ex10_1.htm


    
      

    

    Exhibit
10.1

     

    

      Confidential
& Privileged

      Pursuant
to Joint Defense Agreement

      


      JOINT
DEVELOPMENT AGREEMENT

      


      


      This
JOINT DEVELOPMENT AGREEMENT (this “Agreement”), dated as of October 2, 2008, by
and between CENTRAL MAINE POWER COMPANY, a Maine corporation with its corporate
office in Augusta, Maine or its designated affiliate  (hereinafter
“CMP”) and
MAINE PUBLIC SERVICE COMPANY, a Maine corporation with its corporate office in
Presque Isle, Maine or its designated affiliate (hereinafter “MPS”); (MPS and CMP
are collectively referred to herein as the “Parties” and each
individually as a “Party”),

      


      


      W
I T N E S S E T H:

      


      WHEREAS,
CMP and MPS desire to work together to develop and implement electric
transmission projects to increase the transmission capability between the MPS
system and the rest of the State of Maine and possibly the Province of New
Brunswick by developing a 345 kV electricity transmission line between the MPS
system and the CMP system with the possibility of extending to the New Brunswick
transmission system (the “Project”);

       

      WHEREAS,
MPS is a Maine corporation and public utility, which is primarily engaged in
transmitting and distributing electricity in Maine;

       

      WHEREAS,
CMP is a Maine corporation and public utility, which is primarily engaged in
transmitting and distributing electricity in Maine;

       

      WHEREAS,
CMP and MPS are co-owners of Maine Electric Power Company (“MEPCO”);

       

      WHEREAS,
the capabilities and expertise of each of the Parties complement those of the
other, and their cooperation would facilitate the joint development and
implementation of the Project;

       

      WHEREAS,
CMP and MPS entered into a Memorandum of Understanding, (“MOU”) dated February
27, 2007 that was amended and restated on March 14, 2008 (the “ARMOU”), to evaluate
the feasibility of the Project, begin development activities and set forth
certain Project cost sharing and ownership principles;

       

      WHEREAS,
among other things, the Project will, in part, allow generators located in
northern Maine to have access to the ISO-NE Grid and facilitate generation
interconnection to MPS as the interconnecting transmission and distribution
utility in its territory;

       

      WHEREAS,
the development and implementation of the Project will consist of several phases
and decision points occurring over an extended period of time, may require the
participation of additional parties, potentially including electricity
generators and transmission providers, and will involve existing and proposed
facilities within the region,

       

      
        
           


        

        
          1

          
            

          

        

        
           


        

      


      WHEREAS,
the Parties contemplate seeking to have all or a portion of the costs of the
Project allocated regionally as a pooled transmission facility under the ISO-NE
tariff, but to the extent the Project, or any portion of the Project, is
required under ISO-NE tariffs or FERC regulations to be treated as a generator
interconnection facility, or upgrade facilities, under the applicable open
access transmission tariff (“OATT”), development of that portion of the Project
shall be governed by such tariff and any interconnection agreements entered into
by either Party and the generator; including without limitation Aroostook Wind
Energy, LLC (“AWE”), which proposes to develop up to 1200 MW of new wind
generation in MPS’s service territory; and

       

      WHEREAS,
the Parties desire to further set forth their development activities and
obligations with respect to the development, construction, ownership and
operation of the Project and the negotiation of other agreements required for
the joint development, construction, ownership and operation of the Project on
the terms and conditions set forth in the Agreement;

       

      NOW
THEREFORE, in consideration of the premises and the covenants and agreements as
herein set forth and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Parties hereto agree as
follows:

      


       

      ARTICLE
I

      DEFINITIONS

      


       

      Section
1.1       Defined Terms. The following
terms when used in this Agreement, including its preamble and recitals, shall
have the following meanings:

      


      “Confidential
Information” shall have the meaning ascribed thereto in
Section 7.1(a).

      


      “Consultants” shall
have the meaning ascribed thereto in Section 3.1(a).

      


      “Development Budget”
shall mean the Development Budget described in Section 5.1.

      


      “Development Costs”
shall mean the aggregate sum of Internal Costs and Third Party Costs incurred in
connection with the development activities contemplated by this Agreement, in
each case incurred in accordance with Section 5.2.

       

       “Governmental
Authority” means any court, tribunal, arbitrator, authority, agency,
commission, official or other instrumentality of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or similar governing entity.

      


      “Interconnection Customer
Agreement” shall mean any agreement with AWE or other proposed generation
interconnection customer with respect to the development or use of any portion
of the Project which is required to be paid for by such potential generation
interconnection customer under any applicable OATT.

      


      “Internal Costs” shall
mean with respect to each Party, and its affiliates, any internal costs
reasonably incurred by such party in the development of the Project, including
without limitation the Parties’ general administrative expenses related to the
Project and the salaries, bonuses and benefits of the Parties’ management
personnel attributable to the development of the Project.  Internal
Costs shall not include Third Party Costs.


      
        
           


        

        
          2

          
            

          

        

        
           


        

      


      “ISO-NE” shall mean
ISO New England, Inc., the independent system operator of the bulk electric
transmission grid throughout most of New England.

      


      “Joint Intellectual
Property” shall mean all intellectual property created, developed or
prepared in connection with the development of the Project, including without
limitation the Project Budget, Project financial models and financial plans,
studies and reports prepared by Consultants, external due diligence
investigations, environmental and feasibility studies, transmission corridor
assessments, OATT queue and investigations, and permits and permit applications.
Joint Intellectual Property shall not include any financial models, plans,
studies, reports, environmental and feasibility studies, transmission corridor
assessments, designs or drawings created, developed or prepared by or at the
direction of either Party prior to the date of this Agreement or developed by
MPS for purposes other than meeting its obligations under this
Agreement.  Joint Intellectual Property shall not include any
intellectual property, as defined above, to the extent such property is deemed
to belong to AWE under the Interconnection Customer Agreement.

       

      “Joint Ownership
Agreement” or “JOA” means the Joint
Ownership Agreement to be entered into by the Parties upon Project Approval
which shall provide for the construction, ownership and operation of the Project
by the Parties as co-owners of the Project in undivided interests on terms and
conditions substantially in accordance with those set forth on Exhibit
A.

       

      “Land Contracts” means
the options, easements, leases, licenses, instruments, agreements, fee interests
and documents that grant rights with respect to the land in the Transmission
Corridor.

      


      “Management Personnel”
shall have the meaning ascribed thereto in Section 3.3(b).

      


      “Management Committee”
shall have the meaning ascribed thereto in Section 3.3(a).

      


      “MPUC” shall mean the
Maine Public Utilities Commission.

      


      “Other Project
Parties” shall have the meaning ascribed thereto in
Section 2.3.

      


      “Project” shall have
the meaning ascribed thereto in the preamble.

       

      “Project Approval”
means a binding commitment by the Parties to commence construction of the
Project or a specific phase of the Project and enter into a Joint Ownership
Agreement with respect to the construction and ownership of the
Project.

       

      “Termination Date”
shall have the meaning ascribed thereto in Section 6.1(a).


      
        
           


        

        
          3

          
            

          

        

        
           


        

      


      “Third Party Costs”
shall mean (i) all reasonably incurred fees, costs, liabilities, claims.
expenses and amounts paid or owing to persons and entities (“Costs”) other than
to the Parties for equipment, materials or services provided in connection with
the development of the Project, including without limitation costs and expenses
of all Consultants, the costs and expenses associated with due diligence
investigations, environmental and feasibility studies, transmission corridor
assessments, OATT queue investigations, and the development and preparation of
permit applications, application fees, filing fees and the negotiation and
drafting of the Project contracts and (ii) all out-of-pocket Costs
reasonably incurred by the Parties’ Management Personnel in connection with the
development of the Project, including without limitation all expenses incurred
in respect of travel, lodging, meals and entertainment.   Third
Party Costs shall not include Internal Costs, including without limitation any
inter-company or inter-affiliate charges.

      


      “Transmission
Corridor” shall mean the area in which the Project, including but not
limited to substations related to the Project, shall be located,
which  shall be sufficient for the construction, maintenance and safe
operation thereof in accordance with any applicable regulatory requirements,
including the requirements of ISO-NE as determined from time to time by the
Management Committee.

