EXHIBIT 10.91

JPMorgan

CREDIT AGREEMENT

dated as of

October 21, 2005

between

CENTRAL VERMONT PUBLIC SERVICE CORPORATION,
as Borrower

and

JPMORGAN CHASE BANK, N.A.,
as Lender

TABLE OF CONTENTS

Page

ARTICLE I

Definitions

Section 1.01.

Defined Terms

1

Section 1.02.

Classification of Loans and Borrowings

12

Section 1.03.

Terms Generally

13

Section 1.04.

Accounting Terms; GAAP

13

ARTICLE II

The Credits

Section 2.01.

Commitments

13

Section 2.02.

Revolving Loans and Borrowings

13

Section 2.03.

Requests for Revolving Borrowings

14

Section 2.04.

Letters of Credit

14

Section 2.05.

Interest Elections

17

Section 2.06.

Termination and Reduction of Commitments

18

Section 2.07.

Repayment of Loans; Evidence of Debt

18

Section 2.08.

Prepayment of Loans

19

Section 2.09.

Fees

19

Section 2.10.

Interest

20

Section 2.11.

Alternate Rate of Interest

20

Section 2.12.

Increased Costs

21

Section 2.13.

Break Funding Payments

22

Section 2.14.

Taxes

22

Section 2.15.

Payments Generally

23

Section 2.16.

Mitigation Obligations

23

ARTICLE III

Representations and Warranties

Section 3.01.

Organization; Powers

24

Section 3.02.

Authorization; Enforceability

24

Section 3.03.

Governmental Approvals; No Conflicts

24

Section 3.04.

Financial Condition; No Material Adverse Change

24

Section 3.05.

Properties

25

Section 3.06.

Litigation and Environmental Matters

25

Section 3.07.

Compliance with Laws and Agreements

26

Section 3.08.

Investment and Holding Company Status

26

Section 3.09.

Taxes

26

Section 3.10.

ERISA

26

Section 3.11.

Disclosure

27

Section 3.12

Bonding Capacity

27

ARTICLE IV

Conditions

Section 4.01.

Effective Date

27

Section 4.02.

Each Credit Event

28

ARTICLE V

Affirmative Covenants

Section 5.01.

Financial Statements, Ratings Change and Other Information

29

Section 5.02.

Notices of Material Events

31

Section 5.03.

Existence; Conduct of Business

31

Section 5.04

Payment of Obligations

31

Section 5.05.

Maintenance of Properties; Insurance

32

Section 5.06.

Books and Records; Inspection Rights

32

Section 5.07.

Compliance with Laws

32

Section 5.08.

Use of Proceeds and Letters of Credit

32

ARTICLE VI

Negative Covenants

Section 6.01.

Indebtedness

32

Section 6.02.

Liens

33

Section 6.03.

Fundamental Changes

34

Section 6.04.

Investments, Loans, Advances, Guarantees and Acquisitions

34

Section 6.05.

Swap Agreements

35

Section 6.06.

Restricted Payments

35

Section 6.07.

Transactions with Affiliates

35

Section 6.08.

Restrictive Agreements

35

Section 6.09

Total Debt to Total Capitalization Rate

36

Section 6.10

Interest Coverage Ratio

36

ARTICLE VII

 

Events of Default

36

ARTICLE VIII

Miscellaneous

Section 8.01.

Notices

38

Section 8.02.

Waivers; Amendments

39

Section 8.03.

Expenses; Indemnity; Damage Waiver

39

Section 8.04.

Successors and Assigns

40

Section 8.05.

Survival

42

Section 8.06.

Counterparts; Integration; Effectiveness

42

Section 8.07.

Severability

42

Section 8.08.

Right of Setoff

43

Section 8.09.

Governing Law; Jurisdiction; Consent to Service of Process

43

Section 8.10.

Waiver of Jury Trial

43

Section 8.11.

Headings

44

Section 8.12.

Confidentiality

44

Section 8.13.

Interest Rate Limitation

44

Section 8.14.

USA Patriot Act

44

SCHEDULES

:

Schedule 3.04(d) -- Guaranteed Indebtedness
Schedule 3.06 -- Disclosed Matters
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.08 -- Existing Restrictions

EXHIBITS

:

Exhibit A -- Form of Promissory Note
Exhibit B -- Form of Opinion of Borrower's Counsel
Exhibit C -- Borrower's Investment Policy

                            CREDIT AGREEMENT dated as of October 21, 2005
between CENTRAL VERMONT PUBLIC SERVICE CORPORATION, as Borrower, and JPMORGAN
CHASE, N.A., as Lender.

                            The parties hereto agree as follows:

ARTICLE I
Definitions

                            SECTION 1.01.     Defined Terms. As used in this
Agreement, the following terms have the meanings specified below:

"ABR", when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

"Act" has the meaning assigned to such term in Section 8.14.

"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

"Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

"Alternate Base Rate" means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus one half of 1%. Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective from and including the effective date of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.

"Applicable Rate" means, for any day, with respect to any ABR Loan or Eurodollar
Revolving Loan, or with respect to the facility fees payable hereunder, as the
case may be, the applicable rate per annum set forth below under the caption
"ABR Spread", "Eurodollar Spread" or "Facility Fee Rate", as the case may be,
based upon the ratings by Moody's or S&P, respectively, or if both are
available, Moody's and S&P, applicable on such date to the Index Debt:

Index Debt Rating by Moody's or S&P

Eurodollar Spread*

ABR Spread*

Facility Rate Fee

> A- or A3

0.300%

0%

0.090%

BBB+ or Baa1

0.375%

0%

0.100%

BBB or Baa2

0.500%

0%

0.125%

BBB- or Baa3

0.700%

0%

0.150%

BB+ or Ba1

0.900%

0%

0.225%

BB or Ba2

1.200%

0%

0.325%

<BB or Ba2

1.500%

0%

0.450%

*Plus 12.5 basis points for >50% utilization by Borrower of the Commitment.

                            For purposes of the foregoing, (i) if either Moody's
or S&P shall not have in effect a rating for the Index Debt (other than by
reason of the circumstances referred to in the last sentence of this definition)
or in the absence of such, the corporate credit rating, then such rating agency
shall be deemed to have established a rating of Ba3 or BB- respectively; (ii) if
the ratings established or deemed to have been established by Moody's and S&P
for the Index Debt shall fall within different Categories, the Applicable Rate
shall be based on the higher of the two ratings unless one of the two ratings is
two or more Categories lower than the other, in which case the Applicable Rate
shall be determined by reference to the Category next below that of the higher
of the two ratings; and (iii) if the ratings established or deemed to have been
established by Moody's and S&P for the Index Debt shall be changed (other than
as a result of a change in the rating system of Moody's or S&P), such change
shall be effective as of the date on which it is first announced by the
applicable rating agency, irrespective of when notice of such change shall have
been furnished by the Borrower to the Lender pursuant to Section 5.01 or
otherwise. Each change in the Applicable Rate shall apply during the period
commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. If the rating
system of Moody's or S&P shall change, or if either such rating agency shall
cease to be in the business of rating corporate debt obligations, the Borrower
and the Lender shall negotiate in good faith to amend this definition to reflect
such changed rating system or the unavailability of ratings from such rating
agency and, pending the effectiveness of any such amendment, the Applicable Rate
shall be determined by reference to the rating most recently in effect prior to
such change or cessation.

"Approved Fund" has the meaning assigned to such term in Section 8.04.

"Assessment Rate" means, for any day, the annual assessment rate in effect on
such day that is payable by a member of the Bank Insurance Fund classified as
"well-capitalized" and within supervisory subgroup "B" (or a comparable
successor risk classification) within the meaning of 12 C.F.R. Part 327 (or any
successor provision) to the Federal Deposit Insurance Corporation for insurance
by such Corporation of time deposits made in dollars at the offices of such
member in the United States; provided that if, as a result of any change in any
law, rule or regulation, it is no longer possible to determine the Assessment
Rate as aforesaid, then the Assessment Rate shall be such annual rate as shall
be determined by the Lender to be representative of the cost of such insurance
to the Lender.

"Availability Period" means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Commitment.

"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate multiplied
by the Statutory Reserve Rate plus (b) the Assessment Rate.

"Board" means the Board of Governors of the Federal Reserve System of the United
States of America.

"Bonding Capacity" means the incremental amount of first mortgage bonds
permitted to be issued under the Indenture, without violating the terms and
conditions thereof.

"Borrower" means Central Vermont Public Service Corporation, a Vermont
corporation.

"Borrowing" means Revolving Loans of the same Type, made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.

"Borrowing Request" means a request by the Borrower for a Revolving Borrowing in
accordance with Section 2.03.

"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

"Capital Lease Obligations" of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of Equity
Interests representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of the Borrower; (b)
occupation of a majority of the seats (other than vacant seats) on the board of
directors of the Borrower by Persons who were neither (i) nominated by the board
of directors of the Borrower nor (ii) appointed by directors so nominated; or
(c) the acquisition of direct or indirect Control of the Borrower by any Person
or group.

"Change in Law" means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by the Lender (or, for purposes of
Section 2.12(b), by any lending office of the Lender or by the Lender's holding
company, if any) with any request, guideline or directive (whether or not having
the force of law) of any Governmental Authority made or issued after the date of
this Agreement.

"Charges" has the meaning assigned to such term in Section 8.13.

"Class", when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans.

"Closing Date" means October 21, 2005.

"Code" means the Internal Revenue Code of 1986, as amended from time to time.

"Commitment" means the commitment of the Lender to make Revolving Loans and to
acquire participations in Letters of Credit hereunder, expressed as an amount
representing the maximum aggregate amount of the Lender's Revolving Credit
Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.06 and (b) reduced or increased from time to time pursuant
to assignments by Lender pursuant to Section 8.04. The initial aggregate amount
of the Lender's Commitment is Twenty-Five Million Dollars ($25,000,000).

"Control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.

"Default" means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.

"dollars" or "$" refers to lawful money of the United States of America.

"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 8.02).

                            "Environmental Laws" means all laws, rules,
regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices
or binding agreements issued, promulgated or entered into by any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, release or threatened release of any
Hazardous Material or to health and safety matters.

"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

"Equity Interests" means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.

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

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

"ERISA Event" means (a) any "reportable event", as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multi-employer Plan; or
(g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the
receipt by any Multi-employer Plan from the Borrower or any ERISA Affiliate of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multi-employer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA.

"Eurodollar", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.

"Event of Default" has the meaning assigned to such term in Article VII.

