Document:

Converted by EDGARwiz

  Exhibit 10.4
 

 

 

 

 

 

 

 

 PURCHASE AND SALE AGREEMENT
 

 by and between
 

 THE CONNECTICUT LIGHT AND POWER COMPANY, as Seller
 

 and
 

 CONNECTICUT TRANSMISSION MUNICIPAL ELECTRIC 
 ENERGY COOPERATIVE, as Buyer
 

 DECEMBER 16, 2010
 

 

 Execution Version - Confidential
 

 
 

 

 TABLE OF CONTENTS
 

                                                 Page
 ARTICLE 1.  DEFINITION OF TERMS; INTERPRETATION
 

      1.1.  Definitions
 1
      1.2.  Entire Agreement; Interpretation
 12
      
 ARTICLE 2.  PURCHASE AND SALE
 

      2.1.  Transfer of Assets
 13
      2.2.  Excluded Assets
 14
      2.3.  Assumed Liabilities
 15
      2.4.  Excluded Liabilities
 16
      2.5.  Guaranty
 16
 

 ARTICLE 3.  PURCHASE PRICE; TAX GROSS-UP; CLOSING ADJUSTMENTS
 

      3.1   Purchase Price
 17
      3.2.  Closing Adjustments
 17
      3.3.  Tax Gross-Up
 19
      3.4.  Wire Transfer Instructions
 20
      3.5.  Allocation of Purchase Price
 20
 

 ARTICLE 4.  THE CLOSING; DELIVERIES AT CLOSING
 

      4.1.  Time and Place of Closing
 21
      4.2.  Deliveries by Seller
 21
      4.3.  Deliveries by Buyer
 22
 

 ARTICLE 5.  REPRESENTATIONS AND WARRANTIES OF PARTIES
 

      5.1.  Mutual Representations
 23
      5.2.  Buyer Representations
 23
 

 ARTICLE 6.  TERMS OF CONVEYANCE
 

      6.1.  Title; Liens
 25
      6.2.  “As Is, Where Is” Transaction
 25
      6.3.  Buyer Acknowledgement
 26
      6.4.  Risk of Loss
 27
      6.5.  Regulatory Treatment
 27
      6.6.  Ownership Obligations
 28
      6.7.  Relationship of Parties
 29
 

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      6.8.  Claims Management
 30
 

 ARTICLE 7.  COVENANTS
 

      7.1.  Public Announcement
 36
      7.2.  Further Assurances; Records
 36
      7.3.  Consents and Approvals
 38
      7.4   Alternate Arrangements
 39
      7.5   Regulatory Matters
 42
      7.6   Reserved Rights
 44
      7.7   Retirement
 48
      7.8   Expenses
 49
      7.9   Right of First Refusal
 50
    7.10   Buy-Back Option
 51
    7.11   Limitations
 53
 

 ARTICLE 8.  CONDITIONS PRECEDENT
 

      8.1.  Buyer’s Conditions
 55
      8.2.  Seller’s Conditions
 56
      8.3.  Satisfaction of Conditions Precedent
 57
      8.4.  Closing Deadline
 58
      8.5.  Compliance Filings at Transfer
 58
 

 ARTICLE 9.  PRE-CLOSING TERMINATION
 

      9.1.  No Fault Termination
 58
      9.2.  Pre-Closing Termination by Buyer
 59
      9.3.  Pre-Closing Termination by Seller
 60
      9.4.  Seller's Termination for Convenience
 60
      9.5.  Failure of Conditions
 61
      9.6.  No Extension of Closing Date
 61
      9.7.  Cooperation
 61
 

 ARTICLE 10.  INDEMNIFICATION
 

    10.1   General Indemnification
 61
    10.2   Environmental Indemnification
 62
    10.3   Indemnification Notice
 62
    10.4   Indemnification Procedure
 62
    10.5   Insurance
 63
    10.6   Survival
 64
    10.7   Indemnification Limitation
 64
 

 

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 ARTICLE 11.  EVENT OF DEFAULT; REMEDIES
 

    11.1.  Event of Default
 64
 

 ARTICLE 12.  DISPUTE RESOLUTION 
 

   12.1   Negotiation Between Executives
 65
   12.2   Mediation
 65
   12.3   Arbitration
 65
   12.4   Powers of Arbitrators
 66
   12.5   Deferral
 66
   12.6   Continued Performance
 66
   12.7   Compelled Arbitration
 66
   12.8   Related Parties and Proceedings
 67
   12.9   Exclusion
 67
 

 ARTICLE 13.  LIMITATION ON LIABILITIES
 

    13.1.  No Consequential Damages
 67
    13.2.  Limitations of Seller’s Liability
 68
    13.3.  Mitigation
 69
    13.4.  No Recourse
 69
    13.5.  Other Limitations
 69
 

 ARTICLE 14.  MISCELLANEOUS PROVISIONS
 

    14.1   Applicable Law
 69
    14.2   Notices
 70
    14.3   Waivers
 71
    14.4   Time
 71
    14.5   Invalid Provisions
 71
    14.6   Succession/Assignment
 71
    14.7   Confidentiality
 73
    14.8   Survival
 74
    14.9   Counterparts/Facsimiles/PDF Copies
 74
 

 Exhibits:
 

 Exhibit A - Bill of Sale
 Exhibit B - Assignment and Assumption Agreement
 Exhibit C - License Agreement
 Exhibit D - Property Tax Agreement
 Exhibit E - Asset Demarcation Agreement
 Exhibit F - Step-In Agreement
 Exhibit G - O&M Agreement
 

 

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 Schedules:
 

 Schedule 2.1(a) – Transmission Facilities
 Schedule 2.1(b) – Transferrable Contracts
 Schedule 2.1(c) – Transferrable Permits
 Schedule 2.3(e) – Pending Proceedings
 Schedule 3.1 – Calculation of Purchase Price
 Schedule 3.3 – Calculation of Tax Gross-Up
 Schedule 4.2(k) – Partial Release of Mortgage
 Schedule 6.8(i) – Form of Joint Defense Agreement
 Schedule 7.5(b) – Pending Regulatory Proceedings
 Schedule 8.1(c) – List of Buyer's Regulatory Approvals
 Schedule 8.2(d) – List of Seller's Regulatory Approvals
 

 

 

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 PURCHASE AND SALE AGREEMENT
 THIS PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of December 16, 2010 ("Effective Date"), is made and entered into by and between The Connecticut Light and Power Company, a specially chartered Connecticut corporation ("Seller"), and Connecticut Transmission Municipal Electric Energy Cooperative, a publicly-owned, joint-action power supply agency formed under C.G.S. Chapter 101a ("Buyer").  Capitalized terms used herein but not otherwise defined shall have the respective meanings set forth in Article 1.
 

 WHEREAS, Seller owns certain assets comprising a portion of the M/N Project primarily located in Wallingford, Connecticut; and
 

 WHEREAS, Buyer desires to purchase and assume, and Seller desires to sell and assign, the Purchased Assets and associated Liabilities, on the terms and conditions set forth in this Agreement.
 

 NOW, THEREFORE, in consideration of the Parties' respective covenants, representations, warranties, and agreements hereinafter set forth and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
 

 ARTICLE 1.
 DEFINITION OF TERMS; INTERPRETATION
 

 1.1
 Definitions.  As used herein, the following terms shall have the following meanings:
 

 "Additional Agreements" means collectively the Asset Demarcation Agreement, the Assignment and Assumption Agreement, the Bill of Sale, the License Agreement, the O&M Agreement, the Property Tax Agreement and the Step-In Agreement and/or any other document, instrument and/or agreement executed in connection herewith and/or therewith.
 

 "Additional Installations" has the meaning set forth in Section 7.11(a).
 

 "Affiliate" means, when used with reference to a specified Person, any Person that directly or indirectly controls or is controlled by or is under common control or ownership with the specified Person, including, in case of each Party, the ultimate parent company of such Party. For purposes of this definition, "control" means the power to direct the management and policies of the specified Person, and the Guarantor and Members shall be deemed to be Affiliates of Buyer.
 

 "Agreement" has the meaning set forth in the preamble of this Agreement and includes all exhibits and schedules hereto and attachments thereto.
 

 "Asset Demarcation Agreement" has the meaning set forth in Section 4.2(e).
 

 

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 "Assignment and Assumption Agreement" has the meaning set forth in Section 4.2(b).
 

 "Assumed Environmental Liabilities" has the meaning set forth in Section 2.3(d).
 

 "Assumed Liabilities" has the meaning set forth in Section 2.3.
 

 "Bankrupt" means, as to a Person, that such Person (a) files a petition or otherwise commences a Proceeding under any bankruptcy, insolvency, reorganization or similar Law, or has any such petition filed or commenced against it; (b) makes an assignment or any general arrangement (other than an assignment undertaken in connection with a financing) for the benefit of creditors; (c) otherwise becomes bankrupt or insolvent (however evidenced); (d) has a liquidator, administrator, receiver, bankruptcy trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, provided that if such action is taken without the consent of such Person, such Person shall be allowed twenty (20) days to dismiss such appointment; or (e) is generally unable to pay its debts as they fall due.
 

 "Bill of Sale" has the meaning set forth in Section 4.2(a).
 

 "Business Day" means any day other than Saturday, Sunday, and other than when the following holidays are celebrated:  New Year's Day; Presidents' Day, Good Friday; Memorial Day; Independence Day; Labor Day; Columbus Day; Veterans Day; Thanksgiving Day; day after Thanksgiving; and Christmas Day.
 

 "Buy-Back Option" has the meaning set forth in Section 7.10(a).
 

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

 "Buyer Notice" has the meaning set forth in Section 7.9(b).
 

 "Buyer's Regulatory Approvals" has the meaning set forth in Section 8.1(c).
 

 "Buyer's Representatives" means Buyer's accountants, employees, counsel, consultants, financial advisors, and other representatives.
 

 "Calculation Period" has the meaning set forth in the O&M Agreement.
 

 "Capital Improvement" has the meaning set forth in the O&M Agreement.
 

 "CEII" means critical energy infrastructure information as defined by FERC pursuant to 18 C.F.R. §388.113(c)(1), or any successor designation of information having a similar effect.
 

 "C.F.R." means the Code of Federal Regulations.
 

 "C.G.S." means the Connecticut General Statutes.
 

 "CIP" has the meaning set forth in Section 6.6(f).
 

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 "CL&P Facilities" means collectively all electric transmission facilities (including towers, poles, conductors, conduits, substations and associated land and land rights) owned by Seller.
 

 "CL&P Property" means any real property owned by Seller in fee simple and/or real property in which Seller owns an interest (including an easement or license).
 

 "Claim" means any claim, complaint, investigation, hearing, demand, demand letter, allegation of whatever form of Liability or potential Liability or notice of noncompliance or violation delivered by any Governmental Authority or other Person, including any administrative, regulatory, or judicial Proceeding resulting therefrom.
 

 "Closing" has the meaning set forth in Section 4.1.
 

 "Closing Date" means May 31, 2011.
 

 "CMEEC" means Connecticut Municipal Electric Energy Cooperative, a publicly-directed joint-action supply agency formed by the state's municipal electric utilities in 1976 under authority of the C.G.S.
 

 "Code" has the meaning set forth in Section 3.5.
 

 "Commercially Reasonable Efforts" means efforts that are reasonably within the contemplation of the Parties at the Effective Date and that do not require the performing Party to undertake actions and/or expend any funds other than expenditures that are customary and reasonable in transactions of the kind and nature similar to the Transaction in order for the performing Party to satisfy its obligations hereunder.
 

 "Common Permit" has the meaning set forth in Section 7.4(e).
 

 "Contract" means any agreement, lease, license, note, evidence of indebtedness, mortgage, security agreement, understanding, instrument or other arrangement, in each case, whether written or oral.
 

 "CONVEX" means The Connecticut Valley Electric Exchange.  CONVEX is a Local Control Center (as defined in the ISO-NE Tariff) and performs certain functions regarding the operation of the electric transmission system and dispatch of generation in the State of Connecticut and the Commonwealth of Massachusetts in accordance with the ISO-NE Tariff and the TOA.
 

 "Cost Allocation" has the meaning set forth in the O&M Agreement.
 

 "CPR" means the CPR Institute for Dispute Resolution (formerly known as the Center for Public Resources).
 

 

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 "CPR Mediation Procedure" means the procedures developed by CPR to facilitate the conduct of the mediation process.
 

 "CPR Panels of Distinguished Neutrals" means a list of qualified mediators and arbitrators developed and maintained by CPR available to help resolve complex business disputes.
 

 "CPR Rules for Non-Administered Arbitration" means the rules developed by CPR to facilitate the conduct of the arbitration process.
 

 "Credit Rating" means, with respect to any Person, the rating assigned to such Person by Moody's or S&P for such Person's senior unsecured, unsubordinated long-term debt obligations (not supported by third party credit enhancements) or, if such Person does not have a rating for its senior unsecured, unsubordinated long-term obligations, then the rating one notch below the rating then assigned to such issuer as a corporate or long-term issuer rating.  If a Person has a rating from Moody's and S&P, then, if the ratings differ, the lower of the two Credit Ratings shall apply.
 

 "DEP" means the State of Connecticut Department of Environmental Protection and any successor thereto.
 

 "Deposit" has the meaning set forth in Section 3.1(b).
 

 "DOT" means the Connecticut Department of Transportation and any successor thereto.
 

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

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

 "Environment" means soil, land surface or subsurface strata, real property, surface waters, groundwater, wetlands, sediments, drinking water supply, ambient air (including indoor air) and any other environmental medium or natural resource.
 

 "Environmental Claim" means a Claim by any Person based upon a breach of Environmental Law or an Environmental Liability alleging loss of life, injury to persons, property or business, damage to natural resources or trespass to property, whether or not such loss, injury, damage or trespass arose or was made manifest before the Closing Date or arises or becomes manifest after the Closing Date.
 

 "Environmental Law" means Law relating to: (a) the regulation, protection and use of the Environment; (b) the conservation, management, development, control and/or use of land, natural resources and wildlife; (c) the management, manufacture, possession, presence, use, generation, transportation, treatment, storage, disposal, release, threatened release, abatement, removal, remediation, or handling of, or exposure to, any Hazardous Materials, including all applicable common law pertaining to actions for personal injury and/or property damage 
 

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 resulting from Hazardous Materials with respect to both on-site and off-site contamination; or (d) noise.
 

 "Environmental Liability" means any Liability (including enhanced oversight expenses) under or related to Environmental Law arising as a result of or in connection with (a) the construction, installation, ownership, use or operation of all or any portion of any Purchased Assets whether occurring prior to, on or after the Closing Date; (b) any and all Environmental Claims caused (or allegedly caused) by Hazardous Materials that are present or have been Released in connection with the construction, installation, ownership, use, operation and/or maintenance of all or any portion of any Purchased Assets (including Hazardous Materials at, on, in, under, adjacent to or migrating from the location of any of the Purchased Assets) prior to, on or after the Closing Date; (c) the investigation and/or Remediation (whether or not such investigation or Remediation commenced before the Closing Date or commences on or after the Closing Date) of Hazardous Materials that are present or have been Released in connection with the construction, installation, ownership, use, operation and/or maintenance of all or any portion of any Purchased Assets prior to, on or after the Closing Date (including Hazardous Materials at, on, in, under, adjacent to or migrating from the location(s) of any of the Purchased Assets); (d) compliance with Environmental Law on or after the Closing Date with respect to the construction, installation, ownership, use, operation and/or maintenance of all or any portion of any Purchased Assets; (e) any Environmental Claim arising from or relating to the off-site disposal, treatment, storage, transportation, discharge, Release or recycling, or the arrangement for such activities, of Hazardous Materials, prior to, on or after the Closing Date, in connection with the construction, installation, ownership, use, operation and/or maintenance of all or any portion of any Purchased Assets; and (f) the investigation and/or Remediation of Hazardous Materials that are generated, disposed, treated, stored, transported, discharged, Released, recycled, or the arrangement of such activities, on or after the Closing Date, in connection with the construction, installation, ownership, use, operation and/or maintenance of all or any portion of any Purchased Assets, at any Off-site Disposal Facility.
 

 "EPA" means the United States Environmental Protection Agency and any successor thereto.
 

 "Event of Default" has the meaning set forth in Section 11.1.
 

 "Excluded Assets" has the meaning set forth in Section 2.2.
 

 "Excluded Communication Assets" has the meaning set forth in Section 7.6(b).
 

 "Excluded Liabilities" has the meaning set forth in Section 2.4.
 

 "Existing Electric Facilities" has the meaning set forth in Section 7.6(e).
 

 "FERC" means the Federal Energy Regulatory Commission and any successor thereto.
 

 "Good Utility Practices" has the meaning set forth in the TOA from time to time.
 

 

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 "Governmental Authority" means any federal, state, commonwealth, county, local or other governmental, quasi-governmental, regulatory or administrative authority, agency, body, commission, department, board, or other governmental subdivision, legislature, rulemaking board, court, tribunal, arbitral body, FERC, EPA, DEP, DOT, ISO-NE, CONVEX, government-owned corporation or any other governmental or quasi-governmental authority or department thereof or any Person exercising or purporting to exercise any governmental or quasi-governmental authority or prerogative.
 

 "Guarantor" means CMEEC.
 

 "Guaranty" means the guaranty agreement of even date herewith, executed and delivered by Guarantor to Seller unconditionally guarantying, among other things, Buyer's payment and performance obligations to Seller under the Transaction Documents.
 

 "Hazardous Materials" means (a) any petrochemical or petroleum products, oil, waste oil, asbestos in any form that is or could become friable, urea formaldehyde foam insulations, lead-based paint and polychlorinated biphenyls; (b) any products, mixtures, compounds, materials or wastes, air emissions, toxic substances, wastewater discharges or any chemical, material or substance that may give rise to Liability pursuant to, or is listed or regulated under, or the human exposure to which or the release of which is controlled or limited by, Environmental Law; and (c) any materials or substances defined in Environmental Law as "hazardous", "toxic", "pollutant", or "contaminant", or defined in Environmental Law using any words of similar meaning or legal or regulatory effect.
 

 "Indemnified Environmental Obligations" has the meaning set forth in Section 10.2.
 

 "Indemnified Person" has the meaning set forth in Section 10.1.
 

 "Independent Accounting Firm" means Ernst & Young.
 

 "Intervening Claim" has the meaning set forth in Section 6.8(b).
 

 "Investment Grade" means having a Credit Rating of at least BBB- by S&P and Baa3 by Moody's (or the equivalent of such ratings if either of such rating agencies has modified its rating scale since the Effective Date).
 

 "ISO-NE" means ISO-New England Inc. and any successor thereto.
 

 "ISO-NE Tariff" means the ISO-NE Transmission, Markets, and Services Tariff, FERC Electric Tariff No. 3.
 

 "Knowledge" means the actual, current knowledge, after due inquiry, of Seller's Director – Claims and Insurance and Seller's Project Director for the M/N Project.
 

 "Law" means any current and future applicable federal, state, local or other governmental or quasi-governmental constitution, charter, act, statute, law, ordinance, code, rule, regulation, 
 

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 Order, license, or permits applicable to the Purchased Assets and/or the Parties' respective obligations under the Transaction Documents (including the Assumed Liabilities).
 

 "Liability" or "Liabilities" means any loss, fee (including experts' and/or attorneys' fees), cost, damage, expense, fine, penalty, liability, action, settlement, judgment, award or other obligation of whatever nature, including cost and expense of claims management and litigation (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, whether incurred or consequential and whether due or to become due), including those arising as a result of any Claim and/or Proceeding and including any Environmental Liability.
 

 "License Agreement" has the meaning set forth in Section 4.2(c).
 

 "M/N Project" means the Middletown to Norwalk 345-kV Transmission Line Project, as more particularly described in the Opinion, Decision and Order, and Findings of Fact dated April 7, 2005 in Connecticut Siting Council Docket No. 272, and in the FERC decision in Northeast Utilities Service Co., 124 FERC ¶ 61,044; reh'g denied 126 ¶ 61,052 (2009).
 

 "Managed Claims" means collectively (a) the Pending Proceedings; (b) the Intervening Claims (if any); (c) any Claim or Proceeding alleging that all or any portion of the Purchased Assets, or the activities associated with the construction of, and/or capital improvements to, all or any portion of the Purchased Assets, constitute overburdening of easement, trespass, nuisance, inverse condemnation, and/or similar Claims arising out of, and/or related to, in whole or in part, the construction of, and/or capital improvements to, all or any portion of the Purchased Assets, including any Claims filed by the Law Offices of Benson Snaider arising out of, and/or relating to, the construction of all or any portion of the Purchased Assets as part of the M/N Project; and (d) any Claim or Proceeding arising out of and/or related to electromagnetic fields associated with, and/or produced by, in whole or in part, all or any portion of the Purchased Assets.
 

 "Master Agreements" has the meaning set forth in Section 7.6(d).
 

 "Members" means collectively the municipal electric utilities of East Norwalk, Groton (including the Bozrah Light and Power Company), Jewett City, Norwich, South Norwalk and Wallingford and any other members of Buyer from time to time.
 

 "Monthly Usage Fee" has the meaning set forth in Section 7.6(e).
 

 "Moody's" means Moody's Investor Services, Inc. 
 

 "NEON" means NEON Optica, Inc., a Delaware corporation, as successor in interest to NECOM LLC.
 

 "NEON Agreements" means collectively (a) the Second Amended and Restated Agreement for the Provision of Fiber Optic Facilities and Services – Phase 1 dated December 23, 2002 (but effective as of September 27, 1994), among NUSCO, Seller, Western Massachusetts Electric Company, Public Service Company of New Hampshire and NEON; and (b) Second 
 

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 Amended and Restated Agreement for the Provision of Fiber Optic Facilities and Services - Phase 2 dated December 23, 2002, among NUSCO, Seller, Western Massachusetts Electric Company, Public Service Company of New Hampshire and NEON, as each such agreement has been or may be amended from time to time.
 

 "NERC" means the North American Electric Reliability Corporation and any successor thereto.
 

 "No Harm Principle" has the meaning set forth in Section 7.2(a).
 

 "Non-Breaching Party" means the Party as to whom an Event of Default has not occurred.
 

 "Non-Managed Claim" means any Claim for which Seller is entitled to indemnification by Buyer under the Transaction Documents that is not a Managed Claim.
 

 "NPCC" means the Northeast Power Coordinating Council and any successor thereto.
 

 "NUSCO" means Northeast Utilities Service Company, a Connecticut corporation.
 

 "O&M Agreement" has the meaning set forth in Section 4.2(g).
 

 "Off-Site Disposal Facility" means a location, other than the location of any asset comprising the Purchased Assets, that receives or received Hazardous Materials arising out of, and/or relating to all or any portion of the Purchased Assets for storage and/or disposal by or on behalf of Seller prior to the Closing Date or by or on behalf of Buyer on or after the Closing Date.
 

 "Order" means any order, consent order, judgment, writ, injunction, decree, decision, directive or award of a court, administrative judge or other Governmental Authority acting in an adjudicative or regulatory capacity, or of an arbitrator or arbitrators with applicable jurisdiction over the subject matter.
 

 "Partially Assigned Contract" has the meaning set forth in Section 7.4(b).
 

 "Participating Transmission Owners" means those transmission owners who have executed the TOA with ISO-NE with the consent and approval of ISO-NE.
 

 "Party" means either Buyer or Seller, as indicated by the context, and "Parties" means Buyer and Seller.
 

 "Pending Proceedings" has the meaning set forth in Section 2.3(e).
 

 "Permit" means any approval, authorization, certificate, permit, agreement, Order, and license issued with respect to the ownership, installation, operation, use and/or maintenance of electric transmission facilities by any Governmental Authority.
 

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 "Person" means any individual, partnership, limited liability company, joint venture, corporation, trust, unincorporated organization, Governmental Authority or other entity.
 

 "Planning Authority" shall mean ISO-NE and/or any other regional and/or national planning authority for electric transmission facilities, including any committees, commissions and/or other organizations that make recommendations with respect to, and/or have a role in the approval of, the operation, maintenance, improvement and/or expansion of electric transmission facilities.
 

 "Proceeding" means (a) any action, cause of action, and/or proceeding of whatever form including any writ, filing, complaint, hearing, lawsuit, litigation, mediation, arbitration, regulatory proceeding, investigation, petition for relief, appeal, injunction, declaratory action, and/or any process that has any effect similar to any of the foregoing; and (b) without limiting the generality of clause (a) of this definition, any process that involves the enforcement and/or declaration of any right, benefit and/or entitlement, seeks relief from, and/or the imposition of, any Liability of whatever nature, and/or requests any decision, authorization and/or other action from a Person other than a Party, whether or not a Governmental Authority.
 

 "Property Tax Agreement" has the meaning set forth in Section 4.2(d).
 

 "Purchased Assets" has the meaning set forth in Section 2.1.
 

 "Purchase Price" has the meaning set forth in Section 3.1(a).
 

 "Purchaser" has the meaning set forth in Section 14.6(c)(i).
 

 "Regulatory Proceeding" means any Proceeding relating to the regulation of any asset and/or group of assets and/or the conduct of any business and/or other activities before and/or administered by any Governmental Authority (including FERC and ISO-NE) and/or NERC, including any federal and/or state legislative, regulatory and/or judicial Proceedings, and any resulting judicial Proceedings.
 

 "Release" means any actual, threatened or alleged spilling, leaking, pumping, pouring, emitting, dispersing, emptying, discharging, injecting, escaping, leaching, dumping, or disposing of any Hazardous Materials into the Environment that may cause an Environmental Liability (including the disposal or abandonment of barrels, containers, tanks or other receptacles containing or previously containing any Hazardous Materials).
 

 "Remediation" means any or all of the following activities to the extent required to address the presence or Release of Hazardous Materials: (a) monitoring, investigation, assessment, treatment, cleanup, containment, removal, mitigation, response or restoration work as well as obtaining any permits, consents, approvals or authorizations of any Governmental Authority necessary to conduct any such activity; (b) preparing and implementing any plans or studies for any such activity; (c) obtaining a written notice (or an oral notice that is appropriately documented or memorialized) from a Governmental Authority with competent jurisdiction under 
 

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 Environmental Law or a written opinion of a Licensed Environmental Professional (as defined in C.G.S. § 22a-133v), as contemplated by the relevant Environmental Law and in lieu of a written notice from a Governmental Authority, that no material additional work is required; and (d) any other activities reasonably determined by a Party to be necessary or appropriate or required under Environmental Law.
 

 "Repurchase Closing" has the meaning set forth in Section 7.10(a).
 

 "Reserved Ancillary Rights" has the meaning set forth in Section 7.6(c).
 

 "Reserved Non-Transmission/Distribution Rights" has the meaning set forth in Section 7.6(a).
 

 "Reserved Assets" means collectively the Excluded Communication Assets, the Existing Electric Facilities and the Master Agreements.
 

 "Reserved Rights" means collectively the Reserved Non-Transmission/Distribution Rights and the Reserved Ancillary Rights.
 

 "Retained Interests" has the meaning set forth in Section 7.4(a).
 

 "Right of First Refusal" has the meaning set forth in Section 7.9(c).
 

 "S&P" means Standard and Poor's Rating Group (a division of McGraw-Hill, Inc.).
 

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

 "Seller's Regulatory Approvals" has the meaning set forth in Section 8.2(d).
 

 "Seller's Representatives" means Seller's accountants, employees, counsel, consultants, financial advisors, and other representatives.
 

 "Shared Contract" has the meaning set forth in Section 7.4(b).
 

 "Step-In Agreement" has the meaning set forth in Section 4.2(f).
 

 "Support Agreement" means the Support and Cooperation Agreement of even date herewith, among Seller, Buyer and CMEEC.
 

 "Tax" or "Taxes" means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, franchise, profits, withholding, real property, personal property, sales, use, transfer, conveyance, registration, value added, alternative or add-on minimum, estimated, or other tax, fees and other charges of any Governmental Authority of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.
 

 

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 "Tax Gross-Up" has the meaning set forth in Section 3.3.
 

 "Tax Return" means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
 

 "Termination Fee" has the meaning set forth in Section 9.4.
 

 "Third Party" means any Person other than the Parties or any of their respective Affiliates.
 

 "TOA" means that certain Transmission Operating Agreement dated February 1, 2005, between ISO-NE and the Participating Transmission Owners (as amended from time to time) on file with FERC or any successor document thereto.
 

 "Town" has the meaning set forth in Section 3.2(a)(ii).
 

 "Transaction" means the purchase and sale of the Purchased Assets, the assignment and assumption of associated Liabilities, and execution and delivery of the Transaction Documents and the performance thereunder, all on the terms and conditions set forth in the Transaction Documents.
 

 "Transaction Assets" has the meaning set forth in Section 14.6(c)(i).
 

 "Transaction Documents" means collectively this Agreement and the Additional Agreements.
 

 "Transfer" means, whether used in noun or verb form, a transaction by which Buyer directly or indirectly (through an equity sale, merger or other means) sells, assigns, conveys, delegates or otherwise transfers (or agrees or is required to do any of the foregoing) all or any portion of its rights, obligations and/or other interests in the referenced agreement, property and/or other asset (including the proceeds thereof), including (a) a sale, assignment, license, lease, transfer, gift, or exchange, (b) as a result of the exercise of rights by any Person other than a Party under any pledge, encumbrance, hypothecation, and/or mortgage granted by Buyer, (c) any involuntary or voluntary transfer to a bankruptcy estate, receiver or similar person acting for the benefit of creditors, (d) the transfer of a controlling interest in Buyer by its parent, members and/or other Person possessing control (as defined in the definition of Affiliate), or (e) any other disposition whatsoever (including any transaction that could result in the functional equivalent of any of the foregoing), or an agreement to do any of the foregoing.
 

 "Transferable Contract" means each Contract to be transferred by Seller to Buyer as a Purchased Asset pursuant to Section 2.1(b).
 

 "Transferable Permit" means each Permit to be transferred by Seller to Buyer as a Purchased Asset pursuant to Section 2.1(c).
 

 

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 "Transmission Facilities" has the meaning set forth in Section 2.1(a).
 

 "U.S.C." means the United States Code.
 

 1.2
 Entire Agreement; Interpretation.
 

 (a)
 Entire Agreement.  The Transaction Documents contain the entire agreement between the Parties pertaining to the purchase and sale of the Purchased Assets and supersede any and all prior oral or written agreements, terms, understandings, conditions, proposals, negotiations and representations with respect to that subject matter. 
 

 (b)
 Amendments.  No amendments or modifications of this Agreement and/or any of the other Transaction Documents shall be valid unless evidenced in writing, and signed and delivered by duly authorized officers or agents of Seller and Buyer.
 

 (c)
 No Third Party Beneficiaries.  This Agreement and all rights hereunder are intended for the sole benefit of the Parties and shall not imply or create any rights on the part of, or obligations to, any other Person (other than the Indemnified Persons).
 

 (d)
 Documents Comprising the Agreement.  The terms and conditions of this Agreement and the other Transaction Documents are complementary.  Insofar as possible, all of such terms and conditions shall be construed and interpreted consistently.  In any case of inconsistency, conflict or ambiguity between or among such terms and conditions (including any exhibits, schedules and/or documents incorporated by reference), the terms and conditions of the applicable Transaction Document shall have precedence over the provisions of any other Transaction Document that may have general applicability and/or any terms incorporated by reference, and within each Transaction Document, any specifically applicable term and/or condition shall have precedence over a provision having general applicability.
 

 (e)
 References.  Reference to a given article, section, subsection, exhibit or schedule is reference to an article, section, subsection, exhibit or schedule of this Agreement, unless otherwise specified.  The terms "hereof", "herein", "hereto", "hereunder" and "herewith" refer to this Agreement as a whole.
 

 (f)
 Number.  As used in the Transaction Documents, all singular terms shall include the plural and vice versa as the context may require.
 

 (g)
 Interpretation.  Except where otherwise expressly provided or unless the context otherwise necessarily requires in a Transaction Document:  (i) reference to a given Law or tariff shall mean such Law or tariff in effect as amended or modified on the date on which the reference is made or determined, or performance and/or compliance is required; (ii) reference to a given agreement or instrument is a reference to that agreement or instrument as originally executed, and as modified, amended, supplemented and restated through the date as of which reference is made to that agreement or instrument or performance is required under that agreement or instrument; (iii) "include(s)", "including" or any other variant thereof means "include(s), without limitation," or "including, without limitation," or any other variant thereof as 
 

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 the context requires; (iv) the phrase "and/or" shall be deemed to mean the words both preceding and following such phrase, or either of them; (v) reference to a Person includes its heirs, executors, administrators, successors and permitted assigns; and (vi) any pronoun includes the corresponding masculine, feminine and/or neuter forms as the context may require.  The words "will" and "shall" are used interchangeably throughout the Transaction Documents; the use of either connotes a mandatory requirement; and the use of one or the other will not mean a different degree of right or obligation for either Party.  The headings and captions for the articles, sections and subsections contained in the Transaction Documents have been inserted for convenience only and form no part of the Transaction Documents and shall not be deemed to affect the meaning or construction of any of the terms or conditions of the Transaction Documents.
 

 (h)
 Days.  Unless otherwise indicated, whenever any Transaction Document refers to a (i) number of days, such number shall refer to calendar days; and (ii) year, such year shall refer to a calendar year.  If any deadline (other than the Closing Date) calculated in accordance with the provisions of any Transaction Document falls on a day that is not a Business Day, such deadline shall be extended automatically to the next Business Day.
 

 (i)
 Construction.  The Parties acknowledge that (i) they are of equal bargaining strength and have jointly participated in the preparation of the Transaction Documents; and (ii) any rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not apply in the interpretation of all or any portion of the Transaction Documents, or to any amendment of the Transaction Documents.
 

 ARTICLE 2.
 PURCHASE AND SALE
 

 2.1
 Transfer of Assets.  Upon the terms and subject to the conditions set forth in the Transaction Documents, at the Closing, Seller shall sell, assign, convey, transfer, and deliver to Buyer, and Buyer shall purchase, assume and acquire from Seller, all of Seller's right, title, and interest in, to, and under the following assets and properties except to the extent that such assets are Excluded Assets (collectively, the "Purchased Assets"):
 

 (a)
 the electric transmission facilities described in Schedule 2.1(a) (the "Transmission Facilities");
 

 (b)
 to the extent transferable, the Contracts listed on Schedule 2.1(b) necessary to own, use and/or operate the Transmission Facilities after the Effective Date; provided that (i) if any of such Contracts also relate to portions of the M/N Project and/or any other electric transmission facilities retained by Seller, then the Purchased Assets shall only include the portions of such Contracts that are related to the Transmission Facilities; and (ii) Seller or its Affiliates, as applicable, shall retain the rights and interests under any Contract to the extent such rights and interests provide for indemnity and exculpation rights for pre-Closing occurrences for which Seller or its Affiliates remain liable under this Agreement; and
 

 (c)
 to the extent transferable, the Permits listed on Schedule 2.1(c) necessary to own, 
 

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 use and/or operate the Transmission Facilities after the Effective Date; provided that if any of such Permits also relate to portions of the M/N Project and/or any other electric transmission facilities retained by Seller, then the Purchased Assets shall only include the portions of such Permits that are related to the Transmission Facilities.
 

 Notwithstanding anything to the contrary herein, neither this Agreement, nor any of the other Transaction Documents conveying title to, and/or rights in, the Purchased Assets shall sell, assign, convey and/or otherwise transfer any ownership interest of whatever nature in real property.  The Purchased Assets shall constitute only personal property, and the Parties shall take such actions, execute and deliver such documents and/or otherwise do such things (including appropriate filings with Tax authorities) from time to time as may be necessary and/or appropriate to confirm, clarify and/or otherwise characterize the Purchased Assets as personal property.  If a Governmental Authority determines after the Closing that any of the Purchased Assets constitute real property, then the Parties shall negotiate in good faith to determine whether the conveyance of the affected Purchased Assets was consistent with the original purpose and intent of the Parties, and if so, the Parties shall execute and/or deliver such documents (including a deed and a non-disturbance agreement which respect to any liens affecting such real property) as are reasonable and customary to transfer such Purchased Assets on the terms and conditions contemplated herein; provided that if the Parties fail to reach agreement regarding such transfer within thirty (30) days after commencing such good faith negotiations, then, subject to the receipt of all necessary regulatory approvals, Buyer shall convey good and valid title to such affected Purchased Assets to Seller on an "as is, where is" basis free and clear of any liens or other encumbrances in exchange for a payment by Seller to Buyer equal to the net book value of such Purchased Assets.
 

 2.2
 Excluded Assets.  The Purchased Assets do not include any property or assets of Seller not described in Section 2.1 and, notwithstanding any provision to the contrary in Section 2.1 or elsewhere in this Agreement, the Purchased Assets do not include the following property or assets of Seller (all assets excluded pursuant to this Section 2.2, the "Excluded Assets"):
 

 (a)
 all cash, cash equivalents, bank deposits, accounts and accounts receivable, prepaid expenses, and other rights to payment relating to the installation, ownership, use and/or operation of the Purchased Assets through the Closing Date, including (i) Seller's right to recover the costs incurred by Seller with respect to the Transmission Facilities through rates with respect to the period through the Closing Date; and (ii) all revenue under Transferable Contracts through the Closing Date;
 

 (b)
 any income, sales, payroll or other Tax receivables relating to the installation, ownership, use and/or operation of any of the Purchased Assets (in each case, whether held by Seller or any Third Party) with respect to any period through the Closing Date;
 

 (c)
 any refund or credit (i) related to Taxes paid by or on behalf of Seller, whether such refund is received as a payment or as a credit against future Taxes payable; or (ii) relating to a period before the Closing Date;
 

 (d)
 the right, title and interest of Seller and its successors, assigns and Seller's 
 

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 Representatives in, to and under all Claims against Third Parties, if any, relating to the construction, installation, ownership, use and/or operation of any of the Purchased Assets by Seller through the Closing Date, whether accruing prior to, on or after the Closing Date, including all Claims for refunds, prepayments, offsets, recoupment, insurance proceeds, insurance distributions, dividends or other proceeds, condemnation awards, judgments and the like, whether received as payment or credit against future Liabilities;
 

 (e)
 the right, title and interest of Seller and its successors, assigns and Seller's Representatives in, to and under all Contracts of any nature, other than the Transferable Contracts;
 

 (f)
 all insurance policies maintained by Seller and/or its Affiliates and rights thereunder relating to the construction, installation, ownership, use and/or operation of the Purchased Assets;
 

 (g)
 the assets identified in the Asset Demarcation Agreement, or any document or exhibit referred to or incorporated in the Asset Demarcation Agreement, as being on Seller's side of the point of demarcation thereunder;
 

 (h)
 the rights of Seller arising under or in connection with the Transaction, including any of the Transaction Documents; and
 

 (i)
 the Retained Interests.
 

 2.3
 Assumed Liabilities.  On the Closing Date, Buyer will deliver to Seller an Assignment and Assumption Agreement pursuant to which Buyer will assume and agree to pay, perform and otherwise discharge when due, without recourse to Seller or its Affiliates, all of the Liabilities of Seller and its Affiliates, successors, assigns and Seller's Representatives of any kind and description, relating to, in respect of, or otherwise arising from the development, construction, installation, ownership, operation, maintenance and/or use of, the Purchased Assets (collectively, the "Assumed Liabilities"), including the following Liabilities:
 

 (a)
 all Liabilities arising under, in respect to, or relating to the Transferable Contracts;
 

 (b)
 all Liabilities arising under, in respect to, or relating to the Transferable Permits;
 

 (c)
 all Liabilities for any and all post-Closing Date Taxes with respect to the Purchased Assets;
 

 (d)
 all Liabilities with respect to the construction, installation, ownership, use, operation and/or maintenance of the Purchased Assets, including any and all Liabilities arising from and/or relating to compliance or non-compliance with any and all (i) past, present and/or future Environmental Laws, including any and all Environmental Liabilities, (ii) past, present and/or future Orders issued by any Governmental Authority, and/or (iii) past, present and/or future permits or other approvals issued under any Environmental Law (collectively, the "Assumed Environmental Liabilities");
 

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 (e)
 all Liabilities arising under, in respect to, or relating to any Claim existing, arising, or asserted with respect to the Purchased Assets on or after the Closing Date, including the pending Proceedings asserted by Third Parties set forth Schedule 2.3(e) ("Pending Proceedings") and any Intervening Claims; and
 

 (f)
 all other Liabilities of any nature whatsoever to the extent arising from the development, construction, installation, ownership, use, operation and/or maintenance of all and/or any portion of the Purchased Assets.
 

 2.4
 Excluded Liabilities.  Notwithstanding anything to the contrary contained in this Agreement, Buyer shall not assume and shall not be obligated to pay, perform or otherwise discharge any of the following Liabilities of Seller (collectively, the "Excluded Liabilities"):
 

 (a)
 any Liabilities of Seller to the extent related to any Excluded Assets, except to the extent caused by the acts or omissions of Buyer or any Buyer's Representative or Buyer's ownership, use and/or operation of the Purchased Assets; and
 

 (b)
 any Liabilities of Seller in respect of Taxes attributable to the Purchased Assets for taxable periods ending before the Closing Date, except for Taxes for which Buyer is liable pursuant to Article 3.
 

 For the avoidance of doubt, since the Parties do not intend the Transaction Documents to convey and/or otherwise transfer any ownership interest of whatever nature in real property, Buyer shall not assume, and Seller shall retain the Liabilities of Seller relating to real property, except to the extent that such Liabilities relate to, result from, and/or otherwise exist with respect to the development, construction, installation, ownership, operation, maintenance and/or use of, the Purchased Assets (including the Assumed Environmental Liabilities).  The foregoing shall not affect in any manner whatsoever Buyer's obligations after the Closing Date with respect to real property under the Transaction Documents, including the obligation to comply with requirements relating to real property under the License Agreement.
 

 2.5.
 Guaranty.  On the Effective Date, Buyer shall deliver to Seller the Guaranty, executed and delivered by the Guarantor, and shall maintain at all times thereafter the Guaranty in full force and effect.  If at any time the Guarantor shall cease, for whatever reason, to be a guarantor and/or the Guaranty shall fail, in whole or in part, to remain in full force and effect as to the Guarantor, then Buyer shall, within ten (10) days after the earlier of the date on which (a) Buyer shall have been given notice of such cessation by Seller, or (b) Buyer becomes aware of such cessation, propose to Seller the form of an additional guaranty from a replacement guarantor for Seller's review and approval in Seller's sole and absolute discretion.  If Seller withholds such approval, Buyer shall promptly take such corrective action as will address Seller's concerns until Seller issues such approval.  Buyer shall deliver to Seller an original additional guaranty executed and delivered by such replacement guarantor within ten (10) days after such approval.
 

 

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 ARTICLE 3.
 PURCHASE PRICE; TAX GROSS-UP; CLOSING ADJUSTMENTS
 

 3.1
 Purchase Price.
 

 (a)
 Calculation.  The purchase price for the Purchased Assets shall be equal to the net book value of the Transmission Facilities as shown on Seller's books as of the Closing Date (the "Purchase Price").  Schedule 3.1 sets forth the estimated Purchase Price based on the Closing Date.  During the meeting to finalize adjustments pursuant to Section 3.2(a)(i), the Parties also shall finalize, to the extent practical, the Purchase Price; provided that if any estimated component of the Purchase Price cannot be reasonably finalized at such time, the Parties shall consummate the Closing using Seller's good faith estimate of such amounts pending a mutually agreed adjustment process after the Closing Date (or the resolution of any dispute regarding such amounts pursuant to Article 12).
 

 (b)
 Deposit.  Simultaneously with the execution and delivery hereof, Buyer shall deposit with Seller One Million Dollars ($1,000,000.00) (the "Deposit").  The Deposit shall not be refunded or otherwise returned to Buyer unless this Agreement has been terminated because either (i) the conditions set forth in Section 8.1(a), Section 8.1(b), Section 8.1(f), Section 8.2(d) or Section 8.2(e) have not been satisfied; (ii) a Party has terminated this Agreement pursuant to Section 8.3(b), Section 9.1(b), Section 9.1(c) or Section 9.4; or (iii) Buyer has terminated this Agreement in accordance with Section 6.4 or Section 9.2, and in each such instance under clauses (i) through (iii), Seller shall return the Deposit to Buyer within thirty (30) days after the effective date of such termination.  Buyer shall not be entitled to interest in any form whatsoever on the Deposit, and Seller shall be entitled to use the Deposit without restriction and without an accounting to Buyer.
 

 3.2
 Closing Adjustments.
 

 (a)
 Pro-Ration.
 

 (i)
 In addition to the Purchase Price, all of the items normally prorated in a sale of assets of the type contemplated by this Agreement relating to the ownership and/or operation of the Purchased Assets, including those listed below, will be prorated between the Parties as of the Closing Date, with Seller liable to the extent such items relate to any period through the Closing Date, and Buyer liable to the extent such items relate to periods after the Closing Date:
 (A) Taxes on or associated with the Purchased Assets (including any associated personal property Taxes which shall be allocated to the Purchased Assets based on their net book value as included in any applicable personal property declaration by Seller and then adjusted on a fiscal year basis in accordance herewith based on the Closing Date).  For example, presuming a Closing Date of May 31, 2011, Seller shall receive a credit for the thirty (30) days remaining in fiscal year 2011 and for fiscal year 2012 for personal property Taxes on the Purchased Assets, subject to Seller's obligation to pay fiscal year 2012 personal property Taxes in full (as contemplated in Section 3.2(a)(ii));
 (B) rent, Taxes and other items payable by or to Seller under any of the written contracts (with any contractual arrangement concerning personal property Taxes to be adjusted as 
 

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 provided for in clause (A) above concerning personal property Taxes), agreements, arrangements, licenses, easements, subeasements and other documents and/or instruments, relating to the ownership and/or operation of such Purchased Assets assigned to and assumed by Buyer (in the case of any partial assignment, to the extent so assigned and assumed), or for which other arrangements have been made under this Agreement, pursuant to the terms of the Transaction Documents;
 (C) any Permit, license, registration or similar fee with respect to any Transferable Permit; and
 (D) to the extent applicable, sewer charges and charges for water, fire protection, telephone, electricity and other utilities or services (with all municipal and/or other charges of a Governmental Authority being adjusted on a fiscal year basis based on the Closing Date).
 Subject to Section 3.2(a)(ii), and not less than five (5) Business Days prior to the Closing Date, the Parties shall agree upon the sum of the net amount of the prorated amounts to which either Seller or Buyer shall be entitled pursuant to this Section 3.2(a)(i) and such net amount shall be paid at Closing.  In the event that a dispute exists between the Parties with regard to any proration, the Parties shall consummate the Closing using Seller's good faith estimate of amounts pending the resolution of such dispute pursuant to Article 12.
 

 (ii)
 If the amount of one or more of the Taxes or other Liabilities to be prorated in accordance with Section 3.2(a)(i) is not known or determinable on or prior to the Closing Date, the amounts to be prorated as of the Closing Date in accordance with Section 3.2(a)(i) shall be based upon the actual Taxes or other Liabilities for the most recent preceding fiscal or calendar year (or other appropriate period) for which such actual Taxes or Liabilities are available.  The amount of unknown or indeterminable Taxes or other Liabilities prorated as of the Closing Date pursuant to Section 3.2(a)(i) shall be adjusted to reflect the actual amount of such Taxes or Liabilities upon the request of either Seller, on the one hand, or Buyer, on the other hand, within sixty (60) days after the date the actual amounts become available, and the resulting payment shall be made within thirty (30) days after receipt of a correct invoice or other accurate written request for payment.  The Parties agree to furnish each other with such documents and other records that may be reasonably requested in order to confirm all adjustment and proration calculations made pursuant to this Section 3.2(a)(ii).  Without limiting the generality of the foregoing, if Seller has submitted a personal property declaration to the Town of Wallingford ("Town") before the Closing Date which included, among other things, the Purchased Assets, Seller will remain liable to the Town for personal property Taxes associated with the Purchased Assets for the fiscal year(s) covered by such declaration(s).  At the Closing, Buyer shall pay to Seller the amount estimated by Seller for that portion of the Tax associated with the Purchased Assets under such declaration(s) (in addition to the adjustment contemplated in Section 3.2(a)(i) with respect to personal property Taxes associated with the Purchased Assets for the Town's current fiscal year), and Seller shall directly pay the Town each installment for such personal property Taxes.  Buyer shall remain liable to Seller pursuant to this Section 3.2(a) if and to the extent that the Town adjusts the Liability for such personal property Taxes for any fiscal year, including as a result of the adjustment in the mil rate, and any such adjustment shall be effected in accordance with this Section 3.2(a)(ii).  Buyer shall be directly responsible for Taxes on or associated with such Purchased Assets for each fiscal year of the Town after the Closing Date and not covered by the adjustments contemplated in this Section 3.2(a)(ii), 
 

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 including the filing of a declaration with the Town for such fiscal years.
 