      


      “Withdrawing Party”
shall mean a Party that (i) determines unilaterally that it does not wish to
proceed with the development of such Project (in which case, it shall promptly
provide a written termination notice to the other Party), (ii) does not vote in
favor of Project Approval under Section 3.7 in the event that the conditions set
forth in Sections 3.7(a) have been satisfied and a meeting of the Management
Committee for the purpose of obtaining Project Approval has been called by the
other Party (and, if such meeting is held the other Party votes in favor of
Project Approval), or (iii) is determined to be a Withdrawing Party after such
Party fails to perform one or more of its material obligations under this
Agreement which failure materially affects the Project and, within thirty (30)
days after notice thereof, fails to cure such default.

       

      Section
1.2       Principles of
Interpretation.  In this Agreement, unless a clearly contrary
intention appears  (a) the singular number includes the plural number
and vice versa; (b) reference to any person includes such person’s successors
and assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement, and reference to a person in a particular capacity
excludes such person in any other capacity; (c) reference to any gender includes
each other gender; (d) reference to any agreement (including this Agreement),
document or instrument means such agreement, document or instrument as amended
or modified and in effect from time to time in accordance with the terms thereof
and, if applicable, the terms hereof; (e) reference to any Article, Section,
Schedule or Exhibit means such Article, Section, Schedule or Exhibit to this
Agreement, and references in any Article, Section, Schedule, Exhibit or
definition to any clause means such clause of such Article, Section, Schedule,
Exhibit or definition; (f) “hereunder,” “hereof,” “hereto,” “herein” “herefrom”
and words of similar import are reference to this Agreement as a whole and not
to any particular Section, Article or other provision hereof; (g) relative to
the determination of any period of time, “from” means “from and including,” “to”
means “to but excluding” and “through” means “through and including;” (h)
“including” (and with correlative meaning “include”) means including without
limiting the generality of any description preceding such term; (i) reference to
any law (including statutes and ordinances) means such law as amended, modified,
codified or reenacted, in whole or in part, and in effect from time to time,
including rules and regulations promulgated thereunder, and (j) references to
“days” shall mean calendar days, unless otherwise indicated.


      
        
           


        

        
          4

          
            

          

        

        
           


        

      

       

      ARTICLE
II

      PURPOSE;
BINDING NATURE OF AGREEMENT; EXCLUSIVITY

       

      Section
2.1       Purpose.  The
purpose of this Agreement is to set forth (i) the terms on which the Parties
will work together to jointly develop the Project through the commencement of
construction and the date of Project Approval; and (ii) the basis on which the
Parties will enter into further agreements required for the construction,
ownership and operation of the Project thereafter, including without limitation
the JOA.

       

      Section
2.2       Legal
Relationship.  The legal relationship of the Parties hereunder
shall be cooperative and shall be governed solely by the terms of this
Agreement.  Nothing herein shall be construed to create a partnership
or joint venture or impose the duties, obligations or liabilities associated
with a partnership or joint venture on or with regard to either Party, or to
create a relationship of principal and agent between the Parties.  The
Parties further agree that this relationship is limited to the Project, and
neither Party will pursue any other type of joint venture or merger between the
Parties without the prior written consent of the other Party.

       

      Section
2.3       Limited
Exclusivity.  Subject to the statutory and regulatory
obligations of the Parties, including MPS’s potential obligations to serve AWE
as an interconnection customer and any of its obligations under an
Interconnection Customer Agreement, and to the Management Committee’s decision
to enter into confidential discussions with potential project investors,
including but not limited to other Maine utilities (“Other Project Parties”) to
the Project, it is the intent of the Parties to work together exclusively to
develop the Project.  During the term of this Agreement, neither
Party, nor any affiliate thereof shall solicit or engage in any negotiations
regarding the development of the Project or the development of any competing
transmission project reasonably similar to the development of the Project within
the territory covered by the Project, either on its own or in conjunction with
any other party by any means, including, without limiting the generality of the
foregoing, investing in a competing project, providing assistance to a developer
of a competing project, and/or providing engineering, management or other
consulting services to the developer of a competing project during the term of
this Agreement and any extensions to this Agreement without the consent of the
other Party, except as MPS may otherwise be required by statute, regulation, or
as a part of MPUC Docket No. 2006-513. Notwithstanding the foregoing, nothing
herein shall restrict either Party from participating in MEPCO, as an investor
or member of the MEPCO board.  Further nothing herein shall prohibit
or restrict either Party from meeting its obligations as a transmission and
distribution utility, as a participant in Northern Maine Independent System
Administrator, Inc., under any federal or state law or regulation, or under its
OATT.

       

      Section
2.4       Other Project Parties
Participation.   Any decision to permit other Project Parties to
participate in the Project, as investors or otherwise, will require the approval
of the Management Committee.  In the event that the Management
Committee agrees to permit Other Project Parties to participate in the Project,
the Parties hereby agree that they will negotiate in good faith any amendments
to this Agreement deemed necessary to allow such participation on terms
acceptable to the Parties.  The Parties acknowledge that the Term
Sheet attached hereto as Exhibit A contemplates a joint ownership of the Project
solely by the Parties.  In the event that the Management Committee
votes to allow Other Project Parties to participate in the Project, the terms of
the Joint Ownership Agreement will be renegotiated to allow such participation
on terms acceptable to the Parties as well as the Other Project
Parties.


      
        
           


        

        
          5

          
            

          

        

        
           


        

      

       

      ARTICLE
III

      DEVELOPMENT
ACTIVITIES

      


       

      Section
3.1       Development
Activities.

      


      (a)
Subject at all times to the direction of the Parties, the Parties and or the
Management Committee (defined below), shall have the following primary
development responsibilities:

      


      
        	
                 
      

              	
                (i) 

              	
                participation
      in regional stakeholder transmission planning activities affecting the
      Project (including the MPUC Docket No. 2006-513
    proceedings);

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                seeking
      MPUC approval for a Certificate of Public Convenience and Necessity (CPCN)
      for the Project, or any portion
thereof;

              


      

       

      
        	
                 
      

              	
                (iii) 

              	
                building
      local community support for the
Project;

              


      

       

      
        	
                 
      

              	
                (iv) 

              	
                undertaking
      local publicity and public relations pertaining to the
      Project;

              


      

       

      
        	
                 
      

              	
                (v)

              	
                seeking
      commitments from generators, including
AWE;

              


      

       

      
        	
                 
      

              	
                (vi) 

              	
                identifying, selecting
      and contracting with consultants and engineers (the “Consultants”) for the
      purpose of conducting all system impact studies, real estate acquisitions,
      economic assessments, environmental assessments, engineering and public
      outreach required to develop the Project including any studies as may be
      necessary to help gain approval from ISO-NE that it will include the
      Project as a pooled transmission facility
  (“PTF”);

              


      

       

      
        	
                 
      

              	
                (vii)  

              	
                obtaining
      ISO-NE approval of the Project under terms acceptable to the
      Parties;

              


      

       

      
        	
              	
                (viii)

              	
                filing
      for and obtaining all necessary environmental and siting
      approvals;

              


      

       

      
        	
                 
      

              	
                (ix)

              	
                subject
      to and in accordance with Section 3.2, acquiring fee title or Land
      Contracts with respect to the Transmission
  Corridor;

              


      

       

      
        	
                 
      

              	
                (x)

              	
                obtaining
      approval to include all or a part of the Project as a Market Efficiency
      Upgrade, a Reliability Benefit Upgrade, or such other basis for PTF
      treatment under the ISO-NE OATT and operation as a PTF by
      ISO-NE;

              


      

       

      
        	
                 
      

              	
                (xi)

              	
                undertaking
      such other development activities reasonably related to the development of
      the Project prior to regulatory permits and approvals necessary to meet
      the requirements of such approval processes and the required construction
      completion date; and

              


      

       

      
        	
                 
      

              	
                (xii)

              	
                undertaking
      all other activities necessary to develop the Project to the point where
      construction can commence.

              


      

       

      
        
           


        

        
          6

          
            

          

        

        
           


        

      


      (b)  MPS
or one of its affiliates shall file and use its reasonable best efforts to
pursue an application with ISO-NE to have its bulk transmission facilities
included in ISO-NE as PTF, subject to the conditions set forth in the letter
from Brent Boyles to Gordon Van Welie dated February 27, 2008, and such other
terms as agreed to by MPS and the Management Committee or as may be imposed as a
part of the CPCN proceedings by the Maine Public Utilities
Commission.  The Parties acknowledge that MPS or its affiliates will
not be obligated to pursue the application in the event that the cost of joining
will exceed the benefits thereof, assuming completion of the Project and
regional allocation of the costs thereof.  In the event that MPS (or
its affiliates) make such a determination, it shall promptly provide CMP with
written notice thereof and its analysis of the costs and benefits, and the
Parties agree to consider other alternatives to regional cost allocation from
ISO-NE..

