Exhibit 10.1.5
(COMPOSITE CONFORMED COPY - as amended)
Amendment No. 1- May 1, 1986
Amendment No. 2-February 1, 1987
Amendment No. 3-June 1, 1987
Amendment No. 4-Sept. 1, 1987
Amendment No. 5-October 1, 1987
Amendment No. 6-August 1, 1988
Amendment No. 7-January 1, 1989
Amendment No. 8-January 1, 1990
 

PHASE II NEW HAMPSHIRE TRANSMISSION
FACILITIES SUPPORT AGREEMENT
Dated as of June 1, 1985
 

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TABLE OF CONTENTS

Section 1.
Basic Understandings and Purpose
1
Section 2.
Precedent to Effectiveness
7
Section 3.
Effective Date and Term
12
Section 4.
Participating Shares
14
Section 5.
Relationship among Participants
16
Section 6.
Project Control and Advisory Committee
16
Section 7.
Design and Construction of the Transmission Facilities
19
Section 8.
Operation and Maintenance of the Transmission Facilities
20
Section 9.
New Hampshire Hydro Relationship to Participants
21
Section 10.
Payment for Preliminary Costs
21
Section 11.
Transmission and Other Services
22
Section 12.
Support Charge
22
Section 13.
Payments
27
Section 14.
Character of Payment Obligations
29
Section 15.
Default
31
Section 16.
Delay, Suspension, Termination, Cancellation, or Shutdown
34
Section 17.
Termination by New Hampshire Hydro
36
Section 18.
Debt Service Fund
38
Section 19.
Cash Deficiency Commitment
38
Section 20.
Miscellaneous
39
Section 21.
Refund of Gain on Sale or Other Disposition of Transmission Facilities
45
Section 1.
Basic Understandings and Purpose
66
Section 2.
Conditions Precedent to Effectiveness
70
Section 3.
Effective Date and Term
73
Section 4.
Equity Sponsor Qualification
73
Section 5.
Equity Shares
75
Section 6.
Relationship Among Equity Sponsors
77
Section 7.
Equity Contribution
77
Section 8.
Cash Deficiency Guarantee
80
Section 9.
Acceptance of Participating Shares
82
Section 10.
Character of Payment Obligations
83
Section 11.
Default
84
Section 12.
Restrictions on Transfer of Common Stock
85
Section 13.
Dividends on Common Stock
85
Section 14.
Restrictions on Dividends. Return of Capital and Repurchase of Common Stock
85
Section 15.
Certain Actions of New Hampshire Hydro
86
Section 16.
Miscellaneous
86

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Signatures
 
X
 
 
 

Schedule I - VELCO
139

Schedule II - MMWEC
141

Attachment A - Kilowatthour Loads
X

Attachment B - Description of Transmission Facilities
X

Attachment C - Documentation
X

Attachment E - Subscription Process for Determining Initial Participating Shares
X

Attachment F - Credit Enhancement Charge
X

Exhibit G - Form of Equity Funding Agreement
 X

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PHASE II NEW HAMPSHIRE TRANSMISSION
FACILITIES SUPPORT AGREEMENT
This AGREEMENT dated as of June 1, 1985, is between New England
Hydro-Transmission Corporation (New Hampshire Hydro) and the New England
utilities listed in Attachment A hereto. Those New England utilities that have
executed this Agreement and meet the further conditions for participation
hereunder are hereinafter referred to as Participants or individually as a
Participant. The Participants, each of which is a member of the New England
Power Pool (NEPOOL), are sometimes referred to collectively herein, but their
rights and obligations hereunder are several and not joint as described in
Section 5 hereof.
In consideration of the premises, the concurrent execution of the other Basic
Agreements hereinafter referred to, the mutual covenants hereinafter and therein
set forth, and other good and valuable consideration, receipt whereof is hereby
acknowledged, it is hereby agreed as follows:
Section 1. Basic Understandings and Purpose
Some or all of the Participants are participants in the existing arrangements
for the Phase I interconnection planned by NEPOOL with Hydro-Quebec, which is to
consist of a ± 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 (hereinafter referred to as Phase
I). The basic arrangements covering the portion of Phase I in the United States
are set forth in the New England Power Pool Agreement, as amended (the NEPOOL
Agreement) and three contracts among the participants in Phase I as follows:

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1.
Vermont Transmission Line Support Agreement, dated as of December 1, 1981, as
amended, with Vermont Electric Transmission Company, Inc.

2.
Phase I Terminal Facilities Support Agreement, dated as of December 1, 1981, as
amended, with New England Electric Transmission Corporation, and

3.
Agreement With Respect To Use Of Quebec Interconnection, dated as of December 1,
1981, as amended, including the restatement thereof in connection with Phase II
(this Agreement as restated to cover Phase II is hereinafter referred to as the
Use Agreement).

These Phase I interconnection facilities are currently under construction with
completion scheduled during 1986.
With the completion of arrangements for Phase I and the related contracts with
Hydro-Quebec, the members of NEPOOL have conducted studies of the benefits of an
expanded interconnection for NEPOOL with Hydro-Quebec (Phase II) and have
negotiated with Hydro-Quebec a firm energy arrangement to utilize the expanded
interconnection facilities. The results of these studies indicate that such an
expansion of the interconnection capacity will be beneficial to the New England
utilities and to their respective customers.
The portion of Phase II in the United States will consist of an extension of the
Phase I DC transmission line from the proposed terminus of Phase I at the
Comerford Station through New Hampshire to a site in Massachusetts with
additional terminal facilities installed at that site to increase the total
transfer capacity between Hydro Quebec and NEPOOL from the 690 MW of Phase I to
approximately 2000 MW. Reinforcements to the existing AC transmission system of
New England Power and to certain AC facilities of Boston Edison Company will
also be required. The United States portion of the Phase II facilities will be
designated as pool-planned

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facilities in the same manner as the United States portion of the Phase I
facilities was so designated.
Hydro Quebec and the Participants have agreed to enter into a ten year energy
contract for Phase II. Under that contract, the Participants would purchase, at
favorable prices from Hydro Quebec, 7 Twh of energy per year. The Phase II
energy will provide an opportunity to displace oil as a fuel for generation and
should reduce consumers’ annual fuel costs in New England. The commitment of
Hydro Quebec to supply to the Participants this large amount of energy should
also defer New England’s need for expensive new generation. There is also the
potential for additional benefits from Phase II, such as energy banking, energy
interchange, and emergency transfer for mutual reliability purposes.
Studies performed on behalf of and by NEPOOL show that the aggregate present
value of these benefits is expected to significantly exceed the cost of Phase
II. The Phase I Support Agreements provide for allocation of participation in
Phase II pro rata among all Participants based upon their proportionate shares
of the 1980 NEPOOL load with provision for some preferential allocations to
certain Participants involved in Phase II.
Each Participant acknowledges that it has been represented on the Executive and
Planning Committees of NEPOOL that had responsibility for evaluating the
feasibility of Phase II and, through this representation, actively participated
in the decision of NEPOOL to go forward with Phase II. Furthermore, each
Participant represents that it made its own independent investigations and
inquiries as it deemed appropriate and did not rely upon representations (other
than those contained in this Agreement) of New Hampshire Hydro or its affiliates
in deciding to enter into this Agreement.

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The sharing of benefits among the Participants associated with Phase II is set
forth in the Use Agreement. The Use Agreement also permits each Participant to
make its own entitlement transactions with Hydro Quebec and to use the
interconnection for such transactions. Each Participant acknowledges that the
benefits of participating in Phase II set forth in the Use Agreement are the
fundamental consideration for its signing of this Agreement and making the
significant commitments to each other Participant specified herein.
The provisions of this Agreement cover the Phase II New Hampshire HVDC
transmission line (the Transmission Facilities) as described in more detail in
Attachment B hereto. In accordance with the provisions hereof, New Hampshire
Hydro agrees to build, own, operate, and maintain the Transmission Facilities.
Each
Participant hereby agrees to support the construction, operation, maintenance,
and capital costs of the Transmission Facilities in accordance with the
provisions hereof. In connection with the HVDC transmission line to be
constructed by New Hampshire Hydro in New Hampshire, New England Power and
Public Service Company of New Hampshire have agreed to lease rights-of-way to
New Hampshire Hydro for the full term of this Agreement.
All improvements and reinforcements to AC transmission systems in Massachusetts
necessitated by Phase II are covered under the Phase II New England Power AC
Facilities Support Agreement and the Phase II Boston Edison AC Facilities
Support Agreement.
The portion of the Phase II HVDC transmission line to be constructed in
Massachusetts and the terminal facilities to be constructed in Massachusetts are
covered under the Phase II Massachusetts Transmission Facilities Support
Agreement among New England Hydro-Transmission Electric Company, Inc. (New
England Hydro), an affiliate of New Hampshire

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Hydro, and the Participants. New England Hydro will build, own, operate, and
maintain these Massachusetts Phase II facilities.
In view of the need to formalize the agreements among the parties at an early
date so that (i) binding commitments with Hydro Quebec for Phase II may be made,
(ii) binding commitments for ultimate construction and the financing of the
United States portion of Phase II may be undertaken consistent with the time
schedule anticipated by NEPOOL and with the assurance that the Participants’
commitments are in place and (iii) licensing activities may proceed on a
schedule that enables completion of such construction consistent with the time
schedule anticipated by NEPOOL, the following agreements are concurrently being
entered into (the “Basic Agreements”) which collectively set forth rights and
obligations with respect to the foregoing undertaking: (1) this Agreement; (2)
the Equity Funding Agreement for New Hampshire Hydro; (3) the Phase II
Massachusetts Transmission Facilities Support Agreement; (4) the Equity Funding
Agreement for New England Hydro; (5) the Phase II New England Power AC
Facilities Support Agreement; (6) the Use Agreement; (7) various amendments to
the NEPOOL Agreement relating to the sharing of savings, capability
responsibilities, and Pool transmission arrangements; and (8) the Phase II
Boston Edison AC Facilities Support Agreement.
In order to coordinate each Participant’s participation in Phase II to the
fullest extent possible, each Participant acknowledges that it is to have the
same participating interest under each of these agreements: this Agreement, the
Phase II Massachusetts Transmission Facilities Support Agreement, the Phase II
New England Power AC Facilities Support Agreement, the Phase II Boston Edison AC
Facilities Support Agreement, and the Use Agreement. Each Participant
acknowledges that these agreements have been drafted with the overriding intent
to so coordinate participating interests and that, notwithstanding any provision
thereof that may be

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interpreted to the contrary, the proper interpretation of each of these
agreements is to be consistent with such overriding intent. The Equity Funding
Agreement for New Hampshire Hydro and the Equity Funding Agreement for New
England Hydro have also been drafted to require actions of Equity Sponsors or
their appointees affecting such participating interests to be the same under
each Equity Funding Agreement in order to also be consistent with such
overriding intent.
During the term of this Agreement, New Hampshire Hydro shall limit its
activities to those necessary or desirable in connection with Phase II unless
New Hampshire Hydro requests authority from the Advisory Committee for other
activities and such authority is granted. New Hampshire Hydro shall endeavor to
obtain permanent debt financing at reasonable rates with maturities
approximating to the extent practicable the then remaining useful life of the
Transmission Facilities or to secure other advantageous financial arrangements.
New Hampshire Hydro will limit its equity investment to a maximum of 40% of its
total capital as of the Effective Date. During the time that New Hampshire Hydro
has outstanding debt in its capital structure, New Hampshire Hydro shall use its
best efforts to continue to limit its equity investment to 40% of its total
capital; provided, however, that New Hampshire Hydro shall be under no
obligation to so limit its equity investment in the event that, after the Date
of Full Support Payment (as defined in Section 13) the term of its debt
financing or other financing arrangements is less than ten years.
New Hampshire Hydro’s common equity will be provided under the Equity Funding
Agreement by the Equity Sponsors thereunder including New England Electric
System (NEES) and those Participants or their authorized designees that qualify
by having outstanding long-term debt securities rated at least one grade above
the lowest investment grade rating as of the date so

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required under the Equity Funding Agreement. (The form of Equity Funding
Agreement is included as Attachment G hereto.) The Equity Funding Agreement
requires equity contributions to New Hampshire Hydro from Equity Sponsors up to
a maximum of $90 million unless Equity Sponsors having an aggregate of 66-2/3%
equity participation agree to increase such maximum.
However, prior to the Effective Date, all equity of New Hampshire Hydro will be
contributed by NEES.
To provide assurance that adequate funds will be available to support the
financing of the Transmission Facilities, each Participant has agreed, in
accordance with Section 14 hereof, to an absolute and unconditional obligation
to make payments hereunder and to meet all other commitments hereunder,
including but not limited to those of Section 19 hereof. In order to provide
further assurance that adequate debt financing will be available to New
Hampshire Hydro, the Equity Sponsors have agreed in the Equity Funding Agreement
to severally guarantee certain obligations under Section 19 hereof of certain
Participants with respect to each debt financing of New Hampshire Hydro;
provided that the several guarantees of the Equity Sponsors are subject to the
limits as set forth in section 8 C and D of the Equity Funding Agreement for New
Hampshire Hydro; and further provided that one or more Equity Sponsors or their
appointees may voluntarily agree to guarantee additional amounts of obligations
under such debt financing. During the term of each New Hampshire Hydro debt
financing, any Participant which, on the commitment date of that financing, (a)
had below investment grade debt ratings on its most junior long-term debt
securities or did not have a debt rating, (b) had not provided substitute credit
enhancement in accordance with Attachment F, and (c) is credit enhanced by
Equity Sponsors for such financing, is a Credit Enhanced Participant. In
addition, any

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Participant which is a credit enhanced participant under the Phase II
Massachusetts Transmission Facilities Support Agreement is also a Credit
Enhanced Participant hereunder.
Section 2.     Precedent to Effectiveness
The effectiveness of this Agreement, and all rights, obligations, and
performance of the signatories hereunder, is subject to (a) New Hampshire Hydro
having executed this Agreement, (b) members of NEPOOL serving at least 66 2/3%
of the aggregate kilowatthour load served by all NEPOOL members in 1980 (i) each
having executed this Agreement and the other Basic Agreements (except for the
two Equity Funding Agreements executed by the Equity Sponsors and the amendments
to the NEPOOL Agreement) and (ii) each having satisfied the conditions precedent
set forth below, (c) Equity Sponsors covering at least 100% of New Hampshire
Hydro’s equity requirements having executed the Equity Funding Agreement with
New Hampshire Hydro and covering at least 100% of New England’s Hydro’s equity
requirements having executed the Equity Funding Agreement with New England
Hydro, and (d) members of NEPOOL having executed the amendments to the NEPOOL
Agreement for Phase II in order that such amendments may become effective in
accordance with the NEPOOL Agreement. The signatories to this Agreement shall
also sign and supply any required documentation under the Phase II Massachusetts
Transmission Facilities Support Agreement, the Phase II New England Power AC
Facilities Support Agreement, the Phase II Boston Edison AC Facilities Support
Agreement, the Use Agreement, and amendments to the NEPOOL Agreement relating to
Phase II.
By September 15, 1988, each signatory to this Agreement shall provide
certificates and legal opinions from counsel satisfactory to New Hampshire
Hydro, together with certified copies of related resolutions, consents,
approvals, authorizations, and other documents (Documentation)

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necessary to establish to the satisfaction of New Hampshire Hydro that all
corporate and regulatory consents, waivers, approvals, authorizations and other
actions necessary in connection with performance by such signatory of its
obligations under the Agreement have been obtained and are in full force and
effect, that the Agreement has been duly authorized, executed, and delivered by
such signatory, and that it constitutes a binding commitment by the signatory
enforceable in accordance with its terms. Forms of Documentation acceptable to
New Hampshire Hydro are included in Attachment C hereto. Prior to signing this
Agreement, each signatory has provided to New Hampshire Hydro a listing of all
consents, waivers, approvals, authorizations, and other actions required for
that signatory to deliver its Documentation.
Since Vermont Electric Power Company, Inc. (VELCO) and Massachusetts Municipal
Wholesale Electric Company (MMWEC) represent a number of electric systems, in
calculating their respective kilowatthour loads on Attachment A, they are deemed
to have signed on behalf of those respective systems listed in Schedules I or
II, respectively. By September 1, 1988, VELCO and MMWEC will provide New
Hampshire Hydro with copies of contracts with those respective systems which
impose absolute and unconditional obligations on such systems to pay their
proportionate shares of all costs incurred under this Agreement by VELCO or
MMWEC, respectively. By that date, VELCO and MMWEC will also provide to New
Hampshire Hydro, as part of their Documentation, certificates, legal opinions
(from counsel satisfactory to New England Hydro), and other documents in form
and substance satisfactory to New Hampshire Hydro representing unconditionally
that all consents, approvals, and authorizations have been obtained by their
contracting systems in connection with each such system’s performance of its
obligations under its respective contract with VELCO or MMWEC and that each such
contract imposes absolute and unconditional obligations on such systems to pay
their proportionate shares

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of all costs incurred under this Agreement by VELCO or MMWEC, respectively, and
has been duly authorized, executed, and delivered and is a binding commitment of
such system enforceable in accordance with its terms. If regulatory approvals
have not been obtained by September 1, 1988, such representations shall be
conditioned upon receipt of regulatory approvals. VELCO and MMWEC will have
until September 15, 1988 to receive such approvals and make such representations
unconditionally. In order that percentages of participation be consistent among
the Basic Agreements, VELCO and MMWEC shall have their contracts with their
contracting systems cover the necessary commitments for each Basic Agreement.
All expenses in connection with obtaining and delivering any Documentation under
this Agreement, including legal opinions, are to be borne by the signatory
incurring such expense. New Hampshire Hydro will have no responsibility for any
expenses incurred by VELCO and MMWEC in providing Documentation for their
respective contracting systems. (All expenses of further Documentation including
legal opinions required for any financing by New Hampshire Hydro with an
unaffiliated third party will be borne by the Participants in the same manner).
In the event that VELCO or MMWEC does not provide such contracts and
Documentation by the aforementioned deadlines under this Agreement and similar
contracts and documentation as required by the other Basic Agreements, for all
electric systems shown on Schedules I or II, their respective kilowatthour loads
on Attachment A will be automatically adjusted to equal the 1980 kilowatthour
loads of those contracting electric systems for which the required contracts and
Documentation have been provided. Promptly thereafter, New Hampshire Hydro will
prepare and distribute an appropriately modified Attachment A with an additional
column showing Participating Shares for all Participants and modified Schedules
I and II.

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If MMWEC provides by December 31, 1985, to New Hampshire Hydro at MMWEC’s
expense an opinion of nationally recognized bond counsel (listed in the Blue
Book) stating unequivocally that MMWEC is not legally authorized to enter into
and perform the obligations of this Agreement on any basis other than as an
obligation payable solely from revenues derived by MMWEC under the contracts
entered into with its contracting electric systems, then New Hampshire Hydro and
the other Participants agree that MMWEC’s liability hereunder shall be so
limited. Otherwise, MMWEC’s liability hereunder shall not be so limited and
shall be on the same basis as that of the other Participants.
VELCO and MMWEC hereby grant to New Hampshire Hydro, on a pari passu basis with
New England Hydro, New England Power Company, and Boston Edison Company, a
security interest in, and pledge of, their respective contracts with their
respective systems covering Phase II, including but not limited to all revenues
derived or to be derived therefrom. VELCO and MMWEC also agree not to grant to
any other party any lien upon, or pledge or assignment of revenues from, such
contracts, except as required in connection with any financing by New Hampshire
Hydro with an unaffiliated third party (Lender) or by New England Hydro with a
Lender, or except with the approval of New England Hydro and New Hampshire
Hydro, as required in connection with any financing by MMWEC, the proceeds of
which are to be applied exclusively by MMWEC to meet its obligations under Phase
II, provided that such grant by MMWEC to its third party lenders shall be on a
pari passu basis with the Lenders, New England Hydro, New Hampshire Hydro, New
England Power Company and Boston Edison Company, and provided further that MMWEC
shall have its third party lenders execute and deliver intercreditor agreements
acceptable to the Lenders, New England Hydro, New Hampshire Hydro, New England
Power Company and Boston Edison Company providing an appropriate

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allocation between MMWEC’s third party lenders and the Lenders, New England
Hydro, New Hampshire Hydro, New England Power Company and Boston Edison Company
of payments made under MMWEC’s contract with its systems and including
appropriate notice provisions. VELCO and MMWEC will execute and deliver in a
timely manner all Documentation requested by New Hampshire Hydro to perfect such
grants.
Any signatory, that is unable to provide all Documentation by the applicable
deadlines required by this Section 2 or that fails to obtain any regulatory
approval required to deliver such Documentation by the applicable deadlines,
will not be a Participant under this Agreement and will not have any rights and
obligations hereunder after the date of such deadline. All obligations of New
Hampshire Hydro hereunder are subject to obtaining all regulatory approvals
necessary for New Hampshire Hydro to charge the Participants in accordance with
the terms of this Agreement.
New Hampshire Hydro by written notice to all signatories may extend any deadline
date specified in this Agreement to a later date, provided that any extension
for longer than six months requires the consent of the Advisory Committee.
Section 3.     Effective Date and Term
This Agreement shall become effective (the Effective Date) upon the last to
occur of the following dates:
(i)    the date that Participants serving at least 66 2/3% of the aggregate
kilowatthour load in 1980 served by NEPOOL members have satisfied all conditions
precedent to effectiveness set forth in Section 2;
(ii)    the date that New Hampshire Hydro shall give written notice to all
Participants that it has determined (such notice to be promptly given upon such
determination) that all regulatory

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approvals necessary for it to charge the Participants in accordance with the
terms of this Agreement have been obtained and are no longer subject to appeal;
(iii)    the date on which New Hampshire Hydro shall give written notice to all
Participants that it has determined (such notice to be promptly given upon such
determination) that all major regulatory approvals and licenses necessary for
construction and operation of Phase II have been obtained and are no longer
subject to appeal, unless New Hampshire Hydro and the Advisory Committee agree
that this Agreement shall become effective before one or more of such approvals
and licenses has been obtained and is no longer subject to appeal;
(iv)    the date that New Hampshire Hydro first receives borrowed funds as part
of a financing arranged with Lenders for construction of the Transmission
Facilities; and
(v)    the date that the last of the other Basic Agreements (excluding the Use
Agreement) becomes effective or would become effective but for a condition that
its effectiveness is subject to this Agreement becoming effective.
Upon execution and delivery of the Agreement by members of NEPOOL serving at
least 66 2/31, of the aggregate kilowatthour load in 1980 served by NEPOOL
members, and notwithstanding any provision herein to the contrary, no signatory
may terminate its obligations hereunder except in accordance with provisions of
this Agreement.
Each Participant which is also a participant under the Phase I Support
Agreements shall exercise its rights and take all actions under the Phase I
Support Agreements to assure that the Phase I facilities are available to permit
continued operation of Phase II. (In order to assure that Phase II is permitted
to operate for a full maximum term of fifty years, New Hampshire Hydro
understands that New England Electric Transmission Corporation and Vermont
Electric

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Transmission Company, Inc. have agreed to extend the provisions of the Phase I
Support Agreements to the Phase II Participants to cover this time period.)
The initial term of this Agreement shall expire thirty years from the Date of
Full Support Payment as defined in Section 13. If (i) the Transmission
Facilities are in commercial operation and (ii) there are continuing commitments
by Participants to support the full costs of the Transmission Facilities, a
Participant at that time shall be entitled not less than two years prior to the
expiration of the initial term to elect to continue participation for an
additional period not to exceed 20 years upon the terms and conditions of this
Agreement. Such additional period is to be determined by the Advisory Committee
no later than two years and three months prior to the end of the initial term.
The Advisory Committee in determining this additional period shall take into
account the then remaining term of the Phase I Support Agreements.
If all regulatory approvals authorizing New Hampshire Hydro to charge the
Participants in accordance with the Support Charge described in Section 12
hereof are not received by June 1, 1986, New Hampshire Hydro may thereafter
elect to terminate this Agreement by notice in writing to the signatories.
Section 4.     Participating Shares
A.    Allocation. Each Participant shall have and be charged with a percentage
interest in all of the rights and obligations hereunder determined in accordance
with this Section 4 (which interest is herein referred to as its “Participating
Share”).
The Participating Share of each Participant shall be computed both initially and
as changed from time to time in accordance with the terms hereof, by New
Hampshire Hydro as hereinafter provided. Such computations shall be made as of
the first day of any month in which there is a change in the number of
Participants or any change in the interest of any Participant as