"Excluded Taxes" means, with respect to the Lender or any other recipient of any
payment to be made by or on account of any obligation of the Borrower hereunder,
(a) income or franchise taxes imposed on (or measured by) its net income by the
United States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or in which
its applicable lending office is located and (b) any branch profits taxes
imposed by the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located.

"Federal Funds Effective Rate" means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Lender from three Federal funds brokers of recognized standing
selected by it.

"Financial Officer" means the chief financial officer, principal accounting
officer, treasurer, assistant treasurer or controller of the Borrower.

"GAAP" means generally accepted accounting principles in the United States of
America.

"Governmental Authority" means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.

"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation, including, without limitation, pledge agreements; provided, that the
term Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.

"Guarantor" means Custom Investment Corporation, a Vermont corporation and C.V.
Realty, Inc., a Vermont corporation.

"Hazardous Materials" means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

"Income Tax Expense" means, for any period, all provisions for taxes based on
net income of the Borrower (including, without limitation, any additions to such
taxes, and any penalties and interest with respect thereto), all as determined
for the Borrower on standalone basis in accordance with GAAP.

"Indebtedness" of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others,
(h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty and (j) all obligations, contingent or
otherwise, of such Person in respect of bankers' acceptances. The Indebtedness
of any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.

"Indemnified Taxes" means Taxes other than Excluded Taxes.

"Indemnitee" has the meaning assigned to such term in Section 8.03.

"Indenture" means the Indenture of Mortgage dated as of October 1, 1929, between
the Borrower and the trustee named therein, as supplemented and amended by
forty-five indentures supplemental thereto and amendatory thereof, including the
Forty-Fourth Supplemental Indenture dated as of June 15, 2004, entered into by
the Borrower and U.S. Bank National Association, a national banking association,
as trustee, which amended, supplemented and restated the Indenture and the prior
supplemental indentures, and the Forty-Fifth Supplemental Indenture dated as of
July 15, 2004.

"Index Debt" means senior, unsecured, long-term indebtedness for borrowed money
of the Borrower that is not guaranteed by any other Person or subject to any
other credit enhancement.

"Information" has the meaning assigned to such term in Section 8.12.

"Interest Election Request" means a request by the Borrower to convert or
continue a Revolving Borrowing in accordance with Section 2.05.

"Interest Expense" means, for any period, total interest expense (including,
without limitation, that which is capitalized, that which is attributable to
capital leases or synthetic leases and the pre-tax equivalent of dividends
payable on redeemable stock) however, excluding interest on existing capital
leases totaling $7,400,000 as of September 30, 2005 classified as an operating
expense, of the Borrower on a standalone basis with respect to all outstanding
Indebtedness of the Borrower including, without limitation, all commissions,
discounts and other fees and charges owed with respect to letters of credit and
net costs under Swap Agreements.

"Interest Payment Date" means (a) with respect to any ABR Loan, the last day of
each March, June, September and December, and (b) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months' duration, each day prior to the last day of
such Interest Period that occurs at intervals of three months' duration after
the first day of such Interest Period.

"Interest Period" means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect, and provided, that (a) if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless, in the case of a
Eurodollar Borrowing only, such next succeeding Business Day would fall in the
next calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (b) any Interest Period pertaining to a Eurodollar
Borrowing that commences on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the last calendar
month of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period. For purposes hereof, the date of a
Borrowing initially shall be the date on which such Borrowing is made and, in
the case of a Revolving Borrowing, thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.

"LC Disbursement" means a payment made by the Lender pursuant to a Letter of
Credit.

"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time.

"Lender" means JP Morgan Chase Bank, N.A. and any other Person that shall have
become a party hereto pursuant to an assignment and assumption, other than any
such Person that ceases to be a party hereto pursuant to an assignment and
assumption.

"Letter of Credit" means any letter of credit issued pursuant to this Agreement.

"LIBO Rate" means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on the Telerate Service Page 3750 of the Dow Jones
Market Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Lender from time to time for purposes of providing quotations
of interest rates applicable to dollar deposits in the London interbank market)
at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Lender in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.

"Lien" means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

"Loans" means the loans made by the Lender to the Borrower pursuant to this
Agreement.

"Material Adverse Effect" means a material adverse effect on (a) the business,
assets, operations, prospects or condition, financial or otherwise, of the
Borrower, the Regulated Subsidiaries, and the Subsidiaries taken as a whole,
(b) the ability of the Borrower to perform any of its obligations under this
Agreement or (c) the rights of or benefits available to the Lender under this
Agreement.

"Material Indebtedness" means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of the Borrower and its Subsidiaries in an aggregate principal amount
exceeding $2,000,000. For purposes of determining Material Indebtedness, the
"principal amount" of the obligations of the Borrower or any Subsidiary in
respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower or such Subsidiary
would be required to pay if such Swap Agreement were terminated at such time.
Notwithstanding the foregoing, Material Indebtedness does not include
Indebtedness or Swap Agreements of any Subsidiary that are non-recourse to the
Borrower, Guarantor or any Regulated Subsidiary.

"Maturity Date" means September 30, 2008.

"Maximum Rate" has the meaning assigned to such term in Section 8.13.

"Moody's" means Moody's Investors Service, Inc.

"Multi-employer Plan" means a multi-employer plan as defined in
Section 4001(a)(3) of ERISA.

"Net Income" means, for any period, the net income (or loss), without deduction
for minority interests, of the Borrower on a standalone basis for such period
taken as a single accounting period determined in conformity with GAAP.

"Net Worth" means, at any time, all amounts that, in conformity with GAAP, would
be included under the caption "total stockholders' equity" (or any like caption)
on a standalone balance sheet of the Borrower as of such date provided that, in
no event shall Net Worth include any amounts in respect of mandatorily
redeemable stock.

"Other Taxes" means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement.

"Participant" has the meaning set forth in Section 8.04.

"PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

"Permitted Encumbrances" means:

(a) Liens imposed by law for taxes that are not yet due or are being contested
in compliance with Section 5.04;

(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04;

(c) pledges and deposits made in the ordinary course of business in compliance
with workers' compensation, unemployment insurance and other social security
laws or regulations;

(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

(e) judgment liens in respect of judgments that do not constitute an Event of
Default under clause (k) of Article VII; and

(f) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of the Borrower or any Subsidiary;

provided

that the term "Permitted Encumbrances" shall not include any other Lien securing
Indebtedness.

 

"Permitted Investments" means:

(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;

(b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P or from Moody's;

(c) investments in certificates of deposit, banker's acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States of America or any state thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;

(d) fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above;

(e) money market funds that (i) comply with the criteria set forth in Securities
and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii)
are rated AA by S&P and Aa by Moody's and (iii) have portfolio assets of at
least $5,000,000,000;

(f) investments in accordance with the Borrower's investment policy, attached
hereto as Exhibit C and made a part hereof;

(g) instruments of federal agencies not guaranteed by the U.S. Government
maturing within 270 days rated AA or AAA by S&P;

(h) Tax-Exempt Floating Rate Notes and Bonds maturing within 270 days of a
corporation or a company carrying Aa or Aaa long-term debt rating and/or P-1
commercial paper rating from Moody's or equivalent, or carrying a letter of
credit from a bank meeting the same criteria; and

(i) Municipal Bonds, Taxable or Tax-Exempt, maturing within 270 days issued by
Municipal or tax-exempt institution rated Aa or Aaa long-term debt rating and/or
P-1 commercial paper rating and/or MIG-1 rating from Moody's or equivalent, or
carrying a letter of credit from a bank meeting the same criteria.

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

"Plan" means any employee pension benefit plan (other than a Multi-employer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

"Power Transactions" means transactions relating to the purchase, sale, swap,
hedge, trade, option, replacement, scheduling, offset, claim, settlement or
other agreement for the acquisition or disposition of electric capacity or
energy or other products or services related thereto, including, without
limitation, the transporting, delivery or transmission thereof and any
collateral, credit support, margin agreements or similar arrangements.

"Prime Rate" means the rate of interest per annum publicly announced from time
to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

"Regulated Subsidiary" means (a) a subsidiary of the Borrower which is regulated
by the Vermont Public Service Board or any successor regulatory commission or
agency to either and any other subsidiary that is subject to federal or state
regulation as a public utility company and (b) Custom Investment Corporation and
C.V. Realty, Inc.

"Regulators" means the Vermont Public Service Board or any successor regulatory
commission or agency to either.

"Related Parties" means, with respect to any specified Person, such Person's
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person's Affiliates.

"Restricted Payment" means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Borrower or any Regulated Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such Equity Interests in the Borrower or any option, warrant
or other right to acquire any such Equity Interests in the Borrower.

"Revolving Credit Exposure" means the sum of the outstanding principal amount of
the Lender's Revolving Loans and its LC Exposure at such time.

"Revolving Loan" means a Loan made pursuant to Section 2.03.

"Significant Subsidiary" means any Regulated Subsidiary, Catamount Resources
Corporation on a standalone basis, and Eversant Corporation.

"S&P" means Standard & Poor's.

"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Lender is subject (a) with respect to the
Base CD Rate, for new negotiable nonpersonal time deposits in dollars of over
$100,000 with maturities approximately equal to three months and (b) with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

"subsidiary" means, with respect to any Person (the "parent") at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, (i) as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, Controlled or held, and (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent or (ii) that is, as of such
date, controlled by the parent or one or more subsidiaries of the parent, or by
the parent and one or more subsidiaries of the parent.

"Subsidiary" means any subsidiary of the Borrower.

"Swap Agreement" means any agreement with respect to any swap, hedge, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, commodities, equity or
debt instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions; provided that no phantom
stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
the Borrower or the Subsidiaries shall be a Swap Agreement.

"Taxes" means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

"Three-Month Secondary CD Rate" means, for any day, the secondary market rate
for three-month certificates of deposit reported as being in effect on such day
(or, if such day is not a Business Day, the next preceding Business Day) by the
Board through the public information telephone line of the Federal Reserve Bank
of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day) or, if such rate is not so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Lender from three negotiable certificate of deposit dealers of recognized
standing selected by it.

"Total Capitalization" means the sum of the Total Debt of Borrower plus the
Borrower's Net Worth.

"Total Debt" means Indebtedness of the Borrower referred to in clauses (a)
through (j) of the definition of Indebtedness plus mandatorily redeemable stock
and, without limitation, all contingent obligations with respect to any of the
foregoing, to the extent (i) such Indebtedness matures one year or more from
issuance or (ii) such Indebtedness remains outstanding one year or more from
issuance under any credit facility or combination thereof.

