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                                                                    EXHIBIT 10.3

                                                                  CONFORMED COPY

                              CONSENT AND AGREEMENT

         The undersigned, Select Energy, Inc. ("SELECT ENERGY"), a corporation
organized under the laws of the State of Connecticut, and Northeast Utilities
("NU"), an unincorporated voluntary business association organized under the
laws of the Commonwealth of Massachusetts (Select Energy and NU are hereinafter
referred to individually as "COUNTERPARTY" and collectively, as the
"COUNTERPARTIES"), as of October 18, 2001, hereby acknowledge notice of, and
consent to, for themselves, the assignment of the agreements listed in Exhibit A
hereto (the "ASSIGNED AGREEMENTS") with Northeast Generation Company, a
corporation organized under the laws of the State of Connecticut (the
"COMPANY"), to the Trustee referred to below, and hereby agrees as follows:

         The Company and The Bank of New York as Trustee for the holders of
bonds issued thereunder (in such capacity, together with its successors in such
capacity, the "TRUSTEE") are parties to an Indenture dated as of October 18,
2001 (as amended, modified and supplemented and in effect from time to time, the
"INDENTURE").

         The Company and the Trustee are parties to a Security Agreement dated
as of October 18, 2001.

         1. INTERPRETATION. Unless otherwise stated, references herein to any
Person shall include its permitted successors and assigns and, in the case of
any Government Authority, any Person succeeding to its functions and capacities.
In case of any conflict or inconsistency between this Consent and Agreement and
the Assigned Agreements, this Consent and Agreement shall control. Capitalized
terms used but not defined herein are used as defined in the Indenture.

         2. REPRESENTATIONS AND WARRANTIES. Each Counterparty represents and
warrants, as of the date hereof, that:

         (a) CORPORATE EXISTENCE. NU represents and warrants that it is an
unincorporated voluntary business association duly organized, validly existing
and in good standing under the laws of the Commonwealth of Massachusetts. Select
Energy represents and warrants that it is a corporation duly organized, validly
existing and in good standing under the laws of the State of Connecticut.

         (b) NO CONTRAVENTION. The execution, delivery and performance by such
Counterparty of this Consent and Agreement and the Assigned Agreements have been
duly authorized by all necessary corporate or other organizational action of
such Counterparty, and do not and will not (i) violate any provision of any law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award applicable to such Counterparty or any provision of the certificate of
incorporation or by-laws of such Counterparty or (ii) result in a breach of or
constitute a default under any agreement relating to the management or affairs
of such Counterparty, or any indenture or loan or

                              Consent and Agreement
                              ---------------------
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                                       2

credit agreement or any other material agreement, lease or instrument to which
such Counterparty is a party or by which such Counterparty or its properties or
assets may be bound that would, individually or in the aggregate, have a
material adverse effect on such Counterparty's performance under the Assigned
Agreements or this Consent and Agreement.

         (c) DUE EXECUTION AND ENFORCEABILITY. This Consent and Agreement and
the Assigned Agreements have been duly executed and delivered by each
Counterparty, are in full force and effect and constitute the legal, valid and
binding obligations of such Counterparty enforceable against such Counterparty
in accordance with their respective terms, except as the enforceability thereof
may be limited by the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and by general equitable principles.

         (d) GOVERNMENTAL APPROVALS. No Governmental Approval (as defined below)
is required to be obtained by any Counterparty for the execution, delivery and
performance by such Counterparty of this Consent and Agreement, except for such
Governmental Approvals that have already been obtained.

         "Governmental Approval" shall mean any authorization, consent,
approval, license, ruling, permit, tariff, rate, certification, exemption,
filing (other than filings relating to the perfection of security interest),
variance, claim, order, judgment, decree, publication of, notice to, or
registration by or with, any governmental authority.

         (e) NO LITIGATION. There are no suits or proceedings at law or in
equity or by or before any governmental or regulatory authority or agency, now
pending, or to its knowledge threatened, against such Counterparty or any of its
properties, rights or assets which if adversely determined, individually or in
the aggregate, could reasonably be expected to have a material adverse effect on
its ability to perform its obligations hereunder or under the Assigned
Agreements.

         (f) NO DEFAULT UNDER ASSIGNED AGREEMENTS. Such Counterparty is not in
default in any material respect under any material covenant or obligation under
the Assigned Agreements and no such default has occurred prior to the date
thereof. To the best knowledge of such Counterparty, without inquiry, the
Company is not in default in any material respect under any material covenant or
obligation under the Assigned Agreements and no such default has occurred prior
to the date hereof, and the Company has complied in all material respects with
the conditions precedent to the obligations of such Counterparty to perform
under the Assigned Agreements.

         3. CONSENT AND AGREEMENT. Each Counterparty hereby consents,
acknowledges and agrees that the rights of the Company arising on or before
December 31, 2005 under the Assigned Agreements have been or will be assigned to
the Trustee in connection with the issuances from time to time of bonds under
the Indenture. In connection with the foregoing, each Counterparty acknowledges
and agrees that:

                              Consent and Agreement
                              ---------------------
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                                       3

                  (a) EXERCISE OF RIGHTS. From and after delivery by the Trustee
         to the Counterparties of written notice that an Event of Default has
         occurred and so long as such Event of Default is continuing, the
         Trustee and any designee or assignee thereof shall be entitled to (i)
         exercise any and all rights of the Company under the Assigned
         Agreements in accordance with their terms and (ii) enforce directly
         against the Counterparties all obligations of the Counterparties under
         the Assigned Agreements.

                  (b) RESTRICTIONS ON TERMINATION. No Counterparty will, without
         the prior written consent of the Trustee, take any action to cancel or
         terminate, or suspend performance under, the Assigned Agreements, or
         consent to or accept any cancellation, termination or suspension
         thereof, unless such Counterparty shall have delivered to the Trustee
         30 days' (or, in the case of a payment default under the Assigned
         Agreements, 10 days') prior written notice specifying the nature of the
         default giving rise to such right (and in the case of a payment
         default, specifying the amount thereof). Following receipt of any such
         notice but prior to the Counterparty's taking any action to cancel or
         terminate, or suspend performance under, any Assigned Agreement, the
         Trustee shall have the right, but not the obligation, to cure (by
         payment or performance on behalf of the Company) any default giving
         rise to (or that could give rise to) the Counterparty's right to
         cancel, terminate or suspend performance under the Assigned Agreements.