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herein provided. The initial computation of Participating Shares shall be made
on the basis that each signatory to this Agreement as shown in Attachment A is a
Participant. After such initial computation and before the Effective Date, each
Participant shall be entitled to transfer any or all of its Participating Share
to one or more other Participants. On or before September 1, 1988, any
Participant listed in Attachment A who has transferred, or intends to transfer,
any or all of its Participating Share to one or more other Participants listed
in Attachment A must provide documentation to New Hampshire Hydro covering the
transfer. The initial computation is to be recomputed on and as of the Effective
Date on the basis that each signatory to this Agreement which has provided
timely documentation of its participation or transfer is a Participant. Any such
transfers of Participating Shares will be taken into account after such
recomputation. Any such transfer of Participating Shares hereunder shall have no
effect on the interests, rights, or obligations of participants in Phase I.
Subsequent computations are to be made thereafter as of the first day of each
month in which an interest is modified or terminated pursuant to any provision
hereof. All computations shall be final unless there is a manifest error.
B.    The Participating Shares on and as of the initial computation will be
calculated as follows:
(i)    up to 5% to VELCO, if then a Participant;
(ii)    up to 5% to Participants that serve “kilowatthour loads” in New
Hampshire (New Hampshire Participants), if then Participants, (Apportioned on
the basis of their relative “kilowatthour loads” in New Hampshire); and
(iii)    the balance (after deducting the percentages, if any, under paragraphs
B(1) and B(2) above, respectively) apportioned among all Participants, including
VELCO (if then a Participant) and

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the New Hampshire Participants (if then Participants) on the basis of an initial
share allocation determined by the subscription process as described in
Attachment E.
C.    The term “kilowatthour load,” as used herein, shall mean the sum of a
Participant’s 1980 kilowatthour sales as shown on Attachment A hereto.
D.    The precise percentages under B(1) and B(2) shall be specified by VELCO
and the New Hampshire Participants, on or before the date of signing this
Agreement.
Section 5.     Relationship among Participants
The rights and obligations of the Participants hereunder are several, in
accordance with their respective Participating Shares, and not joint. The rights
and obligations of New Hampshire Hydro hereunder are also several and not joint
with those of the Participants, the Equity Sponsors, or any one thereof. There
is no intention to create by this Agreement, or by any grant, lease, license, or
activity related hereto, an association, joint venture, trust, or partnership or
to impose on New Hampshire Hydro or any Participant trust or partnership rights
or obligations; and any such implied intention is expressly negated. Except as
expressly provided in this Agreement, no Participant shall have by virtue of
this Agreement or of any such grant, lease, license, or activity the right or
power to bind any other Participant without its express written consent.
Section 6.     Project Control and Advisory Committee
Each Participant may designate in writing, initially on or before June 1, 1986,
and from time to time thereafter, a representative and an alternate
representative to serve on the Advisory Committee. If a representative is unable
to attend, an alternate may attend in his or her place. The Advisory Committee
shall have the power and responsibilities set forth in this Agreement and shall
adopt its own by-laws, provided that (i) voting shall be by Participating Shares
at the

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time of the vote, (ii) a vote of two-thirds or more of Participating Shares is
required to accept a New Hampshire Hydro proposal or to take other affirmative
action and a vote of more than one-third is required to reject a New Hampshire
Hydro proposal, and (iii) one or more Participants having Participating Shares
of at least 10% in the aggregate may by reasonable written notice to all
Participants call a meeting of the Advisory Committee. The Advisory Committee
will advise New Hampshire Hydro on all major matters of concern to the
Participants regarding the Transmission Facilities and Phase II.
New Hampshire Hydro shall make prompt proposals for decisions on the following,
and the Advisory Committee shall accept or reject these proposals for decisions
on the following:
(i)    Commencement of construction of the Transmission Facilities;
(ii)    The original design concept for the Transmission Facilities;
(iii)    Overall project budget estimate for design, engineering and
construction of the Transmission Facilities;
(iv)    Major changes to the original design concept of the Transmission
Facilities that, based on reasonable engineering estimates, will increase or
decrease the cost by more than 10% of the overall budget approved in (iii) above
or might have a significant detrimental effect on reliability or availability;
any changes whether changes to the original design concept or otherwise that
will result in an increase in the cost to more than 100% above the initial
overall project budget approved in (iii), which will require an affirmative vote
of at least 80% to accept the changes, or an affirmative vote of a percentage
less than 80% in the event that only one Participant (subsidiaries of Northeast
Utilities shall be treated as a single Participant for this sole purpose) having
more than 20% casts a negative vote;
(v)    General terms of major contracts in excess of $25 million;

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(vi)    Capital additions to the Transmission Facilities in excess of $5
million;
(vii)    Major changes in operation and maintenance of the Transmission
Facilities that will increase operation and maintenance costs by more than 10%
of previous year’s actual operation and maintenance costs or might have a
significant detrimental effect on reliability or availability;
(viii)    Delay, restriction, suspension, termination or cancellation of
planning or construction, or shut down of Transmission Facilities, for a period
of six months or longer or permanently under Section 16;
(ix)    The term of any New Hampshire Hydro debt financing or any other
financial arrangements (other than any construction financing) with a principal
amount in excess of $25 million, provided that such term must be between 5 and
30 years; the Advisory Committee may reject the proposed term only if it is less
than 10 years and is unreasonable or impracticable; New Hampshire Hydro shall
consult with the Advisory Committee on the other principal terms of such
financings and any construction financing and shall use reasonable efforts to
accommodate their reasonable requests;
(x)    The target date for commercial operation of the Transmission Facilities
for purposes of Section 13B which shall be determined at least 90 days before
the Effective Date; and
(xi)    Such other matters as are specified elsewhere in this Agreement.
If New Hampshire Hydro makes a proposal for a decision from the Advisory
Committee and the Advisory Committee fails, however, to accept or reject such
proposal within thirty days, the Advisory Committee shall be deemed by New
Hampshire Hydro to have approved New Hampshire Hydro’s proposal and New
Hampshire Hydro may immediately proceed to implement its proposal.

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Each Participant shall be responsible for all of its expenses related to
membership on the Advisory Committee.
This Section shall be effective on June 1, 1986, notwithstanding that the
Effective Date has not yet occurred.
Section 7.     Design and Construction of the Transmission Facilities
Except for those areas of responsibility assigned to the Advisory Committee as
specified in Section 6, New Hampshire Hydro shall be responsible for the design,
engineering, procurement, installation, and all other aspects of the
construction of the Transmission Facilities, and any modifications or additions
made to the Transmission Facilities at any time before or after completion of
the Transmission Facilities, all in accordance with good utility practice for
the benefit of all Participants, the objective being to achieve an appropriate
balance among minimization of construction cost, minimization of operation and
maintenance cost, licensing and environmental considerations, and safety and
reliability of service. In carrying out these activities, New Hampshire Hydro
may utilize the services of its affiliates and may also select and employ a
financial adviser, legal counsel, design engineering firm, a construction
engineering firm, consultants, and such other firms as it considers desirable.
To the extent services are performed by an affiliate of New Hampshire Hydro,
such affiliate will charge on the same basis that it would charge its costs to
other affiliates pursuant to the rules and regulations of the Securities and
Exchange Commission (SEC) under the Public Utility Holding Company Act of 1935
(the 1935 Act).
In order for the Advisory Committee to meet its responsibilities as specified in
Section 6, New Hampshire Hydro will provide all necessary information reasonably
requested by the Advisory Committee. During the course of the work, New
Hampshire Hydro shall furnish

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quarterly reports to all Participants with respect to the progress of the work
and an annual report to all Participants of actual and estimated construction
expenditures for the Transmission Facilities.
New Hampshire Hydro intends, consistent with good utility practice, to construct
the Transmission Facilities on a schedule that permits the commercial operation
of Phase II by September 1, 1990. However, New Hampshire Hydro does not
represent that construction will be completed by such date or any other date.
Section 8.     Operation and Maintenance of the Transmission Facilities
Except for those areas of responsibility assigned to the Advisory Committee as
specified in Section 6, New Hampshire Hydro shall be responsible for the
operation and maintenance of the Transmission Facilities in accordance with good
utility practice for the benefit of all Participants, the objective being to
operate the Transmission Facilities as efficiently, economically, safely, and
reliably as feasible. New Hampshire Hydro shall use its best efforts to
coordinate the operation and maintenance of the Transmission Facilities with the
operation and maintenance of the Phase I facilities and other Phase II
facilities. In carrying out these activities, New Hampshire Hydro may utilize
the services of its affiliates and may also select and employ a financial
adviser, legal counsel, consultants, and such other firms as it considers
desirable. In furtherance of its responsibility, New Hampshire Hydro may from
time to time designate a company, which need not be a Participant, to operate
and maintain the Transmission Facilities. To the extent services are performed
by an affiliate of New Hampshire Hydro, such affiliate will charge its costs on
the same basis that it would charge to other affiliates pursuant to the rules
and regulations of the SEC under the 1935 Act.

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In order for the Advisory Committee to meet its responsibilities as specified in
Section 6, New Hampshire Hydro will provide all necessary information reasonably
requested by the Advisory Committee.
After the Transmission Facilities are placed in commercial operation, New
Hampshire Hydro shall furnish quarterly reports to all Participants with respect
to the operation and maintenance of the Transmission Facilities and an annual
report to all Participants of estimated operation and maintenance expenses.
Section 9.     New Hampshire Hydro Relationship to Participants
In carrying out its responsibilities hereunder, New Hampshire Hydro agrees that
it shall use its best efforts to act for the collective benefit of all
Participants and New Hampshire Hydro, to include in its contracts with
independent contractors the customary provisions for assuring professional and
workmanlike performance, including warranties, insurance coverage and other
protections consistent with good utility practice, and to enforce its rights
under such contracts against the other contracting parties to the extent
reasonable, reserving the discretion to settle claims on a reasonable basis. All
costs of construction, including damages caused by the risks of negligence
(other than gross negligence) and other risks of construction in excess of the
recoveries obtained from offending parties or insurers, shall be included as
part of investment in the Transmission Facilities (as defined in Section 12
below) and all costs of operating the Transmission Facilities, including damages
caused by risks of negligence (other than gross negligence) or other risks of
operation in excess of any recoveries obtained from offending parties or
insurers, shall be included in New Hampshire Hydro’s operating costs (as defined
in Section 12 below).

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Section 10.     Payment for Preliminary Costs
New Hampshire Hydro agrees to pay those New England utilities that initially
paid for costs related to the Transmission Facilities incurred under the
Preliminary Quebec Interconnection Support Agreement - Phase II (the Preliminary
Agreement) that are determined by New Hampshire Hydro to be capitalizable costs
of the Transmission Facilities, in accordance with the Uniform System (as
defined hereinafter in Section 12). It is understood that it is the intention of
New Hampshire Hydro and the Participants for all costs related to and allocated
to the Transmission Facilities incurred under the Preliminary Agreement, to be
capitalized to the extent permitted in accordance with good utility practice.
Within ninety days after the Effective Date, New Hampshire Hydro agrees to make
the repayment with interest calculated from the original date of payment using
the monthly average rate on one month commercial paper as published in the
Federal Reserve Bulletin for each month during such time period.
Section 11.     Transmission and Other Services
In accordance with good utility practice, New Hampshire Hydro will make the
Transmission Facilities available for the Participants for transmission services
as part of Phase II. New Hampshire Hydro hereby grants to each Participant an
exclusive right to use its Participating Share of the Transmission Facilities in
accordance with the Use Agreement.
New Hampshire Hydro agrees that it will serve as an agent or in other similar
capacity for any Participant that so requests for the buying or selling of power
to be transmitted over the Transmission Facilities as an entitlement transaction
with Hydro-Quebec pursuant to the terms of the Use Agreement or otherwise,
provided, however, that a formal written contract with terms

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and conditions, including compensation for services, satisfactory to New
Hampshire Hydro is executed and delivered prior to performance of such services.
Section 12.     Support Charge
Commencing in the month of the Date of Full Support Payment (as defined in
Section 13) and in each month thereafter, each Participant shall pay in
accordance with Section 13 its Participating Share of a monthly Support Charge
in an amount determined in accordance with this Section 12, plus a credit
enhancement charge calculated in accordance with Attachment F. The Support
Charge shall be equal to New Hampshire Hydro’s total cost of service related to
the Transmission Facilities for such month.
The “total cost of service related to the Transmission Facilities” for any month
commencing with the month in which the Date of Full Support Payment occurs shall
be the sum of (a) New Hampshire Hydro’s operating expenses for such month with
respect to the Transmission Facilities, plus (b) an amount equal to one-twelfth
of the composite percentage for such month times the average net rate base for
the Transmission Facilities, less (c) investment earnings of the Debt Service
Fund, as defined in Section 18, realized by New Hampshire Hydro, less (d) any
other income received by New Hampshire Hydro resulting from costs or rate base
supported by the Participants other than income received pursuant to (a), (b),
or (c) above or Credit Enhancement Charges and other income allocated to Equity
Sponsors elsewhere under this Agreement. If a Support Charge payment under
Section 13 is to be calculated from a date other than the first day of a month,
an appropriate proration of the amount determined in (b) above shall be made for
such payment only.

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“Uniform System” shall mean the appropriate Uniform System of Accounts
prescribed by the Federal Energy Regulatory Commission (FERC) for Public
Utilities and Licensees, as from time to time in effect.
New Hampshire Hydro’s “operating expenses” shall include all amounts related to
the Transmission Facilities and properly chargeable to expense accounts less any
applicable credits thereto, in accordance with the Uniform System, including but
not limited to operation and maintenance expense such as rent on leased property
and administrative and general expenses, state and Federal income and franchise
taxes, property taxes, payroll taxes, any other taxes not based on income, and
depreciation and/or amortization expense; it being understood that unless the
FERC, upon application by New Hampshire Hydro, authorizes a shorter depreciation
and/or amortization period, for purposes of this Agreement depreciation and/or
amortization shall be at a rate sufficient to recover the investment in the
Transmission Facilities (including estimated cost of removal less any salvage
value which salvage value, for the purpose of calculating such depreciation
and/or amortization, will not exceed the amount of cost of removal) over the
greater of: (i) ten years from the Date of Full Support Payment or (ii) the term
of New Hampshire Hydro’s permanent debt financings or other permanent financing
arrangements related to the Transmission Facilities, adjusted for multiple
maturities and repayment schedules; and it also being understood that rents on
leased property shall include the rental of property or property rights related
to the Transmission Facilities from any Participant with rent based on book
value. “Operating expenses” shall also include all payments made by New
Hampshire Hydro pursuant to Section 8 of the Phase II Maine Electric Power SVC
Facilities Support Agreement between New Hampshire Hydro and Maine Electric
Power Company, dated as of October 1, 1988, as amended from time to time (the
“SVC Agreement”). In addition, each Participant will pay to

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New Hampshire Hydro, and New Hampshire and Hydro will pay to New England Power
and Public Service Company of New Hampshire , for the benefit of their
respective customers, such Participant’s Participating Share of a monthly
charges of $268,000 and $41,300, respectively, to compensate New England Power
and Public Service Company for the lost capacity on their respective New
Hampshire rights-of-way, provided however, that no such charges shall be paid to
New England Power or Public Service Company during such time as construction or
operation is suspended on account of a defect in title for such rights-of-way.
The allowance for state and Federal income taxes included in operating expenses
shall reflect the normalization of timing differences and the flow through of
permanent differences between book income and tax income. New Hampshire Hydro,
as the tax owner of the Transmission Facilities, will be entitled to the
benefits and subject to the burdens of such ownership for tax purposes. The
allowance for state and Federal income taxes included in operating expenses
shall include a provision for taxes on dividends received by stockholders,
calculated at the then current statutory rate for corporate stockholders.
The “investment in the Transmission Facilities” shall be the aggregate amount
incurred at any time either before or after commercial operation of the
Transmission Facilities which relates to the Transmission Facilities and is
properly chargeable to New Hampshire Hydro’s utility plant accounts in
accordance with the Uniform System. The investment in the Transmission
Facilities shall also include operating expenses incurred prior to the month in
which the Date of Full Support Payment occurs and an allowance for funds used
during the period prior to the Date of Full Support Payment (AFDC) accrued on
the investment in the Transmission Facilities. The AFDC rate shall be calculated
pursuant to the last FERC approved AFDC formula including in

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construction work in progress all investment in the Transmission Facilities
prior to the Date of Full Support Payment and using 14 percent as the return on
equity for such calculation.
“Composite percentage” shall be computed as of the last day of each month (the
“computation date”). “Composite percentage” as of a computation date shall be
the sum of (i) Return on Equity then in effect multiplied by the percentage
which equity investment as of such date is of the total capital as of such date;
plus (ii) the average monthly effective interest rate per annum of each
principal amount of indebtedness outstanding on such date for money borrowed,
whether long term or short term, multiplied by the percentage which each such
principal amount is of total capital as of such date. The effective interest
rate shall take into account premiums, discounts, fees, and other costs that are
related to the indebtedness.
“Return on Equity” shall be the return on equity on file with the FERC and in
effect under The Federal Power Act.
“Equity investment” as of any date shall consist of the sum of (i) all amounts
theretofore paid to New Hampshire Hydro for all capital stock theretofore
issued, plus all capital contributions, less the sum of any amounts paid by New
Hampshire Hydro in the form of stock retirements, repurchases or redemptions or
return of capital including liquidating dividends; plus (ii) any credit balance
in the capital surplus account not included in (i) and any credit balance in the
earned surplus (retained earnings) account on the books of New Hampshire Hydro
as of such date.
“Total capital” as of any date shall be the equity investment plus the total of
all indebtedness then outstanding for money borrowed.
From the Date of Full Support Payment until the first to occur of June 30 or
December 31 thereafter, the “average net rate base” for the Transmission
Facilities shall be the average of the

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net rate base determined as of the Date of Full Support Payment and the first to
occur of June 30 or December 31 thereafter. Thereafter, for subsequent months of
January through June, average net rate base shall be the average of the net rate
base as of the preceding December 31 and the following June 30. For other
months, average net rate base shall be the average of the net rate base as of
the preceding June 30 and the following December 31. The “net rate base” shall
consist of (i) the investment in the Transmission Facilities, less (ii) the
amount of any accumulated provision for depreciation and amortization related to
the investment in the Transmission Facilities, less (or plus) (iii) the amount
of any reserve for deferred income taxes received (or paid) by New Hampshire
Hydro, such deferred income taxes to include deferred income taxes due to
accelerated depreciation, construction tax benefits, and any other book/tax
timing differences related to the Transmission Facilities, less (iv) the amount
of any unamortized investment tax credits (ITC), plus (v) such allowances
related to the Transmission Facilities for materials and supplies, prepaid items
and cash working capital as may from time to time by determined by New Hampshire
Hydro, as reasonably necessary and in accordance with accepted utility
accounting practice, plus (vi) the amounts held in the Debt Service Fund, as
described in Section 18. New Hampshire Hydro shall normalize ITC over the
depreciation and/or amortization period relating to the Transmission Facilities.
Any allowance for cash working capital shall be limited to that not sufficiently
recovered through the use of estimated billing for the current month.
Section 13.     Payments
A.    Commencing on or about the Date of Full Support Payment and for each month
thereafter, New Hampshire Hydro will render to each Participant an invoice for
its Participating Share of the Support Charge and the Credit Enhancement Charge,
if any, for such month

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calculated on an estimated basis for the current month and subject to corrective
adjustment in subsequent months. Unless New Hampshire Hydro is prevented by
circumstances beyond its reasonable control, New Hampshire Hydro shall use its
best efforts to render final bills within two years after the end of the
calendar year in which the estimated bill was rendered. New Hampshire Hydro will
also render to each Participant an invoice or notice for its Participating Share
of any amounts due under this Agreement (other than monthly Support Charge and
the Credit Enhancement Charge) including but not limited to payments to be made
under Sections 15, 16, 17, and 20D.
Each Participant shall promptly pay to New Hampshire Hydro the amount shown on
any invoice submitted under this Section. New Hampshire Hydro will date and mail
monthly invoices for the Support Charge and Credit Enhancement Charge, if any,
on or about the 25th day of the month for the coming month and this invoice
shall be due and payable by the 15th day of the coming month and if not paid
within that time period shall bear interest compounded monthly from the first
day of the month in which payment is due to the date when payment is made at an
annual rate equal to two percent (2%) over the current interest rate on prime
commercial loans from time to time in effect (the Base Rate) at the principal
office of The First National Bank of Boston.
Any invoice or notice for payments due under this Agreement (other than a
monthly Support Charge and Credit Enhancement Charge invoice), that is not paid
when due under this Agreement shall bear interest compounded monthly from the
mailing date of the invoice to the date when payment is made at an annual rate
equal to two percent (2%) over the Base Rate at the principal office of The
First National Bank of Boston.

