1.44 INSTALLED CAPABILITY of an electric generating unit or combination

of units during the Winter Period is the Winter Capability of such

unit or units and during the Summer Period is the Summer Capability of

such unit or units.

1.45 INSTALLED CAPABILITY ENTITLEMENT is (a) the right to all or a

portion of the Installed Capability of a generating unit or units to

which an Entity is entitled as an owner (either sole or in common) or

as a purchaser pursuant to a Unit Contract, (b) REDUCED BY any portion

thereof which such Entity is selling pursuant to a Unit Contract, and

(c) further REDUCED OR INCREASED, as appropriate, to recognize rights

to receive or obligations to supply Installed Capability pursuant to

Firm Contracts or System Contracts in accordance with Section 14.7(a).

An Installed Capability Entitlement relating to a unit or units may,

but need not, be combined with any other Entitlements relating to such

generating unit or units and may be transferred separately from the

related Operable Capability Entitlement, Energy Entitlement, Operating

Reserve Entitlements, or AGC Entitlement.

1.46 INSTALLED CAPABILITY RESPONSIBILITY * of a Participant for any

month is the number of Kilowatts determined in accordance with Section

12.2.

1.47 INSTALLED SYSTEM CAPABILITY of a Participant at a particular time

is (1) the sum of such Participant's Installed Capability Entitlements

PLUS (2) its HQ Net Interconnection Capability Credit at the time.

1.48 INTERCHANGE TRANSACTIONS are transactions deemed to be effected

under Section 12 of the Prior NEPOOL Agreement prior to the Second

Effective Date, and transactions deemed to be effected under Section

14 of this Agreement on and after the Second Effective Date.

1.49 INTERNAL POINT-TO-POINT SERVICE is the transmission service by that

name provided pursuant to Section 19 of the Tariff.

1.50 INTERRUPTION is a reduction in non-firm transmission service due to

economic reasons pursuant to Section 28.7 of the Tariff, other than a

reduction which results from a failure to dispatch a generating

resource, including a contract, used in a transaction requiring In

Service or Through or Out Service which is out of merit order.

1.51 ISO is the Independent System Operator which is responsible for the

continued operation of the NEPOOL Control Area from the NEPOOL control

center and the administration of the Tariff, subject to regulation by

the Commission.

1.52 KILOWATT is a kilowatthour per hour.

1.53 LOAD * (in Kilowatts) of a Participant during any particular hour

is the total during such hour (eliminating any distortion arising out

of (i) Interchange Transactions, or (ii) transactions across the

system of such Participant, or (iii) deliveries between Entities

constituting a single Participant, or (iv) other electrical losses, if

and as appropriate) of

(a) kilowatthours provided by such Participant to its retail

customers for consumption (excluding any kilowatthours which

may be classified as interruptible under market operation

rules approved by the Regional Market Operations Committee),

PLUS

(b) kilowatthours delivered by such Participant pursuant to Firm

Contracts to its wholesale customers for resale, PLUS

(c) kilowatthours of use by such Participant, exclusive of use

by such Participant for the operation and maintenance of its

generating unit or units, PLUS

(d) kilowatthours of electrical losses and unaccounted for use

by the Participant on its system.

The Load of a Participant may be calculated in any reasonable manner

which substantially complies with this definition.

For the purposes of calculating a Participant's Annual Peak, Adjusted

Monthly Peak, Adjusted Annual Peak and Monthly Peak, the Load of a

Participant shall be adjusted to eliminate any distortions resulting

from voltage reductions. In addition, upon the request of any

Participant, the Regional Market Operations Committee shall make, or

supervise the making of, appropriate adjustments in the computation of

Load for the purposes of calculating any Participant's Annual Peak,

Adjusted Monthly Peak, Adjusted Annual Peak and Monthly Peak to

eliminate any distortions resulting from emergency load curtailments

which would significantly affect the Load of any Participant.

1.54 LOCAL NETWORK is the transmission facilities constituting a local

network identified on Attachment E to the Tariff, and any other local

network or change in the designation of a Local Network as a Local

Network which the Management Committee may designate or approve from

time to time. The Management Committee may not unreasonably withhold

approval of a request by a Participant that it effect such a change or

designation.

1.55 LOCAL NETWORK SERVICE is the service provided, under a separate

tariff or contract, by a Participant that is a Transmission Provider

to another Participant, or other entity connected to the Transmission

Provider's Local Network to permit the other Participant or entity to

efficiently and economically utilize its resources to serve its load.

1.56 LOWER VOLTAGE PTF are all PTF facilities other than EHV PTF.

1.57 MANAGEMENT COMMITTEE is the committee established pursuant to

Section 6.

1.58 MARKET RELIABILITY PLANNING COMMITTEE is the committee established

pursuant to Section 8.

1.59 MONTHLY PEAK of a Participant for a month is the maximum Adjusted

Load of the Participant during any hour in the month.

1.60 NEPOOL is the New England Power Pool, the power pool created under

and governed by this Agreement, and the Entities collectively

participating in the New England Power Pool as Participants.

1.61 NEPOOL CONTROL AREA is the integrated electric power system to

which a common Automatic Generation Control scheme and various

operating procedures are applied by or under the supervision of the

System Operator in order to:

(i) match, at all times, the power output of the generators

within the electric power system and capacity and Energy

purchased from entities outside the electric power system,

with the load within the electric power system;

(ii) maintain scheduled interchange with other interconnected

systems, within the limits of Good Utility Practice;

(iii)maintain the frequency of the electric power system within

reasonable limits in accordance with Good Utility Practice

and the criteria of the Northeast Power Coordinating Council

and the North American Electric Reliability Council; and

(iv) provide sufficient generating capacity to maintain operating

reserves in accordance with Good Utility Practice.

1.62 NEPOOL INSTALLED CAPABILITY at any particular time is the sum of

the Installed System Capabilities of all Participants at such time.

1.63 NEPOOL INSTALLED CAPABILITY RESPONSIBILITY for any month is the sum

of the Installed Capability Responsibilities of all Participants

during that month.

1.64 NEPOOL OBJECTIVE CAPABILITY for any year or period during a year is

the minimum NEPOOL Installed Capability, treating the reliability

benefits of the HQ Interconnection as Installed Capability, as

established by the Management Committee, required to be provided by

the Participants in aggregate for the period to meet the reliability

standards established by the Management Committee pursuant to Section

6.12.

1.65 NEW UNIT is an electric generating unit (including a unit or units

owned by a Non-Participant in which a Participant has an Entitlement

under a Unit Contract) first placed into commercial operation after

May 1, 1987 (or, in the case of a unit or units owned by a

Non-Participant, in which a Participant's Unit Contract Entitlement

became effective after May 1, 1987) and not listed on Exhibit B to the

Prior NEPOOL Agreement.

1.66 NON-PARTICIPANT is any entity which is not a Participant.

1.67 OPERABLE CAPABILITY of an electric generating unit or units in any

hour is the portion of the Installed Capability of the unit or units

which is operating or available to respond within an appropriate

period (as identified in market operation rules approved by the

Regional Market Operations Committee) to the System Operator's call to

meet the Energy and/or Operating Reserve and/or AGC requirements of

the NEPOOL Control Area during a Scheduled Dispatch Period or is

available to respond within an appropriate period to a schedule

submitted by a Participant for the hour in accordance with market

operation rules approved by the Regional Market Operations Committee.

1.68 OPERABLE CAPABILITY ENTITLEMENT is (a) the right to all or a

portion of the Operable Capability of a generating unit or units to

which an Entity is entitled as an owner (either sole or in common) or

as a purchaser pursuant to a Unit Contract, (b) REDUCED BY any portion

thereof which such Entity is selling pursuant to a Unit Contract, and

(c) further REDUCED OR INCREASED, as appropriate, to recognize rights

to receive or obligations to supply Operable Capability pursuant to

Firm Contracts or System Contracts in accordance with Section 14.7(a).

An Operable Capability Entitlement relating to a unit or units may,

but need not, be combined with any other Entitlements relating to such

generating unit or units, and may be transferred separately from the

related Installed Capability Entitlement, Energy Entitlement,

Operating Reserve Entitlements, or AGC Entitlement.

1.69 OPERABLE CAPABILITY REQUIREMENT of a Participant for any hour is

the number of Kilowatts determined in accordance with Section 12.3.

1.70 OPERABLE SYSTEM CAPABILITY of a Participant in any hour is the sum

of such Participant's Operable Capability Entitlements.

1.71 OPERATING RESERVE is any or a combination of 10-Minute Spinning

Reserve, 10-Minute Non-Spinning Reserve, and 30-Minute Operating

Reserve, as the context requires.

1.72 OPERATING RESERVE ENTITLEMENT is (a) the right to all or a portion

of the Operating Reserve of any category which can be provided by a

generating unit or units to which an Entity is entitled as an owner

(either sole or in common) or as a purchaser pursuant to a Unit

Contract, (b) REDUCED BY any portion thereof which such Entity is

selling pursuant to a Unit Contract, and (c) further REDUCED OR

INCREASED, as appropriate, to recognize rights to receive or

obligations to supply Operating Reserve of that category pursuant to

Firm Contracts or System Contracts in accordance with Section 14.7(a).

An Operating Reserve Entitlement in any category relating to a

generating unit or units may, but need not, be combined with any other

Entitlements relating to such generating unit or units and may be

transferred separately from the other categories of Operating Reserve

Entitlements related to such unit or units and from the related

Installed Capability Entitlement, Operable Capability Entitlement,

Energy Entitlement, or AGC Entitlement.

1.73 OTHER HQ ENERGY is Energy purchased under the HQ Phase I Energy

Contract which is classified as "Other Energy" under that contract.

1.74 PARTICIPANT is an eligible Entity (or group of Entities which has

elected to be treated as a single Participant pursuant to Section 4.1)

which is a signatory to this Agreement and has become a Participant in

accordance with Section 3.1 until such time as such Entity's status as

a Participant terminates pursuant to Section 21.2.

1.75 POOL-PLANNED FACILITY is a generation or transmission facility

designated as "pool-planned" pursuant to Section 18.1.

1.76 POOL-PLANNED UNIT is one of the following units: New Haven Harbor

Unit 1 (Coke Works), Mystic Unit 7, Canal Unit 2, Potter Unit 2, Wyman

Unit 4, Stony Brook Units 1, 1A, 1B, 1C, 2A and 2B, Millstone Unit 3,

Seabrook Unit 1 and Waters River Unit 2 (to the extent of 7 megawatts

of its Summer Capability and 12 megawatts of its Winter Capability).

1.77 POWER YEAR is the period of twelve months commencing on November 1.

1.78 PRIOR NEPOOL AGREEMENT is the NEPOOL Agreement as in effect on

December 1, 1996.

1.79 PROXY UNIT is a hypothetical electric generating unit which

possesses a Winter Capability, equivalent forced outage rate, annual

maintenance outage requirement, and seasonal derating determined in

accordance with Section 12.2(a)(2).

1.80 PTF are the pool transmission facilities defined in Section 15.1,

and any other new transmission facilities which the Regional

Transmission Planning Committee determines, in accordance with

criteria approved by the Management Committee and subject to review by

the System Operator, should be included in PTF.

1.81 REGIONAL MARKET OPERATIONS COMMITTEE is the committee established

pursuant to Section 10.

1.82 REGIONAL NETWORK SERVICE is the transmission service by that name

provided pursuant to Section 14 of the Tariff.

1.83 REGIONAL TRANSMISSION OPERATIONS COMMITTEE is the committee

established pursuant to Section 11.

