Document:

Exhibit 4.1 Eighteenth Supplemental Indenture

    Exhibit
      4.1

    

    

    

     

    GREEN
      MOUNTAIN POWER CORPORATION

     

    to

     

    THE
      BANK OF NEW YORK

    successor
      to United States Trust Company of New York, successor to The Chase Manhattan
      Bank (National Association), successor to The Chase National Bank of the City
      of
      New York, Trustee

    

    

    

    EIGHTEENTH
      SUPPLEMENTAL INDENTURE

     

    Dated
      as of July 1, 2006

     

    

    

    

    Supplemental
      to

     

    Indenture
      of First Mortgage

     

    and
      Deed of Trust

     

    Dated
      as of February 1, 1955

     

    

     

    This
      is a Security Agreement relating to Personal Property as well as a Mortgage
      upon
      Real Estate and Other Property

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    This
      EIGHTEENTH SUPPLEMENTAL INDENTURE dated as of July 1, 2006 made by GREEN
      MOUNTAIN POWER CORPORATION, as debtor (its Federal Tax Number being 03-0127430),
      a corporation duly organized and existing under the laws of the State of Vermont
      (hereinafter sometimes called the “Company”), whose mailing address and address
      of its chief executive office is 163 Acorn Lane, Colchester, Vermont 05446,
      party of the first part, and THE BANK OF NEW YORK, successor to United States
      Trust Company of New York, successor to The Chase Manhattan Bank (National
      Association), successor to The Chase National Bank of the City of New York,
      as
      Trustee and secured party (its Federal Tax number being 13-5160382), a
      corporation existing under the laws of the State of New York and having its
      principal corporate trust office at 101 Barclay Street, New York, New York
      10286
      (hereinafter sometimes called the “Trustee”), party of the second
      part.

     

    WHEREAS,
      the Company has heretofore executed and delivered an Indenture of First Mortgage
      and Deed of Trust dated as of February 1, 1955 (herein sometimes called the
      “Original Indenture”), to secure, as provided herein, its bonds (in the Original
      Indenture and herein called the “Bonds”), to be designated generally as its
“First Mortgage Bonds”, and to be issued in one or more series as provided in
      the Original Indenture;

     

    WHEREAS,
      the Company has heretofore executed and delivered a First Supplemental Indenture
      dated as of April 1, 1961, a Second Supplemental Indenture dated as of January
      1, 1966, a Third Supplemental Indenture dated as of July 1, 1968, a Fourth
      Supplemental Indenture dated as of October 1, 1969, a Fifth Supplemental
      Indenture dated as of December 1, 1973, a Sixth Supplemental Indenture dated
      as
      of June 1, 1975, a Seventh Supplemental Indenture dated as of August 1, 1976,
      an
      Eighth Supplemental Indenture dated as of December 1, 1979, a Ninth Supplemental
      Indenture dated as of July 15, 1985, a Tenth Supplemental Indenture dated as
      of
      June 15, 1989, an Eleventh Supplemental Indenture dated as of September 1,
      1990,
      a Twelfth Supplemental Indenture dated as of March 1, 1992, a Thirteenth
      Supplemental Indenture dated as of March 1, 1992, a Fourteenth Supplemental
      Indenture dated as of November 1, 1993, a Fifteenth Supplemental Indenture
      dated
      as of November 1, 1993, a Sixteenth Supplemental Indenture dated as of December
      1, 1995 and a Seventeenth Supplemental Indenture dated as of December 1, 2002
      supplementing and modifying the Original Indenture, each of which Supplemental
      Indentures provided for, among other things, the creation of a new series of
      First Mortgage Bonds;

     

    WHEREAS,
      pursuant to the Original Indenture, as heretofore supplemented and modified,
      there have been executed, authenticated, delivered and issued and there are
      now
      outstanding First Mortgage Bonds of series and in principal amounts as
      follows:

     

    
      	
               

              Title

            	
              Issued
                and 

              Outstanding

            
	
              First
                Mortgage Bonds, 7.05% Series due 2006

            	
              4,000,000

            
	
              First
                Mortgage Bonds, 7.18% Series due 2006

            	
              10,000,000

            
	
              First
                Mortgage Bonds, 6.04% Series due 2017

            	
              42,000,000

            
	
              First
                Mortgage Bonds, 6.70% Series due 2018

            	
              15,000,000

            
	
              First
                Mortgage Bonds, 9.64% Series due 2020

            	
              9,000,000

            
	
              First
                Mortgage Bonds, 8.65% Series due 2022

            	
              13,000,000

            

    

    

    WHEREAS,
      the Board of Directors of the Company has established a series of Bonds to
      be
      designated First Mortgage Bonds, 6.53% Series due August 1, 2036 (herein
      sometimes called “Bonds of the 2036 Series”), and has authorized an issue of
      Thirty Million Dollars ($30,000,000) principal amount thereof, and the Company
      has complied or will comply with all provisions required to issue additional
      Bonds provided for in the Original Indenture;

     

    WHEREAS,
      the Company desires to execute and deliver this Eighteenth Supplemental
      Indenture, in accordance with the provisions of the Original Indenture, for
      the
      purposes, among others, of (a) further assuring, conveying, mortgaging and
      assigning unto the Trustee certain additional property acquired by the Company,
      (b) providing for the creation of a new series of Bonds, designating the series
      to be created and specifying the form and provisions of the Bonds of such series
      and (c) adding to the Original Indenture, as supplemented and modified, other
      covenants and agreements to be hereafter observed by the Company (the Original
      Indenture, as heretofore supplemented and modified and as hereby supplemented
      and modified, being herein sometimes called the “Indenture”); and

     

    WHEREAS,
      all acts and proceedings required by law and by the Restated Articles of
      Association and By-laws of the Company necessary to secure the payment of the
      principal of, premium, if any, and interest on the Bonds of the 2036 Series,
      to
      make the Bonds of the 2036 Series to be issued hereunder, when executed by
      the
      Company, authenticated and delivered by the Trustee and duly issued, the valid,
      binding and legal obligations of the Company, and to constitute the Indenture
      a
      valid and binding mortgage for the security of all of the Bonds, in accordance
      with its and their terms, have been done and taken; and the execution and
      delivery of this Eighteenth Supplemental Indenture have been in all respects
      duly authorized:

     

    NOW,
      THEREFORE, THIS EIGHTEENTH SUPPLEMENTAL INDENTURE WITNESSETH, that in order
      to
      secure the payment of the principal of, premium, if any and interest on all
      Bonds at any time issued and outstanding under the Indenture, according to
      their
      tenor, purport and effect, to confirm the lien of the Indenture upon the
      mortgaged property mentioned therein including any and all property purchased,
      constructed or otherwise acquired by the Company since the date of execution
      of
      the Original Indenture and to secure the performance and observance of all
      the
      covenants and conditions herein and in the Bonds and in the Indenture contained,
      to declare the terms and conditions upon and subject to which the Bonds of
      the
      2036 Series are and are to be issued and secured, and held, and for and in
      consideration of the premises and of the mutual covenants herein contained
      and
      of the purchase and acceptance of the Bonds of the 2036 Series by the holders
      thereof, and of the sum of Ten Dollars ($10) duly paid to the Company by the
      Trustee, at or before the ensealing and delivery hereof, and for other valuable
      consideration, the receipt whereof is hereby acknowledged, the Company has
      executed and delivered this Eighteenth Supplemental Indenture, and by these
      presents, does grant, bargain, sell, alien, remise, release, convey, assign,
      transfer, mortgage, pledge, set over and confirm unto The Bank of New York,
      as
      Trustee, and to its successors in trust and to its and their successors and
      assigns forever, all and singular the property, rights, privileges and
      franchises (other than excepted property) of the character described in the
      Granting Clauses of the Original Indenture now owned of record or otherwise
      by
      the Company, whether or not constructed or acquired since the date of execution
      of the Original Indenture or which may hereafter be constructed or acquired
      by
      it, including, without limiting the generality of the foregoing, the property
      in
      Vermont, Massachusetts and Maine described in Article Five hereof, but subject
      to all exceptions, reservations and matters of the character therein referred
      to, and expressly excepting and excluding from the lien and operation of the
      Indenture all properties of the character specifically excepted by Paragraphs
      B
      through H of Granting Clause VII of the Original Indenture, to the extent
      contemplated thereby, and all property heretofore released or otherwise disposed
      of pursuant to the provisions of the Indenture.

     

    TO
      HAVE
      AND TO HOLD all
      of
      the property, real, personal and mixed, and all and singular the lands,
      properties, estates, rights, franchises, privileges and appurtenances hereby
      granted, bargained, sold, aliened, remised, released, conveyed, assigned,
      transferred, mortgaged, pledged, set over or confirmed or intended so to be,
      unto the Trustee and its successors in the trust and to its and their successors
      and assigns, forever.

     

    BUT
      IN
      TRUST, NEVERTHELESS,
      for the equal and proportionate use, benefit, security and protection of those
      who from time to time shall hold the Bonds and coupons, or any of them,
      authenticated and delivered under the Indenture, and duly issued by the Company,
      without any discrimination, preference or priority of any one Bond or coupon
      over any other by reason of priority in the time issue, sale or negotiation
      thereof or otherwise, except as provided in Section 12.28 of the Original
      Indenture, so that, subject to said Section 12.28, each and all of said Bonds
      and coupons shall have the same right, lien, and privilege under the Indenture,
      and shall be equally and proportionately secured by the Indenture (except as
      any
      sinking and improvement fund, depreciation fund or other fund established in
      accordance with the provisions of the Indenture may afford additional security
      for the Bonds of any particular series), with the same effect as if all the
      Bonds and coupons had been issued, sold and negotiated simultaneously on the
      date of the delivery of the Original Indenture.

     

    It
      is
      hereby covenanted, declared and agreed by and between the parties hereto that
      all Bonds and coupons, if any, are to be authenticated, delivered and issued,
      and that all property subject or to become subject to the Indenture is to be
      held, subject to the further covenants, conditions, uses and trusts set forth
      in
      the Indenture, and the Company for itself and its successors or assigns does
      hereby covenant and agree to and with the Trustee and its successor or
      successors in such trust, for the benefit of those who shall hold said Bonds,
      or
      coupons, or any of them, as follows:

     

    ARTICLE
      I  

     

    BONDS
      OF THE 2036 SERIES AND CERTAIN PROVISIONS RELATING THERETO

     

    SECTION
      1.01.  A.
      Terms of Bonds of the 2036 Series.
      There
      shall be hereby established a series of Bonds, known as and entitled “First
      Mortgage Bonds, 6.53% Series due 2036” (herein sometimes referred to as the
“Bonds of the 2036 Series”). The aggregate principal amount of the Bonds of the
      2036 Series shall be limited to $30,000,000.

     

    The
      definitive Bonds of the 2036 Series shall be registered Bonds without coupons
      of
      the denominations of $1,000 or integral multiples thereof.

     

    All
      Bonds
      of the 2036 Series shall mature August 1, 2036 and will bear interest at the
      rate of 6.53% per annum until maturity, such interest to be payable
      semi-annually on February 1 and August 1 in each year commencing February 1,
      2007. The principal of and the premium, if any, and interest on the Bonds of
      the
      2036 Series will be paid in lawful money of the United States of America.
      Principal of and premium, if any, on the Bonds of the 2036 Series will be
      payable at the principal corporate trust office of the Trustee in the Borough
      of
      Manhattan, City and State of New York, or its successor in trust, except
      that, in
      case
      of the redemption as a whole at any time of Bonds of the 2036 Series then
      outstanding, the Company may designate in the redemption notice other offices
      or
      agencies at which, at the option of the holders, Bonds of the 2036 Series may
      be
      surrendered. Interest on Bonds of the 2036 Series will be payable at the
      principal corporate trust office of the Trustee in the Borough of Manhattan,
      City and State of New York, or its successor in trust, in each case to the
      holder of record on the record date as hereinbelow defined. Interest on the
      Bonds of the 2036 Series shall, unless otherwise directed by the holder, be
      paid
      by checks payable to the order of the respective holders entitled thereto,
      and
      mailed by the Trustee by first class mail, postage prepaid, to such holders
      at
      their respective registered addresses shown on the Bond register for the Bonds
      of the 2036 Series.

     

    Notwithstanding
      the foregoing, pursuant to the fourth paragraph of Section 10.04 of the Original
      Indenture, the Company has entered into agreements with the initial purchasers
      of the Bonds of the 2036 Series providing for the payment to such initial
      purchasers and any nominees thereof of all payments of principal of, premium,
      if
      any, and interest on the Bonds of the 2036 Series held by them by such methods
      as they shall direct and without the necessity of presenting or surrendering
      such Bonds, except that any Bond paid or redeemed in full shall thereafter
      be
      surrendered to the Trustee at its principal office, and further providing for
      the extension of such benefits of such agreements to any transferees of the
      foregoing which are institutional investors acquiring at least $1,000,000
      principal amount of Bonds of the 2036 Series.

     

    The
      definitive Bonds of the 2036 Series may be issued in the form of Bonds engraved,
      printed or lithographed on steel engraved borders.

     

    Notwithstanding
      any provision in the Original Indenture to the contrary, the person in whose
      name any Bond of the 2036 Series (or one or more Predecessor Bonds, as
      hereinbelow defined) is registered at the close of business on any record date
      (as hereinbelow defined) with respect to any interest payment date shall be
      entitled to receive the interest payable on such interest payment date
      notwithstanding the cancellation of such Bond of the 2036 Series upon any
      transfer or exchange thereof (including any exchange effected as an incident
      to
      a partial redemption thereof) subsequent to such record date and prior to such
      interest payment date, except that, if and to the extent that the Company shall
      default in the payment of the interest due on such interest payment date, then
      the registered holders of such Bonds of the 2036 Series on such record date
      shall have no further right to or claim in respect of such defaulted interest
      as
      such registered holders on such record date, and the persons entitled to receive
      payment of any defaulted interest thereafter payable or paid on any Bonds of
      the
      2036 Series shall be the registered holders of such Bonds of the 2036 Series
      on
      the record date for payment of such defaulted interest. The term “record date”
as used in this Section 1.01, and in the form of the Bonds of the 2036 Series,
      shall mean the January 15 next preceding a February 1 interest payment date
      or
      the July 15 next preceding an August 1 interest payment date, as the case may
      be, or a special record date established for defaulted interest as hereinafter
      provided. The term “Predecessor Bond” as used in this Section 1.01, and in the
      form of the Bonds of the 2036 Series, with respect to any particular Bond of
      the
      2036 Series, shall mean every previous Bond of the 2036 Series evidencing all
      or
      a portion of the same debt as that evidenced by such particular Bond of the
      2036
      Series; and, for the purpose of this definition, any Bond of the 2036 Series
      authenticated and delivered under Section 3.12 of the Original Indenture in
      lieu
      of a mutilated, lost, stolen or destroyed Bond of the 2036 Series shall be
      deemed to evidence the same debt as the mutilated, lost, stolen or destroyed
      Bond of the 2036 Series.