      


      (c)  With
respect to the development of a third 345kV interconnection with Canada located
in the MPS service territory, responsibilities will be determined by the
Management Committee consistent with Section 3.1(a).  The decision on
whether to develop a third interconnection will be determined by agreement of
the Parties, taking into consideration the costs of development and conditions
for achieving PTF treatment of the Project.

      


      (d) The
Parties shall negotiate in good faith with respect to (i) a definitive Joint
Ownership Agreement that incorporates the terms and conditions set forth in the
Term Sheet  in Exhibit A hereto in advance of the anticipated date for
Project Approval and in any event, within twelve (12 months following the date
hereof and (ii) an operations and maintenance agreement (“O&M
Agreement”)pursuant to which each Party shall provide real property management
and line maintenance services with respect to the portions of the Project that
are located within its service territories on customary and commercially
reasonable terms; provided that real property within the MPS service territory
shall be subject to the terms of any Interconnection Customer Agreements with
AWE.  To the extent that any portion of the Project is subject to an
Interconnection Customer Agreement under an applicable transmission tariff, the
terms of that agreement will govern.

      


      (e) The
Parties anticipate that MPS will enter into any necessary Interconnection
Customer Agreement with AWE, including as needed a Large Generator
Interconnection Agreement.

      


      (f)  Each
Party shall make available the personnel and resources necessary to complete
such Party’s responsibilities under this Agreement.  Each Party agrees
to consult and cooperate with the other Party with respect to the development of
the Project pursuant to this Agreement.  Each Party shall take all
additional actions and shall execute all other and further instruments and
documents as are necessary or appropriate to give full effect to the provisions
of this Agreement.

       

      Section
3.2       Real Property
Acquisition.

      


      (a)  The
Parties shall seek to obtain options to acquire easements or fee for
substantially all land within the Transmission Corridor.  To the
extent possible, such options shall permit the assignment of the options and the
Parties shall acquire the property as tenants-in-common. Any expenses associated
with acquiring options for easements or fee under this section shall be
allocated between the Parties as Third Party Costs of  Development
under Section 5.2(b) of this Agreement.


      
        
           


        

        
          7

          
            

          

        

        
           


        

      


      (b) To
the extent that options are not available and the landowner wishes to sell the
parcel or grant an easement during the development stage, the Parties shall seek
to acquire fee title to all real property as tenants-in-common pursuant to the
Target Ownership Percentages as described in the Term Sheet attached as Exhibit
A, with the costs to be paid according to the Target Ownership
Percentages.

      


      The
Parties agree to acquire easements or fee interests from landowners abutting the
MEPCO corridor or from MEPCO, additional land or easements adjacent to MEPCO’s
existing 345 kV line approximately from Haynesville to the Chester area and
continuing south for several miles (the “MEPCO Line”) and to
obtain an easement from MEPCO for the portions of the Transmission Corridor that
will run within the existing MEPCO corridor.

      


      (d) Notwithstanding
the foregoing, to the extent that any portion of the Project is subject to an
Interconnection Customer Agreement and treated as interconnection facilities,
the ownership of any property or property rights shall be governed by the terms
of the Interconnection Customer Agreement.

      


      (e) 
The Parties acknowledge that the Bridal Path, consisting of easements and rights
held by MPS for land between Houlton and Haynesville, shall remain the property
of MPS, unless and until such rights are assigned to the Project in accordance
with the JOA or to CMP pursuant to Section 6.1.

      


       

      Section
3.3       Management; Management
Committee.

      


      (a)  Decisions
regarding the management of the Project, shall be made by a management committee
(the “Management
Committee”) consisting of eight (8) members, with four (4) members
appointed by MPS and four (4) members appointed by CMP.  The initial
Management Committee shall consist of the following members:

      


      
        	
                 
      

              	
                (i)

              	
                Appointed
      by MPS: Brent Boyles, Tim
      Brown, Patrick Cannon and Mike
Williams

              


      

      


      
        	
                 
      

              	
                (ii)

              	
                Appointed
      by CMP: Sara Burns, R.
      Scott Mahoney, Hariph Smith, and Stephen
  Robinson.

              


      

      


      Each
Party may replace its appointed Management Committee members by providing
written notice to the other Party.

      


      The
Management Committee may hold meetings by conference call at any time, and shall
meet at least once every three (3) months.  Management Committee
meetings may not be held without the participation of at least one (1) member
from each Party.  Each Party shall be entitled to one collective vote
and all Management Committee decisions shall be made by unanimous vote of the
Parties.  In the event any such Management Committee decision requires
(or may require) any further corporate, administrative or approval by either
Party, such Party shall so notify the other at the time such Management
Committee vote is taken.  The Parties acknowledge that any reference
in this Agreement to “Management Committee approval” or words of like import
shall be understood to mean and be a reference to Management Committee approval,
subject to and conditioned upon any such required corporate, administrative or
other consent.


      
        
           


        

        
          8

          
            

          

        

        
           


        

      


      (b)  Implementation
of the decisions of the Management Committee and the day-to-day management of
the Project shall be vested in the following management personnel (collectively,
the “Management
Personnel”):

      


      
        	
                 
      

              	
                (i)

              	
                MPS
      Management Personnel: Brent Boyles, Tim Brown, Patrick Cannon and Mike
      Williams.

              


      

      


      
        	
                 
      

              	
                (ii)

              	
                CMP
      Management Personnel: Sara Burns, R. Scott Mahoney and Hariph Smith,
      Stephen Robinson and Ellen Miller.

              


      

      


      Either
Party may assign personnel to work on the Project.  Each Party shall
be responsible for assigning appropriate personnel to Project activities, and
for making changes in such assignments as required from time to
time.

      


      The
Management Committee shall appoint a single Project Manager to coordinate all
activities of the Project.  The Project Manager shall report to the
Management Committee.

       

      Section
3.4       Reporting.  The
Project Manager shall prepare monthly reports summarizing the Project’s status,
recent progress, the next steps to be taken, expenditures and Project cash
flows, and the Project’s performance relative to budget.

       

      Section
3.5       Statutory and Regulatory
Obligations.  The Parties acknowledge that the authority of MPS
and CMP is established by statute and that their direct or indirect
participation in the Project, including their compliance with the terms of this
Agreement, will require compliance with relevant statutory and regulatory
obligations.

       

      Section
3.6       Cooperation of the
Parties.  The Parties shall use all reasonable efforts in
performing the development activities contemplated by this Article III, and
shall cooperate with each other fully and in good faith to facilitate the
completion of the development of the Project in accordance with this Agreement
and to resolve disagreements and disputes.  Each Party shall cause its
affiliates and its personnel to comply with the terms and conditions of this
Agreement.

       

      Section
3.7       Project Approval. The Parties
may elect to give Project Approval for all or a portion of the Project. Unless
the Parties otherwise agree in writing  with respect to portions of
the Project not subject covered a Project Approval, this Agreement will continue
in effect with respect to the continued development of such Project
portions.

       

      (a)  The
Parties agree that the Parties may agree to commence construction on a
particular phase of the Project (“Project Phase Approval”).  To
commence a phase of construction, the Parties shall have: (i) acquired Land
Contracts or other rights in the Transmission Corridor at a level acceptable to
the Parties necessary for that phase of the Project, (ii) obtained all material
permits and approvals from Governmental Authorities for that phase of the
Project, including if necessary FERC approval of the Parties’ financing plans
and recovery of financing costs, (iii) negotiated a draft construction contract
that the contractor and the Parties would be prepared to execute and deliver
relating to that phase of the Project, (iv) developed a construction budget for
that phase of the Project, (v) entered into such agreements and obtained such
commitments from AWE as are necessary to satisfy any conditions imposed as a
part of the regulatory approval process for that phase of the Project, and (vi)
obtained approval from ISO-NE transmission owners to regionally allocate the
costs of that phase of the Project at a level acceptable to the
Parties.