1.84 REGIONAL TRANSMISSION PLANNING COMMITTEE is the committee

established pursuant to Section 9.

1.85 RELATED PERSON of a Participant is either (i) a corporation,

partnership, business trust or other business organization 10% or more

of the stock or equity interest in which is owned directly or

indirectly by, or is under common control with, the Participant, or

(ii) a corporation, partnership, business trust or other business

organization which owns directly or indirectly 10% or more of the

stock or other equity interest in the Participant, or (iii) a

corporation, partnership, business trust or other business

organization 10% or more of the stock or other equity interest in

which is owned directly or indirectly by a corporation, partnership,

business trust or other business organization which also owns 10% or

more of the stock or other equity interest in the Participant.

1.86 SCHEDULED DISPATCH PERIOD is the shortest period for which the

System Operator performs and publishes a projected dispatch schedule

based on projected Electrical Loads and actual Bid Prices and

Participant-directed schedules for resources submitted in accordance

with Section 14.2(d).

1.87 SECOND EFFECTIVE DATE is the date on which the provisions of Part

Three of the Agreement (other than the Installed Capability

Responsibility provisions of Section 12) shall become effective and

shall be such date as the Commission may fix on its own or pursuant to

a request of the Management Committee.

1.88 SERVICE AGREEMENT is the initial agreement and any amendments or

supplements thereto entered into by the Transmission Customer and the

System Operator for service under the Tariff.

1.89 SUMMER CAPABILITY of an electric generating unit or combination of

units is the maximum dependable load carrying ability in Kilowatts of

such unit or units (exclusive of capacity required for station use)

during the Summer Period, as determined by the Regional Market

Operations Committee in accordance with Section 10.13(f).

1.90 SUMMER PERIOD in each Power Year is the four-month period from June

through September.

1.91 SYSTEM CONTRACT is any contract for the purchase of Installed

Capability, Operable Capability, Energy, Operating Reserves and/or

AGC, other than a Unit Contract or Firm Contract, pursuant to which

the purchaser is entitled to a specifically determined or determinable

amount of such Installed Capability, Operable Capability, Energy,

Operating Reserves and/or AGC.

1.92 SYSTEM IMPACT STUDY is an assessment pursuant to Part V, VI or VII

of the Tariff of (i) the adequacy of the NEPOOL Transmission System to

accommodate a request for the interconnection of a new or materially

changed generating unit or a new or materially changed interconnection

to another Control Area or new Regional Network Service, Internal

Point-to-Point Service or Through or Out Service, and (ii) whether any

additional costs may be required to be incurred in order to provide

the interconnection or transmission service.

1.93 SYSTEM OPERATOR is the central dispatching agency provided for in

this Agreement which has responsibility for the operation of the

NEPOOL Control Area from the NEPOOL control center and the

administration of the Tariff. The System Operator is the ISO.

1.94 TARGET AVAILABILITY RATE is the assumed availability of a type of

generating unit utilized by the Management Committee in its

determination pursuant to Section 6.14(e) of NEPOOL Objective

Capability.

1.95 TARIFF is the NEPOOL Open Access Transmission Tariff set out in

Attachment B to the Agreement, as modified and amended from time to

time.

1.96 THIRD EFFECTIVE DATE is the date on which all Interchange

Transactions shall begin to be effected on the basis of separate Bid

Prices for each type of Entitlement. The Third Effective Date shall

be fixed at the discretion of the Management Committee to occur within

six months to one year after the Second Effective Date, or at such

later date as the Commission may fix on its own or pursuant to a

request by the Management Committee.

1.97 THROUGH OR OUT SERVICE is the transmission service by that name

provided pursuant to Section 18 of the Tariff.

1.98 TRANSITION PERIOD is the five-year period commencing on March 1,

1997.

1.99 TRANSMISSION CUSTOMER is any Eligible Customer that (i) is a

Participant which is not required to sign a Service Agreement with

respect to a service to be furnished to it in accordance with Section

48 of the Tariff or (ii) executes, on its own behalf or through its

Designated Agent, a Service Agreement, or (iii) requests in writing,

on its own behalf or through its Designated Agent, that NEPOOL file

with the Commission a proposed unexecuted Service Agreement in order

that the Eligible Customer may receive transmission service under the

Tariff.

1.100TRANSMISSION PROVIDER is the Participants, collectively, which own

PTF and are in the business of providing transmission service or

provide service under a local open access transmission tariff, or in

the case of a municipal Participant, would be required to do so if

requested pursuant to the reciprocity requirements specified in the

Tariff, or an individual such Participant, whichever is appropriate.

1.101UNIT CONTRACT is a purchase contract pursuant to which the

purchaser is in effect currently entitled either (i) to a specifically

determined or determinable portion of the Installed Capability of a

specific electric generating unit or units, or (ii) to a specifically

determined or determinable amount of Operable Capability, Energy,

Operating Reserves and/or AGC if, or to the extent that, a specific

electric generating unit or units is or can be operated.

1.102VOTING SHARE has the meaning specified in Section 6.3.

1.103WINTER CAPABILITY of an electric generating unit or combination of

units is the maximum dependable load carrying ability in Kilowatts of

such unit or units (exclusive of capacity required for station use)

during the Winter Period, as determined by the Regional Market

Operations Committee in accordance with Section 10.13(f).

1.104WINTER PERIOD in each Power Year is the seven-month period from

November through May and the month of October.

1.10510-MINUTE SPINNING RESERVE in an hour are the following resources

that are designated by the System Operator in accordance with market

operation rules, as approved by the Regional Market Operations

Committee, to be available to provide contingency protection for the

system: (1) the Kilowatts of Operable Capability of an electric

generating unit or units that are synchronized to the system, unloaded

during all or part of the hour, and capable of providing contingency

protection by loading to supply Energy immediately on demand,

increasing the Energy output over no more than ten minutes to the full

amount of generating capacity so designated, and sustaining such

Energy output for so long as the System Operator determines in

accordance with market operation rules approved by the Regional Market

Operations Committee is necessary; and (2) any portion of the

Electrical Load of a Participant that the System Operator is able to

verify as capable of providing contingency protection by immediately

on demand reducing Energy requirements within ten minutes and

maintaining such reduced Energy requirements for so long as the System

Operator determines in accordance with market operation rules approved

by the Regional Market Operations Committee is necessary.

1.10610-MINUTE NON-SPINNING RESERVE in an hour are the following

resources that are designated by the System Operator in accordance

with market operation rules, as approved by the Regional Market

Operations Committee, to be available to provide contingency

protection for the system: (1) the Kilowatts of Operable Capability of

an electric generating unit or units that are not synchronized to the

system, during all or part of the hour, and capable of providing

contingency protection by loading to supply Energy within ten minutes

to the full amount of generating capacity so designated, and

sustaining such Energy output for so long as the System Operator

determines in accordance with market operation rules approved by the

Regional Market Operations Committee is necessary; (2) any portion of

a Participant's Electrical Load that the System Operator is able to

verify as capable of providing contingency protection by reducing

Energy requirements within ten minutes and maintaining such reduced

Energy requirements for so long as the System Operator determines in

accordance with market operations rules approved by the Regional

Market Operations Committee is necessary; and (3) any other resources

and requirements that were able to be designated for the hour as 10-

Minute Spinning Reserve but were not designated by the System Operator

for such purpose in the hour.

1.10730-MINUTE OPERATING RESERVE in an hour are the following resources

that are designated by the System Operator in accordance with market

operation rules, as approved by the Regional Market Operations

Committee, to be available to provide contingency protection for the

system: (1) the Kilowatts of Operable Capability of an electric

generating unit or units that are capable of providing contingency

protection by loading to supply Energy within thirty minutes of demand

at an output EQUAL TO its full amount of generating capacity so

designated and sustaining such Energy output for so long as the System

Operator determines in accordance with market operation rules approved

by the Regional Market Operations Committee is necessary; (2) any

portion of the Electrical Load of a Participant that the System

Operator is able to verify as capable of providing contingency

protection by reducing Energy requirements within thirty minutes and

maintaining such reduced Energy requirements for so long as the System

Operator determines in accordance with market operation rules approved

by the Regional Market Operations Committee is necessary; and (3) any

other resources and requirements that were able to be designated for

the hour as 10-Minute Spinning Reserve or 10-Minute Non-Spinning

Reserve but were not designated by the System Operator for such

purposes in the hour.

1.10833RD AMENDMENT is the Thirty-Third Agreement Amending New England

Power Pool Agreement dated as of December 1, 1996.

1.109MODIFICATION OF CERTAIN DEFINITIONS WHEN A PARTICIPANT PURCHASES A PORTION OF ITS REQUIREMENTS FROM ANOTHER PARTICIPANT PURSUANT TO FIRM CONTRACT

Definitions marked by an asterisk (*) are modified as follows

when a Participant purchases a portion of its requirements of

electricity from another Participant pursuant to a Firm Contract:

(a) If the Firm Contract limits deliveries to a specifically

stated number of Kilowatts and requires payment of a demand

charge thereon (thus placing the responsibility for meeting

additional demands on the purchasing Participant):

(1) in computing the ADJUSTED LOAD of the purchasing

Participant, the Kilowatts received pursuant to such

Firm Contract shall be deemed to be the number of

Kilowatts specified in the Firm Contract; and

(2) in computing the LOAD of the supplying Participant, the

Kilowatts delivered pursuant to such Firm Contract

shall be deemed to be the number of Kilowatts specified

in the Firm Contract.

(b) If the Firm Contract does not limit deliveries to a

specifically stated number of Kilowatts, but entitles the

Participant to receive such amounts of electricity as it may

require to supply its electric needs (thus placing the

responsibility for meeting additional demands on the

supplying Participant):

(1) the INSTALLED CAPABILITY RESPONSIBILITY of the

purchasing Participant shall be EQUAL TO the amount of

its Installed Capability Entitlements;

(2) in computing the ADJUSTED LOAD of the purchasing

Participant, the Kilowatts received pursuant to such

Firm Contract shall be deemed to be a quantity R{l};

and

(3) in computing the LOAD of the supplying Participant, the

Kilowatts delivered pursuant to such Firm Contract

shall be deemed to be a quantity R{l}.

The quantity R{l} equals (i) the Load of the purchasing

Participant less (ii) the amount of the purchasing

Participant's Installed Capability Entitlements multiplied

X is the maximum Load of the purchasing Participant

in the month, and

Y is the NEPOOL Installed Capability Responsibility

multiplied by the purchasing Participant's

fraction P determined pursuant to Section

12.2(a)(1), computed as if the Firm Contract did

not exist.

Terms used in this Agreement that are not defined above, or in the

sections in which such terms are used, shall have the meanings

customarily attributed to such terms in the electric power industry in

New England.

SECTION 2

PURPOSE; EFFECTIVE DATES

2.1 PURPOSE. This Restated NEPOOL Agreement is intended to provide for

a restructuring of the New England Power Pool by modifying the pool's

governance and market provisions to take account of a changed

competitive environment, by modifying the transmission

responsibilities of the Participants so that the pool will perform the

functions of a regional transmission group and provide service to

Participants and Non-Participants under a regional open access

transmission tariff, and by providing for the activation of the ISO

and the execution of a contract between the ISO and NEPOOL to define

the ISO's responsibilities.

2.2 EFFECTIVE DATES; TRANSITIONAL PROVISIONS. The provisions of Parts

One, Two, Four and Five of this Agreement and the Tariff became

effective on the First Effective Date and replaced on the First

Effective Date the provisions of Sections 1-8, inclusive, 10, 11, 13,

14.2, 14.3, 14.4 and 16 of the Prior NEPOOL Agreement. The provisions

of Sections 12.1(a), 12.2, 12.4 (as to Installed Capability only),

12.5 and 12.7(a) of this Agreement became effective on April 1, 1998

and replaced on such date the provisions of Section 9 of the Prior

NEPOOL Agreement.