     

    In
      case
      of failure by the Company to pay any interest when due the claim for such
      interest shall be deemed to have been transferred by transfer of any Bond of
      the
      2036 Series registered on the Bond register, and the Company by not less than
      10
      days written notice to Bondholders may fix a subsequent record date, not more
      than 15 days prior to the date fixed for the payment of such interest, for
      determination of holders entitled to payment of such interest. Such provision
      for establishment of a subsequent record date, however, shall in no way affect
      the rights of Bondholders or of the Trustee consequent on any
      default.

     

    Bonds
      of
      the 2036 Series shall be dated, and shall accrue interest, as provided in
      Section 3.05 of the Original Indenture. Interest on the Bonds of the 2036 Series
      shall be computed on the basis of a year of 360 days consisting of twelve 30-day
      months.

     

    As
      permitted by the provisions of Section 3.10 of the Original Indenture and upon
      payment at the option of the Company of a sum sufficient to reimburse it for
      any
      stamp tax or other governmental charges as provided in Section 3.11 of the
      Original Indenture, but without payment of any other charge, Bonds of the 2036
      Series may be exchanged for other Bonds of the 2036 Series of different
      authorized denominations of like aggregate principal amount.

     

    The
      trustee hereunder shall, by virtue of its office as such Trustee, be the
      registrar and transfer agent of the Company and shall maintain the Bond register
      for the Bonds of the 2036 Series for the purpose of registering and transferring
      Bonds of the 2036 Series. Notwithstanding any provision in the Original
      Indenture to the contrary, neither the Company nor the Trustee shall be required
      to make transfers or exchanges of Bonds of the 2036 Series for a period of
      ten
      days next preceding any designation of Bonds of the 2036 Series to be redeemed
      and neither the Company nor the Trustee shall be required to make transfers
      or
      exchanges of any Bonds designated in whole for redemption or that part of any
      Bond designated in part for redemption.

     

    B. Form
      of Bonds of the 2036 Series.
      The
      Bonds of the 2036 Series and the Trustee’s authentication certificate to be
      executed on the Bonds of said Series shall be in substantially the following
      forms, respectively:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    [FORM
      OF
      FACE OF BOND OF THE 2036 SERIES]

     

    No.
      R                                                                                $____

    Private Placement
      No. 393154 AC 3

     

    GREEN
      MOUNTAIN POWER CORPORATION

     

    FIRST
      MORTGAGE BOND, 6.53% SERIES DUE 2036

     

    DUE
      AUGUST 1, 2036

     

    GREEN
      MOUNTAIN POWER CORPORATION, a Vermont corporation (hereinafter sometimes called
      the “Company”), for value received hereby promises to pay to ____________ or
      registered assigns, __________ Dollars on August 1, 2036, and to pay to the
      registered holder hereof interest thereon from the date hereof, or if one or
      more payments of interest has or have theretofore been made or duly provided
      for, from the most recent interest payment date to which interest has been
      paid
      or duly provided for, semi-annually on February 1 and August 1 in each year,
      commencing with February 1, 2007, at the rate per annum specified in the title
      hereof, until maturity.

     

    The
      interest so payable upon any February 1 or August 1 will, subject to certain
      exceptions referred to on the reverse hereof, be paid to the person in whose
      name this bond (or one or more Predecessor Bonds, as defined in the Eighteenth
      Supplemental Indenture mentioned on the reverse hereof) is registered at the
      close of business on the January 15 preceding such February 1, or the July
      15
      preceding such August 1, as the case may be.

     

    The
      principal of, premium, if any, and interest on this bond will be paid in lawful
      money of the United States of America at the principal corporate trust office
      in
      the Borough of Manhattan, City and State of New York, of the Trustee under
      the
      Indenture mentioned on the reverse hereof, except that, in case of redemption
      as
      a whole at any time of the bonds of this series then outstanding, the Company
      may designate in the redemption notice other offices or agencies at which,
      at
      the option of the holder, this bond may be surrendered for redemption and
      payment. Interest on this bond may be paid by check payable to the order of
      the
      registered holder entitled thereto and mailed by the Trustee by first class
      mail, postage prepaid, to such holder at his address as shown on the Bond
      register for the bonds of this series.

     

    This
      bond
      shall not become or be valid or obligatory for any purpose until the
      authentication certificate hereon shall have been signed by the
      Trustee.

     

    The
      provisions of this bond are continued on the reverse hereof and such continued
      provisions shall for all purposes have the same effect as though fully set
      forth
      at this place.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, GREEN MOUNTAIN POWER CORPORATION has caused these presents
      to
      be executed in its name and behalf by its President or one of its Vice
      Presidents, and its corporate seal or a facsimile thereof to be affixed hereto
      and attested by its Secretary or its Assistant Secretary.

     

    Dated:                 

     

    GREEN
      MOUNTAIN POWER CORPORATION

     

    By:                             

     

    Attest:
      

                      

    [FORM
      OF
      REVERSE OF BOND OF THE
      2036
      SERIES]

     

    This
      bond
      is one of the bonds, of the above designated series, of an authorized issue
      of
      bonds of the Company known as First Mortgage Bonds, not limited as to maximum
      aggregate principal amount, all issued or issuable in one or more series under
      and equally secured (except as any sinking and improvement fund, depreciation
      fund or other fund established in accordance with the provisions of the
      Indenture hereinafter mentioned may afford additional security for the bonds
      of
      any specific series) by an Indenture of First Mortgage and Deed of Trust dated
      as of February 1, 1955 (herein sometimes called the “Original Indenture”), duly
      executed and delivered by the Company to The Chase National Bank of the City
      of
      New York (now The Chase Manhattan Bank (National Association)), as Trustee,
      United States Trust Company of New York having succeeded The Chase Manhattan
      Bank (National Association) as Trustee and The Bank of New York having succeeded
      United States Trust Company of New York as Trustee (The Bank of New York and
      its
      successors under said Indenture being herein sometimes called the “Trustee”), as
      supplemented and modified by seventeen indentures supplemental thereto, and
      as
      supplemented and modified by an Eighteenth Supplemental Indenture dated as
      of
      July 1, 2006 thereto (herein sometimes called the “Eighteenth Supplemental
      Indenture”) duly executed and delivered by the Company to the Trustee, to which
      Indenture of First Mortgage and Deed of Trust and all indentures supplemental
      thereto (herein sometimes called the “Indenture”) reference is hereby made for a
      description of the property mortgaged and pledged as security for said bonds,
      the nature and extent of the security, and the rights, duties and immunities
      thereunder of the Trustee, the rights of the holders of said bonds and of the
      Trustee and of the Company in respect such security, and the terms upon which
      said bonds may be issued thereunder. The bonds of this series are limited to
      $30,000,000 aggregate principal amount.

     

    The
      bonds
      of this series are subject to redemption prior to maturity (a) at the option
      of
      the Company, as a whole at any time, or in part from time to time (on a pro
      rata
      basis), upon payment of the principal amount thereof plus the Make-Whole Premium
      (as herein defined); and (b) as a whole at any time or in part from time to
      time, upon payment of the principal amount thereof, by application of the
      proceeds of any taking of all or any portion of property of the Company subject
      to the lien of the Indenture, or the proceeds of any sale of such property
      in
      anticipation of or in lieu of any such taking, as provided in said Eighteenth
      Supplemental Indenture; in the case of each of clause (a) and clause (b),
      together with interest accrued thereon to the date fixed for redemption, and
      upon prior notice given by registered mail, postage prepaid, as provided in
      said
      Eighteenth Supplemental Indenture to the holders of record of each bond affected
      not less than 30 days nor more than 60 days prior to the redemption date, all
      as
      more fully provided in the Indenture.

     

    “Make-Whole
      Premium”
      shall
      mean, with respect to any Bond, a premium equal to the excess, if any, of the
      Discounted Value of the Called Principal of such Bond over the sum of such
      Called Principal plus interest accrued thereon as of the redemption date
      (including interest due on such date) with respect to such Called Principal
      (provided that the Make-Whole Premium shall in no event be less than zero).
      “Called
      Principal”
shall
      mean, with respect to any Bond, the principal of such Bond that is to be
      redeemed pursuant to clause (a) under the foregoing provisions for optional
      redemption. “Discounted
      Value”
shall
      mean, with respect to the Called Principal of any Bond, the amount calculated
      by
      discounting all Remaining Scheduled Payments with respect to such Called
      Principal from their respective scheduled due dates to the redemption date
      with
      respect to such Called Principal, in accordance with accepted financial practice
      and at a discount factor (applied on a semiannual basis) equal to the sum of
      (i)
      the Reinvestment Yield with respect to such Called Principal, plus (ii) thirty
      basis points (0.30%). “Remaining
      Scheduled Payments”
shall
      mean, with respect to the Called Principal of any Bond, all payments of such
      Called Principal and interest thereon that would be due on or after the
      redemption date with respect to such Called Principal if no payment of such
      Called Principal were made prior to its scheduled due date. “Reinvestment
      Yield”
shall
      mean, with respect to the Called Principal of any Bond, the yield to maturity
      implied by (i) the yields reported, as of 10:00 a.m. (New York City time) on
      the
      fifth business day proceeding the date set for redemption on the display
      designated as “PX1” of the Bloomberg Financial Markets Screen (or such other
      display as may replace page PX1 of Bloomberg) for actively traded United States
      Treasury Notes having a maturity closest to the weighted average life of the
      bonds as of the date of redemption, or (ii) if such yields are not reported
      as
      of such time or the yields reported as of such time are not ascertainable,
      the
      Treasury Constant Maturity Series yields reported (for the latest day for which
      such yields shall have been so reported as of the fifth Business Day preceding
      the redemption date with respect to such Called Principal) in Federal Reserve
      Statistical Release H.15(519) (or any comparable successor publication) for
      actively traded U.S. Treasury securities having a constant maturity equal to
      the
      remaining weighted average life to final maturity (calculated in accordance
      with
      accepted financial practice) of such Called Principal as of such redemption
      date. Such implied yield shall be determined (a) by calculating the remaining
      weighted average life to final maturity of such Called Principal rounded to
      the
      nearest quarter-year and (b) if necessary, by interpolating linearly between
      Treasury Constant Maturity Series yields.

     

    If
      this
      bond or any portion thereof (One Thousand Dollars or a multiple thereof) is
      called for redemption and payment duly provided for as specified in the
      Indenture, this bond or such portion thereof, as the case may be, shall cease
      to
      be entitled to the lien of the Indenture from and after the date payment is
      so
      provided for and shall cease to bear interest from and after the redemption
      date.

     

    Except
      as
      otherwise provided in the Eighteenth Supplemental Indenture, in the event of
      the
      redemption of a portion only of the principal of this bond, payment of the
      redemption price will be made at the option of the registered holder, either
      (a)
      upon presentation of this bond for notation hereon of such payment of the
      portion of the principal of this bond so called for redemption, or (b) upon
      surrender of this bond in exchange for a registered bond or bonds (but only
      of
      authorized denominations of the same series) for the unredeemed balance of
      the
      principal amount of this bond.

     

    The
      Company and the Trustee, with the consent of the holders of not less than
      sixty-six and two-thirds percent in principal amount of the bonds at the time
      outstanding (determined as provided in the Indenture) and affected (consenting
      as a single class), may effect, by an indenture supplemental to the Indenture,
      modifications or alterations of the Indenture and of the rights and obligations
      of the Company and of the holders of the bonds and coupons. In no event shall
      any such modification or alteration be made without the written approval or
      consent of the registered holder hereof which will (a) extend the maturity
      of
      this bond or reduce the rate or extend the time of payment of interest hereon,
      or reduce the amount of the principal hereof, or reduce any premium payable
      on
      the redemption hereof, or (b) permit the creation of any lien, not otherwise
      permitted, prior to or on a parity with the lien of the Indenture, or alter
      the
      equal and proportionate security afforded by the lien of the Indenture for
      the
      bonds issued thereunder, or (c) reduce the number or percentage of the principal
      amount of the bonds upon the consent of the holders of which modifications
      or
      alterations may be made as aforesaid or defaults may be waived.

     

    This
      bond
      is transferable by the registered holder hereof in person or by his duly
      authorized attorney, on books of the Company kept for the purpose at the
      principal corporate trust office of the Trustee upon surrender of this bond
      for
      cancellation and thereupon a new registered bond of the same series of like
      principal amount will be issued to the transferee in exchange
      therefor.

     

    The
      registered holder of this bond at his option may surrender the same for
      cancellation at said office and receive in exchange therefor the same aggregate
      principal amount of registered bonds of the same series but of other authorized
      denominations subject to the terms and conditions set forth in the
      Indenture.

     

    Neither
      the Company nor the Trustee shall be required to make transfers or exchanges
      of
      bonds of this
      series for a period of ten days next preceding any designation of bonds of
      said
      series to be redeemed, and neither the Company nor the Trustee shall be required
      to make transfers or exchanges of any bonds designated in whole for redemption
      or that part of any bond designated in part for redemption.

     

    The
      Eighteenth Supplemental Indenture provides that in the event of any default
      in
      payment of the interest due on any interest payment date, such interest shall
      not be payable to the holder of the bond on the original record date but shall
      be paid to the registered holder of such bond (or one or more Predecessor Bonds,
      as defined in the Eighteenth Supplemental Indenture) on the subsequent record
      date established for payment of such defaulted interest.

     

    If
      a
      default as defined in the Indenture shall occur, the principal of this bond
      may
      become or be declared due and payable before maturity in the manner and with
      the
      effect provided in the Indenture. The holders, however, of specified percentages
      in principal amount of the bonds at the time outstanding, to the extent and
      as
      provided in the Indenture, may waive certain defaults thereunder and the
      consequences of such defaults.

     

    No
      recourse shall be had for the payment of the principal of or the premium, if
      any, or the interest on this bond, or for any claim based hereon, or otherwise
      in respect hereof or of the Indenture, against any incorporator, stockholder,
      director or officer, past, present or future, as such, of the Company or of
      any
      predecessor or successor corporation, either directly or through the Company
      or
      such predecessor or successor corporation, under any constitution or statute
      or
      rule of law, or by the enforcement of any assessment or penalty, or otherwise,
      all such liability of incorporators, stockholders, directors and officers,
      as
      such, being waived and released by the registered holder hereof by the
      acceptance of this bond and as provided in the Indenture.