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B.    The “Date of Full Support Payment” shall be the later of (i) the target
date for commercial operation of the Transmission Facilities as determined by
the Advisory Committee, or (ii) the date on which the Transmission Facilities
are ready for commercial operation, but in no event later than one year after
the date specified in subpart (i) above unless an extension is agreed to in
writing by all Lenders. However, if all of Phase II commences commercial
operation prior to the target date specified in subpart (i) above, the “Date of
Full Support Payment” shall be the date on which Phase II is in commercial
operation.
Section 14.     Character of Payment Obligations
The obligations of each Participant to make payments hereunder, and to perform
and observe all other agreements on its part contained herein, are absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any insolvency, composition, bankruptcy, reorganization,
arrangement, liquidation or similar proceedings relating to New Hampshire Hydro,
the Participant, any other Participant, any Equity Sponsor, or any affiliate
thereof, (ii) any failure of the Transmission Facilities to operate for any
reason, including but not limited to the failure of Hydro-Quebec to sell
electric power to the Participants, (iii) any damage to or destruction of the
Transmission Facilities, including but not limited to any defect in the title,
quality, condition, design, operation, or fitness for use of, or any loss of use
of, all or any part of the Transmission Facilities, (iv) any interruption or
prohibition of the use or possession by New Hampshire Hydro of, or any ouster or
dispossession by paramount title or otherwise of New Hampshire Hydro from, all
or any part of the Transmission Facilities, or any interference with such use or
possession by any governmental agency or authority or other person or otherwise,
(v) any inability to use the Transmission Facilities because a necessary license
or other necessary public authorization cannot be obtained or is revoked, or
because the

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utilization of such a license or authorization is made subject to specified
conditions which are not met, (vi) any invalidity or unenforceability or
disaffirmance by New Hampshire Hydro or any Participant of any provision of this
Agreement or any failure, omission, delay, or inability of New Hampshire Hydro
to perform any of its obligations contained herein, (vii) any amendment,
extension, or other change of, or any assignment or encumbrance of any rights or
obligations under, this Agreement, or any waiver or other action or inaction, or
any exercise or nonexercise of any right or remedy, under or in respect to this
Agreement, (viii) any inability of the Participant or any other Participant to
obtain regulatory approvals for financing its Participating Share of any
obligations under this Agreement or for meeting any other obligations under this
Agreement, or (ix) any inability to start, complete, or use the Transmission
Facilities due to any other circumstance, happening, or event whatsoever,
whether foreseeable or unforeseeable and whether similar or dissimilar to the
foregoing, it being the intention of the parties hereto that all amounts payable
by each Participant in respect of this Agreement shall begin to be payable and
shall continue to be payable in all events in the manner and at the time herein
provided; provided, however, that nothing in this Section 14 shall (a) prevent a
Participant from transferring its interests and obligations hereunder to another
Participant prior to the Effective Date, or (b) impose any continuing
liabilities or obligations on said transferring Participant with respect to this
Agreement incurred or relating to the period of time after said transferring
Participant’s Participating Share has been reduced to zero. In that connection,
each Participant hereby waives, to the extent permitted by applicable law, any
and all rights which it may now have or which may at any time hereafter be
conferred upon it (other than those expressly conferred in this Agreement), by
statute or otherwise, to terminate, cancel, or surrender any of its obligations
under this Agreement, and agrees that if, for any reason whatsoever, this
Agreement

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shall be terminated in whole or in part by operation of law or otherwise, each
Participant will nonetheless promptly pay to New Hampshire Hydro amounts as
required by Section 16 of this Agreement.
Notwithstanding the character of the above payment obligations, when the net
proceeds from a total taking of the Transmission Facilities in an eminent domain
proceeding or from insurance in the event of complete destruction of the
Transmission Facilities have been received by New Hampshire Hydro in an amount
equal to or greater than the amounts then due hereunder from the Participants,
then no payment shall be required.
Section 15.     Default
A.    If any of the following events (Events of Default) shall occur and be
continuing:
(i)    a Participant shall fail to pay when due any amount which it has agreed
to pay under any provision of this Agreement, and such failure shall continue
for more than 10 days after written notice thereof has been given to such
Participant by New Hampshire Hydro; or
(ii)    a Participant shall fail to supply in accordance with the terms hereof
any documentation required by New Hampshire Hydro in connection with financing
with Lenders by New Hampshire Hydro (for VELCO and MMWEC, this includes
documentation for their respective contracting electric systems), and such
failure shall continue for more than 30 days after written notice of such
failure has been given to such Participant by New Hampshire Hydro; or
(iii)    a Participant shall admit in writing its inability to pay its debts, or
shall make a general assignment for the benefit of its creditors; or any
proceeding shall be instituted against a Participant (and is not dismissed
within sixty days), or by a Participant, seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, or composition of
it or its debt under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors

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or seeking appointment of a receiver, trustee, or other similar official for it
or for any substantial part of its property; or if a Participant shall take any
action to authorize any of the actions set forth in this subsection (iii); or
(iv)    prior to the retirement of the last amount of New Hampshire Hydro’s debt
and prior to the reduction of New Hampshire Hydro’s equity investment to an
amount less than or equal to 10% of its highest previous amount, a Participant
shall fail to make a payment of principal under any bank loan or other
obligation for borrowed money (including financing leases or other similar
arrangements) exceeding the lesser of $1 million or 5% of such Participant’s
total capitalization, which failure is not excused or cured within the earlier
of 30 days or the acceleration of the maturity thereof; or
(v)    a Participant shall fail to perform any other obligation under this
Agreement in accordance with the terms hereof, and such failure shall continue
for more than 30 days after written notice thereof has been given to such
Participant by New Hampshire Hydro; or
(vi)    a Participant shall experience an event of default under any of the
other Basic Agreements or under any of the basic agreements for Phase I listed
in the first paragraph of Section 1; then, and in any such event, in addition to
any other rights or remedies that it may have against such Participant by reason
thereof, New Hampshire Hydro shall, by written notice to such Participant,
terminate all rights of such Participant under this Agreement as of the date of
such Event of Default. New Hampshire Hydro may with the approval of the Advisory
Committee waive any Event of Default hereunder or grant extensions of time to
cure any Event of Default.
B.    Immediately upon termination of the rights of a Participant pursuant to A
above:

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(i)    if such terminated Participant was then a Credit Enhanced Participant,
then New Hampshire Hydro shall allocate the Participating Share of the
terminated Participant to the Equity Sponsors or their appointees in proportion
to the Equity Sponsors’ then respective equity percentages;
(ii)    if such terminated Participant was not then a Credit Enhanced
Participant, then New Hampshire Hydro will offer the Participating Share of the
terminated Participant as of the date of termination to the Equity Sponsors or
their appointees and upon acceptance of the offer will allocate the
Participating Share in accordance with the acceptance (if the offer is
oversubscribed by Equity Sponsors, the allocation will be made in proportion to
such Equity Sponsors’ then respective equity percentages); provided that, if
such Participating Share is not so completely allocated, then New Hampshire
Hydro will offer such unallocated Participating Share to Participants whose most
junior long-term debt securities are then rated at least one grade above
investment grade or, if not so rated, who have obtained the consent of all New
Hampshire Hydro’s Equity Sponsors (if the offer is oversubscribed, the
allocation will be made in proportion to respective participating shares); and
provided further that such Equity Sponsors or their appointees or Participants
receiving such an allocation accept an equal support or participating share
under the Phase II New England Power AC Facilities Support Agreement, the Phase
II Boston Edison AC Facilities Support Agreement, and the Phase II Massachusetts
Transmission Facilities Support Agreement; and
(iii)    the Equity Sponsors have been allocated B (i) or (ii) above have been
allocated B (ii) above or New allocation is made, or their appointees that
Participating Shares under or any Participants that Participating Shares under
Hampshire Hydro, if no such shall allocation is made, shall be entitled to
receive in accordance with the Use Agreement from the escrow agent as liquidated

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damages the allocated share of all Phase II amounts retained under the Use
Agreement on or after the date of such termination for the account of such
terminated Participant.
C.    The terminated Participant shall immediately pay either (i) if an
allocation is made under Section 15B, to the Equity Sponsors or their appointees
or any Participants that have received such allocation or (ii) otherwise, to New
Hampshire Hydro, in addition to any other amounts due under any provisions of
this Agreement, an amount equal to its Participating Share of the investment in
the Transmission Facilities (including any cost of removal and disposal) less
any depreciation and amortization relating to the Transmission Facilities to the
date of such payment. In addition, such Participant’s payment required by the
preceding sentence shall be increased by an amount equal to its Participating
Share of the “amounts” determined in Section 11B of the SVC Agreement. New
Hampshire Hydro will credit any such amounts it receives from the terminated
Participant for the benefit of the Equity Sponsors.
D.    New Hampshire Hydro or any Equity Sponsor or any Participant shall be free
to invoke such remedies at law or in equity as may be deemed appropriate against
any Participant that defaults under this Agreement.
Section 16.     Delay, Suspension, Termination, Cancellation, or Shutdown
If at any time New Hampshire Hydro determines that continued planning,
construction, or operation of the Transmission Facilities is not advisable for
any reason New Hampshire Hydro deems appropriate, it may, after written notice
to all Participants, delay, restrict, or suspend planning, construction, or
operation, or shut the Transmission Facilities down for a period of less than
six months. In accordance with Section 6, the Advisory Committee has
responsibility for accepting or rejecting a proposal submitted by New Hampshire
Hydro recommending a delay, restriction, suspension, termination, or
cancellation of planning or construction, or shut down of

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the Transmission Facilities for a period of six months or longer or permanently.
In any case in which New Hampshire Hydro determines that safety considerations
require an immediate shutdown, it shall proceed without consultation with the
Advisory Committee or written notice to the Participants.
If the Advisory Committee has determined that (i) planning or construction of
the Transmission Facilities is to be terminated or cancelled, or (ii) the
Transmission Facilities are to be permanently shutdown, then New Hampshire Hydro
shall give each Participant not less than ninety days advance written notice of
any such event. Each Participant shall pay to New Hampshire Hydro within such
notice period an amount, as specified in such notice and calculated as of the
date of the event so notified, equal to its Participating Share of the “amounts”
determined in the second paragraph of Section 12 of the SVC Agreement plus the
greater of:
(a)    its Participating Share of the investment in the Transmission Facilities
(less any depreciation and amortization to the date of payment) together with
all costs relating to or resulting from such termination, cancellation or
permanent shutdown, including any premiums and penalties incurred because of the
early retirement of any indebtedness and further including without limitation
any costs of total or partial demolition and disposal of the Transmission
Facilities net of any actual salvage value received by New Hampshire Hydro
including the proceeds from any sale and net of the actual proceeds received by
New Hampshire Hydro from any condemnation proceeding or insurance for
destruction; or
(b)    its Participating Share of the then total capital of New Hampshire Hydro
plus any premiums and penalties incurred because of the early retirement of any
financing plus without limitation any costs of total or partial demolition and
disposal of the Transmission Facilities net of any actual salvage value received
by New Hampshire Hydro including the proceeds from any sale and net

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of the actual proceeds received by New Hampshire Hydro from any condemnation
proceeding or insurance for destruction.
If New Hampshire Hydro and the Advisory Committee agree on the decision to
terminate, cancel or permanently shutdown the Transmission Facilities under this
Section 16, New Hampshire Hydro shall have and retain, upon termination of this
Agreement, the right to sell the Transmission Facilities (including New
Hampshire Hydro’s rights to Transmission Faculties in Vermont and the SVC
Facilities in Maine) at fair market value to any NEES affiliate of New Hampshire
Hydro. Any amounts received from such sale shall be considered salvage value
under (a) or (b) above. If New Hampshire Hydro’s recommendation to terminate,
cancel or permanently shutdown is not adopted by the Advisory Committee, New
Hampshire Hydro shall be paid an amount determined in accordance with this
Section 16 and if directed by the Advisory Committee shall transfer its rights,
assets, and obligations related to the Transmission Facilities to the
Participants or any group or designee thereof. New Hampshire Hydro’s lease of
the right-of-way shall be assigned in connection with such transfer.
If New Hampshire Hydro is paid such amount and transfers its rights, assets, and
obligations related to the Transmission Facilities to the Participants or any
group or designee thereof, New Hampshire Hydro shall refund any costs of total
or partial demolition and disposal of the Transmission Facilities to such
Participants or group or designee thereof.
Section 17.     Termination by New Hampshire Hydro
If at any time New Hampshire Hydro elects and so notifies in writing all
Participants that, as a result of a default under Section 15, the Participating
Share of a terminated Participant cannot be allocated to Equity Sponsors or
their appointees or other Participants pursuant to

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Section 15B and the aggregate of the Participating Shares of all nonterminated
Participants is less than 100%, each such other Participant’s participation
hereunder shall terminate on a date (effective date of termination) not less
than 90 days after the date of New Hampshire Hydro’s written notice, and each
such other Participant on or before the effective date of termination shall pay
to New Hampshire Hydro an amount calculated in accordance with the second
paragraph of Section 16.
Upon termination of this Agreement pursuant to this Section 17, New Hampshire
Hydro shall offer each Participant which (i)    was not a terminated Participant
immediately prior to termination of the Agreement pursuant to this Section 17
and (ii) has paid all amounts due under the first paragraph of this Section 17,
an opportunity to participate in a new support agreement, provided that all
participants in such new support agreement agree to pay 100% of the costs of
service of New Hampshire Hydro, including, without limitation, the “amounts”
that New Hampshire Hydro must pay to Chester SVC Partnership pursuant to Section
8 of the SVC Agreement. The new support agreement will have a term equal to the
remaining term of this Agreement. Other provisions of the new support agreement
will be substantially similar to those in this Agreement. The investment in the
Transmission Facilities under the new support agreement shall be reduced by any
amount received as termination payments hereunder which would be properly
applied to utility plant accounts in accordance with the Uniform System less any
costs of termination or premiums or penalties incurred because of the early
retirement of any financing of New Hampshire Hydro. Any participant in the new
support agreement shall also be a supporter of the AC facilities of New England
Power and Boston Edison Company and the transmission facilities of New England
Hydro.

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No termination of this Agreement shall relieve any party of any obligation
arising prior to making the payment to New Hampshire Hydro required by the first
paragraph of this Section 17. In addition, notwithstanding the termination of
this Agreement for other purposes, this Agreement shall continue in effect to
the extent necessary to provide for paying all “windup costs” and final
billings, billing adjustments and payments.
Section 18.     Debt Service Fund
New Hampshire Hydro may establish and maintain at its option a Debt Service Fund
with funds which may be borrowed from unaffiliated third parties. The Debt
Service Fund may be assigned in connection with a financing by New Hampshire
Hydro with the Lenders in order to provide assurance to such Lenders that New
Hampshire Hydro will pay its debt service obligations in a timely manner.
The Debt Service Fund shall not exceed the lesser of (i) the amount required to
pay six months of interest on indebtedness plus five percent of the largest
principal amount of debt outstanding at any time plus any accrued earnings from
investment of the amounts in the Debt Service Fund not yet credited to Support
Charges as provided in Section 12 or (ii) the total amount of debt service
remaining to be paid.
Section 19.     Cash Deficiency Commitment
A.    “Cash Deficiency” attributed to a Participant means with respect to any
Due Date, the amount by which that Participant’s Participating Share of the
aggregation of the principal of, premium, if any, and interest on any of the
funds borrowed by New Hampshire Hydro from Lenders to finance the Transmission
Facilities or the construction thereof and payable on such Due Date (whether at
maturity, pursuant to mandatory prepayment, by acceleration or otherwise)
exceeds the amount of cash from such Participant’s payments made under any other
section of

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this Agreement and available to New Hampshire Hydro for repayment to Lenders of
such borrowed funds.
B.    If New Hampshire Hydro has a Cash Deficiency attributed to a Participant
on any Due Date, that Participant agrees that it shall absolutely and
unconditionally guarantee to pay its Cash Deficiency on demand of Lenders, to be
paid directly on demand to Lenders, in cash, provided, however, that no Cash
Deficiency attributed to a Participant shall include any unpaid obligations
hereunder of other Participants.
For purposes of this Section 19, “Due Date” shall mean the date any payments are
due and payable under the terms of any indebtedness of New Hampshire Hydro with
Lenders.
C.    Payments by Participants under this section shall be considered by New
Hampshire Hydro to be prepayments of amounts due or to become due to New
Hampshire Hydro pursuant to any other section hereof.
Section 20.     Miscellaneous
A.    Insurance. New Hampshire Hydro will at all times during the term of this
Agreement keep the Transmission Facilities insured against such risks as
electric utility companies, similarly situated, constructing and operating like
properties, usually insure against. Any uninsured loss, damage, or liability
related to the Transmission Facilities or arising out of New Hampshire Hydro’s
performance hereunder and any expenses in connection with any such loss, damage,
or liability shall be deemed to be an expense reimbursable by the Participants
in accordance with Section 12. New Hampshire Hydro will assist any Participant,
at the Participant’s expense, in obtaining any other insurance coverage related
to the Transmission Facilities that such Participant requires. Upon request, New
Hampshire Hydro will supply certificates of insurance coverage.

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B.    Limitation of Liability. For and in consideration of the fact that New
Hampshire Hydro is undertaking to design, engineer, procure, install, construct,
operate, and maintain the Transmission Facilities for and on behalf of
Participants without any compensation or charge other than the payments provided
under this Agreement, no Participant shall be entitled to recover from New
Hampshire Hydro or any affiliate or any shareholder, director, officer,
employee, or agent of New Hampshire Hydro or any affiliate, any damages
resulting from error or delay, whether or not due to negligence, in the design,
engineering, procurement, installation or construction of the Transmission
Facilities, or for any damage to the Transmission Facilities, any curtailment of
power, or any other damages of any kind, including but not limited to
consequential damages, arising out of or in connection with the performance of
this Agreement by New Hampshire Hydro. Notwithstanding the above limitation, if
New Hampshire Hydro is found by a court of competent jurisdiction to have
intentionally violated this Agreement in a material manner or to have acted
hereunder in a grossly negligent manner and if such court finding is final and
no longer subject to appeal, then the Participants shall be entitled to recover
from New Hampshire Hydro direct damages (but not consequential or any other
damages) resulting from such material intentional violation or gross negligence,
unless New Hampshire Hydro’s actions or omissions have been expressly approved
in advance by the Advisory Committee. New Hampshire Hydro will use its best
efforts to enforce all contracts related to the construction and operation of
the Transmission Facilities for the benefit of New Hampshire Hydro and the
Participants.
C.    Audit. New Hampshire Hydro will arrange for an annual audit to be
performed by an independent public accounting firm of recognized standing
selected by New Hampshire Hydro. The costs of the annual audit will be included
in the operating expenses under Section

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12. The books and records of New Hampshire Hydro (including metering records)
shall be open to reasonable inspection and audit by any Participant. The costs
of any such additional audit, including the costs of New Hampshire Hydro in
connection with such audit, shall be borne by the Participant or Participants
requesting such audit. New Hampshire Hydro will promptly make any reasonable
corrections necessitated as a result of the annual audit or an additional audit.
D.    Cost Reimbursement. In the event New Hampshire Hydro reasonably incurs any
costs not provided for elsewhere herein in connection with or as a result of
planning, organizing, documenting, construction, suspensions, rescheduling,
cancellation, operation, maintenance, shutdown, demolition, disposition, or
termination of the Transmission Facilities, or otherwise arising in connection
with this Agreement, each Participant shall promptly reimburse to New Hampshire
Hydro, within 15 days of the mailing date of the invoice, its Participating
Share of such costs. Each Participant’s obligation to reimburse New Hampshire
Hydro under this Section shall also include its Participating Share of the
amounts that New Hampshire Hydro must pay to Chester SVC Partnership under
Section 11B or Section 12 of the SVC Agreement. However, New Hampshire Hydro
will endeavor to finance any additional costs, to the extent such additional
costs are properly capitalizable, over the shorter of the then remaining useful
life of the Transmission Facilities, the remaining term of the Agreement, or the
remaining term of its permanent financing. For the purpose of this subsection,
the Transmission Facilities shall include the SVC Facilities as defined in the
SVC Agreement.
E.    Uncontrollable Force. No delay or failure in the performance of any
obligation by New Hampshire Hydro shall be deemed to exist if it is the result
of an “uncontrollable force”. The term “uncontrollable force” shall be deemed to
mean any cause beyond the reasonable control of New Hampshire Hydro, which New
Hampshire Hydro could not reasonably have been

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expected to avoid by exercise of due diligence and foresight, including, without
limiting the generality of the foregoing, storm, flood, lightning, earthquake,
fire, explosion, failure of facilities not due to lack of proper care or
maintenance, civil disturbance, labor disturbance, sabotage, war, national
emergency, or restraint by court or public authority. In such event, New
Hampshire Hydro shall use reasonable diligence to notify the Participants of
such event.
F.    Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of, and may be performed by, the successors and assigns of
the parties and shall also be binding, insofar as permitted by law, on any
receiver or trustee in bankruptcy, receivership, or reorganization of any party.
Except (i) for a reallocation resulting from a default as provided in Section
15, (ii) for a sale, merger, or consolidation which is approved by New Hampshire
Hydro and results in the transfer of substantially all of a Participant’s assets
to, and the assumption of all of the Participant’s obligations hereunder by, an
electric utility which is a member of NEPOOL, and (iii) for an assignment by New
Hampshire Hydro to a NEES affiliate of New Hampshire Hydro which expressly
assumes New Hampshire Hydro’s rights and obligations hereunder and acquires the
Transmission Facilities, and (iv) for a transfer of any or all of a
Participant’s Participating Share prior to the Effective Date as provided in
Section 4A hereof, no assignment of this Agreement shall operate to relieve the
assignor of its obligations under this Agreement without the written consent of
the parties hereto. In addition to New Hampshire Hydro’s right to assign to an
affiliate, New Hampshire Hydro may assign, without the consent of the
Participants, its right, title, and interest in this Agreement, in whole or in
part, and any security interests contained herein or granted hereunder, to one
or more banks, investment banking firms, insurance companies, other financial
institutions, or others as collateral security for New

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Hampshire Hydro’s obligations in connection with financing the Transmission
Facilities. Written notice to all parties will be given prior to any assignment
hereunder.
G.    Right of Setoff. No Participant shall be entitled to set off against the
payments required to be made by it hereunder (1) any amounts owed to it by New
Hampshire Hydro, any affiliate of New England Hydro, any Equity Sponsor, or any
other Participant or (2) the amount of any claim by it against New Hampshire
Hydro, any affiliate of New Hampshire Hydro, any Equity Sponsor, or any other
Participant. However, the foregoing shall not affect in any other way any
Participant’s rights and remedies with respect to any such amounts owed to it by
New Hampshire Hydro, any affiliate of New Hampshire Hydro, any Equity Sponsor,
or any other Participant or any such claim by it against New Hampshire Hydro or
any other Participant.
H.    Amendments. New Hampshire Hydro shall have the right to amend the
provisions of Section 12 hereof from time to time by serving an appropriate
statement of such amendment upon the Participants and filing the same with the
Federal Energy Regulatory Commission (or such other regulatory agency as may
have jurisdiction) in accordance with the provisions of applicable laws and any
rules and regulations thereunder, and the amendment shall thereupon become
effective on the date specified therein, subject to any suspension order duly
issued by such agency. The Participants have the right to intervene in any
regulatory proceeding brought by New Hampshire Hydro to consider such amendment
of the provisions of Section 12.
Any amendments changing the Participating Shares of the Participants, the rights
of the Participants or a Participant as specified in Section 11, or the several
nature of the obligations and rights of the Participants hereunder as specified
in Section 5, shall require consent by all parties. All other amendments to this
Agreement shall be by mutual agreement of New Hampshire Hydro and Participants
owning Participating Shares aggregating at least 66 2/3%,

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evidenced by a written amendment signed by New Hampshire Hydro and such
Participants; and New Hampshire Hydro and all Participants shall be bound by any
such amendment.
I.    Notices. Except as the parties may otherwise agree, any notice, request,
bill, or other communication, relating to this Agreement, or the rights,
obligations or performance of the parties hereunder, shall be in writing and
shall be effective upon delivery. Any such communication shall be considered as
duly delivered when delivered in person or mailed by registered or certified
mail, postage prepaid, to the respective post office address of the other
parties shown following the signatures of such other parties hereto, or such
other address as may be designated by written notice given as provided in this
paragraph I.
J.    Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of The Commonwealth of Massachusetts.
K.    Other.
(1)    No action, regardless of form, arising out of this Agreement may be
brought by any party hereto more than three years after the cause of action has
arisen.
(2)    In the event that any clause or provision of this Agreement, or any part
thereof, shall be declared invalid or unenforceable by any court having
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remaining portions of this Agreement.
(3)    All provisions of this Agreement providing for limitation of, or
protection against, liability shall apply to the full extent permitted by law,
and regardless of fault, and shall survive either termination pursuant to this
Agreement or cancellation.
(4)    Each party shall, upon request of another party, execute and deliver any
document reasonably required to implement any provision hereof.

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(5)    Any number of counterparts of this Agreement may be executed and each
shall have the same force and effect as the original.
(6)    This Agreement, with the other Basic Agreements, Preliminary Quebec
Interconnection Support Agreement - Phase II, the agreements with Hydro-Quebec
regarding Phase II, and the basic agreements covering Phase I shall constitute
the entire understanding among the parties and shall supersede any and all
previous understandings pertaining to the subject matter of this Agreement.
(7)    This Agreement is the act and obligation of the parties hereto in their
corporate or governmental capacity, and any claim hereunder against any
shareholder, director, officer, employee, or agent of any party, as such, is
expressly waived.
Section 21.     Refund of Gain on Sale or Other Disposition of Transmission
Facilities
In the event that any of the Transmission Facilities are sold or otherwise
disposed of during the term of this Agreement, if the Net Proceeds (defined as
the amount received from such sale or disposition less all costs relating to or
resulting from such sale or disposition, including without limitation any income
taxes relating to or resulting from such sale or disposition, any premiums and
penalties incurred because of the early retirement of any indebtedness
associated with the sold or disposed of Transmission Facilities, and any costs
of total or partial demolition of the sold or otherwise disposed of Transmission
Facilities) from such sale or disposition exceed the greater of (i) the
investment in the entire Transmission Facilities (less any depreciation and
amortization to the date of sale or disposition) or (ii) the then total capital
of New Hampshire Hydro (as defined in Section 12), New Hampshire Hydro shall (a)
refund to the then current Participants, in proportion to their then current
Participating Shares, any such excess, and (b) credit to the accumulated
provision for depreciation and amortization

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related to the investment in the Transmission Facilities the investment in the
entire Transmission Facilities (less any depreciation and amortization to the
date of sale or disposition). The total capital of New Hampshire Hydro, for the
purposes of this section, may exceed the investment in the entire Transmission
Facilities (less any depreciation and amortization to the date of sale or
disposition) due to (1) any reserve for deferred income taxes paid by New
Hampshire Hydro or (2) for other reasons related to the investment in the
Transmission Facilities. If the Net Proceeds do not exceed the greater of (i) or
(ii) above, the Net Proceeds will be credited to the accumulated provision for
depreciation and amortization related to the investment in the Transmission
Facilities in lieu of payment to the Participants. The Participants agree to
flow through any such refunds to their customers and shall seek any necessary
regulatory approvals to reflect in their rates any such refunds and the effect
of any such credits to the accumulated provision for depreciation and
amortization related to the investment in the Transmission Facilities; except
that to the extent that a Participant’s customers’ rates have not reflected all
or a portion of that Participant’s share of the costs of the Transmission
Facilities, then that Participant agrees that a complete flow-through of such
refunds may not be appropriate and that particular Participant shall seek any
necessary regulatory approvals for the appropriate disposition of an appropriate
portion of such refunded amounts or credits.

IN WITNESS WHEREOF, the signatories have caused this Agreement to be executed by
their duly authorized officers or agents.