The effectiveness of the remaining Sections of this Restated NEPOOL

Agreement shall be delayed pending the preparation of implementing

criteria, rules and standards and computer programs. These Sections

shall become effective on the Second Effective Date and shall replace

on the Second Effective Date the remaining provisions of the Prior

NEPOOL Agreement, which shall continue in effect until the Second

Effective Date.

As provided in Section 14, certain portions of Section 14 which will

become effective on the Second Effective Date will be superseded on

the Third Effective Date by other portions of Section 14.

SECTION 3

MEMBERSHIP

3.1 MEMBERSHIP. Those Entities which are Participants in NEPOOL on the

First Effective Date shall continue to be Participants.

Any other Entity may, upon compliance with such reasonable conditions

as the Management Committee may prescribe, become a Participant by

depositing a counterpart of this Agreement as theretofore amended,

duly executed by it, with the Secretary of the Management Committee,

accompanied by a certified copy of a vote of its board of directors,

or such other body or bodies as may be appropriate, duly authorizing

its execution and performance of this Agreement, and a check in

payment of the application fee described below.

Any such Entity which satisfies the requirements of this Section 3.1

shall become a Participant, and this Agreement shall become fully

binding and effective in accordance with its terms as to such Entity,

as of the first day of the second calendar month following its

satisfaction of such requirements; provided that an earlier or later

effective time may be fixed by the Management Committee with the

concurrence of such Entity or by the Commission.

The application fee to be paid by each Entity seeking to become a

Participant shall be in addition to the annual fee provided by Section

19.1 and shall be $500 or such other amount as may be fixed by the

Management Committee.

3.2 OPERATIONS OUTSIDE THE CONTROL AREA. Subject to the reciprocity

requirements of the Tariff, if a Participant serves a Load, or has

rights in supply or demand-side resources or owns transmission and/or

distribution facilities, located outside of the NEPOOL Control Area,

such Load and resources shall not be included for purposes of

determining the Participant's rights, responsibilities and obligations

under this Agreement, except that the Participant's Entitlements in

facilities or its rights in demand side-resources outside the NEPOOL

Control Area shall be included in such determinations if, to the

extent, and while such Entitlements are used for retail or wholesale

sales within the NEPOOL Control Area or such Entitlements or rights

are designated by a Participant for purposes of meeting its

obligations under Section 12 of this Agreement.

3.3 LACK OF PLACE OF BUSINESS IN NEW ENGLAND. If and for so long as a

Participant does not have a place of business located in one of the

New England states, the Participant shall be deemed to irrevocably (1)

submit to the jurisdiction of any Connecticut state court or United

States Federal court sitting in Connecticut (the state whose laws

govern this Agreement) over any action or proceeding arising out of or

relating to this Agreement that is not subject to the exclusive

jurisdiction of the Commission, (2) agree that all claims with respect

to such action or proceeding may be heard and determined in such

Connecticut state court or Federal court, (3) waive any objection to

venue or any action or proceeding in Connecticut on the basis of FORUM

NON CONVENIENS, and (4) agree that service of process may be made on

the Participant outside Connecticut by certified mail, postage

prepaid, mailed to the Participant at the address of its member on the

Management Committee as set out in the NEPOOL roster or at the address

of its principal place of business.

3.4 OBLIGATION FOR DEFERRED EXPENSES. NEPOOL may provide for the

deferral on the books of the Participants from time to time of capital

or other expenditures, and the recovery of the deferred expenses in

subsequent periods. Any Entity which becomes a Participant during the

recovery period for any such deferred expenses shall be obligated,

together with the continuing Participants, for its share of the

current and deferred expenses pursuant to Section 19.2.

3.5 FINANCIAL SECURITY. For an Entity applying to become a Participant

or any continuing Participant that the Management Committee reasonably

determines may fail to meet its financial obligations under the

Agreement, the Management Committee may require reasonable credit

review procedures which shall be made in accordance with standard

commercial practices. In addition, the Management Committee may

prescribe for such Entity or Participant a requirement that the Entity

or Participant provide and maintain in effect an irrevocable letter of

credit as security to meet its responsibilities and obligations under

the Agreement, or an alternative form of security proposed by the

Entity or Participant and acceptable to the Management Committee and

consistent with commercial practices established by the Uniform

Commercial Code that protects the Participants against the risk of

non-payment.

SECTION 4

STATUS OF PARTICIPANTS

4.1 TREATMENT OF CERTAIN ENTITIES AS SINGLE PARTICIPANT. All Entities

which are controlled by a single person (such as a corporation or a

business trust) which owns at least seventy-five percent of the voting

shares of, or equity interest in, each of them shall be collectively

treated as a single Participant for purposes of this Agreement, if

they each elect such treatment. They are encouraged to do so. Such

an election shall be made in writing and shall continue in effect

until revoked in writing.

In view of the long-standing arrangements in Vermont, Vermont Electric

Power Company, Inc. and any other Vermont electric utilities which

elect in writing to be grouped with it shall be collectively treated

as a single Participant for purposes of this Agreement.

4.2 PARTICIPANTS TO RETAIN SEPARATE IDENTITIES. The signatories to this

Agreement shall not become partners by reason of this Agreement or

their activities hereunder, but as to each other and to third persons,

they shall be and remain independent contractors in all matters

relating to this Agreement. This Agreement shall not be construed to

create any liability on the part of any signatory to anyone not a

party to this Agreement. Each signatory shall retain its separate

identity and, to the extent not limited hereby, its individual freedom

in rendering service to its customers.

SECTION 5

NEPOOL OBJECTIVES AND COOPERATION BY PARTICIPANTS

5.1 NEPOOL OBJECTIVES. The objectives of NEPOOL are, through joint

planning, central dispatching, cooperation in environmental matters

and coordinated construction, central dispatch by the System Operator

of the operation and coordinated maintenance of electric supply and

demand-side resources and transmission facilities, the provision of an

open access regional transmission tariff and the provision of a means

for effective coordination with other power pools and utilities

situated in the United States and Canada,

(a) to assure that the bulk power supply of the NEPOOL Control

Area conforms to proper standards of reliability;

(b) to create and maintain open, non-discriminatory,

competitive, unbundled markets for Energy, capacity, and

ancillary services that function efficiently in a changing

electric power industry and have access to regional

transmission at rates that do not vary with distance;

(c) to attain maximum practicable economy, consistent with

proper standards of reliability and the maintenance of

competitive markets, in such bulk power supply; and

(d) to provide access to competitive markets within the NEPOOL

Control Area and to neighboring regions;

and to provide for equitable sharing of the resulting

responsibilities, benefits and costs.

5.2 COOPERATION BY PARTICIPANTS. In order to attain the objectives of

NEPOOL set forth in Section 5.1, each Participant shall observe the

provisions of this Agreement in good faith, shall cooperate with all

other Participants and shall not either alone or in conjunction with

one or more other Entities take advantage of the provisions of this

Agreement so as to harm another Participant or to prejudice the

position of any Participant in the electric power business.

Until the Second Effective Date, in order to assure the equitable

sharing among the Participants of the benefits contemplated by this

Agreement, no Participant shall participate, except pursuant to this

Agreement, in any transaction with one or more other Participants or

other Entities if such transaction involves an economy interchange

arrangement. The foregoing restriction shall not, however, apply to

an economy interchange or other similar arrangement between or among a

Participant and one or more Entities which are not Participants if,

and to the extent that, such arrangement is consistent with attainment

of the objectives stated in Section 5.1 and with the Participant's

obligations under this Agreement.

PART TWO

GOVERNANCE

SECTION 6

MANAGEMENT COMMITTEE

6.1 MEMBERSHIP. There shall be a Management Committee which shall be

constituted as follows: each Participant shall appoint and be

represented by one member of the Management Committee.

6.2 TERM OF MEMBERS. Each member of the Management Committee shall hold

office until such member is replaced by the Participant which

appointed the member or until such Participant ceases to be a

Participant. Replacement of a member shall be effected by delivery by

a Participant of written notice of such replacement to the Secretary

of the Management Committee.

6.3 VOTES. Each member of the Management Committee shall have a Voting

Share in any month entitling the member to cast, on behalf of the

Participant which the member represents, votes representing the

percentage to which the member's Participant is entitled of the

aggregate Voting Shares of all Participants for the month. The

percentage of the aggregate Voting Shares of all Participants to which

a Participant is entitled in any month shall be determined in

accordance with the following formula:

in which

V = the Participant's Voting Share as a percentage of the

aggregate Voting Shares of all Participants;

P    =    the average for each of the most recently completed twelve

          months of the Participant's maximum Load during any clock

          hour in a month;



P{1} =    the average of the sums for each of the most recently

          completed twelve months of the noncoincidental maximum Load

          during any clock hour in a month of all Participants;



E    =    the average for the most recently completed twelve months of

          the sum for each month of the Participant's Load for each

          hour of the month PLUS any kilowatthours delivered during

          the month to loads classified as interruptible under market

          operation rules approved by the Regional Market Operations

          Committee;



E{1} =    the average for the most recently completed twelve months of

          the sum for each month of the Loads of all Participants for

          each hour of the month PLUS any kilowatthours delivered

          during the month to loads classified as interruptible under

          market operation rules approved by the Regional Market

          Operations Committee.



C    =    the average in megawatts for the most recently completed

          twelve months of the sum for each month of the Generation

          Ownership Shares, as defined in this Section, of the

          Participant;

C{1} = the average in megawatts for the most recently completed

twelve months of the sum for each month of the Generation

Ownership Shares of all Participants;

X = the average for the most recently completed twelve months of

the sum for each month of (i) a number of kilowatthours

EQUAL TO the Kilowatts of the Participant's Generation

Ownership Shares, TIMES the number of hours in the month,

PLUS (ii) the number of kilowatthours that the Participant

was entitled to receive in each hour with respect to its

Energy Entitlements under Unit Contracts or System Contracts

TIMES, in the case of each contract, the number of hours the

contract was in effect in the month, as computed without

giving effect to any resale in whole or part of any such

Energy Entitlement;

X{1} =   the average for the most recently completed twelve months of the

         sum for each month of (i) a number of kilowatthours EQUAL TO the

         Kilowatts of the Generation Ownership Shares of all Participants,

         TIMES the number of hours in the month, PLUS (ii) the number of

         kilowatthours that all Participants were entitled to receive in

         each hour with respect to their Energy Entitlements under Unit

         Contracts or System Contracts TIMES, in the case of each

         contract, the number of hours the contract was in effect in the

         month, as computed without giving effect to any resale in whole

         or part of any such Energy Entitlement;



M    =    the circuit miles of the Participant's Transmission

          Ownership Shares, as defined in this Section, of PTF

          transmission lines TIMES, in the case of each line, the

          nominal operating voltage of the line;



M{1} =    the aggregate of the circuit miles of the Transmission

          Ownership Shares of PTF transmission lines of all

          Participants TIMES, in the case of each line, the nominal

          operating voltage of the line;



R    =    the Annual Transmission Revenue Requirements of the

          Participant's PTF as of the beginning of the current

          calendar year as determined in accordance with Attachment F

          to the Tariff except that 1) such Revenue Requirements shall

          not be reduced by the transmission support revenue received

          as described in Section I of that Attachment and 2) such

          Revenue Requirements shall not include transmission support

          payments as described in Section J of that Attachment for

          support arrangements which were entered into after December

          31, 1996;



R{1} =    the aggregate Annual Transmission Revenue Requirements of

          the PTF of all Participants as of the beginning of the

          current calendar year as determined in accordance with

          Attachment F to the Tariff, except that 1) such Revenue

          Requirements shall not be reduced by the transmission

          support revenue received as described in Section I of that

          Attachment and 2) such Revenue Requirements shall not

          include transmission support payments as described in

          Section J of that Attachment for support arrangements which

          were entered into after December 31, 1996;

Y = 1; and

Y{1} = the number of NEPOOL Participants at the beginning of the

month;

PROVIDED, HOWEVER, that a Participant and its Related Persons may not have

aggregate Voting Shares exceeding 25% of the aggregate Voting Shares to

which all Participants are entitled. If the aggregate Voting Shares of a

Participant and its Related Persons would be in excess of 25% if it were

not for this limitation, the remaining Voting Shares to which such

Participant and its Related Persons would otherwise be entitled shall be

allocated to the other Participants on a pro rata basis.