     

    The
      Company and the Trustee, any paying agent and any bond registrar may deem and
      treat the person in whose name this bond is registered, or his registered
      assigns, as the absolute owner hereof, whether or not this bond shall be
      overdue, for the purpose of receiving payment and for all other purposes and
      neither the Company nor the Trustee nor any paying agent nor any bond registrar
      shall be affected by any notice to the contrary.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    [FORM
      OF
      TRUSTEE’S AUTHENTICATION CERTIFICATE

     

    FOR
      BONDS
      OF THE 2036 SERIES]

     

    This
      is
      one of the bonds, of the series designated therein, described in the within
      mentioned Indenture.

     

    THE
      BANK
      OF NEW YORK, as Trustee,

     

    By:                         

    Authorized
      Officer

    

     

    [FORM
      OF
      ENDORSEMENT ON BONDS OF THE 2036 SERIES WITH RESPECT TO PAYMENTS ON ACCOUNT
      OF
      PRINCIPAL

     

    PAYMENTS
      ON ACCOUNT OF PRINCIPAL

     

    
      	 	 	 	 
	
               

              Date

            	
               

              Amount
                Paid

            	
              Balance
                of Principal

              Amount
                Unpaid

            	
               

              Authorized
                Signature

            
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

    

    

    

    C. Form
      of Legend. Bonds
      of
      the 2036 Series shall bear a legend or legends with respect to (a) the status
      of
      such bond under the Securities Act of 1933, as amended, and (b) the existence
      of
      arrangements, if any, for the payment of the redemption price of Bonds of the
      2036 Series without presentation or surrender thereof, which shall state
      substantially as follows:

     

    “This
      bond has not been registered under the Securities Act of 1933, as amended,
      and
      no transfer hereof may be effected unless (i) the transaction shall be exempt
      within the meaning of such Act and the rules and regulations of the Securities
      and Exchange Commission adopted thereunder or (ii) pursuant to a registration
      statement. The registered holder of this bond is entitled to the benefits of
      a
      Bond Purchase Agreement, dated July 27, 2006, with the Company, approved by
      and
      on file with the Trustee, respecting payment of the redemption price of this
      bond without presentation or surrender thereof, except that any bond paid or
      redeemed in full shall thereafter be surrendered to the Trustee at its principal
      office.”

     

    SECTION
      1.02.  Redemption
      Provisions for Bonds of the 2036 Series.

     

    A.  The
      Bonds
      of the 2036 Series

     

    (i)
        shall
      be
      subject to redemption prior to maturity, at the option of the Company, as a
      whole at any time or in part from time to time, after the date of original
      issue
      upon payment of the principal amount thereof plus the Make-Whole Premium (as
      defined in the form of the Bonds of the 2036 Series set forth in Section 1.01.B
      hereof), if any; and

     

    (ii)
        shall
      be
      subject to redemption prior to maturity, as a whole at any time or in part
      from
      time to time, upon payment of the principal amount
      thereof, through the application pursuant to Article Eight of the Original
      Indenture of any trust moneys held by the Trustee received from the proceeds
      of
      the taking of all or any portion of the property of the Company subject to
      the
      lien of the Indenture, or from the proceeds of any sale of such property in
      anticipation of or in lieu of any such taking;

     

    together
      in any case with interest thereon to the date fixed for redemption, upon not
      less than 30 days’ nor more than 60 days’ notice given by registered mail,
      postage prepaid, to the holder of record at the date of such notice of each
      Bond
      of the 2036 Series affected, at his address as shown on the bond register for
      Bonds of the 2036 Series. Such notice shall be sufficiently given if deposited
      in the United States mail within such period. Neither the failure to mail such
      notice, nor any defect in any notice so mailed to any such holder, shall affect
      the sufficiency of such notice with respect to other holders. The foregoing
      provisions with respect to notice shall be subject to all other conditions
      and
      provisions of the Indenture not inconsistent herewith.

     

    In
      the
      case of any redemption pursuant to clause (i) of this Section 1.02.A,
      concurrently with the making of the deposit required by Section 10.04 of the
      Indenture the Company shall deliver to the Trustee a written statement setting
      forth the calculation of the Make-Whole Premium to be paid.

     

    B.  Whenever
      less than all the outstanding Bonds of the 2036 Series are to be redeemed,
      the
      Trustee shall redeem the Bonds of the 2036 Series or portions thereof as
      follows:

     

    (i)
        The
      Trustee shall prorate the principal amount of Bonds of the 2036 Series to be
      redeemed among all registered holders of Bonds of the 2036 Series in the
      proportion that the aggregate principal amount of Bonds registered in the name
      of each such registered holder bears to the aggregate principal amount of
      outstanding Bonds of the 2036 Series. In any prorating pursuant to this clause
      the Trustee shall, according to such method as it shall deem proper in its
      discretion, make such adjustments, by increasing or decreasing by not more
      than
      One Thousand Dollars ($1,000) the amount which would be allocable to any one
      or
      more registered holders of Bonds as may be necessary to the end that the
      principal amount so prorated shall be One Thousand Dollars ($1,000) or an
      integral multiple thereof.

     

    (ii)
        So
      long
      as any initial purchaser of Bonds of the 2036 Series, any nominee of any such
      initial purchaser, any institutional investor entitled to the benefits of home
      office payment pursuant to the agreements filed with and approved by the Trustee
      as referred to in Section 1.01.A hereof, or any other registered holder to
      which
      the Company and the Trustee shall have agreed to extend the provisions of this
      clause shall hold more than one Bond of the 2036 Series, for purposes of any
      proration pursuant to the procedure set forth in clause (i) above, all Bonds
      of
      the 2036 Series registered in the name of any such initial purchaser, nominee,
      institutional investor or other registered holder shall be deemed to be one
      Bond
      of the 2036 Series. In the event of a partial redemption of any Bonds of the
      2036 Series registered in the name of such holder, the amount so redeemed shall
      be allocated (1) pro rata among such Bonds registered in the name of such holder
      in the proportion that the principal amount of each such bond so registered
      bears to the principal amount of all such Bonds so registered or (2) by such
      other method as such holder reasonably may request.

     

    (iii)
        Subject
      to the specific provisions set forth hereinabove in this Section 1.02 and in the
      form of the Bonds of the 2036 Series in Section 1.01.B hereof, the provisions
      of
      Article Ten of the Original Indenture shall govern any redemption of the Bonds
      of the 2036 Series.

     

    SECTION
      1.03.  Depreciation
      Fund.
      Notwithstanding the provisions of Section 4.06 of the Original Indenture, the
      Company hereby covenants that so long as any of the Bonds of the 2036 Series
      shall remain outstanding (a) the covenants made by the Company in Section 4.04
      of the Original Indenture shall continue in full force and effect and (b) Bonds
      delivered, redeemed or purchased pursuant to said Section 4.04 and any amount
      of
      unfunded Bond credits used as a credit in Item 7 of any annual depreciation
      fund
      certificate shall be deemed to be funded, unless and until the same shall have
      been reinstated as provided in said Section 4.04 or in Section 2.03 of the
      Original Indenture.

     

    SECTION
      1.04.  Restriction
      on Payment of Dividends on Common Stock.
      So long
      as any of the Bonds of the 2036 Series shall remain outstanding, the Company
      shall not (a) declare or pay any dividend (other than dividends payable in
      capital stock of the Company) or make any other distribution on any shares
      of
      Common Stock, or (b) make any expenditures for the purchase, redemption or
      other
      retirement for a consideration of any shares of Common Stock of the Company
      (other than in exchange for, or from the proceeds of, new shares of capital
      stock of the Company), if (i) after giving effect to and as a result of the
      declaration or payment of such dividend, distribution or expenditure, a default
      (as defined in the Indenture) would be deemed to exist or (ii) the aggregate
      amount of all such dividends, distributions and expenditures made after December
      31, 2005, would exceed the aggregate amount of the net income of the Company
      available for such dividends, distributions or retirements, accumulated after
      December 31, 2005, plus the sum of $4,000,000.

     

    Net
      income of the Company for the purpose of this Section shall mean the total
      operating revenues of the Company, and other income, less all proper deductions
      for expenses, taxes (including without limitation, income, excess profits and
      other taxes based on or measured by income or undistributed earnings or income),
      interest charges and other appropriate items, including provision for
      maintenance and provision for retirements, depreciation or obsolescence which
      shall be the amount actually charged by the Company on its books of account
      (but
      in respect of utility property not subject to prior liens in an amount not
      less
      than the minimum provision for depreciation, as defined in Section 1.32 of
      the
      Original Indenture), and after provision for all dividends accrued (whether
      or
      not paid) on any outstanding stock of the Company having preference over the
      Common Stock as to dividends, and otherwise determined in accordance with sound
      accounting practice; provided,
      however,
      that in
      determining the net income of the Company for purposes of this Section no
      deduction or adjustment shall be made for or in respect of (a) expenses in
      connection with the redemption or retirement of any securities issued by, the
      Company, including any amount paid in excess of the principal amount or par
      or
      stated value of securities redeemed or retired, or, in the event that such
      redemption or retirement is effected with the proceeds of sale of other
      securities of the Company, any interest or dividends on the securities redeemed
      or retired from the date on which the funds required for such redemption or
      retirement are deposited in trust for such purpose to the date of redemption
      or
      retirement; (b) profits or losses from sales of property or other assets carried
      in plant or investment accounts of the Company or from the reacquisition of
      any
      securities of the Company, or taxes on or in respect of any such profits; (c)
      any change in or adjustment of the book value of any assets owned by the Company
      arising from a revaluation thereof; (d) charges to surplus on account of the
      amortization or elimination of utility plant adjustment or acquisition accounts
      or intangibles; and (e) any adjustment (including tax adjustments) applicable
      to
      any period prior to January 1, 2006; provided,
      further, however,
      that in
      the calculation of such net income from any investments in associated companies
      and any net income of subsidiaries shall be included only to the extent that
      such amounts represent dividends declared or paid.

     

    SECTION
      1.05.  Minimum
      Provision for Depreciation.
      The
      Company covenants that the term “minimum provision for depreciation” shall have
      the meaning specified in Section 1.32 of the Original Indenture so long as
      any
      of the Bonds of the 2036 Series shall remain outstanding.

     

    SECTION
      1.06.  Duration
      of Effectiveness of Article One.
      This
      Article shall be in force and effect only so long as any of the Bonds of the
      2036 Series are outstanding 

     

    ARTICLE
      II

     

    PRINCIPAL
      AMOUNT PRESENTLY TO BE OUTSTANDING

     

    SECTION
      2.01.  The
      total
      aggregate principal amount of First Mortgage Bonds of the Company issued and
      outstanding and presently to be issued and outstanding under the provisions
      of
      and secured by the Indenture will be (a) as of the date of initial issuance
      of
      Bonds of the 2036 Series, One Hundred Four Million ($104,000,000), namely,
      Four
      Million Dollars ($4,000,000) principal amount of First Mortgage Bonds, 7.05%
      Series due 2006, Ten Million Dollars ($10,000,000) principal amount of First
      Mortgage Bonds, 7.18% Series due 2006, Forty-Two Million Dollars ($42,000,000)
      principal amount of First Mortgage Bonds, 6.04% Series due 2017, Fifteen Million
      Dollars ($15,000,000) principal amount of First Mortgage Bonds, 6.70% Series
      due
      2018, Nine Million Dollars ($9,000,000) principal amount of First Mortgage
      Bonds, 9.64% Series due 2020, Thirteen Million Dollars ($13,000,000) principal
      amount of First Mortgage Bonds, 8.65% Series due 2022 now issued and
      outstanding, and Eleven Million Dollars ($11,000,000) principal amount of First
      Mortgage Bonds, 6.53% Series due 2036, to be issued upon compliance by the
      Company with the provisions of Sections 5.02 and 5.03 and/or 5.04 and/or 5.05
      of
      the Original Indenture; and (b) as of the date of the second tranche of issuance
      of Bonds of the 2036 Series, One Hundred Thirteen Million ($113,000,000),
      namely, Four Million Dollars ($4,000,000) principal amount of First Mortgage
      Bonds, 7.05% Series due 2006, Forty-Two Million Dollars ($42,000,000) principal
      amount of First Mortgage Bonds, 6.04% Series due 2017, Fifteen Million Dollars
      ($15,000,000) principal amount of First Mortgage Bonds, 6.70% Series due 2018,
      Nine Million Dollars ($9,000,000) principal amount of First Mortgage Bonds,
      9.64% Series due 2020, Thirteen Million Dollars ($13,000,000) principal amount
      of First Mortgage Bonds, 8.65% Series due 2022 now issued and outstanding,
      and
      Thirty Million Dollars ($30,000,000) principal amount of First Mortgage Bonds,
      6.53% Series due 2036, to be issued upon compliance by the Company with the
      provisions of Sections 5.02 and 5.03 and/or 5.04 and/or 5.05 of the Original
      Indenture.

     

    ARTICLE
      III

     

    MODIFICATIONS
      AND AMENDMENTS

     

    SECTION
      3.01.  So
      long
      as any of the Bonds of the 2036 Series shall remain outstanding, Article One
      of
      the Original Indenture is hereby modified by adding a new Section 1.43 which
      shall read as follows: “Section 1.43. The term “Business Day” shall mean any day
      other than a Saturday, Sunday or other day on which banks located in The City
      of
      New York, or Burlington, Vermont or any other city in which the principal
      corporate trust office of the Trustee is located (if such office is not located
      in The City of New York) are authorized or required by law to be
      closed.”

     

    SECTION
      3.02.  Pursuant
      to clause (i) of Section 18.01 of the Original Indenture, the modification
      of
      the Original Indenture effected by Section 3.01 of this Eighteenth Supplemental
      Indenture shall take effect without the consent of the holders of any of the
      Bonds at the time outstanding, notwithstanding any of the provisions of Section
      18.02 of the Original Indenture.

     

    ARTICLE
      IV

     

    MISCELLANEOUS

     

    SECTION
      4.01.  This
      Eighteenth Supplemental Indenture is executed and shall be construed as an
      indenture supplemental to the Original Indenture, and shall form a part thereof,
      and the Original Indenture, as heretofore supplemented and modified and hereby
      supplemented and modified, is hereby confirmed. Except to the extent
      inconsistent with the express terms hereof, all of the provisions, terms,
      covenants and conditions of the Original Indenture, as supplemented and
      modified, shall be applicable to the Bonds of the 2036 Series to the same extent
      as if specifically set forth herein. All terms used in this Eighteenth
      Supplemental Indenture shall be taken to have the same meanings as in the
      Original Indenture, except in cases where the context clearly indicates
      otherwise.

     

    SECTION
      4.02.  All
      recitals in this Eighteenth Supplemental Indenture are made by the Company
      only
      and not by the Trustee; and all of the provisions contained in the Original
      Indenture, as supplemented and modified, in respect of the rights, privileges,
      immunities, powers and duties of the Trustee shall be applicable in respect
      hereof as fully and with like effect as if set forth herein in
      full.

