Document:

B&W DRAFT
                                                                  MARCH 20, 2001

================================================================================

                            THE STATE OF CONNECTICUT,

                            ACTING THROUGH THE OFFICE

                             OF THE STATE TREASURER

                        AS FINANCE AUTHORITY AND SETTLOR,

                                       AND

                FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,

                               AS DELAWARE TRUSTEE

                          ----------------------------

                              DECLARATION OF TRUST

                           DATED AS OF MARCH __, 2001

                          ----------------------------

================================================================================
<PAGE>

                                Table of Contents

                                                                            PAGE

                                    ARTICLE 1
                   Definitions and Incorporation By Reference

Section 1.1       Definitions.................................................4

                                    ARTICLE 2
                                  Organization

Section 2.1       Creation of Trust...........................................4
Section 2.2       Trust as Financing Entity...................................4
Section 2.3       Situs of the Trust..........................................4
Section 2.4       Purposes and Powers.........................................5
Section 2.5       Trust Property..............................................5
Section 2.6       Issuance of Certificates....................................6
Section 2.7       Organizational Expenses.....................................6
Section 2.8       No Liability of the Finance Authority or Its Personnel......6
Section 2.9       Independent Status..........................................6
Section 2.10      Tax Treatment; Construction.................................6

                                    ARTICLE 3
                          Delivery of Certain Documents

Section 3.1       Documents Relating to Issuance of Certificates..............7

                                    ARTICLE 4
                              The Delaware Trustee

Section 4.1       Appointment.................................................7
Section 4.2       Duties and Responsibilities.................................7
Section 4.3       Prohibited Actions..........................................7
Section 4.4       Acceptance of the Trusts....................................8
Section 4.5       Limitation of Liability.....................................8
Section 4.6       Compensation and Reimbursement; Indemnification.............9
Section 4.7       Resignation................................................10
Section 4.8       Representations and Warranties of Delaware Trustee.........10
Section 4.9       Reliance; Advice of Counsel................................11
Section 4.10      Delaware Trustee May Own Certificates......................12
Section 4.11      Right to Receive Instructions..............................12
Section 4.12      No Duties Except as Specified in this
                  Agreement or in Instructions...............................12

                                    ARTICLE 5
             Representations and Warranties of the Finance Authority

Section 5.1       Representations and Warranties of Finance Authority........13
<PAGE>

                                    ARTICLE 6
                           Termination of Declaration

Section 6.1       Termination of the Trust...................................13

                                    ARTICLE 7
                                  Miscellaneous

Section 7.1       No Legal Title to Trust Property...........................14
Section 7.2       Limitations on Rights of Others............................14
Section 7.3       Notices....................................................14
Section 7.4       Severability...............................................15
Section 7.5       Amendments Without Consent of Holders......................15
Section 7.6       Amendments With Consent of Holders.........................16
Section 7.7       Form of Amendments.........................................16
Section 7.8       Counterparts...............................................17
Section 7.9       Successors.................................................17
Section 7.10      No Petition Covenant.......................................17
Section 7.11      Headings...................................................17
Section 7.12      GOVERNING LAW..............................................17
<PAGE>

         DECLARATION OF TRUST dated as of March __, 2001 (as amended or restated
from time to time, the "DECLARATION"), by the State of Connecticut, acting
through the Office of the State Treasurer, acting hereunder as the finance
authority and settlor (the "FINANCE AUTHORITY") pursuant to Sections 16-245e to
and including 16-245k of the Connecticut General Statutes (the "STATUTE") and
First Union Trust Company, National Association, acting hereunder not in its
individual or corporate capacity but solely as trustee under the laws of the
State of Delaware (the "DELAWARE TRUSTEE").

                                    RECITALS

         Pursuant to the Statute, an electric company in the State of
Connecticut may obtain from the Connecticut Department of Public Utility Control
(the "DEPARTMENT") a financing order (as defined in the Statute) permitting such
utility to recover a portion of its stranded costs (as defined in the Statute)
through the issuance of rate reduction bonds (as defined in the Statute). The
Statute further empowers a special purpose trust (as defined in the Statute)
established by the Finance Authority to issue such rate reduction bonds.

         The Connecticut Light and Power Company, a Connecticut corporation
("CL&P"), has applied for and received a financing order from the Department,
and has requested the Finance Authority to establish a special purpose trust to
issue rate reduction bonds.

         The Trust created hereby (the "TRUST") shall constitute a special
purpose trust and shall be empowered to issue one series with one or more
classes of certificates constituting Connecticut RRB Special Purpose Trust
CL&P-1 Rate Reduction Certificates (the "CERTIFICATES"). All such Certificates
shall be issued pursuant to an indenture (the "CERTIFICATE INDENTURE"), by and
among the Delaware Trustee, the Trust and a trustee (the "CERTIFICATE TRUSTEE"),
initially designated as First Union Trust Company, National Association, and
each class of Certificates shall represent fractional undivided beneficial
interests in the corresponding class of CL&P Funding LLC Notes (the "NOTES")
issued by CL&P Funding LLC, a special purpose limited liability company (the
"NOTE Issuer") created by CL&P. The Certificate Indenture and this Declaration
shall together constitute the governing instrument of the Trust. The Trust shall
purchase the Notes from the Note Issuer pursuant to a note purchase agreement (a
"NOTE PURCHASE AGREEMENT") relating to the Notes. The Notes will be issued
pursuant to an indenture (the "NOTE INDENTURE"), by and between the Note Issuer
and a trustee (the "NOTE TRUSTEE"), initially designated as First Union Trust
Company, National Association, and secured by a pledge of and lien upon
transition property (as defined in the Statute) purchased by the Note Issuer
from CL&P together with any other assets of the Note Issuer. CL&P will service
such transition property for the benefit of the Note Issuer pursuant to a
transition property servicing agreement (the "SERVICING AGREEMENT"), between
CL&P as servicer (in such capacity, together with any successor servicer, the
"SERVICER") and the Note Issuer. The Declaration, the Certificate Indenture, the
Note Purchase Agreement, the Note Indenture, the Servicing Agreement, the Fee
and Indemnity Agreement defined and described in Section 2.7 hereof, the
Transition Property Purchase and Sale Agreement between the Note Issuer and
CL&P, as seller, relating to the purchase and sale of the transition property
described above, the Administration Agreement between the Note Issuer and CL&P,
as administrator, relating to the administration of the Note Issuer, the
Underwriting Agreement among the Note Issuer, CL&P and certain underwriters,
relating to the underwriting of the Certificates, and any interest rate swap
agreement (a "SWAP AGREEMENT") executed in connection with the issuance of any

                                       1
<PAGE>

class of floating rate Certificates are herein collectively referred to as the
"BASIC DOCUMENTS."

        THE FINANCE AUTHORITY AND THE DELAWARE TRUSTEE AGREE AS FOLLOWS:

                                   ARTICLE 1

                   DEFINITIONS AND INCORPORATION BY REFERENCE

         Section 1.1 DEFINITIONS. All references herein to "the Declaration" or
"this Declaration" are to this Declaration of Trust, all references herein to
the "Trust" are to the trust created hereunder, and all references herein to
Articles, Sections, subsections, Schedules and Exhibits are to Articles,
Sections, subsections, Schedules and Exhibits of this Declaration, unless
otherwise specified. All capitalized terms used herein and not otherwise defined
shall have the meanings set forth in the Recitals hereto.

                                   ARTICLE 2

                                  ORGANIZATION

         Section 2.1 CREATION OF TRUST. The Trust created hereby shall be known
as "Connecticut RRB Special Purpose Trust CL&P-1," in which name the Delaware
Trustee may conduct the business of the Trust, make and execute contracts and
other instruments on behalf of the Trust and sue and be sued on behalf of the
Trust. In addition, the Delaware Trustee may conduct the business of the Trust
in its own name, as trustee hereunder, to the extent the Delaware Trustee is
directed in accordance herewith; provided that the Delaware Trustee may rely
conclusively upon an opinion of counsel as to whether any proposed action is
necessary or appropriate. It is the intention that the Trust shall constitute a
not-for-profit business trust under the Delaware Business Trust Act (being
Chapter 38 of Title 12 of the Delaware Code, 12 DEL. C., ss. 3801 ET SEQ., as
the same may be amended from time to time and any successor statute) (the
"BUSINESS TRUST ACT"), that the Certificate Indenture shall be deemed a part of
this Declaration and that this Declaration (together with the Certificate
Indenture) shall constitute the governing instrument of the Trust. To the extent
that the provisions of this Declaration and the Certificate Indenture conflict
with respect to the issuance of the Certificates and the rights of the holders
thereof, the Certificate Indenture shall control. The Delaware Trustee and the
Certificate Trustee shall file the Certificate of Trust, substantially in the
form attached hereto as EXHIBIT A, pursuant to ss. 3810 ET SEQ. of the Business
Trust Act in connection with the formation of the Trust as a not-for-profit
business trust under the Business Trust Act. The fiscal year of the Trust shall
be the calendar year.

         Section 2.2 TRUST AS FINANCING ENTITY. The Finance Authority hereby
finds and determines, and hereby represents and warrants, that the Trust
constitutes a "special purpose trust" and a "financing entity" within the
meaning of the Statute, and that the Trust is being established to issue "rate
reduction bonds" within the meaning of the Statute.

         Section 2.3 SITUS OF THE TRUST. The office of the Trust shall be in
care of the Delaware Trustee at the corporate trust office (the "OFFICE") at One

                                       2
<PAGE>

Rodney Square, Suite 102, 920 King Street, Wilmington, Delaware 19801,
Attention: Corporate Trust Administration (although any notice, direction,
consent or waiver given to the Delaware Trustee hereunder may be given in care
of the address set forth in Section 7.3(a) hereof), which Office shall be
located in Delaware, or at such other address in Delaware as the Delaware
Trustee may designate by written notice to the Finance Authority, the
Certificate Trustee, the Note Issuer, the Note Trustee, the Servicer, and the
holders of the Certificates, and the Trust shall conduct its business in such
Office, separate and apart from that of the Finance Authority and their
affiliates. If and to the extent required pursuant to the provisions of the
Business Trust Act, all bank accounts of the Trust maintained by the Delaware
Trustee, except those bank accounts maintained by the Certificate Trustee, shall
be located in the State of Delaware. Any bank accounts of the Trust maintained
by the Delaware Trustee that are not required to be located in the State of
Delaware by the Business Trust Act may be maintained in Delaware, New York or
Hartford, Connecticut, or such other location as is acceptable to the Finance
Authority. The Trust shall not have any employees in any state other than
Delaware; provided, however, that nothing herein shall restrict or prohibit the
Delaware Trustee (in its individual capacity but not as Delaware Trustee) from
having employees within or without the State of Delaware. If and to the extent
required pursuant to the provisions of the Business Trust Act, payments shall be
received by the Trust only in Delaware, and payments shall be made by the Trust
only from Delaware, except as otherwise provided in the Basic Documents. To the
extent the Business Trust Act does not require that payments be received in and
paid from Delaware, to the extent consistent with such act and the Basic
Documents, payments may be received and made by the Trust in and from Delaware,
New York or Hartford, Connecticut, or such other location as is acceptable to
the Finance Authority. To the extent required pursuant to the provisions of the
Business Trust Act, the Delaware Trustee shall conduct the Trust's activities
from Delaware, sign documents on behalf of the Trust in Delaware and maintain
business records on behalf of the Trust in Delaware.

         Section 2.4 PURPOSES AND POWERS.

            (a) The Trust shall have the power and authority to, and is
constituted solely for the purpose of, acquiring and holding the Notes and
issuing the Certificates, applying the proceeds of the Notes to the payment of
the Certificates and entering into and performing its obligations under each of
the Basic Documents to which it may be a party (which functions the Delaware
Trustee shall perform or cause to be performed on behalf of the Trust), and,
except as set forth herein, the Delaware Trustee is not authorized or empowered
to acquire any other investments or engage in any other activities on behalf of
the Trust and, in particular, the Delaware Trustee is not authorized or
empowered to do anything that would cause the Trust to fail to qualify as a
"grantor trust" for federal income tax purposes.

            (b) The Delaware Trustee shall have all rights and powers set forth
herein and, to the extent not inconsistent herewith, in the Business Trust Act
with respect to accomplishing the purposes of the Trust.