      
        
           


        

        
          9

          
            

          

        

        
           


        

      

       

      (b)  Project
Phase Approval shall require the favorable vote of both Parties.  Upon
Project Phase Approval, the Parties shall:

       

      
        	
                 
      

              	
                (i)

              	
                enter
      into a mutually agreeable Joint Ownership Agreement negotiated in
      accordance with Section 3.1(d);

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                enter
      into a construction contract or contracts for that phase of the Project,
      and, if appropriate, give a final notice to proceed
      thereunder;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                exercise
      all options and other rights under the Land Contracts for the portions of
      the Transmission Corridor that will be will be constructed for that phase
      of the Project;

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                enter
      into construction loan facilities or otherwise provide assurance to the
      other party that it has access to funds sufficient to fund its share of
      the construction budget for that phase of the Project;
  and

              


      

       

      
        	
                 
      

              	
                (v)

              	
                provide
      any security required by any construction contractors on customary and
      commercially reasonable terms for that phase of the
    Project.

              


      

       

       

      Section
3.8       Ownership and
Operation

       

       

      The
Parties contemplate that each Party shall own an undivided interest in the
Project with the respective ownership percentages being substantially as set
forth in the terms and conditions for the Joint Ownership Agreement in Exhibit
A.  In the event that the Parties are unable to reach final agreement
on the Joint Ownership Agreement following satisfaction of the conditions to
Project Approval set forth in Section 3.7(a), it shall be considered a dispute
subject to the provisions of Article VIII.

       

      The
Parties agree that, subject to any necessary regulatory approval and upon
reaching agreement on terms reasonably satisfactory to each Party, each Party
shall be permitted to, and if requested by the other Party, shall be obligated
to, operate the portions of the Project located within its service territory
following the in service date, pursuant to an O&M Agreement, in each case,
without regard to whether such Party still maintains an ownership interest in
the Project.

       

      
        
           


        

        
          10

          
            

          

        

        
           


        

      

       

      ARTICLE
IV

      CONTRACT
AUTHORITY

       

      Section
4.1       Contract
Authority.  The Parties agree that all agreements for Third
Party Costs associated with the Project shall be submitted for approval by the
Management Committee and shall be entered into by both Parties pursuant to this
Agreement.  Either MPS or CMP, as the Parties agree with respect to
the management of Third Party Costs, may serve as the agent for billing and
disbursement of Third Party Costs under this Agreement.  The Parties
further agree that they shall be jointly and severally liable for all Third
Party Costs approved by the Management Committee, subject to the reimbursement
provisions of Article V below.

      


       

      ARTICLE
V

      DEVELOPMENT
COSTS

       

      Section
5.1       Development
Budget.  The Development Budget previously adopted by the
Management Committee shall be updated at least quarterly and shall reflect all
costs incurred to date and all anticipated Internal Costs and Third Party Costs.
Any increase in the aggregate Development Budget shall be subject to approval by
the Management Committee, provided that the failure to approve an increase shall
not otherwise affect the status of the Development Budget then in
effect.

      


       

      Section
5.2       Reimbursement of Development
Costs.

      


      (a)       No
Development Costs incurred by either Party shall be reimbursable until approved
by the Management Committee.

      


      (b)       CMP
shall be responsible for 90% of any Third Party Costs and MPS shall be
responsible for 10% of such Third Party Costs and each Party shall be entitled
to reimbursement from the other Party for the Third Party Costs it incurs and
pays in accordance with this Section 5.2.  Not later than twenty (20)
days after the end of each month, each Party shall present the other with an
invoice listing such month’s costs, and, not later than thirty (30) days after
the end of such month, a net cash settlement shall be made in the amount of the
difference between the respective invoices.  In the event a Party is
reimbursed by a third party for costs previously shared as a Third Party Cost
hereunder, said Party shall reimburse the other Party its proportionate share of
such costs.

      


      (c)       Each
Party shall have the right, upon reasonable request to the other Party, to
inspect the books and records of the other Party
relating to Third Party Costs reported under this Section 5.2.

       

      
        
           


        

        
          11

          
            

          

        

        
           


        

      

       

      ARTICLE
VI

      TERMINATION

       

      Section
6.1       Termination.


      (a)  This
Agreement shall terminate upon (i) the Parties’ agreement to terminate, (ii)
AWE’s abandonment of its plans to build new wind generation facilities in Maine,
as evidenced by its termination of any Interconnection Customer Agreement, or
other written notice of abandonment to the Parties, or (iii) one of the Parties
becoming a Withdrawing Party.  The date of termination pursuant to the
foregoing sentence shall be the “Termination
Date.”

      


      (b)  In
the event this Agreement terminates pursuant to Sections 6.1(a)(i) or (ii), each
Party shall prior to termination, make payment of any unpaid reimbursement
obligation under Section 5.2 and upon such termination, each Party shall retain
its rights in all permits, applications, Joint Intellectual Property and all
other assets or rights acquired by the Parties prior to the Termination Date,
unless the Parties otherwise agree in writing.  However, the Parties
shall transfer at book value their ownership interests in any rights-of-way or
real estate previously acquired for the Project, such that MPS shall own all
real property acquired from Haynesville, Maine (commencing at the southern end
of the so called “Bridal Path”) north, and CMP shall own real property acquired
south of Haynesville, Maine (commencing at the southern end of the Bridal
Path).

       

      (c)  In
the event that this Agreement is terminated pursuant to Section 6.1(a)(iii),
then, on or before the 30th day following the
Termination Date, the Party that is not the Withdrawing Party (the “Non-Withdrawing
Party”) shall have the right, exercisable in its discretion, to notify
the Withdrawing Party in writing that it elects to acquire, on the terms and
conditions set forth in this Section 6.1(c), the Withdrawing Party’s interest in
the Project and all or a portion of the Project assets and rights held by the
Withdrawing Party (and in the case that MPS is the Withdrawing Party, CMP shall
have the right to acquire a non-exclusive easement to locate the Project on the
land subject to the Bridal Path Land Contracts, for which CMP shall pay the fair
market value thereof) but excluding any assets and rights acquired on behalf of
AWE at AWE’s expense.  In that event:

      


      
        	
                 
      

              	
                (i)

              	
                Subject
      to obtaining any required regulatory approvals, within thirty (30) days
      following the notice to acquire, the Withdrawing Party shall execute and
      deliver to the Non-Withdrawing Party such bills of sales, deeds,
      assignments or other documents and instruments as are appropriate and
      reasonably requested by the Non-Withdrawing Party (the form of which
      documentation shall be reasonably acceptable to the Non-Withdrawing Party)
      to transfer to the Non-Withdrawing Party all or a portion of the
      Withdrawing Party’s right, title, and interest in and to the Project and
      Project assets and rights (and, if applicable, the non-exclusive easement
      to land subject to the Bridal Path Land Contracts).  The
      transfer shall be made without representation, warranty, covenant, or
      indemnity of any kind, other than that the interests are transferred free
      and clear of any lien, security interest, or adverse claim created by the
      Withdrawing Party.  The Withdrawing Party shall cooperate with
      the Non-Withdrawing Party in respect of any further actions reasonably
      required or requested by the Non-Withdrawing Party to fully effectuate the
      transfers and conveyances contemplated hereby, except for any transfers
      which must be made to AWE pursuant to an Interconnection Customer
      Agreement.

              


      


      
        
           


        

        
          12

          
            

          

        

        
           


        

      


      
        	
                 
      

              	
                (ii)

              	
                In
      consideration of the interests so transferred, on the Termination Date the
      Non-Withdrawing Party shall pay to the Withdrawing Party, in immediately
      available funds, a purchase price equal to the amount of the Third Party
      Costs paid by the Withdrawing Party with respect to the interests so
      transferred (other than the non-exclusive easement to locate the Project
      in the Bridal Path Land Contracts, for which CMP shall pay MPS the fair
      market value thereof based on the value of the other easements obtained by
      the Parties in connection with the Project and the value of a contiguous
      Right of Way).

              


      

      


      
        	
                 
      

              	
                (iii)

              	
                The
      Non-Withdrawing Party shall be obligated to pursue the development of the
      Project, and in the event that it permanently abandons development of the
      Project or has failed to commence the construction of the Project within
      five (5) years following the Termination Date, the Parties shall follow
      the termination procedures outlined in Section
  6.1(b).

              


      

       

      (d)  In
the event of termination of this Agreement, neither Party shall have any
continuing obligation, financial or otherwise, to the other Party except that
the provisions of Articles VI, VII and IX shall survive such
termination.

       

      Notwithstanding
the foregoing, nothing herein shall permit the other Party to have any interest
in or right to acquire the other Party’s electric facilities, assets and rights
used as a part of its operations as a T&D utility.