 (b)
 Transfer, Conveyance, Sales and Gross Receipts Tax.  All transfer, conveyance, sales and gross receipts Taxes payable in connection with the conveyance of the Purchased Assets (whether or not treated by the applicable taxing authority as personal property, notwithstanding the Parties' intent that the Purchased Assets are personal property) and the Transaction, including Connecticut sales and gross receipts Tax, shall be borne by Buyer, and Buyer, at its own cost and expense, will file, to the extent required by Law, all necessary Tax Returns and other documentation with respect to all such transfer, conveyance, sales or gross receipts Taxes.  If required by Law, Seller will execute or join in the execution of any such Tax Returns or other documentation; provided that Seller shall not be required to execute or deliver any Tax Returns or other documentation that Seller, in good faith, believes to be false or misleading.  Prior to the Closing Date, Buyer will provide to Seller, to the extent possible, an appropriate certificate of no Tax due from each applicable taxing authority.  Buyer represents and warrants to Seller that Buyer is a tax exempt entity under the Laws of the State of Connecticut.
 

 (c)
 Capital Additions.  If Seller has made any addition, improvement, upgrade and/or other modification to the Transmission Facilities, in whole or in part, the cost of which constitutes a capital expenditure, and such cost has not been reflected, in whole or in part, in the net book value of the Transmission Facilities as of the Closing Date (whether due to the submission, processing and/or payment of related invoices, the administrative timing associated with record keeping and/or any other reason), then the Purchase Price shall be increased to include such capital costs not reflected in the net book value of the Transmission Facilities.  Not less than ten (10) Business Days prior to the Closing Date, Seller shall furnish Buyer with an estimate of any capital additions that may be subject to this Section 3.2(c), together with such documents and other records that may be reasonably necessary to confirm the costs associated with such capital additions.  To the extent that certain capital costs are not yet fixed (including due to any capital addition pending as of such date), Seller shall be entitled to estimate all or any portion of the adjustment under this Section 3.2(c).  If Seller has estimated any capital cost, Seller shall issue a final adjustment within a reasonable time after accounting for all such capital costs, and Seller shall refund, or Buyer shall pay, as the case may be, the amount due under such final adjustment within thirty (30) days after receipt thereof.  The Parties shall negotiate in good faith to reconcile any differences with respect to such capital addition(s) and/or the adjustment resulting therefrom pursuant to this Section 3.2(c).  If the Parties have not reconciled their differences regarding such adjustment as of the Closing Date, the Parties shall consummate the Closing based on Seller's calculation of the adjustment, and thereafter, the Parties shall wait until Seller has received and accounted for such capital costs before determining the final adjustment and associated true-up payment as contemplated above.  Nothing in this Section 3.2(c) shall apply to, and/or affect the provisions of the O&M Agreement regarding, capital additions to the Transmission Facilities made after the Closing Date.
 

 3.3
 Tax Gross-Up.  At the Closing, in addition to the Purchase Price, Buyer shall pay to Seller the amount necessary to reimburse Seller for the decrease in sales proceeds available to Seller due to the tax consequences of Seller's sale of the Purchased Assets before expiration of the term of their useful life (for tax and accounting purposes) (the "Tax Gross-Up").  The Tax 
 

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 Gross-Up shall be calculated in accordance with the methodology set forth in Schedule 3.3.  Not less than ten (10) Business Days prior to the Closing Date, Seller shall furnish Buyer with a calculation of the Tax Gross-Up projected as of the Closing Date, and the Parties will negotiate in good faith to reconcile any differences with respect to such calculation and/or projection; provided that if the difference between the Tax Gross-Up so furnished by Seller and the Tax Gross-Up estimated in Schedule 3.3 is less than One Hundred Thousand Dollars ($100,000.00), whether positive or negative, then Seller's projected Tax Gross-Up shall be binding and conclusive on the Parties, and the Closing shall occur using such projection without future adjustment and/or reconciliation of whatever nature except as provided below in this Section 3.3.  In the event that such difference exceeds $100,000, and the Parties have not reconciled their differences regarding the amount of the Tax Gross-Up as of the Closing Date, the Parties shall consummate the Closing based on Seller's calculation of the Tax Gross-Up, and thereafter, the Parties shall submit the dispute to the Independent Accounting Firm for resolution, the cost of which shall be shared equally by the Parties.  The resolution of the Independent Accounting Firm shall be final, binding and conclusive on the Parties.  The Tax Gross-Up shall be subject to adjustment after the Closing only if and to the extent that:
 (a)
 a change in Law applicable to the Taxes considered in the methodology for calculating the Tax Gross-Up occurs after the Closing Date (and such change in Law was not anticipated as the Closing Date, or if anticipated, was not implemented as so anticipated);
 (b)
 such change in Law applies to Seller and affects the 2011 tax year; and
 (c)
 the difference between the Tax Gross-Up as of the Closing Date and the Tax Gross-Up calculated based on such change in Law exceeds One Hundred Thousand Dollars ($100,000.00), whether positive or negative.
 If all of such conditions have been satisfied, and a Party desires to adjust the Tax Gross-Up, then such Party shall notify the other Party of the proposed adjustment, which notice shall include reasonable detail regarding the proposed adjustment; provided that if no Party has requested an adjustment to the Tax Gross-Up pursuant to this Section 3.3 on or before September 30, 2012, then the Tax Gross-Up as of the Closing Date shall be binding and conclusive on the Parties, without future adjustment whatsoever.  In the event that the Parties have not reconciled any differences regarding a request to adjust the Tax Gross-Up within sixty (60) days after the receipt of such request, the Parties shall submit the adjustment to the Independent Accounting Firm for resolution, the cost of which shall be shared equally by the Parties.  The resolution of the Independent Accounting Firm regarding such adjustment shall be final, binding and conclusive on the Parties.
 

 3.4
 Wire Transfer Instructions.  Unless otherwise agreed to in writing by the Parties, all payments by Buyer to Seller pursuant hereto, including the Purchase Price and the Tax Gross-Up, shall be made by wire transfer in accordance with the instructions from time to time provided by Seller.
 

 3.5
 Allocation of Purchase Price.  The Purchase Price will be allocated among the Purchased Assets using net book value as indicated on Seller's books in a manner consistent with Section 1060 of the Internal Revenue Code of 1986, as amended from time to time, and the Treasury Regulations promulgated thereunder (the "Code").  Each Party will report the Transaction for federal income Tax and all other Tax purposes in a manner consistent with such 
 

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 allocation to the extent consistent with Law.  Each Party will provide the other promptly with any and all other information required to complete Form 8594 under the Code.  Each Party will notify the other and will provide the other with reasonably requested cooperation in the event of an examination, audit, or other Proceeding regarding the allocations provided for in this Section 3.5.
 

 ARTICLE 4.
 THE CLOSING; DELIVERIES AT CLOSING
 

 4.1
 Time and Place of Closing.  The closing of the purchase and sale of the Purchased Assets and assumption of the Assumed Liabilities (the "Closing") will take place at Seller's office in Berlin, Connecticut at 10:00 a.m. (local time) on the Closing Date; provided that all conditions precedent to Closing contained in Article 8 have been satisfied (or waived as provided herein) on or before such date.  The Closing will be effective as of midnight (local time) on the Closing Date.  It is the intent of the Parties that if the Closing occurs effective as of midnight on May 31, 2011, Seller shall retain ownership of the Purchased Assets through the end of May, 2011 and that Buyer's ownership of the Purchased Assets shall commence as of June 1, 2011.
 

 4.2
 Deliveries by Seller.  At or prior to the Closing, Seller will deliver, or cause to be delivered, the following to Buyer:
 

 (a)
 A Bill of Sale in substantially the form set forth in Exhibit A ("Bill of Sale"), duly executed by Seller;
 

 (b)
 An Assignment and Assumption Agreement in substantially the form set forth in Exhibit B ("Assignment and Assumption Agreement"), duly executed by Seller;
 

 (c)
 A Non-Exclusive License Agreement in substantially the form set forth in Exhibit C ("License Agreement"), duly executed by Seller;
 

 (d)
 A Property Tax Agreement in substantially the form set forth in Exhibit D ("Property Tax Agreement"), duly executed by Seller;
 

 (e)
 An Asset Demarcation Agreement in substantially the form set forth in Exhibit E ("Asset Demarcation Agreement"), duly executed by Seller;
 

 (f)
 A Step-In Agreement in substantially the form set forth in Exhibit F ("Step-In Agreement"), duly executed by Seller;
 

 (g)
 An Operation and Maintenance Agreement in substantially the form set forth in Exhibit G ("O&M Agreement"), duly executed by Seller;
 

 (h)
 A certificate of a duly authorized officer of Seller (i) stating that (A) the execution, delivery and performance of the Transaction Documents to which Seller is a party have been duly authorized by all necessary corporate action by Seller, and (B) all conditions precedent to such execution, delivery and performance have been satisfied or waived by Seller, and (ii) identifying the name and title and bearing the signatures of the 
 

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 officers of Seller authorized to execute and deliver the Transaction Documents;
 

 (i)
 Originals in Seller's possession of the Transferrable Contracts and Transferrable Permits constituting Purchased Assets; provided that (i) if any Transferrable Contracts and/or Transferrable Permits also relate to portions of the M/N Project and/or any other electric transmission facilities retained by Seller, then Seller shall only furnish copies of such related documents; (ii) Seller in its capacity as the operator under the O&M Agreement may retain such originals to the extent reasonably required for the operation and maintenance of the Purchased Assets, in which case Buyer shall have access to the same pursuant to Section 2.9 of the O&M Agreement; and/or (iii) Seller shall have the right to retain copies of all such documents delivered pursuant hereto;
 

 (j)
 The joint defense agreement(s) contemplated in Section 6.8(i); and
 

 (k)
 A partial release of mortgage substantially in the form of Schedule 4.2(k) hereto, having a property description of the Transmission Facilities reasonably consistent with those typically submitted by Seller when requesting similar releases.
 

 4.3
 Deliveries by Buyer.  At or prior to the Closing, Buyer will deliver, or cause to be delivered, the following to Seller:
 

 (a)
 The Purchase Price (less the Deposit);
 

 (b)
 The Tax Gross-Up;
 

 (c)
 The Additional Agreements, each duly executed by Buyer;
 

 (d)
 A certificate of a duly authorized officer of Buyer (i) stating that (A) the execution, delivery and performance of the Transaction Documents to which Buyer is a party have been duly authorized by all necessary corporate action by Buyer, and (B) all conditions precedent to such execution, delivery and performance have been satisfied or waived by Buyer, and (ii) identifying the name and title and bearing the signatures of the officers of Buyer authorized to execute and deliver the Transaction Documents;
 

 (e)
 The instrument contemplated under Section 5.2(c);
 

 (f)
 Payment pursuant to Section 7.8(b) of all Transaction expenses incurred by Seller (to the extent presented for reimbursement at the Closing);
 

 (g)
 A certificate, in form and substance reasonably satisfactory to Seller, evidencing Buyer's status as a tax exempt entity under the Laws of the State of Connecticut; and
 

 (h)
 The joint defense agreement(s) contemplated in Section 6.8(i).
 

 

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 ARTICLE 5.
 REPRESENTATIONS AND WARRANTIES OF PARTIES
 

 5.1
 Mutual Representations.  Each Party represents and warrants to the other that, except as set forth in Article 8:
 

 (a)
 Such Party has full power and authority necessary to execute and deliver this Agreement and, as of the Closing Date, will have the full power and authority to execute and deliver each Transaction Document to which it is a party and to consummate the Transaction.  The execution and delivery by such Party of this Agreement has been duly and validly authorized by all necessary action on its part, and as of the Closing Date, each Transaction Document to which such Party is a party will be, and the consummation of the Transaction will have been, duly and validly authorized by all necessary action on its part.  This Agreement has been duly and validly executed and delivered by such Party, and this Agreement constitutes the valid and binding obligation of such Party, enforceable against such Party in accordance with its terms.  Upon the execution and delivery by such Party of each Transaction Document to which it is a party, such Transaction Document will have been duly and validly executed and delivered by such Party, and such Transaction Document will constitute the valid and binding obligation of such Party, enforceable against such Party in accordance with its terms;
 

 (b)
 Neither the execution and delivery of this Agreement or any other Transaction Document by such Party, nor the consummation by such Party of the Transaction will (i) conflict with or result in any material breach or violation of any provision of the enabling legislation and/or constituent and/or governing documents, as the case may be, of such Party; (ii) result in a default (or give rise to any right of termination, consent, cancellation or acceleration) under any of the terms, conditions or provisions of any material lease, note, bond, mortgage, indenture, agreement or other instrument or obligation to which such Party is a party or by which it may be bound; provided that Seller provides no representation and/or warranty of whatever nature with regard to the Transferable Contracts or the underlying real property rights with respect to properties affected by the License Agreement; or (iii) constitute any material violation of any Law applicable to such Party; and
 

 (c)
 No consent or approval of, filing with, or prior notice to, any Governmental Authority or any other Person by or for such Party is necessary for the execution and delivery of the Transaction Documents by it, or the consummation by it of the Transaction; provided that Seller provides no representation and/or warranty of whatever nature with regard to the Transferable Permits.
 

 5.2
 Buyer Representations.
 

 (a)
 Buyer represents and warrants to Seller that there are no pending, threatened or potential Claims and/or other basis for any Proceeding, by Buyer, or to Buyer's knowledge, by Guarantor and/or any of the Members against Seller and/or any of its Affiliates.
 

 (b)
 Effective on the Effective Date, Buyer, on behalf of itself and its successors and 
 

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 assigns, hereby irrevocably and fully releases and forever discharges Seller, Seller's Representatives and their respective successors and assigns, of and from all manner of action and actions, cause and causes of action, loss, cost, expense, suits, debts, dues, sums of money, accounts, reckoning, bonds, bills, specialties, covenants, Contracts, controversies, promises, variances, trespasses, Liabilities, damages, Orders, extents, executions, and other Claims whatsoever in law or in equity, and whether under domestic or foreign law or Proceeding, which Buyer and/or any of such other Persons ever had, now have or hereafter can, shall or may have against any of such released parties for, upon, or by reason of, any matter, cause or thing whatsoever, direct or indirect, absolute or contingent, arising from, or relating to, any act, obligation (contractual or otherwise), or omission of any of such released parties occurring on or before the Effective Date; excluding, however, the indirect benefits received by Buyer, if any, from Orders issued in Proceedings of Third Parties in accordance with Section 5.2(d).  Buyer, on behalf of itself and its successors and assigns, hereby waives any and all rights and benefits that Buyer and/or such other Persons now has, or in the future may have conferred upon it by virtue of any statute or common law principle which provides that a general release does not extend to claims or other obligations which an entity does not know or suspect to exist in its favor at the time of such release, which if known, would have materially affected such Person's release of another Person.
 

 (c)
 At the Closing, Buyer shall execute and deliver to Seller a representation, release and waiver similar to those set forth in Section 5.2(a) and Section 5.2(b), effective as of the Closing Date, excluding, however, any Claim resulting from any failure of Seller to perform its obligation under, and subject to, the terms and conditions of the Transaction Documents.
 

 (d)
 This Section 5.2 shall not affect any benefits received by Buyer as a result of any Order of general application (including rate adjustments, refunds or credits) issued in connection with Proceedings against Seller by Third Parties pending as of the Effective Date.  Buyer and/or its Affiliates may intervene and/or take other action to become a party in such Proceeding by a Third Party solely for purposes of monitoring such Proceeding; however, Buyer and/or such Affiliate(s) shall not take any action in connection with such Proceeding (including the filing of any briefs and/or other pleadings) that reasonably could be expected to directly or indirectly have a material and adverse effect on Seller's interest and/or position in such Proceeding.  Buyer represents and warrants to Seller that to Buyer's knowledge, the pending Regulatory Proceedings set forth in Schedule 7.5(b) are the only Proceedings pending as of the Effective Date that could result in an Order of general application that could benefit Buyer.
 

 (e)
 In addition to Buyer's obligations under Article 10, Buyer agrees to indemnify Seller and all other Indemnified Persons against, and defend and hold each of them harmless from any and all Claims, Orders and/or Proceedings resulting from actions of, and/or related to, and Liabilities whatsoever to, Guarantor, any Member, any Affiliate of a Member and/or their respective successors and assigns, suffered or incurred by any of such Indemnified Persons arising out of, and/or related to, any electric transmission, interconnection and/or wholesale electric distribution services directly and/or indirectly provided by Seller to, and/or for the benefit of (including through Buyer and/or CMEEC), Guarantor, any Member, any Affiliate of a Member and/or their respective successors and assigns occurring on or before the Effective Date; excluding, however, any indirect Liability of any Indemnified Person to Guarantor, any Member, 
 

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 any Affiliate of a Member and/or their respective successors and assigns, if any, from Orders issued in Proceedings of Third Parties in accordance with Section 5.2(d).  The provisions of Section 10.3 through Section 10.7, inclusive shall apply pari passu to the foregoing indemnification, except that Buyer shall not be entitled to assume the defense thereof pursuant to Section 10.4 or otherwise because such indemnification obligation does not relate to a Third Party Claim.  Accordingly, each Indemnified Person may defend an indemnified Claim and/or other indemnified Liability in such manner as it may deem appropriate, and Buyer shall bear all of the costs and expenses, including attorneys' fees, incurred by each Indemnified Person in connection with such defense, all of which shall be paid from time to time within thirty (30) days after Buyer receives a written request from any Indemnified Person for reimbursement (including reasonably detailed documentation in support of any such request).
 

 (f)
 The provisions of this Section 5.2 shall survive termination of this Agreement, including if the Parties do not consummate the Transaction for whatever reason; provided that the release set forth in Section 5.2(b) and the indemnification set forth in Section 5.2(e) shall be null and void if Buyer has terminated this Agreement in accordance with Section 9.2.
 

 ARTICLE 6.
 TERMS OF CONVEYANCE
 

 6.1
 Title; Liens.  Seller represents and warrants to Buyer that as of the Closing Date, (a) Seller has good and valid title to the Transmission Facilities; and (b) the Transmission Facilities are free and clear of any liens, mortgages or other encumbrances; excluding, however, any encumbrance associated with, and/or resulting from (i) a Permit applicable to the Purchased Assets; (ii) the inherent nature of the Purchased Assets, including restrictions applicable to the Transmission Facilities as a component of the regional electric transmission grid; (iii) the rights of the counterparties under the NEON Agreements, the Master Agreements and/or the Transferable Contracts; and/or (iv) the Retained Interests.  Notwithstanding anything to the contrary in the foregoing, Seller shall not be in breach of the foregoing representation and warranty if and to the extent that the costs incurred by Buyer in discharging any lien, mortgage or other encumbrance can be recovered by Buyer through rates.  Seller, at its sole cost and expense, will perform all such acts, file all such documents, and cause to be done all such other things as Buyer may reasonably request from time to time in connection with the discharge of any such lien, mortgage or other encumbrance and otherwise reasonably cooperate with Buyer in such regard.
 

 6.2
 "As Is, Where is" Transaction.  Except as set forth in Section 6.1, THE PURCHASED ASSETS ARE SOLD "AS IS, WHERE IS," AND SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO THE PURCHASED ASSETS, INCLUDING ANY LIABILITIES ASSOCIATED WITH THE PURCHASED ASSETS, OPERATIONAL FUNCTIONALITY OF THE PURCHASED ASSETS, THE VALIDITY OR ENFORCEABILITY OF THE CONTRACTS AND/OR PERMITS RELATED TO THE PURCHASED ASSETS, WHETHER OR NOT THE ASSIGNMENT (FULL OR PARTIAL) OF, OR OTHER ARRANGEMENTS CONCERNING ANY OF SUCH CONTRACTS OR PERMITS CAN BE MADE, THE CONDITION, VALUE OR QUALITY OF THE PURCHASED ASSETS, OR THE PROSPECTS (FINANCIAL AND OTHERWISE), RISKS AND OTHER INCIDENTS OF OWNERSHIP OF THE 
 

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 PURCHASED ASSETS (INCLUDING BUYER'S ABILITY TO RECOVER THE COSTS ASSOCIATED WITH THE PURCHASED ASSETS THROUGH THE REGIONAL ELECTRIC TRANSMISSION SYSTEM OR OTHERWISE).  SELLER SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, USAGE, OR SUITABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THE PURCHASED ASSETS, OR ANY PART THEREOF, OR AS TO THE WORKMANSHIP THEREOF, OR THE ABSENCE OF ANY DEFECTS OMISSIONS AND/OR OTHER DEFICIENCIES THEREIN, WHETHER LATENT OR PATENT, OR COMPLIANCE WITH ENVIRONMENTAL LAW, OR AS TO THE CONDITION OF THE PURCHASED ASSETS, OR ANY PART THEREOF, INCLUDING WHETHER SELLER POSSESSES SUFFICIENT REAL PROPERTY OR PERSONAL PROPERTY RIGHTS TO OPERATE THE PURCHASED ASSETS.  SELLER FURTHER SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING THE ABSENCE OF HAZARDOUS MATERIALS OR LIABILITY OR POTENTIAL LIABILITY ARISING UNDER ANY ENVIRONMENTAL LAW.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF ANY KIND REGARDING THE SUITABILITY OF THE PURCHASED ASSETS FOR OPERATION AS A PORTION OF THE M/N PROJECT OR THE VALIDITY OR ENFORCEABILITY OF THE CONTRACT RIGHTS RELATED TO THE PURCHASED ASSETS ASSIGNED BY SELLER TO BUYER, OR WHETHER OR NOT ANY OF THE CONTRACTS OR PERMITS CAN BE TRANSFERRED TO BUYER AND WHETHER SELLER HAS THE RIGHTS TO TRANSFER OR TO MAKE OTHER ARRANGEMENTS CONCERNING ALL OR ANY PORTION OF SUCH RIGHTS TO BUYER.  NO MATERIAL OR INFORMATION PROVIDED BY OR COMMUNICATION (ORAL, WRITTEN OR ELECTRONIC) MADE BY SELLER, AND NO ORAL, WRITTEN OR ELECTRONIC RESPONSE TO ANY INFORMATION REQUEST PROVIDED BY SELLER TO BUYER, WILL CAUSE OR CREATE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE CONDITION, VALUE OR QUALITY OF THE PURCHASED ASSETS THAT IS NOT SET FORTH IN THIS AGREEMENT.  The provisions of this Section 6.2 shall survive termination of this Agreement after the Closing.
 

 6.3
 Buyer Acknowledgement.  BUYER ACKNOWLEDGES AND AGREES THAT THE PURCHASED ASSETS ARE BEING ACQUIRED "AS IS, WHERE IS" AS OF THE CLOSING DATE, AND IN THEIR CONDITION AS OF THE CLOSING DATE, AND THAT PRIOR TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE CONSUMMATION OF THE CLOSING, BUYER HAS CONDUCTED TO ITS SATISFACTION ALL NECESSARY AND SUFFICIENT EXAMINATION OF THE PURCHASED ASSETS AND ASSUMED LIABILITIES, AND THAT BUYER IS RELYING ON ITS OWN EXAMINATION OF THE PURCHASED ASSETS AND ASSUMED LIABILITIES, AND IS NOT RELYING ON ANY REPRESENTATION OR WARRANTY MADE BY SELLER OTHER THAN AS EXPRESSLY PROVIDED IN THIS AGREEMENT.  BUYER FURTHER ACKNOWLEDGES AND AGREES THAT THE REPRESENTATIONS AND WARRANTIES OF SELLER REGARDING THE PURCHASED ASSETS AND ASSUMED LIABILITIES SET FORTH IN THIS AGREEMENT (OTHER THAN THOSE SET FORTH IN SECTION 6.1) SHALL 
 

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 TERMINATE AS OF THE CLOSING DATE, AND THAT FOLLOWING THE CLOSING DATE, BUYER SHALL HAVE NO RECOURSE AGAINST SELLER OR ANY OF ITS AFFILIATES WITH RESPECT TO ANY BREACH OF SUCH REPRESENTATIONS AND WARRANTIES AND/OR OTHERWISE WITH RESPECT TO THE PURCHASED ASSETS AND ASSUMED LIABILITIES.  The provisions of this Section 6.3 shall survive termination of this Agreement after the Closing.
 

 6.4.
 Risk of Loss.  All risk of loss or damage suffered by the property included in the Purchased Assets before the Closing shall be, as between Buyer and Seller, borne by Seller.  If during such period, any of the Purchased Assets are damaged by weather, fire and/or other casualty, and Seller has not completed the repair of such damage before the Closing Date, then Seller shall notify Buyer of such occurrence and provide Buyer access to the Purchased Assets and such information as Buyer may reasonably request relating to the pending repairs.  Buyer shall have the right to elect, exercisable by notice to Seller within fifteen (15) days immediately following Buyer's receipt of Seller's notice, either to: (a) proceed with the consummation of the Transaction at Closing, without a reduction and/or other adjustment in the Purchase Price of whatever nature due to such damage, in which case Seller shall complete such repairs for Buyer's account as a Capital Improvement under the O&M Agreement; or (b) terminate this Agreement and the other Transaction Documents without Liability to either Party (other than for the obligations hereunder that survive termination).  If Buyer fails to make the election within such fifteen (15) day period, Buyer will be deemed to have made the election to proceed with the Closing.  Buyer shall not be entitled, under any circumstances, to receive, and hereby disclaims and otherwise irrevocably waives any interest in, any and all insurance and/or other proceeds that Seller receives, or to which Seller becomes entitled by virtue of such casualty (including the right to recover through rates the costs and expenses incurred by Seller in connection with such casualty before the Closing).  If the fifteen (15) day period referenced above extends beyond the Closing Date, such period shall not extend, and shall be deemed to expire on, the Closing Date.  The provisions of this Section 6.4 shall survive termination of this Agreement after the Closing.
 

 6.5
 Regulatory Treatment.
 

 (a)
 Regional/Local.  Notwithstanding anything to the contrary in this Agreement and/or any agreements executed and delivered in connection herewith, following the transfer of the Purchased Assets, Seller will have no exposure with respect to the regulatory treatment of, or recovery on, such Purchased Assets (including the consequences of a Governmental Authority determination that a portion of the cost of such Purchased Assets should be localized), including the effect, if any, of the disposition of any of the pending Regulatory Proceedings identified on Schedule 7.5(b).  Without limiting the generality of the foregoing, Buyer shall not assert or otherwise claim that the Transaction is conditioned in any manner on any of the costs associated with the Transmission Facilities being fully recoverable from regional customers under ISO-NE's regional rates; provided, however, that nothing in this Section 6.5 shall require Buyer to accept any of Buyer's Regulatory Approvals that are not acceptable to Buyer in accordance with Section 8.1(c).  Buyer shall assume the obligation to recover costs associated with the Transmission Facilities from the appropriate customers should ISO-NE determine that some or all costs associated with the Transmission Facilities are not recoverable from regional customers.  The provisions of this Section 6.5(a) shall survive until the termination of this Agreement after the 
 

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 Closing pursuant to Section 7.7(d).
 

 (b)
 Disallowance.  After the Closing, Buyer shall share, in accordance with this Section 6.5(b), the risk of any regulatorily disallowed cost associated with the M/N Project, including the effect, if any, of the disposition of any of the pending Regulatory Proceedings identified on Schedule 7.5(b).  To the extent that any such disallowance solely relates to the Transmission Facilities, Buyer shall solely and fully bear the entire amount of such disallowance.  To the extent that any such disallowance relates to the M/N Project and cannot be reasonably and solely attributed to any particular asset(s) (whether the Transmission Facilities or CL&P Facilities), Buyer shall bear such disallowance on a pro rata basis (pro-rated in proportion to the adjusted gross plant value of the Transmission Facilities relative to the adjusted gross plant value of all transmission facilities in the M/N Project).  In the event of any such pro rata allocation of a disallowance, Seller shall furnish Buyer with a calculation of Buyer's pro rata allocation so that Buyer can effect such disallowance in Buyer's applicable rate or tariff.  Buyer may dispute such calculation within thirty (30) days after Buyer's receipt of such calculation, in which case the Parties will negotiate in good faith to reconcile any differences with respect to such calculation.  If the Parties cannot reconcile such differences within thirty (30) days after Buyer notifies Seller of such dispute, the Parties shall submit the dispute to the Independent Accounting Firm for resolution, the cost of which shall be shared equally by the Parties.  The resolution of the Independent Accounting Firm shall be final, binding and conclusive on the Parties.  The provisions of this Section 6.5(b) shall survive until the termination of this Agreement after the Closing pursuant to Section 7.7(d).
 

 6.6
 Ownership Obligations.
 

 (a)
 Assumption of Responsibility.  Immediately upon the transfer by Seller to Buyer of the Purchased Assets, Buyer shall assume full responsibility for all rights and obligations associated with and/or arising out of the Purchased Assets, including any environmental matters, without recourse to Seller and/or its Affiliates for any matters whatsoever.  The foregoing shall not affect the obligations of Seller under the O&M Agreement or the Step-In Agreement, as applicable.
 

 (b)
 Charges.  Following transfer of the Purchased Assets, without limiting all obligations inherent in the ownership, operation and maintenance of the Purchased Assets, Buyer shall bear all costs (including ISO-NE and CONVEX charges), obligations and risks associated with the Purchased Assets (including future capital improvements, insurance coverage and risk of loss).  The foregoing shall not affect the obligations of Seller under the O&M Agreement or the Step-In Agreement, as applicable.
 

 (c)
 Regional Grid.  The Purchased Assets shall be used for the transmission of electricity.  While Buyer will have ownership of the Purchased Assets, the Purchased Assets will be considered part of Seller's transmission system for operational purposes.  At the Closing, Buyer shall be a member of CONVEX and a Participating Transmission Owner in good standing under the TOA and otherwise with ISO-NE, and thereafter, Buyer shall maintain such membership and good standing.
 

 

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 (d)
 Facilities Upgrade.  To the extent that a Planning Authority mandates, requires, approves and/or otherwise authorizes any upgrade and/or other capital improvement with respect to the Transmission Facilities, including as a result of any request from a transmission owner (including Seller) or generator, and Buyer is obligated as a transmission owner to make such capital improvement, Buyer shall be solely responsible for full and timely compliance with such requirements, including any and all costs associated therewith; provided that for any upgrade and/or other capital improvement that does not require approval of a Planning Authority, Buyer shall upgrade, at Buyer's sole cost, the Transmission Facilities in the same manner and at the same time that Seller upgrades the CL&P Facilities that are interconnected with the Transmission Facilities.  During the term of the O&M Agreement, Seller shall effect, arrange for, and manage any such upgrade of the Capital Improvements as defined in, in accordance with, and subject to, the provisions of the O&M Agreement.
 

 (e)
 Good Utility Practices.  During any period when the O&M Agreement is not in full force and effect for whatever reason, including due to its suspension (in whole or in part), expiration, or termination, Buyer shall maintain the Transmission Facilities in compliance with Good Utility Practices and otherwise in a manner that does not adversely affect any CL&P Facilities that interconnect with any of the Transmission Facilities.  The Step-In Agreement shall apply if Buyer fails to do so.  The provisions of this Section 6.6(e) shall survive until the termination of this Agreement after the Closing pursuant to Section 7.7(d).
 

 (f)
 Compliance with CEII and CIP.  In addition to the obligations set forth in Section 14.7, to the extent that Buyer obtains any CEII in its exercise of its rights under the Transaction Documents, Buyer shall keep confidential any and all CEII whether or not solely applicable to the Transmission Facilities; provided that if Buyer is required by Law to disclose any CEII, Buyer shall make such disclosure in accordance with the requirements of Section 14.7 as though CEII had been designated confidential information by Seller.  To the extent any Transmission Facilities involve critical assets and critical cyber assets, Buyer shall be bound by and comply with the applicable provisions of the NERC Critical Infrastructure Protection ("CIP") standards.  In addition, upon request by Seller, Buyer shall execute an agreement confirming full compliance with the foregoing obligations.  Buyer shall not be responsible for Seller's compliance with the provisions of the NERC CIP applicable to Seller's access to CEII.  The provisions of this Section 6.6(f) shall survive termination of this Agreement.
 

 6.7
 Relationship of Parties.  Nothing in this Agreement or the other Transaction Documents creates or is intended to create an association, trust, partnership, joint venture or other entity or similar legal relationship between the Parties, or impose a trust, partnership or fiduciary duty, or similar obligation or liability on or with respect to either Party.  Except for the powers of attorney granted by Buyer to Seller under the Transaction Documents, neither Party shall be deemed to be a representative, an agent or an employee of the other Party, or have any right or authority to take action that may bind the other Party, without the prior written consent of the other Party, which consent may be granted or withheld in such other Party's sole and absolute discretion.
 

 

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 6.8
 Claims Management.
 

 (a)
 Pending Proceedings.  Seller represents and warrants to Buyer that as of the Effective Date, except for the Pending Proceedings and the Regulatory Proceedings referenced in Schedule 7.5(b), to Seller's Knowledge, there is no material Proceeding pending or threatened in writing by a Third Party as of the Effective Date that seeks monetary damages with respect to the installation, ownership and/or use of the Transmission Facilities.  If the foregoing representation is materially false or misleading, Buyer's sole recourse and remedy with respect to such misrepresentation shall be:
 

 (i)
 for any Claim of misrepresentation discovered or asserted before the Closing Date, the termination of this Agreement, in which event, the Parties shall be released from any and all obligations under this Agreement and the other Transaction Documents, except for the obligations hereunder that survive termination; or
 

 (ii)
 for any Claim of misrepresentation discovered after the Closing Date and determined to have occurred through an appropriate Proceeding, the reimbursement of that portion of any Liability incurred by Buyer as a result of such misrepresentation that Buyer, despite the use of Buyer's best efforts, cannot recover through rates.
 

 (b)
 Intervening Claims.  Seller shall notify Buyer of any material Claim and/or Proceeding asserted by a Third Party relating to the Purchased Assets and asserted between the Effective Date and the Closing Date (each an "Intervening Claim").  Buyer shall have the right to elect, exercisable by notice to Seller within fifteen (15) days immediately following Buyer's receipt of Seller's notice, either to: (i) proceed with the consummation of the Transaction at Closing, without a reduction and/or other adjustment in the Purchase Price of whatever nature due to such Intervening Claim, in which case such Intervening Claim shall be a Managed Claim after the Closing; or (ii) terminate this Agreement and the other Transaction Documents without Liability to either Party (other than for the obligations hereunder that survive termination).  If Buyer fails to make the election within such fifteen (15) day period, Buyer will be deemed to have made the election to proceed with the Closing.  If the fifteen (15) day period referenced above extends beyond the Closing Date, such period shall not extend, and shall be deemed to expire on, the Closing Date.
 

 (c)
 Managed Claims.  After the Closing, Seller shall exclusively manage and control all Managed Claims (whether before or after the Closing); provided that:
 

 (i)
 Seller shall be entitled, by notice given to Buyer within thirty (30) days after Seller receives written notice of a Managed Claim, to elect not to so manage and control such Managed Claim, in which case such Claim or Proceeding shall be a Non-Managed Claim; and/or
 

 (ii)
 if a Third Party has asserted a Managed Claim against Buyer, but has not asserted such Managed Claim against Seller and/or any of its Affiliates, then Seller shall be entitled, by notice given to Buyer within thirty (30) days after Seller receives written notice of such Managed Claim, to elect not to so manage and control such Managed 
 

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 Claim, in which case such Claim or Proceeding shall be a Non-Managed Claim; provided further that if such Third Party subsequently asserts such Claim against, and/or prosecutes a Proceeding involving, Seller and/or any of its Affiliates, then Seller shall be entitled to assume the exclusive management and control of such Claim or Proceeding as a Managed Claim effective upon Seller's notice of such election given to Buyer.  If any Non-Managed Claim becomes a Managed Claim pursuant to this Section 6.8(c), Buyer, at Buyer's sole cost and expense, will perform all such acts, file all such documents, and cause to be performed all such other things as Seller may reasonably request from time to time in connection with the transition of the management and control of such Non-Managed Claim (becoming a Managed Claim) to Seller (including counsel selected by Seller).
 

 (d)
 Management Standard.  The Parties acknowledge the benefits associated with the consistency in the management and control of Managed Claims, and this Section 6.8 reflects the desire of Buyer to align its interests with those of Seller in Managed Claims, recognizing that the relative implications of the disposition of Managed Claims will likely have similar effects on the Purchased Assets, CL&P Facilities and/or CL&P Property.  Buyer acknowledges that since the disposition of any Managed Claims will directly and/or indirectly impact CL&P Facilities and/or CL&P Property, Buyer shall have no recourse whatsoever against Seller with respect to the disposition of any Managed Claims, and Buyer fully accepts and will bear the effects of any Order and/or settlement resulting from any Managed Claims and/or other result in such matter, including the obligation to make any payments due to any Third Party.  Buyer hereby irrevocably (i) waives any and all claims of whatever nature against Seller, counsel selected by Seller, and Seller's Affiliates arising out of, and/or related to, each Managed Claim, including any act and/or omission by Seller, counsel selected by Seller, and any of Seller's Affiliates (whether before or after the Closing Date) that could have and/or has prejudiced, influenced and/or otherwise affected Buyer's Liability with respect to a Managed Claim; and (ii) releases and discharges Seller, counsel selected by Seller, and Seller's Affiliates from any Liabilities regarding a Managed Claim.  The Parties intend that the foregoing waiver and release shall be construed broadly to prohibit any recovery of whatever nature by Buyer against Seller, counsel selected by Seller, and Seller's Affiliates for any Liabilities associated with, and/or relating to, each Managed Claim.  If requested by Buyer for any Managed Claim that Buyer has not exercised its right of separate counsel pursuant to Section 6.8(k)(i), Seller shall provide Buyer with a report regarding the Managed Claim(s), in such form and content as Seller may reasonably determine based on the circumstances, on a quarterly basis.
 

 (e)
 Buyer Support.  Buyer, at Buyer's sole cost and expense, will perform all such acts, file all such documents, and cause to be done all such other things as Seller may reasonably request from time to time in connection with each Managed Claim and otherwise support and cooperate with Seller in such regard.  Buyer hereby appoints Seller (and its agents) as the exclusive attorney-in-fact of Buyer for the purpose of taking any action and executing any instrument that Seller may deem necessary or advisable in connection with each Managed Claim (including any pleadings in connection with Proceedings relating to the same).  Buyer understands and agrees that the power of attorney granted to Seller for such purpose is coupled with an interest and is irrevocable, and Buyer hereby ratifies all actions taken by Seller (and its agents) as Buyer's attorney-in-fact by virtue hereof.  If any Managed Claim also involves any 
 

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 Affiliate(s) of Buyer and/or any of Buyer's Representatives, Buyer shall cause such Affiliate(s) and/or Buyer's Representative(s) to enter into an arrangement with Seller for Seller's exclusive control and management of such Managed Claim on behalf of such Person on terms and conditions substantially identical to those contained in this Section 6.8.
 

 (f)
 Liability for Managed Claims.
 

 (i)
 Except as otherwise provided by the allocation rules in Section 6.8(g) of this Agreement, Buyer shall fully and solely bear and pay all costs, expenses and other Liabilities arising out of, and/or related to each Managed Claim (including the costs of experts and attorneys' fees incurred by Seller in the defense and management thereof and the full amount of any Order and/or settlement resulting from such Managed Claim).  Without limiting the generality of the foregoing, although Buyer has indemnified Seller for Managed Claims pursuant to Article 10 of this Agreement and/or applicable indemnification provisions of other Transaction Documents, the provisions of Section 10.3 and Section 10.4 (and any similar provisions of other applicable Transaction Documents) regarding indemnification notices and indemnification procedure shall not apply to Managed Claims.  Instead, the provisions of this Section 6.8 shall govern the management and administration of Managed Claims.  Except for such management and administration, nothing in this Section 6.8 shall affect in any manner whatsoever the obligations and other Liabilities of Buyer with respect to the indemnification of Seller and/or Seller's Affiliates for Managed Claims under any of the Transaction Documents, including Buyer's obligations to Indemnified Persons under Article 10 of this Agreement.
 

 (ii)
 To the extent that any Claim and/or Proceeding includes one or more Managed Claims and certain Non-Managed Claim(s), such Claim and/or Proceeding shall be deemed and shall constitute a Managed Claim for all purposes hereunder and the Transaction Documents, including Section 6.8(f)(i) regarding the defense and management of such Claim and/or Proceeding at Buyer's sole cost and expense and Buyer's full indemnification of Seller with respect to such Claim and/or Proceeding.  Without limiting the generality of the foregoing, each Pending Proceeding and, unless otherwise mutually agreed before the Closing, each Intervening Claim (if any) shall be deemed to be and shall constitute a Managed Claim in full notwithstanding the inclusion of Claims therein that might not otherwise satisfy the definition of a Managed Claim.
 

 (iii)
 If any Claim and/or Proceeding includes one or more Managed Claims and any Claim for which Seller is not entitled to indemnification by Buyer under the Transaction Documents but for this Section 6.8(f)(iii), then such Claim and/or Proceeding shall be deemed to be and shall constitute a Managed Claim for all purposes hereunder and the Transaction Documents, including Section 6.8(f)(i) regarding the defense and management of such Claim and/or Proceeding at Buyer's sole cost and Buyer's full indemnification of Seller with respect to such Claim and/or Proceeding; provided that if Seller has installed new CL&P Facilities after the Effective Date on CL&P Property subject to the License Agreement, and such new CL&P Facilities are the basis for such Claim and/or Proceeding, then Seller shall share fifty percent (50%) of:
 

 (1)
 the costs and expenses incurred by Seller in the defense and management of such 
 

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 Managed Claim that Buyer otherwise would have paid in full pursuant to Section 6.8(f)(i); and
 (2)
 the Liability suffered and/or incurred by, and/or imposed on, the Parties as a result of such Managed Claim.
 

 The foregoing cost and Liability allocation shall not affect in any manner whatsoever the remaining provisions of the Transaction Documents applicable to such Managed Claim, including this Section 6.8.  For purposes of this Section 6.8(f)(iii), any modification, addition and/or other upgrade to CL&P Facilities existing as of the Effective Date shall not constitute the installation of new CL&P Facilities as long as the nominal rated voltage of such CL&P Facilities has not increased by more than ten percent (10%) (as measured against the nominal rated voltage as of the Effective Date).
 

 (g)
 Related Claim Management.  Seller shall have the right, but not the obligation, to manage and otherwise administer Managed Claims with other Claims against (or being managed by) Seller that involve reasonably similar allegations and/or claims for relief and/or otherwise are reasonably related (as determined in Seller's reasonable discretion), irrespective of whether such Claims have been consolidated in one or more Proceedings.  In such event, to the extent that any costs, expenses and other Liabilities solely relate to the applicable Managed Claim, Buyer shall fully and solely bear and pay all such costs, expenses and other Liabilities arising out of, and/or related to such Managed Claim (including the costs of experts and attorneys' fees incurred by Seller in the management thereof and the full amount of any Order and/or settlement resulting from such Managed Claim).  To the extent that any costs, expenses and other Liabilities cannot be reasonably and solely attributed to any particular Claim (whether the applicable Managed Claim or the related Claim(s)), Buyer shall bear and pay a pro rata share of such costs, expenses and other Liabilities based on the number of properties involved in the Managed Claim(s) (irrespective of the number of claimants) relative to the total number of properties involved in the Managed Claim(s) and Claims being managed with such Managed Claim(s) or such other allocation methodology agreed upon in writing by the Parties that equitably allocates such costs, expenses and other Liabilities.  In the case of Claims subject to the allocation rules of this Section 6.8(g) that also include Third Parties as defendants, and one or more of such Third Parties have agreed to share costs, expenses and/or other Liabilities for such Claims with the Parties, then the Parties will negotiate in good faith to establish an allocation methodology that equitably allocates costs, expenses and other Liabilities pertaining to such Claim in a manner that accounts for such Third Party participation; provided that the allocation rules of this Section 6.8(g) shall apply unless and until the Parties have reached such alternate allocation agreement and/or to the extent that such alternate arrangement fails to address all costs, expenses and other Liabilities.  Without limiting the generality of the foregoing, Seller shall manage the Pending Proceeding of John Verna with other Claims filed by the Law Offices of Benson Snaider with respect to other segments of the M/N Project, and in accordance with the allocation methodology in this Section 6.8(g), the Parties have agreed that Buyer shall pay fourteen percent (14%) of all costs, expenses and other Liabilities that do not solely relate to such Pending Proceeding, based on a total of seven (7) properties involved in such Claims filed by the Law Offices of Benson Snaider as of the Effective Date.  Such allocation shall be subject to adjustment pursuant to this Section 6.8(g) if, after the Effective Date, there are any Managed Claims and/or other Claims (including those commenced by the Law Offices of Benson Snaider) that Seller has decided to 
 

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 manage with such Pending Proceeding pursuant to this Section 6.8(g).
 

 (h)
 Payment.  To the extent that Buyer is not directly billed for costs, expenses and other Liabilities associated with Managed Claims (and/or if Seller pays such direct bills after Buyer's failure to timely pay the same), Buyer shall pay the full amount invoiced by Seller for reimbursement of such costs, expenses and other Liabilities within thirty (30) days after the date of the invoice.  Payment shall be made by wire transfer to an account from time to time designated by Seller, or by other mutually agreeable method(s).  In the event of any dispute regarding costs, expenses and other Liabilities with respect to a Managed Claim, Buyer shall be fully and solely responsible for and pay all costs, expenses and other Liabilities associated with such Managed Claim as determined by Seller in good faith pending the resolution of such dispute in accordance with Article 12.
 

 (i)
 Joint Defense Agreement.  For each Managed Claim, the Parties shall enter into a joint defense agreement in the form of Schedule 6.8(i) with appropriate conforming changes, or a similar agreement mutually acceptable to the Parties.  At the Closing, the Parties shall enter into a joint defense agreement(s) for each of the Pending Proceedings and each Intervening Claim based on such Schedule 6.8(i).  If Seller has not been named in a Managed Claim, Buyer shall not seek to bring and/or otherwise involve Seller and/or any of its Affiliates into or in such Managed Claim unless Seller authorizes Buyer to do so, and Buyer shall support and cooperate with Seller if Seller takes action to join such Managed Claim as a direct, named and/or otherwise active participant.
 

 (j)
 Waiver of Conflict.  Seller, in its sole and absolute discretion, shall select counsel for the defense of each Managed Claim, including the right to supplement, replace and/or otherwise change counsel from time to time.  Buyer, on behalf of itself, its Affiliates, Buyer's Representative and their respective successors and assigns, hereby irrevocably and fully waives any conflict of interest of whatever nature arising out of, and/or related to, counsel selected and/or retained by Seller representing Buyer and/or its interest in any Managed Claim.  If requested by Seller and/or counsel for any Managed Claim, Buyer shall execute and deliver further waivers of conflict and such additional documentation as may be requested to evidence that Buyer has no objection, on an ethical basis or otherwise, to Seller's counsel representing the interests of both Parties and/or such counsel representing Seller in other Claims and/or Proceedings (including any Claim and/or Proceedings in which Buyer and Seller are adverse).  Notwithstanding anything to the contrary in this Section 6.8, if the counsel selected by Seller advises that, due to actual or potential conflicts and/or other reasons, separate counsel should represent Buyer, Seller, in its sole and absolute discretion, shall select separate counsel for Buyer; Seller shall continue to manage and control any Managed Claim; and the costs and expenses associated with such separate counsel shall be fully and solely borne and paid by Buyer.
 