         Section 2.5 TRUST PROPERTY.

            (a) The Finance Authority hereby assigns, transfers, conveys and
sets over to the Delaware Trustee on behalf of the Trust the sum of $1.00. The
Delaware Trustee hereby acknowledges receipt of such amount in trust from the

                                       3
<PAGE>

Finance Authority, which amount shall constitute the initial trust property.

            (b) Upon issuance of the Certificates and purchase of the Notes, the
holders of the Certificates shall become the sole and exclusive beneficial
owners of the Trust estate established hereby. The Delaware Trustee hereby
declares that it shall hold the Notes, the security interest in the transition
property (as defined in the Statute) securing the Notes, any other assets
acquired directly or indirectly from the Note Issuer and the proceeds therefrom
(the "TRUST PROPERTY") in trust as herein provided for the benefit of the
holders of the Certificates, and in the event that floating rate Certificates
are issued, for the benefit of any swap counterparty which enters into a Swap
Agreement with respect to such Certificates, subject to the rights of such
holders under the Certificate Indenture, from and after such date until
termination of the Trust as herein provided, or under the Basic Documents.

            (c) Legal title to the Trust Property shall be vested at all times
in the Trust as a separate legal entity except where applicable law in any
jurisdiction requires title to any part of the Trust Property to be vested in a
trustee or trustees, in which case title shall be deemed to be vested in the
Delaware Trustee, a co-trustee and/or a separate trustee, as the case may be.

         Section 2.6 ISSUANCE OF CERTIFICATES. The Trust shall execute and
deliver the Certificates only upon satisfaction of the terms of the Certificate
Indenture. The Certificates of each Class shall represent undivided beneficial
interests in the assets of the Trust consisting of the Notes of the
corresponding Class and, in the case of floating rate Certificates, any related
Swap Agreement, and payments thereon, and shall be issued in accordance with the
terms of the Certificate Indenture.

         Section 2.7 ORGANIZATIONAL EXPENSES. The Delaware Trustee shall be
reimbursed, but solely from amounts payable by the Note Issuer under a fee and
indemnity agreement (the "FEE AND INDEMNITY AGREEMENT"), for organizational
expenses of the Trust as they may arise. The Delaware Trustee shall have no
recourse against the Finance Authority or against the Notes or the payments
thereon and proceeds thereof, for the reimbursement of such expenses.

         Section 2.8 NO LIABILITY OF THE FINANCE AUTHORITY OR ITS PERSONNEL. No
recourse shall be had by the Delaware Trustee for any claim based on this
Declaration, the Certificates, the Notes or the Basic Documents against any
official, member, director, officer, employee, consultant, agent or attorney of
the Finance Authority unless such claim is based upon the bad faith, fraud or
deceit of such person. No covenant, stipulation, obligation or agreement of the
Finance Authority contained in this Declaration shall be deemed to be a
covenant, stipulation, obligation or agreement of any present or future
official, member, director, officer, employee, consultant, agent or attorney of
the Finance Authority in his or her individual capacity, and any official,
member, director, officer, employee, consultant, agent or attorney of the
Finance Authority executing and delivering or directing the execution and
delivery of the Certificates shall not be liable personally thereon or be
subject to any personal liability or accountability by reason of the issuance of
the Certificates.

         Section 2.9 INDEPENDENT STATUS. The Trust and the Finance Authority
each covenant and agree to hold itself out to the public under its own name as a

                                       4
<PAGE>

separate and distinct entity and will each conduct its business so as not to
mislead others as to its identity. The Trust shall cause those financial
statements and other records required by law, or otherwise required, to be
prepared and maintained separate and apart from those of the Finance Authority.

         Section 2.10 Tax Treatment; Construction.

            (a) It is the intention of the parties hereto that the Trust shall
be treated as a "grantor trust" for federal income tax purposes and all
transactions contemplated by this Declaration will be reported consistently with
such treatment.

            (b) The provisions of this Declaration shall be construed, and the
affairs of the Trust shall be conducted, so as to achieve treatment of the Trust
as a "grantor trust" for federal income tax purposes. Accordingly,
notwithstanding any other provision hereof to the contrary, this Declaration
shall be construed to establish a class or classes of ownership interests, with
each class representing undivided beneficial interests in a separate specified
asset or set of assets of the Trust and facilitating the direct investment in
such assets by the holders of the Certificates. The assets of the Trust shall
consist of the Notes and other assets described in this Declaration, and the
Delaware Trustee shall have no power hereunder to vary the investment of the
holders of the Certificates.

                                   ARTICLE 3

                         DELIVERY OF CERTAIN DOCUMENTS

         Section 3.1 DOCUMENTS RELATING TO ISSUANCE OF CERTIFICATES. The
Delaware Trustee is hereby directed to execute and deliver on behalf of the
Trust from time to time and as instructed in writing by the Finance Authority,
all Basic Documents to which the Trust or the Delaware Trustee may be a party,
including the Certificate Indenture, and any amendment or supplement thereto,
the Note Purchase Agreement, the Fee and Indemnity Agreement, the Underwriting
Agreement, any Swap Agreement and all other documents and instruments as may be
necessary or desirable to issue the Certificates pursuant to the provisions of
the Certificate Indenture and to purchase the Notes pursuant to the Note
Purchase Agreement.

                                   ARTICLE 4

                              THE DELAWARE TRUSTEE

         Section 4.1 APPOINTMENT. For valuable consideration received, it is
mutually covenanted and agreed that the Delaware Trustee has been and by this
document is, appointed to serve as the trustee of the Trust in the State of
Delaware pursuant to Section 3807 of the Business Trust Act.

         Section 4.2 DUTIES AND RESPONSIBILITIES. It is understood and agreed
that, except as provided in Section 2.4 hereof, the duties and responsibilities
of the Delaware Trustee shall be limited to (a) executing and delivering on
behalf of the Trust all Basic Documents to which the Trust or the Delaware
Trustee may be a party and, to the extent required by Article 3 hereof, all
other documents and instruments referred to in Article 3 hereof, (b) accepting
legal process served on the Trust in the State of Delaware and (c) the execution

                                       5
<PAGE>

and delivery of all certifications required to be filed with the Secretary of
State of the State of Delaware in order to form, maintain and terminate the
existence of the Trust under the Business Trust Act. No implied covenants or
obligations shall be read into this Declaration against the Delaware Trustee.

         Section 4.3 PROHIBITED ACTIONS. Except as otherwise expressed herein
and as permitted under the Basic Documents, the Delaware Trustee shall not (i)
take any action with respect to any election by the Trust to file an amendment
to this Declaration, (ii) amend, change, modify or terminate any Basic Document,
or (iii) sell the Notes, any other Trust Property or any interest therein.

         Section 4.4 ACCEPTANCE OF THE TRUSTS. By the execution hereof, the
Delaware Trustee accepts the trusts created hereinabove.

         Section 4.5 LIMITATION OF LIABILITY. Except as otherwise expressly
required by this Declaration, the Delaware Trustee shall not have any duty or
liability with respect to the administration of the Trust, the investment of the
Trust's property or the payment of dividends or other distributions of income or
principal to the holders of the Certificates. The Delaware Trustee shall not be
liable for the acts or omissions of the Certificate Trustee or any other person,
nor shall the Delaware Trustee be liable for supervising or monitoring the
performance of the duties and obligations of the Certificate Trustee or any
other person. The Delaware Trustee shall not be personally liable under any
circumstances, except for its own willful misconduct or gross negligence. In
particular, but not by way of limitation:

            (a) the Delaware Trustee shall not be personally liable for any
error of judgment made in good faith by any officer within the corporate trust
department of the Delaware Trustee who has been assigned to perform or provide
trustee functions or services on behalf of the Trust;

            (b) no provision of this Declaration shall require the Delaware
Trustee to expend or risk its personal funds or otherwise incur any financial
liability in the performance of its rights or powers hereunder, if the Delaware
Trustee shall have reasonable grounds for believing that repayment of such funds
or indemnity satisfactory to it against such risk or liability is not reasonably
assured or provided to it;

            (c) it is expressly understood and agreed by the parties hereto that
(i) this Declaration is executed and delivered by First Union Trust Company,
National Association, not individually or personally but solely as Delaware
Trustee of the Trust, in the exercise of the powers and authority conferred and
vested in it, (ii) the representations, undertakings and agreements herein made
on the part of the Trust are made and intended not as personal representations,
undertakings and agreements by First Union Trust Company, National Association,
but are made and intended for the purpose of binding only the Trust, (iii)
nothing herein contained shall be construed as creating any liability of First
Union Trust Company, National Association, individually or personally, to
perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties who are signatories to
this Declaration and by any person claiming by, through or under such parties
and (iv) under no circumstances shall First Union Trust Company, National
Association, be personally liable for the payment of any indebtedness or
expenses of the Trust or be liable for the breach or failure of any obligation,

                                       6
<PAGE>

representation, warranty or covenant made or undertaken by or on behalf of the
Trust under this Declaration;

            (d) the Delaware Trustee shall not be personally responsible for the
validity or sufficiency of this Declaration, the Certificate Indenture or the
Certificates or for the due execution hereof by the Finance Authority;

            (e) in the exercise or administration of the trusts hereunder, the
Delaware Trustee (i) may act directly or through agents (including affiliates,
such as First Union Trust National Bank), attorneys, custodians or nominees
pursuant to agreements entered into with any of them, and the Delaware Trustee
shall not be liable for the default or misconduct or supervision of such agents,
attorneys, custodians or nominees if such agents, attorneys, custodians or
nominees shall have been selected by the Delaware Trustee in good faith and (ii)
may, at the expense of the Note Issuer, consult with attorneys, accountants and
other skilled persons to be selected in good faith and employed by it, and it
shall not be liable for anything done, suffered or omitted in good faith by it
in accordance with the advice or opinion of any such attorneys, accountants or
other skilled persons;

            (f) except as expressly provided in this Section 4.5, in accepting
and performing the trusts hereby created, the Delaware Trustee acts solely as
trustee for the Trust and not in its individual capacity, and all persons having
any claim against the Delaware Trustee by reason of the transactions
contemplated by this Declaration shall look only to the Trust's property for
payment or satisfaction thereof;

            (g) the Delaware Trustee's sole duty with respect to the custody,
safekeeping and physical preservation of the Trust Property shall be to deal
with such property in a manner similar to the manner in which the Delaware
Trustee deals with similar property for its own account, subject to the
protections and limitations on liability afforded to the Delaware Trustee under
this Declaration;

            (h) the Delaware Trustee shall have no duty or liability for or with
respect to the value, genuineness, existence or sufficiency of the Trust
Property or the payment of any taxes or assessments levied thereon or in
connection therewith;

            (i) the Delaware Trustee shall not be liable for any interest on any
moneys received by it on behalf of the Trust except as the Delaware Trustee may
otherwise agree with the Finance Authority;

            (j) moneys held by the Delaware Trustee on behalf of the Trust need
not be segregated from other moneys except as the Delaware Trustee may otherwise
agree with the Finance Authority or as otherwise required by law; and

            (k) the Delaware Trustee shall have the right at any time to seek
instructions concerning the administration of the Trust from any court of
competent jurisdiction.

                                       7
<PAGE>

         Section 4.6 COMPENSATION AND REIMBURSEMENT; INDEMNIFICATION.

            (a) Pursuant to the Fee and Indemnity Agreement, the Note Issuer has
agreed to pay, or cause to be paid, to the Delaware Trustee from time to time
compensation for its services and to reimburse it for its reasonable expenses
hereunder. The Delaware Trustee shall have no recourse against the Finance
Authority or against the Notes, the payments received thereon or the proceeds
therefrom, for the payment of such compensation or for the reimbursement of such
expenses, except as provided in the Note Indenture or the other Basic Documents.