                  (c) SUCCESSION TO OR TRANSFER OF RIGHTS AND INTERESTS. In the
         event that the Trustee or its designee(s) succeeds to the Company's
         rights and interests in the Assigned Agreements, whether by foreclosure
         or otherwise, the Trustee or its designee(s) may elect, by written
         notice of assumption delivered to the Counterparty, to assume all of
         the Company's obligations under the Assigned Agreements from the date
         of such succession to and including December 31, 2005 (but shall in no
         event be liable for damages or penalties incurred by the Company that
         are not provided for in the Assigned Agreements). Upon the exercise by
         the Trustee of any of the remedies set forth in the Transaction
         Documents, the Trustee may assign its rights and interests, and the
         rights and interests of the Company, in and to the Assigned Agreements
         to and including December 31, 2005 to any purchaser or transferee of
         the Company or any of its assets (and the Counterparties shall have no
         right to terminate the Assigned Agreements or suspend its performance
         thereunder by reason of such assignment), if such purchaser or
         transferee shall have cured all defaults then existing under the
         Assigned Agreements and shall expressly assume in writing all of the
         obligations of the Company under the Assigned Agreements to and
         including December 31, 2005. In connection with the foregoing,
         liability of the Trustee or its designee(s), or any such purchaser or
         transferee in respect of any and all obligations of the Company prior
         to the assumption by such Person of the Company's obligations under
         such Assigned Agreements shall be limited solely to the assets of the
         Company (and neither the Trustee, such designee nor any officer,
         director, employee, shareholder, partner or agent of the Trustee or
         such designee, purchaser or transferee shall have any liability with
         respect thereto).

                              Consent and Agreement
                              ---------------------
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                                       4

                  (d) REPLACEMENT OF ASSIGNED AGREEMENTS FOLLOWING BANKRUPTCY.
         In the event that (i) any of the Assigned Agreements is rejected by a
         trustee or debtor-in-possession in any bankruptcy or insolvency
         proceeding involving the Company or (ii) any of the Assigned Agreements
         is terminated as a result of any bankruptcy or insolvency proceeding
         involving the Company and, if within 15 days after such rejection or
         termination, the Trustee or its designee(s) or assignees(s) shall so
         request and shall certify in writing to the Counterparties that such
         party intends to perform the obligations of the Company as and to the
         extent required under any such rejected or terminated Assigned
         Agreement and any transfer to such designee or assignee shall comply
         with the provisions of Section 3(c) above, the Counterparties will
         execute and deliver to the Trustee or such designee(s) a new Assigned
         Agreement which shall be for the balance of the remaining term (but not
         beyond December 31, 2005) under the original Assigned Agreement before
         giving effect to such rejection or termination and shall contain the
         same conditions, agreements, terms, provisions and limitations as the
         original Assigned Agreement (except for any requirements which have
         been fulfilled prior to such rejection or termination); PROVIDED that
         the Counterparties shall not be obligated to enter into any such new
         Assigned Agreement unless all amounts due and payable to the
         Counterparties under the original Assigned Agreements have been paid.
         References in this Consent and Agreement to such "Assigned Agreement"
         shall be deemed also to refer to such new Assigned Agreement.

                  (e) AMENDMENT. The Counterparties shall not, without the prior
         written consent of the Trustee, amend or modify the Assigned Agreements
         unless the Counterparties have received from the Company a copy of a
         certificate delivered by the Company to the Trustee to the effect that
         such amendment or modification is permitted by the Transaction
         Documents.

                  (f) NOTICES. The Counterparties shall deliver to the Trustee,
         concurrently with the delivery thereof to the Company, a copy of any
         material notice, request, demand or other document given by the
         Counterparties in connection with the Assigned Agreements, including,
         without limitation, (i) any notice of default or of the existence of a
         material dispute concerning the Assigned Agreements, (ii) an event or
         condition which with the passage of time or giving notice could become
         an Event of Default or (iii) any termination or proposed termination of
         the Assigned Agreements.

         4.       MISCELLANEOUS.

                  (a) BINDING EFFECT. This Consent and Agreement shall be
         binding upon the parties hereto and their respective successors and
         assigns.

                  (b) NOTICES. All notices and other communications to a party
         hereunder shall be in writing and shall be sent to the address set
         forth beneath the signature of such Person on the signature pages
         hereof or to such address as such Person may have specified by written
         notice to the other parties hereto and shall be deemed to have been
         given (A) when received by certified mail or by an

                              Consent and Agreement
                              ---------------------
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         international courier, such as Federal Express, by such Person, at said
         address of such Person or (B) when transmitted by facsimile to the
         number specified below and the receipt confirmed telephonically by
         recipient; PROVIDED that such facsimile is promptly followed by a copy
         of such notice delivered to such Person by postage-prepaid certified
         mail, or by an international courier, such as Federal Express.
         Notwithstanding the foregoing sentence, all notices and other
         communications to the Counterparties hereunder shall be in writing and
         shall be sent to the address and in the manner specified in the
         Assigned Agreements.

                  (c) AMENDMENTS. No amendment, modification or waiver of any
         provision hereof shall be effective unless the same shall be in writing
         and signed by the parties hereto, including the Company; PROVIDED that
         if the Trustee shall have delivered a notice to the Counterparties that
         an Event of Default shall have occurred and be continuing the Company
         shall not be required to be a party to any amendment, modification or
         waiver unless its rights or obligations hereunder are affected thereby.

                  (d) COUNTERPARTS; HEADINGS; SEVERABILITY. This Consent and
         Agreement may be executed in any number of counterparts, all of which
         taken together shall constitute one and the same instrument, and any of
         the parties hereto may execute this Consent and Agreement by signing
         any such counterpart. The headings used herein are for convenience of
         reference only and will not affect the construction or interpretation
         of any of the terms hereof. If any provision hereof shall be held to be
         invalid, illegal or unenforceable, the validity, legality and
         enforceability of the remaining provisions in such jurisdiction and the
         validity, legality and enforceability of such provision in any other
         jurisdiction shall not in any way be affected or impaired.