 (k)
 Buyer Reservations.  Notwithstanding anything to the contrary in this Section 6.8:
 

 (i)
 Buyer shall be entitled to participate in (but not control) the defense of each Managed Claim through Buyer's counsel and at Buyer's sole cost and expense; provided that without the prior written consent of Seller, which may be granted or withheld in 
 

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 Seller's sole and absolute discretion, Buyer's counsel shall not file an appearance in any Proceeding and/or otherwise take any action inconsistent with Seller's exclusive management and control of such Managed Claim.  To the extent that Buyer desires to exercise such reserved right, the Parties shall reasonably cooperate and coordinate to ensure that Buyer's participation supports Seller's efforts;
 

 (ii)
 If Seller does not timely assume the defense of any Managed Claim, and as a result thereof, Buyer's interests in such Managed Claim could reasonably be expected to be prejudiced, Buyer may defend such Claim in such manner as it may deem appropriate pending such assumption by Seller; provided that Buyer shall not (1) make any admission in connection with such defense; and/or (2) consent to any settlement, entry of Order or other disposition, in any or all instances without the prior written consent of Seller.  All of the costs and expenses, including attorneys' fees, incurred by Buyer in connection with such temporary defense shall be fully and solely borne and paid by Buyer.  Buyer shall reasonably cooperate with Seller in connection with the transition of such defense to Seller (including counsel selected by Seller); and
 

 (iii)
 Seller shall have no obligation whatsoever regarding, and the provisions of this Section 6.8 shall not apply to, any Non-Managed Claim that has not been deemed to be a Managed Claim.  Buyer reserves the right, and shall have the obligation, to defend any such Non-Managed Claim pursuant to Article 10.  In the event of any dispute regarding whether a particular Claim or Proceeding constitutes a Managed Claim, such Claim or Proceeding shall be deemed to be a Managed Claim pending the resolution of such dispute in accordance with Article 12.
 

 (l)
 Notice.  Each Party shall give the other party notice of any Claim or Proceeding that could reasonably be expected to be a Managed Claim, including reasonable detail about the facts and circumstances thereof, and a complete copy of all legal process and communications relating thereto.  Such notice shall be given as soon as reasonably practical following the time that such Party realizes such potential status.
 

 (m)
 Public Relations.  Seller's management and control of Managed Claims includes all aspects of public relations associated with each Managed Claim.  To the extent that Buyer receives any inquiry from, and/or intends to make any statement to, any Person (other than Seller) regarding any Managed Claim, Buyer (i) shall submit to Seller Buyer's response, statement and/or other communication in advance of Buyer's release of the same; (ii) shall refrain from taking any action with respect thereto pending Seller's prior written approval to do the same; and (iii) if Seller consents to the release of such response, statement and/or other communication with certain conditions, shall fully comply with such conditions.  In the absence of specific direction from Seller, Buyer shall direct to Seller all inquiries and other matters concerning each Managed Claim.
 

 (n)
 Non-Managed Claims.  Nothing in this Section 6.8 shall affect in any manner whatsoever the obligations and other Liabilities of Buyer with respect to the indemnification of Seller and/or its Affiliates under any of the Transaction Documents for Non-Managed Claims, including Buyer's obligations to Indemnified Persons under Article 10 of this Agreement.
 

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 (o)
 Regulatory Proceedings.  Notwithstanding anything to the contrary in this Section 6.8, any Regulatory Proceeding managed and controlled by Seller pursuant to Section 7.5 shall not constitute a Managed Claim, and the provisions of this Section 6.8 shall not apply to such Regulatory Proceeding.
 

 (p)
 Survival.  The provisions of this Section 6.8 shall apply to any Managed Claim that arises out of and/or relates to events, facts and/or circumstances occurring, in whole or in part, before the expiration or earlier termination of this Agreement and/or any of the other Transaction Documents, irrespective of the date of the assertion of such Managed Claim.  The applicable provisions of this Agreement and any other Transaction Document shall remain in effect after the expiration or termination of this Agreement and the other Transaction Documents to the extent necessary to provide for the management and control of such Managed Claim(s) pursuant to this Section 6.8.
 

 ARTICLE 7.
 COVENANTS
 

 7.1
 Public Announcement.  Except for disclosures:
 

 (a)
 to a Party's Affiliates and its own and/or its Affiliates' employees, agents, representatives and consultants who have agreed to be bound by the provisions of Section 14.7;
 

 (b)
 ordered or required by any court having jurisdiction or other Governmental Authority having the legal right to order or require disclosure or any Law of any Governmental Authority (which disclosure shall be subject to the applicable provisions of Section 14.7);
 

 (c)
 to other M/N Project participants to whom such disclosures are reasonably deemed by Seller to be necessary or advisable;
 

 (d)
 required to comply with Law, including in connection with the Buyer's Regulatory Approvals and Seller's Regulatory Approvals, subject to the applicable provisions of Section 14.7; and/or
 

 (e)
 necessary and reasonably appropriate in connection with disclosures required to effect the financing by Buyer of the Purchased Assets or the refinancing thereof, including the securing of credit ratings with respect to any such financing
 

 neither Party shall issue or permit any of its officers, directors, employees, agents, advisors and/or representatives to issue any press release or other information to the press or, consistent with Section 14.7 hereof, to any Third Party with respect to this Agreement, any Additional Agreement or the matters expressed herein or therein without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed.
 

 7.2
 Further Assurances; Records.
 

 (a)
 Pre-Closing.  Subject to the terms and conditions of this Agreement, each of the 
 

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 Parties shall use Commercially Reasonable Efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under Law to consummate and make effective the purchase and sale of the Purchased Assets pursuant to this Agreement and the assumption of the Assumed Liabilities, including using Commercially Reasonable Efforts to ensure satisfaction of the conditions precedent to each Party's obligations hereunder, including obtaining all necessary consents, approvals and authorizations of, and making all required notices or filings with, Third Parties required to be obtained or made in order to consummate the Transaction.  No Party shall, without prior written consent of the other Party, take or fail to take any action which might reasonably be expected to prevent or materially impede, interfere with or delay the Transaction.  Notwithstanding anything to the contrary in the foregoing or elsewhere, Seller shall have no obligation to assist, support and/or otherwise take any action to advance Buyer's purchase of the Transmission Facilities unless Seller expects, in good faith, that as a result of such purchase, the rates anticipated to be charged to customers of Seller and/or Seller's Affiliates after the Closing Date for the transmission of electricity will be equal to or lower than such rates if Seller had retained the Transmission Facilities (the "No Harm Principle").  Seller hereby reserves, and nothing in this Agreement or elsewhere shall prohibit, restrict, limit and/or otherwise affect, Seller's ability to take any action or position (even if adverse or contrary to Buyer and/or its Affiliates) to advocate and/or otherwise advance through any means the No Harm Principle.  Prior to the Closing, if Seller intends to take actions before FERC in furtherance of the No Harm Principle with respect to the matters that could reasonably be expected to adversely affect the consummation of the Transaction, Seller shall give Buyer prior notice of its intent to take such action, which notice shall be given no less than five (5) days before taking such action unless the deadline for taking such action is less than five (5) days, in which case such notice period shall be whatever is reasonable under the circumstances.  In such event, the Parties shall confer in good faith to determine whether Buyer will modify its position and/or otherwise take actions that will obviate the need for Seller to advance the No Harm Principle.  In any event, the Parties shall otherwise act in accordance with Section 7.3(b).
 

 (b)
 Cooperation.  The Parties will generally cooperate with each other as may be reasonably requested in connection with the consummation of the Transaction, including tax matters, and any matters after the Closing that reasonably require the participation of both Parties.  Without limiting the generality of the foregoing, before the Closing, Buyer shall have reasonable access to all of the records, books and documents related to the Purchased Assets to the extent that such access may reasonably be required in connection with the satisfaction of Buyer's conditions precedent set forth in Section 8.1 and/or filings by Buyer required to made before the Closing with respect to Buyer's inclusion of the Transmission Facilities in regional and/or local rates after the Closing.  Such access shall be afforded upon receipt of reasonable advance notice and during normal business hours; provided that Seller reserves the right to reasonably condition Buyer's access to certain records consistent with Section 7.2(d).  Buyer shall be solely responsible for any costs or expenses incurred by it in exercising such access right.
 

 (c)
 Post-Closing.  At any time and from time to time after the Closing, at the reasonable request of a Party, the other Party will execute and deliver such additional instruments, documents, conveyances or assurances and take such other actions as shall be necessary, or otherwise reasonably requested by the other Party, to clarify, confirm and assure 
 

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 the rights and obligations provided for in this Agreement and the Additional Agreements.
 

 (d)
 Records.  For a period of three (3) years after the Closing Date, each Party shall have reasonable access to all of the records, books and documents related to the Purchased Assets of the other Party to the extent that such access may reasonably be required in connection with matters relating to or affected by the operations of Seller prior to the Closing Date or the operations of Buyer after the Closing Date (including Liabilities with respect to Taxes).  Such access shall be afforded upon receipt of reasonable advance notice and during normal business hours; provided that Seller reserves the right to reasonably condition Buyer's access to certain records to maintain system integrity or similar purposes (including the inability to practically separate electronic records relating to the Purchased Assets from records regarding other aspects of Seller's business).  The Party seeking such access shall be solely responsible for any costs or expenses incurred by it in exercising such right.  This Section 7.2(d) shall not limit or otherwise affect any of the provisions of the Additional Agreements regarding access to records, books and other documents.  The provisions of this Section 7.2(d) shall survive termination of this Agreement after the Closing.
 

 7.3
 Consents and Approvals.
 

 (a)
 Subject to compliance with the No Harm Principle, and without limiting the generality of Section 7.2(a), the Parties will cooperate with each other and use Commercially Reasonable Efforts to: (i) promptly prepare and file, on a joint basis where feasible and applicable, all necessary applications, notices, petitions, and filings, and execute all agreements and documents to the extent required by Law or Order for consummation of the transfer of the Purchased Assets to Buyer contemplated by this Agreement, including the Buyer's Regulatory Approvals and the Seller's Regulatory Approvals; (ii) obtain the consents, approvals, and authorizations of all Governmental Authorities to the extent required by Law or Order for consummation of the transfer of the Purchased Assets to Buyer contemplated by this Agreement; and (iii) obtain all consents, approvals, and authorizations of all other Persons to the extent necessary to consummate the transfer of the Purchased Assets to Buyer contemplated by this Agreement as required by the terms of any license, franchise, permit, concession or Contract to which Seller or Buyer is a party or by which either of them is bound.  Seller and Buyer each will have the right to review in advance all characterizations of the information relating to it or the transfer of the Purchased Assets to Buyer contemplated by this Agreement which appear in any filing made by the other in connection with such transfer.
 

 (b)
 Without limiting Section 7.5, before the Closing, neither Party will on an ex parte basis initiate, directly or indirectly, any communications, meetings, or other contacts with any Governmental Authority in connection with the transfer of the Purchased Assets to Buyer, or any matters relating to any declaration, filing, or registration with, notice to, or authorization, consent, or approval of any such Governmental Authority in connection with such transfer under this Agreement.  In connection with any communications, meetings, or other contacts, formal or informal, oral or written, with any Governmental Authority in connection with the consummation of the transfer of the Purchased Assets to Buyer, or any such declaration, filing, registration, notice, authorization, consent, or approval in connection therewith, each Party shall: (i) inform the other Party in advance of any such communication, meeting, or other contact 
 

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 which such Party proposes or intends to make (including the subject matter, contents, intended agenda, and other aspects of any of the foregoing); (ii) consult and cooperate with the other Party; (iii) arrange for the Seller's Representatives and the Buyer's Representatives, as applicable, to participate to the maximum extent possible in any such communications, meetings, or other contacts; (iv) notify the other Party of any oral communications with any Governmental Authority relating to any of the foregoing; and (v) provide the other Party with copies of all written communications with any Governmental Authority relating to any of the foregoing.  Notwithstanding the foregoing, nothing in this Section 7.3(b) will restrict communications or other actions by Seller with or with regard to Governmental Authorities in connection with the Purchased Assets in the ordinary course of business or communications or other actions by either Party with or with regard to Governmental Authorities in connection with such Party's operations that are not related to the Purchased Assets.
 

 7.4
 Alternate Arrangements.
 

 (a)
 Retained Interests.  Notwithstanding anything to the contrary in this Agreement and/or any other Transaction Document, the Purchased Assets shall not include any right, title, or interest in, to, or under any of assets, or any portion thereof, related to or associated with CL&P Facilities and/or other assets (including the Reserved Assets) and/or rights (including the Reserved Rights and the rights relating to Additional Installations) retained by Seller (collectively, the "Retained Interests"), and nothing herein and/or in any of the other Transaction Documents shall transfer or otherwise convey, in whole or in part, any rights beyond those required for the ownership, operation and maintenance of the Purchased Assets and their operation as electric transmission facilities interconnected with the regional transmission grid administered by ISO-NE.  All Retained Interests shall remain in full force and effect for the benefit of Seller, and shall be neither assigned to, nor assumed by, Buyer.  The provisions of this Section 7.4 shall survive until the termination of this Agreement after the Closing pursuant to Section 7.7(d).
 

 (b)
 Partially Assignable Contracts.  Since each Transferable Contract also includes Retained Interests (including warranties) (a "Shared Contract"), the applicable Transaction Documents shall constitute, subject to Section 7.4(d), a partial assignment by Seller to Buyer of such Shared Contract to the extent of rights thereunder solely related to the Transmission Facilities (each, a "Partially Assigned Contract").  Neither Party shall take any action that reasonably could be expected to materially and adversely affect the rights and/or obligations of the other Party with respect to any Partially Assigned Contract, including effecting any amendment, change or other modification of any such Partially Assigned Contract that could reasonably be expected to affect any of such actions and rights and/or obligations.  The Parties shall reasonably coordinate and cooperate in the exercise of any such actions and rights (including enforcement of warranty or guaranty obligations) and/or in responding to any counterparty Claim with respect to any Partially Assigned Contract.  To the extent that either Party desires to exercise any right, respond to any Claim and/or take any other action with respect to any Partially Assigned Contract, such Party shall provide reasonable advance notice of such proposed action to the other Party, in reasonable detail, at least ten (10) days before taking the same.  In the event that Seller determines that it is appropriate to take such action to protect the respective rights of the Parties or otherwise proceed in a joint manner, Seller shall be entitled, 
 

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 by notice given to Buyer, to exclusively manage and control all matters that directly or indirectly involve, could affect, and/or may set precedent applicable to such Partially Assigned Contract.  In such case, Buyer, at its sole cost and expense, will do all such acts, file all such documents, and cause to be done all such other things as Seller may reasonably request from time to time in connection with such Partially Assigned Contract and otherwise cooperate with Seller in such regard.  Buyer hereby appoints Seller (and its agents) as the exclusive attorney-in-fact of Buyer for the purpose of taking any action and executing any instrument that Seller may deem necessary or advisable in connection with any such Partially Assigned Contract (including any Proceedings relating to the same).  Buyer understands and agrees that the power of attorney granted to Seller for such purpose is coupled with an interest and is irrevocable, and Buyer hereby ratifies all actions taken by Seller (and its agents) as Buyer's attorney-in-fact by virtue hereof.  Buyer acknowledges that since the disposition of any matter involving such Partially Assigned Contract will apply to the Purchased Assets and the Retained Interests, Buyer shall have no recourse whatsoever against Seller with respect to the disposition of any matter relating to such Partially Assigned Contract, and Buyer fully accepts and will bear the effects of any Order and/or other result in such matter, including the obligation to pay its proportionate share of any payment due to any Third Party.  Notwithstanding anything to the contrary in the foregoing, Seller shall not be obligated to bring or file any Proceeding against any Third Party; provided that if Seller shall determine not to bring or file a Proceeding after being requested by Buyer to do so, Seller shall assign, without recourse and to the extent permitted by Law and the applicable Partially Assigned Contract, its rights in respect to the Claims on account of the Transmission Facilities with respect to such Proceeding so that Buyer may bring or file such Proceeding.
 

 (c)
 [Intentionally omitted]
 

 (d)
 Non-Assignable Contracts.  The Parties have agreed not to seek the consent or other approval of the counterparty to any Transferable Contract.  To the extent that Seller's right, title or interest in, to or under any Transferable Contract may not be assigned without the consent, approval or authorization of any Third Party, the Transaction Documents shall not constitute an agreement to assign such right, title or interest if an attempted partial assignment would constitute a breach of such Transferable Contract or violate any Law.  If any attempted partial assignment would be ineffective or would materially impair Buyer's rights and obligations under such Transferable Contract such that Buyer would not acquire and assume the benefit and burden of all such rights and obligations, then Seller shall administer such Transferable Contract for the benefit of Buyer pursuant to, and subject to the terms and conditions of, the O&M Agreement; provided that if the O&M Agreement expires or terminates before the expiration or termination of such Transferable Contract, then Seller, at its option (exercisable by notice to Buyer) and to the fullest extent permitted by Law and such Transferable Contract, shall, from and after such expiration or termination of the O&M Agreement, either (i) appoint Buyer to be Seller's agent with respect to such Transferable Contract to the extent of the Transmission Facilities, or (ii) enter into such reasonable arrangements with Buyer or take such other actions as are necessary to provide Buyer with the same or substantially similar rights and obligations under such Transferable Contract to the extent of the Transmission Facilities.  Notwithstanding anything to the contrary in the foregoing, for each Shared Contract subject to this Section 7.4(d) that survives the expiration or termination of the O&M Agreement, the Parties shall enter into an appropriate arrangement pursuant to which Buyer shall irrevocably appoint Seller as its attorney-
 

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 in-fact, coupled with an interest, under terms and conditions substantially similar to those set forth in Section 7.4(b) for Partially Assigned Contracts for the period after such expiration or termination.
 

 (e)
 Common Permits.  Since each Transferable Permit also includes Retained Interests (a "Common Permit"), the Parties shall use Commercially Reasonable Efforts to obtain, before the Closing Date, the consent and/or other appropriate authorization from the issuing Governmental Authority to the partial assignment, without recourse to Seller, of such Common Permit to the extent applicable to the Transmission Facilities (or seek confirmation from the issuing Governmental Authority that such consent and/or other authorizations is not required).  If the Parties cannot effect such partial assignment (or obtain such confirmation) before the Closing after using Commercially Reasonable Efforts to do so, then, subject to Section 7.4(f), Seller shall administer any such Common Permit for the benefit of Buyer pursuant to the O&M Agreement; provided that the Parties shall continue to use Commercially Reasonable Efforts to obtain such consent and/or other appropriate authorization of such Common Permit unless Seller shall notify Buyer that such effort reasonably could be expected to adversely affect any CL&P Facilities subject to such Common Permit.  If the O&M Agreement expires or terminates before the expiration or termination of any Common Permit, then Seller, at its option (exercisable by notice given to Buyer) and to the fullest extent permitted by Law and such Common Permit, shall, from and after such expiration or termination of the O&M Agreement, either:
 

 (i)
 continue to exclusively manage and control all matters that directly or indirectly involve, could reasonably be expected to affect, and/or could reasonably be expected to set precedent applicable to the Retained Interests under such Common Permit.  In such case, Buyer will do all such acts, file all such documents, and cause to be done all such other things as Seller may reasonably request from time to time in connection with such Common Permit and otherwise cooperate with Seller in such regard, in all instances at Buyer's sole cost and expense; provided that the Parties shall share on a pro rata basis (with Buyer’s share pro-rated in proportion to the adjusted gross plant value of the Transmission Facilities covered by the Common Permit relative to the adjusted gross plant value of all transmission facilities covered by the applicable Common Permit) any fees and/or usage charges paid to any Governmental Authority in connection with any Common Permit.  Buyer hereby appoints Seller (and its agents) as the exclusive attorney-in-fact of Buyer for the purpose of taking any action and executing any instrument that Seller may deem necessary or advisable in connection with such Common Permit (including any Proceedings relating to the same).  Buyer understands and agrees that the power of attorney granted to Seller for such purpose is coupled with an interest and is irrevocable, and Buyer, by virtue hereof, hereby ratifies all actions taken by Seller (and its agents) as Buyer's attorney-in-fact.  Buyer acknowledges that since the disposition of any matter involving such Common Permit will apply to the Purchased Assets and the Retained Interests, Buyer shall have no recourse whatsoever against Seller with respect to the disposition of any matter relating to such Common Permit, and Buyer fully accepts and will bear the effects of any Order and/or other result in such matter; or
 

 (ii)
 appoint, to the fullest extent permitted by Law and such Common Permit, Buyer to be Seller's agent with respect to such Common Permit to the extent of the Transmission 
 

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 Facilities, subject to such reasonable terms and conditions as Seller may require in connection with such appointment.
 

 (f)
 Non-Assignable Permit.  To the extent that Seller's right, title or interest in, to or under any Transferable Permit (including any Common Permit) may not be partially assigned without the consent, approval or authorization of any Governmental Authority, which consent, approval or authorization has not been obtained by the Closing Date, this Agreement shall not constitute an agreement to partially assign such right, title or interest if an attempted partial assignment would constitute a breach of such Transferable Permit or violate any Law.  If any consent, approval or authorization to such partial assignment of any such Transferable Permit shall not be obtained without recourse to Seller, or if any attempted partial assignment would be ineffective or would materially impair Buyer's rights and obligations under such Transferable Permit such that Buyer would not acquire and assume the benefit and burden of all such rights and obligations, then Seller shall administer such Transferable Permit for the benefit of Buyer pursuant to, and subject to the terms and conditions of, the O&M Agreement; provided that if the O&M Agreement expires or terminates before the expiration or termination of such Transferable Permit, then Seller, at its option (exercisable by notice to Buyer) and to the fullest extent permitted by Law and such Transferable Permit, shall, from and after such expiration or termination of the O&M Agreement, either (i) appoint Buyer to be Seller's agent with respect to such Transferable Permit to the extent of the Transmission Facilities, or (ii) enter into such reasonable arrangements with Buyer or take such other actions as are necessary to provide Buyer with the same or substantially similar rights and obligations under such Transferable Permit to the extent of the Transmission Facilities.  Notwithstanding anything to the contrary in the foregoing, for each Common Permit subject to this Section 7.4(f) that survives the expiration or termination of the O&M Agreement, Seller shall have the option to manage and control such Common Permit, or appoint Buyer, each in accordance with Section 7.4(e), for the period after such expiration or termination.
 

 (g)
 Buyer as Agent.  To the extent that Seller appoints Buyer as its agent for any Transferrable Contract and/or Transferrable Permit, Buyer shall keep Seller promptly informed of any act or omission by Buyer acting as Seller's agent.  In addition to Buyer's indemnification obligations under Article 10, Buyer shall be responsible for and shall indemnify, defend and save each Indemnified Person harmless from and against any and all Claims, Orders, Proceedings, and Liabilities whatsoever arising out of and/or related to any act or omission by Buyer in connection with any Transferable Contract and/or Transferable Permit, whether or not Buyer acted in its capacity as Seller's agent.
 

 7.5
 Regulatory Matters.  Notwithstanding anything to the contrary in this Agreement and/or any of the other Transaction Documents, Seller shall retain sole and exclusive control of all regulatory matters with respect to the Purchased Assets before the Closing.  Except as provided below in this Section 7.5, Seller shall control all regulatory matters with respect to the Purchased Assets after the Closing.  This Section 7.5 shall apply during any period when the O&M Agreement is not in full force and effect for whatever reason, including due to suspension (in whole or in part), expiration, or termination.
 

 (a)
 Intent.  The Parties acknowledge the benefits associated with the consistency in 
 

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 the participation in, and/or prosecution or defense of, any Regulatory Proceeding after the Closing that involves (i) the Purchased Assets; and/or (ii) the Purchased Assets and all or any portion of the M/N Project (irrespective of whether also involving any other CL&P Facilities and/or other electric transmission facilities of Seller).  This Section 7.5 reflects the desire of Buyer to align its interests with those of Seller in such Regulatory Proceedings, recognizing that the relative implications of the disposition of any such Regulatory Proceedings will likely have similar effects on the Purchased Assets and the M/N Project.
 

 (b)
 Pending Proceedings.  Seller shall exclusively manage and control all Regulatory Proceedings pending as of the Effective Date that involve the Purchased Assets (or any portion thereof), including FERC Proceedings and resulting judicial Proceedings.  Schedule 7.5(b) describes all such pending Regulatory Proceedings.
 

 (c)
 Management.  After the Closing, Seller shall exclusively manage and control all future Regulatory Proceedings that involve the Purchased Assets.  To the extent Seller files any documents in such Regulatory Proceedings that are not available to the public, Seller shall promptly provide to Buyer a copy of such documents on a confidential basis; provided that Seller may (i) further condition such disclosure on Buyer's compliance with additional restrictions designed to preserve the confidentiality of such documents and/or the integrity of such Regulatory Proceedings; and (ii) redact or otherwise withhold any portion of such documents that contains information that Seller considers proprietary, company confidential, or otherwise inappropriate for disclosure to a Third Party but for such Regulatory Proceedings.
 

 (d)
 Buyer Actions.  Buyer, at its sole cost and expense, will perform all such acts, file all such documents, and cause to be done all such other things as Seller may reasonably request from time to time in connection with any Regulatory Proceeding being managed by Seller hereunder and otherwise fully cooperate with Seller in such regard.  Buyer hereby appoints Seller (and its agents) as the exclusive attorney-in-fact of Buyer for the purpose of carrying out the provisions of this Section 7.5 and taking any action and executing any instrument that Seller may deem necessary or advisable to accomplish the purposes hereof.  Buyer understands and agrees that the power of attorney granted to Seller for purposes of this Section 7.5 is coupled with an interest and is irrevocable, and Buyer hereby ratifies all actions taken by Seller (and its agents) as Buyer's attorney-in-fact by virtue hereof.
 

 (e)
 Buyer Reservations.  Notwithstanding anything to the contrary in this Section 7.5:
 

 (i)
 Buyer reserves the right to participate in Regulatory Proceedings that involve the Purchased Assets after the Closing in a manner that is not inconsistent with, or in any other manner adverse to, the positions and/or actions being taken and/or advanced by Seller.  To the extent that Buyer desires to exercise such reserved right, the Parties shall reasonably cooperate and coordinate to ensure that Buyer's participation supports Seller's efforts.  Without limiting the generality of the foregoing, Buyer shall not file or otherwise submit any documentation in any such pending Regulatory Proceeding without furnishing a copy thereof to Seller no later than ten (10) Business Days before the date the documentation is to be filed, and Buyer shall modify such documentation in a manner reasonably requested by Seller; and
 

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 (ii)
 Seller shall have no obligation whatsoever regarding, and the provisions of this Section 7.5 shall not apply to, any Regulatory Proceeding initiated after the Closing for the rate making and/or cost recovery on account of the Purchased Assets (including Buyer's recovery pursuant to Section 6.5(a) of any costs associated with the Transmission Facilities that are not recoverable from regional customers).  Buyer reserves the right to fully and solely manage and control any such Regulatory Proceeding; provided that nothing in this Section 7.5, this Agreement and/or any other Transaction Document shall prohibit, restrict, limit and/or otherwise affect Seller's ability to participate in, and/or to take any action or position (even if adverse or contrary to Buyer) during the course of, any such Regulatory Proceeding as a party, intervener or otherwise.
 

 (f)
 No Liability.  Seller shall have no Liability for, and Buyer shall have no recourse whatsoever against Seller with respect to, the disposition of any Regulatory Proceeding relating to the Purchased Assets.  Buyer fully accepts and will solely bear the effects of any Order and/or other result in such Regulatory Proceedings.
 

 7.6
 Reserved Rights.  Nothing in any of the Transaction Documents shall transfer or convey, in whole or in part, any rights in the Purchased Assets beyond those expressly granted in this Agreement.  Without limiting the generality of the foregoing, and without limiting Seller's reservation and retention of rights and property in any of the other Transaction Documents, Seller hereby reserves the following rights with respect to the Purchased Assets:
 

 (a)
 Non-Electric Transmission/Distribution Uses.  Seller hereby reserves such interest, entitlement and/or such other tangible and/or intangible right in, to, associated with and/or arising out of the Purchased Assets (as the same may be replaced, improved and/or altered from time to time) to the extent not integral to the transmission and distribution of electric energy (collectively, "Reserved Non-Transmission/Distribution Rights"); provided that Buyer has not already exercised any such rights (or similar rights) with respect to the same location or use proposed by Seller, where the prior and actual use of such rights by Buyer prevents Seller from exercising the same or similar rights.  Nothing herein or in any of the other Transaction Documents, including the Bill of Sale, shall transfer or otherwise convey, in whole or in part, any of such Reserved Non-Transmission/Distribution Rights to Buyer.  Reserved Non-Transmission/Distribution Rights include communications, broadband or any similar current or future technological advances for alternate uses of electric transmission assets.  Seller shall be entitled to use and/or otherwise exploit such Reserved Non-Transmission/Distribution Rights directly and/or through any Affiliate of Seller and/or Third Party, and Buyer shall not be entitled to any compensation of whatever form in connection with, and/or as a consequence of, any such exercise of any Reserved Non-Transmission/Distribution Rights.  Buyer acknowledges that some or all Reserved Non-Transmission/Distribution Rights may rely on, and/or be a result of, the operation of the Purchased Assets, and Buyer shall not take, and shall not allow any Person acting for or on behalf of Buyer to take, any action that could interfere, restrict, or otherwise impair the effectiveness of any Reserved Non-Transmission/Distribution Rights.  Seller shall exercise any Reserved Non-Transmission/Distribution Rights in a manner reasonably consistent with the manner in which Seller has exercised such right with respect to similarly situated CL&P Facilities; provided that if Seller has not yet exercised such right with respect to such CL&P 
 

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 Facilities, Seller shall not exercise any Reserved Non-Transmission/Distribution Rights in a manner that Seller, acting in good faith, would not exercise with respect to similarly situated CL&P Facilities.
 

 (b)
 Communications.  The Parties acknowledge and agree that the Purchased Assets exclude any and all current or future fiber optic and other equipment, devices and material used for communication purposes (collectively, the "Excluded Communication Assets"), including the fiber optic strands owned by NEON embedded in the shield wire included in the Purchased Assets and any and all Contracts related thereto (including the NEON Agreements).  Seller hereby reserves, on behalf of itself and NEON (and any and all transferees, in whole or in part, of each), the right to locate, attach, and otherwise preserve, replace, improve and/or alter the Excluded Communication Assets on, in and/or as part of the Purchased Assets.  To the fullest extent necessary, required, or appropriate, Buyer hereby irrevocably grants, without additional cost, charge and/or other compensation to Buyer of whatever nature, Seller and NEON, the right to so locate, attach, and otherwise preserve, replace, improve and/or alter the Excluded Communication Assets on, in and/or as part of the Purchased Assets for the useful life of the Excluded Communication Assets (as the same may be replaced, improved and/or altered from time to time).  In the event of any casualty and/or other damage that affects both any of the Purchased Assets and any Excluded Communication Assets, the Parties shall cooperate and coordinate in the repair and, to the extent necessary or advisable, relocation and/or replacement of such facilities.  Notwithstanding anything to the contrary in this Agreement and/or in any of the other Transaction Documents, Buyer shall purchase and receive the Purchased Assets subject and subordinate to the respective rights and obligations of the parties under the NEON Agreements, and Buyer shall take such action, without cost to Seller, NEON and/or any other Person, as is necessary to fulfill and otherwise fully comply with the obligations of the owner of the electric transmission facilities under such agreements (to the extent that such action is permitted under the O&M Agreement).  Seller shall exercise its right and perform its obligations under the NEON Agreements with respect to the Purchased Assets in a manner reasonably consistent with such exercise and performance with respect to similarly situated CL&P Facilities.  Seller shall notify Buyer of any amendment to the NEON Agreement to the extent that such amendment could reasonably be expected to adversely affect Buyer's obligations under this Section 7.6(b).
 

 (c)
 Reserved Ancillary Rights.  Seller hereby reserves the right, directly and/or indirectly (including through arrangements with any Affiliate of Seller or any Third Party) to attach equipment, material and other property to, locate any assets on, or otherwise use, any of the assets comprising the Purchased Assets for any purpose other than electric transmission or distribution (collectively, the "Reserved Ancillary Rights"); provided that (i) Buyer has not already exercised any such rights (or similar rights) with respect to the same location or use proposed by Seller, where such prior and actual use of such rights by Buyer prevents Seller from exercising the same or similar rights; and (ii) nothing in this Section 7.6(c) shall affect Seller's rights under Section 7.6(e) with respect to Existing Electric Facilities.  Without limiting the generality of the foregoing, and except as provided in the immediately preceding sentence, the Reserved Ancillary Rights include the installation of any equipment, materials and/or other assets to poles and/or structures for whatever purpose other than for electric transmission or distribution unrelated to Existing Electric Facilities.  Buyer shall not be entitled to any 
 

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 compensation of whatever form in connection with, and/or as a consequence of, any such exercise of any Reserved Ancillary Rights.  Seller shall bear all costs and expenses arising out of the exercise of any Reserved Ancillary Rights, including any repair and/or restoration of any portion of the Purchased Assets affected by such exercise.  Nothing herein or elsewhere in any Transaction Document shall transfer or otherwise convey, in whole or in part, any of the Reserved Ancillary Rights to Buyer.  Seller shall be entitled to use and/or otherwise exploit the Reserved Ancillary Rights directly and/or through arrangements with any Affiliate of Seller or any Third Party.
 

 (d)
 Master Communications Leases.  Without limiting the generality of Section 7.6(c), the Parties acknowledge that the Purchased Assets exclude the rights and obligations under master lease agreements with telecommunication providers (collectively, the "Master Agreements"), including the site lease acknowledgments issued as of the Closing Date thereunder and equipment attached to the Transmission Facilities pursuant to the Master Agreements.  Seller hereby reserves, on behalf of itself and such telecommunication providers (and any and all transferees, in whole or in part, of each), the right to locate, attach, and otherwise preserve, replace, improve and/or alter the equipment installed pursuant to the Master Agreements.  To the fullest extent necessary, required, or appropriate, Buyer hereby irrevocably grants, without additional cost, charge and/or other compensation to Buyer of whatever nature, Seller and such telecommunication providers, the right to so locate, attach, and otherwise preserve, replace, improve and/or alter such equipment on, in and/or as part of the Purchased Assets for the term of the applicable Master Agreement and/or site lease acknowledgments issued thereunder (as the same may be replaced, improved and/or altered from time to time).  In the event of any casualty and/or other damage that affects both the Purchased Assets and any equipment installed under a Master Agreement, the Parties shall cooperate and coordinate in the repair and, to the extent necessary or advisable, relocation and/or replacement of such equipment.  Notwithstanding anything to the contrary in this Agreement and/or any of the other Transaction Documents, Buyer shall purchase and receive the Purchased Assets subject and subordinate to the respective rights and obligations of the parties under the Master Agreements, and Buyer shall take such action, without cost to Seller, the applicable telecommunication provider and/or any other Person, as is necessary to fulfill and otherwise fully comply with the obligations of the owner of the electric transmission facilities under the Master Agreements (to the extent that such action is permitted under the O&M Agreement).  Seller shall manage and administer such Master Agreements that affect the Purchased Assets in a manner reasonably consistent with its management and administration of such Master Agreements as applicable to similarly situated CL&P Facilities.  Seller shall notify Buyer of any amendment to any Master Agreement to the extent that such amendment could reasonably be expected to adversely affect Buyer's obligations under this Section 7.6(d).  Any future attachment of new (as opposed to replacement) equipment to the Transmission Facilities pursuant to any current or future Master Agreement shall be pursuant to the Reserved Ancillary Rights.
 

 (e)
 Existing Electric Facilities.  Seller hereby reserves the right, directly and/or indirectly (including through arrangements with any Affiliate of Seller or any Third Party) to locate, attach, and otherwise preserve, and, at Seller’s expense, to replace, improve and/or alter any and all existing electric transmission (to the extent not accounted by Seller as part of the Purchased Assets) and/or distribution wires, equipment and/or related facilities on, in and/or as 
 

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 part of the Purchased Assets as of the Closing Date (collectively, the "Existing Electric Facilities").  To the fullest extent necessary, required, or appropriate, Buyer hereby irrevocably grants Seller the right to so locate, attach, and otherwise preserve, replace, improve and/or alter the Existing Electric Facilities on, in and/or as part of the Purchased Assets for the useful life of the Existing Electric Facilities (as the same may be replaced, improved and/or altered from time to time).  In consideration of such use of the Purchased Assets for the Existing Electric Facilities, Seller shall pay to Buyer a monthly usage fee, in arrears, equal to Ten Thousand Dollars ($10,000.00) (the "Monthly Usage Fee"), commencing with the first full month after the Closing Date and ending with the month in which Seller removes the Existing Electric Facilities from the Purchased Assets (and prorated (based on the days of usage) for such final month).  Buyer shall prepare and submit monthly invoices to Seller for payment of the Monthly Usage Fee, and Seller shall pay such invoices within thirty (30) days after receipt; provided that Seller reserves the right to offset the Monthly Usage Fee against any amounts then due to Seller under the Transaction Documents, including amounts due from Buyer for services rendered under the O&M Agreement.  In the event of any casualty and/or other damage that affects both any of the Purchased Assets and any Existing Electric Facility, the Parties shall cooperate and coordinate in the repair and, to the extent necessary or advisable, relocation and/or replacement of such facilities.  Nothing herein or elsewhere in any Transaction Document shall transfer or otherwise convey, in whole or in part, any of the Existing Electric Facilities to Buyer.  Seller shall be entitled to use and/or otherwise exploit the Existing Electric Facilities directly and/or through arrangements with any Affiliate of Seller or any Third Party.  The Parties acknowledge that the terms and conditions of this Section 7.6(e), including the Monthly Usage Fee, have resulted from negotiations between the Parties, and nothing in this Section 7.6(e) or in any of the other Transaction Documents shall prejudice, establish precedent, and/or otherwise affect in any manner whatsoever the respective rights of each Party with respect to the attachment and/or other collocation of assets of Third Parties on, in and/or as part of any of the electric transmission and/or distribution facilities of such Party.
 

 (f)
 Access Rights.  In addition to the rights of Seller and NEON under the NEON Agreements and of Seller and the telecommunication providers under the Master Agreements, Seller hereby reserves the right to access each of the assets comprising the Purchased Assets to install, maintain, repair, operate and/or otherwise exploit any and all of the rights and/or assets reserved to and/or retained by Seller under this Agreement, including the Reserved Assets and the Reserved Rights.  To the fullest extent necessary, required, or appropriate, Buyer hereby irrevocably grants, without additional cost, charge and/or other compensation to Buyer of whatever nature, Seller the right, on behalf of itself and any other Persons having an interest, to so access the Purchased Assets, or any part thereof.  Seller (or such other Persons) will reasonably coordinate such access with Buyer (or the Person retained by Buyer to maintain the Purchased Assets).
 

 Seller's rights to exercise Reserved Rights and to attach and otherwise locate Excluded Communication Assets, Existing Electric Facilities and/or telecommunications equipment under the Master Agreements shall continue until the Purchased Assets have been dismantled pursuant to Section 7.7.  Seller shall not exercise any of the Reserved Rights and/or locate Reserved Assets in a manner (determined as of the date of such exercise) that impairs the operation and maintenance of the Transmission Facilities for the transmission of electric energy as part of the 
 

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 regional transmission grid in accordance with Good Utility Practices.  Buyer shall promptly notify Seller of any instance in which Buyer in good faith believes that such exercise could reasonably be expected to result in such a violation of Good Utility Practices.  Such notice shall include reasonable detail regarding the alleged consequence and a certification to the effect that to the extent applicable, Buyer currently prohibits such installations and/or uses in connection with its other transmission facilities (or indicating the conditions under which Buyer permits the same).  The Parties shall proceed pursuant to Article 12 of this Agreement to resolve any resulting dispute.  The provisions of this Section 7.6 shall survive until the termination of this Agreement after the Closing pursuant to Section 7.7(d).
 

 7.7
 Retirement.
 

 (a)
 Retirement Decision.  The Parties acknowledge that since the Purchased Assets are interconnected to Seller's transmission facilities, Buyer shall not retire and/or take any action that could result in the retirement of any of the assets comprising the Purchased Assets except in connection with Seller's decision to retire Seller's interconnecting transmission facilities.  Subject to the receipt of required retirement approvals, including those from ISO-NE, Buyer shall take such action as appropriate to effect such retirement in a manner consistent with the retirement, in whole or in part, of such interconnecting facilities of Seller.  Each Party shall promptly notify the other Party after it becomes aware of any public effort to retire any of the assets comprising the Purchased Assets in whole or in part, and without limiting Section 7.5, the Parties shall reasonably coordinate and cooperate during the retirement process.
 

 (b)
 Dismantling; Restoration.  Buyer shall bear sole responsibility for any and all costs and expenses of dismantling and removing any retired Purchased Assets and restoring the site in accordance with the terms of the License Agreement.  Buyer shall commence such dismantling in coordination with Seller's dismantling of Seller's transmission facilities that interconnect to such retired Purchased Assets.  Notwithstanding anything to the contrary in the foregoing, Buyer shall complete the dismantling, removal and restoration no later than two (2) years after the retirement of such Purchased Assets or such longer period as may be reasonably required and in accordance with Good Utility Practices (provided that such longer period shall not exceed five (5) years after the retirement of such Purchased Assets without Seller's prior written consent which shall not be unreasonably withheld).
 

 (c)
 O&M Agreement.  Nothing in this Section 7.7 or elsewhere in this Agreement shall modify, limit or otherwise affect the obligations of Buyer under the O&M Agreement with respect to the retirement, in whole or in part, of the Purchased Assets.
 

 (d)
 Termination.  Unless earlier terminated in accordance with the terms hereof, this Agreement shall remain in effect until the retirement and dismantling of the Purchased Assets in accordance with this Section 7.7; provided that termination shall not effect any obligations hereunder that expressly survive termination (including the provisions of Article 10, Article 12 and Article 13).  The provisions of this Section 7.7 shall remain in effect until such termination.
 

 

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 7.8
 Expenses.
 

 (a)
 Irrespective of whether the Transaction is consummated, all costs and expenses incurred by and/or on behalf of Buyer and/or its Affiliates in connection with this Agreement, any other Transaction Documents, and/or the Transaction will be solely borne by Buyer.
 

 (b)
 Irrespective of whether the Transaction is consummated, Buyer shall solely bear and pay all costs and expenses incurred by and/or on behalf of Seller and/or its Affiliates in connection with this Agreement, any other Transaction Documents, and/or the Transaction, including all costs and expenses incurred by Seller in connection with:
 

 (i)
 the structuring of the Transaction, including legal fees and consulting costs incurred in the investigation of such structures;
 

 (ii)
 the preparation, negotiation and execution of this Agreement, the other Transaction Documents and/or the Guaranty, including legal fees and consulting costs;
 

 (iii)
 the preparation, submission and prosecution of Seller's Regulatory Approvals, including legal fees and consulting costs;
 

 (iv)
 the acquisition of consents and other approvals from Third Parties in furtherance of the Transaction, including the assignment of the Transferable Contracts and Transferable Permits pursuant to Section 7.4; and
 

 (v)
 the consummation of the Transaction.
 

 To the extent not presented for payment (and paid by Buyer) at the Closing, Buyer shall pay the full amount invoiced by Seller for reimbursement under this Section 7.8(b) within thirty (30) days after the date of invoice.  Payment shall be made by wire transfer to an account from time to time designated by Seller, or by other mutually agreeable method(s).
 

 (c)
 Notwithstanding anything to the contrary in Section 7.8(b), if the Transaction has not been consummated and Seller has retained the Deposit pursuant to Section 3.1(b), then the amount of the Deposit shall be credited against Buyer's obligation to reimburse Seller for transaction costs pursuant to Section 7.8(b) such that Buyer shall be responsible only for that portion of Seller's transaction costs, if any, in excess of One Million Dollars ($1,000,000.00).  Nothing in the foregoing shall imply or otherwise require Seller to refund any portion of the retained Deposit if Seller's transaction costs are less than One Million Dollars ($1,000,000.00), and Seller's return of the Deposit to Buyer shall not affect in any manner whatsoever Buyer's obligations under this Section 7.8.
 

 (d)
 If Buyer fails to make any payment to Seller when due under any Transaction Document, interest shall accrue thereon at the rate of one and one-half percent (1.5%) per month (or if less, the maximum rate allowable by Law (including under applicable FERC requirements)) from the date of issuance of the applicable invoice or other written request for payment, which shall be immediately due and payable.  Buyer shall pay for all reasonable costs 
 

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 of collection and enforcement, including reasonable attorneys' fees, which may be incurred by Seller in collecting or attempting to collect amounts due to Seller under any Transaction Document or in otherwise enforcing its rights and remedies against Buyer under any Transaction Document including its indemnification rights under Article 10.
 

 (e)
 The provisions of this Section 7.8 shall survive termination of this Agreement.
 

 7.9
 Right of First Refusal.
 

 (a)
 Intent.  Notwithstanding any other provision contained in this Agreement, in the event that Buyer suffers a Transfer or desires to Transfer any right, title or interest, including operating rights, whether by operation of Law or otherwise, in and to the Purchased Assets (as the same may be replaced, improved and/or altered from time to time), or otherwise desires to Transfer the Purchased Assets, to any Person, or initiates, solicits, proposes, holds any negotiations, discussions, enters into any agreements, or provides any material information to, any Person concerning a Transfer, Seller shall have a right of first refusal to acquire from Buyer and/or such transferee such right, title and interest in and to such Purchased Assets.  This Section 7.9 shall exclude, and the Right of First Refusal shall not apply to, (i) any Transfer to CMEEC; and (ii) any conditional assignment and/or pledge of all or any portion of the Purchased Assets and the associated rights, obligations and/or interests under the Transaction Documents as collateral security as contemplated in Section 14.6(c)(ii); provided that any Transfer in connection with the exercise of rights to realize on such collateral shall be subject to the Right of First Refusal.  Nothing in this Section 7.9 shall relieve Buyer from complying with Section 14.6 with respect to any Transfer.
 

 (b)
 Buyer Notice.  To effect the foregoing, Buyer shall notify Seller no later than ten (10) days after Buyer suffers a Transfer or decides to Transfer the Purchased Assets and/or pursue any transaction that could result in a Transfer (including any unsolicited proposal for a Transfer), and shall promptly provide to Seller a detailed summary of the material terms of such proposed Transfer and copies of any and all material documents (including any offering or similar memorandum, correspondence with potential transferees, draft and final agreements, and proposed filings with Governmental Authorities) (the "Buyer Notice").  Buyer also shall provide such information regarding the potential Transfer as Seller may request and shall meet with Seller from time to time to discuss in good faith any proposed Transfer.  The Buyer Notice shall constitute an irrevocable offer by Buyer to sell the Purchased Assets described in the Buyer Notice.
 

 (c)
 First Refusal.  Seller shall have the prior right, exercisable by it in its sole and absolute discretion, to consummate the proposed Transfer to Seller (the "Right of First Refusal") either on substantially the same terms and conditions contained in the Buyer Notice, or for fair market value.  Within thirty (30) days after Seller's receipt of any Buyer Notice, Seller shall provide written notice to Buyer indicating whether Seller desires to exercise the Right of First Refusal and to consummate the proposed Transfer either on substantially the same terms and conditions set forth in such Buyer Notice, or for fair market value.  If Seller elects to exercise the Right of First Refusal, the Parties shall consummate the Transfer in a timely manner.  If Seller elects not to exercise the Right of First Refusal, Buyer shall have the right to consummate the 
 

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 proposed Transfer with the proposed transferee on terms and conditions no more favorable to the proposed transferee than as set forth in such Buyer Notice within one hundred eighty (180) days after the date of such Buyer Notice.  If Buyer fails to consummate such proposed Transfer to the proposed transferee within such one hundred eighty (180) day period, the affected Purchased Assets shall again be subject to the terms of Seller's Right of First Refusal as described in this Section 7.9.  If the consideration set forth in any Buyer Notice consists of any property or value other than cash, and Seller elects to purchase the affected Purchased Assets on substantially the same terms and conditions set forth in the Buyer Notice, then Seller shall have the right to elect to pay, in cash, the fair market value of such non-cash consideration.  Seller shall make such election by giving written notice to Buyer in the acceptance of the offer under the Buyer Notice.  If the Parties cannot agree on such fair market value within fifteen (15) days after such election, the Parties shall retain the Independent Accounting Firm to determine such fair market value, the costs of which shall be borne equally by the Parties.  Seller's Right of First Refusal shall be assignable to its Affiliates.  Nothing in this Section 7.9 shall modify, alter or otherwise affect any other agreement between the Parties with respect to any Transfer (including restrictions on Transfer in this Agreement).
 