       

       

      ARTICLE
VII

      CONFIDENTIALITY;
PUBLICITY

       

      Section
7.1       Confidentiality.

       

      (a)       Any
and all data, plans, proposals or other material related to the development,
design, construction, configuration or operation of the Project provided to
a Party or any of its affiliates by or on behalf of the other Party or its
affiliates, whether provided orally or in writing, shall be deemed to be
confidential, unless otherwise specified by the Party providing such information
(“Confidential
Information”).  All Confidential Information and all Joint
Intellectual Property shall be used only with regard to the Project and not
for any other
purpose, shall be held in confidence and shall not be disclosed to any third
party, except as reasonably may be required in the fulfillment of this Agreement
or in connection with obtaining loans or financing for the
Project.  Notwithstanding the foregoing, the obligation of confidentiality shall
not apply to any disclosure of Confidential
Information (i) that is in or enters the public domain through no fault
of the receiving
Party, (ii) that was in the possession of the receiving Party
prior to receipt under this Agreement; or (iii) that is required by law,
regulation, legal process or order of any court or governmental body having
jurisdiction; provided
that, to the extent possible, the receiving Party shall give the other Party
prior written notice of and an opportunity to object to such
disclosure.

      


      (b)       If
this Agreement terminates for any reason then all Confidential Information
furnished hereunder and all Joint Intellectual Property shall remain
confidential. All Confidential Information, if provided in writing, shall either
be (i) returned to the Party from which received or (ii) destroyed
with an appropriate assurance that all copies have been
destroyed.


      
        
           


        

        
          13

          
            

          

        

        
           


        

      


      (c)       The
Parties acknowledge and agree that the harm that would be caused by a breach of
this Section 7.1 would be difficult, if not impossible, to calculate, and
accordingly each Party and its affiliates shall be entitled to injunctive relief
to compel compliance with the provisions of this Section 7.1.  The
provisions of this Section 7.1 are intended to benefit, and to be enforceable
by, each Party and its affiliates, and shall survive the termination of this
Agreement.

      


       

      Section
7.2      Publicity.  The
Parties shall jointly agree on a media strategy relating to the Project, and
shall jointly agree on each public announcement regarding the
Project.  Each such public announcement shall have obtained the
approval of the Management Committee prior to its public dissemination,
recognizing that MPS’s Board meetings and Board deliberations relating to the
Project will be required to comply with the Maine statutes relating to open
meetings.  Nothing herein shall prohibit CMP’s or MPS’s corporate
parent company from complying with federal securities laws.

       

      ARTICLE
VIII

      DISPUTE
RESOLUTION

       

      Section
8.1       Reasonable
Efforts.  The Parties shall use reasonable efforts to settle
all disputes arising under this Agreement as a matter of normal business and
without recourse to litigation.  If any dispute arises under this
Agreement, then the Parties shall first submit the dispute to the Management
Committee for resolution.  If the Management Committee is unable to
resolve the dispute, either Party may declare the dispute irresolvable by the
Management Committee and, within thirty (30) days of such declaration, the
President, Chief Executive Officer or Chairman of each Party (or his or her
designee) shall meet for no more than three (3) consecutive days in Presque
Isle, Maine and attempt to resolve the dispute.  If the dispute
remains unresolved, then it shall be subject to the provisions of Section
8.2.

       

      Section
8.2       Third-Party Resolution of
Disputes.  If a dispute remains unresolved following a written
notice that the dispute is irresolvable by the Management Committee in
accordance with Section 8.1, either Party may initiate additional dispute
resolution procedures as follows:

      


      (a)           The
matter shall be submitted to non-binding mediation, held in Portland, Maine in
accordance with the rules established by the American Arbitration
Association.

      


      (b)            If
within fifteen (15) Business Days after the first Day of the mediation sessions
referenced in subsection (a), the mediation process has not resulted in a
resolution of the dispute, the matter may be referred to binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, to be conducted in Portland, Maine.  Each arbitrator
shall have experience in utility rate matters and the development of utility
infrastructure projects.


      
        
           


        

        
          14

          
            

          

        

        
           


        

      


      Should
the arbitrator(s) find the non-prevailing party’s claim(s) or defense(s) to be
frivolous, the arbitrator(s) may compel as part of the award the non-prevailing
party to pay all fees and costs of arbitration, including but not limited to the
reasonable attorneys’ fees of the prevailing party.  This agreement to
arbitrate shall be specifically enforceable.  The arbitrator(s) shall
have the authority to award equitable relief, including partition of the Project
(which shall only be implemented by providing each Party the sole and exclusive
right to develop the Project in its own Service territory) and
damages.  Any award rendered by the arbitrator(s) shall be final, and
judgment may be entered upon it in accordance with applicable law.

      


      Written
demand for arbitration shall be filed by a party hereto requesting the same with
the American Arbitration Association, with notice to all other
parties.  The demand for arbitration must be filed within a reasonable
period of time after the claim, dispute or other matter in question has arisen,
and in no event shall it be made after institution or legal or equitable
proceedings based on such a claim, dispute or other matter in question would be
barred by the applicable statute of limitations.

      


       

      ARTICLE
IX

      INDEMNIFICATION

       

      Section
9.1       CMP hereby releases and
shall indemnify, defend, and hold harmless MPS and its affiliates, directors,
trustees, officers, agents, employees, successors, and assigns and authorized
representatives of all the foregoing from and against any and all losses
directly caused by CMP in connection herewith, or CMP’s breach or failure to
perform its undertakings in connection with this Agreement, including CMP’s
failure to pay its share of any Third Party Costs pursuant to Section
5.2.

       

      Section
9.2       MPS hereby releases and shall
indemnify, defend, and hold harmless CMP and its affiliates, directors,
trustees, officers, agents, employees, successors, and assigns and authorized
representatives of all the foregoing from and against any and all losses
directly caused by MPS in connection herewith, or MPS’s breach or failure to
perform its undertakings in connection with this Agreement, including MPS’s
failure to pay its proportionate share of any Third Party Costs pursuant to
Section 5.2.

      


       

      ARTICLE
X

      REPRESENTATIONS
AND WARRANTIES

       

      Section
10.1     Representations and
Warranties.  Each Party represents and warrants to the other
Party:

       

      
        	
                 
      

              	
                (a)

              	
                Due
      Organization.  Such Party is a duly organized, validly
      existing entity of the type described in the introduction to this
      Agreement and is in good standing under the laws of the jurisdiction of
      its formation and is duly qualified to do business and in good standing as
      a foreign entity in the jurisdiction of its principal place of business
      (if not formed in that
jurisdiction).

              


      


      
        
           


        

        
          15

          
            

          

        

        
           


        

      

       

      
        	
                 
      

              	
                (b)

              	
                Power and
      Authority.  Such Party has the full legal right, power
      and authority to enter into this Agreement and perform its obligations
      hereunder.

              


      

       

      
        	
                 
      

              	
                (c)

              	
                Due
      Authorization.  Such Party has taken all appropriate and
      necessary corporate action to authorize its execution, delivery and
      performance of this Agreement.

              


      

       

      
        	
                 
      

              	
                (d)

              	
                Consents.  Such
      Party has obtained all consents, approvals, permits and other
      authorizations in connection with the execution, delivery and performance
      of this Agreement required to be obtained by it; provided, however, that
      neither Party makes any representation to the other with respect to any
      consents, approvals, permits or other authorizations necessary for Project
      Approval for the Project or the construction or operation of the
      Project.

              


      

       

      
        	
                 
      

              	
                (e)

              	
                Binding
      Obligation.  This Agreement constitutes a legal, valid
      and binding obligation of such Party, enforceable against such Party in
      accordance with its terms (subject to the effects of bankruptcy,
      insolvency, reorganization, moratorium, fraudulent conveyance or other
      applicable laws now or hereafter in effect relating to creditors’ rights
      generally and general principles of
equity).

              


      

       

      
        	
                 
      

              	
                (f)

              	
                No
      Violation.  Except as disclosed on the Disclosure
      Schedule attached hereto, the execution, delivery and performance by such
      Party of this Agreement, and the compliance with the terms and provisions
      hereof, (i) do not conflict with and will not result in a breach or
      violation of any of the terms or provisions of the organizational
      documents of such Party and (ii) do not conflict with and will not result
      in a breach or violation of any of the terms or provisions of any existing
      applicable law to which such Party is subject or by which it or any of its
      property is bound, or any material agreement or instrument to which such
      Party is a party or by which it or any of its property is bound, or
      constitutes or will constitute a default thereunder or will result in the
      imposition of any Encumbrance upon any of its
  property.