For purposes of the preceding formula (i) if an Entity has been a

Participant for less than twelve months, the amounts to be taken into

account for purposes of "P", "E", "C" and "X" in the formula shall be for

the period during which the Entity has been a Participant; (ii) for

purposes of "X" and "X{1}" in the formula, the number of kilowatthours to

be taken into account with respect to the HQ Phase II Firm Energy Contract

for each Participant which has a share in the HQ Phase II Firm Energy

Contract shall be computed on the basis of the number of Kilowatts of its

HQ Interconnection Capability Credit, if any, for the month; and (iii) for

purposes of "X" and "X{1}" in the formula, the number of kilowatthours to

be taken into account with respect to an Energy Entitlement under a Unit

Contract or System Contract, other than the HQ Phase II Firm Energy

Contract, under which a Participant is entitled to receive Energy from

outside the NEPOOL Control Area shall be computed on the basis of the

number of Kilowatts of Installed Capability credit, or Monthly Peak

reduction, for which the Participant is given credit in determining whether

it has satisfied its Installed Capability Responsibility pursuant to

Section 12.

In the event a Participant both participates in the wholesale bulk power

market and owns PTF, the member appointed by the Participant shall be

entitled to divide the member's vote, as determined in accordance with this

Section, on any matter on the basis specified by it in a notice given to

the Secretary of the Management Committee at or prior to the meeting at

which the vote is to be cast, to reflect its market and transmission

interests. In such case the portion of the member's vote reflecting its

transmission interest may be cast by the member's alternate.

For purposes of this Section, the Generation Ownership Shares of a

Participant means and includes:

(A) the direct ownership interest which the Participant has as a sole

or joint owner in the Installed Capability of a generating unit

which is subject to NEPOOL central dispatch in accordance with

Section 13.2;

(B) the indirect ownership interest which the Participant has, as a

shareholder in Vermont Yankee Nuclear Power Corporation or a

similar corporation, or as a general or limited partner in Ocean

State Power or a similar partnership, in the Installed Capability

of a generating unit which is subject to NEPOOL central dispatch

in accordance with Section 13.2, provided the corporation or

partnership is itself not a Participant;

(C) any other interest which the Participant has in the Installed

Capability of a generating unit which is subject to NEPOOL

central dispatch in accordance with Section 13.2, under a lease

or other contractual arrangement, provided the other party to the

arrangement is itself not a Participant and the Management

Committee determines, at the request of the affected Participant,

that the Participant has benefits and rights, and assumes risks,

under the arrangement with respect to the unit which are

substantially equivalent to the benefits, rights and risks of an

owner; and

(D) an interest which the Participant shall be deemed to have in the

direct ownership interest, or the indirect ownership interest as

a shareholder or general or limited partner, of a Related Person

of the Participant in the Installed Capability of a generating

unit which is subject to NEPOOL central dispatch in accordance

with Section 13.2, provided the Related Person is itself not a

Participant.

For purposes of this Section, the Transmission Ownership Shares of a

Participant means and includes:

(W) the direct ownership interest which the Participant has as a sole

or joint owner of PTF;

(X) the indirect ownership interest which the Participant has, as a

shareholder in a corporation, or as a general or limited partner

in a partnership, in PTF owned by such corporation or

partnership, provided the corporation or partnership is not

itself a Participant;

(Y) any other interest which the Participant has in PTF under a lease

or other contractual arrangement, provided the other party to the

arrangement is not itself a Participant and the Management

Committee determines, at the request of the affected Participant,

that the Participant has benefits and rights, and assumes risks,

under the arrangement with respect to the PTF which are

substantially equivalent to the benefits, rights and risks of an

owner; and

(Z) an interest which the Participant shall be deemed to have in the

direct ownership interest, or the indirect ownership interest as

a shareholder or general or limited partner, of a Related Person

of the Participant in PTF, provided the Related Person is itself

not a Participant.

6.4 NUMBER OF VOTES NECESSARY FOR ACTION. Actions of the Management

Committee shall be effected only upon an affirmative vote of members

having at least 66% of the aggregate Voting Shares to which all

members are entitled; PROVIDED, HOWEVER, that the negative votes of

any three or more members representing Participants which are not

Related Persons of each other and which have at least 20% of the

aggregate Voting Shares to which all members are entitled shall defeat

any proposed action. In determining whether the negative vote total

specified above has been reached, the following limitation shall be

applied: if the member or members representing any Participant and

its Related Persons would be entitled to cast against the proposed

action more than 18% of the aggregate Voting Shares to which all

members are entitled, such member or members shall be entitled to vote

negatively only 18% of such aggregate Voting Shares.

6.5 PROXIES. The vote of any member of the Management Committee or the

member's alternate may be cast by another person pursuant to a written

proxy dated not more than one year previous to the meeting and

delivered to the Secretary of the Management Committee at or prior to

the meeting at which the proxy vote is cast.

6.6 ALTERNATES. A Participant may designate, by a written notice

delivered to the Secretary of the Management Committee, an alternate

for a member of the Management Committee appointed by it. In the

absence of the member, the alternate shall have all the powers of the

member, including the power to vote.

6.7 OFFICERS. At its annual meeting, the Management Committee shall

elect from among its members a Chair and a Vice-Chair; it shall also

elect a Secretary who need not be a member. These officers shall have

the powers and duties usually incident to such offices.

6.8 MEETINGS. The Management Committee shall hold its annual meeting in

December at such time and place as the Chair shall designate and shall

hold other meetings in accordance with a schedule adopted by the

Management Committee or at the call of the Chair. One or more members

who represent Participants having in the aggregate at least 3% of the

aggregate Voting Shares of all Participants may call a special meeting

of the Management Committee in the event that the Chair shall fail to

call such a meeting within three business days following the Chair's

receipt from such member or members of a request specifying the

subject matters to be acted upon at the meeting.

6.9 NOTICE OF MEETINGS. Written notice of each meeting of the

Management Committee shall be given to each member not less than five

business days prior to the date of the meeting, which notice shall

specify the principal subject matter expected to be acted upon at the

meeting.

6.10 ADOPTION OF BUDGETS. At each annual meeting, the Management

Committee shall adopt a NEPOOL budget for the ensuing calendar year.

In adopting budgets the Management Committee shall give due

consideration to the budgetary requests of each committee and shall

include the budget of the ISO as determined in accordance with

NEPOOL's contract between NEPOOL and the ISO. The Management

Committee may modify any NEPOOL budget from time to time after its

adoption and shall modify the NEPOOL budget if and as required to

support changes to the ISO budget adopted in accordance with the

contract between NEPOOL and the ISO.

6.11 ADOPTION OF BYLAWS. The Management Committee may adopt bylaws,

consistent with this Agreement, governing procedural matters including

the conduct of its meetings and those of the other committees.

6.12 ESTABLISHING RELIABILITY STANDARDS. It shall be the duty of the

Management Committee, after review of reports or actions of the System

Operator and the Market Reliability Planning Committee and Regional

Transmission Planning Committee and such other matters as the

Management Committee deems pertinent, to establish or approve proper

standards of reliability for the bulk power supply of NEPOOL. Such

standards shall be consistent with the directives of the North

American Electric Reliability Council and the Northeast Power

Coordinating Council and shall be reviewed periodically by the

Management Committee and revised as the Management Committee deems

appropriate.

6.13 APPOINTMENT AND COMPENSATION OF NEPOOL PERSONNEL. The Management

Committee shall determine what personnel are desirable for the

effective operation and administration of NEPOOL and shall fix or

authorize the fixing of the compensation for such persons.

6.14 DUTIES AND AUTHORITY.

(a) The Management Committee shall have the duty and requisite

authority to administer, enforce and interpret the

provisions of this Agreement in order to accomplish the

objectives of NEPOOL including the making of any decision or

determination necessary under any provision of this

Agreement and not expressly specified to be decided or

determined by any other body.

(b) The Management Committee shall have the authority to provide

for such facilities, materials and supplies as the

Management Committee may determine are necessary or

desirable to carry out the provisions of this Agreement.

(c) The Management Committee shall have, in addition to the

authority provided in Section 6.12, the authority, after

consultation with other NEPOOL committees and the System

Operator, to establish or approve consistent standards with

respect to any aspect of arrangements between Participants

and Non-Participants which it determines may adversely

affect the reliability of NEPOOL, and to review such

arrangements to determine compliance with such standards.

(d) The Management Committee, or its designee, shall have the

authority to act on behalf of all Participants in carrying

out any action properly taken pursuant to the provisions of

this Agreement. Without limiting the foregoing general

authority, the Management Committee, or its designee, shall

have the authority on behalf of all Participants to execute

any contract, lease or other instrument which has been

properly authorized pursuant to this Agreement including,

but not limited to, one or more contracts with the ISO, and

to file with the Commission and other appropriate regulatory

bodies: (i) this Agreement and documents amending or

supplementing this Agreement, including the Tariff, (ii)

contracts with Non-Participants or the ISO, and (iii)

related tariffs, rate schedules and certificates of

concurrence. The Management Committee shall, in addition,

have the authority to represent NEPOOL in proceedings before

the Commission.

(e) The Management Committee shall have the duty and requisite

authority, after consultation with other NEPOOL committees

and the System Operator, to fix the NEPOOL Objective

Capability for each month of each Power Year prior to the

beginning of the Power Year and thereafter to review at

least annually the anticipated Load of the NEPOOL

Participants and NEPOOL Installed Capability for each month

of such Power Year and to make such adjustments in the

NEPOOL Objective Capability as the Management Committee may

determine on the basis of such review. Since changes in the

circumstances which must be assumed by the Management

Committee in fixing NEPOOL Objective Capability for a future

period can significantly affect the required level of NEPOOL

Objective Capability for that period, the Management

Committee shall, where appropriate, also determine the

effect on NEPOOL Objective Capability of significant changes

in circumstances from those assumed, either by fixing

alternative NEPOOL Objective Capabilities, or by adopting

adjustment factors or formulas.

(f) The Management Committee shall have the duty and requisite

authority to establish or approve schedules fixing the

amounts to be paid by Participants and Non-Participants to

permit the recovery of expenses incurred in furnishing some

or all of the services furnished by NEPOOL either directly

or through the System Operator.

(g) The Management Committee shall have the duty and requisite

authority to provide for the sharing by Participants, on

such basis as the Management Committee may deem appropriate,

of payments and costs which are not otherwise reimbursed

under this Agreement and which are incurred by Participants

or under arrangements with Non-Participants and approved or

authorized by the Committee as necessary in order to meet or

avoid short-term deficiencies in the amount of resources

available to meet the pool's reliability objectives.