            (b) Pursuant to the Fee and Indemnity Agreement, the Note Issuer has
agreed to indemnify, defend and hold harmless the Delaware Trustee and any of
the affiliates, officials, officers, directors, employees, consultants, counsel
and agents of the Delaware Trustee (the "DELAWARE TRUSTEE INDEMNIFIED PERSONS")
from and against any and all losses, claims, actions, suits, taxes, damages,
costs, expenses (including the reasonable fees and expenses of its counsel) and
liabilities (including liabilities under state or federal securities laws) of
any kind and nature whatsoever (collectively, "DELAWARE TRUSTEE EXPENSES"), to
the extent that such Delaware Trustee Expenses arise out of or are imposed upon
or asserted against such Delaware Trustee Indemnified Persons with respect to
the creation, operation or termination of the Trust, the execution, delivery or
performance of this Declaration or the transactions contemplated hereby;
provided, however, that the Note Issuer is not, and shall not be, required to
indemnify any Delaware Trustee Indemnified Person for any Delaware Trustee
Expenses that result from the willful misconduct or gross negligence of such
Delaware Trustee Indemnified Person. Pursuant to the Fee and Indemnity
Agreement, the obligations of the Note Issuer to indemnify the Delaware Trustee
Indemnified Persons shall survive the termination of this Declaration and the
resignation or removal of the Delaware Trustee. The Delaware Trustee is hereby
authorized to execute the Fee and Indemnity Agreement on behalf of the Trust and
to enforce the terms thereof on its own behalf and on behalf of the Trust.

            (c) Notwithstanding anything to the contrary in this Declaration,
the Delaware Trustee shall have no recourse against the Finance Authority or
against the Notes or the payments thereon and proceeds thereof, for payment of
any amounts required to be paid to the Delaware Trustee under the Fee and
Indemnity Agreement. The Delaware Trustee shall have a lien against the
Transition Property to secure payment of such amounts to the extent provided in
the Statute or the financing order issued pursuant thereto. The Note Issuer's
obligations to make payments of such amounts to the Delaware Trustee shall be
subject to the priorities set forth in Section 8.02 of the Note Indenture.

         Section 4.7 RESIGNATION. The Delaware Trustee may resign upon 30 days'
prior written notice to the Certificate Trustee, the Finance Authority and the
Trust; provided, however, that a successor Delaware Trustee satisfactory to the
Finance Authority shall have been appointed and agreed to serve. If a successor
Delaware Trustee shall not have been appointed by the Finance Authority within
such 30-day period, the Delaware Trustee may apply to the Court of Chancery of
the State of Delaware for the appointment of a successor Delaware Trustee. Any
successor Delaware Trustee must satisfy the requirement of Section 3807(a) of
the Business Trust Act.

                                       8
<PAGE>

         Section 4.8 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE. First
Union Trust Company, National Association, hereby represents and warrants to the
other parties hereto that:

            (a) It is a national banking association duly organized, validly
existing and in good standing under the laws of the United States.

            (b) It has full power, authority and legal right to execute, deliver
and perform this Declaration, and has taken all necessary action to authorize
the execution, delivery and performance by it of this Declaration.

            (c) The execution, delivery and performance by it of this
Declaration (i) do not violate any requirement of law governing its banking and
trust powers or any order, writ, judgment or decree of any court, arbitrator or
governmental authority applicable to it or any of its assets, (ii) do not
violate any provision of its articles of association or by-laws, and (iii) do
not violate any provision of, or constitute, with or without notice or lapse of
time, a default under, or result in the creation or imposition of any Lien on
any properties included in the Trust pursuant to the provisions of any mortgage,
indenture, contract, agreement or other undertaking to which it is a party,
which violation, default or Lien could reasonably be expected to have a
materially adverse effect on its performance or its ability to perform its
duties as a Trustee under this Declaration or on the transactions contemplated
in this Declaration.

            (d) Its execution, delivery and performance of this Declaration
shall not require the authorization, consent or approval of, the giving of
notice to, the filing or registration with, or the taking of any other action in
respect of, any governmental authority or agency regulating the banking and
corporate trust activities of banks or trust companies in the jurisdiction in
which the Trust was formed (except for the filing of the Certificate of Trust
with the Secretary of State of the State of Delaware).

            (e) This Declaration has been duly executed and delivered by it and,
assuming due authorization, execution and delivery hereof by the other parties
hereto and the Certificate Indenture, constitutes the legal, valid and binding
agreement of it, enforceable against it in accordance with the terms of this
Declaration, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, and other similar laws affecting the enforcement of creditors'
rights in general and by general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law.

         Section 4.9 RELIANCE; ADVICE OF COUNSEL.

            (a) The Delaware Trustee shall incur no liability to anyone in
acting upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or paper reasonably
believed by it to be genuine and reasonably believed by it to be signed by the
proper party or parties and need not investigate any fact or matter pertaining
to or in any such document. The Delaware Trustee may accept a certified copy of
a resolution of the board of directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect unless and until the Delaware
Trustee receives a certified copy of a resolution of such board of directors or
other body revoking the same. As to any fact or matter the method of the

                                       9
<PAGE>

determination of which is not specifically prescribed herein, the Delaware
Trustee may for all purposes hereof rely on a certificate, signed by the
president or any vice president or by the treasurer or other authorized officers
of the relevant party, as to such fact or matter, and such certificate shall
constitute full protection to it for any action taken or omitted to be taken by
it in good faith in reliance thereon.

            (b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Declaration and the
Basic Documents, the Delaware Trustee: (i) may, at the expense of the Note
Issuer or any other party, to the extent provided in the Fee and Indemnity
Agreement, act directly or through its agents, attorneys, custodians or nominees
(including, if necessary, the granting of a power of attorney to any of its
officers not otherwise authorized to execute and deliver any Basic Document,
Certificate or other documents related thereto and to take any action in
connection therewith on behalf of the Delaware Trustee) pursuant to agreements
entered into with any of them, and the Delaware Trustee shall not be liable for
the conduct or misconduct of such agents, attorneys, custodians or nominees if
such agents, attorneys, custodians or nominees shall have been selected by the
Delaware Trustee in good faith; and (ii) may, at the expense of the Note Issuer
or any other party, to the extent provided in the Fee and Indemnity Agreement,
consult with counsel, accountants and other professionals to be selected in good
faith by it. The Delaware Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the opinion or advice
of any such counsel, accountant or other such persons reasonably relied on and
which, according to such opinion or advice, is not contrary to this Declaration
or any other Basic Document.

         Section 4.10 DELAWARE TRUSTEE MAY OWN CERTIFICATES. The Delaware
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates and may deal with CL&P, the Note Issuer, the Note Trustee, the
Certificate Trustee, the Servicer, the Finance Authority and their respective
affiliates and with the holders of the Certificates in transactions in the same
manner as the Delaware Trustee would have if it were not a trustee under this
Declaration.

         Section 4.11 RIGHT TO RECEIVE INSTRUCTIONS. In the event that the
Delaware Trustee is unable to decide between alternative courses of action, or
is unsure as to the application of any provision of this Declaration or any
Basic Document, or such provision is ambiguous as to its application, or is, or
appears to be, in conflict with any other applicable provision, or in the event
that this Declaration or any Basic Document permits any determination by the
Delaware Trustee or is silent or is incomplete as to the course of action which
the Delaware Trustee is required to take with respect to a particular set of
facts, the Delaware Trustee may give notice (in such form as shall be
appropriate under the circumstances) to the Finance Authority requesting
instructions and, to the extent that the Delaware Trustee shall have acted or
refrained from acting in good faith in accordance with any instructions received
from the Finance Authority, the Delaware Trustee shall not be liable on account
of such action or inaction to any Person, including any Certificateholder. If
the Delaware Trustee shall not have received appropriate instructions within ten

                                       10
<PAGE>

days of such notice (or within such shorter period of time as may be specified
in such notice) the Delaware Trustee may, but shall be under no duty to, take or
refrain from taking such action, not inconsistent with this Declaration of any
Basic Document, as the Delaware Trustee shall deem to be in the best interests
of the beneficial owners, and the Delaware Trustee shall have no liability to
any Person for such action or inaction.

         Section 4.12 NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS. The Delaware Trustee shall not have any duty or obligation to
manage, make any payment in respect of, register, record, sell, dispose of or
otherwise deal with the Trust Property, prepare or file any tax, qualification
to do business or securities law filings or reports or to otherwise take or
refrain from taking any action under, or in connection with, any document
contemplated hereby to which the Trust is a party, except as expressly provided
by the terms of this Declaration and no implied duties or obligations shall be
read into this Declaration against the Delaware Trustee. The Delaware Trustee
nevertheless agrees that it will, at its own cost and expense, promptly take all
action as may be necessary to discharge any liens on any part of the Trust
Property which result from claims against the Delaware Trustee personally that
are not related to the ownership or the administration of the Trust Property or
the transactions contemplated by the Basic Documents.

                                   ARTICLE 5

             REPRESENTATIONS AND WARRANTIES OF THE FINANCE AUTHORITY

         Section 5.1 REPRESENTATIONS AND WARRANTIES OF FINANCE AUTHORITY. The
Finance Authority, as a settlor of the Trust, will represent and warrant, as of
the Issuance Date of the Certificates, the following:

            (a) the Finance Authority has full power, authority and legal right,
and has taken all action necessary, to execute and deliver this Declaration and
to fulfill its obligations under, and to consummate the transactions
contemplated by, this Declaration;

            (b) the making and performance by the Finance Authority of this
Declaration and all documents required to be executed and delivered by it
hereunder do not and will not violate any law or regulation of the jurisdiction
of its organization or any other law or regulation applicable to it or violate
any provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of any lien on any
properties included in the Trust Property pursuant to, any mortgage, indenture,
contract, agreement or other undertaking to which the Finance Authority is a
party;

            (c) this Declaration has been duly executed and delivered by the
Finance Authority and constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms; and

            (d) to the best knowledge of the Finance Authority, all consents,
licenses, approvals, authorizations, exemptions, registrations, filings,
opinions and declarations from or with any agency, department, administrative
authority, statutory corporation, or judicial entity necessary for the validity
or enforceability of the Finance Authority's obligations under this Declaration
have been obtained, and no governmental authorizations other than any already
obtained are required in connection with the execution, delivery and performance
of this Declaration by the Finance Authority.

                                       11
<PAGE>

                                   ARTICLE 6

                           TERMINATION OF DECLARATION

         Section 6.1 TERMINATION OF THE TRUST. The respective obligations and
responsibilities of the Finance Authority, the Delaware Trustee and the Trust
created hereby shall terminate with respect to any class of Certificates one
year and one day following the distribution to all holders of the Certificates
of such class of all amounts required to be distributed to them pursuant to the
Certificate Indenture and the disposition of all property held as part of the
Trust Property with respect to such class of Certificates. Upon the redemption
of all classes of Certificates and at the election of the Finance Authority, the
Trust shall dissolve. The Finance Authority shall pay or provide for the payment
of all remaining liabilities of the Trust and the Delaware Trustee in accordance
with Section 3808 of the Business Trust Act, but solely from amounts payable to
the Finance Authority under the Fee and Indemnity Agreement, and thereupon the
Delaware Trustee shall file a certificate of cancellation under the Business
Trust Act and the Trust shall terminate, and any fees associated with such
filing shall be paid from amounts payable to the Finance Authority under the Fee
and Indemnity Agreement.

         Notice of any termination of the Trust shall be mailed by the
Certificate Trustee promptly in accordance with the Certificate Indenture.

                                   ARTICLE 7

                                 MISCELLANEOUS

         Section 7.1 NO LEGAL TITLE TO TRUST PROPERTY. As provided in Section
2.5(c) hereof, the Finance Authority shall not have legal title to any part of
the Trust Property.

         Section 7.2 LIMITATIONS ON RIGHTS OF OTHERS. Except as otherwise
provided herein, the provisions of this Declaration are solely for the benefit
of the Finance Authority, the Delaware Trustee, the Certificate Trustee, the
holders of the Certificates and any swap counterparty to any Swap Agreement, and
nothing in this Declaration, whether express or implied, shall be construed to
give to any other person any legal or equitable right, remedy or claim in the
Trust Property or under or in respect of this Declaration or any covenants,
conditions or provisions contained herein.