     

    SECTION
      4.03.  This
      Eighteenth Supplemental Indenture may be executed in several counterparts,
      and
      each of such counterparts shall for all purposes be deemed to be an original,
      and all such counterparts, or as many of them as the Company and the Trustee
      shall preserve undestroyed, shall together constitute but one and the same
      instrument.

     

    SECTION
      4.04.  Although
      this Eighteenth Supplemental Indenture is dated for convenience and for the
      purpose of reference as of July 1, 2006, the actual date or dates of execution
      by the Company and by the Trustee are as indicated by their respective
      acknowledgments hereto annexed.

     

    ARTICLE
      V

     

    SCHEDULE
      OF PROPERTY ACQUIRED BY GREEN MOUNTAIN POWER CORPORATION AND NOT HERETOFORE
      SPECIFICALLY DESCRIBED IN THE INDENTURE

     

    (1)

     

    TRANSMISSION
      LINES

     

    ADDITIONS
      TO PROPERTY
      AS DESCRIBED IN

     

    ORIGINAL
      INDENTURE

     

    All
      of
      the transmission lines and equipment located in the State of Vermont in several
      cities and towns consisting of approximately 287 miles of overhead lines,
      including necessary crossarms, guys and insulators. 1.5 miles is rated at 115
      KV, 10.5 miles is rated at 69 KV, 5.4 miles is rated at 46 KV, 267.6 miles
      is
      rated at 34.5 KV and 2.0 miles of 13.8 KV.

     

    (2)

     

    DISTRIBUTION

     

    ADDITIONS
      TO PROPERTY AS DESCRIBED IN

    ORIGINAL
      INDENTURE

     

    All
      the
      distribution lines and equipment located in the State of Vermont in several
      cities and towns consisting of approximately 2,475
      miles of overhead lines of 2.4 to 34.5 KV including necessary crossarms, guys,
      insulators, appurtenances and line transformers and approximately 438 miles
      of
      underground cable of 2.4 to 34.5 KV. The Company’s property includes 342 MVA of
      distribution substation capacity and approximately 1,019 MVA of transformers
      for
      step-down from distribution to customer use and approximately 91,605 customers
      metering.. It is estimated that
      at least
      80 percent of above-mentioned lines are located upon public highways. With
      respect to such parts of the lines as are located upon private property, the
      Company has the necessary permits, rights in lands or easements enabling it
      to
      maintain said lines which said permits, rights in land or easements are part
      of
      the property hereby conveyed.

     

    (3)

     

    PRODUCTION
      EQUIPMENT

     

    Between
      2003 and 2005, the following significant production equipment investments and
      upgrades were completed:

    

    	·  	
            Refurbishment
              of the Gorge gas turbine in Colchester,
              Vermont;

          

    	·  	
            Purchase
              of three replacement rotor blades for the wind plant in Searsburg,
              Vermont;

          

    	·  	
            Replacement
              of the top section of the timber-crib dam at the Bolton hydroelectric
              plant in Duxbury, Vermont;

          

    	·  	
            Replacement
              of the turbine runner at the hydroelectric plant in Marshfield,
              Vermont;

          

    	·  	
            Reconstruction
              and replacement of the rubber dam at the hydroelectric plant in W.
              Danville, Vermont;

          

    	·  	
            Replacement
              of the control system for the diesel generators in Vergennes, Vermont;
              and

          

    	·  	
            Replacement
              of the hydroelectric turbine on one of the hydroelectric units in
              Vergennes, Vermont.

          

    

     

    (4)

     

    SUBSTATION
      AND LINE IMPROVEMENTS

     

    Between
      2003 and 2005, the following significant substation and line improvements and
      upgrades were completed

     

    	·  	
            An
              entire rebuild of Route 7 in Shelburne was completed including miles
              of
              main line and 3 phase feeders as part of a municipal road
              project;

          

    	·  	
            A
              major rebuild of Kennedy Drive in South Burlington, VT as part of a
              municipal road project;

          

    	·  	
            A
              three phase rebuild in Charlotte to allow a new commercial customer
              to
              come on line;

          

    	·  	
            Rehabilitation
              of parts of our 34,5kV transmission system including new wire and poles
              along the 3314, 3332 and 3311 transmission
              lines;

          

    	·  	
            Voltage
              conversion in Berlin;

          

    	·  	
            New
              joint transmission and distribution substation project with Vermont
              Electric Company and Vermont Electric Cooperative in Williston,
              VT;

          

    	·  	
            Six
              whole circuit protection rehabilitation projects to enhance the
              reliability of our least reliable
              circuits;

          

    	·  	
            Dozens
              of major line rebuilds;

          

    	·  	
            New
              substation in Richmond, VT;

          

    	·  	
            Two
              major substation rebuilds and a voltage conversion in Colchester, VT;
              and

          

    	·  	
            An
              underground 34.5kV distribution and transmission project in Winooski,
              VT.

          

    

     

    
      
         

      

      
         

        
          

        

      

       

    

    IN
      WITNESS WHEREOF, Green Mountain Power Corporation has caused this Indenture
      to
      be signed
      in
      its corporate name and behalf, by Christopher L. Dutton, President and Chief
      Executive Officer, of the Company in that behalf duly authorized, and its
      corporate seal to be hereunto affixed and attested by its Secretary, and The
      Bank of New York in token of its acceptance of the trust hereby created has
      caused this Indenture to be signed in its corporate name and
      behalf by one of its Assistant Vice Presidents, and its corporate seal to be
      affixed and attested by its Secretary or its Assistant Secretary, on the dates
      indicated by their respective acknowledgments hereto annexed, but as of the
      day
      and year first above written.

     

    GREEN
      MOUNTAIN POWER CORPORATION

     

    By:
      /s/
      Christopher L. Dutton             

    Name:
      Christopher L. Dutton

    President
      and Chief Executive Officer

    Attest:

    

    /s/
      Donald J. Rendall, Jr.             

    Donald
      J.
      Rendall, Jr.

    Secretary

    

     

    Signed,
      sealed and delivered on behalf of 

    GREEN
      MOUNTAIN POWER CORPORATION in the presence of:

    

                    /s/
      Dawn
      Bugbee                 

                    Name: Dawn
      Bugbee

     

                    /s/
      Sharon A.
      Lucia              
 

                    Name:
 Sharon
      A.
      Lucia

     

    CORPORATE
      SEAL

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    THE
      BANK
      OF NEW YORK

    

    

    By:
      /s/
      Beata Hryniewicka             

    Name:
      Beata Hryniewicka

               
Assistant
      Vice President

     

    Attest:

     

    /s/
      Alexander Pabon                 

    Alexander
      Pabon

    Assistant
      Vice President

    Signed,
      sealed and delivered on behalf of

    THE
      BANK
      OF NEW YORK in the presence of:

    

    

                                /s/
      Mary
      LaGumina               

                                Name:
      Mary
      LaGumina 

     

    

                                /s/
      Julie
      Salovitch-Miller             

                                Name:
      Julie
      Salovitch-Miller 

     

    CORPORATE
      SEAL

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    STATE
      OF
      VERMONT        )

                            
      )SS.:

    COUNT
      OF
      CHITTENDEN        
)

     

    On
      this
      27th
      day of
      July, A.D. 2006, before me, a Notary Public in and for said County in said
      State
      aforesaid, duly commissioned and acting as such, appeared Christopher L. Dutton,
      personally known to me and known by me to be the person who executed the within
      and foregoing instrument in the name and on behalf of Green Mountain Power
      Corporation, who, being by me duly sworn, did depose and say that he is the
      President and Chief Executive Officer of Green Mountain Power Corporation,
      one
      of the corporations described in and that executed the said instrument, and
      he
      acknowledged said instrument so executed to be his free act and deed and the
      free act and deed of said corporation, and on oath stated that said instrument
      was signed and sealed by him as agent and in behalf of said corporation by
      authority of its Board of Directors, and that the seal affixed to said
      instrument is the corporate seal of said corporation.

     

    Witness
      my hand and official seal the day and year aforesaid.

     

    /s/
      Penny Collins             

    Name:
       Penny
      Collins

                
      Notary
      Public 

                
      State
      of
      Vermont

                
      Commission Expires: 2/10/07

    NOTARIAL
      SEAL

    

    
      
         

      

      
         

        
          

        

      

       

    

    STATE
      OF
      NEW YORK        )

                          )SS.:

    COUNTY
      OF
      NEW YORK      )

     

    On
      this
      27th
      day of
      July, A.D. 2006, before me, a Notary Public in and for said County in said
      State
      aforesaid, duly commissioned and acting as such, appeared Beata Hryniewicka,
      personally known to me and known by me to be the person who executed the within
      and foregoing instrument in the name and on behalf of The Bank of New York,
      who,
      being by me duly sworn, did depose and say that she is an Assistant Vice
      President of The Bank of New York, one of the corporations described in and
      that
      executed the said instrument, and he acknowledged said instrument so executed
      to
      be his free act and deed and the free act and deed of said corporation, and
      on
      oath stated that said instrument was signed and sealed by him on behalf of
      said
      corporation by authority of its By-Laws, and that the seal affixed to said
      instrument is the corporate seal of said corporation.

     

    Witness
      my hand and official seal the day and year aforesaid.

     

                        /s/
      Cheryl
      Clarke         

    Name:
      Cheryl Clarke

    Notary
      Public

    State
      of
      New York

    Qualified
      in New York County

    No.
      01CL5057121

    Commission
      Expires: May 11, 2010

    

    
       
NOTARIAL
      SEALExhibit 10.1 Bond Purchase Agreement

    Exhibit
      10.1

     

    GREEN
      MOUNTAIN POWER CORPORATION

     

    $30,000,000

     

    First
      Mortgage Bonds, 6.53% Series due August 1, 2036

     

    _______________________________

     

    BOND
      PURCHASE AGREEMENT

     

    _______________________________

     

    Dated
      July 27, 2006

     

     

     

    

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
      OF CONTENTS

     

    

      
        	
                1.

              	
                Authorization
                  of Bonds

              	
                1

              
	
                2.

              	
                Sales
                  and Purchase of Bonds

              	
                1

              
	
                3.

              	
                Closing

              	
                1

              
	
                4.

              	
                Conditions
                  to Closing

              	
                2

              
	 	
                4.1. Conditions
                  to Purchaser’s Obligations

              	
                2

              
	 	
                4.2. Conditions
                  to Company’s Obligation

              	
                4

              
	
                5.

              	
                Representations
                  and Warranties, etc

              	
                4

              
	 	
                5.1. Incorporation,
                  Standing, etc

              	
                4

              
	 	
                5.2. Subsidiaries

              	
                5

              
	 	
                5.3. Qualification

              	
                5

              
	 	
                5.4. Business;
                  Financial Statements

              	
                5

              
	 	
                5.6. Tax
                  Returns and Payments

              	
                6

              
	 	
                5.7. Title
                  of Properties

              	
                6

              
	 	
                5.8. Property
                  Subject to the Lien of the Indentures, etc.

              	
                6

              
	 	
                5.9. Franchises,
                  etc.; Power Contracts

              	
                6

              
	 	
                5.10. Litigation,
                  etc.

              	
                7

              
	 	
                5.11. Compliance
                  with Other Instruments, etc.

              	
                8

              
	 	
                5.12. Governmental
                  Consent

              	
                8

              
	 	
                5.13. Offer
                  of Bonds

              	
                8

              
	 	
                5.14. Use
                  of Proceeds

              	
                9

              
	 	
                5.15. Federal
                  Reserve Regulations

              	
                9

              
	 	
                5.16. Compliance
                  with ERISA

              	
                9

              
	 	
                5.17. Foreign
                  Assets Control Regulations, etc.

              	
                10

              
	 	
                5.18. Bonds
                  Comply with Indentures; Rank of Bonds

              	
                11

              
	 	
                5.19. Disclosure

              	
                11

              
	 	
                5.20. Indebtedness

              	
                11

              
	
                6

              	
                Representations
                  and Warranties by Purchasers

              	
                11

              
	 	
                6.1. Purchase
                  for Investment

              	
                11

              
	 	
                6.2. Source
                  of Funds

              	
                12

              
	
                7.

              	
                Accounting,
                  Financial Statements and Other Information

              	
                13

              
	
                8.

              	
                Inspection

              	
                16

              
	
                9.

              	
                Additional
                  Agreements of the Company

              	
                16

              
	 	
                9.1. Home
                  Office Payment, etc.

              	
                16

              
	 	
                9.2. Mutilated,
                  etc., Bonds

              	
                16

              
	 	
                9.3. Power
                  Contracts

              	
                17

              
	 	
                9.4. Denomination
                  of Bonds

              	
                17

              
	 	
                9.5. Proration,
                  etc.

              	
                17

              
	
                10.

              	
                Expenses,
                  etc

              	
                17

              
	
                11.

              	
                Survival
                  of Representations and Warranties

              	
                18

              
	
                12.

              	
                Notices,
                  etc.

              	
                18

              
	
                13.

              	
                Substitution
                  of Purchaser

              	
                18

              
	
                14.

              	
                Exchange
                  of Bonds

              	
                18

              
	
                15.

              	
                Miscellaneous

              	
                19

              

      

       

    

    

    

    SCHEDULE
      A Information
      Relating to Purchasers

     

    EXHIBIT
      A Form
      of
      Supplemental Counsel for the Company

     

    EXHIBIT
      B1 Opinion
      of Special Counsel for the Company

     

    EXHIBIT
      B2 Opinion
      of Counsel for the Company

     

    EXHIBIT
      B3 Opinion
      of Special Maine Counsel for the Company

     

    EXHIBIT
      B4 Opinion
      of Special Massachusetts Counsel for the   Company

     

    EXHIBIT
      B5 Opinion
      of Special Counsel for the Purchasers

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Green
      Mountain Power Corporation

     

    163
      Acorn Lane

     

    Colchester,
      Vermont 05446

     

    First
      Mortgage Bonds, 6.53% Series due August 1, 2036

     

    July
      27, 2006

     

    TO
      EACH
      OF THE PURCHASERS LISTED IN

    THE
      ATTACHED SCHEDULE A

     

    Dear
      Sirs:

     

    Green
      Mountain Power Corporation, a Vermont corporation (the “Company”) agrees with
      each of the purchasers listed in the attached Schedule A (such purchasers,
      together, referred to herein as “you” or the “Purchasers” and individually as a
“Purchaser”) as follows:

     

    1.  Authorization
      of Bonds.
      The
      Company has authorized the issue and sale of $30,000,000 aggregate principal
      amount of its First Mortgage Bonds, 6.53% Series due August 1, 2036 (the
“Bonds”), to be issued under and secured as provided in the Company’s Indenture
      of First Mortgage and Deed of Trust (the “Original Indenture”), dated as of
      February 1, 1955, to The Bank of New York, as successor to United States Trust
      Company of New York, successor to The Chase Manhattan Bank (National
      Association), successor to The Chase National Bank of the City of New York,
      as
      trustee (the “Trustee”), as previously supplemented and modified by seventeen
      supplemental indentures and as to be further supplemented and modified by an
      Eighteenth Supplemental Indenture (the “Eighteenth Supplemental Indenture”), to
      be dated as of July 1, 2006 and to be substantially in the form of Exhibit
      A
      attached hereto. As used herein, “Indenture” shall mean the Original Indenture,
      as previously supplemented and modified by seventeen supplemental indentures
      and
      as further supplemented and modified by the Eighteenth Supplemental Indenture.
      The Bonds shall be issuable in fully registered form only, shall mature on
      August 1, 2036, shall bear interest at the rate of 6.53% per annum, payable
      semi-annually on February 1 and August 1 of each year, commencing February
      1,
      2007, shall be subject to redemption as provided in the Eighteenth Supplemental
      Indenture and shall be in the form established pursuant to the Eighteenth
      Supplemental Indenture. As provided in the Eighteenth Supplemental Indenture,
      the Bonds originally issued to you thereunder shall be dated, and shall bear
      interest from, the date of their original issue on the date of the Closing
      referred to in section 3. References to a “Schedule” or “Exhibit”, unless
      otherwise specified, are to a Schedule or Exhibit to this
      Agreement.