(h) The Management Committee shall have the authority, at the

time that it acts on an Entity's application pursuant to

Section 3.1 to become a Participant, to waive, conditionally

or unconditionally, compliance by such Entity with one or

more of the obligations imposed by this Agreement if the

Management Committee determines that such compliance would

be unnecessary or inappropriate for such Entity and the

waiver for such Entity will not impose an additional burden

on other Participants.

(i) Until the Second Effective Date, the Management Committee

shall have the duty and requisite authority to determine

which generating facilities should be equipped for Automatic

Generation Control in order to maintain proper frequency for

the interconnected bulk power system of the Participants and

to control power flows on interconnections between

Participants and non-Participants. The Management Committee

shall establish a system for sharing by the Participants

until the Second Effective Date, on such basis as the

Committee may deem appropriate, of the costs, including loss

of generator efficiency, that are incurred by Participants

in installing, maintaining and operating Automatic

Generation Control equipment required by the Committee and

are not otherwise reimbursed under this Agreement.

(j) The Management Committee shall have the duty and requisite

authority to act on appeals to it from the actions of other

NEPOOL committees and to appoint a special committee to

administer NEPOOL's alternate dispute resolution procedures

or to take any other action if it determines that such

action is necessary or appropriate to achieve a prompt

resolution of disputes under the provisions of Section 21.1.

(k) The Management Committee shall have such further powers and

duties as are conferred or imposed upon it by other sections

of this Agreement.

6.15 ATTENDANCE OF MEMBERS OF MANAGEMENT COMMITTEE AT OTHER COMMITTEE

MEETINGS. Each member of the Management Committee or that member's

designee shall be entitled to attend any meeting of any other NEPOOL

committee, and shall have a reasonable opportunity to express views on

any matter to be acted upon at the meeting.

SECTION 7

EXECUTIVE COMMITTEE

7.1 ORGANIZATION. There shall be an Executive Committee which shall

have all the powers and duties of the Management Committee (except as

provided below), subject to appeal to the Management Committee

pursuant to the provisions of Section 7.11. Between meetings of the

Management Committee, the Executive Committee shall exercise the

powers and perform the duties of the Management Committee. The

Executive Committee shall not have any of the powers or duties of the

Management Committee under Sections 6.7 and 6.10, except that the

Executive Committee shall have the power of the Management Committee

to modify from time to time an overall NEPOOL annual budget adopted by

the Management Committee, subject to the limitation that the aggregate

amount of net increase in an overall budget which may be effected by

the Executive Committee for any year shall not exceed 10% of the

budget initially adopted by the Management Committee.

7.2 MEMBERSHIP. The Executive Committee shall be constituted as

follows: the ISO shall have the right to appoint a non-voting member

of the Committee; each Participant whose Voting Share equals or

exceeds 3% of the aggregate Voting Shares of all Participants shall

have the right to appoint a voting member of the Committee; the

remaining Participants whose Voting Shares are less than 3% of the

aggregate Voting Shares of all Participants shall be divided into the

following five groups, with each having the right to appoint one

voting member of the Committee:

(a) One group consisting of the remaining Participants

which are municipally-owned and cooperatively-owned

utilities;

(b) One group consisting of the remaining Participants

which are not subject to traditional utility rate

regulation and which are engaged in the NEPOOL Control

Area principally in the business of owning or operating

generation facilities and selling the output of such

generation;

(c) One group consisting of the remaining Participants

which are not subject to traditional utility rate

regulation and which are engaged in the NEPOOL Control

Area principally in a business other than the business

of owning or operating generation or PTF facilities and

selling the output of such generation;

(d) One group consisting of the remaining Participants, if

any, which (i) own PTF, (ii) are not engaged in

electric generation or distribution and do not

participate in the wholesale bulk power market, and

(iii) are not Related Persons of any other Participant;

and

(e) One group consisting of the remaining Participants

which are investor-owned utilities subject to

traditional rate regulation or other Entities which do

not qualify to be included in any of the other four

groups.

Notwithstanding the foregoing, any such Participant may elect to join

a different group than the one to which it would be assigned under the

foregoing provisions if this is acceptable to the members of the group

it elects to join. In the event any Participant is a Related Person

of another Participant which has the individual right to appoint a

member of the Committee on the basis of its individual Voting Share,

the Participant shall be represented on the Committee by the member

appointed by the Participant which is its Related Person and shall not

be assigned to any of the five groups.

7.3 TERM OF MEMBERS. The member of the Executive Committee appointed by

the ISO shall serve until replaced by the ISO. Members of the

Executive Committee appointed by a Participant or group of

Participants shall serve until replaced by the Participant or

Participants which appointed them or until such Participant or

Participants shall lose their status as Participants or otherwise lose

their right to appoint the member. Appointment or replacement of a

member shall be effected by the ISO or a Participant or group of

Participants by giving written notice of such appointment or

replacement to the Secretary of the Executive Committee.

7.4 ALTERNATES. The ISO or a Participant or group of Participants may

designate, by a written notice given to the Secretary of the Executive

Committee, an alternate for any member of the Executive Committee

appointed by the ISO or such Participant or group of Participants. In

the absence of the member, the alternate shall have all the powers of

the member, including the power to vote.

7.5 VOTES. Each voting member of the Executive Committee shall have one

vote, which may be cast in person by the member or the member's

alternate or by another person pursuant to a written proxy dated not

more than one year previous to the meeting and delivered to the

Secretary of the Executive Committee at or prior to the meeting at

which the proxy vote is cast. If a Participant which has the

individual right to appoint a member of the Executive Committee both

participates in the wholesale bulk power market and owns PTF, the

member appointed by the Participant shall be entitled to divide the

member's vote on the basis specified in a notice given by it to the

Secretary of the Committee at or prior to the meeting at which the

vote is to be cast, to reflect the Participant's market and

transmission interests. In such case the portion of the Participant

member's vote reflecting its transmission interest may be cast by the

member's alternate.

A voting member appointed by a group may divide the member's vote on

the basis specified in a notice given by it to the Secretary of the

Committee at or prior to the meeting at which the vote is to be cast,

to reflect the different positions of the members of the group.

7.6 NUMBER OF VOTES NECESSARY FOR ACTION. The adoption of actions by

the Executive Committee shall require affirmative votes by voting

members aggregating at least 60% of the number of votes which the

voting members in attendance at a meeting at which a quorum is present

are entitled to cast. A majority of the voting members at any time

shall constitute a quorum.

7.7 OFFICERS. At its annual meeting, the Executive Committee shall

elect from its voting members a Chair and a Vice-Chair; it shall also

elect a Secretary who need not be a member. These officers shall have

the powers and duties usually incident to such offices.

7.8 MEETINGS. The Executive Committee shall hold its annual meeting in

December or January at such time and place as the Chair shall

designate and shall hold other meetings in accordance with a schedule

adopted by the Executive Committee or at the call of the Chair. Any

two members may call a special meeting of the Executive Committee in

the event that the Chair shall fail to call such a meeting within

three business days following the Chair's receipt from such members of

a request specifying the subject matters to be acted upon at the

meeting. Any regular or special meeting of the Executive Committee

may be conducted by means of conference telephone or other

communications equipment by means of which all persons participating

in the meeting can hear each other.

7.9 NOTICE OF MEETINGS. Written notice of each meeting of the Executive

Committee shall be given to each member of the Committee and each

member of the Management Committee not less than three business days

prior to the date of the meeting. The notice shall specify the

principal subject matter expected to be acted upon at the meeting.

7.10 NOTICE TO MEMBERS OF MANAGEMENT COMMITTEE OF ACTIONS BY EXECUTIVE

COMMITTEE. Prior to the end of the fifth business day following a

meeting of the Executive Committee, the Secretary of the Executive

Committee shall give written notice to the ISO and each member of the

Management Committee of any action taken by the Executive Committee at

such meeting.

7.11 APPEAL OF ACTIONS TO MANAGEMENT COMMITTEE. The ISO or any

Participant may appeal to the Management Committee any action taken by

the Executive Committee. Such an appeal shall be taken prior to the

end of the tenth business day following the meeting of the Executive

Committee to which the appeal relates by giving to the Secretary of

the Management Committee a signed and written notice of appeal and by

mailing a copy of the notice to the ISO and each member of the

Management Committee. Pending action on the appeal by the Management

Committee, the giving of a notice of appeal as aforesaid shall suspend

the action appealed from.

SECTION 8

MARKET RELIABILITY PLANNING COMMITTEE

8.1 ORGANIZATION. There shall be a Market Reliability Planning

Committee which shall have the responsibilities specified in Section

8.11. It may provide from time to time for the creation of one or

more Functional Planning Committees to act in particular functional

planning areas and to exercise such of the Market Reliability Planning

Committee's responsibilities as it may delegate to them.

8.2 MEMBERSHIP. The Market Reliability Planning Committee shall be

constituted as follows: the ISO shall have the right to appoint a

non-voting member of the Committee; each Participant whose Voting

Share equals or exceeds 3% of the aggregate Voting Shares of all

Participants shall have the right to appoint a voting member of the

Committee; the remaining Participants shall be divided into the

following five groups, with each having the right to appoint one

voting member of the Committee:

(a) One group consisting of the remaining Participants which are

municipally-owned and cooperatively-owned utilities;

(b) One group consisting of the remaining Participants which are

not subject to traditional utility rate regulation and which

are engaged in the NEPOOL Control Area principally in the

business of owning or operating generation facilities and

selling the output of such generation;

(c) One group consisting of the remaining Participants which are

not subject to traditional utility rate regulation and which

are engaged in the NEPOOL Control Area principally in a

business other than the business of owning or operating

generation or PTF facilities and selling the output of such

generation;

(d) One group consisting of the remaining Participants, if any,

which (i) own PTF, (ii) are not engaged in electric

generation or distribution and do not participate in the

wholesale bulk power market, and (iii) are not Related

Persons of any other Participant; and

(e) One group consisting of the remaining Participants which are

investor-owned utilities subject to traditional rate

regulation or other Entities which do not qualify to be

included in any of the other four groups.

Notwithstanding the foregoing, any such Participant may elect to join

a different group than the one to which it would be assigned under the

foregoing provisions if this is acceptable to the members of the group

it elects to join. In the event any Participant is a Related Person

of another Participant which has the individual right to appoint a

member of the Committee, the Participant shall be represented in the

Committee by the member appointed by the Participant which is its

Related Person and shall not be assigned to any of the five groups.

8.3 TERM OF MEMBERS. The member of the Market Reliability Planning

Committee appointed by the ISO shall serve until replaced by the ISO.

Members of the Market Reliability Planning Committee appointed by a

Participant or group of Participants shall serve until replaced by the

Participant or Participants which appointed them or until such

Participant or Participants cease to be Participants or otherwise lose

their right to appoint the member. Appointment or replacement of a

member shall be effected by the ISO or a Participant or group of

Participants by giving written notice of such appointment or

replacement to the Secretary of the Market Reliability Planning

Committee.

8.4 VOTING. Each voting member of the Market Reliability Planning

Committee shall have one vote which may be cast in person by the

member or the member's alternate or by another person pursuant to a

written proxy dated not more than one year previous to the meeting and

delivered to the Secretary of the Market Reliability Planning

Committee at or prior to the meeting at which the proxy vote is cast.