         Section 7.3 NOTICES. (a) Unless otherwise specifically provided herein,
all notices, directions, consents and waivers required under the terms and
provisions of this Declaration shall be in English and in writing, and any such
notice, direction, consent or waiver may be given by United States mail, courier
service, facsimile transmission or electronic mail (confirmed by telephone,
United States mail or courier service in the case of notice by facsimile
transmission or electronic mail) or any other customary means of communication,
and any such notice, direction, consent or waiver shall be effective when
delivered, or if mailed, three days after deposit in the United States mail with

                                       12
<PAGE>

proper postage for ordinary mail prepaid,

         if to the Trust, to:

                  First Union Trust Company, National Association,
                       as Delaware Trustee for the
                       Connecticut RRB Special Purpose Trust CL&P-1
                  One Rodney Square, Suite 102
                  920 King Street
                  Wilmington, DE 19801
                  Attention:  Corporate Trust Administration
                  Facsimile:  (302) 888-7544
                  Telephone:  (302) 888-7539

                  with a copy to the Finance Authority at the address
                  listed herein.

         if to the Finance Authority, to:

                  Office of the Treasurer
                  55 Elm Street
                  Hartford, CT  06106
                  Attention:  Assistant Treasurer - Debt Management
                  Facsimile:  (860) 702-3127
                  Telephone:  (860) 702-3034

         if to the Delaware Trustee, to:

                  First Union Trust Company, National Association,
                  One Rodney Square, Suite 102
                  920 King Street
                  Wilmington, DE 19801
                  Attention:  Corporate Trust Administration
                  Facsimile:  (302) 888-7544
                  Telephone:  (302) 888-7539

            (b) The Trust, the Finance Authority or the Delaware Trustee, by
notice to the others, may designate additional or different addresses for
subsequent notices or communications.

            (c) If a notice or communication is mailed in the manner provided
above within the time prescribed, it is conclusively presumed to have been duly
given, whether or not the addressee receives it.

         Section 7.4 SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this Declaration shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Declaration and shall in no way affect the validity or
enforceability of the other provisions of this Declaration.

         Section 7.5 AMENDMENTS WITHOUT CONSENT OF HOLDERS. This Declaration may
be amended by the Delaware Trustee and the Finance Authority with the prior
written consent of the Certificate Trustee but without the consent of any of the

                                       13
<PAGE>

holders of the Certificates (but with prior notice to the rating agencies named
in the Certificate Indenture) to (i) cure any ambiguity; (ii) correct or
supplement any provision in this Declaration that may be defective or
inconsistent with any other provision in this Declaration; (iii) add to the
covenants, restrictions or obligations of the Delaware Trustee for the benefit
of the holders of the Certificates; (iv) evidence and provide for the acceptance
of the appointment of a successor trustee with respect to the Trust Property and
add to or change any provisions as shall be necessary to facilitate the
administration of the trusts hereunder by more than one trustee; or (v) add,
change or eliminate any other provision of this Declaration in any manner that
shall not, as evidenced by an opinion of counsel to the Finance Authority,
adversely affect in any material respect the interests of the holders of the
Certificates; provided, however, that this Declaration shall not be amended in
any manner which (i) would cause the Trust to be characterized as other than a
"grantor trust" for federal income tax purposes or (ii) would affect the rights
of the Finance Authority hereunder or under the Basic Documents without the
prior written consent of the Finance Authority or receipt of an opinion of
counsel to the Finance Authority to the effect that such amendment does not
adversely affect, in any manner, the interests of the Finance Authority under
this Declaration. After the execution of any such amendment, the party that
sought such amendment shall furnish a copy thereof to the rating agencies named
in the Certificate Indenture.

         Section 7.6 AMENDMENTS WITH CONSENT OF HOLDERS. This Declaration may be
amended from time to time by the Delaware Trustee and the Finance Authority with
the consent of the Certificate Trustee and the holders of Certificates whose
Certificates evidence not less than a majority of the outstanding principal
amount of each affected class of the Certificates as of the close of business on
the preceding Certificate payment date (which consent, whether given pursuant to
this Section 7.6 or pursuant to any other provision of this Declaration or the
Certificate Indenture, shall be conclusive and binding on such Certificate
holder and on all future holders of such Certificates and of any Certificates
issued upon the transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made upon the Certificates) (and with
prior notice to the rating agencies named in the Certificate Indenture) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Declaration, or of modifying in any manner the rights
of the holders of the Certificates; provided, however, that no such amendment
shall (a) increase or reduce in any manner the amount of, or accelerate or delay
the timing of, payments that shall be required to be made on any Certificate
without the consent of the holder thereof; (b) adversely affect the rating of
any of the Certificates without the consent of the holders of all of the
outstanding principal amount of such affected Certificates; or (c) reduce the
aforesaid majority required to consent to any such amendment, without the
consent of all of the holders of the Certificates then outstanding. Prior to the
execution of any such amendment, supplement or consent, the party seeking such
amendment shall furnish written notification of the substance of such amendment,
supplement or consent to the rating agencies named in the Certificate Indenture.
After the execution of any such amendment, supplement or consent, the party that
sought such amendment shall furnish a copy thereof to the rating agencies named
in the Certificate Indenture.

         Section 7.7 FORM OF AMENDMENTS.

            (a) Promptly after the execution of any amendment, supplement or
consent pursuant to Section 7.5 and Section 7.6, the party that sought such

                                       14
<PAGE>

amendment shall furnish written notification of the substance of such amendment
or consent to the Certificate Trustee and the Finance Authority.

            (b) The manner of obtaining such consents (and any other consents of
holders of the Certificates provided for in this Declaration or in any other
Basic Document) and of evidencing the authorization of the execution thereof by
holders of the Certificates shall be subject to such reasonable requirements as
the Delaware Trustee may prescribe to the extent not inconsistent with the
provisions of the Basic Documents.

            (c) Promptly after the execution of any amendment to the Certificate
of Trust, the Delaware Trustee shall cause the filing of such amendment with the
Secretary of State of the State of Delaware.

            (d) Prior to the execution of any amendment to this Declaration, the
Delaware Trustee shall receive an opinion of counsel from the party seeking such
amendment to the effect that (i) the execution of such amendment is authorized
or permitted by this Declaration and (ii) such execution will not adversely
affect the treatment of the Trust as a "grantor trust" for federal income tax
purposes.

            (e) The Delaware Trustee may, but shall not be obligated to, enter
into any such amendment or supplement pursuant to Section 7.5 and Section 7.6
that affects and only affects the Delaware Trustee's own rights, duties or
immunities under this Declaration or otherwise.

         Section 7.8 COUNTERPARTS. This Declaration may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument.

         Section 7.9 SUCCESSORS. All covenants and agreements contained herein
shall be binding upon, and inure to the benefit of the Finance Authority, the
Trust and the Delaware Trustee and their respective successors and permitted
assigns, all as herein provided.

         Section 7.10 NO PETITION COVENANT. Notwithstanding any other provision
of this Declaration or any Basic Document and notwithstanding any prior
termination of this Declaration, the Delaware Trustee and the Finance Authority
shall not, prior to the date which is one year and one day after the termination
of this Declaration, acquiesce, petition or otherwise invoke or cause the Trust
to invoke the process of any governmental authority for the purpose of
commencing or sustaining a case against the Trust under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Trust or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Trust.

         Section 7.11 HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.

         Section 7.12 GOVERNING LAW. THIS DECLARATION SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT

                                       15
<PAGE>

REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       16
<PAGE>

         IN WITNESS WHEREOF, the Delaware Trustee and the Finance Authority have
caused this Declaration of Trust to be duly executed by duly authorized
officers, all as of the day and year first above written.

                                    STATE OF CONNECTICUT, acting through the
                                    Office of the State Treasurer, as Finance
                                    Authority and Settlor

                                    By:
                                          --------------------------------------
                                          Name:   Denise L. Nappier
                                          Title:  Treasurer of the State of
                                                  Connecticut

                                    FIRST UNION TRUST COMPANY, NATIONAL
                                    ASSOCIATION, as Delaware Trustee

                                    By:
                                          --------------------------------------
                                          Name:
                                          Title:
<PAGE>

                                                                EXHIBIT A TO THE
                                                            DECLARATION OF TRUST

                             CERTIFICATE OF TRUST OF
                  CONNECTICUT RRB SPECIAL PURPOSE TRUST CL&P-1

         THIS CERTIFICATE OF TRUST of Connecticut RRB Special Purpose Trust
CL&P-1 (the "TRUST"), dated as of March __, 2001, is being duly executed and
filed by the undersigned, as trustees, to form a business trust under the
Delaware Business Trust Act (12 Del. C., ss. 3801 ET SEQ.) (the "ACT").

         1. NAME. The name of the business trust formed hereby is "Connecticut
RRB Special Purpose Trust CL&P-1."

         2. DELAWARE TRUSTEE. The name and business address of the trustee of
the Trust in the State of Delaware are First Union Trust Company, National
Association, One Rodney Square, Suite 102, 920 King Street, Wilmington, Delaware
19801.

         3. EFFECTIVE DATE. This Certificate of Trust shall be effective as of
the date filed.

         4. SERIES. The Trust shall be a series Trust and shall issue series of
beneficial interests having separate rights, powers and duties with respect to
property or obligations of the Trust, as provided in Section 3804 and 3806(b)(2)
of the Act, such that the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a particular series shall
be enforceable against the assets of such series only, and not against the
assets of the Trust generally or any other series.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         IN WITNESS WHEREOF, the undersigned, being the sole trustees of the
Trust, have executed this Certificate of Trust in accordance with Section
3811(a) of the Act.

                                   FIRST UNION TRUST COMPANY, NATIONAL
                                   ASSOCIATION, not in its individual capacity
                                   but solely as Delaware Trustee

                                   By:
                                         ---------------------------------------
                                         Name:
                                         Title:

                                   FIRST UNION TRUST COMPANY, NATIONAL
                                   ASSOCIATION, not in its individual capacity
                                   but solely as Certificate Trustee

                                   By:
                                         ---------------------------------------
                                         Name:
                                         Title:TRANSITION PROPERTY PURCHASE AND SALE AGREEMENT

                                     between

                                CL&P FUNDING LLC

                                   Note Issuer

                                       and

                     THE CONNECTICUT LIGHT AND POWER COMPANY

                                     Seller

                           Dated as of March __, 2001
<PAGE>

      This TRANSITION PROPERTY PURCHASE AND SALE AGREEMENT, dated as of March
__, 2001, is between CL&P Funding LLC, a Delaware limited liability company (the
"NOTE ISSUER"), and The Connecticut Light and Power Company, a Connecticut
corporation (together with its successors in interest to the extent permitted
hereunder, the "SELLER").

                                    RECITALS

      WHEREAS, the Note Issuer desires to purchase the Transition Property (as
defined herein) created pursuant to the Statute and the Financing Order (each as
defined herein); and

      WHEREAS, the Seller is willing to sell the Transition Property to the Note
Issuer.

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:

                                   ARTICLE 1

                                   DEFINITIONS

      Section 1.01. DEFINITIONS. Whenever used in this Agreement, the following
words and phrases shall have the following meanings:

      "ADMINISTRATION AGREEMENT" means the Administration Agreement dated as of
March __, 2001 between The Connecticut Light and Power Company, as
Administrator, and the Note Issuer, as amended and supplemented from time to
time.

      "AGREEMENT" means this Transition Property Purchase and Sale Agreement, as
amended and supplemented from time to time.

      "AUTHORIZED OFFICER" means an officer of the Seller listed on the list of
Authorized Officers delivered by the Seller to the Note Trustee and the
Certificate Trustee on the date of issuance of the Certificates (as such list
may be modified or supplemented by the Seller from time to time).

      "BACK-UP SECURITY INTEREST" has the meaning specified in Section 2.01.

      "BASIC DOCUMENTS" means, collectively, this Agreement, the Note Indenture,
the Declaration of Trust, the Certificate Indenture, the Servicing Agreement,
the Administration Agreement, the Note Purchase Agreement, the Underwriting
Agreement, the Fee and Indemnity Agreement, the Inter-Creditor Agreement and the
Swap Agreement.

      "BUSINESS DAY" means any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in New York, New York, Hartford,
Connecticut or Wilmington, Delaware are authorized or obligated by law,
regulation or executive order to remain closed.

      "CERTIFICATE INDENTURE" means the Certificate Indenture dated as of March
__, 2001, between the Certificate Issuer and the Certificate Trustee, as amended
and supplemented from time to time.
<PAGE>

      "CERTIFICATE TRUSTEE" means the Person acting as trustee under the
Certificate Indenture.

      "CERTIFICATEHOLDERS" has the meaning specified in Section 1.01(a) of the
Certificate Indenture.

      "CERTIFICATES" means the Connecticut RRB Special Purpose Trust CL&P-1 Rate
Reduction Certificates issued under the Certificate Indenture.