"Transactions" means the execution, delivery and performance by the Borrower of
this Agreement, the borrowing of Loans, the use of the proceeds thereof and the
issuance of Letters of Credit hereunder.

"Type", when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

"Withdrawal Liability" means liability to a Multi-employer Plan as a result of a
complete or partial withdrawal from such Multi-employer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

 

                            SECTION 1.02.     Classification of Loans and
Borrowings. For purposes of this Agreement, Loans may be classified and referred
to by Class (e.g., a "Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or
by Class and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and referred to by Class (e.g., a "Revolving Borrowing") or by Type
(e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar
Revolving Borrowing").

                            SECTION 1.03.     Terms Generally. The definitions
of terms herein shall apply equally to the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". The word "will" shall be construed to have the same meaning and
effect as the word "shall". Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Section, Exhibits and Schedules shall be
construed to refer to Articles and Section of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.

                            SECTION 1.04.     Accounting Terms; GAAP. Except as
otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided that, if the Borrower notifies the Lender that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Lender notifies the Borrower that the
Lender requests an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.

ARTICLE II
The Credits

                            SECTION 2.01.     Commitments. Subject to the terms
and conditions set forth herein, the Lender agrees to make Revolving Loans to
the Borrower and to issue Letters of Credit at the request of the Borrower from
time to time during the Availability Period in an aggregate principal amount
that will not result in the Lender's Revolving Credit Exposure exceeding the
Lender's Commitment. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Revolving Loans and request to issue, amend, renew and extend Letters of Credit.

                            SECTION 2.02.     Revolving Loans and Borrowings.

(a) Subject to Section 2.11, each Revolving Loan shall be comprised entirely of
ABR Loans or Eurodollar Loans as the Borrower may request in accordance
herewith.

(b) At the commencement of each Interest Period for any Eurodollar Revolving
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $100,000 and not less than Five Hundred Thousand Dollars ($500,000).
At the time that each ABR Revolving Borrowing is made, such Borrowing shall be
in an aggregate amount that is an integral multiple of $100,000 and not less
than $100,000; provided that an ABR Revolving Borrowing may be in an aggregate
amount that is equal to the entire unused balance of the total Commitment or
that is required to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.04(d). Borrowings of more than one Type and Class may
be outstanding at the same time; provided that there shall not at any time be
more than a total of $25,000,000 Eurodollar Revolving Borrowings outstanding.

(c) Notwithstanding any other provision of this Agreement, the Borrower shall
not be entitled to request, or to elect to convert or continue, any Borrowing if
the Interest Period requested with respect thereto would end after the Maturity
Date.

                            SECTION 2.03.     Requests for Revolving Loans. To
request a Revolving Loan, the Borrower shall notify the Lender of such request
by telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00
a.m., New York City time, three Business Days before the date of the proposed
Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., New
York City time, one Business Day before the date of the proposed Borrowing;
provided that any such notice of an ABR Revolving Borrowing to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.04(d) may be
given not later than 10:00 a.m., New York City time, on the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or telecopy to the Lender of a written
Borrowing Request in a form approved by the Lender and signed by the Borrower.
Each such telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:

(i) the aggregate amount of the requested Borrowing;

(ii) the date of such Borrowing, which shall be a Business Day;

(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term "Interest Period"; and

(v) the location and number of the Borrower's account to which funds are to be
disbursed.

If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Borrower shall be deemed to have selected an Interest Period of one month's
duration.

                            SECTION 2.04.     Letters of Credit.

(a) General. Subject to the terms and conditions set forth herein, the Borrower
may request the issuance of Letters of Credit for its own account, in a form
reasonably acceptable to the Lender, at any time and from time to time during
the Availability Period. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, the Lender relating to any Letter of Credit,
the terms and conditions of this Agreement shall control. The Lender may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of the Lender, in which case the term "Lender" shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate; provided, however,
such Affiliate must have a minimum corporate credit rating of "A-" from S&P or
"A3" from Moody's.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or telecopy (or transmit by electronic communication, if arrangements for doing
so have been approved by the Lender) to the Lender (two business days in advance
of the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c)
of this Section), the amount of such Letter of Credit, the name and address of
the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. If requested by the
Lender, the Borrower also shall submit a letter of credit application on the
Lender's standard form in connection with any request for a Letter of Credit. A
Letter of Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed
Twenty-Five Million Dollars $25,000,000 and (ii) the sum of the total Revolving
Credit Exposures shall not exceed the Lender's Commitment.

(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close
of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five Business Days prior to the Maturity Date.

(d) Reimbursement. If the Lender shall make any LC Disbursement in respect of a
Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to
the Lender an amount equal to such LC Disbursement not later than 12:00 noon,
New York City time, on the date that such LC Disbursement is made, if the
Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m.,
New York City time, on such date, or, if such notice has not been received by
the Borrower prior to such time on such date, then not later than 12:00 noon,
New York City time, on (i) the Business Day that the Borrower receives such
notice, if such notice is received prior to 10:00 a.m., New York City time, on
the day of receipt, or (ii) the Business Day immediately following the day that
the Borrower receives such notice, if such notice is not received prior to such
time on the day of receipt; provided that, if such LC Disbursement is not less
than $100,000, the Borrower may, subject to the conditions to borrowing set
forth herein, request in accordance with Section 2.03 that such payment be
financed with an ABR Revolving Borrowing in an equivalent amount and, to the
extent so financed, the Borrower's obligation to make such payment shall be
discharged and replaced by the resulting ABR Revolving Borrowing.

(e) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (d) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Lender under a Letter of Credit
against presentation of a draft or other document that does not comply with the
terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Lender, nor any of their Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Lender; provided that the foregoing shall not
be construed to excuse the Lender from liability to the Borrower to the extent
of any direct damages (as opposed to consequential damages, claims in respect of
which are hereby waived by the Borrower to the extent permitted by applicable
law) suffered by the Borrower that are caused by the Lender's failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or willful misconduct
on the part of the Lender (as finally determined by a court of competent
jurisdiction), the Lender shall be deemed to have exercised care in each such
determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the Lender may, in its sole discretion, either accept and make
payment upon such documents without responsibility for further investigation,
regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance
with the terms of such Letter of Credit.

(f) Disbursement Procedures. The Lender shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment
under a Letter of Credit. The Lender shall promptly notify the Borrower by
telephone (confirmed by telecopy) of such demand for payment and whether the
Lender has made or will make an LC Disbursement thereunder; provided that any
failure to give or delay in giving such notice shall not relieve the Borrower of
its obligation to reimburse the Lender and the Lender with respect to any such
LC Disbursement.

(g) Interim Interest. If the Lender shall make any LC Disbursement, then, unless
the Borrower shall reimburse such LC Disbursement in full on the date such LC
Disbursement is made, the unpaid amount thereof shall bear interest, for each
day from and including the date such LC Disbursement is made to but excluding
the date that the Borrower reimburses such LC Disbursement, at the rate per
annum then applicable to ABR Revolving Loans; provided that, if the Borrower
fails to reimburse such LC Disbursement when due pursuant to paragraph (d) of
this Section, then Section 2.10(c) shall apply.

(h) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day, that the Borrower receives notice from the
Lender (or, if the maturity of the Loans has been accelerated), demanding the
deposit of cash collateral pursuant to this paragraph, the Borrower shall
deposit in an account with the Lender, an amount in cash equal to the LC
Exposure as of such date plus any accrued and unpaid interest thereon; provided
that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the Borrower described in clause (h) or (i) of Article VII. Such
deposit shall be held by the Lender as collateral for the payment and
performance of the obligations of the Borrower under this Agreement. The Lender
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment
of such deposits, which investments shall be made at the option and sole
discretion of the Lender and at the Borrower's risk and expense, such deposits
shall not bear interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall be applied by the
Lender to reimburse the Lender for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction
of the reimbursement obligations of the Borrower for the LC Exposure at such
time or, if the maturity of the Loans has been accelerated, be applied to
satisfy other obligations of the Borrower under this Agreement. If the Borrower
is required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.

                            SECTION 2.05.     Interest Elections.

(a) Each Revolving Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Eurodollar Revolving
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request. Thereafter, the Borrower may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a Eurodollar
Revolving Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing.

(b) To make an election pursuant to this Section, the Borrower shall notify the
Lender of such election by telephone by the time that a Borrowing Request would
be required under Section 2.03 if the Borrower were requesting a Revolving
Borrowing of the Type resulting from such election to be made on the effective
date of such election. Each such telephonic Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Lender of a written Interest Election Request in a form approved by the Lender
and signed by the Borrower.

(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:

(i)    the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);

(ii)    the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;

(iii)    whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and

(iv)    if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term "Interest Period".

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.

(d) If the Borrower fails to deliver a timely Interest Election Request with
respect to a Eurodollar Revolving Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Lender so notifies the Borrower,
then, so long as an Event of Default is continuing (i) no outstanding Revolving
Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii)
unless repaid, each Eurodollar Revolving Borrowing shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto.

                            SECTION 2.06.     Termination and Reduction of
Commitments.

(a) Unless previously terminated, the Commitments shall terminate on the
Maturity Date.

(b) The Borrower may at any time terminate, or from time to time reduce, the
Commitments; provided that (i) each reduction of the Commitments shall be in an
amount that is an integral multiple of $1,000,000 and not less than $5,000,000
and (ii) the Borrower shall not terminate or reduce the Commitments if, after
giving effect to any concurrent prepayment of the Loans in accordance with
Section 2.08, the sum of the Revolving Credit Exposures would exceed the total
Commitments.

(c) The Borrower shall notify the Lender of any election to terminate or reduce
the Commitments under paragraph (b) of this Section at least three Business Days
prior to the effective date of such termination or reduction, specifying such
election and the effective date thereof. Each notice delivered by the Borrower
pursuant to this Section shall be irrevocable; provided that a notice of
termination of the Commitments delivered by the Borrower may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrower (by notice to the Lender
on or prior to the specified effective date) if such condition is not satisfied.
Any termination or reduction of the Commitments shall be permanent.

                            SECTION 2.07.     Repayment of Loans; Evidence of
Debt.

(a) The Borrower hereby unconditionally promises to pay to the Lender the then
unpaid principal amount of each Revolving Loan on the Maturity Date.

(b) The Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrower to the Lender resulting
from each Loan made by the Lender, including the amounts of principal and
interest payable and paid to the Lender from time to time hereunder.