                  (e) TERMINATION. This Consent and Agreement and the
         obligations of the Counterparties hereunder shall terminate and be of
         no further force and effect on the earlier of (x) the date on which the
         Counterparties shall have received notice in writing from the Trustee
         that all obligations under the Transaction Documents have been paid or
         performed in full in accordance with the terms thereof and (y) the date
         on which the Assigned Agreements have been finally terminated
         (including, and not prior to, termination of all surviving obligations)
         in accordance with their terms and the terms hereof. Notwithstanding
         the foregoing, it is understood and agreed that the Assigned Agreements
         expire on December 31, 2005 and that this Consent and Agreement shall
         have no effect with respect to any renewal or extension of an Assigned
         Agreement past December 31, 2005.

                  (f) GOVERNING LAW. THIS CONSENT AND AGREEMENT SHALL BE
         GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
         NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
         WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
         OF LAW THEREOF TO THE EXTENT THE APPLICATION OF SUCH PRINCIPLES WOULD
         CAUSE THE APPLICATION OF THE LAWS OF ANY

                              Consent and Agreement
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                                       6

         OTHER JURISDICTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
         WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
         COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY OF THIS CONSENT AND
         AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                  (g) LIMITED INDEMNITY. The Company acknowledges and agrees
         that if the Secured Parties, the Trustee or any of their agents or
         designees take action to exercise any of their respective rights under
         the Collateral Documents or this Consent and Agreement, including, but
         not limited to, the assumption, step-in and transfer rights described
         in Section 3 of this Consent and Agreement, the Counterparties shall be
         entitled to rely upon any notice or representation received from the
         Secured Parties, the Trustee or their agents and designees concerning
         such default or actions, and to act in reliance upon such notice or
         representation, in honoring any assumption, step-in or transfer by the
         Secured Parties, the Trustee or their agents or designees. The
         Counterparties shall have no obligation to investigate the accuracy of
         any such notice or representation or the propriety or legality of any
         action taken by the Secured Parties, the Trustee or their agents or
         designees, shall have no obligation or duty to the Company in this
         respect or to protect the Company's interests, and shall have no
         liability to the Company or its officers, directors, partners, agents
         or employees for, acting in good faith to honor the assumption, step-in
         or transfer by payment of amounts due under the Assigned Agreements to
         the Secured Parties, the Trustee or their agents or designees or
         otherwise to the exclusion of the Company.

                  (h) LIMITATION OF LIABILITY. No shareholder or trustee of NU
         shall be held to any liability whatever for the payment of any sum of
         money or for damages or otherwise under this Consent and Agreement, and
         this Consent and Agreement shall not be enforceable against any such
         trustee in their or his or her individual capacities or capacity and
         this Consent and Agreement shall be enforceable against the trustees of
         NU only as such, and every person, firm, association, trust or
         corporation having any claim or demand arising under this Consent and
         Agreement and relating to NU, its shareholders or trustees shall look
         solely to the trust estate of NU for the payment or satisfaction
         thereof.

                  (i) TRUSTEE'S RIGHTS. In acting hereunder, the Trustee is
         entitled to all rights, benefits, protections and indemnities provided
         to it under the Indenture.

                              Consent and Agreement
                              ---------------------
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                  IN WITNESS WHEREOF, the undersigned by its duly authorized
officer has caused this Consent and Agreement to be duly executed and delivered
as of the day and year first above written.

                                         NORTHEAST UTILITIES
                                             as a Counterparty

                                         By: /s/ David R. McHale
                                            ---------------------------------
                                            Name: David R. McHale
                                            Title: Vice President and Treasurer

                                         SELECT ENERGY, INC.
                                             as a Counterparty

                                         By: /s/ William W. Schivley
                                            ---------------------------------
                                            Name: William W. Schivley
                                            Title: President

Accepted and agreed:
         THE BANK OF NEW YORK,
              as Trustee

         By: /s/ Geovanni Barris
            -------------------------------
            Name: Geovanni Barris
            Title: Vice President
         101 Barclay Street, Floor 21W
         New York, NY 10286

Accepted and agreed:
         NORTHEAST GENERATION COMPANY

         By: /s/ Bruce D. Kenyon
            --------------------------------
            Name: Bruce D. Kenyon
            Title: President - Generation Group
         107 Selden Street
         Berlin, CT 06037

                              Consent and Agreement
                              ---------------------
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                                    Exhibit A

                               Assigned Agreements

1.       Power Purchase and Sales Agreement dated as of December 27, 1999
         between Select Energy, Inc. and Northeast Generation Company.

2.       Guaranty dated as of October 18, 2001 made by Northeast Utilities in
         favor of Northeast Generation Company.

                              Consent and Agreement
                              ---------------------<Page>

                                                                    EXHIBIT 10.4

                                                                  CONFORMED COPY

                               SECURITY AGREEMENT

                  SECURITY AGREEMENT dated as of October 18, 2001, between
Northeast Generation Company, a corporation organized and existing under the
laws of Connecticut (the "COMPANY"), and The Bank of New York, a New York
banking corporation as trustee for the benefit of the Holders (in such capacity,
together with its successors in such capacity, the "TRUSTEE"). The Company and
the Trustee are parties to an indenture dated as of October 18, 2001 (as
modified and supplemented and in effect from time to time, the "INDENTURE"),
providing, subject to the terms and conditions thereof, for the creation and
issuance of the Company's bonds, debentures, notes or other evidences of
indebtedness to be issued in one or more series (collectively, "BONDS"),
including its 4.998% Series A Senior Secured Bonds due 2005 (the "SERIES A
BONDS") and its 8.812% Series B Senior Secured Bonds due 2026 (the "SERIES B
BONDS", and collectively with the Series A Bonds, the "INITIAL BONDS").

                  To induce the Trustee to enter into the Indenture, to induce
the Initial Purchasers to purchase the Initial Bonds offered thereunder, to
induce the purchasers of any additional Bonds issued under the Indenture to
purchase such Bonds and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company has agreed to
grant a security interest in the Security Agreement Collateral (as hereinafter
defined) as security for the payment and performance of the Secured Obligations
(as hereinafter defined). Accordingly, the parties hereto agree as follows:

                  Section 1. DEFINITIONS. (a) Terms defined in the Indenture and
not otherwise defined herein are used herein as defined in the Indenture.