      "CLOSING DATE" means March __, 2001.

      "COLLECTION ACCOUNT" has the meaning specified in Section 8.02(a) of the
Note Indenture.

      "CORPORATE TRUST OFFICE" has the meaning specified in Section 1.01(a) of
the Note Indenture.

      "CTA" means the "competitive transition assessment" as defined in the
Statute.

      "DATE OF BREACH" means, with respect to the repurchase obligation
specified in Section 5.01(b), the date of a breach of a representation or
warranty that triggers such repurchase obligation.

      "DECLARATION OF TRUST" means the Declaration of Trust dated as of March
__, 2001, among the Finance Authority and the Delaware Trustee, as amended and
supplemented from time to time.

      "DELAWARE TRUSTEE" means the Person acting as trustee under the
Declaration of Trust.

      "DPUC" means the Connecticut Department of Public Utility Control and any
successor thereto.

      "DPUC REGULATIONS" has the meaning specified in Section 1.01 of the
Servicing Agreement.

      "FEE AND INDEMNITY AGREEMENT" means the Fee and Indemnity Agreement dated
as of March __, 2001 among the Note Issuer, the Delaware Trustee, the
Certificate Trustee, the Trust and the Finance Authority, as amended and
supplemented from time to time.

      "FINANCE AUTHORITY" means, the State of Connecticut, acting through the
office of the State Treasurer.

      "FINANCING ORDER" means the order of the DPUC, issued on November 8, 2000
and supplemented on December 12, 2000 and March 12, 2001 in DPUC-00-05-01.

      "FITCH" means Fitch, Inc. or its successor.

      "INDEMNIFIED PERSON" has the meaning specified in Section 5.01(c), Section
5.01(d), Section 5.01(e) or in Section 5.01(h), for the purposes set forth
therein.

      "INTER-CREDITOR AGREEMENT" means the Inter-Creditor Agreement dated as of
March __, 2001 among Citicorp North America, Inc., Citibank, N.A., the Seller,
the Note Trustee, the Note Issuer and CL&P Receivables Corporation, as amended,
supplemented or modified from time to time.

                                      -2-
<PAGE>

      "ISSUANCE ADVICE LETTER" means the initial Issuance Advice Letter, dated
March __, 2001, filed with the DPUC by the Seller pursuant to the Financing
Order.

      "LIEN" means a security interest, lien, charge, pledge or encumbrance of
any kind.

      "LOSSES" has the meaning specified in Section 5.01(e).

      "MOODY'S" means Moody's Investors Service, Inc. or its successor.

      "NOTE INDENTURE" means the Note Indenture dated as of March __, 2001,
between the Note Issuer and the Note Trustee, as amended and supplemented from
time to time.

      "NOTE ISSUER" has the meaning set forth in the preamble of this Agreement.

      "NOTE PURCHASE AGREEMENT" means the Note Purchase Agreement dated as of
March __, 2001 between the Note Issuer and the Trust, as amended and
supplemented from time to time.

      "NOTE REGISTER" has the meaning specified in Section 2.05 of the Note
Indenture.

      "NOTE TRUSTEE" means the Person acting as trustee under the Note
Indenture.

      "NOTEHOLDER" or "HOLDER" means the Person in whose name a Note is
registered on the Note Register.

      "NOTES" means the CL&P Funding LLC Notes issued under the Note Indenture.

      "OFFICER'S CERTIFICATE" means a certificate signed by the chairman of the
board, the chief executive officer, the president, the vice chairman of the
board, any vice president, the treasurer, any assistant treasurer, the
secretary, any assistant secretary, the controller or the finance manager of the
Seller.

      "OPERATING EXPENSE" has the meaning specified in Section 1.01(a) of the
Note Indenture.

      "OPINION OF COUNSEL" means one or more written opinions of counsel who may
be an employee of or counsel to the party providing such opinion of counsel,
which counsel shall be reasonably acceptable to the party receiving such opinion
of counsel.

      "OUTSTANDING AMOUNT" has the meaning specified in Section 1.01(a) of the
Note Indenture.

      "OVERCOLLATERALIZATION SUBACCOUNT" has the meaning specified in Section
8.02(a) of the Note Indenture.

      "PERSON" means any individual, corporation, limited liability company,
estate, partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.

      "RATING AGENCIES" means, collectively, S&P, Moody's and Fitch.

      "REPURCHASE DATE" means the date that is five Business Days after the date
that is (i) if the terms of Section 5.01(b)(i)(A) and Section 5.01(b)(i)(B)(2)
are applicable, two Business Days after the Date of Breach if the Seller fails
to make the deposit required by Section 5.01(b)(i)(B)(2) or 90 days after the
Date of Breach if the Seller makes the deposit required by Section

                                      -3-
<PAGE>

5.01(b)(i)(B)(2); (ii) if the terms of Section 5.01(b)(ii) are applicable, 90
days after the Date of Breach; and (iii) if the terms of Section 5.01(b)(i)(A)
and Section 5.01(b)(i)(B)(1) are applicable, 90 days after the Date of Breach.

      "REQUIRED OVERCOLLATERALIZATION LEVEL" has the meaning specified in
Section 1.01(a) of the Note Indenture.

      "REPURCHASE PRICE" has the meaning specified in Section 5.01(b)(i).

      "RRB CHARGE" means the portion (which may become all) of the Seller's CTA
designated pursuant to the Financing Order as the RRB Charge, as the same may be
adjusted from time to time as provided in the Financing Order, and may in the
future include a pro rata component of any exit fee collected pursuant to
Section 16-245w of the Connecticut General Statutes.

      "RRB CHARGE COLLECTIONS" has the meaning specified in Section 1.01 of the
Servicing Agreement.

      "SELLER" has the meaning set forth in the preamble of this Agreement.

      "SERVICER DEFAULT" means an event specified in Section 7.01 of the
Servicing Agreement.

      "SERVICING AGREEMENT" means the Transition Property Servicing Agreement
dated as of March __, 2001 between The Connecticut Light and Power Company, as
Servicer, and the Note Issuer, as amended and supplemented from time to time.

      "S&P" means Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc. or its successor.

      "STATE TREASURER" means the Treasurer of the State of Connecticut.

      "STATUTE" means Connecticut General Statutes ss.ss. 16-245e to 16-245k.

      "SWAP AGREEMENT" means any interest rate swap agreement entered into by
the Certificate Issuer with respect to any class of Certificates, including,
without limitation, the ISDA Master Agreement and the related Schedule and
Confirmation between the Certificate Issuer and a swap counterparty, as same may
be amended or supplemented from time to time.

      "TRANSITION PROPERTY" means the transition property that exists under
Order 6 of Exhibit C to the Financing Order, including, without limitation, and
as provided therein, the RRB Charge included in special contract customer rates.

      "TRUST" or "CERTIFICATE ISSUER" means Connecticut RRB Special Purpose
Trust CL&P-1, a Delaware business trust.

      "UNDERWRITING AGREEMENT" means the Underwriting Agreement dated as of
March __, 2001 among The Connecticut Light and Power Company, the Note Issuer
and the underwriters named therein.

                                      -4-
<PAGE>

      Section 1.02. OTHER DEFINITIONAL PROVISIONS.

           (a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.

           (b) The words "hereof," "herein," "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Section, Schedule and
Exhibit references contained in this Agreement are references to Sections,
Schedules and Exhibits in or to this Agreement unless otherwise specified; and
the term "including" shall mean "including without limitation".

           (c) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms.

                                   ARTICLE 2

                        CONVEYANCE OF TRANSITION PROPERTY

      Section 2.01. CONVEYANCE OF TRANSITION PROPERTY. In consideration of the
Note Issuer's delivery to or upon the order of the Seller of $___________ net of
underwriting discounts and commissions, original issue discount, if any, and
other fees and expenses, the Seller does hereby irrevocably sell, transfer,
assign, set over and otherwise convey to the Note Issuer, WITHOUT RECOURSE OR
WARRANTY, except as specifically set forth herein, all right, title and interest
of the Seller in and to the Transition Property (such sale, transfer,
assignment, setting over and conveyance of the Transition Property includes, to
the fullest extent permitted by the Statute, the assignment of all revenues,
collections, claims, payments, money or proceeds of or arising from the RRB
Charge pursuant to the Financing Order). Such sale, transfer, assignment,
setting over and conveyance is hereby expressly stated to be a sale and,
pursuant to Section 16-245k(h) of the Statute, shall be treated as an absolute
transfer of all of the Seller's right, title and interest in (as in a true
sale), and not as a pledge or other financing of, the Transition Property. If
such sale, transfer, assignment, setting over and conveyance is held by any
court of competent jurisdiction not to be a true sale as provided in Section
16-245k(h) of the Statute, then such sale, transfer, assignment, setting over
and conveyance shall be treated as the creation of a security interest in the
Transition Property and, without prejudice to its position that it has
absolutely transferred all of its rights in the Transition Property (including,
to the fullest extent permitted by the Statute, the assignment of all revenues,
collections, claims, payments, money or proceeds of or arising from the RRB
Charge pursuant to the Financing Order) to the Note Issuer, the Seller hereby
grants a security interest in the Transition Property to the Note Issuer (the
"Back-Up Security Interest").

                                      -5-
<PAGE>

                                   ARTICLE 3

                   REPRESENTATIONS AND WARRANTIES OF SELLER

      Subject to Section 3.09 hereof, the Seller makes the following
representations and warranties, as of the Closing Date, on which the Note Issuer
has relied in acquiring the Transition Property.

      Section 3.01. ORGANIZATION AND GOOD STANDING. The Seller is duly organized
and validly existing as a corporation in good standing under the laws of the
State of Connecticut, with the requisite corporate power and authority to own
its properties as such properties are currently owned and to conduct its
business as such business is now conducted by it, and has the requisite
corporate power and authority to own the Transition Property.

      Section 3.02. DUE QUALIFICATION. The Seller is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership or
lease of property or the conduct of its business shall require such
qualifications, licenses or approvals (except where the failure to so qualify or
obtain such licenses and approvals would not be reasonably likely to have a
material adverse effect on the Seller's business, operations, assets, revenues
or properties).

      Section 3.03. POWER AND AUTHORITY. The Seller has the requisite corporate
power and authority to execute and deliver this Agreement and to carry out its
terms; and the execution, delivery and performance of this Agreement have been
duly authorized by all necessary corporate action on the part of the Seller.

      Section 3.04. BINDING OBLIGATION. This Agreement constitutes a legal,
valid and binding obligation of the Seller enforceable against it in accordance
with its terms, subject to applicable insolvency, reorganization, moratorium,
fraudulent transfer and other laws relating to or affecting creditors' or
secured parties' rights generally from time to time in effect and to general
principles of equity (including concepts of materiality, reasonableness, good
faith and fair dealing), regardless of whether considered in a proceeding in
equity or at law.

      Section 3.05. NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not:
(i) conflict with or result in any breach of any of the terms and provisions of,
nor constitute (with or without notice or lapse of time) a default under, the
articles of organization or by-laws of the Seller, or any material indenture,
agreement or other instrument to which the Seller is a party or by which it is
bound; (ii) result in the creation or imposition of any Lien upon any of the
Seller's properties pursuant to the terms of any such indenture, agreement or
other instrument (other than any Lien that may be granted under the Basic
Documents or any Lien created pursuant to Section 245k(g) of the Statute); or
(iii) violate any existing law or any existing order, rule or regulation
applicable to the Seller of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties.

                                      -6-
<PAGE>

      Section 3.06. NO PROCEEDINGS. There are no proceedings pending and, to the
Seller's knowledge, there are no proceedings threatened and, to the Seller's
knowledge, there are no investigations pending or threatened, before any court,
federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties involving
or relating to the Seller or the Note Issuer or, to the Seller's knowledge, any
other Person: (i) asserting the invalidity of this Agreement, any of the other
Basic Documents, the Notes, the Certificates, the Statute or the Financing
Order, (ii) seeking to prevent the issuance of the Notes or the Certificates or
the consummation of any of the transactions contemplated by this Agreement or
any of the other Basic Documents, (iii) seeking any determination or ruling that
might materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, this Agreement, any of
the other Basic Documents, the Notes or the Certificates or (iv) seeking to
adversely affect the federal or state income tax classification of the Notes or
the Certificates as debt.