(c) The Lender shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, the Class and Type thereof and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to the Lender hereunder and
(iii) the amount of any sum received by the Lender.

(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c)
of this Section shall be prima facie evidence of the existence and amounts of
the obligations recorded therein; provided that the failure of the Lender to
maintain such accounts or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Loans in accordance with the terms of
this Agreement.

(e) The Lender may request that Loans be evidenced by a promissory note. In such
event, the Borrower shall prepare, execute and deliver to the Lender a
promissory note payable to the order of the Lender (or, if requested by the
Lender, to Lender and its registered assigns) and in the form of Exhibit A or
any other form approved by the Lender. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 8.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).

 

                            SECTION 2.08.     Prepayment of Loans.

(a) The Borrower shall have the right at any time and from time to time to
prepay any Borrowing in whole or in part, subject to prior notice in accordance
with paragraph (b) of this Section.

(b) The Borrower shall notify the Lender by telephone (confirmed by telecopy) of
any prepayment hereunder (i) in the case of prepayment of a Eurodollar Revolving
Borrowing, not later than 11:00 a.m., New York City time, three Business Days
before the date of prepayment, or (ii) in the case of prepayment of an ABR
Revolving Borrowing, not later than 11:00 a.m., New York City time, one Business
Day before the date of prepayment. Each such notice shall be irrevocable and
shall specify the prepayment date and the principal amount of each Borrowing or
portion thereof to be prepaid; provided that, if a notice of prepayment is given
in connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.06, then such notice of prepayment may be revoked if
such notice of termination is revoked in accordance with Section 2.06. Each
partial prepayment of any Revolving Borrowing shall be in an amount that would
be permitted in the case of an advance of a Revolving Borrowing of the same Type
as provided in Section 2.02. Each prepayment of a Revolving Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued interest to the extent required by Section 2.10.

                            SECTION 2.09.     Fees.

(a) The Borrower agrees to pay to the Lender a facility fee, which shall accrue
at the Applicable Rate on the daily amount of the unused portion of the
Commitment of the Lender during the period from and including the Effective Date
to but excluding the date on which such Commitment terminates; provided that, if
the Lender continues to have any Revolving Credit Exposure after its Commitment
terminates, then such facility fee shall continue to accrue on the daily amount
of the Lender's Revolving Credit Exposure from and including the date on which
its Commitment terminates to but excluding the date on which the Lender ceases
to have any Revolving Credit Exposure. Accrued facility fees shall be payable in
arrears on the last day of March, June, September and December of each year and
on the date on which the Commitments terminate, commencing on the first such
date to occur after the date hereof; provided that any facility fees accruing
after the date on which the Commitment terminate shall be payable on demand. All
facility fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).

(b) The Borrower agrees to pay (i) to the Lender a commission with respect to
its participation in Letters of Credit, which shall accrue at the same
Applicable Rate used to determine the interest rate applicable to Eurodollar
Revolving Loans on the average daily amount of the Lender's LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date on which the Lender's Commitment terminates and the date on
which the Lender ceases to have any LC Exposure, and (ii) the Lender's standard
fees with respect to the issuance, amendment, renewal or extension of any Letter
of Credit or processing of drawings thereunder. Such commissions accrued through
and including the last day of March, June, September and December of each year
shall be payable on the third Business Day following such last day, commencing
on the first such date to occur after the Effective Date; provided that all such
commissions shall be payable on the date on which the Commitment terminate and
any such commissions accruing after the date on which the Commitment terminates
shall be payable on demand. Any other fees and/or commissions payable to the
Lender pursuant to this paragraph shall be payable within 10 days after demand.
All commissions shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).

(c) The Borrower agrees to pay to the Lender usual and customary fees payable in
the amount and at the times separately agreed upon by the Borrower and the
Lender.

(d) All fees and commissions payable hereunder shall be paid on the dates due,
in immediately available funds, to the Lender. Fees and commissions paid shall
not be refundable under any circumstances.

                            SECTION 2.10.     Interest.

(a) The Loans comprising each ABR Borrowing shall bear interest at the Alternate
Base Rate plus the Applicable Rate.

(b) The Loans comprising each Eurodollar Borrowing shall bear interest in the
case of a Eurodollar Revolving Loan, at the Adjusted LIBO Rate for the Interest
Period in effect for such Borrowing plus the Applicable Rate.

(c) Notwithstanding the foregoing, if any principal of or interest on any Loan
or any fee or other amount payable by the Borrower hereunder is not paid when
due, whether at stated maturity, upon acceleration or otherwise, such overdue
amount shall bear interest, after as well as before judgment, at a rate per
annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section.

(d) Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date for such Loan and, in the case of Revolving Loans, upon termination
of the Commitment; provided that (i) interest accrued pursuant to paragraph (c)
of this Section shall be payable on demand, (ii) in the event of any repayment
or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan
prior to the end of the Availability Period), accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment and (iii) in the event of any conversion of any Eurodollar Revolving
Loan prior to the end of the current Interest Period therefor, accrued interest
on such Loan shall be payable on the effective date of such conversion.

(e) All interest hereunder shall be computed on the basis of a year of 360 days,
except that interest computed by reference to the Alternate Base Rate at times
when the Alternate Base Rate is based on the Prime Rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and in each case shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate
or LIBO Rate shall be determined by the Lender, and such determination shall be
conclusive absent manifest error.

                            SECTION 2.11.     Alternate Rate of Interest. If
prior to the commencement of any Interest Period for a Eurodollar Borrowing:

(a) the Lender determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining
the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest
Period; or

(b) the Lender determines that the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period will not adequately and fairly reflect the
cost to the Lender of making or maintaining its Loans included in such Borrowing
for such Interest Period;

then the Lender shall give notice thereof to the Borrower by telephone or
telecopy as promptly as practicable thereafter and, until the Lender notifies
the Borrower that the circumstances giving rise to such notice no longer exist,
(i) any Interest Election Request that requests the conversion of any Revolving
Borrowing to, or continuation of any Revolving Borrowing as, a Eurodollar
Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a
Eurodollar Revolving Borrowing, such Borrowing shall be made as an ABR
Borrowing; provided that if the circumstances giving rise to such notice affect
only one Type of Borrowings, then the other Type of Borrowings shall be
permitted.

 

                            SECTION 2.12.     Increased Costs.

(a) If any Change in Law shall:

(i)    impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, the Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate); or

(ii)    impose on the Lender or the London interbank market any other condition
affecting this Agreement or Eurodollar Loans made by the Lender or any Letter of
Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to the
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to the Lender of
issuing or maintaining any Letter of Credit or to reduce the amount of any sum
received or receivable by the Lender (whether of principal, interest or
otherwise), then the Borrower will pay to the Lender, such additional amount or
amounts as will compensate the Lender for such additional costs incurred or
reduction suffered.

(b) If the Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on the
Lender's capital or on the capital of the Lender's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, the Lender, or the Letters of Credit issued by the Lender, to
a level below that which the Lender or the Lender's holding company could have
achieved but for such Change in Law (taking into consideration the Lender's
policies and the policies of the Lender's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to the Lender,
as the case may be, such additional amount or amounts as will compensate the
Lender or the Lender's holding company for any such reduction suffered.

(c) A certificate of a Lender setting forth the amount or amounts necessary to
compensate the Lender or its holding company, as the case may be, as specified
in paragraph (a) or (b) of this Section shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay the Lender the
amount shown as due on any such certificate within 10 days after receipt
thereof.

(d) Failure or delay on the part of the Lender to demand compensation pursuant
to this Section shall not constitute a waiver of the Lender's right to demand
such compensation; provided that the Borrower shall not be required to
compensate the Lender pursuant to this Section for any increased costs or
reductions incurred more than 270 days prior to the date that the Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of the Lender's intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the 270-day period referred to above shall be
extended to include the period of retroactive effect thereof.

                            SECTION 2.13.     Break Funding Payments. In the
event of (a) the payment of any principal of any Eurodollar Loan other than on
the last day of an Interest Period applicable thereto (including as a result of
an Event of Default), (b) the conversion of any Eurodollar Loan other than on
the last day of the Interest Period applicable thereto, (c) the failure to
borrow, convert, continue or prepay any Eurodollar Loan on the date specified in
any notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.08(b) and is revoked in accordance therewith), or
(d) the assignment of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto as a result of a request by the Borrower
pursuant to Section 2.16, then, in any such event, the Borrower shall compensate
the Lender for the loss, cost and expense attributable to such event. In the
case of a Eurodollar Loan, such loss, cost or expense to the Lender shall be
deemed to include an amount determined by the Lender to be the excess, if any,
of (i) the amount of interest which would have accrued on the principal amount
of such Loan had such event not occurred, at the Adjusted LIBO Rate that would
have been applicable to such Loan, for the period from the date of such event to
the last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which the
Lender would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the Eurodollar
market. A certificate of the Lender setting forth any amount or amounts that the
Lender is entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
the Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.

                            SECTION 2.14.     Taxes.

(a) Any and all payments by or on account of any obligation of the Borrower
hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section ) the Lender receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.

(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

(c) The Borrower shall indemnify the Lender within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Lender on or with respect to any payment by or on account of any obligation
of the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section ) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Borrower by the Lender shall be conclusive absent manifest error.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by the Borrower to a Governmental Authority, the Borrower shall deliver to the
Lender the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Lender.

(e) If the Lender determines, in its sole discretion, that it has received a
refund of any Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section 2.14, it shall pay over such refund to the Borrower
(but only to the extent of indemnity payments made, or additional amounts paid,
by the Borrower under this Section 2.14 with respect to the Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the Lender and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Borrower, upon the
request of the Lender, agrees to repay the amount paid over to the Borrower
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Lender in the event the Lender is required to
repay such refund to such Governmental Authority. This Section shall not be
construed to require the Lender to make available its tax returns (or any other
information relating to its taxes which it deems confidential) to the Borrower
or any other Person.

                            SECTION 2.15.     Payments Generally.

(a) The Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Section 2.12, 2.13 or 2.14, or otherwise) prior to 2:00
p.m., New York City time, on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Lender, be deemed to have been received on
the next succeeding Business Day for purposes of calculating interest thereon.
All such payments shall be made to the Lender at its offices at 12 Corporate
Woods Boulevard, Albany, New York 12211. If any payment hereunder shall be due
on a day that is not a Business Day, the date for payment shall be extended to
the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments hereunder shall be made in dollars.