              


      

       

      
        	
                 
      

              	
                (g)

              	
                No
      Litigation.  There is no litigation pending or, to such
      Party’s knowledge, threatened to which such Party or any of its Affiliates
      is a party that, if adversely determined could reasonably be expected to
      affect a Party’s ability to perform its obligations under this Agreement
      or otherwise has a material effect with respect to the development of the
      Project as contemplated hereunder.

              


      

       

      
        	
                 
      

              	
                (h)

              	
                Authorized
      Signatory.  The representative executing this Agreement
      on behalf of such Party is duly authorized to execute this Agreement on
      such Party’s behalf and to bind such Party
  hereunder.

              


      

       

      
        	
                 
      

              	
                (i)

              	
                Disclosure.  No
      representation or warranty by such Party in this Agreement (including the
      disclosures contained in the Schedules hereto), or any other written
      material delivered by such Party contains any untrue statement of a
      material fact or omits a material fact necessary to make the statements
      contained herein or therein, taken as a whole, in light of the
      circumstances in which they were made, not
  misleading.

              


      


      
        
           


        

        
          16

          
            

          

        

        
           


        

      

       

      ARTICLE
XI

      MISCELLANEOUS

       

      Section 11.1  
  Amendments.  None of
the terms and conditions of this Agreement may be changed, waived, modified or
varied in any manner whatsoever unless in writing duly signed by the Parties
and, in the case of MPS, approved by its Board of Directors.

       

      Section
11.2     Notices.  Except as
otherwise expressly provided herein, all notices, requests and demands to or
upon the respective parties hereto to be effective shall be in writing
(including by telecopy), and shall be deemed to have been duly given or made
when delivered by hand, or upon actual receipt or, in the case of telecopy
notice, when confirmation is received, or, in the case of a nationally
recognized overnight courier service, one (1) Business Day after delivery to
such courier service (charges prepaid), addressed to the addresses set forth
below or to such other address as may be designated by any Party in a written
notice to the other Party hereto.

      


      
        
          	
                  If
      to CMP:

                
	 
      	
                  Ms.
      Sara Burns

                
	 
      	
                  President

                
	 
      	
                  Central
      Maine Power Company

                
	 
      	
                  83
      Edison Drive

                
	 
      	
                  Augusta,
      ME 04336

                
	 
      	 
      
	
                  If
      to MPS:

                
	 
      	
                  Mr.
      Brent Boyles

                
	 
      	
                  President

                
	 
      	
                  Maine
      Public Service Company

                
	 
      	
                  P.
      O. Box 1209

                
	 
      	
                  209
      State Street

                
	 
      	
                  Presque
      Isle, ME 04769-1209

                


        

      

      


       

      Section
11.3     Entire
Agreement.  This Agreement supersedes the MOU and ARMOU, which
are hereby terminated and of no further force or effect.

       

      Section
11.4     Execution in
Counterparts.  This Agreement may be executed in any number of
counterparts, each of which, when so executed and delivered, shall be an
original, but all of which together shall constitute one and the same
instrument.

       

      Section
11.5     Governing Law.  This
Agreement shall be construed and enforced in accordance with, and the rights of
the parties shall be governed by, the law of the State of Maine without
reference to conflicts of law principles; it being acknowledged that each of MPS
and CMP are subject to the rules and regulations of the FERC and such rules and
regulations to the extent required.


      
        
           


        

        
          17

          
            

          

        

        
           


        

      


       

      Section
11.6     Headings.  The
headings of the several sections of this Agreement are inserted for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Agreement.

       

      Section
11.7    Waivers.  Any
waiver, express or implied, by either Party of any right under this Agreement or
of any breach by the other Party shall not constitute or be deemed as a waiver
of any other right or any other breach, whether of a similar or dissimilar
nature to the right or breach being waived.  Failure on the part of a
person to complain of any act of any person or to declare any person in default,
irrespective of how long that failure continues, does not constitute a waiver by
that person of its rights with respect to that default until the applicable
statute-of-limitations period has run.  A waiver of a Party’s rights
under this Agreement shall be effective only if that Party agrees in
writing.

       

      Section
11.8     No Third-Party
Beneficiaries.  This Agreement is solely for the benefit of the
Parties and their respective permitted successors and permitted assigns, and
this Agreement shall not otherwise be deemed to confer upon or give to any other
third party, including any lender or other creditor, any remedy, claim,
liability, reimbursement, cause of action or other right.

       

      Section 11.9   
Severability.  If
any of the provisions of this Agreement are held to be invalid or unenforceable
under the applicable law of any jurisdiction, the remaining provisions shall not
be affected, and any such invalidity or unenforceability shall not invalidate or
render unenforceable that provision in any other jurisdiction.  In
that event, the Parties agree that the provisions of this Agreement shall be
modified and reformed so as to effect the original intent of the Parties as
closely as possible with respect to those provisions that were held to be
invalid or unenforceable.

       

      Section 11.10  Assignment.  Either
Party may assign its rights under this Agreement to an Affiliate, upon prior
notice to the other Party and the execution by such Affiliate of an instrument
of assumption reasonably satisfactory to the other Party; provided, that no such
assignment shall release the assigning Party from any of its obligations under
this Agreement without the consent of the other Party.


      
        
           


        

        
          18

          
            

          

        

        
           


        

      


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

      


      


      
        
          
            
              
                
                  
                    
                      	 
      	 
      	
                              Central
      Maine Power Company

                            
	 
      	 
      	 
      
	 
      	
                              By:

                            	      
                              /s/
      Sara Burns

                            	
                               

                            
	 
      	
                              Name:

                            	
                              Sara
      Burns

                            
	 
      	
                              Title:

                            	
                              President
      and Chief Executive Officer

                            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
                              Maine
      Public Service Company

                            
	 
      	 
      	 
      
	 
      	
                              By:

                            	      
                              /s/
      Brent Boyles

                            	
                               

                            
	 
      	
                              Name:

                            	
                              Brent
      Boyles

                            
	 
      	
                              Title:

                            	
                              President
      and Chief Executive
Officer

                            


                    

                  

                

              

            

          

        

      


      
        
           


        

        
          19

          
            

          

        

        
           


        

      


      Principal
Terms of a Joint Ownership Agreement

      


      Proposed Northern Maine
Electric Transmission Facility (the “Project”)

      


      
        
          
            
              	
                      Purpose:

                    	
                      To
      provide for the construction, ownership and operation of the Project by
      Central Maine Power Company (“CMP”) and Maine Public Service Company
      (“MPS”) (the “Parties”).  While the Parties may agree to sell
      ownership interests to certain other mutually agreed-to parties, such a
      sale of ownership interests will necessarily result in significant
      modification of the terms of a Joint Ownership Agreement.  As
      such, if the Parties sell any other ownership interests in the Project,
      the Parties acknowledge that the terms outlined here will be modified as a
      result of these factors.

                       

                      The
      development of the Project is provided for under the Joint Development
      Agreement (“JDA”) between the Parties. The Project is defined as a new 345
      kV transmission line generally extending from the New Brunswick border
      near Limestone south to Haynesville and then south west to Detroit and may
      be constructed in phases or segments.1  After
      completion of construction, at the in-service date of the Project, each of
      the Parties will own undivided interests in the Project. The ownership
      interests of each Party in the Project will be defined in a Joint
      Ownership Agreement between CMP and MPS (the “JOA”) consistent with these
      terms.