 
COMPANY

By:                     
   It’s President

   Address XXXXX
         XXXXX

VELCO SCHEDULE 1

Vermont Phase II Participant
 
1980
Kilowatthour
Load
 

Percentage  
Interest
 
 
 
 
 
Central Vermont Public 
   Service Corporation
 
1,895,922,200
 
58.1197
Citizens Utilities Company
 
184,496,600
 
5.6558
Franklin Electric Light 
   Company, Inc.
 
7,159,900
 
0.2195
Green Mountain Power 
   Corporation
 
1,174,519,500
 
36.0050

Schedule I
Vermont Electric Power Company, Inc.
Contracting Electric Systems

Central Vermont Public Service Corporation
Citizens Utilities Company
Franklin Electric Light Company, Inc.
Green Mountain Power Corporation

Schedule II
Massachusetts Municipal Wholesale Electric Company
Contracting Electric Systems
Massachusetts Systems

Town of Ashburnham Municipal Light Plant
Town of Georgetown Municipal Light Department
Town of Hull Municipal Lighting Plant
Town of Littleton Electric Light Department
Town of Mansfield Municipal Electric Department
Town of Marblehead Municipal Light Department
Town of Middleton Municipal Electric Department
Town of Paxton Municipal Light Department
Town of Templeton Municipal Lighting Plant

Rhode Island System

Pascoag Fire District

ATTACHMENT A
Except as provided below, if any participant does not receive required consents,
waivers, regulatory approvals, or other actions of governmental authorities
within the time period required by this Agreement, the listing of Participants
and 1980 kilowatthour load will be appropriately modified.
Participant
 
1980 Kilowatthour Load
 
 
 
 
 
The Connecticut Light and Power Company
 
16,002,437,000
 
Western Massachusetts Electric Company
 
3,252,432,000
 
Holyoke Water Power Company
 
106,905,000
 
Holyoke Power and Electric Company
 
0
 
New England Power Company
 
15,444,975,840
(a), (b)
Boston Edison Company (Edison)
 
9,531,773,000
(b), (c)
Central Maine Power Company
 
6,053,571,000
 
Public Service Company of New Hampshire
 
5,043,242,871
(d)
The United Illuminating Company
 
4,715,078,120
 
Vermont Electric Power Company
 
3,262,098,200
 
Canal Electric Company
 
3,227,553,000
 
Montaup Electric Company
 
3,096,872,000
(e)
Bangor Hydro-Electric Company
 
1,305,625,118
 
Connecticut Municipal Electric Energy Cooperative
 
718,177,538
 
UNITIL Power Corp.
 
609,873,261
(f)
Massachusetts Municipal Wholesale Electric Company
 
470,025,000
 
Town of Reading Municipal Light Department
 
401,795,000
 
Newport Electric Corporation
 
382,745,000
 
Fitchburg Gas and Electric Light Co.
 
369,055,118
 
Taunton Municipal Lighting Plant
 
307,460,361
 
City of Chicopee Municipal Lighting Plant
 
279,273,169
 
Town of Braintree Electric Light Department
 
267,289,000
 
City of Peabody Municipal Light Plant
 
245,010,000
 
City of Westfield Gas & Electric Light Department
 
219,026,000
 
City of Holyoke Gas & Electric Light Department
 
214,448,000
 
Town of Danvers Electric Department
 
206,806,000
 
Town of Shrewsbury Electric Light Department
 
146,303,000
 
Hudson Light and Power Department
 
127,808,000
 
Town of Wakefield Municipal Lighting Department
 
107,609,000
 
Town of Hingham Municipal Lighting
 
103,929,000
 
Town of South Hadley Electric Light Department
 
99,981,000
 
Town of North Attleborough Electric Department
 
93,816,000
 
Town of Middleborough Gas and Electric Department
 
92,081,000
 
Town of Holden Municipal Light Department
 
63,676,000
 
Town of West Boylston Municipal Lighting Department
 
43,974,000
 
Town of Sterling Municipal Electric Department
 
24,510,000
 
Town of Groton Electric Light Department
 
22,908,000
 
Town of Boylston Municipal Light Department
 
17,324,000
 
Town of Rowley Municipal Light Department
 
13,551,000
 
Princeton Municipal Light Department
 
7,130,000
 
Town of Concord Municipal Light Plant
 
0
(c)
 
 
 
 
 
 
76,698,146,596
 

 
(a)
Includes New Hampshire retail 1980 kilowatthour load of 434,290,243.

(b)
The 1980 Kilowatthour loads shown for Boston Edison Company and New England
Power Company have been adjusted to reflect the current status of Norwood as a
full requirements customer of New England Power Company.

(c)
As of June 1, 1985, Concord continues to be a full requirements customer of
Edison. At such time as Concord ceases to be a full requirements customer of
Edison, for purposes of this Agreement, Concord shall have an additional
Participating Share equal to 1.087% of Edison’s initial Participating Share
(based on a 1980 Kwh load of 103,629,000 Kwh for Concord) and Edison’s
Participating Share shall be reduced by such amount.

(d)
Includes New Hampshire retail 1980 kilowatthour load of 4,939,218,744.

(e)
The amount shown for Montaup Electric Company includes the load of the other
members of the Eastern Utilities Associates system.

(f)
The amount shown for UNITIL Power Corp. represents the 1980 kilowatthour load of
its affiliates, Concord Electric Company and Exeter & Hampton Electric Company.

ATTACHMENT B
Description of the Transmission Facilities
The Transmission Facilities will include the following:
(1)
the continuation of a single circuit ± 450 kV DC line on an existing
right-of-way from the Comerford Substation to the New Hampshire state line at
Hudson, a distance of 121 miles;

(2)
communication equipment located in New Hampshire; and

(3)
such other facilities in New Hampshire and Vermont as approved by the Advisory
Committee.

ATTACHMENT C
Forms of the following documentation:
1.    Opinion of Counsel
2.    Certificate
3.    Incumbency and Signature Certificate
4.    Directors’ Vote
[Please note - governmental entities may make appropriate modifications to these
documents to reflect that they are not corporations.]

[Form of Opinion of Counsel for Each Utility Participant]
New England Hydro-Transmission
    Electric Company, Inc.;
New England Hydro Transmission
    Corporation; or
New England Power Company

Gentlemen:
This opinion is furnished in connection with the execution and delivery by
         (the Company) of the following Agreements:                         .
We have acted as counsel to the Company, one of the Utility Participants, in
connection with the execution and delivery of the Basic Agreements. We
participated in reviewing and/or drafting the Agreements.
As general [special] counsel to the Company, we are generally familiar with its
affairs. [If special counsel is giving the opinion, describe relationship to the
Company.] We have reviewed the proceedings taken by the Company in connection
with its authorization, execution, and delivery of the Agreements and any
documentation supplied by the Company thereunder. We have also examined executed
counterparts of the Agreements, have made such other investigation, and have
examined such other records and documents, and have made such examination of law
and satisfied ourselves as to such other matters as we have deemed relevant and
necessary in order to enable us to express the opinions set forth below.
Based upon and subject to the foregoing and to the further qualifications in
this opinion, we are of the opinion that:
1.    The Company is a corporation duly organized, validly existing and in good
standing under the laws of [the jurisdiction of its incorporation], has the
corporate power to own its assets and to transact the business in which it is
engaged, and is duly qualified as a foreign corporation in, and is in good
standing under the laws of, each jurisdiction in which the conduct of its
business or the ownership of its assets requires such qualification.
2.    The Company has (and in the case of the Agreements at the time of
execution and delivery thereof, had) full corporate power, and legal right to
execute, deliver and perform the Agreements, and the Company has taken all
necessary corporate action to authorize the execution, delivery, and performance
by it of the Agreements.
3.    The execution, delivery, and performance by the Company of the Agreements
do not (a) contravene the Company’s [charter documents] or by-laws, (b) violate
any applicable law, rule, regulation, order, writ, judgment, injunction, decree,
or award known to us by which the Company is bound, (c) violate any indenture,
instrument, or agreement known to us by which the Company is bound, or (d)
result in or require the creation or the imposition of any lien pursuant to the
provisions of any indenture, instrument, or agreement known to us by which the
Company is bound.
4.    No authorization, approval, consent, or other action by, and no notice to
or filing with, any federal, state, or other governmental authority or
regulatory body which has not been obtained or given and is not in full force
and effect is required for the valid and lawful execution, delivery, and
performance by the Company of the Agreements. [In this connection, to the extent
it may be required by law, the approval of the Massachusetts Department of
Public Utilities [Connecticut PUC, or other] has been given for the Agreements
and the Company’s performance thereunder by order(s) dated             , which
remains in full force and effect.]
5.    The Agreements have each been duly executed and delivered by the Company
and constitute the legal, valid, and binding obligations of the Company
enforceable against it in accordance with their respective terms.
6.    No action, suit, proceeding, or investigation at law or in equity or by or
before any governmental instrumentality or other agency now pending or
threatened against or affecting the Company or its property or rights which, if
adversely determined, would materially impair the ability of the Company to
perform its obligations under the Agreements is known to us.
Our opinion that the Agreements are enforceable, each in accordance with the
terms thereof, is qualified to the extent that the enforcement of the rights and
remedies created thereby is subject to bankruptcy, insolvency, reorganization,
and similar laws of general application affecting the rights and remedies of
creditors and secured parties, and to the further extent that the availability
of the remedies of specific enforcement, injunctive relief, or any other
equitable remedy is subject to the discretion of the court before which any
proceeding therefor may be brought.
Very truly yours,

CERTIFICATE
I, (insert name), the Clerk (or Secretary or other principal recording officer)
of (insert name of Utility Participant), a (insert state of organization) (the
“Company”) do hereby certify that:
(1)    Attached hereto as Exhibit A is a true and correct copy of a vote duly
adopted at a meeting of the Board of Directors of the Company, duly called and
held on _______, ____, and that such vote and the authority vested thereby have
not been amended or revoked and are still in full force and effect.
(2)    Attached hereto as Exhibit B is a true and correct copy of the Articles
of Organization (or other charter documents) of the Company, as amended and in
effect as of the date of this Certificate.
(3)    Attached hereto as Exhibit C is a true and correct copy of the By-Laws of
the Company, as amended and in effect as of the date of this Certificate.
(4)    The persons (or person) listed on Exhibit D have been duly elected to the
offices set forth adjacent to their respective names since the first day of
June, 1985, and the signatures adjacent to their respective names are the
genuine signatures of said officers.
IN WITNESS WHEREOF, I have placed my hand and the seal of the Company this
                day of                 , ____.

 
By:                  

Name:
Title:

CONFIRMATION OF INCUMBENCY AND SIGNATURE OF
CLERK, SECRETARY. OR OTHER PRINCIPAL RECORDING OFFICER
I, (name), (title) of the Company, do hereby certify that (name of officer
executing certificate) is and at all times subsequent to             , ____, has
been the duly elected (title) of the Company and that the signature adjacent to
his (or her) name is the genuine signature of said officer.

 
By:                  

Name:
Title:

FORM OF DIRECTORS’ VOTE APPROVING AGREEMENTS
VOTED:
That in connection with this Company’s participation in the Phase II expansion
of the proposed interconnection between the New England Power Pool companies and
Hydro-Quebec, the execution and delivery on behalf of this Company by
                    , President, of the following agreements: (being
collectively referred to in this vote as “Agreements”) copies of which
Agreements have been presented at this meeting, are hereby authorized, approved,
ratified, and confirmed, and that the officers of this Company are further
authorized severally to take any and all such further actions including the
execution and delivery of such further documents, as such officers or any of
them may deem necessary or appropriate in connection with the actions and
documents authorized by this vote.

 

ATTACHMENT E
Subscription Process for Determining
Initial Participating Shares
After allocation of up to 10% of the Participating Shares pursuant to Section
4(B)(1) and (2), the remaining shares shall be allocated to Participants as
follows:
a.
Each Participant shall be entitled to a pro rata share of the remainder based on
its 1980 Kwh load as a percentage of all Participants’ 1980 Kwh loads.

b.
Upon execution of this Agreement, each Participant may subscribe for more or
less than its share under (a) above.

c.
If there are no undersubscriptions or oversubscriptions under (b) above or if
the sum of the shares under (a) or (b) above for all Participants equals 100% of
such remaining shares, then each Participant shall have a share as determined
under (a) or (b) above. For the purposes of this section, oversubscription shall
mean, with respect to any Participant, a subscription under (b) above of more
than its share under (a) above. For the same purposes, undersubscription shall
mean, with respect to any Participant, a subscription under (b) above of less
than its share under (a) above. The amount of such oversubscription shall be
equal to (b) minus (a) and the amount of such undersubscription shall be equal
to (a) minus (b).)

d
If there are undersubscriptions but no oversubscriptions or if there are
oversubscriptions but no undersubscriptions, then each Participant shall have a
share as determined under (a) above.

e
If the net result of subtracting the aggregate amount of all undersubscriptions
from the aggregate amount of all oversubscriptions is greater than zero, the
aggregate amount of all oversubscriptions must be reduced to the aggregate
amount of all undersubscriptions. This amount shall be referred to as the total
permitted amount of oversubscriptions. Each oversubscriber shall initially be
allocated a share of the total permitted amount of oversubscriptions (pro rata
by the 1980 kwh loads of the oversubscribers); provided that no oversubscriber
shall be allocated more than its requested amount under (b) above. Any remaining
unallocated portion of the total permitted amount of oversubscriptions shall be
allocated to all oversubscribers that have not yet reached their requested
amount under (b) above pro rata by the differences between their requested
amounts under (b) above and their amounts allocated thus far under this section
(d).

f.
If the net result of subtracting the aggregate amount of all oversubscriptions
from the aggregate amount of all undersubscriptions is greater than zero, the
aggregate amount of all undersubscriptions must be reduced to the aggregate
amount of all oversubscriptions. This amount shall be referred to as the total
permitted amount of undersubscriptions. The total permitted amount of
undersubscriptions shall be allocated to the undersubscribers pro rata by the
amounts of their undersubscriptions.

 

ATTACHMENT F
As a result of the support arrangements for building, owning, and financing the
Transmission Facilities, Equity Sponsors have provided credit support for the
project in excess of their Participating Shares. This enhances New Hampshire
Hydro’s ability to finance the project. The status of a Participant as a Credit
Enhanced Participant that receives credit enhancement or not will be determined
in connection with, and as of the date of commitment for, each debt financing,
including any construction financing, in accordance with Section 1 hereof, and
the Credit Enhancement Charge will be determined with respect to each such
financing and will continue to be paid as long as the financing is outstanding
and as long as any accrued unamortized Credit Enhancement Charges for said
Participant remain outstanding.
An “investment grade” Participant is defined in this Agreement as a Participant
which has outstanding junior long-term debt securities which have qualified debt
ratings by two of the three major rating agencies. An “investment grade”
Participant is also defined as a Participant which has a Participating Share of
four-tenths of one percent (0.4%) or less and which has outstanding junior
long-term debt securities having a rating from only one of the three major
rating agencies with that rating being a qualified debt rating. (For these
purposes, the outstanding junior long-term debt securities of a Participant
shall mean (i) its outstanding long-term debentures, or (ii) if no long-term
debentures are outstanding, its most junior outstanding long-term mortgage or
revenue bonds, or (iii) if no long-term debentures, mortgage bonds or revenue
bonds are outstanding, its most junior outstanding long-term debt.) “Qualified
debt ratings” are defined as a minimum rating of Baa3 by Moody’s Investors
Service, BBB- by Standard & Poor’s Corporation and D&P 10 by Duff & Phelps, Inc.
Any “substitute credit enhancement” shall mean, with respect to any New
Hampshire Hydro debt financing, including any construction financing (i) a
letter of credit from a commercial bank having capital, surplus, and undivided
profits of at least $250 million and a credit rating of “AA” or better in form
and substance satisfactory to New Hampshire Hydro or (ii) a credit support that
is equivalent to (i) above which is satisfactory in form and substance to New
Hampshire Hydro, or (iii) a guarantee from an Equity Sponsor which at that time
the guarantee is made satisfies the requirements to be an Equity Sponsor as set
forth in section 4 of the Equity Funding Agreements; provided that such
enhancement is irrevocable until the final maturity of such debt financing,
including any optional extensions thereof. The first time that a Participant
supplies substitute credit enhancement under this Agreement or under the Phase
II Massachusetts Facilities Support Agreement, the substitute credit enhancement
shall also cover such Participant’s share of the debt obligations of New England
Power Company and Boston Edison Company relating to their respective AC
Facilities and the term of such credit enhancement shall extend for the full
term of the then remaining depreciation period for the AC facilities supported
under such AC Facilities Support Agreements.
The principal amount of such substitute credit enhancement shall equal that
Participant’s Participating Share of the maximum amount of obligations under
such New Hampshire Hydro debt financing plus, if not already provided in
connection with any other debt financing of New Hampshire Hydro or New England
Hydro, that Participant’s Participating Share of the maximum amount of debt
obligations of New England Power Company and Boston Edison Company relating to
the AC Facilities as determined by New England Power and Boston Edison,
respectively.
For any substitute credit enhancement that covers that Participant’s
Participating Share of the debt obligations of Boston Edison Company and New
England Power Company relating to the AC Facilities, such substitute credit
enhancement shall provide for direct payment to New England Power and Boston
Edison, respectively, of the amounts included therein for covering such debt
obligations.
As compensation to Equity Sponsors for providing this additional credit support,
a Credit Enhancement Charge, as calculated in connection with each debt
financing is required to be paid by the Participants. If a Participant is a
Credit Enhanced Participant by reason of below-investment grade, withdrawn or
suspended debt ratings, the Credit Enhancement Charge attributed to that Credit
Enhanced Participant will be paid by all Participants with each Participant
paying its Participating Share thereof; provided, however, that if a Participant
is a Credit Enhanced Participant due to lack of debt ratings, the Credit
Enhancement Charge attributed to that Credit Enhanced Participant shall be paid
by such Participant.
The Credit Enhancement Charge (E) attributed to a Credit Enhanced Participant is
a dollar value determined monthly for each Credit Enhanced Participant by the
following formula:
phaseiinewhampshiretr_1.gif [phaseiinewhampshiretr_1.gif]

F =
the Credit Enhancement Change for each New Hampshire Hydro debt financing that
is credit enhanced for the Participant.

i =
a number from 1 to n representing each of New Hampshire Hydro debt financings.

n =
total number of such financings.

G =
the Participant’s Participating Share (in percent)

H =
the maximum outstanding amount of New Hampshire Hydro debt during the month
which was credit enhanced for such Participant

I =
debt premium (in percent) for the Credit Enhanced Participant as shown in the
following table:

Participant’s
Debt Rating*
I(%)
 
 
Below B3 or not rated
7.57
B3
5.32
B2
4.82
B1
4.32
Ba3
3.82
6a2
3.32
Ba1
2.82

* Debt rating shall be the lower of the two highest ratings assigned to the
Participant’s outstanding junior long-term debt securities by Moody’s, Standard
and Poor’s, and Duff & Phelps, converted to a Moody’s equivalent as measured at
the commitment date of such New Hampshire Hydro debt financing. If the
Participant has a Participating Share of four tenths of one percent (0.4%) or
less and has only one debt rating, then the debt rating for such Participant
shall be that rating converted to a Moody’s equivalent as measured at the
commitment date of such New Hampshire Hydro debt financing.
J =
an amount calculated as follows:

During the period from the Effective Date to the Date of Full Support Payment, J
shall equal 0 and the Credit Enhancement Charge calculated during such period
pursuant to the above formula shall be accrued for each Participant during such
period with interest calculated at New Hampshire Hydro’s AFDC rate. After the
Date of Full Support Payment, such previously accrued amount for such
Participant shall be treated as if it represented additional investment in the
Transmission Facilities relating only to such Participant. As a result J shall
include monthly amounts attributable to such Participant (whether or not it
continues to be a Credit Enhanced Participant after the Date of Full Support
Payment and whether or not the debt being enhanced continues to be outstanding)
representing amortization of such previously accrued amount (with amortization
over the period that the investment in the Transmission Facilities is being
amortized) plus one-twelfth of the composite percentage (as defined in Section
12 hereof) times the unamortized accrued amount plus a provision for income
taxes