If a Participant which has the individual right to appoint a voting

member of the Market Reliability Planning Committee both participates

in the wholesale bulk power market and owns PTF, the member appointed

by the Participant shall be entitled to divide the member's vote on

the basis specified in a notice given by it to the Secretary of the

Committee at or prior to the meeting at which the vote is to be cast,

to reflect the Participant's market and transmission interests. In

such case the portion of the member's vote reflecting its transmission

interest may be cast by the member's alternate.

The voting member appointed by a group may divide the member's vote on

the basis specified in a notice given by it to the Secretary of the

Committee at or prior to the meeting at which the vote is to be cast,

to reflect the different positions of the members of the group.

The adoption of actions by the Market Reliability Planning Committee

shall require affirmative votes by voting members aggregating at least

60% of the number of votes which the members in attendance at a

meeting at which a quorum is present are entitled to cast. A majority

of the voting members at any time shall constitute a quorum.

8.5 ALTERNATES. The ISO or a Participant or group of Participants may

designate, by a written notice given to the Secretary of the Market

Reliability Planning Committee, an alternate for the member of the

Market Reliability Planning Committee appointed by the ISO or such

Participant or group of Participants. In the absence of the member,

the alternate shall have all the powers of the member, including the

power to vote.

8.6 OFFICERS. At its annual meeting, the Market Reliability Planning

Committee shall elect from its voting members a Chair and a Vice-

Chair; it shall also elect a Secretary who need not be a member of the

Committee. These officers shall have the powers and duties usually

incident to such offices.

8.7 MEETINGS. The Market Reliability Planning Committee shall hold its

annual meeting in December or January at such time and place as the

Chair shall designate and shall hold other meetings in accordance with

a schedule adopted by the Committee or at the call of the Chair. Any

two members may call a special meeting of the Market Reliability

Planning Committee in the event that the Chair shall fail to call such

a meeting within three business days following the Chair's receipt

from such members of a request specifying the subject matters to be

considered at the meeting. Any regular or special meeting of the

Market Reliability Planning Committee may be conducted by means of

conference telephone or other communications equipment by means of

which all persons participating in the meeting can hear each other.

8.8 NOTICE OF MEETINGS. Written notice of each meeting of the Market

Reliability Planning Committee shall be given to each member not less

than five business days prior to the date of the meeting. The

principal subject matter expected to be acted upon at a meeting shall

be specified in the notice of the meeting whenever the meeting is not

held in accordance with the schedule adopted by the Committee.

8.9 NOTICE TO MEMBERS OF MANAGEMENT COMMITTEE. Prior to the end of the

fifth business day following a meeting of the Market Reliability

Planning Committee, the Secretary of the Market Reliability Planning

Committee shall give written notice to the ISO and each member of the

Management Committee of any action taken by the Market Reliability

Planning Committee at such meeting.

8.10 APPEAL OF ACTIONS TO MANAGEMENT COMMITTEE. The ISO or any

Participant may appeal to the Management Committee any action taken by

the Market Reliability Planning Committee. Such an appeal shall be

taken prior to the end of the tenth business day following the meeting

of the Market Reliability Planning Committee to which the appeal

relates by giving to the Secretary of the Management Committee a

signed and written notice of appeal and by mailing a copy of the

notice to the ISO and each member of the Management Committee.

Pending action on the appeal by the Management Committee, the giving

of a notice of appeal as aforesaid shall suspend the action appealed

from.

8.11 RESPONSIBILITIES. The Market Reliability Planning Committee shall

be responsible, either directly or through its Functional Planning

Committees, and in conjunction with the ISO and the Regional

Transmission Planning Committee, as appropriate, for the following:

(a) providing overall direction to, and coordination of, joint

studies of supply and demand-side resources and

environmental considerations in order to achieve the

objectives of NEPOOL;

(b) recommending to the Management Committee the NEPOOL

Objective Capability for each Power Year;

(c) periodically reviewing the procedures used to calculate

NEPOOL Installed Capability, NEPOOL Objective Capability and

NEPOOL Capability Responsibility;

(d) causing to be prepared periodic short and long term load

forecasts for use in NEPOOL studies and operations and to

meet requirements of regulatory agencies;

(e) overseeing communications and liaison between NEPOOL and

governmental authorities on power supply, environmental and

load forecasting issues;

(f) coordinating the collection and exchange of necessary system

data and future plans for use in NEPOOL planning and to meet

requirements of regulatory agencies;

(g) following appropriate studies, recommending to the

Management Committee reliability standards for the bulk

power system of NEPOOL; and

(h) coordinating the review of proposed supply and demand-side

resource plans of Participants pursuant to Section 18.4 and

the submission of recommendations to the Management

Committee regarding such proposed plans.

8.12 FUNCTIONAL PLANNING COMMITTEES. The Market Reliability Planning

Committee's Functional Planning Committees shall remain subject to

policy-level direction and control by the Market Reliability Planning

Committee. Functional Planning Committees may participate in joint

studies with each other and with other NEPOOL committees or task

forces, but shall submit reports and recommendations directly to the

Management Committee only pursuant to the request of the Market

Reliability Planning Committee.

The members of each Functional Planning Committee shall be appointed

in the same manner as the members of the Market Reliability Planning

Committee, and, if requested by the ISO, shall include a non-voting

member appointed by the ISO. The Chair, Vice-Chair and Secretary of

each Functional Planning Committee shall be appointed in accordance

with procedures specified by the Market Reliability Planning

Committee.

Except as expressly directed by the Market Reliability Planning

Committee, its Functional Planning Committees shall be study, research

and deliberative bodies and shall not resolve by vote differences of

opinion as to proposed plans or other matters on which they may make

reports or recommendations. Functional Planning Committees shall

regularly report the results of their work to the Market Reliability

Planning Committee, and whenever a Functional Planning Committee is

unable to reach a consensus resolution of a policy issue, that issue

shall be reported to the Market Reliability Planning Committee.

Functional Planning Committee reports shall contain such personal

opinions and conclusions as any member may request. Where a vote of a

Functional Planning Committee is required for election of officers or

other organizational matters, the action shall be effective only upon

an affirmative vote of 60% of the voting members present at the

meeting.

8.13 APPOINTMENT OF TASK FORCES. The Market Reliability Planning

Committee and its Functional Planning Committees shall have the

authority, within the Market Reliability Planning Committee's budget

or with the approval of the Management Committee if beyond its budget,

to appoint task forces for particular studies and to name thereto

available employees of Participants.

8.14 CONSULTANTS, COMPUTER TIME AND EXPENSES. The Market Reliability

Planning Committee and its Functional Planning Committees shall have

the authority, within the Market Reliability Planning Committee's

budget or with the approval of the Management Committee if beyond its

budget, to retain the services of the ISO, to hire other consultants,

to procure computer time and to incur such expenses as may be required

to enable the Market Reliability Planning Committee, its Functional

Planning Committees and their task forces properly to perform their

duties.

8.15 FURTHER POWERS AND DUTIES. The Market Reliability Planning

Committee shall have such further powers and duties as may be

prescribed by the Management Committee or as set forth in this

Agreement.

8.16 REPORTS TO MANAGEMENT COMMITTEE. The Market Reliability Planning

Committee shall report to the Management Committee periodically the

results of its work and such reports shall contain such alternative

programs as the Market Reliability Planning Committee may consider

appropriate. Market Reliability Planning Committee reports shall also

contain such minority opinions and conclusions as any member shall

request.

8.17 JOINT MEETINGS WITH REGIONAL TRANSMISSION PLANNING COMMITTEE. The

Market Reliability Planning Committee is authorized and encouraged to

hold its meetings, and to conduct studies and exercise its

responsibilities, jointly with the Regional Transmission Planning

Committee to the extent appropriate.

SECTION 9

REGIONAL TRANSMISSION PLANNING COMMITTEE

9.1 ORGANIZATION. There shall be a Regional Transmission Planning

Committee which shall have the responsibilities specified in Section

9.11. It may provide from time to time for the creation of one or

more Functional Planning Committees to act in particular functional

transmission planning areas and to exercise such of the Regional

Transmission Planning Committee's responsibilities as it may delegate

to them.

9.2 MEMBERSHIP. The Regional Transmission Planning Committee shall be

constituted as follows: the ISO shall have the right to appoint a

non-voting member of the Committee; each Participant whose Voting

Share equals or exceeds 3% of the aggregate Voting Shares of all

Participants shall have the right to appoint a voting member of the

Committee; the remaining Participants whose Voting Shares are less

than 3% of the aggregate Voting Shares of all Participants shall be

divided into the following five groups, with each having the right to

appoint one voting member of the Committee:

(a) One group consisting of the remaining Participants which are

municipally-owned and cooperatively-owned utilities;

(b) One group consisting of the remaining Participants which are

not subject to traditional utility rate regulation and which

are engaged in the NEPOOL Control Area principally in the

business of owning or operating generation facilities and

selling the output of such generation;

(c) One group consisting of the remaining Participants which are

not subject to traditional utility rate regulation and which

are engaged in the NEPOOL Control Area principally in a

business other than the business of owning or operating

generation or PTF facilities and selling the output of such

generation;

(d) One group consisting of the remaining Participants, if any,

which (i) own PTF, (ii) are not engaged in electric

generation or distribution and do not participate in the

wholesale bulk power market, and (iii) are not Related

Persons of any other Participant; and

(e) One group consisting of the remaining Participants which are

investor-owned utilities subject to traditional utility rate

regulation or other Entities which do not qualify to be

included in any of the other four groups.

Notwithstanding the foregoing, any such Participant may elect to join

a different group than the one to which it would be assigned under the

foregoing provisions if this is acceptable to the members of the group

it elects to join. In the event any Participant is a Related Person

of another Participant which has the individual right to appoint a

member of the Committee on the basis of its individual Voting Share,

the Participant shall be represented in the Committee by the member

appointed by the Participant which is its Related Person and shall not

be assigned to any of the five groups.

9.3 TERM OF MEMBERS. The member of the Regional Transmission Planning

Committee appointed by the ISO shall serve until replaced by the ISO.

Other members of the Regional Transmission Planning Committee shall

serve until replaced by the Participant or Participants which

appointed them or until such Participant or Participants shall lose

their status as Participants or otherwise lose their right to appoint

the member. Appointment or replacement of a member shall be effected

by the ISO or a Participant or group of Participants by giving written

notice of such appointment or replacement to the Secretary of the

Regional Transmission Planning Committee.

9.4 VOTING. Each voting member of the Regional Transmission Planning

Committee shall have one vote which may be cast in person by the

member or the member's alternate or by another person pursuant to a

written proxy dated not more than one year previous to the meeting and

delivered to the Secretary of the Regional Transmission Planning

Committee at or prior to the meeting at which the proxy vote is cast.

If a Participant which has the individual right to appoint a member of

the Regional Transmission Planning Committee both participates in the

wholesale bulk power market and owns PTF, the member appointed by the

Participant shall be entitled to divide the member's vote on the basis

specified in a notice given to the Secretary of the Committee at or

prior to the meeting at which the vote is to be cast, to reflect the

Participant's market and transmission interests. In such case the

portion of the member's vote reflecting its transmission interest may

be cast by the member's alternate.

The voting member appointed by a group may divide the member's vote on

the basis specified in a notice given to the Secretary of the

Committee at or prior to the meeting at which the vote is to be cast,

to reflect the different positions of the members of the group.

The adoption of actions by the Regional Transmission Planning

Committee shall require affirmative votes by voting members

aggregating at least 60% of the number of votes which the members in

attendance at a meeting at which a quorum is present are entitled to

cast. A majority of the voting members at any time shall constitute a

quorum.