                  (b) The terms "Accounts", "Chattel Paper", "Deposit Account",
"Document", "Electronic Chattel Paper", "Equipment", "Fixture", "General
Intangible", "Goods", "Instrument", "Inventory", "Investment Property",
"Letter-of-Credit Right", "Payment Intangible", "Proceeds", "security interest"
and "Software" have the respective meanings ascribed thereto in Article 9 of the
UCC.

                  (c) In addition, as used herein:

                  "COLLATERAL ACCOUNT" has the meaning assigned to such term in
Section 4.

                  "MOTOR VEHICLES" means motor vehicles, tractors, trailers and
         other like property, whether or not the title thereto is governed by a
         certificate of title or ownership.

                  "SECURED OBLIGATIONS" means, collectively, (a) the principal
         of and interest or premium on the Bonds and all other amounts or
         obligations whatsoever now or hereafter from time to time owing by the
         Company to the Holders or to the Trustee, or any of them,

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                                      -2-

         under the Indenture or the Bonds (including, without limitation, fees,
         penalties, indemnities and legal and other expenses, whether due by
         scheduled maturity, acceleration or otherwise) and (b) all present and
         future obligations of the Company to the Secured Party hereunder.

                  "SECURED PARTY" means the Trustee for the benefit of the
holders of the Bonds.

                  "SECURITY AGREEMENT COLLATERAL" has the meaning assigned to
such term in Section 3.

                  "UCC" means the Uniform Commercial Code as in effect from time
to time in the State of New York.

                  Section 2. REPRESENTATIONS AND WARRANTIES. The Company
represents and warrants to the Secured Party that:

                  (a) ENFORCEABILITY. This Agreement is a legal, valid and
         binding agreement of the Company, enforceable in accordance with its
         terms, except as the enforceability hereof may be limited by any
         applicable bankruptcy, insolvency, reorganization, moratorium or
         similar laws affecting creditors' rights generally and by general
         equitable principles.

                  (b) TITLE AND PRIORITY. The Company is the sole beneficial
         owner of, and has good and marketable title to, the Security Agreement
         Collateral in which it purports to grant a security interest pursuant
         to Section 3, and no Lien exists upon such Security Agreement
         Collateral, except for Liens permitted under Section 5.9 of the
         Indenture and except for the security interest in favor of the Secured
         Party created pursuant hereto. The security interest created pursuant
         hereto constitutes a valid and continuing perfected security interest
         in favor of the Secured Party in the Security Agreement Collateral in
         which the Company purports to grant a security interest pursuant to
         Section 3, subject to no equal or prior Lien except as expressly
         permitted by Section 5.9 of the Indenture and Section 5.01(a) hereof.

                  (c) PERFECTION. The Company has caused or will have caused,
         within ten days of the Closing Date, the filing of all necessary and
         appropriate financing statements in the proper filing office in the
         appropriate jurisdictions under applicable law in order to perfect the
         security interest in the Security Agreement Collateral granted to the
         Secured Party under this Agreement, to the extent that such security
         interest can be perfected by the filing of financing statements, and
         subject to Section 5.01(a).

                  (d) PRIORITY. Other than the security interest granted to the
         Secured Party pursuant to this Agreement and security interests to be
         terminated on the Closing Date, the Company has not pledged, assigned,
         sold, granted a security interest in, or otherwise conveyed any of the
         Security Agreement Collateral. The Company has not authorized

                 Northeast Generation Company Security Agreement
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                                      -3-

         the filing of and is not aware of any financing statements against the
         Company that include a description of collateral covering the Security
         Agreement Collateral other than any financing statement relating to the
         security interest granted to the Secured Party hereunder or that has
         been terminated or will be terminated on the Closing Date. The Company
         is not aware of any judgment or tax lien filings against the Company.

                  (e) NAMES, ETC. (i) The full and correct legal name, type of
         organization, jurisdiction of organization, organizational ID number
         (if applicable) and mailing address of the Company as of the date
         hereof is correctly set forth in Annex 1.

                  (ii) Annex 1 correctly specifies (i) the place of business of
         the Company or, if the Company has more than one place of business, the
         location of the chief executive office of the Company, and (ii) each
         location where Goods of the Company are located (other than Motor
         Vehicles constituting Equipment and Goods in transit).

                  (f) CHANGES IN CIRCUMSTANCES. The Company has not (i) within
         the period of four months prior to the date hereof, changed its
         location (as defined in Section 9-307 of the UCC), (ii) except as
         specified in Annex 1, heretofore changed its name, or (iii) except as
         specified in Annex 2, heretofore become a "new debtor" (as defined in
         Section 9-102(a)(56) of the UCC) with respect to a currently effective
         security agreement previously entered into by any other Person.

                  (g) FAIR LABOR STANDARDS ACT. Any Goods now or hereafter
         produced by the Company included in the Security Agreement Collateral
         have been and will be produced in compliance with the requirements of
         the Fair Labor Standards Act, as amended.

                  The representations and warranties made by the Company in this
Agreement shall survive the execution and delivery of this Agreement. So long as
the Rating Agencies shall maintain a rating of any Secured Obligation, the
Secured Party shall not waive any breach of the representations and warranties,
except at the written direction of the Majority Holders in accordance with the
Indenture.