ATTACHMENT G
FORM OF
EQUITY FUNDING AGREEMENT
FOR
NEW ENGLAND HYDRO-TRANSMISSION CORPORATION
This AGREEMENT dated as of June 1, 1985, is between New England
Hydro-Transmission Corporation (New Hampshire Hydro) and the New England
entities listed in Attachment A hereto. Those New England entities that have
executed this Agreement and that meet the further conditions for participation
and qualification hereunder are hereinafter referred to as Equity Sponsors or
individually as an Equity Sponsor. The Equity Sponsors are sometimes referred to
collectively herein, but their rights and obligations hereunder are several and
not joint as described in Section 6 hereof.
In consideration of the premises, the concurrent execution of the other Basic
Agreements hereinafter referred to, the mutual covenants hereinafter and therein
set forth, and other good and valuable consideration, receipt whereof is hereby
acknowledged, it is hereby agreed as follows:
Section 1.     Basic Understandings and Purpose
New England utilities are currently participating in the arrangements for the
Phase I interconnection planned by the New England Power Pool (NEPOOL) with
Hydro-Quebec, which is to consist of a ± 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
(hereinafter referred to as Phase I). The basic arrangements covering the
portion of Phase I in the United States are set forth in the New England Power
Pool Agreement, as amended (the NEPOOL Agreement) and three contracts among the
participants in Phase I as follows:
(1)    Vermont Transmission Line Support Agreement, dated as of December 1,
1981, as amended, with Vermont Electric Transmission Company, Inc.
(2)    Phase I Terminal Facilities Support Agreement, dated as of December 1,
1981, as amended, with New England Electric Transmission Corporation, and
(3)    Agreement With Respect To Use Of Quebec Interconnection, dated as of
December 1, 1981, as amended, including the restatement thereof in connection
with Phase II (this Agreement as restated to cover Phase II is hereinafter
referred to as the Use Agreement).
These Phase I interconnection facilities are currently under construction with
completion scheduled during 1986.
With the completion of arrangements for Phase I and the related contracts with
Hydro-Quebec, the members of NEPOOL have conducted studies of the benefits of an
expanded interconnection for NEPOOL with Hydro-Quebec (Phase II) and have
negotiated with Hydro-Quebec a firm energy arrangement to utilize the expanded
interconnection facilities.
The portion of Phase II in the United States will consist of an extension of the
Phase I DC transmission line from the proposed terminus of Phase I at the
Comerford Station through New Hampshire to a site in Massachusetts with
additional terminal facilities installed at that site to increase the total
transfer capacity between Hydro Quebec and NEPOOL from the 690 MW of Phase I to
approximately 2000 MW. Reinforcements to the existing AC transmission system of
New England Power and to certain AC facilities of Boston Edison Company will
also be required. The United States portion of the Phase II facilities will be
designated as pool-planned facilities in the same manner as the United States
portion of the Phase I facilities was so designated.
Each Equity Sponsor acknowledges that it has been represented on the Executive
and Planning Committees of NEPOOL that had responsibility for evaluating the
feasibility of Phase II and, through this representation, actively participated
in the decision of NEPOOL to go forward with Phase II. Furthermore, each Equity
Sponsor represents that it made its own independent investigations and inquiries
as it deemed appropriate and did not rely upon representations (other than those
contained in this Agreement) of New England Hydro or its affiliates in deciding
to enter into this Agreement.
The share of benefits among the New England utilities associated with Phase II
is set forth in the Use Agreement. The Use Agreement also permits each New
England utility to make its own entitlement transactions with Hydro Quebec and
to use the interconnection for such transactions.
The provisions of the Phase II Massachusetts Transmission Facilities Support
Agreement (Massachusetts HVDC Support Agreement) cover the Phase II
Massachusetts HVDC transmission line and terminal facilities in Massachusetts.
New England Hydro-Transmission Electric Company, Inc. (New England Hydro) will
build, own, operate, and maintain those Massachusetts HVDC transmission
facilities.
The portion of the Phase II HVDC transmission line to be constructed in New
Hampshire is covered under the Phase II New Hampshire Transmission Facilities
Support Agreement (New Hampshire HVDC Support Agreement). New Hampshire Hydro
will build, own, operate, and maintain those New Hampshire HVDC transmission
facilities.
All improvements and reinforcements to the AC transmission system in
Massachusetts necessitated by Phase II are covered under the Phase II New
England Power AC Facilities Support Agreement (New England Power AC Support
Agreement) and the Phase II Boston Edison AC Facilities Support Agreement
(Boston Edison AC Support Agreement.
The provisions of this Agreement cover the commitments of the Equity Sponsors of
New Hampshire Hydro to contribute equity funds to New Hampshire Hydro, to
provide certain limited credit support in connection with debt financing of New
Hampshire Hydro and to accept an allocation of a share of Phase II in the event
of a default by certain participating New England utilities under certain other
Basic Agreements.
In view of the need to formalize the agreements among the parties at an early
date so that (i) binding commitments with Hydro Quebec for Phase II may be made,
(ii) binding commitments for ultimate construction and the financing of the
United States portion of Phase II may be undertaken consistent with the time
schedule anticipated by NEPOOL and with the assurance that commitments among the
New England utilities are in place, and (iii) licensing activities may proceed
on a schedule that enables completion of such construction consistent with the
time schedule anticipated by NEPOOL, the following agreements are concurrently
being entered into (the “Basic Agreements”) which collectively set forth rights
and obligations with respect to the foregoing undertaking: (1) this Agreement,
(2) the Massachusetts HVDC Support Agreement; (3) the New Hampshire HVDC Support
Agreement; (4) the Equity Funding Agreement for New England Hydro; (5) the New
England Power AC Support Agreement; (6) the Use Agreement; (7) various
amendments to the NEPOOL Agreement relating to the sharing of savings,
capability responsibilities, and Pool transmission arrangements; and (8) the
Boston Edison AC Support Agreement.
In order to coordinate each participating utility’s interest in Phase II to the
fullest extent possible, each of the following Basic Agreements have been
drafted with the intent that the participating interest of each participating
utility will be the same under each agreement: the Massachusetts HVDC Support
Agreement, the New Hampshire HVDC Support Agreement, the New England Power AC
Support Agreement, the Boston Edison AC Support Agreement, and the Use
Agreement. These Basic Agreements also provide that, notwithstanding any
provision thereof that may be interpreted to the contrary, the proper
interpretation of each of these Basic Agreements is to be consistent with such
overriding intent. Each Equity Sponsor acknowledges this overriding intent and
agrees that any action by it or its appointee affecting such participating
interests shall be the same under this Agreement and the Equity Funding
Agreement with New England Hydro in order to also be consistent with such
overriding intent.
Section 2.     Conditions Precedent to Effectiveness
The effectiveness of this Agreement, and all rights, obligations, and
performance of the signatories hereunder, is subject to (i) New England Electric
System (NEES) and other signatories having executed this Agreement committing in
the aggregate to Equity Shares (as hereinafter defined) equal to at least 100%,
and each such signatory having demonstrated by December 30, 1985, to the
satisfaction of New Hampshire Hydro that is qualified to be an Equity Sponsor
pursuant to Section 4, (ii) New England Hydro or New Hampshire Hydro or New
England Power or Boston Edison and members of NEPOOL (including Boston Edison
and New England Power) serving at least 66-2/3% of the aggregate kilowatthour
load served by NEPOOL members in 1980 having executed the other Basic Agreements
(except for the Equity Funding Agreement for New England Hydro and the
amendments to the NEPOOL Agreement), (iii) each signatory having also executed
the Equity Funding Agreement for New England Hydro and having the same
percentage of New England Hydro’s equity as its Equity Share hereunder, (iv)
members of NEPOOL having executed the amendments to the NEPOOL Agreement for
Phase II in order that such amendments may become effective in accordance with
the NEPOOL Agreement, and (v) each signatory having satisfied the conditions
precedent set forth below.
By June 1, 1986, each signatory to this Agreement shall provide certificates and
legal opinions from counsel satisfactory to New Hampshire Hydro, together with
certified copies of related resolutions, consents, approvals, authorizations,
and other documents (Documentation) necessary to establish to the satisfaction
of New Hampshire Hydro that all corporate and regulatory consents, waivers,
approvals, authorizations and other actions necessary in connection with
performance by such signatory of its obligations under the Agreement have been
obtained and are in full force and effect, that the Agreement has been duly
authorized, executed, and delivered by such signatory, and that it constitutes a
binding commitment by the signatory enforceable in accordance with its terms.
Forms of Documentation acceptable to New Hampshire Hydro are included in
Attachment B hereto. Prior to signing this Agreement, each signatory has
provided to New Hampshire Hydro a listing of all consents, waivers, approvals,
authorizations, and other actions required for that signatory to deliver its
Documentation.
Vermont Electric Power Company, Inc. (VELCO) and Massachusetts Municipal
Wholesale Electric Company (MMWEC) represent a number of electric systems. If
they desire and are qualified to be Equity Sponsors, they shall be deemed to
have signed on behalf of those respective systems listed in Schedules I or II,
respectively. By March 1, 1986, VELCO and MMWEC will provide New Hampshire Hydro
with copies of contracts with their respective systems which impose absolute and
unconditional obligations on such systems to pay their proportionate shares of
all costs or obligation incurred under this Agreement by VELCO or MMWEC,
respectively. By that date, VELCO and MMWEC will also provide to New Hampshire
Hydro as part of their Documentation certificates, legal opinions (from counsel
satisfactory to New Hampshire Hydro), and other documents in form and substance
satisfactory to New Hampshire Hydro representing unconditionally that all
consents, approvals, and authorizations have been obtained by their contracting
systems in connection with each such system’s performance of its obligations
under its respective contract with VELCO or MMWEC and that each such contract
imposes absolute and unconditional obligations on such systems to pay their
proportionate shares of all costs incurred under this Agreement by VELCO or
MMWEC, respectively, and has been duly authorized, executed, and delivered and
is a binding commitment of such system enforceable in accordance with its terms.
If regulatory approvals have not been obtained by March 1, 1986, such
representations shall be conditioned upon receipt of regulatory approvals. VELCO
and MMWEC will have until June 1, 1986, to receive such approvals and make such
representations unconditionally. In order that percentages of participation be
consistent among the Basic Agreements, VELCO and MMWEC shall have their
contracts with their contracting systems cover the necessary commitments for
each Basic Agreement.
All expenses in connection with obtaining and delivering any Documentation under
this Agreement, including legal opinions, are to be borne by the signatory
incurring such expense. New Hampshire Hydro will have no responsibility for any
expenses incurred by VELCO and MMWEC in providing Documentation for their
respective contracting systems.
Any signatory that fails to meet the requirements of Section 2 by the deadlines
contained herein will not be an Equity Sponsor under this Agreement and will not
have any rights and obligations hereunder.
New Hampshire Hydro by written notice to all signatories may extend any deadline
date specified in this Section to a later date, provided that any extension for
longer than six months requires the consent of the Advisory Committee under the
New Hampshire HVDC Support Agreement.
Section 3.     Effective Date and Term
This Agreement shall become effective (the Effective Date) upon the last to
occur of the following dates:
(i)    the date that the Equity sponsors, committing in the aggregate to Equity
Shares (as hereinafter defined) equal to at least 100%, have met the
requirements of Section 2; and
(ii)    the date that the last of the other Basic Agreements (excluding the Use
Agreement) becomes effective or would become effective but for a condition that
its effectiveness is subject to this Agreement becoming effective.
Upon execution and delivery of the Agreement by New Hampshire Hydro and NEES and
other signatories committing in the aggregate to Equity Shares (as hereinafter
defined) equal to no less than 100%, and notwithstanding any provision herein to
the contrary, no signatory may terminate its obligations hereunder except in
accordance with provisions of this Agreement.
The term of this Agreement shall expire on termination date of the New Hampshire
HVDC Support Agreement.
Section 4.     Equity Sponsor Qualification
A.    In order to enhance New Hampshire Hydro’s ability to finance its portion
of Phase II as required under the Massachusetts HVDC Support Agreement and to
enhance the credit support of certain Supporters under the AC Support Agreement,
some or all of the New England utilities participating in Phase II whose credit
ratings are at least one grade above the lowest investment grade have agreed to
provide, or to cause their designees to provide, credit support for those New
England utilities participating in Phase II whose credit ratings are below
investment grade. NEES and those New England utilities or their designees which
have agreed to provide this credit support are the Equity Sponsors of New
Hampshire Hydro under this Agreement.
B.    A Participant under the New Hampshire HVDC Support Agreement or its
authorized designee qualifies to be an Equity Sponsor by having its outstanding
long-term debentures rated at least one grade above the lowest investment grade
rating as of September 1, 1985. If no long-term debentures are outstanding, the
ratings used shall be those of such company’s most junior long-term mortgage or
revenue bonds. If no mortgage bonds, revenue bonds, or debentures are
outstanding, the ratings used shall be those of the most junior long-term debt.
VELCO shall qualify to be an Equity Sponsor if 80% or more of its common stock
is owned by utilities whose debt securities qualify pursuant to this subsection
4(B).
For purposes of this Agreement, “one grade above the lowest investment grade
rating” means a rating equal to the following ratings from two of these rating
agencies: Standard and Poor’s Corporation - Rating BBB; Moodys Investor Service
- Rating Baal; and Duff & Phelps - Rating D&P 9 (or the equivalent municipal
ratings).
C.    A “designee” shall be authorized to be an Equity Sponsor if it is a parent
company of such Participant and (i) its debt securities meet the appropriate
test specified in B above, or (ii) at least 80% of its consolidated utility
revenues are derived from subsidiaries whose debt securities meet the
appropriate test specified in B above. (For VELCO, each stockholder of VELCO
shall be a parent company of VELCO.) On or before the date of execution of this
Agreement, each Participant shall identify its designee, if any.
D.    In order that the necessary credit enhancement is provided as specified in
A above, the qualification of each Equity Sponsor shall be reviewed by New
Hampshire Hydro as of the date that the first equity contributions are to be
made by such Equity Sponsor. If an Equity Sponsor fails to qualify on such date,
appropriate actions and allocations shall be instituted as provided elsewhere in
this Agreement.
Section 5.     Equity Shares
A.    Each Equity Sponsor shall have and be charged with a percentage interest
in all rights and obligations hereunder determined in accordance with this
Section 5 (which interest is hereinafter referred to as its “Equity Share”). All
of the equity of New Hampshire Hydro will be owned by the Equity Sponsors in
proportion to their Equity Shares.
The Equity Share of each Equity Sponsor shall be computed both initially and as
changed from time to time in accordance with the terms hereof, by New Hampshire
Hydro as hereinafter provided. Such computations shall be made as of the first
day of any month in which there is a change in the number of Equity Sponsors or
any change in the interest of any Equity Sponsor as herein provided. The initial
computation is to be made as of September 15, 1985, and subsequent computations
are to be made in any month thereafter in which an interest is modified or
terminated due (i) to the failure of a signatory to provide proof that it is
qualified to be an Equity Sponsor by December 30, 1985, or (ii) to the failure
to provide Documentation by June 1, 1986, or (iii) to the failure to be so
qualified on the date the first equity contributions are to be made by such
Equity Sponsor, or (iv) to the operation of any provision of this Agreement. All
computations shall be final unless there is a manifest error. Such computations
of Equity Sponsors’ Equity Shares as initially calculated and as changed under
(i) and (ii) shall be made pursuant to Attachment C. Changes under (iii) shall
be made pursuant to section 5(C) below, and changes under (iv) shall be made
pursuant to the appropriate section requiring the change.
B.    The Equity Shares on and as of the initial computation date, and as of the
date of subsequent computations under subparts (i) and (ii) of the second
paragraph of A above, will be calculated as follows:
1.
51% to NEES; and

2.
49% apportioned among the other Equity Sponsors on the basis of the subscription
process as described in Attachment C.

(Attachment C provides that each Equity Sponsor may specify a maximum percentage
of equity and that such maximum shall remain in effect until June 1, 1986 or
such later deadline if extended pursuant to Section 2 hereof.)
C.    On the basis of New Hampshire Hydro’s review of the qualifications of each
Equity Sponsor other than NEES as of the date that the first equity
contributions are to be made by such Equity Sponsor, if one or more Equity
Sponsors are no longer qualified under Section 4, (i) the aggregate Equity
Shares of such unqualified Equity Sponsors shall first be offered in writing by
New Hampshire Hydro to all then qualified Equity Sponsors other than NEES for
voluntary subscription, (ii) second, any remaining shortfall shall be allocated
pro rata among such qualified Equity Sponsors not including NEES in proportion
to their Equity Shares determined as of June 1, 1986, provided that the
aggregate of all involuntary allocations under this Section 4(C) to such
qualified Equity Sponsors shall not exceed an aggregate Equity Share of 10%, and
further provided that the aggregate of all such involuntary allocations to any
such Equity Sponsor shall not increase such Equity Sponsor’s Equity Share
determined as of June 1, 1986, by more than 25% thereof, and (iii) finally, any
remaining shortfalls shall be retained pro rata by such no longer qualified
Equity Sponsors in proportion to their Equity Shares determined as of June 1,
1986; provided, however, that NEES and all qualified Equity Sponsors may agree
to other allocation arrangements; and further provided that NEES shall not have
an Equity Share of less than 51% unless it so consents. (The above deadlines of
June 1, 1986 may be extended to a later deadline pursuant to Section 2 hereof.)
All offerings above shall be made in accordance with a voluntary subscription
process as specified in New Hampshire Hydro’s offering letter, and any
oversubscriptions will be treated as provided therein.
Section 6.     Relationship Among Equity Sponsors
The rights and obligations of the Equity Sponsors hereunder are several, in
accordance with their respective Equity Shares, and not joint. The rights and
obligations of New Hampshire Hydro hereunder are also several and not joint with
those of the Equity Sponsors or any one thereof. There is no intention to create
by this Agreement, or by any grant, lease, license, or activity related hereto,
an association, joint venture, trust, or partnership or to impose on New
Hampshire Hydro or any Equity Sponsor trust or partnership rights or
obligations; and any such implied intention is expressly negated. Except as
expressly provided in this Agreement, no Equity Sponsor shall have by virtue of
this Agreement or of any such grant, lease, license, or activity the right or
power to bind any other Equity Sponsor without its express written consent.
Section 7.     Equity Contribution
A.    Under the Massachusetts HVDC Support Agreement, New England Hydro has
agreed to limit its equity investment to a maximum of 40% of its total capital
as of the effective date of that agreement and has agreed to use its best
efforts to continue to limit its equity investment to 40% of its total capital
during the time that New Hampshire Hydro has outstanding debt in its capital
structure.
New Hampshire Hydro may call from time to time by written notification upon the
Equity Sponsors to contribute equity in any of the forms set forth in this
Section up to a maximum aggregate amount of $90 million, provided that Equity
Sponsors having 66-2/3% of Equity Shares may agree to increase this maximum
aggregate amount; and then all Equity Sponsors shall contribute such requested
amount with each Equity Sponsor contributing up to its Equity Share of the new
maximum. Any contribution made in response to New Hampshire Hydro’s call in
excess of the maximum aggregate amount, as adjusted from time to time, may be
made on a voluntary basis by any contributing Equity Sponsor, and New Hampshire
Hydro will make an appropriate adjustment in Equity Shares.
B.    During the term of this Agreement, New Hampshire Hydro has the option from
time to time to call for contribution of equity in any of the following forms:
(1)    New Hampshire Hydro may offer shares of its common stock to its Equity
Sponsors and each Equity Sponsor shall subscribe for and purchase, for cash at a
price set by New Hampshire Hydro, its Equity Share of the common stock so
offered.
(2)    After each Equity Sponsor owns common stock of New Hampshire Hydro, New
Hampshire Hydro may request that capital contributions be made, and each Equity
Sponsor shall contribute to New Hampshire Hydro its Equity Share of the total
capital contribution so requested.
C.    In order that New Hampshire Hydro may limit its equity investment to a
maximum of 401 of its total capital, New Hampshire Hydro may, at its option,
from time to time, take any of the following actions:
(1)    New Hampshire Hydro may repurchase for cash its common stock from Equity
Sponsors in amounts that will not change the relative Equity Shares among Equity
Sponsors and at a price per share equal to book value per share at the time of
repurchase. Each Equity Sponsor shall sell such common stock to New Hampshire
Hydro in the full amount so requested.
(2)    New Hampshire Hydro may return any capital contribution previously
received from Equity Sponsors in amounts that will not change the relative
Equity Shares among Equity Sponsors. Each Equity Sponsor shall accept such
return of capital contribution in the full amount so returned.
(3)    New Hampshire Hydro may pay dividends out of earnings or make liquidating
dividends to the Equity Sponsors.
D.    New Hampshire Hydro shall give written notice of any call for
contributions of equity under B above to each Equity Sponsor. Such notice shall
specify the amount to be contributed, the form of the contribution, and a date,
at least thirty days after the date of the notice, that the equity is to be
contributed. New Hampshire Hydro will provide annually estimates of its equity
requirements and estimated dates when any equity contributions hereunder will be
due. New Hampshire Hydro shall give written notice of any action to reduce its
equity under C above to each Equity Sponsor. Such notice shall specify the
amount and form of the reduction and a date, at least fifteen days after the
date of the notice, that the reduction in equity is to occur.
E.    New Hampshire Hydro shall use the proceeds of any equity contribution
under this Agreement for the sole purpose of meeting its capital requirements
under the New Hampshire HVDC Support Agreement.
F.    All transactions under B, up to a maximum aggregate amount of $90 million,
and under C above shall be subject to receipt of all necessary regulatory
approvals, and New Hampshire Hydro and the Equity Sponsors shall use their best
efforts to obtain, or to assist in obtaining, these approvals in advance of the
Effective Date.
G.    New Hampshire Hydro shall have two classes of common stock, both of which
will have the same preferences, qualifications, special or relative rights or
privileges, except that only one class shall have voting powers. Equity Shares
allocated to NEES shall be evidenced by voting common stock. The Equity Shares
allocated to each other Equity Sponsor shall, at the option of such Equity
Sponsor, be evidenced by shares of voting common stock or non-voting common
stock. Any reallocation of Equity Shares pursuant to Section 5 hereof shall be
effected in such manner as to involve the issuance of additional common stock to
each Equity Sponsor of the class then held by such Sponsor. Such election to
take voting or non-voting stock shall be made in writing to New Hampshire Hydro
by December 31, 1985.
H.    Notwithstanding any provision of this Agreement to the contrary, prior to
the date that New Hampshire Hydro first calls for equity contributions from all
Equity Sponsors, all equity of New Hampshire Hydro will be owned and contributed
by NEES.
Section 8.     Cash Deficiency Guarantee
A.    The New Hampshire HVDC Support Agreement provides that, if New Hampshire
Hydro has, on any Due Date, a Cash Deficiency attributed to a Participant, the
Participant absolutely and unconditionally guarantees to pay its Cash Deficiency
on demand of Lenders. (The commitment is made in section 19 of that Agreement.)
To provide further credit support to New Hampshire Hydro, each Equity Sponsor
absolutely and unconditionally guarantees to pay its then Equity share of the
Cash Deficiency attributed to any Credit Enhanced Participant (as defined in the
New Hampshire HVDC Support Agreement) with respect to any third party debt
financing of New Hampshire Hydro that was credit enhanced for such Participant,
with such amounts to be paid directly on demand to Lenders, in cash, if for any
reason a Credit Enhanced Participant fails to pay when due its Cash Deficiency
on demand of Lenders. Each Equity Sponsor agrees that its obligations under this
Section shall be continuing, absolute, and unconditional and without the benefit
of any defense, claim, set-off, recoupment, abatement, or other right, existing
or future, which an Equity Sponsor may have against the Lenders, New Hampshire
Hydro, or any other person, and shall remain in full force and effect until all
of the obligations of New Hampshire Hydro to the Lenders have been discharged.
Each Equity Sponsor hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of merger or bankruptcy of any Lender
or New Hampshire Hydro or any other Equity Sponsor, protest or notice with
respect to this guarantee, and covenants that the obligations contained in this
guarantee will not be discharged except by complete performance of the
obligations of New Hampshire Hydro to the Lenders.
B.    Notwithstanding any other provision contained herein, each Equity
Sponsor’s obligations under this Section 8 shall be limited to its Equity Share
of the Cash Deficiency attributed to any Credit Enhanced Participant with
respect to any financing of any New Hampshire Hydro that was credit enhanced for
such Participant.
C.    In no event shall the several guarantees of the Equity Sponsors
attributable to Credit Enhanced Participants for each debt financing of New
Hampshire Hydro exceed in the aggregate 35% of the aggregate amount of the
obligations relating to such financing, provided that Equity Sponsors having an
aggregate of at least 80% of the Equity Shares may agree to exceed such 35%
maximum and subject to receipt of any necessary regulatory approvals, such
agreement shall be binding on all Equity Sponsors.
D.    In no event shall Equity Sponsors be required to provide guarantees for a
Participant with respect to a particular third party debt financing of New
Hampshire Hydro if that would result in Credit Enhanced Participants with
respect to that and all other outstanding financings of New England Hydro and
New Hampshire Hydro having Participating Shares exceeding 35% under the New
Hampshire HVDC Support Agreement, provided that Equity Sponsors having an
aggregate of at least 80% of the Equity Shares may agree to exceed such 35%
maximum and subject to receipt of any necessary regulatory approvals, such
agreement shall be binding on all Equity Sponsors.
E.    Each Equity Sponsor shall use its best efforts to obtain and assist others
in obtaining all necessary regulatory approvals required for the several
guarantees made in this Section.
Section 9.     Acceptance of Participating Shares
A.    In accordance with section 15 of the New Hampshire HVDC Support Agreement,
if a Participant that is a Credit Enhanced Participant is terminated by New
Hampshire Hydro as a Participant, each Equity Sponsor or its appointee shall be
allocated by New Hampshire Hydro its then Equity Share of the Participating
Share of such terminated Participant; such allocation to be made as of the date
of such termination. Each Equity Sponsor or its appointee shall accept such
allocation from New Hampshire Hydro and shall unconditionally and absolutely
assume the rights and obligations associated therewith from the date of such
allocation. If a Participant that was not also a Credit Enhanced Participant is
terminated, then acceptance of any allocation shall be voluntary by any Equity
Sponsor or its appointee and shall be in accordance with New Hampshire Hydro’s
offer thereof. If required by New Hampshire Hydro, any Equity Sponsor or its
appointee assuming rights and obligations under the Massachusetts HVDC Support
Agreement shall execute and deliver any documents necessary to effectuate such
assumption. If any Equity Sponsor that is the designee of a Participant is
unable to deliver these documents to effectuate the assumption, such Equity
Sponsor shall take all actions necessary for the Participant that so designated
it as an Equity Sponsor to assume such rights and obligations as its appointee.
The appointee of NEES shall be New England Power Company. The appointee(s) of
any other Equity Sponsor shall be the Participant(s) for which such Equity
Sponsor was acting as a designee. Each Equity Sponsor agrees that if its
appointee is allocated a Participating Share under the New Hampshire HVDC
Support Agreement, such Equity sponsor shall also allocate to it an equal
participating share and support share under the Massachusetts HVDC Support
Agreement and New England Power and Boston Edison AC Support Agreements,
respectively.
B.    Each Equity Sponsor shall use its best efforts to obtain and assist others
in obtaining all necessary regulatory approvals required for performance of its
or its appointee’s commitments made in this Section.
Section 10.     Character of Payment Obligations
The obligations of each Equity Sponsor to make payments hereunder, and to
perform and observe all other agreements on its part contained herein, are
absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, (i) any insolvency, composition, bankruptcy,
reorganization, arrangement, liquidation or similar proceedings relating to New
Hampshire Hydro, New England Power Company, Boston Edison Company, the Equity
Sponsor, any other Equity Sponsor, or any affiliate thereof, (ii) any invalidity
or unenforceability or disaffirmance by New Hampshire Hydro or any Equity
Sponsor of any provision of this Agreement or any failure, omission, delay, or
inability of New Hampshire Hydro to perform any of its obligations contained
herein, (iii) any amendment, extension, or other change of, or any assignment or
encumbrance of any rights or obligations under, this Agreement, or any waiver or
other action or inaction, or any exercise or nonexercise of any right or remedy,
under or in respect to this Agreement, or (iv) any inability of the Equity
Sponsor or any other Equity Sponsor to obtain regulatory approvals for financing
its Equity Share of any obligations under this Agreement or for meeting any
other obligations under this Agreement, it being the intention of the parties
hereto that all amounts payable by each Equity Sponsor in respect of this
Agreement shall begin to be payable and shall continue to be payable in all
events in the manner and at the time herein provided. In that connection, each
Equity Sponsor hereby waives, to the extent permitted by applicable law, any and
all rights which it may now have or which may at any time hereafter be conferred
upon it, by statute or otherwise, to terminate, cancel, or surrender any of its
obligations under this Agreement.
Section 11.     Default
A.    Any of the following events (Events of Default) that occur and are
continuing are Events of Default:
(i)    An Equity Sponsors shall fail to pay to New Hampshire Hydro when due any
amount which it has agreed to pay under any provision of this Agreement, and
such failure shall continue for more than 15 days after written notice thereof
has been given to such Equity Sponsor by New Hampshire Hydro; or
(ii)    Any Equity Sponsor shall fail to supply in accordance with the terms
hereof any documentation required by New Hampshire Hydro in connection with
financing with Lenders by New Hampshire Hydro (for VELCO and MMWEC, this
includes documentation for their respective contracting electric systems), and
such failure shall continue for more than 30 days after written notice of such
failure has been given to such Equity Sponsor by New Hampshire Hydro; or
(iii)    An Equity Sponsor shall fail to perform any other obligation under this
Agreement in accordance with the terms hereof, and such failure shall continue
for more than 30 days after written notice thereof has been given to such Equity
Sponsor or any of its affiliates by New Hampshire Hydro.
(iv)    Any Equity Sponsor shall experience an event of default under the Equity
Funding Agreement for New Hampshire Hydro.
B.    If an Event of Default under Section 12A(i) above shall have occurred, New
Hampshire Hydro may, by written notice to each Equity Sponsor, request that the
nondefaulting Equity Sponsors on a voluntary basis make the overdue payment to
New England Hydro, provided that similar voluntary payments are made under the
Equity Funding Agreement for New Hampshire Hydro.
C.    New Hampshire Hydro or any Equity Sponsor shall be free to invoke such
remedies at law or in equity as may be deemed appropriate against any Equity
Sponsor that defaults under this Agreement.
Section 12.     Restrictions on Transfer of Common Stock
Each Equity Sponsor agrees that it will not transfer any or all of its common
stock of New Hampshire Hydro to any other person unless such person is an Equity
Sponsor or meets the requirements for being an Equity Sponsor under sections 4B
or 4C hereof as of the date of such transfer and a similar transfer is made
under the Equity Funding Agreement for New Hampshire Hydro.
Section 13.     Dividends on Common Stock
Any Equity Sponsor may direct New England Hydro to withhold the payment of a
dividend to such Equity Sponsor and apply such dividend to reduce the current or
the next Support Charge payment required to be made under the New Hampshire HVDC
Support Agreement by such Equity Sponsor or its appointee.
Section 14.     Restrictions on Dividends. Return of Capital and Repurchase of
Common Stock
Any Equity Sponsor which is in default hereunder pursuant to Section 11 is not
entitled to receive any amounts from New Hampshire Hydro representing such
Equity Sponsor’s then Equity Share of dividends, return of capital, or proceeds
from any repurchase of common stock until all amounts (including interest
thereon at an annual rate equal to two percent over the current interest rate on
prime commercial loans from time to time in effect at the principal office of
the First National Bank of Boston) owed by such Equity Sponsor to New Hampshire
Hydro have been paid.
Section 15.     Certain Actions of New Hampshire Hydro
A.    New Hampshire Hydro shall not take any of the following actions without
prior written approval of Equity Sponsors having at that time at least 80% of
the Equity Shares:
(i)    Amend New Hampshire Hydro’s articles of organization or by-laws to
adversely affect the rights of the Equity Sponsors as stockholders in a material
manner under the Basic Agreements, unless such amendment is required by
regulation or law; and
(ii)    Merge, consolidate, or sell all or substantially all of the assets of
New Hampshire Hydro not otherwise permitted by the New Hampshire HVDC Support
Agreement.
B.    New Hampshire Hydro shall distribute in a timely manner to each Equity
Sponsor copies of (a) its annual audited financial statements, (b) notices of
all of its directors’ and stockholders’ meetings (including any committees
thereof), and (c) minutes of all of its directors’ and stockholders’ meetings.
Section 16.     Miscellaneous
A.    Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of, and may be performed by, the successors and assigns of
the parties and shall also be binding, insofar as permitted by law, on any
receiver or trustee in bankruptcy, receivership, or reorganization of any party.
No assignment of this Agreement shall operate to relieve the assignor of its
obligations under this Agreement without the written consent of the parties
hereto. Written notice to all parties will be given prior to any assignment
hereunder.
Notwithstanding the above, New Hampshire Hydro may collaterally assign this
Agreement without the consent of the Equity Sponsors in connection with a third
party financing by New Hampshire Hydro.
B.    Right of Setoff. No Equity Sponsor shall be entitled to set off against
the payments required to be made by it hereunder (1) any amounts owed to it by
New Hampshire Hydro, any affiliate of New Hampshire Hydro, or any other Equity
Sponsor, or (2) the amount of any claim by it against New Hampshire Hydro, any
affiliate of New Hampshire Hydro, or any other Equity Sponsor. However, the
foregoing shall not affect in any other way any Equity Sponsor’s rights and
remedies with respect to any such amounts owed to it by New Hampshire Hydro, any
affiliate of New Hampshire Hydro, or any other Equity Sponsor or any such claim
by it against New England Hydro or any other Equity Sponsor.
C.    Amendments. Any amendments changing the Equity Shares of the Equity
Sponsors or the several nature of the obligations and rights of the Equity
Sponsors hereunder as specified in Section 6, shall require consent by all
parties. In the event that an Equity Sponsor is obligated to acquire Equity
Shares hereunder and does not pay for such Shares, then such Shares will not be
issued to him and such Equity Sponsor’s Equity Share will be reduced
accordingly. All other amendments to this Agreement shall be by mutual agreement
of New Hampshire Hydro and Equity Sponsors owning Equity Shares aggregating at
least 80%, evidenced by a written amendment signed by New Hampshire Hydro and
such Equity Sponsors; and New Hampshire Hydro and all Equity Sponsors shall be
bound by any such amendment.
D.    Notices. Except as the parties may otherwise agree, any notice, request,
bill, or other communication relating to this Agreement, or the rights,
obligations or performance of the parties hereunder, shall be in writing and
shall be considered as duly delivered when delivered in person or mailed by
registered or certified mail, postage prepaid, to the respective post office
address of the other parties shown following the signatures of such other
parties hereto, or such other address as may be designated by written notice
given as provided in this paragraph D.
E.    Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of The Commonwealth of Massachusetts.
F.    Other.
(1)    No action, regardless of form, arising out of this Agreement may be
brought by any party hereto more than three years after the cause of action has
arisen.
(2)    In the event that any clause or provision of this Agreement, or any part
thereof, shall be declared invalid or unenforceable by any court having
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remaining portions of this Agreement.
(3)    All provisions of this Agreement providing for limitation of, or
protection against, liability shall apply to the full extent permitted by law,
and regardless of fault, and shall survive either termination pursuant to this
Agreement or cancellation.
(4)    Each party shall, upon request of another party, execute and deliver any
document reasonably required to implement any provision hereof.
(5)    Any number of counterparts of this Agreement may be executed and each
shall have the same force and effect as the original.
(6)    This Agreement, with the other Basic Agreements, Preliminary Quebec
Interconnection Support Agreement - Phase II, the agreements with Hydro-Quebec
regarding Phase II, and the basic agreements covering Phase I shall constitute
the entire understanding among the parties and shall supersede any and all
previous understandings pertaining to the subject matter of this Agreement.
(7)    Terms defined in the Massachusetts HVDC Support Agreement and the New
England Power and Boston Edison AC Support Agreements used in this Equity
Funding Agreement shall be incorporated herein as defined in such Agreements
unless the context indicates otherwise.
(8)    This Agreement is the act and obligation of the parties hereto in their
corporate or governmental capacity, and any claim hereunder against any
shareholder, director, officer, employee, or agent of any party, as such, is
expressly waived.