                       

                    
	
                      Target
      Ownership Percentages:

                    	
                      Ownership
      interest in the Project will be based on the ongoing investment of each
      Party in the Project including the development costs incurred and paid
      prior to Project Approval.  As set forth in the JDA, the Parties
      acknowledge that some portions of the Project may be treated as generator
      leads or upgrades paid for by the generator under an interconnection
      agreement.  In addition, cost estimates are very preliminary at
      this stage.  Accordingly, the cost of the Project to the Parties
      is difficult to determine.  The estimated cost of construction
      for the entire Project could range between $400 million and $625 million,
      without consideration for the leg between Limestone and the NB
      border.  Without regard to the final cost of the Project, for
      the first $100 million of investment in the Project (excluding any amounts
      paid for by AWE), each of MPS and CMP will contribute $50
      million.  For the remainder of the investment in the Project,
      CMP will contribute 77% of the next $300 million of investment requirement
      and MPS will contribute 23% of the next $300 million investment until they
      achieve the target ownership ratio agreed to by the parties in the JOA
      (expected to be 70% CMP and 30% MPS) (the “Target Ownership Percentages”)
      is reached on the first $400 million of investment.  For
      investment amounts above $400 million, the Parties shall determine the
      investment percentages prior to entering into the JOA; provided that each party shall have the
      right to fund up to its Target Ownership Percentage.  The
      Parties acknowledge that the actual aggregate investment to develop and
      construct the final Project will impact the final ownership ratios and
      therefore, subject to the right of each Party to contribute to the first
      $400 million in accordance with the foregoing, the actual investment
      amounts and ownership percentages may be modified accordingly by the
      Parties in line with the Target Ownership Percentages and the investment
      limits of either Party. CMP and MPS would be "Co-Owners" and each will
      have an undivided interest in the Project (the "Undivided Interests"),
      equal to the actual investment contribution of such party to the total
      investment at any point in time.

                       

                    


            

          

        

      

      ____________________________

      
        1 The
Parties currently anticipate that the costs of the Project will be regionally
allocated to ISO-New England (“ISO-NE”) ratepayers, and that Aroostook Wind
Energy (“AWE”) will be responsible for certain interconnection cost of the
Project.  Alternatively, based on other means of recovery acceptable
to the Parties, the Parties may decide to build the Project without regional
allocation from ISO-NE ratepayers.  The Parties acknowledge that the
terms outlined here may need to be modified as a result of these
factors.

      


      
        
           


        

        
          1

          
            

          

        

        
           


        

      

       

      
        
          
            
              	
                      Real
      Estate

                    	
                      The
      acquisition of the various real estate interests, ownership or otherwise,
      required for the Project will occur under the JDA. The management and
      maintenance of the real estate involved in the Project will be handled on
      an ongoing basis under the terms of an Operations and Maintenance
      Agreement between the Parties. If, following the Project Approval under
      the JDA, either Party elects not to or cannot continue with the Project
      for any reason, the other Party will have an absolute right to purchase
      the real estate interest of the other Party necessary to complete the
      Project, subject to any regulatory requirements, and any terms and
      conditions of agreements with AWE and the real estate
      documents.  Such purchase and sale shall occur at cost and the
      Parties shall use their commercially reasonable efforts to complete the
      purchase and sale within thirty (30) days of a notice to
      withdraw.  Notwithstanding the foregoing, with respect to the
      so-called Bridal Path, in the event that MPS is the Party which elects not
      to continue, it shall, to the extent permitted by law, assign such
      sub-easement rights as are necessary to permit the completion of the
      Project on such terms and at the fair market value thereof.

                       

                    
	
                      Construction
      Stage

                    	
                      Upon
      Project Approval under the JDA, the Parties will each contribute to the
      costs of the construction of the transmission line.  The Parties
      agree that construction will not commence unless the Parties have secured
      approval of a regional cost allocation for the Project that is acceptable
      to the Parties.

                       

                      1.
      Prior to Project Approval, and subject to the investment formula described
      in the Target Ownership Percentages section above, the Parties will
      determine the expected contribution of each Party during construction and
      prior to the in-service date (the “Construction Contribution
      Obligation”).  The Construction Contribution Obligation will be
      subject to Management Committee approval.

                       

                    


            

          

        

         

        
          
             


          

          
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                      2.  Prior
      to Project Approval and commencement of construction, each Party shall
      provide the other Party with satisfactory documentation evidencing how it
      intends to finance its share of construction.  The Parties shall
      determine the extent to which either Party must post security to the other
      Party in order to secure its share of the Construction Contribution
      Obligation.

                       

                      3.
      If MPS is unable to secure financing for its share of the Construction
      Contribution Obligation prior to the Construction Stage on commercially
      reasonable terms, then CMP agrees that it will finance the entire
      Construction Stage of the Project.  In the event that CMP
      provides the construction financing, to the extent permitted and allowed
      under MPS’s existing bond indentures, and subject to immediate release
      upon MPS obtaining permanent financing, MPS shall be required to (i)
      provide CMP a first-priority  security interest  on
      MPS’s Undivided Interest in the Project and all project assets, including
      real property interests (subject to customary permitted exceptions with
      respect to interests in real property that do not materially limit the
      proposed construction, ownership, operation or maintenance of the
      Project), or (ii) in the event such security is unavailable, transfer to
      CMP all of MPS’s Undivided Interests in the Project and Project assets and
      rights other than MPS’s real estate interests, for which MPS may retain
      ownership, but for which MPS will provide appropriate easements to permit
      the construction and operation of the Project and a lien to secure its
      obligations to CMP.

                       

                      4.
      The Parties may elect for CMP to manage the construction phase of the
      Project.   If CMP finances the Construction Stage of the
      Project, it will manage the Construction Stage, subject to such
      obligations as are customary for project management.   The
      Project construction manager shall enter into the necessary construction
      contracts and shall be responsible for the aggregate amount of investment
      to develop and construct the Project (“Project Expenditures”) including
      payments to the construction contractor and Financing Costs (as defined
      below) subject to MPS’ obligation with respect to the Overrun Funding
      Amount described below and Management Committee review and approval of any
      material Project construction contracts, such as the Procurement Services
      Agreement.

                       

                      5.
      Financing Costs:  Project Financing Costs will be accumulated in
      AFUDC (“allowance for funds used during construction”) in accordance with
      FAS 71.

                       

                      6.
      Allocation of Project Expenditures:  For the purpose of tracking
      obligations during the Construction Phase and for determining the Purchase
      Price upon completion, Project Expenditures will be
      allocated.  Expenses will be allocated according to the Target
      Ownership Percentages for the Project.

                       

                    


            

          

        

         

        
          
             


          

          
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                      7.
      Project Budget:  The Parties will establish a Project Budget for
      the entire Project which will include an appropriate level of account
      detail and show monthly expenditures.  The Project Budget will
      include all Project Expenditures.

                       

                      8.
      Cost Overruns:  For expenditures in excess of amounts approved
      for regional cost allocation (“Cost Overruns”), the Parties shall be
      responsible for such Cost Overruns on a pro rata basis according to their
      respective Construction Contribution Obligations, provided that MPS shall
      not be responsible for funding Cost Overruns in excess of the greater of
      (i) MPS’s projected return on equity from the Project during the one-year
      period following the in-service date, determined at the time the JOA is
      executed or (ii) $12,500,000 (the “Overrun Funding Amount”).  In
      the event that MPS does not fund its allocable share of Cost Overruns, CMP
      shall be entitled to make all decisions with respect to the completion of
      the construction of the Project.  Notwithstanding the limits on
      the funding obligations with respect to Cost Overruns, each of the Parties
      shall bear the risk of any prudence disallowance in accordance with their
      respective percentage of Undivided Interests (determined based on their
      respective funding of all development and construction costs through the
      in-service date, as provided above).

                       

                    
	
                      Contribution
      Agreement (if CMP finances Construction Stage 100%)

                    	
                      The
      Contribution Agreement is intended to mitigate some of the risk assumed by
      CMP if CMP is the 100% owner during the Construction Phase.  MPS
      would be required to post a form of security (the “Security”) acceptable
      to CMP.  CMP would have the right to draw on the Security under
      certain pre-defined circumstances. MPS would be eligible to recover drawn
      funds and any other monies paid to CMP to the extent that CMP sought and
      received regulatory recovery of Project Expenditures.

                       

                      Cost
      Overruns.  The Parties anticipate that the terms of any
      approval for the Project Costs to be treated as a pooled transmission
      facility will determine how project Cost Overruns will be
      treated.  The Parties will determine prior to Project Approval
      how such costs are to be funded by the Parties, and to the extent CMP
      provides the entire construction financing, MPS shall provide CMP with
      adequate security to cover the Overrun Funding Amount.  For
      example, the Parties may agree that MPS will provide a letter of credit
      facility sufficient to cover the Overrun Funding Amount which CMP could
      draw on to cover MPS’s share of the Cost Overruns based on its actual
      ownership percentage.  If CMP notifies MPS of its intent to draw
      on the letter of credit, MPS could otherwise provide funds to cover its
      share of the Cost Overruns.

                       

                    


            

          

        

         

        
          
             


          

          
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                      Call
      on Construction Completion (if CMP finances the Construction Stage
      100%)

                    	
                      Upon
      completion of construction and prior to the in-service date for an
      operating segment of the Project, under the terms of the JOA, MPS shall
      have the right to require CMP to sell to MPS MPS’s Target Ownership
      Percentage of Undivided Interests in the Project.