                  Section 3. SECURITY AGREEMENT COLLATERAL. As collateral
security for the prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the Secured Obligations, whether now existing or
hereafter from time to time arising, the Company hereby grants to the Secured
Party, as hereinafter provided, a security interest in all of the Company's
right, title and interest in, to and under the following property, assets and
revenues, whether now owned by the Company or hereafter acquired and whether now
existing or hereafter coming into existence (all of the property, assets and
revenues described in this Section 3 being collectively referred to herein as
the "SECURITY AGREEMENT COLLATERAL"):

                  (a) all Inventory;

                  (b) all Equipment;

                 Northeast Generation Company Security Agreement
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                                      -4-

                  (c) all Fixtures;

                  (d) all Goods not covered by the preceding clauses of this
         Section 3;

                  (e) all rights of the Company arising under the Initial Select
         Power Sales Agreement on or before December 31, 2005 and the Northeast
         Utilities Guarantee thereof;

                  (g) all other tangible personal property whatsoever of the
         Company; and

                  (h) all Proceeds, products, offspring, accessions, rents,
         profits, income, benefits, substitutions and replacements of and to any
         of the Security Agreement Collateral and, to the extent related to any
         Security Agreement Collateral, all books, correspondence, credit files,
         records, invoices and other papers (including without limitation all
         tapes, cards, computer runs and other papers and documents in the
         possession or under the control of the Company or any computer bureau
         or service company from time to time acting for the Company).

                  Section 4.  CASH PROCEEDS OF SECURITY AGREEMENT COLLATERAL.

                  (a) COLLATERAL ACCOUNT. The Trustee will cause to be
established at The Bank of New York a cash collateral account (the "COLLATERAL
ACCOUNT"), which shall be a "securities account" (as defined in Section 8-501 of
the UCC) in respect of which the Trustee shall be the "entitlement holder" (as
defined in Section 8-102(a)(7) of the UCC), into which there shall be deposited
from time to time the cash Proceeds of any of the Security Agreement Collateral
(including Proceeds of insurance thereon) required to be delivered to the
Trustee pursuant hereto and into which the Company may from time to time deposit
any additional amounts that the Company wishes to pledge to the Secured Party as
additional collateral security hereunder. The balance from time to time in the
Collateral Account shall constitute part of the Security Agreement Collateral
hereunder and shall not constitute payment of the Secured Obligations until
applied as hereinafter provided. Except as expressly provided in the next
sentence, the Trustee shall remit the collected balance standing to the credit
of the Collateral Account to or upon the order of the Company as the Company
shall from time to time instruct in writing. However, at any time following the
occurrence and during the continuance of an Event of Default, the Trustee may
(and, if instructed by the Holders as specified in Section 8.11 of the
Indenture, shall) apply or cause to be applied (subject to collection) the
balance from time to time standing to the credit of the Collateral Account to
the payment of the Secured Obligations then due and payable in the manner
specified in Section 5.09. The balance from time to time in the Collateral
Account shall be subject to withdrawal only as provided herein.

                  (b) PROCEEDS OF INITIAL SELECT POWER SALES AGREEMENT AND
NORTHEAST UTILITIES GUARANTEE. If so requested by the Trustee at any time after
the acceleration of each Series of Bonds in accordance with the Indenture, the
Company shall instruct in writing all account debtors in respect of the Initial
Select Power Sales Agreement and Northeast Utilities Guarantee

                 Northeast Generation Company Security Agreement
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                                      -5-

to make all payments in respect thereof either (a) directly to the Trustee or
(b) to one or more other banks in the United States of America under
arrangements, in form and substance satisfactory to the Trustee, pursuant to
which the Company shall have irrevocably instructed such other bank (and such
other bank shall have agreed) to remit all proceeds of such payments directly to
the Trustee for deposit into the Collateral Account. All payments made to the
Trustee, as provided in the preceding sentence, shall be immediately deposited
in the Collateral Account. In addition to the foregoing, the Company agrees
that, at any time after the occurrence and during the continuance of an Event of
Default, if the Proceeds of any Security Agreement Collateral hereunder shall be
received by it, the Company shall as promptly as possible deposit such Proceeds
into the Collateral Account. Until so deposited, all such Proceeds shall be held
in trust by the Company for and as the property of the Trustee and shall not be
commingled with any other funds or property of the Company.

                  (c) INVESTMENT OF BALANCE IN COLLATERAL ACCOUNT. The cash
balance standing to the credit of the Collateral Account shall be invested from
time to time in such Permitted Investments as the Company shall determine, which
Permitted Investments shall be held in the name and be under the control of the
Trustee (and, if the Collateral Account is a securities account, credited to the
Collateral Account), PROVIDED that at any time after the occurrence and during
the continuance of an Event of Default, the Trustee (if instructed by the
Holders as specified in Section 8.11 of the Indenture) shall at any time and
from time to time liquidate any such Permitted Investments and apply or cause to
be applied the Proceeds thereof to the payment of the Secured Obligations then
due and payable in the manner specified in Section 5.09.

                  Section 5. FURTHER ASSURANCES; REMEDIES. In furtherance of the
grant of the pledge and security interest pursuant to Section 3, the Company
hereby agrees with the Secured Party as follows:

                  5.01 DELIVERY AND OTHER PERFECTION. The Company shall:

                  (a) give, execute, deliver, file, record, authorize or obtain
         all such financing statements, notices, instruments, documents,
         agreements or consents or other papers as may be necessary to create,
         preserve, perfect or validate the security interest granted pursuant
         hereto or to enable the Trustee to exercise and enforce its rights
         hereunder with respect to such pledge and security interest, PROVIDED
         that the Company may at any time have Security Agreement Collateral
         with an aggregate market value not exceeding $500,000 or 1% of the
         Company's total assets (as shown on the Company's most recent balance
         sheet), whichever is greater, as to which the steps necessary to
         perfect the security interest granted hereunder have not been
         perfected;

                  (b) following the acceleration of each Series of Bonds then
         outstanding, upon request of the Trustee, promptly notify (and the
         Company hereby authorizes the Trustee so to notify) each account debtor
         in respect of the Initial Select Power Sales Agreement and the
         Northeast Utilities Guarantee that such Security Agreement Collateral
         has been

                 Northeast Generation Company Security Agreement
                 -----------------------------------------------
<Page>
                                      -6-

         assigned to the Trustee hereunder, and that any payments due or to
         become due in respect thereof are to be made directly to the Trustee;

                  (c) without limiting the obligations of the Company under
         Section 5.04 but subject to the proviso to paragraph (a) above, upon
         the acquisition after the date hereof by the Company of any Equipment
         covered by a certificate of title or ownership, cause the Trustee to be
         listed as the lienholder on such certificate of title and take such
         other steps as may be required under the law applicable to perfection
         of a security interest in such property to perfect such security
         interest, and within 60 days of the acquisition thereof deliver
         evidence of the same to the Trustee;

                  (d) keep full and accurate books and records relating to the
         Security Agreement Collateral, and stamp or otherwise mark such books
         and records in order to reflect the security interests granted by this
         Agreement; and

                  (e) permit representatives of the Trustee, upon reasonable
         notice, at any time during normal business hours to inspect and make
         abstracts from its books and records pertaining to the Security
         Agreement Collateral, and permit representatives of the Trustee to be
         present at the Company's place of business to receive copies of all
         communications and remittances relating to the Security Agreement
         Collateral, and forward copies of any notices or communications
         received by the Company with respect to the Security Agreement
         Collateral, all in such manner as the Trustee or its agent may require.