 (d)
 Disputes.  In the event that a dispute exists between the Parties with regard to the terms and conditions of the consummation of the Right of First Refusal, Seller shall have the right to consummate such transaction pending the resolution of such dispute pursuant to Article 12, and the relevant closing documents shall be amended to reflect the results of such dispute resolution Proceeding.  Without limiting the generality of the foregoing, if the dispute concerns fair market value of non-cash consideration, and if Seller exercises its right to consummate the transaction pending the resolution of any such dispute, then the Parties shall consummate such transaction based on Seller's good faith estimate of such consideration or value, subject to subsequent adjustment based on the resolution of such dispute by the Independent Accounting Firm.
 

 (e)
 Survival.  Without limiting Section 14.6 of this Agreement, the Right of First Refusal shall survive any Transfer of any and all Purchased Assets, and the assumption and assignment agreement contemplated in Section 14.6 shall include an acknowledgement of such survival and continuing effect with respect to such transferred assets in a form acceptable to Seller.
 

 7.10
 Buy-Back Option.
 

 (a)
 Option.  Upon the occurrence of any of the following:
 

 (i)
 an Event of Default by Buyer;
 (ii)
 an Event of Default by Buyer under, and as defined in, the O&M Agreement after the expiration of all applicable cure periods;
 (iii)
 a default by Buyer under the License Agreement pursuant to Section 10.1 of the License Agreement that Buyer fails to cure pursuant to said Section 10.1; and/or
 (iv)
 a default by Buyer under the Step-In Agreement pursuant to Section 2.2(b)(ii) of the Step-In Agreement that Buyer fails to cure pursuant to said Section 2.2(b)(ii).
 

 

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 and without limiting any and all other rights and remedies available to Seller, at Seller's option, Seller may repurchase from Buyer any and all Purchased Assets conveyed to Buyer under this Agreement (as the same may be replaced, improved and/or altered from time to time) as of the date of any such occurrence, for a sum equal to the net book value of such Purchased Assets on Buyer's books as of the exercise date, reduced by ten percent (10%) of such net book value (the "Buy-Back Option"); provided that if Seller exercises the Buy-Back Option at any time before January 1, 2017, then Seller shall compare such calculated option price against Seller's good faith estimate of the net book value of the Purchased Assets that Seller would have maintained (consistent with the methodology applied by Seller for similarly-situated CL&P Facilities) as of the exercise date if the Closing had not occurred, and if such net book value estimated by Seller is less than such calculated option price, then the consideration to be paid by Seller on account of the Buy-Back Option shall be Seller's estimated net book value.  Seller shall be entitled to exercise the Buy-Back Option at any time within thirty (30) days after Seller becomes aware of any such occurrence by notifying Buyer in writing of its intention to do so.  The closing of the transaction involving such repurchase by Seller of the Purchased Assets from Buyer (the "Repurchase Closing") shall occur within sixty (60) days after Seller and, if necessary, Buyer obtain the necessary final approvals to do so from FERC, DPUC and/or any other Governmental Authority.  Seller shall have the right to set-off against the purchase price any unrecovered damages or other amounts due and owing to Seller from Buyer at the time of any Repurchase Closing.  The O&M Agreement, the Step-In Agreement and the License Agreement shall remain in effect until consummation of the Repurchase Closing, at which time such agreements shall be deemed terminated.  The rights provided for in this Section 7.10 shall expire if Seller fails to exercise the Buy-Back Option within such thirty (30) day period; provided that such expiration shall not affect in any manner whatsoever Seller's right to exercise the Buy-Back Option as a result of any subsequent occurrence that triggers the Buy-Back Option.  The repurchase by Seller pursuant to this Section 7.10 shall be on an "as is, where is" basis free and clear of any liens or other encumbrances, with terms and conditions substantially the same as those set forth in Article 2 of this Agreement (other than Section 2.5 and other similar inapplicable provisions).
 

 (b)
 Disputes.  In the event that a dispute exists between the Parties with regard to the terms and conditions of the consummation of the Buy-Back Option, Seller shall have the right to consummate such transaction pending the resolution of such dispute pursuant to Article 12, and the relevant closing documents shall be amended to reflect the results of such dispute resolution Proceeding.  Without limiting the generality of the foregoing, if the dispute concerns the value of the Purchased Assets to be conveyed to Seller, and if Seller exercises its right to consummate the transaction pending the resolution of any such dispute, then the Parties shall consummate such transaction based on the net book value of such transferred assets with the ten percent (10%) discount referenced in Section 7.10(a), subject to subsequent adjustment based on the results of such dispute resolution Proceeding.
 

 (c)
 Satisfaction of Approvals.  If Seller elects to exercise the Buy-Back Option, each Party shall use Commercially Reasonable Efforts to obtain the final, non-appealable approvals from FERC, DPUC and/or any other Governmental Authority necessary for the Parties to complete the Repurchase Closing and otherwise take, or cause to be taken, all actions, and to perform, or cause to be performed, all things necessary, proper or advisable under Law to consummate and make effective the Repurchase Closing.  Each Party will reasonably cooperate 
 

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 with the other Party in the other Party's pursuit of obtaining such approvals that are capable of being obtained by the other Party.  No Party shall, without prior written consent of the other Party, take or fail to take any action that might reasonably be expected to prevent or materially impede, interfere with or delay the Repurchase Closing.  Notwithstanding anything to the contrary in the foregoing or elsewhere, Seller shall have no obligation to assist, support and/or otherwise take any action to advance any approvals that Buyer needs to allow the exercise of the Buy-Back Option unless Seller, in good faith, expects that the rates to be charged to customers of Seller or its Affiliates for the transmission of electricity at any time after the Repurchase Closing date will be equal to or lower than such rates if Buyer had retained the Purchased Assets.  Seller hereby reserves, and nothing in this Agreement or elsewhere shall prohibit, restrict, limit and/or otherwise affect, Seller's ability to take any action or position (even if adverse or contrary to Buyer and/or its Affiliates) to advocate and/or otherwise advance through any means the principle set forth in the immediately preceding sentence.
 

 (d)
 Survival.  Without limiting Section 14.6 of this Agreement, the Buy-Back Option shall survive any Transfer of any and all Purchased Assets, and the assumption and assignment agreement contemplated in Section 14.6 shall include an acknowledgement of such survival and continuing effect with respect to such transferred assets in a form acceptable to Seller.
 

 7.11
 Limitations.
 

 (a)
 Additional Installations.  Buyer acknowledges that Seller has not conveyed to Buyer, and the License Agreement does not prohibit or otherwise affect in any manner whatsoever, the right of Seller to erect, install, construct, reconstruct, repair, maintain, replace, relocate, inspect, patrol, expand, operate and/or remove any poles, towers, crossarms, guys, foundations, anchors, braces, ducts, manholes, fences, gates, and other structures, lines, wires, filament, cables, including fiber optic and communication cables, other conductors, antennas, and other structures, fixtures and appurtenances useful for the conducting and the transmission and distribution of electric current, energy, intelligence, wireless signals, light and communications of any character (collectively, the "Additional Installations").  Seller shall be entitled to make and/or otherwise exploit such Additional Installations directly and/or through any Affiliate of Seller and/or any Third Party, and Seller shall have the right, at Seller's sole cost and expense, to relocate all or any portion of the assets comprising the Purchased Assets to accommodate any such Additional Installations.  Seller shall provide Buyer reasonable notice of any such Additional Installations, including any planned and/or potential relocation of any of the assets comprising the Purchased Assets, and the Parties shall reasonably cooperate and coordinate to effect such Additional Installations in a timely and cost-effective manner and to minimize, to the extent possible, any conflict between the Parties' respective activities on the property subject to the License Agreement.  If requested by either Party, the Parties shall negotiate in good faith to amend the License Agreement in connection with Seller's exercise of rights with respect to Additional Installations, including in order for Buyer to retain the requisite rights to own, maintain and operate the Purchased Assets.  Buyer shall not take any action, and shall not allow any Person acting for or on behalf of Buyer to take any action, that could reasonably be expected to affect Seller's exercise of rights with respect to Additional Installations, including the installation of gates or other obstructions that could reasonably be expected to interfere with Seller's free and unrestricted access to the property subject to the 
 

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 License Agreement.  Seller shall not install any Additional Installation in a manner that unreasonably interferes with Buyer's ownership and operation of the Purchased Assets for the transmission of electric energy as part of the regional transmission grid in accordance with Good Utility Practices.  Buyer shall promptly notify Seller of any instance in which Buyer in good faith believes that such Additional Installation could reasonably be expected to result in a violation of Good Utility Practices.  Such notice shall include reasonable detail regarding the alleged consequence and a certification to the effect that Buyer currently prohibits such installations and/or uses in connection with its other transmission facilities (or indicating the conditions under which Buyer permits the same).  The Parties shall proceed pursuant to Article 12 of this Agreement to resolve any resulting dispute.
 

 (b)
 Seller Condemnation Rights.  Entering into this Agreement and transferring the Purchased Assets shall not constitute a waiver of Seller's condemnation, eminent domain and/or other rights to acquire property through involuntary process and/or other Proceeding, including the right to condemn Buyer's interest in any of the assets comprising the Purchased Assets and any and all other rights granted by Seller or any other Person in connection therewith.  Nothing in this Section 7.11(b) shall constitute Buyer's acceptance, acknowledgement and/or other agreement with respect to the existence of any rights of Seller to condemn, exercise the power of eminent domain and/or otherwise acquire the Purchased Assets through involuntary process, and Buyer reserves all rights and defenses regarding whether Seller possesses any of such rights with respect to the Purchased Assets.
 

 (c)
 Waiver of Buyer Condemnation Rights.  Buyer, on behalf of itself and its successors and assigns, hereby irrevocably and fully forever waives and releases any and all rights (whether conferred on any of such Persons by statute, the constituent documents of such Person and/or any other method) to condemn, exercise the power of eminent domain and/or otherwise acquire through involuntary process and/or other Proceeding any right, title and/or interest of whatever nature of Seller and/or any of its Affiliates in and to the M/N Project and/or any portion thereof.  Neither Buyer nor any such other Person shall threaten and/or bring any Claim and/or commence any Proceeding attempting to effect any such condemnation and/or other acquisition, and, in the event that Buyer or any of such Persons should do so, Buyer shall be liable to Seller and/or such Affiliate(s) for any Liabilities (including attorneys' fees) suffered or incurred in the defense of such Claim and/or Proceeding and/or in the enforcement and/or attempted enforcement of this Section 7.11(c).  This Section 7.11(c) shall not affect any and all rights of Buyer to condemn, exercise the power of eminent domain and/or otherwise acquire through involuntary process the property of any Third Party as required for the ownership, operation and maintenance of the Purchased Assets and their operation as electric transmission facilities interconnected with the regional transmission grid administered by ISO-NE, including (i) as contemplated in, and subject to, the License Agreement; and (ii) the exercise of such power against any Third Party (including a lender and/or indenture trustee of Seller's mortgage indenture) that has foreclosed and/or otherwise acquired a fee simple ownership interest in the CL&P Property subject to the License Agreement in a manner that materially and adversely affects Seller's ability to perform its obligations under the License Agreement.  Nothing in this Section 7.11(c) shall constitute Seller's acceptance, acknowledgement and/or other agreement with respect to the existence of any rights of Buyer to condemn, exercise the power of eminent domain and/or otherwise acquire the property of Seller and/or any of its Affiliates through 
 

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 involuntary process, and Seller, on behalf of itself and its Affiliates, reserves all rights and defenses regarding whether Buyer possesses any of such rights.
 

 (d)
 Franchise Preservation.  Entering into this Agreement and the transferring the Purchased Assets shall not constitute a waiver of Seller's franchise rights nor Seller's permission or assent for Buyer or any other Person to own or operate any other transmission facilities within Seller's service territory.  Buyer shall refrain from, and shall not support its Affiliates in, directly or indirectly taking any action and/or otherwise supporting any effort that could be reasonably expected to use in any manner the Transaction (including any of the Transaction Documents) for purposes of furthering such waiver, permission, assent and/or the functional equivalent thereof.  Without limiting the generality of the foregoing, Buyer shall not directly or indirectly use, and shall not support the use by its Affiliates of this Agreement and the consummation of all or any portion of the Transaction as precedent or other evidence of Seller's support of and/or willingness to accept the shared development, construction and/or ownership of Seller's current or proposed transmission facilities.  Seller expressly disclaims any such implication.  The Transaction constitutes a negotiated structure designed to accomplish the mutual goals of the Parties based on the unique circumstances associated with the M/N Project.  This Agreement shall not affect in any manner whatsoever the franchise and other rights of Seller or its Affiliates.
 

 (e)
 Survival.  The provisions of this Section 7.11 shall survive termination of this Agreement.
 

 ARTICLE 8.
 CONDITIONS PRECEDENT
 

 8.1
 Buyer's Conditions.  The obligation of Buyer to consummate the portions of the Transaction to be performed by it in connection with the Closing is subject to the timely fulfillment or waiver of each and all of the following conditions:
 

 (a)
 The representations and warranties of Seller set forth in Article 5 shall be true and correct in all material respects at and as of the Closing Date;
 

 (b)
 Seller shall have performed and complied in all material respects with all of its covenants, agreements and obligations hereunder through the Closing;
 

 (c)
 Buyer shall have received the regulatory and/or other approvals and Permits required in connection with the execution, delivery or performance of the Transaction Documents by Buyer as set forth in Schedule 8.1(c) (collectively, "Buyer's Regulatory Approvals"), all on final and non-appealable terms and conditions acceptable to Buyer in its sole and absolute discretion;
 

 (d)
 Seller shall have received the Seller's Regulatory Approvals without terms and conditions that are reasonably likely to have an adverse effect on Buyer and/or any of the Purchased Assets, as determined by Buyer in its sole and absolute discretion;
 

 (e)
 There shall not be any Order in effect or pending that would prevent or inhibit consummation of the Transaction;
 

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 (f)
 Seller shall have complied in all material respects with the delivery requirements of Section 4.2;
 

 (g)
 Buyer (or its designee) shall have closed, on or before May 15, 2011, a tax exempt bond financing secured solely by the revenues from the Transmission Facilities: (i) in the full amount necessary to acquire the Purchased Assets and to fund all required reserves and expenses of such acquisition and financing; (ii) with a term of not less than 30 years and with an all-in blended interest cost to Purchaser (including the cost of any credit or liquidity enhancement, swap payments, bond insurance or issuance premium) of not in excess of 4.75%; and (iii) with interim maturities and sinking fund payments and such other terms, conditions and covenants as shall be satisfactory to Buyer in its sole discretion; and
 

 (i)
 The Parties shall have agreed on the Cost Allocation for the initial Calculation Period under the O&M Agreement, as determined in accordance with the O&M Agreement, and Buyer shall have paid the first monthly installment of such Cost Allocation pursuant to the O&M Agreement.
 

 The conditions precedent set out in this Section 8.1 are inserted for the exclusive benefit of Buyer, and any such condition may be waived in whole or in part by Buyer by (written) notice to Seller prior to the Closing.  In the event that all of the conditions precedent set out in this Section 8.1 are not fulfilled or waived on or before April 30, 2011, Buyer may terminate this Agreement upon written notice to Seller in accordance with Section 14.2, and, in such event, the Parties shall be released from any and all obligations under this Agreement and the other Transaction Documents, except for the obligations hereunder that survive termination.
 

 8.2
 Seller's Conditions.  The obligation of Seller to consummate the portions of the Transaction to be performed by it in connection with the Closing is subject to the timely fulfillment or waiver of each and all of the following conditions:
 

 (a)
 The representations and warranties of Buyer set forth in Article 5 shall be true and correct in all material respects at and as of the Closing Date;
 

 (b)
 Buyer shall have performed and complied in all material respects with all of its covenants, agreements and obligations hereunder through the Closing;
 

 (c)
 Buyer shall have received the Buyer's Regulatory Approvals without terms and conditions that are reasonably likely to have an adverse effect on Seller and/or any of the CL&P Facilities, as determined by Seller in its sole and absolute discretion;
 

 (d)
 Seller shall have received the regulatory and/or other approvals and Permits required in connection with the execution, delivery or performance of the Transaction Documents by Seller as set forth in Schedule 8.2(d) (collectively, "Seller's Regulatory Approvals"), all on final and non-appealable terms and conditions acceptable to Seller in its sole and absolute discretion;
 

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 (e)
 There shall not be any Order in effect or pending that would prevent or inhibit consummation of the Transaction;
 

 (f)
 Buyer shall be (i) a Participating Transmission Owner in good standing under the TOA and otherwise with ISO-NE; and (ii) participant of CONVEX (including as a counterparty to an agreement for CONVEX services that include transmission system operating functions, emergency load shedding and restoration services);
 

 (g)
 Buyer and CMEEC shall have performed and complied in all material respects with all of their respective covenants, agreements and obligations under the Support Agreement;
 

 (h)
 Buyer and CMEEC shall have performed and complied in all material respects with all of their respective covenants, agreements and obligations under any Contract between Buyer and/or CMEEC, as one party, and Seller and/or any of its Affiliates, as the other party;
 

 (i)
 Buyer shall have complied in all material respects with the delivery requirements of Section 4.3; and
 

 (j)
 The Parties shall have agreed on the Cost Allocation for the initial Calculation Period under the O&M Agreement, as determined in accordance with the O&M Agreement, and Buyer shall have paid the first monthly installment of such Cost Allocation pursuant to the O&M Agreement.
 

 The conditions precedent set out in this Section 8.2 are inserted for the exclusive benefit of Seller, and any such condition may be waived in whole or in part by Seller by (written) notice to Buyer prior to the Closing.  In the event that all of the conditions precedent set out in this Section 8.2 are not fulfilled or waived on or before April 30, 2011, Seller may terminate this Agreement upon written notice to Buyer in accordance with Section 14.2, and, in such event, the Parties shall be released from any and all obligations under this Agreement and the other Transaction Documents, except for the obligations hereunder that survive termination.
 

 8.3
 Satisfaction of Conditions Precedent.
 

 (a)
 Each Party will pursue satisfaction of the conditions precedent to its respective obligations under this Agreement that are capable of being satisfied by such Party in accordance with its usual and customary business practice and, subject to the No Harm Principle, each Party will reasonably cooperate with the other Party in the other Party's pursuit of satisfaction of the conditions precedent to the other Party's obligations under this Agreement that are capable of being satisfied by the other Party.
 

 (b)
 Notwithstanding anything to the contrary in this Article 8 or elsewhere in this Agreement, Seller shall have the right to terminate this Agreement and the Transaction if during any Proceeding relating to any of Buyer's Regulatory Approvals, any of Seller's Regulatory 
 

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 Approvals, the M/N Project and/or any of the CL&P Facilities, Seller, in Seller's sole judgment, believes that any Third Party (including FERC or any other Governmental Authority) has taken, and/or attempted to take, action through whatever means (including through statements), that could reasonably be expected to result in, any Governmental Authority reopening, reviewing, investigating and/or otherwise inquiring in whatever form into Seller's recovery through rates of costs incurred in connection with the development, construction, installation, ownership, use, operation and/or maintenance of the M/N Project.  Seller shall notify Buyer in accordance with Section 14.2 at least forty-eight (48) hours before the effective date of such termination (unless Seller reasonably determines that the action is required in less than forty-eight (48) hours, in which case such notice period shall be whatever is reasonable under the circumstances), and during the period between Buyer's receipt of such notice and the effective date of termination, the Parties shall confer in good faith to determine whether such inquiry into Seller's recovery through rates of such costs can be immediately and permanently terminated without risk of such Governmental Authority reopening it.  In the event that such inquiry cannot be so immediately and permanently terminated, termination of this Agreement shall be effective as of the date set forth in Seller's notice, and the Parties shall be released from any and all obligations under this Agreement and the other Transaction Documents (except for the obligations hereunder that survive termination).
 

 8.4
 Closing Deadline.  Notwithstanding anything to the contrary in this Agreement and/or any of the other Transaction Documents, if the Closing has not occurred on the Closing Date, this Agreement and the other Transaction Documents shall automatically terminate in accordance with Section 9.1(d).  If the Closing has not occurred on the Closing Date due to the failure to timely fulfill any of the conditions precedent to Closing in this Article 8, and there is a reasonable expectation that the passage of a reasonable period of time will result in the satisfaction of such remaining condition(s), then the Parties shall negotiate in good faith terms and conditions under which the Parties would amend this Agreement retroactive to the Closing Date to preserve the Transaction with a new closing date of May 31, 2012; provided that as a condition to such negotiation, Buyer shall pay Seller for all transaction costs and expenses incurred by Seller (as contemplated by Section 7.8(b)) through one or more dates reasonably close to the Closing Date, as invoiced by Seller.  Such payment of transaction costs and expenses shall not affect Buyer's obligation for costs incurred by Seller, but not included in such invoice.
 

 8.5
 Compliance Filings at Transfer.  In connection with the Closing, the Parties shall prepare and file, and shall cause to be prepared and filed, any and all such compliance filings and other related documentation that any Governmental Authority may require in connection with any such transfer, in each case within the time period specified for such filing (or if no period has been specified, within sixty (60) days after the Closing Date).
 

 ARTICLE 9.
 PRE-CLOSING TERMINATION
 

 9.1
 No-Fault Termination.
 

 (a)
 Mutual Agreement.  This Agreement may be terminated at any time before the Closing Date by mutual written consent of Seller and Buyer.
 

 

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 (b)
 Adverse Actions.  This Agreement may be terminated by Seller or Buyer before the Closing Date if (i) any Proceeding shall have been commenced against such Party seeking an Order restraining, enjoining or otherwise preventing such Party from performing any of its material obligations under this Agreement; or (ii) any Governmental Authority shall have proposed any statute, rule, Order or regulation that directly or indirectly prohibits the consummation of the Closing and/or could reasonably be expected to adversely affect the purpose and intent of the Parties as reflected in the Transaction Documents, but only if the terminating Party shall have determined that such proposal is reasonably likely to be adopted.
 

 (c)
 Disallowance.  If any Government Authority disallows the recovery of any costs associated with the M/N Project before the Closing Date, then, within five (5) days or such shorter period as is reasonable under the circumstances, the Parties shall confer in good faith to determine the consequences, if any, of such disallowance on the Transaction, and absence reaching mutual agreement regarding such consequences during such conference, this Agreement and the other Transaction Documents may be terminated by Seller or Buyer at any time thereafter.
 

 (d)
 Closing Deadline.  This Agreement shall terminate if the Closing contemplated hereby shall have not occurred on the Closing Date.
 

 (e)
 Effect.  In the event of termination of this Agreement pursuant to this Section 9.1, written notice thereof shall forthwith be given by the terminating Party to the other Party, whereupon the Parties shall be released from any and all obligations under this Agreement and the other Transaction Documents, except the obligations hereunder that survive termination, and thereafter neither Party shall have any recourse against the other by reason of this Agreement; provided that if this Agreement shall have terminated due to the failure of the Closing to occur on the Closing Date, and the continuing breach of this Agreement by a Party caused such failure, then, subject to the terms and conditions of this Agreement (including the limitations on Seller's Liability set forth in Article 13), such breaching Party shall remain liable to the other Party for the consequences of such breach, and the other Party's rights to pursue all remedies for breach of contract or otherwise, including damages relating thereto, in accordance with the terms hereof, shall survive such termination.
 

 9.2
 Pre-Closing Termination by Buyer.  Buyer may terminate this Agreement by giving written notice to Seller at any time prior to the Closing if any of the following has occurred:
 

 (a)
 Any representation or warranty made by Seller was false or misleading when made in any material respect, Buyer has notified Seller of the misrepresentation, and the breach has continued without cure for a period of thirty (30) days after the notice of breach;
 

 (b)
 Seller fails to perform any material obligation set forth in this Agreement, and Seller fails to cure such breach within thirty (30) days after receipt of (written) notice of such failure from Buyer; provided that if such failure is capable of cure and Seller is pursuing such cure with due diligence, but such cure cannot be effected within such thirty 
 

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 (30) day period with the exercise of reasonable diligence, then such cure period shall be extended for an additional thirty (30) day period; and/or
 

 (c)
 Seller becomes Bankrupt.
 

 Subject to the limitations on Seller's Liability set forth in Article 13, termination shall not affect and/or otherwise prejudice any other rights or remedies Buyer may have under this Agreement, at Law and/or in equity arising out of such event(s) that resulted in termination.
 

 9.3
 Pre-Closing Termination by Seller.  Seller may terminate this Agreement by giving written notice to Buyer at any time prior to the Closing if any of the following has occurred:
 

 (a)
 Any representation or warranty made by Buyer was false or misleading when made in any material respect, Seller has notified Buyer of the misrepresentation, and the breach has continued without cure for a period of thirty (30) days after the notice of breach;
 

 (b)
 Buyer sells, assigns or otherwise transfers its rights or obligations under this Agreement, in each case in breach of Section 14.6;
 

 (c)
 Buyer fails to perform any material obligation set forth in this Agreement, and Buyer fails to cure such breach within thirty (30) days after receipt of (written) notice of such failure from Seller; provided if such failure is capable of cure and Buyer is pursuing such cure with due diligence, but such cure cannot be effected within such thirty (30) day period with the exercise of reasonable diligence, then such cure period shall be extended for an additional thirty (30) day period;
 

 (d)
 Any representation or warranty made by the Guarantor under the Guaranty was false or misleading when made in any material respect and/or the Guarantor fails to perform any material obligation set forth in the Guaranty;
 

 (e)
 Buyer or CMEEC fails to perform any material obligation set forth in the Support Agreement, and such default has not been cured in accordance with the terms of the Support Agreement; and/or
 

 (f)
 Buyer and/or the Guarantor become Bankrupt.
 

 Termination shall not affect and/or otherwise prejudice any other rights or remedies Seller may have under this Agreement, at Law and/or in equity arising out of such event(s) that resulted in termination.
 

 9.4
 Seller's Termination for Convenience.  Seller shall have the right to terminate and/or cancel this Agreement and the Transaction for any reason or for no reason, for Seller's convenience, and at its sole and absolute discretion, upon at least forty-eight (48) hours prior notice to Buyer specifying when such termination becomes effective.  If Seller terminates this 
 

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 Agreement and the Transaction pursuant to this Section 9.4, the Parties shall be released from any and all obligations under this Agreement and the other Transaction Documents (except for the obligations hereunder that survive termination) as of the date specified by Seller; provided that Seller shall pay a termination fee to Buyer in an amount equal to Five Hundred Thousand Dollars ($500,000.00) ("Termination Fee") within thirty (30) days after such effective date of termination.  Seller reserves the right to pay the Termination Fee, in whole or in part, through a credit or other reduction against other amounts due from Buyer to Seller under the Transaction Documents and/or any other Contract between the Parties and/or their Affiliates (including on account of tariff services provided by Seller to Buyer and/or Guarantor).  Seller's obligation to pay the Termination Fee in accordance with this Section 9.4 shall survive the termination of this Agreement by Seller under this Section 9.4, and payment of the Termination Fee shall fully and finally satisfy and discharge any obligation by Seller to Buyer under this Section 9.4.  Buyer acknowledges that Seller shall have no Liability whatsoever regarding the Termination Fee due to the termination of this Agreement for any reason other than Seller's exercise of its termination right under this Section 9.4.  Any and all obligations of Seller with respect to the Termination Fee shall expire and terminate simultaneously with the Closing.
 

 9.5
 Failure of Conditions.  A Party may terminate this Agreement in accordance with Article 8 upon the failure to satisfy certain conditions as more particularly set forth therein.
 

 9.6
 No Extension of Closing Date.  If any cure period in effect under Section 9.2 and/or Section 9.3 extends beyond the Closing Date, then such cure period shall not extend, and shall be deemed to expire on, the Closing Date.
 

 9.7
 Cooperation.  In the event of termination of this Agreement pursuant to this Article 9, the Parties promptly shall take such actions and do such things as are reasonably necessary to withdraw any filings (including those with respect to the Buyer's Regulatory Approvals and the Seller's Regulatory Approvals), applications and other submissions, cancel any Orders and/or otherwise reverse any decisions of Third Parties that have been made, issued and/or otherwise obtained in contemplation of the consummation of the Transaction.
 

 ARTICLE 10.
 INDEMNIFICATION
 

 10.1
 General Indemnification.  Buyer shall be responsible for and shall indemnify, and shall defend and save Seller, its Affiliates and their respective employees, trustees, shareholders, officers, and directors, as well as their respective agents, contractors and consultants (each an "Indemnified Person") harmless from and against any and all Claims, Orders, Proceedings and/or Liabilities whatsoever (including consequences resulting from exposure to electromagnetic fields), regardless of whether or not such Claim, Order, Proceeding, and/or Liability is caused by or is attributable in whole or in part to any negligent act or omission of an Indemnified Person, suffered or incurred by any of such Indemnified Persons arising out of, and/or related to: (a) the Purchased Assets and/or any of the Assumed Liabilities; (b) any breach by Buyer of the terms and conditions of this Agreement and/or any of the other Transaction Documents; and/or (c) any Claim or Proceeding described in Section 6.8(f)(iii) (to the extent of Buyer's Liability for such Claim or Proceeding in accordance with Section 6.8(f)(iii)).
 

 

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 10.2
 Environmental Indemnification.  Without limiting the generality and scope of Section 10.1, Buyer agrees to indemnify each Indemnified Person against, and defend and hold each of them harmless from any and all Assumed Environmental Liabilities (including court costs, attorneys' fees and/or enhanced oversight expenses) (collectively, the "Indemnified Environmental Obligations") suffered or incurred by any of them, including any such Indemnified Environmental Obligation alleged, asserted, initiated or otherwise existing in respect of injury to persons, including death, and damage to property, business and/or natural resources or trespass or nuisance to property suffered by any Person.  The foregoing indemnification shall include any Indemnified Environmental Obligation arising out of, and/or relating to, any acts or omissions of Seller, any consultants, contractors, subcontractors, transporters, recyclers, or any treatment, storage or Off-Site Disposal Facility or location used by Seller or such other Persons, whether or not based upon any act or omission on or off such location.  Further, Indemnified Environmental Obligations shall include any Liability suffered, incurred and/or imposed as a result of actions pursued by any Governmental Authority with respect to the Purchased Assets.
 

 10.3
 Indemnification Notice.  Whenever a Claim for indemnification shall arise under this Article 10, the affected Indemnified Person(s) shall give notice to Buyer of such Claim, including reasonable detail about the facts and circumstances thereof.  Such notice shall be given as soon as reasonably practical following the time that such Indemnified Person realized its entitlement to indemnification under Article 10.  Notwithstanding the foregoing, the failure to provide such notice shall not prejudice, impair or otherwise adversely affect in any manner whatsoever the rights of the Indemnified Persons and the obligations of Buyer, and such Indemnified Person(s) shall have no Liability to Buyer as a result of the failure to provide such notice and such Indemnified Person(s) shall have all of the rights and benefits provided for in this Agreement notwithstanding failure to provide such notice.  Any notice given by an Indemnified Person pursuant to this Section 10.3 shall be deemed to have satisfied the notice requirement under Section 6.8(l) with respect to any Managed Claim.
 

 10.4
 Indemnification Procedure.
 

 (a)
 Assumption of Defense.  If Buyer has acknowledged, by notice given to the affected Indemnified Person(s) within a reasonable period after receiving the notice from such Indemnified Person(s) (based on the circumstances, but no more than five (5) Business Days after receipt of such notice), its indemnification obligation with respect to a particular Claim, Buyer, upon giving such notice to such Indemnified Person(s), may assume, at its sole cost and expense, the defense of any Claim by a Third Party.  Counsel selected for such defense of any Claim by a Third Party shall be reasonably acceptable to such Indemnified Person(s), and such Indemnified Person(s) shall be entitled to participate in (but not control) such defense through its/their own counsel and at its/their own cost and expense; provided that if the counsel selected by Buyer advises that, due to actual or potential conflicts, separate counsel should represent such Indemnified Person(s), the expense of such separate counsel shall be an indemnified expense in accordance with the terms and conditions hereof, the full cost of which shall be borne by Buyer.  Such Indemnified Person(s) shall reasonably cooperate with Buyer in connection with the defense of such Claim by a Third Party.  Notwithstanding anything to the contrary set forth in this Article 10 or elsewhere in this Agreement and/or any other Transaction Document, each Indemnified Person shall have the right to retain separate counsel to represent such Indemnified 
 

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 Person, at the sole cost and expense of such Indemnified Person, concerning such Claim by a Third Party, except to the extent such cost and expense are subsequently determined to be an indemnified expense.
 

 (b)
 Indemnified Persons' Rights.  If Buyer does not acknowledge its indemnification obligation for a particular Claim by a Third Party, or does not timely assume the defense thereof, such Indemnified Person may defend such Claim in such manner as it may deem appropriate.  Buyer shall bear all of the costs and expenses, including attorneys' fees, incurred by such Indemnified Person in connection with such defense, all of which shall be paid from time to time within thirty (30) days after Buyer receives a written request from any Indemnified Person for reimbursement (including reasonably detailed documentation in support of any such request), and Buyer shall be entitled to participate (but not control) such defense through its own counsel and at its own cost and expense.  Buyer shall reasonably cooperate with such Indemnified Person in connection with the defense of such Claim by a Third Party.
 

 (c)
 Buyer Obligations.  Notwithstanding its control of a defense of any Claim by a Third Party, Buyer shall not (i) make any admission or take any other action that is binding on, or otherwise attributable to, any Indemnified Person; and/or (ii) consent to any settlement, entry of judgment or other disposition, in any or all instances without the prior written consent of the affected Indemnified Person(s).
 

 (d)
 Managed Claims.  Notwithstanding anything to the contrary in this Section 10.4 and without affecting in any manner Buyer's Liability with respect to any Claim to which Buyer's indemnification obligations apply under this Article 10, Managed Claims shall be managed and controlled pursuant to Section 6.8.
 

 10.5
 Insurance.  Prior to the Closing and effective from and following the Closing Date, Buyer shall obtain, and maintain at its sole cost and expense, such insurance as will insure its obligations under the provisions of this Article 10, and all other indemnity obligations in this Agreement and the other Transaction Documents; provided that the amount of available insurance shall not limit or otherwise restrict Buyer's indemnity obligations under the Transaction Documents.  All insurance required under the Transaction Documents shall be endorsed to name Seller and its Affiliates as additional insureds (other than for workers' compensation insurance).  The amount of deductibles or self-insured retentions shall be for the sole account of Buyer.  Buyer shall maintain such insurance in place during the entire term of its ownership of the Purchased Assets and for a minimum of three (3) years after the date of change of such ownership and shall cause any transferee of the Purchased Assets permitted under the terms and conditions of this Agreement to maintain such insurance.  Evidence of such insurance (including copies of policies) shall be available for Seller's review and will be furnished to Seller within ten (10) days after its request.  Buyer shall provide Seller with certificate(s) of insurance demonstrating such coverage within ten (10) days after the expiration or earlier termination of the O&M Agreement, and Buyer shall ensure that its broker or insurer provides Seller with replacement certificates evidencing required insurance coverage prior to the expiration of prior certificates.  Such certificate(s) shall contain statements (a) indicating that Seller shall receive a written notice at least thirty (30) days before cancellation/non-renewal or significant modification of any of such policies; and (b) confirming that Seller and its Affiliates (as their 
 

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 interests may appear) have been named as additional insureds (other than under coverage for workers' compensation) and providing a waiver of subrogation which Buyer may have against them.  Such insurance coverages shall be primary to any other coverage available to Seller or its Affiliates, and shall not be deemed to limit Buyer's Liability under the Transaction Documents.
 

 10.6
 Survival.  Indemnification shall apply irrespective of the date of the assertion of any Claim against an Indemnified Person and/or whether the Indemnified Person suffers or incurs any Liability before or after the expiration or earlier termination of this Agreement and/or any of the other Transaction Documents.  The applicable provisions of this Agreement and any other Transaction Document shall remain in effect after the expiration or termination of this Agreement and the other Transaction Documents to the extent necessary to provide for the determination and enforcement of Buyer's indemnification obligations with respect to acts or events that occurred while this Agreement and the other Transaction Documents were in effect.
 

 10.7
 Indemnification Limitation.  Any indemnification or similar hold harmless obligation(s) under this Agreement shall not be enforceable to the extent that a court of competent jurisdiction conclusively determines that such obligation(s) is/are prohibited by Law.  The Parties expressly acknowledge that none of the Transaction Documents constitutes a "contract or agreement relative to the construction, alteration, repair or maintenance of any building, structure or appurtenances thereto" as that phrase is used in C.G.S. §52-572k.
 

 ARTICLE 11.
 EVENT OF DEFAULT; REMEDIES
 

 11.1
 Event of Default.  Upon the occurrence of any of the following (each an "Event of Default") after the Closing Date:
 

 (a)
 Any representation or warranty made by a Party herein and/or in any of the other Transaction Documents is false or misleading in any material respect at the time made;
 

 (b)
 With respect to Buyer, Buyer permits or suffers a Transfer of or Transfers (and/or agrees to Transfer) any of the Purchased Assets and/or its rights or obligations under this Agreement, in each case except as permitted under, and in compliance with, Section 14.6(c);
 

 (c)
 Either Party fails to perform any material obligation set forth in this Agreement (other than any event that is otherwise specifically covered as a separate Event of Default), and such Party fails to cure such breach within thirty (30) days after receipt of (written) notice of such failure from the other Non-Breaching Party; provided if such failure is capable of cure and the defaulting Party is pursuing such cure with due diligence, but such cure cannot be effected within such thirty (30) day period with the exercise of reasonable diligence, then such cure period shall be extended for an additional thirty (30) day period;
 

 (d)
 Either Party fails to perform any material obligation set forth in any Transaction Document (other than this Agreement), and such default has not been cured in accordance with the terms of such Transaction Document;
 

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 (e)
 With respect to Buyer, the Guarantor fails to perform any material obligation set forth in the Guaranty and/or any representation or warranty made by the Guarantor in its Guaranty is false or misleading in any material respect at the time made;
 

 (f)
 A Party, or with respect to Buyer, the Guarantor, becomes Bankrupt; and/or
 

 (g)
 With respect to Buyer, Buyer is no longer a member of CONVEX and/or a Participating Transmission Owner in good standing under the TOA and otherwise with ISO-NE,
 

 then the Non-Breaching Party shall have all rights or remedies under this Agreement (and/or any other Transaction Document), at Law and/or in equity; provided that neither Party shall be entitled to terminate this Agreement under any circumstances due to an Event of Default.
 

 ARTICLE 12.
 DISPUTE RESOLUTION
 

 12.1
 Negotiation Between Executives.  The Parties shall attempt in good faith to promptly resolve any dispute arising out of or relating to this Agreement and/or any of the other Transaction Documents (except as set forth in Section 12.9) by negotiation between executives who have authority to settle the controversy and who are at a higher level of management than the Persons with direct responsibility for administration of the Transaction Documents.  Either Party may give the other Party (written) notice of any dispute not resolved in the normal course of business.  Such notice shall include: (a) a statement of that Party's position and a summary of arguments supporting that position; and (b) the name and title of the executive who will be representing that Party and of any other Person who will accompany the executive.  Within fifteen (15) days after delivery of the notice, the receiving Party shall respond with: (i) a statement of that Party's position and a summary of arguments supporting that position; and (ii) the name and title of the executive who will represent that Party and of any other Person who will accompany the executive.  Within thirty (30) days after delivery of the initial notice, the designated executives of both Parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to attempt to resolve the dispute.  All reasonable requests for information made by one Party to the other will be honored.  All negotiations pursuant to this Section 12.1 shall be confidential and shall be treated as compromise and settlement negotiations for purposes of Law and rules of evidence.
 

 12.2
 Mediation.  If the dispute has not been resolved by negotiation within forty-five (45) days after the disputing Party's notice, or if the Parties have failed to meet within thirty (30) days, each as contemplated in Section 12.1, the Parties shall attempt to settle the dispute by mediation under the then current CPR Mediation Procedure; provided, however, that if one Party refuses or fails to participate in negotiation pursuant to Section 12.1, the other Party may then immediately initiate mediation prior to the expiration of the forty-five (45) day negotiation period.  Unless otherwise agreed, the Parties will select a mediator from the CPR Panels of Distinguished Neutrals.
 

 12.3
 Arbitration.  Any dispute arising out of or relating to the Transaction Documents 
 

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 (except as provided in Section 12.9), including the breach, termination or validity thereof, that has not been resolved by a non-binding procedure as provided in Section 12.1 and/or Section 12.2 within ninety (90) days after notice of the dispute, shall be resolved by final and binding arbitration in accordance with the then current CPR Rules for Non-Administered Arbitration by a sole arbitrator, for any dispute involving amounts in the aggregate under Three Million Dollars ($3,000,000.00), or three (3) arbitrators, for any dispute involving amounts in the aggregate equal to or greater than Three Million Dollars ($3,000,000.00), of whom each Party shall designate one (1) in accordance with the "screened" appointment procedure provided in CPR Rule 5.4, with the third arbitrator selected pursuant to CPR Rules 5 and 6; provided, however, that if either Party will not participate in a non-binding mediation Proceeding as specified in Section 12.2, the other Party may thereafter immediately initiate arbitration (before expiration of the above-mentioned ninety (90) day period).  The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16, inclusive, and judgment upon the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof.  The place of arbitration shall be Hartford, Connecticut.
 

 12.4
 Powers of Arbitrators.  Except with respect to any and all Claims of Third Parties, arbitrator(s) are not empowered to award damages in excess of compensatory damages (subject to the limitation on Liability set forth herein) and each Party expressly waives and foregoes any right to have the arbitrator(s) award indirect, incidental, consequential, special, exemplary, punitive or similar damages, except to the extent Law requires that compensatory damages be increased in a specified manner, or except with respect to any and all Claims of Third Parties.  All costs of the arbitration shall be paid equally by the Parties, unless the award shall specify a different division of such costs.  Each Party shall be responsible for its own expenses, including attorneys' fees.  Each Party shall be afforded adequate opportunity to present information in support of its position on the dispute being arbitrated.  The arbitrator(s) also may request additional information from the Parties.
 

 12.5
 Deferral.  The Parties may agree to defer any arbitration Proceeding, without prejudice to the Indemnified Person, pending the resolution of a particular dispute.
 

 12.6
 Continued Performance.  Each Party shall continue performance of its obligations under the Transaction Documents, in conformance with the terms and conditions of the Transaction Documents, notwithstanding the existence of any Claim, dispute, arbitration and/or other Proceeding between the Parties.  Nothing in this Article 12 shall prejudice, impair or otherwise prevent either Party from receiving equitable relief, including an Order for specific performance and/or an injunction, from a court of competent jurisdiction pending the conclusion of any negotiation, mediation and/or arbitration Proceeding.
 

 12.7
 Compelled Arbitration.  Each Party will proceed in good faith to conclude any arbitration Proceeding referred to above in this Article 12 as quickly as reasonably possible.  If a Party refuses or fails to participate in an arbitration Proceeding referred to above in this Article 12, the other Party may petition any Governmental Authority having proper jurisdiction for an Order directing such Party to participate in the arbitration Proceeding.  All costs and expenses, including attorneys' fees, incurred by the petitioning Party in enforcing such participation shall be paid for by such refusing or non-compliant Party.
 

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 12.8
 Related Parties and Proceedings.
 

 (a)
 Related Parties.  Each Party shall have the right, but not the obligation, to join or otherwise require others (including the Guarantor and/or any Member) to participate as parties and/or witnesses, in the sole and absolute discretion of each such Party exercised in good faith, in any dispute resolution Proceeding hereunder (including any negotiation between executives, mediation and/or arbitration).  If either Party, in its sole and absolute discretion exercised in good faith, exercises such right, then such additional party and/or parties shall be an equal participant in, and subject to all rules and requirements of, such Proceeding; provided that if such additional participation involves an arbitration Proceeding for disputes involving amounts in the aggregate equal to or greater than Three Million Dollars ($3,000,000.00), then three (3) arbitrators shall be designated pursuant to the screened appointment procedure referenced in Section 12.3, with one (1) arbitrator being appointed by Seller, one (1) arbitrator being appointed by Buyer, and the third arbitrator appointed in accordance with CPR Rule 5.4(e).
 

 (b)
 Participation.  Each Party shall have the right, but not the obligation, to require the other Party to join or otherwise participate as a party and/or witness, in the sole and absolute discretion of such Party exercised in good faith, in any dispute resolution Proceeding (including any negotiation between executives, mediation and/or arbitration) involving all or any portion of the M/N Project.  If either Party, in its sole and absolute discretion exercised in good faith, exercises such right, then the other Party shall act in good faith, coordinate and cooperate with such Party and the other parties to the Proceeding, and otherwise proceed as though such Proceeding involved a dispute under the Transaction Documents.  Both Parties hereby consent to being so joined and waive and release, to the fullest extent permitted by Law, any objection, right or other Claim that such Party cannot be compelled or otherwise has no obligation to participate in any such Proceeding.  The joined or otherwise participating Party shall solely bear all costs and expenses incurred in connection with such participation.
 

 (c)
 Compelled Participation.  If either Party refuses or fails to comply with this Section 12.8, in whole or in part, the other Party may petition any Governmental Authority having proper jurisdiction for an Order directing such Party to so comply.  All costs and expenses, including attorneys' fees, incurred by the other Party in enforcing such participation will be paid by such refusing or non-complaint Party.
 

 12.9
 Exclusion.  Any disputes arising out of or relating to the O&M Agreement and/or the Step-In Agreement shall be resolved in accordance with, and subject to, the terms and conditions of such Transaction Documents.
 

 ARTICLE 13.
 LIMITATION ON LIABILITIES
 

 13.1
 No Consequential Damages.  NONE OF SELLER, ITS AFFILIATES, OR SELLER'S REPRESENTATIVES, OR THEIR RESPECTIVE EMPLOYEES, SHALL BE LIABLE HEREUNDER OR ANY OF THE OTHER TRANSACTION DOCUMENTS FOR CONSEQUENTIAL, SPECIAL, EXEMPLARY, INDIRECT, OR INCIDENTAL DAMAGES OR LOSSES, INCLUDING COST OF CAPITAL, LOSS OF GOODWILL, LOST REVENUES 
 

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 OR INCREASED OPERATING COSTS.  NONE OF BUYER, ITS AFFILIATES, OR BUYER'S REPRESENTATIVES, OR THEIR RESPECTIVE EMPLOYEES, SHALL BE LIABLE HEREUNDER OR ANY OF THE OTHER TRANSACTION DOCUMENTS FOR CONSEQUENTIAL, SPECIAL, EXEMPLARY, INDIRECT, OR INCIDENTAL DAMAGES OR LOSSES, INCLUDING COST OF CAPITAL, LOSS OF GOODWILL, LOST REVENUES OR INCREASED OPERATING COSTS.  The foregoing waiver of consequential damages shall not affect in any manner Buyer's indemnification obligations with respect to, and any and all Liability associated with, Claims by Third Parties under any of the Transaction Documents including Buyer's indemnification of the Indemnified Persons under Article 10 for Claims by Third Parties.  The waivers, releases and disclaimers of Liability expressed in this Agreement and/or any of the other Transaction Documents shall survive termination, cancellation or expiration of this Agreement and/or such Transaction Document(s), and shall apply (unless otherwise expressly indicated), whether in contract, equity, tort or otherwise, even in the event of fault, negligence, including sole negligence, foreseeable damages, strict liability, or breach of warranty of the Party released or whose Liabilities are limited, and shall extend to the partners, principals, directors, officers and employees, agents and other Affiliates of such Party, and their partners, principals, directors, officers and employees.  The provisions of this Section 13.1 shall survive termination or expiration of this Agreement.
 