9.5 ALTERNATES. The ISO, or a Participant or group of Participants may

designate, by a written notice given to the Secretary of the Regional

Transmission Planning Committee, an alternate for any member of the

Regional Transmission Planning Committee appointed by the ISO or such

Participant or group of Participants. In the absence of the member,

the alternate shall have all the powers of the member, including the

power to vote.

9.6 OFFICERS. At its annual meeting, the Regional Transmission Planning

Committee shall elect from its voting members a Chair and a Vice-

Chair; it shall also elect a Secretary who need not be a member of the

Committee. These officers shall have the powers and duties usually

incident to such offices.

9.7 MEETINGS. The Regional Transmission Planning Committee shall hold

its annual meeting in December or January at such time and place as

the Chair shall designate and shall hold other meetings in accordance

with a schedule adopted by the Committee or at the call of the Chair.

Any two members may call a special meeting of the Regional

Transmission Planning Committee in the event that the Chair shall fail

to call such a meeting within three business days following the

Chair's receipt from such members of a request specifying the subject

matters to be considered at the meeting. Any regular or special

meeting of the Regional Transmission Planning Committee may be

conducted by means of conference telephone or other communications

equipment by means of which all persons participating in the meeting

can hear each other.

9.8 NOTICE OF MEETINGS. Written notice of each meeting of the Regional

Transmission Planning Committee shall be given to each member not less

than five business days prior to the date of the meeting. The

principal subject matter expected to be acted upon at a meeting shall

be specified in the notice of the meeting whenever the meeting is not

held in accordance with the schedule adopted by the Committee.

9.9 NOTICE TO MEMBERS OF MANAGEMENT COMMITTEE. Prior to the end of the

fifth business day following a meeting of the Regional Transmission

Planning Committee, the Secretary of the Regional Transmission

Planning Committee shall give written notice to the ISO and each

member of the Management Committee of any action taken by the Regional

Transmission Planning Committee at such meeting.

9.10 APPEAL OF ACTIONS TO MANAGEMENT COMMITTEE. The ISO or any

Participant may appeal to the Management Committee any action taken by

the Regional Transmission Planning Committee. Such an appeal shall be

taken prior to the end of the tenth business day following the meeting

of the Regional Transmission Planning Committee to which the appeal

relates by giving to the Secretary of the Management Committee a

signed and written notice of appeal and by mailing a copy of the

notice to the ISO and each member of the Management Committee.

Pending action on the appeal by the Management Committee, the delivery

of a notice of appeal as aforesaid shall suspend the action appealed

from.

9.11 RESPONSIBILITIES. The Regional Transmission Planning Committee

shall be responsible, either directly or through Functional Planning

Committees, and in conjunction with the ISO and the Market Reliability

Planning Committee, as appropriate, for the following:

(a) providing overall direction to, and coordination of, joint

studies of transmission facilities and the development of a

regional transmission plan in order to achieve the

objectives of NEPOOL;

(b) overseeing communications and liaison between NEPOOL and

governmental authorities on transmission issues;

(c) coordinating the collection and exchange of necessary system

data and future plans for use in NEPOOL planning and to meet

requirements of regulatory agencies;

(d) following appropriate studies, recommending to the

Management Committee proposed reliability standards for the

bulk power system of NEPOOL;

(e) coordinating the review of proposed transmission plans of

Participants pursuant to Section 18.4 and the submission of

recommendations to the Management Committee regarding such

proposed plans; and

(f) to the extent appropriate, establishing criteria, guidelines

and methodologies to assure consistency in monitoring and

assessing conformance of Participant and regional

transmission plans to accepted reliability criteria.

9.12 FUNCTIONAL PLANNING COMMITTEES. The Regional Transmission Planning

Committee's Functional Planning Committees shall remain subject to

policy-level direction and control by the Regional Transmission

Planning Committee. Functional Planning Committees may participate in

joint studies with each other and with other NEPOOL committees or task

forces, but shall submit reports and recommendations directly to the

Management Committee only pursuant to the request of the Regional

Transmission Planning Committee.

The members of each Functional Planning Committee shall be appointed

in the same manner as the members of the Regional Transmission

Planning Committee, and, if requested by the ISO, shall include a non-

voting member appointed by the ISO. The Chair, Vice-Chair and

Secretary of each Functional Planning Committee shall be appointed in

accordance with procedures specified by the Regional Transmission

Planning Committee.

Except as expressly directed by the Regional Transmission Planning

Committee, its Functional Planning Committees shall be study, research

and deliberative bodies and shall not resolve by vote differences of

opinion as to proposed plans or other matters on which they may make

reports or recommendations. Functional Planning Committees shall

regularly report the results of their work to the Regional

Transmission Planning Committee, and whenever a Functional Planning

Committee is unable to reach a consensus resolution of a policy issue,

that issue shall be reported to the Regional Transmission Planning

Committee. Functional Planning Committee reports shall contain such

personal opinions and conclusions as any member may request. Where a

vote of a Functional Planning Committee is required for election of

officers or other organizational matters, the action shall be

effective only upon an affirmative vote of 60% of the voting members

present at a meeting.

9.13 APPOINTMENT OF TASK FORCES. The Regional Transmission Planning

Committee and its Functional Planning Committees shall have the

authority, within the Regional Transmission Planning Committee's

budget or with the approval of the Management Committee if beyond its

budget, to appoint task forces for particular studies and to name

thereto available employees of Participants.

9.14 CONSULTANTS, COMPUTER TIME AND EXPENSES. The Regional Transmission

Planning Committee and its Functional Planning Committees shall have

the authority, within the Regional Transmission Planning Committee's

budget or with the approval of the Management Committee if beyond its

budget, to retain the services of the ISO, to hire other consultants,

to procure computer time and to incur such expenses as may be required

to enable the Regional Transmission Planning Committee, its Functional

Planning Committees and their task forces properly to perform their

duties.

9.15 FURTHER POWERS AND DUTIES. The Regional Transmission Planning

Committee shall have such further powers and duties as may be

prescribed by the Management Committee or as set forth in this

Agreement.

9.16 REPORTS TO MANAGEMENT COMMITTEE. The Regional Transmission

Planning Committee shall report to the Management Committee

periodically the results of its work and such reports shall contain

such alternative programs as the Regional Transmission Planning

Committee may consider appropriate. Regional Transmission Planning

Committee reports shall also contain such minority opinions and

conclusions as any member shall request.

9.17 JOINT MEETINGS WITH MARKET RELIABILITY PLANNING COMMITTEE. The

Regional Transmission Planning Committee is authorized and encouraged

to hold its meetings, and to conduct studies and exercise its

responsibilities, jointly with the Market Reliability Planning

Committee to the extent appropriate.

SECTION 10

REGIONAL MARKET OPERATIONS COMMITTEE

10.1 ORGANIZATION. There shall be a Regional Market Operations Committee

which shall be responsible for establishing or approving market

operation rules and for monitoring the operation of NEPOOL supply and

demand-side resources and the wholesale bulk power market.

10.2 MEMBERSHIP. The Regional Market Operations Committee shall be

constituted as follows: the ISO shall have the right to appoint a

non-voting member of the Committee; each Participant whose Voting

Share equals or exceeds 3% of the aggregate Voting Shares of all

Participants shall have the right to appoint a voting member of the

Committee; the remaining Participants shall be divided into the

following five groups, with each having the right to appoint one

voting member of the Regional Market Operations Committee:

(a) One group consisting of the remaining Participants which are

municipally-owned and cooperatively-owned traditional

utilities;

(b) One group consisting of the remaining Participants which are

not subject to traditional utility rate regulation and which

are engaged in the NEPOOL Control Area principally in the

business of owning or operating generation facilities and

selling the output of such generation;

(c) One group consisting of the remaining Participants which are

not subject to traditional utility rate regulation and which

are engaged in the NEPOOL Control Area principally in a

business other than the business of owning or operating

generation or PTF facilities and selling the output of such

generation;

(d) One group consisting of the remaining Participants, if any,

which (i) own PTF, (ii) are not engaged in electric

generation or distribution and do not participate in the

wholesale bulk power market, and (iii) are not Related

Persons of any other Participant; and

(e) One group consisting of the remaining Participants which are

investor-owned utilities subject to traditional utility rate

regulation or other Entities which do not qualify to be

included in any of the other four groups.

Notwithstanding the foregoing, any such Participant may elect to join

a different group than the one to which it would be assigned under the

foregoing provisions if this is acceptable to the members of the group

it elects to join. In the event any such Participant is a Related

Person of another Participant which has the individual right to

appoint a member of the Committee, the Participant shall be

represented in the Committee by the member appointed by the

Participant which is its Related Person and shall not be assigned to

any of the five groups.

10.3 TERMS OF MEMBERS. The member of the Regional Market Operations

Committee appointed by the ISO shall serve until replaced by the ISO.

Other members of the Regional Market Operations Committee shall serve

until replaced by the Participant or Participants which appointed them

or until such Participant or Participants shall lose their status as

Participants or otherwise lose the right to appoint the member.

Appointment or replacement of a member shall be effected by the ISO or

a Participant or group of Participants giving written notice of such

appointment or replacement to the Secretary of the Regional Market

Operations Committee.

10.4 VOTING. Each voting member of the Regional Market Operations

Committee shall have one vote, which may be cast in person by the

member or the member's alternate or by another person pursuant to a

written proxy dated not more than one year previous to the meeting and

delivered to the Secretary of the Regional Market Operations Committee

at or prior to the meeting at which the proxy vote is cast. If a

Participant which has the individual right to appoint a member of the

Regional Market Operations Committee both participates in the

wholesale bulk power market and owns PTF, the member appointed by the

Participant shall be entitled to divide its vote on the basis

specified in a notice given by it to the Secretary of the Committee at

or prior to the meeting at which the vote is to be cast, to reflect

the Participant's market and transmission interests. In such case the

portion of a member's vote reflecting its transmission interest may be

cast by the member's alternate.

The voting member appointed by a group may divide the member's vote on

the basis specified in a notice given by it to the Secretary of the

Committee at or prior to the meeting at which the vote is to be cast,

to reflect the different positions of the members of the group.

The adoption of actions by the Regional Market Operations Committee

shall require affirmative votes by voting members aggregating at least

60% of the number of votes which the members in attendance at a

meeting at which a quorum is present are entitled to cast. A majority

of the voting members at any time shall constitute a quorum.

10.5 ALTERNATES. The ISO or a Participant or group of Participants may

designate, by a written notice delivered to the Secretary of the

Regional Market Operations Committee, an alternate for any member of

the Regional Market Operations Committee appointed by the ISO or such

Participant or group of Participants. In the absence of the member,

the alternate shall have all of the powers of the member, including

the power to vote.

10.6 OFFICERS. At its annual meeting, the Regional Market Operations

Committee shall elect from its voting members a Chair and a Vice-

Chair; it shall also elect a Secretary who need not be a member.

These officers shall have the powers and duties usually incident to

such offices.

10.7 MEETINGS. The Regional Market Operations Committee shall hold its

annual meeting in December or January at such time and place as the

Chair shall designate and shall hold other meetings in accordance with

a schedule adopted by the Regional Market Operations Committee or at

the call of the Chair. Any two members may call a special meeting of

the Regional Market Operations Committee in the event that the Chair

shall fail to call such a meeting within three business days following

the Chair's receipt from such members of a request specifying the

subject matters to be acted upon at the meeting. In the event of

emergency, any member may call a special meeting of the Regional

Market Operations Committee to be held forthwith. Any annual, special

or other meeting of the Regional Market Operations Committee may be

conducted by means of conference telephone or other communications

equipment by means of which all persons participating in the meeting

can hear each other.