                  5.02 OTHER FINANCING STATEMENTS AND LIENS. Except as otherwise
permitted under Section 5.9 of the Indenture, the Company shall not file or
suffer to be on file, or authorize or permit to be filed or to be on file, in
any jurisdiction, any financing statement or like instrument with respect to any
of the Security Agreement Collateral in which the Trustee is not named as the
sole secured party.

                  5.03 PRESERVATION OF RIGHTS. The Secured Party shall not be
required nor have any duty or obligation to take steps necessary to preserve any
rights against prior parties to any of the Security Agreement Collateral.

                  5.04 SPECIAL PROVISIONS RELATING TO MOTOR VEHICLES. (a)
Subject to Section 5.01(a), the Company shall deliver to the Trustee originals
of the certificates of title or ownership for the Motor Vehicles owned by it
with the Trustee listed as lienholder or take such other action as may be
necessary under applicable law to perfect the security interest created
hereunder in all such Motor Vehicles.

                  (b) Without limiting the generality of the foregoing but
subject to the proviso to Section 5.01(a), upon the acquisition after the date
hereof by the Company of any Motor Vehicle, the Company shall deliver to the
Trustee originals of the certificates of title or ownership for such Motor
Vehicles, together with the manufacturer's statement of origin with the Trustee
listed as lienholder, if such actions shall be necessary to perfect the
Trustee's lien on such Motor Vehicles under applicable law; PROVIDED, however,
if the Motor Vehicle to be acquired is subject

                 Northeast Generation Company Security Agreement
                 -----------------------------------------------
<Page>
                                      -7-

to a purchase money security interest, the Trustee shall be listed as a junior
lienholder to the Person holding such purchase money security interest, if so
permitted by such Person.

                  (c) Without limiting Section 5.10, the Company hereby appoints
the Trustee as its attorney-in-fact, effective the date hereof and terminating
upon the termination of this Agreement, solely for the purpose of (i) executing
on behalf of the Company ownership or title applications as provided to it for
filing with appropriate state agencies to enable Motor Vehicles now owned or
hereafter acquired by the Company to be retitled and the Trustee listed as
lienholder thereon, (ii) filing such applications with such state agencies and
(iii) executing such other documents and instruments on behalf of, and taking
such other action in the name of, the Company as necessary to accomplish the
purposes hereof (including, without limitation, the purpose of creating in favor
of the Trustee a perfected lien on the Motor Vehicles and exercising the rights
and remedies of the Trustee under Section 5.05). This appointment as
attorney-in-fact is irrevocable and coupled with an interest.

                  5.05 EXERCISE OF RIGHTS, ETC. Following the acceleration of
each Series of Bonds then outstanding:

                  (a) the Company shall assemble the Security Agreement
         Collateral owned by it at such place or places, reasonably convenient
         to both the Trustee and the Company;

                  (b) the Trustee may, but shall not be obligated to, make any
         reasonable compromise or settlement deemed desirable with respect to
         any of the Security Agreement Collateral and may extend the time of
         payment, arrange for payment in installments, or otherwise modify the
         terms of, any of the Security Agreement Collateral;

                  (c) the Trustee shall have all of the rights and remedies with
         respect to the Security Agreement Collateral of a secured party under
         the Uniform Commercial Code (whether or not said Code is in effect in
         the jurisdiction where the rights and remedies are asserted) and such
         additional rights and remedies to which a secured party is entitled
         under the laws in effect in any jurisdiction where any rights and
         remedies hereunder may be asserted, including, without limitation, the
         right but not the obligation, to the fullest extent permitted by
         applicable law, to exercise all voting, consensual and other powers of
         ownership pertaining to the Security Agreement Collateral as if the
         Trustee were the sole and absolute owner thereof (and the Company
         agrees to take all such action as may be appropriate to give effect to
         such right);

                  (d) the Trustee in its discretion may, in its name or in the
         name of the Company or otherwise, demand, sue for, collect or receive
         any money or property at any time payable or receivable on account of
         or in exchange for any of the Security Agreement Collateral, but shall
         be under no obligation to do so; and

                  (e) the Trustee may, upon ten Business Days' prior written
         notice to the Company of the time and place, with respect to the
         Security Agreement Collateral or any part thereof that shall then be or
         shall thereafter come into the possession, custody or control of the
         Trustee, sell, lease, assign or otherwise dispose of all or any part of
         such

                 Northeast Generation Company Security Agreement
                 -----------------------------------------------
<Page>
                                      -8-

         Security Agreement Collateral, at such place or places as the Trustee
         chooses, and for cash or for credit or for future delivery (without
         thereby assuming any credit risk), at public or private sale, without
         demand of performance or notice of intention to effect any such
         disposition or of the time or place thereof (except such notice as is
         required above or by applicable statute and cannot be waived), and the
         Secured Party or anyone else may be the purchaser, lessee, assignee or
         recipient of any or all of the Security Agreement Collateral so
         disposed of at any public sale (or, to the extent permitted by law, at
         any private sale) and thereafter hold the same absolutely, free from
         any claim or right of whatsoever kind, including any right or equity of
         redemption (statutory or otherwise), of the Company, any such demand,
         notice and right or equity being hereby expressly waived and released
         to the fullest extent permitted by law. The Trustee may, without notice
         or publication, adjourn any public or private sale or cause the same to
         be adjourned from time to time by announcement at the time and place
         fixed for the sale, and such sale may be made at any time or place to
         which the sale may be so adjourned.