 13.2
 Limitations of Seller's Liability.
 

 (a)
 Buyer Damage Limitation.  Buyer shall not be entitled to recover from Seller any damages arising out of, relating to and/or resulting from this Agreement and/or any of the other Transaction Documents, unless such damages shall have resulted from a deliberate violation of this Agreement and/or such other Transaction Document(s) occurring pursuant to authorized corporate action of Seller.
 

 (b)
 Maximum Seller Liability.  To the fullest extent allowable under Law and without limiting the scope of the limitations set forth in this Section 13.2 and elsewhere in this Agreement, Seller's aggregate Liability to Buyer under this Agreement and any of the other Transaction Documents (except as set forth below), whether founded in contract, tort (whether due to negligence, gross negligence, willful misconduct, strict liability or otherwise), statute or regulation, indemnity or otherwise, shall at all times be limited to Five Hundred Thousand Dollars ($500,000); provided that (i) if Seller wrongfully withholds all or any portion of the Deposit, Seller's aggregate Liability shall be increased to the extent necessary to include the amount determined to have been wrongfully withheld by Seller, if necessary; and (ii) the respective limitations of Liability set forth in the License Agreement, the O&M Agreement and the Step-In Agreement shall apply to matters within the scope of such Transaction Documents.
 

 (c)
 Waiver.  Buyer hereby irrevocably waives, releases and discharges any and all rights, entitlements, objections, Claims, discrepancies, disputes or other challenges, direct or indirect, relating to, or arising out of, any Liability of Seller in excess of the limitations set forth in this Section 13.2.  Nothing in this Section 13.2 shall limit Buyer's rights to seek equitable relief (to the extent available under Law) to enforce its rights under this Agreement, subject to the other terms and conditions of the Transaction Documents.
 

 

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 (d)
 Scope.  The limitation on Seller's Liability set forth in this Section 13.2 shall not apply to (i) the Property Tax Agreement and the Asset Demarcation Agreement; and (ii) any other agreements and/or transactions between the Parties that are unrelated to the Transaction, including any wholesale transmission and/or distribution services provided by Seller to Buyer under Seller's tariff.
 

 (e)
 Survival.  The provisions of this Section 13.2 shall survive termination or expiration of this Agreement.
 

 13.3
 Mitigation.  Each Party shall act in good faith to mitigate any Liability of a Party hereunder.  This Section 13.3 shall survive termination or expiration of this Agreement.
 

 13.4
 No Recourse.  Neither Party shall have any recourse whatsoever against any of the directors, officers or employees of the other Party or against any of the other Party's Affiliates.  Without limiting the generality of the foregoing, each Party, on behalf of itself and its Affiliates, hereby fully and irrevocably waives any right, Claim or entitlement whatsoever against any such directors, officers or employees and/or such Affiliates relating to any Liability suffered or incurred by any of them from any acts or omissions of any of such Persons.  Nothing in this Section 13.4 shall affect any separate guaranty, agreement and/or other undertaking by an Affiliate or any other Person with respect to the performance of a Party, including the Guaranty.  This Section 13.4 shall survive termination or expiration of this Agreement.
 

 13.5
 Other Limitations.  The limitations on Liability set forth in this Article 13 or elsewhere in this Agreement shall not affect and/or otherwise impair any limitation on Liability set forth in any other Transaction Document.  Insofar as possible, all of such limitations shall be construed and interpreted consistently and in a manner that limits Seller's Liability to the lowest applicable amount.
 

 ARTICLE 14.
 MISCELLANEOUS PROVISIONS
 

 14.1
 Applicable Law.
 

 (a)
 Governing Law.  The Transaction Documents and the rights and duties of the Parties thereunder shall be governed by and construed, enforced and performed in accordance with the laws of the State of Connecticut, without regard to principles of conflicts of law thereof, except to the extent that the laws of another jurisdiction must govern certain aspects of the enforcement of the rights and remedies of the Parties (including legal process and procedure).
 

 (b)
 Jurisdiction.  The Parties hereby consent to the exclusive personal and subject matter jurisdiction of the courts of the State of Connecticut for enforcement of the outcome of any and all arbitration Proceedings pursuant to Article 12 and any other legal or equitable Proceedings arising out of or relating to any of the Transaction Documents.  Each Party hereby irrevocably waives and releases, to the fullest extent permitted by Law:  (i) any objection to the venue of any such Proceeding brought in such a court; and (ii) any Claim that any such Proceeding brought in such court has been brought in an inconvenient forum.
 

 

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 (c)
 Waiver of Jury Trial.  The Parties hereby expressly, irrevocably, fully and forever, release, waive and relinquish any and all right to trial by jury with respect to any Proceeding by or against the other arising under any of the Transaction Documents.
 

 14.2
 Notices.  All notices, demands, directions, approvals, requests and/or other communications required or permitted to be given hereunder and/or any of the other Transaction Documents that do not contain notice provisions shall be in writing, sent to the recipient's address set forth below and shall be effective: (a) when personally delivered to the recipient; (b) five (5) days after deposit of the notice addressed as provided below in the U.S. mail, if sent by U.S. certified mail, return receipt requested; (c) one (1) Business Day after deposit with a recognized overnight courier or delivery service for delivery on the next Business Day; or (d) upon confirmation of facsimile (provided that a copy of such facsimile and confirmation shall be immediately sent by mail or courier as provided for in this Section 14.2).
 

 The addresses for notice are:
 

 Buyer:
 

 30 Stott Avenue
 Norwich, Connecticut 06360-1526
 Facsimile:
 860.889.8158
 Attention:
 Chief Executive Officer
 

 Seller:
 

 c/o Northeast Utilities Service Company
 107 Selden Street
 Berlin, Connecticut 06037
 Facsimile:
 860.665.6717
 Attention:
 Senior Vice President - Transmission
 

 With a copy to:
 

 Northeast Utilities Service Company
 P.O. Box 270
 Hartford, Connecticut 06141
 Facsimile:
 860.728.4581
 Attention: 
 General Counsel
 

 Address for couriers:
 

 56 Prospect Street
 Hartford, Connecticut 06103-2818
 

 Either Party may send any such notice or other communication using any other means (including personal delivery, expedited courier, messenger service, ordinary mail, or electronic mail), but 
 

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 no such notice or other communication using such other means shall be deemed to have been duly given unless and until it actually is received by the intended recipient.  Either Party may change the address to which notices and other communications hereunder are to be delivered by giving the other Party notice in the manner herein set forth.
 

 14.3
 Waivers.  Any and all waivers by either Party of any breach of, and/or other non-compliance with, any term and/or condition of this Agreement and/or any of the other Transaction Documents must be in writing, delivered to the other Party in accordance with Section 14.2.  The waiver by either Party of any breach of, and/or other non-compliance with, any term and/or condition of this Agreement and/or any of the other Transaction Documents shall not operate or be construed as a waiver of any subsequent breach or non-compliance (except to the extent expressly so stated in the applicable written waiver).  No course of dealing shall operate as a waiver of any right, power or privilege hereunder, and no single or partial exercise of any such right, power or privilege shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege.
 

 14.4
 Time.  Time is of the essence concerning the time periods and deadlines set forth in the Transaction Documents.
 

 14.5.
 Invalid Provisions.  If any provision of this Agreement and/or any of the other Transaction Documents is adjudged in arbitration or by a court of competent jurisdiction to be illegal, invalid or unenforceable at law or in equity for any reason, the same shall, if possible, be modified to the extent necessary to make it legal, valid and enforceable, or, if not possible, such provision shall be deleted.  The remaining provisions of this Agreement and/or such other Transaction Document(s) shall remain enforceable notwithstanding the illegality, invalidity or unenforceability of any individual provision.  The Parties also shall negotiate an equitable adjustment to this Agreement and/or the other Transaction Documents with a view toward effecting, to the extent possible, the original purpose and intent of the severed provision.
 

 14.6
 Succession/Assignment.
 

 (a)
 The Transaction Documents, and the rights and obligations created thereby, shall bind and inure to the benefit of the permitted successors and assigns of the Parties, subject to the provisions set forth below in this Section 14.6.
 

 (b)
 Seller may assign its rights and/or obligations, in whole or in part, under this Agreement and/or any of the other Transaction Documents, without recourse and without the consent of Buyer, to any Affiliate of Seller and/or any Person acquiring all or substantially all of the transmission assets of Seller.  Additionally, Seller may exercise any or all of its rights and/or perform any or all of its obligations under this Agreement through NUSCO or other Affiliate of Seller acting as agent for Seller, and such performance shall not constitute an assignment and/or assumption of Liability by NUSCO and/or any such Affiliate.  Otherwise, Seller shall not assign its interest in this Agreement without the prior written consent of Buyer, which shall not be unreasonably withheld or delayed; provided, however, that Seller may assign this Agreement and/or any of the other Transaction Documents, in whole or in part, without the consent of Buyer 
 

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 to any Person if Seller remains unconditionally liable for all of the obligations and other Liabilities of such transferee hereunder and/or thereunder notwithstanding such assignment.
 

 (c)
 Buyer is not authorized to and shall not Transfer or permit or suffer a Transfer of any of the Purchased Assets, this Agreement and/or any of the other Transaction Documents without the prior written consent of Seller, which may be granted or withheld in Seller's sole and absolute discretion; provided that after the Closing, subject to the Right of First Refusal, Buyer may, without the consent of Seller:
 

 (i)
 Transfer all Purchased Assets and the associated rights, obligations and/or interests under the Transaction Documents (collectively, the "Transaction Assets") to any Person (including an Affiliate of Buyer) that acquires record and beneficial ownership of all such Transaction Assets (a "Purchaser"); provided that:
 

 (1)
 such Purchaser (or its guarantor under a guaranty agreement acceptable to Seller in its sole and absolute discretion) has a Credit Rating as of the date of Transfer of at least Investment Grade; provided that CMEEC, if the Purchaser, will be deemed to have satisfied the foregoing credit requirement for purposes of this Section 14.6(c)(i)(1), irrespective of its Credit Rating;
 

 (2)
 such Purchaser is a Participating Transmission Owner; and
 

 (3)
 there is no pending and/or threatened Proceeding where such Purchaser and/or any of its Affiliates is/are adverse to Seller and/or any of its Affiliates.
 

 Buyer shall notify Seller of any proposed transaction with a Purchaser at least thirty (30) days before the proposed effective date of any Transfer of the Transaction Assets; and/or
 

 (ii)
 conditionally assign and/or pledge all or any portion of the Purchased Assets and the associated rights, obligations and/or interests under the Transaction Documents as collateral security for the purposes of financing its purchase of such Purchased Assets and/or the making of any Capital Improvements so long as the Person providing such financing acknowledges on terms acceptable to Seller that such financing, including the exercise of the rights and remedies of such Person, are subject and subordinate to the Transaction Documents, including the Right of First Refusal, the Buy-Back Option, and the exclusive right of Seller to manage, operate and maintain the Purchased Assets under the O&M Agreement.
 

 Notwithstanding anything to the contrary in this Section 14.6 or elsewhere in the Transaction Documents and without limiting Seller's discretion with respect to any proposed Transfer, any Purchaser or other transferee of the Transaction Assets shall agree to be bound by the terms of this Agreement (including the Reserved Rights, Seller's rights regarding the Reserved Assets, the Right of First Refusal, the Buy-Back Option, and this Section 14.6 for any future Transfers) and the provisions of the other Transaction Documents, all in a form acceptable to Seller.  Without 
 

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 limiting the generality of the foregoing, in connection with such assumption and assignment, such Purchaser or other transferee of the Transaction Assets shall demonstrate to Seller compliance with all of the applicable requirements of this Agreement and the other Transaction Documents applicable to the owner of such Transaction Assets, including the maintenance of insurance and the provision of a guaranty acceptable to Seller.
 

 (d)
 Any purported direct or indirect sale, assignment or other Transfer of any interest, in whole or in part, in violation of this Section 14.6 shall constitute an Event of Default.
 

 14.7.
 Confidentiality.  During the period in which the Transaction Documents are in effect and for a period of one (1) year after the expiration or termination of the last Transaction Document to be in effect, each Party shall: (a) keep confidential all written information furnished by the other Party in furtherance hereof and conspicuously marked as "Confidential Information"; (b) not disclose or reveal, except as permitted pursuant to this Section 14.7, any such confidential information to any Person other than such Party's employees directly involved with the Transaction; and (c) not use such information other than as consistent with the terms hereof.  Each Party shall notify the other Party of any unauthorized disclosure and shall be responsible for any breach hereof by such Party and its representatives.  The receiving Party and/or its representatives may disclose such confidential information under any of the following conditions:
 

 (i)
 if required by Law, including as required in connection with Buyer's Regulatory Approvals and Seller's Regulatory Approvals;
 

 (ii)
 to attorneys for, or consultants or independent public accountants of, the receiving Party, or any Person who has provided financing and/or a credit rating to a Party in connection with the Transaction, provided that in each case only if such Person shall be bound by a confidentiality agreement embodying the terms of this Section 14.7;
 

 (iii)
 if required to be disclosed in connection with the prosecution or defense of any Proceeding;
 

 (iv)
 if such confidential information is or becomes part of the public domain by means other than actions taken by the receiving Party or on its behalf;
 

 (v)
 if the receiving Party rightfully received such confidential information from sources other than the disclosing Party without breach of an obligation of confidentiality; 
 

 (vi)
 if the receiving Party independently developed such information without reliance on the confidential information disclosed by the disclosing Party; or
 

 (vii)
 if agreed to in writing by the disclosing Party.
 

 In the event disclosure is made pursuant to clause (i), the Party effecting such disclosure shall (1) promptly notify the other Party thereof so that such Party may seek a protective Order or other appropriate remedy, and (2) use reasonable efforts to minimize the scope of any disclosure and to 
 

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 require that the recipient(s) maintain the confidentiality of any confidential information covered by this Section 14.7.  Each Party acknowledges that the other Party would not have an adequate remedy at law and would be irreparably harmed if such Party breached this Section 14.7; accordingly, without prejudice to the rights and remedies otherwise available, each Party shall be entitled to equitable relief by way of injunction to prevent breaches of this Section 14.7 by the other Party or any other recipients of such confidential information.
 

 14.8
 Survival.  All agreements and covenants made by each Party in this Agreement and the other Transaction Documents shall be considered to have been relied upon by the other Party and shall survive expiration or earlier termination of this Agreement for so long as is necessary to fulfill the intent thereof.  All requirements, terms, conditions and provisions that have continuing effect after the Closing, including each Party's non-disclosure obligations, the limitations on Seller's Liability, the Retained Interests, and Buyer's indemnities for the benefit of Indemnified Persons, shall survive cancellation, termination or expiration of this Agreement and the other Transaction Documents for so long as is necessary to fulfill the intent thereof.  The remaining terms and conditions of this Agreement and/or the other Transaction Documents shall survive to the extent necessary to give effect to such surviving requirements, terms, conditions and provisions.
 

 14.9
 Counterparts/Facsimiles/PDF Copies.  This Agreement and/or the other Transaction Documents may be executed in counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one and the same instrument.  Facsimile signatures and "portable document format" (PDF) copies of signatures shall be deemed original signatures.
 

 

 [Signature Page Follows]
 

 

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 IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their respective duly authorized officers as of the Effective Date.
 

 

 Signed in the Presence of:
 CONNECTICUT TRANSMISSION
 MUNICIPAL ELECTRIC ENERGY
 COOPERATIVE
 

 

 /S/ LINDA AUDET
 By:  /S/ MAURICE R. SCULLY
 Name:  Linda Audet
 Name:
 Maurice R. Scully
 Title: 
 Chief Executive Officer
 /S/BETNANY SAPIA
 Name:  Betnany Sapia
 

 Signed in the Presence of:
 THE CONNECTICUT LIGHT AND
 POWER COMPANY
 

 

 /S/ WILLIAM O’HARA
 By:  /S/ JAMES A. MUNTZ
 Name:  William O’Hara
 Name:
 James A. Muntz
 Title:
 Senior Vice President - Transmission
 /S/ JOSEPH DORNFRIED
 Name:  Jospeh Dornfried
 

 

 STATE OF CONNECTICUT
 )
 )   ss.
 Norwich
 COUNTY OF NEW LONDON
 )
 

 This Agreement was acknowledged before me on the 16th day of December, 2010, by Maurice R. Scully, Chief Executive Officer of Connecticut Transmission Municipal Electric Energy Cooperative, a publicly-owned, joint-action power supply agency formed under C.G.S Chapter 101a, on behalf of said entity.
 

 My Commission Expires:
 /S/ ELLEN F. KACHMAR
      Notary Public
 April 30, 2012
 Ellen F. Kachmar
      Notary's Printed/Typed Name
 

 

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 STATE OF CONNECTICUT
 )
 )   ss.
 Berlin
 COUNTY OF HARTFORD 
 )
 

 This Agreement was acknowledged before me on the 16th day of December, 2010, by James A. Muntz, Senior Vice President - Transmission of The Connecticut Light and Power Company, a specially chartered Connecticut corporation, on behalf of said corporation.
 

 My Commission Expires:
 /S/ DIANE S. FARYNIARZ
      Notary Public
 11-30-2014
 Diane s. Faryniarz
      Notary's Printed/Typed Name
 

 

 

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 Schedule 2.1(a)
 Transmission Facilities
 

 The Transmission Facilities are identified on the CPR Ledger Detailed Asset Report ("Asset Report") attached to and made a part of this Schedule 2.1(a).
 

 The dollar values in the Accumulated Cost column of the Asset Report reflect gross plant value as installed and do not include depreciation.  Such aggregate gross plant value of the Transmission Facilities, as installed, is $46,385,000.60 (as reflected in the Asset Report).
 

 The "CABLE, FIBER OPTIC" referenced in the Asset Report (H3827A: Beseck – East Devon: Wallingford, Seller's Work Order Number 40292001) represents shield wire, not the fiber optic cable embedded in that shield wire.  Such fiber optic cable has been excluded from the Transaction and retained by Seller pursuant to Section 7.6(b).
 

 As indicated in the Asset Report (H1655A: North Haven-Branford: Wallingford, Seller's Work Order Number 40292003), nine (9) 115-kV insulator assembly units for each of structures #4685 and #4695 (total of 18 insulator assembly units), having an aggregate gross plant value as installed of $43,428.66, have been excluded from the Transmission Facilities.  For the avoidance of doubt, the following assets have been removed from Seller's Work Order Number 40292003 and are not part of the Transmission Facilities:
 

 ·
 POLE, STEEL 70 FOOT FULLY OWNED: 115-KV SINGLE CIRCUIT COMPACT H-FRAME DEADEND, STR# 4695 L&R
 ·
 POLE, STEEL  80 FOOT FULLY OWNED: 115-KV SINGLE CIRCUIT 3-POLE DE (L,M,R POLES) STR. #4685
 ·
 CONDUCTOR,ACSR BARE 795 KCMIL: 795 KCMIL 45/7 ACSR "TERN" BETWEEN EXIST UI 2B & STR. #4685
 ·
 CONDUCTOR,ALUMOWELD BARE 7# 9: WIRE, STATIC 7 NO. 9 ALUMOWELD BETWEEN EXIST UI 2B & STR. #4685
 

 

 

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 Schedule 2.1(b)
 Transferable Contracts
 

 1.
 Amended and Restated Construction Agreement Overhead Transmission Line Construction – Segments 1 and 2 Associated with the Middletown to Norwalk 345-kV Transmission Line Project dated October 19, 2006, between Northeast Utilities Service Company, as agent for The Connecticut Light and Power Company, as Owner and PAR Elecrical [sic] Contractors, Inc., as Contractors.
 

 2.
 Cover Agreement dated June 16, 2006, between Northeast Utilities Service Company As Agent for The Connecticut Light and Power Company and Southwire Company 345kV and 115kV Conductor MN-PM-PRO-0004 to be incorporated with Construction of 345-kV Transmission Lines, Cables, Substations and Switching Stations and Reconstruction of 115-kV Transmission Lines from Scovill Rock S/S in Middletown to Norwalk S/S in Norwalk.
 

 3.
 Cover Agreement dated May 12, 2006, between Northeast Utilities Service Company As Agent for The Connecticut Light and Power Company (CL&P) and Thomas & Betts Corporation (T&B) for Tubular Steel Poles MN-PM-PRO-0005 to be incorporated with Construction of 345-kV Transmission Lines, Cables, Substations and Switching Stations and Reconstruction of 115-kV Transmission Lines from Scovill Rock S/S in Middletown to Norwalk S/S in Norwalk.
 

 4.
 Cover Agreement dated August 23, 2006, between Northeast Utilities Service Company, as Agent for The Connecticut Light and Power Company and Hughes Utilities, Ltd. Insulators and Hardware MN-PM-PRO-0010 to be incorporated with Construction of 345-kV Transmission Lines, Cables, Substations and Switching Stations and Reconstruction of 115-kV Transmission Lines from Scovill Rock S/S in Middletown to Norwalk S/S in Norwalk.
 

 5.
 Cover Agreement dated July 6, 2006, between Northeast Utilities Service Company As Agent for The Connecticut Light and Power Company and INTRAL Inc. Overhead Ground Wire MN-PM-PRO-0008 to be incorporated with Construction of 345-kV Transmission Lines, Cables, Substations and Switching Stations and Reconstruction of 115-kV Transmission Lines from Scovill Rock S/S in Middletown to Norwalk S/S in Norwalk.
 

 6.
 Cover Agreement dated September 20, 2006 between Northeast Utilities Service Company As Agent for The Connecticut Light and Power Company and Brugg Cables, LLC Optical Ground Wire (OPGW) MN-PM-PRO-0009 to be incorporated with Construction of 345-kV Transmission Lines, Cables, Substations and Switching Stations and Reconstruction of 115-kV Transmission Lines from Scovill Rock S/S in Middletown to Norwalk S/S in Norwalk.
 

 7.
 Fixed Price Engineering, Procurement and Construction Agreement for Beseck Switching Station Associated with the Middletown to Norwalk 345-kV Transmission Line Project 
 

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 Between Northeast Utilities Service Company, as agent for The Connecticut Light and Power Company, as Owner and McPhee Electric LTD, LLC, as Contractor dated June 27, 2006 (dead end structures).
 

 8.
 Purchase Order Number 02233303 (Release 00007) issued December 11, 2006 by Northeast Utilities Service Company as agent for The Connecticut Light and Power Company to Hillside Industries, Inc. for Step Rungs.
 

 9.
 Miscellaneous purchase orders issued by Seller, each with a value of less than Twenty-Five Thousand Dollars ($25,000.00), for various assets incorporated into the Transmission Facilities.
 

 

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 Schedule 2.1(c)
 Transferable Permits
 

 1.
 Connecticut Siting Council Certificate of Environmental Compatibility and Public Need dated April 7, 2005 issued in Docket No. 272.
 

 2.
 U.S. Army Corp. of Engineers (ACOE) Permit No. NAE-2004-1162 dated January 12, 2007.
 

 3.
 Connecticut Department of Environmental Protection Permit No. 200402101-MG/WQC dated January 4, 2007.
 

 

 

 

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 Schedule 2.3(e)
 Pending Proceedings
 

 1.
 John Verna v. The Connecticut Light and Power Company et al. (CV-09-5032247 S) (Judicial District of New Haven at New Haven).
 

 

 

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 Schedule 3.1
 Calculation of Purchase Price
 

 Based on the following assumptions and calculation, the Parties have estimated the Purchase Price (the net book value of the Transmission Facilities) as of a Closing Date of May 31, 2011 to be Forty Two Million Three Hundred Twenty Six Thousand Six Hundred Ninety Six Dollars ($42,326,696):
 

 ·
 Original gross plant value:  $46,385,001
 ·
 Book depreciation (estimated through May 31, 2011):  $4,058,3051
 ·
 Net book value (gross plant value less depreciation) of the Transmission Facilities estimated as of May 31, 2011:  $42,326,696.
 

 The Purchase Price shall be adjusted to account for any change in any of the foregoing estimates as of the Closing Date, including as a result of:
 

 (a)
 any capital additions to the Transmission Facilities, including as a result of any casualty and/or other replacement affecting the Transmission Facilities, and attendant economic impacts (including depreciation and other tax considerations) and/or the additional payment on account of the Purchase Price for capital additions to the Transmission Facilities contemplated under Section 3.2(c) of this Agreement; and
 

 (b)
 the continued allocation of generally assigned costs associated with the construction of the M/N Project.  Seller allocates generally assigned costs based on the gross plant value of Seller's assets within the M/N Project.2
 

 In connection with the anticipated Closing, the Parties shall finalize all estimated components of the Purchase Price pursuant to Section 3.1(a) of this Agreement.
 

 In accordance with Section 4.3(a) of this Agreement, the payment of the Purchase Price due at the Closing shall account for the $1,000,000.00 Deposit of Buyer required by Section 3.1(b) of this Agreement.
 

 The Purchase Price does not include the following amounts, obligations and other Liabilities due to Seller from Buyer pursuant to this Agreement:
 

 (i)
 Taxes for personal property associated with the Transmission Facilities and other adjustments contemplated by Section 3.2(a) of this Agreement;
 

 (ii)
 Tax Gross-Up due under Section 3.3 of this Agreement, including any and all adjustments to the Tax Gross-Up that relate to the final Purchase Price;
  
 _________________________
  
 1  Amount assumes straight line depreciation from the Effective Date to the Closing Date for illustrative purposes.
 2  Original gross plant value (and associated depreciation) in this Schedule 3.1 does not include approximately $92,000 of costs generally assigned to the Transmission Facilities in December, 2010 due to the proximity to the Effective Date.  Such allocated costs and associated depreciation will be included in the Purchase Price as of the Closing Date.
 

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 (iii)
 Transaction costs and expenses contemplated by Section 7.8(b) of this Agreement; and
 

 (iv)
 any payments and/or other adjustments (including permit fees) under the Transaction Documents.
 

 

 

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 Schedule 3.3
 Calculation of Tax Gross-Up
 

 The calculation attached to this Schedule 3.3 projects that as of the Closing Date, Buyer shall pay to Seller the Tax Gross-Up in the amount of Three Million Ten Thousand One Hundred One Dollars ($3,010,101.00).  That estimated Tax Gross-Up consists of the following elements:
 

 (a)
 the difference between the Purchase Price (net book value) and Seller's tax basis in the Transmission Facilities which results in a taxable gain;
 (b)
 the effect of equity AFUDC (Allowance for Funds Used During Construction) in net book cost; and
 (c)
 the tax consequences of Seller's receipt of the foregoing reimbursements.
 

 The Tax Gross-Up is based on assumptions, including:
 

 (i)
 the Laws in effect on the Effective Date with respect to Taxes, including the assumption that no Tax applies to Seller's receipt of transaction costs reimbursed by Buyer pursuant to Section 7.8(b) of this Agreement;
 (ii)
 the Purchase Price estimated in Schedule 3.1 to this Agreement;3 and
 (iii)
 an effective blended (Federal and State of Connecticut) Tax rate of Seller equal to 40.3625% based on the application of current Laws with respect to income Taxes.
 

 The Tax Gross-Up shall be adjusted to account for any changes in any of the foregoing assumptions, including adjustments to the Purchase Price to account for actual depreciation and other factors set forth in Schedule 3.1 to this Agreement.
 

 The Tax Gross-Up excludes and does not account for the effects of Seller's receipt of the following:
 

 (1)
 the proration of Taxes for personal property associated with the Transmission Facilities and other adjustments contemplated by Section 3.2(a) of this Agreement;
 (2)
 any transfer and/or conveyance Tax paid by Buyer pursuant to Section 3.2(b) of this Agreement;
 (3)
 any adjustment that occurs after the Closing with respect to any estimates pursuant to Section 3.1(a) and/or capital additions pursuant to Section 3.2(c); and
 (4)
 Buyer's payment of any other adjustments (including permit fees) under the Transaction Documents.
  
 ___________________________________
  
 3  The projected Tax Gross-Up attached to this Schedule 3.3 does not include the effect of the general assignment of approximately $92,000 of costs to the Transmission Facilities in December, 2010 and referenced in footnote 2 to Schedule 3.1.  The Parties acknowledge that such cost allocation will affect the amount of the Tax Gross-Up given the corresponding change to the Purchase Price, and that for purposes of Section 3.3 of this Agreement, the Parties will account for the Tax effect of such cost allocation before considering whether the Tax Gross-Up projected as of the Closing Date varies by more than $100,000 from the Tax Gross-Up estimated in this Schedule 3.3.
 

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 To the extent that any of the foregoing results in a taxable event, the Tax Gross-Up shall be increased to reflect the Tax effect of such event.
 

 In connection with the anticipated Closing, the Parties shall finalize the Tax Gross-Up pursuant to Section 3.3 of this Agreement.
 

 

 

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 Schedule 4.2(k)
 PARTIAL RELEASE OF MORTGAGE
 

 

 WHEREAS, The Connecticut Light and Power Company, a corporation organized and existing under the laws of the State of Connecticut, made, executed and delivered to Bankers Trust Company, now known as Deutsche Bank Trust Company Americas, a corporation organized and existing under the laws of the State of New Jersey, as Trustee, its certain Indenture of Mortgage and Deed of Trust dated as of May 1, 1921, which was duly recorded in the office of the Secretary of the State of Connecticut, on the 18th day of May, 1921, as amended and supplemented; and 
 

 WHEREAS, from time to time said The Connecticut Light and Power Company has made, executed and delivered to Bankers Trust Company, now known as Deutsche Bank Trust Company Americas, as Trustee, certain Indentures amendatory and supplemental to said Indenture of Mortgage and Deed of Trust, which amendatory and supplemental Indentures have been duly recorded in the office of the Secretary of the State of Connecticut; and
 

 WHEREAS, The Connecticut Light and Power Company has requested Deutsche Bank Trust Company Americas, as such Trustee, to release from said Mortgage, and all Indentures amendatory and supplemental thereto, the following described property:
 

 

 See Schedule A attached hereto and made a part hereof.
 

 

 NOW, THEREFORE, Deutsche Bank Trust Company Americas, as Trustee, in pursuance of the provisions of said Indenture of Mortgage, as amended and supplemented, and by request of The Connecticut Light and Power Company, for a valuable consideration, the receipt whereof is hereby acknowledged, does hereby release and discharge from the lien and operation of said Indenture of Mortgage and all of the Indentures amendatory and supplemental thereto, all the right, title and interest, if any, of Deutsche Bank Trust Company Americas (formerly known as Bankers Trust Company) as Trustee as aforesaid, in and to the property described in said Schedule A.
 

 It is hereby expressly understood that this release does not and shall not affect nor impair the lien and operation of said Indenture of Mortgage, as amended and supplemented, upon any portion of the property thereby conveyed except the property described in said Schedule A.
 

 This instrument is executed without covenants or warranty, express or implied, and without recourse against the Trustee in any event.
 

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 IN WITNESS WHEREOF, Deutsche Bank Trust Company Americas by Deutsche Bank National Trust Company, as Trustee as aforesaid, has caused this instrument to be signed by one of its Assistant Vice Presidents and its corporate seal to be hereto affixed and attested by one of its Assistant Vice Presidents this ______ day of _____________2011.  
  
  	 Signed, sealed and delivered in the 
 presence of:
 

 ________________________________
 Signature 
 

 ________________________________
 Print Name 
 

 

 

 ________________________________
 Signature 
 

 ________________________________
 Print Name 
	 DEUTSCHE BANK TRUST COMPANY AMERICAS, f/k/a BANKERS TRUST COMPANY, TRUSTEE
 

 By DEUTSCHE BANK NATIONAL TRUST COMPANY
 

 By____________________________
 

 Print Name: 
 

 Its Vice President
 

 

 Attest:
 

 By____________________________
 

 Print Name:_____________________
 

 Its Assistant Vice President

		  
 (CORPORATE SEAL) 

  STATE OF NEW JERSEY       
 )
                                                 
 )      ss. 
 Town: Summit
 COUNTY OF UNION  
 
 )      
 

 Personally appeared the above-named __________________, and _________________________________, respectively a Vice President and Assistant Vice President of DEUTSCHE BANK NATIONAL TRUST COMPANY, signers and sealers of the foregoing instrument, and acknowledged the same to be their free act and deed and the free act and deed of said corporation, as Trustee aforesaid, before me.
 

 _________________________________
 Notary Public
 My Commission Expires:_____________
 Print Name:________________________
 Notary Public, State of New Jersey
 Qualified in ______________  County
 

 (SEAL)
 

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 SCHEDULE A 
 

 TO PARTIAL RELEASE OF MORTGAGE
 

 

 

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 Schedule 6.8(i)
 Form of Joint Defense Agreement
 

 JOINT DEFENSE AGREEMENT
 

 The Connecticut Light and Power Company (“CL&P”) and Connecticut Transmission Municipal Electric Energy Cooperative (“CTMEEC”) entered into a certain Purchase and Sale Agreement dated December 16, 2010 concerning, inter alia, the sale of certain transmission facilities in the Town of Wallingford (“Purchase and Sale Agreement”).  Under the terms of Section 6.8(i) of the Agreement, CL&P and CTMEEC agreed to execute a joint defense agreement in connection with all Managed Claims.
 

 The matter of [
 ] (hereinafter the “Lawsuit”),which was commenced against [      ] by complaint dated      and is pending in [      ], is a Managed Claim under the Purchase and Sale Agreement.
 

 CL&P, NUSCO, and CTMEEC (CL&P, NUSCO, and CTMEEC are each referred to herein as a “Party” and collectively as the “Parties”) understand that defined terms in this Joint Defense Agreement that are not defined herein are being used as defined in the Purchase and Sale Agreement.
 

 [INSERT THE FOLLOWING PARAGRAPH IF CTMEEC/CL&P IS NOT A DEFENDANT IN THE PARTICULAR LAWSUIT AT ISSUE] It is mutually understood by the Parties that, while [_______] is not a defendant in the Lawsuit at this time, the plaintiff’s assertions in the Lawsuit raise matters of common interest to the CL&P, NUSCO, and CTMEEC.  
 

 To facilitate the defense of the Lawsuit, it is the intention of the Parties to enter into a so-called “Joint Defense Agreement” (herein referred to as this “Agreement”) as recognized by the First Circuit in United States v. Bay State Ambulance and Hospital Rental Service, 874 F.2d 20, 28 (1st Cir. 1989) and the Second Circuit in United States v. Schwimmer, 892 F.2d 237, 243-44 (2d Cir. 1989).  This Agreement confirms that understanding, and sets forth the terms of such agreement as stated herein.  It is the Parties’ mutual understanding and agreement that the Parties share common interests in, or issues with respect to, their handling of the claims and liabilities that have been or may be asserted by plaintiff(s) in the Lawsuit, and that the sharing of documents, information, factual materials, mental impressions, memoranda, interview reports and communications (hereinafter referred to as “Joint Defense Materials”), will facilitate the rendition of professional legal services to the Parties.
 

 It is further understood that these Joint Defense Materials shall be used solely by the Parties and their attorneys, employees, experts or agents (1) in the preparation of claims and defenses to be raised in connection with proceedings arising from or relating to the above-described matter, or (2) for attorneys to advise their respective party clients.  The Joint Defense Materials are privileged from disclosure to adverse or other parties not otherwise considered Parties (or experts or agents of the Parties) to this Agreement, as they represent or reflect communications or information protected from disclosure by the attorney/client privilege, attorney work product 
 

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 doctrine, joint defense doctrine, common interest doctrine and any and all other constitutional, statutory or common law privileges which may apply (collectively, “Rules of Nondisclosure”).
 

 Further, it is the Parties’ mutual understanding that the sharing or disclosure of Joint Defense Materials among the Parties and their respective attorneys, employees, experts and/or agents will not diminish in any way the confidentiality of such materials and will not constitute a waiver of any of the applicable Rules of Nondisclosure.  The Parties have further agreed that without prior consent of the Party furnishing the materials, neither the Parties nor their attorneys, employees, experts or agents will disclose Joint Defense Materials received from each other to anyone except the Parties’ respective attorneys, employees, experts or agents.  
 

 Counsel for the Parties agree to designate specially the documentary Joint Defense Materials that contain the confidences or statements of any of the Parties in a prominent manner with a designation such as:  “PRIVILEGED AND CONFIDENTIAL – JOINT DEFENSE MATERIALS.”  The failure to specially designate documents, however, will not change the confidential and/or privileged nature of the documents.  Counsel receiving such specially designated Joint Defense Materials may make duplicate copies of such materials for internal office use only, unless otherwise designated or agreed in writing.  Upon written demand, counsel receiving such specially-designated Joint Defense Materials agrees to return the original and any copies to the disclosing Party.  Nothing in the preceding sentence shall require, or be construed to require, counsel to turn over any annotations, notes or comments that have been written on copies of documents made for internal office use.
 

 This Agreement may be terminated only upon mutual agreement of the Parties.  The obligations of the Parties and their respective attorneys, employees, experts and agents not to disclose Joint Defense Materials, except in accordance with this Agreement, shall not be affected by the termination of, or withdrawal from this Agreement.  If another person or entity requests or demands, by subpoena or otherwise, Joint Defense Materials obtained from another Party, the Party to whom the request is made will immediately notify the other Parties to this Agreement.  The person or entity seeking the Joint Defense Materials will be informed that such materials are privileged and will not be produced or disclosed without the consent of the Party furnishing them unless ordered by a court.
 

 It is further agreed that the confidentiality prescribed above shall remain operative as to all previously furnished Joint Defense Materials if adversity should subsequently arise between or among any of the Parties to this Agreement, irrespective of any claim that the joint defense and/or interest may become prospectively inoperative by virtue of the claimed adversity.
 

 Nothing in this Agreement shall be considered to create an attorney/client relationship with any other Party to this Agreement, nor shall it create a conflict of interest so as to require the disqualification of any attorney from the representation of his or her client.  Each Party represents and acknowledges that it is represented by its own counsel in connection with this Agreement.  Each Party and each Party’s attorneys, employees, experts and agents participating in this Agreement are obligated to maintain the confidentiality of information specified herein, but each counsel does not act on behalf of any person other than his or her own client.  
 

 

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 If any provision of this Agreement, or any portion thereof, is held by competent authority to be unenforceable or invalid, the remainder of this Agreement shall continue in full force and effect.  Nothing in this Agreement shall require a Party to disclose or share any information that it determines should not be disclosed.
 

 This Agreement shall not modify, limit or otherwise affect the rights and obligations of the Parties under the Purchase and Sale Agreement.  In the event of any conflict or inconsistency between any provision of the Purchase and Sale Agreement and this Agreement, such conflict or inconsistency shall be resolved in favor of the provision of the Purchase and Sale Agreement.
 

 Nothing in this Agreement is intended to create any right on the part of any Party or other person or entity that is not explicitly set forth herein.  It is further agreed that nothing in this Agreement shall operate to limit the ability of any of the Parties to assert any claim or defense otherwise available against any person or entity not a party to this Agreement.  In addition, nothing in this Agreement shall constitute an admission of any fact or liability by any Party.
 

 [INSERT THE FOLLOWING PARAGRAPH IF CTMEEC/CL&P IS NOT A DEFENDANT IN THE PARTICULAR LAWSUIT AT ISSUE]  In the event that [_____] is cited into the Lawsuit as an additional defendant, this Agreement shall continue in full force and effect, unless terminated or modified by mutual agreement of the Parties, and [_________] shall be entitled to [CTMEEC - participate in (but not control)] [CL&P - control] the defense of the Lawsuit in accordance with the provisions of Section 6.8 of the Purchase and Sale Agreement. 
 

 This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Connecticut, without reference to principles of choice or conflict of laws.
 

 This Agreement shall have an effective date of [_____________________].
 

 By signing this Agreement, the Parties represent that they are authorized to execute this Agreement, and they, their attorneys, employees, experts and their agents agree to be bound by its terms.  All amendments and modifications to this Agreement must be in writing and agreed to by the Parties.  This Agreement may be executed in counterparts.
 

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 The foregoing is agreed to:
 

 The Connecticut Light and Power Company
 

 

 By:____________________
 Name:
____________________ Date
 Title:
 

 By:____________________
 Name:
____________________ Date
 Title:  Its Counsel
 

 Northeast Utilities Service Company
 

 

 By:____________________
 Name:
____________________ Date
 Title:
 

 By:____________________
 Name:
____________________ Date
 Title:  Its Counsel
 

 Connecticut Transmission Municipal
 Electric Energy Cooperative
 

 By:____________________
 Name:
____________________ Date
 Title:
 

 By:____________________
 Name:
____________________ Date
 Title:  Its Counsel
 

 

 

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 Schedule 7.5(b)
 Pending Regulatory Proceedings
 

 1.
 Northeast Utilities and The United Illuminating Company Transmission Cost Allocation Application regarding Middletown - Norwalk Project, NU-08-TCA-01 / UI-08-TCA-01, dated April 11, 2008 (pending before ISO-NE).
 

 2.
 Complaint of New England Conference of Public Utilities Commissioners, Inc. vs. Bangor Hydro-Electric Company, et al., FERC Docket No. EL08-69, filed June 12, 2008, denied Sept. 25, 2008, order granting rehearing Nov. 21, 2008.
 

 

 

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 Schedule 8.1(c)
 List of Buyer’s Regulatory Approvals
 

 1.
 Connecticut Siting Council:
 Approval of the partial transfer of the Transferable Permit issued under C.G.S. 16-50k(b)
 

 2.
 United States Army Corps of Engineers:  Approval of the partial transfer of the Transferable Permit issued under:
 

 a.
 33 USC 403
 b.
 33 USC 1344
 

 3.
 Connecticut Department of Environmental Protection:  Approval of the partial transfer of the Transferable Permit issued under C.G.S. 22a-359 through 22a-363f
 

 4.
 Federal Energy Regulatory Commission:  Approval of the Transaction under applicable provisions of the Federal Power Act ("FPA") including FPA Section 203.  Without limiting the generality of the foregoing, approval of the Transaction shall include approval of the right of Buyer to recover in Regional Network Service transmission rates, as specified in Schedule 9 and Attachment F of the ISO-NE’s Open Access Transmission Tariff (as it may be amended (or superseded)) or in Buyer’s local transmission service, as applicable: (a) the component of the Purchase Price that constitutes reimbursement of Seller's federal and state income tax liabilities; (b) reimbursement of applicable transaction/start-up costs of Buyer; and (c) the return on equity, including incentive components, generally applicable to post-2003, pre-2009 PTF, applied to Buyer’s proposed capital structure.
 

 For purposes of Section 8.1(c) of this Agreement, the Buyer's Regulatory Approvals shall be deemed to be final and non-appealable:
 

 (a)
 with regard to the Buyer's Regulatory Approvals identified in paragraphs 1 through 3 above, as of the date that the applicable approval is issued by the applicable Governmental Authority; and 
 

 (b)
 with regard to the Buyer's Regulatory Approval identified in paragraph 4 above, as of the date on which the right to request a rehearing of the order or series of orders by FERC expires; provided that if a rehearing has been requested with respect to such order or series of orders, then such Buyer's Regulatory Approval shall be deemed to be final and non-appealable only after the final and non-appealable disposition of such rehearing.
 

 

 

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 Schedule 8.2(d)
 List of Seller's Regulatory Approvals
 

 1.
 An order or series of orders by FERC approving the Transaction, including an approval under Section 203 of the Federal Power Act (16 U.S.C. § 824b) of Seller's transfer of Purchased Assets to Buyer, and an acceptance by FERC under Section 205 of the Federal Power Act of the O&M Agreement.
 

 2.
 An order or series of orders by the DPUC approving the Transaction, including DPUC approval of the sale of the Purchased Assets by Seller under C.G.S. §16-43.
 

 3.
 CSC approval of a partial transfer of Seller's Certificate issued in Docket No. 272 pursuant to provisions of C.G.S. 16-50k(b)
 

 4.
 Filings with, and approvals from, the appropriate Governmental Authorities regarding the partial transfer of the Transferable Permits, including:
 

 ·
 Army Corps of Engineers Permit No. NAE-2004-1162 (Section 10/404 approval) dated 1/12/07 pursuant to requirements of General Condition No. 4
 ·
 DEP Section 401 Water Quality Certificate dated 1/4/07 pursuant to requirements of General Terms and Conditions #15
 

 For purposes of Section 8.2(d) of this Agreement, the Seller's Regulatory Approvals shall be deemed to be final and non-appealable:
 

 (a)
 with regard to the Seller's Regulatory Approval identified in paragraph 1 above, as of the date on which the right to request a rehearing of the order or series of orders by FERC expires; provided that if a rehearing has been requested with respect to such order or series of orders, then such Seller's Regulatory Approval shall be deemed to be final and non-appealable only after the final and non-appealable disposition of such rehearing;
 

 (b)
 with regard to the Seller's Regulatory Approval identified in paragraph 2 above, as of the forty sixth (46th) day after the issuance date of the order or series of orders by the DPUC; provided that if on or before such forty sixth (46th) day a Third Party has filed an independent action challenging such order or series of orders with a Governmental Authority that has jurisdiction to decide such action, then such Seller's Regulatory Approval shall be deemed to be final and non-appealable only after the final and non-appealable disposition of such independent action; and
 

 (c)
 with regard to the Seller's Regulatory Approvals identified in paragraphs 3 and 4 above, as of the date that the applicable approval is issued by the applicable Governmental Authority.
 