      Section 3.07. APPROVALS. No approval, authorization, consent, order or
other action of, or filing with, any court, federal or state regulatory body,
administrative agency or other governmental instrumentality is required in
connection with the execution and delivery by the Seller of this Agreement, the
performance by the Seller of the transactions contemplated hereby or the
fulfillment by the Seller of the terms hereof, except those that have been
obtained or made and those that the Seller, in its capacity as Servicer under
the Servicing Agreement, is required to make in the future pursuant to the
Servicing Agreement and post closing filings required in connection therewith.

      Section 3.08. THE TRANSITION PROPERTY.

         (a) TITLE. It is the intention of the parties hereto that the transfer
and assignment herein contemplated constitute a sale of the Transition Property
from the Seller to the Note Issuer and that no interest in, or title to, the
Transition Property shall be part of the Seller's estate in the event of the
filing of a bankruptcy petition by or against the Seller under any bankruptcy
law. No portion of the Transition Property has been sold, transferred, assigned
or pledged by the Seller to any Person other than the Note Issuer. On the
Closing Date, immediately upon the sale hereunder, the Seller has transferred,
sold and conveyed the Transition Property to the Note Issuer, free and clear of
all Liens, except for any Lien created pursuant to Section 16-245k(g) of the
Statute and any Lien that may be granted under the Basic Documents, and pursuant
to Section 16-245k(h) of the Statute such transfer shall be treated as an
absolute transfer of all of the Seller's right, title and interest (as in a true
sale), and not as a pledge or other financing of, the Transition Property.

         (b) TRANSFER FILINGS. On the Closing Date, immediately upon the sale
hereunder, the Transition Property has been validly transferred and sold to the
Note Issuer, the Note Issuer shall own all such Transition Property free and
clear of all Liens (including the Lien of the Seller's first mortgage indenture
but excluding any Lien created pursuant to Section 16-245k(g) of the Statute and
any Lien that may be granted under the Basic Documents) and all filings to be
made by the Seller (including filings with the DPUC under the Statute) necessary
in any jurisdiction to give the Note Issuer an ownership interest (subject to
any Lien created pursuant to Section 16-245k(g) of the Statute and any Lien that

                                      -7-
<PAGE>

may be granted under the Basic Documents) in the Transition Property have been
made. No further action is required to maintain such ownership interest (subject
to any Lien created pursuant to Section 16-245k(g) of the Statute and any Lien
that may be granted under the Basic Documents). Filings have also been made to
the extent required by Connecticut General Statutes ss.ss. 42a-9-204, 42a-9-205,
42a-9-401, 42a-9-402 and 42a-9-403 to perfect the Back-Up Security Interest
granted by the Seller to the Note Issuer (subject to any Lien created pursuant
to Section 16-245k(g) of the Statute and any Lien that may be granted under the
Basic Documents).

         (c) FINANCING ORDER AND ISSUANCE ADVICE LETTER; OTHER APPROVALS. On the
Closing Date, under the laws of the State of Connecticut and the United States
in effect on the Closing Date, (i) the Financing Order pursuant to which the
Transition Property has been created is in full force and effect; (ii) the
Certificateholders are entitled to the protections of the Statute and,
accordingly, the Financing Order is not revocable by the DPUC; (iii) the State
of Connecticut may neither limit nor alter the CTA, the Transition Property, or
the Financing Order and all rights thereunder until the Certificates, together
with interest thereon, are fully met and discharged, absent a demonstration that
an impairment is narrowly-tailored and is necessary to advance an important
public interest, such as responding to a "great public calamity;" provided that
the State of Connecticut is not precluded from such limitation or alteration if
and when adequate provision shall be made by law for the protection of the
owners of the Transition Property and Certificateholders; (iv) except for
periodic adjustments to the RRB Charge required under the Statute, the DPUC
shall not have authority either by rescinding, altering, or amending the
Financing Order or otherwise, to revalue or revise for ratemaking purposes the
stranded costs, or the costs of providing, recovering, financing, or refinancing
the stranded costs, determine that the CTA is unjust or unreasonable, or in any
way reduce or impair the value of Transition Property either directly or
indirectly by taking the CTA into account when setting other rates for the
Seller; nor shall the amount of revenues arising with respect thereto be subject
to reduction, impairment, postponement, or termination; (v) the process by which
the Financing Order was adopted and approved, and the Financing Order and
Issuance Advice Letter themselves, comply with all applicable laws, rules and
regulations; (vi) the Issuance Advice Letter has been filed in accordance with
the Financing Order; (vii) no other approval, authorization, consent, order or
other action of, or filing with, any court, Federal or state regulatory body,
administrative agency or other governmental instrumentality is required in
connection with the creation or sale of the Transition Property, except those
that have been obtained or made and post closing filings required in connection
therewith and those that the Seller, in its capacity as Servicer under the
Servicing Agreement, is required to make in the future pursuant to the Servicing
Agreement; (vii) under the Statute, the limit contained in Section 16-244c(a)(2)
of the Connecticut General Statutes on standard offer service rates may be
exceeded if necessary to establish, fix or revise the CTA (including the RRB
Charge) at a level sufficient to pay principal of and interest on the
Certificates and related expenses, to pay stranded costs that are not recovered
through the issuance of rate reduction bonds, and to pay capital costs specified
in the Statute; and (viii) the State of Connecticut, in the exercise of its
executive or legislative powers, may not repeal or amend the Statute or the
Financing Order, or take any action in contravention of the pledge by the State
of Connecticut in Section 16-245j(b) of the Statute without paying just

                                      -8-
<PAGE>

compensation to the Certificateholders, as determined by a court of competent
jurisdiction, if this action would constitute a permanent appropriation of a
substantial property interest of Certificateholders in the Transition Property
and deprive the Certificateholders of their reasonable expectations arising from
their investments in the Certificates.

         (d) ASSUMPTIONS. On the Closing Date, based upon the information
available to the Seller on the Closing Date, the assumptions used in calculating
the initial RRB Charge are reasonable and are made in good faith.
Notwithstanding the foregoing, the Seller makes no representation or warranty
that the assumptions used in calculating such RRB Charge will in fact be
realized.

         (e) CREATION OF TRANSITION PROPERTY. Upon the effectiveness of the
Financing Order and the Issuance Advice Letter: (i) all of the Transition
Property constitutes an existing property right; (ii) the Transition Property
includes the right, title and interest in and to all revenues, collections,
claims, payments, money, or proceeds of or arising from the RRB Charge
(including, without limitation, the RRB Charge included in special contract
customer rates), as adjusted from time to time pursuant to the Financing Order,
and all rights to obtain adjustments to the RRB Charge pursuant to the Financing
Order; and (iii) the owner of the Transition Property is legally entitled to
collect payments in respect of the RRB Charge in the aggregate sufficient to pay
the interest on and principal of the Notes, to pay the fees and expenses of
servicing the Notes and the Certificates, to replenish the Capital Subaccount to
the Required Capital Level and to fund the Overcollateralization Subaccount to
the Required Overcollateralization Level until the Notes and the Certificates
are paid in full. Notwithstanding the foregoing, the Seller makes no
representation or warranty that any amounts actually collected in respect of the
RRB Charge will in fact be sufficient to meet payment obligations with respect
to the Notes and the Certificates.

         (f) PROSPECTUS. As of the date hereof, the information describing the
Seller in "The Seller and Servicer" section of the prospectus dated March __,
2001 offering the Notes and the Certificates is correct in all material
respects.

      Section 3.09. LIMITATIONS ON REPRESENTATIONS AND WARRANTIES.
Notwithstanding any other provisions of this Agreement, the Seller will not be
in breach of any representation or warranty as a result of a change in law by
means of a legislative enactment or constitutional amendment or (if such means
become available in the future) referendum or initiative petition.
Notwithstanding anything to the contrary in this Agreement, the Seller makes no
representation or warranty that any amounts actually collected in respect of the
RRB Charge will in fact be sufficient to meet payment obligations with respect
to the Notes and the Certificates or that the assumptions used in calculating
the RRB Charge will in fact be realized nor shall the Seller be obligated to
reduce, or accept a reduction of, any rates or charges to which it would
otherwise be entitled in respect of services rendered or to be rendered to
customers in order to permit the payment of the RRB Charge.

                                      -9-
<PAGE>

                                   ARTICLE 4

                             COVENANTS OF THE SELLER

      Section 4.01. CORPORATE EXISTENCE. So long as any of the Notes are
outstanding, the Seller (a) will keep in full force and effect its existence,
rights and franchises as a corporation under the laws of the jurisdiction of its
organization and (b) will obtain and preserve its qualification to do business,
in each case to the extent that in each such jurisdiction such existence or
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the other Basic Documents to which the Seller
is a party and each other instrument or agreement necessary or appropriate to
the proper administration of this Agreement and the transactions contemplated
hereby.

      Section 4.02. NO LIENS. Except for the conveyances hereunder or any Lien
under Section 16-245k(g) of the Statute or for the benefit of the Note Issuer,
the Seller will not sell, pledge, assign or transfer, or grant, create, or incur
any Lien on, any of the Transition Property, or any interest therein, and the
Seller shall defend the right, title and interest of the Note Issuer and the
Note Trustee in, to and under the Transition Property against all claims of
third parties claiming through or under the Seller. The Connecticut Light and
Power Company, in its capacity as Seller, will not at any time assert any Lien
against, or with respect to, any of the Transition Property.

      Section 4.03. DELIVERY OF COLLECTIONS. If the Seller receives any payments
in respect of the RRB Charge or the proceeds thereof when it is not acting as
the Servicer, the Seller agrees to pay to the Servicer all payments received by
it in respect thereof as soon as practicable after receipt thereof by it.

      Section 4.04. NOTICE OF LIENS. The Seller shall notify the Note Issuer and
the Note Trustee promptly after becoming aware of any Lien on any of the
Transition Property, other than the conveyances hereunder, any Lien under the
Basic Documents or any Lien under Section 16-245k(g) of the Statute or for the
benefit of the Note Issuer.

      Section 4.05. COMPLIANCE WITH LAW. The Seller hereby agrees to comply with
its organizational and governing documents and all laws, treaties, rules,
regulations and determinations of any governmental instrumentality applicable to
it, except to the extent that failure to so comply would not adversely affect
the Note Issuer's or the Note Trustee's interests in the Transition Property or
under any of the other Basic Documents to which the Seller is party or the
Seller's performance of its obligations hereunder or under any of the other
Basic Documents to which it is party.

      Section 4.06. COVENANTS RELATED TO NOTES AND TRANSITION PROPERTY.

         (a) So long as any of the Notes are outstanding, the Seller shall treat
the Notes as debt of the Note Issuer and not of the Seller, except for financial
accounting or tax reporting purposes.

         (b) So long as any of the Notes are outstanding, the Seller shall
indicate in its financial statements that it is not the owner of the Transition
Property and that the assets of the Note Issuer are not available to pay
creditors of the Seller or any of its Affiliates (other than the Note Issuer).

                                      -10-
<PAGE>

         (c) So long as any of the Notes are outstanding, the Seller shall
disclose the effects of all transactions between the Seller and the Note Issuer
in accordance with generally accepted accounting principles.

         (d) So long as any of the Notes or Certificates are outstanding, the
Seller shall not own or purchase any Notes or Certificates.

         (e) The Seller agrees that, upon the sale by the Seller of the
Transition Property to the Note Issuer pursuant to this Agreement, (i) to the
fullest extent permitted by law, including the Statute and applicable DPUC
Regulations, the Note Issuer shall have all of the rights originally held by the
Seller with respect to the Transition Property, including the right (subject to
the terms of the Servicing Agreement) to exercise any and all rights and
remedies to collect any amounts payable by any customer or third party supplier
in respect of the Transition Property, notwithstanding any objection or
direction to the contrary by the Seller and (ii) any payment by any customer or
third party supplier to the Note Issuer shall discharge such customer's or third
party supplier's obligations in respect of the Transition Property to the extent
of such payment, notwithstanding any objection or direction to the contrary by
the Seller.