     

    2.  Sale
      and Purchase of Bonds.
      Subject
      to the terms and conditions of this Agreement, the Company will issue and sell
      to each Purchaser, and each Purchaser will purchase from the Company, in two
      tranches at the Initial Closing and the Second Closing provided for in section
      3, Bonds in the principal amount specified opposite such Purchaser’s name in
      Schedule A at a purchase price equal to 100% of the face principal amount
      thereof.

     

    3.  Closings.
      The
      sale of the Bonds to be purchased by you shall take place at the offices of
      Hunton & Williams, 200 Park Avenue, New York, New York 10166, at 10:00 a.m.,
      New York City time, in two installments (i) on August 3, 2006, or on such other
      business day thereafter on or prior to August 31, 2006 as may be agreed upon
      by
      the Company and you (the "Initial Closing"), and (ii) on December 1, 2006,
      or on
      such other business day thereafter on or prior to December 31, 2006 as may
      be
      agreed upon by the Company and you (the "Second Closing" -- the Initial Closing
      and the Second Closing being sometimes herein referred to collectively as the
      "Closings" and each individually as a "Closing"). At each Closing, the
      Company will deliver to each Purchaser the Bonds in the principal amount to
      be
      purchased by each Purchaser in the form of a single Bond (or such greater number
      of Bonds as such Purchaser may request) dated the date of such Closing, duly
      authenticated by the Trustee and registered in the name of such Purchaser (or
      in
      the name of its nominee), against delivery by such Purchaser to the Company
      or
      its order of immediately available funds in the amount of the purchase price
      for
      the Bonds being purchased by such Purchaser at such Closing. If at the Closing
      the Company shall fail to tender such Bonds to you as provided in this section
      3, or any of the conditions specified in section 4.1 shall not have been
      fulfilled to your satisfaction, you shall, at your election, be relieved of
      all
      further obligations under this Agreement without thereby waiving any rights
      you
      may have by reason of such failure or such nonfulfillment.

     

    4.  Conditions
      to Closing.

     

    4.1.  Conditions
      to Purchaser’s Obligations.
      Your
      obligation to purchase and pay for the Bonds to be sold to you at each Closing
      is subject to the fulfillment to your satisfaction, prior to or at each Closing,
      of the following conditions:

     

    (a)  The
      representations and warranties of the Company contained in this Agreement shall
      be correct when made and at the time of such Closing, except as affected by
      the
      consummation of such transactions.

     

    (b)  The
      Company shall have performed and complied with all agreements and conditions
      contained in this Agreement required to be performed or complied with by it
      prior to or at such Closing and at the time of such Closing the Indenture shall
      be in full force and effect and no condition or event shall exist that
      constitutes or that, after notice or lapse of time or both, would constitute
      a
“default” (as defined in the Indenture).

     

    (c)  The
      Company shall have delivered to you an Officers’ Certificate, dated the date of
      such Closing, certifying that the conditions specified in subdivisions (a)
      and
      (b) of this section 4.1 have been fulfilled. As used in this Agreement, the
      term
“Officers’ Certificate” shall mean a certificate executed on behalf of the
      Company by its President or one of its Vice Presidents or its Controller and
      its
      Treasurer or its Assistant Treasurer or (solely with respect to the Officers’
Certificate delivered pursuant to this clause (c)) its General
      Counsel.

     

    (d)  You
      shall
      have received from (i) Hunton & Williams, special counsel for the Company,
      (ii) Donald J. Rendall, Jr., Esq., general counsel for the Company, (iii)
      Verrill & Dana, special Maine counsel for the Company, (iv) Bulkey,
      Richardson and Gelinas, special Massachusetts counsel for the Company, and
      (v)
      Greenberg Traurig LLP, your special counsel in connection with the transactions
      contemplated by this Agreement, favorable opinions substantially in the forms
      set forth in Exhibits B1, B2, B3, B4 and B5, respectively, and covering such
      other matters incident to such transactions as you may reasonably request,
      each
      addressed to you, dated the date of such Closing and otherwise satisfactory
      in
      substance and form to you.

     

    (e)  The
      Company and the Trustee shall have duly authorized, executed and delivered
      the
      Eighteenth Supplemental Indenture and the Company shall have caused (i) the
      Eighteenth Supplemental Indenture to have been recorded or filed prior to the
      first Closing as a real estate mortgage in all places in the States of Vermont
      and Maine and The Commonwealth of Massachusetts in which recording is necessary
      to preserve and protect the lien of the Indenture upon any of the properties
      of
      the Company specifically described therein as subject to the lien of the
      Indenture, (ii) all financing and continuation statements under the Uniform
      Commercial Code with respect to the personal property described in the granting
      clauses of the Indenture to have been duly filed in all places necessary to
      perfect and protect the security interest granted by such Indenture to the
      extent such security can be perfected by the filing of appropriate financing
      statements, and (iii) all taxes, fees and other charges payable in connection
      with the execution, delivery and filing of the Eighteenth Supplemental Indenture
      and such financing and continuation statements and in connection with the issue
      and sale Bonds to have been paid in full.

     

    (f)  There
      shall have been issued by the Public Service Board (the “Board”) of the State of
      Vermont an order consenting to the issuance and sale of the Bonds as
      contemplated by this Agreement and such order shall be in full force and effect
      and there shall have been filed with the Department of Telecommunications and
      Energy of The Commonwealth of Massachusetts (the “MDTE”) a certification by the
      Board of the Board’s jurisdiction concerning financing of the
      Company.

     

    (g)  On
      the
      date of each Closing your purchase of and payment for the Bonds to be purchased
      by you (i) shall be permitted by the laws and regulations of each jurisdiction
      to which you are subject (but without recourse, in the case of any such
      jurisdiction, to any provision (commonly referred to as a “basket” provision)
      permitting the investment of an amount not to exceed a specified percentage
      of
      your admitted assets in investments other than those expressly permitted by
      the
      laws and regulations of such jurisdiction), (ii) shall not
      violate any applicable law or regulation (including, without limitation,
      Regulation G, T, U or X of the Board of Governors of the Federal Reserve System)
      and (iii) not subject you to any tax, penalty or liability under or pursuant
      to
      any applicable law or regulation, which law or regulation was not in effect
      on
      the date hereof.
      You
      shall have received such evidence as you may reasonably request, including
      an
      Officers’ Certificate of the Company, to enable you to determine whether such
      purchase is so permitted. The condition to closing contained in this subdivision
      (g) with respect to each Closing will be deemed satisfied upon the occurrence
      of
      each Closing.

     

    (h)  All
      corporate and other proceedings in connection with the transactions contemplated
      by this Agreement, including all proceedings under the Indenture, and all
      documents and instruments incident to such transactions shall be satisfactory
      to
      you and your special counsel, and you and your special counsel shall have
      received all such counterpart originals or certified or other copies of such
      documents as you or they may reasonably request.

     

    (i)  A
      Private
      Placement number issued by Standard & Poor's CUSIP Service Bureau (in
      cooperation with the Securities Valuation Office of the National Association
      of
      Insurance Commissioners) shall have been obtained for the Bonds.

     

    (j)  The
      Company shall not have changed its jurisdiction of incorporation or been a
      party
      to any merger or consolidation and shall not have succeeded to all or any
      substantial part of the liabilities of any other entity, at any time following
      the date of the most recent financial statements referred to in section
      5.4.

     

    4.2.  Conditions
      to Company’s Obligation.
      The
      obligation of the Company to issue, sell and deliver the Bonds to be purchased
      by you under this Agreement shall be subject to the accuracy of your
      representations contained in section 6 of this Agreement.

     

    5.  Representations
      and Warranties, etc.
      The
      Company represents and warrants that:

     

    5.1.  Incorporation,
      Standing, etc. 

     

    (a)  The
      Company is a corporation duly incorporated, validly existing and in good
      standing under the laws of the State of Vermont and has all requisite corporate
      power and authority to own and operate its properties, to carry on its business
      as now conducted and as proposed to be conducted, to enter into this Agreement
      and the Eighteenth Supplemental Indenture, to issue and sell the Bonds and
      to
      carry out the terms of this Agreement, the Indenture and the Bonds.

     

    (b)  This
      Agreement, the Eighteenth Supplemental Indenture, the Bonds and each other
      agreement and instrument executed and delivered by the Company in connection
      with the issuance, sale and delivery of the Bonds (the “Transaction Documents”)
      have been duly authorized by all necessary corporate action on the part of
      the
      Company, and this Agreement constitutes, and upon execution and delivery thereof
      each Bond and each other Transaction Document will constitute, a legal, valid
      and binding obligation of the Company enforceable against the Company in
      accordance with its terms, except as such enforceability may be limited by
      (i)
      applicable bankruptcy, insolvency, reorganization, moratorium or other similar
      laws affecting the enforcement of creditors' rights generally and (ii) general
      principles of equity (regardless of whether such enforceability is considered
      in
      a proceeding in equity or at law).

     

    5.2.  Subsidiaries.
      The
      Company has no subsidiaries, as such term is defined in Regulation S-X of the
      Securities and Exchange Commission (“Subsidiaries”), other than four
      Subsidiaries, the assets and operations of which are not significant to the
      financial or other condition or the operation of the business of the
      Company.

     

    5.3.  Qualification.
      The
      Company is duly qualified and in good standing as a foreign corporation
      authorized to do business in the State of Maine and The Commonwealth of
      Massachusetts, which are the only jurisdictions in which the nature of its
      activities or the character of the properties it owns or leases makes such
      qualification necessary.

     

    5.4.  Business;
      Financial Statements.
      The
      Company has delivered to you complete and correct copies of (a) its annual
      report to stockholders for the fiscal year ended December 31, 2005 (the “Annual
      Report”), (b) its annual report on Form 10-K for such fiscal year (the “Form
      10-K”) as filed with the Securities and Exchange Commission (the “Commission”),
      (c) its quarterly report on Form 10-Q for the quarter ended March 31, 2006
      (the
“Quarterly Report”) as filed with the Commission, (d) its Current Reports on
      Form 8-K dated June 22, 2006, June 19, 2006, May 25, 2006, May 3, 2006, April
      5,
      2006, March 7, 2006, March 2, 2006, March 1, 2006 and January 4, 2006
      (collectively, the “8K Reports”) as filed in the Commission, and (e) a
      memorandum dated July 5, 2006 prepared by Sovereign Securities Corporation,
      LLC
      (the "Placement Agent") for use in connection with the Company’s private
      placement of the Bonds (such memorandum, including appendices thereto, is herein
      called the “Memorandum”). The Annual Report, the Form 10-K, the Quarterly
      Report, the 8-K Reports and the Memorandum are collectively called the "GMP
      Disclosure Documents”. The Memorandum correctly describes, as of its date, the
      business then conducted and proposed to be conducted by the Company. There
      are
      included in the Form 10-K consolidated financial statements of the Company and
      its consolidated Subsidiaries for each of the fiscal years ended December 31,
      2005 and 2004, accompanied in each case by the opinion thereon of Deloitte
&
Touché LLP, independent public accountants. All financial statements included in
      the foregoing materials delivered to you (except as otherwise specified therein)
      have been prepared in accordance with generally accepted accounting principles
      applied on a consistent basis throughout the periods specified and present
      fairly the financial position of the Company and its consolidated Subsidiaries
      as of the respective dates specified and the results of their operations and
      cash flow for the respective periods specified (subject, in the case of the
      unaudited financial statements included in the Quarterly Report, to normal
      year
      end and audit adjustments).

     

    5.5.  Changes,
      etc.
      Since
      December 31, 2005, (a) except for normal seasonal variations in the business
      of
      the Company, the occurrence of events described in the GMP Disclosure Documents
      and the consummation of the transactions contemplated by this Agreement, there
      has been no change in the assets, liabilities or financial condition of the
      Company, other than changes which have not been, either in any case or in the
      aggregate, materially adverse to the Company, (b) except for normal seasonal
      variations in the business of the Company and the occurrence of events described
      in the GMP Disclosure Documents, neither the business, operations or affairs
      nor
      any of the properties or assets of the Company have been affected by any
      occurrence or development (whether or not insured against) which has been,
      either in any case or in the aggregate, materially adverse to the Company and
      (c) the Company has not directly or indirectly declared, ordered, paid, made
      or
      set apart any sum or property for any dividend or any purchase, redemption
      or
      other retirement of any shares of stock of the Company except as permitted
      by
      the Indenture. The Company has no material obligations or liabilities,
      contingent or otherwise, except those (i) disclosed or adequately provided
      for
      by the financial statements mentioned in section 5.4, (ii) disclosed in the
      GMP
      Disclosure Documents, and (iii) relating to the consummation of the transactions
      contemplated by this Agreement.

     

    5.6.  Tax
      Returns and Payments.
      The
      Company has filed all tax returns required by law to be filed by it and has
      paid
      all taxes, assessments and other governmental charges levied upon it and any
      of
      its properties, assets, income or franchises which are due and payable, other
      than those presently payable without penalty or interest. The Federal income
      tax
      liabilities of the Company have been finally determined by the Internal Revenue
      Service and satisfied, or the time for audit has expired, for all fiscal periods
      through December 31, 2001. The charges, accruals and reserves on the books
      of
      the Company in respect of Federal and state income taxes for all fiscal periods
      are adequate in the opinion of the Company, and the Company knows of no unpaid
      assessment for additional Federal or state income taxes for any
      period.