 

 

 ConfidentialConverted by EDGARwiz

  Exhibit 10.5
  
 LIMITED LIABILITY COMPANY
 AGREEMENT OF
 NORTHERN PASS TRANSMISSION LLC,
 a New Hampshire Limited Liability Company
 Dated as of April 6, 2010
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 

 

 

 

 

 

 

 

  
  
 TABLE OF CONTENTS 
  
 	 	 	 	 	 	 	 
	 	 	 	  	Page	 
	 	 
	 ARTICLE 1 DEFINITIONS; INTERPRETATION
	  	 	1	  
	 	 	 
	 1.1
	 	Defined Terms	  	 	1	  
	 	 	 
	 1.2
	 	Other Defined Terms; Interpretation	  	 	13	  
	 	 
	 ARTICLE 2 ORGANIZATIONAL MATTERS
	  	 	14	  
	 	 	 
	 2.1
	 	Formation	  	 	14	  
	 	 	 
	 2.2
	 	Name and Purpose	  	 	14	  
	 	 	 
	 2.3
	 	Principal Place of Business; Other Places of Business	  	 	14	  
	 	 	 
	 2.4
	 	Registered Office; Registered Agent	  	 	14	  
	 	 	 
	 2.5
	 	Business Purpose	  	 	15	  
	 	 	 
	 2.6
	 	Powers	  	 	15	  
	 	 	 
	 2.7
	 	Qualification in Other Jurisdictions	  	 	15	  
	 	 	 
	 2.8
	 	Members	  	 	15	  
	 	 	 
	 2.9
	 	Title to Property	  	 	15	  
	 	 	 
	 2.10
	 	Payments of Individual Obligations	  	 	15	  
	 	 
	 ARTICLE 3 INITIAL CAPITAL; ADDITIONAL CAPITAL
	  	 	16	  
	 	 	 
	 3.1
	 	Development Budget Capital Contributions	  	 	16	  
	 	 	 
	 3.2
	 	Additional Capital Contributions	  	 	16	  
	 	 	 
	 3.3
	 	Failure to make Capital Contributions	  	 	16	  
	 	 	 
	 3.4
	 	Capital Accounts	  	 	16	  
	 	 	 
	 3.5
	 	Member Capital	  	 	16	  
	 	 	 
	 3.6
	 	Member Loans	  	 	16	  
	 	 
	 ARTICLE 4 DISTRIBUTIONS
	  	 	17	  
	 	 	 
	 4.1
	 	In General	  	 	17	  
	 	 	 
	 4.2
	 	Incorrect Distributions	  	 	17	  
	 	 	 
	 4.3
	 	Amounts Withheld	  	 	17	  
	 	 	 
	 4.4
	 	Distributions Upon Liquidation	  	 	17	  
	 	 	 
	 4.5
	 	Distributions in Kind	  	 	17	  
	 	 
	 ARTICLE 5 ALLOCATIONS OF PROFITS AND LOSSES
	  	 	17	  
	 	 	 
	 5.1
	 	Book Allocations	  	 	17	  
	 	 	 
	 5.2
	 	Special Allocations	  	 	18	  

  
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	 5.3
	  	Curative Allocations	  	 	20	  
	 	 	 
	 5.4
	  	Loss Limitation	  	 	20	  
	 	 	 
	 5.5
	  	Other Allocation Rules	  	 	20	  
	 	 	 
	 5.6
	  	Tax Allocations; Code Section 704(c)	  	 	20	  
	 	 	 
	 5.7
	  	Tax Status; Tax Elections; Tax Matters Partner	  	 	21	  
	 	 
	 ARTICLE 6 PROJECTS
	  	 	23	  
	 	 	 
	 6.1
	  	Project	  	 	23	  
	 	 	 
	 6.2
	  	Conditions Precedent to Additional Capital Contributions	  	 	23	  
	 	 
	 ARTICLE 7 MANAGEMENT
	  	 	23	  
	 	 	 
	 7.1
	  	Members Committee	  	 	23	  
	 	 	 
	 7.2
	  	Number; Election; Initial Members Committee	  	 	23	  
	 	 	 
	 7.3
	  	Term of Representatives	  	 	24	  
	 	 	 
	 7.4
	  	Resignation; Removal; Vacancies	  	 	24	  
	 	 	 
	 7.5
	  	Chair	  	 	24	  
	 	 	 
	 7.6
	  	Voting Rights	  	 	24	  
	 	 	 
	 7.7
	  	Meetings	  	 	24	  
	 	 	 
	 7.8
	  	Power and Authority	  	 	25	  
	 	 	 
	 7.9
	  	Matters Requiring Unanimous Approval of the Members Committee	  	 	27	  
	 	 	 
	 7.10
	  	Subcommittees	  	 	28	  
	 	 	 
	 7.11
	  	Defaulting Member	  	 	28	  
	 	 	 
	 7.12
	  	Cooperation of Members for Regulatory Proceedings	  	 	29	  
	 	 	 
	 7.13
	  	Certain Affiliate Arrangements	  	 	29	  
	 	 	 
	 7.14
	  	Budgets	  	 	29	  
	 	 
	 ARTICLE 8 MEMBERS
	  	 	31	  
	 	 	 
	 8.1
	  	Meetings of Members	  	 	31	  
	 	 	 
	 8.2
	  	Action Without Meetings	  	 	31	  
	 	 	 
	 8.3
	  	Voting	  	 	31	  
	 	 	 
	 8.4
	  	Meetings by Telephone or Other Technology	  	 	31	  
	 	 	 
	 8.5
	  	Third-Party Dealings With Members	  	 	31	  
	 	 	 
	 8.6
	  	Liability of Members	  	 	31	  
	 	 	 
	 8.7
	  	Independent Activities; Disclaimer of Duties; Release	  	 	32	  
	 	 	 
	 8.8
	  	Waiver of Conflicts	  	 	34	  

  
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	 ARTICLE 9 MEMBERS’ INTERNAL COSTS
	  	 	35	  
	 	 	 
	 9.1
	  	Pre-Formation Internal Costs	  	 	35	  
	 	 	 
	 9.2
	  	Post-Formation Internal Costs	  	 	35	  
	 	 	 
	 9.3
	  	Cost Pass Through	  	 	35	  
	 	 
	 ARTICLE 10 OFFICERS
	  	 	35	  
	 	 	 
	 10.1
	  	The Company	  	 	35	  
	 	 	 
	 10.2
	  	Officers	  	 	35	  
	 	 
	 ARTICLE 11 COMPLIANCE WITH CERTAIN LAWS
	  	 	37	  
	 	 	 
	 11.1
	  	Compliance with Certain Codes of Conduct	  	 	37	  
	 	 	 
	 11.2
	  	Compliance with Antitrust Laws	  	 	37	  
	 	 	 
	 11.3
	  	Regulatory Compliance	  	 	37	  
	 	 
	 ARTICLE 12 TRANSFERS OF INTERESTS
	  	 	38	  
	 	 	 
	 12.1
	  	General	  	 	38	  
	 	 	 
	 12.2
	  	Transfers to Corporate Affiliates	  	 	38	  
	 	 	 
	 12.3
	  	Transfers After In-Service Date	  	 	38	  
	 	 	 
	 12.4
	  	Deemed Dispositions	  	 	38	  
	 	 	 
	 12.5
	  	Right of First Refusal	  	 	39	  
	 	 	 
	 12.6
	  	Compliance with Securities Laws	  	 	40	  
	 	 	 
	 12.7
	  	Further Restrictions	  	 	40	  
	 	 	 
	 12.8
	  	Prohibited Transfers	  	 	41	  
	 	 	 
	 12.9
	  	Transfer Compensation Amount	  	 	41	  
	 	 	 
	 12.10
	  	Admission	  	 	42	  
	 	 	 
	 12.11
	  	Voluntary Withdrawal	  	 	42	  
	 	 	 
	 12.12
	  	Involuntary Withdrawal	  	 	42	  
	 	 
	 ARTICLE 13 DEADLOCKS
	  	 	42	  
	 	 	 
	 13.1
	  	Deadlock Notice	  	 	42	  
	 	 	 
	 13.2
	  	Mediation	  	 	43	  
	 	 	 
	 13.3
	  	Arbitration	  	 	43	  
	 	 
	 ARTICLE 14 DEFAULT, REMEDIES
	  	 	44	  
	 	 	 
	 14.1
	  	Events of Default	  	 	44	  
	 	 	 
	 14.2
	  	Remedies	  	 	44	  
	 	 	 
	 14.3
	  	Funding Capital Call	  	 	44	  
	 	 	 
	 14.4
	  	Purchase Remedy; Right to Cure	  	 	45	  
	 	 	 
	 14.5
	  	Cooperation by Defaulting Member	  	 	46	  

  
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	 14.6
	  	Third Party Approvals	  	 	47	  
	 	 
	 ARTICLE 15 INDEMNIFICATION; LIMITATION OF LIABILITY
	  	 	47	  
	 	 	 
	 15.1
	  	Indemnification by a Member	  	 	47	  
	 	 	 
	 15.2
	  	Indemnification by Company	  	 	47	  
	 	 	 
	 15.3
	  	Survival; Limitations; Procedures	  	 	48	  
	 	 	 
	 15.4
	  	Indemnification Procedure	  	 	48	  
	 	 
	 ARTICLE 16 DISSOLUTION, LIQUIDATION, AND TERMINATION OF THE COMPANY
	  	 	49	  
	 	 	 
	 16.1
	  	Limitations	  	 	49	  
	 	 	 
	 16.2
	  	Exclusive Causes	  	 	49	  
	 	 	 
	 16.3
	  	Effect of Dissolution	  	 	49	  
	 	 	 
	 16.4
	  	Deficit Capital Accounts	  	 	49	  
	 	 	 
	 16.5
	  	Liquidation	  	 	49	  
	 	 	 
	 16.6
	  	Compliance with Certain Requirements of Regulations	  	 	50	  
	 	 	 
	 16.7
	  	Deemed Contribution and Distribution	  	 	50	  
	 	 	 
	 16.8
	  	Character of Liquidating Distributions	  	 	50	  
	 	 
	 ARTICLE 17 REPRESENTATIONS AND WARRANTIES
	  	 	50	  
	 	 	 
	 17.1
	  	NU Ventures Representations and Warranties	  	 	50	  
	 	 	 
	 17.2
	  	NSTAR Ventures Representations and Warranties	  	 	52	  
	 	 
	 ARTICLE 18 CONFIDENTIALITY
	  	 	53	  
	 	 	 
	 18.1
	  	Confidentiality Obligation; Permitted Disclosures	  	 	53	  
	 	 	 
	 18.2
	  	Legally Required Disclosures	  	 	54	  
	 	 	 
	 18.3
	  	Survival	  	 	54	  
	 	 
	 ARTICLE 19 REPORTS
	  	 	54	  
	 	 	 
	 19.1
	  	Company Records	  	 	54	  
	 	 	 
	 19.2
	  	Examination of Records	  	 	55	  
	 	 	 
	 19.3
	  	Reports	  	 	55	  
	 	 
	 ARTICLE 20 MISCELLANEOUS
	  	 	55	  
	 	 	 
	 20.1
	  	Amendments	  	 	55	  
	 	 	 
	 20.2
	  	Entire Agreement	  	 	55	  
	 	 	 
	 20.3
	  	Further Assurances.	  	 	56	  
	 	 	 
	 20.4
	  	Notices	  	 	56	  
	 	 	 
	 20.5
	  	Governing Law and Jurisdiction	  	 	56	  

  
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	 20.6
	  	WAIVER OF RIGHT TO JURY TRIAL	  	 	56	  
	 	 	 
	 20.7
	  	No Drafting Presumption	  	 	56	  
	 	 	 
	 20.8
	  	Binding Effect	  	 	56	  
	 	 	 
	 20.9
	  	Press Releases	  	 	56	  
	 	 	 
	 20.10
	  	Severability	  	 	56	  
	 	 	 
	 20.11
	  	Counterparts	  	 	57	  
	 	 	 
	 20.12
	  	Waiver	  	 	57	  
	 	 	 
	 20.13
	  	No State-Law Partnership	  	 	57	  
	 	 	 
	 20.14
	  	No Third Party Beneficiaries	  	 	57	  

 Annex A - Form of Joinder Agreement 
 Exhibit A – Form of Service Agreement with Northeast Utilities Service Company 
 Schedule 2.8 – Members 
 Schedule 6.1 - Project 
 Schedule 6.2 - Conditions Precedent 
 Schedule 7.2 – Initial Members Committee 
 Schedule 7.13 – Approved Affiliate Agreements 
  
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LIMITED LIABILITY COMPANY AGREEMENT
 This LIMITED LIABILITY COMPANY AGREEMENT (“Agreement”) of Northern Pass Transmission LLC, a New Hampshire limited liability company (the “Company”), is made and entered into as of the Effective Date, by and between NU Transmission Ventures, Inc., a Connecticut corporation (“NU Ventures”) and NSTAR Transmission Ventures, Inc., a Massachusetts corporation (“NSTAR Ventures”).
 WHEREAS,
 NU Ventures and NSTAR Ventures have determined it would be beneficial for each of them to jointly develop and construct the Project (as defined herein); and
 WHEREAS, NU Ventures and NSTAR Ventures have determined to establish the Company for such purpose and have filed with the Secretary of State of the State of New Hampshire a Certificate of Formation organizing the Company with NU Ventures and NSTAR Ventures as the sole Members thereof, each owning the Membership Interests (as defined herein) as set forth in Schedule 2.8 hereto; and
 WHEREAS, NU Ventures and NSTAR Ventures have entered into this Agreement to govern the affairs of the Company and certain relationships with and among its Members.
 ARTICLE 1
DEFINITIONS; INTERPRETATION
 1.1
 Defined Terms. 
 Capitalized terms used in this Agreement shall, unless otherwise noted or unless the context otherwise requires, have the following meanings:
 “Accounting Matters Partner” means NU Ventures or such other Member designated as Accounting Matters Partner pursuant to this Agreement.
 “Act” means the New Hampshire Limited Liability Company Act, as amended from time to time.
 “Additional Members” means those Persons admitted to the Company pursuant to Section 12.10.
 “Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if any, in such Member's Capital Account as of the end of the relevant Allocation Year, after giving effect to the following adjustments:
 (i)
 Credit to such Capital Account the amount, if any, such Member is expressly obligated to restore with respect to such Member’s deficit balance in such Member’s Capital Account and any amounts such Member is deemed to be obligated to restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) or either of the penultimate sentences in Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), and
 (ii)
 Debit to such Capital Account the items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).
 

 Execution Copy
 Northern Pass LLC Operating Agreement
 

 The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
 “Affiliate Arrangements” has the meaning set forth in Section 7.13.
 “Agreement” has the meaning set forth in the preamble and includes all exhibits and schedules hereto, and any and all amendments hereto or thereto agreed to in writing by the Members.
 “Allocation Year” means (i) the period commencing on the Effective Date and ending on December 31, 2010, (ii) any subsequent twelve (12) month period commencing on January 1 and ending on December 31, (iii) any portion of the period described in clause (i) or (ii) for which the Company is required to allocate Profits, Losses, and other items of Company income, gain, loss, deduction, or credit pursuant to Article 5 or 16, or (iv) for the final Allocation Year, the period commencing on the day after the end of the previous Allocation Year and ending on the date of liquidation of the Company.
 “Annual Operating Budget” has the meaning set forth in Section 7.14.5.
 “Applicable Law” means any statute, law, ordinance, executive order, rule, or regulation (including a regulation that has been formally promulgated in a rule making proceeding but, pending final adoption, is in proposed or temporary form having force of law); guideline, or notice having force of law; or approval, permit, license, franchise, judgment, order, decree, injunction, or writ of any Governmental Authority applicable to a specified Person or specified property, as in effect from time to time.
 “Approved Affiliate Agreements” means those Affiliate Arrangements listed on Schedule 7.13 hereto.
 “Arbitration Initiation Notice” has the meaning set forth in Section 13.3.
 “Arbitrator” has the meaning set forth in Section 13.3.3.
 “Available Cash” means the cash balance of the Company from time to time after the payment of, or provision for the payment of, all of the Company’s obligations then due and after the establishment of such reserves as the Members Committee shall deem appropriate and all other debts, expenses, construction costs, capital improvements, replacements, and contingencies of the Company.
 “Budgets” means, collectively, the Development Budget, the Initial Operating Budget, the Preliminary Construction Budget, the Construction Budget and the Annual Operating Budget, each as approved by the Members Committee.
 “Business Day” means any day other than a Saturday, Sunday or other day on which banks are authorized to be closed in New York, New York.
 

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 “Capital Account” means, with respect to any Member, the Capital Account maintained for such Member in accordance with Regulations Section 1.704-1(b)(2)(iv), which includes, among other things, the following rules:
 (i)
 To each Member's Capital Account there shall be credited (A) the amount of money and the Gross Asset Value of any property contributed by such Member pursuant to any provision of this Agreement, (B) such Member's distributive share of Profits allocated pursuant to Section 5.1 and any items in the nature of income or gain that are specially allocated to such Member pursuant to Section 5.2 or Section 5.3, and (C) the amount of any Company liabilities assumed by such Member or that are secured by any property distributed to such Member;
 (ii)
 To each Member's Capital Account there shall be debited (A) the amount of money and the Gross Asset Value of any property distributed to such Member pursuant to any provision of this Agreement, (B) such Member's distributive share of Losses allocated pursuant to Section 5.1 and any items in the nature of expenses or losses that are specially allocated to such Member pursuant to Section 5.2 or Section 5.3, and (C) the amount of any liabilities of such Member assumed by the Company or that are secured by any property contributed by such Member to the Company;
 (iii)
 In the event Membership Interests (or any portions thereof) are transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred Membership Interests (or portions thereof); and
 (iv)
 In determining the amount of any liability for purposes of subparagraphs (i) and (ii) above there shall be taken into account Code Section 752(c) and any other applicable provisions of the Code and Regulations.
 The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-1(b) and shall be interpreted and applied in a manner consistent with such Regulations. In the event the Members Committee shall determine that it is prudent to modify the manner in which the Capital Accounts are maintained, or any debits or credits thereto (including, without limitation, debits or credits relating to liabilities that are secured by contributed or distributed property or that are assumed by the Company or any Members), the Members Committee may make such modification, provided that it is not likely to have a material effect on the amounts distributed to any Person pursuant to Article 16 upon the liquidation of the Company. The Members Committee also shall (a) make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Members and the amount of capital reflected on the Company's balance sheet, as computed for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q) and (b) make any appropriate modifications if unanticipated events might otherwise cause this Agreement not to comply with Regulations Section 1.704-1(b).
 “Capital Call Default” has the meaning set forth in Section 14.1.
 

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 Northern Pass LLC Operating Agreement
 

 “Capital Contributions” means, with respect to any Member, the total amount of money and the initial Gross Asset Value of property (other than money) contributed to the capital of the Company by such Member, whether as an initial Capital Contribution or as an additional Capital Contribution.
 “Certificate” means the Certificate of Formation of the Company filed under the Act in the Office of the New Hampshire Secretary of State for the purpose of forming the Company as a New Hampshire limited liability company.
 “Code” means the Internal Revenue Code of 1986, as amended from time to time (and any corresponding provisions of succeeding law).
 “Company” has the meaning set forth in the preamble.
 “Company Assets” means all direct and indirect interests in real and personal property owned by the Company from time to time, and shall include both tangible and intangible property (including, without limitation, cash).
 “Company Equity Securities” means any Membership Interest or other equity securities of the Company or any of its subsidiaries (including securities exercisable or exchangeable for or convertible into Membership Interests or other equity securities).
 “Company Minimum Gain” has the same meaning as the term “partnership minimum gain” in Regulations Sections 1.704-2(b)(2) and 1.704-2(d).
 “Conditions Precedent” means, collectively, the conditions precedent listed in Schedule 6.2.
 “Confidential Information” means, collectively, the provisions of this Agreement, all understandings, agreements and other arrangements between the parties hereto, and all confidential or proprietary information or knowledge of a Person, whether or not it constitutes a trade secret under Applicable Law and all other non-public information received from or otherwise relating to, the Company and other Members. “Confidential Information” does not include information that: (a) has become part of the public domain other than by acts or omissions of the recipient or its representatives, (b) to the recipient’s knowledge, has been furnished or made known to the recipient by third Persons (other than those acting on behalf of the disclosing party) as a matter of legal right and without relevant restriction on disclosure or use, (c) was in the recipient’s possession prior to disclosure by the disclosing party and was not previously acquired by the recipient or its representatives directly or indirectly from the disclosing party, or (d) is independently developed by representatives of recipient without access to Confidential Information. 
 “Construction Budget” has the meaning set forth in Section 7.14.4.
 “Contract” means any agreement, contract, understanding, lease, sublease, easement, license, obligation, promise, or undertaking (whether written or oral and whether express or implied) that is legally binding, including any responses to 
 

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 Northern Pass LLC Operating Agreement
 

 request for proposals, applications for permits, any binding or non-binding letter of intent, memorandum of understanding or letter of intent and any and all change orders and amendments to the foregoing.
 “Corporate Affiliate” means, with respect to a specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the Person specified. For purposes of this Agreement, the term “control” (including its correlative meanings, “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by Contract or otherwise).
 “CPR” means the International Institute for Conflict Prevention and Resolution. 
 “CPR Arbitration Rules” means the CPR Rules for Non-Administered Arbitration.
 “Creditworthy” means, with respect to any Person, a credit rating for senior unsecured debt of at least (i) “BBB-” from Standard & Poor’s Ratings Group (a division of The McGraw Hill Companies, Inc.), provided that if such credit rating is “BBB-” such Person shall not be on “CreditWatch Negative”, or (ii) “Baa3” from Moody’s Investors Services, Inc., provided that if such credit rating is “Baa3” such Person shall not be on “Review for possible downgrade.” A Person that is not otherwise Creditworthy shall be deemed Creditworthy if its obligations under this Agreement are absolutely, irrevocably and unconditionally guaranteed pursuant to a guaranty agreement that is reasonably acceptable to the non-transferring Member by a Creditworthy Person that is either a direct or indirect parent entity of such Person or has otherwise received adequate and sufficient consideration for such guaranty.
 “Damages” has the meaning set forth in Section 15.1. 
 “Deadlock” means a dispute, including the inability to agree on a vote or other decision, that has continued for more than fifteen (15) days among the Members or Representatives, which is not resolved by the provisions on voting contained herein, concerning the business or affairs of the Company, or a Disputed Action that is referred by NU Ventures for resolution as a Deadlock in accordance with Section 7.8.3 of the Agreement; provided, however, that a Deadlock shall not include any dispute regarding an interpretation of any terms or conditions of this Agreement; provided further, that a Deadlock shall not include the failure of the Members Committee to approve any matter requiring unanimous approval  under Section 7.9 hereof.
 “Deadlock Arbitration” has the meaning set forth in Section 13.3.
 “Deadlock Notice” has the meaning set forth in Section 13.1.
 “Defaulting Member” means a Member to whom an Event of Default is attributed; provided that such Member shall no longer be deemed a Defaulting 
 

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 Northern Pass LLC Operating Agreement
 

 Member upon such Member’s cure of such Event of Default.
 “Depreciation” means, for each Allocation Year, an amount equal to the federal income tax depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Allocation Year, except that (i) with respect to any asset the Gross Asset Value of which differs from its adjusted tax basis for federal income tax purposes, which difference is being eliminated by use of the “remedial method” pursuant to Regulations Section 1.704-3(d), Depreciation for such year shall be the amount of book basis recovered for such Allocation Year under the rules prescribed by Regulations Section 1.704-3(d)(2), and (ii) with respect to any other asset the Gross Asset Value of which differs from its adjusted basis for federal income tax purposes at the beginning of such Allocation Year, Depreciation shall be an amount that bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Allocation Year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such Allocation Year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Members Committee. Any such calculation of Depreciation shall be in accordance with and as allowed under the Company’s FERC tariff rate.
 “Designating Member” means, with respect to any Representative, the Member that appointed or designated such Representative in accordance with Section 7.2.
 “Development Budget” has the meaning set forth in Section 7.14.1.
 “Disabling Conduct” shall mean conduct that constitutes fraud, willful misconduct, bad faith or gross negligence or conduct that is knowingly outside the scope of conduct permitted in this Agreement or in knowing violation of Applicable Law.
 “Disputed Action” has the meaning set forth in Section 7.8.3.
 “Economic Interest” means a Person’s right to share in the Profits, Losses, or similar items of, and to receive distributions from, the Company, but does not include any other rights of a Member including, without limitation, the right to vote or to participate in the management of the Company, or, except as specifically provided in this Agreement or required under the Act, any right to information concerning the business and affairs of the Company.
 “Effective Date” means April 6, 2010.
 “Employed Officer” means an officer of the Company who is also an employee of a Member or any Corporate Affiliate of a Member.
 “Encumbrance” means any lien, security interest, mortgage, pledge, security interest, hypothecation, assignment, easement, right-of-way, servitude, other encumbrance, equitable interest, charge or encumbrance of any kind (including, without limitation, any conditional sale or other title retention agreement, any 
 

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 Northern Pass LLC Operating Agreement
 

 lease in the nature thereof, and any agreement to give any lien or security interest), restrictive covenant, or other restriction or matter affecting title to the involved property.
 “Event of Default” has the meaning set forth in Section 14.1.
 “Failed Contribution” has the meaning set forth in Section 14.3.1.
 “FERC” means the Federal Energy Regulatory Commission or any Governmental Authority succeeding to the powers of such entity.
 “GAAP” means generally accepted accounting principles consistently applied.
 “Governmental Authority” means any national, state, provincial or local government (whether domestic or foreign), any political subdivision thereof or any other governmental, quasi-governmental, judicial, public or statutory instrumentality, authority, body, agency, department, bureau, commission or entity, or any arbitrator with authority to bind a party at law.
 “Gross Asset Value” means with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows:
 (i)
 The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as determined by the Members Committee;
 (ii)
 The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market values (taking Code Section 7701(g) into account), as determined by the Members Committee, as of the following times: (A) the acquisition of an additional interest in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution; (B) the distribution by the Company to a Member of more than a de minimis amount of Company property as consideration for an interest in the Company; (C) the liquidation of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); and (D) at such other times described in Regulations Section 1.704-1(b)(2)(iv)(f)(5); provided that an adjustment described in clauses (A), (B), and (D) of this paragraph shall be made only if the Members Committee by unanimous consent reasonably determines that such adjustment is necessary to reflect the relative economic interests of the Members in the Company;
 (iii)
 The Gross Asset Value of any item of Company assets distributed to any Member shall be adjusted to equal the gross fair market value of such asset on the date of distribution as determined by the Members Committee; and
 (iv)
 The Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to (A) Regulations Section 1.704-1(b)(2)(iv)(m) and (B) subparagraph (vi) of the definition of “Profits” and “Losses” or Section 5.2(g); provided, however, that 
 

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 Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to the extent that an adjustment pursuant to subparagraph (ii) is required in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv).
 If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraph (i), (ii), or (iv), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset, for purposes of computing Profits and Losses.
 “HQUS” means H.Q. Energy Services (U.S.) Inc.
 “Hydro-Québec” means Hydro-Québec, a body politic and corporate, duly incorporated and regulated by the Hydro-Québec Act (R.S.Q., Chapter H-5) or any of its divisions or affiliates.
 “Indemnified Party” has the meaning set forth in Section 15.4.
 “Indemnified Persons” has the meaning set forth in Section 15.2.1.
 “Indemnifying Member” has the meaning set forth in Section 15.1.
 “Indemnifying Party” has the meaning set forth in Section 15.4.
 “Initial Operating Budget” has the meaning set forth in Section 7.14.3.
 “In-Service Date” means the date on which all of the initial facilities comprising the Project are energized (other than merely for test purposes) and accepted by ISO-NE.
 “Interim Period” has the meaning set forth in Section 14.4.2.
 “Internal Costs” means (i) Management Personnel Costs, (ii) other direct labor determined on an hourly basis, (iii) reasonable allocations of overhead, determined on an hourly basis, (iv) out-of-pocket costs and expenses, including third-party costs, legal fees and travel expenses, that are reasonably incurred by the applicable Member, and (v) costs resulting from any upgrades of computer systems and/or other technology reasonably required by the applicable Member to achieve compatibility with the systems and/or technology used in the operation of the Project, provided that, if such upgrades are used for more than achieving such compatibility, Internal Costs shall only include a reasonable allocation of such costs based on the extent to which such upgrades are required to achieve such compatibility as compared with other uses of such upgrades by such Member, and  provided further, that any such Internal Costs shall be determined on a basis consistent with the principles set forth in the NUSCO Service Agreement.
 “Involuntary Withdrawal” means, with respect to any Member, the occurrence of any of the following events:
 (a)
 such Member makes an assignment for the benefit of creditors;
 

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 (b)
 such Member files a voluntary petition of bankruptcy;
 (c)
 such Member is adjudged bankrupt or insolvent or has entered against such Member an order for relief in any bankruptcy or insolvency proceeding;
 (d)
 such Member files a petition or answer seeking for such Member any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law, or regulation;
 (e)
 such Member files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against such Member in any proceeding described in clauses (a) through (d) above;
 (f)
 such Member seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of such Member or of all or any substantial part of such Member’s properties; or
 (g)
 120 days after commencement of any proceeding against such Member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation if the proceeding has not been dismissed, or if within 90 days after the appointment without such Member’s consent or acquiescence of a trustee, receiver or liquidator of such Member or of all or any substantial part of such Member’s properties, the appointment is not vacated or stayed, or within 90 days after the expiration of any such stay, the appointment is not vacated.
 “ISO-NE” means ISO-New England Inc.
 “Issues Statement” has the meaning set forth in Section 13.3.4.
 “Liquidator” has the meaning set forth in Section 16.5.
 “Management Personnel Costs” means the salaries and benefits of the following personnel employed by a Member and appointed or provided by such Member (or if such personnel are not dedicated full time to the Company or the Project, a reasonable allocation of such salaries and benefits), together with the costs of such other administrative services as such Member deems necessary to support such personnel:  (i) personnel designated by such Member to serve as Officers and Representatives of the Company and its subsidiaries; and (ii) such personnel as such Member deems appropriate to undertake oversight of the assets, liabilities, and business affairs of the Company and its subsidiaries.
 “Member” means any Person who (a) is or becomes a Member (including an Additional Member) pursuant to the terms of this Agreement, and (b) has not ceased to be a Member. Any reference in this Agreement to NU Ventures, NSTAR Ventures or any other Member shall include such Member’s Permitted Transferee.
 

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 “Member Nonrecourse Debt” has the same meaning as the term “partner nonrecourse debt” in Regulations Section 1.704-2(b)(4).
 “Member Nonrecourse Debt Minimum Gain” means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations Section 1.704-2(i)(3).
 “Member Nonrecourse Deductions” has the same meaning as the term “partner nonrecourse deductions” in Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2).
 “Members Committee” means the Members Committee appointed as described in Section 7.2. 
 “Membership Interest” means the entire ownership interest of a Member in the Company at any particular time, including, without limitation, the Member’s Economic Interest, any and all rights to vote and otherwise participate in the Company’s affairs, and the rights to any and all benefits to which a Member may be entitled as provided in this Agreement, together with the obligations of such Member to comply with all of the terms and provisions of this Agreement.
 “Nationally recognized accounting firm” means an accounting firm with multi-state offices and net revenues of at least $1 billion; provided, however, that the independent registered public accounting firm retained by either Member to provide auditing services for its financial statements shall be deemed to be a “nationally recognized accounting firm.”
 “Nonrecourse Deductions” has the meaning set forth in Regulations Sections 1.704-2(b)(1) and 1.704-2(c).
 “Nonrecourse Liability” has the meaning set forth in Regulations Section 1.704-2(b)(3).
 “NUSCO” means Northeast Utilities Service Company.
 “NUSCO Service Agreement” means that certain Service Agreement between the Company and NUSCO of even date herewith attached as Exhibit A hereto, as it may be amended from time to time in accordance with Section 7.9(u) of this Agreement.
 “Officer” has the meaning set forth in Section 10.1.
 “Other Indemnified Persons” has the meaning set forth in Section 15.1.
 “Ownership Interests” means stock, partnership interests, or other indicia of ownership.
 “Percentage Interest” means, with respect to each Member, the percentage set forth opposite such Member’s name on Schedule 2.8, as such percentage interest may be adjusted in accordance with the terms hereof from time to time.
 

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 “Permitted Activities” has the meaning set forth in Section 8.7.1.
 “Permitted Disclosee” has the meaning set forth in Section 18.1.
 “Permitted Transfer” means a Transfer of Membership Interests in compliance with Article 12.
 “Permitted Transferee” means a transferee of a Member that acquires a Membership Interest pursuant to a Permitted Transfer.
 “Person” means and includes an individual, a corporation, a partnership, a limited liability company, a trust, an unincorporated organization, a government or any department or agency thereof, or any entity similar to any of the foregoing.
 “Post-Formation Internal Costs” has the meaning set forth in Section 9.2.
 “PPI” means the Producer Price Index for Finished Goods published by the U.S. Bureau of Labor Statistics (or any successor index).
 “PPI Adjustment” means, for a calendar year, the percent change (expressed as a decimal) in the PPI published in December of the previous year from the PPI published in December of the year immediately preceding such previous year.
 “Pre-Formation Internal Costs” has the meaning set forth in Section 9.1.
 “Preliminary Construction Budget” has the meaning set forth in Section 7.14.2.
 “Proceeding” has the meaning set forth in Section 15.2.1.
 “Profit” and “Loss” mean, for each Allocation Year, an amount equal to the Company's taxable income or loss for such Allocation Year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments (without duplication):
 (i)
 Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition of “Profits” and “Losses” shall be added to such taxable income or loss;
 (ii)
 Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i) and not otherwise taken into account in computing Profits or Losses pursuant to this definition of “Profits” and “Losses” shall be subtracted from such taxable income or loss;
 (iii)
 In the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraph (ii) of the definition of “Gross Asset Value” or would be adjusted pursuant to subparagraph (iii) of the definition of “Gross Asset Value” if Code Section 7701(g) were taken into account, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases (or would increase) 
 

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 the Gross Asset Value of the asset) or an item of loss (if the adjustment decreases (or would decrease) the Gross Asset Value of the asset) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses;
 (iv)
 Gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;
 (v)
 In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Allocation Year, computed in accordance with the definition of “Depreciation;”
 (vi)
 To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Member's interest in the Company, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses; and
 Notwithstanding any other provision of this definition, any items that are allocated pursuant to Section 5.2 or Section 5.3 shall not be taken into account in computing Profits or Losses. The amounts of the items of Company income, gain, loss, or deduction available to be allocated pursuant to Section 5.2 and Section 5.3 shall be determined by applying rules analogous to those set forth in subparagraphs (i) through (vi) above.
 “Project” has the meaning set forth in Section 6.1.
 “Purchase Remedy Notice” has the meaning set forth in Section 14.4.1.
 “Regulations” mean the Income Tax Regulations, including Temporary Regulations, promulgated under the Code, as such regulations are amended from time to time.
 “Regulatory Affiliate” means, with respect to matters subject to the jurisdiction of a Governmental Authority, an “affiliate” as defined by Applicable Law relevant to such Governmental Authority.
 “Regulatory Allocations” has the meaning set forth in Section 5.3.
 “Released Party” has the meaning set forth in Section 8.7.3.
 “Releasing Member” has the meaning set forth in Section 8.7.3.
 “Representative” has the meaning set forth in Section 7.2.
 

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 “Reserves” means funds set aside or amounts allocated to reserves that shall be maintained in amounts deemed sufficient by the Members Committee for working capital, to pay taxes, insurance, debt service, and other costs or expenses incident to the conduct of business by the Company as contemplated hereunder.
 “Settlement Proposal” has the meaning set forth in Section 13.3.5.
 “Tax Matters Partner” means NU Ventures or such other Member designated as Tax Matters Partner pursuant to this Agreement.
 “Third Party Approval” means any consent, approval, permit, license, franchise, or other authorization, or a variance or exemption therefrom or waiver thereof, from a Governmental Authority or other Person.
 “Third Party Claim” has the meaning set forth in Section 15.4.
 “Total Capitalization” means, in the case of the Company, the sum of all common and preferred equity, retained earnings and indebtedness for borrowed money, as set forth on the Company’s balance sheet.
 “TransEnergie” means Hydro-Québec TransEnergie, an affiliate of Hydro-Québec.
 “Transfer” has the meaning set forth in Section 12.1.
 “Transfer Compensation Amount” has the meaning set forth in Section 12.9.
 “Transfer Notice” has the meaning set for in Section 12.5.1
 “Transferring Member” has the meaning set forth in Section 12.5.1
 “Ultimate Parent” means (a) with respect to NU Ventures, Northeast Utilities, a Massachusetts business trust and voluntary association organized under the laws of The Commonwealth of Massachusetts (or any successor thereto) or (b) with respect to NSTAR Transmission Ventures, Inc., means NSTAR, a Massachusetts business trust and voluntary association organized under the laws of The Commonwealth of Massachusetts (or any successor thereto).
 “Voluntarily Withdraw” or “Voluntary Withdrawal” means a Member’s dissociation with the Company other than in connection with a Permitted Transfer or an Involuntary Withdrawal.
 1.2
 Other Defined Terms; Interpretation. 
 1.2.1
 Capitalized terms used in this Agreement and not defined in Section 1.1 shall have the meanings assigned to them elsewhere in this Agreement.
 1.2.2
 The definitions shall apply equally to both the singular and the plural forms of the terms defined. 
 

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 1.2.3
 Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. 
 1.2.4
 The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” 
 1.2.5
 The words “hereof”, “herein”, “hereunder” and other similar words refer to this Agreement as a whole. 
 1.2.6
 Unless otherwise clear from the context, Article, Section and Schedule references in this Agreement are to Articles and Sections of or Schedules to this Agreement.
 ARTICLE 2
ORGANIZATIONAL MATTERS
 2.1
 Formation. The parties hereto have agreed to form a limited liability company pursuant to the Act and the provisions of this Agreement and, for that purpose, caused the Certificate of Formation to be prepared, executed and filed with the Secretary of State of the State of New Hampshire on March 31, 2010.
 2.2
 Name and Purpose. The name of the Company is Northern Pass Transmission LLC. The Company may also conduct business at the same time under one or more fictitious names if the Members Committee determines that such is in the best interests of the Company. The Members have formed the Company with the intention that it be the entity responsible for planning, developing, constructing, owning and operating the New Hampshire portion of a 1,200 megawatt high voltage direct current transmission line to deliver and sell low carbon energy in New England (the “Project” as further defined in Section 6.1). Hydro-Québec is developing the Canadian segment of the line, and the Members are separately negotiating a Transmission Services Agreement between the Company and Hydro-Québec under which Hydro-Québec will reimburse the Company for costs in developing the Project and pay the Company for transmission services. 
 

 2.3
 Principal Place of Business; Other Places of Business. The principal place of business of the Company is located initially at Energy Park, 780 North Commercial Street, Manchester, NH,  03101, or such other place within or outside the State of New Hampshire as the Members Committee may from time to time designate. The Company may maintain offices and places of business at such other place or places within or outside the State of New Hampshire as the Members Committee deems advisable.
 2.4
 Registered Office; Registered Agent. The registered agent of the Company is C T Corporation System and the registered office of the Company within the State of New Hampshire is C T Corporation System, 9 Capitol Street, Concord, New Hampshire, 03301. The Members Committee may change the registered office and/or the registered agent of the Company in accordance with the Act and shall give prompt notice of any such change to each Member.
 

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 2.5
 Business Purpose. 
 The Company is organized for the purposes of:
 

 2.5.1
 acting as an electric public utility regulated under the Federal Power Act that is a transmission service provider within New England;
 2.5.2
 designing, acquiring, constructing, owning and operating certain transmission facilities within New Hampshire;
 2.5.3
 conducting any and all activities normally exercised by an owner and operator of property in relation or incidental to the business conducted or property held by the Company; and
 2.5.4
 conducting any other lawful business, purpose or activity in which a limited liability company may be engaged under Applicable Law (including, without limitation, the Act).
 2.6
 Powers. Subject to all of the terms, covenants, conditions and limitations contained in this Agreement and any other agreement entered into by the Company, the Company shall have the power and authority to do any and all acts and things necessary, appropriate, proper, advisable, desirable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described herein and for the protection and benefit of the Company, including all power and authority, directly or through its ownership interest in other entities, to enter into and perform contracts of any kind, and borrow money and issue evidences of indebtedness, whether or not secured by a mortgage, deed of trust, pledge or other lien.
 2.7
 Qualification in Other Jurisdictions. The Members Committee shall take any and all actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of New Hampshire. Before conducting business in any jurisdiction other than the State of New Hampshire, the Company shall file all forms and take all other actions required under Applicable Law, including the tax laws, of that jurisdiction in order to conduct such business.
 2.8
 Members. The name, mailing address and Percentage Interest of each Member are set forth on Schedule 2.8 hereto. The Members Committee shall update Schedule 2.8 from time to time as necessary to reflect changes to the information therein. An amendment or revision to Schedule 2.8 made in accordance with this Agreement shall not be deemed an amendment to this Agreement. Any reference in this Agreement to Schedule 2.8 shall be deemed a reference to Schedule 2.8 as amended and in effect from time to time.
 

 2.9
 Title to Property. The Company shall at all times hold title to all of its owned and leased property in the name of the Company and not in the name of any Member, and no Member shall have any ownership interest in such property in such Member’s individual name (except to the extent a Member leases property to the Company). Each Member’s Membership Interest shall be personal property for all purposes.  
 2.10
 Payments of Individual Obligations. The Company’s credit and assets shall be used solely for the benefit of the Company, and no asset of the Company shall be transferred or encumbered for, or in payment of, any individual obligation of any Member.
 

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 ARTICLE 3
INITIAL CAPITAL; ADDITIONAL CAPITAL
 3.1
 Development Budget Capital Contributions. The Members shall, at such times and in such amounts as specified in the Development Budget, estimates of which have been reviewed by the Members, and in proportion to their respective Percentage Interests, each make Capital Contributions necessary to fund the Development Budget; which is currently estimated to be $6.8 million. The Members shall not be required to make any further Capital Contributions prior to the satisfaction of each of the Conditions Precedent.
 3.2
 Additional Capital Contributions. Subsequent to the satisfaction of each of the Conditions Precedent, the Members shall be required to make additional Capital Contributions from time to time (i) as required or otherwise specified by the Construction Budget, the Initial Operating Budget or the Annual Operating Budget approved or continued pursuant to Section 7.14., as applicable or (ii) as unanimously approved by the Members Committee pursuant to Section 7.9(m) hereof, with any such contributions to be made by each Member no later than ten (10) Business Days after the date specified, in an amount equal to the applicable capital or operating cash requirements set forth in the applicable Budget or as otherwise unanimously approved by the Members Committee, multiplied by each such Member’s Percentage Interest.
 3.3
 Failure to make Capital Contributions. If any Member fails or refuses to pay any Capital Contribution to the Company when due, the due date for such Member shall be extended for a period of ten (10) Business Days thereafter; provided, however, that a Member shall not be permitted to take advantage of this extension more than two (2) times per calendar year. After either (i) the end of the twenty (20) Business Day period (commencing from the applicable due date specified in a Budget approved or continued pursuant to Section 7.14 or in a written notice delivered to the Members pursuant to Section 3.2 or any extension of such due date that is unanimously approved by the Members Committee, as applicable) in which a Member has failed or refused to pay any Capital Contribution or (ii) the third time in any calendar year in which a Member has failed or refused to pay any Capital Contribution within the ten (10) Business Day period provided in Section 3.2, then any non-Defaulting Member may exercise the remedies set forth in Article 14 hereof.
 3.4
 Capital Accounts. A separate Capital Account shall be established and maintained for each Member in accordance with the terms of this Agreement.
 3.5
 Member Capital. Except as otherwise provided in this Agreement or with the unanimous approval of the Members Committee, (a) no Member shall demand or be entitled to receive a return of or interest on its Capital Contributions or Capital Account, (b) no Member shall withdraw any portion of its Capital Contributions or receive any distributions from the Company as a return of capital on account of such Capital Contributions, and (c) the Company shall not redeem or repurchase the Membership Interest of any Member.
 3.6
 Member Loans. Subject to Section 14.3.1, no Member shall be required or permitted to make any loans or otherwise lend any funds to the Company, except loans made with the unanimous approval of the Members Committee. All loans to the Company shall represent a debt of the Company payable or collectible solely from the assets of the Company in accordance with the terms and conditions upon which such loans were made, and no loans made by any Member to the Company shall have any effect on such Member’s Percentage Interest.
 

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 ARTICLE 4
DISTRIBUTIONS
 4.1
 In General. Except as otherwise specifically provided in this Agreement, distributions of Available Cash, subject to Section 304-C:44 of the Act, will be made only as may be unanimously approved by the Members Committee. Such distributions shall be made to the Members within thirty (30) days after such unanimous approval in accordance with the Members’ respective Percentage Interests as of the time of such approval provided, that any loans payable to Members have been repaid in full prior to any such distribution to the Members.
 4.2
 Incorrect Distributions.  To the extent any distribution made to a Member is incorrectly made, based on the Company’s financial statements, any Member who receives more than should have been distributed to such Member shall promptly repay to the Company the amount of any such incorrect distribution, and any such repaid amounts shall be redistributed (or otherwise applied) pursuant to this Agreement. For US tax purposes any amounts returned are treated as an adjustment to a previously made distribution and not a Capital Contribution under Sections 3.1 and 3.2, provided, however, that a distribution and corrective repayment that occur in different taxable years shall be treated for tax purposes as a distribution in the year in which the actual incorrect distribution was made, followed by a Capital Contribution in the year in which the repayment was made.  
 

 4.3
 Amounts Withheld. All amounts withheld by the Company pursuant to the Code or any provision of any state, local, or foreign law with respect to any payment, distribution or allocation to any Member shall be remitted to the appropriate Governmental Authority, treated as amounts distributed to that Member pursuant to this Article 4 for all purposes under this Agreement and shall accordingly reduce by a corresponding amount distributions the Member would otherwise receive pursuant to this Article 4 or Article 16.  Each Member agrees to furnish the Company with such certifications and forms as shall reasonably be requested by the Company to assist it in determining the extent of, and in fulfilling its withholding obligations.
 4.4
 Distributions Upon Liquidation. Distributions made in conjunction with the final liquidation of the Company shall be applied or distributed as provided in Article 16.
 4.5
 Distributions in Kind. No right is given to any Member to demand or receive property other than cash as provided in this Agreement. The Company may not make any distribution in kind of Company assets to the Members without the unanimous approval of the Members Committee. 
 ARTICLE 5
ALLOCATIONS OF PROFITS AND LOSSES
 5.1
 Book Allocations. Unless otherwise provided in this Agreement, an allocation to a Member of a share of Profits or Losses shall be treated as an allocation of the same share of each item of income, gain, loss or deduction that is taken into account in computing Profits or Losses. After giving effect to the special allocations set forth in Section 5.2 and Section 5.3 and subject to Section 5.4 and Section 5.5, Profits and Losses for any Allocation Year shall be allocated as follows:
 (a)
 All items of Loss shall be allocated as follows:
 

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 (1)
 First, to the Members in the same manner and proportions as Profits were previously allocated under Section 5.1(b)(2) to the extent of the aggregate Profits allocated pursuant to Section 5.1(b)(2) for all periods over the aggregate Losses allocated pursuant to this Section 5.1(a)(1) for all prior periods; and
 (2)
 Second, to the Members in proportion to their Percentage Interests.
 (b)
 All items of Profit shall be allocated as follows:
 (1)
 First, to the Members in the same manner and proportions as Losses were previously allocated under Section 5.1(a)(2) to the extent of the aggregate Losses allocated pursuant to Section 5.1(a)(2) for all periods over the aggregate Profits allocated pursuant to this Section 5.1(b)(1) for all prior periods; and
 (2)
 Second, to the Members in proportion to their Percentage Interests.
 5.2
 Special Allocations. The following special allocations shall be made in the
following order:
 (a)
 Company Minimum Gain Chargeback. Except as otherwise provided in Regulations Section 1.704-2(f), notwithstanding any other provision of this Article 5, if there is a net decrease in Company Minimum Gain during any Allocation Year, each Member shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in an amount equal to such Member's share of the net decrease in Company Minimum Gain, determined in accordance with Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 5.2(a) is intended to comply with the minimum gain chargeback requirement in Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
 (b)
 Member Minimum Gain Chargeback. Except as otherwise provided in Regulations Section 1.704-2(i)(4), notwithstanding any other provision of this Article 5, if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt during any Allocation Year, each Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in an amount equal to such Member's share of the net decrease in Member Nonrecourse Debt Minimum Gain, determined in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 5.2(b) is intended to comply with the 
 

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 minimum gain chargeback requirement in Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
 (c)
 Qualified Income Offset. In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), Section 1.704-1(b)(2)(ii)(d)(5), or Section 1.704-1(b)(2)(ii)(d)(6), items of Company income and gain shall be allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of the Member as quickly as possible, provided that an allocation pursuant to this Section 5.2(c) shall be made only if and to the extent that the Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article 5 have been tentatively made as if this Section 5.2(c) were not in the Agreement.
 (d)
 Gross Income Allocation. In the event any Member has a deficit Capital Account at the end of any Allocation Year that is in excess of the sum of the amount such Member is expressly obligated to restore pursuant to this Agreement and the amount such Member is deemed to be obligated to restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) or either of the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), such Member shall be allocated items of Company income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 5.2(d) shall be made only if and to the extent that such Member would have a deficit Capital Account in excess of such sum after all other allocations provided for in this Article 5 have been made as if Section 5.2(c) and this Section 5.2(d) were not in the Agreement.
 (e)
 Nonrecourse Deductions. Nonrecourse Deductions for any Allocation Year shall be allocated to the Members in proportion to their respective Percentage Interests.
 (f)
 Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for any Allocation Year shall be allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Regulations Section 1.704-2(i)(1).
 (g)
 Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Company asset, pursuant to Code Section 734(b) or Section 743(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Member in complete liquidation of such Member's interest in the Company, the amount of such adjustment to Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be allocated to the Members in accordance with their interests in the Company in the event Regulations Section 1.704-1(b)(2)(iv)(m)(2) 
 

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 applies, or to the Member to whom such distribution was made in the event Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.
 5.3
 Curative Allocations. The allocations set forth in Sections 5.2 and 5.4 (the “Regulatory Allocations”) are intended to comply with certain requirements of the Regulations. It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss, or deduction. Therefore, notwithstanding any other provision of this Article 5 (other than the Regulatory Allocations), the Members Committee shall make (or cause to be made) such offsetting special allocations of Company income, gain, loss, or deduction in a manner so that, after such offsetting allocations are made, each Member's Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of the Agreement and all Company items were allocated pursuant to Section 5.1.
 5.4
 Loss Limitation. Losses allocated pursuant to Section 5.1 shall not exceed the maximum amount of Losses that can be allocated without causing any Member to have an Adjusted Capital Account Deficit at the end of any Allocation Year. In the event some but not all of the Members would have Adjusted Capital Account Deficits as a consequence of an allocation of Losses pursuant to Section 5.1, the limitation set forth in this Section 5.4 shall be applied on a Member by Member basis and Losses not allocable to any Member as a result of such limitation shall be allocated to the other Members in accordance with the positive balances in such Members’ Capital Accounts so as to allocate the maximum permissible Losses to each Member under Regulations Section 1.704-1(b)(2)(ii)(d).
 5.5
 Other Allocation Rules. 
 