                       

                      The
      Purchase Price will equal MPS’s pro-rata portion of Project Expenditures
      including AFUDC plus an interest rate risk premium payment of 2.5%
      multiplied by MPS’ pro-rata portion of the Project Expenditures excluding
      AFUDC. Any Cost Overruns funded by MPS under the Contribution Agreement
      would be offset against the amount of the Purchase Price.

                       

                      If
      MPS does not acquire its Target Ownership Percentage of Undivided
      Interests in the Project pursuant to this section, MPS’s obligations for
      Cost Overruns and prudence disallowance shall be reduced according to
      its  Undivided Interest in the Project based on its final actual
      investment contribution to the total investment in the completed
      Project.

                       

                    
	
                      Project
      Operation

                       

                    	
                      If
      the costs of the Project are regionally allocated to ISO-NE ratepayers,
      the Project will be treated as a Pool Transmission Facility (PTF) with
      Operating Authority turned over to ISO-NE under the Transmission Operating
      Agreement (TOA). The Owners of the Project will remain responsible for all
      maintenance of the right of way and the transmission
      facilities.  Transmission service and cost recovery will be
      under the ISO-NE Open Access Transmission Tariff (OATT).

                       

                    
	
                      Operating
      Budgets:

                    	
                      Each
      Co-Owner would commit to fund its share of the Project's operation
      budget.  A process would be specified for the development and
      approval of all budgets and all modifications thereto.  Each
      Co-Owner would be responsible to fund operation expenses of the Project in
      proportion to its Undivided Interest.

                       

                      To
      the extent that a Co-Owner failed to fund its portion of any required
      contribution when due, the other Co-Owner would have the right to make the
      required contribution and the Co-Owners' respective percentage Undivided
      Interest in the Project would be adjusted pursuant to a formula to be
      mutually agreed upon in connection with the negotiation of the
      JOA.

                       

                    
	
                      Project
      Finance:

                    	
                      Each
      Co-Owner may, in its discretion, separately finance all or a portion of
      its Undivided Interest, provided that neither Co-Owner would have the
      power to grant a Security interest in the Undivided Interest of the other
      Co-Owner.

                       

                    


            

          

        

         

        
          
             


          

          
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                        Management
      of Project:

                         

                         

                      	
                        The
      management committee (the "Committee") structure established under the
      Joint Development Agreement will continue to operate and manage the
      Project during construction.    As per the JDA, the
      Parties would be entitled to change their representatives in their sole
      discretion but after consultation with the other
      Party.  Further, all actions of the Committee would require the
      consent of both Parties, subject to provisions designed to resolve
      disputes and address deadlocks.  During the period that a Party
      has failed to fund all required Construction Contribution Obligations or
      owns less than 20% of the Undivided Interests in the Project, the Parties’
      voting rights shall be modified to equal their actual ownership
      interests.  Under these modified voting circumstances, any
      Management Committee action would require a majority vote of the ownership
      interest in the Project.  The responsibilities of the Committee
      would continue to include, as necessary, siting, negotiating options to
      purchase or lease real estate; permitting and obtaining other necessary
      authorizations; coordinating and securing interconnection rights;
      preparing budgets for all activities; negotiating and managing
      construction and other consulting contracts,  activities
      relating to regulatory proceedings, public relations and other similar and
      related Project activities.

                         

                        The
      Parties will enter into customary and commercially reasonable Operations
      and Maintenance Agreements to provide for ongoing operating
      responsibilities including employing third-party contractors along the
      line once constructed and in-service. The Committee
      would have the authority and power to engage advisors, attorneys and other
      consultants on behalf of the Parties to assist in performing any of its
      activities. The Operations and Maintenance Agreements will provide that
      MPS will be responsible for real estate management for Project real estate
      that is located from Haynesville (commencing at the southern end of the
      Bridal Path) north to Limestone and CMP will be responsible for real
      estate management for Project real estate that is located from Haynesville
      (commencing at the southern end of the Bridal Path) south to
      Detroit.  The costs of such real estate management will be
      shared by the Parties according to their actual ownership
      percentages.

                         

                      
	
                        Actions
      by Co-Owners:

                      	
                        Major
      actions with respect to the Project would require the affirmative vote of
      the Committee. Major actions would include, among other things, Project
      design or scope changes; execution of material agreements; budget
      approvals, modifications, etc.; material construction and operational
      decisions; or sales or other dispositions of a substantial portion of the
      assets of the Project.  If either Party wishes to sell real
      estate acquired for the Project, the other Party shall have a right to
      purchase that real estate at the book value (i.e., original purchase price
      and acquisition costs), with the exception of the Bridal Path value, which
      will be valued at the fair market value thereof determined by reference to
      easements and other rights obtained by the Parties in connection with the
      Project.

                         

                      
	
                        Transactions
      with Affiliates:

                      	
                        The
      Committee may request that a Co-Owner or one of its affiliates perform
      services in connection with the construction and/or operation of a
      Project, provided that any contract or other arrangement is approved by
      other Co-Owner.  Forms of maintenance agreements will be
      attached as exhibits to JOA.

                         

                      


              

            

          

        

         

        
          
             


          

          
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                        Transfer
      Rights and Restrictions:

                      	
                        The
      following rights and restrictions would apply to all proposed transfers of
      Undivided Interests:

                         

                        ·      Pledges
      - The Co-Owners may pledge their Undivided Interests to a third party in
      connection with their financing of the Project.

                         

                        ·     
      Transfers to affiliates - An affiliate of a Co-Owner may, upon
      prior notice to the other Co-Owner, become a Co-Owner pursuant to a
      transfer of all (but not a portion) of such Co-Owner's Undivided Interest,
      as well as any related rights such as ownership in real estate; provided that such affiliate executes an
      instrument of assumption reasonably satisfactory to the other Co-Owner and
      provided, further, that no such assignment shall
      release the assigning Co-Owner from any of its obligations under this
      Agreement.

                         

                        ·     
      Right of first offer – If a Co-Owner desires to sell its Undivided
      Interest to a non-affiliated third party, it would be required to first
      offer the interest to the other Co-Owner.  If the other Co-owner
      does not complete an acquisition of the offered Undivided Interest, any
      subsequent sale by the offering Co-Owner to a third party could not be on
      terms more favorable than those offered to the other
Co-Owner.

                         

                        ·     
      Credit Requirements/Support – the JOA would contain certain
      provisions requiring the transferee of an Undivided Interest to satisfy
      certain credit metrics in connection with any assignment of a Party's
      interest.

                         

                        ·     
      Change in Control – A change in control of MPS shall trigger a
      change in the Parties’ voting interests so that the Parties’ voting
      interests match their actual ownership percentages.  Once a
      change in control were to occur, any Management Committee action would
      require the majority vote of the ownership interest in the
      Project.  For purposes of this provision, “control” shall mean
      (i) the direct or indirect ownership of greater than fifty percent (50%)
      of the equity interests of a Party or (ii) the possession, directly or
      indirectly, of the power to direct or cause the direction of management or
      policies (whether through ownership of securities or any partnership or
      other ownership interest, by contract or otherwise) of a
      Party.

                         

                        ·     
      Termination of the JOA will only occur under certain circumstances,
      including without limitation, one Party selling its interest to the other
      Party, the inability of both Parties to continue to secure adequate
      funding during construction, regulatory or other obstacles arising during
      construction, or inability to obtain adequate or cost-efficient
      construction services.  If the JOA is terminated, each Party
      will be reimbursed by the other Party for its share of construction costs,
      if necessary, such that the Parties’ pro-rata investment will equal their
      respective share of Construction Contribution Obligations incurred through
      the date of termination, unless one Party sells its interest to the other
      Party, in which case the selling Party shall not have any further
      obligation for Construction Contribution Obligations.

                         

                      
	
                        Dispute
      Resolution:

                      	
                        If
      the Co-Owners cannot agree on a proposed action, the Co-Owners agree that
      their respective CEOs would meet to resolve the matter.  If
      within 10 days following a meeting of the CEO's the matter is not
      resolved, a Co-Owner may submit the issue to arbitration with a mutually
      agreeable arbitrator, provided that certain technical disputes would be
      referred for expedited resolution to a mutually agreed technical
      expert.

                         

                      


              

            

          

        

        


         

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