         (f) So long as any of the Notes are outstanding, (i) (A) the Seller
shall affirmatively certify and confirm that it has sold the Transition Property
to the Note Issuer (other than for financial accounting or tax reporting
purposes), and (B) the Seller shall not make any statement or reference in
respect of the Transition Property that is inconsistent with the ownership
thereof by the Note Issuer (other than for financial accounting or tax reporting
purposes), and (ii) the Seller shall not take any action in respect of the
Transition Property except solely in its capacity as the Servicer thereof
pursuant to the Servicing Agreement or as otherwise contemplated by the Basic
Documents.

      Section 4.07. PROTECTION OF TITLE. The Seller shall execute and file such
filings, including filings with the DPUC pursuant to the Statute and Uniform
Commercial Code continuation statements, and cause to be executed and filed such
filings, all in such manner and in such places as may be required by law fully
to preserve, maintain and protect the ownership interest of the Note Issuer in
the Transition Property, including all filings required under the Statute
relating to the transfer of the ownership interest in the Transition Property by
the Seller to the Note Issuer and the continued perfection of such ownership
interest. The Seller shall deliver (or cause to be delivered) to the Note Issuer
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing. The Seller shall institute
any action or proceeding necessary to compel performance by the DPUC or the
State of Connecticut of any of their obligations or duties under the Statute or
the Financing Order, and the Seller agrees to take such legal or administrative
actions, including defending against or instituting and pursuing legal actions
and appearing or testifying at hearings or similar proceedings, as may be
reasonably necessary (i) to protect the Note Issuer, the Noteholders, the
Certificateholders, the Note Trustee, the Delaware Trustee, the Certificate
Trustee, the Certificate Issuer, the State of Connecticut, the Finance
Authority, the State Treasurer, agencies of the State of Connecticut and any of
their respective affiliates, officials, officers, directors, employees,
consultants, counsel and agents from claims, state actions or other actions or

                                      -11-
<PAGE>

proceedings of third parties which, if successfully pursued, would result in a
breach of any representation set forth in Article III or (ii) to block or
overturn any attempts to cause a repeal of, modification of or supplement to the
Statute, the Financing Order, any Advice Letter or the rights of Noteholders by
legislative enactment or constitutional amendment that would be adverse to the
Note Issuer, the Note Trustee or the Noteholders. If the Servicer performs its
obligations under Section 5.02(d) of the Servicing Agreement in all respects,
such performance shall be deemed to constitute performance of the Seller's
obligations pursuant to the immediately preceding sentence. In such event, the
Seller agrees to assist the Servicer as reasonably necessary to perform its
obligations under Section 5.02(d) of the Servicing Agreement in all respects.
The costs of any such actions or proceedings shall be payable from RRB Charge
Collections as an Operating Expense in accordance with the priorities set forth
in Section 8.02(d) of the Note Indenture. The Seller's obligations pursuant to
this Section 4.07 shall survive and continue notwithstanding the fact that the
payment of Operating Expenses pursuant to Section 8.02(d) of the Note Indenture
may be delayed (it being understood that the Seller may be required to advance
its own funds to satisfy its obligations hereunder).

      Section 4.08. NONPETITION COVENANTS. Notwithstanding any prior termination
of this Agreement or the Note Indenture, but subject to the DPUC's right to
order the sequestration and payment of revenues arising with respect to the
Transition Property notwithstanding any bankruptcy, reorganization or other
insolvency proceedings with respect to the Seller pursuant to Section 16-245k(e)
or Section 16-245k(g) of the Statute, the Seller shall not, prior to the date
which is one year and one day after the termination of the Note Indenture,
petition or otherwise invoke or cause the Note Issuer to invoke the process of
any court or government authority for the purpose of commencing or sustaining a
case against the Note Issuer under any Federal or state bankruptcy, insolvency
or similar law, appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Note Issuer or any substantial
part of the property of the Note Issuer, or ordering the winding up or
liquidation of the affairs of the Note Issuer.

      Section 4.09. TAXES. So long as any of the Notes are outstanding, the
Seller shall, and shall cause each of its subsidiaries to, pay all material
taxes, assessments and governmental charges imposed upon it or any of its
properties or assets or with respect to any of its franchises, business, income
or property before any penalty accrues thereon if the failure to pay any such
taxes, assessments and governmental charges would, after any applicable grace
periods, notices or other similar requirements, result in a lien on the
Transition Property; provided that no such tax need be paid if the Seller or one
of its subsidiaries is contesting the same in good faith by appropriate
proceedings promptly instituted and diligently conducted and if the Seller or
such subsidiary has established appropriate reserves as shall be required in
conformity with generally accepted accounting principles.

      Section 4.10. ADDITIONAL SALES OF TRANSITION PROPERTY. So long as any of
the Notes are outstanding, the Seller shall not sell any transition property (as
defined in the Statute) to secure another issuance of rate reduction bonds (as

                                      -12-
<PAGE>

defined in the Statute) if it would cause the then existing ratings on any class
of Certificates from the Rating Agencies to be withdrawn or downgraded.

      Section 4.11. ISSUANCE ADVICE LETTER. The Seller hereby agrees not to
withdraw the filing of the Issuance Advice Letter with the DPUC.

                                   ARTICLE 5

                                   THE SELLER

      Section 5.01. LIABILITY OF SELLER; INDEMNITIES.

         (a) The Seller shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Seller under this
Agreement.

         (b) (i) In the event of a breach by the Seller of any representation
and warranty specified in Sections 3.08(c) or 3.08(e) that has a material
adverse effect on the Certificateholders, the Seller shall repurchase the
Transition Property from the Note Issuer at a purchase price equal to the then
outstanding principal amount of the Notes and all accrued and unpaid interest
thereon, excluding any premium or penalty of any kind (the "REPURCHASE PRICE"),
as of the Repurchase Date; provided, however, that the Seller shall not be
obligated to repurchase the Transition Property if (A) within 90 days after the
Date of Breach such breach is cured or the Seller takes remedial action such
that there is not and will not be a material adverse effect on the
Certificateholders as a result of such breach and (B) either (1) if the Seller
had, immediately prior to the Date of Breach, a long term debt rating of at
least "A3" by Moody's and "BBB" or the equivalent by S&P or Fitch, and the
Seller enters into a binding agreement with the Note Issuer to pay any amounts
necessary so that all interest payments due on the Notes during such 90-day
period will be paid in full, or (2) if the Seller does not have such long term
debt ratings, the Seller deposits, within two Business Days after the Date of
Breach, an amount in escrow with the Note Trustee sufficient, taking into
account amounts on deposit in the Collection Account which will be available for
such purpose, to pay all interest payments which will become due on the Notes
during such 90-day period.

            (ii) In the event of a breach by the Seller of any representation
and warranty specified in Sections 3.01, 3.03, 3.04, 3.05, 3.06, 3.08(a) or
3.08(b) that has a material adverse effect on the Certificateholders, if within
90 days after the Date of Breach such breach has not been cured or the Seller
has not taken remedial action such that there is not and will not be a material
adverse effect on the Certificateholders as a result of such breach, then the
Seller shall repurchase the Transition Property from the Note Issuer for the
Repurchase Price on the Repurchase Date.

            (iii) Notwithstanding any other provision of this Agreement, upon
the payment by the Seller of the Repurchase Price pursuant to this Section
5.01(b), neither the Note Issuer nor any other Person shall have any other
claims, rights or remedies against the Seller under, arising from or with
respect to this Agreement, except as set forth in Section 5.01(h).

         (c) Subject to Section 5.01(i), the Seller shall indemnify the Note
Issuer, the Note Trustee, the Certificate Trustee, the Delaware Trustee, the
State of Connecticut, the Finance Authority, the State Treasurer, agencies of
the State of Connecticut, the Certificate Issuer, the Noteholders and the

                                      -13-
<PAGE>

Certificateholders (each an "INDEMNIFIED PERSON" for purposes of this Section
5.01(c) and Section 5.01(i)) for, and defend and hold harmless each such
Indemnified Person from and against, any and all taxes (other than taxes imposed
on Noteholders or Certificateholders solely as a result of their ownership of
Notes or Certificates, respectively) that may at any time be imposed on or
asserted against any such Person under existing law as of the Closing Date as a
result of the sale of the Transition Property to the Note Issuer, including any
sales, gross receipts, general corporation, tangible personal property,
privilege or license taxes; provided, however, that the Noteholders and the
Certificateholders shall be entitled to enforce their rights against the Seller
under this Section 5.01(c) solely through a cause of action brought for their
benefit by the Note Trustee or the Certificate Trustee, as the case may be.

         (d) Subject to Section 5.01(i), the Seller shall indemnify the Note
Issuer, the Note Trustee, the Certificate Trustee, the Delaware Trustee, the
State of Connecticut, the Finance Authority, the State Treasurer, agencies of
the State of Connecticut, the Certificate Issuer, the Noteholders and the
Certificateholders (each an "INDEMNIFIED PERSON" for purposes of this Section
5.01(d) and Section 5.01(i)) for, and defend and hold harmless each such
Indemnified Person from and against, any and all taxes that may be imposed on or
asserted against any such Indemnified Person under existing law as of the
Closing Date as a result of the issuance and sale by the Note Issuer of the
Notes, the issuance and sale by the Trust of the Certificates or the other
transactions contemplated herein, including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes; provided,
however, that the Noteholders and the Certificateholders shall be entitled to
enforce their rights against the Seller under this Section 5.01(d) solely
through a cause of action brought for their benefit by the Note Trustee or the
Certificate Trustee, as the case may be. The Seller shall be reimbursed for any
payments under this Section 5.01(d) from RRB Charge Collections as an Operating
Expense in accordance with the priorities set forth in Section 8.02(d) of the
Note Indenture.

         (e) Subject to Section 5.01(i), the Seller shall indemnify the Note
Issuer, the Noteholders, the Certificateholders [AND ANY SWAP COUNTERPARTY]
(each an "INDEMNIFIED PERSON" for purposes of this Section 5.01(e) and Section
5.01(i)) for, and defend and hold harmless each such Person from and against,
any and all liabilities, obligations, losses, actions, suits, claims, damages,
payments, costs or expenses of any kind whatsoever (collectively, "LOSSES") that
may be imposed on, incurred by or asserted against each such Indemnified Person
as a result of (i) the Seller's willful misconduct or negligence in the
performance of its duties or observance of its covenants under this Agreement,
or (ii) the Seller's breach in any material respect of any of its
representations and warranties contained in this Agreement (other than the
representations and warranties specified in Sections 3.01, 3.03, 3.04, 3.05,
3.06, 3.08(a), 3.08(b), 3.08(c) or 3.08(e), the breach of which are subject to
the repurchase obligation set forth in Section 5.01(b)), except in the case of
both clauses (i) and (ii) to the extent of Losses either resulting from the
willful misconduct or gross negligence of such Indemnified Person or resulting
from a breach of a representation and warranty made by such Indemnified Person
in any of the Basic Documents that gives rise to the Seller's breach; provided,
however, that the Noteholders and the Certificateholders shall be entitled to

                                      -14-
<PAGE>

enforce their rights against the Seller under this indemnification solely
through a cause of action brought for their benefit by the Note Trustee or the
Certificate Trustee, as the case may be; provided, further, that the Seller may,
at its election and in full satisfaction of its obligations under this Section
5.01(e), repurchase the Transition Property at the Repurchase Price, in which
case neither the Note Issuer nor any other Person shall have any other claims,
rights or remedies against the Seller under, arising from or with respect to
this Agreement, except as set forth in Section 5.01(h).

         (f) Indemnification under Sections 5.01(c), 5.01(d), 5.01(e) and
5.01(h) shall include reasonable fees and out-of-pocket expenses of
investigation and litigation (including reasonable attorneys' fees and
expenses), except as otherwise provided in this Agreement.

         (g) Without prejudice to any of the other rights of the parties, the
Seller will not be in breach of any representation or warranty as a result of a
change in law by means of a legislative enactment or constitutional amendment or
(if such means become available in the future) referendum or initiative
petition. Notwithstanding anything to the contrary in this Agreement, the Seller
makes no representation or warranty that any amounts actually collected in
respect of the RRB Charge will in fact be sufficient to meet payment obligations
with respect to the Notes and the Certificates or that the assumptions used in
calculating the RRB Charge will in fact be realized nor shall the Seller be
obligated to reduce, or accept a reduction of, any rates or charges to which it
would otherwise be entitled in respect of services rendered or to be rendered to
customers in order to permit the payment of the RRB Charge.