IN WITNESS WHEREOF, the signatories have caused this Agreement to be executed by
their duly authorized officers or agents.

 
COMPANY

By:                  
Its

 
Address: XXXXXX
      XXXXXX
 
 

With respect to the Equity Sponsors’ commitments under Section 10 hereof, New
England Power Company hereby acknowledges these commitments.
 
COMPANY

By:                  

ATTACHMENT A
List of Equity Sponsors

New Hampshire Hydro will supply a list of Equity Sponsors as of the date of
initial computation and as of each date thereafter that the list changes.
 

ATTACHMENT B
Forms of the following documentation:
1.    Opinion of Counsel
2.    Certificate
3.    Incumbency and Signature Certificate
4.    Directors’ Vote
[Please note - governmental entities may make appropriate modifications to these
documents to reflect that they are not corporations.]
 

[Form of Opinion of Counsel for Each Utility Participant]
New England Hydro-Transmission
    Electric Company, Inc.;
New England Hydro-Transmission
    Corporation; or
New England Power Company
Gentlemen:
This opinion is furnished in connection with the execution and delivery by
                         (the Company) of the following Agreements:
                                .
We have acted as counsel to the Company, one of the Utility Participants, in
connection with the execution and delivery of the Basic Agreements. We
participated in reviewing and/or drafting the Agreements.
As general [special] counsel to the Company, we are generally familiar with its
affairs. [If special counsel is giving the opinion, describe relationship to the
Company.] We have reviewed the proceedings taken by the Company in connection
with its authorization, execution, and delivery of the Agreements and any
documentation supplied by the Company thereunder. We have also examined executed
counterparts of the Agreements, have made such other investigation, and have
examined such other records and documents, and have made such examination of law
and satisfied ourselves as to such other matters as we have deemed relevant and
necessary in order to enable us to express the opinions set forth below.
Based upon and subject to the foregoing and to the further qualifications in
this opinion, we are of the opinion that:
1.    The Company is a corporation duly organized, validly existing and in good
standing under the laws of [the jurisdiction of its incorporation], has the
corporate power to own its assets and to transact the business in which it is
engaged, and is duly qualified as a foreign corporation in, and is in good
standing under the laws of, each jurisdiction in which the conduct of its
business or the ownership of its assets requires such qualification.
2.    The Company has (and in the case of the Agreements at the time of
execution and delivery thereof, had) full corporate power, and legal right to
execute, deliver and perform the Agreements, and the Company has taken all
necessary corporate action to authorize the execution, delivery, and performance
by it of the Agreements.
3.    The execution, delivery, and performance by the Company of the Agreements
do not (a) contravene the Company’s [charter documents] or by-laws, (b) violate
any applicable law, rule, regulation, order, writ, judgment, injunction, decree,
or award known to us by which the Company is bound, (c) violate any indenture,
instrument, or agreement known to us by which the Company is bound, or (d)
result in or require the creation or the imposition of any lien pursuant to the
provisions of any indenture, instrument, or agreement known to us by which the
Company is bound.
4.    No authorization, approval, consent, or other action by, and no notice to
or filing with, any federal, state, or other governmental authority or
regulatory body which has not been obtained or given and is not in full force
and effect is required for the valid and lawful execution, delivery, and
performance by the Company of the Agreements. [In this connection, to the extent
it may be required by law, the approval of the Massachusetts Department of
Public Utilities [Connecticut PUC, or other] has been given for the Agreements
and the Company’s performance thereunder by order(s) dated                 ,
which remains in full force and effect.]
5.    The Agreements have each been duly executed and delivered by the Company
and constitute the legal, valid, and binding obligations of the Company
enforceable against it in accordance with their respective terms.
6.    No action, suit, proceeding, or investigation at law or in equity or by or
before any governmental instrumentality or other agency now pending or
threatened against or affecting the Company or its property or rights which, if
adversely determined, would materially impair the ability of the Company to
perform its obligations under the Agreements is known to us.
Our opinion that the Agreements are enforceable, each in accordance with the
terms thereof, is qualified to the extent that the enforcement of the rights and
remedies created thereby is subject to bankruptcy, insolvency, reorganization,
and similar laws of general application affecting the rights and remedies of
creditors and secured parties, and to the further extent that the availability
of the remedies of specific enforcement, injunctive relief, or any other
equitable remedy is subject to the discretion of the court before which any
proceeding therefor may be brought.
Very truly yours,
 

CERTIFICATE
I, (insert name), the Clerk (or Secretary or other principal recording officer)
of (insert name of Utility Participant), a (insert state of organization) (the
“Company”) do hereby certify that:
(1)    Attached hereto as Exhibit A is a true and correct copy of a vote duly
adopted at a meeting of the Board of
Directors of the Company, duly called and held on             , ____, and that
such vote and the authority vested thereby have not been amended or revoked and
are still in full force and effect.
(2)    Attached hereto as Exhibit B is a true and correct copy of the Articles
of Organization (or other charter documents) of the Company, as amended and in
effect as of the date of this Certificate.
(3)    Attached hereto as Exhibit C is a true and correct copy of the By-Laws of
the Company, as amended and in effect as of the date of this Certificate.
(4)    The persons (or person) listed on Exhibit D have been duly elected to the
offices set forth adjacent to their respective names since the first day of
June, 1985, and the signatures adjacent to their respective names are the
genuine signatures of said officers.
IN WITNESS WHEREOF, I have placed my hand and the seal of the Company this
         day of             , ____.
 
By                  

Name:
Title:

 

CONFIRMATION OF INCUMBENCY AND SIGNATURE OF
CLERK, SECRETARY, OR OTHER PRINCIPAL RECORDING OFFICER
I, (name), (title) of the Company, do hereby certify that (name of officer
executing certificate) is and at all times subsequent to                 , ____,
has been the duly elected (title) of the Company and that the signature adjacent
to his (or her) name is the genuine signature of said officer.
 
By                  

Name:
Title:

 

FORM OF DIRECTORS’ VOTE APPROVING AGREEMENTS
VOTED:
That in connection with this Company’s participation in the Phase II expansion
of the proposed interconnection between the New England Power Pool companies and
Hydro-Quebec, the execution and delivery on behalf of this Company by
                        , President, of the following agreements: (being
collectively referred to in this vote as “Agreements”) copies of which
Agreements have been presented at this meeting, are hereby authorized, approved,
ratified, and confirmed, and that the officers of this Company are further
authorized severally to take any and all such further actions including the
execution and delivery of such further documents, as such officers or any of
them may deem necessary or appropriate in connection with the actions and
documents authorized by this vote.

ATTACHMENT C
Subscription Process for Determining
Equity Shares under Section 5(B)
After allocation of 51% of the Equity Shares to NEES pursuant to Section
5(B)(1), the Equity Shares shall be allocated to Equity sponsors other than NEES
as follows:
(a)
Each other Equity Sponsor shall be entitled to a pro rata share of the remainder
based on the Participating Share of such Equity Sponsor or the Participant(s)
that has designated it as an Equity Sponsor as a percentage of Participating
Shares of all other Equity Sponsors or such Participants as shown in the
Massachusetts HVDC Support Agreement. For the purpose of this calculation, the
Participating Share of each Equity Sponsor designated by VELCO shall be deemed
to be a pro rata share of VELCO’s Participating Share based on the ratio of such
Equity Sponsor’s 1980 kwh load to the aggregate 1980 kwh load of all Equity
Sponsors designated by VELCO.

(b)
Upon execution of this Agreement, each other Equity Sponsor may subscribe for
more or less than its share under (a) above.

(c)
Upon execution of this Agreement, each other Equity Sponsor may specify a
maximum limit on its share of such remainder that would apply to any allocations
made on or before June 1, 1986 or such later deadline date as is fixed pursuant
to Section 2 hereof.

(d)
If there are no undersubscriptions or oversubscriptions under (b) above or if
the sum of the shares under (a) or (b) above for all Equity Sponsors equals 100%
of such remaining shares, then each Equity Sponsor shall have a share as
determined under (a) or (b) above. (For the purposes of this attachment,
oversubscription shall mean, with respect to any Equity Sponsor, a subscription
under (b) above of more than its share under (a) above. For the same purposes,
undersubscription shall mean, with respect to any Equity Sponsor, a subscription
under (b) above of less than its share under (a) above. The amount of such
oversubscription shall be equal to (b) minus (a) and the amount of such
undersubscription shall be equal to (a) minus (b).)

(e)
If there are undersubscriptions but not oversubscriptions or if there are
oversubscriptions but no undersubscriptions, then each Equity Sponsor shall have
a share as determined under (a) above; provided, however, that no Equity Sponsor
shall be allocated more than its specified limit under (c) above. If the sum of
all shares heretofore allocated is less than 100%, any remaining share shall be
allocated to all Equity Sponsors that have received shares less than their
limits under (c) above, pro rata by the difference between their limits under
(c) above and their shares as heretofore allocated.

(f)
If the net result of subtracting the aggregate amount of all undersubscriptions
from the aggregate amount of all oversubscriptions is greater than zero, the
aggregate amount of all oversubscriptions must be reduced to the aggregate
amount of all undersubscriptions. This amount shall be referred to as the total
permitted amount of oversubscriptions. Each oversubscriber shall initially be
allocated a share of the total permitted amount of oversubscriptions (pro rata
by the Participating Shares of the oversubscribers or their designators as shown
in the Massachusetts HVDC Support Agreement); provided that no oversubscriber
shall be allocated more than its requested amount under (b) above. Any remaining
unallocated portion of the total permitted amount of oversubscriptions shall be
allocated to all oversubscribers that have not yet reached their requested
amount under (b) above pro rata by the differences between their requested
shares under (b) above and their shares as heretofore allocated.

(g)
If the net result of subtracting the aggregate amount of all oversubscriptions
from the aggregate amount of all undersubscriptions is greater than zero, the
aggregate amount of all undersubscriptions must be reduced to the aggregate
amount of all oversubscriptions. This amount shall be referred to as the total
permitted amount of undersubscriptions. The total permitted amount of
undersubscriptions shall be allocated to the undersubscribers pro rata by the
amounts of their undersubscriptions; provided, however, that no Equity Sponsor
shall be allocated more than its specified limit under (c) above. If the sum of
all shares heretofore allocated is less than 100%, any remaining share shall be
allocated to all Equity Sponsors that have received shares less than their
limits under (c) above, pro rata by the difference between their limits under
(c) above and their shares as heretofore allocated.

(h)
If Equity Shares are required to be changed pursuant to subpart (i) or (ii) of
Section 5(a), this reallocation shall be accomplished in accordance with this
Attachment G on the basis of the subscriptions initially made under (b) and the
maximum limits specified under (c) by each continuing Equity Sponsor, and giving
effect to the termination of any Equity Sponsor pursuant to said subpart (i) or
(ii).

 

CONFORMED
AMENDMENT NO. 1
TO
PHASE II MASSACHUSETTS TRANSMISSION
FACILITIES SUPPORT AGREEMENT
This Amendment, dated as of May 1, 1986, is between New England
Hydro-Transmission Electric Company, Inc. (New England Hydro), and the New
England utilities listed in Attachment A to the Phase II Massachusetts
Transmission Facilities Support Agreement, dated as of June 1, 1985 (the
“Massachusetts DC Support Agreement”), and amends the Massachusetts DC Support
Agreement as hereinafter provided.
In consideration of the premises and other good and valuable consideration,
receipt of which is hereby acknowledged, and pursuant to the provision of
Section 20H of the Massachusetts DC Support Agreement, it is hereby agreed as
follows:
1.    Certain terms defined in the Massachusetts DC Support Agreement are used
herein with the meanings there provided.
2.    Attachments A and F of the Massachusetts DC Support Agreement are hereby
deleted and replaced with the Attachments A and F attached hereto.
3.    This Amendment shall become binding upon New England Hydro and the
Participants-when it has been executed by New England Hydro and Participants
owning Participating Shares aggregating at least 66-2/3%.
4.    Any number of counterparts of this Amendment may be executed, and each
shall have the same force and effect as an original instrument and as if all the
parties to all of the counterparts had signed the same instrument.

IN WITNESS WHEREOF, the signatories have caused this Amendment to be executed by
their duly authorized officers or agents.

 
COMPANY

By:                  
Its

 
Address: XXXXXX
      XXXXXX

MA-5/29/86
ATTACHMENT A

If any participant does not receive required consents, waivers, regulatory
approvals, or other actions of governmental authorities within the time period
required by this Agreement, the listing of Participants and 1980 kilowatthour
load will be appropriately modified.

Participant
 
1980 Kilowatthour Load
 
 
 
 
 
Fitchburg Gas and Electric Light Co.
 
369,055,118
 
The United Illuminating Company
 
4,715,078,120
 
New England Power Company (NEP)
 
15,444,975,840
(a), (d)
Bangor Hydro-Electric Company
 
1,305,625,118
 
Canal Electric Company
 
3,227,553,000
 
Public Service Company of New Hampshire
 
5,043,242,871
 
Central Maine Power Company
 
6,053,571,000
 
Vermont Electric Power Company
 
3,262,098,200
 
Boston Edison Company (Edison)
 
9,531,773,000
(c), (d)
City of Chicopee Municipal Lighting Plant
 
279,273,169
 
The Connecticut Light and Power Company
 
16,002,437,000
 
Western Massachusetts Electric Company
 
3,252,432,000
 
Holyoke Water Power Company
 
106,905,000
 
Holyoke Power and Electric Company
 
0
 
Newport Electric Corporation
 
382,745,000
 
Montaup Electric Company
 
3,096,872,000
(b)
Connecticut Municipal Electric Energy Cooperative
 
718,177,538
 
Massachusetts Municipal Wholesale Electric Company (MMWEC)
 
483,576,000
(c), (f)
Taunton Municipal Lighting Plant
 
307,460,361
 
UNITIL Power Corp.
 
609,873,261
(e)
Town of Peabody Municipal Light Plant
 
245,010,000
(f)
Town of Holden Municipal Light Department
 
63,676,000
(f)
Hudson Light and Power Department
 
127,808,000
(f)
Town of Middleborough Gas and Electric Department
 
92,081,000
(f)
Town of Braintree Electric Light Department
 
267,289,000
(f)
Town of Hingham Municipal Lighting Plant
 
103,929,000
(f)
Town of Boylston Municipal Light Department
 
17,324,000
(f)
Town of North Attleborough Electric Department
 
93,816,000
(f)
Town of Wakefield Municipal Lighting Department
 
107,609,000
(f)
City of Westfield Gas & Electric Light Department
 
219,026,000
(f)
Town of Danvers Electric Department
 
206,806,000
(f)
Town of West Boylston Municipal Lighting Plant
 
43,974,000
(f)
City of Holyoke Gas & Electric Light Department
 
214,448,000
(f)
Town of Reading Municipal Light Department
 
401,795,000
(f)
Town of Concord Municipal Light Plant
 
0
(c), (f)
Town of Groton Electric Light Department
 
22,908,000
(f)
Princeton Municipal Light Department
 
7,130,000
(f)
Town of Shrewsbury Electric Light Department
 
146,303,000
(f)
Town of Sterling Municipal Electric Department
 
24,510,000
(f)
Town of South Hadley
 
99,981,000
(f)

(a)    Includes New Hampshire retail 1980 kilowatthour load of 434,290,243.
(b)    The amount shown for Montaup Electric Company includes the load of the
other members of the Eastern Utilities Associates system.
(c)    (1) Concord Municipal Light Plant has elected to be a direct signatory to
this Agreement. However, if it does not receive required consents, waivers,
regulatory approvals, or other actions of governmental authorities within the
time period required, Concord will be grouped with MMWEC. (2) As of June 1,
1985, Concord continues to be a full requirements customer of Edison. At such
time as Concord ceases to be a full requirements customer of Edison, for
purposes of this Agreement, either Concord oz MMWEC, whichever is appropriate,
shall have an additional Participating Share equal to 1.087% of Edison’s initial
Participating Share (based on a 1980 Kwh load of 103,629,000 Kwh for Concord)
and Edison’s Participating Share shall be reduced by such amount.
(d)    The 1980 Kilowatthour loads shown for Boston Edison Company and New
England Power Company have been adjusted to reflect the current status of
Norwood as a full requirements customer of New England Power Company.
(e)    The amount shown for UNITIL Power Corp. represents the 1980 kilowatthour
load of its affiliates, Concord Electric Company and Exeter & Hampton Electric
Company.
(f)    The amount shown for any of these municipal utilities will be added to
MMWEC’s amount if such municipal (i) does not receive the required consents,
waivers, regulatory approvals, or other actions of governmental authorities
within the time period required by this Agreement, and (ii) elects at that time
to be grouped with MMWEC.