The Proceeds of each collection, sale or other disposition under this Section
5.05 shall be applied in the manner specified in Section 5.09.

                  The Company recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Trustee may be compelled, with respect to any sale of all
or any part of the Security Agreement Collateral, to limit purchasers to those
who will agree, among other things, to acquire the Security Agreement Collateral
for their own account, for investment and not with a view to the distribution or
resale thereof. The Company acknowledges that any such private sales may be at
prices and on terms less favorable to the Trustee than those obtainable through
a public sale without such restrictions, and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner and that the Trustee shall have no
obligation to engage in public sales and no obligation to delay the sale of any
Security Agreement Collateral for the period of time necessary to permit the
respective issuer thereof to register it for public sale.

                  5.06 DEFICIENCY. If the Proceeds of sale, collection or other
realization of or upon the Security Agreement Collateral pursuant to Section
5.05 are insufficient to cover the costs and expenses of such realization and
the payment in full of the Secured Obligations, the Company shall remain liable
for any deficiency.

                  5.07 LOCATIONS; NAMES. Without at least 30 days' prior written
notice to the Trustee, the Company shall not change its location (as defined in
Section 9-307 of the UCC) or change its name from the name shown as its current
legal name on Annex 1.

                  5.08 PRIVATE SALE. The Secured Party shall not incur any
liability as a result of the sale of the Security Agreement Collateral, or any
part thereof, at any private sale pursuant to Section 5.05 conducted in
accordance with this Agreement and applicable law. The Company hereby waives any
claims against the Secured Party arising by reason of the fact that the price at
which the Security Agreement Collateral may have been sold at such a private
sale was less than the price that might have been obtained at a public sale or
was less than the aggregate amount of

                 Northeast Generation Company Security Agreement
                 -----------------------------------------------
<Page>
                                      -9-

the Secured Obligations, even if the Secured Party accepts the first offer
received and does not offer the Security Agreement Collateral to more than one
offeree, so long as the Secured Party acted in each case in accordance with this
Agreement and applicable law.

                  5.09 APPLICATION OF PROCEEDS. Except as otherwise herein
expressly provided and except as provided below in this Section 5.09, the
Proceeds of any collection, sale or other realization of all or any part of the
Security Agreement Collateral pursuant hereto, and any other cash at the time
held by the Trustee under Section 4 or this Section 5, shall be applied by the
Trustee:

                  FIRST, to the payment of the costs and expenses of such
         collection, sale or other realization, including reasonable
         out-of-pocket costs and expenses of the Trustee and the fees and
         expenses of its agents and counsel, and all expenses incurred and
         advances made by the Trustee in connection therewith;

                  NEXT, to the payment in full of the Secured Obligations, in
         each case equally and ratably in accordance with the respective amounts
         thereof then due and owing; and

                  FINALLY, to the payment to the Company, or the Company's
         successors or assigns, or as a court of competent jurisdiction may
         direct, of any surplus then remaining.

                  5.10 ATTORNEY-IN-FACT. Without limiting any rights or powers
granted by this Agreement to the Trustee while no Event of Default has occurred
and is continuing, upon the occurrence and during the continuance of any Event
of Default the Trustee is hereby appointed the attorney-in-fact of the Company
solely for the purpose of carrying out the provisions of this Section 5 and
taking any action and executing any instruments that are necessary or advisable
to accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. Without limiting the generality of the
foregoing, so long as the Trustee shall be entitled under this Section 5 to make
collections in respect of the Security Agreement Collateral, the Trustee shall
have the right and power but not the obligation to receive, endorse and collect
all checks made payable to the order of the Company representing any dividend,
payment or other distribution in respect of the Security Agreement Collateral or
any part thereof and to give full discharge for the same.

                  5.11 PERFECTION. Subject to Section 5.01(a), prior to or
concurrently with the execution and delivery of this Agreement, the Company
shall (i) file such financing statements and other documents in such offices as
necessary or desirable to perfect the security interests granted by Section 3 of
this Agreement and (ii) cause the Trustee to be listed as the lienholder on all
certificates of title or ownership relating to Motor Vehicles owned by the
Company. Without limiting the foregoing, the Company consents that UCC financing
statements may be filed describing the Security Agreement Collateral as "all
assets" or "all personal property" of the Company (PROVIDED that no such
description shall be deemed to modify the description of Security Agreement
Collateral set forth in Section 3).

                  5.12 TERMINATION. When all Secured Obligations shall have been
paid in full or otherwise terminated or defeased in full, in cash as provided in
the Indenture, this Agreement

                 Northeast Generation Company Security Agreement
                 -----------------------------------------------
<Page>
                                      -10-

shall terminate, and the Trustee shall forthwith cause to be assigned,
transferred and delivered, against receipt but without any recourse, warranty or
representation whatsoever, any remaining Security Agreement Collateral and money
received in respect thereof, to or on the order of the Company. The Trustee
shall also authorize or execute and deliver, as applicable, to the Company upon
such termination such Uniform Commercial Code termination statements,
certificates for terminating the Liens on the Motor Vehicles and such other
documentation as shall be reasonably requested by the Company to effect the
termination and release of the Liens on the Security Agreement Collateral.

                  5.13 FURTHER ASSURANCES. The Company agrees that, from time to
time, the Company will execute and deliver such further documents and do such
other acts and things as are necessary in order fully to effect the purposes of
this Agreement.

                  5.14 RELEASE OF MOTOR VEHICLES. (a) So long as no Event of
Default shall have occurred and be continuing, upon the written request of the
Company, the Trustee shall execute and deliver to the Company such instruments
as the Company shall reasonably request to remove the notation of the Trustee as
lienholder on any certificate of title for any Motor Vehicle; PROVIDED that any
such instruments shall be delivered, and the release effective only upon receipt
by the Trustee of a certificate from the Company stating that the Motor Vehicle
the lien on which is to be released is to be sold or has suffered a casualty
loss (with title thereto passing to the casualty insurance company therefor in
settlement of the claim for such loss).

                  (b) RELEASE OF SECURITY AGREEMENT COLLATERAL OTHER THAN MOTOR
VEHICLES. Security Agreement Collateral other than Motor Vehicles may be
released in accordance with the procedures set forth in Article 15 of the
Indenture.