(b) If at any time insufficient funds are received by and available to the
Lender to pay fully all amounts of principal, unreimbursed LC Disbursements,
interest and fees then due hereunder, such funds shall be applied (i) first,
towards payment of interest and fees then due hereunder, and (ii) second,
towards payment of principal and unreimbursed LC Disbursements then due
hereunder.

                            SECTION 2.16.     Mitigation Obligations. If the
Lender requests compensation under Section 2.12, or if the Borrower is required
to pay any additional amount to the Lender or any Governmental Authority for the
account of the Lender pursuant to Section 2.14, then the Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of the
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.12 or 2.14, as the case may be, in the future and
(ii) would not subject the Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to the Lender. The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by the Lender in connection with
any such designation or assignment.

ARTICLE III
Representations and Warranties

                            The Borrower represents and warrants to the Lender
that:

                            SECTION 3.01.     Organization; Powers. Each of the
Borrower and its Regulated Subsidiaries is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.

                            SECTION 3.02.     Authorization; Enforceability. The
Transactions are within the Borrower's corporate powers and have been duly
authorized by all necessary corporate and, if required, stockholder action. This
Agreement has been duly executed and delivered by the Borrower and constitutes a
legal, valid and binding obligation of the Borrower, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.

                            SECTION 3.03.     Governmental Approvals; No
Conflicts. The Transactions (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority,
except such as have been obtained or made and are in full force and effect, (b)
will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of the Borrower or any of its Regulated
Subsidiaries (and, to the best of Borrower's knowledge, all of its other
Subsidiaries, except where any such violation would not result in a Material
Adverse Effect) or any order of any Governmental Authority, (c) will not violate
or result in a default under any indenture, agreement or other instrument
binding upon the Borrower or any of its Regulated Subsidiaries (and, to the best
of Borrower's knowledge, all of its other Subsidiaries, except where any such
violation or breach would not result in a Material Adverse Effect) or its
assets, or give rise to a right thereunder to require any payment to be made by
the Borrower or any of its Regulated Subsidiaries (and, to the best of
Borrower's knowledge, all of its other Subsidiaries, except where any such right
would not result in a Material Adverse Effect) and (d) will not result in the
creation or imposition of any Lien on any asset of the Borrower or any of its
Regulated Subsidiaries.

                            SECTION 3.04.     Financial Condition; No Material
Adverse Effect.

(a) The Borrower has heretofore furnished to the Lender its consolidated balance
sheet and statements of income, stockholders equity and cash flows (i) as of and
for the fiscal year ended December 31, 2004, reported on by Deloitte & Touche,
LLP, independent public accountants, and (ii) as of and for the fiscal quarter
and the portion of the fiscal year ended June 30, 2005, certified by its Chief
Financial Officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Borrower and its consolidated Subsidiaries as of such dates and for such periods
in accordance with GAAP, subject to year-end audit adjustments and the absence
of footnotes in the case of the statements referred to in clause (ii) above.

(b) The Borrower has heretofore furnished to the Lender its unaudited balance
sheet, statements of income, and stockholders equity of the Borrower on a
standalone basis (i) as of and for the fiscal year ended December 31, 2004, and
(ii) as of and for the fiscal quarter and the portion of the fiscal year ended
June 30, 2005, all being certified by its Chief Financial Officer. Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower on a
standalone basis as of such dates and for such periods in accordance with GAAP,
subject to year-end audit adjustments and the absence of footnotes.

(c) Since June 30, 2005, there has been no change in the business, assets,
operations, prospects or condition, financial or otherwise, of the Borrower and
its Regulated Subsidiaries, taken as a whole, as of the Closing Date, or
subsequently that has not been publicly disclosed, except changes that
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.

(d) Each of the Borrower and Guarantor are not liable for any Indebtedness of
their respective subsidiaries except as set forth on Schedule 3.04(d) hereof,
and except as allowed by Article VI hereof.

                            SECTION 3.05.     Properties.

(a) Each of the Borrower and its Regulated Subsidiaries (and, to the best of
Borrower's knowledge, all of its other Subsidiaries, except where any such
failure would not result in a Material Adverse Effect) has good title to, or
valid leasehold interests in, all its real and personal property material to its
business, except for Permitted Encumbrances and minor defects in title that do
not interfere with its ability to conduct its business as currently conducted or
to utilize such properties for their intended purposes.

(b) Each of the Borrower and its Regulated Subsidiaries and, to the best of
Borrower's knowledge, all of its other Subsidiaries, owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Borrower and its
Regulated Subsidiaries and, to the best of Borrower's knowledge, all of its
other Subsidiaries, does not infringe upon the rights of any other Person,
except for any such infringements that, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.

                            SECTION 3.06.     Litigation and Environmental
Matters.

                            Other than as disclosed in the Company's most recent
Form 10-K, Form 10-Q and Forms 8-K published since the most recent Form 10-K and
Form 10-Q:

(a) There are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any of its Regulated
Subsidiaries and, to the best of Borrower's knowledge, all of its other
Subsidiaries, (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect (other
than Schedule 3.06, Disclosed Matters) or (ii) that involve this Agreement or
the Transactions.

(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, neither the Borrower nor any of its
Regulated Subsidiaries and, to the best of Borrower's knowledge, all of its
other Subsidiaries, (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability.

(c) Since the date of this Agreement, there has been no change in the status of
the Disclosed Matters that, individually or in the aggregate, has resulted in,
or materially increased the likelihood of, a Material Adverse Effect.

                            SECTION 3.07.     Compliance with Laws and
Agreements. Each of the Borrower and its Regulated Subsidiaries and, to the best
of Borrower's knowledge, all its other Subsidiaries is in compliance with all
laws, regulations and orders of any Governmental Authority applicable to it or
its property and all indentures, agreements and other instruments binding upon
it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.

                            SECTION 3.08.     Investment and Holding Company
Status. (a) Neither the Borrower nor any of its Regulated Subsidiaries is an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940; (b) no Regulated Subsidiary is a "holding
company" as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935 (the "Holding Company Act"); (c) the Borrower (i) is
a holding company as defined in the Holding Company Act which is exempt from all
the provisions of the Holding Company Act and the General Rules and Regulations
under the Holding Company Act (the "Holding Company Rules") (except Section
9(a)(2) of the Holding Company Act) pursuant to Rule 2 of the Holding Company
Rules; (ii) has filed its required exemption statement on or before March 1,
2005, under paragraph (a) of said Rule 2; and (iii) has not received any
notifications from the Securities and Exchange Commission pursuant to Rule 6 of
the Holding Company Rules and has no knowledge that any notification is
contemplated by the Securities and Exchange Commission; and (d) the Borrower has
not taken any action and will not take any action unless required by law which
could cause Lender to become, solely by reason of the Transactions, subject to
regulation under the Holding Company Act.

                            SECTION 3.09.     Taxes. Each of the Borrower and
its Regulated Subsidiaries and, to the best of Borrower's knowledge, all its
other Subsidiaries, has timely filed or caused to be filed all Tax returns and
reports required to have been filed and has paid or caused to be paid all Taxes
required to have been paid by it, except (a) Taxes that are being contested in
good faith by appropriate proceedings and for which the Borrower or such
Regulated Subsidiary, as applicable, has set aside on its books adequate
reserves, in accordance with GAAP, or (b) to the extent that the failure to do
so could not reasonably be expected to result in a Material Adverse Effect.

                            SECTION 3.10.     ERISA. As of the Closing Date, and
subsequently, other than as disclosed in the Company's most recent Form 10-K,
Form 10-Q and Forms 8-K published since the most recent Form 10-K and Form 10-Q,
no ERISA Event has occurred or is reasonably expected to occur that, when taken
together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse
Effect. As of the Closing Date, the present value of all accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the date of
the September 30, 2004 actuarial valuation date reflecting such amounts, exceed
by more than $17,200,000 the fair market value of the assets of such Plan, and
the present value of all accumulated benefit obligations of all underfunded
Plans (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the September 30, 2004 actuarial
valuation date reflecting such amounts, exceed by more than $17,200,000 the fair
market value of the assets of all such underfunded Plans.

                            SECTION 3.11.     Disclosure. The Borrower has
disclosed to the Lender all agreements, instruments and corporate or other
restrictions to which it or any of its Regulated Subsidiaries and, to the best
of Borrower's knowledge, all of its other Subsidiaries, is subject, and all
other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. No reports,
financial statements, certificates or other information furnished by or on
behalf of the Borrower to the Lender in connection with the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Borrower represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.

                            SECTION 3.12.     Bonding Capacity. The Borrower has
Bonding Capacity under the Indenture in excess of $40,000,000 as of the Closing
Date and subsequently in excess of the greater of $30,000,000 or the aggregate
amount of unsecured Indebtedness.

ARTICLE IV
Conditions

                            SECTION 4.01.     Effective Date. The obligations of
the Lender to make Loans and to issue Letters of Credit hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 8.02):

(a) The Lender (or its counsel) shall have received from the Borrower either
(i) a counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Lender (which may include telecopy
transmission of a signed signature page of this Agreement) that the Borrower has
signed a counterpart of this Agreement.

(b) The Lender shall have received all promissory notes required by Lender fully
executed, all in form and substance satisfactory to the Lender and its counsel.

(c) The Lender shall have received a favorable written opinion (addressed to the
Lender and dated the Effective Date) of Kenneth C. Picton, Senior Corporate
Counsel for the Borrower, substantially in the form of Exhibit B, and covering
such other matters relating to the Borrower and this Agreement or the
Transactions as the Lender shall reasonably request. The Borrower hereby
requests such counsel to deliver such opinion.

(d) The Lender's review of and satisfaction with the projections and pro-forma
financial statements of Borrower.

(e) The Lender's satisfaction with the condition (financial and otherwise),
operations, assets, nature of assets, liabilities and prospects of the Borrower.

(f) The Lender has received satisfactory evidence of compliance with all
applicable U.S. federal, state and local laws and regulations, including all
applicable Environmental Laws and regulations and that all necessary regulatory
approvals have been obtained, including but not limited to the Vermont Public
Service Board.

(g) No litigation by any person or entity (private or governmental) shall be
pending or threatened (i) with respect to the Transactions, the Agreement, or
any other documentation executed in connection herewith or therewith or the
transaction contemplated hereby or (ii) which in the Lender's sole judgment,
individually or in the aggregate, could have a Materially Adverse Effect on the
business, property, assets, liabilities, condition (financial or otherwise),
operations, results of operations or prospects of the Borrower after giving
effect to the Transactions.