     

    5.7.  Title
      to Properties.
      The
      Company has title in fee simple, subject only to permitted encumbrances as
      defined in the Indenture, to all the real estate described or referred to in
      the
      Indenture as being subject to the lien thereof, except (i) property heretofore
      released from the lien of the Indenture in accordance with the terms thereof,
      (ii) property held under leases and rights of way, easements, riparian rights,
      flowage rights and property of a similar character, and (iii) certain other
      properties, titles to which are subject to reservations, encumbrances and minor
      defects in titles such as are customarily encountered in the public utility
      business and which do not materially interfere with their use by the Company;
      and the Company has good and marketable title, subject only to permitted
      encumbrances as defined in the Indenture, to the other properties described
      or
      referred to in the Indenture as being subject to the lien thereof, except
      property heretofore released from the lien of the Indenture in accordance with
      the terms thereof.

     

    5.8.  Property
      Subject to the Lien of the Indenture, etc.

     

    (a)  At
      the
      Closing, the physical properties and franchises described in, and subject to
      the
      lien of, the Indenture will include all the physical properties and franchises
      owned by the Company on the date of the Closing and used or useful in its public
      utility business, except (i) such property as may have been duly released from
      the lien of the Indenture and (ii) certain other classes of property expressly
      excepted in the Indenture, and such physical properties and franchises will
      include substantially all of the physical properties and franchises from which
      the consolidated operating revenues of the Company set forth in the income
      statements referred to in section 5.4 were derived.

     

    (b)  At
      the
      Closing, the Indenture will constitute a valid first mortgage lien upon the
      real
      property then owned by the Company and described in the granting clauses of
      the
      Indenture other than classes of property expressly excepted in the Indenture,
      subject only to permitted encumbrances under the Indenture, and a valid and,
      to
      the extent that it may be perfected by filing under the Uniform Commercial
      Code,
      perfected security interest in such of the personal property of the Company
      as
      is described in the Indenture.

     

    (c)  The
      Company is not a party to or bound by any contract or agreement or subject
      to
      any charter, by-law or other contractual restriction which, in its opinion
      materially and adversely affects, or insofar as the Company now foresees will
      in
      the future materially and adversely affect its business, operations, properties
      or assets, or its financial condition.

     

    5.9.  Franchises,
      etc.; Power Contracts.

     

    (a)  The
      Company owns or possesses all franchises, permits, patents, trademarks, service
      marks, trade names, copyrights, licenses and authorizations, and all other
      operating rights, consents, authorizations and orders (collectively,
“Franchises”), and all rights with respect to the foregoing, necessary for the
      conduct of its business as now conducted; all of such Franchises are valid
      and
      subsisting and contain no unduly burdensome restriction, condition or
      limitation; and the Company is not in default in respect of any
      thereof.

     

    (b)  Each
      of
      those agreements (the “Power Contracts”) for the purchase of power listed in the
      Form 10-K under the caption “Power Resources” and in Note J of the Notes to the
      Financial Statements contained in the Form 10-K, excluding those which, by
      their
      terms as stated in the Form 10-K, have expired, has been duly authorized,
      executed and delivered by the Company and, to the best of the Company’s
      knowledge, the other parties thereto and, except as disclosed in the Form 10-K,
      is in full force and effect, with no default or breach existing thereunder
      by
      the Company or, to the best of the Company’s knowledge, by the other parties
      thereto.

     

    5.10.  Litigation,
      etc.
      There
      is no action, proceeding or investigation pending or, to the best of the
      Company’s knowledge, threatened against the Company (a) which questions the
      validity of this Agreement, the Indenture or the Bonds or any action taken
      or to
      be taken pursuant to this Agreement, the Indenture or the Bonds, or (b) except
      as disclosed under the heading “Legal Proceedings” in, and in Note H of the
      Notes to the Financial Statements contained in, the Form 10-K and under the
      heading “Environmental Matters” in the Quarterly Report, which, so far as the
      Company can now foresee, would have a substantial possibility of resulting
      either in any case or in the aggregate, in any adverse change in the business,
      operations, condition (financial or otherwise), properties or assets of the
      Company or in any liability on the part of the Company which in any such case
      would be material to the Company.

     

    5.11.  Compliance
      with Other Instruments, etc.
      The
      Company is not in violation of, and the execution, delivery and performance
      of
      the Transaction Documents will not violate, any term of its Restated Articles
      of
      Association, as amended, or By-Laws, and is not in violation of, and will not
      violate, any term of any agreement or instrument to which it is a party or
      by
      which it or any of its properties are bound or any term of any applicable law,
      ordinance, rule or regulation of any governmental authority or any term of
      any
      applicable order, judgment or decree of any court, arbitrator or governmental
      authority, except as disclosed in the Form 10-K and the Quarterly Report under
      the caption “Environmental Matters,” the consequences of which violation, so far
      as the Company can now foresee, would have a substantial possibility of having
      a
      materially adverse effect on the business, operations, condition (financial
      or
      otherwise), properties or assets of the Company; the execution, delivery and
      performance of the Transaction Documents will not result in any violation of
      or
      be in conflict with or constitute a default under any such term or result in
      the
      creation of (or impose any obligation on the Company to create) any lien (except
      for that created by the Indenture) upon any of the properties or assets of
      the
      Company pursuant to any such term.

     

    5.12.  Governmental
      Consent.
      No
      consent, approval or authorization of, or declaration or filing with, any
      governmental authority is required for the valid execution and delivery of
      this
      Agreement or the Eighteenth Supplemental Indenture or the valid offer, issue,
      sale and delivery of the Bonds pursuant to this Agreement and the Eighteenth
      Supplemental Indenture except (a) the issue of an order by the Board consenting
      to the issuance and sale of the Bonds, (b) the recording and filing of the
      Eighteenth Supplemental Indenture and financing statements pursuant to the
      Indenture and (c) the filing with the MDTE of a certification (the
“Certification”) by the Board of the Board’s regulatory jurisdiction concerning
      financing of the Company. An order in Docket No. 7184, dated July 13, 2006
      (the
“Order”), consenting to the issuance and sale of the Bonds has been issued by
      the Board, the Company has delivered to you complete and correct copies of
      such
      order and all supplements, amendments or other filings to or with the Order,
      the
      Order is in full force and effect, no proceeding has been instituted to review,
      suspend, limit, restrict or revoke the Order and the Company has provided you
      with a copy of a letter by the Department of Public Service of the State of
      Vermont (the “VDPS”) waiving the right of the VDPS to institute any such
      proceeding. The Certification has been filed with the MDTE and is in full force
      and effect.

     

    5.13.  Offer
      of Bonds.
      Neither
      the Company nor the Placement Agent, the only person acting on its behalf in
      connection with the offering or sale of the Bonds or any similar securities
      of
      the Company, has directly or indirectly offered the Bonds or any part thereof
      or
      any similar securities for sale to, or solicited any offer to buy any of the
      same from, or otherwise approached or negotiated in respect thereof with, anyone
      other than you and other accredited investors. Neither the Company nor anyone
      acting on its behalf will offer or sell the Bonds or any part thereof or any
      similar securities so as to subject the issuance and sale of the Bonds to the
      registration and prospectus delivery provisions of the Securities Act of 1933,
      as amended (the “Securities Act”).

     

    5.14.  Use
      of Proceeds.
      The
      Company will apply the net proceeds of the sale of the Bonds, subject to the
      provisions of section 5.15, only (i) to partially fund additional capital
      investment in Vermont Electric Power Company, which owns and operates the bulk
      transmission system in Vermont, (ii) to repay $14,000,000 of first mortgage
      bonds maturing in November and December 2006, and (iii) to repay short-term
      bank
      borrowings.

     

    5.15.  Federal
      Reserve Regulations.
      The
      Company will not, directly or indirectly, use any of the proceeds of the sale
      of
      the Bonds for the purpose, whether immediate, incidental or ultimate, of buying
      a “margin stock” or of maintaining, reducing or retiring any indebtedness
      originally incurred to purchase a stock that is currently a “margin stock”, or
      for any other purpose which might violate, in each case Regulation T, U or
      X
      issued by the Board of Governors of the Federal Reserve System, as at any time
      amended (and any successor regulation or law to any thereof), and the Company
      agrees to execute all instruments which may be necessary from time to time,
      if
      any, to comply with all the requirements of Regulation U of the Federal Reserve
      System, as at any time amended. No indebtedness being reduced or retired out
      of
      the proceeds of the sale of the Bonds was incurred for the purpose of purchasing
      or carrying any such “margin stock”.

     

    5.16.  Compliance
      with ERISA.

     

    (a)  Neither
      any employee pension benefit plan (within the meaning of section 3 of the
      Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) which is
      or has been established or maintained or to which contributions are or have
      been
      made by the Company or any trade or business, whether or not incorporated,
      which, together with the Company, is under common control, as described in
      section 414(b) or (c) of the Internal Revenue Code of 1986, as amended (the
      “Code”) (any such employee pension benefit plan being herein called a “Plan”),
      nor any trust created under any Plan, has been terminated and for which the
      Company had any liability that has not been satisfied in full. No material
      liability of the Company to the Pension Benefit Guaranty Corporation or the
      Internal Revenue Service has been or is expected by the Company to be incurred
      with respect to any Plan which is or would be materially adverse to the
      Company.

     

    (b)  The
      execution and delivery of this Agreement and the Eighteenth Supplemental
      Indenture and the issue and sale of the Bonds under the Indenture at the Closing
      will not involve any transaction which is subject to the prohibitions of section
      406 of ERISA or in connection with which a tax could be imposed pursuant to
      section 4975 of the Code. The representation by the Company in the preceding
      sentence is made in reliance upon and subject to the accuracy of your
      representation in section 6.2 of this Agreement as to the source of the funds
      used to pay the purchase price of the Bonds purchased by you.

     

    (c)  The
      Company and each trade or business (whether or not incorporated) which is under
      common control with the Company under Section 414(b), (c), (m) or (o) of the
      Code (“ERISA Affiliate”) have operated and administered each Plan in compliance
      with all applicable laws except for such instances of noncompliance as have
      not
      resulted in and could not reasonably be expected to result in a Material Adverse
      Effect. Neither the Company nor any ERISA Affiliate has incurred any material
      liability pursuant to Title I or IV of ERISA or the penalty or excise tax
      provisions of the Code relating to employee benefit plans (as defined in Section
      3 of ERISA), and no event, transaction or condition has occurred or exists
      that
      would reasonably be expected to result in the incurrence of any such liability
      by the Company or any ERISA Affiliate, or in the imposition of any Lien on
      any
      of the rights, properties or assets of the Company or any ERISA Affiliate,
      in
      either case pursuant to Title I or IV of ERISA or to such penalty or excise
      tax
      provisions or to Section 401(a)(29) or 412 of the Code, other than such
      penalties, taxes, liabilities or Liens as would not be individually or in the
      aggregate material.

     

    (d)  The
      present value of the aggregate accrued benefits under each of the Plans that
      is
      subject to Title IV of ERISA (other than Multiemployer Plans), determined as
      of
      the end of such Plan's most recently ended plan year on the basis of the
      actuarial assumptions specified for funding purposes in such Plan's most recent
      actuarial valuation report, did not exceed the aggregate current value of the
      assets of such Plan allocable to such accrued benefits. 

     

    (e)  Neither
      the Company nor its ERISA Affiliates have participated in any Multiemployer
      Plans, as defined in Section 3(37) of ERISA.

     

    5.17.  Foreign
      Assets Control Regulations, USAPatriot Act, etc.
      To the
      best knowledge of the Company, neither the
      issue
      and sale of the Bonds by the Company nor its use of the proceeds thereof will
      violate the Trading with the Enemy Act, as amended, the Foreign Assets Control
      Regulations, the Transaction Control Regulations, the Cuban Assets Control
      Regulations, the Foreign Funds Control Regulations or the Iranian Assets Control
      Regulations of the United States Treasury Department (31 C.F.R., Subtitle B,
      Chapter V, as amended) or any enabling legislation or executive order relating
      thereto. The Company is not in violation of any law, rule, regulation
      (including, without limitation under the Uniting
      and Strengthening America by Providing Appropriate Tools Required to Intercept
      and Obstruct Terrorism Act,
      the
      Trading with the Enemy Act, the foreign assets control regulations of the United
      States Treasury Department and Executive Order 13224 of September 23, 2001)
      binding upon it. 

     

    

    5.18.  Bonds
      Comply with Indenture; Rank of Bonds.
      The
      Bonds, when issued and delivered, will comply with the provisions of the
      Indenture and will be secured equally and ratably with all other bonds issued
      under the Original Indenture and any indenture supplemental thereto (except
      insofar as any sinking and improvement fund, depreciation fund or other fund
      established in accordance with the provisions of the Indenture may afford
      additional security for the bonds of any specific series).

     

    5.19.  Disclosure.
      This
      Agreement, the Memorandum and the other documents, certificates’ and instruments
      delivered to you by or on behalf of the Company in connection with the
      transactions contemplated by this Agreement, taken as a whole, do not contain
      any untrue statement of a material fact or omit to state a material fact
      necessary in order to make the statements contained therein, in light of the
      circumstances in which they were made, not misleading. There is no fact known
      to
      the Company which materially adversely affects or in the future has a
      substantial possibility (so far as the Company now foresees) of materially
      adversely affecting the business, operations, condition (financial or
      otherwise), properties or assets of the Company which has not been set forth
      in
      this Agreement or the Memorandum or in the other documents, certificates and
      instruments delivered to you by or on behalf of the Company in connection with
      the transactions contemplated by this Agreement.

     

    5.20.  Indebtedness.
      Except
      for the bonds issued under and pursuant to the Indenture, the Company has no
      indebtedness other than as disclosed in the Memorandum, the Form 10-K and the
      Quarterly Report. Neither the Company nor any Subsidiary is in default and
      no
      waiver of default is currently in effect, in the payment of any principal or
      interest on any indebtedness of the Company or any Subsidiary and no event
      or
      condition exists with respect to any indebtedness of the Company or any
      Subsidiary that would permit (or that with notice or the lapse of time, or
      both,
      would permit) one or more persons to cause such indebtedness to become due
      and
      payable before its stated maturity or before its regularly scheduled dates
      of
      payment.