                  Section 6.  MISCELLANEOUS.

                  6.01 NOTICES. All notices, requests, consents and demands
hereunder shall be in writing and telecopied, faxed or delivered to the intended
recipient at its "Address for Notices" specified pursuant to Section 1.4 of the
Indenture and shall be deemed to have been given at the times specified in said
Section.

                  6.02 NO WAIVER. No failure on the part of the Secured Party to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by the Secured Party of any right, power or
remedy hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies herein are cumulative and are
not exclusive of any remedies provided by law.

                  6.03 AMENDMENTS, ETC. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly executed by the
Company and the Trustee. Any such amendment or waiver shall be binding upon the
Secured Party and each holder of any of the Secured Obligations and the Company.

                 Northeast Generation Company Security Agreement
                 -----------------------------------------------
<Page>
                                      -11-

                  6.04 EXPENSES. The Company agrees to reimburse the Secured
Party for all costs and expenses incurred by the Secured Party (including,
without limitation, the reasonable fees and expenses of legal counsel) in
connection with (i) any Default and any enforcement or collection proceeding
resulting therefrom, including, without limitation, all manner of participation
in or other involvement with (w) performance by the Trustee of any obligations
of the Company in respect of the Security Agreement Collateral that the Company
has failed or refused to perform, (x) bankruptcy, insolvency, receivership,
foreclosure, winding up or liquidation proceedings, or any actual or attempted
sale, or any exchange, enforcement, collection, compromise or settlement in
respect of any of the Security Agreement Collateral, and for the care of the
Security Agreement Collateral and defending or asserting rights and claims of
the Trustee in respect thereof, by litigation or otherwise, including expenses
of insurance, (y) judicial or regulatory proceedings and (z) workout,
restructuring or other negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is consummated) and (ii) the
enforcement of this Section 6.04, and all such costs and expenses shall be
Secured Obligations entitled to the benefits of the collateral security provided
pursuant to Section 3.

                  6.05 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company and the Secured Party, (PROVIDED, however, that, except as provided in
Section 5.11 of the Indenture, the Company shall not assign or transfer its
rights or obligations hereunder without the prior written consent of the
Trustee).

                  6.06 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.

                  6.07 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.

                  6.08 CAPTIONS. The captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.

                  6.09 AGENTS AND ATTORNEYS-IN-FACT. The Trustee may employ
agents and attorneys-in-fact in connection herewith and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it in good faith.

                  6.10 SEVERABILITY. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Secured Party in
order to carry out the intentions of the parties hereto as nearly as may be
possible and (b) the invalidity or unenforceability of any provision hereof in
any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.

                 Northeast Generation Company Security Agreement
                 -----------------------------------------------
<Page>
                                      -12-

                  6.11 INCORPORATION. The Trustee, in connection with its
appointment and administration of duties hereunder, is entitled to all rights,
privileges, protections, immunities and indemnities accorded to it under the
Indenture.

                 Northeast Generation Company Security Agreement
                 -----------------------------------------------
<Page>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Security Agreement to be duly executed and delivered as of the day and year
first above written.

                             NORTHEAST GENERATION COMPANY

                             By /s/ Bruce D. Kenyon
                               --------------------------
                               Name: Bruce D. Kenyon
                               Title: President

                              THE BANK OF NEW YORK
                                as Trustee

                              By /s/ Geovanni Barris
                                -------------------------
                                Name: Geovanni Barris
                                Title: Vice President

                 Northeast Generation Company Security Agreement
                 -----------------------------------------------
<Page>

                                                                         ANNEX 1

                                 FILING DETAILS

CURRENT LEGAL NAME

         Northeast Generation Company

TYPE OF ORGANIZATION

         Corporation

JURISDICTION OF ORGANIZATION

         Connecticut

ORGANIZATIONAL ID NUMBER

CURRENT MAILING ADDRESS

         Northeast Generation Company
         107 Seldon Street
         Berlin, CT  06037
         Attn:  David R. McHale
         Vice President & Treasurer
         Northeast Utilities Service Company
         Agent for Northeast Generation Company

LOCATION OF GOODS

         CONNECTICUT - HOUSATONIC SYSTEM

         Bantam Hydroelectric Station
         Route 202
         Bantam, CT  06750

         Bulls Hydroelectric Bridge Station
         781 Kent Road
         Gaylordsville, CT  06755

         Falls Village Hydroelectric Station
         35 Water Street
         Falls Village, CT  06031

                          Annex 1 to Security Agreement
                          -----------------------------
<Page>
                                      -2-

         Robertsville Hydroelectric Station
         Old Creamery Road
         Colebrook, CT  06021

         Rocky River Hydroelectric Station
         200 Kent Road (Route 7)
         New Milford, CT  06776

         Shepaugh Hydroelectric Station
         2225 River Road
         Southbury, CT  06488

         Stevenson Hydroelectric Station
         1 Roosevelt Drive
         Monroe, CT  06468

         CONNECTICUT - EASTERN HYDRO SYSTEM

         Scotland Hydroelectric Station
         Jerusalem Road
         Windham, CT  06280

         Taftville Hydroelectric Station
         Junction Rt. 169 and Rt. 97
         Taftville, CT  06380

         Tunnel Hydroelectric and Tunnel Jet
         72 Roosevelt Avenue Extension, RFD 6
         Preston, CT  06360

         MASSACHUSETTS - NORTHFIELD MOUNTAIN SYSTEM

         Cabot Station
         Montague City Road
         Turners Falls, MA  01372

         Northfield Mountain Station
         99 Millers Falls Road
         Northfield, MA  01360

         Turners Falls Station
         1 Second Street
         Turners Falls, MA  01376

                          Annex 1 to Security Agreement
                          -----------------------------
<Page>
                                      -3-

FORMER LEGAL NAMES

         None

                          Annex 1 to Security Agreement
                          -----------------------------
<Page>

                                                                         ANNEX 2

                               "NEW DEBTOR" EVENTS

DESCRIPTION OF EVENT                                               DATE OF EVENT
--------------------                                               -------------

None

                          Annex 2 to Security Agreement
                          -----------------------------

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