(h) Since the date of the last financial statements for the Borrower delivered
to the Lender prior to the date hereof, nothing shall have occurred which in the
Lender's sole judgment could, individual or in the aggregate, have a Material
Adverse Effect on (i) the rights and remedies of the Bank under the definitive
documentation for the Transaction, (ii) the ability of the Borrower to perform
its respective obligations or (iii) the business, property, assets, liabilities,
condition (financial or otherwise), operations, results of operations or
prospects of the Borrower after giving effect to the Transactions.

(i) The Lender shall have received such documents and certificates as the Lender
or its counsel may reasonably request relating to the organization, existence
and good standing of the Borrower, the Guarantors, the authorization of the
Transactions and any other legal matters relating to the Borrower, this
Agreement or the Transactions, all in form and substance satisfactory to the
Lender and its counsel.

(j) The Lender shall have received a certificate, dated the Effective Date and
signed by the President, a Vice President or a Financial Officer of the
Borrower, confirming compliance with the conditions set forth in paragraphs (a)
through (i) of Section 4.02.

(k) The Lender shall have received an executed subsidiary guaranty agreement
from the Guarantor, in form and substance satisfactory to the Lender and its
counsel.

(l) The Lender shall have received all fees and other amounts due and payable on
or prior to the Effective Date, including, to the extent invoiced, reimbursement
or payment of all out-of-pocket expenses required to be reimbursed or paid by
the Borrower hereunder.

The Lender shall notify the Borrower of the Effective Date, and such notice
shall be conclusive and binding. Notwithstanding the foregoing, the obligations
of the Lender to make Loans and to issue Letters of Credit hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 8.02) at or prior to 3:00 p.m., New York City time, on
October 26, 2005 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).

                            SECTION 4.02.     Each Credit Event. The obligation
of the Lender to make a Loan on the occasion of any Borrowing, and to issue,
amend, renew or extend any Letter of Credit, is subject to the satisfaction of
the following conditions:

(a) The representations and warranties of the Borrower set forth in this
Agreement, shall be true and correct on and as of the date of such Borrowing or
the date of issuance, amendment, renewal or extension of such Letter of Credit,
as applicable.

(b) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.

(c) Borrower's unsecured long term debt has a rating of "BBB" or higher from S&P
or "Baa3" or higher from Moody's; provided, if the Borrower does not have such
rating, there has been no change in the business, assets, operations, prospects
or condition, financial or otherwise, the Borrower and its Regulated
Subsidiaries, and, to the best of Borrower's Knowledge, all of its other
Subsidiaries taken as a whole, that individually, or in the aggregate, could not
be expected to have a Material Adverse Effect.

(d) Prior to the issuance, amendment, renewal or extension of any Letter of
Credit, the Borrower shall have confirmed in writing to Lender that it has
received all necessary regulatory approvals permitting Borrower to provide the
cash collateral, as set forth in Section 2.04 (h).

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a), (b)
and (c) of this Section.

ARTICLE V
Affirmative Covenants

                            Until the Commitments have expired or been
terminated and the principal of and interest on each Loan and all fees payable
hereunder shall have been paid in full and all Letters of Credit shall have
expired or terminated and all LC Disbursements shall have been reimbursed, the
Borrower covenants and agrees with the Lender that:

                            SECTION 5.01.     Financial Statements; Ratings
Change and Other Information. The Borrower will furnish to the Lender:

(a) within 120 days after the end of each fiscal year of the Borrower:

(i)    its audited consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of and for such
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by Deloitte & Touche, LLP or other
independent public accountants of recognized national standing (without a "going
concern" or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied; provided that the delivery within the time period specified above of
the Borrower's Annual Report on Form 10-K for such fiscal year prepared in
accordance with the requirements therefor and filed with the Securities and
Exchange Commission, shall be deemed to satisfy the requirements of
Section 5.01(a)(i);

(ii)    its unaudited balance sheet and related statements of operations, and
stockholders' equity as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all certified
by its Chief Financial Officer to the effect that such financial statements
present fairly in all material respects the financial condition and results of
operations of the Borrower on a standalone basis in accordance with GAAP
consistently applied; and

(iii)    its unaudited consolidating statement as of end of and for such year as
reported on Form U3/A-2 filed with the U.S. Securities and Exchange Commission,
provided the Borrower is required to file such form;

(b) within 60 days after the end of each of the first three fiscal quarters of
each fiscal year of the Borrower:

 

(i)    its consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such fiscal quarter
and the then elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or periods of (or, in
the case of the balance sheet, as of the end of) the previous fiscal year, all
certified by its Chief Financial Officer as presenting fairly in all material
respects the financial condition and results of operations of the Borrower and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes; provided that delivery within the time period specified
above of copies of the Borrower's Quarterly Report on Form 10-Q prepared in
compliance with the requirements therefor and filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of this
Section 5.01(b)(i); and

(ii)    its unaudited balance sheet and related statements of operations and
stockholders' equity as of the end of and for such fiscal quarter and the then
elapsed portion of the fiscal year, setting forth in each case in comparative
form the figures for the corresponding period or periods of (or, in the case of
the balance sheet, as of the end of) the previous fiscal year, all certified by
its Chief Financial Officer as presenting fairly in all material respects the
financial condition and results of operations of the Borrower on a standalone
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes.

(c) concurrently with any delivery of financial statements under clause (a) or
(b) above, a certificate of a Financial Officer of the Borrower (i) certifying
as to whether a Default has occurred and, if a Default has occurred, specifying
the details thereof and any action taken or proposed to be taken with respect
thereto, (ii) setting forth reasonably detailed calculations demonstrating
compliance with Sections 6.09 and 6.10 and (iii) stating whether any change in
GAAP or in the application thereof has occurred since the date of the audited
financial statements referred to in Section 3.04 and, if any such change has
occurred, specifying the effect of such change on the financial statements
accompanying such certificate unless otherwise disclosed in the Borrower's Forms
10-K or 10-Q delivered under Section 5.01(a) or (b);

(d) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by the Borrower or
any Subsidiary with the Securities and Exchange Commission, or any Governmental
Authority succeeding to any or all of the functions of said Commission, or with
any national securities exchange, or distributed by the Borrower to its
shareholders generally, as the case may be;

(e) promptly after Moody's or S&P shall have announced a change in the rating
established or deemed to have been established for the Index Debt (i) written
notice of such rating change and (ii) if the Index Debt is rated less than BBB-
(stable) by Standard & Poor or Baa3 (stable) by Moody's, the notice shall be
accompanied by a written statement of a Financial Officer or other executive
officer of the Borrower whether or not there has been a change in the business,
assets, operations, prospects or conditions, financial or otherwise, having a
Material Adverse Effect on the Borrower and its Subsidiaries, taken as a whole;
and

(f) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of this Agreement, as the Lender may
reasonably request.

                            SECTION 5.02.     Notices of Material Events. The
Borrower will furnish to the Lender prompt written notice of the following:

(a) the occurrence of any Default;

(b) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting the Borrower or
any Affiliate thereof that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;

(c) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Regulated Subsidiaries in an aggregate amount
exceeding $500,000; and

(d) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

                            SECTION 5.03.     Existence; Conduct of Business.
The Borrower will, and will cause each of its Regulated Subsidiaries to, do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of its business; provided that the foregoing
shall not prohibit any merger, consolidation, liquidation or dissolution
permitted under Section 6.03.

                            SECTION 5.04.     Payment of Obligations. The
Borrower will, and will cause each of its Regulated Subsidiaries to, pay its
obligations, including Tax liabilities, that, if not paid, could result in a
Material Adverse Effect before the same shall become delinquent or in default,
except where (a) the validity or amount thereof is being contested in good faith
by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on
its books adequate reserves with respect thereto as necessary in accordance with
GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.

                            SECTION 5.05.     Maintenance of Properties;
Insurance. The Borrower will, and will cause each of its Regulated Subsidiaries
to, (a) keep and maintain all property material to the conduct of its business
in good working order and condition, ordinary wear and tear excepted, and
(b) maintain, with financially sound and reputable insurance companies,
insurance in such amounts and against such risks as are customarily maintained
by companies engaged in the same or similar businesses operating in the same or
similar locations.

                            SECTION 5.06.     Books and Records; Inspection
Rights. The Borrower will, and will cause each of its Regulated Subsidiaries to,
keep proper books of record and account in which full, true and correct entries
are made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Regulated Subsidiaries
to, permit any representatives designated by the Lender, upon reasonable prior
notice, to visit and inspect its properties, to examine and make extracts from
its books and records, and to discuss its affairs, finances and condition with
its officers and independent accountants, all at such reasonable times and as
often as reasonably requested.

                            SECTION 5.07.     Compliance with Laws. The Borrower
will, and will cause each of its Regulated Subsidiaries to, comply with all
laws, rules, regulations and orders of any Governmental Authority applicable to
it or its property (including, without limitation, ERISA and the Public Utility
Holding Company Act), except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

                            SECTION 5.08.     Use of Proceeds and Letters of
Credit. The proceeds of the Loans will be used only for general corporate
purposes of Borrower in the ordinary course of business. No part of the proceeds
of any Loan will be used, whether directly or indirectly, for any purpose that
entails a violation of any of the Regulations of the Board, including
Regulations T, U and X. Letters of Credit will be issued only to support general
corporate purposes of Borrower in the ordinary course of business.