5/29/86
ATTACHMENT F
As a result of the support arrangements for building, owning, and financing the
Transmission Facilities, Equity Sponsors have provided credit support for the
project in excess of their Participating Shares. This enhances New England
Hydro’s ability to finance the project. As compensation to Equity Sponsors for
providing this additional credit support, a Credit Enhancement Charge, as
calculated in connection with each debt financing is required to be paid by each
Credit Enhanced Participant which has its credit enhanced for such debt
financing. The status of a Participant as a Credit Enhanced Participant that
receives credit enhancement or not will be determined in connection with, and as
of the date of commitment for, each debt financing, including any construction
financing, in accordance with Section 1 hereof, and the Credit Enhancement
Charge will be determined with respect to each such financing and will continue
to be paid as long as the financing is outstanding and as long as any accrued
unamortized Credit Enhancement Charges for said Participant remain outstanding.
An “investment grade” Participant is defined in this Agreement as a Participant
which has outstanding junior long-term debt securities which have qualified debt
ratings by two of the three major rating agencies. An “investment grade”
Participant is also defined as a Participant which has a Participating Share of
four-tenths of one percent (0.4%) or less and which has outstanding junior
long-term debt securities having a rating from only one of the three major
rating agencies with that rating being a qualified debt rating. (For these
purposes, the outstanding junior long-term debt securities of a Participant
shall mean (i) its outstanding long-term debentures, or (ii) if no long-term
debentures are outstanding, its most junior outstanding long-term mortgage or
revenue bonds, or (iii) if no long-term debentures, mortgage bonds or revenue
bonds are outstanding, its most junior outstanding long-term debt.)’- “Qualified
debt ratings” are defined as a minimum rating-of Baa3 by Moody’s Investors
Service, BBB- by Standard & Poor’s Corporation and D&P 10 by Duff & Phelps, Inc.
Any “substitute credit enhancement” shall mean, with respect to any New England
Hydro debt financing, including any construction financing (i) a letter of
credit from a commercial bank having capital, surplus, and undivided profits of
at least $250 million and a credit rating of “AA” or better in form and
substance Satisfactory to New England Hydro or (ii) a credit support that is
equivalent to (i) above which •is satisfactory in form and substance to New
England Hydro, or (iii) a guarantee from an Equity Sponsor which at that time
the guarantee is made satisfies the requirements to be an Equity Sponsor as set
forth in section 4 of the Equity Funding Agreements; provided that such
enhancement is irrevocable until the final maturity of such debt financing,
including any optional extensions thereof. The first time that a Participant
supplies substitute credit enhancement under this Agreement or under the Phase
II New Hampshire Facilities Support Agreement, the substitute credit enhancement
shall also cover such Participant’s share of the debt obligations of New England
Power Company and Boston Edison Company relating to their respective AC
Facilities and the term of such credit enhancement shall extend for the full
term of the then remaining depreciation period for the AC facilities supported
under such AC Facilities Support Agreements.
The principal amount of such substitute credit enhancement shall equal that
Participant’s Participating Share of the maximum amount of obligations under
such New England Hydro debt financing plus, if not already provided in
connection with any other debt financing of New England Hydro or New Hampshire
Hydro, that Participant’s Participating Share of the maximum amount of debt
obligations of New England Power Company and Boston Edison Company relating to
the AC Facilities as determined by New England Power and Boston Edison,
respectively.
For any substitute credit enhancement that covers that Participant’s
Participating Share of the debt obligations of Boston Edison Company and New
England Power Company relating to the AC Facilities, such substitute credit
enhancement shall provide for direct payment to New England Power and Boston
Edison, respectively, of the amounts included therein for covering such debt
obligations.
The Credit Enhancement Charge (E) for each Participant that has its credit
enchanced is a dollar value determined monthly for each Credit Enhanced
Participant by the following formula:
phaseiinewhampshiretr_1.gif [phaseiinewhampshiretr_1.gif]

F =
the Credit Enhancement Change for each New England Hydro debt financing that is
credit enhanced for the Participant.

i =
a number from 1 to n representing each of New England Hydro debt financings.

n =
total number of such financings.

G =
the Participant’s Participating Share (in percent)

H =
the maximum outstanding amount of New England Hydro debt during the month which
was credit enhanced for such Participant

I =
debt premium (in percent) for the Credit Enhanced Participant as shown in the
following table:

Participant’s
Debt Rating*
I(%)
 
 
Below B3 or not rated
7.57
B3
5.32
B2
4.82
B1
4.32
Ba3
3.82
6a2
3.32
Ba1
2.82

* Debt rating shall be the lower of the two highest ratings assigned to the
Participant’s outstanding junior long-term debt securities by Moody’s, Standard
and Poor’s, and Duff & Phelps, converted to a Moody’s equivalent as measured at
the commitment date of such New England Hydro debt financing. If the Participant
has a Participating Share of four tenths of one percent (0.4%) or less and has
only one debt rating, then the debt rating for such Participant shall be that
rating converted to a Moody’s equivalent as measured at the commitment date of
such New England Hydro debt financing.
J =
an amount calculated as follows:

During the period from the Effective Date to the Date of Full Support Payment, J
shall equal O and the Credit Enhancement Charge calculated during such period
pursuant to the above formula shall be accrued for each Participant during such
period with interest calculated at New England Hydro’s AFDC rate. After the Date
of Full Support Payment, such previously accrued amount for such Participant
shall be treated as if it represented additional investment in the Transmission
Facilities relating only to such Participant. As a result J shall include
monthly amounts attributable to such Participant (whether or not it continues to
be a Credit Enhanced Participant after the Date of Full Support Payment and
whether or not the debt being enhanced continues to be outstanding) representing
amortization of such previously accrued amount (with amortization over the
period that the investment in the Transmission Facilities is being amortized)
plus one-twelfth of the composite percentage (as defined in Section 12 hereof)
times the unamortized accrued amount plus a provision for income taxes.

CONFORMED
AMENDMENT NO.2
TO
PHASE II NEW HAMPSHIRE TRANSMISSION
FACILITIES SUPPORT AGREEMENT
This Amendment, dated as of February 1, 1987, is between New England
Hydro-Transmission Electric Company, Inc. (New England Hydro), and the New
England utilities listed in Attachment A to the Phase II New Hampshire
Transmission Facilities Support Agreement, dated as of June 1, 1985, as amended
by Amendment No. 1 dated as of May 1, 1986 (the “New Hampshire DC Support
Agreement”), and amends the New Hampshire DC Support Agreement as hereinafter
provided.
In consideration of the premises and other good and valuable consideration,
receipt of which is hereby acknowledged, and pursuant to the provision of
Section 20H of the Massachusetts DC Support Agreement, it is hereby agreed as
follows:
1.    Certain terms defined IA the New Hampshire DC Support Agreement are used
herein with the meanings there provided.
2.    Attachment D of the New Hampshire DC Support Agreement is hereby deleted
and replaced with the following Attachment D:
“ATTACHMENT D
1.    “Return on Equity” shall be the return on equity on file with the FERC and
in effect under the Federal Power Act. Any filing of a return on equity by New
Hampshire Hydro shall be subject to Section 2 of this Attachment D or, if
Section 2 is not accepted by the FERC, then any such filing shall be subject to
Section 3 of this Attachment D.
2.    New Hampshire Hydro shall request from the FERC a rate of return on equity
determined by the applicable formula in Section 4 of this Attachment D. In
February of each year following the initial filing of this Agreement with the
FERC, New Hampshire Hydro shall file with the FERC a revised Exhibit 1 to this
Attachment D, reflecting a new “Y” for the initial formula in Section 4, below.
The value of “Y” shall be added to the fixed 1.9% value of “P”, which represents
a levelized premium over the life of the project to reflect the unique risks of
the project in addition to the risks encountered by a typical utility. New
Hampshire Hydro shall request that the revised Exhibit 1 be made effective on
February 1, of the calendar year in which the filing is made, without
suspension. Each Participant agrees not to intervene in opposition to a change
in “Y” filed by New Hampshire Hydro in accordance with this Section 2.
3.    If Section 2 of this Attachment D is not accepted by the FERC, New
Hampshire Hydro shall from time to time request from the FERC a specific rate of
return on equity. Each Participant agrees not to intervene in opposition to a
request for a rate of return on equity filed by New Hampshire Hydro on or before
the tenth anniversary of the Date of Full Support Payment if such rate is equal
to or lower than the rate that would have been determined under the applicable
provision of such Section 4. Nothing in this Section 3 shall affect (i) the
right of New Hampshire Hydro to request a rate of return on equity greater than
that determined in accordance with such Section 4, or (ii) the right of any
Participant to intervene in opposition to any such request.
4.    The formula for the rate of return on equity referred to in Section 2 or
Section 3 of this Attachment 0, whichever is accepted by the FERC, shall be as
follows:
R = Y + P
where:
R =
the requested return on equity;

Y =
the FERC generic return on equity in effect for filings made as of the date of
the filing as set out in Exhibit 1 to this Attachment D;

P =
1.9, which represents a levelized premium to adjust the FERC generic return-for
the unique risks of the project in addition to the risks encountered by a
typical utility.

The following is a sample calculation of the Return on Equity as of February
through April 1987:
R =
11.2 + 1.9 - 13.1%

Application of this formula at this time thus yields an initial Return on Equity
of 13.1%.
In the event that the FERC generic return on equity is no longer published for
rate making purposes, then the following formula shall be used to determine “Y”
in the above formula:
Y= A+B+C+D
where:
 
(i)
A =     Weighted average return on the average of three money market indicators

A =     .25(E + F + G) + .75(H + I + J)
     3
where:
 
E =
The most recently available yield to maturity for Moody’s “A” rated Public
Utility Bonds.

F =
The most recently available yield for 10 year Constant Maturity Treasury Bonds.

G =
The most recently released figure for the annualized increase in the United
States GNP price deflator.

H =
The average yield to maturity for the most recently available 36 month period
for Moody’s “A” rated Public Utility Bonds4„

I =
The average yield for 10 year Constant Maturity Treasury Bonds for the most
recently available 36 month period.

J=
The average of the annualized percentage increases in the United States GNP
price deflator for the most recent 36 month period.

(ii)
B =    The average equity premium required for utility stocks over the past 20
years.

B = K - L+M+N
             3
where:
 
K =
the average for the most recent 20 years of the sum of (i) the average annual
yield for Moody’s Electric Utility Common Stock, plus (ii) the ten year growth
in dividends per share for such group of electric utilities.

L =
the average for the most recent 20 years of yields to maturity for Moody’s “A”
rated Utility Bonds.

M =
The average for the most recent 20 years of the yield on en year constant
maturity treasury bonds.

N =
The average for the most recent 20 years of the average annual percentage change
in the United States GNP price deflator.

(iii)
C =    issuance _________ common equity

C    .05(A + B)
(iv)
D =    a dilution allowance to compensate the Equity Sponsors of New Hampshire
Hydro for sale of common shares at a market price below book value

D =    a percentage from 0 to 1 determined on a straight tine basis where 1
represents the weighted average of the common shares of the Equity Sponsors of
New Hampshire Hydro selling at 30% below book and 0 represents those shares
selling at book value. Such weighted average shall be calculated by weighting
the market to book ratio of each Equity Sponsor by its respective equity
ownership share in New Hampshire Hydro. This percentage shall be calculated
semiannually as of January 1 and July 1 of each year until the Transmission
Facilities goes into commercial operation. Each calculation shall cover the
period beginning as of January 1 in the year this Agreement is dated as of and
ending as of the date of the calculation. Book value is the average month end
book value during a calculation period, and market price is the average of each
quarters high and low market price during calculation period. The calculation
made as of January or July next preceding the date of commercial operation of
the Transmission Facilities will be the percentage used thereafter until the end
of the term of this Agreement.
Should any of the indices used in calculating the values of A and B be
discontinued, or should the underlying basis for the calculations in any of
these indices be modified, New Hampshire Hydro may substitute a substantially
similar index for such discontinued or modified index.
Recognizing that this is a long-term contract and that money market conditions
can drastically change over time, New England Hydro retains the option, if the
above formulae produce for two consecutive months a number lower than the
arithmetic average of the return on common equity approved within the last
twelve months by regulatory COMMISSIONS having jurisdiction over rates for each
of the investor owned public electric utilities as reported in the publication
“Argus Utility Scope Regulatory Service - Returns Authorized” to use such
average return as the Return on Equity. In the event this publication is no
longer currently available, New Hampshire Hydro will use a substantially similar
publication which is available.

EXHIBIT 1 TO ATTACHMENT D
 
In determining the Return on Equity in accordance with the formula set out in
Section 4 of Attachment D, the value of “Y” shall be _______%. Applying this
value of “Y” in the formula and adding it to the fixed 1.9% value of “P”, which
represents a levelized premium over the life of the project, yields a Return on
Equity of ________%.”

3.    Section 6 is hereby amended by inserting in item (ix) of the second
paragraph thereof after the words “debt financing” the following:
“or any other financial arrangements”
4.    Section 12 of the Hampshire DC Support Agreement is hereby amended by
deleting the seventh paragraph thereof and substituting the following:
“‘Return on Equity’ shall be determined in accordance with Attachment D.”
5.    Section 12 of the Hampshire DC Support Agreement is hereby amended by
adding the following sentence to the end of the fourth paragraph thereof:
“The allowance for state and federal income taxes included in operating expenses
shall include a provision for taxes on dividends received by stockholders,
calculated at the then current statutory rate for corporate stockholders.”
6.    This Amendment shall become binding upon New Hampshire Hydro and the
Participants when it has been executed by New Hampshire Hydro and Participants
owning Participating Shares aggregating at least 66-2/3%.
7.    Any number of counterparts of this Amendment may be executed, and each
shall have the same force and effect as an original instrument and as if all the
parties to all of the counterparts had signed the same instrument.

IN WITNESS WHEREOF, the signatories have caused this Amendment to be executed by
their duly authorized officers or agents.

 
COMPANY

By:                  
Its President

Address: XXXXXXXXXX
      XXXXXXXXXX

CONFORMED
AMENDMENT NO. 3
TO
PHASE II NEW HAMPSHIRE TRANSMISSION
FACILITIES SUPPORT AGREEMENT
This Amendment, dated as of June 1, 1987, is between New England
Hydro-Transmission Corporation (New Hampshire Hydro), and the New England
utilities listed in Attachment A to the Phase II New Hampshire Transmission
Facilities Support Agreement, dated as of June 1, 1985, as amended by Amendment
No. 1 dated as of May 1, 1986, and Amendment No. 2, dated as of February 1,
1987, (the “New Hampshire DC Support Agreement”), and amends the Massachusetts
DC Support Agreement as hereinafter provided.
In consideration of the premises and other good and valuable consideration,
receipt of which is hereby acknowledged, and pursuant to the provision of
Section 20H of the New Hampshire DC Support Agreement, it is hereby agreed as
follows:
1.    Certain terms defined in the New Hampshire DC Support Agreement are used
herein with the meanings there provided.
2.    Attachment D of the New Hampshire DC Support Agreement is hereby revised
by deleting the last sentence of paragraph 2 thereof and by deleting the second
and third sentences of paragraph 3 thereof.
3.    This Amendment shall become binding upon New Hampshire Hydro and the
Participants when it has been executed by New Hampshire Hydro and Participants
owning Participating Shares aggregating at least 66-2/3%.
4.    Any number of counterparts of this. Amendment may be executed, and each
shall have the same force and effect as an original instrument and as if all the
parties to all of the counterparts had signed the same instrument.
IN WITNESS WHEREOF. the signatories have caused this Amendment to be executed by
their duly authorized officers or agents.

 
COMPANY

By:                  
Its President

Address: XXXXXXXXXX
      XXXXXXXXXX

CONFORMED
AMENDMENT NO. 4
TO
PHASE II NEW HAMPSHIRE TRANSMISSION
FACILITIES SUPPORT AGREEMENT
This Amendment, dated as of September 1, 1987, is between New England
Hydro-Transmission Electric Corporation (New Hampshire Hydro), and the New
England utilities listed in Attachment A to the Phase II New Hampshire
Transmission Facilities Support Agreement, dated as of June 1, 1985, as amended
by Amendment No. 1 dated as of May 1, 1966, Amendment No. 2, dated as of
February 1, 1987, and Amendment No. 3, dated as of June 1, 1987, (the “New
Hampshire DC Support Agreement”), and amends the New Hampshire DC Support
Agreement as hereinafter provided.
In consideration of the premises and other good and valuable consideration,
receipt of which is hereby acknowledged, and pursuant to the provision of
Section 20H of the Massachusetts DC Support Agreement, it is hereby agreed as
follows:
1.
Certain terms defined in the New Hampshire DC Support Agreement are used herein
with the meanings there provided.

2.
Section 1 is hereby amended by adding the following clause to the end of the
last sentence of the thirteenth paragraph thereof:

“; provided, however, that New Hampshire Hydro shall be under no obligation to
so limit its equity investment in the event that, after the Date of Full Support
Payment (as defined in Section 13) the term of its debt financing or other
financing arrangements is less than ten years”.
3.
Section 12 is hereby deleted and replaced with the following Section 12.

Section 12. Support Charge
Commencing in the month of the Date of Full Support Payment (as defined in
Section 13) and in each month thereafter, each Participant shall pay in
accordance with Section 13 its Participating Share of a monthly Support Charge
in an amount determined in accordance with this Section 12, plus a credit
enhancement charge calculated in accordance with Attachment F. The Support
Charge shall be equal to New Hampshire Hydro’s total cost of service related to
the Transmission Facilities for such month.
The “total cost of service related to the Transmission Facilities” for any month
commencing with the month in which the Date of Full Support Payment occurs shall
be the sum of (a) New Hampshire Hydro’s operating expenses for such month with
respect to the Transmission Facilities, plus (b) an amount equal to one-twelfth
of the composite percentage for such month times the average net rate base for
the Transmission Facilities, less (c) investment earnings of the Debt Service
Fund, as defined in Section 18, realized by New Hampshire Hydro, less (d) any
other income received by New Hampshire Hydro resulting from costs or rate base
supported by the Participants other than income received pursuant to (a), (b),
or (c) above or Credit Enhancement Charges and other income allocated to Equity
Sponsors elsewhere under this Agreement. If a Support Charge payment under
Section 13 is to be calculated from a date other than the first day of a month,
an appropriate proration of the amount determined in (b) above shall be made for
such payment only.
“Uniform System” shall mean the appropriate Uniform System of Accounts
prescribed by the Federal Energy Regulatory Commission (FERC) for Public
Utilities and Licensees, as from time to time in effect.
New Hampshire Hydro’s “operating expenses” shall include all amounts related to
the Transmission Facilities and properly chargeable to expense accounts less any
applicable credits thereto. in accordance with the Uniform System, including but
not limited to operation and maintenance expense such as rent on leased property
and administrative and general expenses, state and Federal income and franchise
taxes, property taxes, payroll taxes, any other taxes not based on income, and
depreciation and/or amortization expense; it being understood that for purposes
of this Agreement depreciation and/or amortization shall be at a rate sufficient
to recover the investment in the Transmission Facilities (including estimated
cost of removal less any salvage value which salvage value, for the purpose of
calculating such depreciation or amortization, will not exceed the amount of
cost of removal) over the shorter of: (i) the estimated remaining useful life of
the Transmission Facilities as determined by New Hampshire Hydro or (ii) the
term of New Hampshire Hydro’s debt financings or other financing arrangements
related to the Transmission Facilities, adjusted for multiple maturities and
repayment schedules, unless the term of such financing or other financing
arrangements is les* than ten years in which case such term shall, for purposes
of this subpart (ii), be deemed to be ten years from the Date of Full Support
Payment; and it also being understood that rents on leased property shall
include the rental of property or property rights related to the Transmission
Facilities from any Participant with rent based on book value. In addition, each
Participant will pay to New England Power Company and Public Service Company of
New Hampshire, for the benefit of their respective customers, such Participant’s
Participating Share of a monthly charges of $268,000 and $41,300, respectively,
to compensate New England Power and Public Service Company for the lost capacity
on their respective New Hampshire rights-of-way, provided however that no such
charges shall be paid to New England Power or Public Service Company during such
time as construction or operation is suspended on account of a defect in title
for such rights-of-way. The allowance for state and Federal income taxes
included in operating expenses shall reflect the normalization of timing
differences and the flow through of permanent differences between book income
and tax income. New Hampshire Hydro as the tax owner of the Transmission
Facilities, will be entitled to the benefits and subject to the burdens of such
ownership for tax purposes. The allowance for state and Federal income taxes
included in operating expenses shall include a provision for taxes on dividends
received by stockholders, calculated at the then current statutory rate for
corporate stockholders.
The “investment in the Transmission Facilities” shall be the aggregate amount
incurred at any time either before or after commercial operation of the
Transmission Facilities which relates to the Transmission Facilities and is
properly chargeable to New Hampshire Hydro’s utility plant accounts in
accordance with the Uniform System. The investment in the Transmission
Facilities shall also include operating expenses incurred prior to the month in
which the Date of Full Support Payment occurs and an allowance for funds used
during the period prior to the Date of Full Support Payment (AFDC) accrued on
the investment in the Transmission Facilities. The AFDC rate shall be calculated
pursuant to the last FERC approved AFDC formula including in construction work
in progress all investment in the Transmission Facilities prior to the Date of
Full Support Payment and using 14 percent as the return on equity for such
calculation.
“Composite percentage” shall be computed as of the last day of each month (the
“computation date”). “Composite percentage” as of a computation date shall be
the sum of (i) Return on Equity then in effect multiplied by the percentage
which equity investment as of such date is of the total capital as of such date;
plus (ii) the average monthly effective interest rate per annum of each
principal amount of indebtedness outstanding on such date for money borrowed,
whether long term or short term, multiplied by the percentage which each such
principal amount is of total capital as of such date. The effective interest
rate shall take into. account premiums, discounts, fees, and other costs that
are related to the indebtedness.
“Return on Equity” shall be the return on equity on file with the FERC and in
effect under The Federal Power Act.
“Equity investment” as of any date shall consist of the sum of (i) all amounts
theretofore paid to New Hampshire Hydro for all capital stock theretofore
issued, plus all capital contributions, less the sum of any amounts paid by New
Hampshire Hydro in the form of stock retirements, repurchases or redemptions or
return of capital including liquidating dividends; plus (ii) any credit balance
in the capital surplus account not included in (1) and any credit balance in the
earned surplus (retained earnings) account on the books of New England Hydro as
of such date.
“Total capital” as of any date shall be the equity investment plus the total of
all indebtedness then outstanding for money borrowed.
From the Date of Full Support Payment until the first to occur of June 30 or
December 31 thereafter, the “average net rate base” for the Transmission
Facilities shall be the average of the net rate base determined as of the Date
of Full Support Payment and the first to     occur of June 30 or December 31
thereafter. Thereafter, for subsequent months of January through June, average
net rate base shall be the average of the net rate base as of the preceding
December 31 and the following June 30. For other months, average net rate base
shall be the average of the net rate base as of the preceding June 30 and the
following December 31. The “net rate base” shall consist of (i) the investment
in the Transmission Facilities, less (ii) the amount of any accumulated
provision for depreciation and amortization related to the investment in the
Transmission Facilities, less (or plus) (iii) the amount of any reserve for
deferred income taxes received (or paid) by New Hampshire Hydro, such deferred
income taxes to include deferred income taxes due to accelerated depreciation,
construction tax benefits, and any other book/tax timing differences related to
the Transmission Facilities, less (iv) the amount of any unamortized investment
tax credits (ITC), plus (v) such allowances related to the Transmission
Facilities for materials and supplies, prepaid items and cash working capital as
may from time to time by determined by New Hampshire Hydro, as reasonably
necessary and in accordance with accepted utility accounting practice, plus (vi)
the amounts held in the Debt Service Fund, as described in Section 18. New
Hampshire Hydro shall normalize ITC over the depreciation and/or amortization
period relating to the Transmission Facilities. Any allowance for cash working
capital shall be limited to that not sufficiently recovered through the use of
estimated billing for the current month.
[End of Section 12]
 