10.8 NOTICE OF MEETINGS. Written notice of each meeting of the Regional

Market Operations Committee shall be given to each member not less

than three business days prior to the date of the meeting. The notice

shall normally specify the principal subject matters expected to be

acted upon; provided, however, that no written notice shall be

required for a meeting called in the event of an emergency, although

the Secretary or the member calling the meeting shall use his or her

best efforts to notify every member of the meeting.

10.9 NOTICE TO MEMBERS OF MANAGEMENT COMMITTEE. Prior to the end of the

fifth business day following a meeting of the Regional Market

Operations Committee, the Secretary of the Regional Market Operations

Committee shall give written notice to the ISO and each member of the

Management Committee of any action taken by the Regional Market

Operations Committee at such meeting.

10.10APPEAL OF ACTIONS TO MANAGEMENT COMMITTEE. The ISO or any

Participant may appeal to the Management Committee any action taken by

the Regional Market Operations Committee. Such an appeal shall be

taken prior to the end of the tenth business day following the meeting

of the Regional Market Operations Committee to which the appeal

relates by giving to the Secretary of the Management Committee a

signed and written notice of appeal and by mailing a copy of the

notice to the ISO and each member of the Management Committee.

Pending action on the appeal by the Management Committee, the filing

of a notice of appeal as aforesaid shall suspend the action appealed

from.

10.11APPOINTMENT OF TASK FORCES. The Regional Market Operations

Committee shall have the authority, within its budget or with the

approval of the Management Committee if beyond its budget, to appoint

task forces for particular studies and may name thereto available

employees of Participants.

10.12CONSULTANTS, COMPUTER TIME AND EXPENSES. The Regional Market

Operations Committee shall have the authority, within its budget or

with the approval of the Management Committee if beyond its budget, to

retain the services of the ISO, to hire consultants, to procure

computer time, and to incur such expenses as may be required to enable

the Regional Market Operations Committee and its task forces properly

to perform their duties.

10.13RESPONSIBILITIES. The Regional Market Operations Committee, in

conjunction with the ISO and the Regional Transmission Operations

Committee, as appropriate, shall be responsible for the following:

(a) making or causing to be made, from time to time, necessary

studies and establishing or approving procedures based

thereon to assure the reliable operation and facilitate the

efficient operation of the NEPOOL Control Area bulk power

supply;

(b) performing the following: (i) coordinating studies of, and

providing information to Participants on, maintenance

schedules for the supply and demand-side resources and

transmission facilities of the Participants, and (ii)

adopting and implementing uniform rules or procedures, until

the Second Effective Date, for determining when a generating

unit's outages for maintenance shall be approved for

Scheduled Outage Service and for determining whether the

applicable Capability for a unit to be used in determining

the amount of a Participant's Scheduled Outage Service shall

be the unit's Reserve Capability or its Temporary Reserve

Capability;

(c) to the extent appropriate to assure the reliable operation

of the bulk power supply of NEPOOL, establishing or

approving reasonable standards, criteria and rules relating

to protective equipment, switching, voltage control, load

shedding, emergency and restoration procedures, and the

operation and maintenance of supply and demand-side

resources and transmission facilities of the Participants;

(d) determining the seasonal capabilities of each electric

generating unit or combination of units in which a

Participant has an Entitlement in a uniform manner applying

generally accepted engineering principles;

(e) determining as appropriate from time to time the current

Annual Peak, Adjusted Annual Peak, Monthly Peak, Adjusted

Monthly Peak, Installed Capability Responsibility, Operable

Capability Requirements, and obligations for Energy,

Operating Reserve and AGC of each Participant;

(f) until the Second Effective Date, determining the Incremental

Costs and Decremental Costs for each generating unit in

which a Participant has an Entitlement under the varying

circumstances affecting such costs;

(g) establishing or approving market operation rules governing

the submission of Bid Prices and the determination of prices

for Installed Capability, Operable Capability, Energy, each

category of Operating Reserve and AGC, and establishing or

approving appropriate billing procedures for transactions

pursuant to this Agreement; and

(h) calculating and equitably apportioning losses incurred in

connection with Interchange Transactions.

10.14FURTHER POWERS AND DUTIES. The Regional Market Operations

Committee shall have such further powers and duties as may be

prescribed by the Management Committee or as set forth in this

Agreement.

10.15DEVELOPMENT OF RULES RELATING TO NON-PARTICIPANT SUPPLY AND DEMAND-

SIDE RESOURCES. It is recognized that arrangements between

Participants and Non-Participants with respect to the Non-

Participants' supply and demand-side resources may create special

problems in the application of Sections 12 and 14. Accordingly, the

Regional Market Operations Committee shall analyze such special

problems and develop appropriate rules for reflecting such resources

in the Installed or Operable System Capability of a Participant which

enters into such an arrangement and for the treatment of such

arrangements for Energy, Operating Reserve and AGC purposes. Upon

approval by the Regional Market Operations Committee, such rules shall

supersede the provisions of Sections 12 and 14 (and the related

definitions in Section 1) to the extent of any conflict therewith.

10.16JOINT MEETINGS WITH REGIONAL TRANSMISSION OPERATIONS COMMITTEE.

The Regional Market Operations Committee is authorized and encouraged

to hold its meetings, and to conduct studies and exercise its

responsibilities, jointly with the Regional Transmission Operations

Committee to the extent appropriate.

SECTION 11

REGIONAL TRANSMISSION OPERATIONS COMMITTEE

11.1 ORGANIZATION. There shall be a Regional Transmission Operations

Committee which shall be responsible for monitoring the operation of

NEPOOL transmission and the administration of the Tariff.

11.2 MEMBERSHIP. The Regional Transmission Operations Committee shall be

constituted as follows: the ISO shall have the right to appoint a

non-voting member of the Committee; each Participant whose Voting

Share equals or exceeds 3% of the aggregate Voting Shares of all

Participants shall have the right to appoint one voting member of the

Committee; the remaining Participants whose Voting Shares are less

than 3% of the aggregate Voting Shares of all Participants shall be

divided into the following five groups, with each having the right to

appoint one voting member of the Committee:

(a) One group consisting of the remaining Participants which are

municipally-owned and cooperatively-owned traditional

utilities;

(b) One group consisting of the remaining Participants which are

not subject to traditional utility rate regulation and which

are engaged in the NEPOOL Control Area principally in the

business of owning or operating generation facilities and

selling the output of such generation;

(c) One group consisting of the remaining Participants which are

not subject to traditional utility rate regulation and which

are engaged in the NEPOOL Control Area principally in a

business other than the business of owning or operating PTF

or generation facilities and selling the output of such

generation;

(d) One group consisting of the remaining Participants, if any,

which (i) own PTF, (ii) are not engaged in electric

generation or distribution and do not participate in the

wholesale bulk power market, and (iii) are not Related

Persons of any other Participant; and

(e) One group consisting of the remaining Participants which are

investor-owned utilities subject to traditional utility rate

regulation or other Entities which do not qualify to be

included in any of the other four groups.

Notwithstanding the foregoing, any such Participant may elect to join

a different group than the one to which it would be assigned under the

foregoing provisions if this is acceptable to the members of the group

it elects to join. In the event any such Participant is a Related

Person of another Participant which has the individual right to

appoint a member of the Committee, the Participant shall be

represented in the Committee by the member appointed by the

Participant which is its Related Person and shall not be assigned to

any of the five groups.

11.3 TERMS OF MEMBERS. The member of the Regional Transmission

Operations Committee appointed by the ISO shall serve until replaced

by the ISO. Other members of the Regional Transmission Operations

Committee shall serve until replaced by the Participant or

Participants which appointed them or until such Participant or

Participants cease to be Participants or otherwise lose the right to

appoint the member. Appointment or replacement of a member shall be

effected by the ISO or a Participant or group of Participants by

giving written notice of such appointment or replacement to the

Secretary of the Regional Transmission Operations Committee.

11.4 VOTING. Each voting member of the Regional Transmission Operations

Committee shall have one vote, which may be cast in person by the

member or the member's alternate or by another person pursuant to a

written proxy dated not more than one year previous to the meeting and

delivered to the Secretary of the Regional Transmission Operations

Committee at or prior to the meeting at which the proxy vote is cast.

If a Participant which has the individual right to appoint a member of

the Regional Transmission Operations Committee both participates in

the wholesale bulk power market and owns PTF, the member appointed by

the Participant shall be entitled to divide the member's vote on the

basis specified in a notice given by it to the Secretary of the

Committee at or prior to the meeting at which the vote is to be cast,

to reflect its market and transmission interests. In such case the

portion of the member's vote reflecting its transmission interest may

be cast by the member's alternate.

The voting member appointed by a group may divide the member's vote on

the basis specified in a notice given by it to the Secretary of the

Committee at or prior to the meeting at which the vote is to be cast,

to reflect the different positions of the members of the group.

The adoption of actions by the Regional Transmission Operations

Committee shall require affirmative votes of voting members

aggregating at least 60% of the number of votes which the members in

attendance at a meeting at which a quorum is present are entitled to

cast. A majority of the voting members at any time shall constitute a

quorum.

11.5 ALTERNATES. The ISO or a Participant or group of Participants may

designate, by a written notice delivered to the Secretary of the

Regional Transmission Operations Committee, an alternate for any

member of the Regional Transmission Operations Committee appointed by

the ISO or such Participant or group of Participants. In the absence

of the member, the alternate shall have all of the powers of the

member, including the power to vote.

11.6 OFFICERS. At its annual meeting, the Regional Transmission

Operations Committee shall elect from its voting members a Chair and a

Vice-Chair; it shall also elect a Secretary who need not be a member.

These officers shall have the powers and duties usually incident to

such offices.

11.7 MEETINGS. The Regional Transmission Operations Committee shall hold

its annual meeting in December or January at such time and place as

the Chair shall designate and shall hold other meetings in accordance

with a schedule adopted by the Regional Transmission Operations

Committee or at the call of the Chair. Any two members may call a

special meeting of the Regional Transmission Operations Committee in

the event that the Chair shall fail to call such a meeting within

three business days following the Chair's receipt from such members of

a request specifying the subject matters to be acted upon at the

meeting. In the event of emergency, any member may call a special

meeting of the Regional Transmission Operations Committee to be held

forthwith. Any annual, special or other meeting of the Regional

Transmission Operations Committee may be conducted by means of

conference telephone or other communications equipment by means of

which all persons participating in the meeting can hear each other.

11.8 NOTICE OF MEETINGS. Written notice of each meeting of the Regional

Transmission Operations Committee shall be given to each member not

less than three business days prior to the date of the meeting. The

notice shall normally specify the principal subject matters expected

to be acted upon; provided, however, that no written notice shall be

required for a meeting called in the event of an emergency, although

the Secretary or the member calling the meeting shall use his or her

best efforts to notify every member of the meeting.

11.9 NOTICE TO MEMBERS OF MANAGEMENT COMMITTEE. Prior to the end of the

fifth business day following a meeting of the Regional Transmission

Operations Committee, the Secretary of the Regional Transmission

Operations Committee shall give written notice to the ISO and each

member of the Management Committee of any action taken by the Regional

Transmission Operations Committee at such meeting.

11.10APPEAL OF ACTIONS TO MANAGEMENT COMMITTEE. The ISO or any

Participant may appeal to the Management Committee any action taken by

the Regional Transmission Operations Committee. Such an appeal shall

be taken prior to the end of the tenth business day following the

meeting of the Regional Transmission Operations Committee to which the

appeal relates by giving to the Secretary of the Management Committee