ARTICLE VI
Negative Covenants

                            Until the Commitment has expired or terminated and
the principal of and interest on each Loan and all fees payable hereunder have
been paid in full and all Letters of Credit have expired or terminated and all
LC Disbursements shall have been reimbursed, the Borrower covenants and agrees
with the Lender that:

                            SECTION 6.01.     Indebtedness. The Borrower will
not, and will not permit any Regulated Subsidiary to, create, incur, assume or
permit to exist any Indebtedness, except:

(a) Indebtedness created hereunder, including the Guaranty by Custom Investment
Corporation and C.V. Realty, Inc.;

(b) Indebtedness existing on the date hereof and set forth in Schedule 6.01(b),
and extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof;

(c) Indebtedness of the Borrower to or from Guarantor, or to or from any
Significant Subsidiary provided such Indebtedness to or from a non-Regulated
Subsidiary does not exceed $17,500,000 plus twenty percent (20%) of Borrower's
cumulative net income since January, 2004 or an amount permitted by the
Indenture, whichever is less;

(d) Guarantees by the Borrower of Indebtedness of any Guarantor or any Regulated
Subsidiary and by any Significant Subsidiary of Indebtedness of the Borrower or
any other Regulated Subsidiary existing on the date hereof and set forth on
Schedule 6.01(d), and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof;

(e) Indebtedness of the Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations and any Indebtedness assumed in connection
with the acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and replacements of
any such Indebtedness; provided that (i) such Indebtedness is incurred prior to
or within 90 days after such acquisition or the completion of such construction
or improvement and (ii) such Indebtedness does not reduce the Borrower's Bonding
Capacity below the greater of $30,000,000, or the total aggregate amount of
unsecured Indebtedness;

(f) Indebtedness of Catamount Resources Corporation and its subsidiaries
provided it is not guaranteed by the Borrower and/or Guarantor;

(g) other unsecured Indebtedness in an aggregate principal amount not exceeding
the Borrower's statutory short-term borrowing limit, if the Borrower carries an
investment grade rating, and not exceeding $35,000,000 if the Borrower does not
carry an investment grade rating; and

(h) additional mortgage bonds issued under the Borrower's Indenture, provided
the bonding capacity under the Indenture does not go below the greater of
$30,000,000 million, or the total aggregate amount of unsecured Indebtedness.

                            SECTION 6.02.     Liens. The Borrower will not, and
will not permit any Subsidiary to, create, incur, assume or permit to exist any
Lien on any property or asset now owned or hereafter acquired by it, or assign
or sell any income or revenues (including accounts receivable) or rights in
respect of any thereof, except:

(a) Permitted Encumbrances;

(b) any Lien on any property or asset of the Borrower or any Subsidiary existing
on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien
shall not apply to any other property or asset of the Borrower or any Subsidiary
and (ii) such Lien shall secure only those obligations which it secures on the
date hereof and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;

(c) any Lien existing on any property or asset prior to the acquisition thereof
by the Borrower or any Subsidiary or existing on any property or asset of any
Person that becomes a Subsidiary after the date hereof prior to the time such
Person becomes a Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Borrower or any Subsidiary and (iii) such Lien shall
secure only those obligations which it secures on the date of such acquisition
or the date such Person becomes a Subsidiary, as the case may be and extensions,
renewals and replacements thereof that do not increase the outstanding principal
amount thereof;

(d) Liens on fixed or capital assets acquired, constructed or improved by the
Borrower or any Subsidiary; provided that (i) such security interests secure
Indebtedness permitted by clause (e) of Section 6.01, (ii) such security
interests and the Indebtedness secured thereby are incurred prior to or within
90 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the
cost of acquiring, constructing or improving such fixed or capital assets and
(iv) such security interests shall not apply to any other property or assets of
the Borrower or any Subsidiary;

(e) Liens on property or assets of the Borrower to secure Power Transactions in
the ordinary course of business;

(f) The Lien of the Indenture;

(g) Pledge agreements identified on Schedule 6.08; and

(h) Liens on property or assets of the Borrower under or pursuant to any Swap
Agreement, provided the bonding capacity under the Indenture does not go below
the greater of $30,000,000 or the aggregate amount of the unsecured
Indebtedness.

                            SECTION 6.03.     Fundamental Changes.

(a) The Borrower will not, and will not permit any Regulated Subsidiary to,
merge into or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or sell, transfer, lease or otherwise dispose
of (in one transaction or in a series of transactions) all or any substantial
part of its assets, or all or substantially all of the stock of any of its
Regulated Subsidiaries (in each case, whether now owned or hereafter acquired),
or liquidate or dissolve, except that, if at the time thereof and immediately
after giving effect thereto no Default shall have occurred and be continuing
(i) any Subsidiary may merge into the Borrower in a transaction in which the
Borrower is the surviving corporation, (ii) any Subsidiary may merge into any
Subsidiary in a transaction in which the surviving entity is a Subsidiary, (iii)
any Subsidiary may sell, transfer, lease or otherwise dispose of its assets in
the ordinary course of business or to the Borrower or to another Subsidiary and
(iv) any Subsidiary may liquidate or dissolve if the Borrower determines in good
faith that such liquidation or dissolution is in the best interests of the
Borrower and is not materially disadvantageous to the Lender; provided that any
such merger involving a Person that is not a wholly owned Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by
Section 6.04; and provided further, Eversant Corporation, Catamount Resources
Corporation or Catamount Energy Corporation may sell any or all of their capital
stock to an investor, if the Borrower determines in good faith that such is in
the best interests of the Borrower and is not materially disadvantageous to the
Lender.

(b) The Borrower will not, and will not permit any of its Regulated Subsidiaries
to, engage to any material extent in any business other than businesses of the
type conducted by the Borrower and its Regulated Subsidiaries on the date of
execution of this Agreement and businesses reasonably related thereto.

                            SECTION 6.04.     Investments, Loans, Advances,
Guarantees and Acquisitions. The Borrower will not, and will not permit any of
its Regulated Subsidiaries to, purchase, hold or acquire (including pursuant to
any merger with any Person that was not a wholly owned Subsidiary prior to such
merger) any capital stock, evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, Guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person constituting a business unit,
except:

(a) Permitted Investments;

(b) investments by the Borrower existing on the date hereof in the capital stock
of its Subsidiaries;

(c) loans or advances made by the Borrower to the Guarantor and made by the
Guarantor to the Borrower;

(d) Guarantees constituting Indebtedness permitted by Section 6.01;

(e) transactions by and among the Borrower and Significant Subsidiaries
provided, however, that there is no Event of Default and investments, advances
or loans to a non-Regulated Subsidiaries will not exceed $17,500,000 plus twenty
percent (20%) of Borrower's cumulative net income since January 1, 2004 or an
amount permitted under the Indenture, whichever is less.

                            SECTION 6.05.     Swap Agreements. The Borrower will
not, and will not permit any of its Regulated Subsidiaries to, enter into any
Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate
risks to which the Borrower or any Subsidiary has actual exposure (other than
those in respect of Equity Interests of the Borrower or any of its
Subsidiaries), (b) Swap Agreements entered into in the ordinary course of
business, and (c) Swap Agreements entered into in order to effectively cap,
collar or exchange interest rates (from fixed to floating rates, from one
floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of the Borrower or any Subsidiary.

                            SECTION 6.06.     Restricted Payments. The Borrower
will not, and will not permit any of its Regulated Subsidiaries to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
except (provided there is no Default by the Borrower or Guarantor) (a) the
Borrower may declare and pay dividends ratably with respect to its Equity
Interests, (b) the Borrower may make all mandatory sinking funds, (c)
Subsidiaries may declare and pay dividends ratably with respect to their Equity
Interests, and (d) the Borrower may make Restricted Payments pursuant to and in
accordance with stock option plans or other benefit plans for management or
employees of the Borrower and its Subsidiaries.

                            SECTION 6.07.     Transactions with Affiliates. The
Borrower will not, and will not permit any of its Regulated Subsidiaries to,
sell, lease or otherwise transfer any property or assets to, or purchase, lease
or otherwise acquire any property or assets from, or otherwise engage in any
other transactions with, any of its Affiliates, except (a) in the ordinary
course of business at prices and on terms and conditions not less favorable to
the Borrower or such Regulated Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties, (b) transactions between or
among the Borrower and its wholly-owned Regulated Subsidiaries not involving any
other Affiliate and (c) any Restricted Payment permitted by Section 6.06.

                            SECTION 6.08.     Restrictive Agreements. The
Borrower will not, and will not permit any of its Regulated Subsidiaries to,
directly or indirectly, enter into, incur or permit to exist any agreement or
other arrangement that prohibits, restricts or imposes any condition upon (a)
the ability of the Borrower or any Regulated Subsidiary to create, incur or
permit to exist any Lien upon any of its property or assets, or (b) the ability
of any Regulated Subsidiary to pay dividends or other distributions with respect
to any shares of its capital stock or to make or repay loans or advances to the
Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or
any other Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by this Agreement, (ii) the
foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 6.08 (but shall apply to any extension or renewal
of, or any amendment or modification which materially expands the scope of, any
such restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness and (v) clause (a) of the foregoing shall not
apply to customary provisions in leases and other contracts restricting the
assignment thereof.

                            SECTION 6.09.     Total Debt to Total Capitalization
Ratio. The Borrower, on a standalone basis, shall not permit its ratio of Total
Debt to Total Capitalization to exceed .65 to 1.00, at any time.

                            SECTION 6.10.     Interest Coverage Ratio. The
Borrower, on a standalone basis, shall not permit a ratio of the sum of Net
Income plus Interest Expense and Income Tax Expense, to Interest Expense to be
less than 1.75 to 1.00, in each case tested for the four fiscal quarters of the
Borrower ended on or immediately prior to such date, provided however, the
foregoing may be adjusted, for the applicable time period, by an amount not to
exceed $21,800,000 to reverse charges incurred in connection with a Rate Order
of the Vermont Public Service Board dated March 29, 2005, reflected in the
Borrower's financial statements for the fiscal quarter ended March 31, 2005.

ARTICLE VII
Events of Default

                            If any of the following events ("Events of Default")
shall occur:

(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

(b) the Borrower shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in clause (a) of this Article)
payable under this Agreement, when and as the same shall become due and payable,
and such failure shall continue unremedied for a period of three Business Days;

(c) any representation or warranty made or deemed made by or on behalf of the
Borrower or any Subsidiary in or in connection with this Agreement or any
amendment or modification hereof or waiver hereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with this Agreement or any amendment or modification hereof or waiver
hereunder, shall prove to have been incorrect when made or deemed made;

(d) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02, 5.03 (with respect to the Borrower's
existence) or 5.08 or in Article VI;

(e) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement (other than those specified in clause (a),
(b) or (d) of this Article), and such failure shall continue unremedied for a
period of 30 days after notice thereof from the Lender to the Borrower;

(f) the Borrower or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable;

(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness or the prepayment, repurchase, redemption or
defeasance of a hedge agreement or Swap Agreement in the ordinary course of
business;

(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any Regulated Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Regulated Subsidiary or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;

(i) the Borrower or any Regulated Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Regulated Subsidiary or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

(j) the Borrower or any Regulated Subsidiary shall become unable or admit in
writing its inability or fail generally to pay its debts as they become due;

(k) one or more judgments for the payment of money in an aggregate amount in
excess of $2,000,000 shall be rendered against the Borrower, any Regulated
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of the Borrower or any Regulated Subsidiary to enforce any
such judgment;

(l) An ERISA Event shall have occurred that, in the opinion of the Lender, when
taken together with all other ERISA Events that have occurred, could reasonably
be expected to result in a Material Adverse Effect; or

(m) a Change in Control shall occur without the prior written consent of the
Lender;

then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Lender may, by notice to the Borrower,
take either or both of the following actions, at the same or different
times:  (i) terminate the Commitment, and thereupon the Commitment shall
terminate immediately, and (ii) declare the Loans then outstanding to be due and
payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrower
accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; and in case of any event with respect to the
Borrower described in clause (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.