 
4.
The New Hampshire DC Support Agreement is hereby amended by adding the following
Section 21:

Section 21. Refund of Gain on Sale or Other Disposition of Transmission
Facilities
In the event that any of the Transmission Facilities are sold or otherwise
disposed of during the term of this Agreement, if the Net Proceeds (defined as
the amount received from such sale or disposition less all costs relating to or
resulting from such sale or disposition, including without limitation any income
taxes relating to or resulting from such sale or disposition, any premiums and
penalties incurred because of the early retirement of any indebtedness
associated with the sold or disposed of Transmission Facilities, and any costs
of total or partial demolition of the sold or otherwise disposed of Transmission
Facilities) from such sale or disposition exceed the greater of (i) the
investment in the entire Transmission Facilities (less any depreciation and
amortization to the date of sale or disposition) or (ii) the then total capital
of New Hampshire Hydro (as defined in Section 12), New Hampshire Hydro shall (a)
refund to the then current Participants. in proportion to their then current
Participating Shares, any such excess, and (b) credit to the accumulated
provision for depreciation and amortization related to the investment in the
Transmission Facilities the investment in the entire Transmission Facilities
(less any depreciation and amortization to the date of sale or disposition). The
total capital of New Hampshire Hydro, for the purposes of this section, may
exceed .the investment in the entire Transmission Facilities (less any
depreciation and amortization to the date of sale or disposition) due to (1) any
reserve for deferred income taxes paid by New England Hydro or (2) for other
reasons related to the investment in the Transmission Facilities. If the Net
Proceeds do not exceed the greater of (i) or (ii) above, the Net Proceeds will
be credited to the accumulated provision for depreciation and amortization
related to the investment in the Transmission Facilities in lieu of payment to
the Participants. The Participants agree to flow through any such refunds to
their customers and shall seek any necessary regulatory approvals to reflect in
their rates any such refunds and the effect of any such credits to the
accumulated provision for depreciation and amortization related to the
investment in the Transmission Facilities; except that to the extent that a
Participant’s customers’ rates have not reflected all or a portion of that
Participant’s share of the costs of the Transmission Facilities, then that
Participant agrees that a complete flow-through of such refunds may not be
appropriate and that particular Participant shall seek any necessary regulatory
approvals for the appropriate disposition of an appropriate portion of such
refunded amounts or credits.
[End of Section 21]

5.
Attachment D of the New Hampshire DC Support Agreement is hereby deleted.

6.
Attachment F of the New Hampshire DC Support Agreement is hereby deleted and
replaced with the following Attachment F:

ATTACHMENT F
As a result of the support arrangements for building, owning, and financing the
Transmission Facilities, Equity Sponsors have provided credit support for the
project in excess of their Participating Shares. This enhances New Hampshire
Hydro’s ability to finance the project. The status of a Participant as a Credit
Enhanced Participant that receives credit enhancement or not will be determined
in connection with, and as of the date of commitment for, each debt financing,
including any construction financing, in accordance with Section 1 hereof, and
the Credit Enhancement Charge will be determined with respect to each such
financing and will continue to be paid as long as the financing is outstanding
and as long as any accrued unamortized Credit Enhancement Charges for said
Participant remain outstanding.
An “investment grade” Participant is defined in this Agreement as a Participant
which has outstanding junior long-term debt securities which have qualified debt
ratings by two of the three major rating agencies. An “investment grade”
Participant is also defined as a Participant which has a Participating Share of
four-tenths of one percent (0.4%) or less and which has outstanding junior
long-term debt securities having a rating from only one of the three major
rating agencies with that rating being a qualified debt rating. (For these
purposes, the outstanding junior long-term debt securities- of a Participant
shall mean (i) its outstanding long-term debentures, or (ii) if no long-term
debentures are outstanding, its most junior outstanding long-term mortgage or
revenue bonds, or (iii) if no long-term debentures, mortgage bonds or revenue
bonds are outstanding, its most junior outstanding long-term debt.) “Qualified
debt ratings” are defined as a minimum rating of Baa3 by Moody’s Investors
Service, BBB- by Standard & Poor’s Corporation and D&P 10 by Duff & Phelps, Inc.
Any “substitute credit enhancement” shall mean, with respect to any New
Hampshire Hydro debt financing, including any construction financing (i) a
letter of credit from a commercial bank having capital, surplus, and undivided
profits of at least $250 million and a credit rating of “AA” or better in form
and substance satisfactory to New Hampshire or (ii) a credit support that is
equivalent to (i) above which is satisfactory in form and substance to New
Hampshire Hydro, or (iii) a guarantee from an Equity Sponsor which at that time
the guarantee is made satisfies the requirements to be an Equity Sponsor as set
forth in section 4 of the Equity Funding Agreements; provided that such
enhancement is irrevocable until the final maturity of such debt financing,
including any optional extensions thereof. The first time that a Participant
supplies substitute credit enhancement under this Agreement or under the Phase
II Massachusetts Facilities Support Agreement, the substitute credit enhancement
shall also cover such Participant’s share of the debt obligations of New England
Power Company and Boston Edison Company relating to their respective AC
Facilities and the term of such credit enhancement shall extend for the full
term of the then remaining depreciation period for the AC facilities supported
under such AC Facilities Support Agreements.
The principal amount of such substitute credit enhancement shall equal that
Participant’s Participating Share of the maximum amount of obligations under
such New Hampshire Hydro debt financing plus, if not already provided in
connection with any other debt financing of New Hampshire Hydro or New England
Hydro, that Participant’s Participating Share of the maximum amount of debt
obligations of New England Power Company and Boston Edison Company relating to
the AC Facilities as determined by New England Power and Boston Edison,
respectively.
For any substitute credit enhancement that covers that Participant’s
Participating Share of the debt obligations of Boston Edison Company and New
England Power. Company relating to the AC Facilities, such substitute credit
enhancement shall provide for direct payment to New England Power and Boston
Edison, respectively. of the amounts included therein for covering such debt
obligations.
As compensation to Equity Sponsors for providing this additional credit support,
a Credit Enhancement Charge, as calculated in connection with each debt
financing is required to be paid by the Participants. If a Participant is a
Credit Enhanced Participant by reason of below-investment grade, withdrawn or
suspended debt ratings, the Credit Enhancement Charge attributed to that Credit
Enhanced Participant will be paid by all Participants with each Participant
paying its Participating Share thereof; provided, however, that if a Participant
is a Credit Enhanced Participant due to lack of debt ratings, the Credit
Enhancement Charge attributed to that Credit Enhanced Participant shall be paid
by such Participant.
phaseiinewhampshiretr_1.gif [phaseiinewhampshiretr_1.gif]The Credit Enhancement
Charge (E) attributed to a Credit Enhanced Participant is a dollar value
determined monthly for each Credit Enhanced Participant by the following
formula:

F =
the Credit Enhancement Change for each New England Hydro debt financing that is
credit enhanced for the Participant.

I =
a number from 1 to n representing each of New England Hydro debt financings.

n =
total number of such financings.

G =
the Participant’s Participating Share (in percent)

H =
the maximum outstanding amount of New Hampshire Hydro debt during the month
which was credit enhanced for such Participant

I =
debt premium (in percent) for the Credit Enhanced. Participant as shown in the
following table:

Participant’s
Debt Rating*
I(%)
 
 
Below B3 or not rated
7.57
B3
5.32
B2
4.82
B1
4.32
Ba3
3.82
6a2
3.32
Ba1
2.82

* Debt rating shall be the lower of the two highest ratings assigned to the
Participant’s outstanding junior long-term debt securities by Moody’s, Standard
and Poor’s, and Duff & Phelps, converted to a Moody’s equivalent as measured at
the commitment date of such New Hampshire Hydro debt financing. If the
Participant has a Participating Share of four tenths of one percent (0.4%) or
less and has only one debt rating, then the debt rating for such Participant
shall be that rating converted to a Moody’s equivalent as measured at the
commitment date of such New Hampshire Hydro debt financing.
J +
an amount calculated as follows:

During the period from the Effective Date to the Date of Full Support Payment, J
shall equal 0 and the Credit Enhancement Charge calculated during such period
pursuant to the above formula shall be accrued for each Participant during such
period with interest calculated at New Hampshire Hydro’s AFDC rate. After the
Date of Full Support Payment, such previously accrued amount for such
Participant shall be treated as if it represented additional investment in the
Transmission Facilities relating only to such Participant. As a result J shall
include monthly amounts attributable to such Participant (whether or not it
continues to be a Credit Enhanced Participant after the Date of Full Support
Payment and whether or not the debt being enhanced continues to be outstanding)
representing amortization of such previously accrued amount (with amortization
over the period that the investment in the Transmission Facilities is being
amortized) plus one-twelfth of the composite percentage (as defined in Section
12 hereof) times the unamortized accrued amount plus a provision for income
taxes.
[End of Attachment F]

7.
This Amendment shall become binding upon New Hampshire Hydro and the
Participants when it has been executed by New Hampshire Hydro and Participants
owning Participating Shares aggregating at least 66-2/3%.

8.
Any number of counterparts of this Amendment may be executed, and each shall
have the same force and effect as an original instrument and as if all the
parties to all of the counterparts had signed the same instrument.

IN WITNESS WHEREOF, the signatories have caused this Amendment to be executed by
their duly authorized officers or agents.

 
COMPANY

By:                  
Its President

Address: XXXXXXXXXX
      XXXXXXXXXX

CONFORMED’
AMENDMENT NO. 5
TO
PHASE II NEW HAMPSHIRE TRANSMISSION
FACILITIES SUPPORT AGREEMENT
This Amendment, dated as of October 1, 1987, is between New England
Hydro-Transmission Corporation (New Hampshire Hydro), and the New England
utilities listed in Attachment A to the Phase II New Hampshire Transmission
Facilities Support Agreement, dated as of June 1, 1985, as amended by Amendment
No. 1, dated as of May 1, 1986, Amendment No. 2, dated as of February 1, 1987,
Amendment No. 3, dated as of June 1, 1987, and Amendment No. 4, dated as of
September 1, 1987, (the “New Hampshire DC Support Agreement”), and amends the
New Hampshire DC Support Agreement as hereinafter provided.
In consideration of the premises and other good and valuable consideration,
receipt of which is hereby acknowledged, and pursuant to the provision of
Section 20H of the New Hampshire DC Support Agreement, it is hereby agreed as
follows:
1.
Certain terms defined in the New Hampshire DC Support Agreement are used herein
with the meanings there provided.

2.
Section 12 is hereby amended by deleting the first sentence of the fourth
paragraph thereof and replacing it with the following sentence:

New Hampshire Hydro’s “operating expenses” shall include all amounts related to
the Transmission Facilities and properly chargeable to expense accounts less any
applicable credits thereto, in accordance with the Uniform System, including but
not limited to operation and maintenance expense such as rent on leased property
and administrative and general expenses, state and Federal income and franchise
taxes, property taxes, payroll taxes, any other taxes not based on income, and
depreciation and/or amortization expense; it being understood that unless the
FERC, upon application by New Hampshire Hydro, authorizes a shorter depreciation
and/or amortization period, for purposes of this Agreement depreciation and/or
amortization shall be at a rate sufficient to recover the investment in the
Transmission Facilities (including estimated cost of removal less any salvage
value which salvage value, for the purpose of calculating such depreciation
and/or amortization, will not exceed the amount of cost of removal) over the
greater of: (i) ten years from the Date of Full Support Payment or (ii) the term
of New Hampshire Hydro’s permanent debt financings or other permanent financing
arrangements related to the Transmission Facilities, adjusted for multiple
maturities and repayment schedules; and it also being understood that rents on
leased property shall include the rental of property or property rights related
to the Transmission Facilities from any Participant with rent based on book
value.
3.
This Amendment shall become binding upon New Hampshire Hydro and the
Participants when it has been executed by New Hampshire Hydro and Participants
owning Participating Shares aggregating at least 66-2/3%.

4.
Any number of counterparts of this Amendment may be executed, and each shall
have the same force and effect as an original instrument and as if all the
parties to all of the counterparts had signed the same instrument.

IN WITNESS WHEREOF, the signatories have caused this Amendment to be executed by
their duly authorized officers or agents.

 
COMPANY

By:                  
Its President

Address: XXXXXXXXXX
      XXXXXXXXXX

CONFORMED
AMENDMENT NO. 6
TO
PHASE II NEW HAMPSHIRE TRANSMISSION
FACILITIES SUPPORT AGREEMENT
This Amendment, dated as of August 1, 1988, is between New England
Hydro—Transmission Corporation (New Hampshire Hydro), and the New Hampshire
utilities listed in Attachment A to the Phase II New Hampshire Transmission
Facilities Support Agreement, dated as of June 1, 1985, as amended (the “New
Hampshire DC Support Agreement”), and amends the New Hampshire DC Support
Agreement as hereinafter provided.
In consideration of the premises and other good and valuable consideration,
receipt of which is hereby acknowledged, and pursuant to the provision of
Section 20H of the New Hampshire DC Support Agreement, it is hereby agreed as
follows:
1.
Certain terms defined in the New Hampshire DC Support Agreement are used herein
with the meanings therein provided.

2.
Section 1 is hereby amended by deleting the first sentence of the fifteenth
paragraph thereof.

3.
Section 2 is hereby amended by (i) changing each reference to a “June 1, 1986”
deadline to “September 15, 1988” and (ii) changing each reference to a “March 1,
1986” deadline to “September 1, 1988.”

4.
Section 2 is hereby amended further by deleting, in the last paragraph thereof,
the words “Section 2” and inserting in lieu thereof “Agreement.”

5.
Section 4A is hereby amended by deleting the third sentence of the second
paragraph thereof and inserting in lieu thereof the following:

“The initial computation of Participating Shares shall be made on the basis that
each signatory to this Agreement as shown in Attachment A is a Participant.
After such initial computation and before the Effective Date, each Participant
shall be entitled to transfer any or all of its Participating Share to one or
more other Participants. On or before September 1, 1988, any Participant listed
in Attachment A who has transferred, or intends to transfer, any or all of its
Participating Share to one or more other Participants listed in Attachment A
must provide documentation to New Hampshire Hydro covering the transfer. The
initial computation is to be recomputed on and as of the Effective Date on the
basis that each signatory to this Agreement which has provided timely
documentation of its participation or transfer is a Participant. Any such
transfers of Participating Shares will be taken into account after such
recomputation. Any such transfer of Participating Shares hereunder shall have no
effect on the interests, rights, or obligations of participants in Phase I.
Subsequent computations are to be made thereafter as of the first day of each
month in which an interest is modified or terminated pursuant to any provision
hereof.”
6.
Section 4B is hereby amended by deleting, in the first sentence thereof, the
word “date”.

7.
Section 12 is hereby amended by inserting into the second sentence of the fourth
paragraph thereof following the words “In addition, each Participant will pay
to” the following:

“New Hampshire Hydro, and New Hampshire Hydro will pay to”
8.
Section 14 is hereby amended by adding the following clause to the end of the
first sentence thereof:

“; provided, however, that nothing in this Section 14 shall (a) prevent a
Participant from transferring its interests and obligations hereunder to another
Participant prior to the Effective Date, or (b) impose any continuing
liabilities or obligations on said transferring Participant with respect to this
Agreement incurred or relating to the period of time after said transferring
Participant’s Participating Share has been reduced to zero.”
9.
Section 20F is hereby amended by inserting into the second sentence thereof
following the words “the Transmission Facilities,” the following:

and (iv) for a transfer of any or all of a Participant’s Participating Share
prior to the Effective Date as provided in Section 4A hereof,”
10.
The first attached Schedule I is hereby deleted and replaced with the second
attached Schedule I.

11.
Schedule II to the Agreement is hereby deleted and replaced with the attached
Schedule II.

12.
Attachment A to the Agreement is hereby deleted and replaced with the attached
Attachment A.

13 Any number of counterparts of this Amendment may be executed, and each shall
have the same force and effect as an original instrument and as if all the
parties to all of the counterparts had signed the same instrument.
IN WITNESS WHEREOF, the signatories have caused this Amendment to be executed by
their duly authorized officers or agents.
 
COMPANY

By:                  
Its President

Address: XXXXXXXXXX
      XXXXXXXXXX

Schedule I
Vermont Electric Power Company, Inc.
Contracting Electric Systems

City of Burlington Electric Department
Central Vermont Public Service Corporation
Citizens Utilities Company
Village of Enosburg Falls Water & Light Department
Franklin Electric Light Company
Green Mountain Power Corporation
Village of Hardwick Electric Department
Village of Ludlow Electric Light Department
Village of Lyndonville Electric Department
Village of Morrisville Water & Light Department
Village of Northfield Electric Department
Village of Stowe Water and Light Department
Village of Swanton
Electric Generation & Transmission .Coop., Inc.
Vermont Marble Company
Washington Electric Cooperative, Inc.

[DELETED]

Schedule I
Vermont Electric Power Company, Inc.
Contracting Electric Systems
Central Vermont Public Service Corporation
Citizens Utilities Company
Franklin Electric Light Company, Inc.
Green Mountain Power Corporation

[INSERTED]

Schedule II
Massachusetts Municipal Wholesale Electric Company
Contracting Electric Systems

Massachusetts Systems

Town of Ashburnham Municipal Light Plant
Town of Georgetown Municipal Light Department
Town of Hull Municipal Lighting Plant
Town of Littleton Electric Light Department
Town of Mansfield. Municipal Electric Department
Town of Marblehead Municipal Light Department
Town of Middleton Municipal Electric Department
Town of Paxton Municipal Light Department
Town of Templeton Municipal Lighting Plant

Rhode Island System

Pascoag Fire District

ATTACHMENT A

Except as provided below, if any participant does not receive required consents,
waivers, regulatory approvals, or other actions of governmental authorities
within the time period required by this Agreement, the listing of participants
and 1980 kilowatthour load will be appropriately modified.
Participant
 
1980 Kilowatthour Load
The Connecticut. Light and Power Company
 
16,002,437,000
 
western Massachusetts Electric Company
 
3,252,432,000
 
Holyoke Water Power Company
 
106,905,000
 
Holyoke Power and Electric Company
 
0
 
New. England Power Company
 
15,444,975,840
(a), (b)
Boston Edison Company (Edison)
 
9,531,773,000
(b), (c)
Central Maine Power Company
 
6,053,571,000
 
Public Service Company of New Hampshire
 
5,043,242,871
(d)
The United Illuminating Company
 
4,715,078,120
 
Vermont Electric Power Company
 
3,262,098,200
 
Canal Electric Company
 
3,227,553,000
 
Montaup Electric Company
 
3,096,872,000
(e)
Bangor Hydro-Electric Company
 
1,305,625,118
 
Connecticut Municipal Electric Energy Cooperative
 
718,177,538
 
UNITIL Power Corp.
 
609,873,261
(f)
Massachusetts Municipal Wholesale Electric Company
 
470,025,000
 
Town of Reading Municipal Light Department
 
401,795,000
 
Newport Electric Corporation
 
382,745,000
 
Fitchburg Gas and Electric Light Co.
 
369,055,118
 
Taunton Municipal Lighting Plant
 
307,460,361
 
City of Chicopee Municipal Lighting Plant
 
279,273,169
 
Town of Braintree Electric Light Department
 
267,289,000
 
City of Peabody Municipal Light Plant
 
245,010,000
 
City of Westfield Gas & Electric Light Department
 
219,026,000
 
City of Holyoke Gas & Electric Light Department
 
214,448,000
 
Town of Danvers Electric Department
 
206,806,000
 
Town of Shrewsbury Electric Light Department
 
146,303,000
 
Hudson Light and Power Department
 
127,808,000
 
Town of Wakefield Municipal Lighting Department
 
107,609,000
 
Town of Hingham Municipal Lighting
 
103,929,000
 
Town of South Hadley Electric Light Department
 
99,981,000
 
Town of North Attleborough Electric Department
 
93,816,000
 
Town of Middleborough Gas and Electric Department
 
92,081,000
 
Town of Holden Municipal Light Department
 
63,676,000
 
Town of West Boylston Municipal Lighting Department
 
43,974,000
 
Town of Sterling Municipal Electric Department
 
24,510,000
 
Town of Groton Electric Light Department
 
22,908,000
 
Town of Boylston Municipal Light Department
 
17,324,000
 
Town of Rowley Municipal Light Department
 
13,551,000
 
Princeton Municipal Light Department
 
7,130,000
 
Town of Concord Municipal Light Plant
 
0
(c)
 
 
 
 
 
 
76,698,146,596
 
 
 
 
 

(a)
Includes New Hampshire retail 1980 kilowatthour load of 434,290,243.

(b)
The 1980 Kilowatthour loads shown for Boston Edison Company and New England
Power Company have been adjusted to reflect the current status of Norwood as a
full requirements customer of New England Power Company.

(c)
As of June 1, 1985, Concord continues to be a full requirements customer of
Edison. At such time as Concord ceases to be a full requirements customer of
Edison, for purposes of this Agreement, Concord shall have an additional
Participating Share equal to 1.087% of Edison’s initial Participating Share
(based on a 1980 Kwh load of 103,629,000 Kwh for Concord) and Edison’s
Participating Share shall be reduced by such amount.

(d)
Includes New. Hampshire retail 1980 kilowatthour load of 4,939,218,744.

(e)
The amount shown for Montaup Electric Company includes the load of the other
members of the Eastern Utilities Associates system.

(s) The amount shown for UNITIL Power Corp. represents the 1980 kilowatthour
load of its affiliates, Concord Electric Company and Exeter & Hampton Electric
Company.

AMENDMENT NO. 7
TO
PHASE II NEW HAMPSHIRE TRANSMISSION
FACILITIES SUPPORT AGREEMENT
This Amendment, dated as of January 1, 1989, is between New England
Hydro-Transmission Corporation (New Hampshire Hydro), and the New England
utilities listed in Attachment A to the Phase II New Hampshire Transmission
Facilities Support Agreement, dated as of June 1, 1985, as amended (the “New
Hampshire DC Support Agreement”), and amends the New Hampshire DC Support
Agreement as hereinafter provided.
In consideration of the premises and other good and valuable consideration,
receipt of which is hereby acknowledged, and pursuant to the provisions of
Section 20H of the New Hampshire DC Support Agreement, it is hereby agreed as
follows:
1.
Certain terms defined in the New Hampshire DC Support Agreement are used herein
with the meanings therein provided.

2.
Section 2 is hereby amended by inserting the following at the end of the second
sentence of paragraph seven thereof:

“, or except with the approval of New England Hydro and New Hampshire Hydro, as
required in connection with any financing by MMWEC, the proceeds of which are to
be applied exclusively by MMWEC to meet its obligations under Phase II, provided
that such grant by MMWEC to its third party lenders shall be on a pari passu
basis with the Lenders, New England Hydro, New Hampshire Hydro, New England
Power Company and Boston Edison Company, and provided further that MMWEC shall
have its third party lenders execute and deliver intercreditor agreements
acceptable to the Lenders, New England Hydro, New Hampshire Hydro, New England
Power Company and Boston Edison Company providing an appropriate allocation
between MMWEC’s third party lenders and the Lenders, New England Hydro, New
Hampshire Hydro, New England Power Company and Boston Edison Company of payments
made under MMWEC’s contract with its systems and including appropriate notice
provisions.”
Section 12 is hereby amended by inserting in the fourth paragraph thereof after
the first sentence the following:
“‘Operating expenses’ shall also include all support -charges incurred by New
Hampshire Hydro pursuant to Section 8 of the Phase II Maine Electric Power SVC
Facilities Support Agreement between New Hampshire Hydro and Maine Electric
Power Company, dated as of October 1, 1988 (SVC Agreement).”
Section 15C is hereby amended by inserting after the first sentence thereof the
following:
“In addition, such Participant’s payment required by the preceding sentence
shall be increased by an amount equal to its Participating Share of the
‘amounts’ determined in the first and second sentences of Section 11B of the SVC
Agreement.”
Section 16 is hereby amended by inserting in the second sentence of the second
paragraph thereof, after the words “notified, equal to”, the following:
“its Participating Share of the ‘amounts’ determined in the second and third
sentences of the second paragraph of Section 12 of the SVC Agreement plus”
Section 16 is hereby further amended by inserting in the first sentence of the
third paragraph thereof, after the words “sell the Transmission Facilities”; the
following:
“(including New Hampshire Hydro’s rights to Transmission Facilities in Vermont
and the SVC Facilities in Maine)”
Section 20D is hereby amended by inserting the following at the end of such
section:
“For the purpose of this subsection, the Transmission Facilities shall include
the SVC Facilities as defined in the SVC Agreement.”
3.
This amendment shall become effective on the last to occur of (i) the acceptance
of this amendment by the Federal Energy Regulatory Commission, and (ii) the
effective date of the SVC Agreement.

4.
Any number of counterparts of this Amendment may be executed, and each shall
have the same force and effect as an original instrument and as if all the
parties to all of the counterparts had signed the same instrument.

 
IN WITNESS WHEREOF, the signatories have caused this Amendment to be executed by
their duly authorized officers or agents.

 
COMPANY

By:                  
Its President

Address: XXXXXXXXXX
      XXXXXXXXXX

96078646.2