         (h) Subject to Section 5.01(i), the Seller shall indemnify and hold
harmless the Note Trustee, the Delaware Trustee, the Certificate Trustee, the
Certificate Issuer, the State of Connecticut, the Finance Authority, the State
Treasurer, agencies of the State of Connecticut and any of their respective
affiliates, officials, officers, directors, employees, consultants, counsel and
agents (each an "INDEMNIFIED PERSON" for purposes of this Section 5.01(h) and
Section 5.01(i)) against any and all Losses incurred by any of such Indemnified
Persons as a result of (i) the Seller's willful misconduct or negligence in the
performance of its duties or observance of its covenants under this Agreement or
(ii) the Seller's breach in any material respect of any of its representations
and warranties contained in this Agreement, except in the case of both clauses
(i) and (ii) to the extent of Losses either resulting from the willful
misconduct or gross negligence of such Indemnified Person or resulting from a
breach of a representation or warranty made by such Indemnified Person in any of
the Basic Documents that gives rise to the Seller's breach. The indemnities
contained in this Section 5.01(h) shall survive the resignation or termination
of the Note Trustee, the Certificate Trustee or the Delaware Trustee or the
termination of this Agreement.

         (i) The Seller shall not be required to indemnify any Indemnified
Person under Sections 5.01(c), 5.01(d), 5.01(e) or 5.01(h) for any amount paid
or payable by such Indemnified Person in the settlement of any action,
proceeding or investigation without the written consent of the Seller, which
consent shall not be unreasonably withheld. Promptly after receipt by an
Indemnified Person of notice of its involvement in any action, proceeding or
investigation, such Indemnified Person shall, if a claim for indemnification in

                                      -15-
<PAGE>

respect thereof is to be made against the Seller under this Section 5.01, notify
the Seller in writing of such involvement. Failure by an Indemnified Person to
so notify the Seller shall relieve the Seller from the obligation to indemnify
and hold harmless such Indemnified Person under this Section 5.01 only to the
extent that the Seller suffers actual prejudice as a result of such failure.
With respect to any action, proceeding or investigation brought by a third party
for which indemnification may be sought under this Section 5.01, the Seller
shall be entitled to assume the defense of any such action, proceeding or
investigation. Upon assumption by the Seller of the defense of any such action,
proceeding or investigation, the Indemnified Person shall have the right to
participate in such action or proceeding and to retain its own counsel. The
Seller shall be entitled to appoint counsel of the Seller's choice at the
Seller's expense to represent the Indemnified Person in any action, proceeding
or investigation for which a claim of indemnification is made against the Seller
under this Section 5.01 (in which case the Seller shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by the
Indemnified Person except as set forth below); provided, however, that such
counsel shall be reasonably satisfactory to the Indemnified Person.
Notwithstanding the Seller's election to appoint counsel to represent the
Indemnified Person in an action, proceeding or investigation, the Indemnified
Person shall have the right to employ separate counsel (including local
counsel), and the Seller shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the Seller to
represent the Indemnified Person would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the Indemnified Person and the Seller and the Indemnified
Person shall have reasonably concluded that there may be legal defenses
available to it that are different from or additional to those available to the
Seller, (iii) the Seller shall not have employed counsel reasonably satisfactory
to the Indemnified Person to represent the Indemnified Person within a
reasonable time after notice of the institution of such action or (iv) the
Seller shall authorize the Indemnified Person to employ separate counsel at the
expense of the Seller. Notwithstanding the foregoing, the Seller shall not be
obligated to pay for the fees, costs and expenses of more than one separate
counsel for the Indemnified Persons (in addition to local counsel). The Seller
will not, without the prior written consent of the Indemnified Person, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought under this Section 5.01 (whether or not the
Indemnified Person is an actual or potential party to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of the Indemnified Person from all liability arising out of such claim, action,
suit or proceeding.

         (j) The remedies of the Note Issuer, the Noteholders and the
Certificateholders provided in this Agreement are each such Person's sole and
exclusive remedies against the Seller for breach of its representations and
warranties in this Agreement.

      Section 5.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, SELLER. Any Person (a) into which the Seller may be merged or consolidated,
(b) that may result from any merger or consolidation to which the Seller shall
be a party or (c) that may succeed to the properties and assets of the Seller

                                      -16-
<PAGE>

substantially as a whole, which Person in any case described in the foregoing
clause (c) executes an agreement of assumption to perform every obligation of
the Seller hereunder, shall be the successor to the Seller under this Agreement
without further act on the part of any of the parties to this Agreement;
provided, however, that (i) if the Seller is the Servicer, no Servicer Default,
and no event which, after notice or lapse of time, or both, would become a
Servicer Default shall have occurred and be continuing, (ii) the Seller shall
have delivered to the Note Issuer and the Note Trustee an Officer's Certificate
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have been complied
with, (iii) the Seller shall have delivered to the Note Issuer and the Note
Trustee an Opinion of Counsel either (A) stating that, in the opinion of such
counsel, all filings to be made by the Seller, including filings with the DPUC
pursuant to the Statute, have been executed and filed that are necessary to
fully preserve and protect the interest of the Note Issuer in the Transition
Property and reciting the details of such filings, or (B) stating that, in the
opinion of such counsel, no such action shall be necessary to preserve and
protect such interests and (iv) the Rating Agencies shall have received prior
written notice of such transaction. When any Person acquires the properties and
assets of the Seller substantially as a whole and becomes the successor to the
Seller in accordance with the terms of this Section 5.02 and execution by such
successor of an agreement of assumption to perform every obligation of the
Seller hereunder, then upon satisfaction of all of the other conditions of this
Section 5.02, the Seller shall automatically and without further notice be
released from all of its obligations hereunder.

      Section 5.03. LIMITATION ON LIABILITY OF SELLER AND OTHERS. The Seller and
any director, officer, employee or agent of the Seller may rely in good faith on
the advice of counsel or on any document of any kind, prima facie properly
executed and submitted by any Person, respecting any matters arising hereunder.

                                   ARTICLE 6

                            MISCELLANEOUS PROVISIONS

      Section 6.01. AMENDMENT. This Agreement may be amended by the Seller and
the Note Issuer, with ten Business Days' prior written notice given to the
Rating Agencies and the prior written consent of the Note Trustee, but without
the consent of any of the Noteholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions in
this Agreement or of modifying in any manner the rights of the Noteholders;
provided, however, that such action shall not, as evidenced by an Officer's
Certificate delivered to the Note Issuer and the Note Trustee, adversely affect
in any material respect the interests of any Noteholder.

      This Agreement may also be amended from time to time by the Seller and the
Note Issuer, with ten Business Days' prior written notice given to the Rating
Agencies and the prior written consent of the Note Trustee and the prior written
consent of the Holders of Notes evidencing not less than a majority of the

                                      -17-
<PAGE>

Outstanding Amount of the Notes affected thereby, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Noteholders.

      It shall not be necessary for the consent of Noteholders pursuant to this
Section to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance thereof.

      Prior to the execution of any amendment to this Agreement, the Note
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement. The Note Trustee may, but shall not be obligated to, enter into any
such amendment which affects the Note Trustee's own rights, duties or immunities
under this Agreement or otherwise.

      Section 6.02. NOTICES. Unless otherwise specifically provided herein, all
notices, directions, consents and waivers required under the terms and
provisions of this Agreement shall be in English and in writing, and any such
notice, direction, consent or waiver may be given by United States mail, courier
service, facsimile transmission or electronic mail (confirmed by telephone,
United States mail or courier service in the case of notice by facsimile
transmission or electronic mail) or any other customary means of communication,
and any such notice, direction, consent or waiver shall be effective when
delivered, or if mailed, three days after deposit in the United States mail with
proper postage for ordinary mail prepaid:

(a)   if to the Seller, to

                  The Connecticut Light and Power Company
                  if by U.S. Mail:
                        P.O. Box 270
                        Hartford, CT 02141-0270 if by courier:
                        107 Selden Street
                        Berlin, CT  06037
                  Attention:  Treasurer
                  Facsimile:  (860) 665-5457
                  Telephone:  (860) 665-3258
                  Email: shoopra@nu.com

(b)   if to the Note Issuer, to

                  CL&P Funding LLC
                        c/o The Connecticut Light and Power Company
                  if by U.S. Mail:
                        P.O. Box 270
                        Hartford, CT 06141-0270 if by courier:
                        107 Selden Street
                        Berlin, CT  06037
                  Attention:  Treasurer
                  Facsimile:  (860) 665-5457
                  Telephone:  (860) 665-3258
                  Email: shoopra@nu.com

                                      -18-
<PAGE>

(c)   if to the Note Trustee, to

                  First Union Trust Company, National Association
                  One Rodney Square
                  920 King Street, 1st Floor
                  Wilmington, DE 19801-7475
                  Attention:  Corporate Trust Administration
                  Facsimile:  (302) 888-7544
                  Telephone:  (302) 888-7500

(d)   if to Moody's, to

                  Moody's Investors Service, Inc.
                  99 Church Street
                  New York, NY  10007
                  Attention:  ABS Monitoring Department
                  Facsimile:  (212) 553-0573
                  Telephone:  (212) 553-3686

(e)   if to S&P, to

                  Standard & Poor's
                  55 Water Street, 40th Floor
                  New York, NY 10041
                  Attention:  Asset Backed Surveillance Department
                  Facsimile:  (212) 438-2655
                  Telephone:  (212) 438-2000

(f)   if to Fitch, to

                  Fitch, Inc.
                  One State Street Plaza
                  New York, NY 10004
                  Attention:  ABS Surveillance
                  Facsimile:  (212) 908-0355
                  Telephone:  (212) 908-0500

(g)   if to the Finance Authority, to:

                  Office of the State Treasurer
                  55 Elm Street
                  Hartford, CT 06106
                  Attention:  Assistant Treasurer - Debt Management
                  Facsimile:  (860) 702-3127
                  Telephone:  (860) 702-3034

                                      -19-
<PAGE>

(h)   if to the Certificate Issuer, to:

                  Connecticut RRB Special Purpose Trust CL&P-1
                  c/o First Union Trust Company, National Association
                  One Rodney Square
                  920 King Street, 1st Floor
                  Wilmington, DE 19801-7475
                  Attention:  Corporate Trust Administration
                  Facsimile:  (302) 888-7544
                  Telephone:  (302) 888-7500

                  (with copies to the Finance Authority at the addresses
                  listed herein)

      (i) as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.

      Section 6.03. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 5.02, this Agreement may not be
assigned by the Seller.

      Section 6.04. LIMITATIONS ON RIGHTS OF THIRD PARTIES. The provisions of
this Agreement are solely for the benefit of the Seller, the Note Issuer, the
Noteholders, the Certificateholders, the Note Trustee, the Certificate Trustee,
the Delaware Trustee, the Finance Authority, the Certificate Issuer and the
other Persons expressly referred to herein, and such Persons shall have the
right to enforce the relevant provisions of this Agreement, except that the
Noteholders and the Certificateholders shall be entitled to enforce their rights
against the Seller under this Agreement solely through a cause of action brought
for their benefit by the Note Trustee or the Certificate Trustee, as the case
may be. Nothing in this Agreement, whether express or implied, shall be
construed to give to any other Person any legal or equitable right, remedy or
claim in the Transition Property or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.

      Section 6.05. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

      Section 6.06. SEPARATE COUNTERPARTS. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.

      Section 6.07. HEADINGS. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.

      Section 6.08. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Connecticut, without reference to its

                                      -20-
<PAGE>

conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.

      Section 6.09. ASSIGNMENT TO NOTE TRUSTEE. The Seller hereby acknowledges
and consents to any mortgage, pledge, assignment and grant of a security
interest by the Note Issuer to the Note Trustee pursuant to the Note Indenture
for the benefit of the Noteholders of all right, title and interest of the Note
Issuer in, to and under the Transition Property and the proceeds thereof and the
assignment of any or all of the Note Issuer's rights and obligations hereunder
to the Note Trustee.

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -21-
<PAGE>

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

                                    CL&P FUNDING LLC,
                                    Note Issuer

                                    By:_______________________________________
                                       Name:
                                       Title:

                                    THE CONNECTICUT LIGHT AND POWER COMPANY,
                                     Seller

                                    By:_______________________________________
                                       Name:
                                       Title:

                                     -S-1-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00021-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00021-of-00352.parquet"}]]