ARTICLE VIII
Miscellaneous

                            SECTION 8.01.     Notices.

(a) Except in the case of notices and other communications expressly permitted
to be given by telephone or telecopy (and subject to paragraph (b) below), all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand, overnight courier service, or mailed by certified or
registered mail or sent by telecopy, as follows:

If to the Borrower:

Central Vermont Public Service Corporation
77 Grove Street
Rutland, Vermont 05701
Attn: Director of Treasury and Corporate Planning
Fax: (802) 747-2129

with a copy to:

Central Vermont Public Service Corporation
77 Grove Street
Rutland, Vermont 05701
Attn: Senior Corporate Counsel
Fax: (802) 747-1913

If to the Lender:

JPMorgan Chase Bank, N.A.
2 Corporate Woods Boulevard
Albany, New York 12211
Attn: David C. Horan, Jr.
Fax: (518) 436-9811

with a copy to:

Whiteman Osterman & Hanna LLP
One Commerce Plaza - 19th Floor
Albany, New York 12260
Attn: Charles R. Haviland, Jr.
Fax: (518) 487-7777

(b) Notices and other communications to the Lender hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Lender; provided that the foregoing shall not apply to notices pursuant to
Article II unless otherwise agreed by the Lender. The Lender or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided that approval of such procedures may be limited to particular notices
or communications.

(c) Any party hereto may change its address, contact person(s) or telecopy
number for notices and other communications hereunder by notice to the other
parties hereto. All notices and other communications given to any party hereto
in accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.

                            SECTION 8.02.     Waivers; Amendments.

(a) No failure or delay by the Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the Lender
hereunder are cumulative and are not exclusive of any rights or remedies that it
would otherwise have. No waiver of any provision of this Agreement or consent to
any departure by the Borrower therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the
making of a Loan or issuance of a Letter of Credit shall not be construed as a
waiver of any Default, regardless of whether the Lender may have had notice or
knowledge of such Default at the time.

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Borrower and the Lender.

                            SECTION 8.03.     Expenses; Indemnity; Damage
Waiver.

(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by
the Lender, including the reasonable fees, charges and disbursements of counsel
for the Lender, in connection with the credit facilities provided for herein,
the preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by the Lender in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all reasonable out-of-pocket expenses incurred
by the Lender, including the fees, charges and disbursements of any counsel for
the Lender in connection with the enforcement or protection of its rights in
connection with this Agreement, including its rights under this Section, or in
connection with the Loans made or Letters of Credit issued hereunder, including
all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

(b) The Borrower shall indemnify the Lender, and each Related Party of the
Lender (each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the reasonable fees, charges and disbursements of
any counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement or any agreement or instrument contemplated hereby,
the performance by the parties hereto of their respective obligations hereunder
or the consummation of the Transactions or any other transactions contemplated
hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Lender to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Hazardous Materials on or from any property
owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.

(c) To the extent permitted by applicable law, the Borrower shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.

(d) All amounts due under this Section shall be payable promptly after written
demand therefor.

                            SECTION 8.04.     Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Lender that issues any Letter
of Credit), except that (i) the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void) and (ii) the Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this
Section. Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby (including any Affiliate of the Lender
that issues any Letter of Credit), Participants (to the extent provided in
paragraph (c) of this Section) and, to the extent expressly contemplated hereby,
the Related Parties of the Lender) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

(b)  (i)    Subject to the conditions set forth in paragraph (b)(ii) below, the
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld) of the Borrower, provided that no
consent of the Borrower shall be required for an assignment to the Lender, an
Affiliate of the Lender, an Approved Fund or, if an Event of Default has
occurred and is continuing, any other assignee;

       (ii)    Assignments shall be subject to the following additional
conditions:

       (A)    except in the case of an assignment to the Lender or an Affiliate
of the Lender or an assignment of the entire remaining amount of the assigning
Lender's Commitment or Loans of any Class, the amount of the Commitment or Loans
of the Lender subject to each such assignment shall not be less than $5,000,000
unless each of the Borrower and the Lender otherwise consent, provided that no
such consent of the Borrower shall be required if an Event of Default has
occurred and is continuing; and

       (B)    each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement, provided that this clause shall not be construed to prohibit the
assignment of a proportionate part of all the assigning Lender's rights and
obligations in respect of one Class of Commitments or Loans;

                            For the purposes of this Section 8.04(b), the term
"Approved Fund" has the following meaning:

                            "Approved Fund" means any Person (other than a
natural person) that is engaged in making, purchasing, holding or investing in
bank loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (a) the Lender, (b) an Affiliate
of the Lender or (c) an entity or an Affiliate of an entity that administers or
manages the Lender.

       (iii)    From and after the effective date specified in each Assignment
and Assumption the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of the Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, the Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of
Sections 2.12, 2.13, 2.14 and 8.03). Any assignment or transfer by the Lender of
rights or obligations under this Agreement that does not comply with this
Section 8.04 shall be treated for purposes of this Agreement as a sale by the
Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.

(c)  (i)    The Lender may, without the consent of the Borrower, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of the Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (A) the Lender's obligations under this Agreement shall remain
unchanged, (B) the Lender shall remain solely responsible to the Borrower for
the performance of such obligations and (C) the Borrower shall continue to deal
solely and directly with the Lender in connection with the Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that the Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that the Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 8.02(b) that affects such Participant.
Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.12, 2.13 and 2.14 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 8.08 as
though it were a Lender.

      (ii) A Participant shall not be entitled to receive any greater payment
under Section 2.12 or 2.14 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.14 unless the Borrower
is notified of the participation sold to such Participant.

(d) The Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of the
Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release the Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for the Lender
as a party hereto.

                            SECTION 8.05.     Survival. All covenants,
agreements, representations and warranties made by the Borrower herein and in
the certificates or other instruments delivered in connection with or pursuant
to this Agreement shall be considered to have been relied upon by the Lender and
shall survive the execution and delivery of this Agreement and the making of any
Loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that the
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder (except
to the extent provided pursuant to Sections 5.01 and 5.02 hereof or such notice
was provided in writing to the Lender and, if applicable, clearly states that it
is a notice of Default), and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any fee or any other
amount payable under this Agreement is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.12, 2.13, 2.14 and 8.03 shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof.

                            SECTION 8.06.     Counterparts; Integration;
Effectiveness. This Agreement may be executed in counterparts, each of which
shall constitute an original, but all of which when taken together shall
constitute a single contract. This Agreement and any separate letter agreements
with respect to fees payable to the Lender constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Lender and when the Lender
shall have received counterparts hereof which, when taken together, bear the
signature of the Borrower and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.

                            SECTION 8.07.     Severability. Any provision of
this Agreement held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

                            SECTION 8.08.     Right of Setoff. If an Event of
Default shall have occurred and be continuing, the Lender and each of its
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off (a "Right of Setoff") and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other obligations at any time owing by the Lender or Affiliate
to or for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement held
by the Lender, irrespective of whether or not the Lender shall have made any
demand under this Agreement and although such obligations may be unmatured;
provided, however, that the Right of Setoff contained herein shall not apply to
any deposits, collateral, or other amounts at any time held by, and other
obligations at any time owing by the Borrower to or for the credit or the
account of, the Lender or any of its Affiliates relating to any Power
Transaction by, between or through the Borrower and the Lender and any of its
Affiliates. The rights of the Lender under this Section are in addition to other
rights and remedies (including other rights of setoff) which the Lender may
have.

                            SECTION 8.09.     Governing Law; Jurisdiction;
Consent to Service of Process.

(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.

(b) The Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of the Supreme Court of the State
of New York sitting in Albany County and of the United States District Court of
the Northern District of New York, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Lender may otherwise have to bring any action or proceeding
relating to this Agreement against the Borrower or its properties in the courts
of any jurisdiction.

(c) The Borrower hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement in any court referred to in paragraph (b)
of this Section. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 8.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

                            SECTION 8.10.     WAIVER OF JURY TRIAL. EACH PARTY
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

                            SECTION 8.11.     Headings. Article and
Section headings and the Table of Contents used herein are for convenience of
reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this Agreement.

                            SECTION 8.12.     Confidentiality. The Lender agrees
to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its and its Affiliates' directors,
officers, employees and agents, including accountants, legal counsel and other
advisors (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (b) to the extent requested by any
regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower or (h) to
the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available to the Lender on a
nonconfidential basis from a source other than the Borrower. For the purposes of
this Section, "Information" means all information received from the Borrower
relating to the Borrower or its business, other than any such information that
is available to the Lender on a nonconfidential basis prior to disclosure by the
Borrower; provided that, in the case of information received from the Borrower
after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.

                            SECTION 8.13.     Interest Rate Limitation.
Notwithstanding anything herein to the contrary, if at any time the interest
rate applicable to any Loan, together with all fees, charges and other amounts
which are treated as interest on such Loan under applicable law (collectively
the "Charges"), shall exceed the maximum lawful rate (the "Maximum Rate") which
may be contracted for, charged, taken, received or reserved by the Lender in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to the Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by the Lender.

                            SECTION 8.14.     USA Patriot Act. The Lender hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"), it
is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow the Lender to identify the Borrower in
accordance with the Act.

[Signature Page Follows]

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

 

CENTRAL VERMONT PUBLIC SERVICE CORPORATION

By:  /s/ Edmund F. Ryan                                                  
       Name: Edmund F. Ryan
       Title: Acting Chief Financial Officer and Treasurer

 

JPMORGAN CHASE BANK, N.A.

By:  /s/ David C. Horan, Jr.                                              
       Name: David C. Horan, Jr.
       Title: Vice President

SCHEDULE 3.04(d)

Guaranteed Indebtedness

SCHEDULE 3.06

Disclosed Matters

NONE

SCHEDULE 6.01

Existing Indebtedness

SCHEDULE 6.02

Existing Liens

SCHEDULE 6.08

Existing Restrictions

EXHIBIT A

Form of Promissory Note

EXHIBIT B

Form of Opinion of Borrower's Counsel

EXHIBIT C

Borrower's Investment Policy