 

 (a)
 For purposes of determining the Profits, Losses, or any other items allocable to any period, Profits, Losses, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the Members Committee using any permissible method under Code Section 706 and the Regulations thereunder.
 (b)
 The Members are aware of the income tax consequences of the allocations made by this Article 5 and Article 16.
 (c)
 Solely for purposes of determining a Member's proportionate share of the “excess nonrecourse liabilities” of the Company within the meaning of Regulations Section 1.752-3(a)(3), the Members' interests in Company profits are in proportion to their Percentage Interests.
 5.6
 Tax Allocations; Code Section 704(c).
 

 (a)
 Except as otherwise provided in this Section 5.6, each item of income, gain, loss and deduction of the Company for federal, state, local and foreign tax purposes shall be allocated among the Members in the same manner as such items are allocated for book purposes under this Article 5 and Article 16.  Any tax credits of the Company shall be allocated to the Members in proportion to their Percentage Interests.
 

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 (b)
 In accordance with Code Section 704(c) and the Regulations thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its initial Gross Asset Value (computed in accordance with the definition of Gross Asset Value) using the method described under Treasury Regulation Section 1.704-3(b).
 (c)
 In the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraph (ii) of the definition of Gross Asset Value, subsequent allocations of income, gain, loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and the Regulations thereunder using the allocation method described under Treasury Regulation Section 1.704-3(b).
 (d)
 Except as otherwise provided in Section 5.6(b) and (c) above, any elections or other decisions relating to the allocations described in this Section 5.6 shall be made by the Tax Matters Partner in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this Section 5.6 are solely for purposes of federal, state, local, and foreign taxes and shall not affect, or in any way be taken into account in computing, any Member's Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.
 (e)
 To the extent the Code and the Regulations or other Applicable Law require allocations for tax purposes that differ from the foregoing allocations, the Tax Matters Partner, in its reasonable discretion, may determine the manner in which such tax allocations shall be made so as to comply more fully with the Code and such Regulations or other Applicable Law and, at the same time, preserve the economic relationships among the Members as otherwise set forth in this Agreement.
 5.7
 Tax Status; Tax Elections; Tax Matters Partner.
 

 (a)
 No election shall be made by the Company or any Member to (i) have the Company excluded from the application of Subchapter K, Chapter 1 of Subtitle A of the Code or from any similar provisions of any state, local, or foreign laws or (ii) treat the Company as an association taxable as a corporation for federal, state, local or foreign income tax purposes.
 (b)
 NU Ventures shall be designated as the “Tax Matters Partner” of the Company and shall, to the extent applicable, act in such capacity under the Code and in any similar capacity under state, local, or foreign law. If NU Ventures ceases to be a Member, the Members Committee shall promptly appoint a new Tax Matters Partner. The Tax Matters Partner shall cause the Company’s accountants to prepare all federal, state, local, and foreign 
 

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 tax returns of the Company for each year for which such returns are required to be filed and shall cause such returns to be timely filed.  To the extent not otherwise provided in this Agreement, the Tax Matters Partner shall have the authority to make all tax elections and other tax decisions on behalf of the Company; provided, however, that (1) the Tax Matters Partner shall not make any such tax election on behalf of the Company if that tax election would reasonably be expected to have a disproportionately adverse effect on any Member without the unanimous approval of the Members Committee, and (2) the Tax Matters Partner shall follow the instruction of each Member with respect to the tax treatment of such Member’s distributive share of any cancellation of indebtedness income in case the Company makes an election under Code Section 108(i), in accordance with Revenue Procedure 2009-37 and any similar guidance issued by the Internal Revenue Service.  The Tax Matters Partner shall have the right to  extend the statute of limitations for assessment of tax deficiencies against the Members with respect to adjustments to the Company's federal, state, local, or foreign tax returns; and (ii) to the extent provided in Code Sections 6221 through 6234 and similar provisions of federal, state, local, or foreign law, represent the Company and the Members before taxing authorities or courts of competent jurisdiction in tax matters affecting the Company or the Members in their capacities as members, and file any tax returns and execute any agreements or other documents relating to or affecting such tax matters, including agreements or other documents that bind the Members with respect to such tax matters or otherwise affect the rights of the Company and the Members and shall provide timely notice of any such action to the Members. The Tax Matters Partner is further authorized and required to represent the Company in connection with all examinations of the Company's affairs by tax authorities, including resulting administrative and judicial proceedings, and to expend Company funds for professional services and costs associated therewith. The Members agree to cooperate with the Tax Matters Partner and to do or refrain from doing any or all things reasonably required by the Tax Matters Partner to conduct such proceedings. Any reasonable direct out-of-pocket expense incurred by the Tax Matters Partner in carrying out its obligations hereunder shall be allocated to and charged to the Company as an expense of the Company for which the Tax Matters Partner shall be reimbursed. 
 (c)
 Each Member agrees that if it (i) treats, on its tax returns, any item of income, gain, loss, deduction, credit or expense relating to its Membership Interest in the Company in a manner inconsistent with the treatment of such item by the Company as reflected on the Company’s Internal Revenue Service Form 1065, the Internal Revenue Service Form 1065 (Schedule K-1) issued to such Member, or other information statement furnished by the Company to such Member for use in preparing such Member’s tax returns or (ii) files any claim for refund relating to any such item based on, or that would result in, such inconsistent treatment, it shall notify the Tax Matters Partner of such action within ninety (90) days after the filing of such relevant returns or refunds. 
 

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 (d)
 If so requested by either Member in a written notice to the Company (which notice may be delivered at any time prior to the filing of the U.S. federal income tax return for the last taxable year in which such Member is a Member of the Company), the Tax Matters Partner shall cause the Company to make an election under Section 754 of the Code. 
 (e)
 The provisions of this Section 5.7 regarding tax matters shall survive the termination of this Agreement and the Transfer or termination of any Member’s Interest in the Company.
 

 ARTICLE 6
PROJECTS
 6.1
 Project. The project to be undertaken by the Company, subject to the satisfaction of the Conditions Precedent as provided in Section 6.2 below, is identified and described on Schedule 6.1 hereof (the “Project”).
 6.2
 Conditions Precedent to Additional Capital Contributions. No Member shall have any obligation, other than its obligation to make the Capital Contributions required by the Development Budget as provided for in Section 3.1 and in connection with Pre-Formation Internal Costs as provided for in Section 9.1, to make any other Capital Contributions until such time, if ever, that each of the Conditions Precedent listed in Schedule 6.2 hereof attributable to such Member has been satisfied as provided in Schedule 6.2 or has been waived by such Member.
 ARTICLE 7
MANAGEMENT
 7.1
 Members Committee. Except as provided in Sections 7.11, 7.13 or 16.5, the business and affairs of the Company shall be managed under the sole direction and control of the Members Committee. Subject to all of the terms, covenants, conditions and limitations contained in this Agreement and any other agreement entered into by the Company and subject to the limitations imposed by Applicable Law, including the Act, the Members Committee shall have the power, on behalf of the Company, to do or to direct to be done all things necessary or convenient to carry out the business and affairs of the Company. The Members Committee shall act as the “manager” of the Company under Section 304-C:31 of the Act, subject to the provisions of this Article 7.
 7.2
 Number; Election; Initial Members Committee. The Members Committee shall consist of four (4) individuals (each, a “Representative”). NU Ventures, together with its Permitted Transferees, shall have the right to collectively appoint two (2) Representatives.  NSTAR Ventures, together with its Permitted Transferees, shall have the right to collectively appoint two (2) Representatives. The initial Representatives shall consist of the four individuals set forth on Schedule 7.2. Each such individual shall be deemed duly appointed to the Members Committee as of the date of this Agreement. The Company shall reimburse the Representatives for reasonable expenses incurred by the Representatives in carrying out their responsibilities as Representatives. The Representatives shall not be employees of the Company or entitled to receive any other compensation from the Company.
 

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 7.3
 Term of Representatives. Each Representative shall serve until the earlier of such Representative’s resignation or such Representative’s removal by the Designating Member of such Representative in accordance with Section 7.4.
 7.4
 Resignation; Removal; Vacancies. A Representative may resign as such by delivering written notice to that effect to the Members Committee at least thirty (30) days prior to the effective date of such resignation. A Representative may be removed at any time and for any reason by the Designating Member of such Representative. In the event a vacancy on the Members Committee occurs as a result of the death, disability, resignation, removal or otherwise of a Representative, such vacancy shall be filled by the Designating Member of such Representative. The Designating Member shall provide written notice to the other Member at any time that a Representative of such Designating Member is removed or replaced.
 7.5
 Chair. The chairperson of the Members Committee (the “Chair”) will be one of the appointed Representatives and will serve for a term of one (1) year and until his or her successor is appointed or until his or her earlier death, incapacity, resignation or removal. The Chair shall be elected by the Members Committee, shall preside at all meetings of the Members Committee and shall have the same voting rights as any other Representative.
 7.6
 Voting Rights. The Representatives of each Designating Member shall have aggregate voting rights equal to the Designating Member’s Percentage Interest and, except as otherwise provided in Section 7.9, decisions of the Members Committee shall require the approval of a majority of the Percentage Interests in the Company entitled to be cast by the Representatives. 
 7.7
 Meetings.
 7.7.1
 Meetings; Quorum. Regular meetings of the Members Committee shall be held on a quarterly basis or more frequently as determined by the Members Committee, on such dates and at such times as may be determined by the Members Committee. Special meetings of the Members Committee may be called at any time by any Representative. All Members Committee meetings shall be held at the principal place of business of the Company or at such other place as shall be specified in the notice of such meeting. The Members Committee or its designee shall record minutes of each meeting and, as promptly as practicable following such meeting, provide to each Representative a copy of such minutes. The quorum for all such meetings shall be Representatives holding a majority of the votes entitled to be cast at such meeting (calculated on the basis of Percentage Interests); provided that, in no event shall the presence of a quorum satisfy any requirement for unanimous consent of the Members Committee contained herein.
 7.7.2
 Notice of Meetings. Unless waived, written notice of the place and time of any regular or special meeting of the Members Committee shall be delivered to each Representative not less than ten (10) days before the date of a regular Members Committee meeting and five (5) days before the date of any special Members Committee meeting. A Representative may waive notice of a Members Committee meeting by delivering a written waiver to the Members Committee. A Representative’s attendance at or participation 
 

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 in a meeting waives any required notice of such meeting, unless at the beginning of such meeting or promptly upon his or her arrival, such Representative objects to holding the meeting or transacting business at the meeting, and does not thereafter vote for or assent to action taken at the meeting. Unless otherwise required by Applicable Law or by this Agreement, a notice of a regular meeting of the Members Committee need not specify the business to be transacted at, or the purpose of, any such regular meeting of the Members Committee; provided, however, if such notice does specify the business to be transacted at, or the purpose of, a regular meeting of the Members Committee, such notice shall not limit the actions the Members Committee may take at such regular meeting. Notice of a special meeting of the Members Committee shall state the general purpose or purposes of such meeting and no business other than that of which notice has been so given shall be transacted at such special meeting;
 7.7.3
 Action by Written Consent. Any action required or permitted to be taken at a meeting of the Members Committee may be taken without a meeting and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all of the Representatives. Any action taken by the written consent of the Representatives shall have the same force and effect as if taken by the Representatives at a meeting.
 7.7.4
 Telephonic Meetings. Representatives may participate in any meeting of the Members Committee by means of a conference telephone or similar communication equipment by which all Representatives participating in the meeting can hear and speak to each other at the same time. Such participation shall constitute presence in person at the meeting.
 7.7.5
 Proxy. Any Representative may execute a written proxy in favor of any other Representative permitting such other Representative to vote at the Members Committee on behalf of such first Representative. In the event that a Representative is represented by proxy at any meeting of the Members Committee, such Representative shall be deemed to be present and voting in person for purposes of this Agreement.
 7.8
 Power and Authority.
  Except as provided in Sections 7.9, 7.10 or 16.5:
 7.8.1
 The Members Committee, acting as a group or through the officers of the Company, but not the Representatives acting individually unless specifically authorized by the Members Committee, has sole authority to manage the Company and is authorized to make any contracts, enter into any transactions, make and obtain any commitments and take any and all actions on behalf of the Company to conduct or further the Company’s business. Any action taken by the Representatives or officers of the Company on behalf of the Company in accordance with the provisions of this Agreement shall constitute the act of and shall serve to bind the Company. Except as otherwise specifically provided in this Agreement or by written agreement or written resolution of the Members Committee that is entered into or adopted in accordance with the terms of this Agreement, (a) no Representative or group of Representatives will have any actual, 
 

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 implied or apparent authority to enter into contracts on behalf of, or to otherwise bind, the Company, nor take any action or incur any obligation, liability, debt, cost or expense in the name of or on behalf of the Company or conduct any business of the Company, and (b) no Representative will have the power or authority to delegate to any Person such Representative’s rights and powers as a Representative to manage the business and affairs of the Company; and
 7.8.2
 No Member who is not an agent authorized by the Members Committee shall take any action to bind the Company. 
 7.8.3
  Protest of Members Committee Action
 (a)
 NSTAR Ventures, unless it waives such right to a proposed action, may in good faith protest any proposed action duly approved by the Members Committee, provided that NSTAR Ventures voted against such action, by delivering a written notice to the Company within three (3) Business Days of approval by the Members Committee (i) identifying the action (the “Disputed Action”) and affirmatively stating that it believes that the Disputed Action subjects the Company to a substantial financial, construction, operational or legal risk; and (ii) proposing an alternative course of action that substantially mitigates such risk.
 (b)
 The Company may either (i) proceed with the Disputed Action, notwithstanding such protest, or (ii) refer such protest for resolution as a Deadlock under the provisions of Article 13.
 (c)
 If the Company proceeds with the Disputed Action and it is later determined by a final, non-appealable settlement, judgment or decision that such Disputed Action subjected the Company to a substantial financial, construction, operational or legal risk, NU Ventures shall reimburse the Company for such unreimbursed costs and all reasonable, direct (but not consequential) damages, if any, arising out of or related to such Disputed Action that are not recoverable by the Company from any other source (not including the Members). Such reimbursed amounts shall not be a Capital Contribution under Sections 3.1 and 3.2 or otherwise affect the Members’ Capital Accounts.
 (d)
 If the Company refers such protest for resolution under the Deadlock provisions of Article 13 and such proceeding determines that the proposed Disputed Action subjected the Company, or is likely to be subsequently found to subject the Company to a substantial financial, construction, operational or legal risk, NU Ventures shall reimburse the Company for such unreimbursed costs and all reasonable, direct (but not consequential) damages, if any, arising out of or related to such Disputed Action that are not recoverable by the Company from any other source (not including the Members). Such reimbursed amounts shall not be a Capital 
 

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 Contribution under Sections 3.1 and 3.2 or otherwise affect the Members’ Capital Accounts.
 (e)
 If the Company refers such protest for resolution under the Deadlock provisions of Article 13 and such proceeding determines that the proposed Disputed Action did not subject, or is likely to be subsequently found to not subject the Company to a substantial financial, construction, operational or legal risk, NSTAR Ventures will reimburse the Company for all reasonable, direct damages (but not consequential) the Company incurs arising from the delay, if any, caused by such resolution proceeding. Such reimbursed amounts shall not be a Capital Contribution under Sections 3.1 and 3.2 or otherwise affect the Members’ Capital Accounts.
 (f)
 Actions duly approved by the Members Committee and not protested under the provisions of this subsection 7.8.3 will be deemed to have been actions not subjecting the Members to substantial financial, construction, operational or legal risk, notwithstanding any subsequent action by Hydro-Quebec or any third party against the Company, NU Ventures or NSTAR Ventures arising out of such action, and each Member shall bear its proportionate share of any loss stemming from such claim. 
 7.9
 Matters Requiring Unanimous Approval of the Members Committee. Notwithstanding anything to the contrary contained in this Agreement, without the unanimous approval of the Members Committee the Company shall not directly or indirectly, by amendment, merger, consolidation or otherwise:
 

 (a)
 Amend, modify or restate the Certificate or this Agreement.
 (b)
 Own, manage, operate or engage in any business other than the Project and matters incidental thereto.
 (c)
 Engage in any acquisition (by means of a purchase of stock or other equity interests, purchase of assets or otherwise) of a business or Person. 
 (d)
 Sell, exchange, lease or otherwise transfer all or substantially all of the Company Assets.
 (e)
 Issue, repurchase, redeem or reclassify any Company Equity Securities. 
 (f)
 Create any subsidiary, or make any debt or equity investment in any business or Person. 
 (g)
 Make an initial public offering of Company Equity Securities. 
 (h)
 Admit any additional Members to the Company (other than admitting Additional Members in connection with a Transfer made in accordance with Article 12). 
 

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 (i)
 Enter into any Affiliate Arrangements (other than the Approved Affiliate Agreements set forth on Schedule 7.13 hereto).
 (j)
 Participate in any mergers, consolidations, or other similar business combination.
 (k)
 Liquidate, dissolve or wind up the Company. 
 (l)
 File a voluntary bankruptcy petition on behalf of the Company or make a general assignment for the benefit of creditors.
 (m)
 Require a Member to make any Capital Contributions other than those set forth in a Budget that is approved in accordance with the terms of this Agreement.
 (n)
 Pay interest on Capital Contributions, allow a Member to withdraw Capital Contributions or provide redemption rights to Members. 
 (o)
 Allow Member Loans to the Company except as permitted under Section 14.3.1. 
 (p)
 Make, pay or declare any distributions to Members. 
 (q)
 Make, pay or declare any distributions-in-kind to Members. 
 (r)
 Permit the Transfer of any Membership Interest except for Transfers made in accordance with Article 12.
 (s)
 Incur any indebtedness for borrowed money in excess of 60% of the Total Capitalization of the Company.
 (t)
 Provide any guarantee with respect to borrowed money or other obligations of a Person (including, without limitation, the Members).
 (u)
  Amend or modify the NUSCO Service Agreement. 
 

 7.10
 Subcommittees. The Members Committee may organize one or more subcommittees, and appoint members thereto, to oversee certain Company activities, including design and engineering, permitting, construction, siting, legal and regulatory matters, and public communications. In any such case, each Member shall have the right to appoint an equal number of members to each subcommittee. Each subcommittee shall report to the Members Committee.
 7.11
 Defaulting Member.  Notwithstanding anything to the contrary in this Article 7, if the Percentage Interest of a Defaulting Member is less than ten percent (10.0 %), the business of the Members Committee, including the scheduling of meetings and the taking of action, shall be conducted or determined solely by the Representatives designated by the non-Defaulting Member and the presence of or participation of the Representatives designated by the Defaulting Member shall not be required, including for decisions that require unanimous approval, other than actions described in Section 7.9(a) hereof.
 

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 7.12
 Cooperation of Members for Regulatory Proceedings. The Members will reasonably cooperate, and will cause each of its Regulatory Affiliates to reasonably cooperate, with all regulatory proceedings reasonably necessary or convenient for the Company to conduct its business.
 7.13
 Certain Affiliate Arrangements.
  
 7.13.1
 The Company shall have no obligation to pay any charges rendered by a Member or a Corporate Affiliate of a Member unless the agreement under which the charges are imposed is an Approved Affiliate Agreements or an Affiliate Arrangement approved pursuant to Section 7.9(i) hereof. Any such unapproved charges shall be the responsibility of the Member rendering such charges or the Member with which the Corporate Affiliate rendering such charges is affiliated.
 7.13.2
 With reference to any transaction, Contract or other arrangement to which the Company is a party or otherwise benefits or is bound and to which a Member or Members or a Corporate Affiliate of any Member is a party or is otherwise bound or obligated, including the Approved Affiliate Agreements listed on Schedule 7.13 (collectively, “Affiliate Arrangements”), (a) in the case of any Affiliate Arrangement to which one of the Members is a party or is otherwise bound or obligated and such Member is in breach or other default, or otherwise required to act, the Representatives designated by the Member who is not, and whose Corporate Affiliates are not, a party to or is not otherwise bound or obligated by such Affiliate Arrangement, shall have the right to cause the Company to pursue or enforce any remedy or exercise any other rights of the Company under such Affiliate Arrangement; and (b) in the case of any Affiliate Arrangement to which both Members are a party or are otherwise bound or obligated and one of such Members is in breach or other default or otherwise required to act, the Representatives designated by the non-defaulting Member or the Member not required to take the relevant action, as applicable, shall have the right to cause the Company to pursue or enforce any remedy or exercise any other rights of the Company under such Affiliate Arrangement.
 7.14
 Budgets.
 

 7.14.1
 Development Budget. The budget for the development activities of the Company (the “Development Budget”), estimates of which have been reviewed by the Members, is intended to cover the external operating costs of the Company from the Effective Date through the date that the Conditions Precedent are satisfied. The Members shall, at such times, make the Capital Contributions provided for in the Development Budget in accordance with Section 3.1.
 7.14.2
 Preliminary Construction Budget. The preliminary budget for the construction of the Project (the “Preliminary Construction Budget”) shall be the initial estimate of the construction costs and schedule of funds required to complete the Project.
 

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 7.14.3
 Initial Operating Budget. The approval by the Members Committee of the budget for operating the Company for the partial calendar year and the ensuing calendar year subsequent to the satisfaction of the Conditions Precedent (the “Initial Operating Budget”) shall be one of the Conditions Precedent in Schedule 6.2. The Initial Operating Budget shall include (i) that portion of the Preliminary Construction Budget or the Construction Budget, as applicable, relating to the period covered by the Initial Operating Budget and (ii) an estimate of the costs and schedule of funds required to operate and maintain the Company and the assets of the Company during such period covered by the Initial Operating Budget.
 7.14.4
 Construction Budget. The approval by the Members Committee of the final budget for the construction of the Project (the “Construction Budget”) shall be one of the Conditions Precedent in Schedule 6.2. The Construction Budget shall contain an estimate of the construction costs and schedule of funds required to complete the Project and shall not be exceeded without the approval of the Members Committee.
 7.14.5
 Annual Operating Budget. No later than September 15 of the calendar year in which the Initial Operating Budget ends and by September 15 of each subsequent year, the Treasurer shall propose, for approval by the Members Committee, an operating budget for the operation of the Company for the next calendar year (the “Annual Operating Budget”). The Annual Operating Budget shall include (i) that portion of the Construction Budget relating to the calendar year covered by the Annual Operating Budget, if applicable, (ii) an estimate of the operating and maintenance costs for such calendar year, (iii) an estimate of the capital costs during such calendar year and (iv) a schedule of funds required for such calendar year. A meeting of the Members Committee shall be held prior to each November 1 to approve the Annual Operating Budget for the forthcoming calendar year. In the event the Members Committee  cannot reach agreement as to the Annual Operating Budget prior to the start of such calendar year (which failure to approve shall constitute a Deadlock for purposes of Article 13), the Company shall continue to be operated in accordance with the Annual Operating Budget for the previous calendar year or the Initial Operating Budget for such calendar year if applicable, with an adjustment to each line item in either such budget to reflect the PPI Adjustment, exclusive of that portion of the Construction Budget for the previous calendar year but inclusive of that portion of the Construction Budget, if applicable, for such calendar year, until a new Annual Operating Budget is agreed upon in accordance with the terms of this Agreement. Upon the resolution of any such Deadlock in accordance with Article 13, the Annual Operating Budget as so resolved shall take effect.
 7.14.6
 Supporting Detail. Any Budget to be presented to the Members Committee for approval shall be accompanied by supporting detail and such other information as may be reasonably requested by a Representative. Such supporting detail and information shall be provided to the Members Committee as soon as is reasonably practicable before the 
 

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 meeting at which such Budget is to be voted on, but in no event less than five (5) Business Days prior to such meeting.
 ARTICLE 8
MEMBERS
 8.1
 Meetings of Members. Members shall meet at such times and places as may be requested by either Member.  The quorum for all such meetings shall be Members holding a majority of the votes entitled to be cast at such meeting (calculated on the basis of Percentage Interests); provided that, in no event shall the presence of a quorum satisfy any requirement for unanimous consent of the Members contained herein. Unless waived, written notice of the place and time of any regular or special meeting of the Members shall be delivered by the Company to each Member not less than five (5) days before the date of the meeting. Unless otherwise required by Applicable Law or by this Agreement, a notice of a regular meeting of the Members need not specify the business to be transacted at, or the purpose of, any regular meeting of the Members;  provided, however, if such notice does specify the business to be transacted at, or the purpose of, a regular meeting of the Members, such notice shall not limit the actions the Members may take at such regular meeting. Notice of a special meeting of the Members shall state the general purpose or purposes of such meeting and no business other than that of which notice has been so given shall be transacted at such special meeting.
 8.2
 Action Without Meetings. Any action required or permitted to be taken at a meeting of the Members may be taken without a meeting without prior notice, and without a vote, if a consent in writing, setting forth the action so taken, is signed by all of the Members.  Such consent shall have the same force and effect as a unanimous vote at a meeting.
 8.3
 Voting. Any action by the Members requires either (a) except as otherwise provided in this Agreement, the affirmative vote of a majority in interest (calculated on the basis of Percentage Interests) of all of the Members at a meeting of the Members or (b) a written resolution signed by all of the Members.
 8.4
 Meetings by Telephone or Other Technology. Any or all Members may participate in a meeting by, or conduct the meeting through the use of, telephone or any other means of communication by which either:  (a) all participating Members may simultaneously hear and speak to each other during the meeting or (b) all communication during the meeting is immediately transmitted to each participating Member, and each participating Member is able to immediately communicate to all other participating Members.  If a meeting will be conducted through the use of any means described in this Section 8.4, all participating Members shall be informed that a meeting is taking place at which official business may be transacted.  A Member participating in a meeting by any means described in this Section 8.4 is deemed to be present in person at the meeting.
 8.5
 Third-Party Dealings With Members. Except as permitted by this Agreement, no Member will have any right or authority to take any action on behalf of the Company with respect to third parties.
 8.6
 Liability of Members. Except as otherwise required by any non-waivable provision of the Act or other Applicable Law: (a) no Member shall be personally liable in any manner whatsoever for any debt, liability or other obligation of the Company, whether such debt, liability or other obligation arises in contract, tort, or otherwise; and (b) no Member shall in any 
 

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 event have any liability whatsoever in excess of (i) the amount of its Capital Contributions and any Capital Contributions required to be made pursuant to Sections 3.1 and 3.2 hereof; (ii) its share of any assets and undistributed profits of the Company, and (iii) the amount of any wrongful distribution to such Member, if, and only to the extent, such Member has actual knowledge (at the time of the distribution) that such distribution is made in violation of Section 304-C:44 of the Act or such distribution is an incorrect distribution that is required to be repaid to the Company in accordance with Section 4.2.
 8.7
 Independent Activities; Disclaimer of Duties; Release.
 

 8.7.1
 Independent Activities of the Members.
 (a)
 To the maximum extent permitted by Applicable Law, each Member and its Corporate Affiliates may, notwithstanding this Agreement, engage in whatever activities it chooses, whether or not the same are competitive with those of the Company, without having or incurring any obligation to offer any interest in such activities to the Company or any other Member. Without limitation of the foregoing, each of the Members and its Corporate Affiliates may, in its discretion, (i) undertake transmission projects alone or with any other Person or Persons without proposing that such projects be undertaken by the Company, (ii) engage in the same or similar activities or line of business as the Company or develop or market any services or activities that compete directly or indirectly with those of the Company, or (iii) beneficially own securities of or develop a business relationship with any Person engaged in the same or similar activities or line of business as, or otherwise in competition with, the Company (the activities, projects and relationships described in this Section 8.7.1(a) are collectively referred to as “Permitted Activities”).
 (b)
 Any Member and any of its Corporate Affiliates may independently pursue any project or other Permitted Activities which would otherwise be in the scope of this Agreement without offering such project or Permitted Activities to the Company. Any Member and any of its Corporate Affiliates may further independently pursue any project which is either considered by the Company or offered to the Company, but in either case, the Company decides not to pursue.
 (c)
 Without limiting this Section 8.7.1 in any way, neither the Company nor any Member or any Corporate Affiliates of any Member by virtue of this Agreement shall have any rights in or to any Permitted Activity or the income or profits derived therefrom of any other Member, regardless of whether or not such Permitted Activity was presented to that other Member as a direct or indirect result of its connection with the Company. No Member or any of its Corporate Affiliates shall have any obligation to present any project or other Permitted Activity to the Company, even if the project or other Permitted Activity is one that the Company might 
 

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 reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so, and no Member or any Corporate Affiliate thereof shall be liable to the Company or any other Member for breach of any fiduciary or other duty by reason of the fact that such Member or any Corporate Affiliate thereof pursues or acquires such business opportunity, directs such business opportunity to another Person or fails to present such business opportunity, or information regarding such business opportunity, to the Company.
 (d)
 Without limiting this Section 8.7.1 in any way, in the event that a Representative or an Employed Officer acquires knowledge of a Permitted Activity that may be a corporate opportunity for the Company or the Members, on the one hand, and the Designating Member of such Representative or employer of such Employed Officer, on the other hand, the Representative or Employed Officer shall have fully satisfied and fulfilled his or her fiduciary duty, if any, to the Company and the Members (other than the Designating Member of such Representative or employer of such Employed Officer) with respect to such corporate opportunity, and the Company and the Members (other than the Designating Member of such Representative or employer of such Employed Officer) hereby renounce their respective interest in such business opportunity and waive any claim that such business opportunity constituted a corporate opportunity that should have been presented to the Company, the Members or any of their respective Corporate Affiliates, if the Representative or Employed Officer acts in a manner consistent with the following policy:  a corporate opportunity presented to any Representative or an Employed Officer shall belong to the Designating Member of such Representative or employer of such Employed Officer, unless such opportunity was presented in writing to the Representative or Employed Officer expressly and solely in his or her capacity as a Representative or officer of the Company, in which event such corporate opportunity shall belong to the Company. If the Company decides not to pursue a corporate opportunity that belongs to the Company pursuant to the immediately preceding sentence, any Member and any of its Corporate Affiliates may independently pursue such corporate opportunity.
 8.7.2
 Each Member acknowledges its express intent, and agrees with each other Member for the mutual benefit of both Members, that to the maximum extent permitted by Applicable Law:
 (a)
 no Member shall owe any duty of loyalty, under this Agreement, the Act or otherwise, to the Company, to the other Member or any Representatives in connection with the exercise of its voting, consent or approval rights under this Agreement or the granting or 
 

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 withholding of any vote, consent or approval by any Representative appointed by such Member under this Agreement; 
 (b)
 no Representative shall owe any duty of loyalty, under this Agreement, the Act or otherwise, to the Company, to any Member (other than the Designating Member of such Representative) or any other Representative in connection with the exercise of his or her voting, consent or approval rights under this Agreement; and
 (c)
 the provisions of this Section 8.7.2 shall apply for the benefit of each Member and Representative and no standard of care, duty or other legal restriction or theory of liability shall limit or modify the right of each Member or Representative to act, and, in the case of each Member, to direct the Representatives appointed by such Member to vote in the manner determined by such Member in its sole discretion, other than those expressly set forth in this Agreement.
 8.7.3
 To the maximum extent permitted by Applicable Law, each Member (the “Releasing Member”) hereby releases and forever discharges each other Member and the Representatives appointed by such Member (each, a “Released Party”) from all liabilities that any Released Party might owe, under the Act or otherwise, to the Company, the Releasing Member (a) based on any action or omission by such Released Party in its capacity as a member of the Company or as a Representative (other than any Disabling Conduct of the Released Party) or (b) on the ground that any decision of any Released Party to grant or withhold any vote, consent or approval constituted a breach or violation of any standard of care or duty applicable to the Releasing Member; provided, however, that the release in this Section 8.7.3 shall not apply to any liabilities arising out of or related to a breach of the terms of this Agreement, and nothing in this Section 8.7.3 shall affect the rights of a Member to make a claim or bring an action alleging a breach of the terms of this Agreement, whether or not such breach involved Disabling Conduct by the breaching parties.
 8.7.4
 Each Releasing Member hereby irrevocably covenants to refrain from, directly or indirectly, asserting any claim, or commencing, joining in, prosecuting, participating in, funding any part of, instituting or causing to be commenced, prosecuted, funded or instituted, any suit or other proceeding of any kind against any Released Party based upon any matter released or purported to be released by Section 8.7.3 above.
 To the extent permitted by Applicable Law, the provisions of this Section 8.7 constitute an agreement to modify or eliminate fiduciary duties.
 8.8
 Waiver of Conflicts. The Members hereby waive any and all conflict of interest claims that any Member may have with respect to the execution of the NUSCO Service Agreement.  Subject to the other provisions of this Agreement, the Company may enter into other services agreements with Members or other Persons to provide construction, operation and maintenance services for the Project and certain other services for the Company.
 

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 ARTICLE 9
MEMBERS’ INTERNAL COSTS
 9.1
 Pre-Formation Internal Costs. Within forty-five (45) days following the Effective Date, each Member shall submit to the Company a detailed accounting of its (including its Corporate Affiliates’) Internal Costs relating to pre-development activities related to the Project, including the basis for and detail of any allocation of costs by a Member or its Corporate Affiliate to the Company (the “Pre-Formation Internal Costs”). The Members Committee may approve Capital Contributions necessary for the Company to reimburse the Members and their Corporate Affiliates for such Pre-Formation Internal Costs. The Members and their Corporate Affiliates shall be entitled to reimbursement by the Company of their respective Pre-Formation Internal Costs, but only to the extent such costs are reasonable, purposeful and consistent with historical precedent and cost allocation to other affiliates of such Member, and as permitted by the orders and regulations of the FERC. 
 9.2
 Post-Formation Internal Costs. On or before the twentieth (20th) day of each month, each Member shall submit to the Company a detailed accounting of its (including its Corporate Affiliates’) Internal Costs associated with services performed for or in connection with the Company and the Project, including the basis for and detail of any allocation of costs by a Member or its Corporate Affiliate to the Company (the “Post-Formation Internal Costs”) during the preceding month. The Members and their Corporate Affiliates shall be entitled to reimbursement by the Company for their Post-Formation Internal Costs, but only to the extent permitted under the terms of the NUSCO Service Agreement, an Approved Affiliate Agreement or an Affiliate Arrangement that is approved in accordance with Section 7.9(i) of this Agreement.
 9.3
 Cost Pass Through. A Member’s Pre-Formation Internal Costs and Post-Formation Internal Costs shall be on a cost pass through basis without any markup for profit.
 ARTICLE 10
OFFICERS
 10.1
 The Company. The Members Committee may, but shall not be obligated to, appoint any of the following officers:  a President; a Vice President; a Treasurer; a Secretary; and such other officers with such titles and duties as the Members Committee may determine (each an “Officer” and collectively, the “Officers”).
 10.2
 Officers.
 

 10.2.1
 President. The President, if one shall be appointed, shall have full responsibility and authority for management of the day-to-day operations of the Company, subject to the authority of the Members Committee, and shall exercise the duties and have the powers usually pertaining to the office held by the President of a company. The President may sign and execute, in the name of the Company, deeds, mortgages, bonds, contracts and other instruments, except in cases where the signing and the execution thereof shall be expressly delegated by the Members Committee or by this Agreement to some other officer or agent of the Company. The President may, by instrument in writing, delegate authority to any employee, representative, or agent to sign and execute in the name of the Company 
 

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 deeds, mortgages, bonds, contracts or other instruments except where the signing and execution of such documents shall be expressly delegated by the Members Committee to some other officer or agent of the Company. In addition, the President shall perform all duties incident to the office of the President and such other duties as from time to time may be assigned to him by the Members Committee.
 10.2.2
 Vice Presidents. Each Vice President, if any, shall have such powers and duties as may from time to time be assigned to him or her by the President or the Members Committee. Any Vice President may sign and execute in the name of the Company deeds, mortgages, bonds, contracts or other instruments, except where the signing and execution of such documents shall be expressly delegated by the Members Committee or the President to some other officer or agent of the Company. Each Vice President may, by instrument in writing, delegate authority to any employee, representative, or agent to sign and execute in the name of the Company deeds, mortgages, bonds, contracts or other instruments, except where the signing and execution of such documents shall be expressly delegated by the Members Committee or the President to some other officer or agent of the Company.
 10.2.3
 Treasurer. The Treasurer, if any, shall have charge of and be responsible for all funds, securities, receipts and disbursements of the Company, and shall deposit all monies and securities of the Company in such banks and depositories as shall be designated by the Members Committee.  To the extent not otherwise provided in this Agreement, the Treasurer shall be responsible for: (i) maintaining adequate financial accounts and records in accordance with GAAP; (ii) the preparation of financial statements and draft operating budgets for approval by the Members Committee; (iii) the preparation and filing of all tax returns required by Applicable Law; and (iv) the performance of all duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Members Committee or the President. The Treasurer may sign and execute in the name of the Company deeds, mortgages, notes, bonds, contracts or other instruments authorized by the Members Committee, except in cases where the signing and the execution thereof shall be expressly delegated by the Members Committee or by this Agreement to some other officer or agent of the Company.
 10.2.4
 Secretary. The Secretary, if any, shall act as secretary of all meetings of the Members Committee. The Secretary shall keep and preserve the minutes of all such meetings in permanent books. The Secretary shall see that all notices required to be given by the Company are duly given and served; shall have charge of the books, records and papers of the Company relating to its organization and management as a Company; shall see that all reports, statements and other documents required by Applicable Law (except tax returns) are properly filed; and shall in general perform all the duties incident to the office of Secretary and such other duties as from 
 

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 time to time may be assigned to the Secretary by the Members Committee or the President.
 10.2.5
 Appointment. The Officers of the Company shall be chosen and appointed by the Members Committee annually. Each officer shall hold office for a period of one (1) year or until such officer’s successor has been duly elected and qualified or until such officer’s death, resignation or removal by the Members Committee. In addition, on the day of the occurrence of a Defaulting Member’s Event of Default, each officer of the Company that is an employee, officer or director of the Defaulting Member or one of its Corporate Affiliates shall automatically be terminated as an officer of the Company. 
 10.2.6
 Removal. Any Officer, may be removed from office by the Members Committee at any time, with or without cause, but subject to the rights, if any, of such Officer under any contract of employment.
 10.2.7
 Resignations. Any Officer may resign at any time upon written notice to the Company, without prejudice to the rights, if any, of the Company under any contract to which such Officer is a party. Such resignation shall be effective at the time specified in the notice. The acceptance of any such resignation shall not be necessary to make it effective unless otherwise specified in such notice.
 10.2.8
 Vacancies. A vacancy occurring in any office for any cause may be filled by the Members Committee, in the manner prescribed by this Section 10.2 for the initial appointment to such office.
 ARTICLE 11
COMPLIANCE WITH CERTAIN LAWS
 11.1
 Compliance with Certain Codes of Conduct. In no event shall the Company be permitted to engage in any activity which would violate any codes or standards of conduct imposed on it by the regulations or orders of the FERC, any state public utility commission, or any similar regulatory authority of another jurisdiction. The Members agree to comply with any such codes and standards of conduct imposed on them, including any restrictions on disclosure of information to its Corporate Affiliates or Regulatory Affiliates.
 11.2
 Compliance with Antitrust Laws. The Members Committee shall adopt, from time to time, appropriate procedures and regulations necessary or advisable for the Company to comply with all applicable antitrust laws.
 11.3
 Regulatory Compliance. The Company shall at all times be operated in and conduct its business in a manner which complies in all material respects with all Applicable Laws. No Member, Representative or officer shall be permitted to proceed with any act under this Agreement unless and until appropriate regulatory approval for such act, if necessary, has been obtained. This Agreement shall at all times be interpreted consistently with this Section 11.3.
 

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 ARTICLE 12
TRANSFERS OF INTERESTS
 12.1
 General. Except as provided in Sections 12.2 and 12.3, no Member shall make, effect, close or consummate any sale, assignment, transfer, disposition, exchange, mortgage, pledge, grant, hypothecation or other transfer, whether absolute or as security or encumbrance, including without limitation, any disposition by operation of law (each and collectively a “Transfer”), of any Membership Interest (or portion thereof) without the unanimous approval of the Members.
 12.2
 Transfers to Corporate Affiliates.Subject to payment of any Transfer Compensation Amount owed pursuant to Section 12.9, a Member may Transfer any portion of its Membership Interest to one of its Corporate Affiliates at any time, provided, however, that such Corporate Affiliate must agree in writing to be bound by the terms and conditions of this Agreement.
 12.3
 Transfers After In-Service Date.   At any time after the In-Service Date of the Project, either Member may Transfer all, but not less than all, of its Membership Interest in the Company to a third party, subject to the following terms and conditions:
 (a)
 The proposed transferee must (i) be Creditworthy, and (ii) agree in writing to be bound by the terms and conditions of this Agreement;
 (b)
 The other Member shall have a right of first refusal to purchase such interest in accordance with Section 12.5, unless such other Member is a Defaulting Member, in which event, such other Member shall not have a right of first refusal to purchase such interest; and
 (c)
 The transferring or assigning Member must pay any Transfer Compensation Amount owed pursuant to Section 12.9.
 12.4
 Deemed Dispositions. Any Transfer of all or substantially all of the Ownership Interests in a Member or a direct or indirect parent of a Member, in each case that owns no substantial assets other than, directly or indirectly, its Membership Interest and any assets directly related thereto shall be deemed a Transfer of its Membership Interest hereunder and must comply with the requirements set forth in Section 12.3 and, for purposes of Section 12.3, references to a Membership Interest shall be deemed to be references to such Ownership Interests; provided, however, that this Section 12.4 shall not apply to any such Transfer by such Person to a Corporate Affiliate of a Member, in which case Section 12.2 shall apply and, for purposes of Section 12.2, references to a Membership Interest shall be deemed to be references to such Ownership Interests.  The Transfer of all or substantially all of the Ownership Interests of the Ultimate Parent of NU Ventures or of NSTAR Ventures shall not constitute a Transfer of Membership Interests hereunder or otherwise be subject to the provisions of this Article 12.
 

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 12.5
 Right of First Refusal.
 

 12.5.1
 If a Member (a “Transferring Member”) desires to sell all, but not less than all, of its Membership Interest to a third party (which person shall be Creditworthy as required by Section 12.3(a) above) and has a written offer from such third party (other than a Corporate Affiliate, a sale to which this Section 12.5 does not apply) to purchase such Membership Interest, it must give written notice (“Transfer Notice”) to the other Member describing all the material terms of the proposed sale (including the purchase price, the terms for payment, the anticipated closing date, any conditions to the sale, any non-cash consideration and the Transferring Member’s estimate of the fair market value of any non-cash consideration), and identifying the proposed purchaser. The terms of that sale shall not be bundled with or directly or indirectly connected to a transaction involving assets or securities other than Company Assets.
 12.5.2
 The Transfer Notice delivered pursuant to Section 12.5.1 shall be accompanied by a written offer, irrevocable until the later of (i) thirty (30) days from its receipt or (ii) ten (10) Business Days after determination of the fair market value of any non-cash consideration in accordance with the provisions of this Agreement (the “Notice Period”), to sell to the Member receiving such written notice delivered pursuant to Section 12.5.1 hereof (the “Receiving Member”) all, but not less than all, of the Transferring Member’s Membership Interest on the same terms and conditions as described in the Transfer Notice, except that in lieu of any consideration which is other than cash, the Receiving Member shall instead pay cash equal to the fair market value of the consideration.
 12.5.3
 If the Receiving Member elects to purchase the Transferring Member’s Membership Interest on the terms and conditions described in the Transfer Notice, the Receiving Member shall give the Transferring Member written notice that it has elected to accept the offer made to the Receiving Member pursuant to this Section 12.5, and the Receiving Member will become bound to purchase, and the Transferring Member will become bound to sell, the Transferring Member’s Membership Interest on such terms and conditions described in the Transfer Notice.
 12.5.4
 The closing of any purchase by the Receiving Member will take place in accordance with the specifications in the Transfer Notice, including any specifications concerning regulatory approvals and other conditions.
 12.5.5
 If the Receiving Member does not elect during the Notice Period to purchase the Transferring Member’s Membership Interest as set forth in the Transfer Notice, the proposed sale to the third party of Membership Interests, may take place on the terms and conditions, including price, specified in the Transfer Notice delivered pursuant to this Section 12.5. However, the Receiving Member will have the right to examine, within the thirty (30) days following the closing date described in the Transfer Notice or any later date on which the sale is consummated, the records of the Transferring Member and the third party to satisfy itself that the sale 
 

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 has been consummated on the terms described in the Transfer Notice. If the sale is not consummated on those terms within one (1) year after the delivery of the Transfer Notice, or, if later, within thirty (30) days after receipt of all regulatory approvals required in connection with such sale, the Company may cancel on its books any transfer of Membership Interest previously made to reflect that sale, and the Transferring Member shall be required to comply with the terms of this Section 12.5 with respect to any subsequent Transfer of the Membership Interest.
 12.5.6
 Each Member acknowledges that: (i) the right of first refusal  provided in this Section 12.5 is, subject to Section 12.3(b), a material part of the bargained for consideration under this Agreement, (ii) the inability of a Member to exercise its right of first refusal under this Agreement, except where such Member is a Defaulting Member, would result in a substantial economic detriment to such Member, and (iii) the exercise of the right of first refusal would not hamper the efforts of any Member seeking to transfer its Membership Interest under this Agreement. Further, each Member acknowledges that the identity of the other Member under this Agreement at any point in time is a material element of this Agreement bargained for by each party to this Agreement, and it would be a substantial detriment to each Member if any proposed new Member under this Agreement was not acceptable to the existing Members. 
 12.6
 Compliance with Securities Laws. If any Membership Interests are to be Transferred, either (a) such Membership Interests shall be registered under the Securities Act of 1933, as amended, and any applicable state securities laws, or (b) at the request of the other Member, the Transferring Member shall provide an opinion of counsel, satisfactory to the other Member, that the proposed Transfer is exempt from such registration requirements. The Company and the Members have no obligation or intention whatsoever either to register Membership Interests for resale under any federal or state securities laws or to take any action which would make available to any Person any exemption from the registration requirements of such laws.
 12.7
 Further Restrictions. Any otherwise permitted Transfer shall be null and void if:
 (a)
 such Transfer would cause the Company to become a “publicly traded partnership,” as such term is defined in Code Section 7704, the Regulations thereunder, or any other guidance issued by the Internal Revenue Service;
 (b)
 such Transfer subjects the Company to regulation under the Investment Company Act of 1940, the Investment Advisers Act of 1940 or the Employee Retirement Income Security Act of 1974, each as amended;
 (c)
 such Transfer results in a violation of Applicable Laws;
 (d)
 such Transfer causes the revaluation or reassessment of the value of any Company Asset resulting in any federal, state, local, or foreign tax liability, unless the Transferring Member pays any and all additional costs 
 

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 associated therewith and makes the non-transferring Member whole on an after-tax basis;
 (e)
 such Transfer is made to any Person who lacks the legal right, power or capacity to own such Membership Interest; or
 (f)
 the Company does not receive written instruments (including, without limitation, copies of any instruments of Transfer and such assignee’s consent to be bound by this Agreement as an Additional Member) that are in a form satisfactory to the non-transferring Member (as determined in the non-transferring Member’s reasonable discretion).
 12.8
 Prohibited Transfers. Any purported Transfer of any Membership Interests that is not in compliance with this Article 12 shall be null and void and of no force or effect; provided that if the Company is required to recognize any such Transfer, the Membership Interests Transferred shall be strictly limited to the Transferring Member’s right to allocations and distributions as provided by this Agreement with respect to the Membership Interests Transferred, which allocations and distributions may be applied (without limiting any other legal or equitable rights of the Company) to satisfy any debts or liabilities for damages that the Transferring Member or transferee may have to the Company, and shall not include the right to any information or accounting of the affairs of the Company, the right to inspect the books or records of the Company, and/or any of the other rights of a Member under the Act or this Agreement.
 12.9
 Transfer Compensation Amount. If a Member Transfers all or any portion of its Membership Interest to a Corporate Affiliate pursuant to Section 12.2 or all of its Membership Interest to a third party pursuant to Section 12.3, and if such Transfer results in a termination of the Company pursuant to Code Section 708(b)(1)(B), then the Member transferring its Membership Interest shall pay the Member who is not transferring its Membership Interest a cash amount equal to the tax savings attributable to the excess of (a) the present value of the depreciation deductions that the non-transferring Member would have received with respect to the assets owned by the Company on the Transfer date if such transfer had not occurred over (b) the present value of such deductions after giving effect to Code Section 168(i)(7), which has the effect of restarting the depreciation period for such assets (such amount the “Transfer Compensation Amount”).  The Transfer Compensation Amount shall be determined (i) by using as the discount rate the prime rate as published by The Wall Street Journal for the date of the Transfer, (ii) by using as the tax rate the highest federal and New Hampshire combined corporate income tax rate in effect on the date of the transfer, and (iii) by assuming that the Company will depreciate all of its depreciable assets that it owns on the Transfer date over their entire depreciation periods.  The non-transferring Member shall calculate the Transfer Compensation Amount and make written demand for its payment on the transferring Member, who shall pay such amount within ten (10) Business Days of receipt of such demand. A Member Transferring all or any portion of its Membership Interest pursuant to Section 12.2 or all of its Membership Interest pursuant to Section 12.3 may effect such Transfer in a series of transactions for the purpose of avoiding a termination of the Company pursuant to Code Section 708(b)(1)(B); provided, however, that such series results in such Transfer within a period that does not exceed thirteen (13) calendar months. This Section 12.9 shall not apply to any Transfer pursuant to Section 12.5.
 