     

    6.  Representations
      and Warranties by Purchasers.

     

    6.1.  Purchase
      for Investment.
      Each
      Purchaser represents that such Purchaser is purchasing the Bonds for its own
      account or for one or more separate accounts maintained by such Purchaser or
      for
      the account of one or more pension to trust funds and not with a view to the
      distribution thereof, provided that the disposition of such Purchaser’s or such
      pension or trust fund’s property shall at all times be within such Purchaser’s
      or such pension or trust fund’s control. Each Purchase represents that such
      Purchaser is (and each separate account for which such Purchaser may be acting
      is) an “accredited investor” described in Sections (1), (2), (3) or (7) of Rule
      501(a) of Regulation D of the Securities Act and that it has the ability to
      evaluate the merits and risks of an investment in the Bonds and the ability
      to
      assume the economic risks involved in such an investment. Each Purchaser
      understands that the Bonds have not been registered under the Securities Act
      and
      may be resold only if registered pursuant to the provisions of the Securities
      Act or if an exemption from registration is available, except under
      circumstances where neither such registration nor such an exemption is required
      by law, and that the Company is not required to register the Bonds. Each
      Purchaser acknowledges that each Bond will contain a legend to the foregoing
      effect and agrees that it will only transfer such Bonds in accordance with
      the
      transfer restrictions set forth in such legend.

     

    6.2.  Source
      of Funds.
      Each
      Purchaser represents that at least one of the following statements is an
      accurate representation as to each source of funds (a “Source”) to be used by
      such Purchaser to pay the purchase price of the Bonds to be purchased by such
      Purchaser hereunder:

     

    (a)  the
      Source is an “insurance company general account” within the meaning of
      Department of Labor Prohibited Transaction Exemption (“PTE”) 95-60 (issued July
      12, 1995) and there is no employee benefit plan, treating as a single plan
      all
      plans maintained by the same employer or employee organization, with respect
      to
      which the amount of the general account reserves and liabilities for all
      contracts held by or on behalf of such plan, exceeds ten percent (10%) of the
      total reserves and liabilities of such general account (exclusive of separate
      account liabilities) plus surplus, as set forth in the NAIC Annual Statement
      for
      such Purchaser most recently field with such Purchaser’s state of domcile;
      or

     

    (b)  the
      Source is either (i) an insurance company pooled separate account, within the
      meaning of PTE 90-1 (issued January 29, 1990), or (ii) a bank collective
      investment fund, within the meaning of the PTE 91-38 (issued July 12, 1991)
      and,
      except as such Purchaser has disclosed to the Company in writing pursuant to
      this paragraph (b), no employee benefit plan or group of plans maintained by
      the
      same employer or employee organization beneficially owns more than 10% of all
      assets allocated to such pooled separate account or collective investment fund;
      or

     

    (c)  the
      Source constitutes assets of an “investment fund” (within the meaning of Part V
      of the QPAM Exemption) managed by a “qualified professional asset manager” or
“QPAM” (within the meaning of Part V of the QPAM Exemption), no employee benefit
      plan’s assets that are included in such investment fund, when combined with the
      assets of all other employee benefit plans established or maintained by the
      same
      employer or by an affiliate within the meaning of Section V(c)(1) of the QPAM
      Exemption of such employer or by the same employee organization and managed
      by
      such QPAM, exceed 20% of the total client assets managed by such QPAM, the
      conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither
      the
      QPAM nor a person controlling or controlled by the QPAM (applying the definition
      of “control” in Section V(e) of the QPAM Exemption) owns a 5% or more interest
      in the Company and (i) the identity of such QPAM and (ii) the names of all
      employee benefit plans whose assets are included in such investment fund have
      been disclosed to the Company in writing pursuant to this paragraph (c);
      or

     

    (d)  the
      Source is a governmental plan; or

     

    (e)  the
      Source constitutes assets of a "plan(s)" (within the meaning of Section IV
      of
      PTE 96-23 (the "INHAM Exemption")) managed by an "in-house asset manager" or
      "INHAM" (within the meaning of Part IV of the INHAM Exemption), the conditions
      of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the
      INHAM nor a person controlling or controlled by the INHAM (applying the
      definition of "control" in Section IV(d) of the INHAM Exemption) owns a 5%
      or
      more interest in the Company and (i) the identity of such INHAM and (ii) the
      name(s) of the employee benefit plan(s) whose assets constitute the Source
      have
      been disclosed to the Company in writing pursuant to this clause (e);
      or

     

    (f)  the
      Source is one or more employee benefit plans, or a separate account or trust
      fund comprised of one or more employee benefit plans, each of which has been
      identified to the Company in writing pursuant to this paragraph (e);
      or

     

    (g)  the
      Source does not include assets of any employee benefit plan, other than a plan
      exempt from the coverage of ERISA.

     

    If
      any
      Purchaser or any subsequent transferee of the Bonds indicates that such
      Purchaser or such transferee is relying on any representation contained in
      paragraph (b), (c) or (e) above, the Company shall deliver on the date of the
      applicable Closing and on the date of any applicable transfer a certificate,
      which shall either state that (i) it is neither a party in interest nor a
“disqualified person” (as defined in Section 4975(e)(2) of the Code), with
      respect to any plan identified pursuant to paragraphs (b) or (e) above, or
      (ii)
      with respect to any plan, identified pursuant to paragraph (c) above, neither
      it
      nor any “affiliate” (as defined in Section V(c) of the QPAM Exemption) has at
      such time and during the immediately preceding one year, exercised the authority
      to appoint or terminate said QPAM as manager of any plan identified in writing
      pursuant to paragraph (c) above or to negotiate the terms of said QPAM’s
      management agreement on behalf of any such identified plan. As used in this
      Section 6.2, the terms “employee
      benefit plan”,
      “governmental
      plan”,
      “party
      in interest”
and
      “separate
      account”
shall
      have the respective meanings assigned to such terms in Section 3 of
      ERISA.

     

    7.  Accounting,
      Financial Statements and Other Information.
      The
      Company will maintain a system of accounting established and administered in
      accordance with generally accepted accounting principles and will set aside
      on
      its books all such proper reserves as shall be required by generally accepted
      accounting principles. The Company will deliver to you, so long as you shall
      be
      entitled to purchase Bonds under this Agreement or you or your nominee shall
      be
      the holder of any Bonds:

     

    (a)  within
      60
      days after the end of each of the first three quarterly fiscal periods in each
      fiscal year of the Company, a consolidated balance sheet of the Company its
      consolidated Subsidiaries as at the end of such period and the related
      consolidated statements of income and cash flow, of the Company and its
      consolidated Subsidiaries for such period and (in the case of the second and
      third quarterly periods) for the period from the beginning of the current fiscal
      year to the end of such quarterly period, setting forth in each case in
      comparative form the consolidated figures for the corresponding periods of
      the
      previous fiscal year, all in reasonable detail and certified principal financial
      officer of the Company as presenting fairly, in accordance with generally
      accepted accounting principles applied (except as specifically set forth
      therein) basis consistent with such prior fiscal periods, the information
      contained therein, subject to changes resulting from normal year-end and audit
      adjustments;

     

    (b)  within
      120 days after the end of each fiscal year of the Company, a consolidated
      balance sheet of the Company and its consolidated Subsidiaries as at the end
      of
      such year
      and
      the related consolidated statements of income and cash flow of the Company
      and
      its consolidated Subsidiaries for such fiscal year, setting forth in each case
      in comparative form the consolidated figures for the previous fiscal year,
      all
      in reasonable detail and accompanied by the report thereon, not qualified as
      a
      result of limitations imposed
      by the Company on the scope of the audit or as a result of nonconformity with
      generally accepted accounting principles or auditing standards insofar as may
      be
      required by rule or order of any regulatory body having jurisdiction over the
      Company, of Deloitte & Touche or other independent accountants of recognized
      national standing selected by the Company;

     

    (c)  together
      with each delivery of financial statements pursuant to subdivisions (a) and
      (b)
      of this section 7, an Officers’ Certificate stating that the signers have
      reviewed the terms of this Agreement, the Indenture and the Bonds and have
      made,
      or caused to be made under their supervision, a review in reasonable detail
      of
      the transactions and condition of the Company and its Subsidiaries during the
      accounting period covered by such financial statements and that such review
      has
      not disclosed the existence during or at the end of such accounting period,
      and
      that the signers do not have knowledge of the existence as at the date of the
      Officers’ Certificate, of any condition or event (specifically including any
      condition or event that would violate the provisions of section 1.04 of the
      Eighteenth Supplemental Indenture) which constitutes or which, after notice
      or
      lapse of time or both, will constitute a “default” (as defined in the
      Indenture), or, if any such condition or event exists, specifying the nature
      and
      period of existence thereof and what action the Company has taken or is taking
      or proposes to take with respect thereto;

     

    (d)  together
      with each delivery of consolidated financial statements pursuant to subdivision
      (b) of this section 7, a written statement by the independent public accountants
      giving the report thereon (i) stating that their audit examination has included
      a review of the terms of this Agreement and of the Indenture and the Bonds
      relate to accounting matters and (ii) stating whether, in the course of their
      audit examination, they obtained knowledge (and whether, as of the date of
      such
      written statement, they have knowledge) of the existence of any condition or
      event which constitutes or, with or without notice or lapse of time or both,
      will, constitute a “default” (as defined in the Indenture), and, if so,
      specifying the nature and period of existence thereof;

     

    (e)  promptly
      upon receipt thereof, copies of all reports submitted to the Company by
      independent public accountants in connection with each annual, interim special
      audit of the books of the Company or any Subsidiary made by such accountants
      (excluding confidential management reports and any letters, not made available
      publicly, from the Company’s independent public accountants to management
      commenting upon the Company’s internal accounting controls);

     

    (f)  promptly
      upon their becoming available, copies of all financial statements, reports,
      notices and proxy statements sent or made available generally by the Company
      to
      its public security holders, of all regular and periodic reports and all
      registration statements and prospectuses (other than any registration statement
      or prospectus relating to (i) the offering of securities of the Company to
      stockholders of the Company pursuant to any dividend reinvestment and stock
      purchase plan or (ii) the offering of securities of the Company or of interests
      in an employee benefit plan to employees of the Company or any Subsidiary)
      filed
      by the Company or any Subsidiary with the Commission or any governmental
      authority succeeding to any of its functions (other than any of the foregoing
      or
      any portion thereof as to which the Company shall have requested confidential
      treatment from the Commission, unless and until the Commission shall have denied
      such request) and of all press releases and other statements made available
      generally by the Company to the public concerning material developments in
      the
      business of the Company and its Subsidiaries;

     

    (g)  with
      reasonable promptness, such other information and data with to respect to the
      Company or any of its Subsidiaries as from time to time may be reasonably
      requested; and

     

    (h)  with
      reasonable promptness, copies of all certificates, reports and other documents
      and information delivered by the Company or that the Company causes to be
      delivered to the Trustee customarily or periodically or pursuant to section
      9.06(b), or 9.09 of the Indenture or that you may reasonably
      request.

     

    8.  Inspection.
      The
      Company will permit any authorized representatives designated by you, so long
      as
      you shall be entitled to purchase Bonds under this Agreement or you or your
      nominee shall be the holder of any Bonds, without expense to the Company, to
      visit and inspect any of the properties of the Company or any of its
      Subsidiaries, including its and their books of account, and to make copies
      and
      take extracts therefrom, and to discuss its and their affairs, finances and
      accounts with its and their officers and independent public accountants (and
      by
      this provision the Company authorizes such accountants to discuss with such
      representatives the affairs, finances and accounts of the Company and its
      Subsidiaries), all at such reasonable times and as often as may be reasonably
      requested. Any information relating to the Company and any Subsidiary obtained
      by such inspection shall be considered confidential and you and your authorized
      representatives shall maintain the confidentiality thereof, except (i) such
      information as was in the public domain when so initially disclosed as evidenced
      by publication or otherwise, or as thereafter becomes part of the public domain
      independently of any act of the person performing such inspection, provided,
      however, that such information did not or does not become part of the public
      domain through the breach of any confidentiality obligation owing to the
      Company, (ii) any information the disclosure of which is required by any
      governmental entity or authority having or claiming jurisdiction over you or
      to
      the National Association of Insurance Commissioners or similar organizations
      or
      their successors, (iii) disclosure of information in compliance with the duly
      issued order of any court, or (iv) of such information to the prospective
      transferee in connection with any contemplated transfer by you of any
      Bond.

     

    9.  Additional
      Agreements of the Company.

     

    9.1.  Home
      Office Payment, etc.
      So long
      as you or your nominee shall be the holder of any Bond, and notwithstanding
      anything contained in such Bond and in the Indenture to the contrary, the
      Company will pay, or cause the Trustee or any other paying agent appointed
      by
      the Company to pay, all sums becoming due on such Bond for principal, premium,
      if any, and interest by the method and at the address specified for such purpose
      in Schedule A, or at such other address as you shall have from time to specified
      to the Company and the Trustee or other paying agent in writing for such
      purpose, without the presentation or surrender of such Bond or the making of
      any
      notation thereon, except that any Bond paid or redeemed in full shall thereafter
      be surrendered to the Trustee at its principal office. Prior to any sale or
      other disposition of any Bond held by you or your nominee, you will make a
      notation thereon of all principal payments previously made thereon and of the
      date to which interest has been paid or, at your option, you will surrender
      the
      same to the Trustee in exchange for a Bond or Bonds aggregating the same
      principal amount as the unpaid aggregate principal amount of the Bond
      surrendered. The Company will extend, and will cause the Trustee to extend,
      the
      benefits of Section 1.02(B) of the Supplemental Indenture to any institutional
      investor meeting the requirements of Section 15 hereof which is the direct
      or
      indirect transferee of any Bond purchased by you under this Agreement. The
      Company will cause an executed or conformed copy of this Agreement to be filed
      with the Trustee pursuant to the fourth paragraph of Section 10.04 of the
      Original Indenture.

     

    9.2.  Mutilated,
      etc., Bonds.
      Notwithstanding any provision of the Indenture or the Bonds to the contrary,
      if
      any Bond of which you are the owner is mutilated, destroyed or lost, the
      affidavit of your Treasurer or any Assistant Treasurer or any Securities Officer
      setting forth the circumstances with respect to such mutilation, or loss shall
      be accepted as satisfactory evidence thereof, and no charge, payment of
      expenses, indemnity or security shall be required as a condition to the
      execution and delivery by the Company and the authentication by the Trustee
      of a
      new Bond in replacement thereof other than your written agreement to indemnify
      the Company and the Trustee under the Indenture.