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 12.10
 Admission. Upon any Transfer in strict compliance with this Article 12, the Members Committee shall admit the transferee as a Member in the place of the transferor; provided that such transferee furnishes to the Members Committee its written acceptance and adoption of all terms of this Agreement by executing a joinder in the form of Annex A hereto. By so signing, each Additional Member shall be deemed to have adopted and to have agreed to be bound by all of the provisions of this Agreement. Any Transfer of a Member’s Membership Interests (or portions thereof) requires the compliance with the procedures set forth in this Article 12. Any Transfer that does not comply with the procedures set forth herein shall be void.
 12.11
 Voluntary Withdrawal. No Member shall have the right to Voluntarily Withdraw from the Company; provided however, that in the event that the Transmission Services Agreement entered into or proposed to be entered into by the Company with Hydro-Quebec is not satisfactory to NSTAR Ventures in its sole discretion, NSTAR Ventures shall have the right to withdraw from the Company by providing written notice to the Company at any time within three (3) Business Days following the Company entering into such Transmission Services Agreement. In the case of such withdrawal, NU Ventures shall purchase NSTAR Ventures’ Membership Interest at its net book value as shown on the Company’s books, NSTAR Ventures shall no longer be a Member of the Company, and NSTAR Ventures shall have no further rights or obligations with respect to its Membership Interest, the Company or the Project. Such withdrawal shall be effective upon the giving of such notice, and NU Ventures shall remit the amount properly owing to NSTAR Ventures in cash within thirty (30) days of the end of the month in which such notice is given. Upon such withdrawal, NU Ventures may request that NSTAR Ventures return all Confidential Information, or NU Ventures may request that Confidential Information be destroyed and NSTAR Ventures shall destroy such Confidential Information and provide a certificate to NU Ventures attesting to such destruction.  One copy of documents and other materials containing or comprising Confidential Information may be retained for archival purposes as a means of determining any continuing obligations under this Agreement or as required by Applicable Law.
 12.12
 Involuntary Withdrawal. Immediately upon the occurrence of an Involuntary Withdrawal, the successor of the withdrawn Member, if any, shall thereupon become a transferee of Membership Interests but shall not become a Member. The successor transferee of Membership Interests shall have all the rights of a transferee of Membership Interests but shall not be entitled to receive the fair market value of the Membership Interests as of the date of the Involuntary Withdrawal from the Company as otherwise provided in Section 304-C:41 of the Act. 
 ARTICLE 13
DEADLOCKS
 13.1
 Deadlock Notice. If any Deadlock arises, either Member shall be entitled to provide the other Member with written notice of the Deadlock, including sufficient details with respect to the nature of the Deadlock and remedies being sought (the “Deadlock Notice”).  The Members agree to attempt in good faith to resolve any Deadlock through consultation and negotiation between executives who have authority to settle controversies and who are at a higher level of authority than the persons with direct responsibility for administration of this Agreement.  All negotiations pursuant to this Section 13.1 shall be confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence.
 13.2
 Mediation. If the Deadlock has not been resolved by negotiation within twenty (20) days after delivery of the Deadlock Notice under Section 13.1, or if the Members have 
 

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 failed to meet within twenty (20) days of such delivery, the Members will endeavor to resolve the Deadlock by mediation under the then current CPR Mediation Procedure (or equivalent thereof if the CPR Mediation Procedure no longer exists); provided, however, that if one Member refuses to participate in negotiations as provided in Section 13.1, the other Member may thereupon initiate mediation prior to the expiration of such twenty (20) day period.  Unless otherwise agreed, the Members will select a single mediator from the CPR Panels of Distinguished Neutrals. The Members shall equally share the fees and expenses of the mediation.
 

 13.3
 Arbitration.
 13.3.1
 If the Deadlock has not been resolved within thirty (30) days after appointment of a mediator pursuant to Section 13.2, a Member may commence an arbitration pursuant to this Article 13 (a “Deadlock Arbitration”) by delivering written notice to the other Member stating its intent to commence such Deadlock Arbitration (“Arbitration Initiation Notice”).
 13.3.2
 Without limiting any rights or remedies that may otherwise be available to the Members pursuant to this Agreement or the Act, the procedures set forth in this Article 13 shall constitute the exclusive remedy to resolve a Deadlock.
 13.3.3
 Unless otherwise agreed by the Members, the arbitration shall be conducted pursuant to the then current CPR Arbitration Rules, or the equivalent thereof if the CPR Arbitration Rules no longer exists, by a single arbitrator chosen by the Members in accordance with Rule 5 of the CPR Arbitration Rules.  Within twenty (20) days after the delivery of the Arbitration Initiation Notice, the Members shall endeavor to select a single person to act as arbitrator who has at least five (5) years of experience in the construction of electric transmission facilities; and is knowledgeable professionally regarding the matters that are the subject of the Deadlock (the “Arbitrator”).  If the Members are unable or fail to agree upon the identity of the Arbitrator within such twenty (20) day period, the Arbitrator shall be selected by the CPR in accordance with Rule 6 of the CPR Arbitration Rules, which shall endeavor to nominate the Arbitrator within twenty (20) days thereafter.
 13.3.4
 No later than fourteen (14) days after issuance of an Arbitration Initiation Notice pursuant to Section 13.3.1, each Member shall prepare and deliver to the other Member a written statement (an “Issues Statement”) of each issue that such Member believes constitutes a Deadlock. 
 13.3.5
 No later than twenty-one (21) days after the deadline for delivery of Issue Statements, each Member shall deliver to the Arbitrator and the other Member a written statement (a “Settlement Proposal”) of such Member’s proposed resolution of the Deadlock, which shall be limited to the issues set forth in the Issues Statements.  A Settlement Proposal need not address every issue described in every Issues Statement, but if it does not, any issue described in the Issues Statement of a Member and not addressed in the Settlement Proposal of such Member shall be deemed waived by such 
 

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 Member.  If a Member fails to deliver a Settlement Proposal within such period, such Member shall be deemed to have waived its rights to submit a Settlement Proposal.
 13.3.6
 The Arbitrator shall review the Settlement Proposals and, after due consideration thereof, the Arbitrator shall select the one Settlement Proposal that, in the Arbitrator’s reasoned judgment, best resolves the Deadlock on a basis that is consistent with the terms of this Agreement; provided, however, that the Arbitrator may not alter or add to the terms of any Settlement Proposal in reaching its determination.  
 13.3.7
 An Arbitrator’s decision pursuant to this Section 13.3 shall be final and binding on the Company and the Members with respect to the Deadlock.
 13.3.8
 The Members shall equally share the fees and expenses of the Arbitrator.
 ARTICLE 14
DEFAULT, REMEDIES
 14.1
 Events of Default. It shall be an “Event of Default” under this Agreement if:
 (a)
 a Member fails to make any Capital Contribution as required by this Agreement but subject to the extensions permitted by Section 3.3 (a “Capital Call Default”);
 (b)
 a Member breaches any of its other material obligations under this Agreement and fails to cure such breach within thirty (30) days of receipt of written notice of such breach from any other Member; or
 (c)
 a Member or its Ultimate Parent files a voluntary petition for bankruptcy or is adjudged bankrupt or insolvent, or has entered against such Member or its Ultimate Parent an order for relief, in any bankruptcy or insolvency proceeding.
 14.2
 Remedies. If an Event of Default occurs, the Company and the non-Defaulting Member may pursue all available remedies.
 14.3
 Funding Capital Call. Upon a Capital Call Default, in addition to any other remedy available pursuant to Section 14.2, 
 14.3.1
 The non-Defaulting Member shall have the right, but not the obligation, to elect, in its sole discretion at any time after a Capital Call Default, and after written notice to the non-Defaulting Member, but subject to obtaining any required Third-Party Approvals, to make a loan or otherwise lend funds to the Company within thirty (30) days after occurrence of such Capital Call Default, in such amount such non-Defaulting Member deems appropriate or necessary, but not to exceed the amount of the Capital Contribution which the Defaulting Member has failed to contribute (the “Failed Contribution”). Such loan shall represent a debt of the Company payable or collectible solely from the assets of the Company in accordance with the terms and conditions upon which such loan is made, and such 
 

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 loan shall have no effect on either Member’s Percentage Interest. Such loan shall be on a demand basis and bear interest at 12.74 percent, payable quarterly; and/or
 

 14.3.2
 The non-Defaulting Member shall have the right, but not the obligation, to elect, in its sole discretion at any time after a Capital Call Default, but subject to obtaining any  required Third-Party Approvals, to deliver to the Company within sixty (60) days after occurrence of such Capital Call Default, all, but not less than all, of the Failed Contribution or to convert at any time any loan made by it pursuant to Section 14.3.1 above into a Capital Contribution. The amount shall be treated as payment of the Failed Contribution by the non-Defaulting Member and the non-Defaulting Member’s Capital Account shall be increased accordingly. In addition, the non-Defaulting Member’s Membership Interest and Percentage Interest shall be increased (and the Defaulting Member’s Membership Interest and Percentage Interest shall be correspondingly decreased) by an amount equal to the increase in the non-Defaulting Member’s Capital Account that occurs as a result of the non-Defaulting Member’s payment of the Failed Contribution. Notwithstanding anything to the contrary set forth in this Agreement, neither the Company nor the non-Defaulting Member shall be required to provide any advance notice to the Defaulting Member of any Capital Contribution made pursuant to this Section 14.3.2; provided that the Company shall provide the Defaulting Member with written notice of each adjustment of the Members’ Capital Accounts, Membership Interests and Percentage Interests as a result of Capital Contributions by the non-Defaulting Member pursuant to this Section 14.3.2.
 

 14.4
 Purchase Remedy; Right to Cure 
 

 14.4.1
 Without limiting Section 14.2, at any time that a Defaulting Member’s Percentage Interest is below 15%, then the non-Defaulting Member shall have the right, but not the obligation, to elect in its sole discretion, upon thirty (30) days prior written notice to the Defaulting Member (the “Purchase Remedy Notice”), but subject to obtaining Third Party Approvals, to purchase all, but not less than all, of the Defaulting Member’s Membership Interest at a price equal to the Defaulting Member’s Capital Account balance on the date the Defaulting Member’s Membership Interest is transferred to the non-Defaulting Member less (i) any amounts owed to the Company by the Defaulting Member and (ii) all third party costs reasonably incurred by the non-Defaulting Member to acquire the Defaulting Member’s Membership Interest and to obtain all Third Party Approvals, payable in cash to the Defaulting Member within thirty (30) days after delivery of the Purchase Remedy Notice subject, however, to Section 14.4.3. In the event the non-Defaulting Member provides a Purchase Remedy Notice to the Defaulting Member, the Defaulting Member shall have the right, within such thirty (30) day notice period, to make a capital contribution to the Company in an amount that would cause the Defaulting Member’s Percentage Interest 
 

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 to equal at least 15%.  A Member shall have this right to cure by making such a capital contribution only one time.
 14.4.2
 In the event that the non-Defaulting Member provides a Purchase Remedy Notice, then, during the period that commences on the day of receipt of the Purchase Remedy Notice and ends on the day immediately preceding the day on which the Defaulting Member’s Membership Interest is transferred to the non-Defaulting Member (the “Interim Period”), (a) if the In-Service Date has not occurred, there shall be no distributions of Available Cash to the Members, or (b) if the In-Service Date has occurred, Available Cash shall be distributed to the Members in accordance with their respective Percentage Interests. 
 14.4.3
 The thirty (30) day time period referred to in Section 14.4.1 shall be extended for such period of time as is necessary for the non-Defaulting Member to obtain Third-Party Approvals so long as the non-Defaulting Member is diligently pursuing obtaining any such Third-Party Approvals.
 14.4.4
 At the closing of the transfer of the Defaulting Member’s Membership Interest to the non-Defaulting Member, the Defaulting Member shall (i) sign such documents as may reasonably be requested by the non-Defaulting Member in order to consummate the transfer, (ii) represent and warrant that (A) it has good title to its Membership Interest, (B) there are no Encumbrances on such Membership Interest (other than pursuant to this Agreement or any indebtedness of the Company), (C) it has due authority to transfer the Membership Interest, (D) the agreement transferring such Membership Interest is valid and enforceable against the Defaulting Member and (E) the transfer of the Membership Interest does not violate Applicable Law in any material respect and (iii) disclose in writing the existence and nature of any pending or, to the Defaulting Member’s actual knowledge without any obligation of due inquiry, threatened litigation or arbitration or any audit or investigation initiated by any Governmental Authority against the Defaulting Member or the Company with respect to the Defaulting Member’s Membership Interest. In the event the Defaulting Member discloses the existence of any pending or threatened litigation or other Proceeding required to be disclosed herein or the non-Defaulting Member reasonably determines that any representation or warranty required by clause (ii) herein is inaccurate, the non-Defaulting Member may, in its sole discretion, withdraw its election to purchase the Defaulting Member’s Membership Interest and pursue any other remedies that are available to it under this Agreement.
 14.5
 Cooperation by Defaulting Member. With respect to any Proceedings that result from or are required in connection with the non-Defaulting Member’s exercise of any of the remedies provided for herein, the Defaulting Member shall cooperate with the non-Defaulting Member to the extent reasonably requested to effectuate the non-Defaulting Member’s remedy election; provided however, that this Section 14.5 shall not prohibit or otherwise affect the rights of a Member to dispute the issue of whether an Event of Default has occurred.
 

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 14.6
 Third Party Approvals. The exercise of any of the remedies set forth in this Article 14 shall be in all cases subject to receipt of all necessary Third Party Approvals. The non-Defaulting Member and, if applicable, the Defaulting Member, shall diligently and in good faith pursue all necessary Third Party Approvals.
 ARTICLE 15
INDEMNIFICATION; LIMITATION OF LIABILITY
 15.1
 Indemnification by a Member. Subject to Section 15.3, each Member (the “Indemnifying Member”) shall indemnify, defend and hold harmless the Company, the other Members, the other Members’ Corporate Affiliates, and their respective officers, directors, employees and the Representatives (collectively the “Other Indemnified Persons”) from and against any and all claims, demands, actions, suits, damages, liabilities, losses, costs and expenses (including reasonable attorneys’ fees and out-of-pocket disbursements), judgments, fines, settlements and other amounts, but except to the extent payment on account of or relating to losses or damages are made to a third party, excluding special, incidental, indirect, punitive, exemplary or consequential damages (collectively “Damages”), to the extent caused by, resulting from or arising out of or in connection with any action by the Indemnifying Member outside the scope of the Indemnifying Member’s rights or authority conferred by this Agreement.
 15.2
 Indemnification by Company. 
 

 15.2.1
 To the fullest extent permitted by law, the Company (i) shall indemnify and hold harmless the Members and all directors, officers, shareholders, partners, employees and Corporate Affiliates of a Member, and (ii) shall indemnify all officers and employees of the Company and the Corporate Affiliates thereof and the Representatives (collectively, “Indemnified Persons”) from and against any and all losses, claims, demands, liabilities, expenses (including attorneys’ fees and expenses), judgments, fines, penalties (including excise taxes and similar taxes, and punitive damages), settlements, and other amounts arising from any and all claims, inquiries, demands, actions, suits or proceedings, civil, criminal, administrative, arbitrative or investigative or any appeal thereof (“Proceedings”) in which the Indemnified Person may be involved, or threatened to be involved, as a party or otherwise, by reason of its management of the affairs of the Company, by reason of the fact that the Indemnified Person was serving as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another Person, or which otherwise relates to or arises out of the Company, its property, its business or affairs, and in any instance is related to events occurring during the term of this Agreement. The negative disposition of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not, of itself, create a presumption that the Indemnified Person acted in a manner contrary to the standard set forth in Section 15.2.2 below. Any indemnification pursuant to this Section 15.2 shall be made only out of the assets of the Company. It is expressly acknowledged that the indemnification provided in this Article 15 could involve indemnification for negligence or under theories of strict liability.
 

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 15.2.2
 An Indemnified Person shall not be entitled to indemnification under Section 15.2 with respect to any claim, issue or matter in which it has engaged in Disabling Conduct as determined by a court of competent jurisdiction.
 15.2.3
 To the fullest extent permitted by Applicable Law, until it has been determined that an Indemnified Person is not entitled to be indemnified as authorized in Section 15.2.2, expenses (including reasonable legal fees) incurred by an Indemnified Person in defending any claim, demand, action, suit or proceeding, from time to time, shall be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Company of a written affirmation by the Indemnified Person of its good faith belief that it has met the standard of conduct necessary for indemnification under this Article 15 and a written undertaking by or on behalf of the Indemnified Person to repay such amount if it shall be determined that the Indemnified Person is not entitled to be indemnified as authorized in Section 15.2.1. The Members Committee may, in its sole discretion, require that any such undertaking pursuant to this Section 15.2.3 be secured by the assets of the Indemnified Person.
 15.2.4
 The indemnification provided by this Section 15.2 shall be in addition to any other rights to which an Indemnified Person may be entitled under any agreement, by law or vote of the Members Committee as a matter of law or otherwise, both as to action in the Indemnified Person’s capacity as a Representative, an affiliate thereof or a partner, director, officer, agent of the Company or an affiliate thereof or other capacity, shall continue as to an Indemnified Person who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns and administrators of an Indemnified Person.
 15.2.5
 In no event may any Indemnified Person subject the Members to personal liability by reason of any indemnification of an Indemnified Person under this Agreement or otherwise.
 15.3
 Survival; Limitations; Procedures. The indemnification obligations contained in Section 15.1 will survive any termination of this Agreement or the dissolution and winding up of the Company. The indemnification obligations contained in Section 15.2 will survive any dissolution of the Company until its affairs have been fully wound up and all of its properties and assets distributed in accordance with this Agreement.
 15.4
 Indemnification Procedure. If a Member or the Company (the “Indemnifying Party”) is obligated hereunder to indemnify any Indemnified Person or Other Indemnified Person (in any case the “Indemnified Party”) from any claim, suit, action or proceeding brought by any other person or entity (a “Third Party Claim”), the Indemnified Party shall give notice as promptly as is reasonably practicable to the Indemnifying Party of such Third Party Claim; provided that the failure of the Indemnified Party to give notice shall not relieve the Indemnifying Party of its obligations under this Article 15 except to the extent (if any) that the Indemnifying Party shall have been materially prejudiced thereby.  Such Indemnifying Party will have the right to control the defense and settlement of such Third Party Claim with counsel 
 

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 reasonably acceptable to the Indemnified Party, provided that (i) such Indemnified Party may retain counsel at its expense to assist in the defense and settlement of such Third Party Claim, and (ii) no settlement of any Third Party Claim will contain terms or provisions requiring the Indemnified Party to take any action or perform any undertaking, or prohibit or restrain the Indemnified Party from taking any action, without the prior written consent of the Indemnified Party.
 ARTICLE 16
DISSOLUTION, LIQUIDATION, AND TERMINATION OF THE COMPANY
 16.1
 Limitations. The Company may be dissolved, liquidated, and terminated only pursuant to the provisions of this Article 16, and the parties hereto do hereby irrevocably waive any and all other rights they may have to cause a dissolution of the Company or a sale or partition of any or all of the Company Assets.
 16.2
 Exclusive Causes. Notwithstanding the Act, the following and only the following events shall cause the Company to be dissolved, liquidated, and terminated:
 (a)
 the unanimous consent of the Members; 
 (b)
 entry of a decree of judicial dissolution of the Company under Section 304-C:51 of the Act; and
 (c)
 the sale of all or substantially all of the assets of the Company.
 The bankruptcy or dissolution of a Member, or the occurrence of any other event that terminates the continued membership of a Member in the Company, shall not cause a dissolution of the Company.  
 16.3
 Effect of Dissolution. The dissolution of the Company shall be effective on the day on which the event occurs giving rise to the dissolution, but the Company shall not terminate until it has been wound up and its assets have been distributed as provided in Section 16.5. Notwithstanding the dissolution of the Company, prior to the termination of the Company, the business of the Company and the affairs of the Members, as such, shall continue to be governed by this Agreement.
 16.4
 Deficit Capital Accounts.  Each Member shall look solely to the assets of the Company for all distributions with respect to the Company, its Capital Contribution thereto, its Capital Account and its share of Profits or Losses, and shall have no recourse therefor (upon dissolution or otherwise) against any other Member. If any Member has a deficit balance in its Capital Account, such Member shall have no obligation to make any contribution to the capital of the Company with respect to such deficit, and such deficit shall not be considered a debt owed to the Company or to any other Person for any purpose whatsoever.
 16.5
 Liquidation. Upon dissolution of the Company, the Members Committee (or, in the event there are no remaining members of the Members Committee, any Person designated by the Members) shall act as “Liquidator” of the Company. The Liquidator shall liquidate the assets of the Company, and after allocating (pursuant to Article 5) all income, gain, loss, deductions, and credits resulting therefrom, shall apply and distribute the proceeds thereof and all other Company Assets, including Available Cash, as follows:
 

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 (a)
 First, to the payment of the obligations of the Company, to the expenses of liquidation, and to the setting up of any Reserves for contingencies which the Members Committee may consider necessary.
 (b)
 Thereafter, the then remaining Company Assets, including cash and cash equivalents, shall be distributed to the Members in proportion to the positive balances in the Members’ respective Capital Accounts, determined after taking into account all Capital Account adjustments for the Company Allocation Year during which such liquidation occurs (other than the distributions made pursuant to this Section 16.5(b)), by the end of the Allocation Year in which such liquidation occurs or, if later, within ninety (90) days after the date of the liquidation.
 16.6
 Compliance with Certain Requirements of Regulations. In the event the Company is “liquidated” within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made in accordance with Section 16.5. In the discretion of the Liquidator, a pro rata portion of the distributions that would otherwise be made to the Members pursuant to this Article 16 may be distributed to a trust established for the benefit of the Members for the purposes of liquidating Company assets, collecting amounts owed to the Company, and paying any contingent or unforeseen liabilities or obligations of the Company. The assets of any such trust shall be distributed to the Members from time to time, in the reasonable discretion of the Liquidator, in the same proportions as the amount distributed to such trust by the Company would otherwise have been distributed to the Members pursuant to Section 16.5.
 16.7
 Deemed Contribution and Distribution. In the event the Company is “liquidated” within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no event of dissolution has occurred, the assets shall not be liquidated, the Company's debts and other liabilities shall not be paid or discharged, and the Company's affairs shall not be wound up. Instead, solely for tax purposes, the Company shall be deemed to have contributed all assets and liabilities to a new limited liability company in exchange for an interest in such new limited liability company and, immediately thereafter, the Company will be deemed to liquidate by distributing interests in the new limited liability company to the Members.
 16.8
 Character of Liquidating Distributions. All payments made in liquidation of the Membership Interest of a Member in the Company shall be made in exchange for the interest of such Member in property pursuant to Code Section 736(b)(1), including the interest of such Member in Company goodwill.
 ARTICLE 17
REPRESENTATIONS AND WARRANTIES
 17.1
 NU Ventures Representations and Warranties. NU Ventures represents and warrants to NSTAR Ventures, as of the date hereof, after giving effect to the execution and delivery of this Agreement, as follows:
 (a)
 that it is a corporation, duly organized, validly existing, and in good standing under the laws of the State of Connecticut, with full corporate power and authority to conduct its business as it is now being conducted and to own or use the properties and assets that it purports to own or use;
 

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 (b)
 that the execution delivery and performance of this Agreement by NU Ventures has been duly authorized by all necessary corporate action by NU Ventures and that the individual or individuals executing this Agreement for and on behalf of NU Ventures have been duly authorized to do so;
 (c)
 that this Agreement, when executed and delivered by NU Ventures, will be the valid and binding obligation of NU Ventures, enforceable against NU Ventures in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance or other equitable remedies;
 (d)
 that the execution, delivery and performance of this Agreement by NU Ventures do not and will not: (i) violate any provisions of NU Ventures’ organizational documents, or any law, rule, regulation, order, judgment or decree applicable to or binding on NU Ventures or any of its properties; (ii) violate, or result in any breach of or constitute any default under, any material agreement or instrument to which NU Ventures is a party or by which NU Ventures or any of its properties may be bound or affected; or (iii) require the consent of any Person under any existing law or agreement which has not already been obtained (other than approvals the obtaining of which is a Condition Precedent);
 (e)
 that there is no pending or, to the best of NU Ventures’ knowledge, threatened action or proceeding affecting NU Ventures before any court, governmental agency or arbitrator, which might reasonably be expected to materially and adversely affect the ability of NU Ventures to perform its obligations under this Agreement;
 (f)
 that NU Ventures possesses all franchises, certificates, licenses, permits and other governmental authorizations and approvals necessary for it to own its properties, conduct its businesses and perform its obligations under this Agreement (other than approvals the obtaining of which is a Condition Precedent); 
 (g)
 that NU Ventures is not an “investment company” or a “company controlled by an investment company”, as such terms are defined in the Investment Company Act of 1940, as amended; 
 (h)
 that neither NU Ventures nor any Corporate Affiliate, any agent or other Person acting on its behalf, directly or indirectly, has offered any of the Membership Interests or any similar security of the Company for sale to or solicited offers to buy any thereof from, or otherwise approached or negotiated with respect thereto with, any Person in a manner that would subject the offering of the Membership Interests to the registration requirements of the Securities Act of 1933, as amended; and 
 

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 (i)
 that it is acquiring the Membership Interest for investment purposes for its own account only and not with a view to or for sale in connection with any distribution of all or any part of the Membership Interest. No other Person, other than direct or indirect parent entities, will have any direct or indirect beneficial interest in or right to the Membership Interest.
 17.2
 NSTAR Ventures Representations and Warranties. NSTAR Ventures represents and warrants to NU Ventures, as of the date hereof, after giving effect to the execution and delivery of this Agreement, as follows:
 (a)
 that it is a corporation duly organized, validly existing, and in good standing under the laws of The Commonwealth of Massachusetts, with full corporate power and authority to conduct its business as it is now being conducted and to own or use the properties and assets that it purports to own or use;
 (b)
 that the execution, delivery and performance of this Agreement by NSTAR Ventures has been duly authorized by all necessary corporate action by NSTAR Ventures and that the individual or individuals executing this Agreement for and on behalf of NSTAR Ventures have been duly authorized to do so;
 (c)
 that this Agreement, when executed and delivered by NSTAR Ventures, will be the valid and binding obligation of NSTAR Ventures, enforceable against NSTAR Ventures in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance or other equitable remedies;
 (d)
 that the execution, delivery and performance of this Agreement by NSTAR Ventures do not and will not: (i) violate any provisions of NSTAR Ventures’ organizational documents, or any law, rule, regulation, order, judgment or decree applicable to or binding on NSTAR Ventures or any of its properties; (ii) violate, or result in any breach of or constitute any default under, any material agreement or instrument to which NSTAR Ventures is a party or by which NSTAR Ventures or any of its properties may be bound or affected; or (iii) require the consent of any Person under any existing law or agreement which has not already been obtained (other than approvals the obtaining of which is a Condition Precedent);
 (e)
 that there is no pending or, to the best of NSTAR Ventures’ knowledge, threatened action or proceeding affecting NSTAR Ventures before any court, governmental agency or arbitrator, which might reasonably be expected to materially and adversely affect the ability of NSTAR Ventures to perform its obligations under this Agreement;
 (f)
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 obligations under this Agreement (other approvals the obtaining of which is a Condition Precedent); 
 (g)
 that NSTAR Ventures is not an “investment company” or a “company controlled by an investment company”, as such terms are defined in the Investment Company Act of 1940, as amended; 
 (h)
 that neither NSTAR Ventures nor any Corporate Affiliate, any agent or other Person acting on its behalf, directly or indirectly, has offered any of the Membership Interests or any similar security of the Company for sale to or solicited offers to buy any thereof from, or otherwise approached or negotiated with respect thereto with, any Person in a manner that would subject the offering of the Membership Interests to the registration requirements of the Securities Act of 1933, as amended; and 
 (i)
 that it is acquiring the Membership Interest for investment purposes for its own account only and not with a view to or for sale in connection with any distribution of all or any part of the Membership Interest. No other Person, other than direct or indirect parent entities, will have any direct or indirect beneficial interest in or right to the Membership Interest.
 ARTICLE 18
CONFIDENTIALITY
 18.1
 Confidentiality Obligation; Permitted Disclosures. The Company agrees that it shall hold in strict confidence and shall not disclose or use any Confidential Information of any Member or any Corporate Affiliate of such Member. Each Member agrees that it shall hold in strict confidence and shall not disclose or use any Confidential Information of the Company or the other Member or the Corporate Affiliates of such other Member.
 Notwithstanding the foregoing, a recipient shall be entitled to disclose Confidential Information to its respective Representatives, officers, employees, Corporate Affiliates, Regulatory Affiliates, agents, lenders, attorneys, and other advisors (collectively “Permitted Disclosees”) for purposes of pursuing the business of the Company, meeting the Company’s obligations and exercising the Company’s rights hereunder, and with respect to the Members, as may otherwise be deemed appropriate by the Members in connection with their direct or indirect ownership of the Company, provided that the Permitted Disclosees shall be informed of the confidentiality obligations provided herein. Each recipient agrees to be responsible for any breach of the confidentiality obligations under this Agreement by its Permitted Disclosees. Further, a recipient shall also be entitled to disclose Confidential Information to the extent such disclosure: (a) is necessary or convenient as part of any regulatory proceeding in which the Company or a Regulatory Affiliate is a party subject to a protective order or such other remedy as the disclosing party may consider appropriate in the circumstances, (b) is required to be disclosed by stock exchange requirements applicable to the recipient or its Corporate Affiliates, (c) is necessary or otherwise reasonably deemed appropriate in connection with any dispute resolution commenced pursuant to this Agreement, (d) is disclosed to an entity whose primary business is the issuance of credit ratings, provided the information is disclosed pursuant to a confidentiality agreement (which agreement shall be no less restrictive than the recipient’s obligations under this Agreement) and is disclosed solely for the purpose of developing a credit rating and the entity’s ratings are publicly available, (e) is disclosed to a prospective purchaser of 
 

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 a Membership Interest or other interest in the Company, provided the information is disclosed pursuant to a confidentiality agreement (which agreement shall be no less restrictive than the recipient’s obligations under this Agreement) and is disclosed on a need to know basis, or (f) is disclosed to a prospective merger partner of a Member or prospective purchaser of a Member, provided the information is disclosed pursuant to a confidentiality agreement (which agreement shall be no less restrictive than the recipient’s obligations under this Agreement) and is disclosed on a need to know basis.  
 The mere possession by a Member of Confidential Information is not intended to preclude or inhibit such Member from engaging in a merger, acquisition or sale provided such Member has complied with the terms hereof.
 18.2
 Legally Required Disclosures. If the Company or either Member to whom Confidential Information is transmitted is required pursuant to Applicable Law or otherwise becomes legally compelled to disclose any of the Confidential Information or the fact that the Confidential Information has been made available to it, such entity shall (unless prohibited by Applicable Law from doing so) promptly advise the disclosing party in order that the disclosing party may seek a protective order or such other remedy as the disclosing party may consider appropriate in such circumstances. In any event, the compelled party may disclose only that portion of the Confidential Information which such party is legally required to disclose in the judgment of the party’s legal counsel without any liability to the disclosing party hereunder and such disclosure shall not be a breach of this Article 18.
 18.3
 Survival. The provisions of this Article 18 will survive a termination of this Agreement and the dissolution and winding up of the Company.
 ARTICLE 19
REPORTS
 19.1
 Company Records.  The Company shall keep and maintain the following records in its principal office in the United States or make them available in that office within ten (10) days after the date of receipt of a written request from a Member:
 (a)
 a current list that states the name and mailing address of each Member and the Percentage Interest of each Member;
 (b)
 copies of the federal, state, local, and foreign (if any) information or tax returns for each of the Company’s six most recent taxable years;
 (c)
 a copy of the Certificate of Formation and this Agreement, all amendments or restatements, and executed copies of any powers of attorney; and 
 (d)
 a written statement of:
 (i)
 the amount of the cash Capital Contributions and a description and statement of the agreed value of any other Capital Contributions made by each Member, and the amount of the cash Capital Contributions and a description and statement of the agreed value of any other Capital 
 

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 Contributions that the Member has agreed to make in the future as additional contributions;
 (ii)
 the date on which each Member in the Company became a Member; and
 (iii)
 correct and complete books and records of account of the Company.
 19.2
 Examination of Records. A Member or a Permitted Transferee of a Membership Interest, on written request stating the purpose, may examine and copy, in person or by the Member’s or transferee’s representative, upon reasonable prior notice and during regular business hours, for any proper purpose, and at the Member’s expense, records required to be kept under this Article and other information regarding the business, affairs, and financial condition of the Company as is just and reasonable for the Person to examine and copy.
 19.3
 Reports. The Accounting Matters Partner shall cause to be prepared and delivered to each Member:  (a) no later than five (5) Business Days after the end of each month, a trial balance; (b) no later than ten (10) Business Days after the end of each month, financial statements including balance sheet, statements of operations, statement of cash flows and statements of capital accounts of each Member of the Company relative to the budget; (c) no later than twelve (12) Business Days after the end of each month, a forecast of the financial statements, including capital spending by project and capital contributions, by month for the remainder for the then current calendar year; (d) no later than thirty (30) days after the end of each quarter, unaudited quarterly financial statements prepared in accordance with GAAP and otherwise in a format approved by the Members Committee; (e) no later than ninety (90) days prior to the end of each taxable year of the Company, an updated forecast of tax information for the current taxable year and forecast of tax information for the forthcoming taxable year (such information consistent with the information provided for the Members as would be provided to the Members via the Company’s tax returns); (f) no later than ninety (90) days after the end of each calendar year, financial statements for the Company for such year prepared in accordance with GAAP and audited by a nationally recognized accounting firm; and (g) no later than sixty (60) days after the delivery of audited financial statements of the Company, the tax information concerning the Company that is necessary for preparing the Member’s tax returns for such taxable year.
 ARTICLE 20
MISCELLANEOUS
 20.1
 Amendments.  Except as otherwise specifically provided in this Agreement, no amendment, modification, or change of this Agreement, or any part thereof, shall be valid and effective unless made in writing and signed by all of the Members.
 20.2
 Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof and fully supersedes any and all prior written or oral or oral contemporaneous agreements or understandings among the parties hereto pertaining to the subject matter hereof. 
 20.3
 Further Assurances. Each Member hereby covenants and agrees on behalf of itself, its successors, and its assigns, without further consideration, to prepare, execute, 
 

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 acknowledge, file, record, publish, and deliver such other instruments, documents and statements, and to take such other action as may be required by law or reasonably necessary to effectively carry out the purposes of this Agreement.
 20.4
 Notices. Any notice, consent, payment, demand, or communication required or permitted to be given by any provision of this Agreement shall be in writing and shall be personally delivered or sent by facsimile transmission, reputable overnight courier or registered or certified mail, postage prepaid and return receipt requested, addressed as follows: (a) if to the Company, to the Company at the address set forth in Section 2.3, or to such other address as the Company may from time to time specify by written notice to the Members; and (b) if to a Member, to such Member at the address set forth on Schedule 2.8, or to such other address as such Member may from time to time specify by written notice to the Company. Any such notice shall be deemed to have been given when delivered by personal delivery, reputable overnight courier, facsimile transmission or mailed by registered or certified mail, postage prepaid, return receipt requested, addressed to the Person or Persons to whom such notice is to be given at the addresses set referenced above (or at such other address as shall be stated in a notice similarly given).
 20.5
 Governing Law and Jurisdiction. This Agreement, including its existence, validity, construction, and operating effect, and the rights of each of the parties hereto, shall be governed by and construed in accordance with the laws of the State of New Hampshire without regard to otherwise governing principles of conflicts of law. Except as otherwise provided in Article 13, each Member hereby submits to the jurisdiction of any state or federal court sitting in the State of New Hampshire in any action arising out of or relating to this Agreement or the transactions contemplated herein.
 20.6
 WAIVER OF RIGHT TO JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, AND AS SEPARATELY BARGAINED-FOR CONSIDERATION, EACH MEMBER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATING TO THIS AGREEMENT.
 20.7
 No Drafting Presumption. No presumption will operate in favor of or against any Member as a result of any responsibility that any party may have had for drafting this Agreement.
 20.8
 Binding Effect. Except as otherwise expressly provided herein, this Agreement shall be binding on and inure to the benefit of the Members, and their successors and assigns all other Persons hereafter holding, having or receiving an interest in the Company.
 20.9
 Press Releases. No party shall issue any public statement regarding this Agreement or any matter affecting the Company without the approval of the Members Committee.
 20.10
 Severability. If any of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any respect, the validity, legality or enforceability of the remaining provisions contained herein will not be affected or impaired in any way.  With respect to any provision found to be invalid, illegal or unenforceable by a court of competent jurisdiction or an arbitrator, the parties will expeditiously negotiate in good faith to replace such invalid, illegal or 
 

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 unenforceable provision with the valid, legal and enforceable provision that most closely reflects the intentions of the parties as set forth herein.
 20.11
 Counterparts. This Agreement may be executed in any number of multiple counterparts, each of which shall be deemed to be an original copy and all of which shall constitute one agreement, binding on all parties hereto.
 20.12
 Waiver. The waiver by any Member of a breach or violation of any provision of this Agreement will not operate as or be construed as a waiver of any subsequent breach or violation hereof.
 20.13
 No State-Law Partnership.  Other than for tax purposes the Members intend that the Company not be a partnership (including a limited partnership) or joint venture, and that no Member be a partner or joint venturer of any other Member, and this Agreement may not be construed to suggest otherwise.
 20.14
 No Third Party Beneficiaries. It is expressly understood that the provisions of this Agreement do not impart enforceable rights in anyone who is not a party or a successor or permitted assign of a party hereto.
 [Signature Pages Follow]
 

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 ANNEX A  
 

 FORM OF JOINDER AGREEMENT
 This JOINDER AGREEMENT to LIMITED LIABILITY COMPANY AGREEMENT OF NORTHERN PASS TRANSMISSION LLC (this “Joinder Agreement”) is made and entered into as of ____________, 20__, by and among Northern Pass Transmission LLC, a New Hampshire limited liability company (the “Company”), and the undersigned (the “Joining Member”), and relates to that certain Limited Liability Company Agreement of Northern Pass Transmission LLC, dated as of April  , 2010 (as amended from time to time, the “Operating Agreement”), by and among NU Transmission Ventures, Inc. and NSTAR Transmission Ventures, Inc. (each, individually, a “Member” and, collectively, the “Members”). Capitalized terms used and not defined herein shall have the meanings ascribed to such terms in the Operating Agreement. 
 WHEREAS, the Joining Member is acquiring as Transferee some or all of the Membership Interests in the Company held by ______________________ and, in connection therewith, has agreed to become a party to the Operating Agreement on the terms set forth herein. 
 NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 1. Agreement to be Bound. The Joining Member agrees that, upon the execution of this Joinder Agreement, the Joining Member shall become a party to the Operating Agreement and shall be fully bound by, and subject to, all of the covenants, terms and conditions of the Operating Agreement and the Joining Member shall be deemed a “Member” thereunder for all purposes. 
 2. Address for Notices. For the purposes of Section 20.4 of the Operating Agreement, the Joining Member requests that copies of all notices to the Joining Member be sent to the following address: 
 

 [Address]
 [Address]
 [Fax No.]
 Attention: 
 3. Binding Effect. This Joinder Agreement shall be binding upon and shall inure to the benefit of, and be enforceable by, the Company, the Members and the Joining Member and their respective heirs, personal representatives, successors and assigns. 
 4. Severability. If any provision of this Joinder Agreement (or any portion thereof) or the application of any such provision (or any portion thereof) to any Person or circumstance shall be held invalid, illegal or unenforceable in any respect by a Governmental Authority, such invalidity, illegality or unenforceability shall not affect any other provision hereof (or the remaining portion thereof) or the application of such provision to any other Persons or circumstances. Upon such determination that any provision of this Joinder Agreement (or any portion thereof) or the application of any such provision (or any portion thereof) to any Person or circumstance is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith 
 

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 to modify this Joinder Agreement so as to effect the original intent of the parties hereto as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible. 
 5. Further Agreement. The parties hereto shall use commercially reasonable efforts to do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments or documents as any other party may reasonably request in order to carry out the intent and purposes of this Joinder Agreement and to consummate the transactions contemplated hereby. 
 6. Effect of Headings. The Section headings of this Joinder Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Joinder Agreement. 
 7. Counterparts. This Joinder Agreement may be executed in one or more counterparts, each of which shall be deemed to constitute an original, but all such respective counterparts shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Joinder Agreement by facsimile or other electronic image scan shall be effective as delivery of a manually executed counterpart of this Agreement. 
 8. Governing Law. THIS JOINDER AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW HAMPSHIRE WITHOUT REGARD TO OTHERWISE GOVERNING PRINCIPLES OF CONFLICTS OF LAW. 
 Signature Page Follows.
 

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 IN WITNESS WHEREOF, the parties hereto have executed this Joinder Agreement as of the date first above written. 
 JOINDER AGREEMENT
  
 

 NORTHERN PASS TRANSMISSION LLC:
 

 

 By:_________________________
 Name:
 Title:
 

 

 JOINING MEMBER:
 [NAME]
 

 

 By: _________________________
 Name:
 Title:
 

 

 

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 EXHIBIT A
 

 FORM OF SERVICE AGREEMENT WITH
 NORTHEAST UTILITIES SERVICE COMPANY
 

 

 

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 Ex. A
 Northern Pass LLC Operating Agreement
 

 SCHEDULE 2.8
 MEMBERS
 

 	 	 	 
	 Member
	 Percentage Interest
	 Address

	 NU Transmission Ventures, Inc.
	 75%
	 NU Transmission Ventures Company
 c/o Northeast Utilities Service Company
 107 Selden Street
 Berlin, CT 06047
 Attention: James A. Muntz, President – Transmission
 Fax no.:
 With a copy to:
 Northeast Utilities Service Company
 P.O. Box 270 
 Hartford CT 06141
 Attention: Gregory B. Butler, General Counsel
 Fax: 860-728-4581

	 NSTAR Transmission Ventures, Inc.
	 25%
	 NSTAR Electric & Gas Corporation
 One NSTAR Way, NE240 
 Westwood, MA 02090-9230
 Attn: Geoffrey O. Lubbock, Vice President,
 Financial Strategic Planning and Policy
 Fax no.:
 with a copy to:
 NSTAR Electric & Gas Corporation
 800 Boylston Street, P1700
 Boston, MA 02199-8003
 Attn: Douglas S. Horan, General Counsel
 Fax no.:

  

 

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 Sch. 2.8
 Northern Pass LLC Operating Agreement
 

 

 SCHEDULE 6.1
 

 DESCRIPTION OF THE PROJECT
 

 The Project consists of the development, construction, ownership and maintenance of  (i) a high voltage direct current (“HVDC”) cost-based participant funded transmission line (the “HVDC Facilities”) from the U.S. Border to a point at or near the Webster substation in New Hampshire (the “Delivery Point”) and (ii) certain additions, modifications, or reinforcements to AC transmission facilities in New England that are necessary to interconnect the HVDC Facilities at the Delivery Point and enable the delivery of 1,200 MW of power to the Delivery Point on a firm basis (such additions, modifications, reinforcements and upgrades, collectively, “AC Upgrades”).
 

 

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 Sch. 6.1
 Northern Pass LLC Operating Agreement
 

 SCHEDULE 6.2
 CONDITIONS PRECEDENT TO MEMBERS’ OBLIGATIONS
 FOR ADDITIONAL CAPITAL CONTRIBUTIONS
 

 The Members shall have no obligation, other than the obligation to make the Capital Contributions required by the Development Budget as provided for in Section 3.1 and in connection with Pre-Formation Internal Costs as provided for in Section 9.1, to make any other Capital Contributions until such time, if ever, that each of the Conditions Precedent below has been satisfied or waived by such Member:
 

 1.
 The following shall have been obtained and shall not contain terms and conditions substantially different from those requested in the applications filed therefor unless otherwise acceptable to each Member in its sole discretion:
 

 (a)
 A FERC order accepting or approving the Company’s FPA Section 205 filing of the Transmission Services Agreement between the Company and HQ in a form reasonably satisfactory to the Members.
 (b)
 A FERC order, pursuant to Section 204 of the Federal Power Act of 1935, granting the Company the right to incur debt as contemplated by this Agreement and the right of NU Ventures and NSTAR Ventures to provide equity capital to the Company, in a form reasonably satisfactory to the Members.
 2.
 The following agreements shall have been executed and delivered by all of the applicable parties thereto by no later than March 22, 2011:
 (a)
 Joint Development Agreement among TransEnergie and the Company;
 (b)
 Transmission Services Agreement between the Company and Hydro-Quebec; 
 (c)
 Service Agreement between the Company and NUSCO.
 3.
 The Company shall have received a commitment(s) for debt financing that is acceptable to it by no later than 30 days after the date on which all of the conditions precedent set forth in paragraph 1 above have been satisfied.
 4.
 All Capital Contributions necessary to fund the Development Budget and approved Pre-Formation Internal Costs shall have been funded at the times and in the amounts specified by the Members Committee. 
 5.
 The Members Committee shall have approved the Initial Operating Budget by no later than 90 days after the date on which the conditions precedent set forth in paragraph 1 above have been satisfied.
 6.
 The Members Committee shall have approved the Construction Budget by no later than 90 days after the date on which the conditions precedent set forth in paragraph 1 above have been satisfied.
 

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 Sch. 6.2
 Northern Pass LLC Operating Agreement
 

 

 SCHEDULE 7.2
 INITIAL MEMBERS COMMITTEE
 

 

 NU Transmission Ventures, Inc.  Representatives
 

 James A. Muntz
 

 Gary A. Long
 

 

 NSTAR Transmission Ventures, Inc. Representatives
 

 Paul D. Vaitkus
 

 Geoffrey O. Lubbock
 

 

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 Sch. 7.2
 Northern Pass LLC Operating Agreement
 

 

 SCHEDULE 7.13
 

 APPROVED AFFILIATE AGREEMENTS
 

 Service Agreement between Northeast Utilities Service Company and the Company 
 

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 Sch. 7.13
 Northern Pass LLC Operating Agreement

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