     

    9.3.  Power
      Contracts.
      So long
      as you or your nominee holds any of the Bonds, the Company will not (except
      as
      permitted by the Indenture) transfer or otherwise dispose of, or create or
      incur
      or permit to be created or incurred any mortgage, lien, charge or encumbrance
      of
      any kind upon, the right, title and interest of Company in and to any of the
      Power Contracts or any other contracts for the purchase of power similar thereto
      (the “Future Power Contracts”), provided
      that the
      Company may nonetheless (a) contract for the resale of energy or capacity
      covered by such Power Contracts or Future Power Contracts to the extent not
      deemed necessary to its retail customers’ needs, (b) create or incur or permit
      to be created or incurred any mortgage, lien, charge or encumbrance of any
      kind
      upon the right, title and interest of the Company in and to any of such Power
      Contracts or Future Power Contracts to extent not deemed necessary to its retail
      customers’ needs, and (c) assign or otherwise transfer its rights to or
      interests in any Future Power Contracts to any subsidiary or affiliate of the
      Company. The Company may, in addition, without obtaining any consent or approval
      from you, such nominee or such holder, modify, amend, supplement, terminate
      or
      replace any of said Power Contracts or Future Power Contracts, provided
      that any
      modification, amendment or replacement of or supplement to any of the Power
      Contracts or the Future Power Contracts shall be deemed to be a Power Contract
      or a Future Power Contract, respectively, and subject to the provisions of
      the
      first sentence of this section 9.3.

     

    9.4.  Denomination
      of Bonds.
      At any
      time on request by you, the Company will exchange any Bond or Bonds held by
      you
      for another Bond or other Bonds, in such denominations as you may request,
      equal
      in aggregate principal amount to the aggregate principal amount of the Bond
      or
      Bonds then held by you at such time and surrendered by you to the Company.
      Notwithstanding the preceding sentence, the Company shall have no obligation
      to
      issue, transfer, exchange or sell any Bond to you or any subsequent transferee
      in a principal amount that is less than $500,000, unless you are selling all
      of
      the Bonds then held by you.

     

    9.5.  Proration,
      etc.
      The
      Company will not modify or alter or permit the modification or alteration of
      the
      provisions of Section 1.02(B) of the Eighteenth Supplemental Indenture, or
      your
      rights or the obligations of the Company and the Trustee thereunder, unless
      the
      Company has received your express written consent to such modification or
      alteration.

     

    10.  Expenses,
      etc.
      Whether
      or not the transactions contemplated by this Agreement shall be consummated,
      the
      Company will pay all reasonable expenses in connection with such transactions
      and in connection with any amendments or waivers requested by the Company
      (whether or not the same become effective) under or in respect of this
      Agreement, the Indenture or the Bonds, including, without limitation:
(a)
      the
      cost and expenses of preparing and reproducing this Agreement, the Eighteenth
      Supplemental Indenture and the Bonds, of furnishing all opinions by counsel
      for
      the Company and all certificates on behalf of the Company, the cost of obtaining
      the private placement number from Standard & Poor’s Corporation and of the
      Company’s performance of and compliance with all agreements and conditions
      contained herein on its part to be performed or complied with; (b) the fees
      and
      costs of the Trustee under the Indenture; (c) the cost of delivering to your
      principal or custodian bank, insured to your satisfaction, any Bonds sold to
      you
      hereunder and delivered to you in physical form and delivered in physical form
      upon any substitution or any exchange or transfer of the Bonds pursuant to
      the
      Indenture or section 14 and of your obtaining and delivering Bonds, insured
      to
      your satisfaction, upon any such substitution or exchange or transfer; (d)
      the
      fees and out-of-pocket costs of the Placement Agent, including the reasonable
      fees, expenses and disbursements of its counsel in connection with such
      transactions; (e) the reasonable fees, expenses and disbursements of your
      special counsel in connection with such transactions and any such amendments
      or
      waivers; (f) the reasonable out-of-pocket expenses incurred by you in connection
      with such transactions and any such amendments or waivers; (g) the costs and
      expenses incurred in enforcing or defending (or determining whether or how
      to
      enforce or defend) any rights under this Agreement or the Bonds or in responding
      to any subpoena or other legal process or informal investigative demand issued
      in connection with this Agreement or the Bonds, or by reason of being a holder
      of any Bond; and (h) the costs and expenses, including financial advisors’ fees,
      incurred in connection with the insolvency or bankruptcy of the Company or
      in
      connection with any work-out or restructuring of the transactions contemplated
      hereby and by the Bonds. The Company also will pay, and will save you and each
      holder of any Bonds harmless from any and all liabilities with respect to any
      taxes (including interest and penalties, but excluding taxes based on or
      measured by your net income) which may be payable in respect of the execution
      and delivery of this Agreement, the Eighteenth Supplemental Indenture, the
      issue
      of the Bonds and any amendment or waiver requested by the Company under or
      in
      respect of this Agreement, the Indenture or the Bonds.

     

    11.  Survival
      of Representations and Warranties.
      All
      representations and warranties contained in this Agreement or made in writing
      by
      the Company in connection with the transactions contemplated by this Agreement
      shall survive the execution and delivery of this Agreement and the Eighteenth
      Supplemental Indenture, any investigation at any time made by you or on your
      behalf, the purchase of the Bonds by you under this Agreement and any
      disposition or payment of the Bonds. All statements contained in any certificate
      or other instrument delivered by the Company pursuant to this Agreement or
      in
      the Memorandum or in connection with the transactions contemplated by this
      Agreement shall be deemed representations and warranties of the Company under
      this Agreement.

     

    12.  Notices,
      etc.
      Except
      as otherwise provided in this Agreement, notices and other communications under
      this Agreement shall be in writing and shall be delivered, or mailed by
      registered or certified mail, postage prepaid, addressed, (a) if to you, at
      the
      address set forth in Schedule A or at such other address as you shall have
      furnished to the Company in writing, except as otherwise provided in section
      9.1
      with respect to payments on Bonds held by you or your nominee, or (b) if to
      any
      other holder of any Bond, at such address as such other holder shall have
      furnished to the Company in writing, or, until any such other holder so
      furnishes to the Company an address, then to and at the address of the last
      holder of such Bond who has furnished an address to the Company, or (c) if
      to
      the Company, at its address set forth at the beginning of this Agreement, to
      the
      attention of the General Counsel, or at such other address, or to the attention
      of such other officer, as the Company shall have furnished to you in
      writing.

     

    13.  Substitution
      of Purchaser.
      You
      shall have the right to substitute any one of your “affiliates” (as defined in
      the Indenture) as the purchaser of the Bonds which you have agreed to purchase
      hereunder, by written notice to the Company, which notice shall be signed by
      both you and such affiliate, shall contain such affiliate’s agreement to be
      bound by this Agreement and shall contain a confirmation by such affiliate
      of
      the accuracy with respect to it of the representations set forth in section
      6.
      Upon receipt of such notice, wherever the word “you” is used in this Agreement
      (other than in this section 13), such word shall be deemed to refer to such
      affiliate in lieu of you. In the event that such affiliate is so substituted
      as
      a purchaser hereunder and such affiliate thereafter transfers to you all of
      the
      Bonds then held by such affiliate, upon receipt by the Company of notice of
      such
      transfer, wherever the word “you” is used in this Agreement (other than in this
      section 13), such word shall no longer be deemed to refer to such affiliate,
      but
      shall refer to you, and you shall have all the rights of an original holder
      of
      the Bonds under this Agreement.

     

    14.  Exchange
      of Bonds.
      The
      Company may require you, at the option and
      sole
      expense of the Company, to exchange any Bonds paid or redeemed in part for
      such
      denominations as you may request (subject to the provisions of section 9.4),
      of
      the appropriate aggregate unpaid principal amount, provided
      that the
      Company may require you to make such an exchange of partially paid or redeemed
      Bonds only if (i) Company desires to use Bond Credits (as defined in the
      Indenture) reflected by the portions of such Bonds that have been paid or
      redeemed as a basis for the issuance bonds under the Indenture, and (ii) the
      Trustee requires the exchange of such Bonds a condition to permitting the
      Company to use the Bond Credits reflected by the paid or redeemed portions
      of
      such Bonds as a basis for the issuance of other bonds.

     

    15.  Miscellaneous.
      This
      Agreement shall inure to the benefit of and be binding upon the successors
      and
      assigns of each of the parties hereto, including any of Bonds acquired by you
      pursuant to this Agreement. Except as stated in section 11, this Agreement
      embodies the entire agreement and understanding between you and the Company
      and
      supercedes all prior agreements and understandings relating to the subject
      matter hereof. This Agreement shall be construed and enforced in accordance
      with
      and governed by the law of the State of New York. The headings in this Agreement
      are for purposes of reference only and shall not limit or otherwise affect
      the
      meaning hereof. This Agreement may be executed in any number of counterparts,
      each of which shall be an original, but all of which together shall constitute
      one instrument.

     

    (Remainder
      of Page Intentionally Left Blank)

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    If
      you
      are in agreement with the foregoing, please sign the form of agreement on the
      accompanying counterparts of this letter and return one of the same to the
      Company, whereupon this letter shall become a binding agreement between you
      and
      the Company.

     

    Very
      truly yours,

     

    GREEN
      MOUNTAIN POWER CORPORATION

     

    By: /s/Donald
      J. Rendall, Jr.    

    Name:
      Donald J. Rendall, Jr.

    Title:
      Vice President, General Counsel and Secretary

     

    The
      foregoing Agreement is hereby agreed to as of the date hereof.

     

    CONNECTICUT
      GENERAL LIFE INSURANCE COMPANY

     

    By: CIGNA
      Investments, Inc. (authorized agent)

     

    By: /s/David
      M. Cass   

    Name: David
      M.
      Cass

    Title: Managing
      Director

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    If
      you
      are in agreement with the foregoing, please sign the form of agreement on the
      accompanying counterparts of this letter and return one of the same to the
      Company, whereupon this letter shall become a binding agreement between you
      and
      the Company.

     

    Very
      truly yours,

     

    GREEN
      MOUNTAIN POWER CORPORATION

     

    By: /s/Donald
      J. Rendall, Jr.                

    Name:
      Donald J. Rendall, Jr.

    Title:
      Vice President, General Counsel and Secretary

     

    The
      foregoing Agreement is hereby agreed to as of the date hereof.

     

    HARTFORD
      LIFE INSURANCE COMPANY

     

    By: Hartford
      Investment Management Company,

     

    Its
      Agent
      and Attorney-in-Fact

     

    By: /s/Ronald
      A. Mendel          

    Name: Ronald
      M.
      Mendel

    Title: Managing
      Director

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    SCHEDULE
      A

     

    INFORMATION
      RELATING TO PURCHASERS

     

    
      	
              Name
                And Address Of Purchaser

               

              Connecticut
                General Life Insurance Company

              Nominee
                Name: CIG & Co.

              c/o
                CIGNA Investments, Inc.

              Attention:
                Fixed Income Securities, H16B

              Hartford,
                CT 06103

              Fax:
                860-727-1904

               

              Tax
                Identification No. 13-3574027

              (1) All
                payments by wire transfer

              of
                immediately available funds to:

              J.P.
                Morgan Chase Bank

              BNF=CIGNA
                Private Placements/AC=9009001802

              ABA#
                021000021

               

              With
                each payment identified as follows:

               

              Green
                Mountain Power Corporation

              First
                Mortgage Bonds,

              6.53%
                Series due August 1, 2036

              PPN: 393154
                AC 3

              Principal
                or Interest

               

              (2) Address
                for Notices Related to Payments:

              CIG
                & Co.

              c/o
                CIGNA Investments, Inc.

              Attention:
                Fixed Income Securities, H16B

              Hartford,
                CT 06103

              Fax:
                860-727-8024

               

              with
                a copy to:

              J.P.
                Morgan Chase Bank

              14201
                Dallas Parkway, 13th
                Floor

              Dallas,
                TX 75254

              Attention:
                Karen Mote, Mail Code 300-116

              Fax:
                469-477-1904

               

              (3) Address
                for All Other Notices:

              CIG
                & Co.

              c/o
                CIGNA Investments, Inc.

              Attention:
                Fixed Income Securities, H16B

              Hartford,
                CT 06103

              Fax:
                860-727-1904

            	 	
              Principal
                Amount of

              Bonds
                to be Purchased

               

              At
                Initial Closing:

               

              $3,500,000

              $2,000,000

               

              At
                Second Closing:

               

              $6,500,000

              $3,000,000

            	 	
              Purchase
                Price

               

               

              At
                Initial Closing:

               

              $3,500,000

              $2,000,000

               

              At
                Second Closing:

               

              $6,500,000

              $3,000,000

               

               

            

    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    SCHEDULE
      A

    

    INFORMATION
      RELATING TO PURCHASERS

     

    
      	
              Name
                And Address Of Purchaser

               

              Hartford
                Life Insurance Company

              Hartford
                Investment Management Company

              c/o
                Investment Department-Private Placements

              Regular
                Mailing Address:

              P.O.
                Box 1744

              Hartford,
                CT 06144-1744

              Overnight
                Mailing Address:

              55
                Farmington Avenue

              Hartford,
                CT 06105

              Fax.:
                860-297-8884

               

              Tax
                Identification No. 06-0974148

              (1) All
                payments by wire transfer

              of
                immediately available funds to:

              JP
                Morgan Chase

              4
                New York Plaza

              New
                York, NY 10004

              Bank
                ABA# 021000021

              Chase
                NYC/Cust

              A/C#
                900-9-000200 for F/C/T

              G10056-LC2

              Attn:
                Bond Interest/Principal - Green
                Mountain Power Corp. - 6.53% Due August 2036

              PPN
                # 393154 AC 3 Prin $______ Int $______

              With
                each payment identified as follows:

               

              Green
                Mountain Power Corporation

              First
                Mortgage Bonds,

              6.53%
                Series due August 1, 2036

              PPN: 393154
                AC 3

              Principal
                or Interest

               

              (2) Address
                for Notices Related to Payments:

              Hartford
                Investment Management Company

              c/o
                Portfolio Support

              Regular
                Mailing Address:

              P.O.
                Box 1744

              Hartford,
                CT 06144-1744

              Overnight
                Mailing Address:

              55
                Farmington Avenue

              Hartford,
                CT 06105

              Fax.:
                860-297-8875/8876

               

              (3) Address
                for All Other Notices:

              Hartford
                Life Insurance Company

              Hartford
                Investment Management Company

              c/o
                Investment Department-Private Placements

              Regular
                Mailing Address:

              P.O.
                Box 1744

              Hartford,
                CT 06144-1744

              Overnight
                Mailing Address:

              55
                Farmington Avenue

              Hartford,
                CT 06105

              Fax.:
                860-297-8884

            	 	
              Principal
                Amount of

              Bonds
                to be Purchased

               

              At
                Initial Closing:

               

              $5,500,000

               

              At
                Second Closing:

               

              $5,000,000

              $4,500,000

            	 	
              Purchase
                Price

               

               

              At
                Initial Closing:

               

              $5,500,000

               

              At
                Second Closing:

               

              $5,000,000

              $4,500,000

               

            

    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    Exhibit
      A

    

    [FORM
      OF EIGHTEENTH SUPPLEMENTAL INDENTURE]

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